Several major music copyright owners, including a leading entertainment company, sought to hold an Internet service provider responsible for copyright infringement committed by its subscribers. The service provider, which serves millions of customers, was notified by a monitoring company of over 160,000 instances where its subscribers’ IP addresses were linked to alleged copyright violations such as illegal music file sharing. Although the provider had policies prohibiting infringement and took steps such as issuing warnings and suspending service, the copyright holders argued these measures were inadequate and brought suit seeking to impose liability on the provider for continuing to serve known infringers.

The case was tried in the United States District Court for the Eastern District of Virginia. There, the jury found in favor of the copyright owners on both contributory and vicarious liability, and determined the provider’s infringement was willful, awarding $1 billion in statutory damages. After the District Court denied the provider’s post-trial motion, the United States Court of Appeals for the Fourth Circuit affirmed the finding of contributory liability, reasoning that supplying a service with knowledge it would be used for infringement was sufficient. The Fourth Circuit, however, reversed as to vicarious liability and remanded for a new determination of damages.

The Supreme Court of the United States reviewed the case concerning contributory liability. The Court held that a service provider is contributorily liable for a user’s infringement only if it either induced the infringement or provided a service tailored for infringement. Because the provider neither encouraged infringement nor offered a service primarily designed for infringement—since Internet access has substantial lawful uses—the provider was not contributorily liable. The Supreme Court reversed the Fourth Circuit’s judgment on contributory liability and remanded the case for further proceedings. View “Cox Communications, Inc. v. Sony Music Entertainment” on Justia Law