US Supreme Court grapples with copyright dispute between Cox and record labels

US Supreme Court grapples with copyright dispute between Cox and record labels

Cox’s assertion that its mere awareness of user piracy could not justify holding it liable for copyright infringement was met with skepticism by the justices.

The U.S. Supreme Court grappled with Cox Communications’ bid to avoid financial liability in a major music copyright lawsuit by record labels which accused the internet service provider of helping its customers to plagiarize thousands of songs.

Cox’s assertion that its mere awareness of user piracy could not justify holding it liable for copyright infringement was met with skepticism by the justices. Would holding Cox liable for failing to cut off infringers impact a wide range of innocent internet users, they also questioned.

Justice Sonia Sotomayor reportedly told Paul Clement, the lawyer representing the labels, "We are being put to two extremes here. How do we announce a rule that deals with those two extremes?"

A lower court’s decision to order a new trial to determine how much the Atlanta-based company owes Sony Music, Warner Music Group, Universal Music Group and other labels for contributory copyright infringement has been appealed by Cox. The retrial could lead to a verdict against it of as much as $1.5 billion, Cox said.

The largest unit of privately owned Cox Enterprises, Cox, has argued that it should not be held responsible for piracy by its users of music owned by the labels. A ruling favouring labels could force it to terminate internet access for “entire households, coffee shops, hospitals, universities and others “merely because some unidentified person was previously alleged to have used the connection to infringe, Cox has said.

The issue of how to protect copyright interests without harming innocent users who may be affected if copyright enforcement by internet service providers or ISPs like Cox becomes too broad was grappled with by the justices. That Cox was especially lax in addressing user infringement; some justices appear to agree with the labels.

Sotomayor reportedly told Cox attorney Joshua Rosenkranz, "Your client's sort of laissez-faire attitude towards the respondents is probably what got the jury upset."

In 2019, a jury in Alexandria, Virginia, found that Cox owed the labels $1 billion for its secondary liability for its customers’ infringement of over 10,000 copyrights. The 4th U.S. Circuit Court of Appeals, based out of Richmond, Virginia, threw out the damages award in 2024 after reversing the jury's finding on one form of secondary liability.

Under U.S. law, ISPs are generally not liable for user infringement if they take reasonable preventive measures. However, the labels accused Cox of failing to address thousands of infringement notices and failing to cut off internet access for repeat infringers or take other piracy-deterrent measures.

In awarding $1 billion to the record labels, the jury found Cox liable both for contributory infringement and vicarious infringement, two forms of secondary copyright infringement liability. A retrial on the award’s size was ordered by the 4th Circuit after affirming the jury's finding of contributory infringement but reversing its finding of vicarious liability.

Contributory infringement involves holding parties liable for someone else’s infringement because they knew about it and contributed to it Vicarious infringement involves holding parties liable for someone else's infringement because they had the ability to control the infringement and benefited financially from it.