copyright infringement

Judge: Pirate libraries may have profited from Meta torrenting 80TB of books

AI, AI training, BItTorrent, copyright, copyright infringement, libgen, LLaMA, Meta, online piracy, Policy, shadow libraries, torrenting / Shannon Garcia / June 27, 2025

It could certainly look worse for Meta if authors manage to present evidence supporting the second way that torrenting could be relevant to the case, Chhabaria suggested.

“Meta downloading copyrighted material from shadow libraries” would also be relevant to the character of the use, “if it benefitted those who created the libraries and thus supported and perpetuated their unauthorized copying and distribution of copyrighted works,” Chhabria wrote.

Counting potential strikes against Meta, Chhabria pointed out that the “vast majority of cases” involving “this sort of peer-to-peer file-sharing” are found to “constitute copyright infringement.” And it likely doesn’t help Meta’s case that “some of the libraries Meta used have themselves been found liable for infringement.”

However, Meta may overcome this argument, too, since book authors “have not submitted any evidence” that potentially shows how Meta’s downloading may perhaps be “propping up” or financially benefiting pirate libraries.

Finally, Chhabria noted that the “last issue relating to the character of Meta’s use” of books in regards to its torrenting is “the relationship between Meta’s downloading of the plaintiffs’ books and Meta’s use of the books to train Llama.”

Authors had tried to argue that these elements were distinct. But Chhabria said there’s no separating the fact that Meta downloaded the books to serve the “highly transformative” purpose of training Llama.

“Because Meta’s ultimate use of the plaintiffs’ books was transformative, so too was Meta’s downloading of those books,” Chhabria wrote.

AI training rulings may get more authors paid

Authors only learned of Meta’s torrenting through discovery in the lawsuit, and because of that, Chhabria noted that “the record on Meta’s alleged distribution is incomplete.”

It’s possible that authors may be able to show evidence that Meta “contributed to the BitTorrent network” by providing significant computing power that could’ve meaningfully assisted shadow libraries, Chhabria said in a footnote.

Judge: Pirate libraries may have profited from Meta torrenting 80TB of books Read More »

Key fair use ruling clarifies when books can be used for AI training

AI, AI models, Anthropic, Artificial Intelligence, Claude, copyright, copyright infringement, copyright law, large language models, LLMs, Policy / Beth Washington / June 25, 2025

“This order doubts that any accused infringer could ever meet its burden of explaining why downloading source copies from pirate sites that it could have purchased or otherwise accessed lawfully was itself reasonably necessary to any subsequent fair use,” Alsup wrote. “Such piracy of otherwise available copies is inherently, irredeemably infringing even if the pirated copies are immediately used for the transformative use and immediately discarded.”

But Alsup said that the Anthropic case may not even need to decide on that, since Anthropic’s retention of pirated books for its research library alone was not transformative. Alsup wrote that Anthropic’s argument to hold onto potential AI training material it pirated in case it ever decided to use it for AI training was an attempt to “fast glide over thin ice.”

Additionally Alsup pointed out that Anthropic’s early attempts to get permission to train on authors’ works withered, as internal messages revealed the company concluded that stealing books was considered the more cost-effective path to innovation “to avoid ‘legal/practice/business slog,’ as cofounder and chief executive officer Dario Amodei put it.”

“Anthropic is wrong to suppose that so long as you create an exciting end product, every ‘back-end step, invisible to the public,’ is excused,” Alsup wrote. “Here, piracy was the point: To build a central library that one could have paid for, just as Anthropic later did, but without paying for it.”

To avoid maximum damages in the event of a loss, Anthropic will likely continue arguing that replacing pirated books with purchased books should water down authors’ fight, Alsup’s order suggested.

“That Anthropic later bought a copy of a book it earlier stole off the Internet will not absolve it of liability for the theft, but it may affect the extent of statutory damages,” Alsup noted.

Key fair use ruling clarifies when books can be used for AI training Read More »

Man who stole 1,000 DVDs from employer strikes plea deal over movie leaks

anti-piracy, Blu-ray, copyright infringement, dvd rip, piracy, Policy, spiderman / Shannon Garcia / May 30, 2025

An accused movie pirate who stole more than 1,000 Blu-ray discs and DVDs while working for a DVD manufacturing company struck a plea deal this week to lower his sentence after the FBI claimed the man’s piracy cost movie studios millions.

Steven Hale no longer works for the DVD company. He was arrested in March, accused of “bypassing encryption that prevents unauthorized copying” and ripping pre-release copies of movies he could only access because his former employer was used by major movie studios. As alleged by the feds, his game was beating studios to releases to achieve the greatest possible financial gains from online leaks.

Among the popular movies that Hale is believed to have leaked between 2021 and 2022 was Spider-Man: No Way Home, which the FBI alleged was copied “tens of millions of times” at an estimated loss of “tens of millions of dollars” for just one studio on one movie. Other movies Hale ripped included animated hits like Encanto and Sing 2, as well as anticipated sequels like The Matrix: Resurrections and Venom: Let There Be Carnage.

The cops first caught wind of Hale’s scheme in March 2022. They seized about 1,160 Blu-rays and DVDs in what TorrentFreak noted were the days just “after the Spider-Man movie leaked online.” It’s unclear why it took close to three years before Hale’s arrest, but TorrentFreak suggested that Hale’s case is perhaps part of a bigger investigation into the Spider-Man leaks.

Man who stole 1,000 DVDs from employer strikes plea deal over movie leaks Read More »

Judge on Meta’s AI training: “I just don’t understand how that can be fair use”

AI training, copyright, copyright infringement, fair use, leeching, LLaMA, Meta, piracy, Policy, torrenting / Beth Washington / May 3, 2025

Judge downplayed Meta’s “messed up” torrenting in lawsuit over AI training.

A judge who may be the first to rule on whether AI training data is fair use appeared skeptical Thursday at a hearing where Meta faced off with book authors over the social media company’s alleged copyright infringement.

Meta, like most AI companies, holds that training must be deemed fair use, or else the entire AI industry could face immense setbacks, wasting precious time negotiating data contracts while falling behind global rivals. Meta urged the court to rule that AI training is a transformative use that only references books to create an entirely new work that doesn’t replicate authors’ ideas or replace books in their markets.

At the hearing that followed after both sides requested summary judgment, however, Judge Vince Chhabria pushed back on Meta attorneys arguing that the company’s Llama AI models posed no threat to authors in their markets, Reuters reported.

“You have companies using copyright-protected material to create a product that is capable of producing an infinite number of competing products,” Chhabria said. “You are dramatically changing, you might even say obliterating, the market for that person’s work, and you’re saying that you don’t even have to pay a license to that person.”

Declaring, “I just don’t understand how that can be fair use,” the shrewd judge apparently stoked little response from Meta’s attorney, Kannon Shanmugam, apart from a suggestion that any alleged threat to authors’ livelihoods was “just speculation,” Wired reported.

Authors may need to sharpen their case, which Chhabria warned could be “taken away by fair use” if none of the authors suing, including Sarah Silverman, Ta-Nehisi Coates, and Richard Kadrey, can show “that the market for their actual copyrighted work is going to be dramatically affected.”

Determined to probe this key question, Chhabria pushed authors’ attorney, David Boies, to point to specific evidence of market harms that seemed noticeably missing from the record.

“It seems like you’re asking me to speculate that the market for Sarah Silverman’s memoir will be affected by the billions of things that Llama will ultimately be capable of producing,” Chhabria said. “And it’s just not obvious to me that that’s the case.”

But if authors can prove fears of market harms are real, Meta might struggle to win over Chhabria, and that could set a precedent impacting copyright cases challenging AI training on other kinds of content.

The judge repeatedly appeared to be sympathetic to authors, suggesting that Meta’s AI training may be a “highly unusual case” where even though “the copying is for a highly transformative purpose, the copying has the high likelihood of leading to the flooding of the markets for the copyrighted works.”

And when Shanmugam argued that copyright law doesn’t shield authors from “protection from competition in the marketplace of ideas,” Chhabria resisted the framing that authors weren’t potentially being robbed, Reuters reported.

“But if I’m going to steal things from the marketplace of ideas in order to develop my own ideas, that’s copyright infringement, right?” Chhabria responded.

Wired noted that he asked Meta’s lawyers, “What about the next Taylor Swift?” If AI made it easy to knock off a young singer’s sound, how could she ever compete if AI produced “a billion pop songs” in her style?

In a statement, Meta’s spokesperson reiterated the company’s defense that AI training is fair use.

“Meta has developed transformational open source AI models that are powering incredible innovation, productivity, and creativity for individuals and companies,” Meta’s spokesperson said. “Fair use of copyrighted materials is vital to this. We disagree with Plaintiffs’ assertions, and the full record tells a different story. We will continue to vigorously defend ourselves and to protect the development of GenAI for the benefit of all.”

Meta’s torrenting seems “messed up”

Some have pondered why Chhabria appeared so focused on market harms, instead of hammering Meta for admittedly illegally pirating books that it used for its AI training, which seems to be obvious copyright infringement. According to Wired, “Chhabria spoke emphatically about his belief that the big question is whether Meta’s AI tools will hurt book sales and otherwise cause the authors to lose money,” not whether Meta’s torrenting of books was illegal.

The torrenting “seems kind of messed up,” Chhabria said, but “the question, as the courts tell us over and over again, is not whether something is messed up but whether it’s copyright infringement.”

It’s possible that Chhabria dodged the question for procedural reasons. In a court filing, Meta argued that authors had moved for summary judgment on Meta’s alleged copying of their works, not on “unsubstantiated allegations that Meta distributed Plaintiffs’ works via torrent.”

In the court filing, Meta alleged that even if Chhabria agreed that the authors’ request for “summary judgment is warranted on the basis of Meta’s distribution, as well as Meta’s copying,” that the authors “lack evidence to show that Meta distributed any of their works.”

According to Meta, authors abandoned any claims that Meta’s seeding of the torrented files served to distribute works, leaving only claims about Meta’s leeching. Meta argued that the authors “admittedly lack evidence that Meta ever uploaded any of their works, or any identifiable part of those works, during the so-called ‘leeching’ phase,” relying instead on expert estimates based on how torrenting works.

It’s also possible that for Chhabria, the torrenting question seemed like an unnecessary distraction. Former Meta attorney Mark Lumley, who quit the case earlier this year, told Vanity Fair that the torrenting was “one of those things that sounds bad but actually shouldn’t matter at all in the law. Fair use is always about uses the plaintiff doesn’t approve of; that’s why there is a lawsuit.”

Lumley suggested that court cases mulling fair use at this current moment should focus on the outputs, rather than the training. Citing the ruling in a case where Google Books scanning books to share excerpts was deemed fair use, Lumley argued that “all search engines crawl the full Internet, including plenty of pirated content,” so there’s seemingly no reason to stop AI crawling.

But the Copyright Alliance, a nonprofit, non-partisan group supporting the authors in the case, in a court filing alleged that Meta, in its bid to get AI products viewed as transformative, is aiming to do the opposite. “When describing the purpose of generative AI,” Meta allegedly strives to convince the court to “isolate the ‘training’ process and ignore the output of generative AI,” because that’s seemingly the only way that Meta can convince the court that AI outputs serve “a manifestly different purpose from Plaintiffs’ books,” the Copyright Alliance argued.

“Meta’s motion ignores what comes after the initial ‘training’—most notably the generation of output that serves the same purpose of the ingested works,” the Copyright Alliance argued. And the torrenting question should matter, the group argued, because unlike in Google Books, Meta’s AI models are apparently training on pirated works, not “legitimate copies of books.”

Chhabria will not be making a snap decision in the case, planning to take his time and likely stressing not just Meta, but every AI company defending training as fair use the longer he delays. Understanding that the entire AI industry potentially has a stake in the ruling, Chhabria apparently sought to relieve some tension at the end of the hearing with a joke, Wired reported.

“I will issue a ruling later today,” Chhabria said. “Just kidding! I will take a lot longer to think about it.”

Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.

Judge on Meta’s AI training: “I just don’t understand how that can be fair use” Read More »

Feds arrest man for sharing DVD rip of Spider-Man movie with millions online

Blu-ray, copyright infringement, copyright law, dvd, Marvel, marvel movies, online piracy, Policy, Spider-Man: no way home / Kelly Newman / March 8, 2025

A 37-year-old Tennessee man was arrested Thursday, accused of stealing Blu-rays and DVDs from a manufacturing and distribution company used by major movie studios and sharing them online before the movies’ scheduled release dates.

According to a US Department of Justice press release, Steven Hale worked at the DVD company and allegedly stole “numerous ‘pre-release’ DVDs and Blu-rays” between February 2021 and March 2022. He then allegedly “ripped” the movies, “bypassing encryption that prevents unauthorized copying” and shared copies widely online. He also supposedly sold the actual stolen discs on e-commerce sites, the DOJ alleged.

Hale has been charged with “two counts of criminal copyright infringement and one count of interstate transportation of stolen goods,” the DOJ said. He faces a maximum sentence of five years for the former, and 10 years for the latter.

Among blockbuster movies that Hale is accused of stealing are Dune, F9: The Fast Saga, Venom: Let There Be Carnage, Godzilla v. Kong, and, perhaps most notably, Spider-Man: No Way Home.

The DOJ claimed that “copies of Spider-Man: No Way Home were downloaded tens of millions of times, with an estimated loss to the copyright owner of tens of millions of dollars.”

In 2021, when the Spider-Man movie was released in theaters only, it became the first movie during the COVID-19 pandemic to gross more than $1 billion at the box office, Forbes noted. But for those unwilling to venture out to see the movie, Forbes reported, the temptation to find leaks and torrents apparently became hard to resist. It was in this climate that Hale is accused of widely sharing copies of the movie before it was released online.

Feds arrest man for sharing DVD rip of Spider-Man movie with millions online Read More »

Music labels will regret coming for the Internet Archive, sound historian says

copyright, copyright infringement, fair use, great 78 project, Internet Archive, Policy / Beth Washington / March 8, 2025

But David Seubert, who manages sound collections at the University of California, Santa Barbara library, told Ars that he frequently used the project as an archive and not just to listen to the recordings.

For Seubert, the videos that IA records of the 78 RPM albums capture more than audio of a certain era. Researchers like him want to look at the label, check out the copyright information, and note the catalogue numbers, he said.

“It has all this information there,” Seubert said. “I don’t even necessarily need to hear it,” he continued, adding, “just seeing the physicality of it, it’s like, ‘Okay, now I know more about this record.'”

Music publishers suing IA argue that all the songs included in their dispute—and likely many more, since the Great 78 Project spans 400,000 recordings—”are already available for streaming or downloading from numerous services.”

“These recordings face no danger of being lost, forgotten, or destroyed,” their filing claimed.

But Nathan Georgitis, the executive director of the Association for Recorded Sound Collections (ARSC), told Ars that you just don’t see 78 RPM records out in the world anymore. Even in record stores selling used vinyl, these recordings will be hidden “in a few boxes under the table behind the tablecloth,” Georgitis suggested. And in “many” cases, “the problem for libraries and archives is that those recordings aren’t necessarily commercially available for re-release.”

That “means that those recordings, those artists, the repertoire, the recorded sound history in itself—meaning the labels, the producers, the printings—all of that history kind of gets obscured from view,” Georgitis said.

Currently, libraries trying to preserve this history must control access to audio collections, Georgitis said. He sees IA’s work with the Great 78 Project as a legitimate archive in that, unlike a streaming service, where content may be inconsistently available, IA’s “mission is to preserve and provide access to content over time.”

Music labels will regret coming for the Internet Archive, sound historian says Read More »

ISP sued by record labels agrees to identify 100 users accused of piracy

altice, copyright infringement, Policy / Kelly Newman / February 21, 2025

Cable company Altice agreed to give Warner and other record labels the names and contact information of 100 broadband subscribers who were accused of pirating songs.

The subscribers “were the subject of RIAA or third party copyright notices,” said a court order that approved the agreement between Altice and the plaintiff record companies. Altice is notifying each subscriber “of Altice’s intent to disclose their name and contact information to Plaintiffs pursuant to this Order,” and telling the notified subscribers that they have 30 days to seek relief from the court.

If subscribers do not object within a month, Altice must disclose the subscribers’ names, phone numbers, addresses, and email addresses. The judge’s order was issued on February 12 and reported yesterday by TorrentFreak.

The names and contact information will be classified as “highly confidential—attorneys’ eyes only.” A separate order issued in April 2024 said that documents produced in discovery “shall be used by the Parties only in the litigation of this Action and shall not be used for any other purpose.”

Altice, which operates the Optimum brand, was sued in December 2023 in US District Court for the Eastern District of Texas. The music publishers’ complaint alleges that Altice “knowingly contributed to, and reaped substantial profits from, massive copyright infringement committed by thousands of its subscribers.”

The lawsuit said plaintiffs sent over 70,000 infringement notices to Altice from February 2020 through November 2023. At least a few subscribers were allegedly hit with hundreds of notices. The lawsuit gave three examples of IP addresses that were cited in 502, 781, and 926 infringement notices, respectively.

Altice failed to terminate repeat infringers whose IP addresses were flagged in these copyright notices, the lawsuit said. “Those notices advised Altice of its subscribers’ blatant and systematic use of Altice’s Internet service to illegally download, copy, and distribute Plaintiffs’ copyrighted music through BitTorrent and other online file-sharing services. Rather than working with Plaintiffs to curb this massive infringement, Altice did nothing, choosing to prioritize its own profits over its legal obligations,” the plaintiffs alleged.

ISPs face numerous lawsuits

This is one of numerous copyright lawsuits filed against broadband providers, and it’s not the first time an ISP handed names of subscribers to the plaintiffs. We have previously written articles about film studios trying to force Reddit to identify users who admitted torrenting in discussion forums. Reddit was able to avoid providing information in one case in part because the film studios already obtained identifying details for 118 subscribers directly from Grande, the ISP they had sued.

ISP sued by record labels agrees to identify 100 users accused of piracy Read More »

Anthropic gives court authority to intervene if chatbot spits out song lyrics

AI, Anthropic, chatbots, Claude, copyright infringement, copyright law, generative ai, music publishers, Policy, song lyrics / Kelly Newman / January 3, 2025

Anthropic did not immediately respond to Ars’ request for comment on how guardrails currently work to prevent the alleged jailbreaks, but publishers appear satisfied by current guardrails in accepting the deal.

Whether AI training on lyrics is infringing remains unsettled

Now, the matter of whether Anthropic has strong enough guardrails to block allegedly harmful outputs is settled, Lee wrote, allowing the court to focus on arguments regarding “publishers’ request in their Motion for Preliminary Injunction that Anthropic refrain from using unauthorized copies of Publishers’ lyrics to train future AI models.”

Anthropic said in its motion opposing the preliminary injunction that relief should be denied.

“Whether generative AI companies can permissibly use copyrighted content to train LLMs without licenses,” Anthropic’s court filing said, “is currently being litigated in roughly two dozen copyright infringement cases around the country, none of which has sought to resolve the issue in the truncated posture of a preliminary injunction motion. It speaks volumes that no other plaintiff—including the parent company record label of one of the Plaintiffs in this case—has sought preliminary injunctive relief from this conduct.”

In a statement, Anthropic’s spokesperson told Ars that “Claude isn’t designed to be used for copyright infringement, and we have numerous processes in place designed to prevent such infringement.”

“Our decision to enter into this stipulation is consistent with those priorities,” Anthropic said. “We continue to look forward to showing that, consistent with existing copyright law, using potentially copyrighted material in the training of generative AI models is a quintessential fair use.”

This suit will likely take months to fully resolve, as the question of whether AI training is a fair use of copyrighted works is complex and remains hotly disputed in court. For Anthropic, the stakes could be high, with a loss potentially triggering more than $75 million in fines, as well as an order possibly forcing Anthropic to reveal and destroy all the copyrighted works in its training data.

Anthropic gives court authority to intervene if chatbot spits out song lyrics Read More »

Supreme Court wants US input on whether ISPs should be liable for users’ piracy

The Supreme Court signaled it may take up a case that could determine whether Internet service providers must terminate users who are accused of copyright infringement. In an order issued today, the court invited the Department of Justice’s solicitor general to file a brief “expressing the views of the United States.”

In Sony Music Entertainment v. Cox Communications, the major record labels argue that cable provider Cox should be held liable for failing to terminate users who were repeatedly flagged for infringement based on their IP addresses being connected to torrent downloads. There was a mixed ruling at the US Court of Appeals for the 4th Circuit as the appeals court affirmed a jury’s finding that Cox was guilty of willful contributory infringement but reversed a verdict on vicarious infringement “because Cox did not profit from its subscribers’ acts of infringement.”

That ruling vacated a $1 billion damages award and ordered a new damages trial. Cox and Sony are both seeking a Supreme Court review. Cox wants to overturn the finding of willful contributory infringement, while Sony wants to reinstate the $1 billion verdict.

The Supreme Court asking for US input on Sony v. Cox could be a precursor to the high court taking up the case. For example, the court last year asked the solicitor general to weigh in on Texas and Florida laws that restricted how social media companies can moderate their platforms. The court subsequently took up the case and vacated lower-court rulings, making it clear that content moderation is protected by the First Amendment.

Supreme Court wants US input on whether ISPs should be liable for users’ piracy Read More »

Musi fans refuse to update iPhones until Apple unblocks controversial app

App Store, Apple, copyright infringement, copyright law, musi, music streaming, Policy, Spotify, youtube, youtube music / Beth Washington / November 19, 2024

“The public interest in the preservation of intellectual property rights weighs heavily against the injunction sought here, which would force Apple to distribute an app over the repeated and consistent objections of non-parties who allege their rights are infringed by the app,” Apple argued.

Musi fans vow loyalty

For Musi fans expressing their suffering on Reddit, Musi appears to be irreplaceable.

Unlike other free apps that continually play ads, Musi only serves ads when the app is initially opened, then allows uninterrupted listening. One Musi user also noted that Musi allows for an unlimited number of videos in a playlist, where YouTube caps playlists at 5,000 videos.

“Musi is the only playback system I have to play all 9k of my videos/songs in the same library,” the Musi fan said. “I honestly don’t just use Musi just cause it’s free. It has features no other app has, especially if you like to watch music videos while you listen to music.”

“Spotify isn’t cutting it,” one Reddit user whined.

“I hate Spotify,” another user agreed.

“I think of Musi every other day,” a third user who apparently lost the app after purchasing a new phone said. “Since I got my new iPhone, I have to settle for other music apps just to get by (not enough, of course) to listen to music in my car driving. I will be patiently waiting once Musi is available to redownload.”

Some Musi fans who still have access gloat in the threads, while others warn the litigation could soon doom the app for everyone.

Musi continues to perhaps optimistically tell users that the app is coming back, reassuring anyone whose app was accidentally offloaded that their libraries remain linked through iCloud and will be restored if it does.

Some users buy into Musi’s promises, while others seem skeptical that Musi can take on Apple. To many users still clinging to their Musi app, updating their phones has become too risky until the litigation resolves.

“Please,” one Musi fan begged. “Musi come back!!!”

Musi fans refuse to update iPhones until Apple unblocks controversial app Read More »

Record labels unhappy with court win, say ISP should pay more for user piracy

Music companies appeal, demanding payment for each song instead of each album.

Credit: Getty Images | digicomphoto

The big three record labels notched another court victory against a broadband provider last month, but the music publishing firms aren’t happy that an appeals court only awarded per-album damages instead of damages for each song.

Universal, Warner, and Sony are seeking an en banc rehearing of the copyright infringement case, claiming that Internet service provider Grande Communications should have to pay per-song damages over its failure to terminate the accounts of Internet users accused of piracy. The decision to make Grande pay for each album instead of each song “threatens copyright owners’ ability to obtain fair damages,” said the record labels’ petition filed last week.

The case is in the conservative-leaning US Court of Appeals for the 5th Circuit. A three-judge panel unanimously ruled last month that Grande, a subsidiary of Astound Broadband, violated the law by failing to terminate subscribers accused of being repeat infringers. Subscribers were flagged for infringement based on their IP addresses being connected to torrent downloads monitored by Rightscorp, a copyright-enforcement company used by the music labels.

The one good part of the ruling for Grande is that the 5th Circuit ordered a new trial on damages because it said a $46.8 million award was too high. Appeals court judges found that the district court “erred in granting JMOL [judgment as a matter of law] that each of the 1,403 songs in suit was eligible for a separate award of statutory damages.” The damages were $33,333 per song.

Record labels want the per-album portion of the ruling reversed while leaving the rest of it intact.

All parts of album “constitute one work”

The Copyright Act says that “all the parts of a compilation or derivative work constitute one work,” the 5th Circuit panel noted. The panel concluded that “the statute unambiguously instructs that a compilation is eligible for only one statutory damage award, whether or not its constituent works are separately copyrightable.”

When there is a choice “between policy arguments and the statutory text—no matter how sympathetic the plight of the copyright owners—the text must prevail,” the ruling said. “So, the strong policy arguments made by Plaintiffs and their amicus are best directed at Congress.”

Record labels say the panel got it wrong, arguing that the “one work” portion of the law “serves to prevent a plaintiff from alleging and proving infringement of the original authorship in a compilation (e.g., the particular selection, coordination, or arrangement of preexisting materials) and later arguing that it should be entitled to collect separate statutory damages awards for each of the compilation’s constituent parts. That rule should have no bearing on this case, where Plaintiffs alleged and proved the infringement of individual sound recordings, not compilations.”

Record labels say that six other US appeals courts “held that Section 504(c)(1) authorizes a separate statutory damages award for each infringed copyrightable unit of expression that was individually commercialized by its copyright owner,” though several of those cases involved non-musical works such as clip-art images, photos, and TV episodes.

Music companies say the per-album decision prevents them from receiving “fair damages” because “sound recordings are primarily commercialized (and generate revenue for copyright owners) as individual tracks, not as parts of albums.” The labels also complained of what they call “a certain irony to the panel’s decision,” because “the kind of rampant peer-to-peer infringement at issue in this case was a primary reason that record companies had to shift their business models from selling physical copies of compilations (albums) to making digital copies of recordings available on an individual basis (streaming/downloading).”

Record labels claim the panel “inverted the meaning” of the statutory text “and turned a rule designed to ensure that compilation copyright owners do not obtain statutory damages windfalls into a rule that prevents copyright owners of individual works from obtaining just compensation.” The petition continued:

The practical implications of the panel’s rule are stark. For example, if an infringer separately downloads the recordings of four individual songs that so happened at any point in time to have been separately selected for and included among the ten tracks on a particular album, the panel’s decision would permit the copyright owner to collect only one award of statutory damages for the four recordings collectively. That would be so even if there were unrebutted trial evidence that the four recordings were commercialized individually by the copyright owner. This outcome is wholly unsupported by the text of the Copyright Act.

ISP wants to overturn underlying ruling

Grande also filed a petition for rehearing because it wants to escape liability, whether for each song or each album. A rehearing would be in front of all the court’s judges.

“Providing Internet service is not actionable conduct,” Grande argued. “The Panel’s decision erroneously permits contributory liability to be based on passive, equivocal commercial activity: the provision of Internet access.”

Grande cited Supreme Court decisions in MGM Studios v. Grokster and Twitter v. Taamneh. “Nothing in Grokster permits inferring culpability from a defendant’s failure to stop infringement,” Grande wrote. “And Twitter makes clear that providing online platforms or services for the exchange of information, even if the provider knows of misuse, is not sufficiently culpable to support secondary liability. This is because supplying the ‘infrastructure’ for communication in a way that is ‘agnostic as to the nature of the content’ is not ‘active, substantial assistance’ for any unlawful use.”

This isn’t the only important case in the ongoing battle between copyright owners and broadband providers, which could have dramatic effects on Internet access for individuals accused of piracy.

ISPs, labels want Supreme Court to weigh in

ISPs don’t want to be held liable when their subscribers violate copyright law and argue that they shouldn’t have to conduct mass terminations of Internet users based on mere accusations of piracy. ISPs say that copyright-infringement notices sent on behalf of record labels aren’t accurate enough to justify such terminations.

Digital rights groups have supported ISPs in these cases, arguing that turning ISPs into copyright cops would be bad for society and disconnect people who were falsely accused or were just using the same Internet connection as an infringer.

The broadband and music publishing industries are waiting to learn whether the Supreme Court will take up a challenge by cable firm Cox Communications, which wants to overturn a ruling in a copyright infringement lawsuit brought by Sony. In that case, the US Court of Appeals for the 4th Circuit affirmed a jury’s finding that Cox was guilty of willful contributory infringement, but vacated a $1 billion damages award and ordered a new damages trial. Record labels also petitioned the Supreme Court because they want the $1 billion verdict reinstated.

Cox has said that the 4th Circuit ruling “would force ISPs to terminate Internet service to households or businesses based on unproven allegations of infringing activity, and put them in a position of having to police their networks… Terminating Internet service would not just impact the individual accused of unlawfully downloading content, it would kick an entire household off the Internet.”

Four other large ISPs told the Supreme Court that the legal question presented by the case “is exceptionally important to the future of the Internet.” They called the copyright-infringement notices “famously flawed” and said mass terminations of Internet users who are subject to those notices “would harm innocent people by depriving households, schools, hospitals, and businesses of Internet access.”

Jon is a Senior IT Reporter for Ars Technica. He covers the telecom industry, Federal Communications Commission rulemakings, broadband consumer affairs, court cases, and government regulation of the tech industry.

Record labels unhappy with court win, say ISP should pay more for user piracy Read More »

5th Circuit rules ISP should have terminated Internet users accused of piracy

ISP Grande loses appeal as 5th Circuit sides with Universal, Warner, and Sony.

Illustration of a laptop with the skull-and-crossbones pirate symbol on the screen.

Credit: Getty Images | natatravel

Music publishing companies notched another court victory against a broadband provider that refused to terminate the accounts of Internet users accused of piracy. In a ruling on Wednesday, the conservative-leaning US Court of Appeals for the 5th Circuit sided with the big three record labels against Grande Communications, a subsidiary of Astound Broadband.

The appeals court ordered a new trial on damages because it said the $46.8 million award was too high, but affirmed the lower court’s finding that Grande is liable for contributory copyright infringement.

“Here, Plaintiffs [Universal, Warner, and Sony] 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,” said the unanimous ruling by three judges.

Rightscorp is a copyright-enforcement company used by the music labels to detect copyright infringement. The company monitors torrent downloads to find users’ IP addresses and sends infringement notices to Internet providers that serve subscribers using those IP addresses.

“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,” the 5th Circuit ruling said. “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. 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.”

Grande’s pre-lawsuit policy: No terminations

The ruling described how Grande implemented a new policy on copyright infringement in 2010, a year after being purchased by a private equity firm:

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 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.

The record labels sued Grande in April 2017. “It was not until after Plaintiffs initiated this lawsuit that Grande resumed terminating subscribers for copyright infringement,” the ruling said.

In November 2022, the labels were awarded $46,766,200 in statutory damages by a jury in US District Court for the Western District of Texas. But the District Court will have to hold a new damages trial following this week’s appeals court ruling.

Back in 2020, we wrote about the voir dire questions that record labels intended to ask prospective jurors in their case against Grande. One of those questions was, “Have you ever read or visited Ars Technica or TorrentFreak?”

Damages to be reduced

Although the 5th Circuit agreed that Grande is liable for contributory copyright infringement, judges found that the lower court “erred in granting JMOL [judgment as a matter of law] that each of the 1,403 songs in suit was eligible for a separate award of statutory damages.” The damages were $33,333 per song.

The 5th Circuit remanded the case to the district court for a new trial on damages. Record labels can expect a lower payout because the appeals court said they can’t obtain separate damages awards for multiple songs on the same album.

“The district court determined that each of Plaintiffs’ 1,403 sound recordings that was infringed entitled Plaintiffs to an individual statutory damages award,” the 5th Circuit said. “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.”

The Copyright Act says that “all the parts of a compilation or derivative work constitute one work,” the court said. In the Grande case, record labels sought damages for each song but conceded that “each album constitutes a compilation.”

“In sum, the record evidence indicates that many of the works in suit are compilations (albums) comprising individual works (songs),” the 5th Circuit court wrote. “The statute unambiguously instructs that a compilation is eligible for only one statutory damage award, whether or not its constituent works are separately copyrightable.”

Larger battle could head to Supreme Court

The Grande case is part of a larger battle between ISPs and copyright holders. The industries are waiting to learn whether the Supreme Court will take up a challenge by cable firm Cox Communications, which wants to overturn a ruling in a similar copyright infringement lawsuit brought by Sony.

The US Court of Appeals for the 4th Circuit affirmed a jury’s finding that Cox was guilty of willful contributory infringement, though it also vacated a $1 billion damages award because it found that “Cox did not profit from its subscribers’ acts of infringement.” Cox and other ISPs argue that copyright-infringement notices sent on behalf of record labels aren’t reliable and that forcing ISPs to disconnect users based on unproven piracy accusations will cause great harm.

A Supreme Court brief filed by Altice USA, Frontier Communications, Lumen (aka CenturyLink), and Verizon said the 4th Circuit ruling “imperils the future of the Internet” by “expos[ing] Internet service providers to massive liability if they do not carry out mass Internet evictions.” Cutting off a subscriber’s service would hurt other residents in a home “who did not infringe and may have no connection to the infringer,” they wrote.

Cox told the Supreme Court that ISPs “have no way of verifying whether a bot-generated notice is accurate. And no one can reliably identify the actual individual who used a particular Internet connection for an illegal download. The ISP could connect the IP address to a particular subscriber’s account, but the subscriber in question might be a university or a conference center with thousands of individual users on its network, or a grandmother who unwittingly left her Internet connection open to the public. Thus, the subscriber is often not the infringer and may not even know about the infringement.”

Cox asked the Supreme Court to decide whether the 4th Circuit “err[ed] in holding that a service provider can be held liable for ‘materially contributing’ to copyright infringement merely because it knew that people were using certain accounts to infringe and did not terminate access, without proof that the service provider affirmatively fostered infringement or otherwise intended to promote it.”

Record labels also petitioned the Supreme Court because they want the original $1 billion verdict reinstated. Digital rights groups such as the Electronic Frontier Foundation (EFF) have backed Cox, saying that forcing ISPs to terminate subscribers accused of piracy “would result in innocent and vulnerable users losing essential Internet access.”

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