Last year, a Texas federal jury found Grande Communications liable for willful contributory copyright infringement and ordered the ISP to pay $47 million in damages to a group of record labels.
The ISP was held liable for infringing 1,403 copyrighted songs, as it failed to terminate persistent pirates’ internet access.
District Court Judge David Ezra confirmed the judgment in January. This prompted the ISP to request a do-over but that motion was ultimately declined. As a result, Grande took the matter to the appeals court.
Last month, Grande filed its opening brief in which it again argued that the lower court reached the wrong conclusion. Internet providers shouldn’t be held liable for pirating customers based on third-party allegations, the company argues.
“This appeal presents important questions of first impression in this Circuit about whether, and in what circumstances, an internet service provider may be held secondarily liable for the conduct of users of its service,” the ISP writes.
The ISP believes that it shouldn’t have to terminate Internet access this easily. This view is bolstered by a recent Supreme Court decision in favor of Twitter and other social media platforms, which held that they’re not liable for terrorist messages.
Grande is not alone in this appeal. The company is supported by several telecoms organizations, through a joint amicus curiae brief submitted by broadband association USTelecom and the the CTIA, which represents wireless providers.
Terminating Internet Access a Basic Measure?
According to Grande, the District Court went too far when it informed the jury that a provider can be found liable for contributory infringement if it didn’t take “basic measures” to terminate accounts of repeat infringers. According to Grande, this strong language lacks nuance.
The ISP notes that the ‘basic measures’ theory first emerged more than two decades ago in the Napster lawsuit. In that case, however, Napster failed to remove pirated tracks from its servers, while ISPs only pass on bits and bytes.
“The ‘simple measures’ or ‘basic measures’ theory has its roots in the Labels’ case against Napster. […] Before filing suit, the Labels notified Napster of specific infringing files available on Napster’s service, but Napster declined to remove them.”
The common feature of these cases is that the ‘simple measures’ standard has only been applied to defendants who directly control online content. That is because those defendants can readily remove or disable access to specific infringing content.
The amici support this argument while going into more detail on how Internet terminations can affect the public. They believe that Internet terminations should not be taken lightly.
‘Drastic and Overbroad’
USTelecom and CTIA point out that terminating Internet access can have a negative impact beyond the alleged wrongdoers. It could impact entire households, coffee shops, offices, schools, libraries, or hospitals. That doesn’t qualify as a “basic measure”.
“Termination thus prevents everyone — in a household, coffee shop, office, school, library, or hospital — who relies on a shared internet connection from using the internet for any purpose, whether remote work, accessing educational or health resources, seeking news or other information, or for entertainment.
“It is instead a drastic and overbroad remedy, with severe consequences for non-infringers. Yet the district court’s approach could compel internet service providers to engage in wide-scale terminations to avoid facing crippling damages, like the $1 billion judgment entered against Cox Communications,” the amici add.
These terminations take place with no judicial oversight and run contrary to the initiatives of lawmakers, who freed up billions of dollars to invest in American broadband infrastructure.
“It would also create massive disincentives for providers to invest in the new broadband networks that Congress recognizes are needed to close the digital divide,” the telecoms groups note.
Supreme Court’s Terrorist Ruling
Grande’s appeal also draws heavily on the aforementioned Twitter vs. Taamneh ruling, in which the U.S. Supreme Court recently held that the social media platforms aren’t liable for ISIS terrorists, who used their services to recruit and raise funds.
The Supreme Court rejected the claim that Twitter and others aided and abetted terrorist activity, because it didn’t “consciously and culpably” participate in the illegal activity. According to Grande, Internet providers are even further distanced from any wrongdoing.
“The pleaded allegations in Twitter are illuminating. There, the plaintiffs alleged that Twitter, Facebook, and Google allowed ISIS to upload videos and messages for public display, and that they actively delivered ISIS’s posts to other users based on those users’ information and use history.
“The social media companies failed to remove known ISIS accounts, instead letting ISIS benefit from the companies’ recommendation algorithms…”
The Supreme Court ultimately concluded that the social media companies didn’t engage in purposeful, culpable conduct. Instead, they simply offered their “infrastructure” to the parties. In addition, the Supreme Court suggested that ISPs are even further removed.
“[W]e generally do not think that internet or cell service providers incur culpability merely for providing their services to the public writ large,” the Supreme Court wrote.
The telecoms groups bring up the same case and stress that the Supreme Court ruling suggests that it was an error by the court to hold Grande liable for pirating subscribers. As such, the appeal court should overturn it.
Needless to say, the music companies will have a different take on the matter. They also made this clear when Cox brought up the Twitter ruling a few weeks ago and will likely do the same here.