Judge Denies Altice Motion to Dismiss Music Industry’s Infringement Claims

The court disagrees with Altice’s contentions the plaintiffs failed to meet their burden to plausibly allege the secondary liability copyright infringement theories of vicarious liability and contributory infringement, said Gilstrap’s order. The judge also disagrees with Altice’s arguments the plaintiffs failed to adequately allege Altice acted with culpable intent, which the company maintains is a required element of contributory infringement, said the order. The complaint “is more than sufficient to put Altice on notice of the claims at issue,” it said.

Altice asserts the plaintiffs haven’t plausibly stated a claim for vicarious liability because it has no direct financial interest in the exploitation of infringing materials, said the order. The company further argues it doesn’t have “the power or ability to police the internet or its subscribers’ activity such that it may stop infringement.” the order said. But the court finds the plaintiffs “plausibly alleged both elements of the vicarious liability claim,” it said.

The plaintiffs have “met their burden” to sufficiently allege Altice draws “direct financial benefit” from the infringing conduct of its subscribers, said the order. The complaint alleges Altice “is incentivized to tolerate and foster music piracy,” and the infringement it facilitates is profitable, the order said. It also alleges if Altice terminated the subscriptions of repeat infringers, it would have lost revenue from those ongoing subscription fees, the order said.

If Altice exercised some of its authority to limit or terminate service for infringers, alleged the complaint, its services would be less attractive to prospective infringing customers, said the order. “These factual allegations, which must be taken as true at the 12(b)(6) stage, adequately demonstrate a causal nexus between the infringing activity and the alleged financial benefit gained by Altice in this case,” it said.

The court doesn’t find, contrary to what Altice implies, that denying its motion to dismiss would lead to the “imposition of liability” on every internet service provider, said the order. Taking the allegations in the complaint as true, Altice isn’t “simply providing internet services,” it said. It’s also “directly profiting from the retention of accounts which are used for music piracy,” it said: “Subscribers were drawn to Altice’s services both because of lax policing of such piracy as well as faster internet speed for those willing to pay more.”

The court also finds that the plaintiffs “have adequately alleged that Altice has the authority to supervise or control the infringing activity,” said the order. It’s “not persuaded” by Altice’s argument “the contractual right to condition the availability of the internet is never enough to plausibly allege supervision or control over infringing conduct,” it said.

The court agrees the allegations in the complaint “properly set forth a claim for contributory infringement,” said the order. The court isn’t persuaded that “culpable intent is a mandatory requirement for any theory of contributory infringement,” it said. The plaintiffs properly argued Altice “acted affirmatively to cause or materially contribute to its customers’ infringement with knowledge of each customer’s ongoing infringement,” it said. They also properly argued Altice “continued to provide the necessary means for such infringement despite its knowledge,” it said.