December 28, 2011 12:27pm PT by Eriq Gardner
Film Academy Targets GoDaddy Founder As Legal Fight Heats Up (Exclusive)
In recent weeks, GoDaddy has had a huge target on its back. The Internet domain name registration giant broke ranks with many in the tech community by supporting the Stop Online Piracy Act (SOPA). That led to a boycott against GoDaddy organized by social community site Reddit, which contributed to more than 70,000 of GoDaddy’s customers taking their business elsewhere.
Facing a massive backlash, GoDaddy withdrew its SOPA support, but few were impressed with the company’s half-hearted about-face – especially upon reports that GoDaddy was unfairly attempting to impede those customers who wished to move away.
Meanwhile, as all of this has been happening, GoDaddy has been engaged in a bare-knuckled litigation fight with the Academy of Motion Picture Arts and Sciences, which puts on the Oscars each year. In May 2010, AMPAS sued GoDaddy, accusing it of facilitating trademark infringement from unscrupulous cybersquatters. The case has survived two motions to dismiss, and on Tuesday AMPAS told a court why GoDaddy’s controversial founder Bob Parsons should submit to a seven-hour deposition that explains the company’s various policies.
In the lawsuit, AMPAS takes issue with GoDaddy’s “CashParking” program that allows users to buy a domain, "park" the page and collect a portion of revenue from GoDaddy's advertising partners on a pay-per-click basis. AMPAS alleges that the program has been used to register hundreds of websites such as 2011oscars.com, academyawardz.com, and betacademyawards.com.
Last December, U.S. District Court Judge Audrey Collins refused to dismiss the lawsuit, finding that AMPAS had pled facts sufficient to show standing.
Specifically, the judge allowed the plaintiff to go ahead with its claims that GoDaddy’s “illegal activities result in advertising related to the Academy’s marks being placed on numerous parked pages that have actual relationship to the Academy, thereby causing dilution of Plaintiff’s interest in legally protected trademarks.”
GoDaddy now has to contend with allegations that it aids and abets massive trademark infringement. Not only on this case, but on others as well, such as a $100 million lawsuit over an unauthorized Michael Jackson online casino.
In light of this, the fact that GoDaddy had previously spoken up in support of SOPA was curious. In a statement delivered last month to the House judiciary committee considering the legislation, GoDaddy explained why the Digital Millennium Copyright Act was not enough to deter piracy. The first reason given? “Although we believe that the DMCA works well in some contexts, its remedies are limited in that it does not include mechanisms for addressing trademark infringement…”
What explains the company’s mixed messages?
A number of theories abound, but one gaining steam chalks it up to the eccentricities of founder Bob Parsons, who recently stepped down as CEO but is staying on with the growing company as executive chairman of the board.
In a blog post for SF Weekly on Tuesday, Dan Mitchell targets Parsons for the company’s confounding behavior, from sophomoric Super Bowl commercials and arbitrarily yanking sites from the Internet to phantom IPOs and making it difficult for people to transfer their domains.
In its move on Tuesday to get Parsons to testify in the ongoing litigation, AMPAS makes the same point.
“Bob Parsons is not your typical CEO, who relies upon his executives to manage a publicly listed company,” says AMPAS’ legal brief. The Academy reports that GoDaddy has been attempting to “hamstring” its discovery by refusing to turn over various documents and says that depositions with many of the company’s top executives have been frustrating. Many of them reportedly can’t explain why the company makes the moves it does.
So in advance of a February cut-off date for discovery, AMPAS wishes to depose Parsons, whose “fingerprints are all over GoDaddy’s domain name monetization programs,” according to the brief.
And in the process, perhaps get some answers about why Parsons has seemingly been two-faced on the piracy front.
One example given is a post that Parsons wrote for his personal blog. In it, Parsons takes issue with the practice known as “kiting,” where registrars take advantage of a 5-day grace period to put up mini-Web sites loaded with search engine bait. Later, on his blog, Parsons discussed a trademark lawsuit against Dotster – “a registrar who hasn’t exactly been a stranger to domain kiting,” he said – for registering many misspellings of trademarked names, and associating them with search engine pages.
“This is exactly AMPAS’s complaint in this case,” says the plaintiff. “That its marks are famous and well-known; that GoDaddy monetizes domain names incorporating AMPAS’s trademarks – having received 60 cease/desist letters from AMPAS – yet continues to park domain names incorporating AMPAS’s marks.”
If there's one thing that both supporters and critics might be able to agree upon, it's that GoDaddy is truly befuddling. Can Parson provide some insight here? A decision whether he'll have to testify should come soon.