Supreme Court wrestles with copyright case that could affect web access

The U.S. Supreme Court heard oral arguments Monday in Cox Communications’ appeal of a long-running music piracy lawsuit that could determine whether American internet service providers can be held liable for their users’ behavior.

The copyright case could have profound implications for trademarked works and liability for infringement, as well as internet access for consumers.

Major music labels allege Sandy Springs-based Cox Communications, one of the largest internet service providers in the U.S., failed to adequately prevent its customers from illegally downloading and sharing music.

A federal jury in Virginia in 2019 found in favor of Sony Music Entertainment, Universal and other music publishers, but a federal appeals court tossed the $1 billion jury verdict, saying the broadband provider did not profit from the actions of subscribers who allegedly pirated music.

In that ruling, however, the appellate judges upheld another part of the verdict in which the original trial jury found Cox bore some responsibility for not safeguarding against illegal behavior by its broadband customers. The appeals court panel sent the case back to a lower court for a trial on damages.

Cox sought Supreme Court review arguing it is not a contributory infringer because it merely provides communications infrastructure to a home or business knowing that someone will use that connection to infringe, and that it gained nothing from users’ infringing conduct.

The Trump administration and major technology companies including Google, Amazon and Microsoft have supported Cox in the case while the music industry and other groups supporting artists have backed the record labels.

During the arguments Monday, some of the justices pushed back on Cox’s argument and fretted that Cox was encouraging the high court to adopt a common law rule that would eliminate liability.

“If I’m a gun dealer and I’m selling to someone who says to me: ‘I want to kill my wife with this gun,’ I think the common law would say you knew what he was going to do with the gun,” said Justice Sonia Sotomayor. “You joined in. Why isn’t your continuing to provide internet service the same, when you know that particular location is going to continue to infringe?”

Sony, alongside other record labels, brought action against Cox in 2018, arguing the company should be held responsible for customers that allegedly committed copyright infringement by illegally downloading and sharing music through sites such as BitTorrent. The piracy mostly occurred between 2012 and 2014, a period of time when music was primarily digitally distributed through files purchased and downloaded by users. Today, streaming is the cornerstone of the recording industry.

Cox allegedly failed to terminate the internet connections of the infringing subscribers and helped 60,000 users distribute about 10,000 copyrighted songs.

The following year, the federal jury found Cox liable for contributory infringement and vicarious infringement, both forms of secondary copyright infringement liability. It awarded $1 billion in damages.

The appeals court threw out that verdict but ordered a new trail on damages.

Cox appealed this decision, and the Supreme Court agreed to hear the appeal in June.

Cox Communications is a subsidiary of Cox Enterprises, which is also the parent company of The Atlanta Journal-Constitution. Only about 1% of the homes or businesses in Cox’s customer base are accused in this case, counsel for Cox said in a brief filed in October.

During the arguments, Cox’s attorney Joshua Rosenkranz said the company took actions to reduce infringement, including creating an anti-infringement program that sent out hundreds of warnings per day. When email warnings were not enough, Cox suspended internet service until the customer promised to stop infringing, according to the October brief. If that still wasn’t enough, Cox considered termination, but this was “unconscionable.”

If internet providers face such steep penalties for the actions of customers, it could lead to the loss of internet service to some customers, Cox has argued. The harm from potential loss of internet access is more acute in areas with fewer providers, the company contends.

There is only so much an ISP such as Cox can do to prevent infringement, Cox’s counsel said in the brief. It cannot monitor its users’ online activity through a customer’s internet connection in real-time or afterward. All but one of the 49 accounts most frequently accused of infringement were entities like regional ISPs, university housing and multiunit dwellings, Cox said, so termination would have meant throwing users off the internet en masse. The justices acknowledged this, with Sotomayor saying the judges were caught between “two extremes.”

Noting Cox had competitors in providing internet services, Justice Samuel Alito asked if there was a financial incentive to not becoming known as an ISP that is aggressive in terminating service for infringers. He also asked if there was an incentive to not terminating infringers.

“We have a financial incentive, like any business does, to keep our customers,” Rosenkranz said. “But the Fourth Circuit found, and this was a basis for rejecting vicarious liability, that we did not have a financial incentive to increase infringement.”

In a statement published online ahead of the arguments, the American Civil Liberties Union urged the court to limit copyright penalties imposed on ISPs for alleged user behavior.

Evelyn Danforth-Scott, staff attorney with the American Civil Liberties Union, said the case is bigger than one company paying penalties to another.