On September 10, 2015, the U.S. District Court for the Central District of California handed domain name registrar GoDaddy a victory against the Academy of Motion Pictures Arts & Sciences, holding that GoDaddy was not liable under the Anticybersquatting Consumer Protection Act (ACPA) for “trafficking” in infringing domain names.

The Academy alleged that GoDaddy “trafficked” in infringing domain names because GoDaddy was responsible for creating revenue-generating sponsored ads on domain names that infringed a number of the Academy’s trademarks.  To prevail on its ACPA claim, one of the elements the Academy had to prove was that GoDaddy trafficked in domain names with a “bad faith intent to profit from the mark.”  GoDaddy persuaded the court that it did not have a bad faith intent to profit because (1) GoDaddy reasonably relied on the representations of registrants that the domain names were non-infringing; (2) the routing of the domain names to pages containing sponsored links was done through an automated process; and (3) GoDaddy made significant efforts to assist brand owners (including the Academy) in protecting their intellectual property rights.

With respect to the last point, the court noted that GoDaddy had a written policy which trademark owners could use to request that GoDaddy remove ads/sponsored links from a particular domain name page (similar to a takedown notice); that GoDaddy was extremely responsive in complying with requests made under the policy (taking action, on average, 2.75 days after receiving each notice); and that GoDaddy proactively employed filtering software to block ads and sponsored links from appearing on domain names containing any one of nearly 1400 registered trademarks.

The case is a good example of an intermediary company avoiding liability by taking proactive measures to prevent facilitating infringement, and continues a line of cases placing the burden of policing online infringement squarely on brand owners.  The Academy is appealing the decision to the Ninth Circuit.