UMG v. Grande: Copyright | Outside IP Counsel

The Fifth Circuit held that a broadband provider can be contributorily liable for ignoring 1.3 million piracy notices, then vacated the $46.7 million award over how albums are counted. The Supreme Court vacated that judgment in April 2026 after Cox v. Sony.

For years, internet service providers treated copyright takedown notices as someone else’s problem: forward them, file them, and keep the connection live. In UMG Recordings, Inc. v. Grande Communications Networks, LLC, No. 23-50162 (5th Cir. Oct. 9, 2024), 117 F.4th 314, the Fifth Circuit told a major broadband provider that doing nothing has a price. The court affirmed that Grande could be held contributorily liable for its subscribers’ music piracy after ignoring more than 1.3 million infringement notices. It then vacated the jury’s $46.7 million statutory-damages award over how many “works” had actually been infringed. For anyone who runs a network or licenses a catalog, the decision was a map of where conduit liability begins and ends.

Status update (as of July 16, 2026): This decision no longer stands. On March 25, 2026, the Supreme Court decided Cox Communications, Inc. v. Sony Music Entertainment, 607 U.S. ___ (2026) (No. 24-171), holding that a service provider is contributorily liable for a user’s infringement only if it intended the service to be used to infringe, which requires either inducement or a service tailored to infringement. On April 6, 2026, the Court granted Grande’s petition in No. 24-967, vacated the Fifth Circuit’s judgment, and remanded for reconsideration in light of Cox. The Fifth Circuit’s material-contribution analysis described below is therefore vacated, and the case is back before that court. The discussion here is retained as background on what the panel decided and why the Supreme Court unsettled it.

At a glance

Case: UMG Recordings, Inc., et al. v. Grande Communications Networks, LLC, No. 23-50162 (5th Cir. Oct. 9, 2024), 117 F.4th 314.
Court: U.S. Court of Appeals for the Fifth Circuit; opinion by Judge Stephen A. Higginson, joined by Judges Higginbotham and Stewart, on appeal from the Western District of Texas.
Posture: Appeal from a jury verdict and roughly $46.7 million statutory-damages judgment for the plaintiff record labels.
Holding: A jury could find Grande contributorily liable because it knew of specific, repeated infringement and materially contributed by continuing to provide service without taking basic preventive steps; but the statutory-damages award was vacated because the songs on an album count as one work under Section 504(c), and damages were remanded for a new trial.
Significance: As decided, it treated “material contribution” as a viable theory of secondary copyright liability against ISPs and addressed how statutory damages are counted for albums. The liability half did not survive: the Supreme Court vacated the judgment on April 6, 2026 for reconsideration in light of Cox.
Subsequent history: Judgment vacated and remanded, Grande Communications Networks, LLC v. UMG Recordings, Inc., No. 24-967 (U.S. Apr. 6, 2026) (GVR in light of Cox Communications, Inc. v. Sony Music Entertainment, 607 U.S. ___ (2026)).

The plaintiffs are a coalition of major record labels. Grande is a Texas internet service provider whose subscribers used peer-to-peer networks like BitTorrent to share music. A vendor called Rightscorp monitored those networks and sent Grande more than 1.3 million notices between 2011 and April 2017 identifying specific subscribers tied to specific infringing files, roughly 317,000 of which concerned the works in suit. Grande sent subscribers letters describing the complaints but, critically, took no other action: under a policy adopted in October 2010, it terminated no one for copyright infringement no matter how many notices a subscriber accumulated, and it did not resume terminations until after this suit was filed in 2017. Earlier, in the 2000s, Grande had disconnected subscribers who drew infringement notices. The labels sued for contributory infringement, a jury found Grande liable for 1,403 sound recordings and found the conduct willful, and it awarded $33,333 per recording, totaling $46,766,200.

Why the safe harbor was already gone

The Digital Millennium Copyright Act’s Section 512 safe harbor can immunize a “mere conduit” ISP from monetary liability, but only if the provider satisfies the statute’s threshold conditions, including that it “has adopted and reasonably implemented” a policy for terminating repeat infringers under Section 512(i). Before trial, the district court held that Grande could not claim the safe harbor because it had no meaningful repeat-infringer policy in place during the relevant period; it had effectively stopped terminating anyone for infringement. Grande did not appeal that ruling. The lesson sits in the procedural background of the whole case: a forwarding-and-filing routine is not a “reasonably implemented” termination policy, and once the safe harbor falls away, ordinary secondary-liability rules govern. The Fifth Circuit therefore decided the appeal on common-law contributory infringement, not on Section 512.

Material contribution as a theory (since vacated)

Grande’s central legal argument was that an ISP can be secondarily liable only for inducement (actively encouraging infringement) and not for the looser “material contribution” theory. The Fifth Circuit rejected that in 2024. The Supreme Court’s 2026 decision in Cox substantially vindicated the argument, which is why Grande’s judgment was vacated. Drawing on the common-law roots of secondary liability and the Supreme Court’s secondary-liability cases, the court held that material contribution remains a valid, independent basis for contributory copyright liability. An ISP that knows of specific, ongoing infringement by identified subscribers and continues to furnish the very service used to infringe (without taking any of the steps available to it) can be found to have materially contributed to that infringement. The court was careful to ground liability in knowledge of specific infringing activity, not in the general awareness that some customers somewhere misuse the internet. The 1.3 million notices, tied to identifiable accounts, supplied that specificity.

Knowledge, inaction, and the limits of “just a conduit”

The opinion’s most quotable move is its treatment of inaction as contribution. Grande argued it was a passive pipe that simply transmitted bits. The court answered that providing continued access to known repeat infringers, while declining to use the tools the provider concededly had, is not passivity. It is a choice that materially furthers the infringement. Importantly, the court did not announce a rule that ISPs must terminate accounts on receipt of notices. It held only that a reasonable jury could find material contribution on these facts, where the provider did essentially nothing for years despite overwhelming, specific notice. The decision thus leaves room for providers to argue, in future cases, that they took reasonable intermediate measures short of termination. What it forecloses is the position that an ISP can ignore specific, repeated, identified infringement indefinitely and still hide behind its status as a conduit.

The damages reversal: an album is one work

The plaintiffs’ victory came with an expensive asterisk. Section 504(c) of the Copyright Act allows statutory damages “for all infringements involved in the action, with respect to any one work,” and provides that “all the parts of a compilation or derivative work constitute one work.” The jury, however, had awarded damages for each of the 1,403 individual sound recordings. The Fifth Circuit held that was error: where recordings were issued as parts of an album, the album is the relevant “work” for statutory-damages purposes, and the plaintiffs cannot multiply the award by treating each track separately. The court declined to follow the “independent economic value” approach some other circuits use to let individual tracks count separately. It vacated the entire award and remanded for a new trial on damages computed on a per-work (album) basis, dramatically shrinking the likely recovery even though liability stands.

Open questions

What survives Cox? The Fifth Circuit must decide on remand whether anything in this record can satisfy the Supreme Court’s intent-based standard, or whether Grande’s liability verdict falls entirely.
How specific must notices be? The 1.3 million Rightscorp notices were unusually voluminous and account-specific. After Cox, notice volume alone does not establish liability, and courts have not fixed what role notices still play.
How will the album rule play out? On remand and elsewhere, parties will fight over which recordings were “issued as part of” an album versus released as standalone works with independent value.

Implications

For internet service providers: A real, working repeat-infringer policy still matters. Cox did not touch Section 512(i), and a provider that never terminates anyone can still lose the safe harbor, which is what happened to Grande before trial.
For rightsholders: After Cox, a record of specific, account-level notices and provider inaction is no longer enough on its own; the question is now whether the provider intended its service to be used to infringe. Where liability is established, expect damages to be counted by album, not by track.
For litigators: Cox moved the liability inquiry toward intent, inducement, and whether the service is tailored to infringement. Separately, calibrate damages models to Section 504(c)‘s one-work rule from the outset, since the Fifth Circuit’s album analysis was not what the Supreme Court disturbed.
For the broader docket: The split with circuits that allow per-track statutory damages remains open, and the Fifth Circuit must now apply Cox on remand.

Frequently asked questions

Did Grande lose its DMCA safe harbor in this appeal? Grande had already lost the safe-harbor defense at the district court, which ruled it could not invoke Section 512 because it had no working repeat-infringer policy during the relevant years. Grande did not challenge that ruling on appeal, so the Fifth Circuit decided liability and damages without the safe harbor in play.

Does an ISP have to terminate a customer’s account to avoid liability? The Fifth Circuit did not impose a flat termination rule, and its reasoning has since been vacated. In Cox Communications, Inc. v. Sony Music Entertainment, decided March 25, 2026, the Supreme Court held that a service provider is contributorily liable only if it intended its service to be used to infringe, shown through inducement or a service tailored to infringement. Failing to terminate known repeat infringers is no longer sufficient on its own.

Why did the court throw out the $46.7 million damages award? The jury awarded statutory damages per individual song. The Fifth Circuit held that under Section 504(c) the songs released as parts of an album count as one work, so the award had to be vacated and damages retried on a per-album basis. The Supreme Court then vacated the Fifth Circuit’s judgment on April 6, 2026 on the separate liability question, so the whole judgment is now back before that court.