Popular Internet infrastructure service Cloudflare has come under pressure from copyright holders in recent years.
The company offers its services to millions of customers including multinationals, governments, but also some of the world’s leading pirate sites.
These pirate sites have proven to be quite a headache for Cloudflare. For example, rightsholders continue to complain that the company helps pirates conceal their hosting locations and identities, as was made clear again in recent submissions to the European Commission.
In some countries, rightsholders are using the legal system to address their gripes. This resulted in site blocking orders in Japan, Italy, and Germany. At the same time, Cloudflare has also been sued directly for its association with pirate sites.
Cloudflare’s Moldovan Piracy Lawsuit
In Moldova, for example, book authors Eugeniu and Radu Turuta, sued Cloudflare and several of its customers, including the anonymous operators of file hosting platform doku.pub. The authors accused these services of sharing pirated copies of their book “5000 Integrated Circuits Power Audio Amplifiers”.
When the authors sent Cloudflare a takedown notice, the company responded that it doesn’t host any content for doku.pub, clarifying that it operates as a ‘pass-though’ CDN provider. Instead of taking any direct action, Cloudflare said that it would inform its customers about the allegations.
This response is typical for Cloudflare. The company generally forwards DMCA takedown notices and only takes direct action if it permanently hosts the allegedly infringing material.
However, in the Moldovan case, the authors argued that Cloudflare had the technical capacity to block access to the infringing content on doku.pub, but failed to do so despite being notified. This inaction, they claimed, made Cloudflare complicit and directly contributed to their financial losses.
In 2022, the Chisinau Court dismissed the authors’ claim. The court held that Cloudflare, as a CDN provider, merely acted as an intermediary and was not directly involved in hosting or distributing the pirated content.
This ruling was appealed, with the higher court taking a different stance, emphasizing the responsibility of CDNs to actively combat copyright infringement within their networks.
$1.4 Million Piracy Judgment
The Court of Appeal’s ruling puts Cloudflare on equal footing with other Internet providers. Essentially, it concluded that it doesn’t matter whether Cloudflare merely passes on traffic or if it hosts content as well.
“The company Cloudflare Inc does not provide data transmission services over the internet to the https://doku.pub website, but it does provide data transmission services between the https://doku.pub website and the end users, and this fact is confirmed by Cloudflare Inc., which claims to be a pass-through network.
“[T]he court finds that, by reproducing the content of the works (books) in dispute, without the consent of the authors, there has been a violation of the patrimonial copyright of the plaintiffs,” the Court of Appeals added.
Based on these conclusions, the Court held that Cloudflare is liable for copyright infringement, ordering the company to pay €1.27 million (approximately $1.4 million) in damages to the authors.
Authors Ask U.S. Court to Enforce Judgment
The judgment was undoubtedly a major setback for Cloudflare. In particular, it conflicts with the different types of safe harbors for Internet providers in the United States, where pass-through services are treated differently from hosting platforms.
Despite the court of appeal’s order, the issue isn’t fully resolved yet. According to the authors, Cloudflare has yet to pay any damages. To ensure that this will happen, they took the matter to the U.S. legal system.
At a U.S. federal court in California, the rightsholders point out that the judgment from the Chisinau court of appeal is final, adding that Cloudflare has yet to pay. They therefore ask the court to recognize this foreign order as a valid judgment, so the damages can be collected.
The case was initially filed at the Superior Court of the State of California but was transferred to the federal court this summer, where it’s still pending. Cloudflare has yet to file a detailed response, but it will likely point to the safe harbor protection U.S. copyright law provides.
In theory, the outcome of this case could have far-reaching implications for copyright holders and CDNs worldwide. If the US court recognizes and enforces the Moldovan judgment, it could inspire other copyright holders to pursue similar legal actions against CDNs.
However, enforcing foreign judgments in the U.S. is complex and certainly not guaranteed. The U.S. court will consider various factors, including whether the Moldovan court had jurisdiction and whether the judgment violates U.S. public policy.
In addition to the liability and jurisdiction questions, Cloudflare will likely protest the scale of the damages award as well. In the United States, the maximum statutory damages for a single copyrighted work is $150,000, which is a fraction of the Moldovan award.
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A copy of the legal paperwork, which is currently pending at the U.S. District Court for the Northern District of California, is available here (pdf)
From: TF, for the latest news on copyright battles, piracy and more.
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