Designer Skin LLC v. S & L Vitamins, Inc., et al.
Lockheed Martin Corporation v. Network Solutions, Inc.
Case No. 97-56734 (9th Cir., Oct. 25, 1999)
Plaintiff Lockheed Martin Corporation ("Lockheed") owns the federally registered service mark "Skunk Works." Plaintiff learned that third parties not involved in this action had registered with defendant Network Solutions Inc. ("NSI") domain names containing plaintiff's "Skunk Works" mark, as well as variations thereof. NSI, in turn, had listed these domain names on root servers so that users who entered them would be transported to the computers designated in the third parties' registration. Lockheed demanded that NSI cancel the registration of these domain names, and cease registering them in the future. When NSI refused because Lockheed's request did not conform to NSI's domain name dispute resolution policy, Lockheed commenced suit.
Among other things, the suit charged NSI with contributory trademark infringement as a result of its continuing involvement in the registration and processing of the offending domain names. Plaintiff's theory was that NSI facilitated the infringement by registering the allegedly infringing domain names. Evidently, plaintiff was urging that NSI be forced to undertake some form of screening so as to prevent the use of infringing domain names. The Ninth Circuit, finding that defendant was not guilty of contributory infringement, affirmed the lower court's decision dismissing plaintiff's claims.
"Contributory infringement occurs when the defendant either intentionally induces a third party to infringe the plaintiff's mark or supplies a product to a third party with actual or constructive knowledge that the product is being used to infringe the service mark." Parties have been found guilty of contributory infringement when they supply a product they know a third-party is reselling under a label containing a trademark the third party has no right to use, or when they rent space in a flea market to a third party they know to be selling infringing goods.
Upon examination, the Ninth Circuit determined that NSI did not supply a product -- rather it supplied a service which the alleged infringer used to facilitate its infringement. In such instances, the defendant must exercise "direct control and monitoring of the instrumentality used by a third party to infringe the plaintiff mark" to be liable for contributory infringement. The Ninth Circuit held that NSI did not exercise such control, and accordingly that plaintiff's claim for contributory infringement failed. Said the court:
The district court correctly recognized that NSI's remote translation service does not entail the kind of direct control and monitoring required to justify an extension of the "supplies a product" requirement. ("While the landlord of a flea market might reasonably be expected to monitor the merchandise sold on his premises, NSI cannot reasonably be expected to monitor the Internet.")
In reaching this conclusion, the Ninth Circuit relied on its determination that ninety percent of NSI's registration and routing of domain names is done electronically without review by NSI personnel. Moreover, NSI does not check to determine if a domain name it registers is in fact in use, or, if so, the manner in which the name is being used. As such, the court adopted the following conclusion of the district court:
Where domain names are used to infringe, the infringement does not result from NSI's publication of the domain name list, but from the registrant's use of the name on a web site or other Internet form of communication with goods or services ... NSI's involvement with the use of domain names does not extend beyond registration.
A more thorough analysis of this issue can be found in the district court's decision, which is reported at 985 F.Supp. 949.