Record labels offer to drop the Grande piracy case, then fight over bond costs

The three major record labels have offered to end the Grande piracy case, telling a US appeals court they will no longer pursue its merits following the Supreme Court's ruling in Cox v. Sony Music, Music Business Worldwide reported on August 4. Universal Music Group, Sony Music Entertainment and Warner Music Group still disagree with Grande over who should cover the case's costs, including roughly 4 million dollars in bond premiums Grande says it paid.

In letters to the Fifth Circuit Court of Appeals filed July 29, the labels said they "do not intend to litigate the merits of this case further in light of the new standard" and that both sides "should walk away from this dispute bearing their own costs." Grande's lawyers countered that the labels "never pursued" an inducement theory at trial or on appeal, arguing only that Grande "materially contributed" to piracy by providing internet service, a theory they said Cox forecloses, and asked the court to rule in Grande's favor outright.

The Supreme Court ruled unanimously on March 25 that internet providers cannot be held liable for their users' infringement unless they actively induced it or tailored their service to enable it. The labels, in their letter, quoted the US Register of Copyrights' own assessment that the decision was "cataclysmic."

On the bond costs, the labels argued Grande has never substantiated its roughly 4 million dollar figure and could have moved to discharge the bond as early as October 2024, when the damages award was first vacated, rather than waiting until August 2025. They said any recovery should also be reduced by 191,618 dollars in expert costs Grande was separately ordered to reimburse over what the trial court called a meritless motion, and questioned whether a company they described as "a wealthy litigant recently relieved of a $46.8 million jury verdict" should recover further costs at all.

The case dates to 2017, when the labels sued Grande, a Texas-based subsidiary of Astound Broadband, over its handling of subscribers who repeatedly pirated music. A 2022 jury found Grande liable and ordered it to pay 46.8 million dollars in damages; the Fifth Circuit upheld the liability finding in 2024 but sent the damages figure back for recalculation, before the Supreme Court's Cox ruling in March prompted it to vacate the judgment entirely and return the case to the appeals court.

The Cox decision has reshaped other piracy litigation against internet providers: the labels dropped separate suits against Verizon and Altice USA in April, and Elon Musk's X Corp has since cited the ruling in asking a Nashville court to dismiss a copyright suit brought by music publishers. The decision is being felt in AI copyright litigation too: in the multidistrict case against OpenAI and Microsoft, news publishers have moved to argue that Microsoft "tailored" its systems to help enable OpenAI's infringement, one of the two paths Cox left open for liability, a bid Microsoft is opposing.