Justices to Take Up ISP Copyright Liability for Users’ Acts (2)

The US Supreme Court will weigh the liability of internet service providers that fail to cut off subscribers who repeatedly steal music in the first high court case to examine a 1998 internet-and-copyright law.

Cox Communications Inc. will have an opportunity to convince the justices it shouldn’t be held liable for failing to terminate infringing subscribers as the high court on Monday agreed to hear its case. The justices denied a separate petition from music labels including Sony Music Entertainment and Warner Bros. Records Inc. to consider reviving a $1 billion jury award against Cox.

The cases center on the Digital Millennium Copyright Act’s requirement that online platforms maintain a termination policy for repeat infringers to qualify for the law’s safe harbor from liability for their users’ infringement. Music companies argue ISPs are an ideal bottleneck to address mass infringement yet collect subscription fees from known repeat infringers. ISPs counter that such liability represents a draconian solution that would force them to deny vital internet access over mere allegations.

The high court has never heard any case directly addressing the 27-year-old DMCA, IP attorney Rom Bar-Nissim of Heah Bar-Nissim LLP noted. He said it’s hard for legislators to keep up with technology, so “any law that affects the internet is already outdated by 10 years, if not more” by the time it’s enacted.

The US Justice Department in May urged the high court to take up Cox’s petition, siding with the ISP’s position. Other entities weighed in on both sides. Electronic Frontier Foundation legal director Corynne McSherry said the US solicitor general’s brief did well to outline the stakes.

“This decision is going to matter for the internet in a number of ways. If ISPs have to lean heavily toward cutting people off or risk a billion dollars in damages, they’re going to be a lot faster to cut people off. We all rely on the internet for everything all the time,” she said. “I want ISPs to bend over backwards before cutting off a vital public service.”

Cox praised the court for taking its case.

“Today’s development supports our goal of protecting consumers, preserving open internet access, and ensuring that broadband remains a reliable resource for the communities we serve,” the company said in an emailed statement.

Sony’s counsel didn’t immediately respond to a request for comment.

The US Court of Appeals for the Fourth Circuit vacated a Virginia federal jury’s $1 billion verdict against Cox in February 2024. While it affirmed one of two secondary liability theories, the panel found it unknowable the degree to which the jury relied on an erroneous finding of vicarious liability to calculate the damages figure.

Cox also argued it shouldn’t be on the hook for willful infringement in a separate question that the judges also agreed to hear. The appeals court should’ve rejected a finding based on repeat infringers’ willfulness because the real question was whether Cox itself knew it was infringing by not terminating them, Cox said. Removing the willfulness finding would slash damages to a maximum of $30,000 per work after the jury awarded nearly $100,000 per song.

Still pending before the justices is a petition from Grande Communications Networks LLC challenging a Fifth Circuit ruling that, as in Cox’s case, upheld a basis for liability while overturning a jury’s damages finding. Grande characterized its petition, also slated for consideration at the justices’ June 26 conference, as “an ideal companion to Cox.”

Grande, like Cox, argued an ISP can’t be found contributorily liable for providing content-neutral internet access and failing to terminate subscribers based on allegations from third parties against an IP address.

Reaction

The music publishers’ petition said the vicarious liability finding—and the award—should’ve stood, arguing the panel wrongly found subscription fees from infringing customers didn’t satisfy the requirement that Cox profited from the infringement.

The Recording Industry Association of America expressed confidence that the justices will follow the Fourth Circuit in affirming “Cox’s willful failure to follow well-settled law contributed to massive infringement.”

“Congress made ISPs immune from monetary liability if they act with a modicum of responsibility” by imposing “real consequences on users who repeatedly violate creators’ rights,” the RIAA’s statement said. “Unfortunately Cox breached its part of that bargain.”

But EFF’s McSherry said while rightsholders have long wanted ISPs to “take a greater role as copyright cops,” providers have justifiably resisted. She also said the high court taking the solicitor general’s advice in not only granting Cox’s petition but also denying Sony and the publishers’ is “not a super good sign for Sony.”

Public advocacy group Public Knowledge senior counsel Meredith Rose added ISPs may not need the liability protection the DMCA offers.

“It’s not clear ISPs need that safe harbor. They might not meet the criteria for secondary infringement in the first place,” said Rose, adding there’s a good chance the justices side with the ISPs. “It’s a utility, almost like a power company. You can’t hold a power company liable for running electricity to people’s houses.”

Bar-Nissim, though, noted a trend toward copyright owners in the high court’s recent copyright decisions.

“It’s difficult to see where the court might go from here given the court’s current composition,” he said. “I certainly feel the court is moving in a more pro-rightsholder direction.”

He cautioned against such an outcome. Taking away internet access should require a higher standard than what’s required to kick an account off an internet platform such as YouTube, he said. A household could be booted off the internet because “someone in their parent’s basement” repeatedly infringed. He added that DMCA abuse happens frequently, with fraudulent takedown notices aimed not at enforcing rights but silencing critics or speech the filer doesn’t like.

“Collateral damage to innocent people could occur,” he said.

Orrick, Herrington & Sutcliffe LLP and Latham & Watkins LLP represent Cox. Oppenheim & Zebrak LLP and Hogan Lovells US LLP represent the music industry parties.

The cases are Cox Communications Inc. vs. Sony Music Entertainment, U.S., No. 24-171, cert. granted 6/30/25, Sony Music Entertainment vs. Cox Communications Inc., U.S., No. 24-181, cert. denied 6/30/25.