name.space v. Icann ( 2015 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
NAME.SPACE, INC., No. 13-55553
Plaintiff-Appellant,
D.C. No.
v. 2:12-cv-08676-
PA-PLA
INTERNET CORPORATION FOR
ASSIGNED NAMES AND NUMBERS,
Defendant-Appellee. OPINION
Appeal from the United States District Court
for the Central District of California
Percy Anderson, District Judge, Presiding
Argued and Submitted
March 6, 2015—Pasadena, California
Filed July 31, 2015
Before: Stephen Reinhardt, N. Randy Smith,
and Andrew D. Hurwitz, Circuit Judges.
Opinion by Judge Hurwitz
2 NAME.SPACE, INC. V. ICANN
SUMMARY *
Antitrust / Trademark
The panel affirmed the dismissal of an antitrust suit
brought against the Internet Corporation for Assigned
Names and Numbers, which, under contract with the
Department of Commerce, creates and assigns top level
domains, such as “.com” and “.net.”
name.space, a registry specializing in “expressive” top
level domains, such as .art and .food, challenged ICANN’s
2012 round of applications for new top level domains to be
included in the ICANN “root zone file.”
The panel held that the complaint did not state a claim
for conspiracy in restraint of trade or commerce under § 1
of the Sherman Act because it did not sufficiently allege an
anticompetitive agreement. The complaint did not state a
claim for monopolization in violation of § 2 of the Sherman
Act because ICANN is not a competitor in the market to act
as a top level domain registry, the international market for
domain names, or the market for blocking or defensive
registration services.
The panel held that trademark and unfair competition
claims were not ripe for adjudication because the complaint
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
NAME.SPACE, INC. V. ICANN 3
did not allege that ICANN has delegated or intends to
delegate any of the top level domains that name.space uses.
The panel also held that the complaint did not state a
claim for tortious interference or unfair business practices.
COUNSEL
Michael B. Miller (argued), Craig B. Whitney, Adam J.
Hunt, Morrison & Foerster LLP, New York, New York, for
Plaintiff-Appellant.
Jeffrey A. LeVee (argued), Eric P. Enson, Kathleen P.
Wallace, Jones Day, Los Angeles, California, for
Defendant-Appellee.
4 NAME.SPACE, INC. V. ICANN
OPINION
HURWITZ, Circuit Judge:
The Internet Corporation for Assigned Names and
Numbers (“ICANN”) creates and assigns top level domains
(“TLDs”), such as “.com” and “.net.” In 2012, ICANN
accepted applications for the creation of new TLDs. This
suit alleges that the 2012 Application Round violated
federal and California law. The district court dismissed the
complaint, and we affirm.
I. Factual Background
A. Top Level Domains
Each Internet website is assigned a unique Internet
Protocol (“IP”) numerical address. For ease of searching,
websites also have alphanumeric domain names, such as
“nytimes.com.” The portion before the dot—“nytimes”—is
called the “second level domain.” The portion after the
dot—“com”—is the TLD.
There are three main types of TLDs—sponsored TLDs
(such as “.gov” and “.edu”), restricted to users who meet
specified criteria; country-code TLDs (such as “.uk” or
“.fr”), controlled by sovereign nations; and generic TLDs
(such as “.com” and “.net”), those at issue in this case, open
to all users. Individual generic TLDs are operated by
registries, such as VeriSign, which sell the ability to
register a domain name with a particular TLD and maintain
a zone file, or registry, of all the domain names associated
with that TLD. These registries approve registrars, such as
godaddy.com, to sell domain names incorporating those
TLDs to the public.
NAME.SPACE, INC. V. ICANN 5
A “Domain Name System” (“DNS”) links each of these
unique domain names with the IP address corresponding to
that website. When an Internet user searches for a domain
name, the DNS converts the domain name to the IP address
by searching a list of TLDs called the “root zone file” (the
“Root”). Additional TLDs are made available by
organizations other than ICANN on alternative root files.
However, alternative root files can only be accessed
through special settings not routinely employed by most
Internet users. Thus, the vast majority of Internet users can
only access websites with TLDs included in the ICANN-
controlled Root. When the complaint in this case was filed,
ICANN included eight generic TLDs on the Root.
B. ICANN
The DNS and the Root were initially managed by the
National Science Foundation. See Daniela Michele
Spencer, Note, Much Ado About Nothing: ICANN’s New
gTLDs, 29 Berkeley Tech. L.J. 865, 867–69 (2014). In
1997, the National Science Foundation transferred control
to the Department of Commerce (“DOC”). The DOC later
issued a white paper proposing that management be
transferred to a private, not-for-profit corporation. See
Management of Internet Names and Addresses, 63 Fed.
Reg. 31,741, 31,741 (Jun. 10, 1998). 1 The white paper
suggested that the corporation’s board of directors “should
be balanced to equitably represent the interests of IP
1
The white paper was cited repeatedly in the complaint and was
therefore incorporated by reference. See United States v. Ritchie,
342 F.3d 903, 907–08 (9th Cir. 2003).
6 NAME.SPACE, INC. V. ICANN
number registries, domain name registries, domain name
registrars, the technical community, Internet service
providers (ISPs), and Internet users (commercial, not-for-
profit, and individuals) from around the world.” Id. at
31,750; see also A. Michael Froomkin & Mark A. Lemley,
ICANN and Antitrust, 2003 U. Ill. L. Rev. 1, 12 (2003).
In 1998, the DOC contracted with ICANN, a non-profit
corporation, to manage the Internet Assigned Numbers
Authority (“IANA”). See Justin T. Lepp, Note, ICANN’s
Escape from Antitrust Liability, 89 Wash. U. L. Rev. 931,
935, 959–60 (2012); Froomkin & Lemley, supra, at 15.
ICANN thereby obtained the authority to operate the DNS
and the Root, add new TLDs to the Root, and determine
which registries would operate existing TLDs. The
Memorandum of Understanding between the DOC and
ICANN reserved the DOC’s right to withdraw recognition
of ICANN. See Froomkin & Lemley, supra, at 13–14. In
2009, the Memorandum lapsed and the DOC formally
relinquished control over DNS policy to ICANN. See
Lepp, supra, at 935. 2
ICANN is controlled by a board of directors with
qualifications along the lines proposed in the white paper;
2
The DOC, however, still retained the ability to move the IANA
contract to another organization. See Lepp, supra, at 959–60. The
federal government plans to end its coordination role when the current
IANA contract expires in September 2015, and has asked ICANN to
develop a transition plan. See Nat’l Telecomms. & Info. Admin., NTIA
Announces Intent to Transition Key Internet Domain Name Functions
(Mar. 14, 2014), http://www.ntia.doc.gov/press-release/2014/ntia-
announces-intent-transition-key-internet-domain-name-functions.
NAME.SPACE, INC. V. ICANN 7
many are industry insiders. The government has no formal
input into the selection of the directors. See Froomkin &
Lemley, supra, at 10–11.
C. name.space
name.space is a registry specializing in “expressive”
TLDs, such as .art, .food, .magic, .music, .now, and .sucks.
According to the complaint, name.space’s business model
contemplates “the simultaneous operation of a significant
number of TLDs.” None of name.space’s TLDs is
currently available on the Root.
D. The 2000 and 2012 Application Rounds
In 2000, ICANN first solicited applications for new
TLDs. The application instructions were seven pages, the
fee was $50,000, and a single application could seek
multiple TLDs. The application included a release of all
liability against ICANN. name.space applied for 118
TLDs. ICANN approved only seven new TLDs, none of
which was awarded to name.space.
In 2012, ICANN again accepted applications for new
TLDs. This time, the application guidebook was 349 pages
in length, the fee was $185,000, and each application could
seek only one TLD. Unsuccessful applicants from the 2000
Round received an $86,000 credit on one application, but
were required to waive any claims arising from the 2000
Round. name.space did not apply in 2012 because the
financial and procedural costs were too high. As in 2000,
applications for new TLDs in 2012 came largely from
industry insiders.
The list of TLDs applied for by others in 2012 included
189 TLDs currently in use by name.space. As of the filing
8 NAME.SPACE, INC. V. ICANN
of the complaint, ICANN had not announced which new
TLDs will be included on the Root. 3
E. Procedural Background
In 2012, name.space filed a complaint in the Central
District of California, alleging that ICANN violated
sections 1 and 2 of the Sherman Act, the Lanham Act, the
California Cartwright Act, and the California Business and
Professions Code in connection with the 2012 Application
Round. The complaint also alleged common law
trademark, unfair competition, and tortious interference
claims.
In 2013, the district court granted ICANN’s motion to
dismiss the complaint, holding that the trademark and
unfair competition claims failed to present a justiciable case
or controversy, and that the other claims failed to state a
claim upon which relief could be granted. 4 The district
court dismissed the Sherman Act § 2 claim with prejudice,
and granted name.space leave to amend as to all other
claims. After name.space elected not to amend, final
judgment was entered in favor of ICANN. This timely
appeal followed.
3
name.space’s complaint only challenges the 2012 Round’s rules and
procedures. We therefore do not consider today any questions
concerning the subsequent delegation of TLDs.
4
ICANN had also moved to dismiss on the ground that the release
clause in the 2000 application barred liability on all claims. The district
court converted the motion into one for summary judgment, which it
denied. ICANN does not seek review of that decision.
NAME.SPACE, INC. V. ICANN 9
II. Jurisdiction and Standard of Review
We have jurisdiction over this appeal under 28 U.S.C.
§ 1291. We review de novo dismissals for failure to state a
claim, Coal. for ICANN Transparency, Inc. v. VeriSign,
Inc., 611 F.3d 495, 501 (9th Cir. 2010) (“ICANN
Transparency”), and for absence of a justiciable case or
controversy, Laub v. U.S. Dep’t of Interior, 342 F.3d 1080,
1084 (9th Cir. 2003). “All allegations of material fact are
taken as true and are construed in the light most favorable
to” the plaintiff. ICANN Transparency, 611 F.3d at 501.
III. Sherman Act § 1
Section 1 of the Sherman Act prohibits conspiracies “in
restraint of trade or commerce.” 15 U.S.C. § 1. A § 1
claim requires: (1) a “contract, combination or conspiracy
among two or more persons or distinct business entities”;
(2) which is intended to restrain or harm trade; (3) “which
actually injures competition”; and (4) harm to the plaintiff
from the anticompetitive conduct. Brantley v. NBC
Universal, Inc., 675 F.3d 1192, 1197 (9th Cir. 2012)
(internal quotation marks omitted). “Because § 1 . . . does
not prohibit all unreasonable restraints of trade but only
restraints effected by a contract, combination, or
conspiracy, the crucial question is whether the challenged
anticompetitive conduct stems from independent decision
or from an agreement, tacit or express.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 553 (2007) (alterations, citations,
and internal quotation marks omitted).
A complaint asserting a § 1 claim must allege facts
“plausibly suggesting (not merely consistent with)” a
conspiracy. Id. at 557. It is not enough merely to include
conclusory allegations that certain actions were the result of
a conspiracy; the plaintiff must allege facts that make the
10 NAME.SPACE, INC. V. ICANN
conclusion plausible. See Kendall v. Visa U.S.A., Inc.,
518 F.3d 1042, 1047–48 (9th Cir. 2008). This standard
does not impose a “probability requirement,” but “simply
calls for enough fact to raise a reasonable expectation that
discovery will reveal evidence of illegal agreement.” See
Twombly, 550 U.S. at 556.
The complaint in this case alleges that the rules and
procedures governing the 2012 Application Round were the
result of a conspiracy between ICANN, its board members,
and industry insiders. As is common, the complaint
includes no direct allegation of an agreement among the
alleged co-conspirators. See Oltz v. St. Peter’s Cmty.
Hosp., 861 F.2d 1440, 1450–51 (9th Cir. 1988). Rather,
the complaint’s conspiracy assertion rests on the following
alleged circumstantial evidence: (a) some of ICANN’s
board members have “known, vested interests in the
economic performance of the TLD registries”; (b) ICANN
and its board designed the rules for the 2012 Application
Round; (c) the 2012 application price was significantly
higher than the 2000 price, and the rules more complex; (d)
the 2012 Application Round’s price and rules conflicted
with name.space’s business model; (e) the majority of 2012
applicants were industry insiders and large technology
companies; and (f) some potential applicants, including
name.space, were deterred from applying in 2012 by the
price and rules.
We cannot, however, infer an anticompetitive
agreement when factual allegations “just as easily suggest
rational, legal business behavior.” Kendall, 518 F.3d at
1049. Here, ICANN’s decision-making was fully
consistent with its agreement with the DOC to operate the
DNS and the Root. See Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 597 n.21 (1986)
NAME.SPACE, INC. V. ICANN 11
(“[C]onduct that is as consistent with permissible
competition as with illegal conspiracy does not, without
more, support even an inference of conspiracy.”); Eclectic
Props. E., LLC v. Marcus & Millichap Co., 751 F.3d 990,
996 (9th Cir. 2014) (explaining that courts must consider
obvious alternative explanations for a defendant’s behavior
when analyzing plausibility). In transferring control to
ICANN, the DOC specifically required it to coordinate the
introduction of new TLDs onto the Root. This is exactly
what ICANN did in the 2012 Application Round—after
determining that the Internet could sustain more TLDs,
ICANN created a process for TLD registries to apply for
new ones. The 2012 rules and procedures were facially
neutral, and there are no allegations that the selection
process was rigged. See ICANN Transparency, 611 F.3d at
502–03 (affirming in part a dismissal of a § 1 claim
because there were insufficient allegations that competitive
bidding was rigged).
name.space contends that an anticompetitive agreement
nonetheless is plausible because the rules of the 2012
Application Round, including the application fee and limit
of one TLD per application, were contrary to its business
model. But, absent allegations that suggest ICANN’s
decisions were illogical or suspicious, see Twombly,
550 U.S. at 556 n.4; In re High-Tech Emp. Antitrust Litig.,
856 F. Supp. 2d 1103, 1116 (N.D. Cal. 2012) (noting that it
“strain[ed] credulity” that alleged conduct occurred absent
unlawful coordination), ICANN’s independent business
decisions about how many TLDs to create, and at what
price they are offered, are not policed by § 1, see T.W. Elec.
Serv., Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d 626,
634 (9th Cir. 1987). ICANN was not required to replicate
the 2000 Application Round in 2012, or even to create new
TLDs. The application rules served to ensure that those
12 NAME.SPACE, INC. V. ICANN
who obtained new TLDs would be financially stable. This
is a perfectly logical decision, and one that ICANN,
through its contract with the DOC, had full authority to
make.
The complaint alleges that ICANN’s board members
had motive to design an application process that would
benefit their corporate allies. But such motive alone cannot
sustain a § 1 claim. See Matsushita, 475 U.S. at 597 n.21;
In re Late Fee & Over-Limit Fee Litig., 528 F. Supp. 2d
953, 964 (N.D. Cal. 2007) (citing VI Philip E. Areeda &
Herbert Hovenkamp, Antitrust Law: An Analysis of
Antitrust Principles and Their Application ¶ 1411, at 68 (2d
ed. 2003)), aff’d, 741 F.3d 1022 (9th Cir. 2014). And, the
complaint includes no specific allegations of wrongdoing
that would indicate that the board members acted with an
improper motive. Cf. Am. Soc’y of Mech. Eng’rs, Inc. v.
Hydrolevel Corp., 456 U.S. 556, 560–62, 571–72 (1982)
(evidence that committee members used their positions to
disparage a rival’s product); Radiant Burners, Inc. v.
Peoples Gas Light & Coke Co., 364 U.S. 656, 659–60
(1961) (per curiam) (association members conspired to
withhold a necessary certification from rival).
name.space alleges that the rules advantaged the
businesses with which some board members were
associated. But, it was understood from ICANN’s
inception that its board would include industry insiders, and
that the board would approve the application process. See
Management of Internet Names and Addresses, 63 Fed.
Reg. at 31,749–50. We cannot infer an illegal agreement
with outside interests simply because ICANN’s rational
business decisions favor the status quo rather than
name.space’s untested alternative business model. See
Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 764
NAME.SPACE, INC. V. ICANN 13
(1984) (“There must be evidence that tends to exclude the
possibility that the [alleged conspirators] were acting
independently.”).
It may well be, as name.space claims, that an “open
Internet” represents better public policy than one with a
more limited supply of TLDs. But the DOC left that choice
to ICANN. At bottom, name.space’s complaint alleges that
ICANN’s actions should be viewed as arising from a
conspiratorial agreement because a conspiracy is
theoretically possible. But that is not enough to state a § 1
claim. We cannot infer a conspiracy based on speculation
that the very type of board members the DOC sought must
have conspired to restrain trade simply because the system
they adopted made it difficult for name.space to carry out
its business plans. 5
IV. Sherman Act § 2
Section 2 of the Sherman Act prohibits monopolization.
15 U.S.C. § 2. “There are three essential elements to a
successful claim of Section 2 monopolization: (a) the
possession of monopoly power in the relevant market;
(b) the willful acquisition or maintenance of that power;
and (c) causal antitrust injury.” Allied Orthopedic
Appliances Inc. v. Tyco Health Care Grp. LP, 592 F.3d
991, 998 (9th Cir. 2010) (quoting Cal. Computer Prods.,
5
Because the analysis under the Cartwright Act, Cal. Bus. & Prof.
Code §§ 16700–16770, is identical to that under the Sherman Act, see
Cnty. of Tuolumne v. Sonora Cmty. Hosp., 236 F.3d 1148, 1160 (9th
Cir. 2001), we also affirm the district court’s dismissal of the
Cartwright Act claim.
14 NAME.SPACE, INC. V. ICANN
Inc. v. Int’l Bus. Mach. Corp., 613 F.2d 727, 735 (9th Cir.
1979)) (internal quotation marks omitted). 6
The complaint posits three relevant markets: (a) the
market to act as a TLD registry; (b) the international market
for domain names; and (c) the market for blocking or
defensive registration services. ICANN, however, is
neither a registry nor a registrar. Because ICANN is not a
competitor in any of the three markets, they cannot serve as
the basis for a § 2 monopoly claim. See Mercy-Peninsula
Ambulance, Inc. v. San Mateo Cnty., 791 F.2d 755, 759
(9th Cir. 1986) (“The gravamen of a section 2 claim is the
deliberate use of market power by a competitor to control
price or exclude competition.”); see also Spanish Broad.
Sys. of Fla., Inc. v. Clear Channel Commc’ns, Inc.,
376 F.3d 1065, 1075 (11th Cir. 2004) (“There is no
question that [defendant] does not participate in the
Spanish-language radio market. Thus, [defendant] cannot
attempt to monopolize that market.”).
name.space argues that ICANN should be considered a
participant in the three markets because ICANN has
ultimate control over TLDs, which are the essential aspect
of each of the relevant markets. But this does not mean
that ICANN competes in the markets. In Mercy-Peninsula,
we addressed whether a county monopolized a market
because it chose which company would provide paramedic
services. 791 F.2d at 756. We rejected § 2 liability,
holding that because “the county is not a competitor in the
health care provision market,” it “cannot be charged with
6
No claim for conspiracy to monopolize was raised in the complaint.
NAME.SPACE, INC. V. ICANN 15
having used market position to exclude competition.” Id. at
759; see also Olde Monmouth Stock Transfer Co. v.
Depository Trust & Clearing Corp., 485 F. Supp. 2d 387,
392–93 (S.D.N.Y. 2007) (rejecting the argument that
“market power under Section 2 of the Sherman Act
encompasses ‘influence’ by a non-competitor over the
relevant market”). 7
Even if ICANN competed in any of the relevant
markets, § 2 liability could only arise if ICANN unlawfully
acquired or maintained its monopoly. See Allied
Orthopedic, 592 F.3d at 998. The district court correctly
held that ICANN’s authority was lawfully obtained through
a contract with the DOC. See United States v. Grinnell
Corp., 384 U.S. 563, 570–71 (1966) (distinguishing
“willful acquisition” of monopoly power from
“development as a consequence of a superior product,
business acumen, or historic accident”). A monopolist can
also violate § 2 by engaging in predatory behavior against
potential competitors. See ICANN Transparency, 611 F.3d
7
Contrary to name.space’s argument, this case is not akin to Tate v.
Pacific Gas & Electric Co., 230 F. Supp. 2d 1072 (N.D. Cal. 2002).
There, the relevant market was “natural-gas technologies and/or the
specialized equipment needed to supply the specialized fuels,” which
encompassed two distinct competing technologies—compressed natural
gas (“CNG”) and liquefied natural gas (“LNG”). Id. at 1075–76.
Although the defendant only sold CNG, the district court held it could
be liable for hindering a LNG competitor based on allegations that it
was protecting its CNG business and later planned to enter, and
monopolize, the LNG market. Id. at 1078–79. Here, in contrast,
ICANN does not need to hinder any of the relevant markets to protect
its own monopoly, and there are no allegations that it plans to enter any
of them.
16 NAME.SPACE, INC. V. ICANN
at 506; Alaska Airlines, Inc. v. United Airlines, Inc.,
948 F.2d 536, 547–49 (9th Cir. 1991). But name.space
does not allege such behavior; indeed, name.space is not
restricted from establishing TLDs on alternative root files.
The DOC chose ICANN to manage the DNS and the
Root. Barring predatory behavior, ICANN is “free to
choose the parties with whom [it] will deal, as well as the
prices, terms, and conditions of that dealing.” Pac. Bell
Tel. Co. v. Linkline Commc’ns, Inc., 555 U.S. 438, 448
(2009); see also Verizon Commc’ns Inc. v. Law Offices of
Curtis V. Trinko, LLP, 540 U.S. 398, 407–08 (2004). The
complaint merely alleges that the 2012 Application Round
was structured in a manner not advantageous to
name.space’s business model. But whether ICANN’s
choices were wise or fair is an issue outside the purview of
§ 2.
V. Trademark Claims
Trademark and unfair competition law protect against
the misleading use of another’s mark. See Mattel, Inc. v.
Walking Mountain Prods., 353 F.3d 792, 806 (9th Cir.
2003); Los Defensores, Inc. v. Gomez, 166 Cal. Rptr. 3d
899, 912–13 (Ct. App. 2014). The complaint asserts
Lanham Act, common law trademark, and common law
unfair competition claims because ICANN accepted
applications for TLDs in use by name.space. 8 The district
court found these claims not ripe for adjudication. We
agree.
8
Like the parties, we treat the three related claims collectively.
NAME.SPACE, INC. V. ICANN 17
“A question is fit for decision when it can be decided
without considering ‘contingent future events that may or
may not occur as anticipated, or indeed may not occur at
all.’” Addington v. U.S. Airline Pilots Ass’n, 606 F.3d
1174, 1179 (9th Cir. 2010) (quoting Cardenas v. Anzai,
311 F.3d 929, 934 (9th Cir. 2002)). We applied this
principle to a patent infringement claim in Swedlow, Inc. v.
Rohm & Haas Co., 455 F.2d 884 (9th Cir. 1972) (per
curiam). The plaintiff in that case alleged that the
operation of a factory under construction would, upon
completion, infringe on the plaintiff’s patents. Id. at 885.
We affirmed the dismissal of this claim as unripe, finding
the threat of infringement “too remote and unduly
speculative” because only the floor and the shell of the
factory were then in place. Id. at 886.
The Swedlow analysis applies here. See Image Online
Design, Inc. v. Internet Corp. for Assigned Names &
Numbers, No. CV 12–08968 DDP (JCx), 2013 WL 489899,
at *5 (C.D. Cal. Feb. 7, 2013) (applying Swedlow to
trademark infringement). name.space has not alleged that
ICANN has delegated or intends to delegate any of the
TLDs that name.space uses. All that name.space alleges is
that ICANN has accepted applications from companies
wanting to use one of those TLDs on the Root. Although
name.space may have a ripe claim if such a delegation
occurs, the complaint as it stands does not allege “actual or
imminent infringement.” Swedlow, 455 F.2d at 886. 9
9
Because the complaint contains no allegations about delegations, we
do not today consider whether an actual delegation would give rise to a
18 NAME.SPACE, INC. V. ICANN
We are unpersuaded by name.space’s argument that the
acceptance of the applications and fees alone constitutes
infringement. The cases it cites all deal with situations in
which the defendant clearly intended to violate plaintiff’s
trademarks in the near future. See Levi Strauss & Co. v.
Shilon, 121 F.3d 1309, 1311–12, 1314 (9th Cir. 1997)
(finding Lanham Act liability for a defendant who
“admitted to offering to sell counterfeit Levi’s jeans and
components”); Millennium Labs., Inc. v. Ameritox, Ltd.,
No. 12CV1063-MMA (JMA), 2012 WL 4863781, at *1
(S.D. Cal. Oct. 12, 2012) (denying a motion to dismiss an
infringement claim against a defendant who offered to sell
a product employing similar trade dress); Nova Wines, Inc.
v. Adler Fels Winery LLC, 467 F. Supp. 2d 965, 970–72
(N.D. Cal. 2006) (granting a preliminary injunction against
a defendant who used plaintiff’s trademark in its product
packaging, but had yet to actually sell it). No such facts
were alleged here. Nor did ICANN “use” the TLDs simply
by accepting the applications. See Bosley Med. Inst., Inc. v.
Kremer, 403 F.3d 672, 676 (9th Cir. 2005) (“Infringement
claims are subject to a commercial use requirement.”); Los
Defensores, 166 Cal. Rptr. 3d at 913 (noting that unfair
competition liability requires a “misleading or deceptive
use”).
VI. Tortious Interference Claims
name.space alleges California common law claims for
tortious interference with contract and prospective
economic advantage. The elements of a tortious
justiciable controversy or the merits of such a controversy. See supra
note 3.
NAME.SPACE, INC. V. ICANN 19
interference with contract claim are: “(1) a valid contract
between plaintiff and a third party; (2) defendant’s
knowledge of the contract; (3) defendant’s intentional acts
designed to induce breach or disruption of the contract;
(4) actual breach or disruption; and (5) resulting damage.”
Family Home & Fin. Ctr., Inc. v. Fed. Home Loan Mortg.
Corp., 525 F.3d 822, 825 (9th Cir. 2008). A tortious
interference with prospective economic advantage claim
has the same elements (focusing instead on the existence
and knowledge of a prospective economic relationship), but
also requires that the defendant’s conduct be “wrongful by
some legal measure other than the fact of interference
itself.” Kor. Supply Co. v. Lockheed Martin Corp., 63 P.3d
937, 950 (Cal. 2003) (internal quotation marks omitted).
The district court properly dismissed these claims.
name.space does not allege any facts plausibly suggesting
that ICANN accepted applications in the 2012 Round with
the intent to breach or disrupt any existing contracts or
prospective economic relationships. name.space,
moreover, does not allege any specific resultant disruption
to contractual or economic relationships. See, e.g., Image
Online, 2013 WL 489899, at *9–10; Conte v. Jakks Pac.,
Inc., No. 1:12–CV–00006–LJO–GSA, 2012 WL 6115632,
at *5–6 (E.D. Cal. Dec. 10, 2012); Semi-Materials Co. v.
SunPods, Inc., No. 11–CV–06719–LHK, 2012 WL
3962487, at *6 (N.D. Cal. Sept. 10, 2012). And, the failure
to sufficiently allege a wrongful act outside of the
interference itself forecloses an interference with
prospective economic advantage claim. See Kor. Supply,
63 P.3d at 950.
VII. Unfair Business Practices Claim
“California’s statutory unfair competition laws broadly
prohibit unlawful, unfair, and fraudulent business acts.”
20 NAME.SPACE, INC. V. ICANN
Sybersound Records, Inc. v. UAV Corp., 517 F.3d 1137,
1151 (9th Cir. 2008) (citing Kor. Supply, 63 P.3d at 943).
Statutory liability can be premised on antitrust or trademark
violations. See id. at 1152 (antitrust); Cleary v. News
Corp., 30 F.3d 1255, 1263 (9th Cir. 1994) (trademark).
Because name.space failed to state an antitrust violation,
trademark claim, or other unlawful act, the district court
properly dismissed this claim.
VIII. Conclusion
For the reasons stated above, we AFFIRM the
judgment of the district court.