Petroliam Nasional Berhad v. GoDaddy.com, Inc.
Filing
154
Brief Supplemental Memorandum of Points and Authorities Concerning Contributory Cybersquatting Cases filed byGoDaddy.com, Inc.. (Slafsky, John) (Filed on 12/14/2011)
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JOHN L. SLAFSKY, State Bar No. 195513
DAVID L. LANSKY, State Bar No. 199952
HOLLIS BETH HIRE, State Bar No. 203651
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 Page Mill Road
Palo Alto, CA 94304
Bus: (650) 493-9300
Fax: (650) 493-6811
jslafsky@wsgr.com
dlansky@wsgr.com
hhire@wsgr.com
Attorneys for Defendant/Counterclaimant
GODADDY.COM, INC.
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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PETROLIAM NASIONAL BERHAD,
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Plaintiff,
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vs.
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GODADDY.COM, INC.,
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Defendant.
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GODADDY.COM, INC.,
Counterclaimant,
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vs.
PETROLIAM NASIONAL BERHAD,
Counterclaim Defendant.
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SUPPLEMENTAL MEMORANDUM
CONCERNING CONTRIBUTORY CYBERSQUATTING
CASE NO. 4:09-CV-05939-PJH
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CASE NO.: 09-CV-5939 PJH
SUPPLEMENTAL MEMORANDUM
OF POINTS AND AUTHORITIES
CONCERNING CONTRIBUTORY
CYBERSQUATTING CASES
Date:
Time:
Courtroom:
December 7, 2011
9:00 a.m.
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Honorable Phyllis J. Hamilton
TABLE OF CONTENTS
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Page
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TABLE OF AUTHORITIES ..........................................................................................................ii
I.
INTRODUCTION ............................................................................................................... 1
II.
SUMMARY OF CONTRIBUTORY CYBERSQUATTING CASES ............................... 2
III.
ARGUMENT ...................................................................................................................... 4
A.
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THE COURT SHOULD NOT RECOGNIZE A CAUSE OF ACTION FOR
CONTRIBUTORY CYBERSQUATTING IN THIS CASE .................................. 4
B.
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WERE THE COURT TO RECOGNIZE A CAUSE OF ACTION FOR
CONTRIBUTORY CYBERSQUATTING, IT WOULD STILL NOT
APPLY TO THE FACTS OF THIS CASE ............................................................ 5
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1.
There is No Finding of Cybersquatting by the Registrant .......................... 6
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2.
There Are No Allegations that Go Daddy Induced Cybersquatting ........... 6
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3.
There is No Evidence that Go Daddy Monitored and Controlled the
Instrumentality of Cybersquatting ............................................................... 6
4.
There is No Evidence of Exceptional Circumstances Sufficient to
Impute Knowledge of Cybersquatting to Go Daddy ................................... 7
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C.
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IV.
GO DADDY IS SHIELDED FROM LIABILITY UNDER THE SAFE
HARBOR FOR REGISTRARS AND REGISTRIES IN THE A.C.P.A.
AND ENSUING CASE LAW ................................................................................ 8
CONCLUSION ................................................................................................................... 8
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SUPPLEMENTAL MEMORANDUM
CONCERNING CONTRIBUTORY CYBERSQUATTING
CASE NO. 4:09-CV-05939-PJH
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TABLE OF AUTHORITIES
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CASES
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DSPT Int’l, Inc. v. Nahum,
624 F.3d 1213 (9th Cir. 2010) ............................................................................................. 5
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Page(s)
Facebook, Inc. v. Cyber2Media, Inc.,
No. 4:2011-cv-03619 (N.D. Cal. July 22, 2011) (Hamilton, J.) ......................................... 3
Fare Deals, Ltd. v. World Choice Travel.com, Inc.,
180 F. Supp. 2d 678 (D. Md. 2001) .................................................................................... 8
Ford Motor Co. v. Greatdomains.com, Inc.,
177 F. Supp. 2d 635 (E.D. Mich. 2001) .......................................................................... 2, 7
Inwood Labs, Inc. v. Ives Labs, Inc.,
456 U.S. 844 (1982) ............................................................................................................ 5
Lockheed Martin Corp. v. Network Solutions, Inc.,
194 F.3d 980 (9th Cir. 1999) ............................................................................................... 5
Meyer v. Holley,
537 U.S. 280 (2003) .................................................................................................... 1, 4, 5
Microsoft Corp. v. Shah,
No. C10-0653 (RSM), 2011 WL 108954 (W.D. Wash. Jan. 2, 2011) ............................ 3, 7
Perfect 10 v. Visa Int'l Serv. Ass'n,
494 F.3d 788 (9th Cir. 2007) ............................................................................................... 7
Solid Host, NL v. NameCheap, Inc.,
652 F. Supp. 2d 1092 (C.D. Cal. 2009) ....................................................................... 2, 7, 8
Transamerica Corp. v. Moniker Online Servs, LLC,
672 F. Supp. 2d 1353 (S.D. 2009) ................................................................................... 2, 3
United States v. Texas,
507 U.S. 529 (1993) ............................................................................................................ 4
Verizon California, Inc. v. Above.com Pty Ltd, et al.,
No. 2:11-cv-00973-ABC-CWX (C.D. Cal. July 13, 2011) ................................................. 3
STATUTES
15 U.S.C. § 1114 ............................................................................................................................. 1
15 U.S.C. § 1114(2)(D)(iii) ............................................................................................................ 8
15 U.S.C. § 1125(d) ........................................................................................................................ 1
15 U.S.C. § 1125(d) (1)(d) ............................................................................................................. 8
MISCELLANEOUS
S. REP. No. 106-140 (1999) ......................................................................................................... 4, 5
SUPPLEMENTAL MEMORANDUM
CONCERNING CONTRIBUTORY CYBERSQUATTING
CASE NO. 4:09-CV-05939-PJH
-ii-
Defendant and Counterclaimant GoDaddy.com, Inc. (“Go Daddy”), at the direction of the
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Court, respectfully submits this supplemental memorandum of law setting forth the status of
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other cases in which so-called “contributory cybersquatting” claims have been asserted. Go
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Daddy has previously analyzed the contributory cybersquatting claim of plaintiff Petroliam
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Nasional Berhad (“Petronas”), in detail, in the papers opposing Petronas‟s motion for partial
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summary judgment (Dkt. 128, pp. 7-21) and in the papers supporting Go Daddy‟s motion for
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summary judgment (Dkt. 112, pp. 16-20 and Dkt. 139, pp. 5-10).
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I.
INTRODUCTION
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Count II of the First Amended Complaint purports to be “Contributory Liability for
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Cybersquatting.” It is far from clear, though, that such a claim exists under the circumstances of
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this case. Congress did not include such a claim when it passed the Anti-Cybersquatting
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Consumer Protection Act (“ACPA”), 15 U.S.C. §§ 1114 and 1125(d). No defendant has ever
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been held liable for such a claim and no appellate court has ever recognized such a claim.
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Plaintiffs have asserted such claims in only a handful of cases, and the sole district court decisions
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to date have been at the motion to dismiss stage. Moreover, of the few courts outside the
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Northern District opting initially to recognize such claims, all have emphasized the extraordinary
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nature of such claims and have limited their decisions to exceptional circumstances not present
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here.
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According to the Supreme Court, where, as here, Congress creates a tort-like action, it
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does so with knowledge of existing rules for secondary liability, and thus district courts should
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assume that absent contrary expression in the statute, Congress intended those same rules to
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apply to the new statutory claim. See Meyer v. Holley, 537 U.S. 280, 285 (2003). The existing
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rules for secondary liability at the time the ACPA was passed in 1999 limited such liability to
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narrow and specific circumstances not present here: inducement of infringement, manufacture or
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sale of a product, or leasing of premises where infringing goods are sold. Thus the Court should
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not recognize a cause of action for contributory cybersquatting in this case.
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Expanding the scope of secondary liability in a case like this would implicate a number
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of different service providers – domain name registrars and registries, website hosts, and others
SUPPLEMENTAL MEMORANDUM
CONCERNING CONTRIBUTORY CYBERSQUATTING
CASE NO. 4:09-CV-05939-PJH
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providing servers that facilitate domain name resolution. Embroiling these companies in
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litigation simply because they provided automated services and declined to terminate such
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servers upon receipt of notice of domain name disputes would be contrary to Congress‟s intent in
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enacting the ACPA.
In any event, even were the Court to recognize such a novel “contributory
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cybersquatting” cause of action in this case, Petronas‟s claim against Go Daddy would still fail.
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Go Daddy did not induce any cybersquatting, Go Daddy did not exercise monitoring or control
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over the instrumentality of any cybersquatting, and there are no exceptional circumstances
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sufficient to impute knowledge of any cybersquatting to Go Daddy.
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II.
SUMMARY OF CONTRIBUTORY CYBERSQUATTING CASES
To the best of Go Daddy‟s knowledge, the status of those lawsuits in which plaintiffs
have asserted “contributory cybersquatting” claims is as follows:
1.
Ford Motor Co. v. Greatdomains.com, Inc., 177 F. Supp. 2d 635 (E.D. Mich.
2001)
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Status: Dismissal as against Great Domains. Default judgment against
others.
b.
Allegations: Website owner auctioned domain names, including ones
identical or similar to well-known trademarks.
c.
Motion to Dismiss: Granted.
d.
Key Excerpt: “Because an entity such as Great Domains generally could
not be expected to ascertain the good or bad faith intent of its [customers],
contributory liability would apply, if at all, in only exceptional
circumstances.” Id. at 637.
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Solid Host, NL v. NameCheap, Inc., 652 F. Supp. 2d 1092 (C.D. Cal. 2009)
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Status: Voluntary dismissal by plaintiff.
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Allegations: Registrar (i) ignored sworn affidavit stating that disputed
domain name had been “stolen” from plaintiff domain name owner and
(ii) provided anonymity service to conceal identity of thief.
c.
Motion to Dismiss: Denied.
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Key Excerpts: “NameCheap acted as the registrant for the domain name
utilized in Doe‟s cybersquatting scheme, which it then licensed to Doe….
[In addition, Plaintiff] gave NameCheap evidence, including (but not
limited to) a sworn declaration [indicating a theft]. Based on this
allegation, the court cannot conclude, as a matter of law, that [Plaintiff]
will be unable to prove exceptional circumstances satisfying the
knowledge requirement for contributory liability.” Id. at 1115-1116.
3.
Transamerica Corp. v. Moniker Online Servs, LLC, 672 F. Supp. 2d 1353 (S.D.
2009)
a.
Status: Stipulated dismissal as against defendant registrar Moniker Online.
Default judgment against others.
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SUPPLEMENTAL MEMORANDUM
CONCERNING CONTRIBUTORY CYBERSQUATTING
CASE NO. 4:09-CV-05939-PJH
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b.
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c.
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4.
Microsoft Corp. v. Shah, No. C10-0653 (RSM), 2011 WL 108954 (W.D. Wash.
Jan. 2, 2011)
a.
Status: Stipulated dismissal.
b.
Allegations: Defendants (not registrars) induced cybersquatting by
producing and distributing instructional video (“The Magic Bullet
System”) with directions on how to misleadingly use plaintiff‟s famous
trademarks, namely by registering similar domain names and driving
traffic to unauthorized, revenue-generating websites.
c.
Motion to Dismiss: Denied.
d.
Key Excerpt: “The practice of instructing others on how to engage in
cybersquatting runs counter to the purpose of the ACPA.” Id. at *3.
5.
Verizon California, Inc. v. Above.com Pty Ltd, et al., No. 2:11-cv-00973-ABCCWX (C.D. Cal. July 13, 2011)
a.
Status: Pending.
b.
Allegations: Registrar (i) provided anonymity service, shell companies
and false identities to conceal identity of serial cybersquatters
orchestrating “massive … operation involving hundreds of thousands of
domain names” and many companies‟ famous trademarks and (ii)
monetized “widespread pattern of cybersquatting” by posting advertising
on the cybersquatters‟ websites and securing related revenue.
c.
Motion to Dismiss: Denied.
d.
Key Excerpt: “[C]ontributory liability … is sufficiently cabined by an
„exceptional circumstances‟ requirement to prevent the imposition of
liability in contravention of the intent of the statute. (Order, p. 10)
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Facebook, Inc. v. Cyber2Media, Inc., No. 4:2011-cv-03619 (N.D. Cal. July 22,
2011) (Hamilton, J.)
a.
Status: Pending.
b.
Allegations: Defendants (not registrars) induced others to engage in
“typosquatting,” engaged in typosquatting directly, hosted content of
disputed websites on computer servers and tricked Facebook users into
divulging personal information, all based on confusing mis-spellings of
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c.
Motion to Dismiss: Withdrawn (and Amended Complaint filed).
d.
Key Excerpt: N/A.
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Allegations: Registrar (i) provided anonymity service to conceal identity
of cybersquatter and (ii) monetized the cybersquatting by posting
advertising with the plaintiff‟s trademark, hyper-linking to plaintiff‟s
competitors and securing related revenue.
Motion to Dismiss: Denied.
Key Excerpt: Plaintiff “alleges that [the registrar] does not simply register
a domain name and then go about its business. Instead, [the registrar]
allegedly works with the registrant – generally a fictitious entity – along
with [the co-defendants] in order to profit from the infringing use of the
trademarks.” Id. at 1363.
Also, in this action, the Court granted Go Daddy‟s motion for judgment on the pleadings as to
Petronas‟s combined “Cybersquatting and Contributory Cybersquatting” claim, but allowed
Petronas leave to amend. (Dkt. 67). The Court subsequently acknowledged “certain
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SUPPLEMENTAL MEMORANDUM
CONCERNING CONTRIBUTORY CYBERSQUATTING
CASE NO. 4:09-CV-05939-PJH
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reservations” when, seeking “a developed record,” it denied Go Daddy‟s motion to dismiss the
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contributory cybersquatting and other claims in the First Amended Complaint. (Dkt. 87).
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III.
ARGUMENT
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A.
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THE COURT SHOULD NOT RECOGNIZE A CAUSE OF ACTION FOR
CONTRIBUTORY CYBERSQUATTING IN THIS CASE
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The Supreme Court has made clear that when Congress creates a tort-like action, it does
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so with knowledge of existing rules for secondary liability, and therefore courts should assume
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that absent contrary expression in the statute, Congress intended those same rules to apply to the
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newly created claim. See Meyer, 537 U.S. at 285. Where Congress says nothing about
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extending traditional rules of secondary liability, a court errs by extending secondary liability
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beyond the “traditional principles.” See id. at 286-7 (“Congress‟ silence, while permitting an
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inference that Congress intended to apply ordinary background tort principles, cannot show that
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it intended to apply an unusual modification of those rules.”) (emphasis in original).1
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Here, Congress enacted the ACPA in 1999 against the backdrop of contributory
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trademark liability limited only to narrow and specific circumstances: inducement of
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infringement, manufacture or distribution of a product, or leasing of premises where infringing
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products are sold. The ACPA itself makes no mention of contributory liability, and the
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legislative history shows that far from seeking to expand the scope of traditional contributory
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trademark infringement vis-à-vis domain name registrars, Congress sought to codify the case law
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immunizing registrars from secondary liability. See S. REP. No. 106-140, at 11 (1999) (Conf.
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Rep.). Thus, the Court should not expand the scope of traditional contributory liability and apply
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it to cybersquatting, where, as here, there is no allegation that Go Daddy induced infringement,
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manufactured or delivered a product, or leased or rented space at a marketplace where infringing
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products are sold. See Meyer, 537 U.S. at 285-87.
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See also, United States v. Texas, 507 U.S. 529, 534 (1993) (When a statute “invade[s] the
common law,” it is presumed to “favor[ ] the retention of long-established and familiar
principles, except when a statutory purpose to the contrary is evident. . . . In order to abrogate a
common-law principle, the statute must „speak directly‟ to the question addressed by the
common law.”) (internal citations omitted).
SUPPLEMENTAL MEMORANDUM
CONCERNING CONTRIBUTORY CYBERSQUATTING
CASE NO. 4:09-CV-05939-PJH
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Indeed, the Ninth Circuit has already rejected application of contributory liability under
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Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844 (1982), to a claim against a
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provider of domain name registration and routing services. See Lockheed Martin Corp. v.
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Network Solutions, Inc., 194 F.3d 980, 985 (9th Cir. 1999) (“Such a stretch would reach well
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beyond the contemplation of Inwood Lab. and its progeny.”). The Lockheed court specifically
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addressed a contributory trademark infringement claim against a domain name registrar. Id. at
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982-83. It affirmed the district court‟s grant of summary judgment to the registrar because
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domain name registration and routing is a service, rather than a product, and a registrar that
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provides routing does not exercise the type of direct control and monitoring that would justify
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extension of Inwood Lab. to this context. See id. at 985. The Lockheed decision was called out
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specifically as the very case law that Congress intended to codify when it enacted the ACPA.
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See S. REP. No. 106-140, at 11.
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The facts here are virtually identical and mandate the same result. Go Daddy provided
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registration and routing services to the registrant of the Disputed Domains, who used those
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services to register domain names containing Petronas‟s mark, and to route the Disputed
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Domains to a third-party computer hosting a website. As in Lockheed, Go Daddy exercised no
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control over the domain-name wording selected by the registrant. Nor did Go Daddy exercise
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control over the website to which the registrant routed the Disputed Domains. This service “does
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not entail the kind of direct control and monitoring required to justify an extension of the
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„supplies a product‟ requirement.” Lockheed, 194 F.3d at 985.2
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B.
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WERE THE COURT TO RECOGNIZE A CAUSE OF ACTION FOR
CONTRIBUTORY CYBERSQUATTING, IT WOULD STILL NOT APPLY
TO THE FACTS OF THIS CASE
This case is fundamentally distinct from the other cases (described above) in which
contributory cybersquatting claims have been asserted. There are no allegations that Go Daddy
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At oral argument Petronas‟s counsel highlighted a different decision not cited in any of
Petronas‟s earlier papers: DSPT International, Inc. v. Nahum, 624 F.3d 1213 (9th Cir. 2010).
This is a cybersquatting, not contributory cybersquatting, case merely holding that the ACPA is
broad enough to encompass bad faith “use” of a domain name where a former employee registers
a domain name incorporating an employer‟s trademark and withholds the domain name to obtain
leverage for a claim of commissions.
SUPPLEMENTAL MEMORANDUM
CONCERNING CONTRIBUTORY CYBERSQUATTING
CASE NO. 4:09-CV-05939-PJH
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induced others to engage in cybersquatting; registered any domain names itself; set up shell
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companies for customers; concealed the identity of cybersquatters; monetized the cybersquatters‟
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domain names; or posted the plaintiff‟s trademark on websites. As set forth in Go Daddy‟s
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earlier papers and as summarized below, Petronas has failed to adduce sufficient evidence to
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support any such claim.
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1.
There is No Finding of Cybersquatting by the Registrant
There has been no discovery in this case or in either of the two related in rem lawsuits
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directed at the registrant of the Disputed Domains, Heiko Schoenkeness, and thus there is no
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record evidence of his intent with respect to registration or use of the Disputed Domains.
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Moreover, the orders and judgments from the in rem cases directing Go Daddy to transfer the
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Disputed Domains do not include any determination of cybersquatting; indeed, none of these
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papers refer to “cybersquatting.” Absent an express finding of cybersquatting, there can be no
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finding that Go Daddy is liable for contributory cybersquatting.
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2.
There Are No Allegations that Go Daddy Induced Cybersquatting
Petronas does not allege (nor could it) that Go Daddy in any way induced or encouraged
cybersquatting by the registrant of the Disputed Domains.
3.
There is No Evidence that Go Daddy Monitored and Controlled the
Instrumentality of Cybersquatting
Even assuming the registrant of the Disputed Domains was engaged in cybersquatting,
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Go Daddy cannot be held liable as a contributory cybersquatter because it did not and could not
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monitor and control the unlawful conduct. Here, there is no evidence that Go Daddy had any
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control over the registrant‟s intent when he registered domain names that included the Petronas
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trademark and then forwarded them to a third-party website. There is no evidence that Go
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Daddy had any input into the registrant‟s selection of the domain name wording or the
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registrant‟s decision to route the Disputed Domains to a third-party website. And there is no
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evidence that Go Daddy had any control over the operation or content of the website to which
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the registrant caused the Disputed Domains to be routed.
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SUPPLEMENTAL MEMORANDUM
CONCERNING CONTRIBUTORY CYBERSQUATTING
CASE NO. 4:09-CV-05939-PJH
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By providing a forwarding service, Go Daddy in no way exercises the type of control
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over its registrants‟ intent and use of domain names that would justify imposing a landlord-like
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duty to monitor what is being done with the 8.2 million domain names that utilize Go Daddy‟s
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domain name forwarding service. Cf. Perfect 10 v. Visa Int'l Serv. Ass'n, 494 F.3d 788, 807 (9th
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Cir. 2007) (defendant credit card company, which provided critical support to website hosting
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infringing content, and which could have stopped or reduced infringing activity upon receipt of
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notice from plaintiff did not exercise the type of “direct control” over the infringing conduct to
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justify imposition of contributory trademark liability).
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4.
There is No Evidence of Exceptional Circumstances Sufficient to
Impute Knowledge of Cybersquatting to Go Daddy
Furthermore, the evidence is insufficient to establish any “exceptional circumstances”
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that would justify imputing to Go Daddy knowledge that the registrant registered the Disputed
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Domains and utilized Go Daddy‟s forwarding service with a bad faith intent to profit from
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Petronas‟s trademark. As set forth above, the few district courts that have recognized
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contributory cybersquatting claims at the pleadings stage have uniformly adopted a heightened
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standard of “exceptional circumstances” before imputing any knowledge of cybersquatting.
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These cases make clear that the standard to establish a contributory cybersquatting claim would
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have to be higher than that applied to contributory infringement claims:
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Because an entity such as [a registrar] generally could not be expected to ascertain
the good or bad faith intent of its vendors, contributory liability would apply, if at
all, in only exceptional circumstances.
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Ford Motor, 177 F. Supp. 2d at 647; accord Solid Host, 652 F. Supp. 2d at 1114; see also,
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Microsoft, 2011 WL 108954, at *2. Indeed, as this Court stated when it granted Go Daddy‟s
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motion for judgment on the pleadings, secondary liability for a domain name registrar should
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only lie where the registrar has “unequivocal knowledge” of illegality. (Dkt. 67, p.7). Petronas
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has not come close to making any such showing.
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Mere notice from a trademark owner of alleged cybersquatting is not enough to trigger
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such exceptional circumstances. See id.; Solid Host, 652 F. Supp. 2d at 1116. This is because
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cybersquatting, unlike the sale of counterfeit goods, is not easily detectible: “In general,
SUPPLEMENTAL MEMORANDUM
CONCERNING CONTRIBUTORY CYBERSQUATTING
CASE NO. 4:09-CV-05939-PJH
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cybersquatting is less easily detected than standard trademark infringement, both because it
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involves the consideration of intent and because it is less „transparent‟. . . .” Solid Host, 652 F.
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Supp. 2d at 1117 (quoting Fare Deals, Ltd. v. World Choice Travel.com, Inc., 180 F. Supp. 2d
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678, 691 (D. Md. 2001)).
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C.
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GO DADDY IS SHIELDED FROM LIABILITY UNDER THE SAFE
HARBOR FOR REGISTRARS AND REGISTRIES IN THE A.C.P.A. AND
ENSUING CASE LAW
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In any event Go Daddy is immune from any ACPA claim – alleging either direct or
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contributory liability – directed at its conduct as a domain name registrar. See 15 U.S.C. §
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1125(d) (1)(d) (barring liability for anyone other than domain name registrants and their
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authorized licensees) and 15 U.S.C. § 1114(2)(D)(iii) (shielding registrars in connection with
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their activities related to registration and maintenance of domain names). The immunities for
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registrars and registries are discussed in detail in Go Daddy's papers supporting summary
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judgment (Dkt. 112, pp. 20-22 and Dkt. 139, pp. 10-13) and in its papers opposing Petronas's
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motion for partial summary judgment (Dkt. 128, pp. 10-15).
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IV.
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CONCLUSION
For the foregoing reasons, and for the reasons set forth in Go Daddy‟s previously
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submitted papers, the Court should grant Go Daddy‟s motion for summary judgment in its
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entirety and deny Petronas‟s motion for partial summary judgment.
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Dated: December 14, 2011
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WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
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By:
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/s/ John L. Slafsky
JOHN L. SLAFSKY
DAVID L. LANSKY
HOLLIS BETH HIRE
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Attorneys for Defendant
GODADDY.COM, INC.
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SUPPLEMENTAL MEMORANDUM
CONCERNING CONTRIBUTORY CYBERSQUATTING
CASE NO. 4:09-CV-05939-PJH
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