WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Netcentives Inc. v. B W Brody Company
Case No. D2000-0672
1. The Parties
1.1 Complainant is Netcentives Inc., a corporation organized under the laws of the State of Delaware, U.S.A., with a place of business at 475 Brannan Street, San Francisco, California 94107, U.S.A. (referred to as "Complainant"). Respondent is B W Brody Company, located at 14515 Dickens Street, Suite 200, Sherman Oaks, California 91403, U.S.A. Complainant is represented by counsel, Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P., Washington, D.C.
2. The Domain Name and Registrar
2.1 The domain name which is the subject of this proceeding is "CLICK-REWARDS.COM" owned by B W Brody Company. The domain name is registered with Network Solutions, Inc., Herndon, Virginia, USA.
3. Procedural History
3.1 On June 24, 2000, a Complaint was received by the WIPO Arbitration and Mediation Center by e-mail, a hard copy of which was received on June 27, 2000.
3.2 On July 18, 2000, Network Solutions provided its Verification Response.
3.3 On July 27, 2000, the Notification of Complaint and Commencement of Administrative Proceeding was issued.
3.4 On August 18, 2000, a Notification of Respondent Default was issued.
3.5 On August 29, 2000, a Notification of Administrative Panel was issued.
3.6 On September 7, 2000, a Rule 12 Request was issued by the Panel, which was answered on September 25, 2000.
4. Factual Background
4.1 Complainant was incorporated on June 21, 1996. From inception until March 1998, Complainant's operations consisted primarily of various start-up activities, such as research and development, personnel recruiting, capital raising, and trial sales of its products and services with initial customers. Through these activities, however, there was public exposure of the NETCENTIVES company name and trademark.
4.2 Today, Complainant is a public company traded on the NASDAQ Stock Market, and is a provider of Internet loyalty, direct marketing, and promotion products and services used to drive consumer behavior. Complainant's flagship program, the ClickRewards Network, is an online promotion and loyalty program that allows e-commerce sites to reward consumers with ClickMiles, a digital promotion currency, for making online purchases. Complainant's technology allows consumers to earn rewards currency at the point of purchase on websites throughout the Internet and to track and manage it in their own personal account at a central website. The ClickRewards Network was launched in March, 1998, and as of March 17, 2000, included more than 4.2 million members who had collectively earned more than 513 million ClickMiles.
4.3 The ClickRewards Network has been promoted by Complainant since March 1998 at both its Netcentives website ("www.netcentives.com") and ClickRewards website ("www.clickrewards.com"). The domain name "NETCENTIVES.COM", now owned by Complainant, was registered by Complainant's founders, Elliot Ng and Eric Tilenius, under the registrant name Tilenius & Ng Ventures on April 1, 1996. The domain name "CLICKREWARDS.COM" was registered by Complainant on January 22, 1997.
4.4 The ClickRewards Network includes e-commerce companies from a broad range of industries. These e-commerce companies purchase ClickMiles currency from Complainant and award them to consumers in order to convert Internet browsers to buyers, increase average purchase size, drive repeat purchases, and build loyalty to their sites. Companies in the ClickRewards Network include many large, established companies operating some of the most popular websites such as Banana Republic, "barnesandnoble.com", CDNOW, Compaq, "DisneyStore.com", E*Trade, Fossil, "FTD.com", "gap.com", HBO, "OfficeMax.com", and "skymall.com", as well as smaller, newer e-commerce companies such as "Cooking.com", eBags, eNutrition, PlanetRx, and ShopSports [this is an affiliate of ESPN]. These merchant partners promote the ClickRewards program by featuring the CLICKREWARDS mark and/or logo on their websites.
4.5 The ClickMiles currency is redeemable for frequent flyer miles on 10 major airlines, as well as for other valuable rewards. Complainant has exclusive agreements with 10 major airlines for the use of their frequent flyer miles in points-based Internet promotions networks. These relationships allow consumers to redeem ClickMiles one-for-one for frequent flyer miles from AmericaWest, American Airlines, British Airways, Canadian Airlines, Continental Airlines, Delta Airlines, Northwest Airlines, TWA, United Airlines, and US Airways. ClickMiles currency can also be redeemed for other goods or services. Other rewards suppliers include 3Com, Marriott Rewards, Motorola, National Car Rental, Olympus, Sega, and Toshiba.
4.6 In January 1999, Complainant launched the ClickRewards@Work program for corporate customers. These are programs through which companies use ClickMiles currency to motivate and reward employees, partners, and stakeholders. Companies using the ClickRewards@Work program currently include Cisco Systems, Corel, Microsoft Corporation, Hewlett-Packard Company, Nortel Networks, "EventSource", and Novell Networks.
4.7 Utilizing the technology platform Complainant developed for the ClickRewards Network and its expertise with promotional products and services, Complainant expanded its product offerings in July 1999 to provide Custom Loyalty Networks. Custom Loyalty Networks are promotional programs for Internet portal sites, companies with major brands, and other websites with substantial membership that use a customized currency. The currency and network are branded with the customers' identity. Complainant has launched Custom Loyalty Networks for LookSmart, Alta Vista, American Express Blue, Coolsavings, Disneyís GO Network and Lycos.
4.8 Complainant has received numerous industry awards for its technology from such organizations as ComputerWorld, Information Week, Upside, Technologic Partners, and Ziff Davis Labs.
4.9 Having been widely promoted among members of the general consuming public since March 1998, and having exclusively identified Complainant, Complainantís CLICKREWARDS mark symbolizes the tremendous goodwill associated with Complainant and is a property right of incalculable value. Furthermore, due to its wide and substantial international use, Complainantís CLICKREWARDS mark has become famous.
4.10 Respondent is not and has never been a licensee of Complainant. Respondent is not and has never been otherwise authorized by Complainant to use the Complainant's CLICKREWARDS mark.
4.11 Complainant owns numerous trademark registrations and applications for the CLICKREWARDS mark in the United States and various other countries, including the following:
a. U.S. Application No. 75/245,969 filed on February 18, 1997 for the CLICK REWARDS mark covering goods in the following International Classes: 9 (computer software), 16 (publications), 35 (incentive programs, marketing services, incentive marketing services, and award programs), 36 (financial services).
b. Australian Registration No. 741740 registered on August 18, 1997 for the CLICK REWARDS mark covering incentive programs, marketing services, incentive marketing services, and award programs in Class 35.
c. Mexican Registration No. 621,036 for the CLICK REWARDS mark covering goods in Class 35 (conducting consumer, business to business, and employee incentive award programs promoting purchase, registration, usage, and product awareness; marketing services; and incentive marketing services).
d. Tunisian Registration No. EE970397 for the CLICK REWARDS mark covering goods in Class 35 (incentive programs, marketing services, incentive marketing services and award programs).
e. Canadian Application No. 853,778 for the CLICK REWARDS mark filed on August 18, 1997 covering computer software for use in electronic commerce via a global network for the purpose of processing, analyzing, and transmitting purchase transactions and purchas transaction data for the purpose of conducting, processing, analyzing, and transmitting promotional programs and incentive award programs via a global network.
f. European Community Application No. 609,446 filed on August 18, 1997 for the CLICK REWARDS mark covering goods in the following International Classes: 16 (publications), 35 (incentive programs, marketing services, incentive marketing services, and award programs), 36 (financial services), and 42 (computer services and online services).
g. Japanese Application No. 9-150,421 filed on August 22, 1997 for the CLICK REWARDS mark covering goods in Class 35 (incentive programs, marketing services, incentive marketing services, and award programs).
4.12 Complainant also owns the domain name "CLICKREWARDS.COM". The "CLICKREWARDS.COM" domain name was registered with NSI on January 22, 1997, and has been used to identify the Netcentivesí CLICKREWARDS website at least as early as March 1998.
4.13 Complainantís trademark rights in the mark CLICKREWARDS, based on its trademark filings and on its common law rights acquired through the use of the CLICKREWARDS mark, trade name, and domain name since March, 1998, predate the April 29, 1999 date of registration of the domain name "CLICK-REWARDS.COM" by Respondent.
5. Partiesí Contentions
5.1 Respondentís misappropriation of the domain name "CLICK-REWARDS.COM" will continue to irreparably injure the reputation and hard-earned goodwill of Complainant and the CLICKREWARDS mark.
5.2 If Respondent is allowed to retain ownership of the infringing domain name "CLICK-REWARDS.COM", Complainant will be left unable to control the unlimited material and information Respondent can post on a website associated with that domain name, which consumers will confuse and associate with Complainant and/or its CLICKREWARDS mark.
5.3 Respondentís actions described above meet the bad faith criteria outlined in Paragraph 4(b) of the UDRP, because (1) Respondent registered the domain name "CLICK-REWARDS.COM" primarily to sell, rent, or otherwise transfer it to Complainant (the trademark owner) for valuable consideration in excess of its documented out-of-pocket costs directly relating to the domain name; (2) Respondent registered and uses the domain name "CLICK-REWARDS.COM" primarily for commercial gain by creating a likelihood of confusion with Complainant's CLICKREWARDS mark as to the source, sponsorship, affiliation, or endorsement of Respondent's website and the products and services located on its website; (3) Respondent registered and uses the domain name "CLICK-REWARDS.COM" to interfere with Complainant's business; and (4) Respondent knowingly misrepresented facts to NSI in the registration agreement for the domain name "CLICK-REWARDS.COM".
5.4 There can be no question that Respondent registered the "CLICK-REWARDS.COM" domain name to sell it to Complainant. Three months after registering the domain name, Respondent contacted Complainant in an attempt to create a bidding war between Complainant and "several" unnamed people allegedly interested in acquiring the domain name. In Respondentís own words: "We have been contacted by several people who have inquired about purchasing the domaine [sic] name . . . Since you have the Clickrewards site, I though I should provide you the opportunity."
5.5 By attempting to create a bidding war for the "CLICK-REWARDS.COM" domain name, Respondent has clearly sought more than its out-of-pocket expenses relating to the registration of the domain name, and has used the domain name in bad faith. Under UDRP precedent, as well as U.S. case law, such an offer to sell a domain name clearly is a commercial use of the domain name. See World Wrestling Federation Entertainment, Inc. v. Michael Bosman (WIPO Case No. D99-0001); Panavision International, L.P. v. Dennis Toeppen, et al., 141 F.3d 1316 (9th Cir. 1998).
5.6 Complainantís CLICKREWARDS mark and "CLICKREWARDS.COM" domain name are famous, exclusively identifying Complainant and its goods and services.
5.7 By design, Internet users have been, and will continue to be, mislead into believing that Respondentís "CLICK-REWARDS.COM" website is operated/registered either by Complainant or with Complainantís permission and authorization. Given the fame of and the substantial promotion of the CLICKREWARDS mark, the public will reasonably expect to find Complainant's website when they type the "CLICK-REWARDS.COM" domain name in their browser.
5.8 Respondentís registration and use of the domain name "CLICK-REWARDS.COM" is also likely to confuse and deceive consumers into mistakenly believing that Respondent and its activities are offered, authorized, licensed, or sponsored by Complainant; or are otherwise connected, associated, or affiliated with Complainant and/or its CLICKREWARDS program.
5.9 Respondentís attempt to sell the "CLICK-REWARDS.COM" domain name for a profit to the highest bidder is clearly a commercial use. Further, because the "CLICK-REWARDS.COM" domain name has no value apart from Complainantís CLICKREWARDS mark and "CLICKREWARDS.COM" domain name, no justification or excuse exists for Respondentís unauthorized registration of that domain name. See Cellular One Group v. Paul Brien (WIPO Case No. D2000-0028) (inferring respondent's bad faith intent to sell domain name where name would not otherwise be commercially useful without violating complainant's rights); Fire-Trol Holdings, L.L.C. v. Fire Foam Products Development (NAF File No. FA0002000093709) (finding that respondent had constructive knowledge of complainantís famous mark); America Online, Inc. v. Avrasya Yayincilik Danismanlik Ltd. (NAF File No. FA0002000093679) (same).
5.10 Respondent registered and uses the domain name "CLICK-REWARDS.COM" to interfere with Complainantís business and its ability to promote its ClickRewards Network.
5.11 By using the "CLICK-REWARDS.COM" domain name for an inactive website, Respondent is interfering with Complainantís ability to (1) effectively and fully promote its CLICKREWARDS mark and ClickRewards Network on the Internet, and (2) control the images and information associated with its trademarks and logos. Potential partners may not enter into agreements with Complainant if unauthorized infringers, like Respondent, are permitted to freely use Complainantís valuable marks, especially in a domain name comprised of its CLICKREWARDS mark.
5.12 As noted above in Paragraph 29, Respondent breached its registration contract with NSI for the domain name "CLICK-REWARDS.COM" because it knowingly misrepresented that its registration of that domain name did not infringe the rights of any third party. This has been held to constitute bad faith under the UDRP. See Slep-Tone Entertainment Corporation v. Sound Choice Disc Jockeys, Inc. (NAF File No. FA2002000093636) (finding the domain name was registered and used in bad faith because respondent did not make its warranty of no infringement in registration agreement in good faith); Noodle Time, Inc.v. Max Marketing (eResolution) (same).
5.13 Pursuant to Section 4(c) of the UDRP: (i) Respondent is not using and has not used or is not demonstrating and has not demonstrated an intent to use the "CLICK-REWARDS.COM" domain name in connection with a bona fide offering of goods or services; (ii) Respondent is not and has not been commonly known by the "CLICK-REWARDS.COM" domain name; and (iii) Respondent is not making legitimate noncommercial or fair use of the "CLICK-REWARDS.COM" domain name, without intending to mislead and divert consumers or to tarnish Complainantís CLICKREWARDS mark for commercial gain.
5.14 Pursuant to Section 3(b)(xi) of the Rules, Complainant confirms that it has not commenced or terminated any other legal proceedings in connection with the domain name "CLICK-REWARDS.COM".
5.15 Pursuant to Section 3(b)(xiv) of the Rules, Complainant agrees that its claims and remedies concerning the registration of the domain name, the dispute, or the disputeís resolution shall be solely against the domain-name holder and waives all such claims and remedies against (a) the dispute-resolution provider and panelists, except in the case of deliberate wrongdoing, (b) the registrar, (c) the registry administrator, and (d) the Internet Corporation for Assigned Names and Numbers, as well as their directors, officers, employees, and agents. Complainant certifies that the information contained in this Complaint is to the best of Complainantís knowledge complete and accurate, that this Complaint is not being presented for any improper purpose, such as to harass, and that the assertions in this Complaint are warranted under these Rules and under applicable law, as it now exists or as it may be extended by a good-faith and reasonable argument.
5.16 Respondent is in default and has thus made no contentions.
6. Discussion and Findings
6.1 Complainant must prove each of the following three elements set forth in the Uniform Domain Name Dispute Resolution Policy Paragraph 4(a), namely (i) the domain name is identical or confusingly similar to a trademark or service mark in which the Complainant has rights; (ii) Respondent has no rights or legitimate interests in respect of the domain name; and (iii) the domain name has been registered and is being used in bad faith. The Panel will now look at each one of the elements to determine if Complainant has met its burden of proof.
6.2 Complainant has asserted rights in the trademark and service mark CLICKREWARDS, both at common law as well as through an application to register the mark in the U.S. Patent and Trademark Office, and applications and registrations in other countries. The Panel finds that the trademark and the domain name are identical, and that the Complainant owns trademark rights in such term. Accordingly, the Panel finds that the Complainant has the requisite rights to object pursuant to Policy 4(a)(i).
6.3 There is no proof in the record of rights or legitimate interests of Respondent pursuant to Policy 4(c). Accordingly, the panel finds that Complainant has met its burden of proof concerning Policy 4(a)(ii).
6.4 The last element in the proceeding is bad faith. Policy 4(b)(i) states "circumstances indicating that you have registered or you have acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name" shall be evidence of the registration and use of a domain name in bad faith. In this proceeding, the record indicates that Respondent offered to sell the domain name to the highest bidder with apparent knowledge of Complainantís rights. Accordingly, the Panel finds that Respondent registered and is using the domain name in bad faith pursuant to Policy 4(a)(iii).
7.1 The Panel decides that the domain name "CLICK-REWARDS.COM" is identical or confusingly similar to the trademark of Complainant, that Respondent has no rights or legitimate interests in such domain name, and that the domain name in issue has been registered and is being used in bad faith.
7.2 The Panel hereby orders that the registration of the domain name "CLICK-REWARDS.COM" be transferred to Complainant.
Clark W. Lackert
Date: September 29, 2000