U.S. Govt. Backs Cox in Landmark Supreme Court Battle Over ISP Piracy Liability

The U.S. Solicitor General has urged the Supreme Court to accept Cox Communications' petition in a landmark piracy liability lawsuit. The USSG argues that ISPs are not necessarily liable for pirating subscribers and warns that the current precedent may lead to disconnections for many innocent subscribers. At the same time, the USSG urged the court to deny a petition from the opposing music companies, which seeks to expand the current liability verdict.

supremecourtIn 2019, Internet provider Cox Communications lost its legal battle against a group of dozens of record labels, including Sony and Universal.

Following a two-week trial, a Virginia jury held Cox liable for its pirating subscribers. The ISP failed to disconnect repeat infringers and was ordered to pay $1 billion in damages.

This case is one of many. Other ISPs have been accused of being similarly lax in their stance against alleged piracy. Rightsholders believe that ISPs are motivated by profit, while ISPs typically argue that they shouldn’t be held liable for the alleged wrongdoing of subscribers.

Landmark Piracy Battle

Cox challenged the verdict through several routes and last August filed a petition at the U.S. Supreme Court asking it to hear the case. The Internet provider stressed that the current verdict ‘jeopardizes’ internet access for all Americans.

Around the same time, the music companies filed their own petition, hoping to strengthen the verdict at the Supreme Court. Specifically, the record labels argued that the ISP should also be held liable for vicarious copyright infringement.

Both petitions essentially boil down to questions on liability. Are ISPs liable for copyright infringement if they don’t disconnect subscribers accused of copyright infringement? And can ISPs be held liable for infringing subscribers, even if they don’t directly profit from their activities?

Last November, the Supreme Court suggested that it is indeed interested in the questions. Before deciding, however, the U.S. Solicitor General was invited to share the Government’s view on the matter.

The Solicitor General is a high-ranking official in the U.S. Department of Justice who serves as the federal government’s primary lawyer before the Supreme Court. Needless to say, their input weighs strongly for the Supreme Court’s decision whether to accept these petitions or not.

U.S. Backs Cox’s Petition

Yesterday, the Solicitor General submitted its amicus brief in this matter, clearly siding with the Internet provider.

The Solicitor General argues that the Fourth Circuit’s decision, which held Cox liable for contributory infringement, “departs from this Court’s contributory-infringement precedents” and is in “substantial tension” with the Supreme Court’s recent analysis of secondary liability in Twitter v. Taamneh.

“The Taamneh Court’s reasoning reinforces the conclusion that imposing liability on Cox for copyright infringement committed by its users, based on Cox’s failure to terminate service to IP addresses associated with infringement, is incompatible with traditional common-law limitations on secondary liability,” the brief reads.

The U.S. also cites the Sony and Grokster cases, which make clear that contributory liability for copyright infringement requires more than knowing about pirating activity. Instead, it requires “culpable intent” to cause copyright infringement.

“If Cox had explicitly or implicitly marketed its service as being particularly useful for infringers, or if it had encouraged subscribers to use Cox’s internet service to infringe, liability might be appropriate,” the Solicitor General writes.

According to the view of the U.S. Government, an ISP is not automatically liable for copyright infringement if it fails to terminate subscribers after receiving copyright infringement notices. This is a strong statement that targets the central issue in many similar lawsuits in U.S. courts.

Not Liable

not liable
Innocent Subscribers at Risk

The amicus brief goes on to state that the current verdict of the Court of Appeals can have broad implications for ISPs and their subscribers.

Cox previously argued that, based on this precedent, ISPs find themselves ‘forced’ to terminate subscribers who may have done little wrong. The U.S. Solicitor General acknowledges this potential threat.

If copyright infringement notices from third parties can trigger liability, Internet providers may take more drastic action to avoid legal trouble.

“Given the breadth of that liability, the decision below might encourage providers to avoid substantial monetary liability by terminating subscribers after receiving a single notice of alleged infringement,” the Solicitor General writes.

“Losing internet access is a serious consequence, as the internet has become an essential feature of modern life. And because a single internet connection might be used by an entire family—or, in the case of coffee shops, hospitals, universities, and the like, by hundreds of downstream users— the decision below could cause numerous non-infringing users to lose their internet access.”

No Willful Infringement

Aside from the liability question, the brief also criticizes the Fourth Circuit’s finding of “willfulness” against Cox, which led to the enhanced statutory damages.

The Solicitor General argues that the jury instruction was “erroneous” because it allowed a finding of willfulness based on the notion that Cox knew its subscribers’ actions were unlawful, even though Cox believed its own response was lawful.

The Solicitor General notes that “willfulness” generally requires knowledge or reckless disregard that the defendant’s own conduct was unlawful. Simply knowing about third-party infringements should not be sufficient.

This broad interpretation would essentially undermine the Copyright Act’s two-tiered damages scheme, which reserves higher damages for willful copyright infringement than for non-willful infringement.

Music Companies’ Writ Should be Denied

While the U.S. supports Cox’s petition, it has asked the Supreme Court to deny a related writ from the opposing music labels, who argue that Cox should also be held liable for vicarious copyright infringement.

Defendants can be held vicariously liable if they had the right and ability to control the infringing activities and a direct financial interest in those activities. According to the Solicitor General, the lower court correctly concluded that is not the case here.

“There was no evidence that Cox would be forced to collect a lower fee if the users of its internet service ceased to infringe; that subscribers were drawn to Cox’s internet service because of the ability to engage in copyright infringement using that service; or that Cox had used the opportunity for customers to infringe to lend credibility to the service it offered,” the brief notes.

All in all, it’s clear that the U.S. Solicitor General, and thus the U.S. Department of Justice, supports Cox’s attempt to overturn the piracy liability verdict. While the Supreme Court has yet to formally decide whether it will take on the case, the brief suggests the chance is now significantly higher.

Conclusion

grant
While Cox will be pleased to see the supportive brief, there are no guarantees that the Supreme Court will agree with the U.S. Solicitor General, should it ultimately decide to take on the case.

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