US Supreme Court: Provider not liable for file-sharing
Internet access providers are not liable for their customers' illegal file-sharing, says the US Supreme Court. This saves the entire industry.
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“Cox simply provided Internet access, which is used for many purposes other than copyright infringement,” the US Supreme Court stated in a long-awaited ruling. “Cox is not contributorily liable for the infringement of Sony’s copyright.” The provider Cox Communications was ordered to pay one billion US dollars in damages based on a judgment by a US federal district court because it had not shut off all customer connections that were repeatedly used for illegal file-sharing.
To be liable as a contributory infringer, the defendant must have intended for their service to be used for infringement. The plaintiff must either show that the service is tailored to copyright infringement or that the provider has affirmatively encouraged infringement. Since the plaintiffs have demonstrated neither, seven of the nine Supreme Court justices reject liability. Mere knowledge that some customers are doing illegal things is therefore not a basis for liability (Cox Communications et al. v. Sony Music Entertainment et al, Case No. 24–171).
The other two female judges agree with this but believe that their colleagues should have also examined older grounds for liability. They argue that excluding these will allow companies to evade responsibility too easily.
The Lawsuit
Rights holders continuously inform Cox about apparently unlawful file-sharing transmissions from IP addresses on the Cox network. Cox forwards warnings to its customers and also blocks access for some; however, from the rights holders' perspective, this was not enough. A group led by Sony Music Entertainment therefore sued Cox in the US District Court for the Eastern District of Virginia (Sony Music et al. v. Cox Communications et al, Case No. 1:18-cv-00950).
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In 2021, a jury there ruled that Cox was liable for unauthorized copies of 10,017 musical works by its customers and had to pay one billion dollars. Cox was held liable both vicariously (vicarious infringement) because it collected money for the illegally used internet access and as a contributory infringer (contributory infringement). This verdict was only partially upheld on appeal: The Fourth Circuit Court of Appeals found no vicarious liability; while Cox collects money for internet access, it does not do so for illegal file-sharing. However, the Internet Service Provider (ISP) was still liable as a contributory infringer (Case No. 21-1168).
Now, the Supreme Court has put an end to this theory of liability as well. Rights holders should pursue copyright infringers directly, not their access providers. This is not entirely simple in practice: under US copyright law, access providers are not required to simply reveal who their customers are.
Dissenting Opinion
The majority of the Supreme Court justices refuse to consider liability for aiding and abetting under common law. The two justices, Sonia Sotomayor and Ketanji Brown Jackson, consider excluding this to be a mistake, especially since vicarious liability and contributory liability also arose from Supreme Court rulings. Nothing in the law addresses these.
For liability under aiding and abetting, it is also necessary that the defendant targeted the infringement, which was not the case with Cox. Even the rights holders' notifications about specific IP addresses did not change this, because while the ISP could identify the account holder, it still did not know which *users* were specifically responsible. Therefore, Cox would not be liable under common law either.
However, fundamentally denying this older basis for liability in copyright cases has negative consequences. Certain liability exemptions under the more recent Digital Millennium Copyright Act (DMCA) for internet providers who behave cooperatively would become meaningless. ISPs like Cox would no longer have to care at all whether their customers engage in illegal file-sharing and could ignore relevant notifications from rights holders.
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