SAN FRANCISCO — GoDaddy.com can't be held liable for damages after it registered two domain names that allegedly infringed on a company's trademark, the 9th U.S. Circuit Court of Appeals ruled this week.
The court ruled on the novel claim of "contributory cybersquatting" used by Malaysian national oil company Petronas, which accused GoDaddy of selling domains that included the company's trademark.
Those domains, PetronasTower.net and PetronasTowers.net, eventually were used to redirect traffic to adult webcam site CamFunChat.com.
In a 3-0 decision this week, the court ruled against Petronas, which appealed over a lower court granting summary judgment to the domain registrar.
Petronas said it complained to GoDaddy over the two websites that were alleged to have cybersquatted on its name, but it was not until Petronas obtained two separate court orders that GoDaddy stopped forwarding traffic from those domains to CamFunChat.
GoDaddy attorney John Slafsky told the 9th Circuit in oral arguments in October that with more than 50 million domain names, registrars can't police every trademark dispute. Further, Slafsky said that GoDaddy's position all along is that Petronas should direct its complaints for damages to the operator of CamFunChat.
This week, the court agreed with GoDaddy, saying that trademark holders have sufficient remedies under the Anticybersquatting Consumer Protection Act (ACPA) without turning to contributory liability and that, otherwise, registrars would have herculean tasks of defining customer intent and arbitrating disputes.
"[I]mposing contributory liability for cybersquatting would incentivize 'false positives,' in which the lawful use of a domain name is restricted by a risk-averse third party service provider that receives a seemingly valid take-down request from a trademark holder," the 9th Circuit panel wrote. "Entities might then be able to assert effective control over domain names even when they could not successfully bring an ACPA action in court.
"In addition to the provisions imposing civil liability on cybersquatters, the ACPA authorizes an in rem action against a domain name if the registrant is not available to be sued personally. Finally, trademark holders may still bring claims for traditional direct or contributory trademark infringement that arises from cybersquatting activities."