Supreme Court Clarifies the Limits of Copyright Liability for Internet Service Providers

Cox Communications v. Sony Music Entertainment

Yesterday, the U.S. Supreme Court handed down one of the most consequential copyright decisions in years. In a unanimous ruling in Cox Communications, Inc. v. Sony Music Entertainment, the Court reversed a billion-dollar verdict against Cox Communications and drew a clear — and important — line around when companies can be held liable for the copyright infringement of their users.

The decision matters well beyond the ISP industry. Its implications ripple across the technology sector, digital platforms, and any business that provides services knowing that some users may misuse them.

Background: The $1 Billion Dispute

The case began in 2018, when Sony Music, Warner Music Group, Universal Music Group, and more than 50 other record labels sued Cox Communications, alleging that Cox had turned a blind eye to widespread music piracy on its network. The labels claimed that Cox knew its subscribers were using peer-to-peer file-sharing tools to illegally download and distribute copyrighted songs, yet failed to meaningfully act — declining to terminate repeat infringers and allegedly treating infringement notices as a nuisance to manage around subscriber revenue.

A federal jury agreed with the labels, entering a $1 billion verdict against Cox. The Fourth Circuit largely upheld that outcome on the theory of contributory copyright infringement — finding that knowingly supplying a service to someone you know will use it to infringe is sufficient to establish liability.

Cox petitioned the Supreme Court. The question: does knowledge of infringement, without more, create secondary copyright liability?

The Court’s Answer: Knowledge Is Not Enough

On March 25, 2026, the Supreme Court unanimously said no.

Writing for seven justices, Justice Clarence Thomas held that an internet service provider — or any company — is contributorily liable for a user’s copyright infringement only if it either:

•      Actively induced the infringement — meaning it took affirmative steps to encourage or promote unlawful activity; or

•      Provided a service tailored for infringement — one that is incapable of substantial lawful use.

Cox did neither. Internet access is used every day for an almost limitless range of lawful purposes. Cox issued warnings, suspended accounts, and took steps to address infringement complaints. The Court found no evidence that Cox designed its service with infringement in mind or that it actively encouraged its customers to pirate music.

“Cox provided internet service to its subscribers, but it did not intend for that service to be used to commit copyright infringement. Holding Cox liable merely for failing to terminate internet service to infringing accounts would expand secondary copyright liability beyond our precedents.”

— Justice Clarence Thomas

The Fourth Circuit’s $1 billion verdict was reversed, and the case was remanded for further proceedings.

The Concurrence: A Note of Caution

Justices Sotomayor and Jackson agreed with the outcome but not with the majority’s broader reasoning. In a concurring opinion, Justice Sotomayor warned that the majority’s framework “unnecessarily limits secondary liability” and creates tension with the statutory incentive structure Congress built into the Digital Millennium Copyright Act (DMCA). She concluded that Cox should win on the facts — because the evidence did not establish the requisite intent — but cautioned against the majority’s more sweeping rule.

This concurrence is worth watching. It signals that at least two justices would have preferred a narrower holding, and it may invite future litigation testing the edges of the majority’s framework.

What the Decision Does — and Does Not — Do

This ruling does not eliminate secondary copyright liability. Companies that actively promote or encourage infringement, or that build platforms specifically designed for it, remain exposed. The Court reaffirmed both the inducement theory established in MGM Studios v. Grokster (2005) and the principle that services incapable of substantial lawful use can give rise to liability.

What the decision does do is raise the bar for plaintiffs seeking to hold neutral intermediaries liable for what their users do. Knowledge of infringement — even widespread, documented knowledge — is no longer enough by itself. Plaintiffs must now demonstrate that the defendant intended to facilitate the infringement, either by inducing it directly or by offering a service designed for it.

The DMCA’s safe harbor provisions also received attention. The Court rejected Sony’s argument that those provisions implicitly create liability for providers who don’t qualify for safe harbor protection. As the Court explained, the DMCA creates defenses from liability; it does not manufacture new grounds for imposing it.

Implications for IP Owners and Technology Companies

For copyright holders, this decision raises the difficulty of pursuing secondary liability claims against intermediaries. Going forward, winning these cases will require more than proving an ISP received repeated infringement notices — it will require evidence of intentional facilitation. Rights holders will need to think carefully about litigation strategy, available evidence, and whether the facts in any given case support an inducement or tailored-service theory.

For technology companies, platforms, and service providers, the decision offers meaningful clarity. Providing a general-purpose service to the public — even with awareness that some users will misuse it — does not make you a copyright infringer. But this protection is not unlimited. Platforms that encourage infringement through their design, marketing, or business model remain at risk. The line drawn today is between passive provision of infrastructure and active participation in unlawful conduct.

For businesses of all kinds that license or create copyrighted content, this case is a reminder that the copyright enforcement landscape continues to evolve. The unanimous nature of the ruling sends a strong signal, but Justice Sotomayor’s concurrence suggests that battles over secondary liability are far from over — particularly as AI-generated content and new distribution technologies raise novel questions about who bears responsibility for infringement.

What Comes Next

The case has been remanded for further proceedings. The vicarious infringement question — which the Supreme Court did not accept for review — remains open. And the music industry has already signaled it will look to Congress and policymakers for legislative solutions in the wake of this ruling.

The broader copyright ecosystem is in flux. Rights holders are actively pursuing new enforcement strategies, including direct suits against AI companies for training-data use and litigation over streaming and licensing arrangements. Companies that create, license, distribute, or simply interact with copyrighted content need to understand both the protections this ruling provides and its limits.

How Wood Phillips Can Help

Wood Phillips counsels clients across industries on copyright strategy, portfolio development, licensing, and enforcement. Whether you are a rights holder seeking to protect valuable creative assets, a technology company navigating secondary liability exposure, or a business building a content-based product, our attorneys bring deep IP expertise and a business-first perspective.

If you have questions about how Cox v. Sony affects your business or your IP portfolio, we invite you to contact us at 312-876-1800 or visit woodphillips.com.

This post is provided for general informational purposes and does not constitute legal advice. For advice specific to your situation, please consult an attorney. Wood Phillips is a Chicago-based intellectual property law firm dedicated exclusively to patent, trademark, and copyright matters.