By Cheryl Beise, J.D.
The Academy of Motion Picture Arts and Sciences (“AMPAS”) has failed to show that domain name registrar GoDaddy.com violated the Anticybersquatting Consumer Protection Act (ACPA) through its operation of a parked domain page program that generated advertising revenue, the federal district court in Los Angeles has ruled (Academy of Motion Picture Arts and Sciences v. GoDaddy.com, Inc., September 10, 2015, Birotte, A.). The court concluded that AMPAS failed to establish by a preponderance of the evidence that GoDaddy had a bad faith subjective intent to profit from of any of AMPAS’s marks.
The Academy of Motion Picture Arts and Sciences (AMPAS) is a non-profit organization founded to promote motion picture arts and sciences. AMPAS organizes and presents an annual televised awards show, known as the “Oscars” or the “Academy Awards.” AMPAS owns the following registered trademarks: OSCARNIGHT, ACADEMY AWARD, OSCAR, OSCARS, and ACADEMY AWARDS (the “AMPAS Marks”).
GoDaddy is the world’s largest domain name registrar, with approximately 60 million domain names under management. GoDaddy provides low-cost automated domain name registration services through an online “dashboard.” Registrants may designate the domain name server (“DNS”) to which the domain name will route, including selecting GoDaddy’s parked page servers. If no DNS is selected, the system defaults to GoDaddy’s parked page servers.
In May 2010, AMPAS sued GoDaddy, among others, asserting six claims arising from GoDaddy’s hosting of parked pages associated with domain names that allegedly infringed the AMPAS’s trademarks. GoDaddy was the sole remaining defendant in the case and AMPAS’s only remaining claim was for violation of Anticybersquatting Consumer Protection Act (“ACPA”). 293 domain names incorporating either “academyaward” or “oscar” in the domain name string also remained at issue (the “Accused Domains”). The court held a bench trial on AMPAS’s cybersquatting claim on August 4-7, 2015.
The court explained that AMPAS was precluded from alleging a violation of the ACPA based merely on GoDaddy’s registration of the Accused Domains because registrar survives are shielded from liability by a safe harbor provision in the ACPA. 15 U.S.C. §1114(2)(D)(iii). Rather, AMPAS’s theory at trial was that GoDaddy violated the ACPA through operation of its Parked Page Program.
To prevail on its ACPA claim, AMPAS was required to show by preponderance of evidence that: (1) GoDaddy registered, trafficked in, or used one of the Accused Domains; (2) the Accused Domain was identical or confusingly similar to one or more of the AMPAS Marks; (3) the relevant AMPAS Mark was “distinctive at the time of registration”; and (4) that GoDaddy registered, trafficked in, or used the domain with a “bad faith intent to profit from that mark.” 15 U.S.C. §1125(d)(1)(A)(i)-(ii). The court focused its analysis on the last factor.
“Bad faith intent to profit.” In describing the ACPA’s bad faith limitation, the court explained a plaintiff must prove that “a defendant subjectively intended to profit from of the specific mark at issue in bad faith.” Petroliam Nasional Berhad v. GoDaddy.com, Inc., 737 F.3d 546, 553-54 (9th Cir. 2013) (emphasis added). The court also noted that in Petroliam Nasional the Ninth Circuit expressly held that the ACPA does not permit claims for contributory or vicarious liability.
The ACPA enumerates nine nonexclusive factors for courts to consider in determining whether bad faith exists. However, “the most important grounds for finding bad faith are the unique circumstances of the case.” Interstellar Starship Servs., Ltd. v. Epix, Inc., 304 F.3d 936, 947 (9th Cir. 2002).
Unique circumstances. In evaluating wither GoDaddy acted with subjective bad faith intent to profit from AMPAS’s marks, the court first identified nine unique factual circumstances that favored GoDaddy in the present case:
GoDaddy reasonably relied in good faith on the representations made by the registrants of the Accused Domains stating that the registration of the domains did not violate any third party trademark rights. The registrants granted GoDaddy a license to use their domain names in parked pages.
The automated nature of GoDaddy’s registration and parked page systems refuted a finding of subjective bad faith intent to profit from the AMPAS Marks.
GoDaddy voluntarily established a Trademark & Copyright Infringement Policy (“TM Policy”) to assist brand owners, including AMPAS, in protecting their intellectual property rights. The TM policy established a notice and takedown regime similar to the procedures established in the Digital Millennium Copyright Act (“DMCA”).
Google, rather than GoDaddy, had control over the third-party, pay-per-click advertisements displayed on the Accused Domains.
GoDaddy’s credible witnesses established that GoDaddy did not have a bad faith intent to make an unlicensed profit from the trademarks of third parties by way of its parked page programs, and did not have any intent to serve advertisements containing the AMPAS Marks on parked pages.
In response to AMPAS’s notifications and demands, GoDaddy immediately ceased any alleged use of a domain name in its Parked Page Programs.
During the course of litigation, GoDaddy created and implemented an almost-certainly-overbroad filter to prevent the display of advertisements on any domain name containing one or more of the AMPAS Marks in the domain string.
GoDaddy did not promote or otherwise drive traffic to the Accused Domains. In fact, GoDaddy earned less than $400 in revenue from any of the Accused Domains.
Beginning in January 2011, the third-party advertisements served on GoDaddy parked pages were generated through the use of interest-based advertising (i.e., the search history and/or preferences of the internet user).
ACPA factors. In light of the unique circumstances of the case, the court determined that nine of the ACPA bad-faith factors, the court determined that eight factors favored GoDaddy and one factor was not applicable. The factors that most directly related to bad faith all heavily weigh in GoDaddy’s favor:
GoDaddy did not attempt to divert customers from AMPAS;
GoDaddy never offered to sell the domain names to AMPAS or any other person;
GoDaddy did not try to hide its identity or provide misleading information relative to any of the Accused Domains; and
GoDaddy did not registered any of the Accused Domains let alone registered other infringing domains.
The court also found that the extent Google used one or more of the AMPAS Marks to trigger the placement of advertisements on a parked page, it was a lawful nominative fair use.
The court concluded that AMPAS failed to prove by a preponderance of the evidence that GoDaddy acted with a bad faith intent to profit from AMPAS’s Marks.
Good faith safe harbor defense. The court also held in the alternative that GoDaddy met its burden of proof on its affirmative defense that it acted with a good faith belief that its use of the domain was a fair use or otherwise lawful. The ACPA provides a safe harbor to any person who registers, uses, or traffics in domain names where that person “believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful.” 15 U.S.C. §1125(d)(1)(B)(ii). In light of the widespread prevalence of domain name monetization services, as well as the lack of any regulatory or statutory scheme preventing such a practice, the undisputed evidence demonstrated GoDaddy’s objectively reasonable belief that the placement of advertisements on the Accused Domains was a fair use or otherwise lawful, the court said.
Conclusion. In its conclusion, the court explained that AMPAS’s sole claim against GoDaddy for violation of the ACPA failed for two straightforward reasons. First, AMPAS conflated “a generalized intent to profit with the ACPA’s bad faith intent to profit off of AMPAS’s specific marks.” Although AMPAS repeatedly attempted to equate the provision of domain monetization services with intentional trademark infringement, there was no evidence to support such a position, according to the court.
Second, AMPAS’s theory of liability “confused GoDaddy’s technical capacity to filter all trademarks with AMPAS’s legal duty to police its own trademarks,” the court observed. “At its core, AMPAS’s ACPA claim would impose upon GoDaddy (and presumably any other company offering parking, hosting, or other basic internet services) the unprecedented duty to act as the internet’s trademark police. The ACPA did not impose such sweeping obligations,” the court said.
AMPAS’s failure to establish bad faith intent to profit element required entry of judgment in GoDaddy’s favor.
The case is Nos. CV 10-03738-AB (CW) and CV 13-08458-AB (CW).
Attorneys: David L. Zifkin (Boies Schiller and Flexner LLP) for Academy of Motion Picture Arts and Sciences. Jimmy Tuan Anh Doan (Wilmer Cutler Pickering Hale and Dorr LLP) and Paula L. Zecchini (Ring Bender LLP) for GoDaddy.com, Inc., The GoDaddy Group Inc., BDS, XPDreamTeam LLC, and GoDaddy.com, LLC.
Companies: GoDaddy.com, Inc.; The GoDaddy Group Inc.; XPDreamTeam LLC.
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