ACPA applies to re-registrations

In an issue of first impression, the court held that although a company was not the initial registrant of the relevant domain name, it could nonetheless be held liable for cybersquatting because the Anti-Cybersquatting Consumer Protection Act, or ACPA, encompasses subsequent re-registrations as well.

Background

Prudential Insurance Company of America owns several registered trademarks on the term PRU and other PRU-formative marks. After discovering that Shenzhen Stone Network Information Ltd., or SSN, had registered the domain name PRU.COM, and that users who visited PRU.COM were routed to a page that included advertisements displaying Prudential’s trademarks and the marks of Prudential’s competitors, Prudential sued SSN.

Prudential alleged, among other claims, that SSN violated the ACPA by registering a domain name identical to Prudential’s distinctive mark with the bad faith intent to profit. Although SSN was not the initial registrant of the PRU.COM domain name, the district court determined that SSN could nonetheless be held liable for cybersquatting because the ACPA encompasses subsequent re-registrations as well. The district court concluded that SSN possessed the bad faith intent to profit from the disputed domain name and granted Prudential’s motion for summary judgment.

Jurisdiction

Zhaoyuan Zhang is the CEO of SSN and is responsible for registering and managing the PRU.COM domain name on SSN’s behalf. When Zhang registered the domain name with GoDaddy Inc., he agreed to submit to jurisdiction in Arizona for various types of domain name disputes.

Pursuant to the ACPA, a trademark owner may only proceed in rem against a domain name if the mark owner cannot locate or establish personal jurisdiction over the current domain name holder. Zhang argue that, because Prudential could establish personal jurisdiction over Zhang in Arizona, the district court erred in proceeding in rem against the PRU.COM domain name.

However both Zhang and SSN repeatedly claimed throughout this litigation that SSN owned PRU.COM. Therefore, the district court did not err by finding that Zhang, in his individual capacity, was not a proper defendant in this action. Further, GoDaddy’s Registration Agreement does not require the registrant to submit to jurisdiction in Arizona for all legal disputes.

Nothing in the record suggests that Prudential could have obtained personal jurisdiction in the United States over SSN, a Chinese company that operates almost exclusively in China. Prudential thus satisfied the requirements to proceed in rem in the Eastern District of Virginia because the domain name registry is located there. And the district court did not err in determining that the relevant time for considering an ACPA plaintiff’s ability to obtain personal jurisdiction over the would-be defendant is at the time of filing.

Registration

SSN contends that its re-registration of the PRU.COM domain name in 2017 is not a qualifying “registration” within the meaning of the ACPA because an unaffiliated Texas company initially registered the PRU.COM domain name before Prudential trademarked the term PRU in the United States. This is an issue of first impression for this court. The other circuits to consider the issue have split on the meaning of the term “registers” and its derivatives.

This court joins the Third and Eleventh Circuits in holding that the term “registers” and its derivatives extend to each registration of a domain name, including the initial registration and any subsequent re-registrations. Where a successive registration of a disputed domain name postdates the trademark registration of the corresponding mark, the mark owner may show that the successive registration was done in bad faith.

Bad faith

To prevail on a cybersquatting claim, a plaintiff must show that (1) the party using the domain name “had a bad faith intent to profit from using the … domain name” and (2) the domain name “is identical or confusingly similar to, or dilutive of [a] distinctive and famous … [m]ark.” Here, there is no dispute that PRU.COM is confusingly similar to Prudential’s trademarked PRU. Thus, the sole and dispositive issue on summary judgment is whether SSN had a bad faith intent to profit from using the PRU.COM domain name. Out of the nine non-exclusive factors a court “may consider” when determining bad faith, the court finds that eight of the factors favor Prudential.

Safe harbor

SSN failed to satisfy the statute’s safe harbor provision. First, SSN’s self-serving denials of subjective belief that its use of the PRU.COM domain name was lawful are insufficient to defeat summary judgment absent objective corroboration Second, SSN did not have reasonable grounds to believe that its registration of the PRU.COM domain name was otherwise lawful.

Affirmed.

The Prudential Insurance Company of America v. Shenzhen Stone Network Information Ltd., Case No. 21-1823, Jan. 24, 2023. 4th Cir. (Thacker), from EDVA at Alexandria (Ellis). Benjamin S. Barlow for Appellant. Mark Van Buren Partridge for Appellee. VLW 023-2-024. 40 pp.