When a company provides a product capable of multiple uses, should the company be blamed because some of its customers misuse the product to break the law? In the copyright context, the Supreme Court revisits this question every two decades or so, as new technologies create novel ways to infringe intellectual property. Last month, Cox Communications sought high court review of a decision holding broadband providers liable for users’ copyright infringement. The Court should take the case, as the decision seems contrary to its 2005 MGM Studios v Grokster decision and harmful to the public interest.

In 2018, Sony and several other record labels sued Cox, arguing that many subscribers to Cox’s broadband service used their broadband connections to download pirated material in violation of copyright law, and that the company should be held liable for failing to terminate these subscribers’ internet access. The Digital Millennium Copyright Act (DMCA) gives broadband providers a safe harbor against such claims if they maintain a policy for terminating repeat infringers. But in a related case filed by record label BMG, Cox’s case-by-case approach to termination decisions was neither standardized nor aggressive enough to constitute such a policy.

Armed with this finding, Sony argued that Cox’s failure to terminate infringing accounts both stripped it of its DMCA immunity and also made it contributorily liable for the underlying user’s infringing activity. Generally, a plaintiff is contributorily liable for another’s infringement if the plaintiff has knowledge of the infringing activity and induces, causes, or materially contributes to that activity. The Fourth Circuit found that knowledge was established by notices the record labels sent to Cox notifying it of specific users’ allegedly infringing activity. Once this knowledge was established, the Court held that Cox’s decision to continue providing internet access to those specific users was sufficient to constitute a material contribution to the infringing activity and thus supported a finding of contributory liability.

The Fourth Circuit’s decision seems contrary to the spirit of the two Supreme Court cases addressing this topic. In Sony v Universal City Studios, the Court held that a company (amusingly in this case, Sony, which produced the Betamax VCR) generally could not be contributorily liable for selling a product capable of substantial noninfringing uses, even if some purchasers chose to use the product to violate copyright law. Twenty years later, Grokster created a narrow exception for companies that induce their users to violate copyright law. Grokster, which involved several file-sharing companies, held that a company otherwise protected by Sony could nonetheless violate copyright law if it distributes a product by promoting its use as a tool of noninfringement. But Grokster reaffirmed Sony’s holding that mere “failure to take affirmative steps to prevent infringement” is insufficient to support liability.

In light of these precedents, the Fourth Circuit seems to have erred in two ways, as my Boston College colleague Professor Alfred Yen explains. First, the notice that a user previously infringed does not necessarily mean Cox knew the user would infringe again. Cox applied a graduated-response system to such users, which prompted 95 percent of those users to cease their infringing activity. Second, even Cox customers engaged in copyright infringement were also accessing the internet for substantial non-infringing uses. Cox could reasonably have concluded that a family should not lose internet access—and miss out on news, educational opportunities, and communication with the outside world—merely because young Johnny was illegally downloading songs in the basement. Yen argues that basic tort principles, as interpreted by Sony and Grokster, would find culpable intent only when the company wanted infringement to occur.

Importantly, a ruling for Cox does not leave record labels without a remedy. They can sue individual users directly for infringement. Generally, suing tortfeasors directly is better than seeking intermediary liability, as it places responsibility on the most culpable party rather than the deepest pocket in the causation chain.

For labels and other holders of intellectual property, intermediary liability seems like a silver bullet. But the unintended consequences are significant. False positives can cause a broadband provider to wrongly terminate a user’s access while leaving the user with limited avenues for relief. Holding broadband companies liable for user activity creates incentives for providers to compromise user privacy. And damages awards create costs that will be passed along to consumers, driving up the costs of internet access and potentially widening the digital divide.

Sony and the DMCA recognized the significant benefits most internet-based technologies bring to the society, and the risk that intermediary liability could chill these benefits. Their wisdom holds true today: Intellectual Property holders should police their property directly, and it’s generally unreasonable for them instead to deputize intermediaries to enforce copyright law as a condition of serving the public.

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