Fourth Circuit affirms wide jurisdiction of Anti-cybersquatting Act

In Cable News Network LP v Cnnews.com, the US Court of Appeals for the Fourth Circuit has ruled that in rem jurisdiction in actions brought under the Anti-cybersquatting Consumer Protection Act (ACPA) may be exercised over a US registered domain name, even if the registrant (i) is situated outside the United States and, (ii) has not registered and/or used it in bad faith.

Cable News Network (CNN) owns rights in the trademark CNN. It brought an in rem action, under the ACPA, against the domain name 'Cnnews.com', alleging both trademark infringement and dilution. The ACPA allows a trademark owner to sue a domain name itself when it is not possible to obtain personal jurisdiction over the domain name's owner. Lawsuits directed toward property are known as in rem actions and, under the statute, the domain name itself is considered to be the property in dispute.

At the District Court for the Eastern District of Virginia, the Chinese owner of 'Cnnews.com', Maya Online Broadband Network (HK) Company (Maya), moved to dismiss CNN's action for, among other things, lack of jurisdiction. It argued that it was a Chinese legal entity, the website hosted at the domain name was in Chinese, and it was aimed specifically at Chinese people. These facts, contended Maya, meant that it did not have the requisite amount of contact with the United States to allow the court to exercise in rem jurisdiction. Maya further argued that the exercise of jurisdiction under the ACPA requires evidence of bad-faith registration and/or use.

The district court rejected Maya's arguments and granted CNN summary judgment on the merits of its infringement claim. The domain name was registered with VeriSign - a US-based registry for '.com' domains - and the court held that the exercise of in rem jurisdiction was correct because the action had been filed in VeriSign's place of residence - the United States. The court also held that the requirement of bad faith in the ACPA relates to the substantive element of a cause of action and is not relevant for matters of jurisdiction. Maya appealed.

The Fourth Circuit affirmed the first instance decision in essence but added that the district court need not have addressed the issue of bad faith. It therefore vacated that part of the district court's decision.

Maya has petitioned the Supreme Court for review. The court has denied the application for an emergency stay to prevent the transfer of the domain in the meantime.

Karin Segall, Darby & Darby, New York