WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
DAEDO S.L., Mr. Chuen Wook Park v. Gustavo Rossi Santomauro / Domains By Proxy, LLC
Case No. D2013-0253
1. The Parties
The Complainant is DAEDO S.L., Mr. Chuen Wook Park of Barcelona, Spain, represented by Grau & Angulo, Spain.
The Respondent is Gustavo Rossi Santomauro of Houston, Texas, United States of America (“USA”) / Domains By Proxy, LLC of Scottsdale, Arizona, United States of America, represented by Bret S. Moore, Attorney at Law, USA.
2. The Domain Name and Registrar
The disputed domain name <daedousa.com> is registered with GoDaddy.com, LLC (the “Registrar”).
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on February 6, 2013. On February 6, 2013, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain name. On February 7, 2013, the Registrar transmitted by email to the Center its verification response disclosing registrant and contact information for the disputed domain name which differed from the named Respondent and contact information in the Complaint. The Center sent an email communication to the Complainant on February 8, 2013, providing the registrant and contact information disclosed by the Registrar, and inviting the Complainant to submit an amendment to the Complaint. The Complainant filed an amendment to the Complaint on February 13, 2013.
The Center verified that the Complaint together with the amendment to 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 the Respondent of the Complaint, and the proceedings commenced on February 15, 2013. In accordance with the Rules, paragraph 5(a), the due date for Response was March 7, 2013. The Response was filed with the Center on March 6, 2013.
The Center appointed Andrew D.S. Lothian as the sole panelist in this matter on March 14, 2013. 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.
The Panel notes that the First Complainant and Second Complainant are separate but related entities, the Second Complainant being the founder and managing director of the First Complainant. As noted in the Factual Background below, the Complainants are the owners on an individual basis of various registered trademarks for the same mark upon which they rely for the purposes of this proceeding. While the Complainants did not expressly request permission to consolidate their respective complaints, the Panel nevertheless finds that this is a proper case to bring as a single proceeding under the Policy on the basis that the Complainants are closely related entities whose complaint is based on the same set of facts and on the same legal basis (Media West-CPI, Inc., Media West-DMR, Inc., Media West-GMP, Inc., Media West-GSI, Inc., Media West-PNI, Inc., Media West-PNJ, Inc., Media West-SJC, Inc., Media West-NPP, Inc., Cape Publications, Inc., Des Moines Register and Tribune Co., Gannett Satellite Information Network, Inc., Multimedia Holdings Corp., Phoenix Newspapers, Inc., Gannett Co., Inc. v. Unasi, Inc., WIPO Case No. D2005-1336 and cases therein cited). Furthermore, the Panel notes that the Respondent does not raise any specific objections in the Response to the fact that the Complaint has been brought against it by multiple complainants and the Panel can identify no prejudice to the Respondent arising from such consolidation.
On March 21, 2013, the Complainants submitted to the Center an unsolicited Supplemental Filing commenting upon certain matters in the Response together with further Annexes. On the same date, the Respondent’s counsel issued an email to the Center in which he argued that the said Supplemental Filing should not be submitted, noting that there is no provision in the Rules for such a submission absent a request from the Panel under paragraph 12 of the Rules. The Respondent’s counsel also noted that the Panel was appointed on March 14, 2013 and that the Decision had been requested by the Center to be rendered by March 28, 2013, and that as such the Complainant’s Supplemental Filing was untimely.
Paragraph 4.2 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition (“WIPO Overview 2.0”), notes the consensus view that such unsolicited supplemental submissions may be accepted by a panel. However, it is also well established that the Rules do not provide a right of reply and that supplemental submissions should be allowed sparingly, bearing in mind the need for procedural efficiency (DK Bellevue, Inc. d/b/a Digital Kitchen v. Sam Landers, WIPO Case No. D2003-0780 and Parfums Christian Dior S.A. v. Jadore, WIPO Case No. D2000-0938).
Paragraph 4.2 of the WIPO Overview 2.0 goes on to note that “the party submitting its filing would normally need to show its relevance to the case and why it was unable to provide that information in the complaint or response.” In the present case, the Complainants contend that they should be allowed to make what they term an “extension of allegations” because (i) certain documentation submitted by the Respondent is not authentic; and (ii) the Complainants have recently become aware that the products currently offered through the website associated with the disputed domain name are “fake”. The Supplemental Filing goes on to make a series of lengthy contentions regarding whether or not the present dispute is contractual, whether or not the DAEDO mark is descriptive; addressing the alleged legitimate rights of the Respondent in the disputed domain name including introducing what the Complainants state is a complete copy of the Operating Agreement of Daedo USA, Inc.; and summarising the facts as the Complainants see them.
The Panel has reviewed the Supplemental Filing, extending to some 14 pages together with an associated 40 pages of additional Annexes. The Panel nevertheless is not persuaded that the matters disclosed therein exclusively relate to arguments put forward by the Respondent which the Complainants would have been unable to anticipate when filing the Complaint. In particular, the production of a complete version of the Operating Agreement at this late stage is unacceptable when the entire document must have been in the Complainants’ possession from the outset. The Panel also notes that, to a significant extent, the Supplemental Filing consists of further argument which merely extends the submissions made in the original Complaint.
In light of the above considerations, the Panel declines to take the Supplemental Filing into account, save in respect of (i) noting that the Complainants dispute the authenticity of the documents produced by the Respondent dating from 1996; (ii) noting that the version of the Operating Agreement now produced contains the same wording for clause 2.7 as that produced with the Complaint; and (iii) noting and admitting into the record the terms of the additional correspondence between the Parties in the period from May to June 2007 which has now been produced. The Panel does not consider that any of these matters require an answer from the Respondent and accordingly will proceed to a Decision without affording the Respondent a right of reply. Despite the fact that the Supplemental Filing is not taken into account in its entirety, the Complainants may nevertheless take comfort from the fact that, in light of the Panel’s analysis below, its contents would have been unlikely to have made any difference to the outcome in this case.
4. Factual Background
The First Complainant is a Spanish company incorporated on November 23, 1988. It is dedicated to the design, importation and commercialization of martial arts equipment and accessories. The Second Complainant is the managing director of the First Complainant. The Complainants are the owners on an individual basis of various registered trademarks for the word and/or figurative mark DAEDO or DAE DO, including, for example, USA registered trademark no. 2874315 for the word mark DAE DO in international classes 25 and 28, registered on August 17, 2004. The phrase DAE DO translates from Korean into English as “great way/path” or “magnificent way/path”. The latter translation is noted on the said USA trademark. The Second Complainant is also the owner of the domain names <daedosport.com>, <daedo.net> and <daedo.com>, registered on September 2, 1999, January 4, 1999 and July 24, 2002 respectively.
The Respondent is an individual based in Texas, USA who has a prior business relationship with the Complainants. The chronology of the Parties’ business relationship, based upon the materials provided by the Parties, appears to be as follows:
On January 6, 1996, the Respondent appears to have entered into an Internet services agreement with an Italian Internet Services Provider in which the Respondent stated that his business was named “Mall Enterprises SAS / <taekwondomall.net> / Daedo USA”. The said services agreement refers to the hosting of the domain names <taekwondomall.net> and <daedousa.it>. The authenticity of this document is disputed by the Complainants.
On March 27, 1996, the Respondent, then based in Italy, wrote to the Second Complainant stating that the Respondent was the president and CEO of <taekwondomall.net> and Daedo USA, a new concept in e-commerce solutions for Taekwondo practitioners. The Respondent asked the Second Complainant if it would be interested in having the Respondent as a reliable distributor operating through the Internet. No commercial agreement was reached between the Parties at that stage. The authenticity of this document is disputed by the Complainants.
In 2007, the Parties began to discuss a potential business relationship. By this stage the Respondent had relocated to the USA.
On May 28, 2007, the Second Complainant wrote an email in which he thanked the Respondent for his interest in the Complainants’ products and stated that the Complainants were currently looking for a partner in the USA to distribute these.
On June 1, 2007, the Respondent registered the disputed domain name.
On June 14, 2007, the Respondent wrote a follow up email to the Second Complainant’s email, introducing the Respondent as president and CEO of Taekwondo Mall LLC. The Respondent explained the advantages of a possible distributor arrangement with the Complainants, including the Respondent’s relationship with various prominent persons in the USA Taekwondo scene. The Respondent stated that he proposed to develop “a unique Daedo USA image thru [sic] an exclusive website...if you are interested in our proposal, which of course we can discuss, please let us know at your earliest convenience.”
At some point between June 14, 2007 and June 19, 2007, the Second Complainant confirmed by email to the Respondent that the Complainants were looking for a serious distributor in the USA and would like a distribution network on a national scale, by states or regions, besides Internet sales. The Second Complainant also noted that he had seen an advertisement on the Respondent's website at “www.taekwondomall.com” and requested clarification. The advertisement featured the Complainants’ figurative trademark beside the legend “Dae do USA announces to all its loyal customers the joint venture with the WTF Taekwondo largest mega store on the web”.
On June 19, 2007, the Respondent wrote to the Second Complainant by email inviting the Second Complainant to Texas to view the Respondent’s operations. The Respondent noted that he was committed to the concept of nurturing a Daedo USA full scale distributorship and stated that his business possessed all the necessary infrastructure and was based in a strategic port of entry. With regard to the advertisement announcing a joint venture, the Respondent stated that this was meant to positively impress the Complainants and added “...I hope you understood my excitement to be part of what in my opinion is the NUBER [sic] ONE BRAND in the world: DAEDO. Furthermore the fact that you sent us the price list and we are about to place a major order, we thought would have justified a minimum display of Daedo pride and joy on our part...Again please realize that it was done in good faith but I have already taken it down (as a sign of respect to you) until we further confirm our position in the Daedo family.”
On July 1, 2007, the Respondent incorporated a legal entity in Texas, USA named Daedo USA, LLC.
On or about July 2, 2007, the Second Complainant wrote to the Respondent indicating that the Complainants had come to the conclusion after speaking to the Complainants’ lawyers that the name of Daedo USA, LLC should be changed, otherwise “the type of contract” would also require to be changed. The Respondent replied to that email on July 2, 2007 indicating that while the Respondent preferred to retain the name, he was flexible on both this and on modification of the type of contract to be concluded between the Parties. The Respondent also stated that he accepted that he had no claim to the name DAEDO and that if Daedo USA, LLC stopped selling such products the company would be dissolved and the name handed over to the Complainants.
On July 3, 2007, the First Complainant entered into a Distribution Contract with Daedo USA, LLC whereby Daedo USA, LLC was to be the First Complainant’s sole distributor in respect of the First Complainant’s martial arts products in the USA. The said Distribution Contract confirmed that the DAEDO trademark and other intellectual property rights related to the said products were the sole property of the Complainants and Daedo USA, LLC committed to use such rights only in full compliance with the instructions of the First Complainant. The duration of the said Distribution Contract was stated to be two years from the date of execution thereof.
On July 4, 2007, the members of Daedo USA, LLC entered into a Limited Liability Company Operating Agreement. Two conflicting versions of the Agreement have been produced by the Parties. The Complainant produced the first two pages of a copy containing clause 2.7 stating inter alia “…the name DAEDO USA and the website “www.daedousa.com” …belongs exclusively to [the Second Complainant] (a member). Daedo USA, LLC agrees to have no legal claim over the name…” The Respondent produced what appears to be all four pages of the Agreement including a signature page showing that the Agreement appears to have been signed by various members of Daedo USA, LLC between July 7, 2007 and November 8, 2007 however which does not appear to have been signed by the Second Complainant, for whom a signature line was provided. The Respondent’s version of the said clause 2.7 stated inter alia “…the name DAEDO USA and the website “www.daedousa.com” …belongs solely and exclusively to [the Respondent] (a member). This domain name was registered on June 1, 2007 under the individual physical person’s name registration and therefore is considered as personal property of his. Furthermore, [the Respondent] has greanted [sic] limited use and his permission of the domain <daedousa.com> to be used by the company Daedo USA, LLC until May 15, 2009. As for the name DAEDO USA, it constitutes intellectual property belonging to [the Respondent]…” A third version of the Operating Agreement was produced by the Complainants with their Supplemental Filing of March 21, 2013. This appears to be the most complete copy, albeit bearing different signatures, and contains the Complainants’ version of clause 2.7.
On July 9, 2007, the Respondent wrote to the Complainant by email stating inter alia “This is an update for the things I have accomplished so far… 1) Website has been transferred to your name…”. This email was accompanied by a WhoIs print regarding the disputed domain name showing that the registrant was the First Complainant.
On July 13, 2007, the Second Complainant wrote to the Respondent by email stating inter alia “I recognize that you are the sole owner of the domains <daedousa.com> and <taekwondomall.com> as well as any other future domains you register freely along with the Daedo logo/brand and associated martial arts products for as long as you wish. I recognize that the Daedo USA and Taekwondo Mall names were your original idea and part of your business project since 1997 in Italy. In conclusion and for your peace of mind, I assure you that no conflict of interest will ever exist between your website <daedousa.com>; your chosen company name Daedo USA and our company [the First Complainant] because we are two separate entities in pursuit of different markets.” The authenticity of this email is disputed by the Complainants.
At some point between July 9, 2007 and May 30, 2008, the legal registrant as shown on the WhoIs record of the disputed domain name was changed from the First Complainant to Daedo USA, LLC.
On November 18, 2008, Daedo USA, LLC obtained a legal opinion from a firm of Attorneys in New York, USA regarding the Distribution Contract between The First Complainant and Daedo USA, LLC. The opinion stated that the meaning and effect of the said Distribution Contract was to confer exclusive rights upon Daedo USA, LLC to market and distribute Daedo Martial Arts products in the USA. The opinion went on to state that should the First Complainant engage in direct or indirect sales of such products to third parties in the USA without Daedo USA, LLC’s consent, this would likely constitute a breach of the said Distribution Contract.
Between February 16, 2009 and February 19, 2009, emails were exchanged between a Mr. Yacobucci and the Second Complainant. In so far as the Panel can make sense of the emails without further contextual information, these indicate that the Parties’ business relationship is breaking down and that questions have been raised regarding Daedo USA, LLC’s exclusivity arising from the Distribution Contract.
Between May 20, 2009 and July 14, 2009, the Second Complainant wrote three emails to the Respondent. These indicate that there are disputes between the Parties concerning the operations and financial reporting of Daedo USA, LLC. The emails also indicate that the Parties appear at that time to have been attempting to negotiate a renewal of the Distribution Contract. In the email of May 20, 2009, the Second Complainant inter alia expressly stated that he was the owner of the disputed domain name. In the email of July 14, 2009, the Second Complainant stated that the Distribution Contract had expired as no agreement had been reached regarding its renewal. The Second Complainant requested the Respondent to “take all necessary steps to transfer the domain rights of “www.daedousa.com” to me as soon as possible.” The Second Complainant went on to state “As you already know, according to section 2.7 of the Operating Agreement, the domain is of [sic] my property.”
On or about May 21, 2009, the legal registrant as shown on the WhoIs record of the disputed domain name was changed from Daedo USA, LLC to Domains by Proxy, Inc. At some point thereafter, the Respondent became the underlying registrant of the disputed domain name.
On January 4, 2011, the Second Complainant wrote an email to the Respondent in which the Second Complainant stated inter alia “we need to talk about the domains <daedousa.com> and <daedo.it>”.
On January 13, 2011, Ms. Chiara Rossi, a representative of Taekwondo Mall / Daedo USA, LLC wrote an email to a Ms. Vaccari following what appears to have been a customer complaint. In the said email, Ms. Rossi stated inter alia that Taekwondo Mall / Daedo USA had taken over the administration of the website “www.daedousa.com” on the grounds of incompetence of Adidas Taekwondo USA / Taekwondo Enterprises, and the latter’s failure to renew the disputed domain name. Ms. Rossi goes on to say that the administration of the site was entrusted to Adidas Taekwondo USA / Taekwondo Enterprises on March 15, 2010.
On February 13, 2011, the Respondent replied to the Second Complainant’s email of January 4, 2011 asking whether the Second Complainant was interested in purchasing the disputed domain name and <daedo.it>. The Respondent noted “The traffic generated has a value and the confusion it creates is not worth it for you or for me”. The Respondent also indicated that he wished to “make peace and end old quarrels”.
On August 7, 2011, the Respondent and Ms. Chiara Rossi incorporated a legal entity in Nevada, USA named Daedo USA, Inc.
As at the date of this Decision, the disputed domain name is used by Daedo USA, Inc. for a website which is engaged in the resale of martial arts equipment.
5. Parties’ Contentions
The Complainant contends that the disputed domain name is confusingly similar to trademarks in which it owns rights; that the Respondent has no rights or legitimate interests in the disputed domain name; and that the disputed domain name was registered and is being used in bad faith.
In addition to the Complainants’ registered trademarks, the Complainants state that they rely on the First Complainant’s incorporation as Daedo S.L. in 1998 and the Second Complainant’s registration of various domain names incorporating the Complainants’ DAEDO trademark. The Complainants state that there is an identity between the Complainants’ DAEDO trademark registrations, the First Complainant’s company name and the disputed domain name. The Complainants assert that it is undeniable that confusion is caused to the end consumer by the use of the disputed domain name by a person other than the Complainants and note that the Respondent acknowledged in his email of February 13, 2011 that his use of the disputed domain name is causing confusion among consumers.
The Complainants assert that the Respondent lacks rights and legitimate interests in the disputed domain name because:
(i) the Distribution Contract did not allow Daedo USA, LLC to register the disputed domain name;
(ii) the disputed domain name was registered one month before the signature of the Distribution Contract and the incorporation of Daedo USA, LLC such that the existence of the Distribution Contract cannot be used to justify a legitimate interest in the disputed domain name;
(iii) the termination of the Distribution Contract left the Respondent with no rights or legitimate interests in the disputed domain name; and
(iv) the website associated with the disputed domain name is now being managed by a different company, Daedo USA, Inc., which has never had a distribution agreement with the Complainants and which initiated its use of the disputed domain name in the knowledge of the express opposition of the Complainants thereto.
The Complainants assert that the disputed domain name was registered and used in bad faith because:
(i) the disputed domain name was registered without the knowledge and consent of the Complainants and the Respondent refused to transfer the disputed domain name when requested to do so, preventing the Complainants from using the DAEDO trademark as a domain name;
(ii) in the hypothetical case that the Panel concludes that the disputed domain name was registered in good faith, the termination of the Distribution Contract negatives what would otherwise have been a bona fide registration;
(iii) the website associated with the disputed domain name is being managed by Daedo USA, Inc., being a company incorporated after termination of the Distribution Contract which never had a contractual relationship with the Complainants and which was aware of the Complainants’ rights in the DAEDO trademark when it initiated its use of the disputed domain name. The disputed domain name was transferred to the Respondent after May 20, 2009 and the Respondent knew at that time that he had no rights in the disputed domain name, both in light of his email of July 2, 2007 and in light of his acknowledgements in the Distribution Contract. The Respondent also knew at that time that the Second Complainant had asserted ownership of the disputed domain name in the email of May 20, 2009 and that the Distribution Contract would not be renewed;
(iv) the disputed domain name is being used to attract Internet users, for commercial gain, to the website of Daedo USA, Inc. by creating confusion with the Complainant’s trademark; and
(v) the fact that the disputed domain name was registered with a privacy service one day after the Second Complainant informed the Respondent that the Distribution Contract would not be renewed indicates bad faith on the part of the Respondent.
The Respondent submits that the Complaint should be denied. The Respondent asserts that the Policy was enacted to address obvious cases of cybersquatting and that it is ill-equipped to adjudicate contract disputes. The Respondent states that, to the extent that Complainants have a remedy at all, which is not conceded by the Respondent, such a remedy is likely only available in the courts of Texas.
The Respondent submits that he registered the disputed domain name with the understanding of the Second Complainant that the Respondent was to be the sole, exclusive distributor of the Second Complainant’s DAE DO products in the USA. The Respondent states that the Second Complainant originally agreed to the Respondent’s registration of the disputed domain name and subsequently changed his mind after legal advice, however the Second Complainant nevertheless signed the Distribution Contract. The Respondent submits that the issue of ownership of the disputed domain name continued for several months until the Second Complainant relented and agreed that the disputed domain name was to remain the Respondent’s property.
While the Respondent states that the Complaint should be denied as an attempt to enforce the Distribution Contract using the Policy, the Respondent also asserts that the Complaint fails on the merits for various reasons. The Respondent states that the Complainants’ trademark is not strong as it is at best a descriptive phrase for Korean martial arts. The Respondent notes that the Complainants’ European trademarks are figurative in nature and submits that the Complainants’ USA trademark is exceptionally weak and not registered for online retail sales. The Respondent notes that the website associated with the disputed domain name contains a disclaimer at the bottom of the page stating that the retail business does not claim affiliation or exclusivity to any one brand and that “Daedo USA” is translated from Korean to English as the “Great Way” or “Great Path” to the USA. The Respondent notes that such disclaimers are used by commercial entities to avoid confusion among the public. The Respondent also submits that the Complainants have provided no evidence that there is any consumer confusion and the Respondent is aware of none.
The Respondent states that the Complainants have failed to mention the Respondent’s first approach to the Complainants in 1996 and submits that the Complainants did not object to the Respondent’s business activities at that time in any forum. The Respondent states that he registered the disputed domain name with the understanding that the Distribution Contract would be negotiated and formed a separate legal entity to facilitate the formation of the contract as Daedo USA had to that point been merely an unregistered business.
The Respondent notes that the Complainants admit that the Second Complainant agreed to sign the Distribution Contract despite the prior communication between the Parties in which the Second Complainant expressed concerns about the company name. The Respondent states that it vehemently denies the authenticity of what it asserts is an incomplete portion of the Operating Agreement of Daedo USA, LLC which purports to vest ownership of the disputed domain name in the Second Complainant. The Respondent notes that its copy of the said Operating Agreement states in Section 2.7 thereof that the disputed domain name is to remain the property of the Respondent.
The Respondent disputes the Complainants’ characterizations of, and the authenticity of, the communications related to transfer of the disputed domain name, and adds that the disputed domain name remained under the Respondent’s control, and the Respondent used the disputed domain name to sell the Complainants’ products under the Distribution Contract for several years with the Complainants’ knowledge and consent. The Respondent asserts that any claims by the Complainants for unauthorized trademark use or use in excess of the scope of the license are barred by the equitable doctrine of laches or applicable statues of limitation for breach of contract.
With regard to the alleged transfers of the disputed domain name the Respondent asserts that such transfers do not create a bad faith registration as the Respondent was the controlling party of any involved entities at all times. The Respondent narrates the terms of the legal opinion obtained by Daedo USA, LLC on November 18, 2008 and submits that this was sought because the Respondent had grown concerned that the Second Complainant was violating the terms of the Distribution Contract. The Respondent alleges that he brought his concerns to the attention of the Second Complainant but that no agreement was reached and that thereafter discord between the Parties grew until the Complainants terminated the Distribution Contract.
The Respondent asserts that it continues to make use of the web site at the disputed domain name for legitimate resale of genuine goods.
The Respondent submits that contrary to the submissions in the Complaint, the Complainants did consent to the Respondent’s registration, ownership, and use of the disputed domain name in a letter dated September 28, 2007, a copy of which the Respondent states that it has produced, albeit that the Panel has not identified a letter of this date in the Annexes filed by the Respondent.
The Respondent states that the Complainants have provided no evidence that the Respondent has engaged in any conduct that could be characterized as in bad faith. The Respondent asserts that it did not register or retain the disputed domain name primarily for sale to Complainants, and states that it has not offered the disputed domain name for any specific amount. The Respondent submits that it did not register the disputed domain name to disrupt the Complainants’ business, and has not prevented the Complainants from reflecting their business name in their own domain names.
The Respondent states that, following the termination of the distributorship contract by the Complainants, the Respondent was left with a large inventory of genuine DAEDO products and that the Respondent is aware of no decisions under the Policy or by courts in the USA that forbid resale of genuine goods. The Respondent submits that legitimate business resale of genuine products in this way, including with the use of the disclaimer displayed at the web site hosted on the disputed domain name, is not the sort of intentional disruption or profiting from customer confusion that are contemplated by the Policy.
The Respondent concludes that the Panel should reject what the Respondent characterizes as the Complainants’ abuse of the UDRP process to obtain enforcement of a contract that the Complainants terminated themselves, and that, if the Panel sees fit, it should find that the Complainants have engaged in impermissible Reverse Domain Name Hijacking through such abuse.
6. Discussion and Findings
To succeed, the Complainants must demonstrate that all of the elements listed in paragraph 4(a) of the Policy have been satisfied:
(i) the disputed domain name is identical or confusingly similar to a trademark or service mark in which the Complainants have rights;
(ii) the Respondent has no rights or legitimate interests in respect of the disputed domain name; and
(iii) the disputed domain name has been registered and is being used in bad faith.
A. Identical or Confusingly Similar
The first element of paragraph 4(a) of the Policy has been described as a “standing” requirement (see, for example, the WIPO Overview 2.0, paragraph 3.1, “In all such cases, in order to have a chance to succeed in any filed UDRP complaint, the complainant must actually demonstrate relevant trade mark rights, as these are a precondition for satisfying the standing requirement under the first element of the UDRP for rights in a mark”). Likewise, the test in paragraph 4(a)(i) of the Policy has been described as “a relatively low threshold test for a complainant, the object of which is to establish that there is a bona fide basis for the complaint” (The Perfect Potion v. Domain Administrator, WIPO Case No. D2004-0743).
In the present case, the Panel notes that the Second Complainant is the owner of the USA trademark noted in the Factual Background section above. While the Respondent characterizes this trademark as “exceptionally weak” and descriptive in nature, this is not relevant to the Panel’s assessment under paragraph 4(a)(i) of the Policy, which makes no stipulations as to the distinctiveness or strength of the mark relied upon by a complainant. The Panel notes that the Second Complainant’s trademark is incorporated within the disputed domain name in its entirety together with the initials “USA”. The Panel considers that the dominant element of the disputed domain name is the Complainants’ DAE DO trademark and that the addition of the “USA” element, being the acronym for the United States of America and thus a geographic descriptor, does not serve to distinguish the disputed domain name from the said trademark. The top level domain “.com” is disregarded for the purposes of comparison as is customary in cases under the Policy.
On the basis of the low threshold test outlined above, the Panel finds that there is a bona fide basis for the Complaint and that the disputed domain name is confusingly similar to a trademark in which the Complainants have rights. Accordingly, the first element under the Policy has been established.
B. Rights or Legitimate Interests
The requirements of paragraph 4(a) of the Policy are conjunctive. A consequence of this is that failure on the part of a complainant to demonstrate one element of the Policy, including that the disputed domain name has been registered and is being used in bad faith, will result in failure of the complaint in its entirety. Accordingly, in light of the Panel’s finding under the next head, it is unnecessary for the Panel to address the issue of the Respondent’s rights or legitimate interests in the disputed domain name.
C. Registered and Used in Bad Faith
Paragraph 4(b) of the Policy provides four, non-exclusive, circumstances that, if found by the Panel to be present, shall be evidence of the registration and use of a domain name in bad faith:
“(i) circumstances indicating that you have registered or you have acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name; or
(ii) you have 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 you have engaged in a pattern of such conduct; or
(iii) you have registered the domain name primarily for the purpose of disrupting the business of a competitor; or
(iv) by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your web site or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your web site or location or of a product or service on your web site or location”.
The Panel commences its assessment of this element of paragraph 4(a) of the Policy by reminding itself that the Policy is intended to address abusive cybersquatting activities and is not designed to adjudicate all disputes of any kind that relate in any way to domain names (The Thread.com, LLC v. Jeffrey S. Poploff, WIPO Case No. D2000-1470). As such, it is not the function of the Panel in the present case to adjudicate upon the evidently complex and longstanding commercial dispute between the Parties. In particular, the enforcement of the Distribution Contract between the First Complainant and Daedo USA, LLC, or the interpretation and enforcement of the Operating Agreement of Daedo USA, LLC are matters which are beyond the scope of this administrative proceeding and which would require to be pursued in a different forum.
In the present case, the Complainants submit that the disputed domain name was registered and used in bad faith because first, the Respondent had no rights under the Distribution Contract at the time of such registration and the Complainants neither knew of nor consented to such registration; secondly, the termination of the Distribution Contract “negatives” any bona fide registration; thirdly, the transfer of the disputed domain name to the Respondent after May 20, 2009 constitutes a registration in bad faith; fourthly, the disputed domain name is being used to attract Internet users to the website of Daedo USA, Inc. by creating confusion with the Complainant’s trademark; and fifthly, the disputed domain name was registered with a privacy service.
It is clear to the Panel from the factual matrix in this case that the Respondent registered the disputed domain name in contemplation of the commercial arrangement between the Parties coming into existence. There is no evidence in the record that the Respondent either sought or received the Complainants’ permission to do so. However, there is no provision under the Policy or consensus among UDRP panels that registering a domain name in the absence of express authorization is per se bad faith, where that domain name is intended to be used, and ultimately is used, for a business venture between the trademark owner and the other party (see Recaro North America, Inc. v. Speedware Motorsports, WIPO Case No. D2010-0412).
The Complainants have produced a large volume of material which post-dates the registration of the disputed domain name, and in many cases post-dates the termination of the Distribution Contract. However, on the question of bad faith registration, the Panel’s focus must necessarily be on what was in the Respondent’s mind at the date of registration of the disputed domain name, and not afterwards. Clearly some subsequent correspondence may help to place the registration in context but the vast majority, including the Respondent’s email showing the placing of the disputed domain name into the First Complainant’s name on or about July 9, 2007, is not in the Panel’s view determinative of the Respondent’s original motivation. Nor, in the Panel’s opinion, is the subsequent termination of the Distribution Contract of any assistance on this point. Such termination, and the Respondent’s continued use of the disputed domain name through a succession of businesses, might be pointed to by the Complainants as grounds for a finding that the disputed domain name has been used in bad faith however in the Panel’s view the subsequent actings of the Parties do not inform the background to the registration itself to the conclusive satisfaction of the Panel and the Complainants must prove both registration in bad faith and use in bad faith. As such, in the Panel’s view, it is not possible for the termination of the Distribution Contract to “negative” a bona fide registration as contended by the Complainants.
Furthermore, the Panel does not agree that the alleged transfers of the disputed domain name from the Respondent to the name of the First Complainant, then to Daedo USA, LLC, then to the privacy service, or the use of the disputed domain name by Daedo USA, Inc., are of significance to the date on which registration in bad faith should be assessed. The Panel accepts the Respondent’s contention that at all times he has remained in control of the disputed domain name notwithstanding the fact that the WhoIs record has been amended several times or that the disputed domain name has pointed to websites operated by various entities. In all of the above circumstances, the Panel must focus its assessment upon the original registration date of the disputed domain name, namely June 1, 2007.
As far as materials pre-dating the registration of the disputed domain name are concerned, the Panel notes that the Complainants dispute the authenticity of the ISP form of January 6, 1996 and the letter of March 27, 1996. In light of the fact that in the Panel’s opinion none of the documents whose authenticity has been disputed by either of the Parties are material to the outcome of the case, including the 1996 documents, the Operating Agreement and the alleged email of the Second Complainant dated July 13, 2007 the Panel has not taken them into account.
The Panel has however considered the correspondence between the Parties dating from May and June 2007, which the Complainants produced with their Supplemental Filing as this does shed light on the Respondent’s motivation in registering the disputed domain name. It is clear to the Panel that the Respondent registered the disputed domain name early on in discussions with the Complainants as to a possible distribution arrangement. At about the same time the Respondent, perhaps naively, published an advertisement using the Complainants’ trademark on his beta website announcing the proposed joint venture between the Parties. When the Complainants sought an explanation, the Respondent stated “…Again please realize that it was done in good faith…”.
The Panel views this correspondence as demonstrative of the fact that the Respondent registered the disputed domain name in contemplation of a distribution agreement being entered into with the Complainants, as subsequently occurred, and at a point where the Respondent was enthusiastically promoting himself and his company as an ideal business partner for the Complainants. In contemporaneous correspondence which the Complainants have produced, and whose authenticity they cannot therefore dispute, the Respondent himself describes the advertisement as “done in good faith” and there is no reason under the circumstances for the Panel to believe that the disputed domain name was registered with anything other than the same motivation. In any event, whether or not such correspondence is taken into account, there is no evidence on the record that demonstrates on the balance of probabilities that when the Respondent registered the disputed domain name he did so in bad faith as an act of cybersquatting, with a view to abusing the Complainants’ rights in their trademarks.
The factual matrix does show that the Respondent changed the WhoIs record to reflect the Complainants’ name yet retained control of the domain name account with the Registrar. This does not in the Panel’s view cast any doubt over the Respondent’s good faith at the time when he registered the disputed domain name and is likely to have been a question of convenience for the operation of the distribution agreement. It is clear however that the Respondent subsequently took various actions, to which the Complainants strongly object, after the relationship deteriorated between the Parties. This includes the Respondent allowing the disputed domain name to be used in connection with various businesses and removing the Complainants’ name from the WhoIs record. Again, this does not in the Panel’s view demonstrate that it is more probable than not that any such activities were in the Respondent’s contemplation when he registered the disputed domain name.
In these circumstances, the Panel finds that the Complainants have failed to prove that the disputed domain name was registered in bad faith in terms of the Policy. Accordingly, the Panel does not require to consider in detail the Respondent’s use of the disputed domain name following the termination of the Distribution Contract. In reaching the above conclusion, however, the Panel takes no position on the merits of any contractual dispute that may exist between the Parties, and the finding in the present proceedings should in no way be considered as preventing the Complainants (or indeed either of the Parties) from seeking to pursue this matter through the courts, should they so choose. Furthermore, this Decision should not be regarded as in any way condoning or endorsing the Respondent’s conduct following termination of the Distribution Contract, nor should it be construed as a finding that the Respondent has not acted in bad faith in a wider context than that which the Panel may consider within the framework of the Policy.
D. Reverse Domain Name Hijacking
“Paragraph 15(e) of the UDRP Rules provides that, if “after considering the submissions the panel finds that the complaint was brought in bad faith, for example in an attempt at Reverse Domain Name Hijacking or was brought primarily to harass the domain-name holder, the panel shall declare in its decision that the complaint was brought in bad faith and constitutes an abuse of the administrative proceeding”. Reverse Domain Name Hijacking is defined under the UDRP Rules as “using the UDRP in bad faith to attempt to deprive a registered domain-name holder of a domain name”.
WIPO panels have found that the onus of proving complainant bad faith in such cases is generally on the respondent, whereby mere lack of success of the complaint is not itself sufficient for a finding of Reverse Domain Name Hijacking. To establish Reverse Domain Name Hijacking, a respondent would typically need to show knowledge on the part of the complainant of the complainant’s lack of relevant trademark rights, or of the respondent's rights or legitimate interests in, or lack of bad faith concerning, the disputed domain name. Evidence of harassment or similar conduct by the complainant in the face of such knowledge (e.g. in previously brought proceedings found by competent authorities to be groundless, or through repeated cease and desist communications) may also constitute a basis for a finding of abuse of process against a complainant filing under the UDRP in such circumstances.
WIPO panels have found Reverse Domain Name Hijacking in circumstances including where: the complainant in fact knew or clearly should have known at the time that it filed the complaint that it could not prove one of the essential elements required by the UDRP...”
In the present case, the Respondent has requested that the Panel make a finding of Reverse Domain Name Hijacking on the grounds that the Complainants have abused the process of the UDRP in seeking to obtain enforcement of a contract that the Complainants terminated themselves. The Panel does not agree with the Respondent that the Complainants deliberately set out to seek enforcement of the Distribution Contract via the Policy, albeit that the net effect of a finding for the Complainants might have had the appearance of enforcing a term of that agreement.
The Panel considers that the Complainants were entitled to raise the issue in the present proceedings of whether the disputed domain name was registered in bad faith given that the Respondent did not have the Complainants’ express authorization at the point of registration. Equally, the Panel is of the opinion that the Complainants were entitled to put forward an argument that the issue of bad faith should be determined at the point of the alleged transfers of the disputed domain name rather than its original date of registration. Neither of these approaches was accepted by the Panel, however, as noted above, mere lack of success of the Complaint is not itself sufficient for a finding of Reverse Domain Name Hijacking. Furthermore, in the Panel’s opinion, the Complainants did not bring the Complaint in circumstances where they knew or should have known that they could not prove one of the essential elements of the Policy.
In all of these circumstances, the Respondent’s request that the Panel enter a finding of Reverse Domain Name Hijacking is denied.
For the foregoing reasons, the Complaint is denied.
Andrew D.S. Lothian
Date: March 28, 2013