Case Law Update: Enforcing a Judgment by Levying a Domain Name
The Ninth Circuit issued an ironic ruling last month regarding levying domain names to satisfy a prior judgment. In Office Depot, Inc. v. Zuccarini (9th Cir., Feb. 2010), the Ninth Circuit ruled that a creditor can levy a domain name of a debtor to satisfy a judgment.
John Zuccarini registered hundreds of domain names incorporating other individual’s trademarks, including “officedepot.com.” Office Depot successfully sued Zuccarini under the Anticybersquatting Consumer Protection Act (“ACPA”), 15 U.S.C. § 1125(d). The ACPA provides a cause of action for trademark owners against persons who register their mark(s) as domain name(s) to profit from the trademark. Office Depot obtained a judgment against Zuccarini, but was unable to collect and subsequently assigned the judgment to DS Holdings.
DS initially sought to have 109 “.com” domain names that were registered to Zuccarini transferred directly to it. However, a California statue prohibited the court from ordering transfer of property held by a third party (a registrar maintains domain name registrations). DS then successfully had the court appoint a receiver to take possession of the domain names and sell them to satisfy the judgment.
The irony is that this judgment arose from Zuccarini’s liability from registering these domain names to sell to trademark owners for profit. Now, DS will presumably sell the same domain names to the same trademark owners to satisfy the judgment. While this situation likely does not meet the definition of bad faith required under the ACPA, the end result is the same: a third party selling a domain name confusingly similar to another party’s trademark.
In any event, this decision provides a roadmap to levying domain names to satisfy a judgment. In many cases, domain names would not be worth the effort to seize. But in other cases, domain names can have significant commercial value, making such efforts worthwhile.