SCOTUS Wrestles With ISPs' Liability For Music Piracy

Cox Communications on Monday urged the Supreme Court to wipe out a lower court's decision that the company contributed to music piracy by failing to disconnect accused file-sharers.

In a hearing that lasted for nearly two hours, Cox attorney Josh Rosenkranz argued that failing to terminate internet access to people accused of piracy does not amount to "aiding and abetting" infringement. He also warned that cutting off access in response to infringement allegations would have meant disconnecting universities, hospitals and regional internet service providers.

"Turning internet providers into internet police ... will wreak havoc with the essential medium through which modern public engages in commerce and speech," he told the justices.

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But Paul Clement, who represented record companies, countered that the ruling should stand, arguing that Cox made a "material contribution" to infringement.

"It is beyond dispute that Cox provided the service to known infringers with substantial knowledge that what they themselves called habitual abusers would continue to infringe," he told the justices.

The Trump administration weighed in on Cox's side.

"The approach of terminating all access to the internet based on infringement -- it seems extremely overbroad given the centrality of the internet to modern life and given the First Amendment," Deputy Solicitor General Malcolm Stewart said.

Monday's arguments came in a battle dating to 2018, when Sony Music Entertainment and other music companies sued Cox for allegedly facilitating piracy. The music companies claimed they sent “hundreds of thousands” of notifications about piracy to Cox, and that the company failed to terminate repeat offenders.

Cox was found liable and, in late 2019, a jury ordered the broadband provider to pay $1 billion to the record companies -- or nearly $100,000 per work for around 10,000 pieces of downloaded or shared music.

The company appealed to the 4th Circuit Court of Appeals, which upheld a finding that the company contributed to copyright infringement by failing to disconnect alleged file-sharers, but returned the matter to the trial court for a new trial on damages.

Cox is now appealing that ruling to the Supreme Court.

The justices on Monday questioned both sides about the implications of their arguments,

At one point, Justice Amy Coney Barrett asked Cox's attorney whether, if it prevails on appeal, it would have reason to take any action regarding alleged infringement by users.

"What incentive would you have to do anything if you won?" she asked.

Rosenkranz replied that Cox "is a good corporate citizen that cares a lot about what happens on its system."

"We do all sorts of things that the law does not require us to do," he added.

Justice Sonia Sotomayor later posed a similar question to the Trump administration's Stewart, asking whether he worried that a ruling in Cox's favor would be "a disincentive for ISP providers to provide any aid to copyright holders."

"Why would they bother?" she asked. "I mean, I've never heard of prosecutors ever relying on good citizenship concepts."

Stewart said he agreed that if Cox wins, internet service providers wouldn't have "much economic incentive" to cancel access of alleged infringers, but suggested that terminating access was not an appropriate response to piracy.

Instead, he suggested that internet service providers could take a "more targeted" approach by removing infringing material.

Justice Samuel Alito later asked the record industry's Clement how he proposed internet service providers should respond to allegations that a university's broadband system was used for infringement.

Clement responded by discussing hotels -- a subject he said he knew "a little bit better" than universities.

"A lot of hotels actually ... don't provide their guests with services at a speed that are sufficient to do peer-to-peer downloading," he said.

"Do you think that's what a university should do?" Alito asked.

Clement responded: "I don't think it would be the end of the world if universities provided service at a speed that was sufficient for most other purposes but didn't allow the students to take full advantage of BitTorrent. I could live in that world."

The court is expected to issue a ruling before the end of its term -- which typically occurs in late June or early July.

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