Tag: DMCA

Digital Millennium Copyright Act (DMCA)

Cox Communications v. Sony Music

The Scope of Contributory Liability for Copyright Infringement

Cox Communications, Inc. v. Sony Music Entertainment, 607 U.S. __ (2026)

I didn’t list contributory liability for infringement as one of the enduring non-AI issues in copyright law, but this year’s decision in Cox Communications v. Sony Music Entertainment is a reminder that issues thought to have been resolved years ago can resurface at any time.

Factual Background

Cox Communications, Inc. is an internet service provider selling internet, telephone, and cable television connections to millions of people. Some of its customers used this service to set up peer-to-peer networks such as BitTorrent to distribute copyrighted music without the permission of copyright owners. Sony Music Entertainment and other record companies owned the copyrights in some of these songs. Through the Recording Industry Association of America (RIAA), it hired a company to monitor illegal file sharing and notify internet service providers when it detected infringement. The company sent Cox Communications 163,148 notices of infringement during a two-year period. Cox Communications warned or suspended customers who were repeat infringers, but rarely terminated service for copyright infringement.

Sony and others sued Cox Communications for contributory and vicarious copyright infringement. They claimed that Cox Communications failed to take adequate measures to stop infringement, thereby inducing or materially contributing to its customers’ infringement of music copyrights.

The U.S. District Court for the Eastern District of Virginia denied Cox Communications safe harbor under the Digital Millennium Copyright Act (DMCA) and allowed the case to proceed to trial on theories of vicarious and contributory copyright infringement. The jury found Cox Communications liable on both counts and awarded $1 billion in statutory damages.

The Court of Appeals reversed the vicarious liability verdict, but affirmed the finding of willful contributory infringement. It vacated the damages award and remanded the case for a new trial on damages.

The case ultimately made its way to the United States Supreme Court. The Supreme Court unanimously reversed. Justice Thomas wrote the majority opinion. Justice Sotomayor wrote a concurring opinion.

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Legal Background

Direct and Indirect Infringement

A copyright owner has the exclusive right to copy, distribute, display, perform, and make derivative works based on the copyrighted work. The exclusive right to perform a work includes the exclusive right to digitally transmit it. Anyone who exercises one of these exclusive rights without the owner’s consent is an infringer. Statutory damages of up to $150,000 per work may be awarded if infringement is willful. 17 U.S.C. § 504 (c)(2).

A person who actually performs the acts of unlawful reproduction, distribution, performance, etc. is guilty of direct infringement. A person who did not actually perform the infringing act but is responsible in some way for furthering it may be guilty of indirect infringement.   

Using an internet service to which you subscribe to reproduce, distribute and transmit copies of musical works without the copyright owners’ permission is an example of direct infringement. Providing a service or facility that customers use to do that is a potential source of contributory liability for infringement, but only under certain conditions.

In this case, Sony sought to hold Cox Communications liable for indirect infringement.

Vicarious and Contributory Liability

Courts recognize two kinds of indirect infringement: vicarious and contributory.

Vicarious liability

Vicarious liability may be imposed when one person has the right and ability to control, supervise and stop another person’s activity. Because employers have this power over their employees, they are often held vicariously liable for their employees’ acts within the course and scope of the employment.

Vicarious liability for infringement requires a showing of direct financial benefit from the infringing activity to the person with supervisory control. The lower courts rejected Sony’s claim of vicarious infringement liability because the financial benefit Cox received from its customers took the form of monthly internet subscription fees. It was not directly tied to infringing activity. Subscribers paid for lawful internet access, not for the ability to infringe copyrights. Cox Communications did not profit specifically or directly from the piracy occurring in the networks its customers set up.

The only issue to reach the United States Supreme Court in this case, therefore, was whether Cox Communications could be held contributorily liable for the infringing acts of its customers.

Contributory liability

Contributory liability may be imposed when a person either induces or materially contributes to another person’s wrongful act.

Material Contribution

The common law basis for contributory liability was “material contribution.” A person could be found to have materially contributed to an activity if s/he provided the site and facilities for infringement. No proof of inducement was necessary. Napster, for example, was found to have materially contributed to users’ acts of infringement because it maintained a centralized service with a searchable index of music files for users to download.

Sony Corp. v. Universal City Studios raised the question whether a company that provides products that enable copyright infringement is always contributorily liable for “materially contributing” to users’ acts of direct infringement.

The case involved video recording products, i.e., equipment that people can use to record television programs. The Supreme Court held that recording free, over-the-air broadcasts to watch at a more convenient time is fair use, so long as the recording is made for the viewer’s own personal, noncommercial use. The Court then held that a company is not contributorily liable for infringement merely because it provides a service or product that customers can use to infringe copyrights, provided the product or service has substantial non-infringing uses. Because recording a television program for later viewing is a substantial, non-infringing use, and there was no evidence that Sony said or did anything to encourage customers to make infringing uses of its products, the Court held the company could not be held contributorily liable for infringing acts on the part of the buyers of its products. The short answer, then, is no. Merely providing a product or service that can be used to infringe copyrights will not necessarily result in contributory liability for infringement, provided it has substantial, non-infringing uses.

Inducement

The Court limited the scope of this holding (sometimes called the “Betamax safe harbor”) in Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd. In this case, the Court held that a company does not get the benefit of the Betamax safe harbor for a product or service that has substantial, non-infringing uses if it actively induces infringing uses.

In Grokster, the Court relied on marketing, communications and operational evidence that Grokster had deployed promotional materials and meta-tags designed to capture internet searches for “Napster.” Napster was a file-sharing network that had been shut down after a court ordered it to block users from sharing copyrighted materials. (Napster has since been rebranded as a provider of generative and agentic AI services.) It also distributed newsletters to users touting the availability of copyrighted music and movies to download on its networks. Customer support instructed users on how to locate, download and play copyrighted files.

Even if a product or service has substantial, non-infringing uses, then, contributory liability may arise  if a company actively induces infringing uses by soliciting and encouraging infringers to use it and helping customers use it to infringe copyrights.

The Issue in Cox Communications v. Sony

Two rules can be distilled from pre-2026 contributory infringement cases:

1) Furnishing a product or service may result in “material contribution” liability if its primary use is to infringe copyrights.

2) Furnishing a product or service that has substantial, non-infringing uses will not result in contributory liability unless the provider actively induces infringing uses.

The question raised in Cox Communications v. Sony Music was whether failing to stop known infringing uses is also a basis for imposing contributory liability, when the product or service has substantial, non-infringing uses.

The holding in Cox Communications v. Sony Music

The Supreme Court unanimously held that an internet service provider’s failure to stop known infringing uses of its service is not a basis for imposing contributory liability for the infringing uses that customers make of its service. An ISP’s failure to stop known infringement neither induces users’ infringement nor provides an independent, third basis for contributory liability.

The Digital Millennium Copyright Act

The Digital Millennium Copyright Act (DMCA) immunizes ISPs from contributory liability for user-provided content if they have implemented “a policy that provides for the termination in appropriate circumstances of subscribers and account holders” who are repeat infringers. 17 U.S.C. § 512(i)(1)A).

Sony basically argued that this immunity would be unnecessary if ISPs are not liable for providing services to known infringers anyway. Why try to incentivize ISPs to terminate known infringers’ accounts if they are not at risk of liability even in the absence of the DMCA?

The DMCA, however, does not expressly impose liability for providing internet service to known infringers. Another DMCA provision says that failure to comply with the DMCA’s safe harbor conditions “shall not bear adversely upon . . . a defense by the service provider . . . that the service provider’s conduct is not infringing.” 17 U.S.C. § 512(l).

To put it more colloquially, the DMCA’s safe harbor provisions are meant to be a shield, not a sword.

Intent

Although intent has never been an essential element of a copyright infringement claim, Justice Thomas interpreted the Court’s precedents as imposing an intent requirement in contributory infringement claims:

“The provider of a service is contributorily liable for the user’s infringement only if it intended that the provided service be used for infringement. The intent required for contributory liability can be shown only if the party induced the infringement or the provided service is tailored to that infringement.”

Cox Communications v. Sony Music, at 7.

Justice Sotomayor’s Concurrence

Justice Sotomayor agreed that an ISP cannot be held contributorily liable for copyright infringement unless intent is established. She filed a concurring opinion, however, to dispute that inducement and tailoring a product to infringing uses are the only two situations that may support a finding of intent. She would have held the door open for other ways of establishing intent under common law “aiding and abetting” theory.

She also criticized the majority’s interpretation of the DMCA:

“The majority’s decision thus permits ISPs to sell an internet connection to every single infringer who wants one without fear of liability and without lifting a finger to prevent infringement. It also means that Cox is free to abandon its current policy of responding to copyright infringement. [U]nder the rule the majority adopts today, the safe harbor provision will not “d[o] anything at all” going forward. . . . Congress did not enact the safe harbor just so that this Court could eviscerate it.”

Cox Communications v. Sony Music (J. Sotomayor, concurring opinion) (citations omitted) at 6–7.

Nevertheless, because she did not believe the requisite showing of intent had been made in this case, she concurred in the judgment.

Limitations

 Cox Communications v. Sony Music only applies to internet service providers, what the common law described as “conduits.” It does not directly apply to people who copy, distribute or host infringing material.

Also, the Court noted that an ISP normally does not actually have knowledge of the identity of the user who is committing direct infringement. It has records of IP addresses associated with accounts, but a single IP address might be used by multiple people, not all of whom are infringers. It is possible that in a different case, where the defendant actually does know the identity of the specific direct infringer, the requisite finding of intent might be easier to make. Future cases will need to flesh that out.

Implications

As Congress and courts grapple with emerging generative AI copyright issues, it is likely that attempts will be made to apply the principles announced in Cox Communications v. Sony Music to generative AI architecture. While the internet is a neutral data conduit, large language models that drive generative-AI function by ingesting massive datasets of protected works to optimize their commercial output. Rights holders argue that building a system dependent on unauthorized ingestion constitutes direct or secondary infringement. However, the intent requirement articulated in Cox provides AI developers with a potentially expansive defense to output infringement. If providing a tool with the simple knowledge that users may generate infringing outputs is legally insufficient, then the battleground over generative AI must shift. Because generative AI tools arguably have substantial, non-infringing uses, litigators will need to prove intent to induce infringement to prevail on a contributory output infringement claim. The potential impact on input infringement claims, of course, is a different matter.

We are already seeing this defense framework reshape federal dockets. In June 2026, tech platforms seized upon the Cox precedent to try to stop copyright claims at the pleadings stage. In a motion filed in Tennessee federal court, X Corp. invoked Cox v. Sony Music to argue that music publishers’ secondary liability claims must be dismissed, asserting that the plaintiffs failed to allege explicit “affirmative inducement” rather than general platform piracy.

Practical Tip

Despite the Court’s ruling in Cox Communications v. Sony Music, platform providers may find it prudent to continue to comply with DMCA safe harbor requirements. Not only could this help them qualify for the immunities the DMCA provides, but it might also help demonstrate a lack of infringing intent.

Court Rules AI Training is Fair Use

Court rules that using copyrighted works to train AI is fair use. Kadrey et al. v. Meta Platforms.

Just days after the first major fair use ruling in a generative-AI case, a second court has determined that using copyrighted works to train AI is fair use. Kadrey et al. v. Meta Platforms, No. 3:23-cv-03417-VC (N.D. Cal. June 25, 2025).

The Kadrey v. Meta Platforms Lawsuit

I previously wrote about this lawsuit in an article describing the top 12 generative-AI lawsuits.

Meta Platforms owns and operates social media services including Facebook, Instagram, and WhatsApp. It is also the developer of a large language model (LLM) called “Llama.” One of its releases, Meta AI, is an AI chatbot that utilizes Llama.

To train its AI, Meta obtained data from a wide variety of sources. The company initially pursued licensing deals with book publishers. It turned out, though, that in many cases, individual authors owned the copyrights. Unlike music, no organization handles collective licensing of rights in book content. Meta then downloaded shadow library databases. Instead of licensing works in the databases, Meta decided to just go ahead and use them without securing licenses. To download them more quickly, Meta torrented them using BitTorrent.

Meta trained its AI models to prevent them from “memorizing” and outputting text from the training data, with the result that no more than 50 words and punctuation marks from any given work were reproduced in any given output.

The plaintiffs named in the Complaint are thirteen book authors who have published novels, plays, short stories, memoirs, essays, and nonfiction books. Sarah Silverman, author of The Bedwetter; Junot Diaz, author of The Brief Wondrous Life of Oscar Wao; and Andrew Sean Greer, author of Less, are among the authors named as plaintiffs in the lawsuit. The complaint alleges that Meta downloaded 666 copies of their books without permission and states claims for direct copyright infringement, vicarious copyright infringement, removal of copyright management information in violation of the Digital Millennium Copyright Act (DMCA), and various state law claims. All claims except the ones for direct copyright infringement and violation of the DMCA were dismissed in prior proceedings.

Both sides moved for summary judgment on fair use with respect to the claim that Meta’s use of the copyrighted works to train its AI infringed copyrights. Meta moved for summary judgment on the DMCA claims. Neither side moved for summary judgment on a claim that Meta infringed copyrights by distributing their works (via leeching or seeding).

On June 25, 2025 Judge Chhabria granted Meta’s motion for summary judgment on fair use with respect to AI training; reserved the motion for summary judgment on the DMCA claims for decision in a separate order, and held that the claim of infringing distribution via leeching or seeding “will remain a live issue in the case.”

Judge Chhabria’s Fair Use Analysis

Judge Chhabria analyzed each of the four fair use factors. As is the custom, he treated the first (Character or purpose of the use) and fourth (Effect on the market for the work) factors as the most important of the four.

He disposed of the first factor fairly easily, as Judge Alsup did in Bartz v. Anthropic, finding that the use of copyrighted works to train AI is a transformative use. This finding weighs heavily in favor of fair use. The purpose of Meta’s AI tools is not to generate books for people to read. Indeed, in this case, Meta had installed guardrails to prevent the tools from generating duplicates or near-duplicates of the books on which the AI was trained. Moreover, even if it could allow a user to prompt the creation of a book “in the style of” a specified author, there was no evidence that it could produce an identical work or a work that was substantially similar to one on which it had been trained. And writing styles are not copyrightable.

Significantly, the judge held that the use of shadow libraries to obtain unauthorized copies of books does not necessarily destroy a fair use defense. When the ultimate use to be made of a work is transformative, the downloading of books to further that use is also transformative, the judge wrote. This ruling contrasts with other judges who have intimated that using pirated copies of works weighs against, or may even prevent, a finding of fair use.

Unlike some judges, who tend to consider the fair use analysis over and done if transformative use is found, Judge Chhabria recognized that even if the purpose of the use is transformative, its effect on the market for the infringed work still has to be considered.

3 Ways of Proving Adverse Market Effect

The Order lays out three potential kinds of arguments that may be advanced to establish the adverse effect of an infringing use on the market for the work:

  1. The infringing work creates a market substitute for the work;
  2. Use of the work to train AI without permission deprives copyright owners of a market for licenses to use their works in AI training;
  3. Dilution of the market with competing works.

Market Substitution

In this case, direct market substitution could not be established because Meta had installed guardrails that prevented users from generating copies of works that had been used in the training. Its AI tools were incapable of generating copies of the work that could serve as substitutes for the authors’ works.

The Market for AI Licenses

The court refused to recognize the loss of potential profits from licensing the use of a work for AI training purposes as a cognizable harm.

Market Dilution

The argument here would be that the generation of many works that compete in the same market as the original work on which the AI was trained dilutes the market for the original work. Judge Chhabria described this as indirect market substitution.

The copyright owners in this case, however, focused on the first two arguments. They did not present evidence that Meta’a AI tools were capable of generating books; that they do, in fact, generate books; or that the books they generate or are capable of generating compete with books these authors wrote. There was no evidence of diminished sales of their books.

Market harm cannot be assumed when generated copies are not copies that can serve as substitutes for the specific books claimed to have been infringed. When the output is transformative, as it was in this case, market substitution is not self-evident.

Judge Chhabria chided the plaintiffs for making only a “half-hearted argument” of a significant threat of market harm. He wrote that they presented “no meaningful evidence on market dilution at all.”

Consequently, he ruled that the fourth fair use factor favored Meta.

Conclusion

The decision in this case is as significant for what the court didn’t do as it is for what it did. It handed a fair use victory to Meta. At the same time, though, it did not rule out a finding that training AI tools on copyrighted works is not fair use in an appropriate case. The court left open the possibility that a copyright owner might prevail on a claim that training AI on copyrighted works is not fair use in a different case. And it pointed the way, albeit in dictum, namely, by making a strong showing of market dilution.

That claim is not far-fetched. Scammy AI-Generated Book Rewrites Are Flooding Amazon.

Visit my extensive Copyright FAQs page.

The New Copyright Circumvention Rules

the DMCA made it unlawful to “circumvent a technological measure that effectively controls access to” copyrighted material.

In 1998, Congress enacted the Digital Millenium Copyright Act (“DMCA”). In addition to establishing the notice-and-take-down regimen with which website and blog owners are (or should be) familiar, the DMCA made it unlawful to “circumvent a technological measure that effectively controls access to” copyrighted material. (17 U.S.C. § 1201(a)(1)(A)). The Act set out some permanent exemptions, i.e., situations where circumvention is allowed. In addition, it gave the Librarian of Congress power to periodically establish new ones. These additional exemptions are temporary, lasting for three years, but the Librarian of Congress can and does renew them. On October 18, 2024, the Librarian of Congress issued a Final Rule renewing some exemptions and creating some new ones.

What is “circumvention of a technological measure”?

Circumventing a technological measure means “to descramble a scrambled work, to decrypt an encrypted work, or otherwise to avoid, bypass, remove, deactivate, or impair a technological measure, without the authority of the copyright owner.” (17 U.S.C. § 1201(a)(3)(A)).

So, no decrypting or unscrambling to get access to a copyrighted work. What else? Well, anything that involves avoiding or bypassing a technological measure without the copyright owner’s permission. You can’t do that, either.

A technological measure that “controls access to a work” can be anything that “requires the application of information, or a process or a treatment, with the authority of the copyright owner,” to gain access to the work.” (17 U.S.C. § 1201(a)(3)(B)). Entering a password-protected website without a password the copyright owner has authorized you to use is an example.

The permanent exemptions

Section 1201 of Title 17 lists permanent exemptions for:

  • Nonprofit libraries, archives, and educational institutions that circumvent copyright protection measures solely for the purpose of determining whether to acquire a copy of the work for a permitted purpose
  • Law enforcement, intelligence, and government activities
  • Reverse engineering
  • Encryption research
  • Prevention of access of minors to material on the Internet
  • Prevention of the collection or dissemination of personally identifying information
  • Security testing

Detailed conditions apply to each of these exemptions. If you are thinking of invoking one of them, read the entire statutory provision carefully and seek professional legal advice.

Renewed temporary exemptions

The following temporary exemptions have been renewed for another 3-year term:

  • Fair use of short portions of motion pictures for certain educational and derivative uses

This includes use in a parody or in a documentary film about the work’s biographical or historically significant nature; use in a noncommercial video; use in nonfiction multimedia e-books; use for educational purposes by educational institution faculty and students; educational uses in Massive Open Online Courses; and educational uses in nonprofit digital and media literacy programs offered by libraries, museum, and other organizations.

  • Closed captioning and other disability access services by disability service offices or similar units at educational institutions for students, faculty or staff with disabilities
  • Preservation of copies of motion pictures by an eligible library, archives, or museum
  • Scholarly research and teaching involving text and data mining of motion pictures or electronic literary works by researchers affiliated with a nonprofit educational institution
  • Literary work or previously published sheet music that is distributed electronically and include access controls that interfere with assistive technologies
  • Access to patient data on medical devices or monitoring systems
  • Computer programs that unlock wireless devices to allow connection of a device to an alternative wireless network
  • “Jailbreaking” computer programs (computer programs that enable electronic devices to interoperate with or to remove software applications), for the purpose of jailbreaking smartphones and other portable all-purpose computing devices, smart televisions, voice assistant devices, and routers and dedicated networking devices
  • Computer programs that control motorized land vehicles, marine vessels, and mechanized agricultural vehicles for the purposes of diagnosis, repair, or modification of a vehicle or vessel function
  • Diagnosis, maintenance or repair of devices designed primarily for use by consumers
  • Access to computer programs that are contained in and control the functioning of medical devices or systems, and related data files, for purposes of diagnosis, maintenance, or repair
  • Security research
  • Individual play by video gamers and preservation of video games by a library, archives or museum for which outside server support has been discontinued, and preservation by a library, archives, or museum of discontinued video games that never required server support
  • Preservation of computer programs by libraries, archives, and museums
  • Computer programs that operate 3D printers to allow use of alternative material
  • Investigation of potential infringment of free and open-source computer programs

Again, detailed conditions apply to each of these exemptions. If you are thinking of invoking one of them, read 37 CFR Part 201e carefully and seek professional legal advice.

front view of the Library of Congress building

New Exemptions

New 3-year exemptions the Librarian of Congress just announced in October, 2024 include:

  • Sharing of copies of corpora by academic researchers with researchers affiliated with other nonprofit institutions of higher education for purposes of conducting independent text or data mining research and teaching, where those researchers are in compliance with the exemption
  • Diagnosis, maintenance and repair of retail-level commercial food preparation equipment
  • Access, storage and sharing of vehicle operational and telematics data generated by motorized land vehicles and marine vessels

And once again, detailed conditions apply to each of these exemptions. If you are thinking of invoking one of them, read 37 CFR Part 201e carefully and seek professional legal advice.


Read about other non-AI-related legal issues. 

Confused by copyright, trademark and other IP issues? Visit my extensive Copyright FAQs page, or read my book, IP Law for Non-IP Attorneys, available on Amazon.com. Read information about Thomas B. James.