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Domain Name Registrar Isn’t Liable for Counterfeit Goods โ€“ InvenTel v. GoDaddy

InvenTel makes security cams for cars. It is trying to crack down on Chinese counterfeiters. It brought a prior lawsuit against a wide range of defendants, including GoDaddy. InvenTel voluntarily dismissed GoDaddy from that suit. It brought a second round of litigation involving a new counterfeit site allegedly by the same bad guys, www.hdminorcarnbuy.com, a domain name registered via GoDaddy. Initially, InvenTel claimed GoDaddy hosted the site as well, but it dropped that claim. So the suit against GoDaddy devolves into a simple question: can GoDaddy be liable for counterfeiting activity for registering the domain name?

The answer is no. This is wholly unsurprising because most of these issues were litigated and resolved in the 1990s, making this an old school case. On the plus side, it’s a nice reminder that the law hasn’t changed in the past two decades.

Federal Trademark Infringement. In the ACPA, Congress provided a safe harbor for domain name registrars (15 U.S.C. ยง 1114(2)(D)(iii)). This safe harbor hasn’t been litigated very often, so this is a rare but otherwise unremarkable opinion applying the safe harbor. The court says:

“The only pleaded basis for GoDaddy’s knowledge that the Website would be used to infringe is the Li Defendants’ conduct using other websites and the Prior Action. But GoDaddy’s domain name registration system is automatic. Therefore, without a warning that the specific URL being registered would be used for an illicit purpose, GoDaddy did not have a “bad faith intent to profit” from the automatic registration of ‘www.hdmirrorcambuy.com.’ In other words, failing to prevent its computer system from registering the Website does not constitute ‘bad faith.’ Plaintiff provides no basis for the proposition that GoDaddy must predict which URLs will be used for infringement purposes and proactively stop them from being registered.”

To be clear, I don’t think this passage supports the inverse proposition, i.e., that GoDaddy would be automatically liable if it had gotten a warning that a domain name was being used for illicit purposes.

State Direct Trademark Infringement. GoDaddy didn’t “use” the allegedly counterfeited goods.

State Indirect Trademark Infringement. The Ninth Circuit shut down registrar liability in the 1999 Lockheed v. NSI ruling. “GoDaddy does not control or monitor the instrument of infringement (i.e., the Website).”

Direct Copyright Infringement. As a registrar, GoDaddy doesn’t “copy” anything.

Indirect Copyright Infringement. There was no direct copyright infringement taking place when GoDaddy registered the domain name.

Direct Patent Infringement. GoDaddy didn’t make, use, or sell the counterfeit goods.

Indirect Patent Infringement. “GoDaddy permitting its computer system to automatically register the Website, even with knowledge of the Prior Action, is not an activity GoDaddy knew would ‘cause infringement.’ As previously stated, GoDaddy is not obligated to proactively guess which proposed domain names will likely be used for nefarious purposes.”

State Consumer Fraud Act. InvenTel wasn’t GoDaddy’s “consumer.”

The court summarizes:

“As to the automatic registration of the Website…that conduct cannot produce direct or contributory intellectual property liability on the facts of this case. GoDaddy did not have the requisite knowledge that the Li Defendants would use the Website to infringe on InvenTel’s intellectual property rights when it engaged in the only conduct at issue—providing domain name registration services. InvenTel cannot plausibly allege GoDaddy acted with the requisite knowledge, as InvenTel filed its Complaint without even notifying GoDaddy of the new Website. Even considering facts outside the Complaint set forth by InvenTel, GoDaddy could not be liable. InvenTel has not presented any theory under which GoDaddy is obligated to monitor and predict which websites might be used for infringing purposes. Even when the same individual registers multiple websites, it is the intellectual property holders’ responsibility to protect their property, not third parties’. Had InvenTel taken advantage of GoDaddy’ s takedown request procedures, and GoDaddy refused to deregister the Website (despite evidence of infringement), InvenTel may have a claim. But here, InvenTel ran to federal court without informing GoDaddy of the infringement. Having no notice of the infringement, liability will not attach because GoDaddy did not take any action with the requisite knowledge.”

A periodic reminder that even if the law doesn’t require notice-and-takedown, courts are unimpressed when plaintiffs could have solved their problems by sending takedown notices.

As far as I can tell, the court doesn’t distinguish between domain name registration and domain name hosting (as opposed to website hosting, which the court does distinguish). I wonder if the court would be more amenable to liability for domain name hosting. The above passage suggests it might be.

Trademark, copyright, and patent law all have discretionary fee-shifting provisions. Given the complete lack of merit in this case and the venerability of the legal principles it raised, I wonder if the court will be amenable to a fee-shift request from GoDaddy.

Case citation: InvenTel Products, LLC v. Li, 2:19-cv-09190-WJM-MF (D.N.J. Aug. 13, 2019)

By Eric Goldman, Professor, Santa Clara University School of Law

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