Late 2022, several of the world’s largest music companies including Warner Bros. and Sony Music prevailed in their lawsuit against Internet provider Grande Communications.
The record labels accused the Astound-owned ISP of not doing enough following complaints about pirating subscribers. Specifically, the labels alleged that the company failed to terminate repeat infringers.
The trial lasted more than two weeks and ended in a resounding victory for the labels. A Texas federal jury found Grande guilty of willful contributory copyright infringement, and the ISP was ordered to pay $47 million in damages to the record labels.
$47 Million Appeal
Last September, Grande filed its opening brief in which it again argued that the lower court reached the wrong conclusion. Internet providers shouldn’t be held liable for pirating customers based on third-party allegations, the company noted.
Among other things, the ISP believes that it shouldn’t have to terminate Internet access so easily. This view was supported by several telecom industry groups, who all object to disconnecting subscribers’ internet access based on copyright claims.
The record labels countered the appeal, arguing that the jury’s verdict should be upheld. Any other outcome would make it almost impossible to tackle the online piracy problem.
The labels explained that ISPs play a central role in BitTorrent-based piracy, as they are the only ones who can link an IP-address to a subscriber. This means that when rightsholders or their anti-piracy partners sent infringement notifications to Grande, the ISP was the only party that could address this conduct.
Grande Responds to Labels
This week, Grande submitted a reply brief in which it counters the music companies’ arguments. The ISP maintains that it shouldn’t be held liable for pirating subscribers, citing last year’s ‘Twitter vs. Taamneh‘ Supreme Court ruling.
The U.S. Supreme Court held that social media platforms aren’t liable for ISIS terrorists who used their services to recruit and raise funds. In a similar vein, Grande believes that it shouldn’t be held liable for subscribers who pirate content.
The record labels previously argued that the Supreme Court ruling shouldn’t be directly translated into a copyright context. That would essentially change the concept of contributory copyright infringement based on a case that has nothing to do with copyright, they reasoned.
Understandably, Grande believes that the Supreme Court decision is directly relevant and quite essential.
“The central contributory copyright infringement issue before the Court is whether providing internet service to a direct copyright infringer, standing alone, is sufficient to support contributory liability. The Supreme Court recently made clear that it is not,” the ISP writes.
Grande cites the Supreme Court, which concluded that it would “run roughshod over the typical limits on tort liability” to “effectively hold any sort of communication provider liable for any sort of wrongdoing merely for knowing that the wrongdoers were using its services and failing to stop them.”
“Dramatic Expansion of Copyright Liability”
The ISP notes that the record labels are essentially asking the Court to authorize a dramatic expansion of secondary copyright infringement liability. This means that if an ISP fails to take “simple measures” to stop piracy, it becomes responsible for the activity.
However, if the court of appeals relies on the recent Supreme Court ruling, Grande should not be held liable. This leaves the court with two options, Grande says.
(1) Follow the Supreme Court’s precedents on the proper scope of secondary liability for copyright infringement (as Grande argues)
(2) Deem those precedents inapplicable and instead expand contributory liability (as the district court did) by adopting the Ninth Circuit’s “simple measures”
In its attempt to avoid liability, Grande explicitly points a finger at other parties in the BitTorrent ecosystem, while also highlighting that rightsholders have the option to sue pirates directly.
Suing Pirates, Torrent Sites, or Torrent Client Devs
The record labels previously argued that it’s important to hold ISPs liable because they are the only party that can match IP addresses to individual subscribers; Grande doesn’t deny that. Instead, it points out that rightsholders can use the information to sue pirates directly.
“They can file a John Doe lawsuit against an alleged infringer known only by IP address and then serve a subpoena on the ISP to obtain their identity,” Grande explains.
The Supreme Court rejected the claim that Twitter and others aided and abetted terrorist activity because it didn’t “consciously and culpably” participate in the illegal activity. According to Grande, Internet providers are even further distanced from any wrongdoing.
Another option would be to go after the operators of torrent sites or the developers of BitTorrent clients, the ISP adds.
“The Labels can also pursue claims against people who actually induce and encourage BitTorrent file sharing, like the creators and distributors of BitTorrent software and the operators of BitTorrent websites,” Grande writes.
“That it may be easier for the Labels to sue Grande is not a legitimate basis for expanding the scope of common law contributory liability.”
Grande doesn’t explain why or when developers of torrent clients should be held liable for piracy. Popular torrent clients and sites that distribute this software are typically content-neutral and don’t actively encourage piracy. That is similar to the defense Grande relies on.
“ISPs that actively encourage infringement — for example, by instructing customers on how to engage in piracy — would be contributorily liable. ISPs that merely provide content-neutral internet access to their subscribers would not.”
Material Contribution
The ISP adds that it did not materially contribute to any copyright infringement. Instead, it argues that its actions remained distanced from any piracy activity.
“Grande neither ‘facilitated’ nor ‘provided tools for’ copyright infringement, however one might understand those terms. The only affirmative thing Grande did was provide content-neutral internet service to all its customers”
The reply again brings up the suggestion that there are many other actors who, unlike Grande, directly enable BitTorrent file-sharing. In addition to mentioning torrent client developers, BitTorrent inventor Bram Cohen, tracker operators, and hosting providers all get a mention.
“Each of these actors plays a direct role in the sharing of copyrighted music files over BitTorrent. Grande, in contrast, stands far removed from the infringing conduct,” Grande writes.
Going Forward
We assume that many of the mentioned parties will entirely disagree with the insinuation that they could be liable for piracy. Similarly, the record labels will have a different outlook on the matter as well, as will become clear as the case progresses.
The above is just a small selection of the arguments and counterpoints presented in the 70-page reply brief. Among other things, it also reiterates that would be a “draconian overreaction” to terminate Internet connections because someone in a household may be pirating.
What’s clear, however, is that the stakes are high in this case. Not just for the $47 million that’s on the line here, but also for other ISPs and their subscribers.
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A copy of Grande’s reply brief, filed at the U.S. Court of Appeals for the Fifth Circuit, is available here (pdf).