Supreme Court to Decide Landmark Case on Internet Service Provider Liability for Copyright Infringement

The U.S. Supreme Court has granted certiorari in Cox Communications, Inc., et al. v. Sony Music Entertainment, et al., setting the stage for a landmark decision for copyright infringement liability in the digital age. At issue is whether an internet service provider (ISP) may be held liable for contributory copyright infringement based on its customers’ repeated acts of piracy and what conduct from the ISP makes that infringement willful.

The case stems from a Fourth Circuit decision upholding a $1 billion judgment against Cox Communications. Several record labels sued Cox, alleging it failed to terminate the accounts of subscribers who repeatedly infringed copyrights, despite receiving numerous infringement notices. Cox had a graduated response system intended to comply with The Digital Millennium Copyright Act’s (“DMCA”) safe harbor provisions, issuing warnings and escalating to temporary service suspensions. According to Sony, subscribers received up to 13 or 14 warnings before termination. A jury found Cox willfully liable for contributory copyright infringement and awarded $1 billion in damages. The Fourth Circuit affirmed, ruling that Cox "materially contributed" to the infringement by continuing to provide internet service despite knowing of specific repeat offenders. The court also upheld the jury’s finding of willfulness and concluded that Cox failed to meaningfully enforce its copyright policy, disqualifying it from DMCA safe harbor protection.

Before the Supreme Court are two critical issues: (1) What level of involvement constitutes a “material contribution” under the doctrine of contributory infringement; and (2) Whether knowledge of another’s direct infringement supports a finding of willfulness? The resolution of these questions could significantly impact the scope of liability for ISPs and set a precedent for how aggressively copyright holders may pursue enforcement against internet providers.

This case has the potential to reshape the digital copyright enforcement landscape. A ruling narrowing contributory liability could insulate ISPs from broad accountability for user conduct, while a decision affirming the Fourth Circuit could incentivize stricter compliance regimes and termination policies across the industry. Honigman continues to closely monitor this development. Please reach out to a member of the Intellectual Property Department with any questions or for further assistance.