Note: I checked her LinkedIn page and she didn’t indicate that she has a law degree or is licensed to practice as a lawyer. Legal training or a law license isn’t required to engage in legal theorizing, but it raises some questions about what “legal strategy services” she can offer and what evidentiary privileges apply to any conversations with her actual or prospective clients.

Katherine Starr also appears to be quite interested in trademarks. The footer on her website says:

KATHERINE STARR is a trademark of Katherine Starr. Negligent Dating, Negligent Digital Access, Negligent Digital Architecture, Digital Maritime Doctrine, Negligent Frequency, The Negligent Shield, and Negligent Legal Architecture are service marks of KStarr Enterprises, LLC

If you are wondering, the “digital maritime doctrine” is “a legal framework applying maritime principles like duty of seaworthiness and flag of convenience to modern digital platforms.” I think Admiralty Law has many underexplored insights to offer Internet Law.

[Little-known fact: When I was writing my first Internet Law paper in 1993, the student editor editing my paper independently shared a Maritime Law course outline with me. So I did in fact think about how the Law of the Sea might apply to the Law of the Internet back in 1993! However, I didn’t have the legal vision and insights that Starr has brought to that question.]

Starr wrote a book titled Where There Are Rights. (Yes, she claims a trademark in the book title, despite the trademark rule that a book title isn’t eligible for trademark protection unless it’s part of a series). She describes the book:

Drawing on her dual perspective as a Legal Theorist and Two-Time Olympian, Starr introduces trademarked legal frameworks that name what courts, policymakers, and institutions have ignored: that negligence has an architecture, a frequency, and a delegation pattern, frameworks now ready to be tested in law.

To Starr’s credit, she didn’t just hypothesize that her frameworks were “ready to be tested in law.” She went ahead and actually tested them in court! She brought a pro se lawsuit against Google. Props (?) for walking the walk.

As a trademark geek, I’m intrigued by the concept of “trademarked legal frameworks.” How can a “legal framework” become trademarkable, and what rights would that trademark confer? Could a lawyer sue another lawyer for bringing a claim based on a “trademarked legal framework”? (Especially if Starr isn’t a licensed lawyer and couldn’t file claims based on those frameworks for any clients). Sounds like a good but challenging trademark law final exam question.

The court describes Starr’s claims against Google:

She alleges that when users search for her legal frameworks using Google’s search engine, the frameworks themselves appear, but the search results “fail to return Plaintiff’s name in connection with these works.” She also alleges that Google’s search engine turns up other Katherine Starrs, but it is unclear from the complaint whether this occurs when a user searches for Starr’s legal frameworks or simply for the name “Katherine Starr.” Starr alleges that this conduct has “divert[ed] recognition, professional opportunity and search authority away” from Starr, who is “the rightful originator of the frameworks.” She also alleges that her business, Plaintiff KSTARR Enterprises LLC (“KSTARR”) has “experienced loss of prospective business opportunities, reputational dilution, and economic harm.”

If you want to indulge your inner legal nerd, these arguments raise all kinds of fascinating conceptual issues to cogitate and debate. For example, how could a “trademarked legal framework” confer a right of attribution? If Starr isn’t a licensed lawyer, then exactly what professional opportunities have been disrupted by not attributing the “legal frameworks” to her?

None of these thorny doctrinal questions get addressed. Instead, we get a perfunctory opinion granting a motion to dismiss–the kind of standard opinion we see in pro se cases that are not close.

Lanham Act False Designation of Origin

The magistrate says Starr “does not allege that Google placed Starr’s or KSTARR’s mark on any goods or used or displayed her mark in the sale or advertising of services rendered in commerce….Starr does not allege that Google is selling anything.”

Tortious Interference

Though Starr alleges that Google generally understood that her “digital presence” was important to her business relationships, she fails to make any nonconclusory allegations that Google knew about prospective business relationships between Starr and specific attorneys, legal teams, academic institutions, or legal platforms…any effect on Starr’s business relationships was likely an incidental effect of Google’s broader “search algorithm and indexing practices.”

“Negligent Digital Architecture” and “Violation of Commercial Attribution Rights”

Starr alleges she is entitled to relief based on two legal theories she created: “negligent digital architecture” and “violation of commercial attribution rights.” In support of the former claim, she alleges that Google “owes a duty of care to ensure that its digital architecture does not foreseeably cause reputational or attribution-related harm to individuals whose identities and authored works are indexed on its platform.” According to Starr, Google was negligent in failing to “design[ ] or maintain[ ] a digital infrastructure that ensures accurate author attribution.” In support of the latter claim, Starr states that “[b]y structurally detaching Plaintiff’s name from search results referencing her original legal frameworks, Defendant has deprived Plaintiff of the right to be accurately represented as the author of her work in digital information environments.”

The District Judge should decline Starr’s invitation to recognize these novel causes of action. By Starr’s own admission, her “negligent digital architecture” claim is based in her own legal frameworks, not state or federal law. The undersigned also cannot identify any cause of action under state or federal law for “violation of commercial attribution rights.”

Starr tried to reposition the “negligent digital architecture” claim as a standard products liability claim. This doesn’t work: “Starr does not allege that Google’s search engine is ‘unreasonably dangerous’ or offer any facts suggesting that Google’s search algorithms are unreasonably dangerous.”

* * *

This is a magistrate judge’s R&R, so I imagine we’ll hear about this case at least one more time.

Google invoked Section 230 as a defense, but the court didn’t need to address it.

Starr’s claims challenge Google’s core algorithmic search results offerings. Lawsuits over Google’s organization and dissemination of organic search results have gone nowhere, even when they are not litigated pro se.

Case Citation: Starr v. Google LLC, 2026 WL 1603313 (W.D. Tex. June 3, 2026). The CourtListener page. The initial complaint.

The post Google Defeats “Negligent Digital Architecture” Claim–Starr™ v. Google appeared first on Technology & Marketing Law Blog.

This case is an example of that phenomenon. Many hundreds, or likely thousands, of Northern District of Illinois cases have authorized email service of process on Chinese defendants, collectively affecting tens or possibly hundreds of thousands of defendants. When the issue of email service to Chinese defendants finally reached the Seventh Circuit, a panel rejected the plaintiffs’ core argument.

In the process, the opinion likely overturns many hundreds of SAD Scheme cases that used email service of process to Chinese defendants. Many pending cases have lost jurisdiction, and perhaps prior defaults could be overturned. The ruling also should curb future SAD Scheme cases by jacking up litigation costs. As a result, this is a major SAD Scheme precedent.

This ruling also highlights the urgency of getting SAD Scheme cases before appellate courts. The SAD Scheme inexplicably has defied gravity in the district courts for years. I expect it will eventually come crashing down–if we can just get the appellate courts to weigh in.

* * *

This is a standard SAD Scheme trademark enforcement. The plaintiff Kangol sued 25 defendants listed on a Schedule A, claiming the China-based merchants sold counterfeits on Alibaba. Kangol secured an ex parte TRO and got permission to serve the complaint via email.

The defendant in question, Hangzhou Silk, received the service email and began negotiating with Kangol. However, Hangzhou Silk didn’t make a court appearance. Kangol obtained a default judgment that included a court award of damages, which Kangol collected from Hangzhou Silk’s Amazon account. Hangzhou Silk finally appeared in court and contested the default on multiple grounds. The district court held that the Hague Convention permitted email service to Chinese defendants.

Does the Hague Convention Apply?

The court summarizes:

Article 1 states that the [Hague] Convention “shall apply in all cases, in civil or commercial matters, where there is occasion to transmit a judicial or extrajudicial document for service abroad” but “shall not apply where the address of the person to be served with the document is not known.”

Kangol first argued that emailing links to the summons and complaint wasn’t the transmission of a “document.” The court calls that argument “hardly credible.”

Kangol also argued that Hangzhou Silk’s address wasn’t known, so the Hague Convention didn’t apply. “Kangol asserts that its efforts to locate Hangzhou yielded several, conflicting addresses, and that those addresses were for ‘stalls at an open-air market.’ Hangzhou, on the other hand, maintains that its address is known and easily discoverable.” The district court didn’t resolve this fact dispute. The Seventh Circuit remands the case on this point.

[Personal note: Last summer, I did a 2-week, 5-city speaking tour of China, mostly to discuss the SAD Scheme. My photo album. My speaking companions included some counsel from the firm defending this case. After our presentation in Hangzhou, we went on an excursion to find this defendant’s physical location, which we accomplished easily.]

If the Hague Convention applies to this defendant, email service is not allowed:

The Convention’s text and structure demonstrate that, where it applies, it provides the permissible means of service and excludes all others. And because no provision of the Convention authorizes service by email in China, such service violates the Convention and Rule 4(f)(3) [cites include Smart Study, reaching the same conclusion in the Second Circuit]

The court summarizes its ruling:

if the Hague Service Convention applies, then service was improper because the Convention prohibits service by email in China. But the district court must first determine whether the Convention applies at all. We therefore reverse the district court’s denial of Hangzhou’s motion to vacate and remand with instructions for that court to consider whether the Convention applies

Implications

The 7th Circuit leaves open the possibility that plaintiffs can still serve Chinese defendants via email if a defendant’s physical address isn’t readily ascertainable. (A reminder that the INFORM Consumers Act now requires the disclosure of many online merchants’ addresses). Plaintiffs will surely claim they couldn’t readily find the defendant’s address–whether they actually tried or not–and keep requesting email service to Chinese defendants. In my post about Smart Study, I wrote:

Although many SAD Scheme plaintiffs hypothesize in their robo-filings that the defendants are Chinese counterfeiters, the reality is that far too often the plaintiffs’ lawyers haven’t researched the defendants’ locations (despite their Rule 11 obligation to do so if they are claiming the defendants are Chinese) and don’t have a clue where they actually are located….Plaintiffs may lean into their willful ignorance and simply claim they don’t know where the defendants are, so email service should be OK because the plaintiffs haven’t confirmed the defendants are in China. This move ought to be forcefully rejected by judges for the obvious failure to comply with Rule 11 and other ethics rules, but so long as defendants aren’t around to protest, judges might still allow it.

In contrast, if Northern District of Illinois judges vigorously apply this ruling and routinely reject email service on Chinese-based defendants, this ruling ought to have a major impact on the SAD Scheme. It will force plaintiffs to do more invidualized research about each defendant’s location and incur higher service costs for each defendant. Plaintiffs will rethink some of their shotgun litigation approaches to avoid those requirements.

Until we see what N.D. Ill. judges do with this ruling, I’m not sure if this ruling is just another minor speedbump for SAD Scheme plaintiffs or a major reduction in the scheme. In the short term, I expect SAD Scheme plaintiffs will keep doing exactly what they’ve done in the past and gamble on continued judicial acquiesence/apathy. I hope that judges call out plaintiffs if they try that.

Meanwhile, if you are a China-based SAD Scheme defendant who has been victimized by the scheme based on email service, you might check with your lawyer to see if this ruling opens up the possibility of dismissing your case and clawing back any seized assets.

Case Citation: Kangol LLC v. Hangzhou Chuanyue Silk Import & Export Co., Ltd., No. 25-2205 (7th Cir. May 29, 2026). Kangol was represented by a team from Calfee, Halter, & Griswold in Cleveland. Hangzhou Silk was represented by Wesley E. Johnson and Ben Solter of Cross-Border Counselors.

The post Seventh Circuit Limits Email Service to Chinese SAD Scheme Defendants–Kangol v. Hangzhou Silk appeared first on Technology & Marketing Law Blog.

(Reminder: LegalForce runs Trademarkia).

It was a classic Judge Alsup move. The plaintiff’s dubious assertions survived a motion to dismiss, but Judge Alsup hammered the plaintiff when its proof ultimately didn’t support its claims. In my prior blog post, I wrote:

This case cries out for a trademark fee shift to the defense. That would be the appropriate consequence for forcing a 4-day trial and a 31 page opinion that repeatedly triggered the “what are we doing here?” meme. However, because the judge wasn’t pleased with the defense’s conduct either, the judge might decide to let each party marinate in the litigation choices they made.

Judge Alsup retired before resolving the fee request, so Judge Corley drew the short straw to resolve this stinker. She awards the defense over $90k in fees and costs–a sizable fee shift, but a trivial fraction of the alleged $1.3M in defense costs.

* * *

Judge Corley has tart words for both sides:

Plaintiff’s case became exceptional because Plaintiff alleged facts it knew to be false, discovered other facts demonstrating its case was meritless, took steps to obscure those facts, and continued to litigate its action. However, Defendant’s response was also exceptional. Defendant frivolously delayed discovery which would have removed any doubt Plaintiff’s case was meritless, violated local rules and court orders repeatedly in ways that also delayed resolution, and failed to move for summary judgment even after it had evidence to dispose of Plaintiff’s claims. So, only a small fraction of Defendant’s nearly $1.3 million in fees sought was reasonably incurred.

A pox on both sides’ houses?

One part of Judge Corley’s recitations took my breath away:

Plaintiff argues it “might have continued litigating just to be a thorn” but “ceased the fight once management made an executive decision in view of new facts.” But Plaintiff never ceased litigating; instead, Plaintiff insisted on trial and is appealing.

Say what? Continuing to litigate “just to be a thorn” seemingly violates multiple rules of professional conduct. I wonder if the applicable state bars are aware of this statement?

Judge Corley summarizes:

Plaintiff’s claims appeared just a bit better than meritless from the start, even when buttressed by Plaintiff’s knowingly false allegations. And Plaintiff’s claims cratered as the evidence came in. By February 13, 2025, Plaintiff had received the results of its second consumer survey showing no material likelihood of confusion, even under circumstances it had constructed. And by February 15, 2025, Plaintiff had received and pressure-tested Defendant’s productions showing Defendant had referred nobody to trademark lawyers during the period it used the accused mark. Other dissimilarities between business lines, marketing channels, and the marks were—at least by then—clear. The case was meritless, and Plaintiff knew or should have known it by February 15, 2025….

as the merits of Plaintiff’s case plummeted, Plaintiff’s misconduct escalated, including Plaintiff’s overstating or obscuring the merits to maintain its case…So, Plaintiff’s litigation was infected by bad faith at least after February 15, 2025.

Ordinarily, in plaintiff benchslaps like this, the defense will get a significant fee shift. But Judge Corley has many issues with the defense counsels’ choices, especially the decision not to seek summary judgment and instead let the case proceed to trial:

Because Defendant would not pay a $23,522 bill to end the action with certainty, or the cost to file a summary judgment motion, Defendant decided to incur around $550,000 in charges with the hopes of eventually ending the litigation. Assuming Defendant sought to limit costs, its approach makes no sense. Alternatively, assuming Defendant sought to vindicate its rights, its approach also made no sense; the proposed dismissal or a summary judgment motion would have sufficed.

If the defense’s $1.3M defense costs are correct, the fee shift is about 5% of its spend. That doesn’t sound like a good economic deal to me. And the plaintiff has already appealed the case to the Ninth Circuit, so both parties seemed destined to keep spending/wasting even more time and money on each other. Perhaps the $90k fee and cost shift provides enough clarity to the parties to price their exits.

* * *

Judge Corley ends her opinion with an exasperated plea/fortune cookie message:

“Both sides are cautioned to reflect before making any further filing.”

Created by ChatGPT May 2026

[It reminded me of Judge Kozinski’s closing line from Mattel v. MCA (the Barbie Girl case): “The parties are advised to chill.”]

Judge Corley offers some sage advice. Will the parties heed it? Or will they fall back into old habits? #Pause #Breathe #Reflect #Settle

Case Citation: LegalForce RAPC Worldwide P.C. v. MH Sub I, LLC, 2026 WL 1329654 (N.D. Cal. May 13, 2026). Defense counsel is Steven A. Schuman of Leonard, Dicker & Schreiber LLP and Wendy Evelyn Giberti.

The post Raj Abhyanker’s Firm Ordered to Pay $90k+ for Ill-Advised Trademark Enforcement Lawsuit–LegalForce v. LawFirms appeared first on Technology & Marketing Law Blog.

Plaintiffs are often allowed to choose their own forum. But they’re not supposed to be able to choose their own judge. And yet, in the U.S. District Court for the Northern District of Illinois, some Schedule A plaintiffs appear to be doing just that.

For example, the maneuver I call “defendant pinching” generally goes like this: Plaintiffs will file Schedule A cases against some number of defendants. If they draw certain judges, they immediately amend their complaint to drop all but one of the defendants. They then refile a new case against the dropped defendants, which is randomly assigned to a new judge. Plaintiffs sometimes perform this maneuver repeatedly, amending down and refiling over and over again until they get one of a certain subset of the NDIL judges.

Some judges have called out—and even sanctioned—plaintiffs over this maneuver. When questioned, some plaintiffs have said that they using this maneuver to comply with the judges’ varying views on Schedule A joinder. Whatever the subjective intent may be, these maneuvers have the foreseeable effect of moving most of the plaintiffs’ Schedule A claims off the dockets of judges who have been skeptical (or even critical) of various parts of this litigation model and onto the dockets of the judges who have been more accommodating.

In my forthcoming article, Defendant Pinching & Pressing, I argue that this maneuver is a form of judge shopping. In doing so, I draw an analogy to roulette. Some people have analogized random judicial assignment to a game of roulette—spin the wheel, get a judge. But sometimes people cheat at roulette. They might increase their bet after they know where the ball will land (“bet pressing”) or reduce it (“bet pinching”). In either case, they’re changing the stakes of the game after the final result is known. Similarly, when Schedule A plaintiffs drop (or add) defendants, they’re changing the expected “payout” for the case. Plaintiffs shouldn’t be able to spin the judicial-assignment wheel over and over until they “win.” They don’t get to do it in other cases; I haven’t heard any compelling reason why they should get to do it in Schedule A cases.

This paper is very much still a work in progress. And it is, at least in one respect, already out of date. Since I finished the posted draft, it appears that at least some plaintiffs have switched to a new standard procedure: Upon drawing certain judges, they amend down to one defendant, wait a bit, and then voluntarily dismiss the remaining defendant. Due to all of the sealing, it’s not entirely clear whether or how the claims are being refiled. But given past practice, it would be surprising if they weren’t being refiled somewhere, somehow. If anyone out there has insights into this new maneuver—or thoughts on Schedule A judge-shopping more generally—please reach out. I’d love to hear your thoughts.

The post Judge Shopping & Schedule A (Guest Blog Post) appeared first on Technology & Marketing Law Blog.

The court contextualizes the case:

Intellectual property lawsuits like this one have flooded the Northern District of Illinois. In a typical case, the IP holder files trademark or copyright infringement claims against multiple foreign merchants selling goods on e-commerce platforms like Amazon or Etsy. The plaintiff joins the defendants in a single lawsuit, identifying them in a sealed document attached to the complaint as “Schedule A,” a practice that gives this increasingly common and controversial form of litigation its name. Before defendants are served, a Schedule A plaintiff seeks an emergency temporary restraining order, prejudgment restraint on the defendants’ assets, and electronic service of process, all ex parte. Often, defendants never respond or stop participating in litigation, so the district court must enter default and award statutory damages to the plaintiff with little or no information about the extent of the infringement.

This case follows much of the typical Schedule A playbook. Since 2017, China-based Huajie has sold clothing under the “bellelily” trademark on the website www.bellelily.com. In 2021, Leyibei, also based in China, began selling similar clothing on its similarly named website, www.bellelliy.com. (The “I” and an “L” are transposed in the two names.)

The panel clearly knows about the SAD Scheme, even though it hasn’t heard many appeals yet. For example, the judges already know that SAD Scheme cases are “flooding” the court system and are “controversial.”

Note that this case involves two Chinese litigants fighting in U.S. courts. That is a thing nowadays. Apparently, the Chinese vendors have adopted the philosophy “if you can’t beat ’em, join ’em.” The SAD Scheme gives them another tool to attack their competition. On the plus side, I guess the U.S. is exporting its litigation norms to foreigners. On the minus side, foreign competitor-on-competitor litigation sometimes has nothing to do with protecting U.S. consumers from harmful “counterfeits.” As the stereotype goes, the Chinese are skilled at copying U.S. innovations, and I guess the copiable innovations include the SAD Scheme.

Unlike many SAD Scheme cases, the defendant initially showed up to contest this lawsuit. However, by the time the rightsowner requested summary judgment, the defendant stopped participating.

As a result, the defendant defaulted, and the rightsowner submitted a proposed final judgment. The rightsowner’s proposed order was “barebones” and didn’t justify the rightsowner’s damages request. As a result, the lower court judge issued a final judgment that said the defendant’s infringement was willful and approved an injunction. However, instead of the rightsowner’s requested damages of $2M for willful trademark counterfeiting and $100k for cybersquatting, the district court–without explaining the decision–only awarded the mininum damages for each claim, i.e., $1k each claim, for a total of $2k. DOINK.

The rightsowner appealed the district court’s minimum damages award to the Seventh Circuit. The defendant didn’t show up to contest the appeal, so the rightsowner’s advocacy was completely unrebutted. And yet…the rightsowner still found a way to lose. DOINK AGAIN.

The per curiam opinion summarizes: “it may be better practice for district courts to briefly explain their reasoning in cases like this, but we decline to give Huajie a second bite at the apple.”

The opinion explains:

Huajie failed to offer evidence or arguments in favor of maximum damages, so the district court did not err by failing to offer a robust explanation of its ruling. Huajie argues that the district court should have circled back to its motion for summary judgment to search for support for its damages award. But it was Huajie’s job to make its case for maximum damages on default to the district court, not the court’s job to search through the record for support…

After the district court entered default, Huajie needed to offer evidence and arguments in support of the damages award. But…its proposed order, unaccompanied by any contemporaneously filed motion for entry of default judgment, lacked any rationale to support the maximum award. Although Huajie sought maximum statutory damages in its earlier motion for summary judgment—arguing that only a substantial award could compensate it for its losses and deter future misconduct—it failed to direct the court to those earlier arguments. So Huajie invited the consequence of which it now complains…

we affirm on a basis obvious from the record: nothing immediately available to the district court was adequate to support a $2 million award.

Because Huajie failed to establish its entitlement to the considerable damages it requested, we uphold the district court’s award of minimum statutory damages. We also take this opportunity to remind litigants that the race is not over after the entry of default. A plaintiff with a default in hand still must support a request for damages with evidence and argument.

Judge Pryor dissents in an opinion that recaps a lot of the same material as the per curiam opinion, suggesting that Judge Pryor hoped to write the majority opinion. She says there’s not enough substance in the district court’s judgment to permit the appellate court to evaluate if the district court judge exercised his discretion properly:

The [district court’s] order does not explain how and why the district court landed on its statutory damages award for willful trademark infringement ($1,000) or cybersquatting ($1,000), and nothing else in the record provides any hints. There’s simply no indication the district court exercised its discretion…

a district court must provide some explanation to support its exercise of discretion in fashioning an award of damages to satisfy due process and facilitate appellate review, even in Schedule A litigation regarding statutory damages

For that reason, Judge Pryor would have remanded the case so the lower court judge could explain the damages amounts.

Created by ChatGPT April 2026

I hear the point raised by Judge Pryor. Judicial rulings without explanations leave everyone scratching their head and stymie appellate review. For example, you may recall the avoidable drama created when the Fifth Circuit lifted the stay on Texas’ Social Media Censorship Act without issuing an opinion, making it virtually impossible to challenge at the Supreme Court. (The Supreme Court eventually eviscerated that law). However, in this case, the per curiam opinion persuasively explained that “Huajie invited the consequence of which it now complains” and doesn’t deserve a second bite at the apple.

When the dust settled, the rightsowner walks away with a whopping $2k in damages from this defendant, which is surely a substantial financial loss in light of the appeal costs. However, it also got an injunction, which may or may not be valuable.

* * *

It’s a bummer the Seventh Circuit once again didn’t substantively address the overall viability of the SAD Scheme. As I’ve repeatedly complained, the merits of SAD Scheme cases will rarely reach the appellate courts. The appellate courts’ silence helps the scheme persist.

At the heart of this appeal are two interrelated issues:

1) The rightsowner cut corners on its advocacy, not supporting its proposed final judgment with a rationale that the judge could rely on, and

2) The lower court judge (Judge Seeger, a savvy judge about SAD Scheme abuses) cut corners on issuing the final judgment. This might be the result of the extreme workloads that SAD Scheme cases impose on judges and/or the rightowner’s weak advocacy.

In my opinion, it’s always noteworthy when a plaintiff loses unopposed cases, because they are almost certain to win if they simply make a proper showing of their legal rights. Each time I wonder how they blew the layup.

Case Citation: Shenzhen Huajie Technology Co., Ltd. v. Shenzhen Leyibei Technology Co., Ltd., No. 25-2659 (7th Cir. April 29, 2026). The rightsowner’s lawyers were Adam Edward Urbanczyk and Brian M. Swift of AU LLC.

The post SAD Scheme Plaintiff Gets Default Win But Blows the Layup on Damages–Shenzen Huajie v. Shenzen Leyibei appeared first on Technology & Marketing Law Blog.

On March 25, the U.S. Supreme Court unanimously held that Cox Communications, an internet access provider, is not liable for file-sharing infringements committed by its users.  Cox Communications, Inc. v. Sony Music Entertainment, No. 24-171  (U.S. March 25, 2026).  In so holding, the Court rejected a $1 billion jury verdict in favor of Sony and other copyright owners (which the Fourth Circuit had already held should be remanded for retrial, but only on damages).  The majority opinion (by Justice Thomas, for seven justices) also seemingly rejected the “knowledge plus material contribution” standard for contributory infringement that has been used by the Courts of Appeals in case law for over 50 years.  Two concurring justices (Sotomayor, joined by Jackson) would have preserved that standard, but they would have interpreted it more narrowly than the Fourth Circuit had done.

The decision is a decisive victory for Cox and other internet access providers, and it will be welcomed by any defendant facing claims of contributory infringement.  (The Court did not purport to decide any issues regarding vicarious liability, but the opinion may be helpful to those defendants as well.)  The decision is also a stinging loss for major copyright owners, who have been trying for years to get courts to hold internet service providers and other intermediaries liable for copyright infringements committed by their users.  The opinion makes it significantly harder to do that.  Copyright owners will likely seek legislative relief, but it seems unlikely that Congress will be able to agree on legislation that will satisfy the major interest groups.  I also predict that defendants facing secondary liability claims in trademark cases will try to use the opinion to narrow contributory infringement in trademark law as well.

If you are not already familiar with secondary liability in copyright law, some background is needed to understand the full implications.  If you are already familiar with the existing law and the facts, you can skip straight to my analysis of the majority opinion.

Secondary Liability Before the 1976 Act

The first Supreme Court case to find contributory infringement was Kalem Co. v. Harper Brothers, 222 U.S. 55 (1911).  The Second Circuit explained the facts:

The late Gen. Lew Wallace wrote a story called ‘Ben Hur,’ the copyright of which belongs to the complainants Harper & Bros. The complainants Klaw & Erlanger caused the story to be dramatized, and Harper & Bros. duly copyrighted the dramatization and thereupon granted Klaw & Erlanger the sole right of producing the same upon the stage. The defendant the Kalem Company also employed a writer to read the story, without having any knowledge of the copyrighted drama, and to write a description of certain portions of it. It then produced persons and animals, with their accouterments, to perform the actions and motions so described … from which a positive film suitable for exhibition purposes was reproduced.

Harper & Bros. v. Kalem Co., 161 F. 61, 62 (2d Cir. 1909).  Under the 1870 Act (as amended), the copyright owner of a book had “the sole liberty of printing, reprinting, publishing, completing, copying, executing, finishing, and vending the same; and, in the case of a dramatic composition, of publicly performing or representing it, or causing it to be performed or represented by others. And authors or their assigns shall have [the] exclusive right to dramatize or translate any of their works for which copyright shall have been obtained.”  The Second Circuit held that the 15-minute film did not itself infringe the publisher’s rights: “as pictures only represent the artist’s idea of what the author has expressed in words, they do not infringe a copyrighted book or drama, and should not as a photograph be enjoined.”  161 F. at 63.  When the film was exhibited in theaters, however, that violated the exclusive rights to dramatize and to publicly perform the novel, and the producers were liable for those actions:

It is next objected that the defendant cannot be held as a contributory infringer, because its films are capable of innocent use; e.g., exhibitions for private amusement. This fact only compels the complainants to prove that the defendant does promote a guilty use of them. Inasmuch as it advertises the films as capable of producing a moving picture spectacle of Ben Hur, and sends its advertisements to proprietors of theatoriums with the expectation and hope that they will use them for public exhibitions, charging an entrance fee, and inasmuch as many of these proprietors have so used them, the defendant is clearly guilty of contributory infringement.

161 F. at 64.  On appeal, the Supreme Court assumed without deciding that the first holding was correct, and it then affirmed the second holding:

It is said that pictures of scenes in a novel may be made and exhibited without infringing the copyright, and that they may be copyrighted themselves. Indeed, it was conceded by the circuit court of appeals that these films could be copyrighted, and, we may assume, could be exhibited as photographs. Whether this concession is correct or not, in view of the fact that they are photographs of an unlawful dramatization of the novel, we need not decide. We will assume that it is. But it does not follow that the use of them in motion does not infringe the author’s rights. The most innocent objects … may be used for unlawful purposes. And if, as we have tried to show, moving pictures may be used for dramatizing a novel, when the photographs are used in that way, they are used to infringe a right which the statute reserves.

… [I]t is said that the defendant did not produce the [dramatic] representations, but merely sold the films to jobbers, and on that ground ought not to be held. In some cases where an ordinary article of commerce is sold nice questions may arise as to the point at which the seller becomes an accomplice in a subsequent illegal use by the buyer. It has been held that mere indifferent supposition or knowledge on the part of the seller that the buyer of spirituous liquor [is] contemplating such unlawful use is not enough to connect him with the possible unlawful consequences….  But no such niceties are involved here. The defendant not only expected but invoked by advertisement the use of its films for dramatic reproduction of the story. That was the most conspicuous purpose for which they could be used, and the one for which especially they were made. If the defendant did not contribute to the infringement, it is impossible to do so except by taking part in the final act. It is liable on principles recognized in every part of the law.

222 U.S. at 62-63.

Six decades later, the Second Circuit set forth the standard formulation of secondary liability used in the Courts of Appeals (until now), in Gershwin Publishing Corp. v. Columbia Artists Management, Inc., 443 F.2d 1159 (2d Cir. 1971).  The Gershwin court held there are two types of secondary liability: “vicarious” liability (based on the relationship between the direct infringer and the person to be held liable) and “contributory” infringement:

Although the Act does not specifically delineate what kind or degree of participation in an infringement is actionable, it has long been held that one may be liable for copyright infringement even though he has not himself performed the protected composition. For example, a person who has promoted or induced the infringing acts of the performer has been held jointly and severally liable as a “vicarious” infringer, even though he has no actual knowledge that copyright monopoly is being impaired. Although vicarious liability was initially predicated upon the agency doctrine of respondeat superior, this court recently held that even in the absence of an employer-employee relationship one may be vicariously liable if he has the right and ability to supervise the infringing activity and also has a direct financial interest in such activities. Shapiro, Bernstein & Co., Inc. v. H. L. Green Co., [316 F.2d 304, 307 (2d Cir. 1963)].

Similarly, one who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another, may be held liable as a “contributory” infringer….

443 F.2d at 1161-62.

Meanwhile, in Patent Law

In patent law, two sub-types of “contributory” infringement were separated and codified in the 1952 Patent Act, at 35 U.S.C. § 271:

(b) Whoever actively induces infringement of a patent shall be liable as an infringer.

(c) Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer.

In Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011), the Supreme Court reaffirmed “that induced infringement under § 271(b) requires knowledge that the induced acts constitute patent infringement.” 563 U.S. at 766. Thus, “deliberate indifference to a known risk that a patent exists is not the appropriate standard under § 271(b).” Id.  Nonetheless, the Court affirmed the holding that Pentalpha was liable for active inducement, holding that “willful blindness” can substitute for actual knowledge of a patent. Id. at 766, 768.  For willful blindness, “[t]he defendant must subjectively believe that there is a high probability that a fact exists and (2) the defendant must take deliberate actions to avoid learning of that fact.” 563 U.S. at 769.  In other words, “a willfully blind defendant is one who takes deliberate actions to avoid confirming a high probability of wrongdoing.” Id.  Neither recklessness (“one who merely knows of a substantial and unjustified risk of such wrongdoing”) nor negligence (“one who should have known of a similar risk but, in fact, did not”) is sufficient to show inducement. Id. at 770.

Secondary Liability After 1976 and Before Cox

The 1976 Copyright Act did not expressly address secondary liability.  Section 106 of the Act grants the copyright owner “the exclusive rights to do and to authorize” five activities (reproduction, prepare derivative works, public distribution, public performance, and public display); and the legislative history stated “[u]se of the phrase ‘to authorize’ is intended to avoid any question as to the liability of contributory infringers. For example, a person who lawfully acquires an authorized copy of a motion picture would be an infringer if he or she engages in the business of renting it to others for purposes of unauthorized public performance.”  H.R. Rep. No. 94-1476, at 61 (1976).

Another paragraph in the legislative history addressed vicarious liability:

The committee has considered and rejected an amendment to this section intended to exempt the proprietors of an establishment … from liability for copyright infringement, committed by an independent contractor.…  A well-established principle of copyright law is that a person who violates any of the exclusive rights of the copyright owner is an infringer, including persons who can be considered related or vicarious infringers. To be held a related or vicarious infringer in the case of performing rights, a defendant must either actively operate or supervise the operation of the place wherein the performances occur, or control the content of the infringing program, and expect commercial gain from the operation and either direct or indirect benefit from the infringing performance. The committee has decided that no justification exists for changing existing law, and causing a significant erosion of the public performance right.

H.R. Rep. 94-1476, at 159-60 (1976).  Apparently, Congress did not anticipate the rise of so-called textualism as a dominant (but inconsistently applied) principle of statutory interpretation, with the concomitant reluctance of textualist judges to read and rely on legislative history, or to interpret a statute in light of existing common-law principles.

The first major case that arose under the 1976 Act was Sony Corp. of America v. Universal City Studios, Inc., 484 U.S. 417 (1984). (The case actually was filed before the effective date of the new Act; but the trial included two instances of infringement that occurred after the effective date, January 1, 1978; and both the Ninth Circuit and the Supreme Court primarily cited and relied on the 1976 Act.)

In Sony, Universal and Disney sued Sony for making and distributing the Sony Betamax, the first VCR for home use.  They argued that consumers used the VCR to make reproductions of its over-the-air broadcast programs without its consent (direct infringement), and that Sony should be held liable for contributory infringement for providing the means to make those infringements. The District Court refused to grant a preliminary injunction and held after a bench trial that Sony was not liable; but the Ninth Circuit reversed, holding that Sony was liable; and the Supreme Court granted certiorari.

At the time of trial, there were only about 800,000 VCRs in the United States; but by the time the case reached the Supreme Court (it was argued in January 1983), about 10 million VCRs had been sold.  As Prof. Jessica Litman has previously reported, the Justices initially voted 5-4 to affirm, and Justice Blackmun was assigned the majority opinion, while Justice Stevens undertook to pen the dissent.  Justice O’Connor, however, had second thoughts and could not agree with Justice Blackmun’s opinion.  The Court could not reach a consensus by June, so the case was reargued in October 1983.  When the opinion was issued in January 1984, Justice O’Connor had switched her vote, giving Justice Stevens a 5-4 majority.

Justice Stevens’s majority opinion borrowed the “staple article of commerce” doctrine from patent law (codified in 35 U.S.C. § 271(b)), saying:

We recognize there are substantial differences between the patent and copyright laws. But in both areas the contributory infringement doctrine is grounded on the recognition that adequate protection of a monopoly may require the courts to look beyond actual duplication of a device or publication to the products or activities that make such duplication possible. The staple article of commerce doctrine must strike a balance between a copyright holder’s legitimate demand for effective — not merely symbolic — protection of the statutory monopoly, and the rights of others freely to engage in substantially unrelated areas of commerce. Accordingly, the sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial noninfringing uses….

The question is thus whether the Betamax is capable of commercially significant noninfringing uses….

464 U.S. at 442.  Note that the majority opinion worded its standard in three different ways in three consecutive sentences, and that none of those three sentences exactly matches the wording of the patent statute (“suitable for substantial non-infringing use”).

The majority then held there were two “substantial noninfringing uses” for the Betamax VCR: authorized time-shifting, and unauthorized time-shifting. First, Justice Stevens noted that although Universal and Disney objected to consumers recording broadcast television on their VCRs, other copyright holders consented to such use. Representatives of the four major sports leagues (NFL, NBA, MLB, and NHL) all testified that they had no objection to consumers recording their broadcasts and watching them at a later time.  464 U.S. at 444.  What may have sealed the case was the testimony of children’s television host Mr. Rogers, who testified he thought it was great that parents could record his show and watch it with their children together when they were all at home. Id. at 445 & n.27. Second, Justice Stevens also held that even unauthorized time-shifting was a fair use under Section 107 of the newly-enacted Copyright Act of 1976. Id. at 447-55.

One decade later, internet service providers faced a real possibility of being held liable for infringements committed by their users.  They succeeded in getting Congress to enact the Online Copyright Infringement Liability Limitation Act at Title II of the Digital Millennium Copyright Act (or DMCA).  Codified at 17 U.S.C. § 512, the Act established four “safe harbors” for internet service providers engaging in certain types of activities: (a) “transitory digital network communications” (internet access and “backbone”); (b) “system caching” (temporary storage of material to facilitate access); (c) “hosting” of information posted by users; and (d) “information location tools” (indexing and linking).

To qualify for the (b), (c), and (d) safe harbors, a service provider must comply with the “notice-and-takedown” provisions in section 512(c).  (Notably, internet access providers like Cox are not required to comply with the notice-and-takedown provisions, because there is nothing for them to “take down”: by the time Cox is notified of infringing activity, it has already occurred; whereas the other three categories of service provider can take steps to prevent further infringement.)  And to qualify for any of the safe harbors, a service provider must have “adopted and reasonably implemented … a policy that provides for the termination in appropriate circumstances of subscribers and account holders … who are repeat infringers.”  [17 U.S.C. § 512(i)(1)(A).]  However, the safe harbors do not require a service provider to “monitor[] its service or affirmatively seek[] facts indicating infringing activity” [17 U.S.C. § 512(m)(1)]; and “[t]he failure … to qualify for limitation of liability under this section shall not bear adversely upon the consideration of a defense by the service provider that the service provider’s conduct is not infringing.”  [17 U.S.C. § 512(l).]

The section 512(c) and (d) safe harbors were also conditioned on the absence of facts that might otherwise make the service provider liable for infringement.  For those safe harbors, the service provider must show it:

(A) (i) does not have actual knowledge that the material or an activity using the material on the system or network is infringing;

(ii) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or

(iii) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material;

(B) does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity; and

(C) upon notification of claimed infringement …, responds expeditiously to remove, or disable access to, the material that is claimed to be infringing….

17 U.S.C. § 512(c)(1), (d)(1).  Courts have interpreted these conditions narrowly.  Both “actual knowledge” and so-called “red flag” knowledge have to be knowledge of specific infringing activity to trigger the duty “expeditiously to remove,” because otherwise, the service provider would have to “affirmatively seek[] facts indicating infringing activity.” And the “right and ability to control such activity” has to mean “something more” than the mere ability “to remove or disable access to” the infringing material, because otherwise, satisfaction of condition (A)(iii) would render it impossible to satisfy condition (B).  See Viacom Int’l, Inc. v. YouTube, Inc., 679 F.3d 19, 30-32, 37-38 (2d Cir. 2012); UMG Recordings, Inc. v. Shelter Capital Partners, 718 F.3d 1006, 1020-23, 1029-30 (9th Cir. 2013).

Between the enactment of the DMCA and the cases interpreting it, courts had to confront secondary liability in a series of cases involving peer-to-peer file-sharing.  In A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001), for example, Napster provided software that uploaded the file names (but not the files themselves) of all MP3 files on a user’s system to a central index on the Napster website.  A user could search the file-name index; and when the user clicked on a file name, the Napster software would initial a transfer of the file itself from one user to another (“peer to peer”).  The infringing files themselves were never uploaded to or stored on the Napster servers.  The Ninth Circuit discussed whether and how Napster should be held liable for the infringing conduct of its users:

[C]ontributory liability may potentially be imposed only to the extent that Napster: (1) receives reasonable knowledge of specific infringing files with copyrighted musical compositions and sound recordings; (2) knows or should know that such files are available on the Napster system; and (3) fails to act to prevent viral distribution of the works….

Conversely, Napster may be vicariously liable when it fails to affirmatively use its ability to patrol its system and preclude access to potentially infringing files listed in its search index. Napster has both the ability to use its search function to identify infringing musical recordings and the right to bar participation of users who engage in the transmission of infringing files.

239 F.3d at 1027. The Ninth Circuit affirmed that copyright owners were likely to succeed on both theories, although it modified the preliminary injunction.  Unable to comply with the modified injunction, Napster was forced to shut down.

In Metro-Goldwyn-Mayer, Inc. v. Grokster, Inc., 545 U.S. 913 (2005), the U.S. Supreme Court confronted two successors to Napster, Grokster and StreamCast (Morpheus), both of whom tried to avoid Napster’s fate by providing peer-to-peer file-sharing software that did not rely on a centralized index.  (Grokster’s software stored the index on various “supernodes,” while Morpheus passed a user’s search request from computer-to-computer and sent matching file names to the requesting user.)  It was thus impossible to enjoin the operation of the software, because once it was distributed, Grokster and StreamCast had no control over how it was used.  The Ninth Circuit held that distribution of the software was lawful under Sony because the software was capable of substantial non-infringing uses, even though it was being used primarily to infringe.  The Supreme Court reversed; and in doing so, it re-interpreted Sony as a case about intent:

Sony barred secondary liability based on presuming or imputing intent to cause infringement solely from the design or distribution of a product capable of substantial lawful use, which the distributor knows is in fact used for infringement. The Ninth Circuit has read Sony’s limitation to mean that whenever a product is capable of substantial lawful use, the producer can never be held contributorily liable for third parties’ infringing use of it[,] … even when an actual purpose to cause infringing use is shown by evidence independent of design and distribution of the product….

Sony’s rule limits imputing culpable intent as a matter of law from the characteristics or uses of a distributed product. But nothing in Sony requires courts to ignore evidence of intent if there is such evidence, and the case was never meant to foreclose rules of fault-based liability derived from the common law….

545 U.S. at 933-35.  The Court added that “[t]he classic case of direct evidence of unlawful purpose occurs when one induces commission of infringement by another, or entices or persuades another to infringe, as by advertising.” Id. at 935 (cleaned up).  Accordingly,

For the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule, the inducement rule, too, is a sensible one for copyright. We adopt it here, holding that 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.

545 U.S. at 936-37. The Court cautioned, however, that “mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability.” Id. at 937 (emphasis added).  Instead, “[t]he inducement rule … premises liability on purposeful, culpable expression and conduct.” Id.

The Court found such “purposeful, culpable expression and conduct” in three types of evidence. “First, each company showed itself to be aiming to satisfy a known source of demand for copyright infringement, the market comprising former Napster users.” 545 U.S. at 939. “Second, … neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software.” Id.  Third, the software streamed ads to active users, so “the more the software is used, the more ads are sent out and the greater the advertising revenue becomes.” Id. at 940.  The Court cautioned that the second type of evidence would not be sufficient by itself, id. at 939 n.12; but combined with the other types of evidence, “the unlawful objective is unmistakable.” Id. at 940.

Over time, the substantive law of contributory infringement started to converge with the statutory standard for the § 512(c) safe harbor.  For example, in Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007), the Ninth Circuit held that

[A] computer system operator can be held contributorily liable if it has actual knowledge that specific infringing material is available using its system, and can take simple measures to prevent further damage to copyrighted works, yet [it] continues to provide access to infringing works.

508 F.3d at 1172 (internal quotes and citations omitted; emphasis in original). Accord, UMG Recordings, Inc. v. Grande Comms. Network, LLC, 118 F.4th 697, 715-16 (5th Cir. 2024).  Note that after Cox, the Supreme Court granted certiorari in UMG v. Grande, vacated the decision, and remanded for reconsideration in light of Cox v. Sony. UMG v. Grande, No. 24-967 (U.S. April 6, 2026).

The Cox Facts and Procedural Posture

In 2013-2014, Sony and other record labels sent over 163,000 notices of claimed infringement to Cox, an internet access provider.  The notices claimed that infringing files were being made available online by users of the BitTorrent protocol, and Sony’s agent MarkMonitor identified the allegedly infringing users (or accounts) by their Internet Protocol (IP) addresses.  Although internet access providers like Cox are not subject to the DMCA’s notice-and-takedown provisions, Sony argued that Cox had a common-law obligation to do something about infringing users.

Cox responded with a 13-strike policy, starting with polite requests to subscribers that they should not infringe and ultimately escalating to terminating subscribers’ accounts.  During the two-year period, Cox terminated only 32 subscribers for alleged repeat infringement; it also terminated hundreds of thousands of subscribers for nonpayment.

As a result, in a previous decision, the Fourth Circuit held that Cox was ineligible for the section 512 safe harbor, because it had not “adopted and reasonably implemented … a policy that provides for the termination in appropriate circumstances of subscribers and account holders … who are repeat infringers.” 17 U.S.C. § 512(i)(1)(A); see BMG Rights Mgmt. (US) LLC v. Cox Comms., Inc., 881 F.3d 293 (4th Cir. 2018).

After a 12-day jury trial, the jury found against Cox on both contributory infringement and vicarious liability, and it further found that the infringement was willful.  The jury awarded slightly less than $100,000 in statutory damages for each of the 10,017 works at issue, for a total of $1 billion in statutory damages.  On post-trial motions, the district court largely upheld the verdict; but it agreed there was overlap in the number of works (only one award of statutory damages may be made for a sound recording of a musical work, even though there are two copyrights), so the total verdict had to be adjusted.  Sony Music Entertainment vs. Cox Comms., Inc., 464 F. Supp. 3d 795 (E.D. Va. 2020).

On appeal, “Cox argue[d] 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.’ 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.”  Sony Music Entertainment vs. Cox Comms., Inc., 93 F.4th 222, 230 (4th Cir. 2024).

The Fourth Circuit agreed: “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.” Id. at 232 (emphasis in original).  Evidence that 13% of Cox’s network traffic was attributable to peer-to-peer file-sharing, and that users who were the subject of 20 or more notices of claimed infringement paid higher monthly fees for increased data usage, did not “raise[] 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 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.”  Id. at 233.

The Fourth Circuit, however, did uphold the verdict of contributory infringement.  It first upheld the district court’s ruling on summary judgment that Sony had established the knowledge element as a matter of law, because “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.” Id. at 234.  On the material contribution prong, Cox argued “that it cannot be liable for materially contributing to copyright infringement because the internet service it provides is capable of substantial lawful use and not designed to promote infringement.” Id. at 236.  The Fourth Circuit agreed 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. (emphasis in original, citing Grokster). And it further agreed that “‘mere failure to take affirmative steps to prevent infringement’ does not establish contributory liability ‘in the absence of other evidence of intent.’” Id. (quoting Grokster).  Nonetheless, it held there was sufficient evidence of intent:

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.

Id.  Finally, “[h]aving reversed on one theory of liability and affirmed on the other,” the Fourth Circuit held that the case had to be remanded for a new trial on damages.

Both parties filed petitions for certiorari.  The Supreme Court denied Sony’s petition, which sought review on the question: “Whether the profit requirement of vicarious copyright infringement permits liability where the defendant expects commercial gain from the enterprise in which infringement occurs …, or whether the profit requirement of vicarious copyright infringement permits liability only where the defendant expects commercial gain from the act of infringement itself.” Petition for a Writ of Certiorari , Sony Music Entertainment v. Cox Comms., Inc., No. 24-181 (U.S. filed Aug. 16, 2024), cert. denied, 145 S.Ct. 2844 (U.S. June 30, 2025). But on the recommendation of the Solicitor General, the Supreme Court granted Cox’s petition, which presented two questions:

Did the Fourth Circuit err in holding that a service provider can be held liable for “materially contributing” to copyright infringement merely because it knew that people were using certain accounts to infringe and did not terminate access, without proof that the service provider affirmatively fostered infringement or otherwise intended to promote it?

Did the Fourth Circuit err in holding that mere knowledge of another’s direct infringement suffices to find willfulness under 17 U.S.C. § 504(c)?

Petition for a Writ of Certiorari, Cox Comms., Inc. v. Sony Music Entertainment, No. 24-171 (U.S. filed Aug. 15, 2024), cert. granted, 145 S.Ct. 2841 (U.S. June 30, 2025).  The second question received little attention at oral argument, and the Court did not directly address it in the written opinion. Nonetheless, given the Court’s holding on the first question, one can infer that “mere knowledge of another’s direct infringement” will not suffice to find that a contributory infringer acted “willfully” for purposes of statutory damages.

The Majority Opinion

Justice Thomas’ majority opinion (for seven justices) is brief: just ten pages, four of which are devoted to the facts and procedural posture.  At the end of a short introduction, he states the Court’s conclusion: “a company is not liable as a copyright infringer for merely providing a service to the general public with knowledge that it will be used by some to infringe copyrights.” [Slip op. at 1]  That brief conclusion breaks little new ground; it is essentially a restatement of the holding of the Sony Betamax case, with “service” substituted for “product.” It is the application of that standard to these facts that is controversial, especially since the Fourth Circuit had specifically held there was sufficient evidence that Cox intended to cause infringement.

On the second page, the majority restates some basic principles from Grokster:

The provider of a service is contributorily liable for a user’s infringement if it intended its service to be used for infringement. To establish that a provider intended its service to be used for infringement, a copyright owner must show one of two things. First, it can show that a party affirmatively “induc[ed]” the infringement. Ibid. Or, second, it can show that the party sold a service tailored to infringement. Id., at 942 (Ginsburg, J., concurring). Patent law, with which copyright law has a “historic kinship,” … tracks these two requirements. See 35 U. S. C. §§271(b), (c). [Slip op. at 2]

Previous opinions (Grokster and Sony) had established there was liability if either of those two things was shown.  What is new is that these are apparently the only two means that will render a service provider contributorily liable.  The majority is so committed to textualism that it restricts contributory liability in copyright law to the two avenues (inducement and “tailoring”) that are codified in patent law, a different statute.

(It is worth noting that Justice Ginsburg’s concurring opinion in Grokster nowhere mentions the word “tailored.”  Here is what she said on page 942: “Liability under our juris­prudence may be predicated on actively encouraging (or inducing) infringement through specific acts … or on distributing a product [that] distributees use to infringe copyrights, if the product is not capable of ‘substantial’ or ‘commercially significant’ noninfringing uses.” Her opinion does not suggest that those are the only two ways of proving contributory liability. And even that statement was only for three justices (Ginsburg, Rehnquist, and Kennedy), not for the Court.)

After explaining the facts and procedural posture, the majority opinion returned to Justice Thomas’s “textualism” theme:

The Copyright Act does not expressly render anyone liable for infringement committed by another.” Sony, 464 U. S., at 434. Ordinarily, when Congress intends to impose secondary liability, it does so expressly….  Although our precedents have recognized specific forms of secondary copyright liability that predated the Copyright Act, we are loath to expand such liability beyond those precedents. [Slip op. at 6-7]

Why would the Court be “loath to expand such liability,” especially when the Court said in Grokster that Sony “was never meant to foreclose rules of fault-based liability derived from the common law”? 545 U.S. at 934-35.  Again, the only answer I can find is textualism: the Court thinks Congress should write the rules for secondary liability (even though Congress in 1976 believed that courts should continue the common-law tradition in many respects).  In the Court’s view, Congress did what it was supposed to do in codifying secondary liability in patent law; so the majority does not want to go beyond those boundaries in the related field of copyright law, notwithstanding the “rules of fault-based liability derived from the common law.”

That the majority is limiting contributory infringement to those two means is made abundantly clear in the next paragraph: “The provider of a service is contributorily liable for the user’s infringement only if it intended that the provided service be used for infringement. The intent required for contributory liability can be shown only if the party induced the infringement or the provided service is tailored to that infringement.” [Slip op. at 7, emphasis added]  The majority then discusses the two relevant examples from its own case law [Grokster and Sony]:

A provider induces infringement if it actively encourages infringement through specific acts. For example, in Grokster, … [t]he companies promoted and marketed their software as a tool to infringe copyrights … [and] [t]he “principal object” of their business models “was use of their software to download copyrighted works.” …

A service is tailored to infringement if it is “not capable of ‘substantial’ or ‘commercially significant’ noninfringing uses.” …

These two forms of contributory infringement track patent law…. [Slip op. at 7-8]

There is no analysis here: no discussion of Congressional intent, legislative history, or public policy.  There is no discussion of the two decades of lower court cases that had addressed the issue.  No discussion of the “(specific) knowledge plus material contribution” standard.  The majority opinion is nothing more than assertion: here are two types of contributory infringement that the Court has previously recognized, and we are not going to go beyond them.

In the next paragraph, the Court rejects a “straw man” argument, saying:

This Court has repeatedly made clear that mere knowledge that a service will be used to infringe is insufficient to establish the required intent to infringe. In Kalem Co., the Court explained that “mere indifferent supposition or knowledge on the part of the seller” that the buyer will use the product unlawfully is “not enough” to make the seller liable for the buyer’s conduct. 222 U. S., at 62…. And, in Grokster, the Court confirmed that “a court would be unable to find contributory infringement liability merely based on a failure to take affirmative steps to prevent infringement.” 545 U.S. at 939, n.12. [Slip op. at 8-9]

Here, the majority fails to grapple with the difference between a product and a service.  In Sony, the manufacturer sold VCRs to customers and had no further involvement with them.  It had constructive knowledge that some of them would use the product to infringe, but it had no way of knowing which ones.  But a service provider has an ongoing relationship with its users.  The service provider may lack specific knowledge at the outset; the question is whether it needs to terminate the ongoing relationship once it learns that a specific user intends to infringe.

The Court then restated its conclusion:

Thus, Cox is not contributorily liable for the infringement of Sony’s copyrights. Cox provided Internet service to its subscribers, but it did not intend for that service to be used to commit copyright infringement. Holding Cox liable merely for failing to terminate Internet service to infringing accounts would expand secondary copyright liability beyond our precedents.

… As for inducement, … Sony provided no “evidence of express promotion, marketing, and intent to promote” infringement … [and] Cox repeatedly discouraged copyright infringement by sending warnings, suspending services, and terminating accounts.  As for providing a service tailored to infringement, … Cox simply provided Internet access, which is used for many purposes other than copyright infringement. [Slip op. at 9]

The Court disapproved the Fourth Circuit’s holding that “supplying a product with knowledge that the recipient will use it to infringe copyrights is . . . sufficient for contributory infringement.”  That standard was based on the Second Circuit’s Gershwin opinion, which was cited in Grokster with apparent approval; and it had been adopted by all of the Courts of Appeals to consider the issue.  The Supreme Court did not grapple with any of that case law; instead, it simply said that the Fourth Circuit’s standard “went beyond the two forms of liability recognized in Grokster and Sony.” [Slip op. at 9-10]

Finally, the Court brusquely dismissed Sony’s argument that “Congress must have enacted the DMCA on the presumption that Internet service providers could be held liable in cases such as these” [Slip op. at 10], saying: “The DMCA merely creates new defenses from liability for such providers. And, the DMCA made clear that failure to comply with the safe-harbor rules ‘shall not bear adversely upon . . . a defense by the service provider that the service provider’s conduct is not infringing.’ §512(l).”

The Court could have noted (but didn’t) that, unlike other service providers, internet access providers like Cox are not subject to the notice-and-takedown provisions of section 512(c).  Sony’s attempt to make them liable by sending Cox tens of thousands of notices of claimed infringement therefore contradicts the implicit assumption that Congress made that hosting, caching, or linking to infringing material should be treated differently from internet “backbone” providers and internet access providers, like Cox.

The Concurring Opinion

Justice Sotomayor, joined by Justice Jackson, concurred in the result only.  Her concurring opinion criticized the majority for abandoning other common-law species of contributory liability:

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. In 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.

I nonetheless agree with the majority that Cox cannot be held liable here for a different reason. Plaintiffs cannot prove that Cox had the requisite intent to aid copyright infringement for Cox to be liable on a common-law aiding-­and-abetting theory.

[Conc. op. at 1-2]

The concurring justices agreed that “this Court’s cases have held that contributory liability for copyright infringement may attach in at least two circumstances”: “distributing or providing a product or service that is incapable of “commercially significant noninfringing uses” [Conc. op. at 2] and inducement [Conc. op. at 3]. They also agreed with the majority that “neither of the[se] two prior theories of secondary liability … covers Cox’s conduct” [id.], and that “[t]he provider of a service is contributorily liable for the user’s infringement only if it intended that the provided service be used for in­fringement.” [Id.]  They disagreed, however, with the majority’s assertion that “[t]he intent required for contributory liability can be shown only if the party induced the infringement or the provided service is tailored to that infringement.” [Conc. op. at 3-4 (emphasis added)]  “The inflexible limit the majority imposes is nowhere to be found in either Sony or Grokster.” [Id. at 4]

Instead, “[p]roperly understood, Sony and Grokster preserved other forms of secondary liability derived from the common law.” [Conc. op. at 4]  In Sony, the Court stated that “‘[t]he absence of such express language in the copy­right statute does not preclude the imposition of’ secondary liability, … be­cause both forms of liability are ‘imposed in virtually all areas of the law.’ 464 U. S., at 434-35.” [Id.]  And in Grokster, the Court explained “that Sony neither ‘displace[d] other theories of secondary liability’ nor ‘foreclose[d] rules of fault-based li­ability derived from the common law.’ 545 U. S., at 934-35.” [Id.]

After reviewing 17 U.S.C. § 512, the concurring opinion then complained that the majority opinion undermines the “safe harbors”: “The majority’s new rule completely upends that balance and consigns the safe harbor provision to obsolescence…. After today, … ISPs no longer face any realistic probability of secondary liability for copyright infringement, regardless of whether they take steps to address infringement on their networks and re­gardless of what they know about their users’ activity.” [Conc. op. at 6]

The concurring opinion sensibly concludes that the majority should have applied “the common-law doctrine of aiding and abetting.”  It cautioned, however, that “aiding-and-abetting liability requires proof that the defendant aided another with the intent of helping that other person succeed in committing wrongful conduct.” [Conc. op. at 7]  It cited Twitter, Inc. v. Taamneh, 598 U. S. 471 (2023), for the proposition that “the defendant has to take some ‘affirmative act’ ‘with the intent of facilitating the offense’s commission.’” [Conc. op. at 8]  It also explained that:

The common law … recognizes that intent can sometimes be inferred from what the defendant knew when he acted. The Second Re­statement of Torts explains that this kind of knowledge-based intent can be found where “the actor knows that the consequences are certain, or substantially certain, to result from his act, and still goes ahead. [Conc. op. at 8]

Applying this standard, the concurring opinion found insufficient evidence of any specific intent to infringe:

Cox is merely supplying internet service to its cus­tomers. Nothing about that conduct is inherently culpable: Most internet traffic is lawful, and supplying an internet connection is just as consistent with lawful purposes as it is with unlawful purposes….

Nor have plaintiffs shown that Cox intended to aid spe­cific instances of infringement. That is because, based on plaintiffs’ evidence, Cox does not actually know that specific users will commit infringement using Cox’s network….

… Take, for example, a connection sold to a single-family home. Cox, after receiving three notices of copyright violations, would know only that that home’s connection is substantially certain to be used again in the future to com­mit infringement. Yet Cox would have no knowledge … who within the household committed infringe­ment. Nor … have plaintiffs shown any way for Cox to know if the infringer was a neighbor who might have the Wi-Fi password. Without that knowledge, it is not reasonable to infer that Cox intended to aid infringement committed by another person just because it provided an internet connection to some unknown infringer. [Conc. op. at 10-11]

“Cox [also] provides internet service to regional ISPs who in turn supply internet service to thousands of users.” [Conc. op. at 11-12]  There is no way for either Cox or the regional ISPs to know which of the thousands of users are “substantially certain” to infringe based on the notices. “The same is true for connections Cox provides to university housing, hospitals, military bases, and other places that are likely to have many different users.” [Conc. op. at 12]

What About Trademark Law?

In Cox, the Supreme Court expressly disapproved the Fourth Circuit’s holding that “supplying a product with knowledge that the recipient will use it to infringe copyrights is . . . sufficient for contributory infringement.”  It failed to note, however, that the standard it disapproved is virtually identical to the Supreme Court’s own standard for contributory infringement in trademark law.

In Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844 (1982), the Supreme Court expressed the standard for contributory infringement as follows:

[I]f a manufacturer or distributor intentionally induces another to infringe a trademark, or if it continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement, the manufacturer or distributor is contributorially responsible for any harm done as a result of the deceit.

456 U.S. at 854.  Two features of this statement are notable.  First, unlike in patent law, it is not limited to defendants who have actual knowledge of the infringement (or willful blindness), but it includes those who have “reason to know” of infringement. That sounds like a negligence standard, rather than an intent standard.  Second, except for the “reason to know” language, it is virtually identical to the standard that the Supreme Court just disapproved in Cox.  This raises the question whether the Cox case will be used to call into question the trademark standard.

On the one hand, the Court has repeatedly referred to the “historic kinship” that patent law shares with copyright law.  Both are authorized in the same Constitutional clause (Art. I, §8, cl. 8), and both are intended to provide creators with a financial incentive to create and disseminate new inventions (patent) and new creative works (copyright).  By contrast, federal trademark law rests on a very different Constitutional foundation (the Interstate Commerce Clause, Art. I, §8, cl. 3) and serves different purposes (preventing consumer confusion and allowing a producer to reap the benefit of a reputation for quality). Indeed, in The Trademark Cases, 100 U.S. 82 (1879), the Supreme Court held that trademarks were neither “inventions” nor “writings,” so that federal trademark law could not be authorized by the Patent and Trademark Clause.  A lower court could certainly distinguish Inwood on those grounds.  On the other hand, there seems to be no good reason why general principles of secondary liability that are applicable to statutory torts generally should not be applied in the same manner to both copyrights and trademarks.

It remains to be seen whether Cox will upset the Inwood standard for contributory liability that has been widely cited and relied upon in trademark law.  I predict that defendants in trademark cases will challenge the Inwood standard, based on Cox; and it seems likely that a circuit split will develop on the question of whether Cox changes the law of contributory infringement in trademark law or not.  If so, the Supreme Court may have to take another case to resolve this conundrum of its own making.

Other Implications

The Cox v. Sony decision is a huge victory for internet access providers, who otherwise faced the possibility of either terminating lots of users or facing large statutory damage awards.  It is also a victory for consumers, who are far less likely to be threatened with loss of internet access, which is a practical necessity in today’s society. It also reinforces the previous 2-1 decision of the Ninth Circuit that credit-card companies are not contributorily or vicariously liable for providing payment-processing services to allegedly infringing websites. See Perfect 10, Inc. v. VISA Int’l Serv. Ass’n, 494 F.3d 788 (9th Cir. 2007).

In my opinion, however, the Court should have taken the approach of the two concurring justices.  That approach would have preserved existing case law and the common-law approach to judicial rule-making, while still making it clear that losing internet access is a disproportionate penalty for alleged acts of copyright infringement.

One of the few benefits of the Cox decision is that it states a clear rule that ought to be relatively easy for lower courts to apply.  As Prof. Rub explained, the real question is whether lower courts will follow Cox literally, or whether they will find ways to distinguish its holding from other common situations.  When you squeeze a balloon, it tends to bulge out in other directions.  It is easy to predict that copyright owners will now focus on “inducement,” trying to argue that specific knowledge of infringing material leads to an inference of intent.  If one takes Cox literally, even knowledge of specific infringing files is not enough to constitute “inducement” without some affirmative steps to promote infringement; but one court has already distinguished Cox on similar (albeit tenuous) legal grounds.

It is also easy to predict that copyright owners will now focus on “vicarious” liability, which formally remains untouched by Cox.  It is already the case that vicarious liability in copyright law has been stretched far beyond its origins in agency law: there is no requirement that there be a principal-agent relationship, only that one party have the “right and ability to control” (or “supervise”) the other party.  Most courts have held that is satisfied by a showing that the party has the ability to terminate access.  Cox would likely have been held vicariously liable if the plaintiff could have shown that it received a financial benefit from infringement.  Will advertiser-supported services fall into this category?  It seems likely that some lower courts will say “yes.”  I think an honest reading of Cox should lead to the conclusion that imposing vicarious liability on internet access providers should be equally problematic; but because the Court expressly did not address vicarious liability, copyright holders will surely try to use it.

Consequently, I think “hosting” providers will still want to follow the “notice-and-takedown” procedures in 17 U.S.C. § 512.  Unlike access providers, hosting providers face the possibility of “direct” liability under the “server” test that the Ninth Circuit uses for “direct” liability.  Unlike contributory infringement, “direct” liability and vicarious liability do not require knowledge or intent, so the absence of an intent to infringe will not save a “hosting” provider.  Compliance with the § 512(c) safe harbor, however, will keep the provider from being held liable for direct and vicarious liability as well as for contributory infringement.  That gives such providers a strong incentive to maintain their “notice-and-takedown” procedures.  It also helps with appearances, because at least it looks like the defendant is trying to do something to discourage blatant infringement.

The hard test will come when a hosting provider doesn’t qualify for the safe harbor: will courts let them off the hook under Cox, or will they find ways to work around the Cox opinion, as Prof. Guy Rub recently argued in this space?  Only time will tell.

Conclusion

Cox v. Sony is undoubtedly a landmark opinion on contributory infringement that will now appear in all copyright and IP casebooks.  It seemingly limits contributory infringement to just two theories: inducement (from Grokster) and “tailoring” (from Sony).  It seemingly rejects the “knowledge and material contribution” standard that has been used by the lower courts for over 50 years, and that the Supreme Court itself has used in trademark law.  Whether it ultimately has that effect remains to be seen; but it certainly raises multiple avenues for argument that are likely to occupy the lower courts for years to come.

Blog Coverage of Cox v. Sony

The Cox Shock: A Tectonic Shift or Just a Tremor? (Guest Blog Post)

Will Lower Courts Find Ways Around Cox v. Sony? You Betcha

Prof. Goldstein on Cox v. Sony (Excerpt from His Treatise)

Quick Comments on the SCOTUS Cox v. Sony Ruling

The post U.S. Supreme Court Narrows Secondary Liability in Copyright Law–Cox v. Sony (Guest Blog Post) appeared first on Technology & Marketing Law Blog.

If this were a framed original of the trading card, the First Sale doctrine should apply. If it were a counterfeit version of the trading card, it would be an obvious legal violation. But this appears to be a photo of the trading card that’s printed. No reasonable buyer would believe this is the original trading card.

Upper Deck nevertheless seeks to enforce its IP rights in the print, both in the Michael Jordan imagery (it received via a license) and its hologram mark (the black shape in the upper left of the print–see the outline from the trademark registration). I believe the original card has actual holographic imagery in the mark’s location to reinforce the original’s authenticity. (Holograms are harder and more expensive to mimic, so they are routinely used as an anti-counterfeiting or security device). So when the reproduction lacks the holographic component of the mark, what does that signify? To me, it’s a strong signal to consumers that the copy isn’t being presented as authentic. Does that demonstrated lack of authenticity have any relevance to the trademark considerations? Unfortunately, the court doesn’t address that issue.

Trademark Dilution

The court says the hologram trademark isn’t sufficiently famous to qualify for dilution protection.

Trademark Infringement

• Mark strength. Even though the hologram mark isn’t famous, it’s a strong mark.
• Proximity of goods. Both offer sports memorabilia.
• Mark similarity. Identical.
• Actual confusion. The court presumes actual confusion from the mark’s identicality, with a bonus gratuitous shoutout to initial interest confusion because why not?
• Marketing channels. Both sell on the Internet.
• Purchaser care. An authentic Michael Jordan trading card depicted in the image above would sell for upwards of $1M. Pixels sells the reprint for $70. Purchasers will note the differences.
• Intent. “the mere existence of [Pixels’] notice-and-takedown policy does not indicate that Pixels has knowledge about the infringing use of the Upper Deck Hologram Mark in particular….Upper Deck has not indicated it attempted to take advantage of Pixels’ notice-and-takedown procedure to notify Pixels’ DMCA agent as to Pixels’ infringing use of the Upper Deck Hologram Mark.” How hard would it have been for Upper Deck to send takedown notices?
• Product line expansion. No evidence.

The court summarizes that 5 factors favor Upper Deck, 2 favor Pixels, and one is neutral. That’s enough to defeat Pixels’ summary judgment motion.

False Advertising

The opinion shifts to Upper Deck’s licensed interests in Michael Jordan’s depiction.

Standing. “a reasonable jury could find that Pixels’ use of Jordan’s likeness in its own similar products could result in a loss of sales of Upper Deck’s products and threatens Upper Deck’s commercial interests.”

False Advertising. I guess Pixels’ advertising claim is that Pixels has the right to market Michael Jordan trading cards when Upper Deck has the exclusive rights? The court says Upper Deck showed enough to survive summary judgment.

False Association. The false association analysis triggers a new round of Sleekcraft factor review, this time focused on Michael Jordan’s trademarks. The result is even more favorable to Upper Deck, so it again defeats Pixels’ summary judgment motion.

Publicity Rights

Pixels challenged Upper Deck’s exclusive right to the Michael Jordan personality. The court says the evidence provided by Upper Deck survives the summary judgment motion.

First Amendment Defense

A Rogers defense goes nowhere. Upper Deck presented “evidence that Pixels used Jordan’s Marks and/or the Upper Deck Hologram Mark in Pixels’ products featuring pictures and photographs displaying Jordan’s likeness. The pictures and photographs of Jordan displayed in Pixels’ products at issue in this action are source-identifying insofar as they contain Jordan’s Marks.”

Section 230

Pixels sought to clean up some of the state law IP and unfair competition law claims per Section 230.

In a footnote, the court acknowledges that Section 230’s IP exception applies to the federal Lanham Act claims but doesn’t apply to state IP claims.

The court summarizes: “while advertising and curating content on websites constitute publishing conduct that can be immunized under Subsection (c)(1), the sale and distribution of physical products does not.” Thus:

Pixels is entitled to Section 230 immunity where Upper Deck seeks to hold it accountable for the advertisement of allegedly infringing goods, or for creating website tools that allow users to search and view allegedly infringing goods based on images uploaded by third parties. However, Pixels is not entitled to Section 230 immunity to Upper Deck’s California state law claims where Upper Deck seeks to hold Pixels accountable for manufacturing and selling the allegedly infringing products listed for sale on its website (e.g., contracting with vendors to manufacture and ship illicit products)

As applied: “Pixels does not create the illicit images of products uploaded and displayed on its site, and Pixels’ website search engine and content filtering tools do not contribute to the creation of those products.” However, Section 230 doesn’t apply to “Pixels’ involvement in offline manufacturing or selling physical prints containing infringing images (e.g., hiring and coordinating with print and shipping vendors, facilitating product returns, offering a money-back guarantee).” It seems pretty straightforward that Section 230 wouldn’t apply to offline activities, no?

* * *

This case raises many complex issues. In addition to the hologram mark issue, this case raises questions about the scope of merchandising rights, the permissibility of displaying historical items such as old sports trading cards, print-on-demand manufacturers’ liability for vendor uploads, and more. The court mostly sidesteps all of these legal complexities. Instead, the opinion narrowly focuses on more technical aspects, such as whether the hologram mark’s shape could be infringed even when it’s being accurately displayed in historical context.

The court’s rejection of most of Pixels.com’s summary judgment motion seems to position Upper Deck’s claims for a trial, unless the parties can figure out a settlement beforehand.

Case Citation: The Upper Deck Co. v. Pixels.com LLC, 2026 WL 776227 (S.D. Cal. March 19, 2026). This is an amended version of the opinion issued on March 6. As the court explains in the first footnote, the prior opinion had errors that the court needed to correct.

Related posts

* DMCA 512(c) Helps Redbubble Defeats Copyright Lawsuit–Wallshoppe v. Redbubble
* Print-on-Demand Service Defeats Fish Illustrator’s Copyright Claim–Tomelleri v. Sunfrog
* Print-on-Demand Services Face More Legal Woes–Canvasfish v. Pixels
* Atari’s Lawsuit Against a Print-on-Demand Service Fizzles Out–Atari v. Printify
* Ninth Circuit Highlights the Messy Law of Contributory Trademark Infringement Online–YYGM v. RedBubble
* RedBubble Gets Another Favorable Ruling–YZ Productions v. RedBubble
* IP Lawsuits Against Print-on-Demand Vendors Continue to Vex the Courts–OSU v. Redbubble & More
* Another Tough Ruling for Print-on-Demand Vendors–Sid Avery v. Pixels
* Print-on-Demand Vendor Doesn’t Qualify for DMCA Safe Harbor–Feingold v. RageOn
* CreateSpace Isn’t Liable for Publishing Allegedly Infringing Uploaded Book–King v. Amazon
* More Evidence That Print-on-Demand Vendors May Be Doomed–Greg Young Publishing v. Zazzle
* Section 230 Doesn’t Protect Print-on-Demand Vendor–Atari v. Sunfrog
* Online Marketplace Defeats Trademark Suit Because It’s Not the “Seller”–OSU v. Redbubble
* Zazzle Loses Copyright Jury Verdict, and That’s Bad News for Print-on-Demand Publishers–Greg Young Publishing v. Zazzle
* Trademark Injunction Issued Against Print-on-Demand Website–Harley Davidson v. SunFrog
* DMCA Safe Harbor Doesn’t Protect Zazzle’s Printing of Physical Items–Greg Young Publishing v. Zazzle
* CafePress May Not Qualify For 512 Safe Harbor – Gardner v. CafePress
* Cafepress Suffers Potentially Significant Trademark Loss for Users’ Uploaded Designs
* Life May Be “Rad,” But This Trademark Lawsuit Isn’t–Williams v. CafePress.com
* Print-on-Demand “Publisher” Isn’t Liable for Book Contents–Sandler v. Calcagni
* Griper Selling Anti-Walmart Items Through CafePress Doesn’t Infringe or Dilute–Smith v. Wal-Mart
* CaféPress Denied 230 Motion to Dismiss–Curran v. Amazon

The post What Does a Hologram Trademark Signify When the Hologram Isn’t There?–Upper Deck v. Pixels appeared first on Technology & Marketing Law Blog.

The plaintiff sued in state court, the defendant removed to federal court, and in this ruling, the court remands the case back to state court because the plaintiff lacks Article III standing. This reminded me of the Yelp law litigation genre, where the cases routinely bounce from federal court because they are such trash that they lack Article III standing. Getting a case remanded to state court because the case is so terrible seems like a short-term “victory” for plaintiffs.

* * *

The court summarizes the key evidence of the lawsuit’s lack of merit:

[Defendant’s] search confirmed that Defendants received three leads from online searches for the terms “Brothers Buy Homes,” or “Brothers Buys Homes” between January 1, 2024, and December 31, 2024. All three leads occurred when the keyword insertion feature was turned off; thus, Blue Bay’s trademark never appeared in any of the three ads that generated leads. Blue Bay’s Operations Manager, Mike Briener, admitted there would not be any confusion with potential customers if the keyword insertion feature was turned off and Blue Bay’s trademark name did not appear in Defendants’ ad. Defendants therefore did not receive any revenue, profit, or business opportunity from any Google Ads containing Blue Bay’s name.

Let’s go over that the evidence again:

(1) The plaintiff is suing over 3 clicks. That alone is almost certainly financially irrational.

(2) Those clicks came from keyword ads without the plaintiff’s trademark in the ad copy.

(3) The plaintiff concedes those clicks aren’t attributable to consumer confusion. Briener’s concession may sound like a big deal, but he’s just acknowledging black letter law. Courts have repeatedly and unhesitatingly rejected trademark lawsuits over competitive keyword ads that don’t reference the TM in the ad copy. See, e.g., the Lerner & Rowe case.

(4) Defendants “did not receive any revenue, profit, or business opportunity from any Google Ads containing Blue Bay’s name.”

Why is this case still going? What are we even doing here?

The court recapitulates why this lawsuit is so meritless:

Defendants’ evidence shows that Defendants have not misrepresented themselves as Blue Bay, Defendants did not use Blue Bay’s trademark to generate leads by confusing consumers, Defendants did not do business with consumers who mistook Defendants as Blue Bay, and Blue Bay has not lost money from Defendants’ actions.

Sounds like this case is primed for dismissal. However, unfortunately for the defendants, the court resolves these problems on Article III standing rather than substantively dismissing the case for lack of merit. The court says it’s required to remand the case due to the Article III problem. This case is already clearly dead, but I guess the funeral will be a bit delayed. It seems like an excellent candidate for a trademark fee shift to the defendant.

Case Citation: Blue Bay Ventures LLC v. John Buys Bay Homes LLC, 2026 WL 710398 (N.D. Cal. March 13, 2026)

Personnel note: the plaintiff’s lawyer is Steffanie Danielle Stelnick, whose website self-styles herself as “the Real Estate Queen.” Her bio explains: “she earned her title as the Real Estate Queen helping clients with their full service real estate needs year after year.”

BONUS: David Penner MD PLLC v. Clear TMS+ PLLC, 2026 WL 838294 (W.D. Wash. March 26, 2026): “Clear argues persuasively that its purchasing or using a “keyword” is not itself a trademark infringement.”

* * *

More Posts About Keyword Advertising

* Post-Mortem of a Misguided Logo Trademark Lawsuit–LegalForce v. Internet Brands
* The Initial Interest Confusion Doctrine Refuses to Die
* Court Rejects Initial Interest Confusion Claims for Competitive Keyword Ads–Regalo v. Aborder
* Lawsuits Over Competitive Keyword Advertising Are Still Stupid–NRRM v. American Dream Auto Protect
* NJ Supreme Court Blesses Lawyers’ Competitive Keyword Ads (With a Baffling Caveat)
* Ninth Circuit Tells Trademark Owners to Stop Suing Over Competitive Keyword Ads–Lerner & Rowe v. Brown Engstrand
* Second Circuit Tells Trademark Owners to Stop Suing Over Competitive Keyword Advertising
* Catching Up on Two Keyword Ad Cases
* Competitor Isn’t Responsible for Google Knowledge Panel’s Contents–International Star Registry v. RGIFTS
* TIL: “Texas Tamale” Is an Enforceable Trademark–Texas Tamale v. CPUSA2
* Internal Search Results Aren’t Trademark Infringing–PEM v. Peninsula
* When Do Inbound Call Logs Show Consumer Confusion?–Adler v McNeil
* Court Denies Injunction in Competitive Keyword Ad Lawsuit–Nursing CE Central v. Colibri
* Competitive Keyword Ad Lawsuit Fails…Despite 236 Potentially Confused Customers–Lerner & Rowe v. Brown Engstrand
* More on Law Firms and Competitive Keyword Ads–Nicolet Law v. Bye, Goff
* Yet More Evidence That Keyword Advertising Lawsuits Are Stupid–Porta-Fab v. Allied Modular
* Griper’s Keyword Ads May Constitute False Advertising (Huh?)–LoanStreet v. Troia
* Trademark Owner Fucks Around With Keyword Ad Case & Finds Out–Las Vegas Skydiving v. Groupon
* 1-800 Contacts Loses YET ANOTHER Trademark Lawsuit Over Competitive Keyword Ads–1-800 Contacts v. Warby Parker
* Court Dismisses Trademark Claims Over Internal Search Results–Las Vegas Skydiving v. Groupon
* Georgia Supreme Court Blesses Google’s Keyword Ad Sales–Edible IP v. Google
* Competitive Keyword Advertising Claim Fails–Reflex Media v. Luxy
* Think Keyword Metatags Are Dead? They Are (Except in Court)–Reflex v. Luxy
* Fifth Circuit Says Keyword Ads Could Contribute to Initial Interest Confusion (UGH)–Adler v. McNeil
* Google’s Search Disambiguation Doesn’t Create Initial Interest Confusion–Aliign v. lululemon
* Ohio Bans Competitive Keyword Advertising by Lawyers
* Want to Engage in Anti-Competitive Trademark Bullying? Second Circuit Says: Great, Have a Nice Day!–1-800 Contacts v. FTC
* Selling Keyword Ads Isn’t Theft or Conversion–Edible IP v. Google
* Competitive Keyword Advertising Still Isn’t Trademark Infringement, Unless…. –Adler v. Reyes & Adler v. McNeil
* Three Keyword Advertising Decisions in a Week, and the Trademark Owners Lost Them All
* Competitor Gets Pyrrhic Victory in False Advertising Suit Over Search Ads–Harbor Breeze v. Newport Fishing
* IP/Internet/Antitrust Professor Amicus Brief in 1-800 Contacts v. FTC
* New Jersey Attorney Ethics Opinion Blesses Competitive Keyword Advertising (…or Does It?)
* Another Competitive Keyword Advertising Lawsuit Fails–Dr. Greenberg v. Perfect Body Image
* The Florida Bar Regulates, But Doesn’t Ban, Competitive Keyword Ads
* Rounding Up Three Recent Keyword Advertising Cases–Comphy v. Amazon & More
* Do Adjacent Organic Search Results Constitute Trademark Infringement? Of Course Not…But…–America CAN! v. CDF
* The Ongoing Saga of the Florida Bar’s Angst About Competitive Keyword Advertising
* Your Periodic Reminder That Keyword Ad Lawsuits Are Stupid–Passport Health v. Avance
* Restricting Competitive Keyword Ads Is Anti-Competitive–FTC v. 1-800 Contacts
* Another Failed Trademark Suit Over Competitive Keyword Advertising–JIVE v. Wine Racks America
* Negative Keywords Help Defeat Preliminary Injunction–DealDash v. ContextLogic
* The Florida Bar and Competitive Keyword Advertising: A Tragicomedy (in 3 Parts)
* Another Court Says Competitive Keyword Advertising Doesn’t Cause Confusion
* Competitive Keyword Advertising Doesn’t Show Bad Intent–ONEpul v. BagSpot
* Brief Roundup of Three Keyword Advertising Lawsuit Developments
* Interesting Tidbits From FTC’s Antitrust Win Against 1-800 Contacts’ Keyword Ad Restrictions
* 1-800 Contacts Charges Higher Prices Than Its Online Competitors, But They Are OK With That–FTC v. 1-800 Contacts
* FTC Explains Why It Thinks 1-800 Contacts’ Keyword Ad Settlements Were Anti-Competitive–FTC v. 1-800 Contacts
* Amazon Defeats Lawsuit Over Its Keyword Ad Purchases–Lasoff v. Amazon
* More Evidence Why Keyword Advertising Litigation Is Waning
* Court Dumps Crappy Trademark & Keyword Ad Case–ONEPul v. BagSpot
* AdWords Buys Using Geographic Terms Support Personal Jurisdiction–Rilley v. MoneyMutual
* FTC Sues 1-800 Contacts For Restricting Competitive Keyword Advertising
* Competitive Keyword Advertising Lawsuit Will Go To A Jury–Edible Arrangements v. Provide Commerce
* Texas Ethics Opinion Approves Competitive Keyword Ads By Lawyers
* Court Beats Down Another Competitive Keyword Advertising Lawsuit–Beast Sports v. BPI
* Another Murky Opinion on Lawyers Buying Keyword Ads on Other Lawyers’ Names–In re Naert
* Keyword Ad Lawsuit Isn’t Covered By California’s Anti-SLAPP Law
* Confusion From Competitive Keyword Advertising? Fuhgeddaboudit
* Competitive Keyword Advertising Permitted As Nominative Use–ElitePay Global v. CardPaymentOptions
* Google And Yahoo Defeat Last Remaining Lawsuit Over Competitive Keyword Advertising
* Mixed Ruling in Competitive Keyword Advertising Case–Goldline v. Regal
* Another Competitive Keyword Advertising Lawsuit Fails–Infogroup v. DatabaseLLC
* Damages from Competitive Keyword Advertising Are “Vanishingly Small”
* More Defendants Win Keyword Advertising Lawsuits
* Another Keyword Advertising Lawsuit Fails Badly
* Duplicitous Competitive Keyword Advertising Lawsuits–Fareportal v. LBF (& Vice-Versa)
* Trademark Owners Just Can’t Win Keyword Advertising Cases–EarthCam v. OxBlue
* Want To Know Amazon’s Confidential Settlement Terms For A Keyword Advertising Lawsuit? Merry Christmas!
* Florida Allows Competitive Keyword Advertising By Lawyers
* Another Keyword Advertising Lawsuit Unceremoniously Dismissed–Infostream v. Avid
* Another Keyword Advertising Lawsuit Fails–Allied Interstate v. Kimmel & Silverman
* More Evidence That Competitive Keyword Advertising Benefits Trademark Owners
* Suing Over Keyword Advertising Is A Bad Business Decision For Trademark Owners
* Florida Proposes to Ban Competitive Keyword Advertising by Lawyers
* More Confirmation That Google Has Won the AdWords Trademark Battles Worldwide
* Google’s Search Suggestions Don’t Violate Wisconsin Publicity Rights Law
* Amazon’s Merchandising of Its Search Results Doesn’t Violate Trademark Law
* Buying Keyword Ads on People’s Names Doesn’t Violate Their Publicity Rights
* With Its Australian Court Victory, Google Moves Closer to Legitimizing Keyword Advertising Globally
* Yet Another Ruling That Competitive Keyword Ad Lawsuits Are Stupid–Louisiana Pacific v. James Hardie
* Another Google AdWords Advertiser Defeats Trademark Infringement Lawsuit
* With Rosetta Stone Settlement, Google Gets Closer to Legitimizing Billions of AdWords Revenue
* Google Defeats Trademark Challenge to Its AdWords Service
* Newly Released Consumer Survey Indicates that Legal Concerns About Competitive Keyword Advertising Are Overblown

The post Another Reminder: Lawsuits Over Competitive Keyword Ads Are Stupid appeared first on Technology & Marketing Law Blog.

I’m a little confused by this lawsuit, because I thought Emojico had retrenched its usage of the SAD Scheme after it suffered a bad loss. I guess they are back? This time, they have a different law firm representing them (Marijan Stephan Hucke of Hucke & Sanker PLLC instead of Hughes Socol Piers Resnick & Dym).

In this case, Emojico sued 125 defendants using the SAD Scheme template. The court credits Emojico’s trademark registrations but questions Emojico’s explanation of the likelihood of consumer confusion. Emojico deployed its IP Privilege Card, saying it called the defendants “counterfeiters,” so why would it need to say more than that to establish consumer confusion? The court says…yes, you do need to say more than that…

Plaintiff makes no effort through argument or evidence to show that the products to which it affixes its trademark as a source of origin or sponsorship are substantially identical to or competitive with Defendants’ products, the sale of which Plaintiff seeks to restrain. Aside from a few conclusory lines in its memorandum in support of the temporary restraining order, it does not address the Polaroid factors at all. Plaintiff thus has not shown that it is entitled to a temporary restraining order against any of the Defendants

I’m always fascinated when rightsowners blow a shot on an open net in the form of losing a TRO request EX PARTE. It’s a bit like losing an election while running unopposed.

The court also questions joinder of the 125 defendants: “Plaintiff shall show cause by no later than March 11, 2026, why all Defendants except for the first-named one should not be dismissed from this action for misjoinder.” I have a hunch Emojico’s joinder explanations will not be any more persuasive than its other arguments.

Case Citation: Emoji Co. GmbH v. Schedule A Defendants, 2026 WL 594186 (S.D.N.Y. March 3, 2026)

The post A “But They’re ‘Counterfeiters’!” Argument Doesn’t Clinch a SAD Scheme TRO–Emojico v. Schedule A Defendants appeared first on Technology & Marketing Law Blog.

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The plaintiff, Price, has a trademark registration in the phrase “White Privilege Card,” for novelty plastic identification cards. Ugh. His lawsuit names 102 defendants and “follows the mold of thousands like it that have appeared in the last few decades,” including, as usual, getting an ex parte TRO. However, the case falls apart when he requests a preliminary injunction.

The court says the case “presents difficult merits and procedural questions regarding due process and joinder….[and] presses the bounds of the judiciary’s equitable powers.” In fact, it’s pretty easy to spot the many, many flaws in this case. The opinion contains 37 pages of withering critiques that would make many lawyers cry if a judge expressed these concerns about their work. For example, the court says:

• “At the time that Price moved for a temporary restraining order, Price provided no legal names of the sellers.” [I guess precisely identifying defendants is now optional to getting a TRO?]
• “Price did allege irreparable harm in his affidavit, but only in general terms without differentiation between the over 100 sellers’ products or the sellers’ likelihood of evading judicial action.”
• “Absent from the preliminary injunction motion and the properly attached papers upon which it relies is any description or a visual depiction of Price’s own products or how the Mark appears in context….Without evidence in the record of Price’s Mark as consumers encounter it, the Court cannot assess its similarity with the screenshots of the allegedly infringing products displayed in Schedule B.” [Schedule B was 150 pages of poorly organized screenshots of the defendants’ products. Filed under seal, naturally.]
• “Price fails to provide evidence of how the Mark appears in context, making it impossible to assess whether the defendants’ marks are identical or similar to Price’s Mark or otherwise evaluate consumer confusion. Even if Price had properly submitted evidence of his Mark, his arguments about the similarity of the sellers’ products are too generalized, and Price presents no evidence of the strength of his Mark or the market more broadly. Indeed, several allegedly infringing products bear no resemblance to the description of Price’s Mark.”
• “Price did not offer a single example of consumer confusion or specify any product or defendant in particular.” Later, the court says “Price’s allegations of similarity against at least four of the sellers’ products fail on their face, as the cards are distinct from Price’s Mark.”
• “While many other products appear identical or nearly identical to the card displayed at the hearing (at least based on the screenshots, as no tangible products were introduced) and Price might ultimately succeed against some of those sellers, Price offers no specific argument about any of them in his motion, nor any evidence concerning the customer base, advertising, sellers’ intent, actual consumer confusion, or consumer sophistication. While “[t]here are no hard and fast rules as to how much evidence of confusion is enough,” surely this is not enough.”
• “Price’s conclusory allegation that he and the sellers operate in the same geographic areas is hardly enough to satisfy Rule 8.”
• “absent from the record is any evidence of actual confusion or argument about consumer sophistication—let alone analysis of any specific infringing product.”
• “the alleged similarity (based on the screenshots) proves little more than that it is seemingly easy to make and market the cards. That may very well be true, but it does not mean that joinder is proper under Rule 20.”
• “Price alleged that the defendant sellers use third-party marketplaces to sell infringing goods. Price never alleged that the nonparties were aiding and abetting the infringement or otherwise acting in concert with the sellers under Rule 65(d)(2)(C)….at the time that the temporary restraining order was entered, Price failed to prove that the Court had authority to direct a nonparty financial institution or marketplace to halt the movement of funds in an account when that nonparty did not know about the infringement.”
• “Price does not explain or provide evidence why preliminary relief of this scope—a total asset freeze of every defendant—is necessary to secure a later equitable remedy from any particular defendant.”
• “unlike other Schedule A litigation, many of the defendants according to Price’s amended complaint are based in the United States, mitigating one of the barriers that Pricer [sic] earlier alleged might prevent later recovery. Given this and Price’s failure to offer any specific justification for freezing the assets of any particular defendant, granting an asset freeze would go against the very purpose of equity.” [Note: anyone who tries to normalize the SAD Scheme by saying it only targets foreign defendants can stuff it.]
• “not all of the defendants have received notice of the motion for a preliminary injunction, and, even for those that Price has noticed under Rule 65, Price has not proven service of process of the underlying complaint for any seller. That creates one-sided briefing, which “renders balancing the private interests impossible.” Moreover, the vagueness of the complaint cautions against an award of a preliminary injunction, particularly because an asset freeze is a powerful remedy. With such a dearth of information and lack of specificity, “there is significant doubt that the Schedule A mechanism serves the public interest” in its present form.”

To me, it feels like the lawyers expected to get their wishlist granted just by showing up in court. Maybe they thought their IP privilege card was a get-out-of-lawyering-free card…?

The court summarizes its conclusions:

Because of procedural irregularities, due process problems, and the absence of evidence to support a substantial likelihood of success on the merits, I vacate the temporary restraining order, deny the motion for a preliminary injunction, and dismiss the amended complaint as to all defendants but Cone

[Cone has brought counterclaims against Price, pointing out she uses cardstock and not plastic and began selling her items 3 years before Price got started.]

Good for the court for bouncing this crap lawsuit now. AND YET….the lawyers wreaked some havoc with the court-approved TRO:

Price reported settlements with approximately twenty-three sellers and separately filed notices of voluntary dismissal of his claims against another nineteen. Four sellers responded to the preliminary injunction motion, and Price settled or voluntarily dismissed his claims against all but one of them.

This sounds bad, so how do you think the court addressed these problems? Did the court…

• sanction Price for getting an unmerited TRO;
• provide relief to the online marketplaces who had to contend with a TRO that never should have applied to them; [Note: “Price represented at the February 4 hearing that the freezes remain in place despite the expiration of the temporary restraining order.” Continued post-TRO restrictions are typical. It’s a good reminder of how the SAD Scheme impacts defendants outside the court’s purview.]
• dismiss the remaining defendants with prejudice; [the court did dismiss the defendants….without prejudice FFS]
• provide recourse for the 23 settlements that were triggered by the unmerited TRO;
• compensate the seller-defendants who spent their time and money to respond to the obviously defective PI motion; or
• flag the lawyers’ numerous and obvious failings for potential license discipline?

Nope. None of the above. This is a SAD Scheme case–a genre where judges rarely impose even a trivial amount of accountability.

While it’s easy to mock the terrible work by these lawyers, to me, they are a symptom of the disease. The SAD Scheme only works when lawyers bend the law and facts to reach undeserved outcomes. The SAD Scheme is rigged in such a way that it categorically encourages bad lawyering. Hate the players AND the game.

Case Citation: Price v. Schedule A Defendants, 2026 WL 470599 (M.D. Fla. Feb. 19, 2026). The court’s TRO. The court’s order to show cause regarding joinder.

Personnel note: the plaintiff’s lawyers are Terry Marcus Sanks and Liandra Izquierdo of Beusse Sanks, PLLC, Orlando, FL.

The post A SAD Scheme Plaintiff Unsuccessfully Plays an IP Privilege Card–Price v. Schedule A Defendants appeared first on Technology & Marketing Law Blog.