• by Wendy Davis  @wendyndavis, October 10, 2024

Siding with the record industry, a federal appellate court has upheld a finding that Grande Communications contributed to copyright infringement by failing to disconnect internet subscribers who were accused of unlawfully sharing music.

In an opinion issued Wednesday, a three-judge panel of the 5th Circuit Court of Appeals said Grande (now owned by Astound Broadband) either knew or was willfully blind to identities of infringing subscribers, yet “made the choice to continue providing services to them anyway, rather than taking simple measures to prevent infringement.”

The ruling comes in a battle dating to 2017, when Universal Music Group, Warner Records and other record companies accused Grande of contributing to piracy by failing to take “meaningful action” against alleged file-sharers.

The record companies' complaint, brought in federal court in Austin, alleged that the internet provider allowed “repeat infringers to use the Grande service to continue to infringe plaintiffs’ copyrights without consequence.”

The labels added the Grande allegedly “refused to take any meaningful action ...let alone suspend or terminate subscribers who repeatedly commit copyright infringement through its network.”

A jury found in 2022 that the labels proved Grande contributed to infringement and awarded around $47 million in damages.

Grande appealed to the 5th Circuit, arguing that the verdict should be reversed for several reasons.

Among other arguments, Grande said that merely providing people with an internet connection isn't the kind of activity that warrants a finding of contributory copyright infringement.

“There is not a single shred of evidence that Grande did anything other than provide internet access to its subscribers, some of whom were accused copyright infringers,” the company argued, adding that there was no evidence that it “marketed or advertised the use of its internet service for illegal file sharing.”

The appellate judges rejected that argument, noting that a different circuit court -- the 4th Circuit Court of Appeals -- recently upheld a finding that the internet service provider Cox Communications contributed to copyright infringement by failing to disconnect subscribers who had been accused of piracy. (Cox recently asked the Supreme Court to hear an appeal of that decision, contending it “will have dangerous and drastic consequences.”)

The panel that ruled on Grande's appeal sided with the company on one issue -- that the amount of damages was based on an incorrect calculation of the number of infringing works. The jury found Grande contributed to infringement of 1,403 works, and awarded damages of $3,333 per work. But the appeals court said the 1,403 figure was too high because it included individual songs on albums. The judges said each album should instead be considered a single “work” for copyright infringement purposes, and ordered a new hearing on damages.