Copyright infringement comes in two forms: direct and indirect. Direct infringement does not require proof of the accused infringer’s intent. However, indirect infringement, where a copyright owner seeks to hold a defendant responsible for infringements by third parties, does. The distinction often drives disputes between content owners, such as music artists and movie studios, and intermediaries like internet service providers (ISPs).
In Cox Communications v. Sony Music, the U.S. Supreme Court reinforced this standard by overturning a $1 billion verdict against Cox (an ISP) for copyright infringements committed by some of its subscribers who used Cox’s internet service to illegally upload or download Sony’s copyrighted works. The Court held that Cox’s awareness of user infringements, and its failure to terminate those users’ accounts, was insufficient to establish Cox’s intent for purposes of contributory copyright infringement.
Sony alleged Cox was contributorily liable for its users’ copyright infringement because Cox continued to provide internet access to subscribers whose IP addresses Sony had identified as associated with infringement and provided notice of those infringements to Cox.
Cox responded that an ISP cannot be held liable for simply continuing to provide internet service to known infringers, especially given that its internet services had numerous non-infringing uses. A Virginia federal jury found Cox contributorily liable and awarded Sony $1 billion in damages. The Fourth Circuit affirmed the verdict on Sony’s contributory infringement theory because Sony had notified Cox about the infringements. The Supreme Court took the case to review the question of whether an ISP can be liable for indirect copyright infringement based on the knowledge of infringements and failure to terminate infringers’ accounts.
The Court ruled that contributory infringement requires proof of intent, which can be shown through either affirmative inducement of infringement, such as encouraging or promoting unlawful uses, or providing a service “tailored to infringement.” The Court found insufficient evidence of either.
There was no evidence that Cox induced the infringements through promotion and marketing. Rather, the Court noted that Cox took meaningful steps to discourage it by sending warning notices, suspending services, and terminating some accounts. Nor was Cox’s internet service tailored to infringement as it had abundant lawful uses. The Court reiterated that knowledge of infringement alone is not proof of intent, and it favorably compared indirect copyright infringement to the similar standards for indirect patent infringement.
These facts were key to the Court’s distinguishing its 2005 decision in Metro-Goldwyn Mayer Studios v. Grokster, which examined one of many peer-to-peer sharing platforms that were created in the internet’s early days. In Grokster, the defendant operated the service but did not, itself, commit direct acts of infringement. But the Court found it liable based on a contributory infringement theory because it actively encouraged infringing uses of its platform. The Cox decision, in contrast, emphasizes the importance of not encouraging such infringing uses, even though it does not create a duty to remove users who are known copyright infringers.
In Justice Sotomayor’s concurring opinion, she emphasized that providers who deliberately design business models to profit from infringement may still face liability under other theories. This warning may take on new significance in cases working their way through the court system now where copyright owners seek to hold popular AI platforms indirectly responsible for platform users’ copyright infringement.
Three key takeaways from the Court’s opinion:
- Intent, not knowledge alone, still defines contributory copyright liability.
- Neutral infrastructure providers are generally protected, especially when system design, marketing, and enforcement practices show a lack of intent.
- Companies that encourage, benefit, or optimize unlawful uses remain potentially exposed to liability.
