Namecheap ordered to explain why it shouldn’t pay $50,000 in ACPA case

The ACPA requires registrars to hold a domain name in place once an in rem complaint is served. Namecheap did not transfer the name between accounts. It let the registration lapse, and a new customer registered it. The court said that may still be a violation.

The distinction matters to anyone holding domains. A registrar's duty is not limited to blocking a transfer. It extends to any modification that changes control. Expiration and re-registration is a change in control. Domain holders with an active dispute should not assume an expiring name is safe.

The case also shows how privacy services interact with litigation. After the new registrant used Whois privacy, the plaintiff had to seek a subpoena to learn who controlled the name. That added time and cost. The court found this could be evidence Namecheap knew of the action and disregarded its obligations.

The sanctions question is unresolved. The ACPA limits monetary liability for registrars absent bad faith. The judge asked both sides to address whether the court can use its inherent authority to sanction a nonparty. The outcome will affect how aggressively registrars police domains under court order.

There is a practical lesson for plaintiffs. Filing in Arizona, where Namecheap is based, put the burden on the registrar. Filing in the Eastern District of Virginia, where the .com registry is located, would have put a lock on the domain at the registry level. That could have prevented the registrant change entirely.

For registrars, the message is that compliance with an in rem notice is not a matter of account-level transfers. They need procedures to flag domains involved in litigation and prevent expiration from becoming a way around a court order. The cost of getting this wrong may be more than the domain.