Misuse is common. Liability is conditional..
In 2026, the U.S. Supreme Court delivered two major decisions that could redefine when businesses are on the hook for how customers misuse their products. The message is clear: simply providing a service that gets misused isn’t enough to trigger liability — unless the business actively helps make it happen.
The two decisions — Cox Communications, Inc. v. Sony Music Entertainment and Hikma Pharmaceuticals USA Inc. v. Amarin Pharma, Inc. — come from different industries, but their implications apply to nearly every industry.
By way of background, I am a Century City media, business, and technology attorney focused on the intersection of law, media, and technology — particularly AI, data use, platform liability, and intellectual property. I also teach at USC Gould School of Law and USC Annenberg, and I am a contributor for Inc. Magazine.
What happened in Cox?
The Cox and Sony Music case involved claims that the internet service provider should be held responsible for the subscribers’ infringement of Sony Music copyrights. The basic allegation was Cox knew some of its customers were repeatedly infringing on the music copyrights of Sony and failed to terminate those accounts.
The Supreme Court drew a line between providing a lawful service that some customers choose to misuse and actively inducing infringement. That distinction matters because internet access, cloud services, social platforms, AI systems, and other infrastructure can all be misused by consumers.
What happened in Hikma?
In the second case, the drug patent holder, Amrin, claimed the generic drug manufacturer, Hikma, induced patent infringement when doctors and pharmacists prescribed its generic drug for a patented use not included on the generic label.
The Supreme Court rejected the inducement theory. The core lesson was like the Cox case. Indirect liability requires more than a lawful product being used in an infringing way by the consumer.
Why do the two cases matter together?
The Cox and Hikma cases did not involve the same legal doctrine. However, the Supreme Court decisions can apply across all industries, including yours.
Even though your company may know its product or service could be misused, knowledge of misuse is not an inducement by your company. For example, your platform may receive complaints about bad actors, or your company may understand that some users will push tools beyond lawful boundaries. However, failure to eliminate this misuse is not the same thing as participating in it.
That does not mean your company is free to ignore infringement or fraud on your platforms and services. Willful blindness, design choices, or marketing that encourages unlawful use can still create legal exposure. Just look at the recent Meta verdict to understand how Meta was responsible for the design choices it made for its platforms.
What companies should take away?
The practical takeaway is that your business is not automatically responsible for every downstream act committed by your users, vendors, or third parties.
The risk question is no longer simply: “Did your company know misuse was possible?” The better question is: “Did your company actively encourage it, design for it, materially support it after specific notice, or turn a blind eye to known infringement?”
That distinction may become one of the most important legal lines for modern technology and platform businesses in the future.
This article was originally published by Inc. June 27, 2026.