Berhad v. Godaddy.Com, Inc.

• Decision Date: 04 December 2013
• Docket Number: No. 12–15584.,12–15584.
• Citation: 737 F.3d 546
• Parties: PETROLIAM NASIONAL BERHAD, (Petronas), Plaintiff–counter–claim–defendant–Appellant, v. GODADDY.COM, INC., Defendant–counter–claimant–Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

737 F.3d 546

PETROLIAM NASIONAL BERHAD, (Petronas), Plaintiff–counter–claim–defendant–Appellant,

v.GODADDY.COM, INC., Defendant–counter–claimant–Appellee.

No. 12–15584.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Oct. 8, 2013.

Filed Dec. 4, 2013.

Perry Reed Clark (argued), Palo Alto, CA, for Plaintiff–counter–claim–defendant–Appellant.

John Lawrence Slafsky (argued), David L. Lansky, and Evan M.W. Stern, Wilson Sonsini Goodrich & Rosati, Palo Alto, CA, for Defendant–counter–claimant–Appellee.

Ian Charles Ballon and Lori Chang, Greenberg Traurig, LLP, Los Angeles, CA, for Amicus Curiae eNom, Inc.

Aaron M. McKown and Paula L. Zecchini, Wrenn Bender LLP, Irvine, CA, for Amici Curiae Network Solutions, LLC and Register.com, Inc.

Appeal from the United States District Court for the Northern District of California, Phyllis J. Hamilton, District Judge, Presiding. D.C. No. 4:09–cv–05939–PJH.

Before: DOROTHY W. NELSON, MILAN D. SMITH, JR., and SANDRA S. IKUTA, Circuit Judges.

OPINION

M. SMITH, Circuit Judge:

In this appeal, Petroliam Nasional Berhad (Petronas) requests that we read a cause of action for contributory cybersquatting into the Anticybersquatting Consumer Protection Act (ACPA or Act), 15 U.S.C. § 1125(d). Because we conclude that neither the plain text nor the purpose of the ACPA provide support for such a cause of action, we hold that there is none. We therefore affirm the judgment of the district court.

FACTS AND PRIOR PROCEEDINGS

Petrolium Nasional Berhad (Petronas) is a major oil and gas company with its headquarters in Kuala Lumpur, Malaysia. Petronas owns the trademark to the name “PETRONAS.” GoDaddy.com, Inc. (GoDaddy) is the world's largest domain name registrar, maintaining over 50 million domain names registered by customers around the world. GoDaddy also provides domain name forwarding services, which, like its registration service, enables Internet users who type in a particular domain name to arrive at the target site specified by GoDaddy's customer, the registrant.

In 2003, a third party registered the domain names “petronastower.net” and “petronastowers.net” through a registrar other than GoDaddy. In 2007, the owner of those names transferred its registration service to GoDaddy. The registrant used GoDaddy's domain name forwarding service to direct the disputed domain names to the adult web site, “camfunchat.com,” which was hosted on a web server maintained by a third party, and which had been associated with the disputed domain names, using the previous registrar.

In late 2009, a Petronas subsidiary responsible for ferreting out potential trademark infringement contacted GoDaddy and requested that it “take action against the website associated with the ‘petronastower.net’ domain name.” Officials from the Malaysian and U.S. governments also contacted GoDaddy regarding the domain name. GoDaddy investigated the issue, but took no action with respect to the alleged cybersquatting because (1) it did not host the site; and (2) it was prevented by the Uniform Domain Name Dispute Resolution Policy (“UDRP”) from participating in trademark disputes regarding domain name ownership.¹

Petronas sued GoDaddy in the United States District Court for the Northern District of California on a number of theories, including cybersquatting under 15 U.S.C. § 1125(d), and contributory cybersquatting. The district court dismissed all of Petronas's claims on the pleadings, with leave to amend. Petronas filed an amended complaint, in which it continued to allege, inter alia, contributory cybersquatting. The district court allowed discovery because it “require[d] a record clarifying the mechanics of what GoDaddy did or does with regard to the disputed domain names, and what ‘forwarding’ and ‘routing’ are and whether either or both can be considered part of domain name registration services generally or the services offered by GoDaddy.” Following the completion of limited discovery, the district court granted summary judgment in favor of GoDaddy. Petronas appeals from the grant of summary judgment only with respect to its claim of contributory cybersquatting.

JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction to review the district court's grant of summary judgment under 28 U.S.C. § 1291. We review the district court's order de novo, In re Ilko, 651 F.3d 1049, 1052 (9th Cir.2011), and may affirm on any ground supported in the record. Sams v. Yahoo! Inc., 713 F.3d 1175, 1179 (9th Cir.2013) (citing Islamic Republic of Iran v. Boeing Co., 771 F.2d 1279, 1288 (9th Cir.1985)).

DISCUSSION

The Lanham Act, 15 U.S.C. § 1051 et seq., passed in 1946, codified the then existing common law of trademarks, which in turn was based on the tort of unfair competition. See Moseley v. V Secret Catalogue, Inc., 537 U.S. 418, 428, 123 S.Ct. 1115, 155 L.Ed.2d 1 (2003) (“Traditional trademark infringement law is a part of the broader law of unfair competition that has its sources in English common law, and was largely codified in the Trademark Act of 1946 (Lanham Act).” (internal citations omitted)). Due primarily to the common law origins of trademark infringement, courts have concluded that the Lanham Act created a cause of action for secondary liability. See, e.g., Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 854, 102 S.Ct. 2182, 72 L.Ed.2d 606 (1982) (“[I]f a manufacturer or distributor intentionally induces another to infringe a trademark, or if it continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement, the manufacturer or distributor is contributorially responsible for any harm done as a result of the deceit.”).²

In 1999, Congress passed the ACPA, which amended the Lanham Act by adding two new causes of action aimed at cybersquatting.³ Consolidated AppropriationsAct, 2000, Pub.L. No. 106–113, Div. B, § 1000(a)(9), 113 Stat. 1536, 1501 A–545. Under the ACPA, a person may be civilly liable “if ... that person has a bad faith intent to profit from that mark ... and registers, traffics in, or uses a [protected] domain name.” 15 U.S.C. § 1125(d)(1)(A). Congress also created an in rem action to facilitate recovery of domain names by their rightful owners. 15 U.S.C. § 1125(d)(2)(A). Petronas contends that the ACPA also provides a cause of action for contributory cybersquatting because Congress intended to incorporate common law principles of secondary liability into the Act by legislating against the backdrop of the common law of trademark infringement, and by placing the ACPA within the Lanham Act. We disagree.

Our first obligation in determining whether the ACPA includes a contributory cybersquatting claim is to examine the plain text of the statute. See Hawaii v. Office of Hawaiian Affairs, 556 U.S. 163, 173, 129 S.Ct. 1436, 173 L.Ed.2d 333 (2009). Established common law principles can be inferred into a cause of action where circumstances suggest that Congress intended those principles to apply. Compare, e.g., Meyer v. Holley, 537 U.S. 280, 285, 123 S.Ct. 824, 154 L.Ed.2d 753 (2003) (“[W]hen Congress creates a tort action, it legislates against the legal background of ordinary tort-related vicarious liability rules and consequently intends its legislation to incorporate those rules.”) with Cent. Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164, 182, 114 S.Ct. 1439, 128 L.Ed.2d 119 (1994) (“[W]hen Congress enacts a statute under which a person may sue and recover damages from a private defendant for the defendant's violation of some statutory norm, there is no general presumption that the plaintiff may also sue aiders and abettors.”).

We hold that the ACPA does not include a cause of action for contributory cybersquatting because: (1) the text of the Act does not apply to the conduct that would be actionable under such a theory; (2) Congress did not intend to implicitly include common law doctrines applicable to trademark infringement because the ACPA created a new cause of action that is distinct from traditional trademark remedies; and (3) allowing suits against registrars for contributory cybersquatting would not advance the goals of the statute.

I. The Plain Text of the ACPA Does Not Provide a Cause of Action for Contributory Cybersquatting

“The preeminent canon of statutory interpretation requires us to ‘presume that [the] legislature says in a statute what it means and means in a statute what it says there.’ ” BedRoc Ltd., LLC v. United States, 541 U.S. 176, 183, 124 S.Ct. 1587, 158 L.Ed.2d 338 (2004) (quoting Conn. Nat'l Bank v. Germain, 503 U.S. 249, 253–254, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992)). We thus begin our analysis with the text of the ACPA.

The ACPA imposes civil liability for cybersquatting on persons that “register[ ], traffic[ ] in, or use[ ] a domain name” with the “bad faith intent to profit” from that protected mark. 15 U.S.C. § 1125(d)(1)(A). The plain language of the statute thus prohibits the act of cybersquatting, but limits when a person can be considered to be a cybersquatter. Id. The statute makes no express provision for secondary liability. Id. Extending liability to registrars or other third parties who are not cybersquatters, but whose actions may have the effect of aiding such cybersquatting, would expand the range of conduct prohibited by the statute from a bad faith intent to cybersquat on a trademark to the mere maintenance of a domain name by a registrar, with or without a bad faith intent to profit. This cuts against finding a cause of action for contributory cybersquatting. See Cent. Bank, 511 U.S. at 177–178, 114 S.Ct. 1439 (“We cannot amend the statute to create liability for acts that are not themselves [prohibited] within the meaning of the statute.”).

Furthermore, “Congress knew how to impose [secondary] liability when it chose to do so.” Id. at 176, 114 S.Ct. 1439. Congress chose not to impose secondary liability under the ACPA, despite the fact that the...