ISPs Fail to Dismiss Filmmakers’ Piracy Liability Lawsuits

Over the past two decades, online piracy has proven a massive challenge for the entertainment industries.

 

Copyright holders have tried to go after individual pirates and pirate sites in court, but third-party intermediaries are now increasingly seen as targets as well.

 

Several active lawsuits in the United States feature rightsholders accusing Internet providers of not doing enough to stop piracy. One of the main allegations is that ISPs fail to terminate the accounts of repeat infringers in ‘appropriate circumstances’ as the DMCA requires.

 

These lawsuits have resulted in multi-million dollar judgments against Cox and Grande. Meanwhile, more companies at risk too, such as WideOpenWest (WOW!), which was sued by a group of smaller movie companies, including Millennium Media and Voltage Pictures.

 

The filmmakers accused the colourado-based ISP of failing to terminate the accounts of subscribers who were repeatedly flagged for sharing copyrighted material. They argue that WOW! is liable for these piracy activities and are demanding millions of dollars in damages.

WOW! Wants ‘Troll’ Case Dismissed

The ISP challenged the claims and filed a motion to dismiss the case. WOW! addressed the substance of the allegations and described the film companies and their anti-piracy partner Maverickeye as “copyright trolls”.

 

“Plaintiffs and Maverickeye are part of a well-known web of copyright trolls. Until now, Plaintiffs’ modus operandi has been to file John Doe lawsuits in the hope of securing quick settlements and to dismiss them at the slightest resistance,” they wrote.

 

Indeed, several of the plaintiff film companies have filed cases against individual file-sharers, but they have also sued hosting providers, site operators, and app developers.

 

Responding to the substance of the allegations, WOW! argued that an IP address is not sufficient to prove that subscribers downloaded or shared any infringing material. And if that’s not clear, the ISP can’t be held liable either.

Something More?

To back this up, WOW! cites the Cobbler Nevada v. Gonzales case, where the court held that an IP-address alone is not sufficient to identify an infringer.

 

In the present lawsuit, WOW argues that IP-address evidence (~30,000 piracy notices) doesn’t prove that its subscribers pirated content; it could also be someone else using the network. To build a valid case, rightsholders should have ‘something more’ than just IP-addresses.

 

“Plaintiffs do not allege facts showing that any WOW subscriber committed direct copyright infringement; that WOW had knowledge of the specific alleged infringements at issue; or that WOW encouraged, induced, or profited from any alleged direct infringement,” the ISP wrote.

 

“But here, Plaintiffs only identify the alleged direct infringers by IP address; there are no additional allegations demonstrating that the activity at that IP address came from a WOW subscriber, and not some other user of WOW’s network.”

Court Refuses to Dismiss Copyright Claims

A few days ago, colourado District Court Judge Daniel D. Domenico ruled on the motion to dismiss and rejected most arguments. For one, the Judge doesn’t believe the “Cobbler” ruling is directly relevant here, as that was a case against an actual infringer, not an ISP.

 

For this lawsuit, the provided IP-address evidence is sufficient to allege that WOW! can be held liable for the copyright infringements of its subscribers. The court doesn’t rule on the merits yet but notes that the filmmakers’ arguments are good enough to move the case forward.

 

“Taking Plaintiffs’ factual allegations as true in this early stage of litigation, Plaintiffs have plausibly stated that Defendant had knowledge of its subscribers’ direct infringement, if not from the 30,000 notices, then from the correspondence between counsel.

 

“It is reasonable to infer that such notices and correspondence gave Defendant enough knowledge to have done something about the alleged direct infringement,” Judge Domenico adds.

Ability to Stop Infringements

The court also believes that the movie companies sufficiently plead the various copyright infringement allegations. They include contributory and vicarious copyright infringement claims.

 

To allege vicarious liability, for example, the filmmakers have to plead that WOW! had the right and ability to supervise the infringing activity and had a direct financial interest in the activities of pirating subscribers. According to the court, that’s the case here.

 

“Plaintiffs in this case have sufficiently pleaded that Defendant’s advertisements for high download speeds and known practice of ignoring or failing to act on notices of infringement serve as a draw for subscribers.

 

“Likewise, Plaintiffs sufficiently pleaded that Defendant has the legal ability to stop and limit copyright infringement by its subscribers,” Judge Dominico writes.

 

Based on these and other arguments, WOW!’s motion to dismiss the copyright infringement claims is denied,

Grande’s Motion to Dismiss also Strands

In addition to the WOW! case, the filmmakers also lodged a complaint against Grande Communications. Grande lost a similar case against several music companies last fall but hoped to have this lawsuit dismissed.

 

The motion to dismiss is largely the same as WOW!’s, which makes sense as both parties are represented by the same attorneys. Unfortunately for Grande, the ruling on the motion to dismiss is similar as well.

 

In January, a Texas federal court issued a report and recommendation, concluding that the motion to dismiss the copyright claims should be denied.

 

“Plaintiffs have alleged in their pleadings that Grande has received Notices about specific infringing uses of its services, but failed to take measures to prevent such uses, and failed to investigate the piracy,” Magistrate Judge Howell wrote.

 

“The undersigned finds that Plaintiffs have alleged sufficient facts to state a plausible claim of contributory copyright infringement against Grande, which is all that is required at the motion to dismiss stage.”

 

District Court Judge Robert Pitman adopted the recommendation last week. This means both WOW! and Grande will have to defend themselves against the piracy liability claims.

No Pirate Site Blocking Injunctions, Yet

The motions to dismiss weren’t denied in their entirety, however. In both cases, the filmmakers also requested pirate site-blocking injunctions, to limit piracy activity on the Internet providers’ networks.

 

In addition, the movie companies requested broad injunctions requiring the ISPs to identify pirates and suspend the accounts of subscribers who receive three unique DMCA notices in 72 hours.

 

The federal courts in Texas and Colorado both granted the motions to dismiss these injunction requests, as these proposed measures are remedies, not causes of action. However, they could be reintroduced at a later stage.

 

“I agree and will grant Defendant’s motion to dismiss Plaintiffs’ ‘claim’ for injunctive relief. I note, however, that dismissal of this ‘claim’ does not preclude Plaintiffs’ from seeking injunctive relief if appropriate as a remedy should they prevail on the merits of one or more of their claims,” Judge Domenico writes in the WOW! case.

 

All in all, the recent orders are a win for the movie companies, as they can continue with their piracy liability claims. However, there is still a long way to go before there’s a final decision on the merits of those claims.

 

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A copy of Judge Domenico’s order on the motion to dismiss in the WOW! lawsuit is available here (pdf). The recently accepted report and recommendation to largely deny Grande’s motion to dismiss can be found here (pdf).