Nevada Judge orders Google, Facebook to be trademark police

From an ars technica article, US judge orders hundreds of sites “de-indexed” from Google, Facebook, another example of censorship, theft of domain names, and creeping interference with Internet freedom, all in the name of trademark and stopping “counterfeit goods”:¹

After a series of one-sided hearings, luxury goods maker Chanel has won recent court orders against hundreds of websites trafficking in counterfeit luxury goods. A federal judge in Nevada has agreed that Chanel can seize the domain names in question and transfer them all to US-based registrar GoDaddy. The judge also ordered “all Internet search engines” and “all social media websites”—explicitly naming Facebook, Twitter, Google+, Bing, Yahoo, and Google—to “de-index” the domain names and to remove them from any search results.

The case has been a remarkable one. Concerned about counterfeiting, Chanel has filed a joint suit in Nevada against nearly 700 domain names that appear to have nothing in common. When Chanel finds more names, it simply uses the same case and files new requests for more seizures. (A recent November 14 order went after an additional 228 sites; none had a chance to contest the request until after it was approved and the names had been seized.)

(h/t Briggs Armstrong)

1. I use the term “creeping interference” here to refer to incremental restrictions that over time have a large cumulative regulatory effect. This is similar to the notion of “creeping expropriation” used in the international law context. I discuss this in my book International Investment, Political Risk, and Dispute Resolution: A Practitioner’s Guide (Oxford University Press, 2005), at chapter 5.B.3:

   … the greater contemporary risk to foreign investors is government interference that does not formally transfer title away from the investor, but damages or destroys his ability to control or benefit from the investment he has made. Government measures that eliminate substantially all of an investment’s value may constitute regulatory expropriation, including creeping or indirect expropriation—where a series of State acts accumulates to deprive an investment of its value.47 Such State actions can deprive the investor of the productive use and benefit of its assets, making ownership practically worthless, even though the investor may retain formal attributes of ownership.48 In the Starrett decision, the Iran-U.S. Claims Tribunal explained that “Measures taken by a state can interfere with property rights to such an extent that these rights are rendered so useless that they must be deemed to have been expropriated, even though the state does not purport to have expropriated them and the legal title to the property formally remains with the original owner.”49

   Some define “creeping expropriation” as government measures that impose incremental restrictions and controls (such as excessive or repetitive regulatory measures) to make it difficult for the investor to continue in business at the profit level that justified the project in the first place.50 Such government measures may lead to the sale or abandonment of the project to the government or to local private investors,51 but the government may obtain no obvious direct benefit. Although each measure in isolation may not be enough to damage the investor’s rights in any fundamental way, the cumulative effect of the measures can nevertheless be confiscatory, depriving the investor of control or a substantial portion of the benefits of his enterprise.52

   …

   47. While the phrase “de facto expropriation” is perhaps a better description than “creeping expropriation” or “indirect expropriation” (Robert B. Shanks, Insuring Investment and Loans Against Currency Inconvertibility, Expropriation, and Political Violence, 9 HASTINGS INT’L & COMP. L. REV. 417, 424 (1986) ), the latter terms have received widespread acceptance and will be used more frequently in this book. “Creeping expropriation” stresses that the State has taken a series of measures with a cumulative expropriatory effect, while “indirect” emphasizes the fact that the investor’s formal or nominal title to the asset was not actually affected. In practice, much de facto expropriation is both “creeping” and “indirect.” On regulatory expropriation generally, see Jack Coe, Jr & Noah Rubins, Regulatory Expropriation and the Tecmed Case: Context and Contributions, INTERNATIONAL INVESTMENT LAW AND ARBITRATION 597 (Todd Weiler, ed. 2005); Sean D. Murphy, Contemporary Practice of the United States relating to International Law, 95 A.J.I.L. 873, 881-885 (2001); UNCTAD, Taking of Property, supra note 31, at 11-12. See also Methanex Corp. v. United States, Final Award on Jurisdiction and Merits of Aug. 3, 2005 (NAFTAChapter 11), available at www.state.gov/documents/organization/51052.pdf, at Part IV–Chapter D, paras. 6-7 (non-discriminatory regulations for a public purpose, such as environmental laws, not considered expropriation).

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