The Supreme Court ruled Wednesday that a major internet service provider is not liable for copyright infringement for failing to remove known violators from its network, a setback for the music industry seeking greater ISP accountability.
Justice Clarence Thomas wrote the Court’s unanimous opinion.
The largest record labels want internet providers to be held liable for failing to block users known to download pirated music.
These music companies own the rights to many well-known American artists, including Bob Dylan, Bruce Springsteen, Beyoncé, Eminem, Eric Clapton, and Gloria Estefan.
Under our precedent, a company is not liable as a copyright infringer for merely providing a service to the general public with knowledge that it will be used by some to infringe copyrights, Thomas wrote.
A jury initially awarded Sony Music Entertainment and other record companies $1 billion against Cox Communications for infringing over 10,000 copyrighted works. The Court of Appeals later overturned the award but found Cox could still be indirectly liable for large-scale infringement. The Supreme Court ultimately ruled that Cox is not liable for failing to remove non-violators from its network.
Cox warned that holding internet providers liable as Sony wants could have broad effects, such as essential institutions losing internet due to a few users. Both liberal and conservative judges noted these concerns in the December arguments.
Sony Universal Music Corp and other companies representing 80% of the music industry filed a lawsuit in 2018. A Virginia jury found Cox liable for both vicarious infringement (when a party can be held responsible for another’s infringing actions because it benefits financially) and contributory infringement (when a party knowingly contributes to someone else’s infringement). The Fourth U.S. Circuit Court of Appeals in Richmond reversed the vicarious liability decision and ordered the district court to review the $1billion verdict.
However, the appeals court held the contributory infringement decision. It noted that from 2013 to 2014, the music industry sent Cox many infringement notices, but Cox ended service for only 32 customers over copyright issues. In contrast, it cut off hundreds of thousands of subscribers for non-payment (Copyright infringement means violating the exclusive rights given to creators.) The court ordered a new trial to decide the amount of the award.
The evidence at trial, viewed in the light most favorable to Sony, showed exceeding mere failure to prevent infringement, the appeals court wrote. The jury saw evidence that Cox knew of specific instances of repeat copyright infringement occurring on its network, traced those instances to specific users, and chose to continue providing monthly internet access to those users despite believing the online infringement would continue, because it wanted to avoid losing revenue.
The Latest Ruling Declining to Hold Companies Liable
The Supreme Court has also recently said that companies should not be held liable for aiding and abetting in other civil damages cases.
Last year, the court unanimously ruled that American gun makers could not be held responsible for cartel violence on the southwest border, even if their guns are often used in those crimes.
The court also unanimously ruled that Twitter, now called X, could not be held liable for simply hosting ISIS tweets. Both this year’s and last year’s gunmaker rulings were important in the Cox and Sony case.
The case drew in major tech companies like Google and X, which warn that holding service providers responsible for US user-generated content could disrupt the industry, especially in the context of AI.
X said that if content creators can sue AI platforms for users’ copyright violations, tech companies may have to limit their services to avoid lawsuits.
Several media companies, such as Warner Bros. Discovery, have filed lawsuits against AI platforms for alleged copyright infringement. Warner Bros. Discovery owns CNN.
Source: Supreme Court says internet service provider isn’t liable for bootlegged music downloads
