UMG v. Grande Communications Update: Grande’s Motion For Summary Judgment
UPDATE: ISP Grande Communications Found Secondarily Liable For Copyright Infringement, Must Pay $46.7 Million In Statutory Damages
November 3, 2022 – A jury has determined that Grande Communications, LLC is contributorily liable for copyright infringement of 1,403 copyrighted works owned by a group of record labels. It also concluded Grande’s contributory infringement was willful. The jury awarded the record labels a total of $46,766,200.00 in statutory damages.
For the past 18 months, Texas-based Internet service provider Grande Communications Networks, LLC has been defending itself against a copyright infringement lawsuit brought by a group of record companies. The record companies allege Grande’s broadband subscribers have infringed their copyrighted works by reproducing and distributing them using BitTorrent. The record companies claim Grande is secondarily liable for these infringements because Grande does not follow it DMCA policy by terminating subscribers who are repeat infringers. The plaintiffs are referred to collectively as UMG Recordings, Inc. because that is the record company listed first in the caption for the lawsuit. The parties have conducted discovery, and both have moved for summary judgment.
To provide some quick background, when a party to a lawsuit moves for summary judgment, it is arguing that there is no need for the action to go any further because based on the evidence so far, there is no genuine issue for trial. A party can move for summary judgment on some or all elements of a case.
UMG’s summary judgment motion seeks to strip Grande of its Section 512 DMCA safe harbor from secondary copyright infringement liability.[1] Surprisingly or not, Grande’s motion for summary judgment does not address whether Grande is eligible for a DMCA safe harbor.[2] Instead, Grande claims UMG cannot prove direct infringement by Grande broadband subscribers or that Grande is liable for contributory infringement. There are some compelling arguments as to why. However, the court’s not gonna grant this motion, but will instead make Grande prove its claims at trial. Below is a summary of Grande’s arguments.
Grande Slams The U.S. Recording Industry (or says what every ISP is thinking!)
Grande’s motion for summary judgment starts with a few introductory paragraphs ranting against the record companies’ litigation strategy. Here is the opening paragraph, but the others are just as riveting:
This case is an attempt by the U.S. recording industry to make Internet service providers, or ISPs, its de facto copyright enforcement agents. Having given up on actually pursuing direct infringers due to bad publicity, and having decided not to target the software and websites that make online file-sharing possible, the recording industry has shifted its focus to fashioning new forms of copyright liability that would require ISPs to act as the copyright police.[3]
Making Copyrighted Material Accessible Is Not Proof Of Infringement
Grande’s motion for summary judgment claims UMG cannot prove direct infringement or contributory liability. Again some quick background. The record companies allege Grande’s broadband subscribers have infringed their copyrighted works by reproducing and distributing them using BitTorrent. The record companies claim Grande is secondary liable for these infringements because Grande does not follow it DMCA policy by terminating subscribers who are repeat infringers. Grande’s motion, interestingly enough, doesn’t mention the DMCA safe harbor. Grande simply argues UMG cannot prove its case.
Grande claims UMG cannot prove that a Grande subscriber actually infringed UMG’s copyrighted material – the reproduction and distribution rights – using Grande’s broadband service. Uploading copyrighted material to another BitTorrent user violates a copyright owner’s right to distribution, while downloading it from another user violates the right to reproduction.
Grande argues UMG has no solid evidence. Grande claims UMG is relying on purported evidence from Rightscorp showing a Grande broadband subscriber using BitTorrent made UMG copyrighted material “available” to other BitTorrent users. This action, Grande argues, is not an infringement.
First, Grande argues there is no evidence showing where a Grande subscriber obtained the copyrighted material in the first place. Making something available on BitTorrent does not mean the material was obtained by downloading it from someone else on BitTorrent. The point here is that the user could have legally purchased it somewhere (digitally or physically). Meaning, “at best [UMG] could only possibly show that certain Grande subscribers possessed [UMG’s] copyrighted works.”[4]
Second, making material available on BitTorrent does not mean it was actually disseminated to another BitTorrent user (actually uploaded or transferred to someone else). Grande cites a number of cases from various federal circuits supporting its claim that “[c]ourts consistently hold that merely making copyrighted works available to others does not violate the distribution right – actual dissemination is required.” Making content available is not the same as actually uploading it to someone else.
There is simply no direct evidence, Grande claims, or circumstantial evidence that could be used to prove actual dissemination. Grande says what UMG has is information showing a Grande broadband subscriber may have offered material for dissemination. But, Grande points out, the law does not impose liability for attempted infringement.
Grande’s Substantially Similar Argument
In its summary judgement motion, Grande claims UMG cannot show substantial similarity between the copyrighted and disseminated materials. That is, UMG cannot show that a “BitTorrent user actually downloaded one of [UMG’s] alleged copyrighted works from a Grande subscriber through Grande’s network.”[5] How so? Technology, that’s how. BitTorrent separates files into pieces, so when a user downloads something, the user receives pieces from many other users, and then reassembles them into the complete file. It’s like a jigsaw puzzle. Due to the way BitTorrent works, Grande argues “a Grande subscriber who allegedly uploads one small piece of [a] work does not distribute a file ‘substantially similar’ to the copyrighted work.”[6] Grande says its entitled to summary judgment because “[t]here is no evidence in this case that permits the factfinder to conduct a ‘substantial similarity’ comparison between (1) a file allegedly reproduced, distributed, or publicly performed by a Grande subscriber and (2) a copyrighted song owned by any Plaintiff.”
Grande also maintains that UMG must provide evidence showing a Grande broadband subscriber actually reproduced or distributed that work over Grande’s network for each work that has allegedly been infringed. Grande tells the court that UMG cannot simply rely on the millions of DMCA notices sent to Grande by Rightscorp. Grande is correct here. Think of the most famous copyright cases, the ones involving alleged copying of a single song. Remember the recent case on the song Stairway To Heaven by Led Zeppelin? At trial, a jury usually hears the original copyrighted song and then they hear the song that allegedly infringes the original. They listen to see if there is substantial similarity. What Grande is saying is that UMG has to do something like that here in this case. Even if you agree that UMG can’t prove substantial similarity, it seems that’s something that needs to play out at trial in front of a jury. Right?
Grande Says No Contributory Liability Either
Grande first argues there is no contributory liability in this case because UMG has no evidence proving Grande (1) had knowledge of specific instances of infringement taking place on its network and (2) induced that infringing conduct. Grande says an inducement theory won’t work because there is no evidence that it took affirmative steps to induce or encourage its subscribers to infringe UMG’s copyrights. The evidence of intent that UMG has, Grande argues, “is based entirely on Grande’s alleged failure to act on the copyright notices it received from Rightscorp,” which is not enough.
Next, Grande says contributory liability based on a “material contribution” theory won’t work either. First, Grande argues the theory doesn’t exist “as a separate and independent basis for contributory infringement liability.” Second, under Grokster, Grande argues, “proof of intent is necessary for any contributory infringement claim, and...such intent cannot be inferred solely from knowledge of actual infringing uses of the defendant’s product or service.” Third, Grande argues that even if UMG is permitted to pursue a material contribution theory, there is no genuine issue of material fact as to whether Grande “substantially assists” its subscribers in committing direct infringement.[7] There is no “substantial assistance” because, as Grande explains, it does not have a direct role in contributing to the infringement. It merely provides Internet access service.
Grande then moves on to the required knowledge standard, beginning with this: “Courts are split on whether a contributory infringement claim requires actual knowledge of direct infringement or may be based on willful blindness, and the Fifth Circuit has not directly addressed the issue.”[8] Regardless, Grande says UMG cannot prove actual knowledge or willful blindness. First, Grande says the Rightscorp notices “cannot confer knowledge of ‘specific instances’ of direct infringement for the simple reason that they are not generated upon an actual instance of direct infringement.”[9] Next, Grande claims UMG cannot prove willful blindness because there is no evidence that Grande has the ability to “unblind” itself by verifying the allegations in Rightscorp’s notices. Unblind yourself! Grande argues it can’t look into subscribers computers to confirm that a subscriber actually possesses any of the alleged infringement material. Besides, Grande says, Rightscorp notices don’t “correlate to actual instances of the uploading or downloading of a file” anyway, meaning Grande wouldn’t be able to “verify” whether an alleged infringement happened at the supposed time. Finally, Grande argues there is no proof of willful blindness because, putting aside the inherent deficiencies in Rightscorp’s detection method (i.e., the making available argument), “Rightscorp’s notices simply do not contain enough information to convey knowledge of direct infringement.”
Grande makes a few more general arguments related to the case. Specifically, Grande argues UMG cannot prove (1) willful copyright infringement, (2) the “discovery rule” expands the statutory damages period, (3) actual damages or Grande’s profits resulting from any alleged infringement, and (4) UMG owns many of the asserted copyrights. But these aren’t as interesting as the direct and contributory infringement issues.
So that’s it. Grande makes some good arguments. But remember, the summary judgment standard is what applies here – the Celotex standard – summary judgment is proper if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” It’s unlikely Grande’s motion will be granted in any fashion. The arguments in Grande’s motion are compelling, but they will have to be proven at trial.
For more on UMG Recordings, Inc., et al., v. Grande Communications Networks, LLC, go here:
Death Blow: Texas Court Strips ISP Grande Communications Of DMCA Safe Harbor Defense
Another Broadband Provider Battles DMCA Lawsuit
Court Denies UMG’s Attempt To Amend Copyright Infringement Complaint Against Grande Communications
UMG v. Grande Communications Update: Grande’s Motion For Summary Judgment
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[1] UMG Recordings, Inc., et al., v. Grande Communications Networks, LLC, and Patriot Media Consulting, LLC, CAUSE NO. A-17-CA-365-LY, Plaintiffs’ Motion For Partial Summary Judgment As To Grande Communications Networks LLC’s DMCA Safe Harbor Defense (filed Aug. 8, 2018, W.D. Tex.).
[2] UMG Recordings, Inc., et al., v. Grande Communications Networks, LLC, and Patriot Media Consulting, LLC, CAUSE NO. A-17-CA-365-LY, Grande Communications Networks LLC Motion For Summary Judgment (filed Aug. 10, 2018, W.D. Tex.).
[3] Grande Motion at p. 1.
[4] Grande Motion at p. 7.
[5] Grande Motion at p. 8.
[6] Grande Motion at p. 9.
[7] Grande Motion at p. 14.
[8] Grande Motion at p. 15.
[9] Grande Motion at p. 15-16.