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.