SONY MUSIC ENTERTAINMENT; ARISTA MUSIC; ARISTA RECORDS, LLC; LAFACE RECORDS LLC; PROVIDENT LABEL GROUP, LLC; SONY MUSIC ENTERTAINMENT US LATIN LLC; VOLCANO ENTERTAINMENT III, LLC; ZOMBA RECORDINGS LLC; SONY/ATV MUSIC PUBLISHING LLC; EMI AI GALLICO MUSIC CORP.; EMI ALGEE MUSIC CORP.; EMI APRIL MUSIC INC.; EMI BLACKWOOD MUSIC INC.; COLGEMS-EMI MUSIC INC.; EMI CONSORTIUM MUSIC PUBLISHING INC., d/b/a EMI Full Keel Music; EMI CONSORTIUM SONGS, INC., d/b/a EMI Longitude Music; EMI FEIST CATALOG INC.; EMI MILLER CATALOG INC.; EMI MILLS MUSIC, INC.; EMI UNART CATALOG INC.; EMI U CATALOG INC.; JOBETE MUSIC COMPANY, INCORPORATED; STONE AGATE MUSIC; SCREEN GEMS-EMI MUSIC, INCORPORATED; STONE DIAMOND MUSIC CORP.; ATLANTIC RECORDING CORPORATION; BAD BOYS RECORDS LLC; ELEKTRA ENTERTAINMENT GROUP, INCORPORATED; FUELED BY RAMEN LLC; ROADRUNNER RECORDS, INC.; WARNER-TAMERLANE PUBLISHING CORPORATION; WB MUSIC CORPORATION; UNICHAPPELL MUSIC, INCORPORATED; RIGHTSONG MUSIC INC.; COTILLION MUSIC, INCORPORATED; INTERSONG U.S.A., INC.; UMG RECORDINGS, INCORPORATED; CAPITOL RECORDS, LLC; UNIVERSAL MUSIC CORPORATION; UNIVERSAL MUSIC-MGB NA LLC; UNIVERSAL MUSIC PUBLISHING INC.; UNIVERSAL MUSIC PUBLISHING AB; UNIVERSAL PUBLISHING LIMITED; UNIVERSAL MUSIC PUBLISHING MGB LIMITED; UNIVERSAL MUSIC - Z TUNES LLC; UNIVERSAL/ISLAND MUSIC LIMITED; UNIVERSAL/MCA MUSIC PUBLISHING PTY. LIMITED; POLYGRAM PUBLISHING, INC.; SONGS OF UNIVERSAL, INC.; WARNER RECORDS, INC., f/k/a W.B.M. Music Corp.; WARNER CHAPPELL MUSIC, INC., f/k/a Warner/Chappell Music, Inc.; W.C.M. MUSIC CORP., f/k/a W.B.M. Music Corp., Plaintiffs – Appellees, and NONESUCH RECORDS INC.; WARNER BROS. RECORDS, INC.; WARNER/CHAPPELL MUSIC, INC.; W.B.M. MUSIC CORP.; UNIVERSAL - POLYGRAM INTERNATIONAL TUNES, INC.; UNIVERSAL - SONGS OF POLYGRAM INTERNATIONAL, INC.; UNIVERSAL POLYGRAM INTERNATIONAL PUBLISHING, INC.; MUSIC CORPORATION OF AMERICA, INC., d/b/a Universal Music Corporation; RONDOR MUSIC INTERNATIONAL, Plaintiffs, v. COX COMMUNICATIONS, INCORPORATED; COXCOM, LLC, Defendants – Appellants.
No. 21-1168
UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT
February 20, 2024
Certiorari granted by Supreme Court, June 30, 2025; PUBLISHED
Argued: March 9, 2022 Decided: February 20, 2024
Before HARRIS and RUSHING, Circuit Judges, and FLOYD, Senior Circuit Judge.
Affirmed in part, reversed in part, vacated in part, and remanded by published opinion. Judge Rushing wrote the opinion, in which Judge Harris and Senior Judge Floyd joined.
ARGUED: E. Joshua Rosenkranz, ORRICK, HERRINGTON & SUTCLIFFE LLP, New York, New York, for Appellants. Catherine Emily Stetson, HOGAN LOVELLS US LLP, Washington, D.C., for Appellees. ON BRIEF: Michael S. Elkin, Jennifer A. Golinveaux, Geoffrey P. Eaton, WINSTON & STRAWN LLP, New York, New York; Mark S. Davies, Sheila A. Baynes, Washington, D.C., Christopher J. Cariello, Rachel G. Shalev, Alexandra Bursak, ORRICK, HERRINGTON & SUTCLIFFE LLP, New York, New York, for Appellants. Matthew J. Oppenheim, Scott A. Zebrak, Jeffrey M. Gould, OPPENHEIM + ZEBRAK, LLP, Washington, D.C.; Jo-Ann Tamila Sagar, Patrick C. Valencia, HOGAN LOVELLS US LLP, Washington, D.C., for Appellees. Joseph C. Gratz, Samuel J. Zeitlin, DURIE TANGRI LLP, San Francisco, California, for Amicus Internet Association. Mitchell L. Stoltz, Corynne McSherry, ELECTRONIC FRONTIER FOUNDATION, San Francisco, California; Erik Stallman, Juliana DeVries, Samuelson Law, Technology & Public Policy Clinic, UC BERKELEY SCHOOL OF LAW, Berkeley, California, for Amici Electronic Frontier Foundation, Center for Democracy and Technology, American Library Association, Association of College and Research Libraries, Association of Research Libraries, and Public Knowledge. David E. Weslow, Megan L. Brown, Ari S. Meltzer, Kevin G. Rupy, Adrienne J. Kosak, WILEY REIN LLP, Washington, D.C., for Amici NTCA – The Rural Broadband Association, CTIA – The Wireless Association, and USTelecom – The Broadband Association. Andrew L. Deutsch, DLA PIPER LLP (US), Los Angeles, California, for Amicus Internet Commerce Coalition. Phillip R. Malone, Juelsgaard Intellectual Property and Innovation Clinic, Mills Legal Clinic, STANFORD LAW SCHOOL, Stanford, California, for Amici Intellectual Property Law Professors. Danielle M. Aguirre, Kerry M. Mustico, Christopher A. Bates, NATIONAL MUSIC PUBLISHERS’ ASSOCIATION, Washington, D.C.; Ruthanne M. Deutsch, Hyland Hunt, Alexandra Mansbach, DEUTSCH HUNT PLLC, Washington, D.C., for Amici National Music Publishers’ Association, Nashville Songwriters Association International, and Songwriters of North America. Nancy Wolff, Sara Gates, COWAN DEBAETS ABRAHAMS & SHEPPARD LLP, New York, New York, for Amicus The Copyright Alliance.
RUSHING, Circuit Judge:
Defendant Cox Communications sells internet, telephone, and cable television service to 6 million homes and businesses across the United States. Plaintiffs—Sony Music Entertainment and numerous other record companies and music publishers—own some of the most popular copyrighted musical works of our time. Some users of Cox‘s internet service infringed Plaintiffs’ copyrights by downloading or distributing songs over the internet without permission. Rather than sue those individuals, Plaintiffs sued Cox, seeking to hold it responsible for its customers’ copyright infringement.
Federal law protects internet service providers from monetary liability for copyright infringement committed by users of their networks, but only if those service providers reasonably implement a policy to terminate repeat infringers in appropriate circumstances. In a prior case, our Court held that Cox had failed to reasonably implement an anti-piracy program and therefore did not qualify for the statutory safe harbor.
This case proceeded to trial on two theories of secondary liability: vicarious and contributory copyright infringement. The jury found Cox liable for both willful contributory and vicarious infringement of 10,017 copyrighted works owned by Plaintiffs and awarded $1 billion in statutory damages. Cox appealed.
We affirm the jury‘s finding of willful contributory infringement. But we reverse the vicarious liability verdict and remand for a new trial on damages because Cox did not profit from its subscribers’ acts of infringement, a legal prerequisite for vicarious liability.
Copyright owners possess the “exclusive rights” to “reproduce,” “distribute,” “perform,” “display,” or “prepare derivative works based upon” their copyrighted works, subject to limitations not relevant here.
Congress recognized that internet service providers may get caught in the crossfire when infringers use the internet to reproduce or distribute copyrighted works, so it created a safe harbor defense in the Digital Millennium Copyright Act (DMCA). See
This lawsuit began when Sony and other owners of copyrighted musical works (collectively, Sony or Plaintiffs) sued Cox for infringement committed by subscribers to Cox‘s internet service from 2013 to 2014. During the claim period, Cox provided internet service to residential and commercial subscribers, charging different flat fees for different download speeds according to a tiered pricing plan.
Plaintiffs are members of the Recording Industry Association of America (RIAA), which hired the anti-piracy company MarkMonitor to catch infringements of its members’ copyrights on peer-to-peer networks using file-sharing protocols like BitTorrent and others. See BMG, 881 F.3d at 298–299 (explaining peer-to-peer file sharing and BitTorrent). When MarkMonitor discovered an internet user downloading or distributing a copyrighted music file, it notified the user‘s internet service provider. Only the service provider can match an alleged infringer‘s internet protocol address to its owner‘s identity. When Cox received infringement notices from MarkMonitor, Cox‘s automated system sent notices to the infringing subscribers. The notice Cox sent varied by how far along the subscriber was in Cox‘s thirteen-strike policy, ranging from an email warning to a temporary suspension. See BMG, 881 F.3d at 299 (describing the thirteen-strike policy).
After discovery, Sony and Cox cross-moved for summary judgment. Two of the district court‘s rulings at that stage are relevant for this appeal. First, the district court concluded that the infringement notices MarkMonitor sent to Cox proved Cox‘s knowledge of infringement as a matter of law. That knowledge established one element of contributory liability. Second, the district court denied Cox‘s motion to reduce the number of copyrighted works in suit. Cox argued that, for the purpose of statutory damages, all songs included on a single album constitute one work, and a sound recording and the music composition it embodies likewise count as a single work. See
The parties presented their case to the jury over the course of twelve days. Plaintiffs limited their case to Cox subscribers who received three or more infringement notices. In the end, the jury found Cox liable for vicarious and contributory infringement of all 10,017 copyrighted works alleged. The jury also found that Cox‘s infringement was willful, which increased the available maximum statutory damages to $150,000 per work. See
After the verdict, Cox renewed its motion for judgment as a matter of law, which the district court ultimately denied in full. Regarding liability, the district court rejected Cox‘s arguments that the evidence did not prove vicarious or contributory infringement. Cox also sought again to reduce the number of works—and with it, damages—to account for compilations and derivative works. The district court rejected Cox‘s request as to compilations but invited Cox to submit a calculation of the derivative works that were allegedly double counted. After receiving Cox‘s submission, however, the district court denied any reduction in the number of works, reasoning that Cox‘s posttrial arguments required factfinding within the province of the jury and that Cox had failed to present evidence sufficient to enable the jury to make the adjustments it requested.
Now on appeal, Cox raises numerous questions of law concerning the scope of secondary liability for copyright infringement and what constitutes a compilation or
II.
We begin with Cox‘s contention that the district court erred in denying it judgment as a matter of law on Sony‘s vicarious infringement claim. We review that ruling de novo. Russell v. Absolute Collection Servs., Inc., 763 F.3d 385, 391 (4th Cir. 2014). Judgment as a matter of law is proper if, viewing all evidence and reasonable inferences in the light most favorable to the nonmoving party, “a reasonable jury would not have a legally sufficient evidentiary basis to find for [that] party.”
A defendant may be held vicariously liable for a third party‘s copyright infringement if the defendant “[1] profits directly from the infringement and [2] has a right and ability to supervise the direct infringer.” Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 930 n.9 (2005); see also CoStar Grp., Inc. v. LoopNet, Inc., 373 F.3d 544, 550 (4th Cir. 2004) (“[A] defendant who ‘has the right and ability to supervise the infringing activity and also has a direct financial interest in such activities’ is [vicariously] liable.” (quoting Gershwin Pub. Corp. v. Columbia Artists Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir. 1971))). Cox contests both elements on appeal. Because we conclude Sony failed, as a matter of law, to prove that Cox profits directly from its
Cox argues that it does not profit directly from its subscribers’ infringement because “[a]ll subscribers pay Cox a flat monthly fee for their internet access package no matter what they do online.” Opening Br. 27. Whether a subscriber uses her internet access for lawful or unlawful purposes, Cox receives the same monthly fee, and a subscriber‘s decision to download or distribute a copyrighted song without permission does not benefit Cox. The district court rejected this argument, concluding that Sony had proven Cox‘s direct financial interest by showing that Cox repeatedly declined to terminate the accounts of infringing subscribers in order to continue collecting their monthly fees. To understand this issue, some legal background is necessary.
Vicarious liability for copyright infringement is an “outgrowth of the agency principles of respondeat superior.” Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 262 (9th Cir. 1996); see also A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1022 (9th Cir. 2001). It extends beyond a strict employer-employee relationship to other settings in which a defendant similarly “‘has the right and ability to supervise the infringing activity and also has a direct financial interest in such activities.‘” CoStar Grp., 373 F.3d at 550 (quoting Gershwin Pub. Corp., 443 F.2d at 1162). So, for example, we have held that a property owner was vicariously liable for its closely related developer‘s infringing use of copyrighted architectural drawings in a construction project. Nelson-Salabes, Inc. v. Morningside Dev., LLC, 284 F.3d 505, 513–514 (4th Cir. 2002). In addition to its control over the project, the property owner had “an obvious and direct financial interest in the
The landmark case on vicarious liability for infringing copyrighted musical recordings is Shapiro, Bernstein & Co. v. H. L. Green Co., 316 F.2d 304 (2d Cir. 1963). There a department store was held accountable for the infringing sale of “bootleg” records by a concessionaire operating in its stores. Id. at 307–308. The store retained the ultimate right to supervise the concessionaire and its employees, demonstrating its control over the infringement. And the store received a percentage of every record sale, “whether ‘bootleg’ or legitimate,” giving it “a most definite financial interest” in the infringing sales.2 Id.
Courts have recognized, however, that a defendant may possess a financial interest in a third party‘s infringement of copyrighted music even absent a strict correlation
Applying these principles to copyright infringement in cyberspace, courts and Congress agree that “‘receiving a one-time set-up fee and flat periodic payments for service‘” from infringing and noninfringing users alike ordinarily “‘would not constitute receiving a financial benefit directly attributable to the infringing activity.‘” Ellison v. Robertson, 357 F.3d 1072, 1079 (9th Cir. 2004) (quoting S. Rep. 105-190, at 44 (1998)). But “‘where the value of the service lies in providing access to infringing material,‘” those flat fees may constitute a direct financial benefit. Id. (quoting S. Rep. 105-190, at 45).
For example, the file-sharing service Napster had a direct financial interest in its users’ exploitation of copyrighted music. An increasing volume of pirated music available for download drew more users to register with Napster, and its “future revenue [was] directly dependent upon increases in userbase.” Napster, 239 F.3d at 1023 (internal quotation marks omitted).
As these cases illustrate, the crux of the financial benefit inquiry is whether a causal relationship exists between the infringing activity and a financial benefit to the defendant. If copyright infringement draws customers to the defendant‘s service or incentivizes them to pay more for their service, that financial benefit may be profit from infringement. See, e.g., EMI Christian Music Grp., Inc. v. MP3tunes, LLC, 844 F.3d 79, 99 (2d Cir. 2016). But in every case, the financial benefit to the defendant must flow directly from the third party‘s acts of infringement to establish vicarious liability. See Grokster, 545 U.S. at 930 & n.9; Nelson-Salabes, 284 F.3d at 513.
To prove vicarious liability, therefore, Sony had to show that Cox profited from its subscribers’ infringing download and distribution of Plaintiffs’ copyrighted songs. It did not.
We disagree. The continued payment of monthly fees for internet service, even by repeat infringers, was not a financial benefit flowing directly from the copyright infringement itself. As Cox points out, subscribers paid a flat monthly fee for their internet access no matter what they did online. Indeed, Cox would receive the same monthly fees even if all of its subscribers stopped infringing. Cox‘s financial interest in retaining subscriptions to its internet service did not give it a financial interest in its subscribers’ myriad online activities, whether acts of copyright infringement or any other unlawful acts. An internet service provider would necessarily lose money if it canceled subscriptions, but that demonstrates only that the service provider profits directly from the sale of internet access. Vicarious liability, on the other hand, demands proof that the defendant profits directly from the acts of infringement for which it is being held accountable.
Sony responds that, even if we disagree with the district court, the jury heard other evidence of Cox‘s direct financial interest in its subscribers’ copyright infringement. But none of Sony‘s alternative theories supports vicarious liability here.
Second, Sony asserts that “subscribers were willing to pay more for the ability to infringe,” but the evidence does not go nearly so far. Response Br. 36. Cox had a tiered pricing structure by which it charged customers higher monthly fees for increased data allowances. According to Sony, peer-to-peer activity is “bandwidth-intensive,” “more data usage requires more speed,” and Cox advertised its network speeds in relation to how quickly a user could download songs. Response Br. 37. Further, Sony explains, “residential subscribers who were the subject of 20 or more infringement notices from 2012
None of this raises a reasonable inference that any Cox subscriber paid more for faster internet in order to engage in copyright infringement. As Sony‘s expert testified, other data intensive activities include legally streaming movies, television shows, and music, as well as playing video games. Subscribers may have purchased high speed internet for lawful streaming and downloads or because their households had many internet users; Sony‘s expert didn‘t claim to know why any customer purchased a higher tier of service. Sony has not identified any evidence that customers were attracted to Cox‘s internet service or paid higher monthly fees because of the opportunity to infringe Plaintiffs’ copyrights.
At bottom, Sony offered no legally adequate theory to establish the required causal connection between subscribers’ copyright infringement and increased revenue to Cox. While Cox profited from the sale of internet service, Sony has not shown that Cox, in any sense, had a financial interest in its subscribers committing infringement. See CoStar Grp., 373 F.3d at 550. And it is the infringement itself that must in some fashion profit the defendant for vicarious liability to attach. Accordingly, under the correct legal standard, no reasonable jury could find that Cox received a direct financial benefit from its subscribers’ infringement of Plaintiffs’ copyrights. We therefore conclude that Cox is not vicariously liable for its subscribers’ copyright infringement and reverse the district court‘s denial of Cox‘s motion for judgment as a matter of law.
We turn next to contributory infringement. Under this theory, “‘one who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another’ is liable for the infringement, too.” CoStar Grp., 373 F.3d at 550 (quoting Gershwin Pub., 443 F.2d at 1162). The district court resolved the question of Cox‘s knowledge on summary judgment, while the jury found material contribution at trial, so we address Cox‘s challenge to each element separately.
A.
We review the district court‘s grant of summary judgment de novo, applying the same standard the district court was required to apply. See Variety Stores, Inc. v. Wal-Mart Stores, Inc., 888 F.3d 651, 659 (4th Cir. 2018). Summary judgment is appropriate when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Our Court has recently clarified the intent necessary to prove contributory infringement by an internet service provider based on its subscribers’ direct infringement. In BMG Rights Management v. Cox Communications, we held that intent to cause infringement may be shown by willful blindness—which is not at issue in this appeal—or by “know[ledge] that infringement [was] substantially certain to result from the sale” of internet service to a customer. 881 F.3d at 307. General knowledge of infringement occurring on the defendant‘s network is not enough; “[s]elling a product with both lawful and unlawful uses suggests an intent to cause infringement only if the seller knows of specific instances of infringement.” Id. at 311. Applying these principles to Cox in that
As BMG suggests, in this scenario, knowledge that particular subscribers are substantially certain to infringe is a predictive question. We reasoned in BMG that knowledge of past infringement is relevant to proving this element. See id. at 308. Here, Cox produced data purporting to show the effectiveness of each step of its thirteen-strike policy at reducing future infringement, which could also be relevant. And Sony highlights internal emails implying that Cox continued providing internet service to certain habitual infringers despite believing they would infringe again. A jury could consider this and other evidence to determine whether, when Cox continued providing internet service to customers receiving three or more infringement notices, it knew they were substantially certain to infringe Plaintiffs’ copyrights by, for example, downloading another song or distributing a song they had previously downloaded.
Cox argues that the district court erred by taking this factual determination away from the jury and deciding as a matter of law that notices of past infringement established Cox‘s knowledge that subscribers were substantially certain to infringe in the future. Unfortunately, Cox did not make any argument of this ilk to the district court when opposing summary judgment on the knowledge element. Instead, Cox‘s opposition to Sony‘s motion for summary judgment on knowledge focused exclusively on the adequacy of the infringement notices from MarkMonitor. Cox argued that the notices lacked information, that the notices were too vague to notify Cox of infringement of specific
In the district court, all parties (and the court itself) appear to have proceeded on the assumption that knowledge of subscribers’ past infringement sufficed to prove this element of contributory liability. Addressing the arguments Cox actually made, the district court concluded that the infringement notices from MarkMonitor were sufficiently detailed to notify Cox of specific instances of infringement.3 And based on Cox‘s knowledge of those notices, the court concluded that Sony had established the knowledge element of contributory liability as a matter of law.
Cox did not argue to the district court, as it does now on appeal, that notices of past infringement failed to establish its knowledge that the same subscriber was substantially certain to infringe again. Cox cites certain pages of its memorandum opposing Sony‘s motion for summary judgment where it claims to have preserved this argument. But no arguable interpretation of those pages or their context reveals any theory like the one Cox advances on appeal. In the district court, Cox contested the sufficiency of the infringement notices to prove Cox‘s knowledge of the past infringements alleged therein. On appeal, Cox argues that its knowledge of past infringements “does not prove Cox knew ex ante that the same subscriber was ‘substantially certain’ to infringe again.” Opening Br. 38 (emphasis added). “These are different arguments entirely, and making the one does not
Because Cox did not press this argument in the district court, it is forfeited for appeal. “Arguments raised in a trial court must be specific and in line with those raised on appeal.” In re Under Seal, 749 F.3d 276, 287 (4th Cir. 2014). “[A]n objection on one ground does not preserve objections based on different grounds.” Id. (internal quotation marks omitted); see also, e.g., United States v. Zayyad, 741 F.3d 452, 459 (4th Cir. 2014) (“To preserve an argument on appeal, the defendant must object on the same basis below as he contends is error on appeal.“); United States v. Banisadr Bldg. Joint Venture, 65 F.3d 374, 379 (4th Cir. 1995) (“[A] theory not raised at trial cannot be raised on appeal.“).
“Absent exceptional circumstances, . . . we do not consider issues raised for the first time on appeal.” Robinson v. Equifax Info. Servs., LLC, 560 F.3d 235, 242 (4th Cir. 2009); see also Agra, Gill & Duffus, Inc. v. Benson, 920 F.2d 1173, 1176 (4th Cir. 1990) (“We will not accept on appeal theories that were not raised in the district court except under unusual circumstances.“). Cox does not contend that any such circumstances exist here, nor does Cox make any effort to show “fundamental error or a denial of fundamental justice.” In re Under Seal, 749 F.3d at 285 (internal quotation marks omitted); see id. at 292 (finding that appellant abandoned any argument for overlooking forfeiture by failing to brief it). Consequently, we decline to consider Cox‘s new argument on appeal.
Moving to the material contribution element of contributory liability, Cox appeals the district court‘s denial of its renewed motion for judgment as a matter of law. We review that denial de novo and must affirm if, “viewing the facts in the light most favorable to the non-moving party, there is sufficient evidence for a reasonable jury to have found in the non-moving party‘s favor.” First Union Com. Corp. v. GATX Cap. Corp., 411 F.3d 551, 556 (4th Cir. 2005) (internal quotation marks and brackets omitted); see
The district court declined to disturb the jury‘s contributory liability verdict because sufficient evidence supported a finding that Cox materially contributed to its subscribers’ direct infringement of Plaintiffs’ copyrights.4 As the court explained, Cox‘s internet service “was indispensable to each instance of [peer-to-peer] infringement on its network.” Sony Music Ent. v. Cox Commc‘ns, Inc., 464 F. Supp. 3d 795, 816 (E.D. Va. 2020). And, considering the evidence in the light most favorable to Plaintiffs, a reasonable jury could have found that Cox provided that service “with actual knowledge” of infringement occurring “on specific subscribers’ accounts,” yet “fail[ed] to address” that infringement occurring on its network. Id.
Cox makes two principal objections. The first rests on the contention that it cannot be liable for materially contributing to copyright infringement because the internet service
Second and similarly, Cox claims its contribution must “amount[] to culpable conduct equivalent to aiding and abetting the infringement,” Opening Br. 43 (internal quotation marks and ellipsis omitted), and that “failing to prevent” its subscribers’ infringement does not suffice, Opening Br. 46. This argument ignores the evidence before the jury.
It is true that “mere[] . . . failure to take affirmative steps to prevent infringement” does not establish contributory liability “in the absence of other evidence of intent.” Grokster, 545 U.S. at 939 n.12. But supplying a product with knowledge that the recipient will use it to infringe copyrights is exactly the sort of culpable conduct sufficient for contributory infringement. For example, in BMG we reasoned that leasing a VCR to a customer—innocent conduct by itself—can support contributory liability if the lessor knows the customer is substantially certain to use it for copyright infringement. See BMG, 881 F.3d at 308. In such a situation, providing the means to infringe is culpable pursuant
The evidence at trial, viewed in the light most favorable to Sony, showed more than mere failure to prevent infringement. The jury saw evidence that Cox knew of specific instances of repeat copyright infringement occurring on its network, that Cox traced those instances to specific users, and that Cox chose to continue providing monthly internet access to those users despite believing the online infringement would continue because it wanted to avoid losing revenue. Sony presented extensive evidence about Cox‘s increasingly liberal policies and procedures for responding to reported infringement on its network, which Sony characterized as ensuring that infringement would recur. And the jury reasonably could have interpreted internal Cox emails and chats as displaying contempt for laws intended to curb online infringement. To be sure, Cox‘s anti-infringement efforts and its claimed success at deterring repeat infringement are also in the record. But we do not weigh the evidence at this juncture. The evidence was sufficient to support a finding that Cox materially contributed to copyright infringement occurring on its network and that its conduct was culpable. Therefore we may not disturb the jury‘s verdict finding Cox liable for contributory copyright infringement.
Having reversed on one theory of liability and affirmed on the other, we now must address the scope of the vacatur and proceedings on remand. We conclude that reversal of the vicarious infringement verdict warrants vacatur of the damages award and remand for a new trial on damages. But we see no reason to vacate the contributory infringement verdict, nor will we direct the district court to enter judgment on any part of the now-vacated statutory damages verdict.
A.
When a jury returns a special verdict form finding two bases for liability but a general damages verdict that does “not apportion damages between the claims,” reversal of one theory of liability on appeal typically requires “a new trial . . . on the damages issue.” Barber v. Whirlpool Corp., 34 F.3d 1268, 1278 (4th Cir. 1994). Only “where it is reasonably certain that the jury was not significantly influenced by issues erroneously submitted to it” is vacatur of the general damages award unnecessary. Tire Eng‘g & Distrib., LLC v. Shandong Linglong Rubber Co., 682 F.3d 292, 314 (4th Cir. 2012) (internal quotation marks omitted).
We lack sufficient confidence that the jury‘s vicarious liability verdict here did not materially influence its statutory damages award. The $1 billion award was a “global figure” for all infringements in the case. Barber, 34 F.3d at 1278. Although the vicarious and contributory infringement claims were predicated on the same conduct and the maximum damages for each is identical, the statutory range is wide and the jury‘s choice within it is highly discretionary and may have been influenced by the vicarious
B.
Cox urges us to vacate not just the damages award but also the contributory liability verdict because, in its view, the two types of secondary liability are intertwined. We don‘t see much to support Cox‘s unadorned claim that a wrong conclusion on direct financial interest in subscriber infringement would significantly influence the jury‘s finding on material contribution to infringement. Accordingly, we decline to vacate the contributory infringement verdict on this ground.
Finally, Cox argues that, even if we remand the case for a new trial on damages, we should direct the district court to enter judgment in Cox‘s favor as to certain copyrighted works that Cox claims cannot be used to calculate statutory damages. Cox renewed its motion for judgment as a matter of law on this ground after trial, and the district court denied relief. Even though we have vacated the entire damages determination, we address this issue because if Cox were right, it would be entitled to exclude a number of works from consideration for statutory damages and would not have to prove the status of those works to the jury at retrial.
The Copyright Act authorizes an award of statutory damages within a certain dollar range “for all infringements involved in the action, with respect to any one work” and specifies that, “[f]or the purposes of this subsection, all the parts of a compilation or derivative work constitute one work.”5
statutory damages awards because they are part of a compilation or derivative work. Specifically, Cox claims that the number of compensable works was inflated in two ways: (1) by counting both musical compositions and their derivative sound recordings, and (2) by counting individual sound recordings that were compiled in a single album.
A “derivative work” is “a work based upon one or more preexisting works, such as a . . . sound recording[.]”
A “compilation” is “a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship. The term ‘compilation’ includes [a] collective work[],” which is “a work, such as a periodical issue, anthology, or encyclopedia, in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole.”
Before and during trial, the parties were aware of the need for evidence to identify the alleged derivative works and compilations among the 10,017 copyrighted works at issue. Pretrial, the district court denied Cox‘s motion for summary judgment on the topics, observing that issues of material fact remained. At various points during the trial, Cox acknowledged its obligation to put forth evidence identifying the derivative works and compilations and forecasted that it would do so through requests for admissions, answers to interrogatories, deposition testimony, certificates of registration, or expert testimony. But it did not, and pertinent testimony from Cox‘s expert witness was excluded from evidence as beyond the bounds of his expert report and disclosures.6 Having heard no
evidence or argument about the number of derivative works or compilations, the jury returned a statutory damages award for each of the 10,017 copyrighted works infringed.7
After trial, Cox asked the district court to reduce the damages award to account for derivative works and compilations. The court declined, and we review its judgment de novo. See First Union Com. Corp., 411 F.3d at 556.
1.
Regarding derivative works, the district court agreed with Cox on the legal question, ruling that Plaintiffs were entitled to only one statutory damages award, not two, for infringement of a musical composition and its derivative sound recording.8 But on the factual question, the court concluded that Cox had not presented evidence from which the jury could determine which recordings and compositions overlapped.
In support of its posttrial motion, Cox created three schedules identifying the works that it claimed overlapped and those that did not. To do so, Cox consulted two trial exhibits—PX1, which listed the infringed sound recordings, and PX2, which listed the infringed musical compositions—and the works’ copyright registration certificates, some but not all of which were in evidence. Cox compared information from these sources, including the title of the work, artist, album, publication date, and ownership information,
As the district court realized, this additional information necessary for distinguishing derivative from non-derivative works had not been presented to the jury. Even if the jury had been asked to comb through the thousands of entries on PX1 and PX2, that comparison alone would not have enabled it to determine which entries were derivative of each other, as demonstrated by Cox‘s posttrial submissions. The court therefore correctly concluded that it could not use the new analysis in Cox‘s posttrial schedules to decide which works were derivative and reduce the damages award. As the court explained, “Cox did not provide the information to the jury that it has provided to the [c]ourt in its post-trial brief,” and “[t]he jury answered that question [about statutory damages] with the information available” at trial. Sony Music Ent. v. Cox Commc‘ns, Inc., No. 1:18-cv-00950, 2021 WL 1254683, at *3 (E.D. Va. Jan. 12, 2021).
Cox now argues, based on the information it presented to the district court after trial, that the jury‘s verdict was unjust because 2,235 sound recordings are undisputedly derivative works. But like the district court when deciding the Rule 50 motion, we must assess the verdict based on the evidence before the jury, not Cox‘s efforts to supplement the record after trial. See 9B Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 2529 (3d ed. & Supp. 2023) (“Rule 50 motions must be considered in light of the evidence presented at trial.“). Because the evidence at trial supported the jury‘s verdict, we affirm the district court‘s denial of judgment as a matter of law.
As for compilations, Cox contends that Plaintiffs were not entitled to separate statutory damages awards for songs that were contained on the same album. We need not decide whether Cox‘s legal premise is sound because, even assuming it is for the sake of argument, Cox does not identify evidence from which the jury could have determined which songs were released on albums together.9
Nowhere in its briefing does Cox identify evidence it presented to the jury about whether infringed works were contained on albums. Neither PX-1 (the list of infringed sound recordings) nor PX-2 (the list of infringed compositions) mentions the album information for any work. To bridge this gap, Cox relies on the summary judgment record, citing deposition testimony and the supposed absence of dispute at that stage about certain facts. But we see no indication this evidence was presented to the jury, and our focus when reviewing the district court‘s Rule 50 ruling must be the record created at trial. See
For the foregoing reasons, we reverse the district court‘s order denying Cox judgment as a matter of law on Sony‘s claim of vicarious copyright infringement. We affirm the district court‘s orders denying Cox relief from the jury‘s contributory infringement verdict and denying judgment as a matter of law regarding the number of derivative works and compilations. Given our reversal of the vicarious liability verdict, we also vacate the damages award and remand for a new trial on the amount of statutory damages to be awarded.
SO ORDERED