Observations on Cox v. Sony

Yesterday the Supreme Court released its opinion in Cox Communications, Inc. v. Sony Music Entertainment, holding: “The provider of a service is contributorily liable for the user’s infringement only if it intended that the provided service be used for infringement. The intent required for contributory liability can be shown only if the party induced the infringement or the provided service is tailored to that infringement. Grokster, 545 U. S., at 930; Sony, 464 U. S., at 440–441.”

The decision casts itself, persuasively, as an affirmation of precedent (but see the concurrence). It focuses especially on Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005) and Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984), while also citing older precedents (Kalem (1911)!) with approval. How is it possible to praise both cases given the popular understanding that Grokster narrowed Sony? For me, after reading Cox, Grokster looks more minor than it did, and Sony (1984, for avoidance of confusion) looks more important. 

It’s really striking what a different place we are at now compared to at the time of the District Court verdict. First, the Fourth Circuit beat back a dangerous interpretation of vicarious liability (the plaintiffs argued that infringer’s payment for internet service counted as a financial interest in the infringement on the defendant’s part). Now, the Supreme Court has done the same for an overbroad interpretation of contributory liability. I was not expecting this, at least not until SCOTUSblog’s post on oral argument gave me reason to hope. (Not to mention – the Court denied cert on the vicarious liability analysis from the Fourth Circuit, implying that it is also sound.)

Internet access at libraries, universities, and coffee shops

I was watching this case for the same reason that the Association of Research Libraries joined an amicus brief (with EFF, ALA, and Re:Create). Upholding the Fourth Circuit’s ruling on contributory liability would have made it tough for entities like libraries and universities (as well as the Court’s charming example of coffee shops) to maintain internet service. A service provider like Cox would have to cut off an entire library in order to avoid being liable for infringement by a library user. The infringing acts of one person would cost everyone. The Court took this argument seriously.

Safe harbors

Cox’s behavior during the relevant period was outside the safe harbor of DMCA Section 512. Sony argued that, given Cox was potentially in the safe harbor but ended up outside of it, Cox’s activities must surely give rise to liability (otherwise, why the need for the safe harbor?). The Court neatly dismissed this argument, in a way that I think has heartening consequences for libraries and archives. The Court wrote that the DMCA “does not [expressly impose liability for Internet service providers who serve known infringers]. The DMCA merely creates new defenses from liability for such providers. And, the DMCA made clear that failure to comply with the safe-harbor rules ‘shall not bear adversely upon . . . a defense by the service provider that the service provider’s conduct is not infringing.’”

Although we don’t often use the language of “safe harbor” for Section 108, the users’ rights for libraries and archives in the Copyright Act, its function is similar to 512’s. It does not create liability – it only removes it. In at least two cases (Authors Guild v. HathiTrust, 755 F.3d 87 (2d Cir. 2014) and Hachette v. Internet Archive, 664 F.Supp.3d 370 (S.D.N.Y. 2023)), plaintiffs have argued that a library whose behavior falls outside 108 must be infringing. This is false, based on the plain text of 108: “Nothing in this section . . . in any way affects the right of fair use as provided by section 107.” The Second Circuit in HathiTrust and the District Court in Hachette rightly disposed of this argument. It is great to see the Supreme Court doing something similar here.

(I think there is a typo in this part of the opinion. It reads, “Sony overreads the DMCA. Sony does not contend that the DMCA expressly imposes liability for Internet service providers who serve known infringers. It does not.” Surely this should read, “Sony contends that…”? Will be curious to see what others make of this.)

Tailored to infringement

This opinion introduces a phrase that seems to be new. (At least, I don’t see it in Grokster or Sony.) 

A service is tailored to infringement if it is “not capable of ‘substantial’ or ‘commercially significant’ noninfringing uses.” Grokster, 545 U. S., at 942 (Ginsburg, J., concurring) (quoting Sony, 464 U. S., at 442).

“Tailored to infringement” now forms one subtype of contributory liability, the other being inducement. There is, it would seem, no other theory of contributory liability. (The concurrence by Justice Sotomayor, joined by Justice Jackson, criticizes this aspect of the opinion: “The majority is wrong, however, that those are or should be the only two forms of secondary liability for copyright infringement.”) 

The formulation that contributory liability requires a material contribution and plus actual or constructive knowledge is out. That formula was difficult to apply, especially with Sony and Grokster thrown into the mix. And as the amicus brief mentioned above pointed out, it was prone to overbroad interpretation. There is a difference between preventing liability for devices that are capable of substantial noninfringing use and creating liability only where the device distributed is not capable of substantial noninfringing use (or where there has been inducement). This latter formulation is now “tailored to infringement,” and I like it!

I teach copyright law every spring, and it’s always exciting when new Supreme Court precedent comes out in the middle of the class. This time it’s doubly exciting because the law has actually gotten clearer, which laws ought to be if they possibly can. (Sometimes March opinions have been a disappointment – here’s looking at you, Star Athletica.)

Sony v. Sony

Sony is a named party in this case and in one of the key precedents. In fact it seems to have been a plaintiff in Grokster as well. (I had to go back to the 9th Circuit opinion to get past the et al.). Since Sony Corp. v. Universal City Studios (1984), Sony has switched sides. In that case, Sony was the defendant, sued by Universal over its manufacture and sale of Betamax videotape recorders. Its arguments helped to create the doctrine that sale of a device “capable of substantial noninfringing use” does not give rise to contributory infringement. But here, as in Grokster, Sony is the plaintiff, arguing for a narrowing or abandonment of the doctrine it helped create 42 years ago. (If Grokster feels recent to you like it does to me, consider that 2005 marks the halfway point between 1984 and 2026.)

Looking at copyright policy in the U.S. (both in Congress and in the courts), it’s undeniable that it is shaped by powerful corporate interests. Certainly there have been moments of triumph for grassroots movements – stopping SOPA/PIPA comes to mind; people actually took to the streets to protest copyright overreach. But the public interest has done best when it has aligned with the self-interest of a powerful for-profit. Indeed, the SOPA/PIPA fight is an example of this – Wikipedia, a non-profit, led the way on a blackout of its services, and many other non-profits participated. But Google joined in too.

Knowing that alliances with for-profits can advance the public interest in balanced copyright, we might fall into the trap of thinking that a particular company is aligned with the public interest or the interests of libraries. It’s not like that. Companies change. Sony benefited from limitations on copyright in the early 1980s when it was selling hardware. It avoided secondary liability, and by getting the Supreme Court to recognize time-shifting by individual Betamax users as fair use, it reduced the cost to consumers of a complementary good (stuff to watch with your Betamax). When the price of the complement falls, sales of your own product should go up. Consider a food example: if the price of hot dogs falls, sales of hot dog buns will increase. User’s rights in copyright benefit companies selling technologies that can be used to consume or reproduce copyrighted material. (An unrelated problem prevented the success of Betamax – JVC quickly captured a greater market share with its cheaper VHS format. Network effects exacerbated the situation, because now it was easier to find tapes in VHS format than Betamax. And that meant people bought VHS machines instead.)

Sony still makes hardware (TVs, semiconductors (foreshadowing?)…), but at the moment that’s not driving the company’s copyright strategy. It currently seeks to expand copyright’s ambit for the benefit of its film, music, and video game businesses. Of course this has been obvious for a while, and I’m sure others have remarked on it – in addition to Grokster, see e.g. the Sony rootkit (uncovered in 2005) and Sony’s lawsuit against Joel Tenenbaum (begun in 2007). With Sony being a named party here, the contradiction is just more obvious. 

This is a reminder, if you needed it, not to take a corporation too seriously when it defends the public interest. Alliances shift. To put a cheerier spin on it, this is America’s adversarial court system working. In 1984, Sony poured its substantial resources into one side of this debate. Now it has poured them into the other side. In both cases, the other sides were also powerful, and the Court reached an outcome that serves the public interest. (Can we see balanced power in a multinational suing a college student, even one with excellent lawyers? I don’t.)

P.S. You would not believe how many times I hit command+I to italicize before typing Sony, only to realize that I wanted to refer to the company rather than the precedent. That’s how inextricable the connection is between Sony and the principles of Sony (despite over two decades of examples to the contrary).