Supreme Court Weighs Liability Of Internet Providers For Users’ Music Piracy

As the Supreme Court considered the liability of internet providers for users’ copyright infringement in oral arguments on Monday, justices expressed concern over rendering a decision that would free ISPs from any responsibility over piracy on their networks.

The justices’ decision could have a major impact on how online piracy is policed, long a source of frustration among content creators who have pressed tech companies, internet providers and others to take greater steps to curb infringement.

Major record labels, including Sony, were among those that sued Cox over infringement by its subscribers from 2013 to 2014, arguing that it failed to take action against almost 60,000 users despite repeated notices of their accessing of pirated music.

A federal jury found Cox Communications liable for “willful contributory infringement,” but on appeal, a the verdict for “vicarious” liability was overturned an an award of $1 billion in damages was sent back to a district court for a new trial.

The Supreme Court agreed to hear Cox’s appeal in June.

“What concerns me a bit is your encouraging us to adopt a common law rule that would essentially eliminate liability in this situation,” Justice Ketanji Brown Jackson told Cox’s counsel, Joshua Rosencranz.

In the Digital Millennium Copyright Act of 1998, Congress provided a “safe harbor” to sites to shield them from liability for third-party content, provided that they took a series of steps to curb infringement, including a notice-and-takedown system.

Jackson said, “Even though there isn’t secondary liability in the statute, it appears as though Congress sought to use the liability risk that exists in the common law to incentivize this cooperation, and as several have pointed out, you seem to be undermining that, because we no longer have the incentives is we interpreted this the way that you would have us.”

Rosencranz said that Congress back then “had no clue what the liability would end up being against for different types of service providers. Back then, service providers were confronting all sorts of theories of liability.” He argued that at the time, Congress stated that “failure to satisfy a safe harbor shall not adversely bear on liability,” adding that lawmakers could not agree on the guardrails given the evolving technology.

Sony Music and other labels claim that Cox should have cut off internet access for almost 60,000 users because of rampant infringement, but ISPs have warned that they should not be required to “police everything that happens online.”

The record labels claimed that Cox was too lax in responding to notices that its users were pirating music content. Cox had a policy to cut off service after 14 strikes, the labels noted, and then “simply stopped terminating infringing subscribers.”

Paul Clement, representing the labels, was pressed by Justice Elena Kagan on whether ISPs could simply decline to read any notices of infringement, a way of avoiding the question of whether they had knowledge among piracy among its users.

“There’s a concept in the law called willful blindness, and I think willful blindness would satisfy the common law standard for aiding and abetting,” Clement said.

Justice Neil Gorsuch, meanwhile, expressed concern that Congress had not “defined the contours of what secondary liability should look like. Here we are debating them. So shouldn’t that be a flag of caution in us expanding it too broadly?”

Clement, though, said that there were ample examples for the justices to rely upon in a ruling.

“Well, I think that would be a cautionary tale to not go beyond the common law,” he said, adding, “It’s always good to have caution, but I would look not just to the patent law, I would look to the trademark law, and I would the the trouble to trace it back to the common law.”

More to come.