U.S. Court Of Appeals For The Ninth Circuit Rules There Is No Cause Of Action For 'Contributory Cybersquatting'

On December 4, the Ninth Circuit ruled that the 1999 Anticybersquatting Consumer Protection Act (ACPA), 15 U.S.C. § 1125(d) does not provide a cause of action for contributory cybersquatting. In Petroliam Nasional Berhad (Petronas) v. GoDaddy.com, Inc., No. 12-15584 (Dec. 4, 2013), the Ninth Circuit affirmed the district court's decision granting summary judgment in favor of the domain registrar GoDaddy against claims by a Malaysian oil company known as Petronas arising from registration of the domains petronastower.net and petronastowers.net by a third party.

his case provides one important precedent in the broader landscape of liability rules pertaining to "intermediary" businesses—businesses that provide platforms or technologies to others—relating to alleged misconduct by customers of those businesses. This decision takes its place among Tiffany v. eBay in the Second Circuit and Metro-Goldwyn-Mayer Studios v. Grokster in the Supreme Court as a defining landmark in that landscape. Debates will surely continue about legal rules regulating whose job it is to police the internet to protect rights claimants' interests, the rights claimants themselves or businesses that provide the public with technology and communication capabilities.

The Petronas v. GoDaddy Decision

Petronas, a Malaysian energy company, discovered that one of GoDaddy's customers had registered petronastower.net and petronastowers.net, which redirected to a porn site. Petronas sued GoDaddy for, among other claims, contributory cybersquatting under the ACPA.

he district court granted GoDaddy summary judgment on all claims raised in the complaint. Petronas appealed only the dismissal of its contributory cybersquatting claim. A panel of the Ninth Circuit Court of Appeals unanimously held for GoDaddy, affirming the district court's decision.

Analyzing the issues through three common lenses of statutory interpretation, the Ninth Circuit held (1) the plain text of the ACPA did not support a cause of action for contributory liability, (2) it did not appear Congress intended implicitly to incorporate common law doctrines in the ACPA; and (3) contributory liability would not advance the ACPA's goals. While expanding on the third point, the Ninth Circuit noted that it would be "nearly impossible" for GoDaddy to analyze bad faith, under the ACPA's nine-factor test, with respect to each of GoDaddy's 50 million domain names. Slip Op. 14. In contrast, the court was rather unsympathetic to...