Whois Proxy Service Can Be Liable For Enabling Cybersquatting

In a recent California case, Solid Host NL v. NameCheap, Inc., (CD Cal, 2009), the Court held that a domain name registrar acting as a Whois proxy service may be held liable as a contributory infringer for a customer's cybersquatting under the Anticybersquatting Consumer Protection Act (ACPA). The question under the ACPA is not whether the registered domain names are likely to be confused with a plaintiff's domain name, but whether they are identical or confusingly similar to a plaintiff's trademark. See 15 U.S.C. § 1125(d)(1)(A)(ii). Contributory liability exists where a party either intentionally induces a third party to infringe a mark or supplies a product or service with actual knowledge that the product or service is being used to infringe the mark.

The decision is important for several reasons. First, the domain tasting trend among brand managers. "Domain tasting" is the practice of registering a domain to test for traffic (brand acceptance/monetization) and deleting it without cost within a grace period. Second, the recent proliferation of "anonymous" domain name registrations and registration services. Third, the pending increase in generic top level domains that will have brand owners scrambling to out-register their competition. Lastly, the case is unusual for an ACPA case. Here, a third-party hacked the domain name owner's registration, and re-registered the domain anonymously in an attempt to re-sell it back to the owner.

The ACPA creates a safe harbor from liability for certain domain registrars. But here, the proxy service did not qualify for the safe harbor because it was not acting as a registrar at the time of the alleged misconduct. In order for a plaintiff to assert a claim of cybersquatting, it must allege facts that demonstrate: (1) a valid trademark entitled to protection; (2) that the subject mark is distinctive or famous; (3) that the defendant's domain name is identical or confusingly similar to the mark; (4) that the defendant used, registered, or trafficked in the domain name; and (5) that defendant did so with a bad-faith intent to profit.

Ordinarily, the cybersquatters themselves are named in ACPA actions . Here, the trademark owner named the proxy service as the defendant because, under the proxy arrangement, the service was listed as the registrant in the Whois directory.