On March 25, the U.S. Supreme Court issued a unanimous 9-0 decision that prevents a new trial to determine damages owed by Cox Communications to record labels that had accused the internet service provider of facilitating piracy. The dispute involved songs owned by Sony Music, Warner Music Group, Universal Music Group and other labels, and stemmed from allegations that Cox failed to act on widespread copyright-infringing activity by its subscribers.
The ruling overturns a lower-court order that had directed a retrial on the size of damages tied to a form of secondary liability called contributory copyright infringement. Cox had warned that a retrial could expose the Atlanta-based internet service provider to a damages verdict as large as $1.5 billion.
More than 50 record labels banded together in 2018 to sue Cox. At a 2019 jury trial in Alexandria, Virginia, jurors found Cox liable for infringement by its users of more than 10,000 copyrights and returned a $1 billion damages award. That jury verdict had rested on findings of both contributory infringement and vicarious infringement, two distinct legal theories of secondary liability.
In 2024 the 4th U.S. Circuit Court of Appeals set aside the $1 billion damages award. The appeals court affirmed the jurys finding of contributory infringement but reversed the vicarious-liability finding and ordered a new trial limited to determining the proper amount of damages.
Contributory infringement, as described in the litigation, holds a party responsible for anothers unlawful copying when the party knew about the infringement and materially contributed to it. Vicarious infringement, by contrast, is based on a partys ability to control the infringing conduct and an associated financial benefit from that conduct.
The record labels had accused Cox - the largest unit of privately held Cox Enterprises - of ignoring thousands of infringement notices, failing to cut off internet access for repeat infringers and not implementing other measures that the labels contend would have deterred piracy.
Cox countered that the labels' legal position would dangerously expand contributory liability, potentially resulting in the loss of internet access for large numbers of innocent users. Counsel for Cox warned this outcome could affect "entire households, coffee shops, hospitals, universities" and other users "merely because some unidentified person was previously alleged to have used the connection to infringe."
The Supreme Court heard oral arguments in the case in December. A lawyer representing the administration of President Donald Trump argued in support of Cox's position. The company also drew support from major technology firms and internet-focused businesses; Alphabet, Amazon, Microsoft and other technology companies filed in support of Cox. Industry trade groups representing music, film and book interests backed the record labels' position.
With the high court's unanimous decision, the prospect of a retrial limited to damages has been removed, closing a major procedural chapter in a lawsuit that had reached the trial court, the appeals court and ultimately the Supreme Court.
Legal terms defined in the case:
- Contributory infringement - liability for another's infringement where the defendant knew about the infringement and contributed to it.
- Vicarious infringement - liability where the defendant had the ability to control the infringing activity and benefited financially from it.