SCOTUS HOT TAKE: Betamax, Grokster and the pathway to Cox Communication v. Sony Music

Music Row Dealmakers Barry Neil Shrum and Dennis Disney hotly debate the 9-0 decision by the Supreme Court to overturn the 1 Billion Dollar copyright infringement verdict in Sony Music Entertainment v. Cox Communications, exploring the roots of the conflict and prior Supreme Court opinions, as well as of Betamax and Grokster, as well as the decisions implications on the Digital Millineum Copyright Act.

Transcript

 Summary : Cox Communications and Sony Music Entertainment recently had a Supreme Court case involving copyright infringement. Cox is a major internet service provider and received numerous notices about users illegally downloading songs. In response, Cox developed a 13 strike policy, and while they rarely terminated service for these notices, they did regularly terminate service for non-payment. The court's opinion cannot be fully understood without understanding the history of Napster and the DMCA law. Napster was a software program that allowed users to share music for The Cox v. SONY decision is a controversial case that deals with the issue of contributory infringement, or whether a company can be held liable for the copyright infringement of its users. It involves Cox Communications, an internet service provider, and Sony Music Entertainment, a record company. The case began in 2013 and went through several appeals and a trial before reaching the Supreme Court in 2020. In the case, Sony argued that Cox should be held liable for the copyright infringement of The Supreme Court's recent decision in the case Cox Communications, Inc. v. Sony Music Entertainment has significant implications for copyright infringement cases involving ISPs and other technology companies. The decision focused on secondary liability for copyright infringement, specifically whether ISPs can be held liable for the actions of their users. The Court's ruling, which was supported by six Justices, held that ISPs can be held contributorily liable for the actions of their users if they have knowledge that their service is being used for infringement and do================================================ Summary: 

The Supreme Court ruled in favor of Cox Communications in a case involving copyright infringement by its subscribers. The majority opinion stated that Cox could not be held liable for infringement, as there was no evidence of intent to aid and abet the infringing activities of its users. The concurring opinion agreed with the outcome but argued that the ruling could have broader effects on the DMCA's safe harbor provisions. The dissenting opinion disagreed with the majority's reasoning and argued that the ruling could The U.S. Supreme Court recently issued an opinion in the case of “Sony Music Entertainment v. Cox Communications,” which involves a dispute between the record companies and an internet service provider (ISP) regarding copyright infringement. The majority opinion, written by Justice Clarence Thomas, sided with the ISP and ruled that the Digital Millennium Copyright Act (DMCA) does not impose liability for contributory infringement on ISPs. However, Justice Sonia Sotomayor wrote a separate concurrence, disagreeing with the In this episode of Music Row Dealmakers, entertainment attorneys Barry Neil Shrum and David Brewer discuss a recent Supreme Court decision involving Cox Communications and potential implications for internet service providers (ISPs) and copyright infringement. They also address critics of the decision and debate the differing perspectives of Supreme Court Justices Thomas and Sotomayor. They conclude by inviting ISPs to seek legal representation from their law firm. Transcription Welcome to Music Row Dealmakers, where we explore our world of making deals from Nashville's famed Music Row in the heart of Music City. We are the dealmakers. From composing to closing now, here's your host, Barry Neal Shrub and Dennis Disney. To all of our faithful dealmakers listening and out there, we appreciate your continued support and we welcome you to our special anniversary episode, the 20th episode of Music Row. Dealmakers from composing to Closing. I'm Barry Neil Strom, founding partner of Sram Disney and associate and co-host along with Dennis Disney. Um, and we thank you so much for listening in and supporting us and continuing to support our work toward our goal of 2500 listeners. Um, please help us do that by sharing a link to this podcast with your friends on your social media. And if you haven't already subscribed, spread the word around, and we appreciate it. Uh, Dennis will be joining us, uh, briefly after an introduction to our topic today to discuss, uh, a recent decision by the Supreme Court involving some significant issues concerning copyright and copyright infringement. Uh, don't forget, if you'd like to interact with us more, we always welcome your questions and comments about anything we discuss here on the show. So please call us or leave us a message at eight, 777 dealmakers, or send us an email to questions at Music Row dealmakers.com, and we'll answer your questions on the air. Uh, the Supreme Court case that was decided last week or in the last week or so is Cox Communications versus Sony Music Entertainment. Uh, two huge conglomerates. Uh, it's copyright infringement action at the lower level. Uh, went all the way to the Supreme Court. Of course, Cox is a major internet service provider. Or in terms of, of the law, the an ISP. They sell internet, telephone, cable television to to millions of people. 6 million approximately. And between 2013 and 2014, some of Cox's internet subscribers were using peer to peer file sharing networks involving things like BitTorrent, for example, to download and distribute copyrighted songs owned by record companies and music publishers, which included, of course, Sony Music Entertainment. They are the the plaintiffs in the underlying action. The record companies like Sony are usually represented by the Recording Industry Association of American Industry Association, the RIAA. That company, on behalf of the record companies, hired a company called Mark monitor to monitor illegal filesharing and notify ISP providers when they detected an infringement. And, um, we'll talk a little bit about the Digital Millennium Copyright Acts takedown notices in just a second. And that's that's how they file these notices. And in order to receive a safe harbor, Cox is required to respond to those in a certain way. So, uh, during this period of time, this one year period, this one year window, over 163,000 notices of infringement occurred from 2013 to 2014. Now. In response, Cox's action was to develop what they called a 13 strike policy, under which it, um, warned, if you can call it that, or um would temporarily suspend subscribers after repeated notice. But the problem is it rarely terminated service for for these copyright infringement violations, the violations of the DMCA, but it regularly terminated services for non-payment. So again, in order to really fully understand this Cox opinion, it's necessary to understand the history of illegal downloading of music in the United States. Um, as well as the DMCA takedown notice requirements. So in the late 1990s is when this all began. Um, this was a period of time after, uh, al Gore had, um, proposed and funded, uh, the movement of the, the, the internet from a military installation under, under what was called Arpa to the, the commercial enterprise that it is uh, today. Um, during the same period of time, um, became, um, relevant and, uh, Sean Fanning and others, uh, worked together to create a downloadable software program called Napster, which they distributed over the internet. Napster was a, uh, essentially a free download of software that installed a peer to peer system on your computer, your, your personal computer, um, and which users could, could download this software and share the music that they had stored on their computers, the MP3's. It does scoured, um, you know, scanned your computer hard drive and, and put all of these MP3 files, the music files, into a special folder, which it then indexed. Uh, Napster operated through a centralized server located, I think, California. I don't remember exactly where it was, but a physical server. And that server, uh, looked at all of these user's, uh, hard drives and indexed the files and associated them with these users. So anyone user using Napster could then search everybody else's files in their computer systems. An identify and download their favorite songs. And of course, all of this was done without paying for them. So much like a bank announcing that it's given away free dollar bills. This, of course, triggered a mass hysteria. And and the following decade after Napster came online, the revenue for the record industry not only in America, in the United States, where Napster was, was located, but worldwide declined by over 50%. Now, take that in for a second. Revenues of close to $20 billion a year went down by 50%. In other words, went to 10 billion. Take that amount of money, that 50% of any industry's revenue. Suck it out of that industry and see how long an industry survives. Of course, it hurt the music industry. And sometimes that that decade between roughly 1999 and 2009 is referred to as the lost decade because the industry almost went away. The people, of course, who were heard the hurt the most were the songwriters. Ultimately, because they were no longer receiving money for performance or mechanicals or the royalty streams that they were accustomed to. But but the trickle down effect or the widespread catastrophe that that resulted from Napster and these free downloads affected every aspect of the music industry, including entertainment lawyers like like me and Dennis. So as a result of this new phenomenon called the Worldwide web, um, Congress in the late 90s passed what's known as the Digital Millennium Copyright Act, what I've referred to as the DMCA, which made it illegal to, uh, primarily to bypass certain security measures that were in place on on music CDs and other physical product. But as far as that goes, the damage had already been done by Napster and the likes of Fanning. Um, as part of that DMCA. Congress insulated a service provider from infringement actions, um, when their users would participate in these peer to peer networks, the record labels and those in the industry would sue the ISPs, but Congress insulated them through the DMCA if they would take certain actions to take down offending copyrights when the owners of those copyrights sent them what's called a takedown notice informing the ISP, the service provider, that its users were in fact infringing their copyright and give them notice of which ones were being infinitely infringed. It was called a safe harbor provision, which is an idea that is actually borrowed from a 1980s case involving the Sony Betamax system. Now, those of you who are as old as I am will remember the Sony Betamax. It was the first video recording system. It allowed us to record programming from over the air, broadcast of television, a copyrighted entertainment programs, and of course, that industry had a problem with Sony Betamax and said you are facilitating infringement. That case went all the way to the Supreme Court, and it's known as the Betamax decision. In that decision, the Supreme Court granted Sony a safe harbor against the actions of Disney and other content providers, saying that the Betamax system had significant non infringing uses, and that use, according to the Supreme Court, was time shifting. And that was the first case to provide a safe harbor for those kinds of things. It actually borrowed a principle from patent law called the stable article doctrine, which means that if you own a patent, you don't own those stable articles of commerce like screws and things that go into your patent. You only own the original portion. And the somebody using those stable staple articles are not infringing. So it provides them with a safe harbor. And they borrowed that concept and said that the Betamax was actually allowing consumers to shift time, and so that they didn't have to sit down in front of the television at the scheduled time to watch that program. They could program it, record it, and watch it later. So that was the safe harbor that Betamax provided. And that comes in to be relevant in this case. So Napster ultimately was sued by the RIAA. Um, and it was a tumultuous time. And through an extended legal battle, the courts ultimately determined that Napster was not only contributory liable for the infringement of its user, but that it had vicariously infringed, um, the copyrights of all the music that was being downloaded. Um, so they held it liable for the infringing activities of its users. That's a concept, a construct called secondary liability for copyright infringement. And it's something that honestly does not appear in the 1976 Copyright Act, but is a product of court decisions and other principles from law that that courts have applied to copyright. So let's fast forward a little bit. Napster is now out of the picture. It's been shut down through this lawsuit, ultimately acquired by by the music industry itself. Um, so fast forward to the 2000. And the Napster users are now clamoring for more free music. Of course, they've got a taste for having their favorite songs without having to pay for them. So they're looking to do this even more. Enter services the likes of Rockstar and Dreamcast, and you may remember those from from those days, the early 2000. Um, and they began to fill the void. But there was a difference between Rockstar and Screencast and Napster. Um, these new services, um, took a page from the legal struggles that Napster went through and from its demise. And instead of having a centralized server, a physical centralized server, it used something called a decentralized server. Um, in other words, uh, what we would now call a VPN or a virtual personal network. Instead of having this centralized server. This new breed of P2P or peer to peer networks created virtual servers on the fly by combining the users that were online at the same time and roughly the same locality, thereby eliminating that Achilles heel of the Napster litigation. And what really brought Napster down, they were, in fact, physically facilitating here. Rockstar had the argument that we're not facilitating it. We're simply creating the virtual network. So when the RIAA a sued Rockstar for infringement, they utilize this Betamax decision of a safe harbor in their defense, uh, arguing that their service provided this significant non infringing purpose of not time shifting, but space shifting the music. Um, and not only that, but they argued that it allowed their users to share just about any kind of file, word processing files, uh, databases, all kinds of different documents. Now. The record company, in response, argued that these new services, um, not only basically facilitated the exchange of music file files, but rather targeted users of Napster in order to acquire them in their advertising and marketing. Um, and in response to the the allegation or the defense of of Rockstar that that users could share any kind of files. Uh, the evidence presented by the music industry indicated that 98% of those files exchanged on Rockstar and Dreamcast were music files. So they argued, um, like an Napster, uh, contributory, uh, contributory infringement and vicarious liability. That case two, of course, went all the way up to the Supreme Court, uh, with one major difference in the Napster case. It was primarily music companies that were involved. However, in Rockstar, we had the movie industry being involved as well, because with these new, faster peer to peer networks, um, larger files like movies could be exchanged as well. So when the Supreme Court's ruling in Rochester, um, we we we have a essentially a an evaluation of the Sony Betamax case. Uh, the court examined it, uh, toyed with the idea of of overturning it and ruling, going in a different direction. But in the end, they did not overturn it. They upheld it. In his majority opinion, David Souder, uh, introduced a concept that is known as the, quote, active inducement rule, end quote. Um, which is what they called it. And that active inducement rule is that, quote, one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties. Now the question is, does that rule apply to what Cox did in the most current case? But in order to prove this active inducement, according to the Supremes, the plaintiffs has to show, quote, purposeful, culpable expression and conduct, end quote, intended to induce the infringement. Now in character, the Supremes found that the culpability in this culpability was Rochester's direct marketing efforts. Using keywords and AdWords like Napster and illegal downloads and and and other words directly marketing toward those, um, displaced Napster users. So that case was decided in 2005, a mere eight years prior to when, um, this case of Cox versus Sony that was recently decided get started somewhere between 2013 and 2014. Um, so in that period of time, Cox communication, as I indicated earlier, received almost 200,000 DMCA takedown notices from the RIAA. And in the industry representative I referred to earlier, um, that represents Sony Music in this case in response. Cox alleges that we took the proper steps. We acted according to the DMCA. Um, and we created a system of strikes, as it were. Um, so that after certain amounts of notices, we would do certain things after receiving a second notice that a subscriber, a takedown notice that a subscriber account had been downloading infringing items. Cox sent a warning to that subscriber after two notices. After additional notices, a cox would temporarily terminate the internet access to that IP address until that the subscriber responded to the warning in some way if it continued to receive notices for that same IP address. Cox suspended service until the subscriber called and received a warning over the phone. It took 13 of these notices before the subscriber was actually subject to the termination of all its internet services. Now, the question is, is that enough? Um, in reality, Sony, in its oral argument, pointed out that in fact, only 32 of its 6 million subscriber Cox's 6 million subscriber accounts that had they had received notice of infringing were terminated. In response to these 200,000 takedown notices, 32 out of 200,000. Whereas when it comes to payment or termination of accounts for non-payment, during that same period of time, they had terminated hundreds of thousands of those accounts. So as a result, Sony argued not only vicarious liability but contributory negligent infringement as well. And they argued that Cox had, quote, profited directly from the infringement and had a right and ability to supervise the direct infringers. They were in that language, quoting from the Baxter case in the district court. The trial court's court of first impression Sony prevailed on both of those arguments of contributory and vicarious liability. The jury found in favor of Sony on both theories in the Eastern District of Virginia in 2020, and they found that Cox's infringement was willful. 13 notices was a bit too much, and they awarded $1 billion in statutory damages for infringement of over 10,000 works. So of course, both parties appealed. Sony appealed. The denial of um or Sony appealed for for damages, and um Cox appealed the judgment in general and on on appeal, the Fourth Circuit, uh, which is the appeal appeals court for the Eastern District of Virginia, uh, affirmed in part and reversed in part. It affirmed as to to the contributory liability because Cox continued to provide internet services to known infringers, uh, applying its own precedent, the circuit precedent, it reasoned that, quote, supplying a product with knowledge that the recipient will use it to infringe copyrights is exactly the sort of culpable conduct sufficient sufficient for contributory, uh, contributory infringement. Um, they they cited a case that, of course, cites Betamax. The Fourth Circuit reversed, however, with regard to vicarious liability, because it concluded that Cox did not, quote, receive a direct financial benefit from its subscriber's infringement. So the court vacated the damages award and remanded it back to the jury to reassess damages based solely on the contributory liability alone. In the meantime, of course, um, Cox asked for cert from the Supreme Court. Supreme court granted it. Sony also asked for CERT on the basis of the vicarious liability decision, but the Supreme Court denied that decision. So let's bring in Dennis and let's talk about this decision. All right. Welcome back into the studio. Dennis, welcome. Thank you. Let me go ahead and get it out. We're going to talk about today. You're wrong. Well, you know, greater minds can disagree, but you're not right. So anyway, we got a hell of a decision here. And you and I have talked about this prior to coming on air. And I do know that your opinion is a little bit different than mine. I mean, and I understand this is a nine year old decision. So, you know, I don't I don't come to my opinion lightly in view of that. But I do think that that both the majority opinion written by Clarence Thomas and the concurring opinion by Sotomayor and Jackson missed the boat in a lot of ways in the in the majority. The Thomas kind of focuses on the service, the ISP and Cox and says that he explains that a product or service is not going to be liable for infringement unless it's tailored to facilitating infringement. And to me, that's the wrong focus. And he said, particularly when it's capable of substantial or commercially significant non-inverting infringing uses. That, of course, is is the Betamax decision from 1980. Right. And that's that's what it found is that the VCR was capable of substantial non infringing infringing uses. So he focuses primarily on that. And in my opinion, and then he goes on to say failure to take affirmative steps to prevent infringement is insufficient to support contributed contributory liability. So combined those that focus dramatically limits the secondary liability principle of contributory negligence or infringement. And by doing so, in my opinion, he completely ignores the active inducement basis of contributory infringement that was established in the Boxster case, otherwise known as Betamax two. So then then turning to to Sotomayor and Jackson. They concur with the holding, so they agree that Cox is not liable. But they don't concur with his reasoning. And I agree with them. But but their reasoning, in my opinion, is also misplaced. They first of all, with Thomas, they objected to his his limitation on that. I talked about placing, you know, placing a limitation on contributory infringement and then by the court itself, declining to grant cert to Sony on the issue of vicarious liability. They effectively eliminate that active inducement component. And that's something that that Sotomayor and Jackson don't really address. They do address the fact that that soda that Thomas renders the DMCA safe harbor provisions meaningless because he effectively waters down this contributory liability. And because of that, you're rarely going to have an instance where contributory infringement can be found. So effectively. Mr. Thomas, Mr. Textualist stepped into the role of a legislator and removed those safe harbor provisions, effectively gutting the takedown provisions. So ostensibly, Sotomayor, in her concurrence, wrote it because she felt that Thomas didn't put enough emphasis on this alternative theory of aiding and abetting a criminal principle in the context of copyright. That's an issue that actually Cox raised, and it's appealed to the Fourth Circuit. And so she agreed with the holding because she said Sony didn't actually prove intent to infringe. But when you look at the four circuits opinion about that, they said that supplying a product with knowledge that the recipient will use it to infringe is exactly the sort of culpable conduct sufficient for contributory infringement. So that's something I think this concurring opinion overlooked. So my personal opinion is that they're both wrong. They place the emphasis on the wrong syllable, as it were now. And I'll shut up in a minute and let you say something, but fine. But unfortunately, just keep digging your whole your field. And the problem with this, Dennis, and here's, I guess, where the rubber meets the road, I think the implications for Scotus decision. And again, they all they all agree with this. It has far reaching implications not just on litigation Infringement litigation against ISPs, but against any kind of technology company. And of course, now my concern is how it's going to impact cases involving AI, because it's going to make defendants in those cases a lot more capable of of defending against secondary liability like vicarious and contributory in the actions of their users. And, you know, there are a lot of cases out there. And no surprise, Thomas didn't address any of those, nor did so to my ear. And so obviously, they kind of I don't know if they glossed over it or if it was intentional, but but they just didn't take into consideration how it's going to affect those products, especially for claims that are based on outputs of these generative generative AI products. It's going to be more difficult for copyright owners. And that's that's where my heart lies. And I see this case as extremely beneficial for technology companies and extremely detrimental to to the creative industry. So that's that's my main objection to it. So I rest my piece. Well, I'll, I'll start by saying this. And I won't be as verbose as you were. But first of all, I disagree that that that anyone says it decimated the DMCA. That was one of the concerns. I mean, I think what Sotomayor said, it vitiated the DMCA. It did it, didn't it? Primarily from from this perspective. Cox does not host anything, so even doing a takedown notice doesn't directly apply to Cox. They are a roadway from the host to the consumer and vice versa, if you will. So for them to do a takedown, even though they were doing some of that, and I actually do agree with Thomas in that. The statute in and of itself for for DMCA doesn't require you to do it. You can use it as a defense mechanism. Hey, you. You were. You should have taken it down. Well hang on. If I do, I can use the DMCA as my defense, right? That's that's really what it is. It doesn't say I have to affirmatively always take something down. It's just that if and when I do it, I have that defense against charges that I am inappropriately. I disagree with you. That's I think you're missing the point of the DMCA. It does require. If if the service provider wants the safe harbor, if they don't want to be sued for the infringement of their users, correct, then they have to comply with the takedown notices. But that is a defense mechanism. You just said it the way you just said it. If you do not want to be sued by. But what Thomas is talking about is, is it is a textual thing. He focuses on the component that says the takedown notices don't limit them in the defense against infringement. That's what he says. Okay. And if you look at the language that he cites from the DMCA, that's exactly what it says. You've got these notices. It gives you a safe harbor. And yes, that is a defense mechanism. But then it also says failure to do this does not limit a defense to copyright infringement. And what it's talking about, of course, is the other defenses. If you didn't actually do it, if, you know, if there's if there's some other defense that you're that that you're capable of exercising. Yeah. That's what it's talking about. Well it does. I mean, the actual language that was used, at least by him under the DMCA safe harbor defense service providers cannot be secondarily liable for certain forms of copyright infringement if they have implemented, quote, a policy that provides for the termination in appropriate circumstances of subscribers and account holders in quote who, quote are repeated infringers. Close quote. So he goes on to say, at the same time, the DMCA specifies that failure to qualify for the safe harbor defense. There it is. Quote, shall not bear adversely upon the consideration of a defense by the service provider that the service providers conduct is not infringing. Close quote. So you can still argue. I'm not infringing even if I didn't adhere to the DMCA takedown. Well, the problem is that nobody argued that Cox was not infringing. This this wasn't about that. Cox was not infringing. Its users were, but Cox. Cox was, in my opinion, under Rockstar, actively inducing the infringement because it had a 13 step takedown procedure, 13 steps, and that was reset every time they sent the guy a notice. So they get a notice from from Sony or whoever that that that they need to take this down. So they send immediately. They send this guy because they're the only ones that knows his identity. They don't. Did you read the full Eva? Sotomayor concurred. They don't know the identity of every user. They know the identity of their subscriber. But some of the subscribers are households with multiple people. Are universities or are. Yeah, I get that, I get that. And but I think that that again is placing the. Focus on the wrong thing. In the Fourth Circuit's opinion, it noted that Cox was the only one who knows how to get in touch with these people. They know who they are because they're calling them part of their takedown procedure, as you call us, and we'll put your service back up again. And every time they do that. So what you're saying is, hey, Mr. Dean, they reset the clock. Mr. Dean or Mr. University, you have hundreds of thousands of people. Hotels have thousands of people staying at your place. Right. Somebody we've identified through your connection with that hotel in France. You're going to shut down the entire hotel. You're going to shut down the entire universe, and you're going to turn off the entire internet to the cafe. The internet cafe? How do you do that? Yeah, but that's not the facts. Don't bear that scenario. Absolutely did. According to the to the ruling that both the majority and the concurrence both brought this up. Yeah. Because that was in the oral arguments argued by Cox II. The fact is, they know who their subscribers are. Yes, but they don't know who the user was of that. They do not know specifically if that subscriber was the one who infringed. That's correct. So let me bring down to this. I will agree with that. I build a subdivision. It's a private subdivision. I have a street. Somebody on that street is carrying drugs. Am I liable for that? As the owner, as the developer of that subdivision. Now? Of course not. Unless you're facilitating that. Unless I'm saying, hey, drug dealers drive on my streets, or if you're inducing the drug dealers to move into your neighborhood. Yes, yes. Then you could be correct. That's where I don't see any of the inducement here. Just because you're an ISP and you were not maybe as aggressive as other people in the takedown aspect of things. I don't see that being an inducement. I, I see where you're going, but I don't agree. I think if you look at Rockstar, the way that Rockstar induced was to use AdWords, to use your analogy, they don't know who is coming as a result of those AdWords, but they know people are coming. They know people are inducing. And the way I would pull that in to Cox is and the proof is in the numbers. But the way I would prove that in pull that in is to say Cox is aware of who's infringing because they're sending them notices of suspension and warnings and emails. Emails and so they know who the infringers are. And then when they would send them an email, get this, they reset the clock. Okay. And so the subscribers just go on doing what they're doing. Maybe that I don't know, I still come back to we know who the subscriber is. We don't know who the infringer is. And if I am a place with multiple users coming into my using my internet service, you're going to shut the whole thing down because somebody, some salesman from two months ago stopped in over and out of my hotel. But you're going to shut my entire hotel down because one user one time came in and did something, and I can't find I don't and I don't know who that would be. Well, yeah. And I get I get your argument and I know how URLs work and how IP addresses work. And I know that that IP address shields the actual identity of the person using it. I get all of those principles. But again, I go back to the fact that in this case and by the way, they only shut 32 freaking people down in that year period when they got over 160,000 takedown notices, 32 people. That tells me that their takedown procedure was not reasonable. And so. But but back to my point. I guess that is my point. It is not a reasonable procedure. So your your example of a hotel is extreme and there weren't any situations like that. That's a hypothetical. Do we know that? I mean I've only read the the Scotus opinion. I didn't go back to the trial court. I didn't look at the evidence. I don't know who they introduced into the trial that says these are the people that were infringing and they're actual, identifiable, discrete individuals. I don't know that. Well, I don't either. I haven't read the trial transcript. I read the Fourth Circuit's appeal. I mean, it's more plausible to me that those 32 people were actually discrete individuals they could identify. It is more plausible. And that's why it's only 32 instead of the 160,000. Yeah. Well, I don't disagree with that, I think. But but the fact is, they're more prone to terminate the services of people who are not paying their bill. They terminated some 600,000 of those or 10% of their subscriber base, but not the the 32. So, I mean, I, I get your point. I know that's really apples and oranges though. Don't you think they're terminating unpaid subscribers but not terminating based on a third party because it was some monkey mark or whatever that that firm was that Sony uses to identify infringing ISPs that they listed in here. Yeah. It was, uh. Hang on. I'm here. Oh. Monitor, monitor. Monitor monitor. Mark. Yeah. Yeah. What? I call it monkey. Mark. Yeah. Sorry. Sorry, guys. You actually are a good service. So apologize for that. They really are. Think of the name. Yeah. That's not to eliminate any, uh. No sponsors. Well, I started to say Mark and Mark, and I'm like, no, it's not Mark Wahlberg. It's not Marky Mark. Using Mark Marky Mark to go check this down. Now I've lost my train of thought, so we'll go on. I did want to bring up though. They both opinions. I mean, I mean the majority and the the concurrence both eliminated vicarious liability pretty quickly in their discussion, if I remember it correctly. Well, and you know why? Well, first of all, I curious has to convey some sense of control over. Yeah, but that's a contributory to us as well. But but vicarious adds the element of you have to be financially benefiting from it. And according to both the Fourth Circuit and Thomas and I think maybe even sold them a year, they didn't think that Cox. Ah that yeah. That Cox was financially benefiting directly from the infringement. So that's how they got around vicarious. Okay. So then what was the purpose of trying to hold them contributory liable. What's the benefit to cocks. In other words if you're if you're there is no benefit requirement. Aiding and abetting or it's good. Let's go to Sotomayor's aiding and abetting analogy. Right. So if you're aiding and abetting, there has to be a reason for that. Right. Otherwise, how are you aiding and abetting someone to commit a crime or even a tort or whatever? I'm not sure what you mean. Yeah. I mean, well, I'm trying. I'm assuming the reasoning is they're they're somehow benefiting from that. Okay. Welcome back folks. We had a little technical difficulty. My computer battery went so low we couldn't record anymore. So we're picking back up where we left off. Dennis was explaining, aiding and abetting to me. Yeah, I was winning the argument. You turned me off. That's what it was. Well, you know, it's the only way I can win. You know, we were talking about. You were explaining the vicarious liability has to be they they have to financially benefit from it. Yeah. And my point I was trying to get to what that means contributory negligence. But they also brought in aiding and abetting as an alternative as an alternative theory. My point to both of those is why why would you contribute to why would you aid and abet? And aiding and abetting is intentional unless you had some positive result coming back your way? I mean, what would it be? And if it's positive for Cox, it only is positive because it's financial. They have nothing else to gain. Hey, you know well more users will use them. That means more money for Cox because more users are using them. If they were, you know, vicarious or whatever. So my point to the whole thing is I don't I did agree with the opinion overall, because there was nothing in this for Cox to do or that they did that would have been done simply for financial gain. So vicarious, throw it out for your purposes and I'll agree with that definition. They're also not controlling anything, right? I mean, in tort law and employers vicariously liable to the employee as long as they're working within the scope of employment and they do something, the employer can be vicariously liable because they control the activities of the employee within the scope of employment. So, okay, fine. We're not controlling anybody here. And to your point, we're not there's not a financial incentive for us to do this great. Throughout vicarious okay. Now we can contributory. Well, when you say they're not controlling, I don't necessarily agree with that. They are controlling whether or not the person has continued service, and they can control that as exhibited by the fact. And that's why it's relevant that they did cancel subscribers who didn't pay their bills. So that is a form of control. Now, the control you're talking about is a response to a superior kind of control, where the agent is acting on behalf of the superior. And, and so and that is a component of aiding and abetting to some degree. So but again, I don't see that as relevant to contributory liability because those are two separate issues. And that's one of the problems I have with Sotomayor. Years emphasis on aiding and abetting. Well, is that it also ignores the active inducement component, that contributory liability. That's ultimately where I was getting to. Right. So there are three theories, right. Vicarious, contributory. And now a so to my year mare potentially aiding and abetting. Yeah. And her whole argument is. That should be thrown in. There are some precedent that used that language in some other cases that she thought were relevant to to this issue here. So don't limit us, is what her basic argument comes down to. Don't limit the ruling here to too narrowly, because aiding and abetting can create an opportunity like the word creates the ability for people to stop more additional infringers under this aiding and abetting theory. That's her thought, but it all comes down to the same bottom line. Okay, what's the intent? What's the inducement? What? Why would Cox want to do all this at the risk of losing $1 billion? That makes no sense to me. And that's where I look at it. And I go, I think the ruling and the concurrence were both right. Ultimately, I am on the fence whether or not this particular case needed to extend into the whole aiding and abetting alternative theory. I've just always been a big believer that with Supreme Court in particular, Supreme Court rulings keep it as narrow as possible. And there's nothing in here that tells me that this will have a wide ranging detrimental effect on future cases. I don't see it that way. How how not I mean, it it limits. And even even in his argument, I forget who the who argued on behalf of Cox, but even in his sentence. And let me find the the the quote he recognizes that moving forward if if they decided on behalf of Cox. Effectively, the DMCA takedown notices were superfluous. No need to have them anymore. So as it relates to Cox, which I don't necessarily disagree with. They're a channel. They don't host anything. They're a channel. That's it. They are. I don't understand what hosting has to do with it. Well, the quote unquote takedown, which means you've got to go in and tell somebody to take down your offending content or we're going to shut you off. Right. So from that perspective, Cox, first of all, isn't hosting anything. They're not YouTube YouTube hosts things. No, no, no, I understand that. And a takedown can apply to a hosted material. Yes. But the DMCA is not limited to host. It also applies directly to internet service providers and user infringing. Yes. So it has nothing to do with hosting only to the degree of as it relates to this case. Okay. So DMCA is not an eviscerated. This case, says Cox, you are a conduit only, and until someone can provide a discreet identification for you to take down, you're not. You yourself are not liable for anything. To your point, there was 32 that they did take down. Now you're you're saying, well, there's another 160. They didn't 160,000. They didn't. Yeah. Okay. And obviously those are broad range numbers. I don't think that implicates necessarily anything other than from a very narrow perspective. If you can identify discrete infringers, you can take them down. And if that, then of course, the DMCA, they didn't overrule the DMCA. All that is still there. They didn't come in and change law. I don't agree with that. I think they very much did the the safe harbor provisions that were given to ISP under the DMCA. Were effectively extended under this act. Now, ISPs are no longer at all responsible to take down any user that infringes. I just don't read the opinion that way. And obviously nine zero at the Supreme Court also agreed it doesn't do that well. No, I don't agree with that because Sotomayor specifically says that I didn't read her opinion to be that way at all. I read her opinion to be it doesn't go far enough. It's not broad enough. She does say, hey, it eviscerates the DMCA being limited as it is, which I disagree with that part of it, but she didn't disagree so much to say that she didn't concur with the opinion she did not occur with his concur with his reasoning. She only concur with the holding that they were not liable, and that because there was no intent to aid and abet. According to her, the majority's new rule completely upends that balance and confines the safe harbor provision to obsolescence. Obsolescence. After today, however, ISPs no longer face any realistic probability of secondary liability for copyright infringement infringement, regardless of whether they take steps to address infringement on their networks and regardless of what they know about their users activities. I don't know how you can make it any more clear. Well, she may have gone that far, but she didn't go far enough to to not make it nine one or not or A81 or 972, but she could easily have done and still passed and still brought in her dissent. Totally agree. And I, I, I honestly, it wasn't as big of a deal as she wants to make it out to be, or I think she would have. She's never been shy not to step up before. Nor has Ketanji Brown. Well, no, I agree with that. And so they're saying, hey, we agree they're not liable, but it's for these reasons. And then you say, but it's now going to eviscerate the DMCA. Well, you could have easily as a stance because dissents and concern concurrencies. Aren't case law. We know. You know it's it's it can be used for argument purposes. They could have easily have stepped up and said no for these reasons. And so therefore I dissent. And that could have even gone in the reverse and said I dissent. However, I might have agreed with the with the final holding if not for this. Okay, but that's not what she said. Well, and I would probably have more respect for the opinion if she had done that. I, to be frank with you and I have a great deal of respect for Sotomayor. She wrote one of the best opinions since Ruth Bader Ginsburg on copyright in Warhol versus Goldsmith. Very well written, very well reasoned. And so I was surprised to see this as a concurrence based on the argument she makes. I just didn't see it. And and let's be frank. This happens. You know, they are listening to oral arguments from the perspective of these advocates that advocate on behalf of their clients, and they are reading briefs that are written by them. And a lot of the language about aiding and abetting was brought up by Cox on the Fourth Circuit appeal, which rejected the argument. But that's where Sotomayor got this idea and where she focuses and said, this is where I would have spent my time reasoning. So disagreeing with Thomas in that regard, I don't disagree that it's a nine old opinion. They all agree that Cox shouldn't be liable here. I don't know why I don't understand it. I would have liked to have been a fly on the wall or sitting in the chambers when. It was argued, and when it was discussed amongst the justices. But unfortunately we can't do that. So I just think, and you know me, I've been in the record business a long time before I became a lawyer. Yeah, I love labels. I love the creative world. I love all that. I love business. Part of me still thinks that the whole point behind this was because it was easier for Sony. Sorry to go and try to sue Cox for $1 billion than to go and try to find each of those individuals. They wanted to put the onus back on them, which the DMCA does to a significant degree, generally says, hey, you guys need to be monitoring some of this as well. Yeah it did. Well, I think it still does. I don't think that's gone away at all in that regard. But I disagree with probably the approach that the big record companies and even the RIAA, in my opinion, took the easy way out. And why did they do that? Because they got their butts kicked back in 2000 when they were suing little, you know, Sally Ann in Paducah, Kentucky, for. Yeah, $300,000. I think there's a disconnect there. I mean, that that was back in the early days. And then and then there was Rockstar and Napster and they won those arguments. Oh, they did. And, and and they got the DMCA pass, which I applaud. I love them. They did. I think I think it was in essence, it was a great act up until. I will say that sometimes my passion for the arts does affect my reasoning, but I don't think that's happening here. I mean, you know me, I've been teaching copyright law for a long time, and I've often seen the DMCA as one of the most powerful tools that a small artist has. We can talk about Cox and Sony all day long, and yes, they are power players and I get that and there's a lot of money involved. But let's not forget they convinced a jury of 12 people. It it isn't just a Supreme Court decision. And they reversed that verdict that was upheld at the Fourth Circuit level. So that was held. The other part was, I understand, reversed. The scariest part was reversed. Yeah, yeah, but but the Fourth Circuit upheld the contributory negligence on the reasoning I'm talking about on the inducement principle. And I will say definitely that's gone now. That is no longer an issue. You can induce all you want because I think that's what was happening here. Right. They know these URLs, ISPs, whatever you want to call it. We're infringing. Because they had sent multiple notices to them, and yet they continued to let them renew their service by their service again and for 13 times. I mean, the question here is that is that reasonable? Is that reasonable under the DMCA standards? And in my opinion, it's not. Of course, Supreme Court disagreed with me. So that's you know, well, that will happen. You know, to your point about the trial court being in front of a jury. You know, when you come into court, you can demand a jury trial or a bench trial. And when it gets to complex points of law, and even, if you will, complex points of business, most people want to go to a bench trial because the judge, generally speaking, should have a better grasp ability to process the nuances. Right? So instead you pick a jury. So why would you pick a jury if you're Sony, the big bad record company? Why would you pick a jury? Because you know that Cox is looked at even worse than the record companies. That's the only reason you do that, if that's possible. If that's possible, that's really the only reason you do that. And so you get in there and you get in front of 12 normal, average people who don't understand nuances. But what they do understand is I hate my ISP who likes their internet provider every day. Nobody, right? They just don't. You know, there's always something going. People are swapping back and forth all the time. So all that to say to your point of it was a jury that ruled on this. It was a jury of laypeople that don't understand copyright law, for one thing. Yeah, but it was a jury verdict that was upheld at least partially on appeal. It was. And that part is what the Supreme Court reversed. And generally speaking, they are loath to do that. So there was some reason why they thought this was an issue that should be brought up. Yes. And I think it probably was because they wanted to make a point about the parties. In this case. I'm not sure. Probably. I have no idea. But. And they made that point. Nine. Oh they did. You keep you keep bringing that up. Well, see, I mean, I, I do believe this will have impact on future liability issues. I think it's going to bring up tons of arguments in courts. Oh, sure. I mean, I'll be one of the first ones to jump on it, and it will it will cause our craft, the craft of songwriting and making music pains in the future. Possibly. But I don't don't. I think it's narrowly tailored enough that it says. If you bring us a case again, it's got to be fact dependent or fact specific that fits into this narrow case. Now, I think you're giving Clarence Thomas way too much credit. Oh, yeah. I don't think you and I disagree on that anyway. You know, that goes back to our political persuasions a little bit. I'm sure so. Well, no, I don't think it has anything to do with my political persuasion. It has to do with other things, which I won't get it. No. Man. So anyway, I. I didn't have a huge problem with it. I don't think it's nearly as dire as some people are making it out to be. And, you know, so interesting. I give them a shout out. You know, we listen to Entertainment Law Update with Tamara Bennett and Gordon Mark, and they had just done a piece on this for their March show, and I took from them kind of the same position. Hey, they didn't like it. I didn't get the sense of tsunami like effect. It was really more of a well, let's let's wait and see. I honestly, I really am more of a I'm not opposed to it. Definitely understand. I really do actually understand Sotomayor's position. I really did, but I just don't see it as being the Armageddon for the DMA that maybe she said, well, not just the DMCA. What what what is at stake here is a long history of cases going all the way back to the 80s, like I described earlier with with Sony Betamax decision. And in that decision, that actually was a well-reasoned decision. And it went against the infringement claim because it held that the there was a substantial non infringing use for that VCR, and that being what they called time shifting right before that, we budget all our programs at a certain time. And then now if you had a degree from MIT, you could program your VCR to record at a certain time on a certain channel. I always missed it. But anyway, that was the the substantial non infringing use. Well that became and that was borrowed by the way from patent law the stable article principle. But, um, that ultimately was used that Betamax safe harbor. That's the first safe harbor that the Supreme Court really designated for, for copyright infringement. And that was sort of borrowed in the DMCA. But before that, that that defense was used by Napster and all of the infringers who provided the services. And that's where our laws of contributory infringement and vicarious liability, at least in part, were developed, the precedent. And then Rockstar came along and Rockstar didn't really fit into that mold as well. Much like this case does not. And a rockstar came up with another principle from patent law, and that is the act of inducement. If you actively induce people to infringe, then you are contributory liable. And that line of cases, in my opinion, is what Thomas weakened. See. I don't see that. First of all, with the Betamax ruling, he brought that up. And I think Sotomayor did as well, that no one can argue that Cox has many more non infringing uses for their ISP than they do infringing uses, assuming people are using it for infringement. I don't argue that they do have substantial non infringing uses. So it lines up almost perfectly with Betamax. Nothing changes with that. Then with grok ster, this is where now you brought this up to me the other day. It's this whole idea of inducement, right? That's where you're sort of locked in on. Are they inducing people? And I you know, we had that discussion. I said, well, I read this one comment, actions from Mark. And he said encouraging and something else. And you go, well, encouraging. That's not induced. That's not inducement in my argument was it's a, it's in the family of inducements so to speak. So I, you know, and I haven't come off that after I read this opinion, a couple I don't know that it would qualify. Distant cousin would qualify as active inducement. Yeah. He's related. But thank you very much. I'm going to call that the second cousin argument. Is that how rednecks find their husbands and wives at a family reunion, a family reunion? Yes, that's what I've heard. Good pickup opportunity. Yeah. So thank you, Jeff Foxworthy. Exactly. So anyway, all that to say, I don't think anything has been weakened yet. I know you and Billy's. Two of the justices do, but they didn't think so enough to rule against the opinion. Well, and if you read reviews of this opinion, every one of them talks about the limitation on contributory liability. To a degree. What I don't know is who is writing those critiques. I mean, I'm just saying the ones that I've read and I'm I'm sure you did the same research I did, but but most of the ones come out of the creative community. You think they have a biased opinion? The ones I read were on law firm sites and other places that were not entertainment lawyers. I haven't seen any. I haven't seen any of those yet. I think that they I think just like anything you read, you have to read the underlying what is there? What is their benefit. You know, for making this case, either the representing clients in that area or they are in that. So I don't know. You know, Gordon, Mark and Tamara are both in the creative space as attorneys. Yeah, I would, I would imagine they probably did not like the opinion. They weren't they weren't thrilled with it. No. And he even said I disagree with with the opinion. But again, I didn't take from the way they presented it to be again, like a hair on fire. Urgent that this is going to just decimate things. I didn't read it that way, even though Sotomayor uses the word eviscerated and he brought that out. I still don't see it quite that way. I hope that at the end of the day that everybody gets treated fairly, and that includes the big business ISPs. Well, I don't have anything against the company being big business. I think I've told you before. It's my belief throughout my history with being aware of Napster since the 90s and and all of these cases. Cox has always been an obstacle to the industry, and they, in my opinion, frequently supported infringing activities right down to the original arguments that you were talking about the individual actions against individuals that the RIAA did in the 90s and even at that time. Cox, as you and I talked about, refused to. Give over the URLs and who was associated with those URLs, because they just took the stance that that was their information and they didn't want to share it. So you know that that is their corporate right. But it's also my right to say, you know, in certain circumstances you need to be a better corporate citizen. I'm not denying that every company can be accused of in certain situations. They need to be better corporate citizens. Absolutely. But I mean, there's a reason why the RIAA went after Cox. And this this case, by the way, is from 2013 is where it started. So it's over ten years old. So yeah, you know, you're talking about some some old fights going on. And that's the part I think, I don't know. I, I, I just I looked at Thomas's opinion as focusing on the wrong thing. He's focused primarily on that substantial non infringing use. I mean obviously it's an internet service provider. Obviously it has substantial non infringing purposes. But that's not the issue. The issue is did it actively induce. And he does does not do that justice. He glosses over Rockstar. He may not have gone deep enough for your liking. And others saying he didn't, and Sotomayor didn't really delve into a lot of that any deeper than he knew. Matter of fact, I think she agreed with him on those those certain points that he did bring out. But her point was but it could have gone deeper, especially as it relates to her theory of aiding and abetting. No, I think you mischaracterized Sotomayor there. She did not agree with his limiting. As I pointed out earlier, she she didn't at all. She thought that reasoning was wrong and that he should have focused more on the aiding and abetting and the intent. No, no, no, she didn't think his reasoning was wrong. She thought it may have not gone deep enough, but she didn't have a problem with the analogies with rock star and Betamax. And they matched up almost exactly with what he was saying. I think you're wrong, Dennis. I that's the way I read it. If you read it in English. It's funny how two people can read the same opinion. That's why we have lawyers. The majority holds that Cox is not liable solely because its conduct does not fit within the two theories of secondary liability previously applied by this court, and so doing the majority without any meaningful explanation unnecessarily limits secondary liability. Even though this court's precedents have left open the possibility that other common law theories of such liability, like aiding and abetting, could apply in the copyright context. Right there. Oh, wait, let me finish her thought by ignoring these past decisions. Ignoring these past decisions, the majority also upends the statutory incentive structure that Congress created. She's talking about both the decisions I'm talking about and the DMCA. Okay, so what she's saying there, can she look down? She didn't say I disagree with his opinion. I didn't agree to disagree with his reasoning. She said he unnecessarily limited how deep it went. She says in the next sentence, I nonetheless agree with majority that Cox cannot be held liable here for a different reason. Yes. Rather, go back to the top of that passage again. Just go back to the top of the passage again. What's it say? It says the majority holds that Cox is not liable solely because its conduct does not fit within the two theories of secondary liability previously applied. To this court. She disagrees with that. She's saying the majority opinion holds that. She's not saying she believes that she's the majority. It's A90 majority. But you she is not talking about the nine zero. She is talking about the written majority opinion. Right. Which is nine zero. I don't know how you get it. And all other all the Supreme Court opinions, when they talk about the majority, it's because there's a five, four, six, three, seven, two whatever. Right, right. There is no majority here. It's A90 opinion. But how can you explain that in her next sentence when she says, and so doing the majority without any meaningful explanation in the next word, or the next part of that line without unnecessarily limit secondary liability right there, unnecessarily amendments. She didn't say I disagree with it. She's not saying he's wrong. He didn't go deep enough or far enough. That's all she's saying. Oh, I. Otherwise if she thought he was wrong I don't I don't agree with it. I think because of the way the Supreme Court works, when you write a concurrence, you refer to the majority opinion, even if you're part of it. Yes. As the majority opinion. Yes. And that's what she's talking about. She is not saying I totally agree with his reasoning. I didn't say she said that, but I said that she doesn't disagree with his opinion. I yeah, what she disagreed with and just said that he unnecessarily limited. He didn't say, hey, your references to Rockstar and Betamax backs don't apply here for these reasons. You totally misread that. Yada yada yada. She didn't say that because she and her opinion brings those up and addresses the same elements that he did, and she quotes from Betamax and she quotes from Rockstar. And then but then she has her opinion of the aiding and abetting. That's my story and I'm sticking to it. Okay. Well, we'll just have to agree to disagree on that one because I, I think she, um, I, I think I think we're thinking we're just reading it differently. Okay. In fact, in section two, she says the majority is wrong, however, that there are or should be only two forms of secondary liability for copyright infringement. So the whole phrase not that wrong, period. No wrong for only saying these two forms I agree. Right. So now if you would repeat after me. Dennis. Go ahead. Repeat. I am not going to say you're right. I know where this is going. Well, hopefully when people tune in to to to listen to us, it's not two guys who line up on every issue exactly the same. You know, that would be boring to listen to. Oh, you're right Barry. No. You're right. You're right. Certainly this is not going to be a one of those boring. Everybody agrees with everybody kind of stuff so well. Audience. We hope you've enjoyed our, um, our disagreement. Um, so. And if you're an ISP out there, come see us and we'll represent you. Yeah. We will. I mean, I'll represent you all the way to the bank, so. Yeah. Come see us. Thank you for so much. Uh, like us on, uh, all your social media, you know, share us all that good stuff. Call us if you have questions. Eight, seven, seven, seven dealmakers. In the meantime, we'll see you in two weeks. Music Row Dealmakers is a production of Shrum, Disney and Associates, recorded on location on Music Row, the heart of Music City Nashville. Subscribe to future episodes wherever you enjoy your podcasts