Google, Amazon and Microsoft have joined the US government in urging the Supreme Court to reverse a $1 billion copyright ruling against Cox Communications, warning that the decision threatens internet service providers with liability for user misconduct.
Along with Mozilla and Pinterest, the tech giants filed a joint brief (which you can read in full here) supporting the ISPP’s appeal of a previous verdict that held it liable for subscribers’ piracy activities.
On August 29, Cox Communications filed a brief to the Supreme Court, over two months after the court granted Cox’s request to hear the company’s appeal of a Fourth Circuit decision that threw out a $1 billion penalty awarded to Cox by a Virginia jury.
The appeals court had ruled that Cox could be held liable for “materially contributing” to copyright infringement simply by knowing that customers were using certain accounts to infringe but did not stop access. Cox argued that it “did not engage in a single affirmative act with the purpose of furthering infringement.”
Now, the tech companies argue the Fourth Circuit Court of Appeals’ ruling “threaten[s] all types of online service providers with potentially massive copyright liability and enhanced statutory damages, based on the alleged misdeeds of a tiny minority of their users.”
Cox had already warned earlier that accepting the Fourth Circuit’s ruling would expose ISPs to liability “for literally everything bad that happens on the internet—bullying, harassment, libel, racketeering, unlawful gun sales … everything.”
It argued that this would force providers to become “internet police” and potentially deny service to “homes, barracks, hospitals, and hotels” based on accusations alone.
The tech giants have now joined the US government’s support for Cox in the case. In late May, the Solicitor General backed Cox’s position, arguing that ISPs don’t become liable simply by failing to terminate accounts after receiving infringement notices. The government brief stated that “willfulness” requires knowledge that subscriber conduct was actually unlawful, not just awareness of potential infringement.
The tech companies’ brief warns that the appeals court created “overbroad and unpredictable liability rules” by transforming the Digital Millennium Copyright Act‘s (DMCA) safe harbors into a “liability-creating mechanism.” The DMCA provides legal protections for ISPs that cooperate with copyright holders.
“The Fourth Circuit’s overbroad standard for contributory infringement liability, if permitted to stand, will open the door to illegitimate lawsuits—like the claim here—that are based solely on providers’ failure to act. Such suits will significantly diminish the vitality of the internet economy,” according to the companies.
“The Fourth Circuit’s overbroad standard for contributory infringement liability, if permitted to stand, will open the door to illegitimate lawsuits… that are based solely on providers’ failure to act.”
Google, Amazon, Microsoft, Mozilla and Pinterest
The tech giants argue that copyright liability should require “conscious, culpable conduct” that assists infringement. “With respect to enhanced damages for willful infringement, the Court should hold that the defendant must actually know that its conduct is unlawful.”
They added: “The Court’s decision in this case will have a significant impact on a broad range of internet companies that make it possible for Americans to find, create, and share information online.”
The brief cites the court’s 2005 decision in MGM Studios v. Grokster, which held that “contributory liability requires proof that the defendant ‘intentionally induc[ed] or encourag[ed] direct infringement.’ A mere failure to act is not sufficient.” It also cited the 2003 decision in Twitter v. Taamneh, in which Tiwtter confirmed that “‘conscious and culpabl[e]’ conduct is required to meet that standard… and expressly rejects liability based on the failure to act.”
The case against Cox involves statutory damages that could reach $150,000 per copyrighted work.
Back in June, major record companies filed a rebuttal to the US government’s support for Cox in the copyright case. Cox was sued by record labels including Sony Music Entertainment (the lead plaintiff), Universal Music Group and Warner Music Group in 2018, arguing that it “knowingly contributed to, and reaped substantial profits from, massive copyright infringement committed by thousands of its subscribers.”
“The Court’s decision in this case will have a significant impact on a broad range of internet companies that make it possible for Americans to find, create, and share information online.”
Google, Amazon, Microsoft, Mozilla and Pinterest
This long-running lawsuit is one of many similar cases between ISPs and music labels. The labels have also pursued legal action against other internet providers, including Charter Communications and Astound Broadband.
In a recent development on May 28, major record companies and ABKCO settled a piracy lawsuit with Frontier Communications. The legal battle, which began in 2021, could have resulted in hundreds of millions of dollars in damages for the ISP.
The case was dismissed “with prejudice,” which means it cannot be refiled. The terms of the settlement were not revealed, but the court filing confirmed that all parties had agreed to “bear [their] own fees and costs.”
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