On March 25, the U.S. Supreme Court held that an internet service provider (ISP) may be contributorily liable for a user’s copyright infringement only if the ISP intended for its service to be used for infringement or if the service provider affirmatively induced infringement. The unanimous decision clarifies the intent requirement for contributory copyright infringement, and restricts efforts to impose secondary liability on ISPs based primarily on notice-and-knowledge theories.
The Cox Communications, Inc. v. Sony Music Entertainment case arose after Sony Music and other copyright owners complained Cox continued to provide internet access to subscribers whose IP addresses were repeatedly identified in infringement notices generated by Markmonitor. A jury in the Eastern District of Virginia found Cox liable for contributory and vicarious infringement, found willfulness, and awarded $1 billion in statutory damages (later vacated on appeal after the Fourth Circuit reversed on vicarious liability but affirmed contributory liability).
The Supreme Court reiterated that the Copyright Act does not expressly impose secondary liability, and emphasized its reluctance to expand judge-made secondary liability beyond established precedent. Instead, the Court held, contributory liability turns on intent, which may only be shown via (1) inducement (active encouragement through specific acts) or (2) providing services “tailored to infringement” (i.e., not capable of substantial or commercially significant non-infringing uses). The Court stressed that mere knowledge a service will be used for infringement—without more—is insufficient, and that contributory liability cannot rest on an ISP’s failure to take affirmative steps to prevent infringement.
Applying those principles, the Court found no evidence that Cox promoted or encouraged infringement; to the contrary, Cox’s policies included warnings, suspensions, and terminations – as such, Cox’s service was not “tailored to infringement.” The Court likewise found that Sony presented no “evidence of express promotion, marketing, and intent to promote” infringement by Cox. Likening Cox’s services to general internet access, the Court found them “capable of ‘substantial’ or ‘commercially significant’ noninfringing uses.” The Court also rejected the Fourth Circuit’s findings that supplying a service with knowledge the recipient will use it to infringe, is, by itself, “sufficient for contributory infringement,” noting that such an approach conflicts with earlier Supreme Court decisions relating to at-home recording (Sony Corp. of America v. Universal City Studios, Inc., 464 U. S. 417 (1984)) and peer-to-peer file sharing (Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U. S. 913 (2005)).
Sony argued that rejecting this rule undermines the DMCA’s repeat-infringer provision. The Court disagreed, explaining that the DMCA does not itself impose liability for servicing known infringers; it creates defenses, and failure to qualify for the safe harbor “shall not bear adversely” on a provider’s defense that its conduct is not infringing.
For copyright owners, Cox severely narrows a common litigation path: secondary liability claims premised on notice and continued service now face a steeper climb to success, absent evidence the provider actively encourages infringement or that the services are “good for nothing else” besides infringement. For ISPs, while the decision appears to broaden protection against notice-based theories at first glance, Justice Sonia Sotomayor and Justice Ketanji Brown Jackson cautioned that the decision does eliminate their obligation “to take reasonable steps to prevent copyright infringement on their networks.”
For more information on this ruling, please contact Fitch Even partner Mary F. Fetsco, author of this alert.
Fitch Even IP Alert®
Mary F. Fetsco
Mary F. Fetsco has a diverse IP practice with a particular focus on litigation. Her experience includes brand enforcement and trademark infringement litigation, as well as patent licensing and infringement litigation.