To prevail on its ACPA cybersquatting counterclaim, defendant "must show (1) registration of a domain name, (2) that was identical or confusingly similar to a mark that was distinctive at the time of registration, and (3) bad faith intent at the time of registration." GoPets Ltd. v. Hise, 657 F.3d 1024, 1030 (9th Cir. 2011) (citing 15 U.S.C. § 1125(d)(1)) (internal quotation marks omitted) (emphasis in original).[3]
The Ninth Circuit addressed the meaning of "registration" in GoPets. The domain name gopets.com was first registered by defendant Edward Hise in March 1999. Id. at 1026. GoPets Ltd. first used the GoPets mark in August 2004. Id. at 1027. In December 2006, Hise transferred the registration of the gopets.com domain name to co-defendant Digital Overture, a corporation he co-owned. Id. at 1028.
GoPets Ltd. asserted a cybersquatting claim under the ACPA. It conceded that gopets.com was not identical to a protected mark when Hise first registered the domain name in 1999, but argued that the transfer of the domain name to Digital Overture in 2006 was a "registration" under the meaning of the ACPA. Id. at 1030. The court disagreed, holding that Digital Overture's 2006 re-registration of gopets.com was not a registration under § 1125(d)(1). Id. at 1032. The court noted that it was "undisputed that [] Hise could have retained all of his rights to gopets.com indefinitely if he had maintained the registration of the domain name in his own name." Id. at 1031. It found that there was "no basis in ACPA to conclude that a right that belongs to an initial registrant of a currently registered domain name is lost when that name is transferred to another owner." Id. Doing so would effectively make rights to many domain names inalienable, whether "by gift, inheritance, sale, or other form of transfer," in contrast to the general rule that "a property owner may sell all of the rights he holds in property." Id. at 1031-32. Accordingly, GoPets concluded that "[b]ecause [] Hise registered gopets.com in 1999, long before GoPets Ltd. registered its service mark, Digital Overture's re-registration and continued ownership of gopets.com does not violate § 1125(d)(1)." Id. at 1032.
Defendant argues that GoPets is distinguishable, because in GoPets Hise transferred the domain name to an entity he co-owned, and here Lurie purchased airfx.com from an unrelated third party. According to defendant, the purpose of the ACPA will be undermined if a cybersquatter who purchases a domain name in bad faith is immune from liability simply because the domain name he purchased existed before a mark was distinctive. Nothing in the language of GoPets indicates that it should be read as narrowly as defendant suggests. GoPets did not distinguish between transfers of a domain name to related parties and other kinds of domain name transfers. To the contrary, GoPets broadly reasoned that if an original owner's rights associated with a domain name were lost upon transfer to "another owner," the rights to many domain names would become "effectively inalienable," a result the intention of which was not reflected in either the structure or the text of the ACPA. Id. at 1031-32.
We find GoPets squarely on point. It is undisputed that airfx.com was initially registered on March 21, 2003 by Bestinfo. It is also undisputed that ASE's first use in commerce of the AirFX mark was June 2005 and that Elliot purchased airfx.com on February 2, 2007. Under these facts, airfx.com was registered more than two years before the AirFX mark existed. Thus, under GoPets, plaintiffs' re-registration of airfx.com in February 2007 "was not a registration within the meaning of § 1125(d)(1)." Id. at 1032. Rather, because Bestinfo registered airfx.com "long before [defendant] registered its service mark," plaintiffs' registration and ownership of airfx.com "does not violate § 1125(d)(1)." Id. Plaintiffs are therefore entitled to summary judgment on defendant's cybersquatting counterclaim.
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