The Tokyo District Court has ordered Cloudflare to pay ¥500 million (around $3.2 million) in damages to Manga publishers. The ruling stems from a case in which Cloudflare had been accused of aiding manga piracy sites in distributing copyrighted content.
Manga is among the most heavily pirated content, with Japanese publishers reportedly losing billions annually to piracy. But in a landmark ruling, a Japanese court has sided with manga publishers against Cloudflare.
Below is a detailed look at the ruling, the case at hand, and how the decision will affect the fight against piracy going forward.
Cloudflare accused of distributing pirated content
In 2022, four Japanese Manga publishers, Shueisha, Kodansha, Kadokawa, and Shogakukan, filed a lawsuit against Cloudflare in the Tokyo District Court. The publishers accused Cloudflare of infringing on their copyrights by distributing data for manga piracy sites.
Before filing the lawsuit, the Manga publishers had requested that Cloudflare stop offering its services to piracy sites and had reached an agreement in 2019. However, they claimed the company continued to host its servers for piracy sites despite the agreement.
In their filings, the Japanese Manga publishers sought an injunction against the U.S. company and ¥460 million (around $4 million at the time) in compensation.
Japanese court finds Cloudflare liable for pirated manga distribution
The Tokyo District Court ruled that Cloudflare was not the primary entity responsible for distributing pirated manga; instead, the website operators who uploaded the illegal content to the company’s servers were.
However, it still found Cloudflare liable, recognizing its services helped pirated website operators efficiently distribute large amounts of data. It also found that the company should have realized that the distributed content was illegal and infringing on copyrights.
The Japanese court also concluded that Cloudflare had enabled piracy website operators to remain anonymous by simplifying its identification procedures.
Additionally, it indicted the company for continuing to offer its services even after manga publishers notified it of copyright infringement.
The Japanese court acknowledged that the four manga publishers had suffered $24 million in damages. However, it entered a judgment of $3.2 million, since the publishers had attributed only a portion of their losses to Cloudflare.
The U.S. cloud service company defends itself
Cloudflare has described the Japanese court’s ruling as “regrettable” and stated it will appeal the decision.
During the lawsuit, the company had defended itself, arguing it was the website operators who distributed the pirated content.
It also argued that it was a technical intermediary, whose role is to deliver (and not directly host) data, and thus it cannot control or delete it.
However, none of its arguments were enough to convince the court, resulting in a ruling that the company “aided and abetted” copyright infringement.
Japanese court could reshape digital content liability
The ruling by the Japanese court against Cloudflare is the first of its kind worldwide to hold a content delivery network (CDN) liable for distributing pirated content.
The manga publishers that filed the lawsuit have termed the ruling a victory in the fight against piracy.
“This ruling will lead to the prevention of the abuse of content delivery network (CDN) services by piracy sites and maintenance of a content creation cycle that returns appropriate compensation to creators,” stated Kadokawa in a statement.
However, Cloudflare argues that the decision is harmful and could have global implications, threatening the efficiency and reliability of the internet.
“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,” stated the company in a statement to TorrentFreak.
It remains to be seen whether Cloudflare will win the appeal that it plans to file. However, as it stands, the Japanese court’s ruling has set a precedent that could hold other technical intermediaries liable for distributing pirate content.