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Go Daddy not liable for cybersquatting, US court rules

Oil company domain name 'lookalikes' redirected users to smut site

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Go Daddy did not redirect in 'bad faith'

Because Go Daddy's forwarding system was free, the company did not profit from allowing the registrant of the cybersquatting domains to use the technology to redirect visitors to the pornography site, the court ruled. It also rejected Petronas' argument that Go Daddy had sought to profit from the activity by "establishing immunity" from liability for infringement under US safe harbor rules.

"There is no evidence that Go Daddy had a bad faith intent to profit from Petronas’ mark," the court ruled.

"The fact that the forwarding service was based on customer demand does not show intent to profit specifically from Petronas’ mark, and, in addition, is based on a flawed premise – that Go Daddy profited from customers using its forwarding service. As Go Daddy did not charge for the forwarding service, it cannot be said to have profited from it. Moreover, Petronas' argument that Go Daddy sought to profit by establishing immunity from liability is entirely untenable," it ruled.

The court also rejected Petronas' claims that Go Daddy was liable for contributory cybersquatting because of established US case law, because the registrar had not exercised "direct control and monitoring over the alleged cybersquatting" and because Petronas had not established that Schoenekess had been guilty of cybersquatting.

Case law in the US has shown that in order to qualify as a contributory infringer parties must be shown to have had knowledge that infringement was taking place and to have materially assisted in that infringement. Direct infringement must also have been established.

"A claim for contributory cybersquatting does not exist under the circumstances of this case, as a company providing an internet routing service does not exercise the type of direct control and monitoring that would justify recognition of a contributory infringement claim," the court ruled.

"Based on the evidence presented, the court is satisfied that the service at issue here – domain name forwarding – is a form of routing. Permitting a contributory cybersquatting claim based on a forwarding service cannot be squared with the Ninth Circuit’s rejection of such a claim based on the same conduct in the context of traditional trademark infringement (as opposed to cybersquatting)," the court said. "Further, Go Daddy did not exercise 'direct control and monitoring' over the alleged cybersquatting. Domain name registration and routing are services routinely provided by registrars, and cannot be considered the type of direct control over the use of the mark that is required for the application of secondary liability principles."

"There is no evidence that Go Daddy had any control over the registrant when he registered the disputed domains, or when he used the forwarding service," it said. "What is most significant, however, is that Petronas’ evidence is inadequate to establish cybersquatting by the non-party registrant. In particular, there is no evidence that can establish the registrant’s 'bad faith intent to profit' from Petronas’ mark."

"Arguably, the fact that the registrant arranged to have internet traffic directed from the disputed domains to a pornographic website is sufficient to show some variety of bad faith. However, the record is silent as to the intent of the registrant – that is, there is absolutely no evidence of bad faith intent to profit from Petronas’ mark," it said.

"It is not enough to say that one can 'infer' a bad faith intent to profit, even were such an inference sufficient to establish that element of the claim," said the ruling. "One could just as easily infer a bad faith intent to create mischief, or a bad faith intent to annoy the owner of the Petronas mark. Because Petronas has failed to present evidence sufficient to support all the statutory elements of a claim of direct cybersquatting, it cannot show that Go Daddy engaged in contributory cybersquatting."

The court also rejected Petronas' claims that Go Daddy had been in breach of California state competition laws.

It said that Go Daddy has the right to present a future case that could see Petronas' trademark for 'Petronas and Design' invalidated. Under the Lanham Act federal courts can invalidate registered trademarks if they have been abandoned or used outwith the scope in which they were registered.

"It appears that Go Daddy has standing to seek cancellation because Petronas is using the registration as a sword against Go Daddy, in that this Lanham Act lawsuit is premised on the registered mark," the court said.

Both parties will be able to argue whether Petronas has abandoned its trademark or whether it has used it outside the scope it was registered under at a hearing on 12 January, the court said.

Copyright © 2012, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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