The opinion
Case: 23-50162 Document: 117-1 Page: 1 Date Filed: 10/09/2024
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
____________ FILED
October 9, 2024
No. 23-50162
Lyle W. Cayce
____________ Clerk
UMG Recordings, Incorporated; Capitol Records,
L.L.C.; Warner Bros. Records, Incorporated; Sony
Music Entertainment; Arista Records, L.L.C.; Arista
Music; Atlantic Recording Corporation; Capitol
Christian Music Group, Incorporated; Elektra
Entertainment Group, Incorporated; Fonovisa,
Incorporated; Fueled by Ramen, L.L.C.; LaFace Records,
L.L.C.; Nonesuch Records, Incorporated; Rhino
Entertainment Company; Roadrunner Records,
Incorporated; Roc-A-Fella Records, L.L.C.; Tooth &
Nail, L.L.C.; Zomba Recording, L.L.C.,
Plaintiffs—Appellees/Cross-Appellants,
versus
Grande Communications Networks, L.L.C.,
Defendant—Appellant/Cross-Appellee.
______________________________
Appeal from the United States District Court
for the Western District of Texas
USDC No. 1:17-CV-365
______________________________
Before Higginbotham, Stewart, and Higginson, Circuit Judges.
Stephen A. Higginson, Circuit Judge:
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This appeal arises from an action filed by Plaintiffs-Appellees/Cross-
Appellants, a group of major record labels (collectively “Plaintiffs”), against
Defendant-Appellant/Cross-Appellee Grande Communications Networks,
LLC (“Grande”), a large internet service provider (“ISP”) in Texas, for
contributory copyright infringement. Judgment was entered below in
Plaintiffs’ favor following a three-week jury trial, in which ten jurors
unanimously found Grande liable for willful contributory copyright
infringement. The jury awarded Plaintiffs $46,766,200 in statutory damages
pursuant to the Copyright Act of 1976, 17 U.S.C. § 101 et seq. (“the Copyright
Act”). During trial, Grande moved orally for judgment as a matter of law
(“JMOL”) on the issue of its liability, which the district court denied.
Grande renewed its motion for JMOL and, alternatively, a new trial on the
issue of statutory damages, which the court again denied.
On appeal, Grande challenges the district court’s rulings reflected in
(1) the order denying Grande’s renewed motion for JMOL or a new trial,
including its reference back to legal questions previously resolved at
summary judgment; (2) the jury instructions; and (3) the final judgment.
Plaintiffs’ conditional cross-appeal challenges one ruling made by the district
court in its jury instructions.
We hold that the district court did not err in concluding the jury’s ver-
dict finding Grande liable for contributory copyright infringement was sup-
ported both as a matter of law and by sufficient evidence, so we do not reach
Plaintiffs’ conditional cross-appeal. However, the district court erred in
granting JMOL that each of the 1,403 songs in suit was eligible for a separate
award of statutory damages. Accordingly, we AFFIRM the jury’s verdict
finding Grande liable for contributory copyright infringement; VACATE
the jury’s damages award and REMAND for a new trial on damages; and
DISMISS Plaintiffs’ conditional cross-appeal as moot.
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I.
A.
This appeal follows a judgment entered in Plaintiffs’ favor following a
three-week jury trial. After hearing all the evidence, ten jurors unanimously
found Grande liable for willful contributory copyright infringement. The jury
awarded Plaintiffs $46,766,200 in statutory damages pursuant to the
Copyright Act. That award was based on Plaintiffs’ presentation of the facts
below, which we must “credit” just as the jury did. Abraham v. Alpha Chi
Omega, 708 F.3d 614, 620 (5th Cir. 2013) (citation omitted).
1.
Peer-to-peer (“P2P”) file-sharing networks have existed for decades
and enable internet users to copy and distribute digital files directly to each
other. Notable examples over the years include Napster, Grokster, KaZaA,
and LimeWire. P2P networks have been used to facilitate the unauthorized
distribution of copies of copyrighted works. Each of the P2P networks
mentioned above was sued by copyright owners for secondary copyright
infringement, adjudicated to be liable, and shut down as a result.
P2P networks have evolved over time, making them increasingly
difficult for copyright owners to police. Plaintiffs argued at trial that the P2P
network BitTorrent substantially limits the ability of copyright owners to
protect their rights in two important ways. First, BitTorrent is decentralized,
meaning that no single company or entity manages the distribution of its
software. Thus, there is no “BitTorrent” entity that can be sued like Napster
or Grokster were. Second, BitTorrent is “anonymous,” meaning that its
users cannot be identified by their names or physical addresses. Rather,
BitTorrent identifies users only by their “IP addresses,” which are unique
strings of characters identifying particular devices connected to networks run
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by various ISPs. Only the ISPs operating those networks possess the records
necessary to match specific IP addresses to specific internet users.
To crack down on copyright infringement, third-party companies
have developed technologies to infiltrate BitTorrent and identify infringing
users by their IP addresses. One such company is Rightscorp, Inc.
(“Rightscorp”). Rightscorp’s proprietary technology:
• Interacts with BitTorrent users and obtains their agree-
ment to distribute unauthorized copies of copyrighted
works
• Records the relevant available details of that agreement,
such as the user’s IP address and what the infringed
content is
• Cross-references the user’s IP address against publicly
available databases to identify which ISP is affiliated
with that IP address
• Generates and sends infringement notices to the rele-
vant ISPs so that they can identify their infringing sub-
scribers and take appropriate action; and
• Frequently reconnects with the identified infringing IP
addresses and downloads copies of the copyrighted
works at issue directly from those users
In other words, Rightscorp identifies infringing conduct on
BitTorrent by engaging with BitTorrent users, documents that conduct, and
uses the information available to it to notify ISPs of its findings so that the
ISP can take appropriate action. 1
_____________________
1
Grande disputes Plaintiffs’ characterization of Rightscorp as innocuously seeking
to help ISPs reduce infringement by their subscribers, pointing to Rightscorp’s profit
motive as driving the high volume of notices it sent to Grande.
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2.
The efficacy of Rightscorp’s technology is dependent on the
participation of the ISP. Only the ISPs possess the records necessary to
match specific IP addresses to specific individual subscribers. Thus, when
Rightscorp sends its notices to ISPs informing them of the IP addresses of
their subscribers engaging in specific infringing conduct, the ISPs are the only
parties capable of identifying the infringing subscribers and addressing their
misconduct.
Because ISP involvement is critical to stemming the tide of copyright
infringement, copyright law incentivizes ISPs to participate in addressing the
conduct of their infringing subscribers. Specifically, 17 U.S.C. § 512, enacted
as part of the Digital Millennium Copyright Act (“DMCA”), gives ISPs a
complete defense (a “safe harbor”) to claims seeking damages for copyright
infringement based on the activities of their users. That safe-harbor defense
is available to ISPs only if they meet certain threshold requirements,
including that they have “adopted and reasonably implemented . . . a policy
that provides for the termination in appropriate circumstances of
subscribers . . . who are repeat infringers.” 17 U.S.C. § 512(i)(1)(A).
However, § 512 also provides that an ISP’s failure to qualify for the safe
harbor “shall not bear adversely upon the consideration of a defense by the
[ISP] that [its] conduct is not infringing under this title or any other defense.”
Id. § 512(l); see BWP Media USA, Inc. v. T & S Software Assocs., Inc., 852 F.3d
436, 443-44 (5th Cir. 2017) (explaining that “the DMCA’s safe harbor for
ISPs is a floor, not a ceiling, of protection” (cleaned up)). Section 512 thus
balances the interests of copyright owners (who need the help of ISPs to stop
mass infringements by subscribers of their networks) and ISPs (who are
immunized from infringement claims seeking damages if they take steps to
address their infringing subscribers).
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3.
In the early 2000s, Grande began addressing copyright infringement
by its subscribers through an “abuse process,” which the company employed
to address illicit activity conducted on its network. At that time, when
Grande received an infringement notice about one of its subscribers, Grande
disconnected that subscriber’s service. Grande then informed the subscriber
and applied “punitive measures” if the conduct continued. One of Grande’s
trial witnesses agreed that subsequent infringements by the same subscriber
“led to account termination.” 2
However, in 2009, the private equity firm ABRY Partners purchased
Grande and installed a different company to manage Grande’s operations. In
October 2010, that company changed Grande’s policy. Under Grande’s new
policy, Grande no longer terminated subscribers for copyright infringement,
no matter how many infringement notices Grande received. As Grande’s
corporate representative at trial admitted, Grande “could have received a
thousand notices about a customer, and it would not have terminated that
customer for copyright infringement.” Further, under Grande’s new policy,
Grande did not take other remedial action to address infringing subscribers,
such as suspending their accounts or requiring them to contact Grande to
maintain their services. Instead, Grande would notify subscribers of
copyright infringement complaints through letters that described the nature
_____________________
2
At trial, Grande disputed whether account terminations occurred during this time
period, and it maintains on appeal that the trial evidence showed that before 2010, it only
“occasionally suspended” subscribers’ service “on an ad hoc basis” in response to
infringement notices. But Grande’s corporate representative testified at his deposition that
Grande “did terminate subscribers for copyright infringement” during this period. At trial,
that witness testified that Grande did not “permanently terminate” subscribers’ accounts
during that period, but as Plaintiffs note, the jury was entitled to rely on his prior statement,
as well as the similar trial testimony of a colleague.
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of the complaint and possible causes and advised that any infringing conduct
is unlawful and should cease. Grande maintained that policy for nearly seven
years, until May 2017.
In 2011, Rightscorp began sending notices via email to Grande (and
other ISPs), pursuant to an agreement it had with certain music publishing
companies. Between 2011 and when Plaintiffs filed this lawsuit in April 2017,
Rightscorp sent more than 1.3 million infringement notices to Grande,
approximately 317,000 of which concerned works in this suit. Each notice
documented a specific instance of a Grande subscriber agreeing to distribute
a copy of a copyrighted work without authorization. These emails asked the
ISP to forward the notice to the relevant subscriber and included a link for
the subscriber to contact Rightscorp and settle the claim for a small sum (e.g.,
$30). Rightscorp also sent periodic “roll-up reports” to Grande, each of
which summarized the infringement notices that Rightscorp had previously
sent to Grande. The jury learned that in one year alone, Grande had been
advised that more than forty of its subscribers had infringed over 1,000 times
and that one subscriber had infringed nearly 14,000 times.
During the period when Grande was receiving Rightscorp’s notices
but had a policy not to terminate subscribers’ accounts for copyright
infringement, one of Grande’s employees wrote an email to his colleagues
explaining that Grande’s policy had “no limits” and that some of Grande’s
subscribers were “up to their 54th notice” with “no process for remedy in
place.” That employee testified at trial that, in April 2013, he “was
concerned” that Grande was not in compliance with the law. But Grande did
not change its policy.
Nor did Grande change its policy after learning in December 2015 that
a different ISP, Cox Communications (“Cox”), had been found liable for
secondary copyright infringement based on its continued provision of
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internet services to subscribers it knew were infringing based upon its receipt
of Rightscorp’s notices. See BMG Rts. Mgmt. (US) LLC v. Cox Commc’ns,
Inc., 149 F. Supp. 3d 634 (E.D. Va. 2015), aff’d in part, rev’d in part, 881 F.3d
293 (4th Cir. 2018).
Shortly thereafter, Grande undertook an internal investigation to
determine how many Rightscorp notices it had received over the years and
had internal discussions about a letter Rightscorp sent to Grande a year
earlier seeking a meeting to discuss how they could work collaboratively to
address infringements by Grande’s subscribers. Yet Grande chose not to
change its policy or meet with Rightscorp. It was not until after Plaintiffs
initiated this lawsuit that Grande resumed terminating subscribers for
copyright infringement.
Grande’s policy during the nearly seven years at issue in this case not
to terminate subscribers for copyright infringement contrasted with its policy
during the same time period regarding subscribers who did not pay Grande’s
monthly fees. The trial record established that Grande consistently
terminated the accounts of all subscribers who stopped paying Grande’s fees
during that period. One of Grande’s witnesses admitted that Grande
terminated non-paying subscribers 100% of the time and that, during the time
period relevant to this case, Grande terminated “thousands” of subscribers
for nonpayment.
B.
1.
In April 2017, Plaintiffs filed suit against Grande, alleging claims for
both contributory and vicarious copyright infringement under the Copyright
Act. The district court dismissed the vicarious-infringement claim at the
pleading stage and Plaintiffs do not dispute its dismissal on appeal.
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After discovery, the parties cross-moved for summary judgment.
Grande asserted that it qualified for the DMCA safe-harbor defense, but the
district court held that Grande was not entitled to that defense as a matter of
law. Grande does not dispute that ruling on appeal.
The district court otherwise denied the parties’ cross-motions on
liability, concluding that fact issues precluded the resolution of Plaintiffs’
contributory-infringement claim as a matter of law. Accordingly, that claim
went to trial.
2.
A jury of ten jurors was impaneled in Austin, Texas in October 2022.
Trial was held from October 12, 2022, through November 1, 2022.
During trial, Grande moved orally for JMOL on the issue of its
liability, which the district court denied. After deliberating for a day and a
half, the jury returned a verdict, finding that Grande was liable for
contributory copyright infringement of 1,403 of Plaintiffs’ sound recordings.
The jury also found that Grande’s infringement was willful. 3 The jury
awarded $46,766,200 total in statutory damages, or $33,333 per song. See 17
U.S.C. § 504(c)(1-2) (setting statutory damages at up to $30,000 per work,
or up to $150,000 per work if the infringement was willful).
The district court entered a final judgment in January 2023. In
February 2023, Grande renewed its motion for JMOL and, alternatively, a
new trial. Grande filed a notice of appeal a few days later, and Plaintiffs filed
their notice of conditional cross-appeal shortly thereafter. After the district
_____________________
3
Grande has abandoned any challenge to the jury’s finding that its infringement
was willful by failing to brief it. See Rollins v. Home Depot USA, 8 F.4th 393, 397 (5th Cir.
2021).
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court denied Grande’s post-judgment motion in May 2023, Grande amended
its notice of appeal in June 2023 to add that ruling.
3.
Grande’s appeal challenges the district court’s rulings reflected in (1)
the order denying Grande’s renewed motion for JMOL or a new trial,
including its reference back to legal questions previously resolved at
summary judgment; (2) the jury instructions; and (3) the final judgment.
Plaintiffs’ cross-appeal, which is conditional on a determination that this case
must be remanded to the district court for a new trial, challenges one ruling
made by the district court in its jury instructions.
II.
We have jurisdiction over Grande’s appeal from a final judgment
under 28 U.S.C. § 1291. We also have jurisdiction over Plaintiffs’
conditional cross-appeal, which is timely. 4 See Art Midwest Inc. v. Atl. Ltd.
P’ship XII, 742 F.3d 206, 211 (5th Cir. 2014) (holding that “a party who
prevails in the district court is permitted to conditionally raise issues in a
cross-appeal” in furtherance of “the important value of procedural
efficiency” (internal quotation marks and citations omitted)); Fed. R. App.
P. 4(a)(3) (providing that “[i]f one party timely files a notice of appeal, any
other party may file a notice of appeal within 14 days after the date when the
first notice was filed”).
_____________________
4
Although we have jurisdiction over Plaintiffs’ cross-appeal, we do not reach it for
the reasons explained infra n.15.
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The district court’s legal rulings are reviewed de novo. 5 Janvey v.
Dillon Gage, Inc. of Dallas, 856 F.3d 377, 384 (5th Cir. 2017).
“We review a district court’s denial of a motion for judgment as a
matter of law de novo, applying the same standards as the district court.” Id.
“Under Rule 50, a court should render judgment as a matter of law when ‘a
party has been fully heard on an issue and there is no legally sufficient
evidentiary basis for a reasonable jury to find for that party on that issue.’”
Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 149 (2000) (quoting
Fed. R. Civ. P. 50(a)). When a party challenges the denial of a motion for
JMOL following a jury trial, our review is “especially deferential” to the
jury’s verdict. Olibas v. Barclay, 838 F.3d 442, 448 (5th Cir. 2016) (citation
omitted). We must “credit the non-moving party’s evidence and disregard
all evidence favorable to the moving party that the jury is not required to
believe.” Abraham, 708 F.3d at 620 (cleaned up). That is because
“[c]redibility determinations, the weighing of the evidence, and the drawing
of legitimate inferences from the facts are jury functions, not those of a
judge.” Reeves, 530 U.S. at 150 (citation omitted).
Our court has not decided the standard for reviewing what constitutes
a “work” for statutory damages purposes, but other circuits treat it as a
mixed question of fact and law subject to de novo review. See, e.g., VHT, Inc.
v. Zillow Grp., Inc., 918 F.3d 723, 739 (9th Cir. 2019); Yellow Pages Photos, Inc.
v. Ziplocal, LP, 795 F.3d 1255, 1277 (11th Cir. 2015); Bryant v. Media Right
Prods., Inc., 603 F.3d 135, 140 (2d Cir. 2010). Where, as here, legal questions
(such as statutory interpretation) predominate, we review mixed questions
_____________________
5
As the district court correctly observed, Grande preserved its challenges to the
district court’s legal conclusions.
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of fact and law de novo. See Beech v. Hercules Drilling Co., 691 F.3d 566, 569
(5th Cir. 2012).
“Jury instructions are reviewed for abuse of discretion.” Janvey, 856
F.3d at 388. While the scope of review requires us to consider the charge as
a whole, Mid-Continent Cas. Co. v. Petroleum Sols., Inc., 917 F.3d 352, 357 (5th
Cir. 2019), “[t]he abuse-of-discretion standard includes review to determine
that the discretion was not guided by erroneous legal conclusions,” Koon v.
United States, 518 U.S. 81, 100 (1996). “A district court by definition abuses
its discretion when it makes an error of law.” Id. Thus, when a challenged
jury instruction hinges on a question of law, review is de novo. GE Cap. Com.,
Inc. v. Worthington Nat’l Bank, 754 F.3d 297, 302 (5th Cir. 2014). However,
an erroneous jury instruction is reversible only if it “affected the outcome of
the case.” Mid-Continent, 917 F.3d at 357 (citation omitted).
III.
Pursuant to longstanding principles of secondary copyright liability,
Plaintiffs’ claim against Grande for contributory copyright infringement had
four elements. In order to prove direct infringement by Grande’s
subscribers, Plaintiffs had to show (1) that Plaintiffs own or have exclusive
control over valid copyrights and (2) that those copyrights were directly
infringed by Grande’s subscribers. See BWP Media USA, 852 F.3d at 439.
To further prove that Grande was secondarily liable for its subscribers’
conduct, Plaintiffs had to demonstrate (3) that Grande had knowledge of its
subscribers’ infringing activity and (4) that Grande induced, caused, or
materially contributed to that activity. See Alcatel USA, Inc. v. DGI Techs.,
Inc., 166 F.3d 772, 790 (5th Cir. 1999). The district court did not err in
upholding the jury’s unanimous liability verdict because Plaintiffs satisfied
each element legally and factually. The court correctly interpreted the law
and instructed the jury on the relevant legal standards in light of the factual
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issues disputed by the parties, and Plaintiffs introduced ample evidence from
which a reasonable jury could find in Plaintiffs’ favor. We discuss each of
those four elements in turn.
A.
To establish ownership, a “plaintiff must prove that the material is
original, that it can be copyrighted, and that he has complied with statutory
formalities.” Lakedreams v. Taylor, 932 F.2d 1103, 1108 (5th Cir. 1991). The
requisite statutory formalities are receipt of the application for registration,
fee, and deposit by the copyright office. Id.
At summary judgment, Plaintiffs submitted declarations establishing
the chains of title by which they came to own or exclusively control the
copyrights in each work in suit. Grande did not dispute the validity of this
evidence on the merits. Accordingly, the district court reasoned that
Plaintiffs’ unrebutted evidence was “sufficient to prove ownership” as a
matter of law and did not include ownership as an issue of fact remaining to
be resolved in the case.
The district court reaffirmed this ruling multiple times. In its ruling
on the parties’ motions in limine before trial, the district court confirmed that
it had “already ruled on ownership” and held that “[o]wnership is not a
remaining issue for trial.” In its jury instructions, the district court
instructed that the “issue [of ownership] has already been resolved, and you
do not need to decide it.” The district court also indicated at the jury-charge
conference that there was “no question” that Plaintiffs own or control the
works in suit. And when addressing Grande’s oral motion for JMOL, the
district court reaffirmed these prior rulings, determining that “there’s not
been one shred of evidence anywhere that . . . plaintiffs in this case don’t own
those copyrights.”
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Grande did not challenge any of these rulings on the merits below, nor
does it challenge them on appeal. Rather, Grande complains about the
process by which the district court ruled on this issue in its procedural-history
section. Grande has therefore forfeited any argument that Plaintiffs failed to
establish ownership over the works in suit, see Smith v. Sch. Bd. of Concordia
Par., 88 F.4th 588, 594-96 (5th Cir. 2023), and the district court properly
concluded that Plaintiffs satisfied the first element.
B.
To prove the second element—that the defendant copied constituent
elements of the plaintiff’s work that are original—a plaintiff must establish
“(1) factual copying and (2) substantial similarity.” Baisden v. I’m Ready
Prods., Inc., 693 F.3d 491, 499 (5th Cir. 2012) (citation omitted). Factual
copying can be proven by either direct or circumstantial evidence. Armour v.
Knowles, 512 F.3d 147, 152 (5th Cir. 2007) (per curiam). Substantial
similarity requires proof that “the copyrighted expressions in the two works
are sufficiently alike that the copyright to the original work has been
infringed.” Id.
The district court instructed the jury that, to prove direct
infringement, Plaintiffs needed to establish that each work in suit was
“infringed by distributing any part of the copyrighted work without
Plaintiffs’ authorization.” To find an unauthorized distribution, the jury
could consider “direct or circumstantial evidence,” including “evidence
that copyrighted content was offered or distributed to a third party who is
investigating or monitoring infringing activity.”
Plaintiffs provided substantial evidence that Grande’s subscribers
committed direct infringement. For each work in suit, Plaintiffs introduced
testimony and documentary evidence that (1) Rightscorp reached an
agreement with a Grande subscriber to distribute the work; (2) Rightscorp
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sent Grande a notice of infringement documenting that agreement; (3)
Rightscorp re-approached Grande users who had previously agreed to
distribute the work and obtained at least one (and usually more than one)
complete copy of the work from those Grande subscribers; 6 (4) Plaintiffs’
trade association, the Recording Industry Association of America, Inc.
(“RIAA”), used an industry-standard software program called Audible
Magic—which forensically analyzes the contents of digital audio files to
determine if those files match the contents of files in a database that contains
authorized authentic copies of Plaintiffs’ sound recordings—to verify that
Rightscorp in fact downloaded each work at issue; 7 and (5) each Plaintiff had
an employee personally familiar with Plaintiffs’ sound recordings listen to a
_____________________
6
The jury also heard testimony that data contained within the files Rightscorp
downloaded from Grande’s subscribers verified the accuracy of Rightscorp’s notices. The
processes by which Rightscorp generated notices and obtained downloads were both based
on searching for the same underlying “hash value” by which the works in suit could be
identified on BitTorrent. As one of Plaintiffs’ experts, Barbara Frederiksen-Cross,
explained: A “hash value” is a unique “long string of letters and numbers” that is
“generated mathematically based on the contents” of a particular digital file. Frederiksen-
Cross testified that the chances that two files with the same hash value are in fact two
different files is so “infinitesimally small” that it is “one followed by 26 to 50 different
zeros.”
7
An RIAA employee testified that over the course of his career, he has used
Audible Magic “millions of times” to determine whether digital files downloaded from
many different sources online are actual copies of Plaintiffs’ sound recordings in Audible
Magic’s database. In all that use, Audible Magic never made a mistake in identifying the
contents of a digital file. Indeed, one of Plaintiffs’ experts offered unrebutted testimony
that Audible Magic’s error rate in identifying the contents of digital audio files is
approximately one in three billion. And as the district court recognized, Plaintiffs’ use of
Audible Magic to confirm that the digital files at issue were copies of their copyrighted
works is a well-established practice in large-scale copyright infringement cases such as this
one. See, e.g., UMG Recordings, Inc. v. Shelter Cap. Partners LLC, 718 F.3d 1006, 1012 (9th
Cir. 2013); Capitol Recs., LLC v. Escape Media Grp., Inc., No. 12-CV-6646, 2015 WL
1402049, at *23 (S.D.N.Y. Mar. 25, 2015) (collecting cases); UMG Recording, Inc. v. Escape
Media Grp., Inc., No. 11 Civ. 8407, 2014 WL 5089743, at *17 (S.D.N.Y. Sept. 29, 2014)
(collecting cases).
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random sample of fifty Rightscorp downloads, and those employees testified
that the files they listened to were in fact copies of the sound recordings that
Audible Magic identified and were owned by their respective companies.
Grande’s key defense at trial was that Plaintiffs’ evidence of direct
infringement was unreliable. On appeal, Grande does not challenge any of
the evidence of direct infringement that Plaintiffs offered. Grande instead
asserts that because Plaintiffs did not introduce the copyrighted songs at
issue into evidence, the jury could not conduct a side-by-side comparison of
the works, and thus could not find that the allegedly infringing works were
substantially similar to the works owned by Plaintiffs.
To support its argument, Grande relies principally on this court’s
decisions in Bridgmon v. Array Systems Corp., 325 F.3d 572 (5th Cir. 2003)
and King v. Ames, 179 F.3d 370 (5th Cir. 1999).
King involved a copyright-infringement claim in which the plaintiff
“failed to produce the copies of the sound recordings she deposited with the
United States Copyright Office.” King ex rel. King v. Ames, No. 3:95-CV-
3180, 1997 WL 327019, at *5 (N.D. Tex. June 4, 1997). On appeal, this court
explained that “[t]o determine whether an instance of copying is legally
actionable, a side-by-side comparison must be made between the original and
the copy to assess whether the two works are substantially similar.” King,
179 F.3d at 376. Because “copying is an issue to be determined by
comparison of works, not credibility,” and the plaintiff failed “to adduce
evidence for such a comparison,” her claim was “vitiate[d].” Id.
This court applied King in Bridgmon. There, the plaintiff brought a
copyright-infringement claim against a corporation for its use and sale of a
computer program known as ICUS, which he alleged infringed his copyright
in another computer program called ADS, of which he was the author.
Bridgmon, 325 F.3d at 575. However, the plaintiff was “unable to produce a
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copy of the ADS software; the only evidence of its content consisted of his
oral testimony.” Id. at 576. This court rejected the plaintiff’s contention
“that he need not produce evidence of substantial similarity between the
copyrighted [ADS] software and the [ICUS] software . . . because there is
evidence of direct copying.” Id. at 577. That’s because “the law of this
circuit prohibits finding copyright infringement without a side-by-side
comparison of the two works.” Id. Therefore, the plaintiff’s “failure to
adduce evidence to allow a comparison between the ADS and the allegedly
infringing program vitiate[d] his claim.” Id.
It’s true that King and Bridgmon contemplate “side-by-side
comparison” of the works at issue. 179 F.3d. at 376; 325 F.3d at 577. But in
those cases, the parties meaningfully disputed whether the defendants’
alleged copies were substantially similar to the plaintiffs’ alleged works, and
the only evidence about the contents of the plaintiffs’ works was the oral
testimony of the plaintiffs themselves. See King ex rel. King, 1997 WL 327019,
at *5-6; Bridgmon, 325 F.3d at 576. As a result, the plaintiffs could not satisfy
their burdens to prove that the defendants’ alleged copies were substantially
similar to the plaintiffs’ alleged works merely by asking the jury to credit the
plaintiffs’ oral testimony. See King, 179 F.3d at 375-76; Bridgmon, 325 F.3d
at 576. Those circumstances differ markedly from the record here, where
Plaintiffs introduced extensive, forensically reliable evidence proving that the
files Rightscorp downloaded were exact copies of Plaintiffs’ sound
recordings. The jury was entitled to rely on the records generated by Audible
Magic, which themselves evinced a “side-by-side comparison” between
Plaintiffs’ copyrighted sound recordings and Rightscorp’s BitTorrent
downloads, see King, 179 F.3d. at 376; Bridgmon, 325 F.3d at 577, as well as
the unrebutted testimony offered by Plaintiffs that Audible Magic’s error rate
is approximately one in three billion. Particularly in light of evolving
technology—and the side-by-side comparison now permitted by software
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programs like Audible Magic in cases involving BitTorrent downloads
identified by hash values—Grande’s rigid reading of King and Bridgmon is
inapposite. Accordingly, a new trial is not warranted on this ground.
C.
As to the third element, the district court applied the correct legal
standard and Plaintiffs presented sufficient evidence to show that Grande
had knowledge of, or was willfully blind to, its subscribers’ infringing activity.
Pursuant to the district court’s jury instruction, Plaintiffs were
required to demonstrate that Grande “knew of specific instances of
infringement or was willfully blind to such instances of infringement,” where
willful blindness meant that Grande “believe[d] there [was] a high
probability of a fact but deliberately [took] steps to avoid learning it.” 8
The district court also correctly concluded that the jury had a legally
sufficient basis to find knowledge or willful blindness. Grande does not
challenge the sufficiency of evidence supporting the jury’s finding that
Grande had knowledge of, or was willfully blind to, its subscribers’ infringing
activity. Grande has therefore abandoned any argument concerning the
insufficiency of its knowledge or willful blindness. See Rollins, 8 F.4th at 397.
D.
Grande’s challenge to the district court’s application of material-
contribution liability—the fourth element—is the crux of its appellate
challenge to the judgment below. Although Grande makes several strong
arguments, they are ultimately unavailing for the reasons we explain.
_____________________
8
Grande does not challenge the district court’s instruction concerning “willful
blindness” on appeal and has therefore abandoned any argument against that instruction.
See Rollins, 8 F.4th at 397.
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1.
First, we conclude that the district court applied the correct legal
standard by determining that Grande could be secondarily liable if it induced,
caused, or materially contributed to its subscribers’ infringing activity.
The district court explained at summary judgment and again post-
judgment that “the purveyor of a technology capable of both infringing and
non-infringing uses cannot hide behind the technology’s non-infringing uses
to shield itself from liability when the purveyor has induced, caused, or
materially contributed to the infringer’s activity.”
Grande contends the district court’s reasoning was erroneous because
“[t]he Supreme Court has recognized two—and only two—types of
contributory copyright infringement”: (1) where “the defendant
distribute[s] a product or service without any commercially significant, non-
infringing use,” and (2) where there is “clear expression or other affirmative
steps taken to foster infringement” by the defendant. Plaintiffs respond that
this court “has expressly embraced [the material-contribution] theory of
liability” and the three Supreme Court opinions cited by Grande “did not
write material contribution out of the law.”
In 1999, our court recognized the validity of material-contribution
claims for contributory copyright infringement. See Alcatel, 166 F.3d at 790.
In doing so, we adopted the elements of the contributory-copyright claim
from the Second Circuit’s seminal decision in Gershwin Publishing Corp. v.
Columbia Artists Management, Inc., 443 F.2d 1159 (2d Cir. 1971). See id. at
790 n.71. Gershwin recognized that contributory-infringement claims stem
from “the common law doctrine that one who knowingly participates [in] or
furthers a tortious act is jointly and severally liable with the prime
tortfeasor.” 443 F.2d at 1162 (citation omitted). The court in Gershwin
synthesized that common-law principle into a rule that “one who, with
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knowledge of the infringing activity, induces, causes or materially contributes
to the infringing conduct of another, may be held liable as a ‘contributory’
infringer.” Id.; see Alcatel, 166 F.3d at 790 & n.71.
Grande contends that material contribution is not a valid basis for
contributory copyright liability, based on its reading of three United States
Supreme Court opinions: Sony Corp. of America v. Universal City Studios, Inc.,
464 U.S. 417 (1984), Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545
U.S. 913 (2005), and Twitter, Inc. v. Taamneh, 598 U.S. 471 (2023). However,
none of those decisions holds that knowingly providing material contribution
to infringement is an inadequate basis for a finding of contributory copyright
liability. See United States v. Lipscomb, 299 F.3d 303, 313 n.34 (5th Cir. 2002).
We consider each case in turn.
a.
As an initial matter, in both Sony and Grokster, the Court expressly
embraced the common-law standards for contributory infringement and
acknowledged more generally that cases based on different factual
circumstances would require different applications of those standards.
In Sony, the Court addressed the issue of when the manufacturer and
distributor of a product (there, the Betamax video tape recorder) could be
held secondarily liable for subsequent copyright infringements committed by
users of that product. See 464 U.S. at 420. The question presented to the
Court was whether selling a product that facilitated infringement, standing
alone, was sufficient to impose contributory copyright liability. The Court
held it was not, so long as the product was “capable of substantial
noninfringing uses.” Id. at 442. This mirrors the standard for contributory
liability under patent law, which “is confined to the knowing sale of a
component especially made for use in connection with a particular patent.”
Id. at 440.
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The Court’s analysis in Sony focused on the fact that the case involved
the sale of a product, because in such a case, the defendant’s contact with its
customers ended at the “moment of sale” and the defendant did not know
what its customers did with the product thereafter. Id. at 437-38.
Accordingly, any liability had to be premised solely on the defendant’s
“constructive knowledge” of how its customers might use the product in the
future. Id. at 439. Sony did not limit—or even address—the scope of
contributory liability generally or criticize or limit the controlling principles
derived from common law. To the contrary, the Court expressly contrasted
the type of case before it (i.e., one involving the sale of a product) with one in
which the defendant might have an “ongoing relationship” with its infringing
customers beyond the moment of sale. Id. at 437; see id. at 437 n.18 (citing
Gershwin as one such case involving an ongoing relationship). Sony therefore
stands only for the narrow proposition that a defendant’s mere sale of a
product capable of infringement is not sufficient to establish the defendant’s
knowledge of its customers’ future infringing activity when the product is
also capable of non-infringing uses.
b.
Like Sony, Grokster dealt with a defendant that distributed a product
which facilitated infringement—specifically, software that enabled users to
share digital files through a P2P network. 9 See 545 U.S. at 919-20. Purporting
to apply Sony, the Ninth Circuit had held that the defendant was entitled to
summary judgment because the software was capable of non-infringing uses.
See id. at 932-34.
_____________________
9
BitTorrent lacks a centralized corporate entity that could be sued as Grokster was.
Even so, Grande has identified at least six actors that “play[] a direct role in the sharing of
copyrighted music files over BitTorrent.”
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The Supreme Court reversed, holding that while Sony prohibited
“imputing culpable intent” from the distribution of the product alone, it
“did not displace other theories of secondary liability” or require courts to
ignore other evidence of the defendant’s intent. Id. at 934. Because the
record in Grokster contained evidence that the defendant distributed the
software “with the object of promoting its use to infringe copyright” (i.e., to
“induce” its customers’ infringements), summary judgment in the
defendant’s favor was not warranted. Id. at 936-37.
By holding that the distributor of a product that facilitates
infringement can be liable when it induces future infringements after the
moment of sale, Grokster expanded the doctrine of contributory
infringement. Before Grokster, the distributor of a product could not be liable
for future infringements so long as the product was capable of “substantial
non-infringing uses.” Sony, 464 U.S. at 442. But after Grokster, an
inducement claim could succeed against the distributor of a product if the
distributor affirmatively induced future infringements, even if the product
was capable of substantial non-infringing uses. See Grokster, 545 U.S. at 936-
37; see also BMG Rts. Mgmt. (US) LLC v. Cox Commc’ns, Inc., 881 F.3d 293,
306 (4th Cir. 2018) (“In fact, providing a product with ‘substantial non-
infringing uses’ can constitute a material contribution to copyright
infringement.”).
Here, Grande provides its subscribers with internet services on a
continuous basis in exchange for regular monthly subscription fees. Those
actions create an “ongoing relationship” between Grande and its infringing
subscribers that extends beyond a single moment of sale. Sony, 464 U.S. at
437. Accordingly, Plaintiffs’ theory of liability in this case is not based on
Grande’s knowledge about its subscribers’ likely future activities after the
moment of sale, but rather on Grande’s knowledge of its subscribers’ actual
infringements based on its ongoing relationship with those subscribers.
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Because Sony and Grokster expressly addressed records where such a
continuing relationship did not exist, their holdings do not foreclose the
theory of liability on which Plaintiffs here based their claim. See, e.g., Sony
Music Ent. v. Cox Commc’ns, Inc., 93 F.4th 222, 235-36 (4th Cir. 2024); BMG,
881 F.3d at 305-07.
It’s true, as Grande points out, that Grokster omitted any mention of
material contribution when it cited Gershwin, instead referring solely to
liability based on “intentionally inducing or encouraging direct
infringement.” 545 U.S. at 930. However, nothing required the Court to list
every possible basis for relief, rather than the grounds directly relevant to the
dispute at hand. See 6 Patry on Copyright § 21:48 (“The issue of
material contribution was not reached by the Supreme Court in vacating and
remanding this decision since the Court found liability based on
inducement.”). Moreover, Grokster endorsed the broader common-law
theories of contributory liability articulated in Gershwin and other authorities;
it didn’t constrict them. See 545 U.S. at 934-35 (explaining that “nothing in
Sony requires courts to ignore evidence of intent if there is such evidence,
and the case was never meant to foreclose rules of fault-based liability derived
from the common law”).
Grande further argues that if a party can be contributorily liable for
copyright infringement simply by “materially contributing” to the
conduct—without any purposeful, culpable conduct of its own—then
Grokster and Sony are “meaningless.” Grande contends that no copyright
plaintiff would ever need to prove inducement of infringement as in
Grokster—requiring “clear expression or other affirmative steps taken to
foster infringement,” 545 U.S. at 936-67—if they could simply show material
contribution instead. Plaintiffs respond that the distinction between the
material-contribution and inducement standards of liability is evident in
David v. CBS Interactive Inc., where a district court considered a claim against
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a website that merely distributed P2P software and let the plaintiffs’
inducement claim proceed to discovery while dismissing the plaintiffs’
material-contribution claim. See No. 11-cv-9437, 2012 WL 12884914, at *3-5
(C.D. Cal. July 13, 2012). While we agree with Grande that material-
contribution claims would appear to be more broadly attractive to plaintiffs
than inducement claims, that’s a policy argument that runs into Alcatel.
c.
As to Twitter, we note at the outset that it was litigated pursuant to the
Justice Against Sponsors of Terrorism Act and does not mention copyright
law. See 598 U.S. at 482-84. Thus, because material contribution remained
a viable theory of secondary copyright infringement after Grokster, Twitter
cannot furnish clear, contrary Supreme Court authority displacing Alcatel
and its incorporation of Gershwin. To conclude otherwise would require us
to decide that the Supreme Court changed fundamental principles of
copyright liability without saying so in a case that was not about copyrights.
See Burge v. Parish of St. Tammany, 187 F.3d 452, 466 (5th Cir. 1999) (“It is
a firm rule of this circuit that in the absence of an intervening contrary or
superseding decision by this court sitting en banc or by the United States
Supreme Court, a panel cannot overrule a prior panel's decision.”).
Twitter underscores the general importance, in all cases of secondary
liability, of demonstrating a direct nexus between the defendant’s conduct
and the underlying tort at issue. While that nexus was absent in Twitter, it is
present here as Grande’s conduct directly enabled and facilitated continued
copyright infringement by its subscribers.
In Twitter, family members of a victim of an ISIS terrorist attack in
Istanbul, Turkey sued three U.S. social media companies, alleging that the
companies aided and abetted ISIS by permitting its members to use the
platforms for “recruiting, fundraising, and spreading their propaganda.” 598
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U.S. at 479, 481. The Court held that aiding-and-abetting liability (which also
derives from common-law principles of secondary liability) requires courts to
focus on the defendant’s “assistance to the tort for which plaintiffs seek to
impose liability.” Id. at 506. In Twitter, the relevant underlying tort was the
Istanbul terrorist attack. Because the defendants did not knowingly provide
ISIS any assistance relating to the commission of that attack, they could not
be liable on an aiding-and-abetting theory. Id. at 506-07.
The Court concluded that aiding-and-abetting claims are strongest
when there is a “direct nexus” between the defendant’s conduct and the
underlying tort. Id. at 506. When such a “direct nexus” exists, courts and
juries alike can “more easily infer” that the defendant’s conduct—especially
if done with knowledge of the tort—was “culpable.” Id. By contrast, when
no direct nexus exists, plaintiffs alleging aiding-and-abetting claims must
instead show “participation through intentional aid” in order to generate the
same inference of culpability. Id. The Court rejected the notion that
“defendants’ ‘recommendation’ algorithms go beyond passive aid and
constitute active, substantial assistance.” Id. at 499. Instead, the
defendant’s public social-media platforms are simply “infrastructure,” and
“[o]nce the platform and sorting-tool algorithms were up and running,
defendants at most allegedly stood back and watched.” Id. Because the
plaintiffs in Twitter could not allege a direct nexus between the social media
companies’ services and the particular terrorist attack for which they sought
relief, their claim could not survive absent evidence the companies
intentionally supported ISIS, which they did not.
In contrast to Twitter, the nexus between Grande’s conduct and the
tort for which Plaintiffs seek redress is direct. The underlying tort at issue
here is copyright infringement—specifically, the unauthorized distribution
of Plaintiffs’ copyrighted sound recordings by Grande’s subscribers. Grande
provided those subscribers with the tools necessary to conduct those
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infringements (i.e., high-speed internet access) and continued doing so after
learning that those subscribers were repeatedly using those tools to infringe,
in furtherance of a policy never to terminate subscribers for copyright
infringement (i.e., not “mere passive nonfeasance”). 10 Id. at 500. Unlike in
Twitter—where ISIS did not use the social media companies’ services to
carry out its terrorist attack—this case involves tortfeasors that directly
relied on and used Grande’s services to carry out their torts. Thus, the
liability verdict here is consistent with the Court’s holding in Twitter; the
direct nexus between Grande’s conduct and the tort at issue permits an
inference that Grande’s knowing provision of internet services to infringing
subscribers was actionable.
2.
Next, we consider the district court’s jury instruction on material
contribution. The district court instructed the jury that Grande is
contributorily liable if it “induced, caused, or materially contributed to the
infringing activity,” and that “[t]his standard is met” if Grande could have
“take[n] basic measures to prevent further damages to copyrighted works,
yet intentionally continue[d] to provide access to infringing sound
recordings.” Grande challenges that instruction on two principal grounds.
_____________________
10
These facts distinguish this case from Twitter’s reference to “the internet
generally” because, as the Court in Twitter explained, “we generally do not think that
internet or cell service providers incur culpability merely for providing their services to the
public writ large.” 598 U.S. at 499 (emphasis added). Although aiding-and-abetting
liability also derives from common-law principles, it does not map one-to-one onto
contributory copyright infringement, meaning that Twitter’s broader language—
concluding that it would “run roughshod over the typical limits on tort liability” to
“effectively hold any sort of communication provider liable for any sort of wrongdoing
merely for knowing that the wrongdoers were using its services and failing to stop them,”
598 U.S. at 503—cannot in itself be read to uproot material-contribution liability.
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a.
First, Grande takes issue with the court’s instruction based on its
adoption of the “simple measures” standard. 11 In several cases involving
online infringements with new technologies, the Ninth Circuit has imposed
an additional step before allowing a finding of contributory copyright liability.
In these cases, even when the defendant provides the tools necessary for
infringement, the court also inquires whether the defendant “can take simple
measures to prevent further damage to copyrighted works.” Perfect 10, Inc.
v. Amazon.com, Inc., 508 F.3d 1146, 1172 (9th Cir. 2007) (internal quotation
marks and citation omitted). If such measures are available and the defendant
does not take them, liability is appropriate. See id. at 1172-73; A&M Records,
Inc. v. Napster, Inc., 239 F.3d 1004, 1021-22 (9th Cir. 2001). Conversely, if
such measures are unavailable to the defendant, liability is inappropriate. See
VHT, 918 F.3d at 745; Perfect 10, Inc. v. Giganews, Inc., 847 F.3d 657, 671-72
(9th Cir. 2017).
Grande contends that the line of “simple measures” cases is
inapposite because it applies only to defendants “who directly control
content online” because only such defendants “can readily remove or disable
access to specific infringing content.” However, the Ninth Circuit in
Amazon.com clarified that it designed this test broadly for “the context of
cyberspace” and for any defendant that provides “Internet access or
services.” 508 F.3d at 1171. That breadth was reflected in the test itself,
which does not ask narrowly whether the defendant can remove access to the
infringing content online, but more generally whether the defendant
possesses “reasonable and feasible means” to “prevent further damage to
_____________________
11
Ninth Circuit cases uniformly use the term “simple measures.” See, e.g., Perfect
10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1172 (9th Cir. 2007). The district court used
“basic measures” instead.
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copyrighted works.” Id. at 1172 (internal quotation marks and citation
omitted). Thus, Grande urges an unduly limited reading of these authorities
that is belied by the plain language of the cases themselves.
More importantly, as Plaintiffs correctly note, this standard favors
defendants over copyright plaintiffs by offering defendants a way out if they
have no “simple” (or “basic”) means of avoiding secondary liability.12
That’s why in Giganews, the court ruled for the defendant—not because it
failed to provide the tools necessary to infringe or lacked knowledge of
infringing conduct—but because it found that plaintiff’s proposed method by
which the defendant could have prevented further damage to copyrighted
works was “onerous and unreasonably complicated.” 847 F.3d at 671.
Similarly, the defendant in VHT prevailed not because it failed to provide
tools for or lacked knowledge of direct infringement, but because while the
plaintiff made three different proposals as to how the defendant could have
prevented further damage to copyrighted works, the court found them all
insufficiently practical. See 918 F.3d at 745-46.
The district court’s “basic measures” instruction thus did not
“lower[] the bar” of liability, as Grande contends; the instruction made clear
that Grande was liable if it “intentionally continue[d] to provide access to
infringing sound recordings,” unless Grande was incapable of “taking basic
measures to prevent further damages to copyrighted works.” See
Amazon.com, 508 F.3d at 1172. And here, Grande had available to it at least
one basic measure: it could have terminated high-speed internet services to
known, repeat infringers, as it did when subscribers failed to pay Grande’s
_____________________
12
Indeed, Cox favorably “addressed the simple-measures test as an alternative to
Grokster’s affirmative-conduct standard before the Fourth Circuit.” Petition for Writ of
Certiorari at 21, Cox Commc’ns, Inc. v. Sony Music Ent., No. 24-171 (U.S. Aug. 15, 2024).
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monthly fees. In short, the “basic measures” instruction stood to benefit,
not harm, Grande. See Mid-Continent, 917 F.3d at 357.
b.
Second, Grande disputes whether the district court’s instruction—
that “intentionally continu[ing] to provide access to infringing sound
recordings” constitutes material contribution—was correct as a matter of
law. Grande contends that this instruction flouts Grokster and Twitter and
was therefore erroneous because “[u]nder the district court’s view, reflected
in its jury instruction, a jury could permissibly find liability even in the
absence of affirmative, culpable conduct.” Plaintiffs respond by citing what
they call “the established principle that ISPs provide a material contribution
to infringements by their subscribers when they knowingly provide infringing
customers with the necessary tools to infringe—in particular, a high-speed
connection to the internet.” We acknowledge this is a closer question, but
we nonetheless conclude the instruction was not erroneous.
The closest on-point authorities considering the application of a
material-contribution theory to ISPs are the Fourth Circuit’s decisions in
BMG (2018) and Cox (2024). In BMG, 13 the court considered a contributory-
infringement claim essentially on all fours with this one, arising out of Cox’s
continued provision of internet services to known infringing subscribers. See
881 F.3d at 298-300. The Fourth Circuit held that in a case involving
“subscription services” like those provided by an ISP, liability could be
imposed if the service provider learns that its customers are using its services
to infringe and “nonetheless renews the lease to those infringing customers.”
Id. at 308. Under such circumstances, the continued provision of services
_____________________
13
BMG is the appeal that followed from the 2015 trial against Cox premised on its
receipt of Rightscorp’s notices, of which Grande was contemporaneously aware.
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“is substantially certain to result in infringement, and so an intent to cause
infringement may be presumed.” Id.; see also Grokster, 545 U.S. at 932
(noting that a person “will be presumed to intend the natural consequences
of his acts” (citation omitted)); Restatement (Second) of Torts
§ 8A cmt. b (1965) (acknowledging that if a person “knows that the
consequences are certain, or substantially certain, to result from his act, and
still goes ahead, he is treated by the law as if he had in fact desired to produce
the result”).
In Cox, as here, the Fourth Circuit affirmed a jury’s finding that Cox
was willfully liable for contributory copyright infringement because it
intentionally continued to provide its internet services to infringing
subscribers. In so doing, the Fourth Circuit squarely rejected the primary
liability arguments made by Grande in this appeal. Specifically, the court
applied the principle established in BMG that material contribution is an
appropriate basis for a finding of contributory copyright liability. See Cox, 93
F.4th at 235-37. The court concluded that where, as here, an ISP knew of
specific instances of repeated infringement by specific users and “chose to
continue” providing services to them, a jury is entitled to find material
contribution because the ISP’s conduct exceeds “mere failure to prevent
infringement.” Id. at 236. That reasoning is incompatible with Grande’s
primary arguments that material contribution is insufficient to prove
contributory infringement and that Grande did not materially contribute as a
matter of law. Moreover, the court had the benefit of letter briefing on
Twitter before it reached its decision. See Cox’s 28(j) Letter, Sony, No. 21-
1168 (4th Cir. May 23, 2023), ECF No. 87; Plaintiffs’ Response to Cox’s
28(j) Letter, Sony, No. 21-1168 (4th Cir. May 30, 2023), ECF No. 88.
Although the court ultimately didn’t cite Twitter in its decision, it held that
imposing contributory liability on ISPs on the facts at issue there (which
closely resemble those in this case) comports with the traditional principles
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of aiding-and-abetting liability that Twitter addressed. See Cox, 93 F.4th at
236.
Grande maintains that those decisions—like the jury instruction
here—stray from the principles set forth in Grokster and Twitter.
Specifically, Grande points to language in Grokster providing that “in the
absence of other evidence of intent, a court would be unable to find
contributory infringement liability merely based on a failure to take
affirmative steps to prevent infringement, if the device otherwise was capable
of substantial noninfringing uses.” 545 U.S. at 939 n.12. Grokster held that
“mere knowledge of infringing potential or of actual infringing uses” is not
enough for liability. Id. at 937. And Twitter explained that a “communication
provider” cannot be liable under an aiding-and-abetting theory “merely for
knowing that [] wrongdoers were using its services and failing to stop them.”
598 U.S. at 503.
These are not weak arguments. But the Fourth Circuit heard these
same arguments about Grokster in BMG and about Twitter in Sony. Applying
the “rules of fault-based liability derived from the common law” explicitly
endorsed by Grokster, 545 U.S. at 934-35, the court in BMG found the
requisite intent in the ISP’s continued provision of services that were
“substantially certain to result in infringement,” 881 F.3d at 308. Cox, too,
recognized Grokster’s rule that “mere[] . . . failure to take affirmative steps
to prevent infringement” does not establish contributory liability “in the
absence of other evidence of intent,” 545 U.S. at 939 n.12, but nonetheless
concluded that “supplying a product with knowledge that the recipient will
use it to infringe copyrights is exactly the sort of culpable conduct sufficient
for contributory infringement,” Cox, 93 F.4th at 236. That’s because such
conduct “accords with principles of aiding and abetting liability in the
criminal law.” Id.; see id. (“Lending a friend a hammer is innocent conduct;
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doing so with knowledge that the friend will use it to break into a credit union
ATM supports a conviction for aiding and abetting bank larceny.”).
Moreover, for the reasons explained above, Twitter does not control
because it was litigated pursuant to the Justice Against Sponsors of Terrorism
Act, not the Copyright Act. And Grokster must be read in light of the fact
that it dealt with inducement liability, with no occasion to reach the issue of
material contribution. See 6 Patry on Copyright § 21:48. Further, the
component parts of the district court’s jury instruction cannot be read in
isolation: The instruction permitted a finding of liability only if the jury found
Grande “intentionally continue[d] to provide access to infringing sound
recordings” while refusing to “take basic measures to prevent further
damages to copyrighted works.” And Plaintiffs established at trial that,
unlike Cox—which implemented a “graduated response system,” Sony
Music Ent. v. Cox Commc’ns, Inc., 464 F. Supp. 3d 795, 816 (E.D. Va. 2020),
aff’d in part, vacated in part, rev’d in part, 93 F.4th 222 (4th Cir. 2024)—
Grande took no action in response to its subscribers’ repeated infringements.
So, Grande necessarily did not avail itself of any “basic measures” to prevent
infringement.
Applying the same material-contribution standard, the court’s
instruction was proper in light of the factual disputes in this case. See Louis
Vuitton Malletier, S.A. v. Akanoc Sols., Inc., 658 F.3d 936, 944 (9th Cir. 2011)
(holding the district court did not err “by narrowing the instruction on
material contribution to the only genuine question as to that element”). At
summary judgment, the district court determined that Grande’s material
contribution—its provision of the tools necessary for its subscribers to
infringe—was “clear” and that the real “question” was whether Grande
provided its services knowing that its customers were using them to infringe.
There was therefore no factual dispute on that issue for the jury to resolve.
The only issue left was whether Grande could have taken simple measures to
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prevent further damages to copyrighted works, but failed to take them.
That’s precisely what the district court instructed the jury to determine. We
see no error in the district court’s decision to model its jury instruction after
those upheld by the Fourth Circuit.
3.
The evidence at trial demonstrated that Grande provided its
subscribers with the tools necessary to infringe (i.e., high-speed internet
access) and that Grande’s subscribers used those tools to infringe Plaintiffs’
copyrights. 14 See BMG, 881 F.3d at 306-08. Based on the consistency of the
trial evidence, the district court determined that there was “no question that
[Grande] intentionally continued to provide Internet service” to its
infringing subscribers.
Grande’s affirmative choice to continue providing its services to
known infringing subscribers—rather than taking simple measures to
prevent infringement—distinguishes this case from Cobbler Nevada, LLC v.
Gonzales, 901 F.3d 1142 (9th Cir. 2018), on which Grande relies. There, the
Ninth Circuit considered a claim alleging that a subscriber of internet
services who received infringement notices failed to “secure, police and
_____________________
14
We note that, at times, Plaintiffs’ briefing appears to “direct[ly] leap from safe
harbor to liability,” implying that “an ISP has two options: qualify for the safe harbor or be
found liable for copyright infringement.” As the district court’s jury instructions properly
recognized, § 512(l) forecloses that argument by providing that an ISP’s failure to qualify
for the safe harbor “shall not bear adversely upon the consideration of a defense by the
[ISP] that [its] conduct is not infringing under this title or any other defense.” 17 U.S.C.
§ 512(l). However, Grande does not contend on appeal that the district court erred in
admitting any evidence pertaining to the safe harbor. And the district court did not prevent
Grande from contesting its liability on grounds other than the safe harbor: namely, by
attempting to refute Plaintiffs’ evidence supporting any of the four elements that Plaintiffs
were required to prove (e.g., by demonstrating that Rightscorp’s notices did not trigger any
duty by Grande because they were unreliable). That’s precisely what Grande attempted to
do at trial—the jury just didn’t find Grande’s defense persuasive.
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protect” his account from third parties who used his internet access to
infringe. Cobbler, 901 F.3d at 1145-46. The direct infringers were never
identified. See id. at 1145 n.1. Because the pleading premised liability
exclusively on the subscriber’s failure to take action against unknown third-
party infringers, it was insufficient to state a claim. See id. at 1147-49. Here,
Plaintiffs proved at trial that Grande knew (or was willfully blind to) the
identities of its infringing subscribers based on Rightscorp’s notices, which
informed Grande of specific IP addresses of subscribers engaging in
infringing conduct. But Grande made the choice to continue providing
services to them anyway, rather than taking simple measures to prevent
infringement. Additionally, Cobbler addressed only inducement liability
under Grokster; it did not opine on the evidence required for establishing
material contribution. See id. The court in Cobbler rejected the plaintiff’s
invitation to create “an affirmative duty for private internet subscribers to
actively monitor their internet service for infringement,” id. at 1149; it did
not absolve ISPs like Grande that continue providing services to known
infringing subscribers.
The evidence at trial demonstrated that Grande had a simple measure
available to it to prevent further damages to copyrighted works (i.e.,
terminating repeat infringing subscribers), but that Grande never took it. On
appeal, Grande and its amici make a policy argument—that terminating
internet services is not a simple measure, but instead a “draconian
overreaction” that is a “drastic and overbroad remedy”—but a reasonable
jury could, and did, find that Grande had basic measures, including
termination, available to it. See Amazon.com, 508 F.3d at 1172. And because
Grande does not dispute any of the evidence on which Plaintiffs relied to
prove material contribution, there is no basis to conclude a reasonable jury
lacked sufficient evidence to reach that conclusion.
* * *
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In sum, because (1) intentionally providing material contribution to
infringement is a valid basis for contributory liability; (2) an ISP’s continued
provision of internet services to known infringing subscribers, without taking
simple measures to prevent infringement, constitutes material contribution;
and (3) the evidence at trial was sufficient to show that Grande engaged in
precisely that conduct, there is no basis to reverse the jury’s verdict that
Grande is liable for contributory infringement. 15
IV.
Next, we consider Grande’s damages argument, which presents a
question of first impression in this circuit. 16 The district court determined
that each of Plaintiffs’ 1,403 sound recordings that was infringed entitled
Plaintiffs to an individual statutory damages award. Grande contends that
the text of the Copyright Act requires a different result: Whenever more than
one of those recordings appeared on the same album, Plaintiffs are entitled to
only one statutory damages award for that album, regardless of how many
individual recordings from the album were infringed. Grande has the better
reading of the text of the statute.
Under § 504 of the Copyright Act, a copyright owner may elect to
recover
_____________________
15
Because we affirm the jury’s liability verdict, we do not reach Plaintiffs’ cross-
appeal challenging the district court’s jury instruction concerning proof of actual
distribution.
16
The only Fifth Circuit case to have addressed this question did so in an
unpublished opinion, in which the court similarly concluded “that the district court did not
abuse its discretion in treating the photographs”—which the plaintiff had registered
“under a single copyright registration number” and which he “himself refer[red] to . . . in
the record on appeal as a ‘collection’”—“as a compilation instead of individual works for
purposes of calculating damages.” Cullum v. Diamond A Hunting, Inc., 484 F. App’x 1000,
1002 (5th Cir. 2012) (per curiam).
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an award of statutory damages for all infringements involved in
the action, with respect to any one work, . . . in a sum of not less
than $750 or more than $30,000 as the court considers just.
For the purposes of this subsection, all the parts of a compilation
or derivative work constitute one work.
17 U.S.C. § 504(c)(1) (emphases added). The Copyright Act defines a
“compilation” as “a work formed by the collection and assembling of
preexisting materials or of data that are selected, coordinated, or arranged in
such a way that the resulting work as a whole constitutes an original work of
authorship.” Id. § 101. The term “compilation” includes “collective
works,” which are defined as works “in which a number of contributions,
constituting separate and independent works in themselves, are assembled
into a collective whole.” Id. To be eligible for statutory damages for
infringement of “any one work” under § 504, the copyright owner must have
registered “the work” within the time required by § 412, which is titled
“Registration as prerequisite to certain remedies for infringement.” See 17
U.S.C. §§ 412, 504(c); see also S. Credentialing Support Servs., L.L.C. v.
Hammond Surgical Hosp., L.L.C., 946 F.3d 780, 785 (5th Cir. 2020)
(emphasizing “the need for the limit on statutory damages to be read
consistently with the provision [§ 412] authorizing those damages in the first
place”).
The Supreme Court has “ma[d]e clear that the starting point for our
analysis is the statutory text.” Desert Palace, Inc. v. Costa, 539 U.S. 90, 98
(2003). “And where, as here, the words of the statute are unambiguous, the
‘judicial inquiry is complete.’” Id. (quoting Conn. Nat’l Bank v. Germain,
503 U.S. 249, 254 (1992)). The plain language of the Copyright Act
mandates the conclusion that each registered compilation is eligible for only
one award of statutory damages. As the Supreme Court has “stated time and
again,” “courts must presume that a legislature says in a statute what it
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means and means in a statute what it says there.” Conn. Nat’l Bank, 503 U.S.
at 253-54.
In concluding otherwise, the district court “found that the majority of
case law holds that when individual sound recordings are available as
individual works, a plaintiff can recover one statutory damages award per
recording.” The district court’s assessment of existing circuit case law was
accurate: As Plaintiffs contend, the majority of the seven circuits to have
considered this question apply a “functional” test that looks to “where the
market assigns value,” deciding whether the parts of a compilation are
individually eligible for statutory damages by determining whether the parts
have “independent economic value.” Sullivan v. Flora, Inc., 936 F.3d 562,
572 (7th Cir. 2019). In addition to the Seventh Circuit, the D.C., First,
Ninth, and Eleventh 17 Circuits also take this approach. See, e.g., Walt Disney
Co. v. Powell, 897 F.2d 565, 570 (D.C. Cir. 1990); Gamma Audio & Video, Inc.
v. Ean-Chea, 11 F.3d 1106, 1117-18 (1st Cir. 1993); VHT, 69 F.4th at 990;
MCA Television Ltd. v. Feltner, 89 F.3d 766, 769 (11th Cir. 1996).
Contrary to Plaintiffs’ assertion, the Second Circuit has not adopted
this functional test, although it has awarded statutory damages for individual
songs on albums. In EMI Christian Music Group, Inc. v. MP3tunes, LLC, the
Second Circuit acknowledged that “[m]aterials that are sold as part of a
compilation, such as songs on an album, ordinarily are not deemed separate
works for the purpose of determining statutory damages.” 844 F.3d 79, 101
_____________________
17
Notably, since its decision in Feltner adopting the independent-economic-value
test, the Eleventh Circuit appears to have narrowed its application of that test. See Yellow
Pages Photos, Inc. v. Ziplocal, LP, 795 F.3d 1255, 1279 (11th Cir. 2015) (“Although this Court
held that the particular television episodes in Feltner were separate works because they
could each ‘live their own copyright life,’ we certainly do not read the Feltner decision as
foreclosing the application of 17 U.S.C. § 504(c)(1)’s directive that ‘all parts of a
compilation . . . constitute one work’ for all cases.” (internal citation omitted)).
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(2d Cir. 2016) (citing Bryant, 603 F.3d at 141). Notwithstanding its decision
in Bryant, in which the Second Circuit held that “[a]n album falls within the
[Copyright] Act’s expansive definition of [a] compilation,” Bryant, 603 F.3d
at 140, the court in MP3tunes concluded that “when a copyright holder or
publisher issues material on an independent basis, the law permits a statutory
damages award for each individual work,” MP3tunes, 844 F.3d at 101. That
was so, the court in MP3tunes reasoned, even though Bryant had held that
“[b]ased on a plain reading of the statute, . . . infringement of an album
should result in only one statutory damage award,” and “[t]he fact that each
song may have received a separate copyright”—and that the infringer “sold
the songs individually”—“is irrelevant to this analysis.” Bryant, 603 F.3d at
140-41. The court in MP3tunes reached that conclusion because the “focus
is on whether the plaintiff—the copyright holder—issued its works
separately, or together as a unit,” not on how the infringer distributed the
works. 844 F.3d at 101. So, the district court “properly allowed separate
statutory damages awards for songs that the plaintiffs issued as singles, even
if those songs were also made available on albums.” Id.
The Fourth Circuit’s approach also has uncertainty. Its answer to the
question presented in Xoom, Inc. v. Imageline, Inc. followed the Second
Circuit’s approach in Bryant but suggested that different facts might require
a different construction of § 504(c)(1). 323 F.3d 279, 285 (4th Cir. 2003),
abrogated on other grounds by Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154
(2010). In Xoom, the court determined that two collections of several
thousand digital images, protected under two copyright registrations, were
compilations and thus only eligible for two statutory damages awards under
§ 504(c)(1). See id. at 285 n.8 (explaining that “Imageline is entitled to one
award of statutory damages per work infringed because SuperBundle and
Master Gallery are compilations or derivative works in which Imageline holds
copyrights”). At another point in its opinion, however, the Fourth Circuit
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appeared to agree that “the Copyright Act does not bar multiple awards for
statutory damages when one registration includes multiple works.” Id. at
285. As the Seventh Circuit in Sullivan recognized, “[t]his qualification is
substantial and seems to suggest the Fourth Circuit may chart a different
course—perhaps the one followed by most other circuits—on different
facts.” 936 F.3d at 571; cf. Cox, 93 F.4th at 240 (assuming arguendo Cox’s
contention “that Plaintiffs were not entitled to separate statutory damages
awards for songs that were contained on the same album,” but “not
decid[ing] whether Cox’s legal premise [was] sound” because “Cox [did]
not identify evidence from which the jury could have determined which songs
were released on albums together”).
Plaintiffs urge this court to adopt the majority approach and affirm the
district court’s ruling that because each song “has its own independent
economic value in the marketplace at the time it is infringed, it constitutes a
separate work for the purpose of determining eligibility for statutory
damages.” But their position—which, admittedly, is a position shared by
five other circuit courts—cannot be squared with the statutory text.
Nothing in the statute permits Plaintiffs to recover damages for each
individual song because the song was “exploited . . . individually,” or began
to live its “own copyright life.” Gamma Audio & Video, 11 F.3d at 1116
(citation omitted). Instead, because—as Plaintiffs concede—each album
constitutes a compilation, the statutory text constrains Plaintiffs’ eligible
award to statutory damages for each album, rather than each song in suit.
Record evidence supports this conclusion. The works’ certificates of
registration—which are “prima facie evidence . . . of the facts stated”
therein, 17 U.S.C. § 410(c)—bear numerous hallmarks of compilations.
Many of the certificates feature express notations like “Basis for registration:
collective work,” “Compilation of sound recordings,” and “Sound
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recordings registered as a collective work.” Those same certificates and
many others identify the album title as the “Title of Work.” Additionally,
many of the certificates identify preexisting material to be excluded from the
registration, as required “in the case of a compilation or derivative work.” 17
U.S.C. § 409(9). And nearly all the registrations are designated as “works
made for hire.” “Work made for hire” status is available only for certain
types of works. 17 U.S.C. § 101. Here, because the artists were not Plaintiffs’
employees, the only two possible bases for “work made for hire” registration
are that the work is a “compilation” or a “collective work,” which is a
species of compilation. See id.
The amicus supporting plaintiffs, the Copyright Alliance, separately
contends that “[w]hile Section 504(c)(1) of the Act provides that all parts of
a compilation constitute one work, it does not say that individual works in a
compilation cannot also exist as separate, independent works.” See VHT, 69
F.4th at 990. But with all due respect, that is not what the statute says. True,
parts of a compilation can constitute separate works for other purposes, 18 but
“[f]or the purposes of [§ 504(c)], all the parts of a compilation or derivative
work constitute one work.” 17 U.S.C. § 504(c)(1). “One work” means one
work: If parts of a compilation are counted independently of the compilation
and as additive to the compilation, they—mathematically and
axiomatically—no longer constitute “one work.” So, in fact, § 504 does “say
that individual works in a compilation cannot also exist as separate,
_____________________
18
Relevant legislative history confirms that
[w]here the suit involves infringement of more than one separate and independent
work, minimum statutory damages for each work must be awarded. . . . Subsection (c)(1)
makes clear, however, that, although they are regarded as independent works for other purposes,
“all the parts of a compilation or derivative work constitute one work” for this purpose.
H.R. Rep. No. 94-1476, at 162 (1976) (emphases added).
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independent works”—at least when determining eligibility for “an award of
statutory damages for all infringements involved in the action.” Id.
The Copyright Alliance also marshals policy arguments against this
interpretation of the statutory text. The Copyright Alliance complains that
the result of Grande’s reading is harsh and will “threaten the livelihood of
some copyright owners.” Paraphrasing the Ninth Circuit, the Copyright
Alliance argues that if a copyright holder could receive only one statutory
damage award for infringements of multiple works that have independent
value, then the attempt to save the copyright owner expenses and foster
efficiency via registration of a compilation, collective work, or group
registration 19 would be “at best an empty gesture and at worst a cruel joke.”
VHT, 69 F.4th at 992. But “to award statutory damages on a per-song basis
would make a total mockery of Congress’[s] express mandate that all parts of
a compilation must be treated as a single ‘work’ for purposes of computing
statutory damages.” Bryant, 603 F.3d at 142 (internal quotation marks and
citation omitted). And between policy arguments and the statutory text—no
matter how sympathetic the plight of the copyright owners—the text must
prevail. See Desert Palace, 539 U.S. at 98. So, the strong policy arguments
made by Plaintiffs and their amicus are best directed at Congress.
In sum, the record evidence indicates that many of the works in suit
are compilations (albums) comprising individual works (songs). The statute
unambiguously instructs that a compilation is eligible for only one statutory
damage award, whether or not its constituent works are separately
_____________________
19
Importantly, “[n]one of the works at issue here were registered using group
registration,” which—along with individual registration of each work—Grande
acknowledges would “provide[] the public notice Congress intended.” See 37 C.F.R.
§ 202.4.
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copyrightable. Thus, the district court erred in holding that each individual
song in a compilation was eligible for a statutory damage award.
* * *
All that remains is the appropriate remedy. For the first time on
appeal, Grande asks this court to “reverse the district court’s denial of JMOL
and modify the statutory damages award to $22,066,446 based on 662
copyrighted works.” In its renewed motion for JMOL or a new trial, Grande
requested only that the district court “order a new trial on the issue of
statutory damages.” Nowhere in its briefing at summary judgment or post-
judgment did Grande assert that only 662 copyrighted works in evidence
were eligible for statutory damages. In Grande’s own words below, “[n]o
factfinder has considered these issues and determined from the record
evidence which of the 1,403 sound recordings at issue are entitled to and
eligible for a separate award of statutory damages under sections 504(c) and
412.” Accordingly, we vacate the statutory-damages award and remand for
a new trial on damages with the proper jury instruction. See Sullivan, 936
F.3d at 572 (vacating where “[t]he district court did not ask (or put to the
jury) the questions . . . necessary for resolving the statutory damages
question”).
V.
For the foregoing reasons, we AFFIRM the jury’s verdict finding
Grande liable for contributory copyright infringement; VACATE the jury’s
damages award and REMAND for a new trial on damages; and DISMISS
Plaintiffs’ conditional cross-appeal as moot.
42