Cloudflare Isn't Liable for Sites That Hawk Counterfeits

A federal judge ruled yesterday that Cloudflare is not responsible for copyright infringement on websites using its content-delivery or security services.
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Mon Cheri Bridals sued Cloudflare in November 2018. These were two bridal dress sellers and manufacturers that claimed Cloudflare had contributed to copyright infringement by failing to terminate service for websites that violated the copyrighted designs of the dressmakers. Cloudflare was not allowed to stand trial by a jury. Judge Vince Chhabria granted Cloudflare's motion to summary judgment in a US District Court for Northern California.

Chhabria stated that dressmakers have been hurt by the "proliferation of counterfeit retailers who sell knock-offs dresses using the plaintiffs’ copyrighted photographs" and that they have "gone to after the infringers through a variety of actions, but no availeverytime a website is shut down successfully, a new one takes it's place." Chhabria said that the plaintiffs are now pursuing Cloudflare, a service shared by many infringers. Cloudflare is accused of contributing to copyright infringement by providing security and caching services to infringers. A reasonable jury could not conclude that Cloudflare contributes materially to the underlying copyright violation. Cloudflare's motion is denied.

The ruling in favor of Cloudflare resolves the central question. However, the judge has scheduled a conference to discuss the remaining case details for October 27.

There are hundreds of counterfeit websites

According to the lawsuit, the companies "are two of America's largest wholesalers and manufacturers of wedding dresses and other social occasion wear" and "have created many of the most original and unique wedding and social occasion dress patterns in the world." They hold the copyrights to those designs as well as for photographs of the designs.

According to the lawsuit, most of the sites selling fake versions of the dresses are based in China. An amended complaint also listed 500 defendants called "Doe" whose identities were not known. According to the lawsuit, Cloudflare terms state that any violation of law is grounds for termination of service. "CloudFlare’s policy is to investigate and terminate repeat violators."

According to the plaintiffs, they used Counterfeit Technology as a vendor to locate over 365 Cloudflare users. These included and According to the plaintiffs, they sent Cloudflare thousands upon thousands of takedown notices. Sometimes, Cloudflare would receive four notices on the same infringing websites. However, Cloudflare ignored them and did not take any action once it was notified that there was infringing material on their clients' sites.

The amended complaint stated that Cloudflare continued to cache, mirror and store copies of infringing websites and infringing contents on its servers. It also sent copies to infringing website visitors upon request. Cloudflare's contributions enable the Internet browsers of visitors at infringing sites to access and load infringing content and websites much faster than if they were forced to do so from the primary host without Cloudflare.

Plaintiffs claimed that Cloudflare should have stopped caching services to these sites, blocked traffic through Cloudflare to the websites "and reconfigured its firewall settings so that users trying access the infringingdomain would be redirected directly to a blank webpage."

Cloudflare: A Lawsuit Based on Fundamental Misunderstanding

Cloudflare claimed that the plaintiffs brought this suit based on "a fundamental misunderstanding of Cloudflare’s services, the contributory infringement doctrine and the Digital Millennium Copyright Act, all to pursue a statutory damages windfall which has nothing to do the harm they claim to be causing." Cloudflare stated to the court that a victory for plaintiffs would result in "an expansion" of the contributory copyright infringement doctrine beyond its limits.

Cloudflare stated that Cloudflare was not like peer-to-peer search engines or peer-to-peer network services. However, services previously considered by US Court of Appeals for Ninth Circuit actually allowed visitors to find infringing materials they would otherwise have missed. Cloudflare did not fail to take any'simple measures' to stop further infringements. Cloudflare, unlike hosting providers, could not remove infringing material. It is clear that these images would still be available on the accused websites, without Cloudflare.