The three major record companies have told a US appeals court they will not pursue the merits of their music piracy case against internet service provider Grande Communications any further, following the Supreme Court’s ruling in Cox v. Sony Music.
But the labels and Grande remain split over who should pay the costs of the case – including roughly USD $4 million in bond premiums that Grande has told the labels it incurred.
Universal Music Group, Sony Music Entertainment and Warner Music Group set out their position in a letter to the Fifth Circuit Court of Appeals on July 29, and so did Grande.
In its letter, which you can read here, Grande asked the court to “render judgment in favor of Grande,” arguing that the labels cannot prove contributory infringement under the standard set by Cox.
“On remand, the Labels cannot argue that they proved (or could prove) that Grande induced or encouraged the infringement at issue,” Grande’s lawyers wrote.
“That is because the Labels never pursued that theory below or on appeal. Instead, the Labels always claimed that they needed to prove only that Grande ‘materially contributed’ to its customers’ infringing acts, by providing them with internet service.”
Grande also asked the Fifth Circuit to award it the costs of the appeal, and to send the case back to the district court so it can recover its costs and attorneys’ fees there.
Universal, Sony and Warner, for their part, said in their own letter, which you can read here, that they “do not intend to litigate the merits of this case further in light of the new standard.”
They said they had offered to dismiss the case voluntarily – with prejudice, and with each side covering its own costs – but that Grande declined and “requested supplemental briefing in hopes of recovering substantial supersedeas bond costs.”
“The Parties should walk away from this dispute bearing their own costs,” the labels told the Fifth Circuit. Their preferred route is for the appeals court to vacate the judgment against Grande and remand the case to the district court – a course they called “not only proper as a matter of law, but also the most equitable outcome,” because it would leave each side to bear its own appeal costs under the appellate rules.
The dispute is the latest stage in a case that dates to 2017, when the major labels sued Grande – a Texas-based subsidiary of Astound Broadband – accusing it of failing to act against subscribers who repeatedly pirated music.
In 2022, a federal jury in Austin found Grande liable for willful contributory infringement of 1,403 copyrighted sound recordings and ordered it to pay $46.8 million in damages, as MBW reported at the time.
The Fifth Circuit upheld that liability finding in October 2024 but threw out the damages award and ordered a new trial to recalculate it.
Then came Cox v. Sony Music.
In a unanimous ruling on March 25, the Supreme Court held that internet providers cannot be held liable for infringement by their users unless they actively induced it or tailored their service to it.
In their letter, the labels cited the US Register of Copyrights, who called the ruling “cataclysmic.”
That decision prompted the Supreme Court to vacate the Grande judgment on April 6 and send the case back to the Fifth Circuit for reconsideration.
What remains, by the labels’ account, is a fight over bond costs tied to the $46.8 million judgment.
Grande had been ordered to post a bond to cover that sum while it appealed, and it has told the labels it spent roughly $4 million on premiums to keep the bond in place.
But the labels said Grande “has never substantiated that figure,” and they dispute whether the costs were reasonable.
They argued that Grande could have moved to discharge the bond as early as October 2024, when the damages award was vacated, but did not seek relief until August 2025.
The labels also questioned whether Grande – which they called “a wealthy litigant recently relieved of a $46.8 million jury verdict” – should recover “millions of dollars in disputed bond costs after failing to persuade any of the jury, district court, or this Court of its position.”
And they said any bond costs owed to Grande should be reduced by $191,618 in expert costs that Grande was ordered to reimburse after what the district court called a “meritless” motion earlier in the case.
The Cox decision has rippled across other piracy cases against internet providers. In April, the major labels voluntarily dismissed with prejudice their separate infringement suits against Verizon and Altice USA – both of which had been paused pending the ruling – with each side bearing its own costs.
Elon Musk’s X Corp has since cited the decision in asking a Nashville federal court to dismiss a copyright suit brought against it by music publishers. The ruling is being felt in AI copyright litigation too: in the multidistrict case against OpenAI and Microsoft, news publishers have moved to amend their complaint to allege that Microsoft “tailored” its systems to contribute to OpenAI’s infringement – one of the two paths Cox left open for liability – a bid Microsoft is opposing.
It now falls to the Fifth Circuit to decide whether to end the case outright, hand Grande a win, or send the cost question to the district court.
Music Business Worldwide
