Facebook, Inc. v. OnLineNic Inc
3:19-cv-07071
N.D. Cal.May 3, 2024Background
- Facebook and Instagram sued OnlineNIC, ID Shield, and 35.CN (now Leascend Technology) in 2019 for cybersquatting and trademark violations associated with domain names mimicking plaintiffs’ trademarks.
- Defendants repeatedly engaged in discovery misconduct, including deleting, failing to preserve, and withholding electronically stored information (ESI), which impaired plaintiffs’ ability to prosecute their claims.
- Courts confirmed that OnlineNIC, ID Shield, and 35.CN operated as alter egos under a single-entity theory, justifying the exercise of personal jurisdiction and extension of liability to all entities.
- Terminating sanctions were imposed against the defendants, resulting in the striking of their answers and entry of default; the question of remedies was reserved for later.
- Plaintiffs moved for default judgment seeking statutory damages, transfer of infringing domain names, reimbursement of Special Master costs, attorney fees, and a permanent injunction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal Jurisdiction over 35.CN | 35.CN is an alter ego of OnlineNIC, making jurisdiction proper under the single-enterprise doctrine. | 35.CN has insufficient California contacts and new CEO; alter ego finding on discovery does not equal jurisdiction. | Court found jurisdiction proper under alter ego theory; prior findings stand. |
| Adequacy of Claims (Cybersquatting, Trademark) | Claims pled with detail; all defendants liable due to default. | Allegations insufficient; raised fair use and lack of specific notice for some domains. | Allegations accepted as true due to default; claims are sufficient. |
| Sanctions and Default Judgment | Defendants’ discovery abuse and spoliation warrant default judgment and full relief sought. | Default inappropriate; evidence of exculpation destroyed or excusable; dispute merit. | Misconduct justified terminating sanctions; entry of default & judgment is proper. |
| Relief Scope (Damages, Domain Transfer, Injunction) | Sought statutory damages for all infringing domains, domain transfer, fees, injunction. | Damages excessive; injunction overbroad; some domains used fairly. | Full damages, reimbursement, and transfer granted; injunction granted with narrowed language by agreement. |
Key Cases Cited
- Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986) (outlines the factors guiding entry of default judgment)
- TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915 (9th Cir. 1987) (default judgment procedure and effect)
- Geddes v. United Financial Group, 559 F.2d 557 (9th Cir. 1977) (well-pleaded facts in a default are taken as true)
- Ranza v. Nike, Inc., 793 F.3d 1059 (9th Cir. 2015) (personal jurisdiction under alter ego theory)