ACPA

Can Lack Of Bad Faith Be Transferred?


“Bad faith” can some times be the trickiest element to prove when trying to demonstrate that a registrant has cybersquatted a domain name. Many times, whether a domain owner has acted in bad faith comes down to timing, specifically when he or she first registered the domain name. This principle was called into question during a recent cybersquatting lawsuit in a Los Angeles federal court.

Erik Bethke, the founder of the virtual pet game and social network GoPets Ltd., had attempted to purchase the domain name GoPets.com from its owner, Edward Hise. Bethke initially offered Hise $750 for the domain, but when Hise rejected the offer, Bethke filed a UDRP arbitration with the World Intellectual Property Organization (WIPO). Unfortunately for Bethke, because Hise had registered GoPets.com five years before Bethke created GoPets Ltd., the complaint lacked evidence of bad faith and the WIPO Panel denied Bethke’s request to transfer the domain.

After the failed UDRP, Bethke again offered to purchase the domain, this time for $40,000. Hise responded asking for $5 million and threatening to add metatags to the code of GoPets.com in order to redirect visitors to Bethke’s site back to Hise’s domain. After sending that demand, Hise transferred ownership of the GoPets.com domain to Digital Overture, the company that he co-owns with his brother. Through Digital Overture, the Hise brothers have registered over 1,000 domain names.

After Hise transferred the domain, Bethke took legal action, suing him in a Los Angeles federal court for cybersquatting and trademark infringement. He attempted to circumvent the issue of when the domain had originally been registered by arguing that Hise’s renewing the domain name registration and then transferring it to Digital Overture amounted to a new registration. The Los Angeles judge sided with Bethke, awarding him $100,000 in damages as well as the domain name GoPets.com.

However, a three-judge panel of the 9th Circuit judges partially reversed this ruling, on the grounds that the Anitcybersquatting Consumer Protection Act (ACPA) is very clear about its definition of “registration” as referring to the initial domain name registration. In the decision, Judge William Fletcher wrote, “We see no basis in ACPA to conclude that a right that belongs to an initial registrant of a currently registered domain name is lost when that name is transferred to another owner.”

The judges did agree that both Hise and his brother had shown bad faith after the UDRP proceedings, and had also violated unfair competition laws during their negotiations with Bethke. The Los Angeles judge is now left to decide what relief might be appropriate for these offenses. Whether this decision will have any impact on the way domain transfers are regarded under UDRP precedent has yet to be seen.

Aside from highlighting how complex domain name-related matters can be, this case opens up the question of whether or not ACPA needs to be adjusted to more adequately cover scenarios of domain name transfers, as well as other issues.

Start Your Engines


Ferrari F150th ItaliaLast week I read about this case and found it fascinating.

The car you see pictured here is the Ferrari F150, the Italian carmaker’s 2011 Formula 1 racecar named to honor the 150th anniversary of Italy's reunification. You may be thinking that the name “F150” sounds familiar. That’s because it is also the name of Ford’s full-size pickup truck.  And Ford is less than happy that Ferrari is using the same name.

According to The Guardian, Ford sued Ferrari for trademark infringement, eventually forcing Ferrari to use the car’s full name, “Ferrari F150th Italia.” But Ford didn’t stop there – the company is also suing Ferrari for its registration of the domain name FerrariF150.com under the Anticybersquatting Consumer Protection Act (ACPA) and is seeking $100,000 in damages. Ford is basically trying to crush Ferrari on this one.


 
If you’re scratching your head trying to picture Ferrari as a cybersquatter, get ready to be thrown for another loop: Ford doesn’t own F150.com or FordF150.com. FordF150.com points to a fan site, but F150.com resolves to a pay-per-click site.

And what does Ford make of Ferrari's Facebook page for the F150?
 
Seeing brand owners go after cybersquatters whose sole business is cybersquatting is standard for us, but seeing two high-profile brand owners fight it out over a domain name is something that doesn't happen everyday.

Brand dilution is a big deal, but so is lots of free press for both companies.

Such a Pain


Royal Pains is a television show on USA about Hank Lawson, a “concierge doctor” working in the Hamptons.  During a recent episode, in addition to dealing with the usual gamut of medical maladies, the characters were also confronted with a case of typosquatting.

In the opening scene, Hank's brother (and CFO of their company, HankMed) Evan leaves a voicemail furiously explaining that when he accidentally mistyped “HankMed.com” as “YankMed.com” in his Internet browser, he was directed to the site of a rival concierge doctor, Emily Peck.  As the scene goes on, he points out that the rival doctor also owns “HankMe.com,” “HankMes.com” and “HunkMed.com.”  Take a look at the clip:

 

Emily assures Evan that she’s not doing anything illegal. But we all know HankMed could sue her under the Anticybersquatting Consumer Protection Act (ACPA), assuming the fictional business had registered the “HankMed” trademark or could otherwise prove that Hank had developed a reputation under that name (and fans of the show know that he definitely has).  Unfortunately, Hank seems entirely unfazed by Emily’s actions...probably because they’re romantically involved.  At least Evan seems to understand the gravity of the situation.  Clearly typosquatting makes for high drama.   

False Sense of Security


The Ninth Circuit Court of Appeals, in US v. Kilbride, No. 07-10528 (9th Cir. 2009), upheld fraud and conspiracy charges arising from the defendant’s sending of spam emails containing advertisements for pornographic materials. Key to this ruling was the fact that the spam emails contained false and non-functioning email addresses in the “From” field. 
 
More interesting, however, is the fact that the defendant’s use of a privacy service to block access to the Whois information for the domain names they used for such emails constituted “materially falsified” information as defined under the CAN SPAM Act. Specifically, the Court stated ““It should have been clear to Defendants that intentionally falsifying the identity of the contact person and phone number for the actual registrant constitutes intentionally decreasing the ability of a recipient to locate and contact the actual registrant, regardless of whether a recipient may still be left some avenue to do so. We therefore conclude Defendants had notice that their conduct violated.”
 
You may remember that the New York Federal District Court recently sentenced Alan Ralsky, the self-proclaimed “King Of Spam”, and others to prison terms of several years for their participation in a pump-and-dump stock-trading scheme in which the defendants would artificially and temporarily inflate the price of a given stock by the use of spam emails touting that stock.
 
These cases raise the questions of whether the Federal government is taking a more aggressive approach in its prosecution of spam purveyors within its jurisdictional reach and also what, if anything, this could mean for civil domain enforcement actions.  Even if not subject to the criminal terms of CAN SPAM, cybersquatters on the defensive side of UDRP and ACPA actions could find themselves subject to this more aggressive approach to enforcement. 
 
This could be good news for brand owners since a high percentage of spammers, cybersquatters and others rely on private or false Whois information in their attempts to avoid being held accountable for their illegal actions. 

Cybersquatting - Not Just for Brands


On January 29, the Coalition Against Domain Name Abuse (CADNA), which FairWinds helped found and runs, hosted a policy forum here in Washington, D.C.  The forum focused on emerging challenges for the Internet community in 2010, specifically the future of ICANN under the Affirmation of Commitments (AOC) and potential reform to the Anti-Cybersquatting Consumer Protection Act.  Attendees heard from two panels regarding these issues, which featured brand owners, online policy experts and Congressional staff members.  The keynote address was given by Senator Stephen Urquhart (R-UT 29th District), the Chairman of the Utah State Senate Transportation and Public Utilities and Technology Committee.  Urquhart recently introduced the E-Commerce Integrity Act to the Utah state legislature. This bill is designed to make the state of Utah more business-friendly by creating greater deterrents to prevent cybersquatting: firstly, the bill raises the damages that can be levied on a cybersquatter, and secondly, it holds affiliates of domain name registrants liable if it is found that they benefit from cybersquatting behavior.

In addition to Sen. Urquhart, representatives of Jay Rockefeller (D-WV), Chairman of the Senate Commerce, Science, and Transportation Committee; and Patrick Leahy (D-VT), Chairman of the Senate Judiciary Committee spoke on the panels.  Cybersquatting is an issue that hits close to home for the Senators they work for: PatrickLeahy.com and JohnDRockefeller.com both point to pay-per-click (PPC) sites.  (JayRockefeller.com, however, does lead to the Senator’s Web site.) SteveUrquhart.com also leads to a PPC site. 
 
When discussing the problem of cybersquatting, much of the attention often gets focused on businesses and infringements on brands and trademarks.  However, individuals like politicians and celebrities are also frequently the victims of squatting and other malicious conduct online. It’s great to know that Senator Urquhart and Congressional staff members understand this issue, and we’re happy to have them involved in efforts to create a safe, stable and flourishing Internet.

 

Bad Intent on Goodwill.com?


Since our report a week ago on the hostess.com decision, a claim under the Anti-Cybersquatting Consumer Protection Act (ACPA) has been filed in the Federal District Court for the Eastern District of Virginia by Goodwill Industries International, Inc. against Cyber2Media, Inc., the owner of the domain goodwill.com. 
 
As with the word "hostess," the word "goodwill" is arguably a descriptive term.  However, this case is very different from the hostess.com example because the defendant uses goodwill.com to forward visitors to a pay-per-click Web site featuring links to the plaintiff’s site and to other charitable organizations. By using the domain name this way, the defendant appears to be attempting to profit of off Goodwill’s fame as a charitable organization.  By registering goodwill.com and hosting links to charitable organizations, the defendant is likely hoping to take advantage of confused visitors to the site who will assume that the links are approved by Goodwill Industries International. This sort of proof of intent was the missing element in the hostess.com case and seems here to be strong evidence of lack of legitimate use of the domain and the defendant’s registration of the domain in bad faith.

In an interesting side note, the domain savechildren.com was recently ordered to be transferred to the owner of the well-known Save The Children trademark in a UDRP decision which did not make any mention of the potentially descriptive nature of the phrase "save children." In that case, however, the respondent did not file a response and the domain resolved to a pay-per-click Web site featuring links to complainant's competitors and other unrelated products and services.

Disorder in the Court


Southern Company (Southern), a Fortune 500 company that provides energy related services in the South, filed for an injunction against Dauben, Inc, a corporation that owns over 600,000 domain names, to suspend its use of the domains sotherncompany.com and southerncopany.com. Southern, which is a Fortune 500 gas & electric utility, had filed a lawsuit against Dauben over the registration and use of sotherncompany.com and southercopany.com—Southern claimed that Dauben was engaged in typosquatting and was therefore in violation of the Anti-Cybersquatting Consumer Protection Act (ACPA).  The district court found that Southern was likely to prevail in its lawsuit and awarded the injunction to prevent any further damage to the company until the matter was officially resolved.  
 
An appeal filed by Dauben, however, vacated the injunction. The appellate court found that the district court was too quick to assume the likelihood of Southern prevailing in its lawsuit against Dauben. Looking to ACPA, the appellate court determined that Dauben may succeed in its defense using the Act’s “fair use” clause and that the district court did not adequately consider how Dauben’s use of the domains caused “irreparable injury” to Southern.
 
I’m not a trademark lawyer, but in reading the decision, the language that particularly struck me centered around the appellate court’s dismissal of the “irreparable injury” claim. The appellate court stated that the district court inaccurately assessed the confusing similarity of the typo domain names to southerncompany.com and determined that “the likelihood of confusion test in trademark infringement law is different, and more comprehensive, than the test for ‘confusingly similar’ under ACPA.”
 
CADNA has been pushing for a more comprehensive ACPA for years now. In order for ACPA to be an effective piece of legislation—in other words, a piece of legislation that creates a deterrent against cybersquatting, which is what it was intended to do when it was passed a decade ago—it needs to be brought up to date. Cybersquatting techniques have evolved and continue to evolve; we need ACPA to evolve along with them or else cybersquatters will continue to find loopholes to avoid accountability.