WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
SBC Communications Inc. v. eWorldWideWeb, Inc.
Case No. D2002-0608
1. The Parties
Complainant is SBC Communications Inc., a Delaware, United States of America ("USA") corporation with its principal place of business, San Antonio, Texas 78205, USA ("SBC" or "Complainant").
Respondent is eWorldWideWeb, Inc., La Jolla, California 92037, USA., ("Respondent").
2. Domain Name and Registrar
The domain names in issue are: <ebell.com> and <ebell.org> (the "Domain Names").
The registrar is Tucows, Inc., 96 Mowat Avenue, Toronto, Ontario, M6K 3M1 Canada (the "Registrar" or "Tucows").
3. Procedural History
The WIPO Arbitration and Mediation Center (the "Center") received SBC’s complaint via email on June 28, 2002, and in hard copy on July 2, 2002.
The Center emailed the Registrar on July 1, 2002, requesting verification of the Domain Name registration. On July 2, 2002, the Center received confirmation from Tucows via email that the Domain Names were registered with Tucows, as well as confirmation of the registrant contact information, applicability of the Uniform Domain Name Dispute Resolution Policy (the "Policy"), and current status of the Domain Names.
After verifying that the complaint complied with the formal requirements of the Rules for Uniform Domain Name Dispute Resolution Policy (the "Rules"), the Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the "Supplemental Rules"), and the Policy, the Center notified the registrant on July 3, 2002, of the commencement of the administrative proceeding. It notified Respondent that Complainant had submitted a complaint as described above. The notification also stated that the complaint satisfied the formal requirements of the Policy, Rules, and Supplemental Rules and the appropriate payment had been made. Accordingly, the administrative proceeding commenced on July 3, 2002. The notification invited Respondent to reply by July 23, 2002, in accordance with Paragraph 5 of the Rules and the Supplemental Rules. The notification additionally notified Respondent that Complainant elected a single panelist who would be appointed within five days after the Response was due, but that if Respondent preferred a three member panel, Respondent could so designate, with the required Payment, and would have the option to nominate three panelists for possible inclusion on the panel. Finally, Respondent was notified of the identity and contact information of the Case Manager. A copy of the notification was e-mailed to Complainant.
Prior to the response deadline, on July 20, 2002, Respondent requested that the Center allow it an additional period of time to respond, due to difficulty locating an attorney with domain-name expertise, as well as to other commitments of counsel and the impact of the July 4 holiday. On July 22, 2002, the Center extended Respondent’s deadline to August 9, 2002. On that date, Respondent sent its Response to the Complaint. Respondent further requested that a three-member panel resolve this dispute, and tendered the required payment to the Center.
Accordingly, on September 16, 2002, the Center appointed the undersigned three panelists to constitute the Panel to resolve this dispute, advised the parties of the identity of the undersigned panelists, and that the panelists had complied with Paragraph 7 of the Rules by submitting a Statement of Acceptance and Declaration of Impartiality and Independence to the Center.
4. Factual Background; Parties’ Contentions
a. The Trademark
SBC’s complaint alleges that it is one of the concurrent use owners of the BELL marks formerly owned by Atlantic Telephone & Telegraph Co., Inc. ("AT&T"). As a result of the court-ordered break-up of AT&T in 1983, various Regional Bell Operating Companies, colloquially known as "Baby Bells," were formed. SBC is one of the Baby Bells. SBC has presented evidence that it owns incontestable federal trademark registrations for the mark BELL, as well as the mark SOUTHWESTERN BELL. It contends that the BELL word mark has long been recognized in the telecommunications field, and that several different forums have acknowledged the fame of the BELL mark. It argues that its federal registrations grant it exclusive rights to use this mark for goods and services in the fields of providing telecommunication services, installing and maintaining telecommunications systems and equipment, and designing and engineering telecommunications systems and equipment.
b. Jurisdictional Basis
As stated above, Tucows verified that the Policy applies to the Domain Names. Therefore, as this proceeding is likewise governed by the Policy and in accordance with it, the Rules, and the Supplemental Rules, the Panel has jurisdiction to decide this dispute.
c. The Complaint
SBC asserts as follows:
▪ The registered BELL mark has worldwide recognition.
▪ The disputed Domain Names are confusingly similar to the BELL trademark.
▪ Respondent registered the Domain Names on September 16, , 1999, and December 23, 1999, respectively.
▪ On December 14, 1999, Respondent’s president filed a trademark application for the mark EBELL with the United States Patent and Trademark Office ("PTO"), for use in connection with services described in the application as "providing web development for others in the field of electronic business and commerce."
▪ On April 27, 2000, counsel for SBC wrote to Respondent’s trademark counsel asserting that respondent’s use of EBELL was a violation of SBC’s trademark rights. Complainant followed up with several additional letters that went unanswered by Respondent.
▪ After Respondent’s EBELL trademark was allowed and published for opposition by the PTO, and Respondent still did not answer SBC’s demand letters, SBC filed a notice of opposition to that application.
▪ Shortly thereafter, on January 24, 2001, SBC received a letter from Allen Goldstone of Creative Business Strategies, Inc. in Boulder, Colorado. Mr. Goldstone stated that he had received the opposition, and added "[w]e have had several inquiries with respect to the purchase of the URL ebell.com. Given your interest in our trademark application, we would like the opportunity to see if there is any interest on your part in the acquisitions [sic] of the URL ebell.com."
▪ Further correspondence as well as telephone discussions ensued. SBC inquired as to Mr. Goldstone’s authority to speak for Respondent. SBC ultimately spoke directly with Respondent’s president, Robert Wilcox, telling him that SBC believed it had rights in the Domain Names, in addition to the disputed trademark application. SBC offered to compensate Respondent for its out-of-pocket expenses incurred in registering the Domain Names.
▪ On November 30, 2001, Mr. Wilcox filed an express abandonment of the trademark application.
▪ On April 15, 2002, Mr. Wilcox sent a letter to SBC offering to sell the Domain Names to SBC for $38,200 – a sum that he claimed was based on both "objective" and "subjective" estimates of his "investment" in the Domain Names.
▪ The Complaint further notes that Respondent’s business is listed in a Dun & Bradstreet report as "Internet Hosting Services" and "Business Consulting," and that an examination of two web sites that it owns indicate that its business consists of brokering, selling, or registering domain names, as well as marketing, branding, and web design and development.
▪ The Complaint contends that the Domain Names are confusingly similar to the BELL mark, that Respondent has no rights or legitimate interest in the Domain Names, and that Respondent registered them in bad faith as evidenced by its offer to sell them for $38,200 and by the fame of the mark itself.
In its Response, Respondent asserts that:
▪ The Policy was established to permit the expedited disposition of clear abuses, not a resolution of close cases of trademark law.
• The second-level domain "ebell" is not confusingly similar to Complainant’s BELL trademark, because Complainant does not own rights to every mark containing the four letters "BELL," and because the category of goods and services for which SBC has rights in the BELL mark is limited to those shown in its registration. Respondent further argues that the term "bell" is generic.
• That Respondent has legitimate rights in the "ebell" second-level domain because it uses a generic term, and because Respondent invested in the cost of seeking federal registration of the EBELL mark, which constitutes "demonstrable preparations to use" the mark under Policy paragraph 4(c)(ii).
• That it did not abandon such rights when it expressly abandoned its trademark application, which it did for business reasons including the cost of the proceedings.
• That it did not engage in bad faith registration or use. As to SBC’s claim that it offered the Domain Names for sale for a price substantially in excess of their cost, Respondent claims that "Complainant initiated discussions about the Complainant’s purchase of the domain names." Respondent further states, and provides affidavits likewise stating, that when it registered the Domain Names it had no bad-faith intent or purpose to interfere with SBC’s business. Respondent adds (and again asserts under oath in an affidavit) that it has never had a UDRP complaint filed against it, nor any legal action asserting cybersquatting or trademark infringement.
• Finally, Respondent asserts that this is a case of "reverse domain name hijacking" under the Policy, and requests that the Panel so find.
5. Discussion and Findings
The Panel now proceeds to consider this matter on the merits in light of the Complaint, the Response, the Policy, the Rules, and other applicable authority, including U.S. trademark law (which is applicable in this case between two U.S.-based entities).
Complainant bears the burden of proving the three requisite elements of Paragraph 4(a) of the Policy, namely that, with respect to the two Domain Names at issue:
(i) The Domain Names are identical or confusingly similar to SBC’s trademark in issue here; and
(ii) Respondent has no rights or legitimate interests in respect of the Domain Names; and
(iii) The Domain Names were registered and are being used in bad faith.
Paragraph 4(b) of the Policy sets out four non-exclusive, but illustrative, circumstances of acts that for purposes of Paragraph 4(a)(iii) above would be evidence of the registration and use of a domain name in bad faith.
Paragraph 4(c) of the Policy sets out three illustrative circumstances any one of which, if proved by Respondent, would demonstrate Respondent’s rights or legitimate interests in the Domain Name for purposes of Paragraph 4(a)(ii) above.
a. Complainant’s Proof
(i) Domain Name Identical or Confusingly Similar to Trademark
The domain names <ebell.com> and <ebell.org> are alleged to be identical or confusingly similar to SBC’s registered, and arguably famous, trademark BELL.
Respondent could not, of course, avoid such a finding merely because it has added the generic top-level domain names (gTLD) ".com" or ".org" to a mark. The gTLD is a functional necessity rather than an arbitrary trademark choice, and it is well established, therefore, that the gTLD is properly ignored when considering similarity. See College Summit, Inc. v. Yarmouth Educational Consultants, Inc., WIPO Case No. D2000-1575 (January 17, 2001).
Similarly, it is well established that Respondent’s addition of the prefix "e" to a mark does not substantially minimize or detract from any confusing similarity that might exist, because the prefix "e" has come to be commonly used to designate goods or services sold or offered electronically, i.e. on the Internet. See In re Styleclick.com, Inc., 57 U.S.P.Q.2d 1445, 1448 (TTAB 2000); Continental Airlines, Inc. v. United Airlines, Inc., 53 U.S.P.Q.2d 1385, 1396-97 (TTAB 1999). Cf. General Electric Co. v. Forddirect.com, Inc., WIPO Case No. D2000-0394 (June 22, 2000) (addition of generic term does not alter the confusing similarity of a domain name to a mark).
Accordingly, the Panel finds that the Domain Names use a term identical, or virtually identical, to "bell." SBC has met its burden of proof under paragraph 4(a)(i) of the Policy.
(ii) Whether Respondent Has Rights Or Legitimate Interest In the Domain Name.
As to the second element of paragraph 4(a), however, SBC fails to persuade this Panel that it has met its burden to show that Respondent lacks any legitimate rights or interest in the Domain Names.
To be sure, this is not the classic "legitimate interest" case in which both parties made prior concurrent use of the trademark, or in which a respondent had been known by the name at issue prior to any dispute arising. Here, Respondent does not claim to have been known by the name EBELL, or to have made commercial use of that mark prior to the dispute. It does, however, advance two "legitimate interest" arguments, both of which are persuasive.
First of all, Respondent is correct as a matter of U.S. trademark law – as well as under numerous cases decided under the Policy – that no one has exclusive rights to common descriptive terms used in their generic sense. See, e.g., Ing. Mag. Hans Schneider v. ALLRisk Management GmbH, WIPO Case No. D2002-0001 (April 23, 2002); Cream Holdings Ltd. v. National Internet Source, Inc., WIPO Case No. D2001-0964 (September 28, 2001). One could, for example, register <bell.com> or <ebell.com> and use it to resolve to a web site at which bells were offered for sale, or which described the registrant’s unique process for manufacturing bells. Respondent, and anyone else, has a legitimate right to register (and keep) any common descriptive term that is used in a generic sense as part of a domain name – i.e. to resolve to a web site featuring goods or services which the name describes. There is, for example, no bad faith in the registration, use, and/or offering for sale of domain names such as <loans.com> or <business.com>, sold (often for princely sums) to people who wanted to use the domain names in their generic sense.
SBC responds that BELL is a registered, well-known trademark. True; but some words can have more than one function simultaneously: they can exist both as a trademark (when, for example, they are used arbitrarily or suggestively in connection with a particular set of goods and services that the term does not directly describe) and also as a common descriptive term that can be used in a generic sense as discussed above. Determining which type of use is involved, under U.S. trademark law, requires a close examination of the context in which the use occurs, so as to assess whether a likelihood of confusion exists in connection with the goods and services at issue. If, for example, a person were to make and sell computers under the brand name APPLE, that would (absent a license) be likely to be deemed to infringe the strong, arbitrary APPLE® trademark owned by Apple Computer, Inc., as there would be a high likelihood that a consumer or end-user would be confused into believing that these computers originated with, or were authorized or associated with, that company. If, however, the person were to use that same term in connection with selling the fruit of an apple tree, there would be no infringement, and no likelihood of confusion, as the use would be of the descriptive or generic term "apple." As used in that sense, the word would be unprotectable under trademark law.
Here, likewise, the mark BELL is a strong, registered, and perhaps even "famous" trademark in the telecommunications field; yet the word "bell" is also a common descriptive term. The question before us, in resolving this second element of paragraph 4, is: which one is Respondent using? The trademark, or the English word used in a generic sense? The answer is: We cannot tell for sure. Respondent does not appear to have made any commercial use of the Domain Names to date, and its papers are rather cryptic as to its intended use of the Domain Names. The most plausible explanation, given the evidence uncovered by Complainant, seems to be that Respondent is a "warehouser" of domain names (acquired for possible re-sale during the time when the Internet "land rush" was perceived as a potentially-successful business model). This theory is further supported by an examination of the list of other domain names Respondent has registered (annexed to the Complaint), which appear to consist primarily of common English terms. The fact that Respondent has a stockpile of domain names constructed from descriptive terms suggests that Respondent was not intentionally targeting Complainant or attempting to profit from the goodwill established by that trademark holder.
Given the fact that Respondent attempted to register the trademark EBELL for "web development" services, it is also possible that Respondent intended to provide web development services under the Domain Names.
Under either scenario, Complainant has failed to persuade us that Respondent lacks legitimate rights. The burden is not on Respondent to justify its holdings but on Complainant to show them to be improper. On this record, Complainant has not done so. If Respondent merely registered a mark similar to the common English word "bell," that alone is not a violation of the Policy because, as noted above, no one holds exclusive rights to common descriptive terms used in their generic sense.
If Respondent’s intent was to establish a web development business under the Domain Names, that too may constitute a legitimate right. The Panel is not persuaded by Complainant’s argument that web development services are so closely related to SBC’s own telecommunications line of business as to create a likelihood of confusion or to warrant the conclusion that Respondent is using the term "bell" in its trademark rather than ordinary English sense.
SBC emphasizes that, in addition to its well-known telephony services, it is also in the business of providing Internet access services, and indeed is one of the leading Internet Service Providers ("ISP’s") in America. But – even leaving aside that such services do not appear in its registrations – the problem with this argument is that companies can operate under similar trademarks within a broadly-defined field such as "electronics" or "Internet" or "telecommunications" without necessarily causing consumer confusion. SBC offers no evidence that ISP’s are commonly web developers, or vice versa. The fact that both entities are somehow associated with the Internet does not in and of itself create a likelihood of confusion or indicate an intent to trade off the trademark value (rather than the generic value) of the term "bell." The situation would likely be different, of course, if Respondent were using the Domain Names to provide telephony products or services, or acting as an ISP.
In addition, Respondent correctly notes that prior to any notice of this dispute from SBC it had applied to register the trademark EBELL, which constituted an investment of funds in an attempt to do business under that trademark. This fact further supports the conclusion that Respondent made "demonstrable preparations to us" the Domain Names under Policy paragraph 4(c)(i).
SBC argues that Respondent’s express abandonment of its application to register the EBELL mark was a waiver of any legitimate rights in that mark, or an acknowledgment that such rights did not exist. It was neither of these. It was simply a choice not to pursue a potentially-expensive legal dispute with a large adversary. The Panel finds Respondent’s testimony that this was a business decision, made for financial reasons, to be plausible. SBC cites no authority for the proposition that abandoning a trademark application constitutes a waiver of trademark rights (other than the right to proceed with that particular trademark application), or an acknowledgment that no such rights exist.
For all the above reasons, the Panel concludes that Complainant has failed to show that the Respondent lacks rights or legitimate interests to the Domain Names.
Whether a court would reach the same conclusion in a trademark infringement action, after more complete discovery and analysis under trademark law, is not our concern. See J. Crew v. Crew.com, WIPO Case No. D2000-0054(April 20, 2000) ("The ICANN policy is very narrow in scope, covers only clear cases of ‘cybersquatting’ and ‘cyber piracy,’ and does not cover every dispute that might arise over domain names."); Second Staff Report on Implementation Documents for the Uniform Dispute Resolution Policy (October 24th, 1999), "http://www.icann.org/udrp/ udrp-second-staff-report-24oct99.htm 4.1(c)" ("Except in cases involving ‘abusive registrations’ made with bad-faith intent to profit commercially from others’ trademarks (e.g., cybersquatting and cyberpiracy), the adopted policy leaves the resolution of disputes to the courts. . . . [The Policy] does not extend to cases where a registered domain name is subject to a legitimate dispute (and may ultimately be found to violate the challenger’s trademark).").
(iii) Registration and Use in Bad Faith
In light of the above analysis, there is no need to reach the question of bad faith. The Panel will, however, touch on this issue briefly, as it bears some relevance to an issue discussed below.
SBC claims that Respondent offered the domain names for sale to the trademark owner (SBC) for a price substantially in excess of registration costs, thereby committing an act of bad faith as illustrated in paragraph 4(b)(i) of the Policy. Respondent counters that it was Complainant who initiated discussions about purchasing the Domain Names, and that decisions under the Policy have consistently held that such a scenario does not establish bad faith.
In fact, however, the record shows that it was Respondent who first offered to sell the Domain Names. SBC initiated discussions with Respondent only about the application to register EBELL as a trademark. Respondent proceeded to offer the Domain Names for sale to SBC. Up until then, the Domain Names had not been in issue.
Respondent would have done better to admit that it offered the Domain Names for sale; for it was perfectly entitled to do so. There is no bad faith in registering, or offering to sell, a domain name consisting of a common English term, if used in a descriptive, generic, or other non-trademark sense. It is well established that selling, or offering to sell, such domain names – even for a high price (e.g. <loans.com>, <business.com>) – is not a violation of the Policy, at least absent proof of the elements of Paragraph 4(a). As discussed above, Complainant has failed to adduce such proof.
6. Reverse Domain-Name Hijacking
Respondent argues that the complaint was so groundless or frivolous as to constitute a case of reverse domain-name hijacking. The Panel disagrees.
First of all, the case was not frivolous. SBC does indeed own a strong, and arguably famous, trademark, and as noted above, Respondent’s Domain Names are similar to it (although, as we have found, not necessarily confusingly so). Although we have found that the provision of web development services is not so closely related to providing Internet access services as to render Respondent’s registrations improper, SBC’s position is not frivolous.
Second, Respondent’s explanation of its "legitimate interest" in the Domain Names was limited at best. Despite offering several affidavits denying any bad faith, it failed to offer any clear explanation of what it did intend to do with the Domain Names. Warehousing them for sale seems like the most plausible conclusion – a legitimate use, if the Domain Names are being used in a descriptive or generic rather than trademark sense – but Respondent was less than clear about its intent with regard to the Domain Names.
Third, as noted in Section 5, Respondent’s claim that SBC initiated discussions over a sale of the Domain Names is inconsistent with the factual record before us. To the extent that the issue of reverse domain-name hijacking requires a balancing of the equities, we are reluctant to find for a party whose representations on this potentially important issue appear to be less than accurate.
Fourth, the "Reverse Domain Name Hijacking" argument is made in conclusory form, with no explanation of how it applies to the facts of this case (and indeed it refers, confusingly, to a domain name not at issue here).
In sum, the Panel does not find that there was any "reverse domain name hijacking" here.
In light of the above findings and analysis, the Panel decides that Complainant has failed to meet its burden of proving that Respondent has no rights or legitimate interest in the Domain Name, as required by Policy paragraph 4(a)(ii).
Accordingly, pursuant to Rule 15, the Panel decides that the remedies requested by the Complainant are hereby denied, and the registrations of <ebell.com> and <ebell.org> shall remain with Respondent.
Michael A. Albert
G. Gervaise Davis III
M. Scott Donahey
Dated: October 7, 2002