In Lockheed Martin Corp. v. Network Solutions Inc. , the United States District Court for the Northern District of Texas determined that the Anticybersquatting Consumer Protection Act (ACPA), 15 U.S.C. §1125(d), does not impose liability on a registrar of Internet domain names for registering domain names that allegedly infringe trademarks.

Network Solutions Inc., a registrar of top-level domain names, registered ten domain names on behalf of a third party incorporating Lockheed Martin's federally registered trademarks, SKUNK WORKS and LOCKHEED MARTIN. Lockheed Martin alleged that Network Solutions issued and maintained these infringing domain names in bad faith and for profit and, as such, violated the ACPA.

The primary purpose of the ACPA is to prevent persons who have a bad faith intent to profit from another's mark or personal name and register, traffic in or use a domain name that is identical or confusingly similar to an existing mark or name. The determination of "bad faith" is based on a variety of factors, including, but not limited to, the scope of the registrant's trademark rights; the registrant's non-commercial or fair use of the mark; the registrant's offer to sell or transfer rights to the domain name for financial gain, prior conduct in this regard and the registration of multiple domain names which that registrant knows are identical or confusingly similar to the marks of others.

The court concluded that the language of the ACPA does not create a cause of action against domain name registrars. First, none of the factors demonstrating "bad faith", such as an intent to divert consumers from the mark's owner's online location, or an attempt to sell the domain name to the owner or a third party, are applicable to a person functioning solely as domain name registrar. Second, by definition, a domain name registrar does not "register" a domain name (i.e., present a domain name for registration), "traffic in" (i.e., conduct transactions involving the transfer of consideration) or "use" the infringing domain names.

The court also found that the legislative history of the ACPA showed no evidence that Congress intended domain name registrars to act as "gatekeepers." While such a role is theoretically possible, the sheer volume of tasks required of a gatekeeper, even if modified, would prohibit a domain name registrar from performing its functions as a registrar and expose them to the risk of financial ruin. The court further recognized that the Uniform Dispute Resolution Policy (UDRP) was specifically created by ICANN to resolve disputes regarding the right to register domain names. As such, imposing this duty on registrars would not only obviate the need for the UDRP, but would render the domain name registration system unfeasible.