Cox Communications v. Sony Music

1. This Court has held that a business commits contributory copyright infringement when it "distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps to foster infringement." Metro-Goldwyn-Mayer Studios, Inc. v. Grokster , Ltd ., 545 U.S. 913, 919 (2005). The courts of appeals have split three ways over the scope of that ruling, developing differing standards for when it is appropriate to hold an online service provider secondarily liable for copyright infringement committed by users. Did the Fourth Circuit err in holding that a service provider can be held liable for "materially contributing" to copyright infringement 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? 2. Generally, a defendant cannot be held liable as a willful violator of the law-and subject to increased penalties-without proof that it knew or recklessly disregarded a high risk that its own conduct was illegal. In conflict with the Eighth Circuit, the Fourth Circuit upheld an instruction allowing the jury to find willfulness if Cox knew its subscribers ' conduct was illegal-without proof Cox knew its own conduct in not terminating them was illegal. Did the Fourth Circuit err in holding that mere knowledge of another's direct infringement suffices to find willfulness under 17 U.S.C. § 504(c)?

Cox Communications, Inc. is a major internet service provider selling internet, telephone, and cable television to millions across the United States. Between 2013 and 2014, some of Cox’s internet subscribers used peer-to-peer file-sharing networks, such as BitTorrent, to download and distribute copyrighted songs owned by numerous record companies and music publishers, including Sony Music Entertainment (the “Plaintiffs”). These record companies, through the Recording Industry Association of America (RIAA), hired a company called MarkMonitor to monitor illegal file sharing and notify internet service providers when infringement was detected. MarkMonitor sent Cox over 163,000 notices of infringement during the relevant period. In response, Cox operated a “thirteen-strike” policy, under which it warned or temporarily suspended subscribers after repeated notices, but in practice it rarely terminated service for copyright infringement, while regularly terminating service for nonpayment. Plaintiffs became frustrated with Cox’s limited enforcement against repeat infringers and sued Cox instead of its subscribers, alleging that Cox was secondarily liable for copyright infringement occurring on its network. Specifically, plaintiffs contended Cox either intentionally contributed to or benefited from its subscribers’ infringements by failing to take adequate steps to stop it, thereby inducing or materially contributing to the unlawful acts. The U.S. District Court for the Eastern District of Virginia denied Cox statutory safe harbor under the Digital Millennium Copyright Act (DMCA) and allowed the case to proceed to trial on theories of vicarious and contributory copyright infringement. The jury found Cox liable on both counts and awarded $1 billion in statutory damages. On appeal, the U.S. Court of Appeals for the Fourth Circuit affirmed the jury’s finding of willful contributory infringement, reversed the vicarious liability verdict, and vacated the damages award, remanding the case for a new trial on damages.