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Supreme Court Wipes Piracy Liability Verdict Against Grande Communications
news.movim.eu / TorrentFreak • 8:49 • 3 minutes
In 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 to stop pirating subscribers. Specifically, they 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 liable for willful contributory copyright infringement, and the ISP was ordered to pay $47 million in damages to the record labels. The copyright infringement verdict was confirmed by the Fifth Circuit Court of Appeals, though the Fifth Circuit ordered a new trial on damages.
The verdict was not the final word yet, as Grande petitioned the Supreme Court last year, urging the justices to take up the case and review the Fifth Circuit’s decision.
Grande’s petition centered on the crucial question of ISP liability in cases of contributory copyright infringement. Grande framed the issue as an “exceptionally important question under the Copyright Act,” highlighting a “nationwide litigation campaign by the U.S. recording industry” to hold ISPs liable for copyright violations carried out by their customers.
The central question is as follows:
“Whether an ISP is liable for contributory copyright infringement by (i) providing content-neutral internet access to the general public and (ii) failing to terminate that access after receiving two third-party notices alleging someone at a customer’s IP address has infringed.”
Knowledge is Not Intent
The case and the questions are similar to the Cox v. Sony case , which the Supreme Court decided in favor of the Internet provider last month. In a 7-2 decision, it concluded that an ISP cannot be held contributorily liable for copyright infringement merely because it kept providing service to subscribers that were flagged for piracy.
In Cox, the Supreme Court stated that contributory liability requires proof that the provider intended its service to be used for infringement. That intent can only be shown in one of two ways. Either the provider actively induced infringement, or the service is one that has no substantial non-infringing uses.
“Under our precedents, a company is not liable as a copyright infringer for merely providing a service to the general public with knowledge that it will be used by some to infringe copyrights. Accordingly, we reverse,” Justice Thomas wrote in the opinion last month.
The Court also directly countered the Fourth Circuit’s reasoning, which held that supplying a product with “knowledge” of future infringement was enough to establish liability.
Supreme Court Sends Grande v. UMG Back to Fifth Circuit
With Cox v. Sony now settled, the Supreme Court turned its attention to Grande’s pending petition. Rather than taking up the case on the merits, the Court issued a GVR order , granting the petition, vacating the Fifth Circuit’s judgment, and remanding the case for reconsideration under the Cox standard.
The order effectively removes the case from the Supreme Court docket, urging the Fifth Circuit Court of Appeals to take another look at its decision in light of the new ruling.
Given the similarities between the two cases, it is no surprise that the Supreme Court came to this conclusion.
It is now up to the Fifth Circuit to revisit whether Grande’s conduct meets the intent threshold that was established in Cox. That is a significantly higher bar than the one applied in the original verdict, which found that continuing to provide service to known infringers was enough to establish material contribution.
The music companies previously said they sent over a million copyright infringement notices, but that Grande failed to terminate even a single subscriber account in response. However, without proof of active inducement, these absolute numbers carry less weight now.
Whether this translates into a win for Grande on remand remains to be seen. For now, however, the original $47 million verdict is further away than ever.
This week’s GVR order is just one of the many ripple effects of the Sony ruling on other contributory infringement cases. Last week, we reported how X already asked the court to dismiss its liability battle with several music publishers. Meanwhile, the ruling will also directly impact Verizon’s repeat infringer battle with the music industry.
From: TF , for the latest news on copyright battles, piracy and more.
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