Unanimous Supreme Court Says Internet Service Provider Not Liable for Internet Users’ Illegal Downloads

Sometimes, the U.S. Supreme Court will decide a big case and almost everybody will seem to take notice. Other times, however, the Court will decide a major case and practically nobody will seem to notice, except for a small subset of experts, practitioners, and all-purpose SCOTUS nerds. I think it is probably safe to say that yesterday’s important decision in Cox Communications v. Sony Music Entertainment falls within the latter category.

Cox v. Sony is one of those cases in which the legal stakes were incredibly high, but the underlying legal dispute was technical and dry. At issue was whether “an internet service provider (ISP) can be held liable for ‘materially contributing’ to copyright infringement merely because the ISP knew that people were using certain accounts to infringe but did not terminate access, without proof that the ISP engaged in affirmative conduct with the purpose of furthering infringement.”

In other words, if Cox Communications was aware of the fact that certain of its paying users were repeat offenders who routinely used the ISP to illegally download copyrighted materials, such as songs or movies, and Cox failed to cut off the internet access of those repeat offenders, was Cox also guilty under federal copyright law?

Writing yesterday for a unanimous Supreme Court, Justice Clarence Thomas answered that question with a clear no. “Under our precedents,” he wrote, “a company is not liable as a copyright infringer for merely providing a service to the general public with knowledge that it will be used by some to infringe copyrights.”

When I described the stakes involved in this case as incredibly high, I was thinking in part about a statement made during oral arguments by Cox’s lawyer, Joshua Rosenkranz. A loss for his side would be “cataclysmic,” he explained. “There is no sure-fire way for an ISP to avoid liability, and the only way it can is to cut off the Internet not just for the accused infringer but for anyone else who happens to use the same connection. That could be entire towns, universities, or hospitals.”

To put that another way, the legal arguments made by Sony, if successful, would not just apply to cutting off internet access for a single home. They would also apply to cutting off internet access for an account that might include hundreds or even thousands of lawful users and just a small number of scofflaws, such as the accounts of libraries or universities. To play it safe, the ISP would have to drastically curtail the ways in which all of those law-abiding users accessed the internet in the hopes of thwarting the actions of a lawbreaking minority.

But that far-reaching dire result was avoided by the Court’s judgment. “Cox provided Internet service to its subscribers, but it did not intend for that service to be used to commit copyright infringement,” Thomas wrote. “Holding Cox liable merely for failing to terminate Internet service to infringing accounts would expand secondary copyright liability beyond our precedents.”

Cataclysm averted.

After listening to The Book Club podcast’s recent episode about George Orwell’s 1984, I was inspired to grab a random volume of Orwell’s collected writings off the shelf. That in turn led me to revisit Orwell’s 1944 review of Friedrich Hayek’s The Road to Serfdom, which is basically a meeting of anti-Communist titans on the scale of King Kong vs. Godzilla.

Libertarians will be pleased to learn or recall that Orwell thought highly of what he termed “the negative part of Professor Hayek’s thesis.” According to Orwell, “it cannot be said too often—at any rate, it is not being said nearly often enough—that collectivism is not inherently democratic, but, on the contrary, gives to a tyrannical minority such powers as the Spanish Inquisition never dreamed of.”

Hayek’s positive case for laissez faire, however, left Orwell, a man of the left, entirely unpersuaded. What Hayek “does not see, or will not admit,” Orwell argued, is “that a return to ‘free’ competition means for the great mass of people a tyranny probably worse, because more irresponsible, than that of the State.”

Did Hayek ever comment on Orwell’s work? A quick search didn’t turn up anything for me. But perhaps one of the readers of this newsletter knows more. If you’re aware of any Hayek on Orwell action, please drop me a line.