# Music Companies Seek Damages Per Song in Piracy Litigation: A Dispute Over Copyright Compensation
In a pivotal legal confrontation that may alter the calculation of damages for copyright violations, prominent music firms—Universal, Warner, and Sony—are contesting a court verdict that determined damages on an album basis instead of for each song. The case highlights Grande Communications, an Internet service provider (ISP), and has ignited a wider discussion about the application of copyright law in the online sphere, especially concerning digital piracy.
## The Context: Grande Communications and Copyright Violations
This dispute revolves around Grande Communications, a Texas-based ISP and part of Astound Broadband, which was deemed culpable for not disconnecting the accounts of users accused of ongoing copyright violations. These users were identified for illegally downloading music through torrenting, with Rightscorp, a copyright enforcement firm enlisted by the music labels, monitoring their IP addresses.
In October 2024, the 5th Circuit Court of Appeals determined that Grande infringed the law by not acting against these repeat offenders. However, the court mandated a retrial regarding damages, asserting that the initial award of $46.8 million—determined at $33,333 for each song—was excessive. The court ruled that damages ought to be assessed on an album level, not per individual song, citing the Copyright Act stipulations.
This ruling has not been well received by the music labels, who maintain that it severely underestimates the damage caused by piracy and jeopardizes their capacity to achieve equitable compensation.
## The Legal Dispute: Damages Per Song vs. Per Album
The core of the controversy lies in the understanding of the Copyright Act, which asserts that “all the parts of a compilation or derivative work constitute one work.” The panel from the 5th Circuit interpreted this to imply that a compilation, such as an album, qualifies for a singular statutory damage award, irrespective of the number of individual tracks it comprises.
Conversely, the music labels argue that this interpretation is erroneous. They contend that the legislation was intended to stop copyright owners from claiming multiple damages for differing components of a single compilation, including an album’s arrangement or the selection of its songs. In this context, they argue that the infringement pertains to individual tracks, each being a distinct, copyrightable entity that generates income independently of the album.
In their petition for an *en banc* rehearing (a hearing involving all judges of the court), the labels argue that the ruling “endangers copyright owners’ ability to secure appropriate damages” and misreads the statutory language. They emphasize that six other appeals courts in the U.S. have favored per-song damages in analogous situations involving non-musical works, such as images and television episodes.
The labels also underscore the evolving dynamics of the music industry, pointing out that piracy significantly influenced the transition from physical album sales to the distribution of single tracks through digital downloads and streaming services. They assert that the per-album ruling does not reflect this evolution and blocks them from receiving fair compensation for the infringement of individual songs.
## The Wider Consequences: ISPs and Copyright Enforcement
While the music labels concentrate on the per-song versus per-album damages debate, Grande Communications seeks to completely overturn the foundational ruling. The ISP maintains that offering Internet services should not engage it in liability for the actions of its users, even if those users are participating in unlawful activity.
Grande references Supreme Court decisions in cases like *MGM Studios v. Grokster* and *Twitter v. Taamneh*, which established that facilitating a platform or service does not inherently make a company liable for how that service is utilized. Grande argues that it should not be held accountable for not terminating users based on unverified accusations of piracy, particularly when such allegations can hinge on IP addresses that may be utilized by various individuals.
The outcome of this litigation could have extensive ramifications for ISPs, which have traditionally resisted initiatives holding them accountable for monitoring their networks for copyright violations. ISPs contend that obliging them to eject users based on copyright infringement notifications could lead to widespread disconnections, potentially severing entire families, businesses, and institutions from Internet access.
## The Supreme Court’s Involvement: A Potential Landmark Ruling
The Grande Communications case isn’t the sole legal conflict involving ISPs and copyright enforcement; another notable case includes Cox Communications, which is appealing a judgment that deemed it responsible for contributory copyright infringement and demanded it pay $1 billion in damages to Sony and other record labels. Cox has solicited the Supreme Court’s involvement, arguing that the verdict could compel ISPs to disconnect users based on unvalidated claims, a situation that could have catastrophic effects on Internet accessibility.
Numerous other prominent ISPs have aligned with Cox in urging the Supreme Court to review the case, claiming that the legal issues at stake are “exceptionally important to the future of
