Cox Communications’ Petition On Infringement Liability For Isps Will Be Reviewed By SCOTUS

Cox Communications’ Petition On Infringement Liability For Isps Will Be Reviewed By SCOTUS

The Supreme Court was petitioned by Cox in August 2024 asking whether the US Court of Appeals for the Fourth Circuit made a mistake in finding that Cox materially contributed to infringement merely because it did not terminate Internet access to subscribers who allegedly committed infringement without proof.

The US Supreme Court took the advice of the Solicitor General in granting a petition for certiorari brought by Cox Communications and denying one brought by Sony in the same matter. Copyright claims were filed against Cox in July 2018 by music publishers including Sony, Arista Records, Warner Music and Universal Music Group alleging that Cox was liable for infringement of 10,017 musical works that were illegally distributed by the ISP’s subscribers. Cox was found liable for both vicarious and contributory infringement by a 2020 jury verdict, leading to a $1 billion damages verdict against Cox after damages were increased for the jury’s wilfulness finding.

The Fourth Circuit in February 2024 ruled on Cox’s appeal, affirming the wilful contributory infringement finding but remanding for a new trial on damages after overturning the vicarious liability finding for lack of Cox’s profit directly attributable to its subscribers’ acts of infringements. The Supreme Court was petitioned by Cox in August 2024 asking whether the US Court of Appeals for the Fourth Circuit made a mistake in finding that Cox materially contributed to infringement merely because it did not terminate Internet access to subscribers who allegedly committed infringement without proof. The petition also questioned whether the mere knowledge of infringement sufficed to find wilfulness under 17 USC. A competition petition was filed by Sony a day later asking the court whether the profit requirement for vicarious liability only allows liability where the defendant expects commercial gain from the alleged infringing act or whether other circuits are correct in holding that this requirement is fulfilled when the defendant expects to gain from the enterprise, allowing infringement to occur. Amici representing both ISPs and music publishers in September 2024 weighted in on each petition. The Solicitor General was invited by the court to file a brief on November 25.

The High Court should grant Cox’s petition on both questions but deny Sony’s, the department of justice said. Regarding the first question in Cox’s petition, “Whether an ISP materially contributes to copyright infringement by continuing to provide internet access to particular subscribers after receiving notice that copyright infringement has occurred on their accounts,” the DOJ said the fourth circuit’s ruling is in ‘substantial tension’ with a recent Supreme Court analysis of contributory liability in Twitter Versus Taamneh (2023). The court found no contributory liability for Twitter’s provision of communication services to terrorist groups like ISIS who used the platform for recruiting purposes because it was mere passive nonfeasance and did not give rise to the aiding and abetting standard required to find contributory liability under common law principles. The DOJ reportedly said, “The contributory infringement question is legally and practically important, and courts of appeals have taken divergent approaches to the question.” On Cox’s second question addressing the “circumstances under which a contributory infringer can be held liable for enhanced statutory damages based on a finding of ‘wilful’ infringement,” the DOJ said that the court should review whether the jury instruction given constituted ‘substantial legal error’ since it told jurors that they could find wilfulness if Cox knew its subscribers had committed infringement, rather than assessing whether Cox ‘reasonably believed’ that its own conduct comported with the Copyright Act. Regarding Sony’s vicarious liability question, the DOJ reportedly said, “There is no disagreement among the courts of appeals” on the Fourth Circuit’s holding that “a plaintiff alleging vicarious infringement must show that the defendant profited from the infringement.” The court has denied that petition. The court also denied a petition filed by inventor Matthew McLeay against the US Patent and Trademark Office (USPTO)/ Coke Morgan Stewart on appeal from in re: McLeay. The Federal Circuit there affirmed the Patent Trial and Appeal Board’s (PTAB’s) decision to uphold a patent examiner’s rejection of a patent application claiming the use of ribavirin for the treatment of respiratory conditions including SARS-CoV-2.