APPENDIX
`APPENDIX
`
`

`

`TABLE OF CONTENTS
`
`Page
`
`Appendix A—Fourth Circuit Opinion (Feb. 20, 2024) ............................................... 1a
`
`Appendix B—Fourth Circuit Order Denying Rehearing (Mar. 19, 2024) ............... 34a
`
`i
`
`

`

`APPENDIX A
`_________
`PUBLISHED
`_________
`UNITED STATES COURT OF APPEALS
`FOR THE FOURTH CIRCUIT
`_________
`No. 21-1168
`_________
`SONY MUSIC ENTERTAINMENT; ARISTA MUSIC; ARISTA RECORDS, LLC;
`LAFACE RECORDS LLC; PROVIDENT LABEL GROUP, LLC; SONY MUSIC
`ENTERTAINMENT US LATIN LLC; VOLCANO ENTERTAINMENT III, LLC;
`ZOMBA RECORDINGS LLC; SONY/ATV MUSIC PUBLISHING LLC; EMI AI
`GALLICO MUSIC CORP.; EMI ALGEE MUSIC CORP.; EMI APRIL MUSIC INC.;
`EMI BLACKWOOD MUSIC INC.; COLGEMS-EMI MUSIC INC.; EMI
`CONSORTIUM MUSIC PUBLISHING INC., D/B/A EMI FULL KEEL MUSIC; EMI
`CONSORTIUM SONGS, INC., D/B/A EMI LONGITUDE MUSIC; EMI FEIST CATALOG
`INC.; EMI MILLER CATALOG INC.; EMI MILLS MUSIC, INC.; EMI UNART
`CATALOG INC.; EMI U CATALOG INC.; JOBETE MUSIC COMPANY,
`INCORPORATED; STONE AGATE MUSIC; SCREEN GEMS-EMI MUSIC,
`INCORPORATED; STONE DIAMOND MUSIC CORP.; ATLANTIC RECORDING
`CORPORATION; BAD BOYS RECORDS LLC; ELEKTRA ENTERTAINMENT
`GROUP, INCORPORATED; FUELED BY RAMEN LLC; ROADRUNNER
`RECORDS, INC.; WARNER-TAMERLANE PUBLISHING CORPORATION; WB
`MUSIC CORPORATION; UNICHAPPELL MUSIC, INCORPORATED;
`RIGHTSONG MUSIC INC.; COTILLION MUSIC, INCORPORATED; INTERSONG
`U.S.A., INC.; UMG RECORDINGS, INCORPORATED; CAPITOL RECORDS, LLC;
`UNIVERSAL MUSIC CORPORATION; UNIVERSAL MUSIC-MGB NA LLC;
`UNIVERSAL MUSIC PUBLISHING INC.; UNIVERSAL MUSIC PUBLISHING AB;
`UNIVERSAL PUBLISHING LIMITED; UNIVERSAL MUSIC PUBLISHING MGB
`LIMITED; UNIVERSAL MUSIC - Z TUNES LLC; UNIVERSAL/ISLAND MUSIC
`LIMITED; UNIVERSAL/MCA MUSIC PUBLISHING PTY. LIMITED; POLYGRAM
`PUBLISHING, INC.; SONGS OF UNIVERSAL, INC.; WARNER RECORDS, INC.,
`F/K/A W.B.M. MUSIC CORP.; WARNER CHAPPELL MUSIC, INC., F/K/A
`WARNER/CHAPPELL MUSIC, INC.; W.C.M. MUSIC CORP., F/K/A W.B.M. MUSIC CORP.,
`
`Plaintiffs – Appellees,
`
`and
`
`NONESUCH RECORDS INC.; WARNER BROS. RECORDS, INC.;
`WARNER/CHAPPELL MUSIC, INC.; W.B.M. MUSIC CORP.; UNIVERSAL -
`
`(1a)
`
`

`

`(2a)
`
`POLYGRAM INTERNATIONAL TUNES, INC.; UNIVERSAL - SONGS OF
`POLYGRAM INTERNATIONAL, INC.; UNIVERSAL POLYGRAM
`INTERNATIONAL PUBLISHING, INC.; MUSIC CORPORATION OF AMERICA,
`INC., D/B/A UNIVERSAL MUSIC CORPORATION; RONDOR MUSIC INTERNATIONAL,
`
`v.
`COX COMMUNICATIONS, INCORPORATED; COXCOM, LLC,
`
`Plaintiffs,
`
`_________
`
`Defendants – Appellants.
`
`INTERNET ASSOCIATION; ELECTRONIC FRONTIER FOUNDATION; CENTER
`FOR DEMOCRACY AND TECHNOLOGY; AMERICAN LIBRARY ASSOCIATION;
`ASSOCIATION OF COLLEGE AND RESEARCH LIBRARIES; ASSOCIATION OF
`RESEARCH LIBRARIES; PUBLIC KNOWLEDGE; NTCA THE RURAL
`BROADBAND ASSOCIATION; CTIA - THE WIRELESS ASSOCIATION;
`USTELECOM THE BROADBAND ASSOCIATION; INTERNET COMMERCE
`COALITION; INTELLECTUAL PROPERTY LAW PROFESSORS,
`
`Amici Supporting Appellant,
`
`and
`
`NATIONAL MUSIC PUBLISHERS’ ASSOCIATION; NASHVILLE SONGWRITERS
`ASSOCIATION INTERNATIONAL; SONGWRITERS OF NORTH AMERICA;
`COPYRIGHT ALLIANCE,
`
`Amici Supporting Appellee.
`
`_________
`On Appeal from the United States District Court
`for the Eastern District of Virginia, at Alexandria.
`Liam O’Grady, Senior District Judge. (1:18-cv-00950-LO-JFA)
`_________
`
`Argued: March 9, 2022
`
`
`
`Decided: February 20, 2024
`
`_________
`Before HARRIS and RUSHING, Circuit Judges, and FLOYD, Senior Circuit Judge.
`_________
`
`

`

`(3a)
`
`Affirmed in part, reversed in part, vacated in part, and remanded by published
`opinion. Judge Rushing wrote the opinion, in which Judge Harris and Senior Judge
`Floyd joined.
`_________
`
`ARGUED: E. Joshua Rosenkranz, ORRICK, HERRINGTON & SUTCLIFFE LLP,
`New York, New York, for Appellants. Catherine Emily Stetson, HOGAN LOVELLS
`US LLP, Washington, D.C., for Appellees. ON BRIEF: Michael S. Elkin, Jennifer A.
`Golinveaux, Geoffrey P. Eaton, WINSTON & STRAWN LLP, New York, New York;
`Mark S. Davies, Sheila A. Baynes, Washington, D.C., Christopher J. Cariello, Rachel
`G. Shalev, Alexandra Bursak, ORRICK, HERRINGTON & SUTCLIFFE LLP, New
`York, New York, for Appellants. Matthew J. Oppenheim, Scott A. Zebrak, Jeffrey M.
`Gould, OPPENHEIM + ZEBRAK, LLP, Washington, D.C.; Jo-Ann Tamila Sagar,
`Patrick C. Valencia, HOGAN LOVELLS US LLP, Washington, D.C., for Appellees.
`Joseph C. Gratz, Samuel J. Zeitlin, DURIE TANGRI LLP, San Francisco, California,
`for Amicus Internet Association. Mitchell L. Stoltz, Corynne McSherry,
`ELECTRONIC FRONTIER FOUNDATION, San Francisco, California; Erik
`Stallman, Juliana DeVries, Samuelson Law, Technology & Public Policy Clinic, UC
`BERKELEY SCHOOL OF LAW, Berkeley, California, for Amici Electronic Frontier
`Foundation, Center for Democracy and Technology, American Library Association,
`Association of College and Research Libraries, Association of Research Libraries, and
`Public Knowledge. David E. Weslow, Megan L. Brown, Ari S. Meltzer, Kevin G. Rupy,
`Adrienne J. Kosak, WILEY REIN LLP, Washington, D.C., for Amici NTCA – The
`Rural Broadband Association, CTIA – The Wireless Association, and USTelecom –
`The Broadband Association. Andrew L. Deutsch, DLA PIPER LLP (US), Los Angeles,
`California, for Amicus Internet Commerce Coalition. Phillip R. Malone, Juelsgaard
`Intellectual Property and Innovation Clinic, Mills Legal Clinic, STANFORD LAW
`SCHOOL, Stanford, California, for Amici Intellectual Property Law Professors.
`Danielle M. Aguirre, Kerry M. Mustico, Christopher A. Bates, NATIONAL MUSIC
`PUBLISHERS’ ASSOCIATION, Washington, D.C.; Ruthanne M. Deutsch, Hyland
`Hunt, Alexandra Mansbach, DEUTSCH HUNT PLLC, Washington, D.C., for Amici
`National Music Publishers’ Association, Nashville Songwriters Association
`International, and Songwriters of North America. Nancy Wolff, Sara Gates, COWAN
`DEBAETS ABRAHAMS & SHEPPARD LLP, New York, New York, for Amicus The
`Copyright Alliance.
`
`_________
`
`RUSHING, Circuit Judge:
`
`Defendant Cox Communications sells internet, telephone, and cable television
`
`service to 6 million homes and businesses across the United States. Plaintiffs—Sony
`
`

`

`(4a)
`
`Music Entertainment and numerous other record companies and music publishers—
`
`own some of the most popular copyrighted musical works of our time. Some users of
`
`Cox’s internet service infringed Plaintiffs’ copyrights by downloading or distributing
`
`songs over the internet without permission. Rather than sue those individuals,
`
`Plaintiffs sued Cox, seeking to hold it responsible for its customers’ copyright
`
`infringement.
`
`Federal law protects internet service providers from monetary liability for
`
`copyright infringement committed by users of their networks, but only if those service
`
`providers reasonably implement a policy to terminate repeat infringers in
`
`appropriate circumstances. In a prior case, our Court held that Cox had failed to
`
`reasonably implement an anti-piracy program and therefore did not qualify for the
`
`statutory safe harbor.
`
`This case proceeded to trial on two theories of secondary liability: vicarious and
`
`contributory copyright infringement. The jury found Cox liable for both willful
`
`contributory and vicarious infringement of 10,017 copyrighted works owned by
`
`Plaintiffs and awarded $1 billion in statutory damages. Cox appealed.
`
`We affirm the jury’s finding of willful contributory infringement. But we
`
`reverse the vicarious liability verdict and remand for a new trial on damages because
`
`Cox did not profit from its subscribers’ acts of infringement, a legal prerequisite for
`
`vicarious liability.
`
`I.
`
`

`

`(5a)
`
`Copyright owners possess the “exclusive rights” to “reproduce,” “distribute,”
`
`“perform,” “display,” or “prepare derivative works based upon” their copyrighted
`
`works, subject to limitations not relevant here. 17 U.S.C. § 106. Anyone who violates
`
`any of these exclusive rights of the copyright owner is “an infringer of the copyright.”
`
`Id. § 501(a). A copyright owner may “institute an action” against an infringer, id.
`
`§ 501(b), and receive either statutory damages, id. § 504(a)(2), or actual damages plus
`
`the infringer’s profits, id. § 504(a)(1). Although the Copyright Act “does not expressly
`
`render anyone liable for infringement committed by another,” the Supreme Court has
`
`long held that vicarious and contributory liability for copyright infringement rest on
`
`firm legal footing. Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417,
`
`434–435 (1984).
`
`Congress recognized that internet service providers may get caught in the
`
`crossfire when infringers use the internet to reproduce or distribute copyrighted
`
`works, so it created a safe harbor defense in the Digital Millennium Copyright Act
`
`(DMCA). See 17 U.S.C. § 512. To be eligible for the defense, an internet service
`
`provider must have “adopted and reasonably implemented . . . a policy that provides
`
`for the termination in appropriate circumstances of subscribers and account holders
`
`of the service provider’s system or network who are repeat infringers.” Id.
`
`§ 512(i)(1)(A). This Court previously held that Cox did not qualify for the safe harbor
`
`because its repeat infringer policy as implemented was inadequate under the DMCA.
`
`See BMG Rts. Mgmt. (US) LLC v. Cox Commc’ns, Inc., 881 F.3d 293, 301–305 (4th
`
`Cir. 2018). The claim period in this case coincides with the period during which Cox
`
`

`

`(6a)
`
`was ineligible for the safe harbor, so Cox faces the secondary liability claims here
`
`without that protection.1
`
`This lawsuit began when Sony and other owners of copyrighted musical works
`
`(collectively, Sony or Plaintiffs) sued Cox for infringement committed by subscribers
`
`to Cox’s internet service from 2013 to 2014. During the claim period, Cox provided
`
`internet service to residential and commercial subscribers, charging different flat fees
`
`for different download speeds according to a tiered pricing plan.
`
`Plaintiffs are members of the Recording Industry Association of America
`
`(RIAA), which hired the anti-piracy company MarkMonitor to catch infringements of
`
`its members’ copyrights on peer-to-peer networks using file-sharing protocols like
`
`BitTorrent and others. See BMG, 881 F.3d at 298–299 (explaining peer-to-peer file
`
`sharing and BitTorrent). When MarkMonitor discovered an
`
`internet user
`
`downloading or distributing a copyrighted music file, it notified the user’s internet
`
`service provider. Only the service provider can match an alleged infringer’s internet
`
`protocol address to its owner’s identity. When Cox received infringement notices from
`
`MarkMonitor, Cox’s automated system sent notices to the infringing subscribers. The
`
`notice Cox sent varied by how far along the subscriber was in Cox’s thirteen-strike
`
`policy, ranging from an email warning to a temporary suspension. See BMG, 881 F.3d
`
`at 299 (describing the thirteen-strike policy).
`
`1 The DMCA safe harbor defense is not exclusive, so Cox remains “entitled to all other
`arguments under the law” in its defense. CoStar Grp., Inc. v. LoopNet, Inc., 373 F.3d 544, 552 (4th Cir.
`2004); see 17 U.S.C. § 512(l).
`
`

`

`(7a)
`
`Over time, Cox developed various methods to stem the tidal wave of
`
`infringement notices it was receiving and mitigate the consequences for its
`
`subscribers. It capped the number of notices it would accept from RIAA, eventually
`
`holding it at 600 notices per day. It took no action on the first DMCA complaint for
`
`each subscriber, limited the number of account suspensions per day, and restarted
`
`the strike count for subscribers once it terminated and reinstated them. MarkMonitor
`
`sent Cox 163,148 infringement notices during the claim period. Over that time, Cox
`
`terminated 32 subscribers for violation of its Acceptable Use Policy, which prohibits
`
`copyright infringement among other things. By comparison, it terminated over
`
`600,000 subscribers for nonpayment over that same time. Frustrated with Cox’s
`
`lackluster response to the notices, Sony sued Cox for vicarious and contributory
`
`copyright infringement.
`
`After discovery, Sony and Cox cross-moved for summary judgment. Two of the
`
`district court’s rulings at that stage are relevant for this appeal. First, the district
`
`court concluded that the infringement notices MarkMonitor sent to Cox proved Cox’s
`
`knowledge of infringement as a matter of law. That knowledge established one
`
`element of contributory liability. Second, the district court denied Cox’s motion to
`
`reduce the number of copyrighted works in suit. Cox argued that, for the purpose of
`
`statutory damages, all songs included on a single album constitute one work, and a
`
`sound recording and the music composition it embodies likewise count as a single
`
`work. See 17 U.S.C. § 504(c)(1) (authorizing statutory damages for infringement “with
`
`respect to any one work” and explaining that “all the parts of a compilation or
`
`

`

`(8a)
`
`derivative work constitute one work”). The district court found that issues of material
`
`fact remained and so this claim should “be resolved at trial.” Sony Music Ent. v. Cox
`
`Commc’ns, Inc., 426 F. Supp. 3d. 217, 236 (E.D. Va. 2019).
`
`The parties presented their case to the jury over the course of twelve days.
`
`Plaintiffs limited their case to Cox subscribers who received three or more
`
`infringement notices. In the end, the jury found Cox liable for vicarious and
`
`contributory infringement of all 10,017 copyrighted works alleged. The jury also
`
`found that Cox’s infringement was willful, which increased the available maximum
`
`statutory damages to $150,000 per work. See 17 U.S.C. § 504(c)(1)–(2). The jury
`
`awarded Sony $99,830.29 per infringed work, for a total of $1 billion in statutory
`
`damages.
`
`After the verdict, Cox renewed its motion for judgment as a matter of law,
`
`which the district court ultimately denied in full. Regarding liability, the district
`
`court rejected Cox’s arguments that the evidence did not prove vicarious or
`
`contributory infringement. Cox also sought again to reduce the number of works—
`
`and with it, damages—to account for compilations and derivative works. The district
`
`court rejected Cox’s request as to compilations but invited Cox to submit a calculation
`
`of the derivative works that were allegedly double counted. After receiving Cox’s
`
`submission, however, the district court denied any reduction in the number of works,
`
`reasoning that Cox’s posttrial arguments required factfinding within the province of
`
`the jury and that Cox had failed to present evidence sufficient to enable the jury to
`
`make the adjustments it requested.
`
`

`

`(9a)
`
`Now on appeal, Cox raises numerous questions of law concerning the scope of
`
`secondary liability for copyright infringement and what constitutes a compilation or
`
`derivative work in the internet age. Ultimately, we find we must answer only some
`
`of these novel questions to resolve this appeal.
`
`II.
`
`We begin with Cox’s contention that the district court erred in denying it
`
`judgment as a matter of law on Sony’s vicarious infringement claim. We review that
`
`ruling de novo. Russell v. Absolute Collection Servs., Inc., 763 F.3d 385, 391 (4th Cir.
`
`2014). Judgment as a matter of law is proper if, viewing all evidence and reasonable
`
`inferences in the light most favorable to the nonmoving party, “a reasonable jury
`
`would not have a legally sufficient evidentiary basis to find for [that] party.” Fed. R.
`
`Civ. P. 50(a)(1). A district court should grant judgment as a matter of law “if the
`
`nonmoving party failed to make a showing on an essential element of his case with
`
`respect to which he had the burden of proof.” Russell, 763 F.3d at 391 (internal
`
`quotation marks omitted).
`
`A defendant may be held vicariously liable for a third party’s copyright
`
`infringement if the defendant “[1] profits directly from the infringement and [2] has
`
`a right and ability to supervise the direct infringer.” Metro-Goldwyn-Mayer Studios
`
`Inc. v. Grokster, Ltd., 545 U.S. 913, 930 n.9 (2005); see also CoStar Grp., Inc. v.
`
`LoopNet, Inc., 373 F.3d 544, 550 (4th Cir. 2004) (“[A] defendant who ‘has the right
`
`and ability to supervise the infringing activity and also has a direct financial interest
`
`in such activities’ is [vicariously] liable.” (quoting Gershwin Pub. Corp. v. Columbia
`
`

`

`(10a)
`
`Artists Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir. 1971))). Cox contests both elements
`
`on appeal. Because we conclude Sony failed, as a matter of law, to prove that Cox
`
`profits directly from its subscribers’ copyright infringement, we do not reach the
`
`additional question of Cox’s right and ability to supervise its subscribers.
`
`Cox argues that it does not profit directly from its subscribers’ infringement
`
`because “[a]ll subscribers pay Cox a flat monthly fee for their internet access package
`
`no matter what they do online.” Opening Br. 27. Whether a subscriber uses her
`
`internet access for lawful or unlawful purposes, Cox receives the same monthly fee,
`
`and a subscriber’s decision to download or distribute a copyrighted song without
`
`permission does not benefit Cox. The district court rejected this argument, concluding
`
`that Sony had proven Cox’s direct financial interest by showing that Cox repeatedly
`
`declined to terminate the accounts of infringing subscribers in order to continue
`
`collecting their monthly fees. To understand this issue, some legal background is
`
`necessary.
`
`Vicarious liability for copyright infringement is an “outgrowth of the agency
`
`principles of respondeat superior.” Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259,
`
`262 (9th Cir. 1996); see also A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1022
`
`(9th Cir. 2001). It extends beyond a strict employer-employee relationship to other
`
`settings in which a defendant similarly “‘has the right and ability to supervise the
`
`infringing activity and also has a direct financial interest in such activities.’” Costar
`
`Grp., 373 F.3d at 550 (quoting Gershwin Pub. Corp., 443 F.2d at 1162). So, for
`
`example, we have held that a property owner was vicariously liable for its closely
`
`

`

`(11a)
`
`related developer’s infringing use of copyrighted architectural drawings in a
`
`construction project. Nelson-Salabes, Inc. v. Morningside Dev., LLC, 284 F.3d 505,
`
`513–514 (4th Cir. 2002). In addition to its control over the project, the property owner
`
`had “an obvious and direct financial interest in the [developer’s] infringing activities”
`
`because the owner “enjoyed the benefit of any increase in the Project’s value resulting
`
`from [the developer’s] infringement” of the copyrighted drawings. Id. at 514. In
`
`another example, a company that sold nutritional supplements was vicariously liable
`
`for its distributors’ infringing use of copyrighted photographs to advertise its products
`
`because the company could control the distributors and stood to benefit from
`
`increased sales spurred by the infringing advertisements. Leonard v. Stemtech Int’l,
`
`Inc., 834 F.3d 376, 389 (3d Cir. 2016).
`
`The landmark case on vicarious liability for infringing copyrighted musical
`
`recordings is Shapiro, Bernstein & Co. v. H. L. Green Co., 316 F.2d 304 (2d Cir. 1963).
`
`There a department store was held accountable for the infringing sale of “bootleg”
`
`records by a concessionaire operating in its stores. Id. at 307–308. The store retained
`
`the ultimate right to supervise the concessionaire and its employees, demonstrating
`
`its control over the infringement. And the store received a percentage of every record
`
`sale, “whether ‘bootleg’ or legitimate,” giving it “a most definite financial interest” in
`
`the infringing sales. 2 Id.
`
`2 In an analysis that courts still use today, the Shapiro court contrasted two types of
`relationships: (1) landlords and tenants and (2) dance halls and bands. Shapiro, 316 F.2d at 307; see
`Sony, 464 U.S. at 437 n.18 (picking up this comparison); Leonard, 834 F.3d at 388–389 (same). A
`landlord is not vicariously liable for a tenant’s copyright infringement, the court explained, because he
`exercises no supervision over the tenant and charges a fixed rental fee regardless of whether the tenant
`infringes copyrights in the rented house. Shapiro, 316 F.2d at 307. But the dance hall proprietor who
`
`

`

`(12a)
`
`Courts have recognized, however, that a defendant may possess a financial
`
`interest in a third party’s infringement of copyrighted music even absent a strict
`
`correlation between each act of infringement and an added penny of profits. For
`
`example, Fonovisa concerned the operator of a swap meet who allowed vendors to sell
`
`infringing records. The complaint alleged that the operator collected “admission fees,
`
`concession stand sales and parking fees”—but no sales commission—“from customers
`
`who want[ed] to buy the counterfeit recordings at bargain basement prices.”
`
`Fonovisa, 76 F.3d at 263. These allegations sufficed to state a direct financial benefit
`
`to the swap meet operator, the court held, because “the sale of pirated recordings at
`
`the . . . swap meet [was] a ‘draw’ for customers.” Id. The infringing sales “enhance[d]
`
`the attractiveness of the venue to potential customers,” giving the swap meet operator
`
`a financial interest in the infringement sufficient to state a claim for vicarious
`
`liability. Id.
`
`Applying these principles to copyright infringement in cyberspace, courts and
`
`Congress agree that “‘receiving a one-time set-up fee and flat periodic payments for
`
`service’” from infringing and noninfringing users alike ordinarily “‘would not
`
`constitute receiving a financial benefit directly attributable to the infringing
`
`activity.’” Ellison v. Robertson, 357 F.3d 1072, 1079 (9th Cir. 2004) (quoting S. Rep.
`
`105-190, at 44 (1998)). But “‘where the value of the service lies in providing access to
`
`hires a band can control the premises, and the band’s infringing performances of copyrighted songs
`“provide the proprietor with a source of customers and enhanced income,” exposing him to vicarious
`liability. Id.
`
`

`

`(13a)
`
`infringing material,’” those flat fees may constitute a direct financial benefit. Id.
`
`(quoting S. Rep. 105-190, at 45).
`
`For example, the file-sharing service Napster had a direct financial interest in
`
`its users’ exploitation of copyrighted music. An increasing volume of pirated music
`
`available for download drew more users to register with Napster, and its “future
`
`revenue [was] directly dependent upon increases in userbase.” Napster, 239 F.3d at
`
`1023 (internal quotation marks omitted).
`
`By contrast, America Online (AOL) was not vicariously liable for copyright
`
`infringement occurring over an online forum to which it provided its subscribers
`
`access. Although access to online forums encouraged overall subscription to AOL’s
`
`services, there was no direct financial benefit from infringement where no evidence
`
`indicated “that AOL customers either subscribed because of the available infringing
`
`material” or “canceled subscriptions” when the material was no longer available.
`
`Ellison, 357 F.3d at 1079. Without “evidence that AOL attracted or retained
`
`subscriptions because of the infringement or lost subscriptions because of [its]
`
`eventual obstruction of the infringement,” “no jury could reasonably conclude that
`
`AOL received a direct financial benefit from providing access to the infringing
`
`material.” Id.
`
`As these cases illustrate, the crux of the financial benefit inquiry is whether a
`
`causal relationship exists between the infringing activity and a financial benefit to
`
`the defendant. If copyright infringement draws customers to the defendant’s service
`
`or incentivizes them to pay more for their service, that financial benefit may be profit
`
`

`

`(14a)
`
`from infringement. See, e.g., EMI Christian Music Grp., Inc. v. MP3tunes, LLC, 844
`
`F.3d 79, 99 (2d Cir. 2016). But in every case, the financial benefit to the defendant
`
`must flow directly from the third party’s acts of infringement to establish vicarious
`
`liability. See Grokster, 545 U.S. at 930 & n.9; Nelson-Salabes, 284 F.3d at 513.
`
`To prove vicarious liability, therefore, Sony had to show that Cox profited from
`
`its subscribers’ infringing download and distribution of Plaintiffs’ copyrighted songs.
`
`It did not.
`
`The district court thought it was enough that Cox repeatedly declined to
`
`terminate infringing subscribers’ internet service in order to continue collecting their
`
`monthly fees. Evidence showed that, when deciding whether to terminate a
`
`subscriber for repeat infringement, Cox considered the subscriber’s monthly
`
`payments. See, e.g., J.A. 1499 (“This customer will likely fail again, but let’s give him
`
`one more chan[c]e. [H]e pays 317.63 a month.”). To the district court, this
`
`demonstrated the requisite connection between the customers’ continued
`
`infringement and Cox’s financial gain.
`
`We disagree. The continued payment of monthly fees for internet service, even
`
`by repeat infringers, was not a financial benefit flowing directly from the copyright
`
`infringement itself. As Cox points out, subscribers paid a flat monthly fee for their
`
`internet access no matter what they did online. Indeed, Cox would receive the same
`
`monthly fees even if all of its subscribers stopped infringing. Cox’s financial interest
`
`in retaining subscriptions to its internet service did not give it a financial interest in
`
`its subscribers’ myriad online activities, whether acts of copyright infringement or
`
`

`

`(15a)
`
`any other unlawful acts. An internet service provider would necessarily lose money if
`
`it canceled subscriptions, but that demonstrates only that the service provider profits
`
`directly from the sale of internet access. Vicarious liability, on the other hand,
`
`demands proof that the defendant profits directly from the acts of infringement for
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`which it is being held accountable.
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`Sony responds that, even if we disagree with the district court, the jury heard
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`other evidence of Cox’s direct financial interest in its subscribers’ copyright
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`infringement. But none of Sony’s alternative theories supports vicarious liability
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`here.
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`First, Sony contends that the jury could infer from the volume of infringing
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`activity on Cox’s network that the ability to infringe was a draw for customers. In
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`support, Sony highlights evidence that roughly 13% of Cox’s network traffic was
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`attributable to peer-to-peer activity and over 99% of peer-to-peer usage was
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`infringing. Even if the jury believed Sony’s characterization that this was a high
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`volume of infringing activity in general, the evidence falls considerably short of
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`demonstrating that customers were drawn to purchase Cox’s internet service, or
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`continued to use that service, because it offered them the ability to infringe Plaintiffs’
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`copyrights. Cf. Ellison, 357 F.3d at 1079. Many activities of modern life demand
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`internet service. No one disputes that Cox’s subscribers need the internet for
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`countless reasons, whether or not they can infringe. Sony has not identified evidence
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`that any infringing subscribers purchased internet access because it enabled them to
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`infringe copyrighted music. Nor does any evidence suggest that customers chose Cox’s
`
`

`

`(16a)
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`internet service, as opposed to a competitor’s, because of any knowledge or
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`expectation about Cox’s lenient response to infringement.
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`Second, Sony asserts that “subscribers were willing to pay more for the ability
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`to infringe,” but the evidence does not go nearly so far. Response Br. 36. Cox had a
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`tiered pricing structure by which it charged customers higher monthly fees for
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`increased data allowances. According to Sony, peer-to-peer activity is “bandwidth-
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`intensive,” “more data usage requires more speed,” and Cox advertised its network
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`speeds in relation to how quickly a user could download songs. Response Br. 37.
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`Further, Sony explains, “residential subscribers who were the subject of 20 or more
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`infringement notices from 2012 [to] 2014 paid Cox more per month, on average, than
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`residential subscribers who were the subject of only 1 or 2 infringement notices.”
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`Response Br. 34.
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`None of this raises a reasonable inference that any Cox subscriber paid more
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`for faster internet in order to engage in copyright infringement. As Sony’s expert
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`testified, other data intensive activities include legally streaming movies, television
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`shows, and music, as well as playing video games. Subscribers may have purchased
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`high speed internet for lawful streaming and downloads or because their households
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`had many internet users; Sony’s expert didn’t claim to know why any customer
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`purchased a higher tier of service. Sony has not identified any evidence that
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`customers were attracted to Cox’s internet service or paid higher monthly fees
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`because of the opportunity to infringe Plaintiffs’ copyrights.
`
`

`

`(17a)
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`At bottom, Sony offered no legally adequate theory to establish the required
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`causal connection between subscribers’ copyright infringement and increased
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`revenue to Cox. While Cox profited from the sale of internet service, Sony has not
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`shown that Cox, in any sense, had a financial interest in its subscribers committing
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`infringement. See Costar Grp., 373 F.3d at 550. And it is the infringement itself that
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`must in some fashion profit the defendant for vicarious liability to attach.
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`Accordingly, under the correct legal standard, no reasonable jury could find that Cox
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`received a direct financial benefit from its subscribers’ infringement of Plaintiffs’
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`copyrights. We therefore conclude that Cox is not vicariously liable for its subscribers’
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`copyright infringement and reverse the district court’s denial of Cox’s motion for
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`judgment as a matter of law.
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`III.
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`We turn next to contributory infringement. Under this theory, “‘one who, with
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`knowledge of the infringing activity, induces, causes or materially contributes to the
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`infringing conduct of another’ is liable for the infringement, too.” CoStar Grp., 373
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`F.3d at 550 (quoting Gershwin Pub., 443 F.2d at 1162). The district court resolved the
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`question of Cox’s knowledge on summary judgment, while the jury found material
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`contribution at trial, so we address Cox’s challenge to each element separately.
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`A.
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`We review the district court’s grant of summary judgment de novo, applying
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`the same standard the district court was required to apply. See Variety Stores, Inc. v.
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`Wal-Mart Stores, Inc., 888 F.3d 651, 659 (4th Cir. 2018). Summary judgment is
`
`

`

`(18a)
`
`appropriate when “there is no genuine dispute as to any material fact and the movant
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`is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).
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`Our Court has recently clarified the intent necessary to prove contributory
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`infringement by an internet service provider based on its subscribers’ direct
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`infringement. In BMG Rights Management v. Cox Communications, we held that
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`intent to cause infringement may be shown by willful blindness—which is not at issue
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`in this appeal—or by “know[ledge] that infringement [was] substantially certain to
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`result from the sale” of internet service to a customer. 881 F.3d at 307. General
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`knowledge of infringement occurring on the defendant’s network is not enough;
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`“[s]elling a product with both lawful and unlawful uses suggests an intent to cause
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`infringement only if the seller knows of specific instances of infringement.” Id. at 311.
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`Applying these principles to Cox in that case, we held that Cox could not be
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`contributorily liable absent “knowledge that infringement [was] substantially certain
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`to result from Cox’s continued provision of Internet access to particular subscribers.”
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`Id.
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`As BMG suggests, in this scenario, knowledge that particular subscribers are
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`substantially certain to infringe is a predictive question. We reasoned in BMG that
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`knowledge of past infringement is relevant to proving this element. See id. at 308.
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`Here, Cox produced data purporting to show the effectiveness of each step of its
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`thirteen-strike policy at reducing future infringement, which could also be relevant.
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`And Sony highlights internal emails implying that Cox continued providing internet
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`service to certain habitual infringers despite believing they would infringe again. A
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`

`

`(19a)
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`jury could consider this and other evidence to determine whether, when Cox
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`continued providing internet service to customers receiving three or more
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`infringement notices, it knew they were substantially certain to infringe Plaintiffs’
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`copyrights by, for example, downloading another song or distributing a song they had
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`previously downloa