Suing Cloudfare: Will Dressmakers Succeed Where Pornographers Have Not?

SAN FRANCISCO – When Cloudflare terminated the services of the neo-Nazi website “The Daily Stormer” last year, the company’s CEO Matthew Prince initially said that he “woke up this morning in a bad mood and decided to kick them off the Internet.”

Prince later took to Cloudflare’s corporate blog to offer a more detailed rationale for the termination, writing that Cloudflare’s “terms of service reserve the right for us to terminate users of our network at our sole discretion.”

“The tipping point for us making this decision was that the team behind Daily Stormer made the claim that we were secretly supporters of their ideology,” Prince added. “Our team has been thorough and have had thoughtful discussions for years about what the right policy was on censoring. Like a lot of people, we’ve felt angry at these hateful people for a long time but we have followed the law and remained content neutral as a network. We could not remain neutral after these claims of secret support by Cloudflare.”

Neither explanation sat particularly well with those who favored the company’s very hands-off approach to the content distributed across its network by Cloudflare clients. The explanations also didn’t go over very well with various content creators and rightsholders, many of whom wondered aloud why the company is able to terminate neo-Nazis quickly and easily yet can’t seem to act with the same sort of alacrity when it comes to Cloudflare clients who repeatedly infringe on copyrights and other intellectual property.

Not long after Prince explained the decision to terminate the Daily Stormer, adult content publisher ALS Scan highlighted his comments in a lawsuit it had filed against Cloudflare and sought permission to depose Prince about his authority to terminate customers.

While the ALS Scan lawsuit was eventually settled without reaching the question of whether Cloudflare’s policy with respect to alleged repeat offenders satisfied the requirements of §512 of the Digital Millennium Copyright Act, Cloudflare is now facing similar claims from a very different plaintiff.

In a complaint filed earlier this month, Mon Cheri Bridals and Maggie Sottero Designs assert that “Cloudflare’s liability arises from its failure to terminate the providing of its content delivery services to customers it knows, or has reason to know, is using those services to infringe on Plaintiffs’ copyrights.”

“Plaintiffs have filed hundreds of ‘takedown notices’ with CloudFlare, consistent with the Digital Millenium Copyright Act (DMCA),” the plaintiffs’ add in the complaint, “but Cloudflare has failed and/or refused to respond to those notices by terminating its services to infringers. As such, CloudFlare is liable for the infringements committed by its customers.”

The complaint alleges that Cloudflare clients have both infringed on copyrighted dress designs, as well as the images used by Mon Cheri and Maggie Sottero to market those dresses. (The images, just like the designs themselves, have duly registered copyrights.)

According to the complaint, the plaintiffs and many other members of the formalwear industry “are the victims of a massive Internet scheme to advertise and sell products using the copyrighted images of their dresses.”

“These Internet websites, including ones serviced by Cloudflare which are the subject of this Complaint, have manufactured, imported, distributed, offered for sale and sold counterfeit goods, including bridal gowns, social occasion dresses, prom dresses and other formalwear using copyrighted images of Plaintiffs’ dresses, they continue to do so to this day,” the complaint continues.

While the safe harbor provisions of §512 generally shield internet service providers like Cloudflare from liability for the actions of third-party users of their network and services, the safe harbor also has something of a catch when it comes to repeat offenders served by the ISP.

The pertinent portion of §512 reads: “The limitations on liability established by this section shall apply to a service provider only if the service provider… has adopted and reasonably implemented, and informs subscribers and account holders of the service provider’s system or network of, a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider’s system or network who are repeat infringers; and… accommodates and does not interfere with standard technical measures.”

Whether Cloudflare’s repeat infringer policy will be considered “reasonably implemented” is likely to be the question at the heart of the court’s eventual decision in the lawsuit filed by Mon Cheri and Maggie Sottero – if the case ever reaches that point. Cloudflare may well decide it’s wiser to settle with the dressmakers, rather than wait and see what answer the court comes up with.

One thing is certain: The trade organization of which the plaintiffs are a part – the American Bridal & Prom Industry Association – is no stranger to intellectual property litigation, and it has the full support of the federal government in fighting against counterfeits.

Whatever else ALS Scan had going for it in its litigation against Cloudflare, I think it’s safe to say it didn’t have the latter of those two things.