What is the Cloudflare Case? An Analysis of the Ruling on the Responsibility of 'Distribution Infrastructure' for Pirated Websites

CDN (Content Delivery Network), an infrastructure essential for the rapid distribution of content over the internet, is indispensable in current web services. However, there are numerous instances where this mechanism is exploited as a distribution platform for pirate websites.

On November 19, Reiwa 7 (2025), the Tokyo District Court recognized the liability for aiding copyright infringement by the American company Cloudflare, which provided CDN services to a pirate website, and ordered them to pay approximately 500 million yen in damages. This ruling, which acknowledges the responsibility of the service provider rather than the operators of the pirate site, could significantly impact digital platform businesses.

Reference: Court｜Tokyo District Court Judgment on November 19, Reiwa 7 (2025)

This article will outline the key issues and the court’s judgment in this case, and explain the practical points that corporate legal officers in Japan should be mindful of.

Background of the “Cloudflare Case”: Infringement of Publishing Rights by Pirate Sites in Japan

This case involves four publishing companies, KADOKAWA Corporation, Kodansha Ltd., Shueisha Inc., and Shogakukan Inc. (hereinafter referred to as “the Plaintiffs”), who filed a lawsuit against the U.S.-based company Cloudflare, Inc. (hereinafter referred to as “the Defendant”), seeking damages for infringement of publishing rights (public transmission rights) under Japanese law.

Operation of Pirate Sites and Use of Defendant’s Services

The issue centered around two massive pirate sites, which received over 300 million monthly visits. The operators of these sites, without obtaining permission from the Plaintiffs, recorded and distributed duplicate data of approximately 4,000 manga titles on an “origin server.”

The Defendant, Cloudflare, Inc., entered into a service agreement with these operators, providing a CDN service that efficiently distributed content through “cache servers” (Defendant’s servers) located worldwide.

Infringement Notices and Defendant’s Response

The Plaintiffs sent copyright infringement notices (hereinafter referred to as “the Notices”) to the Defendant based on the U.S. Digital Millennium Copyright Act (DMCA). The Notices specifically included information such as URLs of the infringing works, allowing for precise identification of the infringing content.

However, even after receiving the Notices, the Defendant did not cease providing services to the sites in question and only took measures to delete some cached content (copies stored for distribution) from the CDN servers.

Unique Characteristics of Defendant’s CDN Service

The Defendant’s CDN service included a “reverse proxy” function that concealed the IP addresses of users’ servers (origin servers) from external view. This mechanism made it difficult for third parties to identify the location or operators of the servers used by the pirate site operators.

Furthermore, the Defendant did not conduct strict Know Your Customer (KYC) verification of users at the time of service contract. As a result, even if rights holders sought information disclosure through legal procedures, identifying the site operators was not straightforward.

Due to these circumstances, the Plaintiffs filed this lawsuit, holding the Defendant responsible not only for the pirate site operators but also for continuing to provide the distribution infrastructure.

What Are the Legal Responsibilities of CDN Service Providers Under Japanese Law?

In this trial, the main points of contention were whether the CDN service provider could be considered the direct infringer of rights, whether they could be said to have assisted in the infringement, and whether the limitations on rights under the Japanese Copyright Act would apply.

Entity Responsible for Automatic Public Transmission (Primary Claim) Under Japanese Law

The plaintiffs argued that the defendant was the entity responsible for public transmission. However, the court did not accept this claim. In making its decision, the court referred to the Supreme Court ruling in the so-called “Maneki TV Case.”

The Maneki TV Case involved a service that allowed television programs to be viewed over the Internet, and the dispute centered on who was considered the entity responsible for the “automatic public transmission” of copyrighted works. In its ruling, the Supreme Court determined that the entity responsible for the transmission of copyrighted works is essentially “the person who inputs and records the copyrighted work on a server and makes it available for transmission.”

The court applied this reasoning to the current case, determining that the operators of the pirate website, who recorded manga data on the origin server and configured it for distribution, were the entities responsible for automatic public transmission. Therefore, the court recognized that it was the operators, not the defendant providing CDN services, who were responsible for the automatic public transmission.

Assisting in Infringement of Publishing Rights (Preliminary Claim) Under Japanese Law

On the other hand, the court recognized the establishment of “assistance” by the defendant under Article 719, Paragraph 2 of the Japanese Civil Code.

In determining the establishment of assistance by the defendant, the court emphasized that the defendant’s CDN service substantially supported the operation of the pirate website. It was acknowledged that the caching function provided by the defendant distributed the load of content delivery, enabling the pirate website to efficiently distribute a large volume of manga data.

Additionally, the defendant’s service included a mechanism to conceal the IP address of the origin server, and strict identity verification of users was not conducted. As a result, it became difficult to identify the operators of the pirate website, and the court judged that such a highly anonymous environment facilitated the infringement of publishing rights.

Furthermore, the court recognized the defendant’s negligence. It was stated that the defendant could have recognized the fact of rights infringement through the infringement notices sent by the plaintiffs. Moreover, since the content on the site contained watermarks indicating they were pirated, it was judged that with ordinary care, it would have been easy to recognize the site as a pirate website.

Based on these facts, the defendant was deemed negligent for failing to suspend the service provision despite having the obligation to do so one month after receiving the notice, which was necessary for internal procedures.

Determining Exemption Validity Under the Japanese Information Distribution Platform Act

The defendant claimed exemption based on Article 3, Paragraph 1 of the Act on the Limitation of Liability for Damages of Specified Telecommunications Service Providers and the Right to Demand Disclosure of Identification Information of the Senders (hereinafter referred to as the “Information Distribution Platform Act”).

However, the court recognized that there were sufficient grounds to believe that the defendant “could have known that another person’s rights were being infringed” (as per Item 2 of the same paragraph). Furthermore, the court determined that it was “technically possible” to cease providing services to pirate websites, deeming it a reasonable preventive measure, and thus denied the exemption.

Applicability of Article 47-4 of the Japanese Copyright Act (Limitations on Rights)

The defendant argued that the distribution of cached content is an incidental use related to the operation of electronic computers, invoking the limitations on rights under Article 47-4, Paragraph 1 of the Japanese Copyright Act.

The court first noted that the act of temporarily “recording” a work on a server as a CDN cache could potentially fall under the limitations on rights as a technical use associated with computer processing, according to the intent of Article 47-4, Paragraph 1, Item 2 of the Japanese Copyright Act.

However, on the other hand, the court determined that the “automatic public transmission” of data stored in the cache to users is not merely a technical process. Instead, it constitutes an independent act of use that directly creates an opportunity for users to view manga.

Therefore, this distribution activity was deemed not to qualify as “incidental use” as defined in Article 47-4 of the Japanese Copyright Act. Furthermore, even if it were considered incidental use, allowing users to view pirated manga for free would unjustly harm the interests of the copyright holders, and thus, the application of the limitations on rights under the same article was not recognized.

Calculation of Damages Under Japanese Copyright Law

The court calculated damages based on Article 114, Paragraph 3 of the Japanese Copyright Act. It multiplied the anticipated distribution fee by a reasonable usage rate (80%) and used the estimated number of views derived from access statistics as the basis for this calculation. As a result, the court ordered the defendant to pay a total of approximately 500 million yen in damages to the four plaintiff companies.

Lessons for Companies from the “Cloudflare Case” Under Japanese Law

This ruling not only resolves a single case but also provides crucial guidance for all companies offering digital platforms and those managing intellectual property.

Responsibilities for Service Providers (Providers and Infrastructure Operators) in Japan

Companies providing digital infrastructure must recognize that the legal risks of their services being misused for infringement have been clarified by this ruling.

One major reason the court acknowledged the defendant’s liability was the failure to verify identities, thereby offering “strong anonymity.” Service providers must implement effective identity verification measures, such as credit card information or SMS authentication, at the time of contract signing, in line with the intent of the Information Distribution Platform Countermeasures Act, to avoid future liability for aiding and abetting.

Ignoring DMCA notices or infringement notices under Japanese law due to “unclear content” poses a significant risk. The ruling suggests a guideline of investigating the facts and, if infringement is apparent, suspending services or removing content within approximately one month of receiving the notice. Legal departments need to clarify internal decision-making processes for notices and establish a system for swift decision-making.

Responsibilities for Rights Holders (Content Holders) in Japan

Companies holding copyrights and other intellectual property have gained a new legal tool in combating piracy.

In this case, the method of estimating the viewing scale of pirate sites using data from tools like SimilarWeb was partially accepted as a basis for calculating damages. Therefore, rights holders should collect data that objectively demonstrates the access status and impact scale of infringing sites. Additionally, when issuing infringement notices, it is practically important to present evidence that specifically identifies which works are infringed upon at which URLs.

Previously, it was challenging to identify and sue operators of anonymously run pirate sites overseas. However, this ruling indicates that not only site operators but also CDN providers and other infrastructure providers could be held liable. This suggests that pursuing the responsibility of such intermediary providers could become a viable option in future anti-piracy efforts.

Nonetheless, the ruling emphasized specific circumstances, such as the site’s apparent status as a pirate site and the defendant’s inadequate identity verification. Therefore, similar liability may not always be recognized, and caution is advised.

Risk Management in Digital Legal Affairs in Japan

The interpretation of Article 47-4 of the Japanese Copyright Act, which indicates that cache distribution is not always exempt from liability, should be taken seriously. Rather than easily assuming exemption due to technical ancillary actions, compliance checks should always consider whether the “interests of the copyright holder are unduly harmed.”

Conclusion: Consult Experts on Copyright Infringement in Japan

The Cloudflare case ruling is a groundbreaking precedent that delineates the boundary between social responsibility and legal obligations in the provision of advanced technologies like CDNs. This decision has made it clear that infrastructure providers in Japan cannot simply remain passive conduits; they are now strongly required to respond appropriately and maintain transparency regarding infringement activities.

The defendant has appealed, and the upcoming hearings at the Intellectual Property High Court in Japan are drawing significant attention. Even at this stage, the principles established by this ruling carry substantial weight in the digital strategies and legal risk management of companies. Each company must align its operations with the “timely and appropriate response” standards set by this ruling and strive to enhance compliance further.

In addressing these issues, it is advisable to consult with attorneys who are well-versed not only in Japanese law but also in IT technology.

Guidance on Measures by Our Firm

Monolith Law Office is a legal firm with extensive experience in both IT, particularly the Internet, and law. In recent years, intellectual property rights, especially concerning copyright, have garnered significant attention, and the necessity for legal checks is increasingly on the rise. Our firm provides solutions related to intellectual property under Japanese law. Detailed information is provided in the article below.