The Cox v. Sony Music Entertainment argument just ended as I started this; here are my immediate takeaways. (For more detail on the case, see my blog series over the weekend: Part 1 on the contributory infringement test, Part 2 on the confusion about the required mental state after Grokster, and Part 3 on the connections between contributory copyright infringement doctrine and the common law.)

It’s almost always difficult to predict a result, or even votes, based on the oral argument, and I haven’t even had the opportunity to read the transcript yet. But here’s a few things that stood out to me:

1. Much of the argument focused on the required state of mind for liability. There was basically no appetite from anyone for adopting the Restatement/Gershwin standard of knowledge of the wrongdoing. Cox, represented by Joshua Rosenkranz, and the Solicitor General’s office, represented by Malcolm Stewart, argued that contributory liability requires a showing that the defendant shared the same purpose as the direct infringer, and wanted to accomplish the same goal — a standard drawn from the many criminal aiding and abetting cases cited in Twitter. A number of questions from the justices seemed to support this idea, leading Justice Gorsuch at one point to conclude, perhaps optimistically, that a consensus view had emerged on that. In response, Paul Clement, representing the music companies, argued that intent was the correct standard, defining intent as including, under Restatement 2d of Torts sec. 8A, substantial certainty that harm to the plaintiff will result from one’s actions.

The word used for the required mental state is one thing, but how it can be proved is where the rubber hits the road. There were suggestions from multiple justices that even purpose can be inferred from conduct, and thus we’re back to whether Cox’s knowledge and actions in this case would allow an inference that it shared the purpose of the direct infringers. (Direct Sales is something like this: the Court concluded that the drug manufacturer defendant entered into a de facto criminal conspiracy with a prescribing physician by using various sales tactics to get physicians to order insanely large amounts of narcotics.) Rosenkranz held firm that no amount of notice of wrongdoing would suffice to show that a supplier who continuing to provide a good or service shared the same purpose, even if a subscriber straight-up admitted that they intended to engage in infringement 24/7, but he got some skeptical questions on that.

Clement’s fallback to intent, including substantial-certainty knowledge, has its own difficulties. As the IP Professors’ brief by Fred Yen and Laura Heymann argued (18-20), substantial certainty is supposed to be a limited exception to purpose-based intent, where the result is so certain it might as well be treated as an intentional tort rather than negligence or recklessness. It applies most readily to consequences of one’s own actions rather than someone else’s, such as throwing a hand grenade into a room full of people in order to kill just one of them. Clement therefore got a lot of questions about how his notion of “substantial certainty” differs from just knowledge of an infringer’s plan on the one hand, or sharing the same purpose on the other, particularly if sharing the same purpose is defined broadly to include inferences of shared purpose from the sort of facts at issue in this case: knowledge of infringing activity while continuing to supply a good or service that is useful in carrying it out. At one point Clement suggested it was really not that different from simple knowledge at all, when he emphasized the Inwood Labs trademark standard of “continu[ing] to supply its product to one whom it knows or has reason to know is engaging in trademark infringement.” (Emphasis added.) Clement added (something like), “I’ll even give you substantially certain on top of that,” which to me indicates that knowledge is the standard, but Clement as a good advocate is trying to mollify the justices’ concerns.

2. All the wrangling over defining the required mental state seems to be caused by the court’s attempts to avoid either of two results: (1) allowing an example of an ISP being subject to significant damages because it (among other things) refused to terminate infringing subscribers, and (2) adopting a rule that would allow ISPs to avoid liability no matter what they know about what their subscribers are doing. The court wants a clear rule that preserves liability for (at least) egregious acts of assisting infringement in future cases. But the problem is insoluble by tinkering with the scienter standard. Especially when the stakes are high, clear rules are at the extremes: either easy liability, or no liability. Anything in the middle is murkier. As I mentioned in my last post, what intrigued me about this case was the court’s obvious interest in Twitter v. Taamneh in stressing the overall balance that common law aiding and abetting doctrine achieves. In some cases routine acts of assistance are enough; in others they are not, depending on the amount of knowledge someone has. And whether the assistance is culpable depends on the variety of factors listed in the Halberstam case about the connection between the secondary actor, the direct actor, and the wrongdoing. A long time ago, that’s how judicial decision-making was done.

But despite the long discussions of doctrine in Taamneh and Smith & Wesson, factually those were easy cases. It was fine to emphasize the balancing act of civil aiding and abetting in Taamneh because Taamneh didn’t really require much balancing — based on the pleadings, the plaintiffs had not alleged either specific knowledge or that the defendants’ services had helped in planning the subject terrorist attack at all. In harder cases, the balancing must be done by either a trial court judge or a jury, and some vagary in the results will follow, which is just the nature of the common law process. Given deference to juries, there’s no way to both leave the essential balancing up to them but also give appellate courts like the Supreme Court to step in in big cases. The Court seemed extremely uncomfortable with that outcome, and also had no interest in discussing how the Halberstam factors might limit liability for access providers other than Cox. One solution might be to lower the stakes in, for example, secondary liability cases, so that a mix of results is not quite so troublesome to the court. In tort law, for example, the Third Restatement has challenged the notion that contributory tortfeasors are necessary liable for the full extent of the harm caused by direct tortfeasors. But that ship has sailed here.

3. The stakes may be even higher than the effect on ISPs here because there also seemed to be general agreement among the parties and some of the justices that the standards for contributory infringement are the same as the standards for civil aiding and abetting, so a holding that knowledge and continuing to supply a product or service is inadequate here would spill over into tort law, a possibility that seemed to concern Justice Barrett in particular.

Several questions from justices suggested splitting copyright secondary liability off from civil aiding and abetting. One particularly telling exchange was between Justice Kagan and Paul Clement, when Clement tried to argue that substantial certainty should be the standard. Justice Kagan responded that while that might be true under the common law, she read Twitter and Smith & Wesson to apply a different standard. Based on her reading, federal aiding and abetting liability requires “three big principles”: that the secondary actor seeks by their actions to make the wrongdoing occur; that there is a distinction between nonfeasance and misfeasance; and that there is a distinction between treating customers the same versus providing special assistance to wrongdoers. And “you fail on all three.” One possibility is that the court might apply these three requirements only to federal claims such as copyright infringement, without saying anything about standard tort law — but it’s unclear how that could be squared with JASTA’s direct invocation of Halberstam, which in turn expressly applies Restatement 2d of Torts sec. 876(b). Of course the Court can square that circle simply by declaring it to be so.

4. What should the Court do if it finds for Cox? Justice Gorsuch asked this question a couple of times. Once he suggested that since the jury instructions referred to knowledge, the cleanest reversal would simply be to reverse based on erroneous instructions. But Joshua Rosenkranz pointed out that Cox was not challenging the jury instructions (because as I mentioned earlier it couldn’t). What was challenged was the grant of summary judgement for the plaintiffs on knowledge and the denial of a post-trial motion for judgement as a matter of law on material contribution. Reversing the affirmance of summary judgement on knowledge has its own issue, which is that the Fourth Circuit held that Cox had forfeited any argument “that notices of past infringement failed to establish its knowledge that the same subscriber was substantially certain to infringe again.” If the Supreme Court accepts the idea that “substantially certain” knowledge of consequences can satisfy whatever intent requirement it imposes, then it looks like the Fourth Circuit held that Cox’s challenge to “substantially certainty” has been waived. That leaves an argument that continuing to supply service is not material contribution, possibly based on Justice Kagan’s “three big principles,” but that would require making some categorical statements about what constitutes material contribution, which other justices expressed some hesitancy about.

5. Bottom line, I predict some sort of remand to the Fourth Circuit, and some sort of shake-up of contributory infringement doctrine, but just how extensive it is (or whether it even happens) is up in the air.