Written by: Haim Ravia, and Dotan Hammer
In an appeal by the Texan internet service provider (ISP) Grande Communication Networks LLC (“Grande”), a U.S. federal court of appeals upheld the lower court’s decision finding the ISP liable for copyright infringements and pirating practices committed by its subscribers. However, the court of appeals dismissed the nearly $47 million dollar jury verdict of the lower court.
In the lower federal district court, The ISP was found liable for contributory copyright infringement due to the direct nexus between the ISP’s network and infringements made by users in peer-to-peer file-sharing networks. The court found that the ISP “provided those subscribers with the tools necessary to conduct those infringements” while having knowledge of these actions. The court found the ISP failed to adopt or reasonably implement policies to terminate repeat infringing subscribers which would have provided the ISP with a defense in the Digital Millennium Copyright Act (DMCA).
The ISP took issue with the lower court’s decision that it did not take “simple measures” to prevent infringements. The ISP asserted that implementing such a measure would essentially require it to terminate users’ internet access too easily, as compared to media platforms that could target specific infringing content by removing it. Thus, the ISP claimed, the court lowered the bar of liability. The appeals court rejected the argument, stating that the ISP could have terminated high-speed internet services to known repeat infringers. The court cited a similar practice used by the ISP when users fail to pay their monthly fees.
The ISP also relied on the Twitter vs. Taamneh Supreme Court decision, where Twitter and other social media platforms were found not to be aiding and abetting international terrorism due to ISIS posts on their platforms. The court rejected that claim, explaining that it leaned on a precedent not rooted in copyright law, and thus cannot be used to challenge fundamental principles of copyright liability.
The jury verdict found the ISP liable for contributing to users pirating more than 1,403 songs, leading to the $47 million verdict. The court of appeals rejected the damages calculation granting statutory damages individually for each of the 1,403 songs. Instead, the court of appeals treats songs from the same album as a single protected work. The court of appeals remanded the case to the district court for a new trial on damages.
Click here to read the court’s decision in UMG Recordings, Incorporated v. Grande Communications Networks LLC.
