Court finds 35.cn and OnlineNic are alter egos, $5 million sanctions possible

The ruling means Meta Platforms could get over $5 million from 35.cn.

A court has found that ICANN-accredited domain name registrars 35.cn and OnlineNic are alter egos, potentially opening 35.cn up to paying more than $5 million to Meta Platforms.

Meta sued OnlineNic and its privacy service in October 2019, alleging that either OnlineNic or customers using Domain ID Shield used domains such as www-facebook-login(.)com and login-lnstargram(.)com.

OnlineNic stopped defending the suit and said it was going to shut down its business back in 2021, but it still operates today.

In March, Judge Susan Van Keulen issued terminating sanctions against OnlineNic and Domain ID Shield. She calculated varying damages for each of the 35 domains Facebook alleged were cybersquatting. Van Keulen differentiated between domains that contained Facebook’s exact trademarks and those that were typos. In all, she awarded $3.135 million in statutory damages.

OnlineNic will also be on the hook for some attorneys’ fees, owing to the spoilation of evidence. Facebook’s attorneys are asking for more than $2 million. The judge also ordered the registrar to pay Facebook’s share of the costs of a Special Master who verified OnlineNic’s spoilation of evidence.

But the question remained: would OnlineNic duck responsibility by merely shutting down?

Meta subsequently argued that 35.cn and OnlineNic are alter egos. It’s undisputed that Shaohui Gong founded both companies. There was allegedly a sale of OnlineNic in 2007, but the court received conflicting details and evidence about this.

U.S. District Judge Susan Illston, who is now overseeing the case, has ruled (pdf) they are alter egos. This opens 35.cn up to being on the hook for potentially over $5 million.