Plaintiffs may bring novel causes of
action for contributory cybersquatting and for contributory trademark
dilution, according to a recent ruling from the U.S. District Court for the
Western District of Washington. In so ruling, the district court refused to narrowly
read the Anti-Cybersquatting Consumer Protection Act (ACPA) and deemed contributory
dilution consistent with the Trademark Dilution Act.
Corp. v. Shah, 2011 U.S. Dist. LEXIS 2995 (W.D. Wash. Jan.
12, 2011) [enhanced version available to lexis.com subscribers], Microsoft
sued defendants who had allegedly registered domain names containing
Microsoft trademarks in order to drive
traffic to their website. Defendants were also alleged to have induced others
to engage in infringement and cybersquatting by providing instruction on how to
misleadingly use Microsoft marks to increase website traffic.
The district court recognized Microsoft's
cause of action for contributory cybersqatting, couching it in the ACPA's framework,
which required the additional element of bad faith; particularly, a
"cyber-landlord's" knowledge that vendors were illegitimately utilizing
the marketplace for domain names. The district court held
In essence, the contributory
cybersquatting claim alleges that Defendants induced others to use domain names
incorporating Microsoft marks. Defendants did not simply provide a marketplace
where a trade in domain names may take place, as was the case in Ford [Ford Motor Co. v. Great Domains.com, Inc., 177 F. Supp. 2d 635 (
E.D. Mich. 2001) [enhanced version]]. Rather, Defendants allegedly developed
and marketed a method, the sole purpose of which was to allow purchasers to
profit from the illicit use of Microsoft marks. Unlike the defendant in Ford, the Defendants in the case at hand
either knew or should have known that the purchasers of the "Magic Bullet
System" could not have had a legitimate reason for purchasing the method.
Therefore, it is likely that Plaintiff has made a sufficient showing of
Defendants' bad faith under the heightened standard employed by the Ford court.
The district court also recognized a cause of action for contributory trademark dilution. The district court stated:
contributory dilution is a
tort-like cause of action which naturally lends itself to the theory of
contributory liability. In the case at hand, Defendants are alleged to have
encouraged others to utilize the famous mark in such a way that could cause
dilution of the Microsoft mark. The Trademark Dilution Act seeks to provide a
mechanism through which owners of famous marks may seek protection against
exactly the kind of harm - in the form of blurring or tarnishing - that is
alleged in the present case. It would be inconsistent with the Trademark Dilution
Act to prohibit a cause of action for contributory dilution.