TorrentFreak Cloudflare Says Piracy Liability Ruling Has Global Implications; Publishers Disagree

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Services offered by U.S tech giant Cloudflare improve the performance and security of millions of websites, amounting to a significant contribution towards the health of today’s internet.

Those hoping to benefit from Cloudflare’s services find few, if any, barriers to entry. Typically a working email address is sufficient to gain access, meaning new users can protect their websites in a matter of minutes.

Cloudflare Held Liable For Anonymous Users​

Frictionless onboarding is popular with users and good for Cloudflare’s overall business. For Japanese manga publishers Shueisha, Kodansha, Kadokawa, and Shogakukan, the absence of identity verification is a gift to pirate site operators. Not only are they allowed to remain personally anonymous, their websites’ IP addresses can be hidden and exchanged for Cloudflare’s, making enforcement more difficult.

A decision handed down this week by Judge Aya Takahashi at the Tokyo District Court, holding Cloudflare liable for infringement carried out by its customers, concerns a lawsuit filed by the publishers in 2022.

The companies said that the anonymity afforded by Cloudflare to site operators and their websites, provides an attractive environment for piracy of their content to thrive. When the publishers’ repeatedly complained, Cloudflare should’ve taken the strongest of action against such abuse, including terminating the accounts of known pirate sites.

Liability and Future Growth​

Judge Takahashi agreed that the lack of identity verification was a piracy-enabling factor but Cloudflare’s inaction amounted to a failure to acknowledge responsibility.

“(Cloudflare) failed in its duty to stop providing the service,” Judge Takahashi said.

Liability in this instance led to a damages award against Cloudflare of 500 million yen, around US$3.2 million. In the bigger picture, the money is less important to Cloudflare than new liability and what that might mean for the growth of its business.

In this instance, the court did not issue an injunction to restrain Cloudflare moving forward. However, the finding of liability is unacceptable to Cloudflare so it intends to file an appeal and continue the fight.

“We appreciate the efforts of the Tokyo District Court, which spent a great deal of time and effort reviewing and ruling on this complex case. While we respectfully disagree with the court’s decision, we also express our dissent,” the company said in a statement sent to legal news outlet Bengo4.

Cloudflare maintains its long-held position that as a CDN, it delivers data and doesn’t host anything. Since the pirated content is hosted elsewhere, that’s where it will remain, regardless of any action at Cloudflare.

Cloudflare Ups the Stakes, Warns of Global Implications​

Cloudflare’s pursuit of a decision aligned with its own interests, will see the publishers defend their hard-won position with similar determination. For the former, the decision in Japan isn’t just a local storm, it’s a threat to intermediaries and sets a global precedent with far-reaching implications.

“Holding CDNs like Cloudflare legally liable for content they do not host removes the limitations on liability that have underpinned the growth of the global internet. This ruling is the first of its kind in the world and could have serious implications for the efficiency, security, and reliability of the internet not only in Japan but around the world,” the company says.

While a robust defense of its position is to be expected, Cloudflare seems to be especially vocal – and critical – not just of the decision, but how it will hurt Japan’s progress moving forward.

Describing the ruling as “undermining transparency, fairness and due process,” Cloudflare said the trial questioned whether Japan’s judicial system supports its aspirations for growth in tech.

“This ruling is contrary to the legislative intent of promoting Japan’s technological growth and risks stifling technological innovation among Japan’s emerging technology companies,” Cloudflare added.

If the decision stands, to avoid liability Cloudflare says it would need to terminate CDN services based on takedown notices, rather than under the formal instructions of a competent court.

The Publishers’ View the Decision in a Different Light​

Yuki Hirai is an attorney at Sakurazaka Law Office, where he leads the case on behalf of the publishers.

In recent comments to the USTR, Cloudflare suggested that a negative outcome against the publishers would “necessitate U.S. CDN providers to limit the provision of global services.”

In comments to TorrentFreak, Attorney Hirai disputes that, noting that Cloudflare’s argument “distorts the essence” of the case.

“This ruling concerns responsibility for providing high anonymity and ignoring infringement notices, not the provision of the service itself nor other CDN service provider,” he explains.

“Cloudflare also argues that to avoid their legal liability, it would need to suspend CDN services for a website based on a notice rather than a formal order from an independent court, significantly increasing the potential for abuse. However, this judgment states, citing several reasons, that our infringement notice properly shows the URLs to the infringing content, and that upon viewing those URLs, it was immediately obvious they were pirate sites.”

Attorney Hirai says Cloudflare’s arguments are “highly self-defensive and contain numerous errors.” The publishers true aims are actually quite straightforward.

A Decision That Aligns With Cloudflare Policy​

“What we are demanding is a very general act of ceasing to aid such crimes. Restricting the provision of global services is not the solution we seek, nor is it aligned to this judgement,” Hirai explains.

“What we are seeking is for Cloudflare to promptly cease providing services once the sites are notified as pirate sites, and to implement appropriate measures such as identity verification to prevent repeat infringers.

“These requests from us also align with Cloudflare’s policy in its statement to media outlets, of ‘not hesitating to cooperate in combating piracy’”

From: TF, for the latest news on copyright battles, piracy and more.

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