Arista Records, LLC v. Tkach

District Court, S.D. New York
122 F. Supp. 3d 32 (2015)

ELI5:

Rule of Law:

A third-party service provider is in "active concert or participation" with an enjoined party under Federal Rule of Civil Procedure 65(d)(2) when it has actual knowledge of an injunction and provides services that directly assist the enjoined party in violating that injunction, regardless of whether the services are automated or the provider is motivated by a desire to aid the violation.

Facts:

Plaintiffs, a group of record companies, owned the federally registered trademarks for the "Grooveshark" music service after the original service was shut down by court order.
Shortly thereafter, Defendants, including Vita Tkach, launched "copycat" versions of the infringing Grooveshark service using various domain names such as grooveshark.io and grooveshark.pw.
Defendants used CloudFlare, Inc., an internet service provider, for authoritative domain name system (DNS) services, which translate a domain name into an IP address, allowing users to connect to the website.
CloudFlare's services also optimize the performance of its customers' websites, providing faster page load times and better performance.
On May 14, 2015, Plaintiffs served a copy of a Temporary Restraining Order (TRO) against the Defendants on CloudFlare.
On May 15, 2015, after acknowledging receipt of the TRO, CloudFlare permitted an anonymous user to open a new account and configure another infringing domain name, grooveshark.li, to use its services.
CloudFlare refused Plaintiffs' request to cease providing services to the infringing websites, arguing that its automated and "passive" services did not fall under the scope of the TRO.

Procedural Posture:

Plaintiffs filed suit against Defendants Vita Tkach and Does 1-10 in the U.S. District Court for the Southern District of New York for trademark and copyright infringement.
On May 13, 2015, the court entered a temporary restraining order (TRO) against the Defendants and any persons acting in concert with them.
Plaintiffs served the TRO on third-party service provider CloudFlare, Inc., which refused to comply.
On May 22, 2015, Plaintiffs filed a motion for a supplemental order to show cause, which the court construed as an expedited motion for contempt or, alternatively, for clarification of the TRO as it applies to CloudFlare.
On June 1, 2015, the court entered a preliminary injunction against the Defendants with terms substantially identical to the TRO.

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Issue:

Does a third-party internet service provider that provides authoritative domain name system (DNS) and content delivery services act in "active concert or participation" with an enjoined defendant under Federal Rule of Civil Procedure 65(d)(2) by continuing to provide services that facilitate access to the defendant's infringing website after receiving notice of the injunction?

Opinions:

Majority - Nathan, J.

Yes, a third-party internet service provider acts in active concert or participation with an enjoined defendant under these circumstances. The court found that CloudFlare had actual knowledge of the TRO and its services fundamentally assisted the Defendants in violating the injunction. The services directly connected internet users to the infringing sites by translating the domain name to an IP address, which is an essential function for the site's accessibility. The court rejected CloudFlare's argument that its services were merely "passive" and automated, reasoning that under Second Circuit precedent, the inquiry is directed at the 'actuality of concert or participation, without regard to the motives.' The court also dismissed the "futility" argument that Defendants could easily find another service provider, stating that the possibility of another party aiding the violation does not absolve CloudFlare of its own obligation. The court distinguished this case from others involving more passive hosting, emphasizing that CloudFlare's actions occurred after it received notice of the injunction and actively enabled new infringing activity.

Analysis:

This decision clarifies the application of Federal Rule of Civil Procedure 65(d)(2) to modern internet infrastructure providers. It establishes that companies providing essential services like DNS resolution cannot claim immunity from injunctions against their clients by characterizing their services as "passive" or automated. The ruling strengthens the ability of rights holders to enforce court orders against online infringers by targeting the technical service providers that enable their operations. This precedent suggests that internet intermediaries with actual knowledge of an injunction have a duty to stop facilitating the prohibited conduct, potentially expanding liability for providers who fail to act.

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