Cox Wins US Court Ruling Curbing Music Copyright Suits (Correct)

The US Supreme Court threw out a copyright-infringement verdict against Cox Communications Inc., dealing a major blow to music industry efforts to hold internet providers responsible for piracy by their customers.

Voting unanimously, the justices said Cox couldn’t be held liable for failing to shut down the accounts of people who repeatedly downloaded and distributed songs without permission. A federal appeals court had upheld a finding that Cox contributed to infringement by its subscribers.

“Cox neither induced its users’ infringement nor provided a service tailored to infringement,” Justice Clarence Thomas wrote for the court.

The ruling is likely to affect a similar music industry suit that seeks as much as $2.6 billion from Verizon Communications Inc. The Cox case at one point involved a $1 billion award.

The music companies that sued Cox — including units of Sony Group Corp., Warner Music Group Corp. and Universal Music Group NV — said they found more than 160,000 instances of infringement in 2013 and 2014 through monitoring peer-to-peer platforms. The recording companies said Cox went out of its way not to terminate those customers, giving users 14 chances before they were disconnected and then developing an informal policy of immediately reactivating accounts.

Although the decision to reject the suit was unanimous, Justices Sonia Sotomayor and Ketanji Brown Jackson said the court went too far in insulating internet service providers. Sotomayor said the court should have left open the possibility of suits against companies that intentionally assist specific instances of infringement.

Reasoning Criticized

The court’s reasoning “permits ISPs to sell an internet connection to every single infringer who wants one without fear of liability and without lifting a finger to prevent infringement,” Sotomayor wrote for the pair.

Thomas said the US Copyright Act allows suits for contributory infringement only if a company affirmatively induces piracy or designs its service in a way that makes infringement the only commercially significant use.

“Under our precedents, a company is not liable as a copyright infringer for merely providing a service to the general public with knowledge that it will be used by some to infringe copyrights,” Thomas wrote.

Cox told the justices that a ruling in the music industry’s favor would force carriers to terminate service for millions of innocent people to avoid the risk of massive damage awards.

The music companies said Cox could be sued for contributory infringement because the company knew subscribers were using its service to download songs illegally.

A federal jury in Alexandria, Virginia, found in 2019 that Cox willfully enabled subscribers to copy more than 10,000 works using peer-to-peer networks. The jury awarded $1 billion, or almost $100,000 per instance of infringement.

The 4th US Circuit Court of Appeals upheld a jury’s finding of contributory infringement, though the three-judge panel tossed out the $1 billion damage award along with a different part of the verdict.

The case is Cox Communications v. Sony Music Entertainment, 24-171.

(Corrects word ISPs in seventh paragraph.)

To contact the reporter on this story:
Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editors responsible for this story:
Elizabeth Wasserman at ewasserman2@bloomberg.net

Steve Stroth

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