In Vacating $1 Billion Judgment, the Supreme Court Narrows Contributory Copyright Infringement

In its latest intellectual property decision, Cox Communications, Inc. v. Sony Music Entertainment, on March 25, 2026, the U.S. Supreme Court significantly limited the reach of secondary liability for contributory copyright infringement.

In reversing the Fourth Circuit Court of Appeals, the Supreme Court rejected the premise that “supplying a product with knowledge that the recipient will use it to infringe copyrights is exactly the sort of culpable conduct sufficient for contributory infringement,” Sony Music Entm’t v. Cox Commcn’s, Inc., 93 F. 4th 222, 236 (4th Cir. 2024). Instead, the Supreme Court held that a much narrower “intent” standard applies for contributory liability, and that “intent required for con­tributory liability can be shown only if the party induced the infringement or the provided service is tailored to that infringement.”

Drawing parallels to the standard for secondary liability under patent law, the Supreme Court’s opinion held that the “inducement” test for copyright infringement requires proof that the defendant “actively encourage[d] infringement through specific acts.” With respect to the alternative test for contributory infringement - that the defendant offered a product or service “tailored to ... infringement” - the Supreme Court held the plaintiff must show that the products or services have no “‘substantial’ or ‘commercially significant’ non-infringing uses.” Perhaps just as significantly, the Supreme Court pronounced that while providers of internet-based services may have additional defenses against infringement claims under the 1998 Digital Millennium Copyright Act (DMCA), a service provider’s failure to follow DMCA notice-and-takedown procedures is not a basis for imposing contributory infringement liability.

The upshot of the decision is that providers of otherwise legitimate products and services have significantly less risk of being held liable for their users’ actions, and copyright holders should expect significantly greater difficulty enforcing their rights. But while the Supreme Court made it more difficult to prevail on a claim for contributory copyright infringement, it, perhaps unknowingly, significantly increased the potential liability for defendants who are found to have contributed to copyright infringement.

Background

Since the 1990’s, the Recording Industry Association of America (RIAA) and other copyright holders have devoted extensive efforts to battling online infringement. Due to the costs and reputation risks of bringing enforcement against individual infringers and the difficulties of targeting decentralized file-sharing networks, for the past couple of decades copyright owners have frequently turned to the notice-and-takedown process under the DMCA. Under that framework, online service providers are largely granted immunity from copyright infringement liability for infringement occurring at the direction of their users, as long as they adopt and reasonably implement policies to terminate access for repeat infringers and take prompt action to remove or disable access to infringing content after proper notice from copyright owners.

The District Court Proceedings

In 2018, Sony Music Entertainment, together with a host of other RIAA members, sued Cox Communications, a provider of internet service to millions of users. The RIAA group had hired MarkMonitor, an antipiracy company, to monitor for copyright infringement on file-sharing networks, like BitTorrent. After identifying internet protocol (IP) addresses sharing infringing content, MarkMonitor sent infringement notices to Cox under the DMCA’s procedures. Cox, which had adopted a 13-strike repeat infringer policy, would in turn send notice to the subscriber with that IP address about the infringement notice it had received.

Based on the sheer volume of infringement notices it was receiving, Cox decided to cap the number of notices it would accept from the RIAA at 600 per day. It also limited the number of subscribers it would suspend, and then restarted the 13-strike count for any subscriber whose account was terminated and then reactivated. During 2013 and 2014, the RIAA sent Cox 163,148 infringement notices, but Cox terminated only 32 subscribers in response. The district court found, and the Fourth Circuit affirmed, that Cox had not reasonably implemented a repeat-infringer policy and did not qualify for DMCA safe harbor protection.

The case then proceeded to trial under two theories of secondary copyright infringement liability: vicarious and contributory infringement. At trial, the jury found Cox was liable under both theories for willful secondary infringement of more than 10,000 copyrighted works. The result: a $1 billion damages award.

The Appeal

On appeal, the Fourth Circuit reversed in part and affirmed in part.

First, the appeals court reversed the jury finding of vicarious liability, “because Cox did not directly profit from its subscribers’ infringement.” In other words, for vicarious liability, a “financial benefit to the defendant must flow directly from the third party’s acts of infringement to establish vicarious liability,” but Cox’s revenues came from charging its subscribers a monthly fee to access the internet “no matter what they did online.” Cox’s charging for and receiving “continued payment of monthly fees for internet service, even by repeat infringers, was not a financial benefit flowing directly from the copyright infringement itself.”

Second, the appeals court affirmed Cox’s liability for contributory infringement. Repeating what was then a fairly widespread understanding of the law of contributory copyright infringement, the Fourth Circuit ruled that “supplying a product with knowledge that the recipient will use it to infringe copyrights is exactly the sort of culpable conduct sufficient for contributory infringement.” Accordingly, the Fourth Circuit held that Cox could be held liable because it “knew of specific instances of repeat copyright infringement occurring on its network, … traced those instances to specific users, and … chose to continue providing monthly internet access to those users despite believing the online infringement would continue because it wanted to avoid losing revenue.”

The Supreme Court’s Decision

The Supreme Court granted certiorari on Cox’s appeal from the contributory liability holding, while simultaneously declining to consider Sony’s appeal on the vicarious liability ruling.

In reversing the Fourth Circuit’s contributory liability ruling, Justice Clarence Thomas, writing the majority opinion joined by six other Justices, stated: “Our precedents have recognized specific forms of secondary copyright liabil­ity that predated the Copyright Act,” and “we are loath to expand such liability beyond those precedents.”

Explicitly drawing upon patent law, the opinion held that a defendant’s liability for contributory copyright infringement must be intentional, and that intent can be based only on inducement—meaning “the party express[ed] ‘an affirmative intent that the product [or service] be used to infringe’” (i.e., by expressly promoting or marketing the product for infringement purposes)—or on the basis that the product or service is “especially made or especially adapted for use in an infringement,” i.e., that it has no “substantial or commercially significant non-infringing uses.” The majority held that even though Cox knew some of its users were utilizing its services to infringe, that knowledge was insufficient for contributory liability because the internet services it provided were not made for the purpose of infringing and Cox did not explicitly encourage its users to infringe.  The majority explained that “Cox did not tailor its service to make copyright infringement easier. Cox simply provided Internet access, which is used for many purposes other than copyright infringement.”

Finally, the Court also rejected Sony’s argument that “Congress must have enacted the DMCA on the presumption that Internet service providers could be held liable in cases such as these.” Rather: “The DMCA merely creates new defenses from liability for such providers,” and on its face says that “the safe-harbor rules ‘shall not bear adversely upon . . . a defense by the service provider that the service provider’s conduct is not infringing.’”

While concurring in the judgment, Justice Sonia Sotomayor took issue with the majority’s “inflexible limit” for contributory liability. Justice Sotomayor, who was joined by Justice Jackson, analyzed the issue by assuming that aiding and abetting remains a valid theory for contributory liability, but then found that there was no evidence that “Cox intended to aid spe­cific instances of infringement,” because, in fact, Cox only knows which account is used to infringe, but not who is using that account.

The Immediate Takeaway

For copyright holders, this decision will make enforcement more difficult, because they will no longer be able to rely on service providers’ indifference to infringement as a basis for imposing contributory liability. While the Court’s decision may spell the end of damages-seeking litigation against ISPs, copyright holders are likely to shift their enforcement efforts to other types of service providers, and more likely, to individual infringers.

Service providers should carefully consider whether, and to what extent, implementing a DMCA-compliant notice-and-takedown process is worth the effort. Likewise, defendants facing contributory copyright claims now have additional ammunition to seek early dismissal or judgment where the facts fail to establish the requisite intent with evidence of specific acts to encourage infringement or the absence of non-infringing uses of their services.

Where The Future Lies

By narrowing the scope of potential contributory copyright infringement liability, the Cox decision has significant implications across multiple industries. Despite some of the Justices’ and commentators’ expressed concerns that this decision guts the DMCA’s incentive structure, the DMCA’s safe harbors can still provide meaningful protections for providers of many types of internet-based services. For example, though much of copyright infringement litigation focuses on unauthorized copying (as in Cox, and as would be the issue for most ISPs)—the DMCA may shield service providers from liability for conduct other than copying—for example, unauthorized public display of pictorial and graphic works that users store or transmit through their platforms.

In answering what is necessary to prove contributory copyright infringement, the Supreme Court may have raised another question that will perplex lower courts in the future – is a contributory copyright infringer a per se willful infringer under the Copyright Act?  While the Supreme Court has yet to articulate a standard for willfulness under the Copyright Act, the “majority view among the other circuits” is that “the prima facie case for willful infringement requires a showing of specific intent to violate copyright law.” BC Tech., Inc. Ensil Int’l Corp., 464 Fed. Appx. 689, 696 (10th Cir. Feb. 7, 2012).  This standard for willful copyright infringement – the “specific intent to violate copyright law” seems eerily similar to the Supreme Court’s formulation of the standard for proving contributory copyright liability itself – “an affirmative intent that the product [or service] be used to infringe”.  If “intent” to infringe is the benchmark for both contributory infringement and willful infringement, it begs the question of whether non-willful contributory infringement is even possible. 

The decision may also have a significant impact for providers of generative AI services. As long as the tools they provide are not marketed for or adapted specifically for the purposes of infringement, and as long as they neither directly derive revenues from nor control their users’ intentional infringement through the use of those tools, GenAI providers may be less likely to be targets of copyright holders’ claims, at least when based on user inputs and their resulting outputs.

While most early reactions to Cox are focused on the impacts of the case to the internet and the world of high-tech service providers, it may have a broader impact. As one example, it calls into question the continued viability of the “flea market” cases, where business operators and landlords have been held liable for others’ copyright infringements on their premises when they know vendors are selling infringing works.

Both rights holders and those who host others’ activities (whether physically or digitally) should take a fresh look at their copyright policies, strategies, and practices in light of Cox.

Copyright © 2026 by Ballard Spahr LLP.
www.ballardspahr.com
(No claim to original U.S. government material.)

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.

This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.