Facebook, Inc. v. OnLineNic Inc

CourtDistrict Court, N.D. California
DecidedJanuary 18, 2022
Docket3:19-cv-07071
StatusUnknown

This text of Facebook, Inc. v. OnLineNic Inc (Facebook, Inc. v. OnLineNic Inc) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Facebook, Inc. v. OnLineNic Inc, (N.D. Cal. 2022).

Opinion

1 UNITED STATES DISTRICT COURT 2 NORTHERN DISTRICT OF CALIFORNIA 3 4 FACEBOOK, INC., et al., Case No. 19-cv-07071-SI

5 Plaintiffs, ORDER DENYING XIAMEN 35.COM 6 v. TECHNOLOGY CO., LTD.'S MOTION TO DISMISS THE SECOND 7 ONLINENIC INC, et al., AMENDED COMPLAINT 8 Defendants. Re: Dkt. No. 174, 195, 190

9 10 Xiamen 35.com Technology Co., LTD (“35.CN”) brings the instant motion to dismiss 11 plaintiffs’ second amended complaint (“SAC”). Dkt. No. 174. Defendants OnlineNIC Inc. (“OnlineNIC”) and Domain ID Shield Service Co., Limited (“ID Shield”) seek to join 35.CN’s 12 motion. Dkt. No. 184 (Notice of Joinder). In response, plaintiffs filed a motion to strike the joinder. 13 Dkt. No. 195. The Court previously found this matter appropriate for resolution without oral 14 argument and vacated the December 3, 2021 hearing. Having considered the papers and arguments 15 made, the Court hereby (1) GRANTS the motion to strike and (2) DENIES the motion to dismiss in 16 its entirety. 17

18 BACKGROUND 19 The SAC alleges defendant OnlineNIC, a California corporation with its principal place of 20 business in San Leandro, California, is a domain name registrar that sells, registers and transfers 21 domain names for third parties. Dkt. No. 109 ¶ 9 (SAC). 22 The SAC alleges defendant ID Shield, is a Hong Kong, China, limited company that provides 23 a type of domain name privacy service, specifically a proxy service, for OnlineNIC’s customers. 24 Id. ¶ at 10. ID Shield registers domain names, as the registrant, and licenses these domain names to 25 OnlineNIC’s customers. Id. 26 The SAC alleges defendant 35.CN. is a corporation registered under the laws of Xiamen, 27 Fujian Province, that sells, registers and transfers domain names for third parties. Id. ¶ 11. The 1 SAC alleges 35.CN controls, manages, and runs the operations of OnlineNIC and ID Shield. Id. 2 The SAC alleges plaintiffs, well known social networking sites Facebook and Instagram, 3 own various well-established trademarks. Id. ¶ 18-25. Plaintiffs allege 4 defendants, as registrants and as alter egos of each other, have registered domain names (such as hackingfacebook.net) that have been used for malicious activity, 5 including phishing and hosting websites that purported to sell hacking tools. These domain names also have infringed on Plaintiffs’ trademarks. Plaintiffs have sent 6 multiple notices to Defendants providing evidence of domain name abuse and infringement. Defendants did not timely provide the information requested in any of 7 Plaintiffs’ notices. 8 Plaintiffs seek relief from Defendants, as alter egos of each other, who have registered (as the registrant), used, and trafficked in domain names that include 9 Plaintiffs’ trademarks. 10 Id. ¶ 5-6 11 The SAC further alleges: 12 1. Cybercrime is highly dependent on registered domain names, which are used to send spear phishing emails, operate malware, and engage in other types of online 13 abuse… 14 2. Cybercriminals often rely on domain name privacy registration services, and specifically proxy services, to hide their ownership and control of malicious domains 15 from the public. In exchange for a fee, proxy services conceal the domain name registrant’s identity as listed on publicly available domain name registration records. 16 These proxy services, like the services offered by Defendants, are increasingly used by cybercriminals as they cycle through domain names in order to conceal their 17 identity and evade detection. 18 3. 35.CN is an ICANN1-accredited domain name registrar. 35.CN’s alter ego, OnlineNIC, also is an ICANN-accredited domain name registrar. 35.CN’s and 19 OnlineNIC’s alter ego, ID Shield, provides a type of domain name privacy service, … According to one internet security group, domain names registered by OnlineNIC 20 were reported for abuse in approximately 40,000 instances. In 2019, one internet security group reported that OnlineNIC was one of the top 20 domain name registrars 21 used for abuse. 22 4. Defendants have repeatedly failed to take appropriate “steps to investigate and respond appropriately to any reports of abuse” as required by the RAA and have 23 failed to provide abusive domain name registrants’ names and contact information to victims of online abuse as required under the RAA. 24 25 1 The Internet Corporation for Assigned Names and Numbers (“ICANN”) is a California 26 nonprofit whose mission is to “ensure the stable and secure operation of the Internet’s unique identifier systems” by coordinating “the allocation and assignment of names in the … Domain Name 27 System[.]” Bylaws for Internet Corporation for Assigned Names and Numbers, (as amended 1 Dkt. No. 109 ¶¶ 1-4 (SAC). 2 The SAC alleges OnlineNIC is responsible for the actions of ID Shield because ID Shield is 3 an alter ego of OnlineNIC. Id. ¶¶ 26-43. Specifically, plaintiffs allege ID Shield (1) has no bank 4 accounts or assets and is undercapitalized, (2) has no employees, and (3) does not conduct regular 5 shareholder meetings and does not maintain corporate records. Id. ¶¶ 30-32. Further, OnlineNIC 6 allegedly exercises near total control over ID Shield including the operations, policy decisions, 7 which agreements ID Shield enters into, pays all of ID Shield’s expenses, and collects all of ID 8 Shield’s revenue. Id. ¶¶ 33-38. Carrie Yu allegedly owns ID Shield for the benefit of OnlineNIC 9 and is a director and officer of both companies. Id. ¶¶ 39-40. 10 The SAC alleges 35.CN is responsible for the actions of OnlineNIC and ID Shield because 11 OnlineNIC and ID Shield are alter egos of 35.CN and 35.CN is a direct participant in their actions. 12 Id. ¶¶ 44-55. In support thereof, plaintiffs allege, (1) Carrie Yu is the sole director of OnlineNIC 13 and an employee of 35.CN, (2) 35.CN’s employees carry out all of ID Shield and OnlineNIC’s day 14 to day operations including all technical and customer support, (3) 35.CN share the same domain 15 name registration database used to operate the registrar business for both 35.CN and OnlineNIC, (4) 16 the incorporator and founding president of OnlineNIC is the controlling shareholder of 35.CN. Id. 17 Based on these allegations, plaintiffs conclude (1) ID Shield is a de facto subsidiary of 18 OnlineNIC and (2) ID Shield and OnlineNIC are de facto subsidiaries of 35.CN. Id. ¶¶ 43 and 55. 19 The SAC further alleges defendants registered, used, or trafficked in at least 35 domain 20 names identical or confusingly similar to plaintiffs’ trademarks, including: facebookphysician.com, 21 login-1nstagram.com, and www-instagram.net. Id. ¶ 56. ID Shield is allegedly the registrant for 22 each of the infringing domain names. Id. ¶ 57. 23 The SAC alleges OnlineNIC has a storied history of “cybersquatting on famous and 24 distinctive trademarks” and lists a myriad of allegedly successful lawsuits against OnlineNIC for 25 such brought by well-known companies such as Verizon, Yahoo, and Microsoft. Id. ¶¶ 60-63. 26 Plaintiffs’ representatives sent at least five notices to ID Shield evidencing infringing domain 27 names and requesting ID Shield disclose the identities of the registrants. Id. ¶ 74. ID Shield 1 PROCEDURAL HISTORY 2 Although this case is still at the pleading stage, it was originally filed in 2019 by plaintiffs 3 against only ID Shield and Online NIC. Dkt. No. 1 (Original Complaint). ID Shield and OnlineNIC 4 did not move to dismiss the action; instead they filed an answer on January 6, 2020. Over a year 5 later, on February 25, 2021, after what appears to be extensive and contentious discovery, plaintiffs 6 sought leave to file their first amended complaint (FAC) to add 35.CN as a defendant. Judge van 7 Keulen granted plaintiffs’ motion on March 24, 2021. Dkt. No. 81. Again, ID Shield and 8 OnlineNIC filed an answer. Dkt. No. 88.

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Bluebook (online)
Facebook, Inc. v. OnLineNic Inc, Counsel Stack Legal Research, https://law.counselstack.com/opinion/facebook-inc-v-onlinenic-inc-cand-2022.