As those who are familiar with the domain name space know, the AntiCybersquatting Consumer Protection Act (ACPA) is the U.S. federal law under which cybersquatting is illegal. In a recent lawsuit against Digispace Solutions and yMultimedia, Microsoft argued that ACPA should also cover “contributory cybersquatting,” claiming that the two companies had induced other entities to register domain names that included Microsoft’s trademarks and brand names. The Wall Street Journal’s Law Blog provides a clear overview of the case.

Contributory cybersquatting is a form of secondary liability, meaning a person can be held accountable for cybersquatting even though he or she did not engage in the act directly. Microsoft argued that by encouraging others to cybersquat domains related to its trademarks, Digispace Solutions and yMultimedia had committed contributory cybersquatting. Microsoft also asserted that the companies had sold software that enabled buyers to set up websites that used Microsoft’s trademarks.

The lawyers for the defendants attempted to dismiss the case, on the grounds that no court had ever recognized contributory cybersquatting under ACPA. But federal judge Ricardo Martinez was not persuaded, and ruled that the suit could proceed. Judge Martinez’s ruling, and the future outcome of this suit, could have interesting implications for future suits filed under ACPA and the resources available to trademark owners to pursue infringements. Regardless of the final outcome, Judge Martinez has undeniably expanded the reach of ACPA, and it may eventually require a ruling by an appellate court to determine if it will stand.

On the other hand, as ACPA, first established in 1999, closes in on 12 years of existence, the questions raised by Microsoft could signal that it is time for Congress to revisit ACPA and update the law to reflect new developments in cybersquatting.