WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Wildfire, Inc. v. Namebase
Case No. D2007-1611
1. The Parties
Complainant is Wildfire, Inc., Torrance, California, of United States of America (“Wildfire” or “Complainant”), represented by counsel Fulwider Patton LLP, United States of America.
Respondent is Namebase, New York, New York, of United States of America (“Namebase” or “Respondent”), represented by its president, James Singer, United States of America.
2. The Domain Name and Registrar
The disputed domain name <ironarc.com> (the “Domain Name”) is registered with Blue Razor Domains, Inc. (“Blue Razor Domains” or the “Registrar”).
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on October 30, 2007. On November 2, 2007, the Center transmitted by email to Blue Razor Domains a request for registrar verification in connection with the Domain Name. On November 2, 2007, Blue Razor Domains transmitted by email to the Center its verification response advising the Center that Respondent Namebase is listed as the registrant and providing the contact details.
In response to a notification by the Center that the Complaint was administratively deficient, Complainant filed an amendment to the Complaint on November 6, 2007. The Center verified that the Complaint together with the amendment to the Complaint (hereafter together referred to as “the Complaint”) satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy”), the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the “Supplemental Rules”).
In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified Respondent of the Complaint, and the proceedings commenced on November 7, 2007. In accordance with the Rules, paragraph 5(a), the due date for Response was November 27, 2007. The Response was filed with the Center on November 5, 2007.
In response to a request by the Center, in view of the scheduled expiry of the Domain Name on November 29, 2007, which would become effective immediately upon conclusion of this administrative proceeding, Respondent advised the Center on November 26, 2007, that Respondent had arranged with the Registrar for the automatic re-registration of the Domain Name at its expiration.
The Center appointed Dana Haviland as the sole panelist in this matter on November 30, 2007. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.
In her discretion under Rules, paragraph 12, the Panel has considered but not accepted the supplemental pleading proffered by Complainant on December 3, 2007, and has requested no supplemental response from Respondent. The Panel deems the allegations of the Complaint and Response sufficient for determination of the case.
Due to unanticipated circumstances, the projected due date for the Administrative Decision was subsequently extended pursuant to Rules, paragraph 10(c).
4. Factual Background
Complainant Wildfire is a manufacturer of ultraviolet lighting equipment and related products for visual effects. Complaint, paragraph 13. Complainant registered the domain name <wildfirefx.com> in January 1998, and maintains its business website there. Complaint, paragraph 18.
The Domain Name <ironarc.com> was registered by Respondent on November 29, 2000. Complaint, paragraph 26. Respondent Namebase is a naming and branding company that, as part of its business, registers and holds domain names for actual and potential customers. Complaint, Annex 2; Response, paragraphs 3-5. The Domain Name is not currently being used for an active website.
In 2001, Complainant began using the mark IRONARC in connection with the sale of high output ultraviolet lamps. Complaint, paragraph 15.
Complainant is the owner of United States Trademark Registration No. 2,653,911 for the mark IRONARC covering “electrical lighting fixtures, namely, ultraviolet lamps not for medical purposes” in International Class 011, registered November 26, 2002. Complaint, Annex 5.
Complainant recently learned of Respondent’s earlier registration of the Domain Name in November 2000. Complaint, paragraph 19. When Complainant notified Respondent of Complainant’s rights to the mark IRONARC, Respondent, in a letter dated July 12, 2007, offered to sell Complainant the Domain Name for $7,500. Complaint, Annex 7.
5. Parties’ Contentions
The following allegations are taken from the Complaint:
Complainant Wildfire is a leading manufacturer of UV lighting equipment, UV sensitive paints and related materials for visual effects. Complainant began its business in 1989, and has since expanded to market and sell fixtures and lamps, lighting control software, paints and inks and creative materials, including the IRONARC UV lights.
Over the years, Wildfire has expanded into a national manufacturer, working with film and television companies, theatrical productions and musical tours, nightclubs, amusement parks and shopping centers.
In 2001, Wildfire began using the mark IRONARC in connection with the sale of high output ultraviolet lamps. The Ironarc goods are now promoted and sold under Complainant’s website.
In 2001, recognizing the value of the IRONARC mark, and the associated goodwill, Wildfire applied to register its mark with the U.S. Patent and Trademark Office. Complainant is now the owner of United States Trademark Registration No. 2,653,911 for the mark IRONARC covering “electrical lighting fixtures, namely, ultraviolet lamps not for medical purposes” in International Class 011. Annex 7 of the Complaint is a copy of this registration, dated November 26, 2002.
Today, Wildfire markets, sells and promotes its goods and services across the United States, including the goods sold under the IRONARC mark. Through the company’s many years in service, and the many satisfied customers, Wildfire is now known for consistent high quality goods and boasts an unsurpassable reputation. In addition, consumers recognize the IRONARC mark as indicative of the high quality goods sold by Wildfire. Inherent in Wildfire’s reputation, and the value of the IRONARC mark, is its recognition and wealth of media attention. To that end, search engines Google and Yahoo! including the phrase “ironarc” return hundreds of websites, articles, press releases and links to Complainant’s site.
In January 1998, Wildfire first registered the domain name <wildfirefx.com>. Complainant’s website offers visitors information on the history of the company, detailed product information, ordering information and more. The website has proved to be a valuable addition to Wildfire’s marketing and promotional work, allowing much easier access to Wildfire’s products.
Complainant recently learned that Respondent Namebase had registered the Domain Name <ironarc.com>. There is currently no live website for the Domain Name.
Complainant contends that Respondent is attempting to unfairly profit from its ownership of the Domain Name, stating that Respondent is not currently utilizing the Domain Name for noncommercial or fair use and is not commonly known by the Domain Name.
Upon learning of the registration of the Domain Name, Complainant, through its attorneys, contacted Respondent, informing Respondent of its rights in and to the mark IRONARC. In a July 12, 2007 letter, Respondent responded to Complainant, acknowledging its registration of the Domain Name, and offering to sell the Domain Name for $7,500.
Complainant alleges that after receiving Respondent’s correspondence and offer for sale, Complainant and its attorneys responded to Respondent, offering a reasonable sum for the transfer of the Domain Name, and Respondent indicated that it would not be willing to sell the Domain Name for less than $5,000.
Identical or Confusingly Similar
Complainant asserts that the Domain Name is identical to its registered trademark IRONARC and that Respondent’s registration and use of the <ironarc.com> Domain Name infringes Complainant’s trademark rights and creates a likelihood of confusion under the United States trademark statute, 15 U.S.C. §1025(d).
Rights or Legitimate Interest
Complainant states that it has no relationship with Respondent and has not given permission or authorized Respondent to register and use the contested Domain Name. Moreover, to the best of Complainant’s knowledge, prior to having registered the Domain Name, Respondent had not used or been commonly known by the mark portrayed in the Domain Name. Further, to the best of Complainant’s knowledge, there is not now and never has been, an organization manufacturing or promoting goods or services under the designation IRONARC besides Complainant, and a search of the U.S. Patent and Trademark Office (“USPTO”) records for marks containing the terms “iron” and “arc” reveals only Complainant’s registration.
Complainant contends that Respondent’s lack of any bona fide, legitimate interest in the Domain Name is further borne out by the inactive status of the Domain Name. According to the Complaint, the fact that the Domain Name is not being used in any manner, other than in an effort to sell the Domain Name to Complainant for an exorbitant amount of money, bolsters Complainant’s claim and irrefutably establishes that Respondent did not have, and continues to lack, any intent to make a legitimate use of the Domain Name. In Complainant’s view, these facts lead to an overwhelming presumption that Respondent has no legitimate interest in and to the Domain Name <ironarc.com> and thereby shift the burden to Respondent.
Complainant further argues that Respondent, in its correspondence with Complainant, offers no proof of any commercial use of the term “Ironarc” and effectively concedes that the Domain Name has been inactive since the date of its registration on November 29, 2000, almost seven years ago. According to Complainant, because Respondent is not and has not ever been known by the Domain Name, and has not sold goods under the IRONARC mark, Respondent has no legitimate right in the Domain Name.
Registration and Use in Bad Faith
The Complaint states that under paragraph 4(b)(i) of the Policy, registering a domain name for the purpose of selling the domain name registration to the complainant who is the owner of the trademark or service mark for valuable consideration in excess of out-of-pocket costs is indicia of bad faith. Complainant contends that by offering to sell the Domain Name for an amount far in excess of the reasonable out of pocket costs, Respondent is in violation of paragraph 4(b)(i) of the Policy, and the Domain Name should therefore be transferred to Complainant.
At a minimum, Complainant alleges, the fact that Respondent’s Domain Name is identical to Complainant’s trademark leads to an inference that Respondent was aware of the trademark of Complainant. Complainant further asserts that even if Respondent were to contend that it was ignorant of Complainant’s rights, Respondent is charged with knowledge of Complainant’s federally registered U.S. trademark under U.S. trademark law.
Complainant asserts that Respondent has more than once offered to sell the Domain Name for an amount in excess of the out of pocket costs associated with registration, first for $7,500, and again for $5,000, well exceeding any reasonable cost associated with registrations. Further, Complainant argues that it would be disingenuous for Respondent to claim that it has invested heavily in the creation and maintenance of the website, as it has never become an active website, nor has it ever had any content to support a claim of additional value. According to Complainant, Respondent’s offering for sale of a domain name in excess of the out-of-pocket costs associated with registration is evidence of Respondent’s bad faith registration and use, thereby fulfilling the requirement of paragraph 4(a)(iii) of the Policy.
In accordance with paragraph 4(i) of the Policy, Complainant requests that the Domain Name be transferred to Complainant.
The following allegations are taken from the Response:
Respondent Namebase states that it is a brand naming consultancy founded in 1995. Its business is to create and test, using market research, brand names for companies and their products. Its client list includes many well known companies that it has named or for which it has named products, as shown at its website at “http://www.namebase.com”.
According to Respondent, when Namebase is commissioned to develop a corporate trade name, it is often a requirement that a corresponding domain name be registered so that the company being named may have a place on the web to do its business.
Respondent states that it conducts exhaustive trademark research before it recommends a name to a client or registers a domain on a client’s behalf. According to Respondent, each name created by Namebase undergoes a thorough trademark search, and at the time of registration of the Domain Name, ironarc.com, there was no trademark record in any register. In fact, Respondent asserts, Complainant did not begin selling its products until well after Respondent registered the Domain Name through Network Solutions, its registrar at the time.
Respondent asserts that it is not a “domain broker” or a “squatter, but a legitimate branding firm whose purpose is to develop and test corporate identities and brands for products.
According to the Response, on August 14, 2007, Complainant approached Respondent with an offer to buy the Domain Name from Respondent for the amount of US$750. Respondent turned down this offer. Respondent asserts that Complainant then decided to turn to WIPO for what amounts to a reverse domain hijacking.
Respondent asserts that on November 29, 2000, Namebase created the neologism (coined word) “Ironarc” and registered the Domain Name <ironarc.com> for use by a Namebase client, Maxtor/Maxoptics Corporation, a company that makes data storage devices. According to the Response, the name Ironarc was created by Namebase during a brand naming project for which it was retained to develop brand names, and was offered to Maxtor well before Complainant’s product ever existed. For this reason, Namebase considers the name Ironarc its own intellectual property since it created the name for the purpose of conducting its brand naming business.
According to the Response, Complainant began using the name “Ironarc” in 2001, nearly two years after Namebase created the name Ironarc and registered the Domain Name <ironarc.com>. Complainant then applied for trademark protection with the USPTO in August 2001, and its trademark was registered in September 2002. Respondent notes that Namebase registered the Domain Name in 2000, well before Complainant began using the name Ironarc.
For this reason, Respondent argues, it is obvious that Respondent was not acting in bad faith and had no intention of infringing upon Complainant’s trademark, and that Complainant has no legal right to the Domain Name.
Furthermore, Respondent contends, Complainant’s mark is registered in International Trademark Class 11, and Respondent intends to use the Domain Name in International Trademark Class 009 or in a completely different class of goods, thus causing no trademark infringement or confusion in the mind of the consumer.
Respondent states that since November 2000, it has been maintaining the Domain Name <ironarc.com> with the good intention of using that name for a Namebase brand naming client.
According to Respondent, “if the Complainant is allowed to confiscate what is the Respondent’s rightfully owned intellectual and real property registered in good faith, it would set a precedent that would allow anyone with a trademark, no matter what class of goods, to take over the intellectual and real property of another”.
Respondent contends that it does have a legitimate interest in this name and all other names that it creates and registers. Respondent broadly contends that, “as a business whose specific purpose is to develop names for companies and their products,” it must be allowed to register domain names for its clients, who, according to Respondent, “then have the responsibility to make sure that their name does not infringe upon any other party’s trademark in a given class of goods and services”.
Specifically with respect to the Domain Name in this case, Respondent contends that it has not registered the Domain Name in bad faith. According to Respondent, since Complainant’s product or trademark did not exist at the time Complainant registered the name, there can be no bad faith. Although paragraph 4(b)(i) of the Policy states that registering a domain name for the purpose of selling it to the owner of the trademark is indicia of bad faith, Respondent contends this is impossible in this case, since Complainant had never used the name in question until years after Respondent registered the Domain Name.
6. Discussion and Findings
Under the Policy, in order to prevail, a complainant must prove the following three elements of a claim for transfer or cancellation of a respondent’s domain name:
(i) that the domain name 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 the disputed domain name; and
(iii) that the respondent’s domain name has been registered and is being used in bad faith.
Policy, paragraph 4(a).
Complainant in this case seeks transfer of Respondent’s Domain Name even though Complainant admits that Respondent’s domain name registration took place well before the establishment of Complainant’s trademark rights. The case raises interesting questions as to the rights of domain name registrants in the context of a UDRP proceeding, too often overlooked in the analysis and balancing of the competing interests of trademark owners and domain name holders under the Policy. It is important to remember that not all domain name holders are cybersquatters.
A. Identical or Confusingly Similar
Respondent’s Domain Name <ironarc.com> and Complainant’s IRONARC mark are identical. The addition of the suffix “.com” does not distinguish the Domain Name from the mark. Omyacolor S.A. v. Recep Tanisman - Emko Emaye A.S., WIPO Case No. D2005-0520.
Thus Complainant has shown that the Domain Name is identical to a trademark in which Complainant currently has rights. Should it matter for purposes of paragraph 4(a)(i) of the Policy that Complainant did not have those trademark rights at the time of Respondent’s registration of the Domain Name?
In Document Technologies, Inc. v. International Electronic Communications Inc., WIPO Case No. D2000-0270 (the “Document Technologies” case), the panel considered that for purposes of paragraph 4(a)(i) of the Policy only, it does not matter that the Complainant’s trademark rights postdate the domain name registration, although the fact may be relevant with respect to the analysis under paragraphs 4(a)(ii) and (iii). In that panel’s view:
“The issue under this first factor is whether the Complainant has rights as of the time of the Complaint. Respondent’s lack of knowledge of Complainant and its trademark rights at the time of the registration of the domain name may, in appropriate cases, be relevant to the second and third factors (legitimate interest and bad faith), but it is not relevant to the analysis of the first factor which looks solely at the question of whether the Complainant has trademark rights and whether the domain name is identical or confusingly similar to that mark. Significantly, the Policy does not require the Complainant to prove that it had rights in a trademark “as of the date of the domain name registration”. (Emphasis in original).
Arguably this early construction of paragraph 4(a)(i) of the Policy was dicta, as the panel in the Document Technologies case then proceeded to find that Complainant’s trademark rights had in fact preceded the registration of the domain name in question:
“Even if the relevant time period were the date of the Domain Name registration, Complainant still has shown sufficient use to create trademark rights.”
The panel held that although the complainant had proved the first two elements of its claim under paragraphs 4(a)(i) and (ii), it had failed to show any evidence of respondent’s knowledge of its trademark rights and thus had failed to establish bad faith registration under paragraph 4(a)(iii). The panel also held that the complainant’s showing of respondent’s passive holding of the domain name in question without any use or plan to use the domain name in connection with the bona fide sale of goods and services under paragraph 4(a)(ii) did not support an inference of bad faith registration or use under paragraph 4(a)(iii). Id.
In another early UDRP case, John Ode d/b/a ODE and ODE - Optimum Digital Enterprises v. Intership Limited, WIPO Case No. D2001-0074 (the “John Ode” case), the panel considered that paragraph 4(a)(i) of the Policy, like paragraph 4(a)(iii), should be construed to require that the complainant prove the existence of trademark rights as of the date of the registration of the domain name:
“If paragraph 4(a)(i) of the Policy means that a Complainant must have rights in a trademark which antedates the date when the domain name in issue was registered, then the Complainant does not meet the requirements of this paragraph. If so he cannot succeed. The Panel is of the view that this is arguably an essential requirement of paragraph 4(a)(i) of the Policy.
..…We are of the unanimous view that the trademark must predate the domain name. Whether it arises because of paragraph 4(a)(iii) (requiring bad faith registration), rather than paragraph 4(a)(i) does not call for a decision by us at this time. In either case, the result is the same, as is apparent from our decision below.
On the facts of the case we find that the Complainant fails to make out his case under paragraph 4(a)(i) and/or (iii) of the Policy…” (emphasis added).
The John Ode decision does not set forth the grounds, other than unanimity, for that panel’s decision that the requirements of paragraph 4(a)(i) had not been met.
Recognizing that she is in a distinct minority, this Panel nevertheless, like the panel in the John Ode case, considers that the timing of a complainant’s establishment of trademark rights ought to matter with respect to the analysis of the requirements of paragraph 4(a)(i), and that the relevant date for determination of the complainant’s trademark rights should be the date of registration of the domain name and not the date of the complaint, for consistency with the purpose and structure of the Policy in limiting the scope of the UDRP proceeding and balancing the competing interests of domain name holders and trademark owners.
One reason for the Panel’s view is that the Policy was not designed to change the “first come, first served” registration process for domain names, but to address the specific problem of cybersquatting. The scope of the UDRP procedure was therefore “limited to cases of bad faith, abusive registration of domain names that violate trademark rights (‘cybersquatting’ in popular terminology”), a definition and framework that presupposes the prior existence of trademark rights violated by the abusive registration. See The Management of Internet Names and Addresses: Intellectual Property Issues, Final Report of the WIPO Internet Domain Name Process, April 30, 1999 (the “WIPO Report”) Executive Summary, paragraphs v and vi; Chapter 3, paragraphs 135(i) and (ii).
As stated in the WIPO Report,
“It is considered that concerns about the mandatory nature of the procedure can be greatly alleviated, if not removed entirely, by confining the scope of the procedure to abusive registrations or cybersquatting….Since the procedure would apply only to egregious examples of deliberate violation of well-established rights, the danger of innocent domain name applicants acting in good faith being exposed to the expenditure of human and financial resources through being required to participate in the procedure is removed.”
WIPO Report, Chapter 3, paragraph 160. See also Miele, Inc. v. Absolute Air Cleaners and Purifiers, WIPO Case No. D2000-0756 (“the legislative history of the Policy indicates that it was promulgated to tackle egregious cases of cybersquatting, leaving other disputes to the courts for resolution”).
Thus, arguably, the threshold issue in paragraph 4(a)(i) with respect to the complainant’s trademark rights should be whether they were in fact “well-established rights” at the time of the registration of the domain name. The policy was not designed to protect “non-existent” trademark rights, so the language of paragraph 4(a)(i) need not and should not be so construed.
This approach would also be consistent with the importance of the date of registration of the domain name in the analysis of the other two elements of a claim under the Policy. With respect to the rights and legitimate interests of the domain name holder under paragraph 4(a)(ii) of the Policy, the WIPO Report states that:
“[t]he availability of the date of registration [in the contact details for the domain name holder] is useful as a means of protecting the interests of both the domain name holder and any third party that considers its rights to have been violated. For example, the date of the registration of a domain name may indicate that the domain name holder has established use of a name before any corresponding use or registration of that name as a trademark by a third party.”
WIPO Report, Chapter 2, paragraph 80.
And under paragraph 4(a)(iii) of the Policy, to obtain transfer of a domain name, the complainant must show bad faith registration of the domain name under paragraph 4(a)(iii); a showing of only subsequent bad faith use of the domain name is insufficient. Similarly construing paragraph 4(a)(i) to require a complainant to show the existence of trademark rights at the time of the registration of the domain name, and not just the establishment of trademark rights at some subsequent date prior to the filing of the complaint, would arguably better reflect the balancing of the competing interests of trademark and domain name holders under the Policy, as well as the “first come, first served” nature of the domain name registration process.
Finally, such a requirement in paragraph 4(a)(i) would help protect domain name holders from claims by trademark owners seeking to hijack their domain names by virtue of later-acquired trademark rights.
Proof of trademark rights may be shown in a variety of ways, through registration rights, of course, or through prior use of the mark, for common law trademark rights, as in the Documents Technologies case, or in civil law jurisdictions, through a showing of unregistered rights. Even cases involving so-called “future” or “potential” trademark rights resulting from such events as mergers or product launches might still be brought under one of these methods of showing trademark rights, where the domain name holder’s registration could be shown to be abusive because of the respondent’s prior knowledge or reason to know of the complainant’s prior use of the mark or prior rights to portions of the mark. See the discussion of bad faith in such cases in General Growth Properties, Inc., Provo Mall L.L.C. v. Steven Rasmussen/Provo Towne Centre Online, WIPO Case No. D2003-0845.
But where a complainant can not show any basis for the existence of any trademark rights prior to the registration of the domain name, why should that complainant be entitled to initiate a UDRP proceeding against the domain name holder? Shouldn’t the domain name holder in such a case have the right to peaceful enjoyment of the domain name as contemplated by the drafters of the Policy?
Apparently not, at least with respect to paragraph 4(a)(i), as under most UDRP cases which have considered this issue, domain name holders must look to paragraph 4(a)(iii) of the Policy for protection from such Johnny-come-lately trademark owners. The construction of paragraph 4(a)(i) to require only proof of trademark rights at the time of filing of the complaint has prevailed over time, so that, as set forth in paragraph 1.4 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, the consensus view on this issue is that
“Registration of a domain name before a complainant acquires trademark rights in a name does not prevent a finding of identity or confusing similarity. The UDRP makes no specific reference to the date of which the owner of the trade or service mark acquired rights. However it can be difficult to prove that the domain name was registered in bad faith as it is difficult to show that the domain name was registered with a future trademark in mind.”1
As discussed above, the allegations of the Complaint in this proceeding establish that Complainant did not have any common law or registered trademark rights in the IRONARC mark at the time of Respondent’s registration of the Domain Name, and therefore, in the Panel’s view, should have no standing under paragraph 4(a)(i) of the Policy to bring this claim against the Respondent.2
While dissenting from the consensus view as to the construction of paragraph 4(a)(i), in view of the Panel’s finding that Complainant has failed to satisfy the third element of its claim under paragraph 4(a)(iii) as discussed below, the Panel does not find it necessary to decide whether Complainant has satisfied the first element of its claim for transfer under paragraph 4(a)(i) of the Policy.
B. Rights or Legitimate Interests
“The UDRP procedure should allow all relevant rights and interests of the parties to be considered and ensure procedural fairness for all parties.” WIPO Report, Chapter 3, paragraph 150(ii). What rights or legitimate interests in a domain name, if any, does a respondent have under the Policy or otherwise by virtue of the registration, assuming the registration was not in bad faith?
The mere registration of a domain name does not establish the existence of rights or legitimate interests for the purpose of paragraph 4(a)(ii) of the Policy:
“If mere registration of the domain name were sufficient to establish rights or legitimate interests for the purposes of Paragraph 4(a)(ii) of the Policy, then all registrants would have such rights or interests, and no Complainant could succeed on a claim of abusive registration. Construing the Policy so as to avoid an illogical result, the Panel concludes that mere registration does not establish rights or legitimate interests in a domain name so as to avoid the application of Paragraph 4(a)(ii) of the Policy”.
Educational Testing Service v. TOEFL, WIPO Case No. D2000-0044; Pharmacia & Upjohn Company v. Peoples Revolutionary Suicide Jazz Band, WIPO Case No. D2000-0816; AT&T Corp. v. Swarthmore Associates LLC, WIPO Case No. DBIZ2002-00077 (“the same logic applies…to the application of the identical provision in the STOP”). 3
This rationale with respect to paragraph 4(a)(ii) of the Policy should also apply to any general domain name rights which might arise under national laws simply from a good faith registration of a domain name, whether such rights were deemed property rights, contract rights or something else.
Domain names are arguably a new form of property in this Internet age, and their potential value is one of the principal reasons for the widespread cybersquatting that led to the adoption of the Policy and continues to flourish today. In the United States of America, where both parties to this UDRP proceeding are located, some courts have held that domain name holders have property rights in domain names. See, e.g., Kremen v. Cohen, 337 F.3d 1024 (9th Cir. 2003) (holding that domain names are intangible property).4 See also Mattel v. Barbieclub.com, 310 F.3d 293, 302 (2d Cir. 2002) (“it is the presence of the domain name itself – the ‘property that is the subject of the jurisdiction’ – in the judicial district in which the registry or registrar is located that anchors the in rem action and satisfies due process and international comity.”); Office Depot, Inc. v. Zuccarini, 2007 WL 2688460 (N.D. Cal. 2007) (the ACPA “strongly suggests an intent on the part of the United States Congress to treat domain names as property existing in both the location of the registry, and the location of the registrar.”).
In Gaylord Entertainment Company v. Nevis Domains LLC, WIPO Case No. D2006-0523, the Panel, in a footnote to its lengthy decision, recognized that “a registrant may have some property rights in a domain name,” citing the Kremen case, but characterized those property rights as “more like that of a leaseholder, who is seized of property for a fixed period of time, as opposed to an owner, whose property interests are not so temporally limited.”
An argument may also be made that a domain name registrant has contract rights under the registration contract and the Policy to use or hold the domain name, so long as the registration was not abusive and the use of the domain name is in good faith, under paragraph 4 and paragraph 2 of the Policy. Paragraph 2 provides for the inclusion of certain representations and warranties by the domain name registrant in the registration contract:
“By applying to register a domain name, or by asking us to maintain or renew a domain name registration, you hereby represent and warrant to us that (b) to your knowledge, the registration of the domain name will not infringe upon or otherwise violate the rights of any third party; (c) you are not registering the domain name for an unlawful purpose; and (d) you will not knowingly use the domain name in violation of any applicable laws or regulations. It is your responsibility to determine whether your domain name registration infringes or violates someone else’s rights.”
See Media General Communications, Inc. v. RareNames, WebReg, WIPO Case No. D2006-0964, ( “paragraph 2 of the Policy implicitly requires some good-faith effort to avoid registering and using domain names corresponding to trademarks in violation of the Policy”). Similarly, paragraph 2 may be construed, together with the other provisions of the Policy, as implicitly permitting the good faith use or holding of the domain name by the good faith registrant for the term of the registration, since the domain name can not be transferred or cancelled absent a trademark owner’s showing of abusive bad faith registration.5
The law with respect to the property, contract or other registration rights of domain name registrants is certainly not settled in the United States of America and has been rarely addressed in UDRP cases, but in a UDRP proceeding, such general domain name rights arising solely by virtue of the registration of the domain name should be subject to the above-stated rule that “mere registration does not establish rights or legitimate interests in a domain name so as to avoid the application of Paragraph 4(a)(ii) of the Policy.”6
Without reference to any general registration rights which may or may not exist under national laws by virtue of the registration of a domain name, Paragraph 4(c) of the Policy provides that a respondent may establish particular rights to or legitimate interests in the domain name in question, by proof of any of the following non-exclusive list of circumstances, which will defeat a trademark owner’s claim under the Policy for transfer of the domain name:
(i) before any notice to the respondent of the dispute, respondent used, or made demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or
(ii) respondent (as an individual, business, or other organization) has been commonly known by the domain name, even if respondent has not acquired trademark or service mark rights; or
(iii) respondent is making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.
When a complainant makes out a prima facie case as to the lack of any right or legitimate interest of the respondent under paragraph 4(a)(ii), the burden of production, or going forward, shifts to the respondent. See Document Technologies, supra. Under the Policy, the various examples of rights and interests in a domain name set forth in paragraph 4(c), whereby the domain name holder can show a particular right to or interest in the domain name in question, are neither prerequisites for registration of a domain name nor the result of a registration. They are essentially affirmative defenses under the Policy to the trademark owner complainant’s claim for transfer or cancellation of the domain name.
In this case, Complainant alleges that since Respondent has not been licensed to use Complainant’s trademark, Respondent has not been commonly known by the Domain Name, and Respondent has not made any use of the Domain Name for either a bona fide offering of goods and services or some other noncommercial or fair use under paragraph 4(c) of the Policy, Respondent has no rights to or legitimate interests in the Domain Name, as required by paragraph 4(a)(ii) of the Policy. Complainant has thus made out a prima facie case with respect to paragraph 4(a)(ii) and shifted the burden of production to Respondent to show that it has a particular right or legitimate interest in the domain name under paragraphs 4(a)(ii) and 4(c).
Respondent asserts that it is a “brand naming consultancy” in the business of creating brand names for companies and their products, and that it therefore has a legitimate interest in the domain names it has registered for its clients, including the Domain Name at issue, which it allegedly created and registered for a corporate client. Respondent further asserts that it conducts “exhaustive trademark research” before it recommends a name to a client or registers a domain on a client’s behalf, that it did a trademark search prior to registering the Domain Name, and that there was no trademark record in any register it searched. Respondent has not, however, submitted any affidavit or other documents as evidentiary support for its asserted legitimate interest in the Domain Name in question as part of its brand naming business, other than a reference to its <www.namebase.com> business website.
The Panel notes that Respondent is not represented by counsel, that the Response has apparently been submitted and signed by the president of Respondent Namebase, and that Complainant has admitted in the Complaint that it did not find any other trademark registrations for an IRONARC mark when it registered its own IRONARC mark some time after the registration of the Domain Name. The Panel therefore accepts the representations of Respondent with respect to the stated negative results of its trademark search prior to the registration of the Domain Name.
The Panel deems it unnecessary to determine the sufficiency of the evidentiary basis for Respondent’s asserted legitimate interest in the Domain Name pursuant to its brand naming business. The sufficiency of Complainant’s claim as to the second element of the claim under paragraph 4(a)(ii) is rendered moot by the Panel’s findings with respect to the third element of the claim, bad faith registration and use under paragraph 4(a)(iii).
C. Registered and Used in Bad Faith
Paragraph 4(a)(iii) of the Policy requires that Complainant establish both bad faith registration and bad faith use of the Domain Name by Respondent. See World Wrestling Federation Entertainment, Inc. v. Michael Bosman, WIPO Case No. D1999-0001; Shaw Industries Group, Inc. and Columbia Insurance Company v. DomainsByProxy, Inc. and Patti Casey, WIPO Case No. D2007-0555; Patrick Pawlicki v. The Plastiform Company, WIPO Case No. D2007-1206.
Paragraph 4(b) of the Policy sets out, by way of example, four circumstances, each of which, if proven, shall be evidence of the registration and use of the domain name in bad faith for the purpose of paragraph 4 (a)(iii) above:
(i) circumstances indicating that the registrant has registered or 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 the registrant’s documented out-of-pocket costs directly related to the domain name; or
(ii) the registrant has registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that the registrant has engaged in a pattern of such conduct; or
(iii) the registrant has registered the domain name primarily for the purpose of disrupting the business of a competitor; or
(iv) by using the domain name, the registrant has intentionally attempted to attract, for commercial gain, Internet users to the registrant’s website or other online location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of the registrant’s website or location or of a product or service on the registrant’s website or location.
The allegations of the Complaint establish that the Domain Name was registered by Respondent before Complainant had any common law or registered rights to the IRONARC Mark. Respondent claims to have coined the term “Ironarc” and to have searched trademark records and found no trademarks for Ironarc before registering the Domain Name. Whoever may have coined the term “Ironarc,” there is no evidence that Respondent’s registration of the Domain Name was in bad faith, as Complainant admits that it had neither used nor registered its subsequent IRONARC mark at the time of the registration of the Domain Name, so Respondent could not have been aware of any now alleged rights of Complainant to the mark. See The Knot, Inc. v. Ali Aziz, WIPO Case No. D2007-1006; Digital Vision, Ltd. v. Advanced Chemill Systems, WIPO Case No. D2001-0827.
Nor is there evidence that Respondent’s use of the Domain Name is in bad faith. The fact that the Domain Name does not currently resolve to an active website is not sufficient in and of itself to establish bad faith use. Creation or maintenance of an active website is not a prerequisite to the initial or continued registration of a domain name, and a complainant without other evidence of a respondent’s bad faith is not entitled to transfer of a domain name under the Policy merely because of the domain name registrant’s failure to utilize the domain name for commercial or noncommercial use. There is no evidence that the Respondent in this case is a cybersquatter or that the registration of the Domain Name was in bad faith.
Passive holding of a domain name without a showing of some other “circumstances” of bad faith at the time of registration and thereafter does not constitute bad faith use. See Telstra Corporation v. Nuclear Marshmallows, WIPO Case No. D2000-0003 (the “Telstra” case). The Telstra panel noted that the language of paragraph 4(a)(iii) of the Policy uses both the past and present tenses in requiring proof of both bad faith registration and use of the domain name and construed the provision to require that:
“… in determining whether there is bad faith on the part of the [r]espondent, consideration must be given to the circumstances both at the time of registration and thereafter. So understood, it can be seen that the requirement in paragraph 4(a)(iii) of the Policy that the domain name “has been registered and is being used in bad faith” will be satisfied only if the [c]omplainant proves that the registration was undertaken in bad faith and that the circumstances of the case are such that [r]espondent is continuing to act in bad faith.” (emphasis in original).
This analysis has to be undertaken on a case by case basis. Id. In Telstra, where the respondent was passively holding the domain name in question, the panel found bad faith registration and use because of the particular circumstances in that case – including the fact that the complainant had numerous trademarks and “widespread reputation” in its TELSTRA trademark at the time of the respondent’s registration of the <telstra.org> domain name, the fact that the respondent had taken “active steps to conceal its true identity” and the fact that the respondent had “actively provided, and failed to correct, false contact details, in breach of the registration agreement.” See Cyro Industries v. Contemporary Design, WIPO Case No. D2000-0336; Crystallize, Inc. v. James Eixenberger, WIPO Case No. D2000-0528.
None of those particular circumstances is present in this case. Respondent’s registration of the Domain Name predated Complainant’s acquisition of any trademark rights whatsoever. Respondent has neither sought to conceal its identity nor provided false contact details to the Registrar. On the contrary, Respondent has appeared and filed a Response in this proceeding.
The facts in this case are closer to those in the Document Technologies case, supra, in which the respondent also was passively holding the domain name in question, although Respondent in this case is not a competitor of Complainant like the respondent in Document Technologies.
The complainant in the Document Technologies case argued that because the respondent was not known by the domain name and was merely holding the domain name without use or preparation to use the domain name in connection with a bona fide offering of goods or services, the panel could infer that the respondent had registered and was using the domain name in bad faith. The panel rejected the complainant’s argument:
“These allegations reflect a misunderstanding of the kind of proof required to show bad faith. Bad faith is not proven by showing that Respondent lacks any rights to or legitimate interests in the domain name. That is a separate and distinct factor, with its own proof requirements. If the Panel adopted Complainant’s approach, it would have the practical effect of conflating the second and third requirements. Such an approach is not supported by the clear wording of the Policy, which separates the requirements in Paragraph 4(a) into three distinct elements, and provides separate examples (Paragraphs 4(b) and 4(c)) of how to satisfy the second and third factors.” (emphasis in original).
The panel in Document Technologies then held that the complainant had failed to establish that the respondent had either registered or was using the domain name in bad faith. Id.
In the instant case, Complainant further alleges that Respondent’s offer to sell the Domain Name for more than out of pocket costs is evidence of bad faith registration and use under paragraph 4(b)(i) of the Policy. However, Respondent’s registration of the Domain Name predates Complainant’s common law and registration rights to the IRONARC mark, so the facts do not support an inference that Respondent registered the Domain Name with the bad faith intention of selling it to Complainant, and Respondent is not required by the Policy to limit an offer to sell the Domain Name to Complainant to its out of pocket costs or an amount Complainant considers reasonable. See Global Media Resources SA v. SexPlanets aka SexPlanets Free Hosting, WIPO Case No. D2001-1391(“in the absence of a finding that the Respondent was aware of the Complainant, its mark or its domain name at the time of registration …, the conclusion cannot reasonably be drawn that sale at a profit to the Complainant was the primary purpose of the Respondent in registering the disputed domain name”); John Ode d/b/a ODE and ODE - Optimum Digital Enterprises v. Intership Limited., supra (where respondent offers to sell complainant a domain name registered prior to the existence of complainant’s trademark rights, “it is not blameworthy or contrary to the Policy for the registrant / respondent to ask whatever it considers the market will take in a particular case”).
Thus, Complainant has failed to establish either bad faith registration or bad faith use of the Domain Name by Respondent and has not satisfied the third element of its claim as provided by paragraph 4(a)(iii) of the Policy.
Under the Policy, a good faith registrant of a domain name has the right to keep the domain name, absent a contrary ruling by an appropriate court.7
D. Reverse Domain Name Hijacking
The Rules define reverse domain name hijacking as “using the Policy in bad faith to attempt to deprive a registered domain-name holder of a domain name.” Rule 1. The allegations of the Complaint in this case are clearly insufficient to set forth a claim of bad faith registration of the Domain Name by Respondent. The Panel therefore finds, in accordance with Respondent’s request, that the Complaint was brought in bad faith and constitutes reverse domain name hijacking. See Dreamgirls, Inc. v. Dreamgirls Entertainment, WIPO Case No. D2006-0609.
For all of the foregoing reasons, the Complaint for transfer of the Domain Name is denied.
Date: January 29, 2008
1 The relevant cases cited in the WIPO Overview for this consensus view are consistent with the analysis set forth in the Document Technologies decision, without further discussion of the issue. See Digital Vision, Ltd. v. Advanced Chemill Systems, WIPO Case No. D2001-0827 (“Paragraph 4(a)(i) does not require that the trade mark be registered prior to the domain name. This may be relevant to the assessment of bad faith pursuant to Paragraph 4(a)(iii)”); AB Svenska Spel v. Andrey Zacharov, WIPO Case No. D2003-0527 (citing Digital Vision, Ltd. without comment); Iogen Corporation v. IOGEN, WIPO Case No. D2003-0544 ( “These trademarks are sufficient for the purposes of the Policy, paragraph 4(a)(i), although it is noteworthy that they are quite recent and do not appear to predate the registration of the domain name in question”); Madrid 2012, S.A. v. Scott-Martin-MadridMan Websites, WIPO Case No. D2003-0598 (ditto).
2 The Panel recognizes the importance of striving for consistency and predictability in UDRP decisions. See Howard Jarvis Taxpayers Association v. Paul McCauley, WIPO Case No. D2004-0014 (“When policy disagreements do arise, panelists should pause and consider whether a consensus has emerged that might inform which way they should rule on these types of issues. If such a consensus has emerged, panelists should endeavor to follow that consensus and thus promote consistent application of the UDRP.”).
The Panel strongly disagrees, however, with the statement in the Howard Jarvis case to the effect that panelists should follow the consensus view “even if the consensus supports a decision that individuals believe to be wrong or bad policy, [because] parties would at least know how such decisions would be decided under the Policy, and could elect instead to pursue their claims in court if they believed the judicial system would provide a just result.” Id.
This Panel considers that it is beneficial to development of the UDRP case law that the premises of and rationales for consensus views be re-examined from time to time, to determine, for example, whether the consensus view is being stated correctly or applied too broadly in subsequent cases, whether the application of the consensus view is appropriate in a particular case (particularly where the domain name registrant is not clearly a cybersquatter), whether there is any basis for a different or minority view, and whether the development of national or international law should affect the consensus.
3 The Panel concurs with this rationale and notes its utility with respect to the new forms of cybersquatting currently plaguing the Internet, as increasing numbers of domain names are being registered or ‘harvested’ by speculators on a large scale through the use of automated registration mechanisms, for the purpose of deriving advertising revenues from the use of the domain name websites as pay-per-click landing pages.
Because the cost of domain registration has greatly decreased and ICANN even allows a five day grace period for payment, many of the current large-scale “domainers” now merely “taste” thousands of domain names for the five day grace period to determine their profitability as pay-per-click landing pages before either completing the registration by payment or, more typically, dropping the domain names without penalty prior to payment. The dropped domain names are often then re-registered for another five day period by another “domainer,” perhaps affiliated with the first, and then another, ad infinitum, effectively blocking the use of these domain names by not only trademark owners but any other person or entity that might be interested in registering the domain name in good faith. See Asian World of Martial Arts Inc. v. Texas International Property Associates, WIPO Case No. D2007-1415.
UDRP panels have had no trouble in recognizing the abusive nature of these mass registrations in many cases, particularly where there is no pre-screening for trademark violations and/or the domain names are used for click-through advertising purposes. See Asian World of Martial Arts Inc. v. Texas International Property Associates, supra (respondent “domainer” had no right or legitimate interest in the disputed domain names under paragraph4(a)(ii); bad faith registration and use found under paragraph 4(a)(iii)).
In Mobile Communication Service Inc. v. WebReg, RN, WIPO Case No. D2005-1304, the panel transferred the domain name in question to the complainant, noting that where “a respondent registers large swaths of domain names for resale, often through automated programs that snap up domain names as they become available, with no attention whatsoever to whether they may be identical to trademarks, such practices may well support a finding that respondent is engaged in a pattern of conduct that deprives trademark owners of the ability to register domain names reflecting their marks.”
Similarly, in Media General Communications, Inc. v. RareNames, WebReg, WIPO Case No. 2006-0964, the respondent stated that it was in the business of registering “hundreds of thousands” of “generic” domain names in the hope of selling them and for interim use in displaying advertising links, which it characterized as a bona fide offering of goods and services under paragraph 4(a)(c). The panel nevertheless found that the complainant had satisfied both paragraphs 4(a)(ii) (respondent’s lack of right or interest in the domain name) and 4(a)(iii) of the Policy (bad faith registration and use) and transferred the domain name.
Under the limited scope of the UDRP, only trademark owners can file complaints and obtain relief from domainers’ bad faith registrations, domain name tasting, and pay-per-click use of domain names. However, these pernicious practices now include massive efforts by speculators to register domain names for virtually every generic term in the dictionary and thus affect all potential Internet users. As “the purposes for which the Internet is now used encompass the full range of human activity: research, education, social communication, politics, entertainment and commerce,” WIPO Report, Chapter 1, paragraph 2(iii), the need for further protection of all Internet users and interests from the effects of this twenty-first century land grab is evident.
4 In the Kremen case, the federal appellate court applied a three part test to determine whether a property right existed in domain names:
“First, there must be an interest capable of precise definition; second, it must be capable of exclusive possession or control; and third, the putative owner must have established a legitimate claim to exclusivity. (citation omitted). Domain names satisfy each criterion. Like a share of corporate stock or a plot of land, a domain name is a well-defined interest. Someone who registers a domain name decides where on the Internet those who invoke that particular name – whether by typing it into their web browsers, by following a hyperlink, or by other means – are sent. Ownership is exclusive in that the registrant alone makes that decision. Moreover, like other forms of property, domain names are valued, bought and sold, often for millions of dollars, …and they are now even subject to in rem jurisdiction, see, 15 U.S.C. section 1125(d)(2)” [the Anticybersquatting Consumer Protection Act of 1999 (“ACPA”)].
Finally, registrants have a legitimate claim to exclusivity. Registering a domain name is like staking a claim to a plot of land at the title office. It informs others that the domain name is the registrant’s and no one else’s. Many registrants also invest substantial time and money to develop and promote websites that depend on their domain names. Ensuring that they reap the benefits of their investments reduces uncertainty and thus encourages investment in the first place, promoting the growth of the Internet overall.”
The court then held that Kremen, the registrant of the domain name Sex.com, had a viable claim against the domain name registrar Network Solutions for conversion of his property when it transferred the domain name to a “con man” on the basis of a forged letter.
5 For an interesting article discussing cases in United States courts which have held that domain name registrants have either property or contract rights, see “I’m a Domain Name. What am I? Making sense of Kremen v. Cohen”, 14 J. Bankr. L. & Prac. 3 Art. 3 (2005).
6 Such general registration rights should also only accrue to good faith domain name registrants, not cybersquatters or others registering and using domain names in bad faith. And the practice of domain name tasting, whereby domainers apply for domain names and use them without payment, should not give rise to any domain name rights whatsoever, as the registration transaction is not complete until payment by the registrant.
7 “UDRP decisions are not binding and non-appealable; rather, a losing party is free to pursue its claim in local courts. See Policy ¶ 4(k).” Howard Jarvis Taxpayers Association v. Paul McCauley, WIPO Case No. D2004-0014. “Except in cases involving ‘abusive registrations’ made with a bad faith intent to profit commercially from others’ trademarks (e.g., cybersquatting…), [the Policy] leaves the resolution of disputes to the courts… and calls for registrars not to disturb a registration until those courts decide.” Miele , Inc. v. Absolute Air Cleaners and Purifiers, supra, citing and quoting the legislative history of the Policy.