Supreme Court Asked to Resolve ISP’s Copyright Piracy Conundrum

Can internet service providers be held liable for pirating subscribers? Internet provider Grande Communications asked the Supreme Court to review this key question. With no clear standards for handling copyright infringement notices, internet service providers are caught between a rock and a hard place, Grande argues. In its petition, the ISP highlights the need to resolve the "scattershot" approach to ISP liability, seeking a more defined and workable solution.

cassette tape pirate musicIn 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 guilty of 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 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

Last week, Grande filed a petition at the Supreme Court, urging the justices to take up the case and review the Fifth Circuit’s decision.

The petition centers on the crucial question of ISP liability in cases of contributory copyright infringement. Grande frames 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, as presented in the petition, 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.”
The Fifth Circuit and other courts in related cases have confirmed that ISPs can be held liable. Grande vehemently disagrees, likewise Cox Communications, which filed a similar petition at the Supreme Court last year. The ISPs warn that the status quo could have devastating consequences for the ISP industry and the general public.

grande supreme court
In its petition, Grande highlights splits in lower courts regarding the standard for contributory copyright infringement. It also mentions the Supreme Court’s recent Twitter v. Taamneh ruling, which stated that there is no “duty” for online platforms to “terminate customers after discovering that the customers were using the service for illicit ends.”

What makes matters worse in this case, according to the ISP, is that it’s not clear how services should deal with copyright infringers going forward.

Unworkable Uncertainty

Grande notes that despite lower court decisions, the practical uncertainties for Internet providers remain. Faced with “crushing liability”, ISPs might be more eager to disconnect subscribers, even if they have no faith in the validity of copyright infringement notices.

Even if the notices are valid, other questions 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?

“Respondents ignore the significant practical challenges that ISPs face in making termination decisions, especially without any clear framework dictating when action is required—or what process and protections subscribers should receive,” the petition reads

“Respondents’ position is unworkable and deeply concerning. It misstates the law and produces grave practical problems. It will interfere with the entire ISP industry and unduly harm innocent subscribers.”

The current precedents are based on the DMCA, which in its own right leaves many questions unanswered. There’s no clear definition of what a proper “repeat infringer” policy should look like, or what thresholds warrant Internet disconnections. These uncertainties remain, despite earlier verdicts.

Legal and Practical States

The petition notes that the current situation has astounding implications that warrant urgent intervention. Internet providers should be able to operate under clearly defined terms, Grande notes.

“This Court has long recognized the importance of protecting key industries from undue interference and preserving clear, efficient, workable rules for regulated actors. Yet while respondents pitch their position as straightforward, nothing about their proposed scheme is simple or easy.”

“They brush aside the real-world challenges it thrusts upon others, and shrug at the severe hardship it would impose on families, businesses, schools, hospitals, and major institutions. It endangers jobs, livelihoods, health, education, emotional wellbeing, and political engagement.”

Grande says that the current situation works well for rightsholders, as they have the power to ‘force’ ISPs to terminate accounts of alleged copyright infringers. However, this comes at significant costs for ISPs and their subscribers.

A Need for Clear Policy Guidelines

In conclusion, this petition challenges more than just a wrong interpretation of current law, the ISP says. It essentially argues that the DMCA, as written, is too ambiguous to handle the present conundrum.

“At bottom, this is a policy question for the political branches,” Grande writes, adding that “it needs a regulatory framework with settled rules, clear enforcement mechanisms, and unambiguous legislative guidance.”

“It should not be announced in scattershot fashion by district-court judges on an ad-hoc basis—a process that will wreak havoc on the public and the entire ISP industry for potentially decades.”

For this reason, Grande hopes that the Supreme Court will take on this case. If not in isolation, then as a companion to the petition that Cox filed on this “exceptionally important issue” last year.