Grande Communications Makes a “Grande” Mistake, Loses Its DMCA Safe Harbor

Stephen Carlisle April 26, 2019

As the father of two sons, this is a conversation I’ve had on more than one occasion:

ME: You know you’re supposed to be doing ABC and XYZ, right?

SON: (annoyed) Yeah Dad, I know.

ME: Then why aren’t you doing it?

The same goes for Internet Service Providers like Cox Communications and Grande Communications. They are supposed to, under the terms of the Copyright Acts section 512(i)(1)(A), “adopt and reasonably implement . . . a policy that provides for the termination in appropriate circumstances of subscribers and account holders . . .who are repeat infringers.”

They know they’re supposed to be doing this, so why don’t they do it?

For Cox, it was taking the extreme position that “repeat infringers” meant that the subscribers had to have been found guilty of copyright infringement by a Court of law on more than one occasion. ¹ This, of course, would have the effect of making the process envisioned by 512(i)(1)(A) completely unworkable. Which is exactly what Cox Communications wanted. Needless to say, the Fourth Circuit Court of Appeals rejected this argument, ² ruling:

“[T]he evidence shows that Cox’s decisions not to terminate had nothing to do with ‘appropriate circumstances’ but instead were based on one goal: not losing revenue from paying subscribers.” ³

Grande Communications out-performed Cox on this front. Instead of a “14 strikes and you’re out (maybe) policy,” ⁴ Cox took the bold position of having a policy and doing nothing to enforce it. ⁵ The Court in adopting the Magistrate’s report made this significant quote:

“The undisputed evidence shows that though Grande may have adopted a policy permitting it to terminate a customer’s internet access for repeat infringement, Grande affirmatively decided in 2010 that it would not enforce the policy at all, and that it would not terminate any customer’s account regardless of how many notices of infringement that customer accumulated, regardless of the source of the notices, and regardless of the content of a notice.” ⁶

Consider that:

• “[F]rom 2010 through 2016, Grande did not have any specific policies or procedures providing for how it would actually go about terminating any such infringing customers.” ⁷
• “In internal emails, one Grande employee even stated that ‘we have users who are racking up DMCA take down requests and no process for remedy in place.’” ⁸
• During of period of almost 7 years, Grande received over 1 million copyright infringement notices. ⁹
• Grande was tracking over 9,000 customers for excessive copyright violations. ¹⁰
• One Grande customer had racked up 54 violations, but was not terminated. ¹¹
• Not a single Grande customer was terminated for copyright infringement between October 2010 and May 2017. ¹²
• “Grande’s Corporate Representative… admitted that until 2017 it would not terminate a user for infringement ‘regardless of the source of any notice,’ ‘regardless of the content of any notice,’ and ‘regardless of the volume of notices . . . for a given customer.’” ¹³
• Only after this lawsuit was filed did Grande terminate any customers at all, and even then only 11 customers in the remainder of 2017. ¹⁴

Which brings me back to my first point:

If you know what you’re supposed to do, then why aren’t you doing it?

Citing to the Cox decision, the Court in Grande rules as follows:

“If lax enforcement and frequent circumvention of existent procedures disqualifies a defendant from the safe harbor’s protections, the complete nonexistence of such procedures surely must do likewise. Such a complete abdication of their responsibilities to implement and enforce a policy terminating repeat copyright infringers requires the Court to conclude that Grande is not entitled, as a matter of law, to the safe harbor provisions of 17 U.S.C. § 512(i).” ¹⁵

This is a significant blow to Grande’s case. But it is not determinative.

If the Court had ruled that Grande Communications had “safe harbor” if would have been absolved from any liability for any and all copyright infringement committed by their customers. Currently, Grande is on the hook for contributory liability for all infringements committed by their customers, if and only if the Plaintiff can prove such infringements occurred. ¹⁶

Grande challenges this point, claiming that Plaintiff cannot prove infringing by copying, public performance or distribution. ¹⁷ The Court rules that Plaintiffs did not adequately contest the first two points and therefore waived its defense. ¹⁸ However, the Court notes that as to the distribution right, the Copyright Act envisions that the right of distribution (publication) involves “the offering to distribute copies of phonorecords.” ¹⁹ This, also known as the “making available” right, if proven, would be sufficient to show copyright infringement. ²⁰ Thus, this issue will go to trial. ²¹

Grande further contends it cannot be held responsible for contributory infringement because: ²²

• There is no evidence it induced the direct infringement committed by its customers
• There is no recognized independent contributory liability theory of “material
• contribution”
• That even if there is, there is no evidence Grande’s conduct materially contributed to direct infringement
• There is no evidence Grande had actual knowledge of direct infringement by its customers.

The Court is not buying this.

The whole point is that Grande continued to provide internet service to thousands of customers even after being put on notice that they were using Grande’s services to infringe copyrighted works. ²³

Two other arguments made by Grande on the issue of “substantial similarity” push the limits of sophistry.

The first is that Plaintiff cannot prove the requirement of “substantial similarity” unless a side-to-side comparison is made of the thousands of songs at issue in front of the jury. ²⁴ The Court rejects this argument, noting that such a procedure would “prove beyond impractical in a case of this sort” ²⁵ and that a showing that the same digital watermark is present on both copies or audio fingerprinting of the type performed by Audible Magic would be sufficient. ²⁶

Next up is Grande’s contention that:

“’Plaintiffs cannot demonstrate that the [allegedly] disseminated material satisfies the ‘substantially similar’ requirement’ because ‘BitTorrent operates by breaking a file into small pieces for transmission, and any Internet user who may download an allegedly copyrighted work would only take a small portion of any allegedly infringing work from a particular Grande subscriber.’” ²⁷

Tech types love these types of arguments under the rubric of “it’s tech and it’s different, therefore your laws do not apply here.”

The Court dismisses this with a terse statement that Grande’s position “finds no support in the case law” ²⁸ and notes that one need not copy the entire work in order to be copyright infringement. ²⁹

One would be tempted to call the Grande case another victory for copyright owners. Yet, as several commentators have noted, these “victories” come only after years of litigation, and the expenditure of millions of dollars in attorneys fees, a cost the small copyright owner would find impossible to afford.

Yet, in the wake of the Grande Communications decision, two more lawsuits were filed by copyright owners against large internet service providers. These were against Charter Communications in Colorado and Bright House in Florida. ³⁰

The lawsuit against Bright House alleges:

““During an 827-day period, Bright House subscriber with IP address 75.114.183.231 was identified in 340 infringement notices, sent on at least 232 separate days… rather than terminating repeat infringers – and losing subscription revenues – Bright House simply looked the other way.” ³¹

Sound familiar?

To which again I ask: If you know what you are supposed to do, why aren’t you doing it?