GoDaddy Likely to Duck Cybersquatting Claims

(CN) - The 9th Circuit seemed unlikely to hold GoDaddy.com liable for "contributory cybersquatting" related to pornographic websites that cropped up under the name of a Malaysian oil company.

In a 2009 complaint, Petroliam Nasional Berhad dba Petronas had said GoDaddy was hosting two infringing websites, PetronasTower.net and PetronasTowers.net, that contained "highly offensive, obscene and pornographic material."

A federal judge in Oakland, Calif., nevertheless granted GoDaddy summary judgment after finding no basis to hold the web host liable for contributing to a violation of the Anti-Cybersquatting Consumer Protection Act (ACPA) of 1999.

Petronas, which is owned by the Malaysian government, appealed the case to the 9th Circuit, but quickly met with resistance from a three-judge panel in San Francisco.

"Why is there contributory liability under the [cybersquatting] statute," Judge Sandra Ikuta interrupted in the first minute of the hearing. "The statute doesn't have any language to that affect. Is there any circuit court that has held that, and why should we hold that if we have to?"

Petronas attorney Perry Clark quickly conceded that Ikuta was right.

"The statute does not mention contributory liability," Clark said. "And you are correct, no District Court, or, I'm sorry, the circuit court has found contributory liability with respect to the ACPA, the cyber squatting statute. But, as cases even cited by the appellee cases made clear, when Congress passes a law and does not address existing common-law doctrines, existing case-made law, in this case the law of contributory trademark infringement, those laws are not abrogated."

Judge Milan Smith then piped in that "cybersquatting is not a common-law doctrine."

"I mean, the trademark contributory context arises out of an ancient problem of people stealing things that don't belong to them or helping to make that possible," Smith continued. "This is an entirely new issue, it didn't even exist before, and I would at least ask your thoughts, where is the common-law about cyber squatting?"

Clark highlighted a section of federal law that says, "a domain name registrar, domain registry, or other domain name registration, shall not be liable for damages under this section for the registration or maintenance of a domain name for another, absent of a showing of bad faith."

"Now, that is a description of secondary liability," Clark said. "To do something for another is what creates secondary liability."

Judge Dorothy Nelson seemed skeptical.

"Here you are saying nothing is said, therefore we should discover it," Nelson said.

GoDaddy attorney John Slafsky told the panel that Congress had passed the ACPA with the intent of protect registrars.

"When we look at the ACPA, the federal statute itself, we know that it embraces and that it generally shields from liability registration and maintenance activities," Slafsky said.

There could be dire consequences if those activities were not protected, forcing companies to prove registration and maintenance of millions of domain names are not made in bad faith, the lawyer added.

"There are now over 200 million domain names registered in the world," Slafsky said. "GoDaddy is the world's largest domain name registrar. It has over 50 million domain names under its management. We know that there have been 36,000 domain name arbitrations. The consequences of creating this right of action and exposing intermediaries, these neutral stakeholders, to liability could be very significant and very detrimental to companies like Go Daddy."

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