2009 WL 4715853 (S.D. Fla. Dec. 4, 2009)
Plaintiff sued defendants, including several domain name registrars, for allowing customers to anonymously register domain names containing its TRANSAMERICA mark through defendants’ “privacy service” and to monetize them through associated pay-per-click websites advertising competing services. The court denied defendants’ motion to dismiss all of plaintiff’s claims, finding that Transamerica’s allegations in its complaint were sufficient to support its claims that (1) defendants were not exempt from liability as registrars because their privacy service was listed as the registrant for some of the disputed domain names and/or defendants were “de facto” registrants because defendants received fees whenever a consumer clicked on a link on the corresponding websites, and (2) defendants’ actions constituted a use of the TRANSAMERICA mark in commerce.
Plaintiff Transamerica Corporation (“Transamerica”) sold life insurance and other services under the federally registered TRANSAMERICA mark. Defendant Moniker Online Services, LLC (“Moniker”) was an ICANN-accredited domain name registrar. Transamerica alleged that Moniker, through its privacy registration subsidiary and defendant Moniker Privacy Services (“Moniker Privacy”), violated its ICANN agreement to ensure accurate and current data for the “Whois” database by allowing customers to register and use counterfeit and infringing domain names without revealing their contact information. Transamerica identified eleven domain names containing the TRANSAMERICA mark, including transamericalifeins.com, and Moniker Privacy was listed as the registrant for some of them. These domain names were used for websites that contained a link to a site titled “Transamerica Life Ins. Co.,” which, when clicked, took users to sites promoting competing life insurance and financial services offered by unrelated third parties. Transamerica further alleged that defendant Oversee.net (“Oversee”), parent company of the Moniker companies, provided the monetization service to the domain names, and that defendants received a fee each time an Internet user clicked on one of these links.
Transamerica sued Moniker, Moniker Privacy, Oversee, and “John Does” (i.e., the unknown domain name registrants) for direct and contributory trademark counterfeiting, infringement, dilution, and cybersquatting, among other claims. Transamerica accused defendants of collaborating with the anonymous domain name registrants to use the TRANSAMERICA mark to divert consumers looking to purchase Transamerica’s services, sending them instead to websites selling competing services. Defendants moved to dismiss Transamerica’s complaint in its entirety.
The ACPA provides that “[a] person shall be liable for [illegally] using a domain name only if that person is the domain name registrant or that registrant’s authorized licensee.” 15 U.S.C. § 1125(d)(1)(D). Defendants argued that they were immune from liability for cybersquatting because they were neither the registrants nor the registrants’ “official” licensees for the disputed domain names, and that courts have repeatedly held that registrars such as Moniker cannot be liable under the ACPA. The court disagreed, noting that recent decisions have held that the ACPA’s qualified immunity for registrars does not apply when the registrar is also the domain name registrant. Because defendants here acted as both the registrant and registrar for some names, they did not qualify for the ACPA’s “safe harbor” provision exempting domain name registrars from liability. Moreover, Transamerica’s allegations that defendants were part of a scheme to profit from the use of others’ marks were sufficient to allege that defendants were the de facto registrants of all of the domain names. In particular, the court stated that the payments that Moniker Privacy received when users clicked on the links “establishes at least partial ownership in the domain name.” These allegations, taken as true for purposes of a motion to dismiss, satisfied the requirement that defendants “[acted] as more than registrars so as to strip them of immunity under the ACPA.” Finally, even if the defendants were just the registrar, the court noted that they still would not qualify for the exemption because they would fall within the exception that immunity does not apply in the “case of bad faith or reckless disregard.” 15 U.S.C. § 1125(d)(2)(D)(ii). Specifically, the court stated that defendants “would not qualify . . . because they have acted in ‘bad faith’ and ‘reckless disregard’ of known trademark rights of [Transamerica] and countless other trademark owners.”
The court also rejected defendants’ argument that Transamerica’s trademark counterfeiting, infringement, and dilution claims should be dismissed for failure to allege that defendants used Transamerica’s mark in commerce. Defendants claimed that Moniker Privacy, as a registrar, simply registered domain names on behalf of third parties and played no further role, and cited several cases for the proposition that a registrar is not liable for trademark infringement if the registrant chooses to use the domain name in an infringing manner. However, the court noted that more recent cases, including Vulcan Golf, LLC v. Google Inc., 552 F. Supp. 2d 752 (N.D. Ill. 2008), held that “[use of] a trademark to draw consumers to a particular website not belonging to the trademark holder constitutes use in commerce under the Lanham Act.” Although defendants argued that they simply registered domain names, Transamerica’s complaint alleged much more, i.e., defendants worked with the anonymous registrants to register domain names similar to Transamerica’s mark, monetized those domain names by steering consumers to websites selling competing services, and shared in the profits generated by those websites. These allegations were sufficient to satisfy the “use in commerce” requirement under the test articulated in Vulcan Golf.
Although this decision was not a decision on the merits, it is yet another recent decision suggesting that domain name registrars that register infringing domain names through their privacy registration services may, depending on the particular circumstances, not be immune from liability simply because they are a registrar.