Cox’s Supreme Court Win Damaging—Not Fatal—to Copyright Owners

The US Supreme Court’s decision clearing Cox Communications Inc. of contributory copyright infringement drastically restricted the scope of platform liability, but left content owners a harder case to make rather than true immunity.

The March 25 opinion didn’t immunize ISPs, e-commerce sites, or social media platforms that ignore piracy, law professionals said. But the seismic shift in the landscape will still push content owners toward untested legal strategies—and likely to Congress.

Justice Clarence Thomas’ broad, unqualified language held a provider must either design their products to infringe or actively encourage infringement, leaving unanswered questions about provider obligations and incentives. But while ISPs and most online platforms don’t advertise their services as piracy tools, attorneys expressed uncertainty over how high the bar sits in practice.

Despite rightsowners’ concerns that the Cox decision would gut the notice-takedown regime of the Digital Millennium Copyright Act, IP attorney Suzanne M. Hengl of Baker Botts disagreed. Thomas detailed Cox’s enforcement, a signal, she said, that how a platform responds to takedown notices still matters to the court.

“I don’t think it’s a get-out-of-jail-free card to not respond to DMCA takedown notices,” Hengl said. Largely because there’s still a path to go after platforms that ignore copyright, she said “I don’t think there will be a material shift” in online enforcement.

But the ruling substantially increases the burden on rightsholders, IP law professor Justin Hughes of Loyola Marymount University said. He noted the justices explicitly tried to align copyright and patent law, and in doing so “they’ve completely thrown out of sync copyright and trademark law.” A “willful blindness” standard comparable to trademark law likely won’t fly, he said.

“I would find that needle hard to thread if I were an appellate judge,” Hughes said.

Inducing an Inducement Finding

Congress said the Copyright Act of 1976’s exclusive right to “authorize” use of a work implies statutory inclusion of contributory liability in a report issued shortly before it became law. But Thomas’ opinion said that because contributory infringement wasn’t explicitly in the law, the court was “loath” to expand on the two paths already sanctioned by the Supreme Court.

Thomas’ opinion didn’t distinguish between ISPs, social media, e-commerce, or any other kind of accused contributory infringer, suggesting a universal standard. But the nature of applying those two paths—product design and inducement—may functionally vary depending on platform type, and a clear boundary hasn’t been set.

What’s clear though is the effective end of content owners’ ability to “offload the cost of enforcement to ISPs,” IP law professor Saurabh Vishnubhakat of Cardozo Law School said.

“ISPs are no longer an efficient choke point. You can’t dragoon them into being the copyright police for you on your behalf anymore,” he said. “Active encouragement is infringement, passive tolerance is not.”

The key question now is how broadly courts will read the inducement standard. The 2005 decision in Metro-Goldwyn-Mayer Studios Inc. v. Grokster Ltd., which Thomas cited as the source of that doctrine, involved services that overtly invited piracy. But the bar might be considerably easier to clear than that, Hengl said.

“We’re going to see a deeper dive into whether that inducement prong can be extended to internet service providers that are not just used to provide internet connectivity,” Hengl said.

IP attorney Jeffrey A. Wakolbinger of Bryan Cave Leighton Paisner LLP won’t rule out that an ISP completely blowing off efforts to stop copyright pirates could still trigger a trademark-like “willful blindness” standard. Beyond ISPs, courts could find content hosts like social media and e-commerce sites “much less of a sympathetic actor,” he said.

“I don’t know that this decision would give me that high a level of confidence if I was running a marketplace that all bets are off,” he said. “I still think there’s some risk there.”

Other Pathways

Vicarious infringement, which unlike contributory infringement doesn’t require intent or even knowledge, also remains a threat for non-ISP platforms. Cox escaped a vicarious liability verdict because there wasn’t evidence it profited from the infringement directly. But it could be easier to show infringing works or goods tangibly benefit a site by drawing users and keeping their attention, Hughes said.

“If I were giving legal advice to sites hosting IP, I’d say vicarious liability is still a sticky wicket and we have to be careful,” he said.

Beyond copyright infringement, legal professionals expect a significant effort by content industries to lobby Congress for legislation expanding contributory liability. Wakolbinger said Congress could craft a new broader contributory liability standard, putting more responsibility on platforms than Thomas’ opinion.

Hengl said content companies could also go abroad and take advantage of more aggressive tactics like site-blocking that’s possible in the EU, which could cut off some paths of infringing material into the US. Hughes said a “silver lining” of the decision could be an impetus for the kind of site-blocking legislation Reps. Darrell Issa (R-Calif.) and Zoe Lofgren (D-Calif.) have been pushing.

“The Cox case was about the efficient suppression of demand for pirated work. Site-blocking is about the tools for efficient suppression of supply,” Hughes said.

Even if courts and Congress don’t provide a robust legal fear of liability, business relationships with content industries and reputational risk provides incentives to continue enforcing rights. Wakolbinger said enforcement—both copyright and trademark—is “good business” as big platforms generally don’t want to be known as a pirate site.

But he still sees legal risk in ignoring infringement. “I do think any respectable marketplace will continue to act on takedown notices,” he said.