USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 1 of 32
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 21-1168
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
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 2 of 32
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.
-------------------------
INTERNET ASSOCIATION; ELECTRONIC FRONTIER FOUNDATION;
CENTER FOR DEMOCRACY AND TECHNOLOGY; AMERICAN LIBRARY
ASSOCIATION; ASSOCIATION OF COLLEGE AND RESEARCH LIBRARIES;
ASSOCIATION OF RESEARCH LIBRARIES; PUBLIC KNOWLEDGE; NTCA
THE RURAL BROADBAND ASSOCIATION; CTIA - THE WIRELESS
ASSOCIATION; USTELECOM THE BROADBAND ASSOCIATION;
INTERNET COMMERCE COALITION; INTELLECTUAL PROPERTY LAW
PROFESSORS,
Amici Supporting Appellant,
and
NATIONAL MUSIC PUBLISHERS’ ASSOCIATION; NASHVILLE
SONGWRITERS ASSOCIATION INTERNATIONAL; SONGWRITERS OF
NORTH AMERICA; COPYRIGHT ALLIANCE,
Amici Supporting Appellee.
Appeal from the United States District Court for the Eastern District of Virginia, at
Alexandria. Liam O’Grady, Senior District Judge. (1:18-cv-00950-LO-JFA)
2
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 3 of 32
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.
3
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 4 of 32
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.
4
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 5 of 32
I.
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. 17 U.S.C. § 106. Anyone who violates any of
these exclusive rights of the copyright owner is “an infringer of the copyright.” Id.
§ 501(a). A copyright owner may “institute an action” against an infringer, id. § 501(b),
and receive either statutory damages, id. § 504(a)(2), or actual damages plus the infringer’s
profits, id. § 504(a)(1). Although the Copyright Act “does not expressly render anyone
liable for infringement committed by another,” the Supreme Court has long held that
vicarious and contributory liability for copyright infringement rest on firm legal footing.
Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 434–435 (1984).
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 17 U.S.C.
§ 512. To be eligible for the defense, an internet service provider must have “adopted and
reasonably implemented . . . a policy that provides for the termination in appropriate
circumstances of subscribers and account holders of the service provider’s system or
network who are repeat infringers.” Id. § 512(i)(1)(A). This Court previously held that
Cox did not qualify for the safe harbor because its repeat infringer policy as implemented
was inadequate under the DMCA. See BMG Rts. Mgmt. (US) LLC v. Cox Commc’ns, Inc.,
881 F.3d 293, 301–305 (4th Cir. 2018). The claim period in this case coincides with the
5
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 6 of 32
period during which Cox was ineligible for the safe harbor, so Cox faces the secondary
liability claims here without that protection. 1
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).
The DMCA safe harbor defense is not exclusive, so Cox remains “entitled to all
1
other arguments under the law” in its defense. CoStar Grp., Inc. v. LoopNet, Inc., 373
F.3d 544, 552 (4th Cir. 2004); see 17 U.S.C. § 512(l).
6
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 7 of 32
Over time, Cox developed various methods to stem the tidal wave of infringement
notices it was receiving and mitigate the consequences for its subscribers. It capped the
number of notices it would accept from RIAA, eventually holding it at 600 notices per day.
It took no action on the first DMCA complaint for each subscriber, limited the number of
account suspensions per day, and restarted the strike count for subscribers once it
terminated and reinstated them. MarkMonitor sent Cox 163,148 infringement notices
during the claim period. Over that time, Cox terminated 32 subscribers for violation of its
Acceptable Use Policy, which prohibits copyright infringement among other things. By
comparison, it terminated over 600,000 subscribers for nonpayment over that same time.
Frustrated with Cox’s lackluster response to the notices, Sony sued Cox for vicarious and
contributory copyright infringement.
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 17 U.S.C. § 504(c)(1)
(authorizing statutory damages for infringement “with respect to any one work” and
explaining that “all the parts of a compilation or derivative work constitute one work”).
The district court found that issues of material fact remained and so this claim should “be
7
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 8 of 32
resolved at trial.” Sony Music Ent. v. Cox Commc’ns, Inc., 426 F. Supp. 3d. 217, 236 (E.D.
Va. 2019).
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 17 U.S.C.
§ 504(c)(1)–(2). The jury awarded Sony $99,830.29 per infringed work, for a total of $1
billion in statutory damages.
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
8
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 9 of 32
derivative work in the internet age. Ultimately, we find we must answer only some of these
novel questions to resolve this appeal.
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.” Fed. R. Civ. P. 50(a)(1). A district
court should grant judgment as a matter of law “if the nonmoving party failed to make a
showing on an essential element of his case with respect to which he had the burden of
proof.” Russell, 763 F.3d at 391 (internal quotation marks omitted).
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
9
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 10 of 32
subscribers’ copyright infringement, we do not reach the additional question of Cox’s right
and ability to supervise its subscribers.
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
10
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 11 of 32
[developer’s] infringing activities” because the owner “enjoyed the benefit of any increase
in the Project’s value resulting from [the developer’s] infringement” of the copyrighted
drawings. Id. at 514. In another example, a company that sold nutritional supplements
was vicariously liable for its distributors’ infringing use of copyrighted photographs to
advertise its products because the company could control the distributors and stood to
benefit from increased sales spurred by the infringing advertisements. Leonard v. Stemtech
Int’l, Inc., 834 F.3d 376, 389 (3d Cir. 2016).
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
2
In an analysis that courts still use today, the Shapiro court contrasted two types of
relationships: (1) landlords and tenants and (2) dance halls and bands. Shapiro, 316 F.2d
at 307; see Sony, 464 U.S. at 437 n.18 (picking up this comparison); Leonard, 834 F.3d at
388–389 (same). A landlord is not vicariously liable for a tenant’s copyright infringement,
the court explained, because he exercises no supervision over the tenant and charges a fixed
rental fee regardless of whether the tenant infringes copyrights in the rented house.
Shapiro, 316 F.2d at 307. But the dance hall proprietor who hires a band can control the
premises, and the band’s infringing performances of copyrighted songs “provide the
proprietor with a source of customers and enhanced income,” exposing him to vicarious
liability. Id.
11
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 12 of 32
between each act of infringement and an added penny of profits. For example, Fonovisa
concerned the operator of a swap meet who allowed vendors to sell infringing records. The
complaint alleged that the operator collected “admission fees, concession stand sales and
parking fees”—but no sales commission—“from customers who want[ed] to buy the
counterfeit recordings at bargain basement prices.” Fonovisa, 76 F.3d at 263. These
allegations sufficed to state a direct financial benefit to the swap meet operator, the court
held, because “the sale of pirated recordings at the . . . swap meet [was] a ‘draw’ for
customers.” Id. The infringing sales “enhance[d] the attractiveness of the venue to
potential customers,” giving the swap meet operator a financial interest in the infringement
sufficient to state a claim for vicarious liability. Id.
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).
12
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 13 of 32
By contrast, America Online (AOL) was not vicariously liable for copyright
infringement occurring over an online forum to which it provided its subscribers access.
Although access to online forums encouraged overall subscription to AOL’s services, there
was no direct financial benefit from infringement where no evidence indicated “that AOL
customers either subscribed because of the available infringing material” or “canceled
subscriptions” when the material was no longer available. Ellison, 357 F.3d at 1079.
Without “evidence that AOL attracted or retained subscriptions because of the
infringement or lost subscriptions because of [its] eventual obstruction of the
infringement,” “no jury could reasonably conclude that AOL received a direct financial
benefit from providing access to the infringing material.” Id.
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.
13
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 14 of 32
The district court thought it was enough that Cox repeatedly declined to terminate
infringing subscribers’ internet service in order to continue collecting their monthly fees.
Evidence showed that, when deciding whether to terminate a subscriber for repeat
infringement, Cox considered the subscriber’s monthly payments. See, e.g., J.A. 1499
(“This customer will likely fail again, but let’s give him one more chan[c]e. [H]e pays
317.63 a month.”). To the district court, this demonstrated the requisite connection
between the customers’ continued infringement and Cox’s financial gain.
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.
14
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 15 of 32
First, Sony contends that the jury could infer from the volume of infringing activity
on Cox’s network that the ability to infringe was a draw for customers. In support, Sony
highlights evidence that roughly 13% of Cox’s network traffic was attributable to peer-to-
peer activity and over 99% of peer-to-peer usage was infringing. Even if the jury believed
Sony’s characterization that this was a high volume of infringing activity in general, the
evidence falls considerably short of demonstrating that customers were drawn to purchase
Cox’s internet service, or continued to use that service, because it offered them the ability
to infringe Plaintiffs’ copyrights. Cf. Ellison, 357 F.3d at 1079. Many activities of modern
life demand internet service. No one disputes that Cox’s subscribers need the internet for
countless reasons, whether or not they can infringe. Sony has not identified evidence that
any infringing subscribers purchased internet access because it enabled them to infringe
copyrighted music. Nor does any evidence suggest that customers chose Cox’s internet
service, as opposed to a competitor’s, because of any knowledge or expectation about
Cox’s lenient response to infringement.
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
15
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 16 of 32
[to] 2014 paid Cox more per month, on average, than residential subscribers who were the
subject of only 1 or 2 infringement notices.” Response Br. 34.
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.
16
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 17 of 32
III.
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.” Fed. R. Civ. P. 56(a).
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
17
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 18 of 32
case, we held that Cox could not be contributorily liable absent “knowledge that
infringement [was] substantially certain to result from Cox’s continued provision of
Internet access to particular subscribers.” Id.
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
18
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 19 of 32
copyrighted works by specific internet users, and that Sony needed additional evidence
beyond the notices to prove that those infringements occurred.
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
3
To the extent Cox suggests that disputes about the information in particular
infringement notices independently warrant vacatur of summary judgment, we agree with
the district court that these disputes are immaterial.
19
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 20 of 32
preserve the other.” Laber v. Harvey, 438 F.3d 404, 428 n.24 (4th Cir. 2006). Indeed, Cox
did not even mention the “substantially certain” standard anywhere in its memorandum
opposing summary judgment. Cf. Opening Br. 38 (Cox faulting the district court for not
mentioning this “requirement” in its opinion).
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.
20
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 21 of 32
B.
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 Fed. R. Civ. P.
50(a)(1). We may not weigh evidence or judge the credibility of witnesses. See First
Union Com. Corp., 411 F.3d at 556.
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
4
The jury instruction asked if Cox “induced, caused, or materially contributed to
the infringing activity,” J.A. 801, but only material contribution is before us on appeal.
21
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 22 of 32
it provides is capable of substantial lawful use and not designed to promote infringement.
We rejected that argument in BMG: “In fact, providing a product with ‘substantial non-
infringing uses’ can constitute a material contribution to copyright infringement.” 881
F.3d at 306. As we explained there, “Grokster makes clear that what matters is not simply
whether the product has some or even many non-infringing uses, but whether the product
is distributed with the intent to cause copyright infringement.” Id. Accordingly, Cox’s
concern that businesses “would be automatically liable for providing any product or service
with knowledge that some small set of customers may use it, in part, to infringe” is
misplaced. Opening Br. 45.
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
22
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 23 of 32
to the common law rule that a person is presumed to intend the substantially certain results
of his acts. See id. at 307. This accords with principles of aiding and abetting liability in
the criminal law. Lending a friend a hammer is innocent conduct; doing so with knowledge
that the friend will use it to break into a credit union ATM supports a conviction for aiding
and abetting bank larceny. See United States v. Thompson, 539 Fed. App. 778, 779 (9th
Cir. 2013); United States v. Thompson, 728 F.3d 1011, 1013 (9th Cir. 2013).
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.
23
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 24 of 32
IV.
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
24
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 25 of 32
infringement verdict. See 17 U.S.C. § 504(c)(1), (2) (authorizing a “just” award between
$750 and $150,000 per work for willful infringement). Unlike actual damages, statutory
damages are not tethered to concrete figures like lost profits or incurred expenses. To the
contrary, the jury was instructed to award an amount it found “fair under the
circumstances,” taking into consideration factors such as “[t]he profits Cox earned because
of the infringement,” “[t]he expenses Cox saved because of the infringement,” “[t]he
circumstances of the infringement,” and “the need to punish Cox,” among others. J.A. 803.
We have reversed the vicarious liability verdict because Cox did not directly profit from
its subscribers’ infringement. Without that legally erroneous finding, the jury’s assessment
of at least these damages factors may be different. Given the jury’s wide discretion in
assessing the appropriate damages and its legally erroneous finding that Cox had a direct
financial interest in its subscribers’ infringement, we are not “reasonably certain that the
jury was not significantly influenced” in its statutory damages award by its finding of
vicarious liability. Tire Eng’g, 682 F.3d at 314 (internal quotation marks omitted). We
therefore vacate the damages award and remand for a new trial on damages.
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.
25
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 26 of 32
C.
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 17 U.S.C. § 504(c)(1). “Although parts of a
compilation or derivative work may be regarded as independent works for other purposes,
for purposes of statutory damages, they constitute one work.” Xoom, Inc. v. Imageline,
Inc., 323 F.3d 279, 285 (4th Cir. 2003) (internal quotation marks omitted), abrogated on
other grounds by Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154 (2010). It is undisputed
on appeal that Cox’s subscribers infringed 10,017 copyrighted works owned by Plaintiffs.
But Cox contends that many of those works cannot properly be the subject of separate
5
The range depends on whether the infringement was willful. Non-willful
infringement results in a statutory damages range of $750 to $30,000 per work, whereas
for willful infringement the upper limit increases to $150,000. 17 U.S.C. § 504(c)(1), (2).
26
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 27 of 32
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[.]” 17 U.S.C. § 101. The copyrighted works in this case include
sound recordings and musical compositions, some of which overlap. In other words, some
of the copyrighted recordings are performances of the copyrighted compositions.
Throughout this litigation, Cox has maintained that Plaintiffs cannot collect statutory
damages for infringement of both a copyrighted musical composition and its derivative
sound recording. See 17 U.S.C. § 504(c)(1).
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.” 17 U.S.C. § 101.
In Cox’s view, a musical album is a compilation, and because “all the parts of a compilation
. . . constitute one work” for purposes of statutory damages and some of the infringed songs
were included on albums together, Plaintiffs were limited to one statutory damages award
per album, not one per song. 17 U.S.C. § 504(c)(1).
27
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 28 of 32
Whether any of the works in this case are derivative or part of a compilation is a
mixed question of law and fact. See Bryant v. Media Right Prods., 603 F.3d 135, 140 (2d
Cir. 2010); Gamma Audio & Video, Inc. v. Ean-Chea, 11 F.3d 1106, 1116 (1st Cir. 1993).
The subsidiary legal questions were for the district court to resolve, and the factual
questions were for the jury to decide. See Feltner v. Columbia Pictures Television, Inc.,
523 U.S. 340, 355 (1998) (“[T]he Seventh Amendment provides a right to a jury trial on
all issues pertinent to an award of statutory damages under § 504(c) of the Copyright Act,
including the amount itself.”); cf. Google LLC v. Oracle Am., Inc., 141 S. Ct. 1183, 1199–
1200 (2021) (explaining mixed questions of law and fact).
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
6
Cox does not appeal this evidentiary ruling.
28
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 29 of 32
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,
7
Cox does not challenge the jury instructions or verdict form on appeal.
8
Sony challenges that ruling on appeal as an alternative basis for affirmance.
Because we affirm on the ground Cox raised, we need not address Sony’s alternative
argument.
29
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 30 of 32
to make judgment calls about whether a particular sound recording and musical
composition overlapped.
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.
30
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 31 of 32
2.
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 Fed.
R. Civ. P. 50(a)(1); Ortiz v. Jordan, 562 U.S. 180, 184 (2011) (“Once the case proceeds to
trial, the full record developed in court supersedes the record existing at the time of the
summary-judgment motion.”). Accordingly, we affirm the district court’s denial of
judgment as a matter of law on compilations too.
9
The district court rejected Cox’s legal theory. It instead followed the reasoning of
the Second Circuit in EMI Christian, which “allowed separate statutory damages awards
for songs that the plaintiffs issued as singles, even if those songs were also made available
on albums.” 844 F.3d at 101. Other circuits have applied a third approach—the
“independent economic value test”—to determine whether a copyrighted work is part of a
compilation subject to only one statutory damages award. See, e.g., Sullivan v. Flora, Inc.,
936 F.3d 562, 570–572 (7th Cir. 2019). We need not delve into these conflicting
interpretations of the Copyright Act to resolve this appeal.
31
USCA4 Appeal: 21-1168 Doc: 92 Filed: 02/20/2024 Pg: 32 of 32
V.
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
32