“Never Terminate” Policy: Music Labels Slam Grande’s Supreme Court Piracy Appeal

Major music companies have fired back at Grande Communications' Supreme Court plea, arguing that the ISP's questions about copyright liability are "utterly divorced from reality". They note that the ISP's liability is not the result of shortcomings in copyright law, but from Grande's own "egregious" policy of never terminating even the most rampant infringers.

cassette tape pirate musicLate 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.

A Texas federal jury found Grande guilty of willful contributory copyright infringement, and the ISP was ordered to pay $47 million in damages.

The copyright infringement verdict was confirmed by the Fifth Circuit Court of Appeals but the lower court’s decision on how damages should be calculated was overturned. A new trial will determine the appropriate amount but in the meantime, Grande continues to protest the liability ruling.

Grande Petitions Supreme Court

Earlier this year, Grande asked the Supreme Court to intervene. The Internet provider argued that current law lacks clear standards for handling copyright infringement notices or terminating subscriber accounts.

The petition asked the Supreme Court to answer two key questions, which Grande phrased 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.”

Assuming that third-party notices are valid, other questions also remain unanswered. For example, is it fair to disconnect subscribers from vital services? How many notices should trigger a disconnection when ISPs receive millions of them? And should subscribers be protected in any way?

Grande essentially argues that the DMCA, as it’s written, is too ambiguous to handle the present repeat infringer conundrum. Ideally, the law should be clarified but for now it hopes that the court can provide additional clarity.

Music Companies: Rampant Infringement

Last week, the music companies responded to Grande’s argument. In an opposition brief, they note that the questions posed by the ISP are “utterly divorced from reality” and not worth the Court’s attention.

The brief counters the ISP’s focus on subscribers for which it received two copyright infringement notices, noting that the ISP had no intention of disconnecting any subscribers, no matter how many notices they received.

The music companies contend that Grande’s situation is not a symptom of confusing laws, but a consequence of its own “egregious” policies.

“In truth, Grande had a policy to never terminate service to a customer for engaging in copyright infringement,” the music companies write.

“The trial record demonstrated that Grande knew that dozens of its users infringed more than 1,000 times—and one infringed nearly 14,000 times— annually, yet Grande did nothing in response.”

The music companies stress that Grande had no problem terminating subscribers who didn’t pay their bills. However, when rightsholders repeatedly complained about pirating subscribers, it took no action.

The DMCA clearly states that ISPs must adopt and implement a repeat infringer policy to benefit from safe harbor protection. However, according to the music companies, Grande’s policy was to keep servicing these subscribers instead.

Supreme Court or Congress?

All in all, the plaintiffs see no reason for the Supreme Court to take on this case. If Grande believes that the DMCA safe harbor definitions should be changed, it should petition lawmakers, the music companies add.

“If Grande thinks the safe harbor should be radically expanded to allow the kind of shocking disregard for copyrights it displayed, it should take that up with Congress, not this Court.”

After hearing the positions of both sides, it is now up to the Supreme Court to decide whether it will take on this case or not.

Interestingly, this is not the only repeat infringer case currently under review. Last year, Cox Communications filed a similar petition, warning that the current situation could have devastating consequences for the ISP industry and the public.

The Supreme Court previously signaled interest in the issue. While it’s yet to accept the petition, the Court requested the U.S. Solicitor General’s views, to hear what the Government thinks about the matter.