Second Circuit limits jurisdiction of Anti-cybersquatting Act

In Mattel Inc v Barbie-Club.com, the US Court of Appeals for the Second Circuit has ruled that the jurisdiction in in rem actions brought under the Anti-cybersquatting Consumer Protection Act (ACPA) is limited to the judicial district in which the domain name registrar is located and cannot be extended to cover the district where the registrar's certificates are deposited.

Mattel is the owner of trademark rights in a number of famous names including BARBIE, HOT WHEELS and MATCHBOX. It brought an action against 57 domain names including 'Barbie-Club.com', 'Hotwheelsusa.com' and 'Matchboxonline.com', arguing that they infringed its marks. 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 registrant. 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.

The crucial issue before the court was whether Mattel could obtain in rem jurisdiction over all of the defendant domain names - registered with companies in California, Maryland, New York and Virginia - in a single district court. The ACPA states that in rem jurisdiction can only be established in the judicial district in which the domain name registrar is located.

Since the domain name authorities are located in various districts, Mattel sought to obtain jurisdiction under the Trademark Act of 1946, specifically 15 USC 1125(d)(2)(C). This states that the depositing of a registrar's certificate is sufficient to establish the location of a domain name and a district court's control and authority over its use. Mattel arranged for the domain name authorities to deposit their respective registrar's certificates with the District Court for the Southern District of New York. However, the court dismissed the case, holding that the depositing of the certificates in New York did not meet the requirements for jurisdiction under the ACPA.

On appeal, the Second Circuit affirmed the district court's decision and held that the location of the registrar's certificates is not intended to confer an independent and additional grant of jurisdiction for cybersquatting actions. The appellate court emphasized that under the ACPA, in rem jurisdiction can be established only in the home judicial district of the domain name registrar and reasoned that Section 1125(d)(2)(C) can be used only if an in rem action has already been commenced. It noted that nothing in the ACPA suggests that a plaintiff can file suit in a district of its own choosing and then unilaterally proceed to relocate the domain name's legal location to support that choice.

Parker H Bagley and Kerry McIlroy, Milbank Tweed Hadley & McCloy LLP, New York

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