Nominative Fair Use Doesn’t Stop Airbnb From Reclaiming Domain Name

When an entrepreneur registers a domain name that incorporates a world-famous trademark, sometimes they claim they are simply describing a legitimate third-party service. But a ruling from the U.S. Court of Appeals for the Ninth Circuit serves as a firm reality check for digital marketers and domain registrants looking to ride the coattails of big brands.

In Smith v. Airbnb, Inc., the Ninth Circuit affirmed the dismissal of an action brought by pro se plaintiff Alex Smith, who filed suit under the Anticybersquatting Consumer Protection Act (ACPA) to block Airbnb from reclaiming airbnbseo.com.

The appellate court’s decision offers a masterclass in the limits of nominative fair use, the strength of famous trademarks online, and why appending generic industry acronyms to a famous mark will almost never insulate a registrant from cybersquatting liability.

How This Started: UDRP Eviction and the ACPA Counter-Lawsuit

Alex Smith operated a business offering search engine optimization (SEO) services designed to help hosts optimize their property listings on major travel portals like Airbnb. To attract clients in the hospitality sector, he registered the domain name airbnbseo.com through GoDaddy.

Clever, right?

Well, Airbnb took issue with a third party holding a domain that featured its registered, famous trademark. The company initiated a domain dispute proceeding under GoDaddy’s Uniform Domain-Name Dispute-Resolution Policy (UDRP) and successfully secured an order for the domain to be transferred to them.

To halt the transfer, Smith filed a federal lawsuit under 15 U.S.C. § 1125(d)(1)(V), a provision of the Anticybersquatting Consumer Protection Act (ACPA) that allows a domain registrant to seek a declaratory judgment establishing that their registration and use of the domain is lawful.

Specifically, Smith argued that:

• Combining “Airbnb” with “SEO” created a domain that was not “confusingly similar.”
• He utilized the name in good faith under the doctrine of nominative fair use to describe his service.
• He was entitled to protection under the ACPA’s statutory safe harbor provision.

The federal district court dismissed Smith’s complaint for failure to state a claim. This prompted his appeal to the Ninth Circuit.

How the Ninth Circuit Dissected This Cybersquatting Claim

The Ninth Circuit unanimously affirmed the dismissal, systematically rejecting each of Smith’s arguments.

1. “Confusing Similarity” and Famous Marks

Smith contended that because “SEO” is a recognized industry acronym for search engine optimization, consumers would understand the domain as an independent service rather than an official Airbnb product.

The Ninth Circuit firmly rejected this distinction. Under federal trademark law, adding a generic or descriptive term (like “SEO,” “help,” or “store”) to a famous mark amplifies confusion rather than reducing it. Moreover, it leverages the visibility and goodwill of Airbnb’s brand.

2. The Limits of Nominative Fair Use

Smith relied heavily on the doctrine of nominative fair use, which allows businesses to use a competitor’s or partner’s trademark to accurately identify a product or service (for example, an auto repair shop advertising that it repairs “BMW” vehicles).

The Ninth Circuit clarified that even assuming nominative fair use applies to ACPA domain disputes, it cannot protect a party who embeds a famous trademark directly into their primary web address.

By placing “AIRBNB” in the domain name itself, Smith created an improper commercial connection that went far beyond mere nominative reference.

3. The ACPA Safe Harbor Shield

Finally, Smith attempted to invoke the ACPA’s safe harbor provision, which protects registrants who “believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful.”

The court ruled that safe harbor did not apply. Smith’s own legal filings admitted he strategically selected the domain name because of the widespread fame and visibility of the Airbnb brand. Intentionally piggybacking on a famous brand’s market power defeats any “reasonable ground” to claim a good-faith belief in lawful usage.

What Should You Take Away from This Ruling?

The Ninth Circuit’s ruling provides critical legal guidance for businesses, digital agencies, and third-party vendors that operate alongside major corporate platforms:

Keep Famous Brands Out of Your Web Domain. If your business provides consulting, software, or marketing services for users of a major platform (e.g., Amazon, Shopify, Airbnb, or Salesforce), do not include that platform’s trademark in your domain name. Use a brand name like YourCompanySEO.com and describe your compatibility on the landing page instead.

Descriptive Intent Does Not Equal Fair Use. Intending to describe a service that interacts with a famous brand does not grant a license to register a domain containing that brand’s exact name. Courts will view the domain as an intentional effort to capture search traffic and leverage another entity’s goodwill.

UDRP Injunction Battles are Uphill Struggles. Challenging a successful UDRP decision in federal court under the ACPA requires robust, plausible facts showing a total absence of bad faith. Relying on thin fair-use arguments against a famous mark is a fast track to quick dismissal and significant legal expenses.

If you are a third-party service provider, you must respect the boundaries of a brand’s digital perimeter. It is the only way to build a sustainable, legally sound business model.