Nextgen IP Management, LLC v. Cloudflare, Inc. et al.

Background

Nextgen IP Management, LLC brought claims against Spankbang.com, Beeg.com, Anysex.com, and four John Does for direct copyright infringement, direct trademark infringement, and direct trademark counterfeiting. Nextgen alleged that those defendants displayed its copyrighted content on internet sites without authorization.

Nextgen also sued Cloudflare, Inc. for contributory copyright infringement, vicarious copyright infringement, and contributory trademark infringement. Nextgen alleged that Cloudflare provided network and security services to the websites despite receiving notice of their alleged infringing activity.

Cloudflare moved to stay the claims against it while the Supreme Court considered Cox Communications, Inc. v. Sony Music Entertainment, No. 24-171. The Supreme Court had granted review of whether a service provider can be liable for materially contributing to copyright infringement merely because it knew customers were using accounts to infringe and did not terminate access, without proof that the provider affirmatively encouraged or intended to promote infringement.

Court’s analysis

The court explained that district courts have discretion to pause proceedings. It considered the private interests of the parties, the burden on defendants, the interests of the courts and nonparties, and the public interest.

The court found that waiting for the Supreme Court’s decision would promote judicial efficiency as to Cloudflare. Cox could control the question whether Nextgen’s contributory-infringement claim against Cloudflare was legally viable, or at least provide guidance that would simplify the case. Although Cox would not directly address vicarious liability or contributory trademark infringement, the court concluded that it could still justify pausing the Cloudflare claims because it concerned an important issue bearing on those claims.

The court found little prejudice from delaying the Cloudflare claims because the case had just begun. It also found that the stay would conserve judicial resources and reduce the risk of making a decision that the Supreme Court later rejected.

The court reached a different conclusion for the claims against the website and Doe defendants. Those direct-infringement claims did not depend on Cox. The court said that delaying them could significantly prejudice Nextgen while the alleged infringement continued, particularly because Nextgen might face difficulties identifying the defendants and securing their participation. A stay also would delay possible preliminary relief and discovery on issues unaffected by Cox.

Order and effect

The court granted in part and denied in part Cloudflare’s motion. The claims against Cloudflare are stayed pending the Supreme Court’s decision in Cox. Within 14 days after that decision, the parties must submit a joint status letter proposing next steps.

While the stay remains in place, Nextgen may not obtain discovery from Cloudflare without Cloudflare’s consent or a court order. The court said it will strictly limit any such discovery to information that Nextgen shows is necessary to pursue the claims against the website and Doe defendants and can be obtained only from Cloudflare as a third-party witness.

The claims against Spankbang.com, Beeg.com, Anysex.com, and the four Doe defendants will proceed in the ordinary course. The court also directed Nextgen to file a letter by November 7, 2025, addressing service of the complaint, any needed extension supported by good cause, and communications with the website and Doe defendants. Judge Margaret M. Garnett directed the Clerk of Court to terminate Docket Numbers 13 and 24.