In late 2022, several of the world’s largest music companies, including Warner Bros. and Sony Music, s ecured a key victory against Grande Communications.

A Texas federal jury found the Internet provider liable for willful contributory copyright infringement and ordered it to pay $46.8 million in damages , after Grande failed to disconnect pirating subscribers.

The verdict was a milestone in the recording industry’s campaign to hold ISPs responsible for their subscribers’ piracy. The ruling was later affirmed on appeal by the Fifth Circuit, which also vacated the damages award , sending that question back for a new trial.

That new trial might not come after Cox v. Sony changed the playing field. In March, the Supreme Court reversed a billion-dollar verdict against Cox Communications, holding that an Internet provider is not liable for contributory infringement simply because it keeps serving subscribers it knows have been flagged for piracy.

A few weeks later, the Supreme Court also wiped out the Grande verdict , ordering the Fifth Circuit to reconsider the case in light of the new standard.

Labels Offer to Walk Away

That reconsideration process was set in motion but, according to new filings submitted by both parties last week, it appears that the record labels are ready to throw in the towel.

In their supplemental letter brief, filed on Wednesday, the record labels effectively inform the court they are done.

“The Cox decision represents a material intervening change in law governing contributory copyright infringement by internet service providers. Plaintiffs do not
intend to litigate the merits of this case further in light of the new standard,” the labels write.

This offer to retreat is in line with earlier decisions in ISP liability cases. Since the Cox ruling, the labels have already dropped similar lawsuits against Altice and Verizon , for example.

The music companies say they informed Grande of their “willingness to dismiss the case voluntarily”. That would be with prejudice and with both parties paying their own bills. However, Grande does not agree.

Grande Wants More

Instead of simply dismissing the matter, Grande prefers to end the case with a clear win. In their own letter, the ISP asks the Fifth Circuit to “render judgment in favor of Grande” and declare that the labels cannot win under the new standard.

“The Court should render judgment for Grande. Because the Labels cannot prove contributory infringement under Cox, there is ‘no clear benefit to remanding
this case to the district court’,” the ISP argues.

This isn’t just a matter of principle, there’s a significant amount of money at stake too. To postpone that payment of the $46.8 million judgment during the appeal, the company had to post a bond, and it says the premiums added up.

According to the labels, Grande previously communicated that it incurred roughly $4 million in bond premium costs.

The record labels are pushing back hard against this potential multi-million dollar bill. They accuse the ISP of needlessly inflating its own costs by waiting over nine months to discharge the bond after the initial damages award was vacated.

In addition, the labels argue that any potential payout should be offset by $191,618 in unpaid sanctions that Grande still owes them for filing a “meritless” motion earlier in the litigation.

It’s worth stressing that Grande has not mentioned an exact cost figure in its letter. The exact amount will likely be detailed later, if it gets that far.

It is now up to the Fifth Circuit to decide whether this case should end quietly, by simply vacating the earlier judgment and splitting the costs. Alternatively, it can grant Grande a formal win on the merits, with potential compensation for the costs it made.

—

The record labels’ supplemental letter brief, filed last week, at the U.S. Court of Appeals for the Fifth Circuit, is available here (pdf) . Grande’s supplemental letter brief can be found here (pdf) .

From: TF , for the latest news on copyright battles, piracy and more.