118 F.4th 697
5th Cir.2024Background
- Major record labels (Plaintiffs) sued Grande Communications, a Texas ISP, for contributory copyright infringement due to facilitating infringement by its subscribers on P2P networks like BitTorrent.
- Plaintiffs relied on evidence from Rightscorp, a third-party company that identified infringing users via IP addresses and notified ISPs—including sending over 1.3 million notices to Grande.
- From 2010 to 2017, Grande maintained a policy of not terminating subscribers for copyright infringement, but consistently terminated those who did not pay for service.
- A jury unanimously found Grande liable for willful contributory copyright infringement of 1,403 sound recordings, awarding $46.8 million in statutory damages; Grande's liability motions were denied post-trial.
- On appeal, Grande challenged liability, jury instructions, the legal standard applied, and the damages award; Plaintiffs filed a conditional cross-appeal on jury instructions if remand required.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Liability for contributory copyright infringement | Grande materially contributed to and knew of ongoing infringement. | Only purposeful inducement or lack of noninfringing use can create liability. | Liability affirmed; continued provision with knowledge meets material contribution standard. |
| Valid basis for material-contribution theory | Court precedent and common law permit material contribution liability. | Supreme Court only allows liability for inducement or no noninfringing use. | Material contribution is a valid basis for secondary liability under circuit and Supreme Court precedent. |
| Sufficiency of evidence/proof of direct infringement | Rightscorp/Audible Magic evidence supports direct infringement findings. | Absent side-by-side song comparisons, substantial similarity not established. | Sufficient evidence via forensic confirmation and expert testimony; side-by-side comparisons satisfied. |
| Statutory damages: per-song vs. per-album | Each song is an individual work with independent value; damages per song. | Statute allows only one damages award per compilation/album registration. | Damages should be per compilation/album, not per song; remanded for new trial on damages. |
Key Cases Cited
- Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417 (distinguishes liability for ongoing service vs. sale of a product capable of noninfringing use)
- Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (permits inducement-based secondary liability for copyright, but does not abrogate material contribution)
- BMG Rights Mgmt. (US) LLC v. Cox Commc’ns, Inc., 881 F.3d 293 (ISP's continued service to known infringers can support contributory liability)
- Bryant v. Media Right Prods., Inc., 603 F.3d 135 (albums registered as compilations are a single "work" for statutory damages)
- Sullivan v. Flora, Inc., 936 F.3d 562 (surveys circuit split on statutory damages for compilations vs. individual works)
- Desert Palace, Inc. v. Costa, 539 U.S. 90 (plain statutory text controls policy arguments about remedies)