The Complainant is Inbound Telecommunications Pty Ltd, Phonename Marketing Australia Pty Ltd, of Melbourne, Victoria, Australia, represented by Freehills, Australia.
The Respondent is 1300 Directory Pty Ltd of Sydney, New South Wales, Australia, represented by Guy & Hinton Lawyers, Australia.
The disputed domain names <1300fitness.com.au>, <1300paving.com.au>, <1300phonenames.com.au> and <1800phonenames.com.au> are registered with Distribute.IT t/as ClicknGo.
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on December 16, 2009. On December 18, 2009, the Center transmitted by email to Distribute.IT t/as ClicknGo a request for registrar verification in connection with the Disputed Domain Names. On December 21, 2010, Distribute.IT t/as ClicknGo transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details. The Center verified that the Complaint satisfied the formal requirements of the .AU Dispute Resolution Policy (the “Policy” or “auDRP”), the Rules for AU Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for AU 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 January 14, 2010. In accordance with the Rules, paragraph 5(a), the due date for Response February 3, 2010. Following request from the Respondent, the Center extended the Response due date to February 12, 2010. The Response was filed with the Center February 12, 2010.
The Center appointed Alistair Payne, Warwick A. Rothnie and John Swinson as panelists in this matter on March 23, 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. The Panel subsequently found it appropriate to extend the due date for the issuing of its decision in this case.
From the dates set out in the table below the First Complainant obtained from the Australian Communications Authority the exclusive right to use or licensee in Australia the following “smartnumbers”:
1300 348637 June 21, 2005
1300 728464 September 17, 2008
1300 746636 October 13, 2004
1800 746636 October 13, 2004
These “smartnumbers” correspond, in particular, to the following “phone words”:
1300 348637 1300 FITNESS
1300 728464 1300 PAVING
1300 746636 1300 PHONENAMES
1800 746636 1800 PHONENAMES
The First Complainant also owns the registered trade marks in Australia from the dates set out below:
1300FITNESS + device 1270471 November 4, 2008
1300PAVING + device 1270473 November 4, 2008
1300PHONENAMES +device 1172312 April 20, 2007
1300PHONENAMES KNOW THE NAME. KNOW THE NUMBER + device 1151687 December 12, 2006
1800PHONENAMES KNOW THE NAME. KNOW THE NUMBER + device 1151691 December 12, 2006
The First Complainant is also the owner of the domain names <1300paving.com> and <www.1300fitness.net.au>.
The Respondent registered the Disputed Domain Names on the dates set out below:
<1300fitness.com.au> November 3, 2004
<1300paving.com.au> December 22, 2004
<1300phonenames.com.au> October 14, 2004
<1800phonenames.com.au> October 14, 2004
The First Complainant says that it not only has the exclusive rights to use the “smartnumbers” as listed above but also owns the registered trade marks as set out above, each of which features as a dominant element a phone word corresponding to each “smartnumber”.
The smartnumbers and phonewords and the corresponding trade marks have all been licensed to the Second Complainant since around 2005 for the purposes of sub-licensing to the Second Complainant's customers for use in relation to their businesses. In particular the Second Complainant has used 1300PHONENAMES and 1800PHONENAMES in radio and television advertising since that time and they are used on the home page of the website at “www.phonenames.com.au”. The Second Complainant says that this business has generated revenue for it of well over AUD$2 million and that it has spent around AUD$500,000 on advertising.
Further the Complainants say that they have developed plans in 2010 to license between them and then to sub-license and market the phonenames 1300FITNESS and 1300PAVING and to market theses businesses through the relevant websites at “www.1300paving.com” and “1300fitness.net.au”.
The Complainants submit that they have rights in the smartnumbers and corresponding phone words as set out above and that following the decision in John Kolenda v. 1300 Phonewords Pty Ltd, WIPO Case No.DAU2009-0001 these rights qualify as rights in names for the purposes of the Policy. In addition however and unlike in that case the Complainants say that they also have trade mark rights under the Policy by virtue of the corresponding dominant elements in each of the trade mark registrations set out above. They go on to submit that each of the corresponding smartnames or the dominant elements of their registered trade marks are identical or confusingly similar to a corresponding Disputed Domain Name.
The Complainants say that the Respondent has no legitimate interest in the Disputed Domain names because it does not own the exclusive rights to the corresponding phonewords and smartnumbers in Australia and following IP Australia's published policy would not be entitled to register trade marks in Australia corresponding to those phonewords. Further, according the Complainants the Respondent must be well aware of the significance of domain names as phonewords since it has a history of registering at least 62 other domain names relating to phonewords in which it has no rights, owns a range of other phonewords, operates a website describing the phoneword system and owns around 600 “1300”, “1800” and “13” pre-fixed domain names.
In addition the Complainants say that any argument that the Respondent has a legitimate interest in the Disputed Domain Names for the purposes of developing a directory site for selling or leasing phonewords is implausible for a number of reasons. These include that some 3.5 years after registration the Disputed Domain Names are not used on a directory site and still resolve to placekeeper sites, the Respondent does not own all or a logically full sequence of requisite domain names for this purpose, this model would not appear to be the same as the one used on the “www.gotollfree.com” website and the preparedness of the Respondent to sell several of its domain names to the owners of corresponding phonewords is inconsistent with any argument that ownership of the Disputed Domain Names is necessary for the purposes of a directory.
The Complainants say that the Respondent's conduct fulfills the requirements of paragraph 4(b)(i) of the Policy and constitutes bad faith registration or use. In particular they say that the Respondent made an opportunistic purchase of the Disputed Domain Names by registering them after the auction of corresponding smartnumbers and phonewords and in the case of <1300fitness.com.au> and <1300paving.com.au> it acquired the domain names in anticipation of the auction process for corresponding smartnumbers and phonewords and in doing so undermined the value of the rights being sold under that process and constitutes bad faith for the purposes of the Policy. Further, the fact that the Respondent does not own rights in corresponding phonewords, embarked on registration of numerous corresponding domain names and that there is no other plausible explanation for these registrations all points to bad faith.
Fundamental to this argument, say the Complainants, is the evidence of the Respondent having attempted to sell its domain names to smartnumber/phoneword numbers on at least 8 occasions (including in relation to 2 of the Disputed Domain Names) and in circumstances where he was requesting very inflated transfer prices well in excess of registration costs. In addition the Respondent offered a commission to agents who could help facilitate a sale and appeared to have a standard sale and transfer process. According to the Complainant this all supports the inference that the Respondent was in the business of obtaining domain names for re-sale at more than it's out of pocket costs for the purposes of paragraph 4(b)(i) of the Policy.
The Respondent submits that there is no evidence that the Complainants' smartnumbers have acquired secondary meaning such as will qualify them as “names” the purposes of the Policy and in this regards relies on the decision in Multi-National Concepts Pty Ltd v. 1300 Directory Pty Ltd, WIPO Case No. DAU2009-0002. It does however concede the existence of the Complainant's registered combination word and device marks and that these marks are sufficient to fulfill the requirements of the first element under the Policy.
The Respondent submits that it has made bona fide preparations to use the Disputed Domain Name in relation to a legitimate business activity, namely its anticipated online directory service for sale or lease of 1300 numbers. The Respondent says that by mid 2005 it had registered approximately 600 1300, 1800, and 13 prefixed generic domains that would be suitable for describing the different categories of smartnumbers that might be sold under each domain heading. These domains were to be linked together over a network and were to be linked back to the head page “www.1300directory.com.au”. Further it says that he had registered the Disputed Domain Names prior to the acquisition by the Complainant of its registered trade mark rights.
As it turned out the Respondent was unable to interest any brokers or smartnumber owners in his scheme. Subsequently ending up in a position where it was financially stretched, the Respondent was approached by various parties to sell certain domain names in his portfolio. The Respondent says that he never approached anyone himself with an offer to sell any of his domain name portfolio.
The Respondent says that he could not have registered the Disputed Domain Names in bad faith because he registered them at a time when the Complainants had no trade mark rights for the purposes of the Policy. Further, he says that he has not used the Disputed Domain names in bad faith but only ever sought to use them for the purposes of his proposed directory which was a legitimate business activity. He maintains that he never actively sought to sell domain names in his portfolio but rather re-acted to requests from would be acquirers and accordingly, there is no evidence of registration or of use in bad faith.
A preliminary matter arises in relation to an earlier decision concerning the Disputed Domain Names, National Dial A Word Registry Pty Ltd and others v. 1300 Directory Pty Ltd, WIPO Case No. DAU2008-0021. In that case the Panel dismissed the Complaint but gave leave to the Complainants to re-file a complaint on the following terms:
“For the foregoing reasons, this Panel dismisses the Complaint. This dismissal is made subject to the right of (any or all of) the Complainants to file, in their individual capacity, should they wish to do so, a complaint against the Respondent in relation to any of the domain names (in respect of which such individual Complainant asserts applicable rights under the Policy) that are the subject of this Complaint.”
This Panel acknowledges that even though the terms of this permission refers to the individual capacity of the Complainants to file a new complaint against the Respondents, that Panel Order was made in circumstances of the Panelist finding that the parties in that case did not all have a common legal interest. However in the circumstances of this case that the First Complainant is the owner of smartnumbers and registered trade mark rights and the Second Complainant is its licensee, it is clearly proper for both parties to bring this Complaint.
The Complainant owns registered trade marks in a range of combination word and device marks as set out above. These trade marks respectively contain various key distinctive elements including, 1300FITNESS, 1300PAVING, 1300PHONENAMES and 1800PHONENAMES. The Panel is satisfied that the distinctive elements of each Disputed Domain Name are confusingly similar to at least one of these registered trade marks and accordingly that the Complainant has satisfied the first element of the Policy.
For completeness and because this assessment is relevant to the findings below, the majority notes that it does not accept that the Complainant, by virtue alone of its ownership of rights in the smartnumbers listed above, owns rights in a “name” or “trading name” for the purposes of the Policy. In this regard the majority adopts the panel's view of smartnumbers as set out in Multi-National Concepts Pty Ltd v. 1300 Directory Pty Ltd, WIPO Case No. DAU2009-0002.
In short the majority does not consider that a telephone number can per se constitute a “name” for the purposes of the Policy, even if that telephone number may translate to a name using the alphanumeric keys of a telephone pad. The Complainant as the successful bidder for the listed smartnumbers only acquired rights in relation to use of those numbers as a result of the auction process. Unless it can show that as a consequence of use those telephone numbers have developed secondary a meaning as “names” or trade marks then they will not qualify as such under the Policy. In the majority's view there is insufficient evidence of use to support such a finding of secondary meaning. Nor in the majority's view do the smartnumbers qualify under any of the other specifically enumerated categories set out in the Policy.
In the majority's view smartnumber acquirers who might in the future wish to invoke the protection provided by the Policy, as it currently stands, need to immediately register supporting trade marks or otherwise commence substantive use of the smartnumbers and phonewords in order to develop a protectable goodwill and secondary meaning. A failure to do so may, in the circumstances of the particular case, compromise their prospects of succeeding in a future complaint under the Policy.
The onus is upon the Complainant to demonstrate a prima facie case that the Respondent has no rights or legitimate interests in the Disputed Domain Names and it is then for the Respondent to provide evidence to rebut this case.
The Complainant's main submission in relation to this element of the Policy is that as the Respondent does not own the exclusive rights to the corresponding smartnumbers and phonenames for the Disputed Domain Names and would not be able to register corresponding trade marks in Australia. A further argument is that the Respondent must have been aware of the significance of the smartnumbers and of the particular Disputed Domain names that it registered, in two cases the day after the smartnumber auction. In addition the Complainant says that the Respondent's alleged registration for the purposes of a directory site is for various reasons implausible.
However, based on the majority's finding above that the Complainant's rights under element one are derived from its registered trade mark rights, rather than from its acquisition of smartnumbers, it follows that at the date of registration of each of the Disputed Domain Names the Respondent had as much of an interest or legitimate right in registering the Disputed Domain Names as did the Complainant. By the requisite dates the Complainant neither owned corresponding registered trade marks nor had it made substantive use of the smartnumbers as phonenames such as might result in the development of a protectable goodwill and secondary meaning. As a consequence it cannot be said that the Respondent had “no” rights or legitimate interests in the Disputed Domain Names at this time, quite apart from the credibility or legitimacy of its proposed directory plan scheme.
For these reasons the majority finds that the Complaint fails in relation to the second element.
Although in these circumstances it is not strictly necessary to go on to consider the third element of the Policy, the majority notes that it follows from its findings in relation to element 2 of the Policy that the Respondent did not, in the majority's view, register the Disputed Domain Names in bad faith. Quite simply, the Complainant had no relevant trade mark rights at the time of registration and therefore (absent evidence of substantive use by the Complainant or of specific Respondent knowledge and intent to target a likelihood of Complainant obtaining such rights) the Respondent's act of registration could not have been made in bad faith.
Further, it is notable that there is no evidence that the Respondent sought to pro-actively sell the Disputed Domain Names and it has provided a reasonably credible explanation for its apparent willingness to sell the Disputed Domain names when approached by representatives of the Complainant and others. Nor is there any other evidence which would indicate use in bad faith.
For all the foregoing reasons, the majority of the Panel denies the Complaint.
The Panel also rejects the Respondent's submission that the Complaint constitutes an example of reverse domain name hijacking. In the circumstances of a split in panel opinions to date concerning whether smartnumbers and phonenames constitute “names” for the purposes of element one under the Policy it was entirely reasonable for the Complainant to have brought this Complaint.
The dissenting Panelist disagrees with the majority that the only rights which the Complainants have established under the auDRP are in the registered trade marks. The dissenting Panelist finds that the rights in phonewords claimed by the Complainants qualify as relevant rights under the auDRP. Accordingly, and in view of the reasons explained further below, the dissenting Panelist would have ordered that the Disputed Domain Names be transferred to the First Complainant.
Paragraph 4(a)(i) of the auDRP provides that the Complainants must establish that the Respondent's domain name:
(i) is identical or confusingly similar to a name [Note 1], trademark or service mark in which the complainant has rights;
This requirement under the auDRP is considerably broader than the corresponding requirement under the UDRP in that the auDRP extends to a “name”, not just trade marks. The footnote to the paragraph relevantly states:
For the purposes of this policy, auDA has determined that a “name … in which the complainant has rights” refers to:
(a) the complainant's company, business or other legal or trading name, as registered with the relevant Australian government authority; or
(b) the complainant's personal name.
As recounted above, the First Complainant purchased the right to each of the “smartnumbers” associated with the respective phonewords at a public auction conducted under the auspices of the Australian Communications and Media Authority (“ACMA”).
ACMA is a regulatory agency which, amongst other things, administers the allocation of telephone numbers pursuant to the Telecommunications Act 1997 (Cth).1
According to ACMA's website:2
Phonewords are made up from the letters of the alphabet that appear on a telephone keypad. These letters can be used to form a word, or a part word/part number combination, which can then be dialled as a telephone number to access a particular service. One example is ‘1300 FLIGHT'. Every phoneword has a primary underlying phone number, or in some cases more than one number, used by the telecommunications network as an ‘address' for delivering the call.
smartnumbers® are freephone (1800 numbers) and local rate (13 or 1300 numbers) telephone numbers that are allocated through an on line auction system by the Australian Communications and Media Authority (ACMA) on behalf of the Government. A smartnumber®, or phone word, can be a valuable marketing tool if it is a highly patterned number, for example, 1800 222 222, or if it can be translated into a memorable phoneword, for example, 13 2287 (13 CATS). A caller dials a phoneword by pressing the letters on a telephone keypad. Phonewords are easier for callers to remember, particularly if they can be linked to an organization's name or function e g. 13 RSPCA.
To secure a “smartnumber” for a particular phoneword under the regulatory scheme, an applicant must:
(a) first register with ACMA;
(b) make an application to ACMA to be allocated the relevant smartnumber;
(c) participate in, and be the highest bidder at, a public auction for the allocation of the smartnumber; and
(d) if successful, pay the relevant price.
Upon payment of the relevant amount, the successful bidder:
(a) is entered in the register maintained by ACMA as the rights of use holder;
(b) is entitled to arrange to connect a telephone service to the number through a telephone company (no-one else may do this); and
(c) may assign or license the rights to use the number.
In these circumstances, this Panelist considers that the securing of the phonewords in question through ACMA's auction process for smartnumbers qualifies as an “other legal or trading name registered with the relevant Australian government authority”. The dissenting Panelist is reinforced in this view by the Registrar of Trade Marks' practice of refusing to register as a trade mark a mark which includes a phoneword unless the applicant has a right to use the relevant phoneword through ACMA's smartnumber system.3
While it accurate to say that the holder of a phoneword in fact obtains rights to the particular smartnumber which that phoneword translates into, that is not the whole picture. Once the smartnumber has been allocated, the particular number combination will not be allocated to anyone else unless it is surrendered. Accordingly, no-one else can use a phoneword unless they have secured the rights to the smartnumber. The number has significance, and the legislative scheme is predicated on the number having significance, because it translates into a phoneword.
The dissenting Panelist does not agree that rights (outside registered trade marks) can be obtained under the auDRP only by proof of secondary meaning acquired through use. That would be an approach that could have been taken in the auDRP, as in the UDRP, but it was expressly departed from by the extension of the auDRP to cover “names”. In this connection, it is noted that company names, business names and personal names qualify as names whether or not they have ever been used or acquired secondary meaning. The same is equally true of any other name which has been registered with the relevant Australian governmental agency.
The Disputed Domain Names are plainly identical or confusingly similar to the First Complainant's phonewords.
The Respondent states that it trades as “1300 Directory Pty Ltd”. It then states in the Response that:
Mr Padilla [the Respondent's principal] considered that there was a niche for an online Directory of 1300 numbers that were available for sale or lease and accordingly he registered approximately 600 1300 and 1800 and 13 prefixed generic domains that would be suitable for describing the different categories of smartnumbers that might be sold under each domain heading. These domains were to be linked together over a network and were to be linked back to the head page 1300directory.com.au.
Despite the Respondent's arguments to the contrary, therefore, it is clear that Mr Padilla (and so the Respondent) fully appreciated the phoneword significance of the Disputed Domain Names. However, it appears to be based on a misconception in that no-one, other than the holder of the relevant smartnumber or someone licensed by him, could use or advertise their goods or services by reference to the phoneword.
This, as this Panelist found in John Kolenda v. 1300 Phonewords Pty Ltd, WIPO Case No. DAU2009-0001, is likely to mislead or deceive the public in contravention of, amongst other things, section 52 of the Trade Practices Act 1974 (Cth) and/or cognate legislation.
Having regard to these matters, the dissenting Panelist would find that the Respondent does not have rights or legitimate interests in domain names based on phonewords which it has not obtained the rights to through ACMA's smartnumber system.
Unlike the UDRP, this requirement under the auDRP is disjunctive. It is necessary for the Complainants to show only registration in bad faith or use in bad faith.
The dissenting Panelist would find that the Respondent is at least using the Disputed Domain Names in bad faith in circumstances where it does not have the rights to use the phonewords. This conclusion is reinforced by the prices significantly in excess of the registration fees for which the Respondent offered to sell the Disputed Domain Names when approached about them. The Respondent fully appreciated the monetary value associated with the Disputed Domain Names by reason of their phoneword significance and sought to capitalize on that significance.
For the reasons set out above, by majority, the Complaint is denied, as is Respondent's request for a finding of reverse domain name hijacking.
Warwick A. Rothnie
Dated: April 21, 2010
1 The legislative instruments giving the scheme legal force are the Telecommunications (Freephone and Local Rate Numbers) Allocation Determination 2007 (No 1) and the Telecommunications Numbering Plan 1997, the Telecommunications Number Plan Variation 2004 (No. 1) and the Telecommunications Numbering Plan Declaration 2004.
3 Paragraph 14.4 of Part 22 of the Trade Marks office Manual of Practice and Procedure.