The US music industry’s billion dollar victory against online piracy faces its biggest threat yet after Donald Trump’s appointee as Solicitor General at the Department Of Justice has urged the Supreme Court to review the landmark ruling against internet service provider Cox Communications, arguing that it conflicts with established law and could cut off internet access for millions of Americans.
In a move that could undermine years of anti-piracy efforts, the US Solicitor General D John Sauer has submitted an amicus brief that backs Cox’s position in its long-running litigation with the major labels. In his filing he presents legal arguments that could pose a major setback to the music industry’s ongoing battle against online piracy.
Unsurprisingly, Cox has welcomed Sauer’s intervention. A spokesperson says, “We are pleased the Solicitor General agrees the Supreme Court should review this significant copyright case that could jeopardise internet access for all Americans and fundamentally change how internet service providers manage their networks”.
The record companies’ legal battles with Cox - initially a lawsuit filed by BMG, and then litigation pursued by the majors - have resulted in significant wins as part of the music industry’s long-term strategy to force ISPs to play a more proactive role in policing online piracy. In their case, the majors also initially won a billion dollars in damages.
If that judgement is now overturned, not only would the majors lose their massive damages award, but with it the legal leverage to force ISPs to crack down on serial pirates.
Sauer argues that the Cox ruling conflicts with decades of Supreme Court precedent on when tech companies can be held responsible for their users’ actions. Sauer’s key warning - echoing a narrative previously pushed by Cox - is that if the ruling stands, ISPs might begin terminating accounts based on a single copyright complaint, with millions of Americans losing internet access as a result.
“Losing internet access is a serious consequence, as the internet has become an essential feature of modern life”, Sauer writes. He also notes that, because connections are often shared by families or businesses, the Cox ruling could also “cause numerous non-infringing users to lose their internet access”.
The majors have consistently downplayed these warnings, desperate to preserve both their mega-damages, and the precedent the Cox ruling provides to crack down on piracy.
The Supreme Court first invited the Solicitor General’s input on this case last November under the Biden administration. Sauer - who previously represented Trump in the criminal case stemming from the January 6 insurrection - then took on the role of Solicitor General in April
The music industry’s big legal battle with Cox
The major labels sued Cox for failing to deal with customers that the music companies had identified as repeat pirates.
While US law typically protects internet companies like ISPs from being held liable for their users infringing copyright, this ‘safe harbour’ requires them to have reasonable policies in place to deal with repeat infringers.
The lower courts found Cox’s anti-piracy policies inadequate, meaning it could not rely on the safe harbour, and then ruled that the company was liable for contributory infringement - knowingly helping users pirate music - and for vicarious infringement - profiting from those pirating customers.
A jury then awarded the music companies a billion dollars in damages.
On appeal, the contributory infringement was upheld, but the vicarious infringement ruling was overturned, forcing a recalculation of the damages.
Both sides want the Supreme Court to intervene - Cox to overturn the contributory infringement judgement, and the majors to restore the ruling on vicarious infringement. Basically the majors want the original ruling with the billion dollar damages restored, while Cox wants the entire case to be thrown out.
Reviewing key Supreme Court cases
Sauer’s brief argues that the Cox ruling breaks with 40 years of precedent about when tech companies are responsible for user behaviour, citing three key cases.
First, the Sony Betamax case from the 1980s, in which Sony was the technology company rather than the copyright owner, sued by the movie studios because people were using its Betamax video recorders to pirate movies.
The Supreme Court ruled that - because the video recorders had legitimate as well as illegitimate uses, and Sony had no control over how its customers use its devices - it couldn’t be held liable when its customers used a Betamax player to make pirated copies of movies.
The Sony Betamax ruling - and similar judgements in similar disputes in other countries - were very relevant when the music industry started suing the providers of P2P file-sharing software in the late 1990s and early 2000s.
The file-sharing companies argued that because Sony wasn’t liable for its customers’ infringement, they shouldn’t be liable either when everyone started using P2P file-sharing apps to make illegal copies of music.
In the main, that argument failed in court, on the basis that file-sharing companies did actually have some control over how people used their software, while the sellers of physical recording devices did not.
However, with the big file-sharing case that got to the US Supreme Court in 2005 - involving Grokster - what was key to the judgement against the file-sharing company was that its marketing heavily implied people should use its software to infringe copyright by illegally sharing copyright-protected works.
Sauer’s view on the majors v Cox case
“Taken together”, Sauer says, “Sony and Grokster make clear that contributory liability for copyright infringement requires more than knowledge that others have put the defendant’s products to infringing uses”. Which is to say, record labels telling Cox that its customers have pirated music is not enough. Instead, he argues, it requires “culpable intent” on the part of Cox to cause infringement.
The lower court, he notes, acknowledged that “Cox’s business model was indifferent to whether its subscribers used the internet for lawful or unlawful purposes”.
Therefore, Sauer continues, the Supreme Court needs to consider what US law says about ‘culpable intent’. Which is exactly what it did in the third case cited by Sauer, 2023’s Twitter v Taamneh case, which Cox has also argued is very relevant to this dispute.
That case focused on whether social media companies aided and abetted ISIS by allowing its members to use their platforms for “recruiting, fundraising and spreading their propaganda”. The Supreme Court ruled the social media companies were not liable for third parties undertaking illegal acts on their platforms.
The May 2023 Supreme Court judgement in Twitter v Taamneh came after the first appeal of the major labels v Cox dispute. However, in another copyright dispute between the major labels and a different ISP - Grande Communications - the Twitter v Taamneh ruling came up when that case was appealed in 2024.
The court considering the appeal concluded there was no direct connection between the Twitter case and the piracy case, and therefore Grande was still liable for contributory infringement - but Sauer disagrees.
The Supreme Court’s reasoning in the Twitter v Taamneh case, he writes, “reinforces the conclusion that imposing liability on Cox for copyright infringement” when it failed to disconnect known pirates was the wrong decision because it is “incompatible” with “traditional limitations” around “secondary liability” in US law.
Because of all this - and because of the significant legal precedents that need to be considered - it’s important that the majors vs Cox dispute is reviewed by the Supreme Court, Sauer concludes.
The Supreme Court will now decide whether or not it is going to take up the case. If it does, the result could reshape how the music industry fights piracy in the digital age. A reversal would not only cost the majors their mega-bucks piracy payout, but eliminate a powerful precedent for forcing ISPs to take action to stamp out piracy on their networks.
Throughout the proceedings, the industry has fought hard to downplay concerns about the potential consequences of people being kicked off the internet. But with a key Trump ally now weighing in on Cox’s side, momentum may be shifting back in favour of tech companies.
With power in the US now held by an unashamedly pro-tech president who has surrounded himself with CEOs and lobbyists from some of the most powerful technology companies on the planet, the outcome of a Supreme Court review of this case could have significant implications for the music industry’s ongoing battle against piracy.