TorrentFreak Supreme Court Grants Cox’s Bid to Reexamine Liability for Pirating Subscribers

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Last summer, Cox Communications filed a petition at the U.S. Supreme Court, requesting a review of the Fourth Circuit ruling that held the company contributorily liable for pirating subscribers.

The internet provider ultimately challenged the $1 billion verdict from a Virginia jury in 2019, which went in favor of a group of major record labels, including Sony and Universal.

As Cox petitioned the Supreme Court, the music companies filed their own petition, hoping to expand the verdict. Specifically, they argued that the ISP should also be held liable for vicarious copyright infringement.

From the outset it was clear this would be a pivotal case with potentially broad consequences for many other ISPs and rightsholders dealing with similar copyright issues. After considering the arguments from both sides and the U.S. Government, the Supreme Court announced its decisions today.

Supreme Court Grants Cox’s Petition​

In the latest order list released this morning, the Supreme Court grants Cox’s petition for a writ of certiorari.

By granting Cox’s petition, the Supreme Court agrees to review crucial questions surrounding contributory copyright infringement. This includes a potential re-evaluation of how ISPs are required to respond to copyright infringement notices and what an appropriate “repeat infringer policy” entails.

Specifically, Cox presented the following question to the Supreme Court:

“Did the Fourth Circuit err in holding that a service provider can be held liable […] merely because it knew that people were using certain accounts to infringe and did not terminate access, without proof that the service provider affirmatively fostered infringement or otherwise intended to promote it?”

Contributory copyright infringement requires a finding that ISPs have “knowledge” of and “materially contribute” to piracy activities. However, Cox questions whether these elements are triggered upon mere receipt of multiple piracy notices from third-party rightsholders.

In addition, Cox also raised concerns about the jury’s “willfulness” ruling, which resulted in the maximum statutory damages of $150,000 per work. The ISP countered that knowledge of subscribers’ copyright infringements is not necessarily willful, if the company did not know that its own conduct was illegal.

Key Input from U.S. Solicitor General​

The highly anticipated decision comes just weeks after the U.S. Solicitor General filed an influential amicus brief, urging the Supreme Court to take precisely this path.

The Solicitor General argued that an ISP is not automatically liable for copyright infringement if it merely fails to terminate subscribers after receiving multiple notices. It warned that the Fourth Circuit’s verdict could have “broad negative implications for ISPs and their subscribers,” potentially leading to disconnections of many innocent users.

The brief also strongly argued that Cox’s actions were not “willful,” stating that “willfulness” generally requires knowledge or reckless disregard for the defendant’s own unlawful conduct, not just that of third parties.

While the reasoning of the Supreme Court is currently unknown, the decision matches the advice of the U.S. Solicitor General. This also applies to the separate cross petition filed by the record labels.

Supreme Court Denied Labels’ Petition​

In the same order batch this morning, the Supreme Court denies the labels’ petition for a writ of certiorari. Again, without providing any details for its reasoning.

The record labels were seeking to hold Cox vicariously liable, arguing that it profited directly from piracy by declining to terminate repeat infringers to keep their subscription fees.

The lower court previously dismissed this claim, but the labels asked the Supreme Court to take up the issue in their own cross-petition. This request was denied.

The denial is in line with the Solicitor General’s assessment that the Fourth Circuit correctly concluded Cox did not derive a direct financial benefit from the alleged infringements, or that its stance towards piracy acted as a draw to potential customers.

The record labels previously rebuffed the U.S. Government position, characterizing it as bewildering, but that didn’t yield a result.

Path Forward​

With Cox’s petition granted, the case will now be scheduled for oral arguments before the Supreme Court in the upcoming term. This highly anticipated hearing will offer both sides the opportunity to present their arguments in detail.

Needless to say, this case will continue to be watched closely by internet providers and copyright holders alike.

Today’s orders ensure that Cox’s liability for contributory infringement will be reviewed in detail. At the same time, the battle over vicarious liability, at least for now, appears to be settled in favor of ISPs.

From: TF, for the latest news on copyright battles, piracy and more.

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