Florida court says hosting company cant be liable for copyright infringement via VPN it hosts

Business News Digital Legal

By Chris Cooke | Published on Monday 28 March 2022

Internet

A court in Florida has upheld an earlier ruling that US hosting company Quadranet isn’t liable for any copyright infringement undertaken by the users of a VPN that it provides services to, that being LiquidVPN.

The judge ruled that a specific anti-piracy tactic proposed by a group of movie producers which sued LiquidVPN and Quadranet wasn’t viable, and therefore the latter’s failure to employ that tactic was not grounds for making it liable for the conduct of the former’s customers.

Those movie producers – many of which are affiliates of Millennium Media – have targeted a plethora of internet companies with copyright lawsuits.

Their litigation builds on the legal action successfully pursued by the music industry against the American internet service provider Cox Communications, which was found liable for its customers’ copyright infringement because its slack repeat infringer policies meant it didn’t qualify for protection under the safe harbour contained in the US Digital Millennium Copyright Act.

The music industry has filed similar lawsuits against a number of other ISPs, as has this consortium of movie producers. However, they have gone further in also targeting VPNs – or virtual private networks – which, among other things, can be used to circumvent anti-piracy measures put in place by ISPs. And not only that, the film firms have also gone after server hosting companies that provide services to VPNs.

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A number of those targeted companies have actually agreed to out of court settlements. Those are confidential, of course, so it’s not known what commitments the VPNs and hosting companies have made, although it is known that some have agreed to block certain piracy websites or to initiate other technical measures that make it harder to access or share unlicensed content.

However, when it was named as a defendant on the movie producers’ lawsuit against LiquidVPN, Quadranet pushed back. Last December, the court in Florida where the film firms had gone legal dismissed the action against the hosting company on the basis there were no straightforward tactics it could employ to stop any infringing activities happening on its networks.

The movie producers had argued that the hosting company could ‘null route’ IP addresses linked to infringing activity which would make them unusable and stop the infringement. But, according to Torrentfreak, the court concluded this was an “impermissibly broad measure” because it would interfere in the relationship between the VPN and its customers, and could also negatively impact on other people making legitimate use of the VPN’s services.

The movie producers then asked the court to reconsider, citing its past settlements with other internet companies as proof the court was wrong to conclude their proposed anti-piracy tactic would have unintended consequences. They cited a statement from VPN provider TorGuard to the effect that null-routing was a standard practice in the VPN business, and also referenced their settlement with hosting company Sharktech which has agreed to block some piracy traffic.

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But, in her latest ruling, judge Beth Bloom said none of this persuaded her to overturn her original decision to dismiss the litigation against Quadranet. “The manner in which Sharktech operates and is willing to implement systems to attempt to block pirating websites is from an unrelated settlement agreement that has no bearing on Quadranet’s ability and alleged obligation to implement similar measures”, she stated.

Plus, “assuming for the sake of argument that Quadranet could null-route a specific IP address – static or dynamic – without interfering with other end users’ legitimate use of the same IP address”, she added, “Quadranet’s actions would be wholly ineffective as the copyright infringer could get a new IP address to continue infringing plaintiffs’ copyrighted works. In other words, null-routing an IP address or an account is not a practical measure to police infringing activity”.

So, a definite win for Quadranet. Although with the hosting company now removed from the movie producers’ legal action against LiquidVPN, they can now push for a default judgement against the VPN company itself, it having failed to mount a defence in court.

The producers are seeking nearly $15 million in damages. Though the LiquidVPN home page has been offline for a while, so it’s not entirely clear what’s going on at the VPN business and whether there’s anyone left there to pay out.

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