A federal court in California awarded Facebook $2.8 Million dollars under the Anticybersquatting Consumer Protection Act (ACPA) yesterday.

There were 10 domain name holders and one company that seemed to supply the landing page that some of the domain holders used to monetize the domains.

In all there were 105 domain names at issue.

The Court actually set up a formula to determine what the damage per domain should be based on several factors outlined below starting as low as $5,000 per domain but having several multipliers based factors like how many infringing domains each Defendant had, what they did with the domain and whether the domain had “Facebook” spelled right or was a typo.

All of the defendants were defaulting parties meaning that none formally appeared in this action, nor did they respond to Facebook’s complaint or motion for default judgment.

Here is the relevant part of the court opinion which lays out the formula to compute damages against each of the defendants:

“While some of the landing websites to which users were redirected looked similar to Facebook, they are noticeably different. On the contrary, in eAdGear the infringing domain and website appeared to be the site it was infringing upon, and even purported to sell the same products. ”

“So while the Court should not look beyond the domain name to consider the content of a website in determining whether there is an ACPA violation, the content is relevant in determining a “just” damages award. ”

“Second, Default Defendants were engaged in typosquatting, which, while this is one type of behavior that the ACPA is designed to prevent, it is not as egregious as the cases that include the correct spellings of plaintiffs’ trademarked names.” See, e.g., Verizon California Inc. v. Online NIC, Verizon California Inc. v. OnlineNIC Inc., C 08-2832 JF (RS), 2008 WL 5352022 (N.D. Cal. Dec. 19, 2008) (court ordered statutory damages at default judgment of $50,000 per infringing domain against serial cybersquatter who had registered 663 domain names, including buyverizon.net, mobileverizon.net, and verizon-cellular.com);

Lastly, while Default Defendants’ misconduct was willful and comprises the behavior that the ACPA is designed to prevent, the Court is hesitant to apply the maximum penalty in a default setting. This does not mean, however, that the failure of Default Defendants to participate in the litigation should mean that they should be ordered to pay the minimum statutory damages.

The Court notes that Facebook, in seeking the maximum damages of $100,000 per infringing domain, made no attempt to distinguish between each defendant’s conduct despite the existence of varying degrees of wrongdoing.

Therefore, the Court will independently assess damages for each defendant below, taking into account each defendant’s actions, including, but not limited to, the number of infringing domain names registered, whether the defendant is a serial cybersquatter, and the ACPA’s other statutory factors.

While all Default Defendants acted in bad faith by intentionally diverting consumers from
Facebook, their conduct differs in terms of degree of maliciousness and wrongdoing. T

To ensure consistency in the calculation of the recommended damages awards, the Court has devised a formula to calculate damages based on each Defendant’s actions incorporating the ACPA factors, as well as other factors deemed relevant by the Court based on the circumstances of this case.

These factors include the number of domain names registered, whether there was an attempt to conceal the registrant’s identity, whether the correct spelling of Plaintiff’s trademark is contained in the infringing domain names, whether an individual defendant is a serial cybersquatter.

The number of infringing domain names is indicative of bad faith.

The more infringing domain names a defendant registered or acquired, the more malicious the conduct.

For those defendants who registered between one and nine domains, the Court will assess a base statutory damages award of $5,000 per domain. Between 10 and 19 domains, the base damages award is $10,000 per domain. Between 20 and 29 domains, the base damages award is $15,000 per domain. Between 30 and 39 domains, the base damages award is $20,000 per domain. Between 40 and 49 domains, the base damages award is $25,000 per domain.

The intentional redirection of internet traffic from a typosquatting domain to one of Cleanser Products’ landing websites is more egregious conduct, because the landing websites were designed to deceive users into believing that they were on Facebook’s official website.

The owners and operators of the domain names monetized their scheme by redirecting users to landing websites, where users were would click on their advertisements, were encouraged to divulge personal information, or purchase products.

In recognition of the egregiousness of this conduct, Defendants that engaged in this conduct will be subject to twice the amount of base damages (or “double-multiplier”) for each domain that redirected users to Cleanser Products’ websites.

The double-multiplier will be assessed based on the “base damages”, and any additional damages per domain will be added thereafter.

Defendants who engage in repeated cybersquatting or typosquatting, referred to as “serial cybersquatting,” will also be assessed a double-multiplier on the base damages per infringing domain name in recognition of their recurring bad behavior.

Typosquatting is generally regarded as less malicious than true cybersquatting, where the domain name is spelled correctly. See, e.g., Verizon California Inc., 2008 WL 5352022 (infringing domains included buyverizon.net, mobileverizon.net, and verizon-cellular.com).

But some of the typosquatting domains incorporate the FACEBOOK mark spelled correctly, even if the entire domain name is not.

The Court finds that domains that contain the correctly-spelled FACEBOOK mark are more malicious than those that misspell “Facebook.” This behavior shall result in an additional $5,000 in damages per domain name, to be assessed after any applicable multipliers.

Other domain names incorporate the correctly-spelled FACEBOOK mark alongside other correctly-spelled common words, which is more akin to the conduct in the Verizon case. This misconduct is even more malicious than incorporating the FACEBOOK mark alongside misspelled words, and shall result in an additional $10,000 in damages per domain name, to be assessed after any applicable multipliers.

Another indication of malice is attempting to conceal the registrant’s identity. 15 U.S.C. § 1125(d)(1)(B)(i)(VII). This conduct shall also result in an additional $5,000 in damages per domain name, to be assessed after any applicable multipliers.

Using this damages formula, the Court recommends the imposition of statutory damages on each Default Defendant as set forth below.

1. Counter Balance

Plaintiff’s FAC identifies two infringing domain names attributed to Counter Balance.

Both of these redirect users to landing websites operated by Cleanser Products.

Since there are only two infringing domains, the Court recommends $5,000 in damages per domain, plus a double-multiplier for redirecting to Cleanser Products’ landing pages, for a total of $10,000 per domain. Thus, the total recommended damages award is $20,000.

2. Intercontinental

Plaintiff’s FAC identifies ten infringing domain names attributed to Intercontinental, none of which redirect to Cleanser Products’ landing websites.

Ten infringing domain names triggers a recommendation of statutory damages of $10,000 per domain.

In addition, Intercontinental utilized the Dynamic Dolphin internet service to conceal its registrant information, so the Court recommends an additional damages award of $5,000 per domain.

Intercontinental also incorporates the correctly-spelled FACEBOOK mark in two of its domains— and —so that is an additional damages award of $5,000 for each domain.

Thus, the total recommended damages award is $160,000.

3. Mackrooner

Plaintiff only identifies one infringing domain attributed to Mackrooner. The domain redirects users to a landing website operated by Cleanser Products.

Since there is only one infringing domain, the Court recommends an award of $5,000 in damages, plus the double-multiplier for redirecting to Cleanser Products’ landing website, and $5,000 for incorporating the correctly-spelled FACEBOOK mark, for a total award of $15,000.

4. Newgate

Plaintiff’s FAC identifies 47 infringing domain names attributed to Newgate. Of those, four redirect users to landing websites operated by Cleanser Products.

The Court therefore recommends $25,000 in damages per domain, plus a double-multiplier for the four domains that redirect users to Cleanser Products’ landing websites.

In addition, seven Newgate domains incorporate the correctly-spelled FACEBOOK mark warranting an additional damages award of $5,000 per domain.

Three other domain names incorporate the correctly- spelled FACEBOOK mark alongside other correctly-spelled common words warranting an additional $10,000 per domain.

Thus, the total recommended damages award is $1,340,000.

5. Pioneer

Plaintiff’s identifies eight domains, two redirect users to landing websites operated by Cleanser Products.

Based on the number of infringing domains, the Court recommends $5,000 in damages per domain.

In addition, the Court recommends the double- multiplier for the two domains that redirect users to Cleanser Products’ landing websites.

Also, one of Pioneer’s domains incorporates the correctly-spelled FACEBOOK mark alongside other correctly-spelled common words warranting an additional $10,000 in damages for that domain.

Two other Pioneer domains incorporate the correctly-spelled FACEBOOK mark alongside misspelled words warranting an additional $5,000 in damages per domain.

Thus, the total recommended damages award is $70,000.

6. YourTick

Plaintiff’s FAC only attributes one infringing domain name to YourTick. There is no allegation that the domain redirects users to a landing page operated by Cleanser Products.

Since there is only one infringing domain, the Court recommends that $5,000 in damages be awarded for the infringing domain, plus the additional $5,000 in damages for incorporating the correctly- spelled FACEBOOK mark, for a total recommended damages award of $10,000.

7. Paul Baker

Plaintiff’s FAC only attributes one infringing domain name to Baker. There is no allegation that the domain redirects users to a landing page operated by Cleanser Products.

Since there is only one infringing domains, the Court recommends that $5,000 in damages be awarded for the infringing domain.

8. Reggie Bush

Plaintiff’s FAC identifies three infringing domain names attributed to Bush.

Of those, one domain redirects users to a landing page operated by Cleanser Products.

Since there are only three infringing domains, the Court recommends $5,000 in damages per domain, plus a double-multiplier for the single domain that redirects users to a Cleanser Products’ landing page, for a total recommended damages award of $20,000.

9. Karrie-Lee Karreman

Plaintiff’s FAC identified one infringing domain name attributed to Karreman.

Karreman is a serial cybersquatter who has been sued by other mark holders for virtually identical conduct.

In light of her status as a serial cybersquatter, the Court recommends that the $5,000 base damages award be doubled.

In addition, Karreman’s domain name incorporates the correctly- spelled FACEBOOK mark alongside other correctly-spelled common words warranting an additional $10,000 in damages, for a total recommended damages award of $20,000.

10. Michael Suggs (doing business as Michael Timothy Suggs, Timothy Suggs, FB Promotions/Freebie Promos, and Rabbit GoGo Media LLC)

Plaintiff’s FAC identified 28 infringing domains attributed to Suggs and his alter egos FB Promotions and Rabbit GoGo Media LLC.

During informal discovery, and without making a formal appearance in this litigation, Suggs admitted to registering 100 additional domains, all presumably in violation of the ACPA. At the hearing, Plaintiff informed the Court that Suggs decided to break off contact during settlement negotiations and, instead, declined to participate resulting in his entry of default.

The Court, in recommending that default judgment be entered, declines to recommend statutory damages for those domains not identified in the FAC, as the scope of relief available on default judgment is generally limited to the pleadings. This does not mean, however, that Facebook does not have a right to those domains, and, in fact, the Court, in exercising its discretion, recommends below that all 128 domains be transferred to Facebook.

As to the ACPA factors, of the 28 domains, 19 redirect Internet traffic to Cleanser Products’ landing websites.

In addition, one of Suggs’ alter egos is called FB Promotions, with the “FB” presumably used to mislead users to believe that there is a legitimate connection with Facebook.

In light of these factors, this Court recommends that Suggs be ordered to pay $15,000 in damages for each of the originally identified 28 infringing domains.

In addition, the Court recommends that the double-multiplier be applied for the 19 domains that redirect users to Cleanser Products. Thus, the total recommended damages award is $705,000.

11. Cleanser Products

Plaintiffs seek $100,000 in damages for each of at least 60 infringing domain names that
redirected traffic from typosquatter domains to landing pages operated by Cleanser Products.

These five landing pages were used by at least 10 direct infringers.

The number of typosquatting domains that redirect users to Cleanser Products’ landing pages, however, is not in the FAC. Given the sheer number of domains and the fact that almost half of the redirecting domains are attributed to parties who have either been terminated from this case, are Doe Defendants, or are not otherwise involved in this case, the Court limits the scope of relief to those allegations in the FAC, which contained only the five landing pages and referenced three typosquatting domains that redirected users to Cleanser Products’ landing pages.

Cleanser Products’ participation in the elaborate typosquatting scheme, wherein other infringers redirected Internet traffic to Cleanser Products’ landing websites, is particularly egregious. For that reason, and the reasons stated above finding that Cleanser Products was contributorily liable in the infringement of the other typosquatting defendants, the Court recommends that $80,000 in statutory damages be awarded for each of the five landing pages in recognition of the severity of its misconduct. In addition, the Court recommends that $10,000 in damages be awarded for each of the three typosquatting domains identified in the FAC that redirected traffic to its landing pages, for a total damages award of $430,000.