ACPA covers trafficking of domain names registered prior to enactment

In Ford Motor Company v Catalanotte, the US Court of Appeals for the Sixth Circuit has ruled that a defendant can be required to pay statutory damages under the Anti-cybersquatting Consumer Protection Act (ACPA) for trafficking in a domain name after the enactment of the ACPA, even if the defendant registered the domain name prior to its implementation.

Ford Motor Company, a US car manufacturer, commenced an action against Peter J Catalanotte, an employee of the company, when Catalanotte sent an email on October 27 2000 to Ford officers offering to sell the domain name 'fordworld.com' to the company. Catalanotte, aware of a Ford employee newspaper entitled Ford World, had registered the domain name on January 21 1997. He had previously registered two domain names similar to the trademarks of other companies and sold them to those companies.

The United States District Court for the Eastern District of Michigan held Catalanotte liable for trafficking in the domain name 'fordworld.com' under the ACPA and granted Ford injunctive relief, as well as $5,000 in statutory damages.

On appeal, Catalanotte argued that although the alleged trafficking occurred after implementation of the ACPA in 1999, he could not be required to pay statutory damages because he had registered the disputed domain name prior to its enactment. The Sixth Circuit rejected this argument, observing that registration, trafficking and use of a domain name are separate acts, each of which may separately create liability. Consequently, the fact that a defendant registered a domain name prior to the enactment of the ACPA is irrelevant if use or trafficking of that domain name occurs post-enactment. The court went on to reject Catalanotte's argument that an offer to sell does not constitute 'trafficking' under the statute, stating that registering a famous trademark and subsequently offering it for sale to the trademark owner is "exactly the kind of wrong Congress intended to remedy when it passed the ACPA". The court also rejected Catalanotte's contention that Ford's claim was barred by the statute of limitations.

Accordingly, the court affirmed the district court's award of statutory damages to Ford.

Robert Alpert and Justin Deabler, Ladas & Parry, New York

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