Court Shoots Down Record Label's Attempt To Expand The Definition Of 'Vicarious' Infringement

from the that's-not-how-it-works dept

While there has been plenty of attention paid to the BMG v. Cox case, in which Cox was found not to be protected by the DMCA's safe harbors in dealing with repeat infringers, it's increasingly looking like the ruling in that case (which eventually led to a "substantial" settlement) was fairly unique to Cox's situation. Specifically, while much was made of Cox's "13 strikes" repeat infringer policy, in the end the nature of the policy wasn't what sunk Cox: it was the fact that Cox didn't follow its own policy. In other cases, courts seem willing to grant much more latitude to the ISPs to make their own calls. We wrote about the 9th Circuit and its ruling in the Motherless case, which made it clear that a platform gets to set its own policy, and that policy need not be perfect.

Meanwhile, down in Texas, there's the UMG v. Grande Communications case, which many had seen as a parallel case to the BMG v. Cox case. This was another case that involved an ISP being bombarded with shakedown (not takedown) notices from Rightscorp, in which Righscorp and its clients felt that ISP was not willing to pass on those notices (thus denying Rightscorp and its clients the ability to collect money in exchange for a promise not to sue). As we noted back in April, while still in the district court, the Grande case wasn't going nearly as smoothly as the Cox case for those wishing to copyright troll. The magistrate judge was quite skeptical, and had tossed out entirely the claims of vicarious infringement (while somewhat skeptically allowing the claims of contributory infringement to move forward).

Vicarious and contributory infringement are often lumped together, but they are different. For there to be vicarious infringement, you have to show that the party being sued both had the right and ability to supervise the activity, and that it would directly financially benefit from the infringement. The court rejected that in the case of Grande, noting that just because Grande makes money from its subscribers, that's not enough to show that it was profiting from the infringement.

Universal Music tried to amend the complaint to show that it had "more evidence" that Grande and its management company, Patriot, were still vicariously liable -- but the magistrate judge says it's just trying to re-litigate what it lost last time. The recommendation makes fairly quick work of UMG's arguments:

The new evidence Plaintiffs rely on is: (1) Grande tracks its infringing customers; (2) these customers are “a la carte” internet customers; (3) Grande’s profit margins on a la carte customers are its highest of any business lines; and (4) Grande never terminated any user regardless of how many notices of infringement it received... Plaintiffs contend that these facts make a difference, and are enough to suggest that Grande’s failure to terminate infringers is a draw.... The Court disagrees. First, the original Complaint alleged essentially the same or similar facts. Second, the new allegations still fail to say anything about the motivations of Grande’s subscribers when they sign up with Grande. That is, Plaintiffs still fail to plead facts showing Grande gained or lost customers because of its failure to terminate infringers. Instead, the proposed amended complaint states that, “the evidence demonstrates that Plaintiffs’ Copyrighted Sound Recordings were a draw to Grande’s infringing customers, including customers Grande had identified as repeat infringers.” ... But as has been noted in prior orders, the means by which Plaintiffs contend the infringing subscribers infringed the Copyrighted Sound Recordings by use of the internet and the BitTorrent protocol, which one can access through any ISP. Again, the draw must be something more than this to state a vicarious infringement claim. The allegedly “new” facts are insufficient to overcome the deficiencies of the original Complaint.

This is important. For years, the legacy copyright players have continually tried to expand what third parties could be liable for when it came to infringement. It's always been a stretch to use both vicarious and contributory infringement claims in these ways, and it's good to see courts pushing back (though, in this case, the contributory infringement claims still have a chance...). The court directly pointing out that just because a company makes money from a client, that doesn't mean the money is from infringement is an important point that many among the copyright legacy world would like to ignore.


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  • identicon
    Valkor, 1 Oct 2018 @ 4:02pm

    The Internet is for... infringement.

    reply to this | link to this | view in chronology ]

  • icon
    Toom1275 (profile), 1 Oct 2018 @ 4:11pm

    The court directly pointing out that just because a company makes money from a client, that doesn't mean the money is from infringement is an important point that many among the copyright legacy world would like to ignore.

    Sort of such as "Google makes money with advertising, therefore earns-no-money Android is infringing!" CAFC.

    reply to this | link to this | view in chronology ]

  • icon
    That One Guy (profile), 1 Oct 2018 @ 4:29pm

    Lawsuits, lawsuits for EVERYONE!

    Stores enable massive amounts of crime, some of it violent, via selling products that they know can be used in said crimes.

    The state enables massive amounts of crime, some of it violent, by constructing, improving and maintaining roads.

    The music and movie industries enable massive amounts of crime, some of it violent, by continuing to create, publish and sell content that includes depictions of violence and/or crime, at times in a positive light.

    If they want to argue that 'the service they provide enables copyright infringement, they know about it in general, therefore they are liable for it' then a whole lot of industries and companies are suddenly open to being sued into the ground.

    reply to this | link to this | view in chronology ]

    • icon
      Toom1275 (profile), 1 Oct 2018 @ 4:31pm

      Re: Lawsuits, lawsuits for EVERYONE!

      Stores enable massive amounts of crime, some of it violent, via selling products that they know can be used in said crimes.

      Even worse, they also enable it by providing a venue that they know to expect crime to take place.

      reply to this | link to this | view in chronology ]

    • icon
      Ninja (profile), 2 Oct 2018 @ 10:09am

      Re: Lawsuits, lawsuits for EVERYONE!

      Details, pesky details.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 2 Oct 2018 @ 12:43pm

        Re: Re: Lawsuits, lawsuits for EVERYONE!

        The music and movie industries enable massive amounts of crime, some of it violent, by continuing to create, publish and sell content that includes depictions of violence and/or crime, at times in a positive light.

        Not only that, but those industries enable copyright infringement by creating content! Infringement would drop dramatically if they would just stop making things!

        reply to this | link to this | view in chronology ]

  • icon
    Gary (profile), 1 Oct 2018 @ 6:13pm

    Compitition

    It is also worth pointing out that customers of this ISP didn't choose them over a different ISP based on their termination policies. Because... no competition!

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 1 Oct 2018 @ 7:03pm

    So instead of trying to prove the non-existent, undefined standard of "third party" infringement, the RIAA went for the option... with the higher burden of proof.

    And we all know what their track record is like when it comes to burdens of proof. Way to go, geniuses!

    reply to this | link to this | view in chronology ]

  • icon
    That Anonymous Coward (profile), 1 Oct 2018 @ 7:45pm

    'Repeat Infringers'

    That sounds like it is a legal definition, but somehow courts are accepting the word of a random that the accused is an infringer.

    We've done this before, the 'Satanic Daycare Panic' leaps to mind. Accusations with no basis in reality, experts claiming it is all true, outrage that anyone dare question them.

    One of the extortion mills is known to have sent dozens of notices timed milliseconds apart for a single alleged download. Under what the cartels want (and idiot Judges have rubber stamped) that account should be terminated because the ISP was on notice the customer was a repeat infringer. Funny if you look at the business model for other extortion mills, when a defendant (and very very rarely a court) ask to see actual proof... the cases go away very quickly, because the evidence they claim to have doesn't exist & would not meet the bare requirements of being evidence.

    This is all from the 'idea' that the cartels are losing billions of dollars, which there is no evidence (other than what they paid people to report) to support. They have spent more money than they are actually losing on ways to stop losing the money, while treating paying customers like unimportant parts of the system.

    I wonder if their contempt for the public is born out of the idea that we don't matter despite the fact we're supposed to be the most screwed stakeholder.

    "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."

    Yet we have decades of nothing entering the public domain, because limited has been extended beyond human life span.
    It would be nice if they stopped treating customers as the enemy & actually remembered they are supposed to meet the demands of those who pay them, not impose demands on consumers to protect them from fantasy visions of lost money that never existed.

    reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 1 Oct 2018 @ 7:59pm

      Re:

      'Repeat Infringers'

      That sounds like it is a legal definition, but somehow courts are accepting the word of a random that the accused is an infringer.

      'Accusation of being an infringer is not evidence of infringement, never mind repeat infringement, and as such any 'repeat infringer' policy we may have has no basis on the demands being presented here because it never even reached that point.'

      You'd think that that simple tidbit would be enough to kill off any lawsuit of this type, but as has been demonstrated time and time again courts and judges have a distressing tendency to lose their minds the second 'copyright' is brought into the picture, remarkably like the example you gave from the satanic panic.

      reply to this | link to this | view in chronology ]

      • identicon
        Wishful Thinking, 2 Oct 2018 @ 10:08am

        Re: Re:

        I wonder if "repeat unsubstantiated accusation" would lead to some sort of investigation.

        reply to this | link to this | view in chronology ]

        • icon
          That One Guy (profile), 2 Oct 2018 @ 3:24pm

          Re: Re: Re:

          If the one being investigated was the one making the accusations it should be, yes, however the fact that copyright extortion is and continues to be not only viable but highly profitable makes clear that it does not.

          reply to this | link to this | view in chronology ]

  • icon
    Jeroen Hellingman (profile), 2 Oct 2018 @ 2:07am

    So, to be save, an ISP simply has to have a repeat infringer policies that says that it will terminate a customer when it has collected at least three final convictions for copyright infringement using the ISP's infrastructure. When a copyright holder starts knocking on the door, just send them away with a "get your convictions first, then our repeat infringer policy will jump in."

    reply to this | link to this | view in chronology ]

    • icon
      DannyB (profile), 2 Oct 2018 @ 6:25am

      Re:

      I propose a new ISP repeat infringer policy. (let the wookie win)

      Infinity minus one strikes.

      Don't laugh. Remember back in the day. The fights over copyright length extension. Jack Valenti. The constitution doesn't say how long copyright can last, it only says "for limited times". Jack Valenti proposed extending copyright to infinity minus one day.

      So this repeat infringer policy seems fair. And how could the MPAA complain after what Jack Valenti said.

      reply to this | link to this | view in chronology ]

      • icon
        Toom1275 (profile), 2 Oct 2018 @ 7:16am

        Re: Re:

        My similar idea involved a concrete, definite number of flaggings needed, rather than something undefined.
        10^100^100 was the appropriate number of strikes.

        reply to this | link to this | view in chronology ]

      • icon
        That One Guy (profile), 2 Oct 2018 @ 3:30pm

        'We said we'd set a limit. We never said you could REACH it.'

        Seems fair. If they want to argue that 'longer than anyone will live' counts as a 'limited time', then 'a higher limit than could be reached in a lifetime' would seem to be a reasonable response.

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 2 Oct 2018 @ 4:34pm

    Since music labels don't understand numbers (hence the hundreds of thousands of dollars per "lost sale"), someone needs to make an ISP that WILL kick people off.

    But they need to receive 354,000 infringement notices (matching the compensation PER SONG!) within a 12month period, or it all resets again!

    reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 3 Oct 2018 @ 3:16am

      Re:

      So long as you required that any notices be filed manually, prohibiting any use of bots to file them, and limiting them to a single claim per notice I could see that. Without those restrictions they'd just let the bots handle it, I'm sure they could easily hit that limit in a 12 month period.

      reply to this | link to this | view in chronology ]


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