Court rules that world’s largest domain name registrar can face a lawsuit in Illinois.
The United States Court of Appeals for the Seventh Circuit has dealt a blow to domain name registrar Go Daddy, deciding that Go Daddy should face a cybersquatting lawsuit filed by uBid in Illionis.
uBid, which is based in Illinois, sued Go Daddy because some of the registrar’s customers registered typos of uBid.com and these domains were parked with advertisements by Go Daddy.
Go Daddy asked for the case to be dismissed for lack of lack of personal jurisdiction. A district court agreed with the company, but the Court of Appeals reversed that decision yesterday (pdf).
The court ruled that Go Daddy targets Illinois residents in advertising, and its national advertising campaigns are meant to target consumers in all states:
While GoDaddy has taken pains to limit its physical presence to Arizona, its virtual presence in the rest of the country cannot be ignored. GoDaddy has imprinted itself on the national consumer consciousness with a series of television advertisements featuring the “GoDaddy Girlsâ€â€”celebrities who invite viewers to register a domain name at a low price…In Illinois, GoDaddy has put up billboards in the home ballparks of the Chicago Cubs and White Sox, and fans who attend Chicago Bulls or Blackhawks games or races at the Chicagoland Speedway have been treated to GoDaddy ads as well.
The court compared it to a case in which Hustler was sued for libel. Because the adult magazine was sent to 10,000-15,000 subscribers in the state where it was sued, the Supreme Court ruled that the publisher could face a lawsuit there:
The same reasoning applies here. GoDaddy has thoroughly, deliberately, and successfully exploited the Illinois market. Its attempt to portray itself either as a local Arizona outfit or as a mindless collection of servers is unconvincing.
This may be a scary notion for internet companies, and the court acknowledged this…
The concept of a geographical nexus is harder to apply to cases like this one, where the alleged wrong can fairly be characterized as occurring anywhere the Internet is accessible. In other words, uBID has the same claim against GoDaddy whether the customer who registered ubidd.com or another similar domain name did so from Illinois, from Wyoming, or from China. One conclusion we might draw from this fact is that a physical geographical nexus is simply less important in cases where the alleged harm occurred over the Internet.
…but in this case Go Daddy’s size may have come back to haunt it:
The burden of defending a lawsuit in Illinois is minimal for GoDaddy, a corporation with a broad enough reach to operate and market its services on a national scale.
The registrar has successfully moved another lawsuit to Arizona, but in that case it was filed by customers who agreed to that jurisdiction when registering their domains, not by a third party.
Louise says
If GoDaddy wants to profit from parked pages, it should review domains before it places ads, same as everybody else!
Batfan says
Just idiotic. uBid will get nothing out of this. Any parked GoDaddy domains show GoDaddy ads. They’ll end up turning over the typo domains and that’s it.
Deke says
I agree with Louise.
This notion should also be applied to ISPs like Verizon.
If domainers are liable for TM infringement, then the registars, ISPs, and other blatant infringers should be liable also.
These registrars and ISPs make good domainers look bad. It’s damn near destroying the industry, and there is no excuse for it.
GoDaddy knew what they were doing with on both their domain parking platform and placing ads on unpaid domains or domains where the DNS had not been changed away from GoDaddy’s nameservers. They knew there would be plenty of ads placed on plenty of trademark domains, but they wanted the money so bad they could not walk away from it, and it IS big money.
It time to clean this market up folks so that the honest folks can conduct business!
The Original Domainer says
The difference is that Godaddy renews for themselves and then auctions off typos for sometimes thousands of dollars over the renewal costs.
mansour says
Take my word. GoDaddy will settle this case faster than a lightning. looking for a buyer with deep pockets, they cannot afford to have any road blocks in their way. They are strapped for cash. Otherwise why have they sent me 9 different emails in September alone offering a 20% discount for any purchase over $75. This case with Ubid became a big can of worms they can’t keep open.
diapermack says
Hello – uBid is in CH 11 – maybe this will save them!