WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
East End N.Y. Imports Inc. v. DYNAMO.COM, c/o Privacy Protection and Autorenewal
Case No. D2015-0995
1. The Parties
Complainant is East End N.Y. Imports Inc. of Dayton, New Jersey, United States of America (“United States”), represented by Gordon & Jacobson P.C., United States.
Respondent is DYNAMO.COM, c/o Privacy Protection and Autorenewal of Austin, Texas, United States, represented internally.
2. The Domain Name and Registrar
The disputed domain name <modway.com> (the “Domain Name”) is registered with eNom (the “Registrar”).
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on June 12, 2015. On June 12, 2015, the Center transmitted by email to the Registrar a request for registrar verification in connection with the Domain Name. On June 15, 2015, the Registrar 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 June 19, 2015. In accordance with the Rules, paragraph 5(a), the due date for Response was July 9, 2015. The Response was filed with the Center on July 9, 2015. On July 15, 2015, the Center received a supplemental filing from Complainant.
The Center appointed Christopher S. Gibson, Andrew F. Christie and Tony Willoughby as panelists in this matter on August 6, 2015. 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.
On August 11, 2015 the Panel issued Procedural Order No. 1 requesting that Respondent file an amended response to conform to the Supplemental Rules; in particular, Supplemental Rules paragraph 11(b) provides that the word limitfor a response “shall be 5,000 words”. Respondent’s amended response therefore was directed to be shortened to comply with this Rule. The Panel’s Order also stipulated that following the filing of an amended response, the Panel will not accept any unsolicited supplemental filings from either Party. Respondent filed its Amended Response (with attachments) on August 14, 2015. The Amended Response complies with the Supplemental Rules.
Regarding the supplemental filing of Complainant received on July 15, 2015, the Panel has determined that in view of the lengthy initial submissions filed by Complainant and Respondent in this case, there is no need to consider Complainant’s supplemental filing.
4. Factual Background
Complainant is the owner of the trademark, MODWAY, which was registered on April 1, 2014 by the United States Patent and Trademark Office (“USPTO”) as registration No. 4,507,008. The trademark certificate for the MODWAY mark indicates that it was first used in commerce on April 1, 2012, with the trademark application filed on December 6, 2012. The trademark is registered in class 20 covering furniture for house, office and garden.
Respondent is a company founded in 2005 that executes name conception, logos and brand graphics, trademark research, and promotional copy for startups and corporations. Respondent holds numerous generic and coined terms as domain names for use in its business. The homepage of Respondent’s website at “www.dynamo.com” contains a graphical showcase of its name creation and logo work product, including the Centrino name for Intel, the logo for Wiki.com and the AquaBella name for Trump Enterprises, among others.
The Domain Name was registered by Respondent on May 3, 2005. The Parties do not dispute that the Domain Name, for many years and at all relevant times for purposes of this dispute, has resolved to a blank webpage.
5. Parties’ Contentions
(i) Identical or confusingly similar
Complainant submits that it has rights in its trademark, MODWAY, which was registered in the United States on April 1, 2014 covering furniture for home, office and garden. Complainant states that the relevant part of Respondent’s Domain Name is the term “modway”, which is identical to Complainant’s trademark. Complainant contends that UDRP panels in cases such as this have consistently found that the domain name in dispute is identical to the complainant’s trademark.
(ii) Rights or legitimate interests
Complainant states that prior to the notice it provided to Respondent, there was no evidence of Respondent’s use of, or demonstrable preparations to use, the Domain Name or a name corresponding to the Domain Name in connection with a bona fide offering of goods or services. Complainant asserts that Respondent does not appear to be using the Domain Name in any manner, let alone in connection with a bona fide offering of goods or services. Further, based upon Respondent’s admissions to Complainant, Respondent has always pointed the Domain Name toward a blank white webpage. Complainant states that Respondent (as an individual, business, or other organization) has not been commonly known by the Domain Name, nor has Complainant given Respondent permission to use its trademark. Instead, Complainant claims Respondent has been commonly known by its domain name, <dynamo.com>.
(iii) Registered and used in bad faith
Complainant has made lengthy arguments in support of its claim of Respondent’s bad faith registration and use of the Domain Name. Complainant urges that Respondent has cybersquatted on the Domain Name for over a decade. Complainant’s arguments are summarized below.
Complainant states that Respondent registered the Domain Name on May 3, 2005, but contends that it has never been used in connection with a bona fide offering of goods or services. On or about April 1, 2012, Complainant first used its MODWAY trademark in commerce. On several dates commencing in January 2012 until November 12, 2012, Complainant and Respondent exchanged emails including a draft contract by which Respondent offered to sell the Domain Name to Complainant for USD 25,500, a sum asserted to be in excess of Respondent’s out-of-pocket costs directly related to the Domain Name (Complainant estimates that out-of-pocket costs directly related to the Domain Name have been between USD 8 and 30 per year). On April 1, 2014, Complainant’s trademark MODWAY was registered with the USPTO. Complainant’s attorney sent a letter on August 21, 2014 to Respondent with terms of a counteroffer to purchase the Domain Name for USD 7,500. On October 8, 2014, Complainant received Respondent’s rejection of Complainant’s counteroffer. On December 8, 2014 Complainant’s attorney sent another letter to Respondent with terms of an offer to purchase the Domain Name for USD 5,000. Complainant’s letter also gave Respondent notice that any renewal of the Domain Name beyond May 3, 2015 (the end date of Respondent’s initial ten year registration) would constitute a fraudulent renewal because it would infringe on Complainant’s rights. On December 9, 2014, Complainant’s attorney received an email from Respondent rejecting Complainant’s offer. Complainant claims that Respondent’s email contained threats, which are illustrative of a pattern of bad faith dealing by Respondent. On or about May 3, 2015, Respondent renewed the Domain Name for a year until May 3, 2016.
Complainant contends that from these facts, it is possible to infer that the Domain Name was registered and used primarily for the purpose of selling it for valuable consideration in excess of out-of-pocket costs directly related to it. The price that Respondent offered Complainant for sale of the Domain Name was USD 25,500, which is in excess of the sum of USD 330, a figure based on an estimated USD 30 annual registration costs over eleven years.
Complainant cites Mary-Lynn Mondich and American Vintage Wine Biscuits, Inc. v. Shane Brown, doing business as Big Daddy’s Antiques, WIPO Case No. D2000-0004, a case decided in favor of the complainant. Complainant argues that Mondich is similar because the UDRP panel there found that the respondent’s (i) failure to make good faith use of the domain name and (ii) offer to sell it, combined with the respondent’s failure to submit evidence rebutting complainant’s allegations, supported the complainant’s claim of bad faith registration and use. In Mondich, the respondent failed to make use of the domain name for a period of two years, whereas in this case Complainant contends that Respondent has not made bona fide use of the Domain Name for more than ten years.
Responding to the argument (made by Respondent in an email to Complainant dated December 9, 2014) that there can be no bad faith registration because Respondent registered the DomainName before Complainant registered its trademark, Complainant states that in Mondich, the UDRPpanel did not base its decision on whether the date of registration of the domainnamepredated registration of the trademark. There was no record of the date of registration of the trademark in that case. Complainant further asserts that Respondent’s position on this point is contrary to the Policy as well as prior UDRP decisions taking into account such temporal fact patterns. Complainant argues that Respondent’s position seeks to construe the Policy so that it confers rights on trademark owners without any remedy in the face of cybersquatting, which cannot be what the drafters of the Policy intended. Complainant states that panelists in various UDRP cases have found bad faith domain name registrations, even when the domain name was registered prior to registration of the relevant trademark.
Citing paragraph 4.1 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition (“WIPO Overview 2.0”), Complainant states that the UDRP does not operate on a strict doctrine of precedent; however, UDRP panels consider it desirable that their decisions are consistent with prior decisions, which ensures that the system operates in a fair, effective and predictable manner. Given that prior UDRP panels have found bad faith registration in similar circumstances where the domain name was registered prior to registration of the relevant trademark, Complainant contends that there cannot be a per se rule contrary to those panels’ decisions or UDRP policy, as suggested by Respondent in its email of December 9, 2014. Moreover, given the goal of ensuring that the UDRP operates in a fair, effective and predictable manner, Complainant asserts it would be unfair for prior panels to have provided a remedy to complainants in similar circumstances, but deny such a remedy to Complainant here.
Complainant further contends that Respondent’s renewal of the Domain Name, after receiving offers from Complainant to purchase it, constitutes bad faith registration and use. In this case, Respondent initially registered the Domain Name for a period of ten years. Then, after receiving Complainant’s offers to purchase the Domain Name, Respondent renewed it for only a single year. Complainant argues that it can be inferred that Respondent’s primary intent in renewing the Domain Name for only a single year was to sell it to Complainant, as owner of the MODWAY trademark, for valuable consideration in excess of out-of-pocket costs directly related to the Domain Name. It can be inferred that Respondent did not want to spend more money than was necessary to maintain the Domain Name’s registration because Respondent intended to sell it during the one year renewal period.
Complainant also states that given Respondent was put on notice by Complainant of Complainant’s trademark rights, the renewal of the Domain Name, as well as the passive holding of it, were in violation of Respondent’s representations and warranties under paragraph 2 of the Policy. Complainant says that paragraph 2 requires a domain name registrant to make not only representation but also warranties as to the registrant’s future conduct. It imposes a duty on the part of the registrant to conduct an investigation not only at the time of registration, but also includes a warranty by the registrant that it will not now or in the futureuse the domain name in violation of any laws or regulations, including intellectual property rights and the laws protecting them. The paragraph 2 representation and warranty is not limited to the moment at which the registrant registers the domain name; rather, it extends to use of the domain name in the future. Further, Complainant argues that given the strength of its MODWAY mark, it is not possible to conceive of any plausible active use of the Domain Name by Respondent that would not be a violation of the warranties set out in paragraph 2 of the Policy.
Citing Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No. D2000-0003, Complainant urges that Respondent’s use of the Domain Name constitutes passive holding with circumstances pointing to the conclusion that this passive holding is a bad faith use of the Domain Name. Complainant states that in Telstra, as in the present case, the respondent’s domain name did not resolve to a website or other online presence. Complainant refers to particular circumstances in Telstra that supported a conclusion of bad faith use and compares them to the circumstances in this case:
(i) the complainant’s trademark in Telstra had a strong reputation and was widely known, as evidenced by its substantial use in Australia and other countries. Here, Complainant contends that during the decade when Respondent has held but did not use the Domain Name, Complainant’s trademark generated a strong reputation and became widely known in the furniture industry. Complainant states that its trademark is so well known that many customers have notified Complainant that they were unsuccessful in locating Complainant’s website after they have entered <modway.com> into a browser search bar. Also, a worldwide business search for companies related to the phrase “modway” identified only four companies, two of which are Complainant’s companies (i.e., East End Imports and East End N.Y. Imports). Moreover, the combined sales (in millions of USD) of Complainant’s companies exceeds all of the others (who have reported sales) by two orders of magnitude, providing further evidence of the strength of Complainant’s mark relative to others.
(ii) in Telstra the respondent provided no evidence of any actual or contemplated good faith use of the domain name. Complainant argues that in this case, Respondent has similarly provided no evidence of any actual or contemplated good faith use of the Domain Name. Respondent admitted in its email of December 9, 2014 that the Domain Name has, for more than a decade, resolved to a blank webpage.
(iii) in Telstra the respondent had taken active steps to conceal its identity, by operating under a name that is not a registered business name. Complainant states that this circumstance is not pertinent to the present dispute.
(iv) in Telstra the respondent had actively provided, and failed to correct, false contact details, in breach of its registration agreement. Here, Complainant notes that Respondent renewed the Domain Name with knowledge of Complainant’s trademark, and thereby violated section 16 of its registration agreement and the warranties in paragraph 2 of the Policy.
(v) the panel in Telstra found that taking into account all of the above, it was not possible to conceive of any plausible actual or contemplated active use of the domain name by the respondent that would not be illegitimate, such as by being a passing off, an infringement of consumer protection legislation, or an infringement of the complainant’s rights under trademark law. Here, Complainant contends that by virtue of the widespread use and reputation of Complainant’s MODWAY mark, members of the public (in the United States as well as internationally) would believe that the entity owning the Domain Name was Complainant or in some way associated with Complainant. Any realistic use of the Domain Name, therefore, would misrepresent an association with Complainant and its goodwill, resulting in a trademark infringement and passing off. An online search for “modway” reveals that a vast majority of the search results are related to Complainant’s business rather than any of the other companies in the search results. In view of the strength of Complainant’s mark, it is more likely than not that use of the Domain Name for any purpose other than for Complainant would cause confusion as to the source and affiliation of the Domain Name.
Complainant provides detailed citation to United States trademark law, in particular the Anticybersquatting Consumer Protection Act (“ACPA”). Complainant argues that, under the ACPA, Respondent’s offer to sell the Domain Name to Complainant for financial gain without having used it may be considered by a court for determining whether Respondent had a bad faith intent to profit from the trademark of Complainant, which might be determinative of a violation of the ACPA. Complainant argues that such a violation falls within a “violation of any applicable laws or regulations” referenced in paragraph 2 of the Policy.
Lastly, Complainant argues that Respondent has been involved in disputes with other rights holders and has therefore engaged in a pattern of conduct that might be considered to rise to the level of a domain name “troll”. Complainant states that while Respondent may have a legitimate branding business that creates domain names for clients, it also has a less creative business of trolling the Internet for unused domain names and warehousing them until such time as a trademark holder approaches Respondent for a domain name corresponding to their trademark. It appears that Respondent has registered over 5,000 domain names. Complainant asserts that many professional domain name registrants, such as Respondent, use automated programs to register domain names as they become available with little to no regard for the rights of third parties. After spending little to no effort to acquire the domain names, the domain name troll attempts to obtain sums of money vastly in excess of what was paid, while justifying its conduct as legal under the Policy. Complainant states that Respondent’s email of December 9, 2014 appears to be based on Respondent’s belief that its conduct cannot be challenged and is not an abuse. However, in this case, Respondent’s email appears to be an attempt to extort an exorbitant sum (USD 25,500) for the Domain Name, which has no legitimate commercial use other than for Complainant. Complainant believes that such conduct is economically inefficient, as well as contrary to the UDRP and, therefore, requests that the Panel identify that conduct as a violation of the Policy.
(i) Identical or confusingly similar
Respondent has stipulated that the first element of the UDRP is satisfied in this case.
(ii) Rights or legitimate interests
Like Complainant, Respondent has made lengthy arguments in its submission, particularly in support of its claims of rights or legitimate interests in the Domain Name and no bad faith registration and use of it. Respondent’s arguments are summarized below.
Respondent states that in connection with its naming, logo and branding business it holds numerous domain names corresponding to generic and coined terms. Use of these domain names in connection with Respondent’s business provides a legitimate interest in them. Respondent explains that there are similar companies in the United States, offering the service of coining and locating names that are viable for new commercial use, and that this is a bona fide, established field of trade. Respondent states that its domain names, reflecting Respondent’s creative work product, are of the same “non-distinctive trademark nature” as those of other naming companies. Respondent claims that generic domain names, such as <modway.com>, find legitimate use in Respondent’s field of trade.
Respondent asserts that it registered the Domain Name for use in its business in May 2005, immediately following its abandonment by a prior registrant. The Domain Name had been registered and dropped by three parties prior to Respondent’s registration. Respondent observes that one trademark for MODWAY registered with the USPTO predated Respondent's registration of the Domain Name, but that mark had already been cancelled in 1991. Respondent states that the Domain Name was initially registered for use in relation to a dishware (stoneware) product-line, but the name was abandoned as too “robotic” for that client. However, Respondent retained the Domain Name as an asset for potential future use for its clients. Respondent says that the Domain Name has been repeatedly vetted and researched towards new trademark use for Respondent’s clients since its registration in 2005, and was nearly used for an entity offering low-resistance wiring.
Respondent further claims that because the Domain Name <modway.com> can convey that a product or service is technologically advanced, it is a versatile and valuable asset for Respondent’s business. For instance, Respondent states that the USPTO lists approximately 2,500 marks that include the term “delta” as part of the marks, and another 2,500 marks that include the term “omni”. Respondent argues that “modway” could be used similarly alongside another term in a trademark.
Respondent states that it has never offered the Domain Name, or any domain name, for sale to the public at large. Respondent further explains that no embarrassing or sexually suggestive content, or any content that could be confused with a trademark user’s rights, has ever appeared at the website linked to the Domain Name. This approach preserves the utility of the Domain Name. The Domain Name is hosted to resolve to a blank white webpage to prevent display of any automated content by the Registrar, which could infringe upon the rights of any known or unknown trademark users. Further, Respondent states that no party may purchase the Domain Name anonymously; instead, Respondent claims its mandatory contract form prohibits sale of a domain name to any party who is ineligible to purchase it from a United States trademark law perspective.
Respondent argues it is settled that the registration of domain names containing common words is permissible on a first-come, first-served basis, and such registration establishes Respondent’s legitimate interest, provided the Domain Name was not registered with a trademark in mind. Respondent states that in this case there is no evidence that the Domain Name was registered with Complainant’s trademark in mind, because Complainant’s MODWAY mark did not exist in 2005 when Respondent registered the Domain Name, and did not come into use by Complainant until seven years later.
Respondent urges that it was found to have a legitimate interest in use of a domain name in a prior UDRP case, Parlance Corporation v. Dynamo.com, NAF Claim No. 1508767. Consistent with Respondent’s legitimate interest in the generic <parlance.com> domain name, Respondent contends that the Domain Name is comprised of two generic words. Arguing that evidence of generic word status can be demonstrated from the presence of a word in a dictionary and online searches (that are configured to exclude a complainant), Respondent asserts that the American Heritage Dictionary defines the generic word “mod” as “fashionably up-to-date, especially in style, design, or dress.” An online search for “mod,” set to exclude Complainant, yields 810,000,000 web pages. The American Heritage Dictionary also defines the generic word “way” as a “road, path or highway affording passage from one place to another.” An online search for “way,” set to exclude Complainant, yields 5,100,000,000 result pages.
Respondent maintains that because the Domain Name is comprised of two generic words, the term “modway” is in use worldwide, including Modway Shoes; Modway, the rock band; Modways, another rock band; Modway construction; Modway industrial saws; the family name, Modway; and Modways leather goods. “Modway” trademarks have been filed by several parties worldwide. There is also allegedly another Modway furniture company, which predates Complainant’s trademark registration by four years.
Respondent submits that the price of USD 25,500, which it had offered for sale of the Domain Name to Complainant, is at or below market value and that the Domain Name has intrinsic value for use by a new bona fide trademark user wholly unrelated to Complainant. Respondent submits as evidence the prices of other domain names that have been sold. Respondent states that after it had established Complainant’s eligibility to purchase the Domain Name under trademark law, the 2012 price was set at USD 25,500, which is the same price that was offered to Complainant in 2014 after Complainant had registered its MODWAY mark.
Respondent therefore requests that the Panel find that Respondent has a legitimate interest in its Domain Name, which was non-distinctive at the time of registration and intended to be used solely by a client developing a bona fide new trademark. Respondent argues that this dispute is the second time it has been forced to respond under the largely disavowed “retroactive bad faith” line of UDRP cases. In the prior case, the complaint listed all of the domain names under Respondent’s control and claimed that 13 violated the Policy. Respondent asserts that all were first-in-time or generic and resolved to blank webpages. Respondent defended those registrations, and the complainant terminated the case the day after receiving Respondent’s response in that case, in which Respondent had raised alleged grounds for Reverse Domain Name Hijacking (“RDNH”).
(iii) Registered and used in bad faith
Respondent contends that it could not have registered the Domain Name in bad faith in 2005, because Complainant did not begin to use the term “modway” until seven years thereafter. Respondent states that the registration and use requirements of paragraph 4(a)(iii) of the Policy are conjunctive, and a complainant bears the burden of proof on each. Respondent argues that Complainant has filed this case under the largely disavowed “retroactive bad faith registration” interpretation of the Policy; however, the inclusion of the word “and” (instead of “or”) in paragraph 4(a)(iii) of the Policy is intentional. Further, the system of domain name registration is, in general terms, a first-come, first-served system; absent pre-existing rights which may be applicable to impugn a registration, the first person in time to register a domain name would normally be entitled to use it for any legitimate purpose.
Citing the WIPO Overview 2.0, Respondent states that the consensus view is that, although a trademark can form the basis for an action under the first element of the UDRP irrespective of its date, when a domain name is registered by a respondent before the complainant’s relied-upon trademark right is shown to have been established, the registration of the domain name could not have been in bad faith because the registrant could not have contemplated the complainant’s then non-existent right.
In addition, on the first element of the conjunctive test, Respondent submits that the Domain Name was presumptively registered in good faith as it is comprised of generic dictionary words possessing intrinsic value. Respondent references UDRP decisions supporting a finding of good faith registration where the domain name at issue contained dictionary terms. Respondent asserts that its numerous domain names are not evidence of a bad faith registration, as Complainant suggests, but are evidence of good faith registration towards a good faith use. The large number of domain names under Respondent’s control provides an advantage in its business. One can compare these domain name holdings to those of other branding and name conception companies to see the similarities, targeting terms that are Latin roots, cute words, coined or compound terms, but non-distinctive and non-infringing.
Further responding to Complainant’s contentions, Respondent emphasizes that paragraph 4(b)(i) of the Policy refers to a respondent acquiring a domain name primarily for the purpose of selling it to a complainant or a competitor of the complainant for valuable consideration. However, in this case Respondent could not have registered the Domain Name primarily for this purpose because Complainant did not exist at the time of registration. That Respondent has considered selling the Domain Name for valuable consideration is not, by itself, evidence that Respondent acquired the Domain Name for the purpose of selling it to Complainant or a competitor of Complainant for valuable consideration.
Regarding Complainant’s arguments under paragraph 2 of the Policy, Respondent contends that even the leading decisions on the applicability of paragraph 2 contemplate that a renewal of a domain name registration might not be considered as having been made bad faith if there is no material change in the use to which the domain name is put after renewal. In this case, there has been no transfer of the Domain Name since its registration by Respondent in 2005. Further, there has been no change in use of the Domain Name. It resolved to a blank white webpage long before Complainant began using its MODWAY trademark, and this use continues to this day. It has never been made available for sale to the public. The renewal of Respondent’s Domain Name occurs automatically one month prior to its expiry, and this is industry standard as it avoids risk of loss. Respondent also refers to United States court decisions in support of its argument that the re-registration (renewal) of the Domain Name was not in violation of the ACPA, as long as the initial registration was lawful.
Respondent asserts that the Complaint omitted to refer to Respondent’s website at <dynamo.com>, which presents Respondent’s work product, past clients, and content reflecting the good faith use of its domain names. As evidence of good faith use, Respondent claims it exercises care in the protection of the rights of trademark owners, both known and unknown, which goes beyond that required by current law and business practices. Respondent states its contracts are written to protect mark holders and exceed the duties imposed by United States trademark law, and relevant terms are laid out on its website at <dynamo.com>.
Respondent argues that it does not benefit from, infringe upon, or tarnish Complainant’s trademark in any way. No embarrassing or sexually suggestive content, or any content that could be confused with any “modway” mark user’s rights, has ever appeared at the site connected to the Domain Name. As to cases where passive holding of a domain name may be sufficient to indicate bad faith registration, Respondent argues that those are typically cases in which the complainant’s trademark is sufficiently well known that it would be implausible to assume that the respondent was not aware of it, and that is not the case here.
Even in the event of a possible disruption of Complainant’s future business through confusion among clients, Respondent contends that this, in itself, would not establish Respondent’s bad faith use of the Domain Name where there is no evidence that Respondent intended to divert business from Complainant. Further, although Complainant claims Respondent is in the business of domain name speculation, in this case the Domain Name is comprised of two common dictionary words, there are no other registrations by Respondent confusingly similar to Complainant’s mark, and there is no pay-per-click advertising on the webpage connected to the Domain Name.
(iv) Reverse domain name hijacking
Respondent requests that the Panel enter a finding of Reverse domain name hijacking (“RDNH”) against Complainant. Respondent refers to the negotiating history between the Parties (including Respondent’s December 9, 2014 email to Complainant in which Respondent stated its view that the filing of a UDRP case would result in a RDNH finding against Complainant), Complainant’s alleged omissions of certain information and misrepresentation regarding Respondent’s business, and referring to a number of disputes and other matters allegedly related to Complainant that are outside the scope of this case.
6. Discussion and Findings
In order to succeed in its claim, Complainant must demonstrate that the three elements enumerated in paragraph 4(a) of the Policy have been satisfied. These elements are that:
(i) the Domain Name registered by Respondent is identical or confusingly similar to a trademark or service mark in which Complainant has rights;
(ii) Respondent has no rights to or legitimate interests in respect of the Domain Name; and
(iii) Respondent has registered and is using the Domain Name in bad faith.
A. Identical or Confusingly Similar
Complainant and Respondent agree that Complainant has registered rights in its MODWAY trademark and that the Domain Name is identical to Complainant’s mark (with the exception of the “.com” top-level suffix). Accordingly, the Panel finds that the Domain Name is identical to a trademark in which Complainant has rights, and the first element of paragraph 4(a) of the Policy is satisfied.
B. Rights or Legitimate Interests
Pursuant to paragraph 4(a)(ii) of the Policy, Complainant must prove that Respondent has no rights or legitimate interests in respect of the Domain Name. A complainant is normally required to make out a prima facie case that respondent lacks rights or legitimate interests. Once a prima facie case is made, respondent carries the burden of demonstrating rights or legitimate interests in the domain name. If respondent fails to do so, a complainant is deemed to have satisfied paragraph 4(a)(ii) of the Policy.
This case presents a close call as to whether Complainant has successfully made out a prima facie case based on its Complaint. Complainant has presented a number of the elements commonly relied upon by complainants to make a prima facie showing: that Respondent is not commonly known by the Domain Name or the name “Modway”; that Complainant did not provide Respondent with permission to use Complainant’s MODWAY trademark in the Domain Name; and that, at least according to the Complaint, there is no evidence of Respondent’s use of, or demonstrable preparations to use, the Domain Name or a name corresponding to the Domain Name in connection with a bona fide offering of goods or services. Instead, the Domain Name at all relevant times has been linked to a blank webpage. In addition, Complainant has asserted Respondent’s abusive passive holding of the Domain Name based on several factors including Respondent’s alleged failure to use it, Complainant’s developing trademark rights, and the renewal of the Domain Name after Respondent had been given notice of Complainant’s mark.
Even in light of this showing, there are also several indications in the Complaint (and its attachments) that Complainant had some awareness of Respondent’s name/branding business and how Respondent uses its domain name holdings in support of that business, although Complainant did not elaborate on these aspects. Moreover, Complainant was aware that the Domain Name had been registered prior to the existence of its MODWAY trademark rights. As discussed below, all this information offers potential evidence in support of finding a legitimate interest by Respondent in the Domain Name and thereby counters Complainant’s prima facie showing. However, the Panel considers that, while it certainly would have been wise to do so, it was not Complainant’s responsibility to attempt to explain fully Respondent’s business and motives for registering its domain names, including the Domain Name. Instead, Complainant made extensive arguments in an attempt to argue that the registration of the Domain Name pre-dating its trademark rights did not bar its claim.
Assuming that Complainant did make out a prima facie case, the Panel finds that Respondent nonetheless has successfully carried its burden of demonstrating a legitimate interest with respect to the Domain Name. The key contested provision in this case concerning the issue of whether Respondent has demonstrated rights or legitimate interests in the Domain Name is set forth in paragraph 4(c)(i) of the Policy: did Respondent, before receiving any notice of this dispute, demonstrate its “use of, or demonstrable preparations to use” the Domain Name “in connection with a bona fide offering of goods or services.” The Panel concludes, on the balance of the probabilities, that Respondent has provided sufficient evidence of its naming and branding business and how its domain name holdings, including the Domain Name, were acquired for and used “in connection” with this bona fide business and the services offered by Respondent. Respondent appears to register common words, dictionary and coined terms that are then held to be used in naming, branding and logo projects for its clients. Respondent has shown that there are other companies offering similar services. Moreover, Respondent has demonstrated that it has implemented procedures to avoid inadvertently infringing on the rights of known or unknown trademark owners.
In addition, there is no dispute that when Respondent registered the Domain Name in 2005, Respondent was not targeting Complainant or its MODWAY trademark, especially as any rights attaching to that mark did not come into existence until sometime after April 2012, approximately seven years later. This undisputed evidence supports Respondent’s claim that it registered the Domain Name for its utility as a term combining two common words, “mod” and “way”, in a manner that could be suggestive of a product or service that is technologically advanced.
Paragraph 2.2 of the WIPO Overview 2.0 states that “Panels have recognized that mere registration of a domain name, even one that is comprised of a confirmed dictionary word or phrase…, may not of itself confer rights or legitimate interests in the domain name.” Therefore, Respondent’s registration of the Domain Name and linking it to a blank webpage did not, on its own, indicate any rights or legitimate interests. However, as noted above, Respondent’s holding of the Domain Name for use in connection with its greater branding business creates a sufficient legitimate interest with respect to the Domain Name in this case. A similar finding was made concerning Respondent and its registration of the domain name <parlance.com> in a previous UDRP case. See Parlance Corporation v. Dynamo.com c/o Privacy Protection, supra (“Since ‘parlance’ is a word in the English language, and the Respondent is in the business of registering domain names composed of common words, the Panel holds that the Complainant has failed to satisfy its burden of proving that the Respondent lacks rights or legitimate interests.”)
Accordingly, the Panel finds that the second element of paragraph 4(a) of the Policy is not satisfied.
C. Registered and Used in Bad Faith
Given the Panel’s finding regarding Respondent’s legitimate interest in the Domain Name, it is unnecessary in this case to determine whether Respondent has registered or subsequently used the Domain Name in bad faith. However, because both Parties submitted detailed arguments on these issues, they are addressed below. The Panel finds that Complainant has failed to demonstrate either bad faith registration or bad faith use.
As noted above, it is undisputed that when Respondent registered the Domain Name in 2005, Complainant’s trademark did not exist. There was no improper targeting in this case. Complainant, however, has maintained that various UDRP cases have found bad faith registrations even when the domain names had been registered prior to the establishment of the complainant’s relevant trademark rights. In particular, Complainant has argued that Respondent’s recent renewal of the Domain Name in May 2015 constitutes a bad faith registration. The Panel disagrees. The WIPO Overview 2.0, paragraph 3.7, provides relevant guidance on this point:
“While the transfer of a domain name to a third party does amount to a new registration, a mere renewal of a domain name has not generally been treated as a new registration for the purpose of assessing bad faith. Registration in bad faith must normally occur at the time the current registrant took possession of the domain name.”
In the present case, Respondent has not transferred the Domain Name following its initial registration in 2005. Respondent’s renewal of the Domain Name in May 2015 was prompted by the imminent expiration of Respondent’s initial ten year registration term. However, Complainant has argued that the recent renewal, nonetheless, was in bad faith because it violates the warranties in paragraph 2 of the Policy, given that Respondent had been put on notice by Complainant of Complainant’s trademark rights prior to this renewal, as well as Respondent’s passive holding of the Domain Name. Again, the Panel disagrees. Paragraph 2 of the Policy provides:
“Your Representations. By applying to register a domain name, or by asking us to maintain or renew a domain name registration, you hereby represent and warrant to us that (a) the statements that you made in your Registration Agreement are complete and accurate; (b) to your knowledge, the registration of the domain name will not infringe upon or otherwise violate the rights of any third party; (c) you are not registering the domain name for an unlawful purpose; and (d) you will not knowingly use the domain name in violation of any applicable laws or regulations. It is your responsibility to determine whether your domain name registration infringes or violates someone else's rights."
The WIPO Overview 2.0, in paragraph 3.7, also provides useful direction concerning paragraph 2 of the Policy:
“However, relying in part on paragraph 2 of the UDRP which expressly references the representations made at the time of renewal, a small number of panels have begun to consider the renewal of a domain name as equivalent to a new registration in certain circumstances, including where it is found that: the registrant changed its use of the domain name prior to renewal; such use amounts to textbook cybersquatting; and the registrant nevertheless proceeded to renew the domain name registration with intent to benefit from its inclusion of the complainant’s trademark.”
In this case, it is undisputed that Respondent did not change its use of the Domain Name before or after the recent renewal (such that Complainant could, for example, seek to rely on Policy paragraph 4(b)(iv)). It has always linked to a blank webpage since the initial registration in 2005. Moreover, Respondent has provided plausible reasons related to its naming and branding business for why it continues to maintain its domain name holdings, including registration of the Domain Name, and for why the Domain Name has always resolved to a blank webpage (i.e., to preserve the utility of the Domain Name for Respondent’s business and to prevent display of any automated content by the Registrar, which could infringe upon the rights of a trademark user). In view of the circumstances of this case, the Panel finds, on balance, that there is insufficient evidence to indicate that, even at the time of renewal, Respondent violated any of the warranties under paragraph 2 of the Policy (i.e., registering the Domain Name for an unlawful purpose or with intent to knowingly use it in violation of any applicable laws or regulations).
As to Complainant’s claim that Respondent’s alleged passive holding of the Domain Name amounts to bad faith, the Panel also rejects this claim. WIPO Overview 2.0, paragraph 3.2 (addressing passive holding), provides that the “panel must examine all the circumstances of the case to determine whether the respondent is acting in bad faith. Examples of what may be cumulative circumstances found to be indicative of bad faith include the complainant having a well-known trademark, no response to the complaint having been filed, and the registrant's concealment of its identity.” Here, although Complainant has provided evidence to show that the strength of its MODWAY mark – covering furniture – may have increased over time through Complainant’s use and promotion of the mark, this evidence does not suggest that the mark is so well-known that the term “modway” could not be used by a third-party in relation to a different line of business (which is consistent with the objectives of Respondent’s branding business). Moreover, as explained above, there is no sufficient evidence to show that Respondent registered (or renewed) the Domain Name in an attempt to take advantage of Complainant’s MODWAY trademark. Respondent has not concealed its identity. Importantly, Respondent has submitted a comprehensive Response in this case and provided credible reasons for why the Domain Name has always resolved to a blank webpage and been held in support of Respondent’s branding business. In view of all of these circumstances, the Panel finds there is no abusive passive holding of the Domain Name.
Finally, Complainant has also alleged that under paragraph 4(b)(i) of the Policy, Respondent registered the Domain Name primarily for the purpose of selling it to Complainant or a competitor for valuable consideration in excess of out-of-pocket costs directly related to it. The Panel rejects this claim. The record before the Panel shows that Respondent never made any unsolicited offer to sell the Domain Name to Complainant or a third party. Instead, Respondent only responded to inquiries to purchase the Domain Name first initiated by Complainant, which commenced even before Complainant had established any rights in its MODWAY trademark. A protracted and tough set of communications have been exchanged between the Parties; however, these negotiations do not necessarily indicate bad faith. Moreover, the evidence concerning Respondent’s branding and naming business, and why Respondent maintains its large domain name holdings (including the Domain Name), refutes Complainant’s argument of bad faith under paragraph 4(b)(i) of the Policy.
Accordingly, for all of the foregoing reasons, the Panel concludes that Complainant has failed to demonstrate Respondent’s bad faith registration and use of the Domain Name.
D. Reverse Domain Name Hijacking
Respondent has requested that the Panel making a finding of RDNH against Complainant. Paragraph 15(e) of the 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 RDNH or primarily to harass the domain name holder, the Panel shall declare that the Complaint was brought in bad faith and constitutes an abuse of the administrative proceeding. RDNH is defined as using the Policy in bad faith to attempt to deprive a domain name holder of a domain name.
WIPO Overview 2.0 states that UDRP panels have found RDNH 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”; “a respondent’s use of a domain name could not, under any fair interpretation of the reasonably available facts, have constituted bad faith”; or “the complainant knew that the respondent used the disputed domain name as part of a bona fide business for which the respondent obtained a domain name prior to the complainant having relevant trademark rights.”
It can be argued that each of the above examples is suggestive of certain of the circumstances in this case. Thus, the Panel’s decision on RDNH presents a very close call. However, the Panel (by a majority) considers, on balance, that in view of Complainant’s submissions, the Complaint was not brought primarily as a means of harassment. Complainant relied on a number of decisions, drawing from a diverse pool of prior UDRP cases, which could be read to support arguably certain of Complainant’s claims on particular issues. Moreover, Respondent in support of its RDNH request has sought to introduce information about unrelated matters and allegations concerning Complainant that are irrelevant to these proceedings. Despite the tough communications between the Parties, some of which emanated from Respondent, and in view of the complete record in this case, a majority of the Panel is not persuaded to enter a finding of RDNH against Complainant.
For the foregoing reasons, the Complaint is denied.
Christopher S. Gibson
Andrew F. Christie
(joining in the main decision but dissenting on issue of RDNH)
Date: August 31, 2015
I respectfully dissent from the view of the majority in relation to Respondent’s request for a finding of Reverse Domain Name Hijacking.
As the majority accurately observe:
“WIPO Overview 2.0 states that UDRP panels have found RDNH 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’; ‘a respondent’s use of a domain name could not, under any fair interpretation of the reasonably available facts, have constituted bad faith’; or ‘the complainant knew that the respondent used the disputed domain name as part of a bona fide business for which the respondent obtained a domain name prior to the complainant having relevant trademark rights.’”
I believe that the Complaint never had a chance of success under either the second or third elements of the Policy, but for simplicity will restrict my comments on this topic to Complainant’s contention that the Domain Name was registered and is being used in bad faith, Respondent’s bad faith intent being to sell the Domain Name to Complainant at a profit. This was a contention made in the knowledge that the Domain Name was registered several years before Complainant first used its MODWAY trade mark and, more than that, that the negotiations over purchase of the Domain Name were initiated by Complainant several months before Complainant first used its trade mark. It was an absurd contention.
Nonetheless the majority decline to make a finding of RDNH on two bases. First, that Complainant raised several arguable points. On the basis that anything is arguable, I agree. However, the arguments were so flawed that I disregard them.1 Secondly, Respondent’s behaviour is not free from criticism. I accept that Respondent has responded to the Complainant’s pre-Complaint emails and in the Response in a manner that one might say is well over the top. But what we are addressing with regard to RDNH is not the behaviour of Respondent, but the behaviour of Complainant in launching the Complaint. While I do not condone the excesses of Respondent, it is the fact that the false allegations of bad faith directed at Respondent were highly provocative and, in my view, wholly unjustified.
When Complainant decided to launch its MODWAY brand it was aware that Respondent was the owner of the Domain Name. It tried to buy the Domain Name from Respondent, but declined to accept Respondent’s terms. It was aware that if it proceeded with the launch of its MODWAY brand, it was likely that in time its customer base would visit the website connected to the Domain Name, believing it to be the Domain Name of Complainant, and would be confused on finding that it was a website unassociated with Complainant. Nonetheless, despite all that knowledge and without acquiring the Domain Name from Respondent, it went ahead and launched under the MODWAY brand.
I have found instructive a passage from Complainant’s representative’s letter to Respondent dated August 21, 2014:
“East End is desirous of using the domain name modway.com as its customers expect that the internet domain modway.com is associated with East End. When East End’s customers do not find East End’s website upon entering modway.com, they are confused, and this is causing damage to East End.
It is our understanding that your company owns the domain name ‘modway.com’ but has never used it for commercial purposes. The domain name modway.com is identical or confusingly similar to East End’s trademark MODWAY, and we believe that Dynamo.com has no rights or legitimate interests with respect to the domain name. Further, we believe that Dynamo.com recently renewed the domain name registration in bad faith. As a result, East End is considering filing a complaint with ICANN.org under the Uniform Domain Name Dispute Resolution Policy in order to force Dynamo.com to release the name.
It is our understanding that you are willing to sell East End the domain name modway.com but are demanding $25,500 for the sale of the domain name. East End is willing to buy the name form Dynamo.com for a reasonable fee, but considers your demand to be unreasonable. For less than that, East End believes that it can be successful in utilizing ICANN’s Uniform Domain Name Dispute Resolution Policy to force Dynamo.com to release the name.”
This telegraphs to me that (a) as Complainant must have known from the outset, not having the Domain Name would be a disadvantage – hence the attempts to purchase it prior to launch of Complainant’s brand; (b) nothing that Respondent has done in relation to the Domain Name could conceivably constitute bad faith use, Respondent never having made any use of it; (c) Complainant will have been aware of Respondent’s legitimate business conducted through its website at <dynamo.com>, which involves the warehousing of a portfolio of potentially attractive domain names; and (d) the one argument left to it is one based on Respondent’s renewal of the Domain Name with knowledge of Complainant’s trade mark rights.
Even in cases where UDRP panelists are prepared to treat renewal of a domain name as a re-registration of the domain name, common sense dictates that for a renewal of a legitimately registered and used domain name to constitute bad faith registration and use of that domain name, there has to be some culpable change of use of the domain name targeted at the complainant or its trademark. Here there has been no change of use. Moreover, the renewal “authority” cited by Complainant, Big 5 Corp. v. EyeAim.com, NAF Case No. FA13080015137014 was a very different case. It is true that in that case the UDRP panel found bad faith registration and use on the basis of bad faith use following renewal with knowledge of the complainant’s rights, but the use in question was very different from Respondent’s non-use: “Respondent used the disputed domain name to resolve to a website that displayed pay-per-click advertisement for, among others, Complainant’s goods and goods sold in competition with Complainant’s goods.”
At its simplest, this is a case where, on any basis, there has been no bad faith use. To the knowledge of Complainant the same “non-use” (a blank page) has been continuous throughout.
In my view the Complaint was actuated by a desire to obtain a domain name, which was commercially important to Complainant, but which it could not obtain by legitimate means, otherwise than by paying more than it was prepared to pay. The arguments were artificial in the extreme and must have been known to be so.
This Complaint was doomed from the start. To quote another dissenting panelist in another case, “a finding of abuse of this proceeding and an attempt at Reverse Domain Name Hijacking is richly deserved.” 2
Date: August 31, 2015
1 They were all based on previous UDRP cases with very different factual backgrounds and to a significant degree on no-response cases with materially different facts (e.g., Mary-Lynn Mondich and American Vintage Wine Biscuits, Inc. v. Shane Brown, supra and Telstra Corporation Limited v. Nuclear Marshmallows, supra)