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Grande Communications must post multi-million dollar bond while it appeals music industry’s copyright litigation

By | Published on Tuesday 1 August 2023

Grande Communications

A US judge has confirmed that American internet service provider Grande Communications must post a multi-million dollar bond while it takes its legal battle with the record industry to the Fifth Circuit Appeals Court.

Grande – which rebranded as Astound Broadband last year – was one of the American ISPs sued by the music industry for not doing enough to combat infringement and infringers on its networks.

As with the precedent-setting legal battle in this domain – against Cox Communications – the record companies argued that Grande did not do enough to deal with repeat infringers among its customer base to avoid liability for its users’ infringement via the copyright safe harbour.

Siding with the music industry on all this, last year a jury ordered Grande to pay the labels $46.8 million in damages in relation to the 1400 tracks which the music companies said had been distributed across the ISP’s networks without licence.

Attempts by the net firm to persuade the judge overseeing the case to reverse that decision then failed.

Which is why Grande is now taking the matter to the Fifth Circuit Appeals Court. The labels want the ISP to post a bond equivalent to the damages while the appeals process goes through the motions, to be certain the cash is available to pay the damages should the appeal fail.

However, Grande has argued that its parent company Astound has lots of money, so there is no risk of any damages going unpaid down the line.

Moreover, it told the court earlier this year: “Requiring Grande to post bond or other security when there is no dispute as to Grande’s financial security would be a ‘waste of money’. A bond for the full amount of the current judgment would cost Grande approximately $4 million per year”.

“Because Grande is capable and will continue to be capable of satisfying the judgment”, it added, “it would serve no legitimate purpose to require Grande to incur this substantial annual expense, which would benefit the issuer of the bond and no one else”.

To that end, Grande filed a motion asking the court to state that it did not have to post any bond. But the labels hit back at that suggestion.

In their legal filing, the labels noted that during the actual court case on this dispute, Grande insisted that its parent company was irrelevant and should not be factored in when considering the size and revenues of the net firm. Therefore, the labels argued, the parent company shouldn’t now be used as a reason to not post the bond.

The judge considering the matter has agreed with the music companies. “Having considered the parties’ filings, the record, the applicable law, and the arguments and evidence offered at the hearing”, a judgement last week stated, “the court, for the reasons stated on the record … denies Grande’s motion”.