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Go Daddy not liable for cybersquatting, US court rules

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Go Daddy was not liable for a form of trademark infringement when a system that the domain name registrar operates was used to redirect visitors from allegedly 'cybersquatting' web domain names to a pornographic website, a US court has ruled.

Petronas, the national oil company of Malaysia, had argued that Go Daddy was in breach of US trademark law because it "used" the two domains to re-route visitors to the allegedly infringing sites to the pornography website through its servers in bad faith with the intent of profiting from its actions.

A district court in California dismissed Petronas' claims that Go Daddy was liable for cybersquatting. It also dismissed claims that Go Daddy was liable for contributory cybersquatting and instead granted Go Daddy the right to argue that Petronas' own trademark for the mark 'Petronas and Design' be invalidated.

Cybersquatting occurs when businesses buy website domain names with the purpose of selling them on to trademark owners for a profit.

In 2010 Petronas had obtained a court order requiring the websites www.petronastower.net and www.petronastowers.net to be transferred into its name. The two domains were registered with Go Daddy by Heiko Schoenekess, which used Go Daddy's automated website-forwarding system to redirect visitors to the domains to a website featuring pornography. Petronas itself operates several websites encompassing the word 'petronas' in the domain name, including www.petronastwintowers.com.my, according to the court ruling.

Under part of the US Lanham Act – the Anticybersquatting Consumer Protection Act (ACPA) – damages of up to $100,000 can be awarded against anyone who registered or "used" domains "identical to, confusingly similar or dilutive of" a trademark in bad faith and with intent to profit.

The court ruled that Go Daddy had not used the domains and was therefore not liable for cybersquatting under the terms of ACPA.

"The forwarding of the disputed domains does not amount to 'use' of the domain names," the district court in the northern district of California ruled.

"Domain name forwarding is a standard service that has been provided by Go Daddy and virtually all registrars for more than a decade. Go Daddy provides forwarding services for millions of domain names under its management, and has provided such service in combination with its other domain name routing services since 2002 or before. Go Daddy does not charge customers for domain forwarding, but rather offers this routing option as part of its registration services. Go Daddy’s registration customers, using Go Daddy’s dashboard, can configure the name server to forward a domain name to an existing website. This automated process is accomplished without any interaction between the registrant and Go Daddy personnel," the ruling said.

"The evidence shows that Go Daddy simply provided the infrastructure to the registrant to route the disputed domains to the website of his choosing. Only the domain name registrant or the registrant’s authorised licensee can 'use' a domain name for purposes of the ACPA," the court ruled.

The court said that there was no evidence that Go Daddy had entered into a licence agreement to authorise it to 'use' the cybersquatting domains.

"GoDaddy's contractual right to terminate service does not equate to a license to use the registrant’s domain names, and the fact that the registrant forwards the domain name through Go Daddy’s systems does not create a reciprocal license for Go Daddy to use the registrant’s domain names," the court said.

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