At the end of 2022, several of the world's largest music companies, including Warner Bros. and Sony Music, prevailed in your demand against Internet provider Grande Communications.
Record labels accused the Astound-owned ISP of not doing enough following complaints about subscriber piracy. Specifically, the record labels alleged that the company failed to fire repeat offenders.
The trial lasted more than two weeks and ended with a resounding victory for the record companies. A federal jury in Texas found Grande guilty of willful copyright infringement and ISP was ordered to pay $47 million in damages to the record companies.
$47 million appeal
Last September, Grande presented her brief opening in which he again argued that the lower court reached the wrong conclusion. Internet providers should not be held responsible for hacking customers based on third-party accusations, the company said.
Among other things, the ISP believes that it should not have to interrupt Internet access so easily. This view was supported by several telecommunications industry groups, who oppose disconnecting subscribers' Internet access based on copyright claims.
record labels countered the appeal, arguing that the jury's verdict should be confirmed. Any other outcome would make addressing the problem of online piracy nearly impossible.
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 rights holders or their anti-piracy partners sent infringement notices to Grande, the ISP was the only party that could address this conduct.
Grande responds to tags
This week, Grande filed a response brief in which she contradicts the music companies' arguments. The ISP maintains that it should not be held responsible for subscriber piracy, citing last year's report.Twitter against Taamneh' Supreme Court ruling.
The US Supreme Court held that social media platforms are not responsible for ISIS terrorists who used their services to recruit and raise funds. Similarly, Grande believes that he should not be held responsible for subscribers who pirate content.
Record labels previously argued that the Supreme Court ruling should not be directly translated into the 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 the Supreme Court's decision is directly relevant and quite essential.
โThe central issue of contributory copyright infringement before the Court is whether providing an Internet service to a direct copyright infringer, alone, is sufficient to support contributory liability. The Supreme Court recently made it clear that it does not,โ writes the ISP.
Grande cites the Supreme Court, which concluded that it would โoverride typical limits of tort liabilityโ if it โeffectively held any type of communications provider liable for any type of wrongdoing simply for knowing that infringers were using its services and failing to stop them.โ "
โDramatic expansion of copyright liabilityโ
The ISP notes that record labels are essentially asking the Court to authorize a dramatic expansion of liability for secondary copyright infringement. This means that if an ISP does not take โsimple stepsโ to stop piracy, it becomes liable for the activity.
However, if the appeals court relies on the recent Supreme Court ruling, Grande should not be held liable. This leaves the court with two options, Grande says.
(1) Follow Supreme Court precedents on the proper scope of secondary liability for copyright infringement (as Grande maintains)
(2) Deem those precedents inapplicable and instead expand tax liability (as the district court did) by adopting the Ninth Circuit's โsimple measures.โ
In her attempt to avoid liability, Grande explicitly points the finger at other parties in the BitTorrent ecosystem, while highlighting that rights holders have the option of suing pirates directly.
Sue pirates, torrent sites or torrent client developers
Record labels have previously argued that it is important to hold ISPs accountable because they are the only party that can match IP addresses to individual subscribers; Grande does not deny it. Instead, he notes that rights holders can use the information to sue pirates directly.
"They can file a lawsuit against an alleged infringer known only by their IP address and then serve a subpoena to the ISP to obtain their identity," Grande explains.
The Supreme Court rejected the claim that Twitter and others aided and abetted the terrorist activity because they did not โknowingly and culpablelyโ participate in the illegal activity. According to Grande, Internet providers are even further removed from any irregularity.
Another option would be to go after torrent site operators or BitTorrent client developers, the ISP adds.
"Record labels can also file lawsuits against people who actually induce and encourage the sharing of BitTorrent files, such as the creators and distributors of BitTorrent software and the operators of BitTorrent websites," Grande writes.
"That it may be easier for labels to sue Grande is not a legitimate basis for expanding the scope of common law contributory liability."
Grande does not explain why or when torrent client developers should be held responsible for piracy. Popular torrent sites and clients that distribute this software are usually content-neutral and do not actively encourage piracy. That's similar to the defense Grande relies on.
โISPs that actively encourage infringement (for example, by instructing customers how to engage in piracy) would be contributorily liable. โISPs that simply provide content-neutral Internet access to their subscribers would not do so.โ
Material contribution
The ISP adds that it did not materially contribute to any copyright infringement. Rather, he maintains that his actions stayed away from any hacking activity.
โGrande neither 'facilitated' nor 'provided tools' for copyright infringement, however those terms are understood. The only affirmative thing Grande did was provide content-neutral Internet service to all of her customers.โ
The answer again raises 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 get a mention.
โEach of these actors plays a direct role in the sharing of copyrighted music files through BitTorrent. Grande, on the other hand, is far removed from the offending behavior,โ Grande writes.
Going forward
We assume that many of the parties mentioned will strongly disagree with the suggestion that they could be responsible for piracy. Likewise, record labels will also have a different view on the matter, as will become clear as the case progresses.
The above is only a small selection of the arguments and counterpoints presented in the 70-page response brief. Among other things, it also reiterates that it would be a โdraconian overreactionโ to cut off Internet connections because someone in a household may be hacking.
What is clear, however, is that there is a lot at stake in this case. Not only for the $47 million at stake here, but also for other ISPs and their subscribers.
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A copy of Grande's response brief, filed with the U.S. Court of Appeals for the Fifth Circuit, is available available here (pdf).
