D. Expansion of Inwood Standard to “Non-Product” Cases: The “Direct Control and Monitoring” Test: 2. Internet Activity: (f) Contributory Cybersquatting (i) Introduction
Cybersquatting is a form of cyberpiracy involving the bad-faith use of another’s trademark in a domain name with the intent to profit. It is recognized as a form of trademark infringement under the Anti-Cybersquatting Consumer Protection Act (“ACPA”), passed by Congress in 1999 as an amendment to the Lanham Act. The ACPA provides in relevant part as follows:
(d) Cyberpiracy prevention
(1)(A) A person shall be liable in a civil action by the owner of a mark, including a personal name which is protected as a mark under this section, if, without regard to the goods or services of the parties, that person
(i) has a bad faith intent to profit from that mark, including a personal name which is protected as a mark under this section; and
(ii) registers, traffics in, or uses a domain name that—
(I) in the case of a mark that is distinctive at the time of registration of the domain name, is identical or confusingly similar to that mark;
(II) in the case of a famous mark that is famous at the time of registration of the domain name, is identical or confusingly similar to or dilutive of that mark; or
(III) is a trademark, word, or name protected by reason of section 706 of Title 18 or section 220506 of Title 36.
15 U.S.C. §1125(d)(1)(A). See also Solid Host, NL v. Namecheap, Inc. 652 F.Supp.2d 1092, 1099-1101 (C.D. Cal. 2009)(discussing the legislative history and purpose of the ACPA). Note that the ACPA further contains a non-exhaustive list of factors for the court to consider in determining whether a domain name registrant has acted with “bad faith intent to profit.” See 15 U.S.C. § 1125(d) (1)(B)(i)((I) –(VIII) and Ford Motor Co. v. Greatdomains.com, 177 F.Supp.2d 635, 642 (E.D. Mich. 2001)
The statute grants immunity to those who do not possess bad faith intent under a safe harbor provision of the ACPA stating
Bad faith intent described under subparagraph (A) shall not be found in any case in which the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful.
15 U.S.C. § 1125(d) (1)(B)(ii).
The statute also contains provisions that specifically shield domain name registrars from liability under certain circumstances. For example, 15 U.S.C. §§ 1114(2)(D)(i)-(ii) provide that “[a] domain name registrar, a domain name registry, or other domain name registration authority” shall not be liable for damages or, with certain exceptions, subject to injunctive relief for “refusing to register, removing from registration, transferring, temporarily disabling, or permanently canceling a domain name” in compliance with a court order or “in the implementation of a reasonable policy … prohibiting the registration of a domain name that is identical to, confusingly similar to, or dilutive of another’s mark.” Solid Host, NL v. Namecheap, Inc. 652 F.Supp.2d 1092, 1101 (C.D. Cal. 2009).
And 15 U.S.C. § 1114(2)(D)(iii) provides that
[a] domain name registrar, a domain name registry, or other domain name registration authority shall not be liable for damages under this section for the registration or maintenance of a domain name for another absent a showing of bad faith intent to profit from such registration or maintenance of the domain name.
Note that where liability was alleged against a domain name registrar for actions outside its “core function” as registrar, the safe harbor provisions of the ACPA were found inapplicable. See Solid Host, NL v. Namecheap, Inc. 652 F.Supp.2d 1092, 1105 (C.D. Cal. 2009), discussed below.
In practice, to bring an action for cybersquatting under the ACPA, courts have held that a plaintiff must show that “(1) the defendant registered, trafficked in, or used a domain name; (2) the domain name is identical or confusingly similar to a protected mark owned by the plaintiff; and (3) the defendant acted with ‘bad faith intent to profit from that mark.’ ” Microsoft Corp. v. Shah, 2011WL 108954 *1 (W.D. Wash.), citing DSPT International v. Nahum, No. 08-55062 2010 WL 4227883 at *3 (9th Cir. 2010); 15 U.S.C. § 1125(d)(1)(A).
Since the passage of the ACPA, cases have emerged that vary from the “paradigmatic” cybersquatting originally contemplated by the Act. In that “typical” case,
[c]ybersquatting occurs when a person other than the trademark holder registers the domain name of a well known trademark and then attempts to profit from this by either ransoming the domain name back to the trademark holder or by using the domain name to divert business from the trademark holder to the domain name holder.
Petroliam Nasional Berhad v. Godaddy.com, Inc., 2010 WL 3619780 *2 (C.D. Cal)(dismissing both the direct and contributory cybersquatting claims with leave to amend), quoting DaimlerChrysler v. The Net Inc., 388 F.3d 201, 204 (6th Cir.2004), quoted in Bosley Med. Inst., Inc. v. Kremer, 403 F.3d 672, 680 (9th Cir.2005). In contrast, the courts inMicrosoft Corp. v. Shah and Solid Host, NL v. Namecheap, Inc., discussed below, considered contributory liability claims where the cybersquatter had not acted first to register the plaintiff’s mark as a domain name.