Federal Judge Allows Lawsuit Against Cloudflare to Proceed

Cloudflare doesn’t exactly have the best relationship with either the music industry nor the entertainment industry.

In the U.S., the content delivery network (CDN) has faced subpoenas for multiple music piracy websites it hosts.  This has led to the closure of top infringing websites, including , .

In Italy, a top court ordered Cloudflare to immediately terminate several pirates websites.

According to the Recording Industry Association of America (RIAA), the CDN – whose clients include The Pirate Bay – readily protects copyright infringers.

In a report highlighting the fight against piracy, the influential music organization wrote,

[Piracy] sites are increasingly turning to Cloudflare because routing their site through Cloudflare obfuscates the IP address of the actual hosting provider, masking the location of the site.

Now, a federal judge has ordered a lawsuit from an unlikely industry to proceed.

The bridal industry vs. Cloudflare.

Late last year, two wedding dress manufacturers and wholesalers – – filed a contributory infringement lawsuit against Cloudflare.

Filed at the United States District Court for the Central District of California, both companies claim the CDN provides services to Chinese websites.  These sites sell wedding dresses based on their designs.  To promote their counterfeit designs, the websites use photos taken from Mon Cheri Bridals and Maggie Sottero Designs.

The companies explained,

The photographic images of plaintiffs’ dress designs are the lifeblood of plaintiff’s advertising and marketing of their dress designs to the consuming public.

According to Mon Cheri and Maggie Sottero, the bridal industry invests hundreds of thousands of dollars “in the development of sophisticated marketing campaigns which involve the engagement of models and photographers and the coordination of expensive photoshoots to capture the appropriate ‘look’ of the campaign for a particular line of dresses.”  Cloudflare allegedly “shields pirate sites and their hosts from legal recourse.”

In short, the beleaguered CDN ensures no one can successfully take any of its clients to court.  This includes ignoring DMCA takedown notices altogether.

Responding to the claims, Cloudflare refused to acknowledge Mon Cheri and Maggie Sottero’s takedown notices.  Instead, the company argued both manufacturers outright failed to state a proper claim.  In fact, they hadn’t formatted the lawsuit properly.

Stating it doesn’t remain liable for these notifications, the CDN wrote,

Plaintiffs characterize their notifications as ‘credible’ without stating any facts that demonstrate their credibility.  In any event, defective notifications, like those the plaintiffs sent to Cloudflare, cannot support any claim of actual knowledge.

A federal judge didn’t buy it.

Siding with Mon Cheri and Maggie Sottero, District Judge Vince Chhabria tore Cloudflare’s argument to shreds in the company’s motion to dismiss.

The judge wrote,

Cloudflare’s main argument – that contributory liability cannot be based on a defendant’s knowledge of infringing conduct and continued material contribution to it – is wrong.

In fact, both manufacturers’ arguments are good enough in this stage of the lawsuit.

Allegations that Cloudflare knew its customer-websites displayed infringing material and continued to provide those websites with faster load times and concealed identities are sufficient to state a claim.

In its motion to dismiss the case, the CDN added it doesn’t serve as a hosting provider.  Judge Chhabria also didn’t buy this argument.

In what could ultimately serve as the company’s undoing in the case, the judge wrote,

The notices allegedly sent by the plaintiffs gave Cloudflare specific information, including a link to the offending website and a link to the underlying copyrighted material, to plausibly allege that Cloudflare had actual knowledge of the infringing activity.

Judge Chhrabia also opened the door to stripping away the company’s DMCA safe harbor protection.

Allowing the lawsuit to proceed, the judge concluded,

Cloudflare’s challenge to the sufficiency of the notices under 17 U.S.C. section 512 [of the Digital Millennial Copyright Act] is misplaced.

[The CDN] hasn’t shown that its conduct should be considered under one safe harbor rather than under another safe harbor (and thus has not shown that the alleged notice would need to be formatted in one way rather than another).

You can view Judge Chhabria’s order below.