The Supreme Court let stand a Ninth Circuit ruling that an internet domain name registrar cannot be held liable for contributory cybersquatting under the AntiCybersquatting Consumer Protection Act (ACPA).
Petronas, a Malaysian national oil company, learned that a third party registered domain names using its trademarks -- petronastower.net and petronastowers.net -- with GoDaddy, an internet domain name registrar and web hosting company. The disputed domain names registered by the cybersquatter were directed to pornographic websites through GoDaddy’s automated system of domain registration. GoDaddy maintains more than 50 million domain names worldwide.
Petronas filed three causes of action against GoDaddy, consisting of cybersquatting, contributory liability for cybersquatting and unfair competition. Prior to filing suit, Petronas had notified GoDaddy of the disputed domain name use and subsequently submitted a trademark claim to GoDaddy, which denied the claim and provided instructions for the appropriate channels for Petronas to follow.
Petronas attempted to contact the third party registrants, but later filed suit against GoDaddy in 2009. The company subsequently filed in rem actions that were granted by the court, to transfer ownership of the disputed domain names to Petronas.
Petronas claimed that the Anticybersquatting Consumer Protection Act (ACPA), added as an amendment to the trademark laws of the Lanham Act, provided a cause of action for contributory cybersquatting.
The Ninth Circuit court, upheld by the Supreme Court, affirmed that the ACPA does not provide a cause of action for contributory cybersquatting claims against a domain name forwarding service, “absent a bad faith intent to profit from such registration or maintenance of the domain name.” Domain name forwarding by the registrar is considered by the court a form of “routing,” which cannot be considered a claim in the same “context of traditional trademark infringement” as Petronas alleged.
Go Daddy sought a motion to dismiss, arguing that Petronas failed to state a claim and asserted that there is no finding of a “bad faith intent” for profit as they “maintain over 50 million domain names registered” worldwide through an automated registration dashboard. GoDaddy only acts as a registrar, automatically routing a domain name to a website selected by the registrants.
The court further clarified that if actionable cybersquatting occurs through the “bad faith and abusive registration of distinctive marks” for profit, the ACPA allows for an in rem action against a domain name, so that the ownership of the domain name is transferred to the rightful owner. In addition, the trademark holders can bring a traditional claim of contributory trademark infringement if the cybersquatting is in fact trademark infringement.