Fifth Circuit must reconsider contributory infringement ruling for record labels after Cox v. Sony: SCOTUS

Fifth Circuit must reconsider contributory infringement ruling for record labels after Cox v. Sony: SCOTUS

But in Cox v. Sony, a decision by the U.S. Court of Appeals for the Fourth Circuit that Cox was not contributorily liable for its subscribers’ copyright infringement was reversed by the Court

The U.S. Supreme Court has granted certiorari to a petition brought by internet service provider (ISP) Grande Communications Networks LLC, appealing from a U.S. Court of Appeals for the Fifth Circuit decision that upheld a jury verdict holding Grande Communications responsible for contributory infringement against a group of major U.S. record labels. Certiorari was granted by the Supreme Court and the judgment was then vacated. The Supreme Court remanded the case to the Fifth Circuit for reconsideration under the Court’s recent opinion in Cox Communications, Inc. v. Sony Music Entertainment. Petition by Grande Communications, submitted in March 2025, asked the High Court to consider the following question: “Whether an ISP is liable for contributory copyright infringement by (i) providing content-neutral internet access to the general public and (ii) failing to terminate that access after receiving two third-party notices alleging someone at a customer’s IP address has infringed.”

According to Grande, there is an “urgent need for intervention” because the Fifth Circuit’s ruling “targets not individual incidents but systemic concerns—putting the burden on private ISPs to conjure up entire regulatory schemes to police and enforce unwritten copyright rules (or face crushing liability).” The respondents, Capitol Records, LLC; UMG Recordings, Inc; Capitol Christian Music Group, Inc.; Fonovisa, Inc.; Roc-A-Fella Records, LLC; and Tooth & Nail, LLC, argued the Court should deny the petition because the question is “not only untrustworthy but utterly divorced from reality.” Grande’s policy was to “never terminate service to a customer for engaging in copyright infringement.” Under the Digital Millenium Copyright Act (DMCA) and the Supreme Court’s precedent in cases like Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984), and MGM Studios Inc. v. Grokster, Ltd. 545 U.S. 913 (2005), ISPs are only protected from contributory liability if they take clear steps to stop it. But in Cox v. Sony, a decision by the U.S. Court of Appeals for the Fourth Circuit that Cox was not contributorily liable for its subscribers’ copyright infringement was reversed by the Court. In a 7-2 decision authored by Justice Thomas, the Court held that a service provider is contributorily liable for a user’s infringement only when it intended for its service to be used in that way, which is established only if the provider either encouraged the infringement or designed the service specifically to facilitate it.

Justice Thomas writing for the court said that the “Copyright Act does not expressly render anyone liable for infringement committed by another.” Sony provided no “evidence of express promotion, marketing, and intent to promote infringement,” and Cox repeatedly discouraged copyright infringement by sending warnings, suspending services, and terminating accounts. The Court stated that Cox’s internet service was clearly “capable of ‘substantial’ or ‘commercially significant non-infringing uses” as for providing a service tailored to infringement. Cox simply provided internet access, which is used for many purposes other than copyright infringement. Grande Communications v. UMG Recordings must hence be revisited by the Fifth Circuit under the standard set forth in Cox.