Tag Archives: Cybersquatting

Inducement to contribute to infringe … to roll on

Originally posted 2013-02-12 16:34:14. Republished by Blog Post Promoter

Michael Atkins:

Novel causes of action for contributory cybersquatting and contributory dilution appear to viable here in the Western District [of Washington].

On Jan. 12, Western District Judge Ricardo Martinez refused to dismiss such claims plaintiff brought in Microsoft Corp. v. Shah.

In that case, Microsoft alleges defendants, among other things, induced others to engage in cybersquatting and dilution by instructing them on how to use Microsoft trademarks to increase traffic on their Web sites. Microsoft also alleges defendants sold a product that contained software that enabled buyers to create Web sites incorporating Microsoft marks to help sell emoticon-related software, including a video narrated by defendant Amish Shah.

Defendants moved to dismiss, arguing claims for contributory cybersquatting and contributory dilution are not recognized.

The court denied the motion.

This is an interesting development, and one to watch, in light of what I see as the overall reluctance of courts to extend the law of secondary liability for trademark infringement — including with respect to domain name registrars.

Petroliam Nasional Berhard to SCOTUS: Gimme shelter

Originally posted 2014-04-24 11:15:02. Republished by Blog Post Promoter

Did the 9th Circuit miss a spot?

In December 2013 I wrote, mostly cribbing from Jane Coleman‘s commentary, about the very dubious Ninth Circuit decision in Petroliam Nasional Berhad v. GoDaddy.com (9th Cir. Dec. 4, 2013) that declared the existential impossibility of a claim for contributory liability based on the Anticybersquatting Consumer Protection Act (ACPA).  The bottom line, I wrote then, was that “Unfortunately the Ninth Circuit went beyond dictum here, it seems, affirmatively deciding a question it didn’t have to and doing so with unfortunately overbroad language that’s likely to cause a lot of litigation confusion.”

Reasonably enough, then, given the view of the matter around my house, Petroliam Nasional Berhad has filed a Petition for Certiorari to the Supreme Court.  The question presented:

Do the normal rules for contributory trademark infringement set forth in Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 854 (1982) apply to trademark infringement by “cybersquatting” under Section 43(d) of the Lanham Trademark Act?

That’s a nice way to present it, I think.  The summary of argument:

In rare cases, a federal court decides an important federal question in a way that conflicts with relevant decisions of this Court. This is such a case, as the court below held that there is no contributory liability for trademark infringement committed in violation of Section 43(d) of the Lanham Act. This approach conflicts with  longstanding contributory liability principles that have guided this Court and other federal courts for more than 30 years. Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 854 (1982) (holding that there is a cause of action for contributory trademark infringement under the Lanham Act.). And it contradicts this Court’s well established precedent that “when Congress creates a tort action, it legislates against the legal background of ordinary tort related vicarious liability rules and consequently intends its legislation to incorporate those rules.” Meyer v. Holley, 537 U.S. 280,285 (2003).

And, if you will, the meat of it:

The Ninth Circuit’s opinion thus misapprehends Section 32(D)(iii) – quoted above – which only exempts from liability the registration or maintenance of a domain name by a registrar “absent a showing of bad faith intent to profit from such registration or maintenance of the domain name.” More importantly, it contradicts the plain language of the statute which shows that Congress did intend for there to be contributory liability for cybersquatting in violation of Section 43(d), albeit subject to the narrow exception in Section 32(D)(iii). And the legislative history of Section 32(D)(iii) confirms what the statute’s plain language makes clear, namely, that Congress was codifying an existing limitation on secondary liability for cybersquatting. See 1999 WL 594571 (Leg.Hist.), S. Rep. 106 140, at 11 (Section 32(D)(iii)’s intended effect was “codifying current case law limiting the secondary liability of domain name registrars and registries for the act of registration of a domain name.”). Neither the language of the statute nor the legislative history supports the Ninth Circuit’s conclusion that Congress intended to eliminate secondary liability altogether.

Secondary Trademark Liability

It’s all in here!

The plain-language point being this:  It’s clear that there is no liability for domain registrars, secondary or otherwise, under the ACPA arising out of their simple execution of the “rote” function of domain registration.  But under the Ninth Circuit’s opinion in Petroliam Nasional Berhardnothing a registrar could do, no matter how beyond this “ministerial” registration function, could result in secondary liability for any party based on an underlying violation of the ACPA. While that wasn’t even close to the dumbest thing a circuit court said about IP law in 2013 (this is), there doesn’t seem to be any reason for the Circuit Court to have said it.  And yes, there are plenty of good reasons for it not to have said that.  Jane explains it all, if you don’t follow.

Still, it’s hard to see how the petitioner gets the Supremes’ attention on this, because the outcome appears to have been right.  As far as I can tell, there isn’t a very good factual hook to justify reversal, and the Court of Courts isn’t in the business of tidying up messes like the one the 9th made here.  (Whose business, exactly, it is to do that is not entirely clear.)

Bully, all the same, and best of luck to Perry Clark, counsel for petitioner, who has ample experience to appreciate the uphillness of his battle.

How the 9th Circuit drove secondary cybersquatting liability off the cliff

The fallout continues

In December 2013 I wrote about and linked to the devastating critique by the diva of secondary trademark liability, Jane Coleman, of the Ninth Circuit’s decision reading contributory liability for cybersquatting out of the law in Petroliam Nasional Berhad v. GoDaddy.com,  737 F.3d 546 (2013).

But wait.  There’s more.  Now that she has sent her annual update of Secondary Trademark Infringement to Bloomberg BNA, she’s gunning for (more) bear in a new post at her blog called “How the 9th Circuit Veered Off Course in Petroliam Nasional Berhad (Petronas) v. GoDaddy.com:  The Misapplication of Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A.

Oh yes:

We’ve had a lot to say — and with good reason — about Petroliam Nasional Berhad (Petronas) v. GoDaddy.com, Inc., the Ninth Circuit decision that held there is no cause of action for contributory cybersquatting under the Anti-Cybersquatting Consumer Protection Act (ACPA), which was passed as an amendment to the Lanham Act in 1999. This ruling was no mere “development”; it was a great upheaval in the law. The court’s analysis is at odds with the plain meaning of the statute, its legislative history, and the contributory liability case law construing it. We first reported the decision as a blog post here. A lengthier analysis appeared in the Winter 2014 issue of Bloomberg BNA’s Books Monitor. And the case gets the million-dollar treatment in the upcoming 2014 Supplement to Secondary Trademark Infringement. Each time we looked at the opinion, it became harder to understand it.

Secondary Trademark Liability treatiseIn addition to the issues we’ve already addressed is the less obvious but equally problematic dependence by the court on Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A (Central Bank), which involved aiding and abetting liability under the SecuritiesExchange Act of 1934 (the “Exchange Act”).The GoDaddy court relied on that Supreme Court case to help answer an old question that had already been answered, albeit not in the cybersquatting context: Should courts apply common law principles of secondary liability to the Lanham Act?

Both the Supreme Court and subsequent circuit courts have done so for decades. . . .

Heh.  “The court’s analysis is at odds with the plain meaning of the statute, its legislative history, and the contributory liability case law construing it.”  Otherwise, no problem, huh?

The application for certiorari is pending.  Read the whole thing, as they say.

That means you, Supreme Court!



Fallout from 9th Circuit’s “nuclear option” on cybersquatting secondary liability

mushroom cloudDid the 9th Circuit’s opinion last week in Petroliam Nasional Berhad v. GoDaddy.com  (9th Cir. Dec. 4, 2013) really “kill” secondary liability for trademark infringement under the Anticybersquatting Consumer Protection Act (ACPA)?  Or did the court merely, as seems to be the case, engage in a bit of overkill?

Here’s Jane Coleman‘s take on it:

As our book speeds its way to the printer, the Ninth Circuit has made sure we will have a lot to discuss on this blog and in the upcoming supplement to Secondary Trademark Infringement.  Last week it held there is no cause of action for contributory cybersquatting under the ACPA, exercising the nuclear option on a body of case law that says such claims are valid when they involve fact patterns this sweeping decision ignores. . . .

Viewed against this backdrop of jurisprudence distinguishing mere registrars from complicit actors, the Ninth Circuit’s decision is hard to understand. The court simply declined to address the issues raised in cases like Verizon Cal. when it affirmed the district court’s grant of summary judgment in favor of GoDaddy.  Instead it said this:

Extending liability to registrars or other third parties who are not cybersquatters, but whose actions may have the effect of aiding such cybersquatting, would expand the range of conduct prohibited by the statute from a bad faith intent to cybersquat on a trademark to the mere maintenance of a domain name by a registrar, with or without a bad faith intent to profit.

2013 WL 6246460 at *3 (emphasis added).

None of the foregoing cases has even remotely suggested that secondary liability would extend to such “rote” activity as the “mere maintenance of a domain name.” In the much more relevant contexts where contributory liability presumably would lie, the courts have made clear that a cause of action for contributory cybersquatting would reach precisely the defendants whose conduct the Act was meant to prohibit – those who are complicit actors in cybersquatting schemes.

Read the whole post; then buy the book from Bloomberg BNA!  (It’s only available for pre-order right now, which is why you haven’t seen the big splashy announcement here yet.)

nuclear-fallout-shelter-e1268946574684-300x226In theory, when faced with such a case, a court in the Ninth Circuit will want to say that the Petroliam Nasional case decision didn’t go that far.  The problem is that the plain language in the opinion appears to … go that far.   The result will be meritorious claims under the Verizon Cal. line of cases being dismissed, or weird workarounds that will distort jurisprudence even more unless and until the Circuit itself reconsiders this opinion (en banc or otherwise).

Alternatively, and less pleasant to contemplate, the Ninth may eventually correct itself without admitting any mistake on its part — the way the Second Circuit did in Rescuecom, pretending that its decision in 1-800 Contacts couldn’t possibly be read to suggest that keyword advertising did not constitute trademark use, even though that’s how pretty much every court in the Second Circuit, and elsewhere, read it.

Their mistake; everyone else’s fallout — an old story.  The question here, though, is:  Why?  The District Court, as Jane points out in her full blog post, had found that the claim failed, on summary judgment, on evidentiary grounds.  Whatever happened to judicial restraint, which would have resulted here in a perfectly acceptable “we need not reach the question of whether there is a viable claim for secondary liability under the ACPA?” — even, if the Circuit wanted to say more, followed by a bit of analysis as to why it’s a question.

Unfortunately the Ninth Circuit went beyond dictum here, it seems, affirmatively deciding a question it didn’t have to and doing so with unfortunately overbroad language that’s likely to cause a lot of litigation confusion.  Ka-boom!

Trademarks are forever?

No, not necesarily, but the DeBeers name is still pretty good currency when it comes to selling diamonds:

A New York diamond merchant acted in bad faith when he sought to capitalize on the famed De Beers name as part of his plan to sell diamonds on the Internet, a federal judge ruled on Friday.

U.S. District Judge Denise Cote ruled Rosenblatt violated trademark law through the use of the name DeBeers Diamond Syndicate Inc. that rightly belonged to plaintiffs De Beers LV Ltd., a joint venture of De Beers and luxury goods maker LVMH Moet Hennessy Louis Vuitton.

Rosenblatt’s decisions to apply for dozens of Internet domain names with the name De Beers, obtain a Web site proposal and seek investment dollars “were done in entirely bad faith,” she said.

This doesn’t sound like a particularly hard case, or an interesting one — so ordinary that it raises, in fact, the interesting question: How did this litigation every get to trial?

UPDATE:  I decided to look into the question on PACER.  This was actually some pretty hard-fought litigation, as obvious as the outcome looks in retrospect.  One opinion and order by Judge Cote involved motions to strike affirmative defenses.  The affirmative defense of unclean hands was stricken (not “struck”?); the motions to strike the affirmative defense of lack of standing and to dismiss the declaratory judgment counterclaim was denied; the motion to dismiss Sherman Antitrust Act counterclaim was granted, and defendants’ motion for was joinder was denied.

It still seems hard to justify, but of course, we know so much more now than they knew then, I guess.

Defensive domaining

Spring evening in Herald Square

Gratuitous picture

Kevin Murphy, editor of Domainincite, has a pretty interesting teaser for an analysis — subscription required (maybe he’ll shoot me one, though?) — of how the world’s biggest brands use new gTLDs:

DomainIncite PRO is excited to reveal the results of the domain name industry’s first in-depth study into how the world’s biggest brands use new generic top-level domains.

In March and April 2012, we surveyed the domain name ownership and usage patterns of the world’s 100 most-valuable brands — representing over $1.2 trillion in brand value, according to Interbrand — in six gTLDs introduced since 2001.

As well as confirming the long-held belief that brand owners see little value in defensive registrations — many not even choosing to benefit from residual traffic — the survey also revealed which brands are more likely to develop their sites, which are most vulnerable to cybersquatting, and which appear to care the least about enforcing their brands.

We also examined how “cybersquatters” use the domain names they register, with some surprising results.

Privacy/proxy registration is not nearly as prevalent as many believe, our study found, and a significant portion of registrants have made no effort to monetize the domains they own that match famous brand names.

I wish I had time to get on top of this stuff.  Just from the teaser, however, I’m perceiving one thing that I had predicted is, kind of, coming to pass:  Domain names are, in fact, becoming passé.

I don’t assume Kevin puts it that way in his report.  After all, he’s got this domaining blog; it’s like his life’s work, and that of many others; and just ask my friend Paul Keating — there’s plenty going in UDRP-land, governed as it is by a non-law interpreted by non-courts  (not like our oh-so-with-it real courts!).  Even I play the domain game from time to time.

But reading between the lines of the above, it seems that domain names are of some relevance, yes, but mainly as a part of a far more complex formula that determines how people get places on the Internet and what they “get” once they get there.