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.

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

By Ron Coleman

I write this blog.