Microsoft Corp. v. Shah

Last updated
Microsoft Corp. v. Shah et al.
Washington-western.png
Court United States District Court for the Western District of Washington
Full case nameMicrosoft Corporation v. Amish P. Shah, Jose A. Rivera, Digispace Solutions LLC, YMultimedia LLC, and DOES 1-50
DecidedJuly 11, 2011
Citation(s) Case No. C10-0653 RSM
Transcript(s) On Recap
Holding
Motion to dismiss denied; case settled out of court
Court membership
Judge(s) sitting Ricardo S. Martinez

Microsoft Corp. v. Shah was an Anticybersquatting Consumer Protection Act (ACPA) case heard before the United States District Court for the Western District of Washington. Microsoft sued the defendants, Amish Shah and others, for, among other charges, contributory cybersquatting for encouraging others, through videos and software, to infringe on Microsoft's trademarks. The case was settled out of court in July 2011 after judge Ricardo S. Martinez denied Shah's motion for dismissal. [1] Legal observers suggested that, if upheld, the case would prove notable for the court's expansion of the ACPA liability to include contributory cybersquatting. [2] [3] [4]

Contents

Background

Amish Shah, with help from the other defendants, registered domain names containing Microsoft trademarks, and induced others to register similar domains. Some of these domains used possible misspellings of trademarked Microsoft names. [5] Consumers seeking Microsoft products could mistakenly end up at the defendants' website and be tricked into downloading the defendants' products. In addition to cybersquatting, the defendants also produced instructions (including a video) on how to use Microsoft's marks in a misleading manner to maximize traffic to the website. Shah also offered a software system that enabled buyers to easily create websites incorporating Microsoft's marks.

On the basis of the latter, Microsoft made claims for contributory cybersquatting and contributory trademark dilution, in addition to cybersquatting, trademark dilution, and trademark infringement. Defendants moved to dismiss the claims for contributory cybersquatting and contributory dilution, arguing that such causes of action are not recognized under law. The ACPA created liability only for registering, trafficking, or using a domain name that is identical or confusingly similar to a protected mark. Additionally, the ACPA required proof that the defendant acted with "bad faith with intent to profit from the mark." [6]

Opinion of the Court

Judge Ricardo Martinez decided against dismissal on January 12, 2011, affirming that Microsoft had a possible case against Shah. [7] The court first noted that while contributory trademark infringement is well established, the ACPA, unlike trademark law, required a showing of "bad faith intent."[ citation needed ] Previous courts, notably in Ford Motor Co. v. Greatdomains.com , [8] reasoned that a higher standard was required for claims of contributory cybersquatting.

The court noted that the decision of the Ford court indicated that the court had recognized a cause of action under contributory cybersquatting, but found in favor of GreatDomains.com since Ford failed to show the requisite bad faith by GreatDomains.com.[ citation needed ] The Judge noted that in this particular case, the facts clearly demonstrated bad faith with an intent to profit, and as such denied the defendants' motion to dismiss.[ citation needed ] While the ACPA does not explicitly address causes of action under contributory liability, the court noted that action under the ACPA is a tort-like cause of action, and traditional principles of tort law impose liability on those who assist or contribute in the infringement.[ citation needed ]

Impact

The court's decision notably expanded liability under the ACPA to include contributory damages, basing its decision on traditional principles of liability of tort law. Several scholars noted that the court's decision provides a precedent for expanding ACPA liability, beyond actions explicitly prohibited by the text of the law. [2] [4] This was particularly notable since Microsoft did not have to prove that the defendant actually sold any domain names to third parties or helped third parties acquire domain names. [4]

An attempt was made in 2009 to sue GoDaddy, a domain registrar, under a different charge of "contributory cybersquatting". In this case, the Northern District Court of California ruled in favor of GoDaddy in January 2012. [9]

See also

Related Research Articles

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Trademark dilution is a trademark law concept giving the owner of a famous trademark standing to forbid others from using that mark in a way that would lessen its uniqueness. In most cases, trademark dilution involves an unauthorized use of another's trademark on products that do not compete with, and have little connection with, those of the trademark owner. For example, a famous trademark used by one company to refer to hair care products might be diluted if another company began using a similar mark to refer to breakfast cereals or spark plugs.

The Anticybersquatting Consumer Protection Act (ACPA), 15 U.S.C. § 1125(d),(passed as part of Pub. L. 106–113 ) is a U.S. law enacted in 1999 that established a cause of action for registering, trafficking in, or using a domain name confusingly similar to, or dilutive of, a trademark or personal name. The law was designed to thwart "cybersquatters" who register Internet domain names containing trademarks with no intention of creating a legitimate web site, but instead plan to sell the domain name to the trademark owner or a third party. Critics of the ACPA complain about the non-global scope of the Act and its potential to restrict free speech, while others dispute these complaints. Before the ACPA was enacted, trademark owners relied heavily on the Federal Trademark Dilution Act (FTDA) to sue domain name registrants. The FTDA was enacted in 1995 in part with the intent to curb domain name abuses. The legislative history of the FTDA specifically mentions that trademark dilution in domain names was a matter of Congressional concern motivating the Act. Senator Leahy stated that "it is my hope that this anti-dilution statute can help stem the use of deceptive Internet addresses taken by those who are choosing marks that are associated with the products and reputations of others".

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References

  1. Microsoft Corp. v Amish P. Shah(W.D. Wash.July 20, 2011). Text
  2. 1 2 Elina Saviharju (February 14, 2011). "Federal District Court Denies Motion to Dismiss Contributory Cybersquatting and Contributory Dilution Claims".
  3. Michael Atkins (January 19, 2011). "Western District Denies Dismissal of Novel Trademark Theories".
  4. 1 2 3 Venkat Balasubramani (January 19, 2011). "Court Allows Microsoft's Claims for Contributory Cybersquatting and Dilution to Move Forward -- Microsoft v. Shah".
  5. Ashby Jones, "On Microsoft and ‘Contributory Cybersquatting", Wall Street Journal Law Blog, 14 January 2011.
  6. 15 U.S.C.   § 1125(d)(1)(A)(i)
  7. Microsoft Corp. v Amish P. Shah(W.D. Wash.January 12, 2011). Text
  8. Ford Motor Co. v. Greatdomains.com(E.D. Mich.January 12, 2011). Text
  9. "Godaddy In Suit For Cybersquatting & Contributory Cybersquatting", Tiger Intellectual, 12 January 2012.