Innocent Bystanders of Cybersquatting: Neutral Domain Name Registrars - Petroliam Nasional Berhad (Petronas) v., Inc.

by McDermott Will & Emery

Addressing for the first time the issue of whether the Anticybersquatting Consumer Protection Act (ACPA), which added two cybersquatting causes of action to the Lanham Act, provides for secondary liability, the U.S. Court of Appeals for the Ninth Circuit affirmed that it did not. Engaging in traditional statutory interpretation, the court concluded that the ACPA did not create a cause of action for contributory cybersquatting which would have extended liability to neutral domain name registrars. Petroliam Nasional Berhad (Petronas) v., Inc., Case No. 12-15584 (9th Cir., Dec. 4, 2013) (Smith, Jr., J.).

Plaintiff Petroliam Nasional Berhad (Petronas), a Malaysian government-owned entity, holds the U.S. trademark PETRONAS. In 2003, a third party registered the domain names and (Petronas also owns the Petronas Twin Towers in Malaysia). Defendant, Inc. (GoDaddy) is the world’s largest domain name registrar. In 2007, the third party began using GoDaddy’s domain forwarding services directing the domain names to the adult web site

GoDaddy investigated the alleged cybersquatting, but took no action. Petronas sued GoDaddy alleging, inter alia, cybersquatting and contributory cybersquatting. The district court granted summary judgment with respect to contributory cybersquatting in GoDaddy’s favor. Petronas appealed.

Under the ACPA, a person may be civilly liable “if . . . that person has a bad faith intent to profit from that mark . . . and registers, traffics in, or uses a [protected] domain name.” Petronas argued that the ACPA provides a cause of action for contributory cybersquatting since Congress placed the ACPA within the Lanham Act, and by so doing, intended to incorporate common law principles of secondary liability.

The 9th Circuit disagreed. Although “[e]stablished common law principles can be inferred into a cause of action where circumstances suggest that Congress intended those principles to apply,” the court concluded, for several reasons, agreeing that was not the case here: the plain text of the ACPA did not apply to contributory liability; Congress created a new cause of action distinct from traditional trademark remedies; and allowing suits against neutral service providers would not advance the statutory goals.

First, the court noted that the text of the ACPA limits when a person can be considered a cybersquatter to those that “register, traffic in, or use a domain name” with the “bad faith intent to profit” from that protected mark. Extending liability to third parties, such as GoDaddy, would improperly expand the range of prohibited conduct to include persons who are not cybersquatters (i.e., who lack a “bad faith intent to profit”) but whose actions may have the effect of aiding them. Second, unlike the Lanham Act, which codified then existing common law of trademarks and unfair competition (which recognized secondary liability), the court noted that the ACPA did not result from or codify any existing common laws. Rather, it created a new statutory cause of action to address a new problem: cybersquatting. Third, the court explained that the goal of ACPA was to “ensure that trademark holders can acquire and use domain names without having to pay ransom money to cybersquatters.” This goal is not furthered by imposing contributory liability on service providers but would force them to divine the intent of their customers.

Practice Note: Although the Court concluded that the ACPA was not meant to go after neutral service providers, it did that mark holders have sufficient remedies under the ACPA (and Lanham Act) without the need for contributory cybersquatting liability.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© McDermott Will & Emery | Attorney Advertising

Written by:

McDermott Will & Emery

McDermott Will & Emery on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.