Dear Doc:
Talk about whiplash! First, I read that Cox Communications (a major cable TV company and internet service provider (ISP)) got hit with a jury verdict of (best Doctor Evil impression here) ONE BILLION DOLLARS for copyright infringement committed by its subscribers. Then, just this week, I heard that the Supreme Court REVERSED that award, so Cox gets to walk away. Doc, what gives? Has the Supreme Court LOST ITS MOTHER-LOVING MIND???
Signed,
Dased & Confuzed
Dear D&C:
Let’s leave psychoanalysis of the Highest Court in the Land to the professionals (and by that, the Doc means the diverse hosts over at Fox “Everybody knows that we are just entertainment” “News”.)
On March 25, 2026, the Supreme Court of the United States reversed the Fourth Circuit’s judgment upholding contributory copyright liability in Cox Communications, Inc. v. Sony Music Entertainment, and remanded the case, in which a jury had awarded $1 billion in statutory damages. The Court held that an internet service provider (ISP) is not contributorily liable for its subscribers’ copyright infringement merely because it continued to provide service to IP addresses associated with known infringement.
Background
Cox serves abut six million internet subscribers. Sony Music and other major music copyright owners used a surveillance company, MarkMonitor, to track copyright violations down to particular IP addresses. Over a two-year period, MarkMonitor sent Cox over 163,000 notices identifying IP addresses associated with copying. Cox employed a “graduated” response system, first sending warnings, then, if copying continued, suspending service for a time, and finally for repeat offenders, terminating service. Sony told the Court that Cox terminated only thirty-two subscribers for copyright infringement during the two year period.
The jury found for Sony on both “contributory” and “vicarious liability” theories, found Cox’s infringement willful, and awarded $1 billion in statutory damages. The Fourth Circuit Court of Appeals upheld the judgment on contributory liability but reversed on vicarious liability, finding no direct financial benefit to Cox from the infringement, and it vacated the damages award for reassessment.
The Supreme Court Opinion
Justice Thomas, writing for a rare seven-Justice majority (with the other two justices even more rarely concurring in the judgment), held that contributory copyright liability requires proof that the provider intended its service to be used for infringement, which can be established in only two ways: (1) if the provider induced infringement through specific acts, or (2) if the service was tailored to infringement, meaning it is not capable of substantial or commercially significant noninfringing uses.
The Court found that Cox, “repeatedly discouraged copyright infringement by sending warnings, suspending services, and terminating accounts,” and its service “simply provided Internet access, which is used for many purposes other than copyright infringement.”
Justice Sotomayor, joined by Justice Jackson, concurred in the judgment, but criticized the majority for “unnecessarily limit[ing] secondary liability.” Justice Sotomayor concurred because Cox lacked specific knowledge of who committed the infringement—it knew only which IP address was involved. In other words, it knew the address of the subscriber, but not the identity of the person using the service to copy songs—and that “informational gap” was “fatal” to the requisite showing of intent. She cautioned, that by requiring independent volitional conduct such as either inducing infringement or providing an infringement-only tool, the majority’s framework arguably risks rendering the Digital Millennium Copyright Act’s “repeat infringer policy” requirements a dead letter, since an ISP would have little incentive to police repeat infringers when mere knowledge of their activity no longer triggers contributory liability.
What It All Means
This decision significantly limits knowledge-based contributory liability theories of contributory liability. Copyright owners will now need to show either (i) active inducement by the ISP (such as providing instructions on how to copy) or (ii) a service specifically tailored for infringement that has no legitimate other uses. The Doc cautions that it is still absolutely illegal and wrong to pirate music, movies and other intellectual property over the Internet. Nothing in this case changes that. For giant corporations that run the Internet, however, its nothing but good news from the Court – they effectively profit from allowing copying to continue. IP rights owners now need to track down the person in the house who’s doing the copying and that is effectively impossible.
Do you have a question about intellectual property rights? Contact the attorneys at LW&H. They keep up with the latest decisions, opinions, and just plain hallucinations from across the Internet (and remember, according to the late US Senator Ted Stephens (R-AK) “The Internet is not a big truck. It’s a series of tubes.”
Until next month,
The “Doc”
— Lawrence A. Husick, Esq.