LOS ANGELES (CN) - Academy of Motion Picture Arts and Sciences on Tuesday asked for a $30 million damages award against domain giant GoDaddy as arguments began in the first day of a high-stakes cybersquatting trial.
In 2010, the academy sued GoDaddy for violation of the Anticybersquatting Consumer Protection Act, claiming that the world's largest domain register was profiting from a parked-pages program that allowed its customers to buy domain names that infringe on its Oscar and Academy Awards marks.
Parked pages may be familiar to anyone who has ever mistyped a domain name and clicked through to a temporary web page displaying ads.
Revenue on GoDaddy's parked pages is generated each time a user clicks on advertisements, which include third-party ads by Google and other partners.
The academy claimed in its lawsuit that GoDaddy was diverting traffic from the academy's "legitimate websites to infringing parked domains."
Opening arguments in a bench trial in U.S. District Judge Andre Birotte's Los Angeles courtroom began on Tuesday morning as the academy's attorney Stuart Singer urged the court to award it $10,000 in statutory damages for each of the 293 domains at issue.
The Federal Court has already ruled that 237 of the domain names are confusingly similar, leaving in play 56 Oscar-related names, which include the domain names Oscar4re.com and Oscarcam.com.
According to Singer, GoDaddy made a bad faith decision to enroll the Oscar and Academy named sites even though it knew that the domains infringe on trademarks.
"This was unquestionably done with intent to profit," Singer told the court.
The attorney said that even though GoDaddy had received 1,000 complaints from trademark owners for 9,000 domain names, it continued the parked-pages program. The academy estimates in court filings that GoDaddy has generated $100 million in revenue from the program.
Singer said that "even now GoDaddy is unrepentant" and had attempted to blame registrants and Google, which places ads on the parked pages. But the attorney said that third parties do not have any say in how the program operates.
Noting GoDaddy's $1 billion in annual revenue, the attorney said the court should award the statutory maximum of $10,000 per violation for $29.3 million in damages.
The academy's consolidated complaints also seek a permanent injunction that prevents GoDaddy from registering domain names that use Academy of Motion Picture Arts and Sciences or Oscar marks.
But GoDaddy's attorney Robert Galvin said the company has a "robust" trademark infringement program to filter out domain names that infringe on trademarks.
"GoDaddy is not a cybersquatter. It is not a pirate," Galvin told the court.
GoDaddy had responded within three days after academy complained and had redirected 37 domain names to no-ads templates, Galvin said.
Even though it responded to each complaint, the academy decided to file a lawsuit without giving GoDaddy notice and when the organization had been aware of offending domains for months, the attorney said.
Galvin said that of 18 million domains, the academy's represent less than 1 percent of domains in the parked-pages program. GoDaddy made $108 in revenue from the plaintiff's domains, Galvin said.
GoDaddy registers an average of almost 25,000 domain names per day.
"There are bound to be some problems," Galvin said.
The attorney noted that the word "Oscar" means different things to different people and "does not just have one meaning." GoDaddy can also make a fair use defense against the lawsuit under copyright law, Galvin said.
If Birotte sides with the academy the court should award the minimum statutory damages award of $1,000 per violation, for a total award of $293,000, Galvin said.
GoDaddy's attorney Paula Zecchini wrote in a trial brief: "This case presents a classic example of opportunistic counsel pressing a claim in the hopes of achieving a windfall judgment for themselves."
The academy "admits that it has not suffered any actual harm - no lost profits, no diverted customers, no dilution of its marks, and no loss of goodwill," she added.
Witness testimony began today and is scheduled to end on Friday.
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