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In case involving claims against internet service provider for contributory copyright infringement, U.S. Supreme Court holds that contributory infringement can arise only where service provider affirmatively induces third party’s infringement or provides service tailored to infringement, not where it provides service with mere knowledge it will be used for infringement.
Sony Music Entertainment and other major music copyright owners sued Cox Communications, an internet service provider (ISP) serving approximately 6 million subscribers across the United States—including individual households, businesses and smaller regional ISPs—for vicarious and contributory copyright infringement. Sony alleged that Cox knew that some of its subscribers were using its internet services to commit copyright infringement, yet continued to provide those subscribers with access to its services. Over a two-year period, Cox received 163,148 notices alleging copyright infringement by its subscribers. The notices identified the IP addresses associated with the alleged infringement but did not (and could not) identify the specific users associated with those IP addresses.
Cox implemented a system to address the infringement notices, which included sending warnings to subscribers, temporarily suspending service pending subscribers’ responses to notices and, in some instances, terminating service. Sony contended that the notices rarely resulted in termination of internet access, noting that Cox terminated only 32 subscribers for infringement during the relevant two-year period. Cox, however, maintained that its warning and suspension system halted 98% of the identified infringing activity.
Following a trial in the U.S. District Court for the Eastern District of Virginia, a jury found Cox liable for both vicarious and contributory infringement and awarded plaintiffs $1 billion in statutory damages. Cox appealed to the Fourth Circuit, which reversed as to vicarious liability, holding that Cox did not receive a direct financial benefit from its subscribers’ infringement, but affirmed the finding of contributory infringement. In doing so, the Fourth Circuit stated that “supplying a product with knowledge that the recipient will use it to infringe copyrights is exactly the sort of culpable conduct sufficient for contributory infringement.” (Read our summary of the Fourth Circuit decision here.) Cox then petitioned the U.S. Supreme Court, which granted certiorari solely on the issue of contributory infringement.
The Supreme Court reversed the Fourth Circuit’s holding on that issue. Writing for the Court, Justice Clarence Thomas explained that a service provider is contributorily liable for a user’s infringement only if it intended that its service be used for infringement. To establish such intent, the Court held, a copyright owner must demonstrate one of two circumstances: (1) that the provider actively encouraged infringement through specific acts, such as marketing or promoting its service as a tool for infringing copyrights, or (2) that the provider’s service was tailored to infringement such that it was not capable of substantial or commercially significant non-infringing uses. The Court found these limiting principles in its earlier decisions in Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd. and Sony Corp. of America v. Universal City Studios, Inc., emphasizing that mere knowledge that a service will be used to infringe is insufficient to establish the required intent to infringe.
Applying these principles, the Court concluded that Cox could not be held liable for contributory infringement. The Court found no evidence that Cox marketed or promoted its internet services as a means of infringing copyrights, and determined that Cox’s services were “clearly” capable of substantial non-infringing uses. As the Court explained, “Cox simply provided Internet access, which is used for many purposes other than copyright infringement.” Cox’s knowledge that some of its subscribers were engaging in infringement was therefore insufficient to establish liability.
Sony argued that reversal would undermine the Digital Millennium Copyright Act (DMCA), which provides a safe harbor for ISPs that terminate service for repeat infringers “in appropriate circumstances,” and contended that Congress must have intended that ISPs face liability when they fail to terminate service for such infringers. The Court rejected this argument, reasoning that the DMCA merely created new defenses from liability for ISPs and should not be read to imply liability for those who fail to satisfy the statute’s safe-harbor requirements.
Justice Sonia Sotomayor, joined by Justice Ketanji Brown Jackson, concurred in the judgment only and criticized the majority for limiting secondary liability to cases involving inducement or services tailored to infringement. She argued that neither the Copyright Act nor the Court’s decisions in Grokster and Sony imposed such a constraint, and contended that those cases contemplated secondary liability under other common-law theories, such as aiding and abetting. She also accused the majority of undermining the statutory incentive structure established in the DMCA, asserting that under the Court’s rule, “an ISP faces no liability if it sells an internet connection to a company that the ISP knows runs a website that exclusively hosts illegally obtained copyrighted material.”
Nonetheless, Justice Sotomayor concluded that even under an aiding-and-abetting theory, Cox would not be liable. She explained that aiding and abetting requires, at a minimum, specific knowledge of another’s infringing activity such that it would be reasonable to infer that the defendant provided assistance with the intent to facilitate infringement. Because the infringement notices sent to Cox identified only IP addresses—not specific infringing users—Cox lacked information regarding which individual subscribers would commit infringement using its network. Accordingly, she reasoned, “it is not reasonable to infer that Cox intended to aid infringement committed by another person simply because it provided an internet connection to some unknown infringer.”
Summary prepared by Frank D’Angelo and Edward Delman
