More Than a Registrar: “Parked Pages” Program Leads Court to Deny Domain Name Registrar GoDaddy.com Safe Harbor Protection from Claims under the Anticybersquatting Consumer Protection Act (ACPA)

On June 21, 2013, a Central District of California court refused to extend ACPA safe harbor protection to popular domain name registrar GoDaddy.com, finding that it intended to profit from the registration and maintenance of various domain names that encompassed plaintiff Academy of Motion Pictures Arts and Sciences’ OSCAR, OSCARS, OSCAR NIGHT, ACADEMY AWARD and ACADEMY AWARDS registered trademarks.

The Academy had sued GoDaddy in 2010, alleging, among other things, violations of the Anticybersquatting Consumer Protection Act (ACPA), which provides trademark owners with a federal cause of action against cybersquatting and an alternative mechanism to ICANN’s expedited UDRP proceeding if certain elements are present. The Academy claimed that GoDaddy monetized or attempted to monetize domain names that were identical, confusingly similar, or dilutive of the Academy’s five registered trademarks. Among the hundreds of infringing domain names registered by GoDaddy were “academyawardz.com,” “2011Oscars.com,” and “Osccarlist.com.”

According to the Academy, GoDaddy’s attempts to profit from infringing trademarks constitute bad faith and a violation of the ACPA. GoDaddy moved for summary judgment, contending that it was eligible for the ACPA’s statutory immunity, which protects domain name registrars from liability in certain circumstances – and only in those cases where registrars act solely in a “registration” or “maintenance” capacity. Citing GoDaddy’s Parked Pages Program, the Court disagreed that GoDaddy could avail itself of the statutory immunity and found that GoDaddy’s conduct was beyond the bounds of the safe harbor.

Under GoDaddy’s Parked Pages Program, domain name owners grant GoDaddy the right to place advertising on their placeholder websites. GoDaddy generates revenue whenever a user clicks on an advertisement. In the case of domain names purchased through the “Free Parking Program,” GoDaddy keeps the revenue it receives from the advertising placed on webpages. In the case of domain names purchased through the “Cash Parking Program,” advertising revenues are split among the registrant, GoDaddy, and a third-party advertising partner.

While the ACPA is designed to combat any person or entity that traffics in infringing domain names, certain statutory safeguards can insulate a registrar from owing monetary damages. In particular, “[a] domain name authority” such as GoDaddy is protected from claims for damages “for the registration or maintenance of a domain name for another absent a showing of bad faith intent to profit from such registration or maintenance of the domain name.” 15 U.S.C. § 1114(2)(D)(iii).

GoDaddy’s attempts to invoke the safe harbor were rebuffed by the Court. While GoDaddy contended that there was no evidence that it actually earned revenue from its ad placements on the websites in question, the Court concluded that by operating the Parked Pages Program, GoDaddy was not acting solely as a domain name registrar. Moreover, a bad faith intention to profit, alone, was sufficient to disqualify GoDaddy from safe harbor protection. As the Court observed, “GoDaddy has acted affirmatively and done something with the domain names other than mere passive registration or routing: GoDaddy placed the domain names in a program it designed to make revenue.”

Accordingly, the parties’ motions for summary judgment were granted in part and denied in part. Except with respect to instances involving proper names (such as OscarRamirez.com), the Court deferred ruling on the question of whether the accused domain names were “confusingly similar” and thus infringing; however, if the Court later finds that the Academy has met its burden of proving confusing similarity from an objective perspective, GoDaddy may be held liable under the ACPA.