This December, the Supreme Court will hear arguments in Cox Communications, Inc. v. Sony Music Entertainment. The case marks a turning point in the decades-long saga of litigation between media companies and (so-accused) facilitators of copyright infringement. The Supreme Court’s decision will have far-reaching implications, both for anti-piracy advocates and internet service providers (ISPs).
How did we get here?
Cox allows the Supreme Court to update its stance some twenty years after the last watershed case on contributory copyright infringement. Along with some regrettable trends in music and fashion, the early aughts saw a series of legal battles provoked by peer-to-peer content platforms like Napster. MGM v. Grokster (2005) laid down a key marker by establishing that inducing piracy extends secondary liability to platforms for their users’ infringing activity. As a result, American peer-to-peer companies (largely) vanished over the past twenty years under the threat of crushing liability.
Pirates, of course, are harder to deter. Peer-to-peer content infringement is still rampant online, but the largest platforms are increasingly based abroad. In recent years, media companies (led by the RIAA and the MPAA) responded with public-private law enforcement collaborations and legislative appeals to force ISPs to crack down on infringement. A major obstacle in this latter effort is the Digital Millenium Copyright Act (DMCA), which provides “safe harbors” to insulate ISPs from contributory liability. The DMCA’s safe harbors are conditioned on a few basic criteria, including termination policies for repeat-infringers. Predictably, these criteria are not nearly as stringent as copyright holders would like.
Cox Communications v. Sony Music Entertainment
In their briefs to the Court, Sony and Cox offer predictably divergent interpretations of the facts at hand. According to Cox, record labels flood ISPs with millions of automated notices procured by bots. Importantly, these notices often contain unreliable information. Moreover, suspending services may punish a household (or entire airport terminal) for the actions of one user. Sony, meanwhile, argues that Cox’s “thirteen strike” infringement policies are woefully inadequate and that ISPs drag their feet because it favors their bottom line: “While Cox waxes poetic about the centrality of Internet access to modern life, it neglects to mention that it had no qualms about terminating 619,711 subscribers for nonpayment over the same period that it terminated just 32 for serial copyright abuse.”
By granting cert in Cox, the Supreme Court can clarify how Grokster should apply to ISPs. While it is easy to see how a file-sharing service can know its customers are misusing its platform, an ISP’s product is the entirety of the internet. Sony’s main argument is that Cox materially contributed to the efforts of infringing subscribers by allowing them to access their subscriptions after learning of their infringement. Cox’s basic position is that the internet is a passive utility that does not induce any kind of behavior at all.
Federal circuits set three different thresholds at which ISPs break the Grokster standard by materially contributing to a subscriber’s infringement. The Second and Tenth Circuits impose liability if an ISP has knowledge of infringement and takes an affirmative step to promote it. The Ninth Circuit does so if an ISP has knowledge and fails to take reasonable steps to remove infringing content. Finally, the Fourth Circuit imposes liability if an ISP knows that a subscriber’s infringement was “substantially certain” to result from continued access. In this case, the Fourth Circuit found that Cox was contributorily liable. However, they reversed the trial court’s finding of vicarious liability for the initial acts of piracy. The Supreme Court declined to take up the issue of vicarious liability but granted cert to review the finding of contributory copyright infringement.
In addition, the Court decided to investigate the Fourth Circuit’s finding that Cox’s infringement was “willful” – a standard that ratchets up the statutory damages possible under the Copyright Act. This relatively straightforward piece of statutory interpretation increases the maximum possible damages per infringed work from $30,000 to $150,000. In the lower courts, Cox’s willful infringement resulted in an award totaling over $1 billion for Sony and its co-plaintiffs.
What’s at stake?
The implications of the doctrinal dispute are far larger than the (admittedly eye-popping) damages that hang in the balance. Most immediately, the Supreme Court must decide whether the DMCA’s safe harbor allowed Cox to retain repeat infringers as customers without materially contributing to piracy. Groups filing amici in support of Cox include the ACLU, major tech companies, and the Trump administration. These briefs broadly emphasize that ISPs are not content-policing organizations, that the DMCA safe harbor must protect the basic operations of running a network, and that imposing monitoring duties would chill online speech. In their most recent brief, however, Sony argues that Grokster never displaced older precedents of secondary liability holding that “those who provide goods or services to a specific customer with the expectation that [they] would be used to infringe are contributorily liable if they are.”
A ruling for Cox will further impede copyright holders’ efforts to enlist telecom companies in their battle with online piracy. A ruling for Sony would impose a range of affirmative duties on ISPs to increase surveillance and penalization of ordinary users. Oral argument is set for December 1, 2025.