Ninth Circuit Rejects Claims for Contributory Cybersquatting Under the ACPA

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On December 4, 2013, in Petroliam Nasional Berhad (Petronas) v. GoDaddy.com, Inc., the United States Court of Appeals for the Ninth Circuit held that the Anticybersquatting Consumer Protection Act (“ACPA”) does not provide a cause of action for contributory cybersquatting.

Petronas is a Malaysian oil and gas company that owns the trademark PETRONAS.  It accused GoDaddy of contributory cybersquatting when a registrant used GoDaddy's domain name forwarding service to direct URLs incorporating the PETRONAS mark to a third party’s adult website.  Petronas contacted GoDaddy and requested that it take action against the adult website.  GoDaddy investigated the issue but took no action because it did not host the offending web site, and because it was prevented by the Uniform Dispute Resolution Policy (“UDRP”) from resolving trademark disputes regarding domain name ownership.

Petronas then asserted various claims against GoDaddy in the Northern District of California, including contributory cybersquatting.  After some discovery, the district court dismissed the case on summary judgment.  Petronas appealed only the contributory cybersquatting claim.  On appeal, the Ninth Circuit affirmed the ruling that the ACPA does not provide a cause of action for contributory cybersquatting.  The Ninth Circuit based its holding on its findings that (1) the plain language of the ACPA did not apply to the conduct that would be actionable under a contributory liability theory; (2) Congress did not intend to include common law trademark doctrines when enacting the ACPA; and (3) allowing suits against registrars for contributory cybersquatting would improperly expand the scope of the ACPA and undermine its provisions regarding bad faith and defining who "uses" a domain name.