By Jeff Pietsch
Last year, Google lost the first round of a court battle against Vulcan Golf, a golf club manufacturer, in a trademark and cybersquatting dispute. In that decision, the US District Court in Illinois ruled that Google could be sued for its role in serving ads on websites that use domain names that violate trademark and cybersquatting laws. In the latest round of decisions on this case, the court denied class certification damaging the plaintiffs’ hopes in prevailing in this matter.
This case was originally brought against Google by Vulcan Golf which claims that Google is encouraging and profiting from owners and users of domain names that violate cybersquatting laws. Vulcan Golf sued Google on the basis that Google is benefitting from and encouraging cybersquatters by capitalizing on valid trademarks, such as Vulcan Golf.
Vulcan Golf claimed that Google violated the Anticybersquatting Consumer Protection Act (ACPA). The ACPA, established in 1999, provides trademark holders protection from cybersquatters. Cybersquatting is registering and using a domain name in bad faith with the intent of profiting from the goodwill created by another’s trademark. Cybersquatters often seek to sell the domain name to the trademark holder at an inflated price. In the early days of the internet, who ever registered a domain first had rights to that domain name. Many individuals bought names hoping to later sell them for exorbitant sums of money. For example, the generic domain name business.com sold for 7.5 million dollars in 1999. Concerned about this environment as it relates to federally registered trademarks, Congress passed the ACPA. The ACPA gives trademark owners legal remedies against defendants who cybersquat.
In this case, Vulcan Golf is not concerned with cybersquatters who seek to sell domain names, but, rather, they are concerned with cybersquatters who provide empty sites, known as parked domains, that feature advertisements from Google’s AdSense program. For example, a cybersquatter may own a web address that is similar to the trademark but slightly misspelled. When a user mistakenly types in the wrong web address, an empty page appears featuring ads from Google. These ads will be targeted to the audience that typed in the incorrect domain name. If the user clicks on the ads, the domain name owner and Google earn money. Vulcan Golf claims since Google is benefiting from the illegal domain names, they are violating the ACPA.
In the first round of this case, the court ruled that Google may be liable under the ACPA even if they do not own, register or use the infringing domain names. The court found it is plausible that Google participated in the “trafficking in” of an infringing domain name. The Court stated, “Google pays registrants for its use of the purportedly deceptive domain names, provides domain performance reporting, participates in the testing of domain names, uses semantics technology to analyze the meaning of domain names and select revenue maximizing advertisements and controls and maintains that advertising.”
Based on this decision, the plaintiffs sought to certify a class of plaintiffs that consisted of any individual or owner of a mark that is identical to or similar to the parked domain name that has been “registered, trafficked in or used for commercial gain” by Google. The court denied certification of the class for three reasons. First, the court states that proving ownership of each respective trademark would be unwieldy. The plaintiffs argued that the court should base ownership of trademarks on the USPTO’s database of trademarks, but the court recognized that such a database is not a definitive collection of trademark ownership information. The court would likely have to conduct hearings on potentially thousands of putative class members rendering the process unmanageable. Second, the court held that determination of each trademark’s distinctiveness would be fact specific and would require the court to examine thousands of individual trademarks. The plaintiffs argued that the court should look to trademark registration to determine distinctiveness. But as the court points out, trademark registration is not proof of distinctiveness but rather only rebuttable evidence of distinctiveness. Finally, the court noted that affirmative defenses related to each trademark in the putative class would add another level of analysis in determining the final class.
Because each trademark in the putative class would require individual analyses to determine the class, the court denied class certification to the plaintiffs. Although denial of class certification is not a dismissal of the case, it will likely dampen this and future claims. Without class certification, each individual trademark owner must file its own claim for damages which may not be worth pursing on an individual basis.
Jeff Pietsch is an associate with Weintraub Genshlea Chediak Tobin & Tobin practicing in the Business, Securities & Commercial Transactions and Intellectual Property groups. Jeff focuses his practice on representing public and private companies with business transactions and intellectual property matters.