Major Labels Want ISP to Pay Additional $12 Million in Piracy Liability Case

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In 2022, a group of major recording labels won $47 million in damages from Internet provider Grande Communications. Now, just a few months later, the music companies say they're entitled to more. To compensate for attorneys fees and interest, the labels are seeking over $12 million, a request that has sparked opposition from Grande.

grande astoundLast fall, 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 took more than two weeks to complete 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.

U.S. District Court Judge David Ezra confirmed the judgment on January 31st, but the legal dispute is not over yet. Grande asked the court to either overrule the verdict or grant a new trial. If those options fail, the Internet provider plans to file an appeal.

Music Labels Want $12 Million Extra

While Grande is playing defense, the major music labels are taking a more offensive approach with demands for more compensation. In addition to the previously awarded $47 million in damages, they recently requested an additional $12.7 million in attorney fees, interest, and other costs.

Courts have the freedom to issue this type of compensation when warranted. The labels say this is a prime example of when such an award is appropriate.

In a detailed motion, the music companies explain that Grande was well aware of its misconduct. The company willingly ignored piracy notifications and stopped terminating subscribers based on these accusations, as was admitted at trial.

“[R]ather than acknowledge its wrongdoing and address its role in contributing to the widespread infringement of Plaintiffs’ copyrights, Grande litigated this case aggressively from start to finish.

“At trial, Grande still did not acknowledge any wrongdoing, but instead manufactured arguments about the reliability of the notices of infringement it received that were admittedly never asserted (or even considered) by Grande during the relevant time period.”

Flouting Of And Disdain For The Law

Grande has repeatedly argued that it didn’t act on the notices sent by tracking firm Rightscorp because it doubted their accuracy. The ISP was under the impression that it didn’t have to act on the notices and suggested that it would continue to ignore them if the jury agreed.

The labels say that Grande made no attempts to determine the accuracy of the notices before the ISP was taken to court. According to the music labels, the suggestion that the ISP might not have to act on piracy notices is illustrative of Grande’s “disdain” for the law.

“Most egregiously, Grande even argued to the jury that, if it were found not to be liable in this case, it would again ignore the infringing conduct of its subscribers,” the labels write.

The labels conclude that since Grande’s “intentional flouting of and disdain for the law” must be deterred, the additional $12.7 million in attorney fees, interest, and other costs is warranted.

Grande Responds

Grande opposed the request a few days ago. Calling on the court to deny the music companies any additional money, the ISP says that the statutory damages awarded by the jury already represent a windfall for the labels.

Grande believes the $47 million award is already more than any actual losses attributable to piracy activity.

“Plaintiffs have already obtained a recovery that far exceeds any reasonable estimation of actual harm they suffered — indeed, Plaintiffs never even attempted to prove the amount of any loss. Thus, there is no rationale supporting an additional monetary award,” Grande writes.

The ISP also rejects suggestions that it flouted the law or that its defense was unreasonable. On the contrary, whether the copyright notices sent by Rightscorp were sufficient to establish liability was a key question to be answered at trial.

Based on these and other arguments, Grande believes that the court should reject the labels’ motion for attorneys fees, interest, and additional costs.

Whatever the court decides, this case is far from over. And with dozens of millions at stake, both sides are expected to fight tooth and nail.

A copy of the music labels’ motion is available here (pdf) and Grande’s response can be found here (pdf)


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