Registrar Responsibility - A Question of Liability
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The allegations raised by Dell in the aforementioned case are indeed sensational, and it is “possible” that the registrars were being used by highly skilled clients to execute the scam. But even if this turned out to be the case, the registrars could still be implicated through whatever fees they collected throughout the process. Many similar cases arose during the early days of the Internet, where intellectual property infringement could be filed against the facilitator, which in this case is the registrar.
While the registrars in the Dell case theoretically would have never earned any profit from the scam (if the weren't involved), they did act as facilitators for whoever committed the crime and seemingly made no effort to put an end to it. With a crime as transparent as this though, you can only wonder how long the perpetrators thought the scam would last before they got caught, especially since they went after such a high profile company as Dell.
As of now, third parties (registrars) are liable for any copyright infringement carried out by any of their clients. This means that registrars, and any Web infrastructure providers for that matter, should be fully aware (or at least as much as possible) of all the business activities and transactions of their clients. This is especially important when it comes to trademarks, where there is no line of defense for third party businesses.
In 1998, the Digital Millennium Copyright Act (DMCA) was signed into law dealing particularly with online copyright infringement. It does not deal with trademark infringement, but it could still be useful if registrars want to update the law to include trademarks. Specifically, section 512 has to do with minimizing third party liability for customer infringing violations. In order to qualify for “safe harbor,” it suggests the following three steps:
Designate an agent with the Library of Congress.
List that agent on your website, along with the process you follow to address allegations of third party copyright infringement.
There is also a section that strongly prohibits “distributing” tools that can stave off a company's anti-piracy software. A third party may be held liable if a client or customer is found to be “distributing” the aforementioned tools. A full summary and critique of the law can be found at this link.
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