Facebook, Inc. v. OnLineNic Inc

Background

Facebook and Instagram alleged that the defendants registered, used, or transferred at least 35 domain names that were identical or confusingly similar to their trademarks, including facebookphysician.com, login-1nstagram.com, and www-instagram.net. The complaint alleged that some of the domains were used for phishing or websites that appeared to sell hacking tools.

The complaint described OnlineNIC as a domain-name registrar and ID Shield as a domain-name privacy or proxy service. It alleged that ID Shield was the listed registrant of the challenged domains and licensed them to OnlineNIC’s customers. It also alleged that ID Shield and OnlineNIC were alter egos of each other and that both were alter egos of 35.CN. An alter-ego theory treats separate companies as legally connected when their separation allegedly would result in unfairness or injustice.

The second amended complaint asserted four claims against all defendants: cybersquatting under the Anticybersquatting Consumer Protection Act, trademark infringement, false designation of origin, and trademark dilution.

Motions and Arguments

35.CN moved to dismiss under Federal Rule of Civil Procedure 12(b)(2), which concerns personal jurisdiction, and Rule 12(b)(6), which concerns whether a complaint states a legally sufficient claim. 35.CN argued that it was not subject to the court’s authority because it was incorporated and operated outside California, that it was protected from liability as merely a domain-name registrar, and that plaintiffs had not adequately pleaded their claims against OnlineNIC and ID Shield.

OnlineNIC and ID Shield filed a notice seeking to join 35.CN’s motion. Plaintiffs moved to strike that notice, arguing that OnlineNIC and ID Shield had forfeited their opportunity to file a Rule 12(b)(6) motion. The court agreed and granted the motion to strike.

Court’s Analysis

For general personal jurisdiction, the court considered plaintiffs’ allegations that 35.CN’s employees operated OnlineNIC and ID Shield, that 35.CN shared OnlineNIC’s domain-registration database, and that the companies had overlapping ownership and management. The court found that these allegations created a sufficient initial showing that 35.CN and OnlineNIC might be alter egos of one another. Because the court found general jurisdiction sufficient at the pleading stage, it did not need to find specific jurisdiction.

The court stated that the available facts were insufficient to determine whether it had specific jurisdiction over 35.CN, but ordered the parties to continue discovery concerning both general and specific jurisdiction.

On the cybersquatting claim, the court found that plaintiffs adequately alleged that the defendants registered, trafficked in, or used the challenged domain names. The court relied in part on the allegation that ID Shield licensed the domains to third parties and on ID Shield’s admission that it was listed as the registrant. The court also found that plaintiffs adequately alleged that the defendants acted with an intent to profit from the domains or proxy services.

For the trademark infringement, false-designation, and dilution claims, the court found that plaintiffs adequately alleged commercial use of the marks. The complaint alleged that ID Shield and OnlineNIC did more than merely register domains: they allegedly controlled and licensed the domains. The court also found that the complaint alleged a basis for claims related to the defendants’ failure to disclose licensees’ contact information after receiving evidence of trademark infringement.

Disposition

The court denied 35.CN’s motion to dismiss in its entirety. It granted plaintiffs’ motion to strike OnlineNIC and ID Shield’s notice of joinder. The court also granted the motion to seal portions of plaintiffs’ opposition to the motion to dismiss. The order did not decide whether defendants ultimately infringed plaintiffs’ trademarks or violated the cybersquatting statute; it allowed the claims to proceed beyond this motion and required further jurisdiction-related discovery.