SCOTUS Petition Challenges 9th Circuit Ruling re: ACPA Contributory Cybersquatting

We will be covering the Anticybersquatting Consumer Protection Act (ACPA), 15 U.S.C. § 1125(d), in class this semester, but a new case was appealed to the Supreme Court this week that I thought might be of interest.  This blog entry will act as a bit of a preview of laws, cases, and legal terminology we will see and discuss this semester.

When a party appeals a case to the Supreme Court of the United States (SCOTUS), which is the highest Court in the United States, the appeal has a special name: “petition for writ of certiorari” also called “cert” or “cert petition.”  This petition asks the court a single question of law (or sometime several questions).

In this current case the cert petition was filed in a case titled Petroliam Nasional Berhad v. GoDaddy.com, Inc. (U.S., No. 13-1255), appealing a Dec. 4th decision by the U.S. Court of Appeals for the Ninth Circuit, related to the ACPA.

The ACPA is a 1999 federal law authorizing a trademark owner to obtain a federal-court order transferring ownership of a domain name from a “cybersquatter” to the trademark owner.

Cybersquatting is an act of reserving a domain name on the Internet and then seeking to profit by selling or licensing the name to the company, person, etc.  that has an interest in being identified with that domain name.

To prove a violation of the ACPA, the trademark’s owner must show that (1) the mark and the domain name are identical or confusingly similar; (2) the mark was distinctive when the domain name was first registered; (3) the trademark’s owner used the mark commercially before the domain name was registered; and (4) the domain registrant acted in bad faith and intended to profit from the trademark’s use.

The petitioner in the present case is Petroliam Nasional Berhad, a Malaysian corporation owned by the government, commonly known as “Petronas.” The corporation has a U.S. trademark registration on the term “Petronas” with respect to chemical products, petrochemicals, oil, gasoline and related goods.

Petronas initially objected to the owner of domain names petronastower.net and petronastowers.net redirecting users to adult-oriented content.  It blamed the domain registrar, GoDaddy.com Inc., for not taking action and filed a lawsuit alleging something called “contributory cybersquatting” under the ACPA.  “Contributory cybersquatting” expands liability for cybersquatting to persons or companies who aid and abet cybersquatters.  In this case, Petronas was stating that GoDaddy had “aided and abetted” the cybersquatters, and therefore should be held responsible for some of the wrongdoing.

The 9th Circuit affirmed an award of summary judgment (a motion that allows the speedy disposition of a controversy without the need for a long, expensive trial) in favor of GoDaddy, ruling that the plain meaning of the ACPA, the legislative history, and the goals of the law did not support the idea of an action for “contributory cybersquatting.”  The 9th Circuit court said that something called “contributory trademark infringement” was available to use as a law in this case, but not contributory cybersquatting.

GoDaddy had argued, at the lower court, that a contributory cybersquatting claim does not exist.  The 9th Circuit considered whether the ACPA allowed a claim of contributory cybersquatting.  A few prior cases had said contributory cybersquatting was valid, but only in “exceptional circumstances.”  But, after a short opinion, the 9th Circuit flatly stated the ACPA does not provide for contributory liability. The court gave two reasons for its conclusion:

1) The text of the ACPA does not expressly provide for “secondary liability” like contributory cybersquatting, where a third party, like Go Daddy, is held liable for the actions of others. The 9th Circuit said if Congress wanted to have secondary liability in a statute, it knows exactly how to include it in the language, and it declined to do so here.

2) The ACPA created a new cause of action when it was passed in 1999. The ACPA was enacted precisely because there was no common law for cybersquatting. The 9th Circuit said it’s fair to conclude, then, that the common law doctrines of contributory liability were not a part of the ACPA.

And that’s exactly where Petroliam Nasional Berhad disagreed, and filed a petition for SCOTUS to appeal the 9th Circuit court’s decision.  The question presented in the cert petition is:

“Do the normal rules for contributory trademark infringement…apply to trademark infringement by “cybersquatting” under Section 43(d) of the Lanham Trademark Act?”

Next SCOTUS term, we will have an answer.