Supreme Court Will Weigh Music Piracy Liability for Internet Service Providers in $1B Cox Case

The U.S Supreme Court has agreed to review a billion-dollar lawsuit brought by the major record labels against Cox Communications and decide whether internet service providers can be held liable when their users download music illegally.

The justices’ order list from Monday (June 30) grants Cox’s petition to review a $1 billion jury verdict won by Universal Music Group, Sony Music Entertainment and Warner Music Group in 2019. The case held that Cox was responsible for its users’ music piracy because it failed to terminate subscribers who were repeatedly accused of violating copyright law.

In granting the petition, the Supreme Court is agreeing to decide on a broad scale whether the country’s various internet service providers can be held liable for piracy under a legal theory known as contributory copyright infringement.

Cox says the “draconian” ruling in this case improperly punishes ISPs for the behavior of their users and “threatens mass disruption” across the internet. The Justice Department has sided with Cox, warning that innocent Americans could lose access to the internet if connections used by entire families, businesses or universities are terminated because of infringement by a single user.

The major labels, meanwhile, did not want the Supreme Court to weigh in on the matter. They maintain that the lower court was right on the issue of contributory infringement and that “Cox’s contrived arguments about the tenuous state of the internet are both wrong and disingenuous.”

Universal, Warner and Sony all sued Cox in 2018 over its users’ alleged copyright infringement. ISPs like Cox are often shielded from such lawsuits by the Digital Millennium Copyright Act (DMCA), but a Virginia federal judge ruled ahead of trial that Cox had forfeited that protection by failing to terminate repeat piracy offenders.

Stripped of that immunity, jurors held Cox liable in December 2019 for the infringement of 10,017 separate songs and awarded the labels more than $99,000 for each song — adding up to a whopping $1 billion.

A mid-level appeals court upheld Cox’s liability last year but ordered the damages to be recalculated. The record labels then filed their own Supreme Court petition asking to reinstate the $1 billion verdict, but the justices declined that on Monday.

A spokesperson for Cox said in a statement that the company is “pleased the U.S. Supreme Court has decided to address these significant copyright issues that could jeopardize internet access for all Americans and fundamentally change how internet service providers manage their networks.”

“Today’s development supports our goal of protecting consumers, preserving open internet access and ensuring that broadband remains a reliable resource for the communities we serve,” added the Cox spokesperson. “We look forward to presenting our arguments to the court.”

The Recording Industry Association of America (RIAA) said in a statement of its own on Monday that under the DMCA, ISPs like Cox must face monetary liability if they do not “impose real consequences on users who repeatedly violate creators’ rights.”

“We are confident that on full review of the record, the court — like the trial and appellate courts did before it — will find that Cox’s willful failure to follow well-settled law contributed to massive infringement of the plaintiffs’ copyrights and will return the case to the trial court for final determination of damages,” said the RIAA on behalf of the record labels.