The exponential growth of digital technologies has fundamentally transformed the creation, dissemination and consumption of copyrighted content. Intermediaries, ranging from internet service providers (ISPs) to social media platforms, occupy a central position in this ecosystem by facilitating access to and transmission of user-generated content.
However, this functional centrality has also placed intermediaries at the heart of a persistent legal dilemma: their liability for unlawful or infringing acts committed by their users.
The recent decision of the United States Supreme Court (SCOTUS) in Cox Communications, Inc v. Sony Music Entertainment marks a significant doctrinal development. This case was brought by major music labels who argued that Cox, an ISP, should be held liable because it continued providing internet service to subscribers it knew were using that connection to illegally download music. On March 25, 2026, SCOTUS unanimously reversed a $1 billion verdict against Cox Communications and ruled that Cox was not liable as it ran a general broadband service with countless lawful uses and it actively discouraged infringement through warnings and suspensions. It held that an intermediary’s contributory liability for copyright infringement must be grounded in intent - whether the intermediary intended its service to be used for infringement.
This article examines the Cox v. Sony framework, places it within the history of US secondary copyright liability law and analyses the Indian legal framework on intermediary liability.
Betamax to Grokster: Laying the Groundwork
In Sony Corp. of America v. Universal City Studios, Inc. (Betamax), SCOTUS held that the seller of a product capable of substantial non-infringing uses could not be held contributorily liable for its customers’ infringing acts, even where the seller had constructive knowledge that infringing use was possible. Betamax established what has come to be known as the ‘capable of substantial non-infringing uses’ test as a limit on contributory liability meaning that a general-purpose tool capable of lawful uses could not attract liability.
Years later in Metro-Goldwyn-Mayer Studios Inc v. Grokster, Ltd (Grokster), the SCOTUS held that a service provider may be contributorily liable for copyright infringement where they distribute a product/device/technology with the intent to promote or induce infringement, evidenced by affirmative steps taken to promote such infringement.
Together, Betamax and Grokster defined two pathways to contributory liability for copyright infringement: (i) inducement, where a service provider actively encourages infringement through specific acts; and (ii) a service tailored to infringement, where the service lacks substantial non-infringing uses. The Court in Grokster confirmed that "a court would be unable to find contributory infringement liability merely based on a failure to take affirmative steps to prevent infringement".
The Fourth Circuit’s overreach
Despite the clarity of Betamax and Grokster, the US Court of Appeals for the Fourth Circuit developed a third, broader basis for contributory liability. It held that that "supplying a product with knowledge that the recipient will use it to infringe copyright is exactly the sort of culpable conduct sufficient for contributory infringement". This standard, essentially a ‘knowledge-plus-inaction’ test, had no foundation in either Betamax or Grokster. Applying it, a jury awarded Sony and affiliated copyright owners $1 billion in statutory damages against Cox, for continuing to provide internet service to subscribers whose IP addresses had been associated with infringing activity, even after receiving infringement notices.
The Fourth Circuit’s rule created a troubling incentive structure: ISPs that received infringement notices and failed to terminate subscribers at the copyright owner’s preferred timeline faced near-unlimited statutory damages, while the safe harbour provided under the Digital Millenium Copyright Act, 1998 (DMCA), which requires ISPs to implement a repeat-infringer policy, was rendered effectively redundant. This standard effectively appointed ISPs as copyright enforcement agencies, requiring them to adjudicate disputed infringement claims and remove customers on the basis of unverified notices, with severe consequences for non-compliance.
Aggrieved by the decision of the Fourth Circuit, Cox petitioned the SCOTUS. The SCOTUS granted Cox’s petition and, through the majority opinion by Justice Clarence Thomas, held that Cox was not contributorily liable, emphasising that secondary liability under copyright law must remain narrowly confined to established precedent. SCOTUS articulated a two-pronged test: (i) inducement requires active encouragement of infringement through specific acts (as in Grokster); and (ii) liability may arise where a service is designed for infringement and lacks substantial non-infringing uses (as clarified in Betamax). Applying this framework, SCOTUS found that Cox neither encouraged infringement nor operated a service tailored for unlawful use, given the broad legitimate uses of internet access. It rejected the Fourth Circuit’s ‘knowledge-plus-inaction’ standard, reiterating that mere knowledge of infringement is insufficient to establish intent. The SCOTUS also clarified that the DMCA safe harbour functions as a defence, and failure to qualify does not imply liability.
In her concurrence, Justice Sonia Sotomayor (joined by Justice Ketanji Brown Jackson) agreed with the outcome but criticised the majority for unduly restricting the scope of secondary liability. She argued that Grokster preserved broader common-law doctrines such as aiding and abetting, which the majority limited. Nonetheless, applying aiding and abetting principles from cases like Twitter, Inc. v. Taamneh, she found no liability due to lack of intent, highlighting that Cox could not identify specific infringers and therefore lacked the requisite participation.
Cox v. Sony makes clear that intermediary liability turns primarily on intent: an intermediary cannot be held liable merely for knowing that infringement occurs on its network, but only where it actively induces infringement or designs its service for that purpose. The decision also clarifies that commercial benefit from infringement, which might be relevant to vicarious liability, alone does not establish contributory liability, and even under broader aiding and abetting principles, liability requires concrete knowledge of specific infringing acts or users, not vague or generalised awareness.
India’s primary statutory provision on intermediary liability is Section 79 of the Information Technology Act, 2000 (IT Act), which extends safe harbour protection to intermediaries. However, such safe harbour protection does not apply: (i) where the intermediary has conspired, abetted, aided, or induced the unlawful act; and (ii) where the intermediary, upon receiving ‘actual knowledge’ (or notification by the appropriate government or its agency), fails to expeditiously remove or disable access to the unlawful material. In addition to the IT Act, the Information Technology (Intermediaries Guidelines and Digital Media Ethics Code) Rules, 2021 (Intermediary Guidelines) provide for intermediary liability and sets out the due diligence requirements for intermediaries.
The Indian statutory framework defines liability primarily through the fulfilment or breach of due diligence obligations.
Judicial overview
The Supreme Court of India laid down the governing standard in Shreya Singhal v. Union of India, which held that intermediaries must remove content only upon receiving ‘actual knowledge’ through a court order or government notification.
Building on this foundation, a Division Bench of the Delhi High Court in MySpace Inc v. Super Cassettes Industries Ltd confirmed that liability requires ‘actual knowledge’ of specific infringing works and not mere suspicion or general awareness. This specificity requirement resonates with Cox v. Sony’s insistence on specificity of knowledge.
The Delhi High Court extended this logic in Kent RO Systems Ltd v. Amit Kotak, holding that e-commerce platforms have no duty to proactively monitor listings for infringement, as such an obligation would impose an unreasonable burden and reduce intermediaries to adjudicators of IP disputes. It held that liability is triggered only by specific notice and that repeated infringements do not imply abetment without evidence of intent, which aligns with Cox v. Sony’s ruling.
More recently, a Division Bench of the Delhi High Court in Amazon Seller Services (P) Ltd. v. Amway India Enterprises (P) Ltd held that Section 79 of the IT Act provides a safe harbour defence to intermediaries who comply with due diligence requirements. It observed that Section 79 of the IT Act is not an enforceable provision but rather merely provides affirmative defence.
Taken together, these decisions reflect a judicial consensus that India’s intermediary liability framework sets a high threshold for liability which is anchored in specific notice, actual knowledge and compliance with due diligence obligations, rather than proactive monitoring or general awareness of infringement.
Cox v. Sony delivers a huge win for the ISPs and represents a landmark moment in the evolution of intermediary liability, firmly anchoring contributory copyright liability in an intent-based framework and rejecting the notion that ‘knowledge plus inaction’ alone can ground liability. While the ruling is narrow and confined to contributory liability, the principles it articulates have wider global applicability. The decision also lays emphasis on the importance of the safe harbour defence which shields intermediaries from liability for copyright infringement. It allows tintermediaries to function without having to constantly monitor third-party content, thus encouraging free speech and right to do trade and business.
India’s intermediary liability framework, though significantly matured through statutory reforms and judicial precedents like Shreya Singhal and MySpace, continues to grapple with inconsistencies. The expanding Indian digital landscape and the ongoing statutory reforms present a timely opportunity to draw upon the principled framework of Cox v. Sony to strengthen intermediaries’ protection and simultaneously provide intermediaries the legal certainty necessary to invest in and innovate upon the digital infrastructure.
Shweta Sahu is a Counsel and Deeksha Pokhriyal is an Associate with the Dispute Resolution practice at Shardul Amarchand Mangaldas & Co, New Delhi.