Hollywood's Longest Cybersquatting Feud Nears Finale With Closing Arguments

Will the group behind the Academy Awards take home a prize of $30 million or just $300,000 from GoDaddy? Closing arguments in a five-year-old case are being made.
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The Academy of Motion Picture Arts and Sciences is nearing the end of a cybersquatting case it filed against GoDaddy five years ago, which went to trial this week in a California courtroom.

Judge Andre Birotte Jr. heard arguments Friday afternoon in the federal proceeding, in which the Academy alleges the company sold domain names like betacademyawards.com and 2011Oscars.com and allowed customers to "park" the pages and collect advertising revenue.

Academy attorney Stuart Singer argued in his closing GoDaddy had violated the federal Anti Cyber-Piracy Act not in that the company allowed users to operate domain names with names similar to the Academy's trademarks (like "Oscar"). Simply providing the domain names would make GoDaddy a "registrar" of websites, a kind of web operator provided "safe harbor" under the ACPA. The problem, said Singer, was in GoDaddy's monetization of the domain names by “parking” them and putting advertisements on them.

“We acknowledge registrars have protection. They're more like eBay. They sit out there creating a market, but they're not making use of the participants. GoDaddy is making use of the parked pages," he said.

He and GoDaddy attorney Robert Galvin both covered whether the company acted in "bad faith" in registering the questionable domain names, a part of the standard for violations of the Anti Cyber-Piracy Act.

“Here there is overwhelming evidence of bad faith. Bad faith generally, to trade on other’s marks, and bad faith specifically to the AMPAS marks,” said Singer. He noted his side had submitted into evidence 12,000 complaints about domain names from companies from Nike to Louis Vuitton to Apple, plus 30 from the Academy requesting the provider discontinue offering potentially infringing domain names to users in the first place.

"They knew what they were doing, and they just ignored the request they stop this practice," said Singer.

Galvin replied the company’s good faith intent to trade only in non-infringing domain names was evinced by how quickly the company responded to complaints like the Academy's. He displayed two email exchanges, one in which GoDaddy withdrew a domain name within 17 minutes of a complaint from the Academy and one in which the withdrawal took an hour and 15 minutes.

“They issue isn't how quickly they take them down. The issue is they keep doing it," rebutted Singer, who noted it took the company years following the lawsuit to institute software for detecting infringements. "The issue is how they never dealt with the thrust of the complaints."

Galvin reiterated GoDaddy’s argument the purported infringement on some Academy marks (like "the Oscars") via the various domain names was overreaching. He pointed out domain names from GoDaddy like oscarcomedy.com (which he said linked to the website of a comedian named Oscar) and highpointacademyawards.com (a Pasadena private school). "We know what Oscar means when one is handed to Tom Hanks,” he said. "That's not the world GoDaddy operates in."

"These are the faces of the case. These are the victims of overzealous enforcement," he continued. He pointed out specific phrasing in the Anti Cyber-Piracy Act cautioning, “Congress must not cast its net too broadly" in enforcing the law.

Singer noted websites like oscarcomedy.com and even one for Oscar the cat (who in 2010 was the subject of a book about his apparent ability to predict deaths in a nursing home) had advertisements related to the Academy and the Oscars, which the he argues represents profit from the Academy's trademarks. But in Galvin's description of the way GoDaddy sourced ads (other than banner advertisements for itself), the problem lies with Google, which does big business directing ads into the places left for them on websites like GoDaddy's "parked pages."

"Why are you going after GoDaddy?" he asked. "Is it because we have kind of a funny name and we're not the world's largest search provider?"

Singer argued it’s GoDaddy that set up the system and partnered with Google in the first place, on contractual terms GoDaddy wouldn't take ads from Google on websites with infringing domain names. "They had an obligation if they're going to run the program to filter out the infringing names," he said.

After the Academy was largely given a victory on summary judgment, one of the central questions now is what GoDaddy will have to pay.

The Academy has claimed statutory damages of about $30 million, or $100,000 per infringement for the 293 domain names in question. Testifying for GoDaddy, expert witness James Pampinella said the payout should be much smaller.

He testified the potential damages to the Academy should be based on three factors: the revenue the Academy lost from GoDaddy users’ "parking" of the domain names, the revenue to GoDaddy from the parking and the rate at which the Academy likely would have licensed its intellectual property to GoDaddy for those domain names in question.

Pampinella argued the Academy has admitted it had no knowledge of financial injury, pointing to testimony from the Academy’s assistant general counsel Scott Miller. He added that GoDaddy received $348 or less from the 293 domain names. And in regard to what he thought GoDaddy would pay the Academy for the domain names, he speculated it would be equal to or lower than GoDaddy’s revenue from them.

So instead of $30 million, Pampinella recommends $1,000 per domain name for a total of $293,000 in damages.

In his cross-examination, Academy attorney Stuart Singer pointed out that minimal financial benefit to GoDaddy should not correspond to minimal statutory damages. "You have individuals visiting the pages and never clicking the ads. They might feel the Academy’s been tarnished through association with some kind of marketing outfit, but never click through the ad," he said.

Stuart challenged Pampinella’s estimation of the Academy’s licensing rate. "You’re aware the actual licenses the Academy has entered into with other parties are for very significant amounts, hundreds of thousands of dollars, but your conclusion is the reasonable rate the Academy would want for the use of its marks on all sorts of sites would be not more than three hundred dollars?" he asked.

"Three hundred and forty eight dollars," replied Pampinella.

Birotte will decide without a jury, and there could be significant legal fees tallied as well. At five years and running, this has been one of the longest ever lawsuits for the litigious Academy. The prize is coming.

Aug. 7, 5:30 p.m. Updated with closing arguments.