Summary of the Case
Plaintiffs Baidu, Inc. is an Internet search engine company operating in China. In this case, Baidu used the services of Register.com, Inc. to acquire its domain name “baidu.com” in 2010, which will be a defendant. On January 11, 2019, the cyberattack was implemented against the baidu.com website. The internet traffic was redirected to the “Iranian Cyber Army” website for five hours, disrupting work for two days. In this case, Baide would most likely sue Register for damages, as Register is responsible for the internet traffic routing. Moreover, Register failed to provide any customer support, causing more injuries from the prolonged to cease of the operations. Thus, Baidu will sue Register for damages for the breach of contract and gross negligence, citing contributory trademark infringement under the Lanham Act, 15 U.S.C. § 1114(1)(a) and facilitating the Intruder to gain access to Baidu’s domain.
The Response from Register
Register will most likely deny any of the charges, citing the Master Services Agreement dated December 18, 2019, limiting the liability of Register for providing its services. Register will claim that Baidu agreed to use its services at risk and be responsible for protecting its security information. Thus, Register will dismiss the complaint, using Fed.R.Civ.P. 12(b)(6) and citing the failure to provide the complaint upon which relief may be granted. However, the court will let Baidu proceed with the claim.
The Limitations of Liability
In certain cases, the court can overlook the limitation of liability claims, which in this case, Register states. Gross or willful negligence can be one example of such an exception. Moreover, there are claims from Baidu which proves such an instance. Register’s representative failed to follow its security procedures by releasing the private information of Baidu upon the Intruder’s failure to provide the correct response to the security question and valid security code. Register in its defense will deny its responsibility, claiming to be a victim of the Intruder. However, the court is most likely to dismiss such a statement by referring to the foreseeable predictability of the attack and Register’s failure to follow its security conduct.
Contributory Trademark Infringement
Baidu claims the contributory trademark infringement, citing The Lanham Act, which states that:
A domain name registrar, a domain name registry, or other domain name registration authority shall not be liable for damages under this section for the registration or maintenance of a domain name for another absent a showing of bad faith intent to profit from such registration or maintenance of the domain name (Wahdani 28).
Thus, the court will probably dismiss Baidu’s claim of contributory trademark infringement due to the absence of its precedent. Register did not register the domain with the Intruder but provided access to the security details of Baidu’s account. Moreover, Register did not maintain the domain alone or with the Intruder. The malicious intent for the security breach is not identified as well, only gross misconduct and negligence of its security procedures.
The Outcomes of the Case
Some of the complaints of Baidu will be more likely recognized by the court, including gross negligence on behalf of Register. However, some will not be acknowledged, like the contributory trademark infringement upon the Lanham Act. Baidu might also state Register’s malicious intent and collaboration with the Intruder. However, the court will most likely dismiss these allegations due to the lack of supporting evidence.
Recommendations for Register
Furthermore, to prevent similar issues and possible future lawsuits against the defendant, Register must first conduct workshops for their employees on its security procedures. Then, Register must establish stricter controls, monitor their employees’ compliance with the rules, and possibly introduce punishment and reward incentives. Another recommendation for Register is to improve their customer service again by conducting training and providing prompts for the common problems to minimize the damage to their customers and eventually themselves if the legal action is to take place.
Works Cited
Wahdani, Fahed. “The Legal Character Of Domain Names’ Cybersquatting.” Law, Society & Organisations 10 (1/2021) (2021): 23-41.