The World in U.S. Courts: Winter 2015 - Anti-Cybersquatting Consumer Protection Act ("ACPA")
Denso, a Japanese corporation, registered the domain name denso.com for its business but let the registration lapse. A week later, the domain name was registered by a Russian company, which then transferred it several times until it was owned by a UK entity. Denso’s efforts to reclaim the domain, including a successful arbitration under the auspices of the World Intellectual Property Organization and a lawsuit that was successfully prosecuted through to a favorable decision by the Supreme Court of the Russian Federation. Still, Denso was unable to enforce the orders and recover the domain from the current registrant.
The denso.com domain is maintained in a domain-name registry operated by VeriSign, Inc., which has an office in the Northern District of California. Denso filed suit in federal Court in that district under the ACPA, which provides rights to holders of marks for injury to their property. The statute includes a specific prohibition against “cybersquatting,” the bad-faith use of a domain name in order to profit from the goodwill of a protected mark belonging to someone else. The Court found that Denso’s complaint alleged such violations. The ACPA also provides that in cases where a plaintiff cannot obtain personal jurisdiction over a defendant, it may initiate an “in rem” action—technically against the domain name itself—to obtain a Court order requiring the domain name registry to transfer ownership, if a violation of the statute is found.
As a preliminary matter, the Court found that Denso satisfied the requirement that it could not obtain personal jurisdiction over the current registrant. The Court first noted that the registrant’s actions in maintaining the domain name through VeriSign were inadequate to establish jurisdiction within the meaning of the ACPA. It then observed that the registrant had apparently engaged in informal communications with the Court and had arranged for an initial appearance by counsel, who soon withdrew, but concluded that these actions were likewise inadequate to support personal jurisdiction over an individual claiming some interest in disputed property in an in rem case. Indeed, the Court reviewed the communications and actions and found that they suggested an intent not to waive jurisdictional defenses.
In reaching this conclusion, the Court noted that, under the usual analysis, personal jurisdiction might well attach merely from the act of registration. It concluded that the ACPA standard should be stricter, however, because otherwise the act of registration would preclude the in rem action, which the Court concluded was a result not intended by the U.S. Congress.
[Editor’s note: Denso Corp. v. Domain Name Denso.com is also discussed in the Personal Jurisdiction section of this report.]