A Californian Federal Court(1) recently awarded Facebook $2.8million in damages in a case that involved 10 holders of domain names and 105 contested names.
The Court based its decision on the Anticybersquatting Consumer Protection Act (ACPA). This Act aims to crack down on the activities of cybersquatters and render legally responsible any person who, in bad faith, registers a domain name that is similar or identical to a trademark, well-known or otherwise, with the aim of making a direct or indirect profit. The text specifies that fines can be imposed from $1,000 to $100,000 per domain name.
Facebook had requested the maximum amount in damages, i.e. $100,000 per counterfeit domain name without differentiating between varying levels of abuse. Judgment was rendered by default since none of the accused appeared in court or even responded to Facebook’s complaint.
In order to evaluate the damages awarded against each of the defendants, the Court based its criteria on the ACPA but also on the circumstances of each individual case. In practice, even if all the defendants had acted in bad faith with deliberate intent, the Court decided to distinguish between differing degrees of malevolence and abuse.
The factors taken into account by the Court notably included:
- The number of counterfeit domain names: the Court considered that the number of counterfeit domain names held by each defendant was an indicator of bad faith and fixed thresholds from $5,000 to $25,000 according to the number of domain names registered by each of the accused.
- The way in which the word “Facebook” had been spelled: damages were doubled for defendants who had registered a domain name with the aim of deceiving consumers into thinking that they were accessing the official Facebook site, leading them moreover into divulging personal details.The Court awarded a further $5,000 in damages against cybersquatters who had left the spelling of the word Facebook unchanged. In addition, the fact of using the Facebook trademark correctly spelled alongside other words also spelled correctly was deemed to be even more misleading and was penalized by an increased fine of $10,000 per domain name.
- The track-record of the counterfeiter: the amount of damages was also doubled for cybersquatters or typosquatters guilty of previous similar offences.
In this way, the Californian Federal Court applied in an appropriate manner the principles established by the ACPA, whilst sending a clear and dissuasive message to cybersquatters and typosquatters who attempt to misuse well-known internet trademarks.
Facebook is not the first company to act on the basis of the ACPA text. Other companies such as Microsoft(2) have already based their lawsuit on this text in the past in order to protect their on-line presence and their reputation. Rights holders protected in the United States can file a civil action based on the ACPA text irrespective of the defendant’s location. The judicial process is certainly a lot longer and more costly than a UDRP case, but the amount in damages awarded by American judges suggests that lawsuits based on the ACPA are likely to increase in future according to the specific aspects of each case. To be considered on an individual basis.
(1) California’s Northern District Federal Court, April 30 2013.
(2) Washington District Federal Court, Microsoft Corp. v Shah, July 20 2011.