On June 3, 2015, the Southern District of New York ordered that third-party CloudFlare, Inc. is bound by a TRO and preliminary injunction entered against the founders of online streaming music service Grooveshark, its copycats, and any persons "acting in concert or participation" with them.
Two prior cases found Escape Media Group, Inc., which operated Grooveshark, liable for copyright infringement and entered a permanent injunction against its founders on May 1 and 5. Shortly thereafter, copycat versions of Grooveshark began springing up. The plaintiffs therefore filed this case on May 12 against Vita Tkach and ten John Does doing business as grooveshark.io and grooveshark.pw. On the same day, plaintiffs obtained a TRO and the court entered a preliminary injunction on June 1.
Enforcing the TRO, however, quickly became a "globetrotting game of 'whack-a-mole.'" Plaintiffs would serve notice of the TRO on one domain name registrar, only to find defendants registering new domain names (such as < grooveshark.vc > and < grooveshark.li >) through different registrars, in different countries. Though the registrars who were notified of the TRO disabled the websites, on May 14, plaintiffs tried a different tactic, by filing suit against CloudFare.
CloudFlare's content delivery network and reverse-proxy services are intended to provide a buffer between a website and its visitors, whether they be human internet users or automated malicious attacks. To do so, CloudFlare associates the website's domain name with its own numerical IP address so that visitors are first routed to CloudFlare's servers and screened for potential threats and, if no threats are detected, the domain name is automatically resolved to the IP address of the website's hosting company. All of this is instantaneous and invisible to the internet user.
CloudFare's services provide multiple advantages to a website operator including faster website load times and better performance, as well as increased website security. The effective result is that CloudFlare's service allows a website operator to operate in secrecy by cloaking the ultimate location of where the website is hosted, presenting clear infringement and enforcement challenges for brand and content owners. Since CloudFlare's service masks the source of an infringing website, any party seeking removal of that infringing website by the true webhost would essentially be stopped at CloudFlare's door.
(Source of graphic: https://www.cloudflare.com/overview)
The court noted that on May 15—the day after plaintiffs served the TRO on CloudFlare—an anonymous user opened a free account on CloudFlare configuring < grooveshark.li > to use CloudFlare's services. And since the first permanent injunction entered in the prior litigations on May 1, other anonymous users using different emails and IP addresses had also opened accounts on CloudFlare for different "grooveshark" domain names.
CloudFlare did not dispute the services it provides to the Grooveshark sites, but argued it was not bound by the TRO and preliminary injunction for two reasons. First, CloudFlare argued it was not in "active concert or participation" with the defendants because its systems "passively and automatically served the domain names at issue." Second, CloudFlare argued that even if it did comply with the TRO, that would not necessarily shut down the various incarnations of Grooveshark the defendants might set up. The court was unpersuaded.
Regarding CloudFlare's passivity argument, the court noted that under Federal Rule of Civil Procedure 65, "active concert or participation" exists if CloudFlare "aided and abetted" the defendants. Under existing case law, to find aiding and abetting, CloudFlare must have had actual knowledge of the TRO and violated it, and its services must have been for the benefit of, or to assist, the defendants.
The court found both requirements met. CouldFlare had knowledge of the TRO at least as early as May 14, 2015, and permitted an anonymous user to establish a free account that configured the domain name < grooveshark.li > the very next day. CouldFlare's services benefited the defendants and assisted them in violating the injunction because without CouldFlare's services, a user could not connect to the defendants' website without knowing the site's specific IP address. Moreover, CloudFlare's services improve the < grooveshark.li > site's performance.
The court was also unpersuaded by CloudFlare's futility argument. Even if it were true that another third party could aid and abet the defendants in violating the injunction, plaintiffs were not required to show that defendants' sites would be inaccessible but for CloudFlare's services, only that CloudFlare was in active concert or participation with defendants.
The court therefore concluded that CloudFlare is bound by the TRO and preliminary injunction.
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