On April 6, 2009, Ubid, Inc. (?Ubid?) filed a cybersquatting lawsuit against The Godaddy Group, Inc. and its domain name registrar subsidiary company, Godaddy.com, Inc. (together ?Godaddy?) in the U.S. District Court for the Northern District of Illinois. See UBID, Inc. v. The GoDaddy Group, Inc. et al, Case No. 09-cv-02123 (N.D. Ill.). A copy of the complaint can be viewed here.

Ubid describes itself as the ?leading asset recovery solutions company for the world?s most trusted brands.? Or put in more layman?s terms, Ubid offers an online auction platform for sellers to sell off bulk quantities of excess inventory to the highest bidder. Ubid?s flagship sites are ubid.com and redtag.com. Ubid also has federal trademark registrations for several of its trademarks including UBID.COM, UBID, and REDTAG.COM.

Godaddy.com is the domain name registrar that claims to manage over 29 million domain names. As part of its domain name management services, Godaddy offers several programs for domain name registrants. One such program is a ?Parked Page Service? ? where Godaddy will ?park? the domain name for its registrant customer and will put up a web page (or ?landing page? as its sometimes called) which showcases various advertisements which generate pay-per-click revenue (or PPC revenue).

One interesting nuance regarding this service is that under the ?Domain Name Registration Agreement? between Godaddy and its domain name registrant customers, Godaddy is authorized to redirect the registrant?s website for purposes of placing advertisements on the registrant?s webpage and reserves the right to retain all of the revenue from such advertising (emphasis added):

Ubid alleges in its complaint that Godaddy, through this Parked Page Service, is acting as the ?authorized licensee of the registrants? with respect to such domain names. Ubid?s complaint lists over 100 domain names containing the words ?ubid? or ?redtag? that are allegedly taking part in this service

Another service offered by Godaddy is its CashParking service. This is essentially the same monetization concept as above except that the domain name registrant pays a fee to Godaddy to have the pay-per-click advertising (courtesy of Google) placed on the domain name?s website and the revenue is then split between the registrant, Godaddy, and Google. Ubid?s complaint lists a few websites that it alleges is using this service including as ubidmotor.com and ubididoit.com.

Finally, the complaint mentions Godaddy?s Auction services, where the company helps sell domain names. Ubid?s complaint focuses on approx. 25 domain names that Ubid allegedly sold on February 9, 2009, including ubidsold.com, ubid-online.com, and ubid.ws.

Under the Anti-Cybersquatting Protection Act (15 U.S.C. §1125(d)(1)(A)), a person is liable to a trademark owner if such person, with a bad faith intent to profit from the mark, ?registers, traffics in, or uses a domain name? that is identical or confusingly similar to a mark that is distinctive at the time of registration.

What makes this case unusual is that normal cybersquatting lawsuits (especially most cases these days) will go after the domain name registrants for placing these types of pay-per-click advertising on their websites in order to monetize their domain names. In this case, however, Ubid is going after the domain name registrar itself (and bypassing the registrants).

While Godaddy clearly did not register these domain names, by focusing on Godaddy?s right to place ads on parked pages and to keep the revenue from its Parked Page Service (or its sharing of revenue from its CashParking service), Ubid argues that Godaddy is ?using? these domain names with a bad faith intent to profit ? just like any domain registrant engaging in the same conduct. In addition, Ubid characterizes Godaddy?s role with respect to these domain names using these services as one of an ?authorized licensee? of the domain name registrants in order to argue that Godaddy?s actions also constitute ?trafficking? of such domain names. See 15 U.S.C. §1125(d)(1)(E), which defines the term ?traffics in? as referring to ?transactions that include, but are not limited to, sales, purchases, loans, pledges, licenses, exchanges of currency, and any other transfer for consideration or receipt in exchange for consideration.? (emphasis added). Furthermore, Ubid also argues that Godaddy?s Auction services allows Godaddy to ?traffic? in such domains with a bad faith intent to profit by being involved in the sale of infringing domain names.

Most importantly, however, Ubid?s complaint, by focusing on Godaddy?s profiting from these allegedly infringing domain names that it is maintaining for registrants, gets around the ?cybersquatting immunity? for domain name registrars set forth in 15 U.S.C. §1114(D)(iii) (?A domain name registrar, a domain name registry, or other domain name registration authority shall not be liable for damages under this section for the registration or maintenance of a domain name for another absent a showing of bad faith intent to profit from such registration or maintenance of the domain name.?)

Ubid is seeking Godaddy's profits, or alternatively statutory damages under 15 U.S.C. §1117(d) ($100,000 per domain name), for each of the domains cited in its complaint along with the injunctive relief to stop Godaddy from further use or trafficking in of domains names infringing Ubid?s marks.

With Ubid going up against a major company like Godaddy (definitely not your normal cybersquatter), this should be an interesting case. I would expect that Godaddy will at least answer the complaint (unlike OnlineNic did with Verizon's cybersquatting complaint).

As a sidenote, does anybody else find it odd that Godaddy?s Domain Name Registration Agreement, which allows Godaddy to put ads on a registrant?s parked web page, nonetheless, appears to hold the registrant responsible ?for ensuring that any content placed on Your Parked Page by You or anyone on Your behalf conforms to all local, state, federal, and international laws.? So if a company sues Godaddy for allegedly infringing PPC ads appearing on a parked page (ads that Godaddy, not the registrant, was responsible for putting up), the registrant is held responsible for such infringement?

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