Washington — The Computer & Communications Industry Association has filed a Supreme Court amicus brief in a case that could have broad liability and cost implications for internet and technology companies. CCIA pointed out in its filing that Justices now have an opportunity in the Cox v. Sony case to set clear boundaries on the scope of secondary copyright liability and associated statutory damages.
The brief points to examples of copyright damage awards that have become unmoored from actual harm, and the billions or sometimes even trillions of dollars in potential liability a company or startup faces, which risks investment. In one example, record labels sought damages worth “more money than the entire music recording industry has made since Edison’s invention of the phonograph in 1877.”
A CCIA Research Center study cited in the brief found that statutory damages in the lower court were between 1,445 to 481,695 times larger than the actual harms. By the same logic, copyright holders in another recent case, Hachette v. Internet Archive, could have sought $690 Billion to $6.6 Trillion from the Internet Archive’s internet access provider—simply for not cutting off service.
Without Supreme Court action, legitimate service providers will be pressured to terminate users upon complaints, even before courts decide the merits.
The following can be attributed to CCIA President & CEO Matt Schruers:
“Copyright plaintiffs have run amok with outlandish claims against any deep pocket in sight, despite the Copyright Act only addressing direct liability when an actor knowingly infringes copyrighted material. The $1 billion damages award in the Cox v. Sony case threatens every legitimate digital service provider if allowed to stand.”
“A clear ruling on the scope of secondary copyright liability would help protect a wide range of digital service providers, internet access providers and other legitimate businesses from the threat of Draconian statutory damages that can inhibit companies and startups from innovating.”
