We previously posted about another legal issue that was keeping Facebook busy, namely, a dispute over its use of the term “timeline” which it settled out of Court.
Meanwhile (and more than 2000 miles away), on 30 April 2013 the United States District Court of the Northern District of California handed down a report and recommendation awarding Facebook more than US$2.8 million against 11 defendant ‘typosquatters’. We think US$2.8 million might help soften the blow to the legal budget for using the term “timeline”.
‘Typosquatting’ is a form of cybersquatting which involves registering domain names based on common misspellings or misspellings based on typing errors, which Internet users may enter by accident when looking for an existing website. Typosquatters might buy a typo domain in order to try and sell it back to the brand owner, to make pay-per-click revenues from mistaken navigations to its site, to redirect traffic to another site or to otherwise hijack the brand.
Facebook filed a complaint in July 2011 on the basis of 105 domains which included or misspelled “facebook.com”, including <facebobk.com>, <fqcebook.com>, <faxebook.com>, <facvebook.com>, <facebooj.com>, <facebookwelcome.com>, <faceboocklogin.com>, <wwwfacebookde.com> and <facebokcasino.com>. Facebook filed for default judgment seeking injunctive relief, the transfer of all infringing domain names and statutory damages pursuant to the United States’ Anticybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d) (ACPA).
A defendant will be liable under the ACPA if he or she registers, traffics in or uses a domain name that is identical or confusingly similar to a famous or distinctive mark owned by the plaintiff with a bad-faith intent to profit from the mark. In determining bad faith under the ACPA, the Court may consider whether the mark is in fact famous or distinctive, and whether the defendant:
- has any trade mark or other IP rights in the domain name;
- has registered their own legal name or a name commonly used to identify them;
- has used the domain name in connection with the bona fide offering of any goods or services;
- has used the mark in a bona fide non-commercial or fair use way on the site itself (ie for the purposes of lawful criticism or review)
- intends to divert consumers to a site that could harm the goodwill of the mark, either for commercial gain or with intent to tarnish or disparage the mark by creating a likelihood of confusion as to the site’s source;
- offers to sell the domain to the rights holder without having used it (or a pattern of such conduct);
- provided false contact information when applying to register the domain name; and
- has registered or applied for multiple typesquatting domain names.
One of the defendants listed is “Reggie Bush”, who, according to the complaint, resides in California. We do not know whether this is the same Reggie Bush as the running back for the Detroit Lions of the NFL, who once dated Kim Kardashian, and also manages to find time on the side to register typosquatting domains… or whether this might be an example of a registrant providing false contact information (see consideration (7) above). The Magistrate also notes that another defendant is a serial cybersquatter who has been sued by other mark owners for virtually identical conduct.
None of the defendants formally appeared in the action nor responded to Facebook’s complaint or motion for default judgment.
The ACPA provides for statutory damages of $1000 – $100,000 per infringing domain name. While Facebook sought the maximum statutory damages, totalling over $26 million, the Magistrate awarded between $5,000 and $1.34 million per defendant, a total of $2.8 million.
In its initial complaint, Facebook also claimed for trade mark infringement, false designation of origin, trademark dilution, breach of contract and tortious interference with prospective economic advantage. It appears it decided to pursue default judgment only under the ACPA. It’s breach of contract claim is interesting, based on some of the defendants being registered Facebook users, and having breached it Statement of Rights and Responsibilities by:
- misleading Facebook users;
- using Facebook’s marks or confusingly similar marks without Facebook’s permission;
- improperly collecting information from Facebook users; and
- registering, using and otherwise trafficking in typosquatter domain names.
Unfortunately, due to the default judgment based solely on aspects of the ACPA, we will not have a judgment to review which addresses the potential breach of Facebook’s terms and conditions.