SCOTUS Challenges Cox's Claim That It's Not Liable for Piracy

During the roughly 100-minute oral argument, Orrick attorney Joshua Rosenkranz, representing petitioner Cox, said the company's biggest recidivist infringers include traffic from regional ISPs, hospitals and universities. Those organizations and businesses would be the ones most likely cut off from internet service if the court found that Cox was liable for contributory copyright infringement, he said.

While the 4th Circuit held that an ISP can be liable for not doing enough to kick off an accused infringer, copyright law can't support that, Rosenkranz added. He cited SCOTUS' 2021 Twitter case, in which the court held that there's no duty for communications providers to terminate a customer who they find out is using the service for illegal ends. The consequences of finding a communications provider culpable for infringement for merely knowing that a customer might be doing it would be "cataclysmic."

Justice Sonia Sotomayor said she was "troubled" that Cox "stopped doing anything" about many reported infringers and made no effort to curb infringement activity. "Your client's sort of laissez-faire attitude toward the respondents is probably what got the jury upset."

The idea that Cox did nothing about its broadband subscribers' piracy "is absurd," Rosenkranz said, pointing to its program that sent out hundreds of warnings a day and stopped infringement by 98% of those accused of such activity. He said Cox can't see in real time what subscribers are doing, and it has limited knowledge of their infringement activities.

Justice Ketanji Brown Jackson said she was "concerned" that Cox was encouraging the court to adopt a common law approach that would eliminate ISPs' liability, when the legislative history of the Digital Millennium Copyright Act shows that Congress set up safe harbor protections for ISPs so they would have an incentive to detect and deal with infringement.

Rosenkranz replied that at the time, there were no such things as conduit ISPs, as the AOLs of the world were hosting content. When the DMCA was passed, Congress "had no idea" about ISP liability issues.

Justice Samuel Alito questioned whether Cox has a financial incentive not to be known as particularly aggressive among its ISP competition in terminating infringers. That may be true, Rosenkranz said, but Cox also had a track record of reducing infringement and established a program for deterring piracy. The 4th Circuit found that it didn't have a financial incentive to increase infringement, he noted.

Justice Amy Coney Barrett pressed Rosenkranz on a hypothetical of a social media platform that knew a particular account was used for child trafficking, asking where liability would fall in that case. Rosenkranz said that while the platform wouldn't be liable, one could imagine SCOTUS carving out an exception in cases of imminent danger. But absent that carve-out, SCOTUS' Twitter decision held there's no duty to terminate customers after discovering that they're using a service for illicit ends, he said.

Sotomayor also went back and forth with Rosenkranz about whether Cox is liable when the infringer's identity is pretty evident, such as when the infringement is happening at a single-family home. If Cox knows someone in that home is violating copyright, she asked, how could providing internet service not be seen as participating in that infringement? Rosenkranz said the court's 2023 Smith & Wesson decision explicitly said that among other things, there have to be actions that stimulate further illicit activity for there to be culpability.

Under questioning by Justice Elena Kagan, Rosenkranz acknowledged that while Cox's briefs talk about being a good corporate citizen, even a bad corporate citizen would still not be liable in the same circumstances. The company's good corporate citizen language was intended to make its point about why an ISP would continue to police infringement, even if SCOTUS found there's no liability.

Music Labels Fight Back

SCOTUS has recognized that liability for copyright infringement extends to those who induce, cause or materially contribute to infringement by others, said Paul Clement of Clement & Murphy, representing the respondent music labels. There's no dispute that Cox provided service to known infringers with substantial knowledge that they would keep infringing, he said. That's why the ISP is taking an "extreme position that they can continue to provide service to habitual abusers in perpetuity without consequences." Clement said adopting such a view would kill the DMCA. "Why bother having a reasonable and appropriate system for taking down repeat infringers if you're allowed to behave entirely unreasonably?"

In addition, Clement argued that if the music labels lose, copyright holders would be in "very, very dire straits," as they would lack any "scalable, functional recourse" to fight infringement. ISPs would also be less incentivized to talk with the content community about issues and solutions, he said.

Asked what ISPs are supposed to do about group accounts with many users, such as those for a university, Clement noted that hotels don't provide guests with service at speeds that enable peer-to-peer file sharing in an effort to avoid enabling piracy. "It wouldn't be the end of the world" if universities similarly throttled students' speeds.

Deputy U.S. Solicitor General Malcolm Stewart told the justices that in trying to create a model for liability jurisprudence, the Patent Act's definition of contributory infringement makes clear that selling a device not capable of substantial non-infringing uses makes one liable. He said it would be "unusual" for the court to adopt a copyright rule that ignores patent law. Under questioning, Stewart acknowledged that ISPs wouldn't have considerable economic incentive to control infringement. The Solicitor General's Office previously told SCOTUS that the 4th Circuit decision conflicts with Supreme Court precedent (see 2505280001).