WIPO Arbitration and Mediation Center

 

ADMINISTRATIVE PANEL DECISION

Microsoft v. Unisoft, Inc.

Case No. D2002-0886

The Complainant is Microsoft, (attn: Peter Becker, Microsoft Legal and Corporate Affairs) One Microsoft Way, Redmond, Washington, 98052-6399, United States of America, represented by Arnold & Porter (Suzanne V. Wilson & James S. Blackburn), 1900 Avenue of the Stars, Los Angeles, CA 90067-4408, United States of America.

The Respondent is Unisoft, Inc., 14690 NE 95 Street, Suite 101, Redmond, WA 98052, United States of America.

The disputed domain name is <msdn.com>, registered with Network Solutions, Inc., also known as VeriSign, Registrar.

The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on September 24, 2002. On September 25, 2002, the Center transmitted by email to Network Solutions, Inc. Registrar a request for registrar verification in connection with the domain name at issue. On September 27, 2002, Network Solutions, Inc., Registrar, transmitted by email to the Center its verification response, confirming that the Respondent is listed as the registrant and providing the contact details for the administrative, billing, and technical contact. On September 30, 2002, the Center verified that 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 the Respondent of the Complaint, and the proceedings commenced on September 30, 2002. In accordance with the Rules, paragraph 5(a), the due date for Response was October 20, 2002. The Respondent did not submit any Response. Accordingly, the Center notified the Respondent’s default on October 21, 2002.

The Center appointed Henry H. Perritt, Jr. as the sole Panelist in this matter on November 28, 2002. 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.

Microsoft created and operates the Microsoft Developer Network, known by, and operated under the mark "MSDN".

The United States Patent and Trademark Office granted federal trademark registrations for MSDN mark as follows:

No. 2289990 (November 2, 1999), (providing information in the fields of computer systems and software for use by computer consultants and developers of computer software and computer systems; providing computer and software news by means of computer networks and global communications networks). (first use 1997)

No. 2337115 (April 4, 2000), (computer programs, namely utility programs and programs to assist developers in the creation and modification of other computer programs). (first use 1996)

No. 2346067 (April 25, 2000), (organizing, arranging, conducting and promoting of trade shows, exhibitions and business conferences in the fields of computer hardware, software, telecommunications, and high technology and in the field of development of computer programs and systems; distribution for others of computer programs for use by computer consultants and developers of computer software and computer systems). (first use 1997)

No. 2402499 (November 7, 2000), (publications, namely, newsletters, pamphlets, magazines, books, instruction manuals, user guides and reference guides in the field of computers, software, and development of computer systems and software). (first use 1997)

Microsoft has advertised and promoted the MSDN Mark by establishing an Internet website located at a domain name that includes the MSDN Mark, "msdn.microsoft.com" (the "MSDN Website"). The MSDN Website allows computer users, particularly computer programmers and developers, to access the products, information and services Microsoft offers as part of the Microsoft Developer Network. For example, the MSDN Website includes sample software code that can be used by developers, an online library of technical programming information, and chats, webcasts and newsgroups for persons interested in specific areas of Microsoft software development and design.

In or about 1994, Microsoft entered into a business relationship with CobWeb whereby CobWeb, as a subcontractor to Microsoft, assisted in the development of certain aspects of the MSDN Website. Specifically, CobWeb assisted Microsoft in the development of the e-commerce portion of Microsoft’s online MSDN content, which provided developers the ability to purchase different levels of membership in the Microsoft Developer Network..

CobWeb apparently registered the <msdn.com> domain name for itself, on or about August 17, 1995.

In or about Spring 2002, apparently due to financial difficulties, CobWeb sold all or a substantial portion of its assets to Respondent Unisoft, Inc. The December 2, 2002, version "www.cobweb.com" contained the following statement, "E-Storefront has been acquired by Unisoft, Inc. of Redmond Washington. Unisoft can be found online at "www.unisoftnetworks.com". Unisoft is a self-funded, debt free company with hundreds of customers in the Pacific Northwest." As part of the transfer of assets, the <msdn.com> domain name was re-registered in Respondent’s name on August 5, 2002,

"www.unisoftnetworks.com", (visited December 2, 2002), lists Respondent as a "Microsoft Certified Solutions Provider".

In late August 2002, Microsoft became aware that Respondent was offering the <msdn.com> domain name for sale on the website established at that domain name. The web page at the <msdn.com> domain name stated: "This domain is for sale . . . If you are interested please contact e-storefront@unisoftnetworks.com." Respondent’s web page further states that "This site is receiving over 3,000 unique visitors per day . . . See our web reports." Links to summary and detail website activity reports for <msdn.com> are included on the web page.

In early September, Microsoft responded to Respondent’s open solicitation for offers to purchase the <msdn.com> domain name. In response to an inquiry by a representative of Microsoft regarding the <msdn.com> domain name, Respondent sent Microsoft’s representative an e-mail that stated, in pertinent part, as follows:

"Thank you for your inquiry into the availability of the ‘www.msdn.com’ ‘http://www.msdn.com’ domain name.

At this point we are soliciting firm offers for the rights to the domain, if you are still interested and are committed to making a serious offer please reply to this email with your contact information and an offer in US$

As I am sure you are aware this domain name has generated a lot of interest, as such we expect it to command a premium price.

We have had the domain name appraised with greatdomains.com and they valued it at between $19,000 and $23,000, and we already have an offer on the table at the low end of that range. If you are interested in the report I can make it available for you."

Both the web page located at "msdn.com" and Respondent’s September 3, 2002, e-mail refer to the popularity of the website located at the <msdn.com> domain name and a high degree interest in the domain name. The website activity reports accessible from the "msdn.com" home page demonstrate that this interest and popularity is a result of Internet users visiting the "msdn.com" website in search of information or content related to Microsoft. The summary statistics for <msdn.com>, located at "http://www.msdn.com/Report/Summary," for the period August 22, 2002, through September 18, 2002, indicate that the "msdn.com" website had an average of 4,241 hits per day and a total of 78,420 unique visitors during that 28 day period. The detail reports indicate that most of this traffic is generated by Internet users in search of Microsoft content. For example, the top search phrases – phrases that were used by search engines to find the "msdn.com" website – included "www.msdn.com," "windows icons," "vb 6 examples," and "nt authentication".

Following Respondent’s September 3, 2002, e-mail, Microsoft attempted to negotiate with Respondent to acquire the <msdn.com> domain name. During these negotiations, Microsoft advised Respondent of the history of the <msdn.com> domain name and Microsoft’s legal rights to the MSDN Mark. Microsoft further advised Respondent that its attempt to sell the <msdn.com> violated Microsoft’s rights in the MSDN Mark. Respondent did not dispute Microsoft’s rights to the MSDN Mark. Specifically, Bill Dauenhauer, Respondent’s Vice President and General Manager, stated: "As for those legal rights and/or otherwise that Microsoft has claim to regarding "www.msdn.com", Unisoft has absolutely no desire to dispute your claims in respect to this transaction. We are simply asking for an acceptable tender."

Microsoft made a formal tender offer to Respondent of $15,000 for the <msdn.com> domain name. In its letter, Microsoft stated that "[t]his offer to purchase does not imply any belief on our part that MSDN is not a valid trademark of Microsoft Corporation, or that Unisoft has any legitimate claim to continued possession of this URL, but is made solely to expedite transfer of this URL to its rightful owner and resolve this matter without further delay and expense." By e-mail dated September 20, 2002, Respondent rejected Microsoft’s offer.

Microsoft Has Exclusive Rights In The MSDN Mark.

Microsoft is a well-known, worldwide provider of computer software and related products and services, including products for use on the Internet and for developing Internet software, and online services and information delivered via the Internet. Since its inception in 1975, Microsoft has created software and Internet services for use in the workplace, home, and education. Microsoft’s products and services include computer operating systems, client/server applications, business and consumer productivity applications, software programming tools, electronic commerce services, and computer publications.

Among its other products and services, Microsoft has created and operates the Microsoft Developer Network, which is known by, and operated under, the mark "MSDN". MSDN is the world’s leading resource for developers using Microsoft development tools, products and technologies.

Microsoft has spent substantial time, effort and money advertising and promoting the MSDN Mark and the Microsoft Developer Network throughout the world. As a result, the MSDN Mark has become distinctive and well-known, and Microsoft has developed an enormous amount of goodwill in the mark.

The <msdn.com> domain name is identical, or confusingly similar, to the MSDN Mark.

The only difference between the <msdn.com> domain name and Microsoft’s MSDN Mark is the addition of the top-level domain ".com". It is well established, however, that the addition of a single letter of the alphabet, a minor misspelling or the addition of a ".com" to a famous trademark does not avoid confusion.

Respondent has no legitimate interest in the <msdn.com> domain name. Respondent has no connection or affiliation with Microsoft and has not received any license or consent, express or implied, to use the MSDN Mark in a domain name or in any other manner. In addition, Microsoft is informed and believes that Respondent has never been known by the name "MSDN" or by the domain name incorporating the foregoing.

Furthermore, there is no connection, whether by acronym, plain meaning, secondary meaning or otherwise, between Respondent and the MSDN Mark. Accordingly, Respondent has no legitimate interest in the MSDN Mark or the <msdn.com> domain name.

Respondent Has Registered And Used The Infringing Domain Name In Bad Faith.

As set forth above, CobWeb was working as a subcontractor for Microsoft in connection with development of the MSDN Website at the time it registered the <msdn.com> domain name. See Exhibit F. Thus, CobWeb clearly knew of Microsoft’s use of, and trademark rights in, the MSDN mark at the time it registered the <msdn.com> domain name. Furthermore, CobWeb’s involvement with Microsoft in the development of Microsoft’s online MSDN content was described on CobWeb’s own website. Id. Accordingly, as a basic matter of due diligence, Respondent knew or should have known of Microsoft’s use of, and trademark rights in, the MSDN Mark at the time Respondent acquired the <msdn.com> domain name from CobWeb.

Moreover, the MSDN Mark is well known internationally, particularly among members of the software industry. Accordingly, it is inconceivable that Respondent, a software and information technology company, was not aware of the MSDN Mark at the time it acquired the domain name.

Respondent Acquired the <msdn.com> Domain Name In Bad Faith.

Microsoft is informed and believes that Respondent acquired the <msdn.com> domain name from a company called "CobWeb". At the time of the transfer of the domain name to Respondent, CobWeb’s involvement in the construction of the MSDN Website for Microsoft was publicly available knowledge based upon, among other things, CobWeb’s own website. Moreover, by August 2002, Microsoft had obtained several trademark registrations for the MSDN Mark and the MSDN Website had been operational for several years.

Respondent has used the Infringing Domain Name in bad faith.

Respondent has attempted to sell the <msdn.com> domain name for a sum in excess of its out-of-pocket registration costs. Moreover, Respondent has rejected Microsoft’s offer of $15,000 for transfer of this domain name to Microsoft, presumably because Respondent believes that it will receive an even higher offer for the domain name from a third party.

Attempting to sell or transfer a domain name for valuable consideration in excess of out-of-pocket costs is evidence of bad faith registration and use under Paragraph 4(b) of the Dispute Policy.

Moreover, even though Respondent is not currently using the <msdn.com> domain name to host an active website, its actions still constitute registration and use in bad faith. Respondent must have expected that any use of the <msdn.com> domain name would cause harm to Microsoft because the domain name is composed of a mark that is so "obviously indicative" of Microsoft’s products and services that Respondent’s use of this domain name would "inevitably lead to confusion of some sort".

Finally, even in the unlikely situation that Respondent genuinely did not know about Microsoft’s rights in the MSDN Mark and the MSDN Website when Respondent acquired the <msdn.com> domain name in August 2002, Respondent’s failure to correct the situation immediately after Microsoft first advised Respondent of Microsoft’s rights satisfies the bad faith registration requirement.

Based on the foregoing, Respondent’s actions clearly fall within paragraph 4(b)(iv) of the Dispute Policy in that Respondent has intentionally attempted to attract, for commercial gain, Internet users to its web site by creating a likelihood of confusion with Microsoft’s mark as to the source, sponsorship, affiliation, or endorsement of its web site or location of a product or service on its web site.

The Respondent did not reply to the Complainant’s contentions.

The Respondent has not filed a Response to the Complaint. Paragraph 5(e) of the Rules provides that if a Respondent does not submit a Response, in the absence of exceptional circumstances, the Panel shall decide the dispute based on the Complaint. Under paragraph 14(b) of the Rules, when a party defaults in complying with any of the requirements of the Rules, in the absence of exceptional circumstances, the Panel is entitled to "draw such inferences therefrom as it considers appropriate". No exceptional circumstances have been brought to the Panel’s attention. Accordingly, the panel makes these findings on the basis of the material contained in the Complaint.

This dispute is properly within the scope of the Policy. The registrar of the disputed domain name, VeriSign is a registrar accredited by ICANN (Internet Cooperation for Assigned Names and Numbers) for domains under the top level domains ".com", among others. The registration agreement under which the disputed domain name is registered, incorporates the Policy. Paragraph 5 of Schedule A of the terms and conditions of that agreement provides, in material part: "You agree to be bound by our current domain policy . . . .," giving a URL that points to the UDRP.

The Administrative Panel has jurisdiction to decide the dispute. Under Paragraph 4(a) of the Policy, the Respondent must submit to a mandatory administrative proceeding because the Complaint alleges:

(1) The domain name is identical or confusingly similar to a trademark or service mark in which the Complainants have rights; and

(2) The Respondent has no rights or legitimate interests in respect of the domain name; and

(3) The disputed domain name was registered and is being used in bad faith.

The <msdn.com> domain name is identical, or confusingly similar, to the MSDN Mark. The only difference between the <msdn.com> domain name and Microsoft’s MSDN Mark is the addition of the top-level domain ".com". It is well established that the addition of a single letter of the alphabet, a minor misspelling or the addition of a ".com" to a famous trademark does not avoid confusion.

The Complainant alleges that Respondent has no connection or affiliation with Microsoft and has not received any license or consent, express or implied, to use the MSDN Mark in a domain name or in any other manner. It further alleges that Respondent has never been known by the name "MSDN" or by the domain name incorporating the foregoing. It concludes that the Respondent has no rights or legitimate interests in the domain name.

The facts of the case, however, do not foreclose the possibility that the Respondent may have or have had legitimate interests in the domain name. The Respondent’s predecessor in interest, CobWeb, had legitimate interests in the disputed domain name. It apparently registered the domain name in conjunction with its role as a business partner of the Complainant in developing the Microsoft Developer Network. CobWeb apparently registered the <msdn.com> domain name for itself, on or about August 17, 1995, approximately one year before the first alleged use by Microsoft of the mark MSDN.

The April 14, 1997, version of CobWeb’s website, "www.cobweb.com" (available from web.archive.org), contained the following promotional quotation:

"‘CobWeb is a turn-key Web Site development firm for Microsoft Corporation, providing an endless array of Web Site services. We couldn't have gotten our Site Builder Network site up and running so efficiently and effectively without CobWeb.’

Shawn McMichael, Lead Manager, Microsoft Corporation."

The February 20, 1999, version of "www.cobweb.com"/ "PartnersPavilion.htm" contained a link to Microsoft's Site Builder Network, "www.microsoft.com/sitebuilder/default.htm".

The September 22, 2001, and January 24, 2002, versions of "www.cobweb.com" refer to CobWeb at a "Microsoft Certified Partner," and have links entitled, "How CobWeb Made History With MSDN".

Whether Respondent has legitimate interests in the domain name under the Policy and Rules depends on the answer to two questions: (1) did Respondent’s predecessor, CobWeb have legitimate interests independent of Microsoft’s power to extinguish them, and (2) did Respondent succeed to CobWeb’s interest in the disputed domain name, given that it has purchased CobWeb’s Website development business and continues to engages in activities related to those engaged in by CobWeb, including such activities using Microsoft software?

Whether CobWeb had legitimate interests in the domain name depends on whether it registered the name as Microsoft’s agent, or independently. If it registered the name as Microsoft’s agent, the domain name belonged to Microsoft ab initio. Alternatively if CobWeb registered the trademark as a "work for hire" for Microsoft, Microsoft ownership in the domain name vested in Microsoft ab initio.

Practitioners and courts often treat trademarks as they do copyrights in allocating ownership between principals and agents. "Work for hire" language in contract forms often includes trademark rights, assigning those rights to the principal rather than the agent. The sole Panelist has been unable to find clear primary authority subjecting trademarks to the work for hire doctrine under copyright law. Indeed the fact that the Congress expressly amended the copyright act with work for hire language while leaving the trademark law alone supports an inference that Congress did not intend for the copyright work for hire doctrine to extend literally to trademarks. Nevertheless, trademarks, like copyrights, are property. They can be assigned. The touchstones for assigning original ownership in a principal-agent relationship are similar between the two legal regimes because they are based on common-law. Accordingly, it is reasonable to use the work for hire doctrine as it developed in copyright law as a basic guide for dealing with corresponding issues in trademarks and domain names.

This case is similar in many ways to Milwaukee Tool. Milwaukee Electric Tool Corporation v. Bay Verte Machinery, Inc. d/b/a The Power Tool Store, Case No. D2002-0774 (October 26, 2002) (Frederick M. Abbott). In that case, like this one, Respondent was an agent of the Complainant. In that case, like this one, the Respondent registered a domain name while it was acting within a contractual relationship with Complainant. In that case, like this one, a material issue under the UDRP was whether the Respondent had legitimate interests in the domain name. The panel found that the Respondent did have legitimate interests in the domain name:

"Respondent registered the disputed domain name and began using it well before Complainant adopted and/or communicated its Internet policy. Prior to its adoption, Complainant had not objected to Respondent’s actions. Respondent registered the disputed domain name and began using it before notice of a dispute with Complainant. Respondent, as an authorized distributor, offered Complainant’s trademarked products for sale. . . . The Panel determines that Respondent has legitimate interests in the disputed domain name within the meaning of paragraph 4(a)(ii) and 4(c)(i) of the Policy, and on this basis rejects Complainant’s allegation of abusive domain name registration and use." Id. § 6.

In Robert Bosch Limited, Robhert Bosch GmbH v. Elite Comfort Systems Limited, Case No. D2002-0256 (May 16, 2002) (David H. Tatham), the Respondent, a distributor for one of the Complainants, claimed registration and use of the disputed domain name with the consent of the Complainant. The panel concluded that the Respondent failed to establish such consent and therefore had no rights or legitimate interests in the disputed domain name. Id. § 6.

In Nokia Corp. v. David Wills, Case No. DWS2001-0004 (February 25, 2002), (Wolter Wefers Bettink), the panel cited earlier administrative panel decisions in support of the proposition that licensees, distributors, dealers and agents of trademark owners do not have per se rights to domain names that include the trademark. They only have such rights, the panel concluded, when the trademark owner expressly authorizes registration and use of the domain names. Id. § 7(c).

While there are arguments that CobWeb itself, or Respondent as its successor, might present that would show legal entitlement to the <msdn.com> domain name under a doctrine analogous to work for hire, Respondent has not availed itself of the opportunity to present those arguments to this panel. Respondent might argue, for example, and present evidence in support of its argument that Microsoft’s agreement with CobWeb authorized CobWeb to use the MSDN mark, or that Microsoft failed in that agreement to require CobWeb to transfer to Microsoft ownership in any trademarks or domain names. But the Respondent, having failed to appear, makes no such arguments and presents no such evidence.

Microsoft has alleged that Respondent’s predecessor lacked rights or legitimate interests in the <msdn.com> domain name, and it is reasonable to infer from that assertion that Microsoft conditioned its contract with CobWeb on CobWeb’s obligation to assign any interest in trademarks or domain names to Microsoft. C.f. Mayflower Transit, Inc. v. An Arbor Warehouse Co., 892 F. Supp. 1134, 1139 (S.D. Ind. 1995) (explicit contractual obligation of agent to transfer telephone numbers to principal after expiration of contract supported preliminary injunction against continued use of telephone numbers by former agent). Even if there were no explicit agreement of agency, any implied license to use the name Microsoft in support of the msdn domain was terminable at will by Microsoft. See Dial-a-Mattress Operating Corp. v. Mattress Madness, Inc., 847 F. Supp. 18, 19-20 & n.1 (E.D.N.Y. 1994) (implied license to use trademark was terminable at will by licensor).

Accepting this inference, original equitable ownership in <msdn.com> vested in Microsoft, and neither CobWeb nor its successors could have any legitimate independent interest in the name.

Accordingly, it is not necessary to reach the issue whether a legitimate interest by CobWeb could have been extinguished by transfer to the Respondent after the Complainant had registered the mark.

Attempting to sell or transfer a domain name for valuable consideration in excess of out-of-pocket costs is evidence of bad faith registration and use under Paragraph 4(b) of the Dispute Policy. See CBS Broadcasting, Inc. v. Gaddoor Saidi, WIPO Case No. D2000-0243 at para. 6.8 (June 2, 2000), (M. Scott Donahey) (offer to sell domain name in excess of out-of-pocket costs conclusively establishes that domain name was registered and was being used in bad faith under paragraph 4(b)(i), unless Respondent has legitimate interests in name); Nabisco Co. v. The Patron Group, Inc., WIPO Case No. D2000-0032 at § 5(c) (February 23, 2000), (David W. Plant) [hereinafter "Patron Group"] (offering to sell infringing domain names for a profit is evidence of bad faith).

As in Patron Group the Respondent’s use of the domain name and the correspondence between it and Complainant support the inference that Respondent’s purpose in acquiring and retaining the domain name is only to sell it for a profit, and not to use it in connection with any activity other than trafficking in domain names.

Any value ascribed to the <msdn.com> domain name is the result of its confusing similarity to the MSDN Mark and its association with Microsoft, the MSDN Mark and the Microsoft Developer Network and not to Respondent’s use in connection with any activity of its own other than trafficking in domain names.

The Complainant argues that even if Respondent did not know about Microsoft’s rights in the MSDN Mark and the MSDN Website when Respondent acquired the <msdn.com> domain name in August 2002, Respondent’s failure to correct the situation immediately after Microsoft first advised Respondent of Microsoft’s rights satisfies the bad faith registration requirement. It is not clear that this is so. Cf. Belo Corp. v. George Latimer, Case No: D2002-0329 at n.6 (May 16, 2002), (Michael A. Albert) (registration and/or use after notice of dispute or possible dispute is evidence of bad faith). In this case, unlike Belo Cop., Respondent acquired the domain name in conjunction with the purchase of assets which included activities reasonably associated with the domain name – support of Microsoft Developer’s Network. It did not register the domain name after a dispute developed. How much notice is necessary to obligate one registering or using a domain name to undertake a trademark search or to make further inquiry is uncertain. In Red Nacional De Los Ferrocarriles Espanoles v Ox90, Case No. D2001-0981 (November 21, 2001), Panelists Jose Carlos Erdozain and G. Gervaise Davis III, over a dissent by Presiding Panelist Tony Willoughby, concluded that adoption of a domain name similar to terms in wide popular use may obligate the user of that name to inquire into preexisting rights in trademarks identical to or confusingly similar to the domain name.

But it is not necessary to resolve the question whether Respondent had a duty to discover Complainant’s trademark registration. Its efforts to sell the domain name for a profit satisfies the bad faith requirement. Given Respondent’s default, the Complainant is entitled to have reasonable inferences of bad faith drawn in its favor.

Moreover, Respondent’s default in this proceeding reinforces an inference of bad faith. If it had arguments that it acquired the domain name in good faith, and had good faith bases for using or selling the domain name, it should have asserted them.

For all the foregoing reasons, in accordance with Paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the domain name <msdn.com> be transferred to the Complainant.