Bright House Earns Big Copyright Win Internet Service Providers

Defendant Bright House Networks LLC has been granted its motion to dismiss music rights holder UMG Recordings, Inc., et al., (Plaintiffs) vicarious infringement claims because Plaintiffs failed to sufficiently allege a direct financial benefit. Bright House Networks LLC is one of the “largest internet service providers (“ISPs”) in the country.” UMG Recordings, Inc. et al v. Bright House Networks, LLC., 8-19-cv-00710, 1 (MDFL 2020-07-08, Order) (Mary S. Scriven).

Plaintiffs in this case consisted of a group of record companies that possessed copyrights to “some of the world’s most famous and popular music.” Id. Plaintiffs sought to hold Bright House liable due to the fact that Bright House allegedly did not “take steps to stop its subscribers from illegally downloading and distributing Plaintiff’s music through BitTorrent and other file-sharing services.” Id. at 1-2. Plaintiffs allege that they sent hundreds of thousands of notices to Bright House illustrating infringement on behalf of its subscribers; however, Bright House did not intervene. Id. at 2. Thus, Plaintiffs asserted that the lack of action by Bright House subjected it to secondary liability for direct infringement by its users. Id.

The alleged and ongoing uploading, downloading and sharing amongst Bright House users occurred via BitTorrent. However, Bright House is simply an ISP that allowed its users to access high speed internet. Id. Bright House does; however, advertise that “its service enables subscribers to download and upload large amounts of content, including music, in seconds.” Id. at 3. Bright House also has a policy that allows for it to “suspend or terminate a subscriber’s internet access for a variety of reasons, including a subscriber’s copyright infringement activity.” Id. However, Bright House allegedly did not act on enforcing this policy.

“Direct copyright infringement arises upon violation of the exclusive rights of a copyright holder.” Id. at 6. Citing BUC Int’l Corp. v. Int’l Yacht Council Ltd., 489 F. 3d 1129, 1138 n.19 (11th Cir. 2007). Further, “Liability for vicarious copyright infringement arises ‘when the defendant profits directly from the infringement and has a right and ability to supervise the direct infringer, even if the defendant initially lacks knowledge of the infringement.’” Id. Citing Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 931 (2005).

Originally, vicarious liability was used “to hold employers liable for copyright infringement committed by employees within the scope of their employment.” Id. Citing, e.g., M. Witmark & Sons v. Calloway, 22 F.2d 412, 414 (E.D. Tenn. 1927). Vicarious liability was further developed and was held to apply to “the operator of an entertainment venue. . . for infringing performances when the operator (1) could control the premises and (2) obtained a direct financial benefit from the audience, who paid to enjoy the infringing performance.” Id. at 7. Citing Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 262 (9th Cir. 1996) (citing Buck v. Jewell-LaSalle Realty Co., 283 U.S. 191, 198-99 (1931); Dreamland Ball Room, Inc. v. Shapiro, Bernstein & Co., 36 F.2d 354 (7th Cir, 1929)).

There are two main elements required for vicarious liability. The first is the right and ability to supervise direct infringement and the second is a receipt of a direct financial benefit from the infringement. Id. at 5. In this case, Judge Mary S. Scriven stated in her order that the claim by Plaintiffs fails due to the fact that Plaintiffs did not “adequately allege a direct financial benefit.” Id. at 5. Plaintiffs attempted to use a line of “non-binding cases holding that, ‘to constitute a direct financial benefit, the ‘draw’ of infringement need not be the primary, or even a significant draw – rather, it need only be ‘a’ draw.” Id. at 9. Citing Arista Records LLC. V., Inc., 633 F. Supp 2d 124, 157 (S.D.N.Y. 2009) (citing Ellison v. Robertson, 357 F.3d 1072, 1079 (9th Cir. 2004)). The court rejected this argument due to the fact that it left “direct” out of the test. Id at 9. The court stated that “even if liability. . . [was] established under a ‘draw’ theory, liability must, nonetheless, be based upon a direct financial benefit to the alleged vicarious infringer.” Id. at 10. Citing Grokster, 545 U.S. at 931 n.9; BUC Int’l Corp., 489 F.3d at 1138 n.19.

The theory that the Plaintiffs utilized in this case, if accepted, “would impose liability on every ISP, as the music at issue is available on the Internet generally, as is the BitTorrent protocol, and is not something exclusively available through [Bright House’s] services.” Id. at 13. Citing UMG Recordings, Inc. v. Grande Commc’ns Networks, LLC, No. A-17-CA-365-LU, 2018 WL 1096871, at *10 (W.D. Tex. Feb. 28, 2018). The order in this case will provide further protection to ISP’s due to the fact that BitTorrent protocol is not something exclusive to Bright House, but is afforded to all those who access the Internet. This ruling is logical, as Bright House is not engaging in any infringing activity; it is simply providing Internet service for its users, who are choosing to infringe on copyright on their own accord.