Cox v Sony: Analyzing the Supreme Court Decision

Cox v Sony
Contributory infringement
The U.S. Supreme Court released an important decision on the scope of U.S. secondary liability for copyright infringement applied to ISPs in Cox Communications, Inc. et al. v. Sony Music Entertainment et al., 607 U.S. ——- S.Ct. —-2026 WL 815823. The syllabus of the court summarized the case and the court’s opinion are set out below. My comments on the case follows the summary of the Cox v Sony opinion of the SCOTUS.

Cox v Sony case summary

Under the Copyright Act, “[a]nyone who violates any of the exclusive rights of the copyright owner … is an infringer of the copyright.” 17 U.S.C. § 501(a). This Court has also recognized two categories of secondary liability, which means liability for the copyright infringement of another. Those two categories are “contributory” liability and “vicarious” liability. Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 930, 125 S.Ct. 2764, 162 L.Ed.2d 781.

This case concerns contributory liability, which requires that a provider intended its service to be used for infringement. A copyright owner can show the requisite intent in two ways. First, it can show that a party affirmatively induced the infringement. Ibid. Second, it can show that the party sold a service tailored to infringement. Id., at 942, 125 S.Ct. 2764 (Ginsburg, J., concurring). These two bases for contributory liability track patent law. See 35 U.S.C. §§ 271(b), (c).
Cox Communications, Inc., is an Internet service provider serving approximately six million subscribers, each associated with a unique Internet Protocol address. Internet service providers like Cox have limited knowledge about how their services are used; they know which IP address corresponds to which subscriber account but cannot distinguish individual users or directly control how services are used. Cox contractually prohibits subscribers from using their connection to post, copy, transmit, or disseminate content that infringes copyrights.
Sony Music Entertainment and other major music copyright owners enlisted MarkMonitor to track copyright infringement across the Internet. MarkMonitor’s software detects when copyrighted works are illegally uploaded or downloaded and traces the activity to particular IP addresses. During the roughly two-year period at issue, MarkMonitor sent Cox 163,148 notices identifying IP addresses of Cox subscribers associated with infringement.
Sony sued Cox in Federal District Court, advancing two theories of secondary copyright liability. First, Sony alleged that Cox contributed to its users’ infringement by continuing to provide Internet service to subscribers whose IP addresses Cox knew were associated with infringement. Second, Sony alleged that Cox was vicariously liable for its users’ infringement. The jury found in favor of Sony on both theories, found Cox’s infringement willful, and awarded $1 billion in statutory damages. The District Court denied Cox’s post-trial motion for judgment as a matter of law in relevant part. The Fourth Circuit affirmed as to contributory liability, reasoning 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. The Fourth Circuit reversed as to vicarious liability. This Court granted Cox’s petition for certiorari as to contributory liability.
Held: The provider of a service is contributorily liable for a user’s infringement only if it intended that the provided service be used for infringement, which can be shown only if the party induced the infringement or the provided service is tailored to that infringement; Cox neither induced its users’ infringement nor provided a service tailored to infringement; accordingly, Cox is not contributorily liable for the infringement of Sony’s copyrights. Pp. 966 – 969.
(a) “The Copyright Act does not expressly render anyone liable for infringement committed by another.” Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 434, 104 S.Ct. 774, 78 L.Ed.2d 574. Ordinarily, when Congress intends to impose secondary liability, it does so expressly. Central Bank of Denver, N. A. v. First Interstate Bank of Denver, N. A., 511 U.S. 164, 176–177, 114 S.Ct. 1439, 128 L.Ed.2d 119. The Court’s precedents have recognized specific forms of secondary copyright liability that predated the Copyright Act, but the Court is loath to expand such liability beyond those precedents.
Under this Court’s precedents, the intent required for contributory liability can be shown only if the party induced the infringement or the provided service is tailored to that infringement. See Grokster, 545 U.S., at 930, 125 S.Ct. 2764; Sony, 464 U.S., at 440–441, 104 S.Ct. 774.
A provider induces infringement if it actively encourages infringement through specific acts, as in Grokster, where file-sharing software companies promoted and marketed their software as a tool to infringe copyrights. See 545 U.S., at 926, 125 S.Ct. 2764. A service is tailored to infringement if it is “not capable of ‘substantial’ or ‘commercially significant’ noninfringing uses.” Id., at 942, 125 S.Ct. 2764 (Ginsburg, J., concurring). For example, in Sony, the Court held that sale of the Betamax video tape recorder to the general public did not constitute contributory infringement. It reasoned that the tape recorder was “capable of substantial noninfringing uses” because it could be used to record copyrighted television programs for later personal viewing, which would not constitute infringement—even though it could also be used to reproduce and sell copyrighted programming, which would constitute infringement. 464 U.S., at 449, 456, 104 S.Ct. 774. The Court has repeatedly made clear—see Kalem Co. v. Harper Brothers, 222 U.S. 55, 32 S.Ct. 20, 56 L.Ed. 92, Sony, and Grokster—that mere knowledge that a service will be used to infringe is insufficient to establish the required intent to infringe. Pp. 966 – 968.
(b) Cox neither induced its users’ infringement nor provided a service tailored to infringement. As for inducement, Cox did not “induce” or “encourage” its subscribers to infringe in any manner, Grokster, 545 U.S., at 930, 125 S.Ct. 2764; Sony provided no “evidence of express promotion, marketing, and intent to promote” infringement, id., at 926, 125 S.Ct. 2764; and Cox repeatedly discouraged copyright infringement by sending warnings, suspending services, and terminating accounts. As for providing a service tailored to infringement, Cox’s Internet service was clearly “capable of ‘substantial’ or ‘commercially significant’ noninfringing uses,” id., at 942, 125 S.Ct. 2764; Cox simply provided Internet access, which is used for many purposes other than copyright infringement.
The Fourth Circuit’s holding went beyond the two forms of liability recognized in Grokster and Sony by holding that “supplying a product with knowledge that the recipient will use it to infringe copyrights is … sufficient for contributory infringement.” 93 F.4th 222, 236. This holding went beyond the two bases for contributory liability recognized in the Court’s precedent and conflicted with the Court’s repeated admonition that contributory liability cannot rest only on a provider’s knowledge of infringement and insufficient action to prevent it. Pp. 968 – 969.
(c) Sony argues that the Digital Millennium Copyright Act safe harbor—under which Internet service providers cannot be secondarily liable for certain forms of copyright infringement if they have implemented “a policy that provides for the termination in appropriate circumstances of subscribers and account holders” who “are repeated infringers,” 17 U.S.C. § 512(i)(1)(A)—would have no effect if Internet service providers are not liable for providing Internet service to known infringers. The DMCA does not expressly impose liability for Internet service providers who serve known infringers; it merely creates new defenses from liability for such providers. The DMCA itself made clear that failure to comply with the safe-harbor rules “shall not bear adversely upon … a defense by the service provider,” as here, “that the service provider’s conduct is not infringing.” § 512(l). P. 969.

Comments on Cox v Sony

There was a concurring opinion of Justice SOTOMAYOR (with whom Justice JACKSON joined, concurring in the judgment). It noted that under the common law other forms of secondary liability existed such as aiding and abetting, recently considered by the court in decisions such as Twitter, Inc. v. Taamneh, 598 U.S. 471 and that the majority decision unnecessarily restricted the development of such liability theories to secondary liability for  copyright infringement. 

My McCarthy Tetrault colleagues Steve Mason, Richard Lizius, Andrea Lee and I recently published a commentary on the Cox v Sony case in the blog post U.S. Supreme Court Narrows ISP Liability for Copyright Infringement — What Cox Communications, Inc. v. Sony Music Entertainment Means for Canada. We noted, among other things, the following as to how the Cox case is relevant for Canada:

First, as a matter of statutory law, Canadian copyright cases often turn on whether the alleged secondary infringer has “authorized” infringement under Section 3(1) of the Copyright Act. There are many different formulations of the test for authorizing infringement. While they parallel some of the factors that U.S. courts look to in assessing contributory and vicarious liability, the tests are not the same.

Second, as a matter of common law, Canadian courts have also recognized that common law accessorial theories of liability can apply in assessing secondary liability claims. Thus, under Canadian law, persons can be liable on accessorial (secondary) liability grounds if they induce or procure infringement, or act under a common design to infringe. These theories have their initial roots in tort principles and have much in common with the U.S. secondary liability principles, although the formulations of the tests have not evolved in exactly the same ways.

Thus, if this case had arisen in Canada, Sony’s case would have been advanced on both statutory ground (alleged authorizing of infringement) as well as common law (accessorial liability) theories. In both cases the statutory safe harbours would be raised by the ISPs.

The U.S. law related to the liability of intermediaries also diverges from laws in other territories including the European Union. The German copyright lawyer Jan Bernd Nordemann, for example, summarized a panel discussing the Cox v Sony case at Fordham noting that access providers like ISPs and hosting providers like Google (YouTube) may have other liabilities under several EU Directives.

 

 

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Barry Sookman
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