World Intellectual Property Organization

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

UMB Financial Corporation v. Cynthia Galant

Case No. D2010-1855

1. The Parties

Complainant is UMB Financial Corporation of Kansas City, Missouri, United States of America, represented by Erickson, Kernell, Derusseau & Kleypas, LLC, United States of America.

Respondent is Cynthia Galant of Warren, New Jersey, United States of America, acting on behalf of Mark Galant and represented by Lewis & Hand, LLP, United States of America.

2. The Domain Name and Registrar

The disputed domain name <scoutinvestments.com> is registered with GoDaddy.com, Inc.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on November 2, 2010. On November 2, 2010, the Center transmitted by email to GoDaddy.com, Inc. a request for registrar verification in connection with the disputed domain name. On November 2, 2010, GoDaddy.com, Inc. transmitted by email to the Center its verification response confirming that Respondent is listed as the registrant and providing the contact details. The Center verified that the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy” or “UDRP”), 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 November 5, 2010. In accordance with the Rules, paragraph 5(a), the due date for Response was November 25, 2010. The Response was filed with the Center November 24, 2010.

The Center appointed Mark Partridge, M. Scott Donahey and Diane Cabell as panelists in this matter on December 16, 2010. The Panel finds that it was properly constituted. Each member of 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.

4. Factual Background

Complainant offers investment services and mutual funds under the mark SCOUT.

Complainant owns the following trademark registrations:

SCOUT (Reg. No. 1,918,993, Registered September 12, 1995) for financial and investment services, namely mutual fund distribution and investment services;

SCOUT (Reg. No. 2,053,151, Registered April 15, 1997) for financial and insurance services, namely, mutual fund and investment brokerage services, and insurance brokerage services;

SCOUT INVESTMENT ADVISORS (Reg. No. 3,695,224, Registered October 13, 2009) for financial services, namely, investing the funds of other, investment advisory services, investment management services and mutual fund services, all in the nature of managing and investing the funds of others;

SCOUT and Design (Reg. No. 3,754,721, Registered March 2, 2010) for financial services, namely, investing the funds of others, investment advisory services, investment management services and mutual fund services, all in the nature of managing and investing the funds of others;

SCOUT TRENDSTAR (Reg. No. 3,754,734, Registered March 2, 2010) for financial services, namely, investing the funds of others, investment advisory services, investment management services, asset management services, and mutual fund services, all in the nature of managing and investing the funds of others;

SCOUT (Reg. No. 3,773,354, Registered April 6, 2010) for financial services, namely, investing the funds of others, investment advisory services, investment management services and mutual fund services, all in the nature of managing and investing the funds of others.

Respondent is Mark Galant, an investor with an established business, reputation and history operating various hedge funds. Mark Galant, through his agent obtained the disputed domain name, along with other names, for potential use for hedge fund operations. The domain name is not yet used for an active site. When Complainant objected to the registration of the disputed domain name by Respondent, Respondent offered to sell the domain name for a substantial amount. This proceeding followed.

5. Parties’ Contentions

A. Complainant

Complainant contends that the disputed domain name is identical or confusingly similar to Complainant’s SCOUT trademarks, that the disputed domain name fully incorporates Complainant’s trademark and merely adds the descriptive or generic term “investments” to Complainant’s SCOUT trademark; and that such use is insufficient to distinguish the disputed domain name from Complainant’s mark.

Complainant further contends that Respondent has not shown any bona fide use in connection with any goods or services after over two years of maintaining the domain name registration nor has Respondent shown any evidence of demonstrable preparation to use the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services. Complainant was unable to find any evidence showing Respondent is commonly known by the disputed domain name or has acquired any trademark rights in the phrase “Scout Investments” or “Scout”. Complaint states that Respondent offered to sell the disputed domain name for “mid-five figures”. This attempt to profit by transferring the disputed domain name in excess of Respondent’s out-of-pocket costs related to domain name negates any inference that Respondent may have any right or legitimate interest in respect of the domain name when the domain name itself is not in bona fide use.

Finally, Complainant states that it has established significant goodwill and public recognition of the SCOUT trademark in association with investment related services through long and continuous use of the SCOUT mark and registration of its trademark rights in the SCOUT mark for investment-related services. Complaint obtained a registration of SCOUT in 1995 for “financial services; namely mutual fund distribution and investment services” and has been using the mark SCOUT INVESTMENT ADVISORS since 2001. The amount of money invested in the SCOUT funds exceeds USD 6 Billion while SCOUT INVESTMENT ADVISORS manages over USD 9 Billion in assets. For the past 9 years Complainant has spent over USD 3.6 Million promoting the SCOUT brand in the investment industry. Complainant feels it is highly unlikely that Respondent was not aware of Complainant’s use of its SCOUT marks prior to the registration date of the domain name; moreover, Respondent had constructive notice of Complainant’s use of its SCOUT marks based on the prior federal registrations.

B. Respondent

Respondent states that Mark Galant is the actual owner of the disputed domain name although Cynthia Galant is listed as the registrant. Respondent is a New Jersey based trader and entrepreneur who specializing in hedge funds, commodity and foreign exchange trading. Respondent created the Galant Center for Entrepreneurship at the McIntire School of Commerce at the University of Virginia.

Respondent claims he is an entrepreneur who has started a number of successful investment companies. Respondent’s company Tyndal Trading trades roughly USD 4 Billion per day. When preparing for his next investment or start-up Respondent acquires domain names he believes would be a good name for a future company. Respondent owns 41 domains which incorporate financial terms such as “trading, capital, hedge fund and accelerator.” Respondent states he had never heard of Complainant until he was contacted by a representative of Complainant. Respondent claims Complainant’s rights in SCOUT INVESTMENT are weak based on the fact that there are numerous other companies using the terms “Scout” and “Investment” in the financial industry. Respondent believes the presence of these marks as well as the fact that his companies are related to hedge funds while Complainant’s are related to mutual funds support that it was legitimate for him to register <scoutinvestments.com> for possible use in connection with a hedge fund or other highly leveraged proprietary trading company.

Respondent claims he registered the disputed domain name as part of his portfolio of names for a future hedge fund, propriety trading firm, or a hedge fund seeder company. The combination of “Scout” and “Investment” was intended to connote a hedge fund that is on the forefront of trading acumen, constantly seeking out new ideas. Respondent never heard of UMB’s Scout Funds or Scout Investment Advisors because Respondent’s expertise is in hedge funds while Complainant’s marks are a proprietary family of mutual funds. Further Mr. Galant claims he would never have heard of UMB’s marks because they do not operate in the same geographical region as he does. Mr. Galant did not acquire the disputed domain name primarily for the purpose of selling, renting, or otherwise transferring the registrations to Complainant and he is not a cybersquatter.

6. Discussion and Findings

A. Identical or Confusingly Similar

Complainant has demonstrated that it owns prior rights in the mark SCOUT and SCOUT INVESTMENT ADVISORS.

The disputed domain name incorporates Complainant’s SCOUT mark entirely into Respondent’s domain name. Numerous UDRP panels have found that a domain name that wholly incorporates a complainant’s registered mark may be sufficient to establish confusing similarity for the purposes of the Policy: for example, The Ritz Hotel, Limited v. Damir Kruzicevic, WIPO Case No. D2005-1137 (finding the addition of the word “hotel” tends, if anything, to increase the likelihood of confusion ruling that the domain name <ritz-hotel.com> be transferred to complainant); and Mastercard International Incorporated v. Eric Hochberger, WIPO Case No. D2006-1050 (finding the addition of the generic term “offers” in the domain <mastercard-offers.com> is insufficient to avoid confusion).

Accordingly, the Panel finds that the disputed domain name is identical or confusingly similar to Complainant’s mark, and that Complainant has satisfied the requirements of paragraph 4(a)(i) of the Policy. This conclusion, however, is based on a comparison of the name and mark only, and does not take into account the actual or proposed nature of use of the name and marks.

B. Rights or Legitimate Interests

Under the Policy, rights or legitimate interests in a domain name may be demonstrated by showing that: (i) before any notice of this dispute, respondent used, or demonstrably prepared to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; (ii) respondent has been commonly known by the domain name, even if no trademark or service mark rights have been acquired; or (iii) respondent is making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert customers or to tarnish the trademark at issue. Policy, paragraph 4(c).

Respondent has not used the disputed domain name for a bona fide offering of goods or services. Similarly, Respondent is not known by the disputed domain name. Finally, Respondent has not made noncommercial or fair use of the disputed domain name. Respondent does have a history of creating companies and buying domains which he thinks are valuable such as <foreignexchange.com> for USD 250,000 and <forex.com> for USD 100,000 and then creating robust websites; however, Respondent has not provided any evidence that he has actually undertaken any steps to use the disputed domain name in connection with a bona fide business.

Mere registration and ownership of a domain is not sufficient to demonstrate any right or legitimate interest in a domain name. Further, we are not prepared to conclude that a vague intent to use a domain name for a legitimate business is sufficient to create a legitimate interest in the name.

Accordingly, the Panel finds that Respondent lacks any rights or legitimate interest in the disputed domain name under the terms of the Policy.

C. Registered and Used in Bad Faith

Under Paragraph 4b of the Policy, bad faith registration and use can be found when the registrant seeks to profit from the sale of a domain name in which it has no legitimate interest; or if the registrant intentionally attempted to attract for commercial gain users to its website by creating a likelihood of confusion with complainant’s mark.

Complainant’s claim for bad faith arises from the fact that it has prior rights in SCOUT in the financial field and that Respondent offered to sell the disputed domain name for profit. The domain name otherwise is not yet in use.

As a matter of U.S. trademark law Respondent had constructive notice of Complainant’s trademark rights in the SCOUT mark based on its federal trademark registrations. However, just because a respondent is on constructive notice about the trademark rights asserted by a complainant does not per se mean a domain name was registered in bad faith. See Drake Bliss v. Cyberline Enterprises, WIPO Case No. D2001-0718. It is possible to adopt a domain name that is similar to another’s name in good faith and with the belief that it would not be an infringement of another’s rights.

In this case Respondent states he chose the name <scoutinvestments.com> because the term “scout” connoted a positive image for his potential company. Although he claims he was not aware of Complainant’s business when he registered the disputed domain name, he now asserts that his proposed use would not be an infringement of Respondent’s rights because his potential use would be in a segment of the financial industry which is different than Complainant’s. Respondent’s background as the legitimate operator of hedge funds supports the conclusion that he registered the disputed domain name with the good faith intent to use the name in connection with hedge funds. Moreover, in this Panel’s view, Respondent’s position regarding lack of infringement seems to be a reasonable argument under existing case law.

Both U.S. Courts and the Patent and Trademark Office have held that similar or identical marks do not necessarily create a likelihood of confusion merely because they exist in the same broad industry. See, Checkpoint Sys., Inc. v. Check Point Software Techs., Inc., 104 F.Supp. 2d 427, 467-68 (D.N.J. 2000), affirmed in 269 F.3d 270 (3d Cir. 2001) (no likelihood of confusion between identical marks used for goods that were both in the broad field of corporate security); In re Digirad Corp., 45 U.S.P.Q. 2d 1841 (T.T.A.B. 1998) (DIGIRAY and DIGIRAD for medical diagnostic equipment not confusing); Clayton Mark & Co. v. Westinghouse Elec. Corp., 356 F.2d 943 (C.C.P.A. 1966) (MARK for electrical conduit not likely to cause confusion with MARK 75 for industrial circuit breaker); Knaack Mfg. Co. v. Rally Accessories, Inc., 955 F. Supp. 991 (N.D. Ill. 1997) (WEATHER GUARD and WeatherGUARD for motor vehicle accessories not confusingly similar).

Haven Capital Mgmt, Inc. v. Havens Advisors, L.L.C., 965 F.Supp. 528 (S.D.N.Y. 1997), involved services similar to those here and is instructive. In Haven, the plaintiff sued defendant for infringing its federally registered mark HAVEN. Plaintiff was in the investment management business, and operated a mutual fund under its HAVEN mark. Defendant, on the other hand, focused on alternative investments, namely risk arbitrage, hedges, and distressed securities. The court found that there is little similarity between mutual funds and hedge funds, concluded that there was little risk of confusion, and dismissed the case.

Given this case law and Respondent’s history as a legitimate hedge fund operator (as well as taking into account the jurisdiction of both Parties, and the Panel’s powers under paragraph 10 and 15 of the Rules), we are unable to agree that Complainant has met its burden of showing bad faith registration and use based on the mere registration of a similar domain name for use in the financial services field.

We acknowledge that Respondent went beyond mere registration when it offered the domain name for sale. This, of course, is one of the circumstances that may be considered in determining bad faith. However, not all such offers constitute bad faith. See, SOUTHBank v. Media Street, WIPO Case No. D2001-0294 (the domain name “was registered by the [r]espondent… three and a half years before the allegation of attempted sale to the [c]omplainant supports the likelihood that the [r]espondent did not register the name primarily to sell to the [c]omplainant or to prevent the [c]omplainant from reflecting its trademark in a corresponding name”). It is not bad faith to sell a domain name for a high cost corresponding only to the descriptive (not trademark) value of the domain name based on a good faith belief that the domain is rightfully owned by a respondent, particularly where respondent does not initiate the transaction. In this case Respondent owned the domain name registration for two years and only offered to sell the domain name after being contacted by Complainant’s representatives. Respondent arrived upon his offer to sell based on his previous experiences in purchasing domain name registrations for his prior companies. Such an offer does not necessarily establish bad faith registration and use.

Our conclusion here is narrowly limited to the unique circumstances of this case which involve (1) a respondent with an established business and reputation in the proposed field of use; (2) a name which has a descriptive or suggestive meaning that is apt for the proposed field of use; (3) a very specific and narrow field of proposed use that is arguably distinguishable from the services of complainant; (4) a plausible explanation for registration of the domain name; (5) no conflicting evidence to suggest that respondent’s explanation is disingenuous or a sham; and (6) no evidence that respondent otherwise engages in domain name speculation or cybersquatting. This conclusion could change if the domain name is used for an improper purpose. So far, however, the record supports a conclusion that the domain name was registered in good faith with intent to use it in good faith for services that are in the same broad field as Complainant’s but are distinguishable to the point that a court under similar circumstances has found no infringement.

This decision should not be construed as a substantive decision on the likelihood of confusion between the parties’ respective uses of SCOUT INVESTMENTS. Rather, there appears to be a genuine dispute on those issues which cannot be resolved in the context of this proceeding. Legitimate disputes concerning trademark infringement require a fully developed record, are outside the scope of the Policy, and should be directed to the Courts. See Adaptive Molecular Technologies, Inc. v. Priscilla Woodward & Charles R. Thorton, WIPO Case No. D2000-0006.

7. Decision

For all the foregoing reasons, the Complaint is denied.

Mark Partridge
Presiding Panelist

M. Scott Donahey
Panelist

Diane Cabell
Panelist

Dated: January 31, 2011

 

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