Prof. Marc Randazza had a great post Is GoDaddy a Mass Cybersquatter? on his Legal Satyricon and, while it's great fun to muse about these things hypothetically, I think everyone agrees that live action is best. Now we have it in Ubid Inc. v. Godaddy Group Inc., No. 09-2123 (N.D. Ill., complaint filed April 6, 2009).
The plaintiff in Ubid v. GoDaddy owns trademark registrations for UBID, UBID.COM, AND REDTAG.COM. The plaintiff operates a merchandise auction site at ubid.com. For any reader that doesn't know, defendant GoDaddy is a domain name registrar, an ICANN-accredited company that fulfills domain name registration requests for a small fee.
According to the complaint, GoDaddy registered dozens of domain names that contain the plaintiff's trademarks (for example: ubidd.com, ubidauctionsales.com, ubid2save.com, ubid4.com, buyredtag.com etc etc). The plaintiff is not complaining about this part of GoDaddy's operation. However, in cases in which the domain name registrant does not transfer the registered domain to a domain name hosting service, GoDaddy will "park" the domain on its own servers. A domain name can be parked at GoDaddy anywhere from a day to an eternity. It all depends on what the registrant elects to do with the domain name.
GoDaddy places advertisements on parked pages, keeping whatever advertising revenue is generated for itself. Here is an example of a GoDaddy parked page. This is what the plaintiff is complaining about in the Ubid v. GoDaddy lawsuit. Every time somebody registers a variant of the plaintiff's trademark and then leaves the domain "parked" on GoDaddy's servers, GoDaddy monetizes that page by displaying advertising on it. GoDaddy -- not the registrant -- is thus engaging in cybrersquatting, according to the plaintiff's argument.
According to the complaint:
GoDaddy illegally achieves monetary gain by knowingly diverting internet traffic to said Deceptive Domains. The Deceptive Domains in this case are "parked pages" meaning that they display no substantive content and are used exclusively for the display of revenue generating Google AdWords advertisements. GoDaddy derives revenue each time an internet user is directed to the Deceptive Domains and ad advertisement is "clicked." GoDaddy has been deriving revenue from more than one hundred deceptive domains solely with the intent to profit from advertising on domain names that are confusingly similar to uBID's valuable marks.
The plaintiff's complaint alleges that GoDaddy is violating the Anticybersquatting Consumer Protection Act, 15 U.S.C. 1125(d), because it is "traffic[ing] in " or "us[ing]" a domain name that is identical or confusingly similar to the UBID or REDTAG marks. I hope this case gets at least to the summary judgment stage; it would be great to see how a court resolves this question. As far as I know, there is no ruling yet that squarely answers whether a domain name registrar does, or does not, have cybersquatting liability in this situation.
I have a couple impressionistic observations to make about this lawsuit:
First, the ACPA's authors did not see this one coming. The legislation, enacted in 1999, predates the Google advertising, domaining, and other ways to monetize Web pages.
Second, the ACPA contains liability limitations for domain name registrars, but they are limited and not clearly applicable to this case. Registrars are not liable to registrants for removing, transferring, disabling or cancelling a registration at the request of a trademark owner. Another part of the ACPA, also found within the Limitation on Liability section (codifed at 15 U.S.C. 1114), actually seems to support -- rather than defeat -- the plaintiff's claim: It reads:
A domain name registrar, registry, or other registration authority shall not be liable for damages under this section for the registration or maintenance of a domain name absent a showing of bad faith intent to profit from such registration or maintenance of the domain name.
The lawsuit would seem to turn on whether or not GoDaddy is acting in "bad faith." It could be liable as a cybersquatter if it used or trafficked in domain names similar to the plaintiff's marks -- if it did so in bad faith. Moreover, it is not entitled to claim the liability limitations in 15 U.S.C. 1114 if it acted in bad faith. "Bad faith" is defined according to an eight-factor test, which I won't go into here. As far as I can see, it doesn't cut clearly in favor or against GoDaddy.
Third, available statutory damages under the ACPA are between $1,000 and $100,000 per domain name, plus attorneys' fees and costs of suit -- amounts way higher than the revenue GoDaddy could possibly be making on the parked pages.
Fourth, a very long time ago, one court, in Bird v. Parsons, 127 F. Supp.2d 885 (S.D. Ohio 2000), wrote that "the Lockheed Martin decision and indeed 15 U.S.C. 1125(d)(1)(D) provides that a person shall be liable under the act for using a domain name only if that person is the domain name registrant." Lockheed Martin was a pre-ACPA case, involving a claim of contributory liability against a domain name registrar, and the court here is misreading/overstating the case (I think).
Fifth, I can't imagine how GoDaddy would cope with an adverse ruling, other than by removing the ads from its parked pages. Perhaps there are other ways to "park" a registered-but-not-yet-in-use domain.
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A bit late, but how about the last Size Inc v NSI decision?
Posted by: Dave Zan | June 21, 2009 at 12:22 PM