Supreme Court Questions $1 Billion Music Piracy Suit Against Cox

The US Supreme Court weighed giving internet providers a stronger shield from legal liability when customers pirate copyrighted works, questioning a $1 billion music industry copyright lawsuit against Cox Communications Inc.

Hearing arguments in Washington Monday, several justices expressed doubts about an appeals court ruling that partially upheld a jury verdict against Cox. Units of Sony Group Corp., Warner Music Group Corp. and Universal Music Group NV are suing Cox for not shutting down the accounts of customers who repeatedly downloaded and distributed songs without permission.

Justice Samuel Alito indicated he viewed the ruling as imposing an unreasonable burden on internet service providers.

“What is an ISP supposed to do with a university account that has, let’s say, 70,000 users?” Alito asked Paul Clement, the lawyer representing the music companies.

The 4th US Circuit Court of Appeals said Cox could be held liable for contributing to infringement by subscribers, though the appeals court tossed out a different part of the verdict, along with a $1 billion award. The high court’s decision could affect several pending suits, including a similar music-industry case against Verizon Communications Inc.

Other justices expressed concern that a ruling too favorable to Cox would leave internet providers free to ignore clear evidence of copyright infringement by their users.

“What incentive would you have to do anything if you won?” Justice Amy Coney Barrett asked Joshua Rosenkranz, the lawyer for Cox.

The music companies say they found 160,000-plus instances of infringement in 2013 and 2014 through monitoring peer-to-peer platforms. The recording companies say Cox went out of its way to avoid terminating those customers, giving users 14 chances before they were disconnected and then developing an informal policy of immediately reactivating accounts.

Cox contends that under a 2005 Supreme Court ruling, the company can’t be held liable for contributory infringement unless it affirmatively fostered piracy or clearly intended to promote it. The music companies say it’s enough that Cox knew subscribers were using its service to download songs illegally.

Justice Sonia Sotomayor indicated she wasn’t comfortable with either position. “We are being put to two extremes here,” she said.

The Supreme Court could kick the case back to the lower courts for another look, upending the music companies’ victory without killing the lawsuit altogether.

The Supreme Court will rule by July in the case, Cox Communications v. Sony Music Entertainment, 24-171.

(Updates with excerpts from arguments starting in fourth 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

Anthony Aarons

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