On March 25, 2026, the Justices issued their landmark decision in Cox Communications, Inc. v. Sony Music Entertainment, No. 24-171, holding that an ISP is not contributorily liable for copyright infringement committed by its users merely because it continued to provide service to subscribers it knew were associated with infringing activity. The Court reversed the U.S. Court of Appeals for the Fourth Circuit’s affirmance of a $1 billion statutory damages verdict, finding that Cox neither induced its users’ infringement nor provided a service tailored to infringement.
The Court’s Holding
In a majority opinion authored by Justice Clarence Thomas, the Court held that a service provider is contributorily liable for a user’s infringement only if it intended its service to be used for infringement, and that such intent can be established in only two ways. First, a copyright owner can show that the provider affirmatively induced the infringement by actively encouraging it through specific acts, such as the promotion and marketing at issue in Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005). Second, a copyright owner can show that the provider’s service was tailored to infringement — meaning it was “not capable of ‘substantial’ or ‘commercially significant’ noninfringing uses,” as the Court assessed in Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984).
Applying this framework, the Court found that Cox’s actions satisfied neither prong. Cox did not induce or encourage its subscribers to infringe; to the contrary, it actively discouraged infringement through warnings, suspensions and terminations. And Cox’s internet service was plainly capable of substantial non-infringing uses, as it simply provided general internet access used for many lawful purposes. The Court emphasized that “mere knowledge that a service will be used to infringe is insufficient to establish the required intent to infringe,” reaffirming a principle it traced through Kalem Co. v. Harper Brothers, Sony, and Grokster.
The Court also rejected Sony’s argument that the Digital Millennium Copyright Act’s (DMCA) safe harbor provisions, which protect ISPs that terminate repeat infringers “in appropriate circumstances,” presuppose ISP liability for serving known infringers. The Court observed that the DMCA does not expressly impose such liability, but merely creates new defenses, and that failure to qualify for the safe harbor “shall not bear adversely upon … a defense by the service provider that the service provider’s conduct is not infringing.”
Key Takeaways and Implications
Narrowed scope of secondary copyright liability for service providers
The decision establishes a clear rule that contributory copyright liability requires inducement of infringement or provision of a service tailored to infringement. Mere knowledge that a service is being used for infringement, even coupled with a failure to terminate the infringing user, is insufficient. This provides significant protection for ISPs and other general-purpose service providers.
Potential implications beyond ISPs
The Court’s reasoning may extend to other intermediaries — such as cloud storage providers, hosting platforms and payment processors — that provide general-purpose services used by some customers for infringing purposes. Any entity providing a service capable of substantial non-infringing uses may benefit from this decision when faced with claims of contributory infringement based on knowledge alone.
Potential implications for AI-related litigation
The Court’s reasoning may also impact evolving caselaw regarding liability for user-prompted outputs of generative AI tools.
Potential implications for secondary trademark liability
This ruling creates a divide between the standard for secondary liability for trademark infringement, which can be based on knowledge of infringement coupled with a failure to cease providing services, and the secondary copyright liability standard. Courts may move to align the standard for secondary trademark infringement with the Cox standard, or litigants may look to bring secondary liability cases under trademark theories instead of copyright.
Copyright enforcement strategies will shift
Copyright owners may need to focus enforcement efforts on direct infringers or pursue theories of vicarious liability, inducement or service tailoring rather than relying on knowledge-based contributory liability theories against intermediaries.
McGuireWoods continues to monitor developments stemming from this decision and any legislative responses. For questions regarding the impact of this ruling on your business or enforcement strategy, contact the authors or a member of the Intellectual Property Practice Group.