A Malaysian oil company cannot successfully sue a domain name registrar for “contributory cyber squatting” in a case where computer users were directed to a similarly named “adult” website, says an appellate court.

The focus of the ruling is the Anticybersquatting Consumer Protection Act, which was approved by Congress in 1999. The act provides for liability for the bad faith use of a protected domain name, according to Wednesday's ruling by the 9th U.S. Circuit Court of Appeals in Petroliam Nasional Berhad v. GoDdaddy.com Inc.

Kuala Lumpur, Malaysia-based Petroliam, a major oil and gas firm, owns the trademark to the name “Petronas,” according to the ruling. Scottsdale, Ariz.-based GoDaddy.com, the world's largest domain name registrar, maintains more than 50 million domain names registered by customers around the world and also provides domain name forwarding services, said the ruling.

In 2003, a third party registered the domain names “petronastower.net” and “petronastowers.net” through a registrar other than GoDaddy, but in 2007, the names' owners transferred its registration service to GoDaddy.

The registrant used GoDaddy's domain name forwarding service to direct the disputed domain names to the adult website, “camfunchat.com,” which was hosted on a Web server maintained by a third party, said the ruling.

In late 2009, a Petronas subsidiary asked GoDaddy to take action against the website associated with the petronastower.net domain name, and officials from the Malaysian and U.S. governments also contacted GoDaddy regarding the domain name.

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But GoDaddy took no action because it did not host the site and because it was prevented by the Uniform Domain-Name Dispute-Resolution Policy from participating in trademark disputes regarding domain name ownership, according to the ruling. This dispute resolution policy was established by the Los Angeles-based nonprofit Internet Corporation for Assigned Names and Numbers.

Petronas sued GoDaddy on several theories including cyber squatting and contributory cyber squatting. A federal district court in Oakland, Calif., granted GoDaddy summary judgment, and Petronas appealed on the issue of contributory cyber squatting.

A unanimous three-judge panel upheld the case’s dismissal. The Anticybersquatting Consumer Protection Act does not include a cause of action for contributory cyber squatting because the act’s text “does not apply to the conduct that would be actionable under such a theory,” said the ruling.

In addition, “Congress did not intend to implicitly include common law doctrines applicable to trademark infringement because (the act) created a new cause of action that is distinct from traditional remedies,” the ruling said.

The appellate court also said, in upholding the case’s dismissal, that “allowing suits against registrars for contributory cyber squatting would not advance the goals of the statute.”