Court seems dubious of billion-dollar judgment for copyright infringement

The arguments yesterday, Dec. 1, in Cox Communications v. Sony Entertainment confronted one of the central features of internet behavior as it has developed this century: the seemingly ineradicable interest of users in consuming copyrighted media – movies, music, and the like – without permission of the content providers. In this case, the lower courts held that Cox was liable for its customers’ infringement, to the tune of more than a billion dollars. If the arguments yesterday give a reliable hint of their views on the matter, the justices are unlikely to accept that outcome.

Both sides have powerful arguments. Sony’s side is that Cox received numerous notices (millions) of the infringing behavior of its customers and continued to provide service to them even when the repetitive notices made it absolutely clear to Cox that the user would continue to use its service to infringe the copyrights of Sony and its counterparts. The statute has a safe harbor that protects internet service providers like Cox if they have a “reasonable” practice of terminating repeat infringers but the lower courts didn’t think Cox qualified because it so rarely terminated repeat infringers.

Cox’s side is that it has done absolutely nothing to support or encourage infringement, that there is nothing as a practical matter that it could do to stop internet infringement except to terminate service, and that terminating service is not a reasonable response, especially for the users with the most repetitive infringement practices, which are overwhelmingly places like universities, hospitals, and military bases.

The justices had some sharp questions for both sides. Several suggested, for example, that accepting Cox’s argument that an ISP can never be held responsible for the acts of its customers absent some affirmative malfeasance would make the safe harbor meaningless: if Cox has no chance of liability even if it blows the safe harbor (as it did here), what is the point of having a safe harbor at all? By the end of the argument, though, it seemed clear that a majority of the justices simply could not accept the position Paul Clement presented on behalf of Sony.

By far the most pointed inquiries came from Justice Samuel Alito, who told Clement: “I really don’t see how your position works in th[e university] context but maybe you can explain how it could.” Specifically, he asked, “what is an ISP supposed to do with a university account that has, let’s say, 70,000 users?” When Clement responded that the ISP needed to “have a conversation” with the university, Alito pressed ahead with an imaginary conversation: “The ISP tells the university: Look, you know, a lot of your 50,000 students are infringing my copyright. Do something about it. … And so then it knocks out a thousand students. And then another thousand students are going to pop up doing the same thing. I just don’t see how it’s workable at all.”

At that point, Clement pointed to the example of hotels, that “don’t provide their guests with services at a speed that are sufficient to do peer-to-peer downloading precisely because they don’t want to be in the position of having guests that are staying there largely so they can sort of upload and download copyrighted works.” Alito (incredulously) responded: “Do you think that’s what a university should do?” To which Clement replied, “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.” My strong guess is that computer science departments, to say nothing of hospitals and military bases, don’t think the Supreme Court should push them into “that world.”

On a more doctrinal note, Justice Elena Kagan offered a detailed summary of the existing cases, which suggests she is most unlikely to agree with Sony. She explained that she sees “three big principles” in those cases. The first is that you can’t be liable unless you “seek by your action to make [the infringement] occur, like want to do it, want to have this happen. … [T]hat’s one. The second is this real distinction between non-feasance and misfeasance. If all you do [is] say we’re not doing anything, that does not suffice. And the third is this distinction between treating the customer just like you treat everybody else, on the one hand, and, on the other hand, providing special assistance [to the infringing activity].”

The problem for Clement, Kagan explained, is that “if you look at those three things, you fail on all of them. And that is because those three things are kind of inconsistent with the … standard that you[’ve] laid out.” 

Another problem for Sony that worried several of the justices is that the admittedly significant liability Sony seeks to impose on Cox is not easy to see in anything Congress has enacted. The justices in several contexts have been reluctant to impose this kind of aiding-and-abetting liability without direct statutory authorization. Justice Neil Gorsuch, for example, emphasized the court’s unwillingness to create liability like this in the securities area, suggesting that a judicial proclamation of liability in the intellectual-property area amounts to a “flag on the field.” Justices Brett Kavanaugh and Clarence Thomas seemed to share that concern, and by the end of the argument, Gorsuch seemed pretty clearly to be laying out the basic lines of an opinion he would be pleased to write rejecting the lower court’s analysis.

My basic reaction to the argument is that the justices would be uncomfortable with accepting the broadest version of the arguments that Cox has presented to it (that the ISP is protected absent an affirmative act of malfeasance), but Sony’s position seems so unpalatable to them that a majority is most unlikely to coalesce around anything that is not a firm rejection of the lower court’s ruling against Cox. I wouldn’t expect that ruling to come soon, but I don’t think there is much doubt about what it will say.