When is an Internet service provider liable for its customers’ copyright infringement? Almost never, according to a seven-member majority decision by SCOTUS in Cox Communications, Inc., et al. v. Sony Music Entertainment, et al. (March 2026). The ruling overturns a $1 billion award of statutory damages to Sony and other copyright holders.
Cox is an Internet service provider (ISP) whose subscribers each have a unique Internet Protocol (IP) address. Of course, any particular IP can have multiple users, such as a family living under one roof, a coffee shop, or a college dormitory. So, like any other ISP, when Cox learns of an instance of copyright infringement, it only knows the IP address of the subscriber’s account. It cannot determine the identity of the individual infringer.
Sony, in an effort to curtail the rampant copyright infringement occurring in the digital space, hired a firm called MarkMonitor to track the illegal copying of protected works through the Internet and trace the activity to the corresponding IP address. Over a two year period, MarkMonitor sent Cox a total of 163,148 notices of copyright infringement.
Cox allegedly implemented a system intended to limit illegal downloading and uploading of content using its service. First, its contract with subscribers expressly prohibits its service from being used “to post, copy, transmit, or disseminate any content that infringes the patents, copyrights…or proprietary rights of any party.” Second, Cox set up an intervention consisting of progressive warnings and interruption of service to infringing IP subscribers. However, of the 163,148 notices of copyright infringement sent by MarkMonitor, Cox terminated the accounts of only 32 subscribers.
Sony’s lawsuit in the Eastern District of Virginia alleged that Cox was contributorily liable for its users’ infringement by continuing to provide Internet service to IP addresses it knew were sources of infringing activity. The jury found in favor of Sony and awarded $1 billion in damages. The Fourth Circuit Court of Appeals upheld the verdict based on a legal standard it had previously applied, according to which Cox could be held liable for “supplying a product with knowledge that the recipient will use it to infringe copyrights.”
The Supreme Court invalidated the Fourth Circuit’s “with knowledge” standard and held that contributory liability can be shown only if the party induced the infringement or the provided service is tailored to that infringement. For instance, if a company promotes and markets their product as a tool to infringe copyrights, the principal object of their business model can be deemed to be illegal copying of protected works and they may be found contributorily liable. But, mere knowledge that a service will be used to infringe is insufficient where the service is capable of being used for both lawful and unlawful purposes. Because there was no evidence in the record that Cox promoted or marketed its service as a tool of infringement and did not induce its subscribers’ infringement, the judgment against it was reversed.
Justice Sotomayor’s concurring opinion, in which Justice Jackson joined, argued that the majority’s limitation of contributory liability to two narrow theories unnecessarily disregards other possibilities left open by the Court’s precedents, including the common-law theory of aiding and abetting. This theory requires proof that the defendant aided another with the intent of helping that other person succeed in committing a wrongful act, which could be applicable to an ISP’s service to a subscriber (although not Cox’s). Sotomayor lamented that, under the majority’s rule, an ISP would not be liable if it sold an Internet connection to a company that it knows runs a website that exclusively hosts infringing content, or if it sold a connection to an individual who stated that another, more scrupulous ISP terminated his service for unabated piracy. Time will tell if this argument is raised in future ISP litigation.