United States: U.S. Court Of Appeals For The Ninth Circuit Rules There Is No Cause Of Action For "Contributory Cybersquatting"

On December 4, the Ninth Circuit ruled that the 1999 Anticybersquatting Consumer Protection Act (ACPA), 15 U.S.C. § 1125(d) does not provide a cause of action for contributory cybersquatting. In Petroliam Nasional Berhad (Petronas) v. GoDaddy.com, Inc., No. 12-15584 (Dec. 4, 2013), the Ninth Circuit affirmed the district court's decision granting summary judgment in favor of the domain registrar GoDaddy against claims by a Malaysian oil company known as Petronas arising from registration of the domains petronastower.net and petronastowers.net by a third party.

his case provides one important precedent in the broader landscape of liability rules pertaining to "intermediary" businesses—businesses that provide platforms or technologies to others—relating to alleged misconduct by customers of those businesses. This decision takes its place among Tiffany v. eBay in the Second Circuit and Metro-Goldwyn-Mayer Studios v. Grokster in the Supreme Court as a defining landmark in that landscape. Debates will surely continue about legal rules regulating whose job it is to police the internet to protect rights claimants' interests, the rights claimants themselves or businesses that provide the public with technology and communication capabilities.

The Petronas v. GoDaddy Decision

Petronas, a Malaysian energy company, discovered that one of GoDaddy's customers had registered petronastower.net and petronastowers.net, which redirected to a porn site. Petronas sued GoDaddy for, among other claims, contributory cybersquatting under the ACPA.

he district court granted GoDaddy summary judgment on all claims raised in the complaint. Petronas appealed only the dismissal of its contributory cybersquatting claim. A panel of the Ninth Circuit Court of Appeals unanimously held for GoDaddy, affirming the district court's decision.

Analyzing the issues through three common lenses of statutory interpretation, the Ninth Circuit held (1) the plain text of the ACPA did not support a cause of action for contributory liability, (2) it did not appear Congress intended implicitly to incorporate common law doctrines in the ACPA; and (3) contributory liability would not advance the ACPA's goals. While expanding on the third point, the Ninth Circuit noted that it would be "nearly impossible" for GoDaddy to analyze bad faith, under the ACPA's nine-factor test, with respect to each of GoDaddy's 50 million domain names. Slip Op. 14. In contrast, the court was rather unsympathetic to Petronas's burden of enforcing its domain name rights against serial cybersquatters, briefly mentioning that the ACPA's direct liability provisions gave mark holders "sufficient remedies." Slip Op. 15.

In reaching its holding, the Ninth Circuit disapproved several earlier district court cases within the circuit that had accepted contributory liability under the ACPA. See Verizon Cal., Inc. v. Above.com Pty Ltd., 881 F. Supp. 2d 1173, 1176–79 (C.D. Cal. 2011); Microsoft Corp. v. Shah, No. 10-0653, 2011 WL 108954, at *1–3 (W.D. Wash. Jan. 12, 2011); Solid Host, NL v. Namecheap, Inc., 652 F. Supp. 2d 1092, 1111–12 (C.D. Cal. 2009). Those cases had thrown the issue into flux, especially those that imposed new limitations on secondary liability, such as an "extraordinary circumstances" test. The Ninth Circuit decided that "[r]ather than attempt to cabin a judicially discovered cause of action for contributory cybersquatting with a limitation created out of whole cloth, we simply decline to recognize such a cause of action in the first place." Slip Op. 14.

The Larger Secondary Liability Landscape

he Petronas decision highlights the jagged topography of secondary liability in intellectual property law. The Patent Act explicitly recognizes secondary liability. 35 U.S.C. § 271(b). The Supreme Court has further recognized the implicit existence of contributory liability for copyright and trademark infringement. Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 442 (1984) (recognizing existence of contributory liability for copyright infringement, but declining to hold defendant liable for selling copying equipment that was capable of substantial noninfringing use); Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 854 (1982) (recognizing existence of contributory liability for trademark infringement, where defendant intentionally induces infringement or continues to supply a product to someone defendant knows is infringing a mark). Lower courts have elaborated on these standards to establish varying standards for contributory liability in copyright and trademark cases. E.g., Perfect 10, Inc. v. Visa Int'l Serv. Ass'n, 494 F.3d 788 (9th Cir. 2007) (copyright contributory liability requires direct control and monitoring of the instrumentality used for infringement; trademark contributory liability requires partnership, authority to bind; or joint ownership or control over the infringing product).

rade secret statutes generally limit secondary liability to persons who know that the trade secrets they receive were misappropriated. See California Uniform Trade Secrets Act § 1(b)(2)(B)(iii); Restatement (Third) of Unfair Competition § 40(b)(3). Further, courts have been reluctant to impose secondary liability under relatively recently enacted statutes focusing on technological violations. For example, in Freeman v. DirecTV, Inc., 457 F.3d 1001 (9th Cir. 2006), the Ninth Circuit held the Electronic Communications Privacy Act, 18 U.S.C. § 2702, and the Stored Communications Act, 18 U.S.C. § 2707, did not authorize secondary liability. Petronas adopts an analytical framework remarkably similar to the Freeman court, which held that the plain text of the ECPA did not provide for contributory liability and neither the circumstances of the ECPA's enactment nor the goals of the statute compelled a finding of contributory liability. Similarly, in Flynn v. Liner Grode Stein Yankelevitz Sunshine Regenstreif & Taylor LLP, 3:09-CV-00422-PMP, 2011 WL 2847712 (D. Nev. July 15, 2011), the court held "aiding and abetting civil liability does not exist under [the Computer Fraud and Abuse Act]." With the Petronas decision, the Ninth Circuit continues the trend against aiding and abetting liability in recently enacted statutes focusing on technology issues.

Implications of the Petronas Decision

he Ninth Circuit was straightforward in denying contributory liability for cybersquatting. Petronas not only insulates domain name registrars from bearing the burden of policing domain names but also reaches much farther. The decision may protect persons who provide technologies or services that alleged cybersquatters may take advantage of. Notably the district court in Petronas rejected plaintiff's claim that merely providing a redirection service from the domain name amounted to contributory infringement.

Trademark owners hoping that litigation leverage over domain registrars would lead to more voluntary action by registrars in curbing allegedly offending domain names will be disappointed by the Petronas decision. They will need, instead, to continue to rely upon domain arbitrations under the Uniform Domain-Name Dispute-Resolution Policy and suits (including in rem, actions) against domain owners or the domains themselves. Those are usually not expensive options. Petronas was successful in its two in rem actions against the accused domains. It stumbled only when it sought to impose damages liability on a registrar even after Petronas had obtained the domains. This decision means that trademark owners may not use the prospect of domain registrar damages liability as leverage for obtaining informal remedies from a registrar.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
17 Jan 2019, Workshop, California, United States

2018 brought a flurry of legislation and other developments in employment law that will undoubtedly affect your workplace.

20 Jan 2019, Conference, California, United States

Fenwick partner ​Kevin Kabler will be speaking at the IO Intellectual Property session (January 21 at 2pm).

20 Jan 2019, Conference, California, United States

Since 2009, recognized as a vital cornerstone for all constituents of the healthcare and biotechnology community, PMWC provides an exceptional forum for the exchange of information about the latest advances in technology (e.g. DNA sequencing technology), in clinical implementation (e.g. cancer and beyond), research, and in all aspects related to the regulatory and reimbursement sectors.

Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions