WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Segway Inc. v. Chappell McPherson
Case No. D2014-0670
1. The Parties
Complainant is Segway Inc. of Bedford, New Hampshire, United States of America ("US"), represented by Burns & Levinson LLP, US.
Respondent is Chappell McPherson of Santa Cruz, California, US, represented by Kunkle Law PLC, US.
2. The Domain Names and Registrars
The disputed domain names <segs4kids.com>, <segs4kids.org>, <segwaysantacruz.com> and <segwayxperience.com> are registered with GKG.NET, INC (formerly GK Group LLC). The disputed domain name <segwaycostarica.com> is registered with GoDaddy.com, LLC.
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on April 23, 2014. On April 23, 2014, the Center transmitted by email to the concerned registrars a request for registrar verification in connection with the disputed domain names. On April 24, 2014, the GoDaddy.com, LLC transmitted by email to the Center its verification response confirming that Respondent is listed as the registrant and providing the contact details. On April 25, 2014, the GKG.NET, INC transmitted by email to the Center its verification response confirming that Respondent is listed as the registrant and providing the contact details.
The Center verified that the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the "Policy" or "UDRP"), the Rules for Uniform Domain Name Dispute Resolution Policy (the "Rules"), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the "Supplemental Rules").
In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified Respondent of the Complaint, and the proceedings commenced on May 8, 2014. In accordance with the Rules, paragraph 5(a), the due date for Response was May 28, 2014. The Response was filed with the Center on May 28, 2014.
The Center appointed Jeffrey M. Samuels as the sole panelist in this matter on June 12, 2014. 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.
4. Factual Background
Complainant, Segway Inc., is an innovator in personal mobility devices that it sells through an international network of over 250 distributors, dealers and retail centers in 80 countries under the SEGWAY trademark. Complainant owns a number of US trademark registrations for the term SEGWAY, as well as a European Community Trade Mark for the SEGWAY mark. Complainant also promotes various products and accessories under the terms "segsolutions" and "segaccessories".
From 2007 through the end of 2010, Respondent, Chappell McPherson, was an authorized distributor for Complainant in Costa Rica, operating under the name Segway Costa Rica, S.A. Annex F to the Complaint consists of the text of the distributor agreement between the parties. Section 4 of the agreement, relating to "Use of Trademarks and Trade Names," provided, in relevant part, that the distributor must establish an Internet website using the SEGWAY trademarks and shall obtain Complainant's prior written consent for any proposed website domain name that includes the term "Segway." Respondent, thereafter, registered the disputed domain name <segwaycostarica.com>. The parties' distribution agreement further provided that, upon expiration or termination thereof, the distributor shall, if Complainant requests, transfer the domain name to Complainant.
Respondent's distributor agreement expired on December 30, 2010. On February 2, 2011, Complainant notified Respondent, via letter, that, as of January 1, 2011, "you no longer have permission to make use of any Segway Trademark material, and you must remove Segway from your trade name and/or legal name (as applicable)."
The ownership of the disputed domain name <segwaycostarica.com> remains with Respondent. While Respondent still owns the disputed domain name <segwaycostarica.com>, the content on such site is now controlled by Complainant's current authorized distributor in Costa Rica, Mr. J. Mann. In Mr. Mann's May 23, 2014 email to the Center, he writes as follows: "I use www.SegwayCostaRica.com. I thought that URL was in my name. Chappell was the Costa Rica Segway distributor before me. I paid Chappell $1,500 for the URL almost four years ago. Our deal was to transfer it to my name. But, I guess that never happened. I have been using the URL and still have my Segway business located on it. I am the current authorized Segway Distributor for Costa Rica…. I would like the URL transferred into my name like all the other Segway Dealers using the Segway trademark in their URL's."
After termination of the Parties' agreement, Respondent began operating under a new trade name, Segway Santa Cruz, in Santa Cruz, California, and registered the disputed domain names <segwaysantacruz.com>, <segwayxperience.com>, <segs4kids.com> and <segs4kids.org>. The latter three disputed domain names do not resolve to active websites.
On November 21, 2013, Complainant's counsel sent a "cease-and-desist" letter to Respondent demanding that Respondent cease the use of the SEGWAY mark on web pages located at the website "www.segwaysantacruz.com" and in the disputed domain name <segwaysantacruz.com>. The letter alleged that Respondent's use of the SEGWAY mark is a breach of the former distributor agreement, which, according to Complainant's counsel, required Respondent to "cease all use of the SEGWAY Mark upon expiration of the Distribution Agreement;…" The letters demanded, in part, that Respondent cease and desist from using the SEGWAY mark and any other mark confusingly similar to the SEGWAY mark in a manner that infringes Complainant's trademark rights and to "[t]ransfer to Segway ownership of the domain name segwaysantacruz.com and any other domain name incorporating Segway and any other designation(s) confusingly similar to Segway." Respondent did not reply to this letter.
5. Parties' Contentions
Complainant asserts that the disputed domain names are identical and/or confusingly similar to the SEGWAY federally registered mark and to the "seg" family of marks in which Complainant owns common law rights. According to Complainant, "[T]he inclusion of the entire SEGWAY trademark in three of the five Disputed Domain Names and of the prefix mark SEG in the remaining two domains, adding only geographic or generic terms, make it evident that the Disputed Domain Name is confusingly similar to the SEGWAY Marks."
Complainant further contends that Respondent has no rights or legitimate interests in respect to any of the disputed domain names. Respondent, Complainant maintains, has no connection or affiliation with Complainant and has not received any license or consent to use the SEGWAY mark in respect of the registration or use of domain names. Complainant asserts that Respondent's prior authorized use of the disputed domain name <segwaycostarica.com> ended upon termination of the distributor agreement on December 31, 2010, and that Respondent was informed of this termination and her obligation to cease use of the SEGWAY mark in February 2011.
With respect to the issue of bad faith registration and use, Complainant indicates that "[i]t is simply inconceivable that Respondent was unaware of Complainant's rights in the SEGWAY Marks when she registered the Disputed Domain Names in view of her prior relationship with Complainant." Moreover, Complainant states, the number of domain names that Respondent registered that contain SEGWAY marks supports a finding of bad faith.
According to Complainant, the disputed domain name <segwaysantacruz.com> resolves to a website1 at which Respondent advertises and offers products or services under the SEGWAY mark and offers tours using so-called "Robsteps" machines, which are miniature personal transporters. The use of the disputed domain name <segwaysantacruz.com> in connection with such site, Complainant maintains, "constitutes an improper use of Complainant's mark to attract Internet users to Respondent's site for commercial gain by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site…. Respondent must have expected that any use of the Disputed Domain Names would cause harm to Complainant. Indeed, Respondent was well aware that Complainant's Distributor Agreements control what uses of the SEGWAY Marks can be made by authorized distributors and what types of use is prohibited. The Disputed Domain Name – wholly incorporating Complainant's SEGWAY Marks – is so 'obviously indicative' of Complainant's products and services and so clearly suggests an association or affiliation with Complainant that does not exist – that Respondent's use of the Disputed Domain Name would 'inevitably lead to confusion of some sort'."
Respondent neither acknowledges nor disputes Complainant's claims of ownership of the SEGWAY trademark, except to point out that none of Complainant's trademark registrations is for use in providing tours. With respect to the term "seg," Respondent notes that Complainant provides no authority recognizing automatic common law rights to a portion of a trademark and argues that there is no evidence that such term has acquired the requisite level of distinctiveness to give rise to trademark rights.
Respondent asserts that she has rights and legitimate interests in the disputed domain names. She points out that she has operated a business and paid for advertising under the name "Segway Santa Cruz" since 2011, well prior to this dispute, and is recognized by third parties and the media by such name. Thus, Respondent asserts, she is using the disputed domain name <segwaysantacruz.com> in connection with a bona fide business and has become known by a variation of this domain.
Respondent notes that she is in the business of providing guided tours in Santa Cruz County, California and, since opening in 2011, her primary method of transporting clients has been Complainant's transporters. Thus, she contends, the use of the disputed domain name <segwaysantacruz.com> constitutes nominative fair use.
Respondent emphasizes that she does not sell Complainant's products or devices; she strictly operates a tour company. "[A]s a result there can by definition be no bait and switch of consumers, which is at the heart of the Policy. The inability to bait and switch consumers is further reinforced by including a disclaimer on the company website, the prominent use of the term Tours, and the fact that the disputed domain currently redirects to a domain that uses tours in the domain."
With respect to the "Robstep" product, Respondent contends that such product does not compete with Complainant's product but, instead, is used for those too young to be able to use the Complainant's transporter safely.
Respondent points out that she does not operate the website at "www.segwaycostarica.com", that the registration of this domain name was authorized by the Parties' distributorship agreement, and that no specific request has been made to turn over the disputed domain name to Complainant. "Therefore, even though Respondent does not operate the website resolving from segwaycostarica.com, Respondent does retain legitimate rights to use the domain in a non-infringing manner because of the previous distribution agreement until a proper demand is made under the agreement."
Respondent further observes that Complainant makes no specific allegations with regard to Respondent's rights to use the disputed domain names <segwayxperience.com>, <segs4kids.com>, and <segs4kids.org> and, for this reason alone, Complainant's complaint fails.
Respondent contends that none of the circumstances set forth in paragraph 4(b) of the Policy, pertaining to bad faith registration and use, is applicable. Respondent asserts that there is "not a scintilla of evidence" to support an assertion that any of the domain names was created with an intent to attract Internet users to Respondent's site for commercial gain by creating a likelihood of confusion; that there is no evidence that she aimed to disrupt Complainant's business; and that the disputed domain names were registered over time and "there is no evidence to support a claim they were registered in bad faith, or with any purpose of preventing complainant from using its mark in a corresponding domain name."
Respondent further emphasizes that the disputed domain name <segwaycostarica.com> "was registered with the express approval of the Complainant" and reiterates that no contractual request to transfer such domain name has been made. Respondent notes that Complainant's counsel's cease-and-desist letter makes no reference to the disputed domain name <segwaycostarica.com>.
Respondent contends that the parties' distribution agreement does not prohibit her from opening up a tour business regarding Segway. She points out that the website resolving from the disputed domain name <segwaysantacruz.com> does not include any representation that she or her business is an authorized dealer of Complainant's devices and that many other tour operations use Complainant's devices, such that the public has no expectation that such tour operators are affiliated with Complainant.
According to Respondent, Complainant was fully aware that Respondent registered the disputed domain name <segwaycostarica.com> in good faith and in accordance with the distribution agreement. Thus, Respondent contends, Complainant has engaged in reverse domain name hijacking.
6. Discussion and Findings
A. Identical or Confusingly Similar
The Panel finds that the disputed domain names <segwaycostarica.com>, <segwaysantacruz.com>, and <segwayxperience.com> are confusingly similar to the SEGWAY mark. Each of these disputed domain names incorporates in full the term "Segway," adding only geographically descriptive and generic matter.
The Panel further determines that Complainant has rights in the SEGWAY mark, as evidence by its registrations for such mark, as well as its long use of the mark.
With respect to the disputed domain names <segs4kids.com> and <segs4kids.org>, the Panel concludes that such names are not identical or confusingly similar to a trademark in which Complainant has rights. While the evidence indicates that Complainant uses the terms "segsolutions" and "segcessories" in connection with its products and accessories, the evidence falls far short of establishing a "seg" family of marks.2 The evidence also falls far short in establishing that Complainant has unregistered trademark rights in the term "seg" itself. As noted in the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition, paragraph 1.7, to successfully assert unregistered trademark rights, a "complainant must show that the name has become a distinctive identifier associated with the complainant or its goods or services. … [A] conclusory allegation of common law … rights (even if undisputed) would not normally suffice; specific assertions of relevant use of the claimed mark supported by evidence as appropriate would be required." There is no such evidence in this case.
In view of the Panel's determination on this element of the Policy with respect to the disputed domain names <segs4kids.com> and <segs4kids.org> and the Policy's requirement that a complainant prevail on all three elements of the Policy in order to be entitled to the requested remedy, the Panel declines to discuss the applicability of the remaining two elements of the Policy with respect to the disputed domain names <segs4kids.com> and <segs4kids.org>.
B. Rights or Legitimate Interests
The Panel rules that Complainant has met its burden of proving that Respondent does not have rights or legitimate interests in the disputed domain name <segwaycostarica.com>. It is undisputed that Respondent was an authorized Segway distributor in Costa Rica from 2007 to the end of 2010 and, during that time, pursuant to the parties' distributor agreement, registered the disputed domain name <segwaycostarica.com>. Such agreement gave Complainant the right to request transfer of the disputed domain name to it upon expiration or termination of the distributor agreement. While Complainant's letter of February 2, 2011 does not specifically request transfer of the disputed domain name <segwaycostarica.com> (as opposed to use of any SEGWAY Trademark material and the removal of the term "Segway" from Respondent's trade name and/or legal name), Complainant's counsel's cease-and-desist letter of November 21, 2013, includes a demand for the transfer of any domain name incorporating the term "Segway".
The Panel further concludes that the evidence establishes that Complainant has failed to meet its burden of proving that Respondent does not have rights or legitimate interests in the disputed domain name <segwaysantacruz.com>. As noted above, Segway's termination letter of February 2, 2011 indicates that Respondent "no longer ha[s] permission to make use of any Segway Trademark material, and you must remove Segway from your trade name and/or legal name (as applicable)." Complainant seems to rely upon this letter in support of its argument that Respondent lacks rights or legitimate interests in the disputed domain name <segwaysantacruz.com> (see amended Complaint, paragraph 46. "[Respondent] was informed of this termination and her obligation to cease use of the SEGWAY Marks in February 2011. Despite this knowledge, she began operating under a new trade name and began registering additional domain names that incorporated the SEGWAY mark."). It is not clear, however, at least to this Panel, that such language is applicable to the disputed domain name <segwaysantacruz.com>, which was registered two months after the date of the termination letter.3
Respondent has presented evidence in Annexes B, C, and D of the Response establishing that she has advertised her business widely under the names "Segway Santa Cruz" and "Segway Santa Cruz Tours" and is referred to by the media and the public by such names. For example, the evidence includes a June 2011 article in the Santa Cruz Wire stating, "Our adventure begins at the recently opened Segway Santa Cruz…." and a Yelp listing of June 29, 2012, indicating that "Seven of us went to Segway Santa Cruz and boy did we have the time of our lives!" These and the vast majority of the other ads included in the annexes predate Complainant's counsel's cease-and-desist letter.
As Complainant notes, however, as a former authorized distributor of Complainant's products, Respondent may be found to have knowledge of Complainant's efforts to control the use of the SEGWAY mark. The issue then arises as to whether such general knowledge bars Respondent from asserting any rights under the Policy.
Upon review of the applicable Policy, the Panel concludes that the Parties' previous relationship does not preclude Respondent from successfully asserting that she and/or her business is commonly known by the disputed domain name <segwaysantacruz.com>, within the meaning of paragraph 4(c)(ii) of the Policy. The Panel notes that the Policy provides that if any of the circumstances set forth in paragraph 4(c) of the Policy is found to have been established, including that one is commonly known by the domain name, such shall demonstrate one's rights or legitimate interests to the disputed domain name. Such language appears clear and, unlike some other provisions of the Policy relating to "rights" and "bad faith," unqualified. Indeed, one may establish rights through the "commonly known" provision even if one has not acquired trademark rights.
In view of the Panel's decision on the issue of rights or legitimate interests in connection with the disputed domain name <segwaysantacruz.com>, it declines to address whether such domain name was registered and is being used in bad faith.
The Panel holds that Complainant has met its burden of proving that Respondent has no rights or legitimate interests with respect to the disputed domain name <segwayxperience.com>. The amended Complaint alleges that "Respondent has no connection or affiliation with Complainant and has not received any license or consent, express or implied, to use the SEGWAY Marks in domain names or in any other manner." According to the Response, to date, the disputed domain name <segwayxperience.com> has not been used, although Respondent continues to consider opportunities to use the domain for development of an adventure-based attraction using Complainant's devices. On balance, the Panel finds that the evidence before it does not establish at this point the existence of any of the circumstances set forth in paragraph 4(c) of the Policy.
C. Registered and Used in Bad Faith
The Panel concludes that the disputed domain name <segwaycostarica.com> was not registered and is not being used in bad faith. At the time of registration, Respondent was an authorized distributor of Complainant's products in Costa Rica, specifically required to establish an Internet website using the SEGWAY mark and implicitly authorized to include the term "Segway" as part of the domain name.
The evidence further establishes that Respondent is not using the domain name at this time. Rather, the website "segwaycostarica.com" is now controlled by Mr. J. Mann, Complainant's current authorized distributor in Costa Rica.4 Moreover, as Respondent notes, before filing the Complaint, Complainant had not specifically requested Respondent to transfer the disputed domain name <segwaycostarica.com> to it.
The Panel finds that the disputed domain name <segwayxperience.com> was registered and is being used in bad faith. While Respondent indicates that she continues to consider opportunities to use this domain name, such bare contention is insufficient to avoid a finding of passive holding. Such passive holding, when viewed in the context of the relative strength of the SEGWAY mark and the parties' prior relationship (including Respondent's knowledge of Complainant's contractual right to control use of the SEGWAY mark) supports a finding of the requisite bad faith with respect to the disputed domain name <segwayxperience.com>.
7. Reverse Domain Name Hijacking
Respondent seeks a determination of reverse domain name hijacking (RDNH). Respondent asserts that the UDRP was not enacted to assist distributors to corner the market on descriptive domain names or to facilitate an end-run around contract law and well-defined trademark principles, such as nominative fair use. Respondent alleges that Complainant was well aware of the weakness of its position and of the total lack of support for its allegations as to the issues of rights or legitimate interests and bad faith. With respect to the disputed domain name <segwaycostarica.com> specifically, Respondent contends that Complainant knew of Respondent's registration of such domain name, that Complainant waited three years after termination of the parties' distribution agreement before filing the instant Complaint, and that Respondent had a right or legitimate interest when the domain was registered.
RDNH is defined under the Rules as "using the UDRP in bad faith to attempt to deprive a registered domain-name holder of a domain name." The Panel concludes that the evidence does not support a declaration that Complainant engaged in RDNH. This is a complicated case, factually and otherwise. As Respondent's counsel notes, Complainant's factual claims raise a "unique issue" for the Panel. Complainant's arguments in support of its Complaint are not insubstantial or unsupported. The fact that Respondent prevailed on all but one of the disputed domain names does not mean that the Complaint was filed in bad faith.
For the foregoing reasons, in accordance with paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the disputed domain name <segwayxperience.com> be transferred to the Complainant and that the Complaint be denied with respect to the disputed domain names <segs4kids.com>, <segs4kids.org>, <segwaycostarica.com>5 , and <segwaysantacruz.com>.
The Panel notes that the Policy was designed to address a certain limited category of trademark-abusive domain name registrations, and not to address all manner of trademark-based domain name disputes. In this Panel's view, certain aspects of this dispute may benefit from a fuller exchange of pleadings and evidence than is normally undertaken in UDRP proceedings. As such, the Panel notes that its findings under the UDRP (noting its limited scope) does not prevent the parties from considering their dispute resolution options in a court of competent jurisdiction.
The Panel further determines that this is not a case of reverse domain name hijacking.
Jeffrey M. Samuels
Date: June 24, 2014
1 The disputed domain name <segwaysantacruz.com> resolves to the website at <segwaysantacruztours.com>.
2 A family of marks is a group of marks having a recognizable common characteristic, wherein the marks are composed and used in such a way that the public associates not only the individual marks, but the common characteristic of the family, with the trademark owner. Simply using a series of similar marks, or the mere fact of registration of many marks with a common "surname," does not of itself establish the existence of a family. See J & J Snack Foods Corp. v. McDonald's Corp., 932 F.2d 1460, 18 USPQ2d 1889 (Fed. Cir. 1991). A proponent of a family of marks must prove that all or many of the marks in the alleged family were used and
promoted together in such a way as to create public perception of the family "surname" as an indication of source. See Champion International Corp. v. Plexowood, Inc., 191 USPQ 160 (TTAB 1976). Such proof is entirely lacking in this case.
3 To the extent Complainant disagrees, it is certainly free to raise this argument in another, more appropriate, forum.
4 In footnote 2 of the Response, Respondent indicates that she is not able to explain why the disputed domain name <segwaycostarica.com> remains in her name, since she has not renewed the name and has not paid any hosting or registration fees in several years. The Panel notes that Mr. Mann indicated in his email to the Center of May 23, 2014 that he paid Respondent for the transfer of the disputed domain name but that such "never happened." Mr. Mann is not a party to this proceeding and, thus, is not bound by any determinations set forth in this decision.
5 The Panel notes that Respondent, in footnote 14 of her Response, indicates that if Complainant makes a specific request for the transfer of the disputed domain name <segwaycostarica.com>, pursuant to the terms of the distribution agreement, Respondent "will take reasonable steps to transfer the domain to Complainant."