On March 25 local time, the U.S. Supreme Court, in a 9-0 decision, overturned the Fourth Circuit Court of Appeals’ ruling in the internet copyright infringement case between Cox Communications (Cox) and Sony Music. The Supreme Court ruled that an internet service provider’s continued provision of services merely because it is aware of user infringement does not constitute contributory infringement. The $1 billion (approximately 6.9 billion RMB) in damages Cox had previously been ordered to pay was consequently overturned.

The central issue in this case was whether an internet service provider constitutes “contributory infringement” if it fails to take effective measures, such as terminating service, after becoming aware that its users are committing copyright infringement through its network. Major music rights holders, including Sony Music, argued that after receiving over 160,000 infringement notices, Cox merely issued warnings and implemented temporary suspensions without actually terminating the accounts of numerous repeat infringers. They contended that Cox should therefore bear liability for contributory infringement and sought a record $1 billion in damages. The jury and the Fourth Circuit Court of Appeals adopted this view, holding Cox liable.

In its ruling, the Supreme Court clarified the standards for determining “contributory infringement.” The majority opinion, authored by Justice Thomas (supported by seven justices), noted that, according to precedent, contributory infringement exists only in two scenarios: “active inducement” or a service “designed specifically for infringement.” The Court held that, as a provider of general internet access, Cox’s service clearly had broad legitimate, non-infringing uses, and the company did not actively induce users to infringe. Mere knowledge of infringing activity and a failure to take adequate measures to prevent it are insufficient to constitute contributory infringement.

In response to Sony’s defense regarding the DMCA’s safe harbor provisions, the court noted that the law aims to provide a defense for service providers that meet certain conditions (such as establishing a “termination policy for repeat infringers”), but the statute explicitly states that failure to qualify for the safe harbor “shall not prejudice the service provider’s defense.” Therefore, one cannot infer the conclusion that “failure to terminate service constitutes infringement.”

Justices Sotomayor and Jackson filed a concurring opinion. While they agreed that Cox should not be held liable in this case, they expressed concern about the narrow standard set by the majority opinion, arguing that it could undermine the legislative intent of the DMCA to protect the rights of copyright holders.

This ruling explicitly rejects an expansive interpretation of contributory liability under copyright law. The U.S. Supreme Court held that, even in the face of rampant online infringement, defining the boundaries of liability remains within the purview of Congress, and it is inappropriate for the courts to create new standards through judicial precedent.