Transamerica v. Moniker Online: When domain registrars go bad

[stextbox id=”info”] This is a summary and analysis of the decision in Transamerica Corp. v. Moniker Online Services, 672 F.Supp.2d 1353 (S.D. Fla. 2009), which stands for the proposition that, yes, a domain name registrar can be liable for contributory trademark infringement arising from the directly infringing acts of its clients.

The decision is over six months old but it whizzed right past LIKELIHOOD OF CONFUSION®. And that’s just wrong.

Luckily, the online treatise Secondary Trademark Infringement by Jane Coleman has recently been updated and the impact of this decision integrated into the text; a full update is planned for September.  This is an adaptation of the integration of Moniker into the treatise text.  The complete analysis of Moniker, including full citations, can be found here.[/stextbox]

Domain name registrars have not typically been held contributorily liable for trademark infringement committed by their registrants. See Lockheed Martin; Size, Inc.; Academy of Motion Picture Arts and Sciences v. Network Solutions.  The courts have found that domain name registrars lack the requisite degree of monitoring and control over the activity of their registrants to trigger contributory liability.  By contrast, where the plaintiff’s allegations against the defendant domain name registrar made out a complex scheme of cybersquatting, the court rejected the defendant’s motion to dismiss the contributory liability claim against it.  Far from the “rote translation” involved in Lockheed, the facts alleged in Transamerica depicted a domain name registrar that acted in concert with other defendants to knowingly profit from the infringing activities of its customers.

In Transamerica, the plaintiff was Transamerica, a holding company for a group of subsidiary companies engaged in the sale of life insurance and other financial services (you can read more on this article regarding subsidiaries that sell insurance). It sued the domain name registrar, “Moniker Online”; a related company, “Moniker Privacy”; and “Oversee,” the company that allegedly owned and controlled the Moniker defendants, as well as other unnamed defendants – the ostensible owners of the infringing domain names.  Transamerica claimed, inter alia, that the defendants were contributorily liable for direct trademark counterfeiting and infringement by their customers who used infringing versions of the TRANSAMERICA mark in their websites, from which use the defendants profited.

Specifically, Transamerica alleged that Moniker Online registered numerous domain names that were substantially similar to the TRANSAMERICA mark and its other registered marks, such as “Transamericalifeins.com.” When internet consumers arrived at the website, the plaintiff alleged, they encountered the TRANSAMERICA service mark or marks likely to be confused with it, and upon clicking a hyperlink would be “duped into believing they [were] accessing the well-known Transamerica, but instead [were] directed to other entities selling comparable products.” The plaintiff further alleged that the “ostensible owners of the infringing domain names are anonymous individuals or fictitious entities who are impossible to locate.”

Defendants argued that these allegations did not satisfy either the inducement or the knowledge and control prong for contributory infringement, citing the two-prong standard under Inwood and the control element pursuant to Lockheed.  The court rejected this argument.  Transamerica, wrote the court, had alleged that Moniker Online’s activity involved much more than merely registering the infringing domain names:

Moniker[did] not simply register a domain name and then go about its business. Instead, Moniker Online allegedly work[ed] with the registrant – generally a fictitious entity – along with Oversee and Moniker Privacy, in order to profit from the infringing use of its trademarks.

More specifically, the allegations against the defendants included conduct enabling a class of customers comprised of fictitious entities and anonymous individuals to “monetize” counterfeit domain names, acting as their authorized licensee and/or otherwise in concert with them, profiting with them jointly in the process, concealing their identity when challenged, and intentionally or recklessly continuing to supply registration services to them with knowledge that they are fictitious entities engaged in trademark and service mark counterfeiting, or with willful blindness to that fact.

Finally, Transamerica alleged that the domain name registrar continued to register counterfeit domains to an entity in China “long after it would have been apparent to any registrar in Moniker’s position that its customer was using [its] services to engage in trademark or service mark counterfeiting . . .”

Given the allegations in the complaint, the court rejected the defendants’ claim that Transamerica had failed to allege “specific knowledge or infringement” or “direct control over the infringing instrumentality.” Any further discussion, the court noted, would go to matters of proof, not to the sufficiency of the complaint, and it therefore rejected the motion to dismiss the claim for contributory counterfeiting and infringement.