Supreme Court Limits Scope of Service Provider Copyright Liability for User Content

When is a provider of an internet service liable for the infringing content of its users? The issue may be of interest to many online businesses that process user content, for example by storing or displaying or distributing it.

The U.S. Supreme Court recently added clarity to this issue in a way that may offer some comfort to providers. The case involved claims by Sony that Cox Communications, an internet Service Provider (ISP) providing internet service to 6 million customers, was liable for the copyright infringement of its users based in part on its knowledge of the users’ infringing activities. A billion-dollar jury verdict was affirmed by the Fourth Circuit Court of Appeals but reversed in a unanimous decision by the Supreme Court. The Court held that a service provider’s mere knowledge of a user’s infringing activities is not enough to establish the provider’s liability. Cox Communications, Inc. v. Sony Music Entertainment, 607 U.S. __, 2026 WL 815823 (March 25, 2026).

By way of background, the Copyright Act expressly confers remedies to copyright holders as against “direct” infringers, i.e. individuals or entities that directly violate any of the copyright holder’s statutorily created exclusive rights, including the right to copy, publicly perform (e.g., a theatrical performance), publicly display, and create adaptations (such as transforming a play into a book). Less certain until Cox was the liability of secondary actors: individuals and entities who might facilitate the infringement by direct infringers. The Copyright Act does not explicitly cover this “secondary” liability, and to the extent it is legally recognized, it is the product of caselaw without hooks in the Copyright Act itself.

The question of secondary liability emerged with some urgency in the mid-1990s with the general public’s adoption of the internet and emergence of e-commerce. If websites directly linked to or displayed third-party content without permissions, were the site’s owners direct infringers?  If not, were they liable under principles of secondary liability – and what would that mean? What threshold of notice and knowledge of infringing activity, for example, might be required to attach liability to service providers? The answers to these questions were not clear and Congress was vitally concerned that a fear of liability – especially a fear clouded in legal uncertainty – might chill the development of the internet and the e-commerce infrastructure. Accordingly, in 1998, Congress enacted Section 512 of the Digital Millennium Copyright Act, which created a “safe harbor” for providers of internet services who might be processing infringing materials. (For similar reasons, Congress enacted 512’s statutory cousin, the now high-profile Section 230 of the Communications Decency Act, which immunized service providers for the tortious speech of their users if they did not participate in its creation and development.)

Section 512 of the DMCA provides the safe harbor so long as the service provider complies with its statutory requirements that include implementation of a notice and take-down process for infringing materials and a repeat infringer policy. The safe harbor is just that: subject to service provider compliance, it creates a defense to liability for the infringement of its users. However, if the user’s conduct is not infringing, or if the law were to be such that the service provider’s conduct did not rise to the level of secondary liability (more uncertain pre-Cox), failure to comply with the safe harbor provisions does not itself create a liability.

The Supreme Court’s unanimous holding in Cox has added clarity to the underlying liability scheme as relates to “contributory liability,” one category of secondary liability (claims regarding another category, vicarious liability, were rejected by the Fourth Circuit and were not before the Supreme Court). Sony asserted that Cox was contributorily liable for its users’ infringement because it continued to supply service to customers with IP addresses Cox knew were associated with infringement resulting in a claim of over 10,000 infringements over the relevant period. An earlier Fourth Circuit ruling determined that Cox failed to comply with the DMCA’s safe harbor requirements. That determination left Cox open to massive claims without a safe-harbor defense. The Fourth Circuit held that Cox’s knowledge was sufficient for contributory liability and affirmed the billion-dollar judgment.

On appeal, the Supreme Court, in an opinion by Justice Thomas, reversed and held that mere knowledge of infringing conduct by a service provider is not enough. To be liable for contributory infringement, said the Court, the service provider must intend that the service be used for infringement (a far cry from a “mere knowledge” standard). That intent can be shown only if (i) the provided service is specifically tailored to the infringing conduct (i.e., not capable of a substantial or commercially significant non-infringing use), a test articulated by the Supreme Court in Sony Corp. v. Universal Studios, 464 U.S. 417 (1984); or (ii) the provider affirmatively induces the infringing behavior. Here, the general ISP services provided by Cox could hardly be deemed to be “tailored” to infringing conduct. Further, there was no evidence that Cox actively encouraged customers to engage in infringing behavior, such as by advertising and promoting the service as an effective tool for copyright infringement, as was the case in MGM Studios, Inc.  v. Grokster, Ltd., 545 U.S. 913 (2005) (operators of a music downloading technology were held liable for the infringement of their users). Thus, reasoned the Court, Cox was not liable for the users’ infringement in the first instance, despite its inability to establish the prerequisites for section 512’s safe harbor defense.

The Court noted that the Copyright Act contains no provisions for secondary liability and that it was reluctant to extend secondary liability to “mere knowledge” beyond precedents already established in earlier Supreme Court cases. In a concurring opinion joined by Justice Jackson, Justice Sotomayor took issue with the Court closing off other forms of secondary liability, specifically aiding and abetting liability, but concurred in the judgment because Sony would not be able to satisfy the intent standard that aiding and abetting liability requires.

In light of this important ruling, service providers may want to revisit their policies and practices relating to copyright infringement and particularly their approach to the DMCA safe harbor.

This publication is intended for general informational purposes only and does not constitute legal advice or a solicitation to provide legal services. The information in this publication is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this information without seeking professional legal counsel. The views and opinions expressed herein represent those of the individual author only and are not necessarily the views of Clark Hill PLC.