WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Trans Continental Records, Inc. v. Compana LLC
Case No. D2002-0105
1. The Parties
The Complainant is Trans Continental Records, Inc., is a Florida corporation having a place of business at Orlando, Florida, United States of America. Represented by Edward J. Naughton of Holland & Knight LLP, 10 St. James Ave., Boston, MA 02116, United States of America.
The Respondent is Compana LLC, Post Office Box 111501,Carrollton, Texas 75011-1501, United States of America. Represented by its president, Jeffrey Baron.
2. The Domain Name and Registrar
The domain name at issue is <LFO.com>. The domain name is registered with Secura GmbH, located at Am Alten Posthof 4-6, 50667 Köln, Germany.
3. Procedural Background
Complainant filed its Complaint under the ICANN Uniform Domain Name Dispute Resolution Policy (the "Policy") with the World Intellectual Property Organization Arbitration and Mediation Center (the "Center") by hardcopy on January 31, 2001 and by e-mail on February 20, 2002. On February 28, 2002, the Center formally commenced this proceeding. Respondent timely filed a Response by e-mail on March 20, 2002. The Complainant elected a single-member Administrative Panel, and the Respondent acceded.
On April 5, 2002, after clearing for potential conflicts, the Center appointed the Panel. Because of transmission difficulties, the hard copy of the Response, with exhibits, was not received by the Panel until April 11, 2002, and the hard copy of the Complaint exhibits was not received by the Panel until April 29, 2002.
Complainant sought leave on April 17, 2002, to file a supplemental submission consisting of a citation to a recent United States federal Court of Appeals decision. Because that decision was released on April 3, 2002, well after the Complaint was filed, and because Complainant promptly submitted it to the Panel and did so without rearguing the merits of the case, the Panel accepts the submission. See Pet Warehouse v. Pets.Com, Inc., WIPO Case No. D2000-0105 (April 13, 2000).
4. Factual Background
Complainant is a record company, among whose musical groups is the Lyte Funky Ones, popularly known as "LFO." Complainant owns the trademark rights associated with LFO, which has sold nearly 1.75 million albums and over 2.5 million singles since April 1996. Several of LFOís singles have had significant success on American popular radio, and the group has received extensive media coverage in both the mainstream press and teen- and pre-teen-oriented periodicals targeting LFOís fan base. LFO has toured Europe and the U.S. extensively since 1996, including as the headline act for the Nickolodeon cable networkís Summer 2000 "All That and More" music festival. Merchandise bearing the LFO logo has generated revenues in excess of $900,000. Complainant has filed an application with the U.S. Patent and Trademark Office for registration of the LFO mark for various entertainment-related goods and services, including posters, backpacks and clothing.
Complainant was the registrant of <LFO.com> from September 23, 1998 until September 23, 2000, when the registration expired.
Respondent registers generic and short, memorable names for use in an email business.
5. Partiesí Allegations
Complainant alleges that the domain name at issue is identical to or confusingly similar with the name of its musical group LFO, and that Respondent has no rights or legitimate interests in respect of the domain name at issue. According to Complainant, Respondent has no trademark registrations comprised in whole or in part of the name, does not carry on a bona fide business under a name corresponding to the domain name, and is not commonly known by any name that includes "LFO." Respondent uses the domain name only to resolve to a third-party search engine.
Complainant further alleges that Respondentís registration and use of the domain name is in bad faith because Respondent has attempted to profit from the registration of the domain name. When Complainant discovered that Respondent had registered the domain name, Complainant offered to purchase it for $3,000. Respondent rejected the offer but invited a higher one. In addition, Complainant alleges that Respondent has demonstrated bad faith by passively holding and "warehousing" the domain name, preventing Complainant from reflecting its mark in a corresponding domain name. Complainant states that Respondent has engaged in a pattern of such conduct, by registering domain names including <agile.com>, <clockwise.com>, <greenlawn.com>, and <insulator.com>. "AGILE," "CLOCKWISE," "GREENLAWN," and "INSULATOR" are all registered as marks in certain categories with the U.S. Patent and Trademark Office.
Complainant also alleges that Respondent acted in bad faith because it intended to cause confusion based on the fact that Complainant owned <LFO.com> for two years and fans of the musical group became accustomed to visiting that site. This, according to Complainant, leads to initial interest confusion, which is a violation of the Lanham Act. Finally, Complainant alleges that Respondent acted in bad faith because its registration has prevented and disrupted Complainantís business by making it more difficult for fans of LFO to find information about them and products bearing their name.
Respondent alleges that it was unaware of Complainantís unregistered trademark or its previous registration of the domain name, and registered it only on December 15, 2000, three months after Complainantís registration lapsed. Its business model, Respondent states, is to register generic and short, memorable names for use in a "vanity"-type email business. Respondent also contests Complainantís rights in the LFO mark because an opposition to Complainantís application is pending at the Trademark Trial and Appeal Board.
Respondent claims that it has rights or legitimate interests in the domain name at issue because LFO is a short, generic letter combination and Complainant may not claim exclusive rights therein. See, e.g., Philippe Tenenhaus v. Telepathy, Inc., NAF Case No. FA0003000094355) (May 17, 2000) (<daf.com> was generic or acronymic term available to multiple parties and therefore not registered or used in bad faith); Kis v. Anything.com, WIPO Case No. D2000-0770 (November 20, 2000) (same for <kis.com>). LFO, among other uses, is an acronym for "Low Frequency Oscillation," and, according to Respondent, the initials of numerous organizations and individuals. Moreover, Respondent claims, it does not use the domain name for its trademark value, but for its value as a short, three-letter combination. Because of the rarity of such combinations (all are registered, as are all two-letter domain names and all allowed one-letter domain names), they have commercial value independent of any trademark value. While it might not be legitimate to register <ibm.com> because of the overwhelming fame of IBM, Respondent suggests, a mere acronym of the name of a musical group without widespread fame or secondary meaning cannot be appropriated by one trademark owner.
In furtherance of its business model, Respondent states that it has registered numerous domain names allowing customers to match their profession, surname or initials, and lists as examples of its registered domain names <mcCoy.com>, <cindi.com>, <abigail.com>, <mickie.com>, <interns.com>, <gra.com>, <hko.net>, <icy.com>, <wce.com>, and <yte.com>. Respondent states that, prior to registering <LFO.com> and prior to any notice from Complainant, it invested in a dedicated web server and began negotiations with software developers to complete the email software applications necessary to its business. Thus, Respondent contends that it has demonstrated preparations to use the domain name in a bona fide business, as part of a business model that numerous Panels have conceded is legitimate (including one evaluating Respondent itself).
Respondent disputes Complainantís allegations of bad faith. Respondent submits that it never offered to sell this domain name or any other, but merely rejected Complainantís unsolicited offer through counsel and granted Complainantís counsel permission to communicate directly with Respondent. Respondent also claims that it has not tried to prevent markholders from using domain names or disrupt their businesses and that it has not attempted to attract Internet users by creating a likelihood of confusion with Complainantís mark.
6. Discussion and Findings
The burden for the Complainant under paragraph 4(a) of the Policy is to prove:
(i) That the domain name registered by the Respondent is identical or confusingly similar to a trademark or service mark in which the Complainant has rights;
(ii) That the Respondent has no rights or legitimate interests in respect of the domain name; and
(iii) That the domain name has been registered and used in bad faith.
In this case, the first element has been established. Complainant has submitted sufficient evidence to establish common-law rights in the initialism "LFO." The mere fact that an opposition proceeding has been filed against its application to register that mark in the U.S. Patent and Trademark Office does nothing to undermine the showing of common law rights (particularly where Respondent has identified neither the opposer nor the grounds for the opposition). The relative strength or weakness of Complainantís rights are not relevant to the first factor once Complainant has shown sufficient interest in the mark to establish some trademark rights.
Complainant has failed, however, to establish the second and third elements of the Policy. Use of short terms that may be appropriate for a vanity email business, or even for sale, is a legitimate business model. See, e.g., International Raelian Religion and Raelian Religion of France v. Mailbank.com Inc., WIPO Case No. D2000-1210 (April 4, 2001) (<rael.com>); General Machine Products Company, Inc. v. Prime Domains, NAF Case No. FA0001000092531 (March 16, 2000) (<craftwork.com>).
In response to Complainantís prima facie case that Respondent lacked a legitimate interest, Respondent produced evidence that it prepared to use the domain name, among others, in that type of business. The Panel is disturbed, however, by the apparent inactivity of Respondentís supposed business model. Respondentís evidence that it prepared to operate an email business is from early 2001, and currently its domain names simply resolve to a search engine. If it would have mattered to the decision in this case, the Panel would have sought additional information from the Respondent to explain the delay. Given the Panelís definitive ruling on the third factor, though, the Panel determined that there was no reason to delay this matter by seeking supplemental submissions.
Significantly, Respondent certifies that it was unaware of Complainantís rights. That the LFO mark is unregistered and that Respondent registered the domain name some months after Complainantís registration had lapsed, apparently in the ordinary course of its business, provides no reason for the Panel to question the credibility of Respondentís certification. If it had registered a generic domain name in good faith for use in a vanity-type email business, Respondent was entitled to reject Complainantís offer to transfer the domain name and even to offer it for sale (as its communication with Complainant seems to have suggested by stating that Respondent was uninterested in selling the name "under the terms [Complainant] offered"). Thus, Complainant has not met its burden of showing that the domain name was registered and used in bad faith.
The Panel specifically rejects Complainantís borderline frivolous argument that Respondentís registration of <agile.com>, <clockwise.com>, <greenlawn.com>, and <insulator.com>, among others, shows a pattern of cybersquatting. Even setting aside the decision in Agile Software Corp. v. Compana LLC, WIPO Case No. D2001-0545 (July 23, 2001), which determined that Respondentís registration of <agile.com> was not in violation of the Policy, these terms are all dictionary terms with obvious generic meanings. That they may be distinctive as applied to particular goods and services, as "Apple" is when applied to computers, is no evidence of bad faith. See, e.g., Etam, plc v. Alberta Hot Rods, WIPO Case No. D2000-1654 (January 31, 2001) (<tammy.com> legitimately registered because it contained a common female name); Zero International Holding GmbH v. Beyonet Services, WIPO Case No. D2000-0161 (May 12, 2000) (<zero.com> legitimately registered because "zero" is a short, common word); Shirmax Retail Ltd. v. CES Marketing Group, eResolution Case No. AF-0104 (March 20, 2000) (<thyme.com>; same).
In addition, the Panel rejects Complainantís argument that Respondent attempted to create a likelihood of confusion merely because former visitors to <LFO.com> might return there, expecting Complainantís site to be there still. While re-registering a domain name corresponding to an inherently distinctive or uniquely famous mark because of the expectation that former visitors would return and be confused or diverted can surely qualify as bad faith, see SlashCity v. Domain For Sale, NAF Case No. FA0108000098823 (October 1, 2001), the Panel will not infer such intent merely because the Respondent registered a short, lapsed domain name. An automatic presumption of bad faith intent to cause confusion, or initial interest confusion, stemming from a registrantís taking over a lapsed registration would essentially give registrants a right of recapture beyond that set forth in their contracts with domain name registrars. The UDRP is not a proper vehicle for such a change.
It may be that Complainant could develop evidence of bad faith and lack of legitimate interest in a legal proceeding that would allow more evidentiary development. The Policy, however, was not designed to transfer domain names in every case that a trademark owner might ultimately win. On the record before it, the Panel cannot say that Complainant has shown that Respondent lacked a legitimate interest and registered and used the domain name in bad faith.
Complainant has failed to establish two of the three elements of the Policy: that Respondent lacks legitimate rights or interests in the domain name <LFO.com>, and that Respondent registered and is using the domain name in bad faith. The Panel therefore denies the Complainantís request that the domain name be transferred from Respondent to Complainant.
David H. Bernstein
Dated: April 30, 2002