WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Chandler Systems, Incorporated v. Tech Admin, Virtual Point
Case No. D2017-1665
1. The Parties
Complainant is Chandler Systems, Incorporated of Ashland, Ohio, United States of America ("United States" or "US"), represented by Walker & Jocke, United States.
Respondent is Tech Admin, Virtual Point of Irvine, California, United States, represented by Lewis & Lin, LLC, United States.
2. The Domain Name and Registrar
The disputed domain name <watersoft.com> is registered with Dynadot, LLC (the "Registrar").
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on August 28, 2017. On August 29, 2017, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain name. On August 29, 2017, 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 and 4, the Center formally notified Respondent of the Complaint, and the proceedings commenced on September 1, 2017. In accordance with the Rules, paragraph 5, the due date for Response was September 21, 2017. On September 21, 2017, Respondent submitted to the Center a copy of a complaint that was filed by Respondent against Complainant the day before in the U.S. District Court for the Northern District of Ohio (the "Federal Action"), seeking (1) a declaratory judgment that, among other things, Respondent is entitled to registration, ownership and use of the disputed domain name, and (2) a finding of Reverse Domain Name Hijacking. Respondent also filed on September 21, 2017 a Request to Terminate or Suspend Proceedings in which Respondent additionally requested that "[t]o the extent that a response [to the UDRP Complaint] is necessary, please consider the [complaint in the Federal Action] as Respondent's response."
On September 22, 2017, the Center issued a communication in response to the filing made by Respondent on September 21, 2017 and specifically requested that if Complainant wanted to terminate the proceeding without prejudice it should advise the Center by no later than September 27, 2017, failing which the Center would proceed and appoint a Panelist. Complainant did not file a request to terminate and the Center, on September 28, 2017, notified the Parties that it would proceed to Panel appointment.
The Center appointed Georges Nahitchevansky as the sole panelist in this matter on October 13, 2017. 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, Chandler Systems, Incorporated, is an Ohio corporation located in Ashland, Ohio. Complainant designs and manufactures water softener and treatment products under the name and mark WATERSOFT. Complainant is the owner of a United States trademark registration for the trademark WATERSOFT (Registration No. 4,754,473), which issued to registration on June 16, 2015 with a claimed first use in commerce date of "0-0-1980".
Respondent is a California corporation that is owned and operated by Dave Lahoti. Respondent is a web development company that, inter alia, purchases domain names and develops websites.
Complainant alleges that Respondent registered the disputed domain name at some point in 2014. Respondent alleges that Dave Lahoti registered the disputed domain name in 2006 and has held it since that time under his own name or that of entities owned and controlled by Dave Lahoti, including Respondent.
5. Respondent's Request to Suspend or Terminate the Proceeding
Respondent has requested that this proceeding be suspended or terminated on account of the Federal Action filed by Respondent on September 20, 2017.
Paragraph 18(a) of the Rules gives the Panel discretion to suspend, terminate or continue a UDRP proceeding where the disputed domain name is also the subject of a concurrent court proceeding. In general, appointed panels have been reluctant to suspend or terminate proceedings, except where exceptional circumstances have warranted such. See section 4.14 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Third Edition ("WIPO Overview 3.0"). The reluctance to grant a suspension is grounded in the potential that a suspension could result in a matter languishing for an indeterminate amount of time without there ever being a resolution. With regard to termination, the Panel is mindful that a U.S. District Court is not bound by a decision rendered by a UDRP panelist. Nevertheless, terminating a proceeding, even without prejudice, may not further the underlying benefit of the UDRP in providing an expeditious resolution of a domain name dispute where a complainant has filed a valid complaint, paid its filing fee, and is thus entitled to a decision on the merits without delay.
In the view of this Panel, terminating a proceeding simply based on the filing of a concurrent court action by a respondent, without any exceptional circumstances being apparent, opens up the possibility of gamesmanship where a respondent could file a court action as a way of undermining or delaying a UDRP proceeding. For instance, a respondent could file an action and thereafter delay service, never serve the complaint and/or withdraw and then refile a complaint in another forum. Consequently, rendering a decision in a UDRP proceeding in the face of a concurrent court proceeding provides, at the very least, a baseline determination for the parties – albeit one that will likely not have any binding effect on a court of competent jurisdiction.
Based on the foregoing, the Panel denies Respondent's Request to Suspend or Terminate Proceedings – particularly where, as here, Complainant has not sought or consented to a termination of the proceeding.
5. Parties' Contentions
Complainant asserts that it owns the WATERSOFT mark, which has been in use since 1980 in connection with water softener and treatment products.
Complainant contends that the disputed domain name is identical or confusingly similar to Complainant's WATERSOFT mark because it consists of the WATERSOFT mark in its entirety.
Complainant argues that Respondent lacks any rights or legitimate interests in the disputed domain name because Respondent (a) does not own a U.S. trademark registration or application for the WATERSOFT mark, (b) had constructive notice of Complainant's prior rights in WATERSOFT before registering the disputed domain name, (c) has not used the disputed domain name for a bona fide offering of goods and services, (d) is not commonly known by the disputed domain name, and (e) is not making legitimate business use of the disputed domain name, as Respondent has only registered the disputed domain name in order to try and sell it for a large sum of money.
Finally, Complainant asserts that Respondent has acted in bad faith since Respondent had constructive notice of Complainant's prior rights in the WATERSOFT mark as of February 4, 2002, when Complainant's predecessor filed its trademark application for the WATERSOFT mark in the United States Patent and Trademark Office. Complainant further argues that Respondent's bad faith registration and use is evident from the fact that Respondent has not made any bona fide use of the disputed domain name with any goods or services and has instead passively held the disputed domain name and sought to profit from such by attempting to sell it at the opportune moment for an amount in excess of Respondent's documented out-of-pocket costs.
Respondent has requested that the Panel consider the complaint filed by Respondent in the Federal Action as Respondent's response. The Panel accepts Respondent's request.
Respondent contends that Dave Lahoti registered the disputed domain name in 2006 and has held the disputed domain since that time either himself or through entities owned and controlled by Dave Lahoti, including Respondent.
Respondent asserts that Dave Lahoti registered the disputed domain after identifying it as a good name for a business offering digital watermarking software. In that regard, Respondent contends that the word "soft" is, apart from its dictionary meaning, a shorthand reference to "software." Respondent further asserts that the disputed domain name was registered before Complainant's predecessor in interest obtained a United States trademark registration for the WATERSOFT mark in 2007. Respondent also contends that Respondent had no knowledge of Complainant or Complainant's alleged WATERSOFT mark at the time the disputed domain name was registered. Lastly, Respondent argues that Complainant's alleged WATERSOFT mark is not famous or well-known and is merely descriptive of Complainant's water softener products. Respondent further argues that registering a domain name for its descriptive meaning and offering such for sale is a legitimate business practice and is not evidence of bad faith registration and use.
Respondent maintains that the dispute has been brought in bad faith by Complainant and constitutes Reverse Domain Name Hijacking.
6. Preliminary Factual Issues
A. Evidentiary Standard
Up front, the Panel notes that both parties have submitted limited evidence in support of their contentions and have largely relied on unsubstantiated factual assertions in their submissions. As a number of Panels have previously made clear, an asserting party cannot meet its burden by simply making conclusory statements unsupported by evidence. WIPO Overview 3.0, section 4.2. A UDRP proceeding is essentially a streamlined trial on paper. A UDRP Panel does not have the ability to examine witnesses or the benefit of a full record after discovery. The determination made in each case is based on the credibility and the reliability of the evidence submitted by the parties to determine whether or not a complainant has carried its burden of proving all three elements under paragraph 4(a) the Policy by a preponderance of the evidence. For this reason, Panels have generally dismissed factual allegations that are not supported by any bona fide documentary or other credible evidence, as allowing unsupported factual allegations would permit parties to freely make claims that could be spurious in nature. Id. (see relevant decisions cited therein).
With regard to the weight to be accorded to the statements made in Respondent's complaint in the Federal Action, the Panel notes that Respondent has submitted a file-stamped copy of the complaint filed in the Federal Action that has been signed by Respondent's counsel. Under Rule 11 of the United States Federal Rules of Civil Procedure, a counsel signing a federal court complaint is attesting that the factual contentions in the complaint have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery. While this does imbue the factual contentions in a complaint with some weight, this does not per se mean that the allegations as stated in a court complaint are accurate, complete or, indeed, always truthful (particularly as some allegations are often set out "on information and belief"). A plaintiff in a federal court action ultimately needs to prove its case with credible evidence. Thus although a UDRP proceeding is a streamlined proceeding on paper, a Panel need not necessarily accept factual allegations made through a court complaint without any supporting evidence.
In the instant proceeding, there are a number of conflicting factual assertions made by the parties concerning when Complainant's rights in the WATERSOFT mark arose and when Respondent secured the disputed domain name. While the Parties likely have evidence in their possession or control that easily could have been submitted to support or negate contentions made by either Party, the Panel is constrained here by the limited record provided by the parties and thus wants to make clear that its determinations in this proceeding are based on the actual evidence submitted by the parties and not on the unsubstantiated factual allegations made by counsel.
B. Complainant's Rights in the WATERSOFT mark
Complainant claims rights in the WATERSOFT mark on the basis of (i) its 2015 United States trademark registration for the WATERSOFT mark, (ii) the rights in WATERSOFT that were owned by Amtrol, Inc. a company that in 1988 acquired Complainant's predecessor company, WaterSoft Inc., and which according to Complainant subsequently resold WaterSoft to Complainant in 2008, and (iii) alleged common law rights that Complainant developed in WATERSOFT going back to 1980.
For purposes of discussion, the Panel first addresses the alleged rights owned by Amtrol Inc. in the WATERSOFT mark. Complainant asserts that it sold its WaterSoft, Inc. company to Amtrol, Inc. in 1988. Amtrol Inc. filed in February 2002 trademark applications to register the marks WATERSOFT and AMTROL WATERSOFT (in a stylized version). These applications matured to registration in May 2007 and March 2008 respectively. Complainant asserts that in 2008 (no actual date provided) it reacquired WaterSoft, Inc. from Amtrol Inc. and thus obtained ownership of the rights that Amtrol Inc. had developed or owned in the WATERSOFT mark during the period 1988 through 2008. The evidence submitted by Complainant to support its contentions is limited at best. Complainant did not submit anything, such as an agreement, assignment, trademark office filing, press release, news article or other document, establishing that rights in the WATERSOFT mark moved to Amtrol Inc. in 1988 or that Complainant actually regained rights in the WATERSOFT mark 2008. Complainant's counsel simply asserts in the Complaint, without any supporting evidence, that there was an asset purchase in 2008 in which Complainant "acquired all WATERSOFT inventory, patents, and trademarks from its predecessor." Notably, the two United States trademark registrations owned by Amtrol Inc. for the WATERSOFT mark, which issued to registration in 2007 and 2008, remained in the name of Amtrol Inc. after 2008 until they lapsed in December 2013 and October 2014 respectively. No assignment was ever filed with the United States Patent Trademark Office transferring ownership of the registrations to Complainant. Notably, no explanation is provided by Complainant for why Amtrol Inc. remained the listed owner of the WATERSOFT registrations after 2008. Moreover, no evidence has been submitted showing that Complainant, in fact, acquired these registrations from Amtrol Inc. in 2008 as Complainant claims.
As to Complainant's claim of owning common law rights in WATERSOFT since 1980, again Complainant has failed to provide any meaningful evidence supporting such a claim. Apart from submitting a 2017 printout of a webpage from its website at "www.watersoftinc.com" that contains a statement that the WaterSoft company was formed in 1980, Complainant has not submitted any evidence showing use of the WATERSOFT mark in 1980, or thereafter, apart from a more recent use in 2017 on its website at "www.watersoftinc.com". Similarly, Complainant has submitted no evidence showing or supporting the contention that consumers associate the WATERSOFT mark with Complainant and its goods or services. While an assertion of common law rights can be accepted to prove that a complainant has rights in a mark, Panels have generally required that proof of such rights be supported by specific evidence and not mere assertions made by a complainant's counsel in a complaint. See WIPO Overview 3.0, section 1.3; see, e.g., Carolina Carports, Inc., Adela Herrera and Javier Herrera v. PrivacyProtect.org/Web Master Internet Services Private Limited, WIPO Case No. D2014-0147.
Complainant also relies on its 2015 United States trademark registration for the WATERSOFT mark, in which Complainant claimed a date of first use in commerce on "0-0-1980." While there is a presumption that the date of first use claimed by Complainant in its trademark filing is accurate, that does not in and of itself establish Complainant's common law rights, prove that the first use date is in fact accurate or that Complainant's claimed trademark use has in fact been continuous since 1980. As Complainant's United States trademark application was filed on May 6, 2014, its constructive national priority under US law would go back to May 6, 2014 and Complainant's claim of rights in WATERSOFT going back to 1980 would still need to be proved by Complainant with sufficient evidence. Moreover, it should be noted that the trademark filings made for the WATERSOFT mark in 2002 by Amtrol, Inc. claimed first use dates of 1988 and 2001. Thus, even if the Panel were to accept that rights in WATERSOFT flowed back and forth between Complainant and Amtrol Inc., there would still be a question as to the timing and extent of Complainant's claimed rights in the WATERSOFT mark.
In sum, while there may be documents in Complainant's possession or control that could clarify matters and prove Complainant's alleged common law rights in WATERSOFT, Complainant's acquisition of Amtrol Inc.'s rights in the WATERSOFT mark and the extent and timing of Complainant's claimed rights in WATERSOFT, the only evidence before the Panel of Complainant's rights in the WATERSOFT mark are printouts from Complainant's 2017 website at "www.watersoftinc.com" and Complainant's United States registration for the WATERSOFT mark (Registration No. 4754473) which was filed on May 6, 2014 and issued to registration on June 16, 2015.
C. Respondent's Registration of the Dispute Domain Name
With regard to Respondent's registration of the disputed domain name, there are likewise issues regarding the evidence that has been submitted. Respondent claims that Dave Lahoti registered the disputed domain name in 2006. However, a domain name report obtained by Complainant from DomainTools.com, an online archival service, does not show a registration in 2006 by Dave Lahoti. Moreover, Respondent has not provided any evidence showing (i) the relationship between the various entities that have owned the disputed domain name since 2006, which include IT Manager, Crosspath Inc., Captive Media, Futurespark and Virtual Point, or (ii) what interest each of these entities purportedly held in the disputed domain name (i.e., are they the same parties with the same owners, business purposes and interests or different entities with different business purposes that share a common owner). Suffice it to say, the evidence before the Panel on the ownership of the disputed domain name, which consists of a DomainTools.com report, shows that an entity by the name of Captive Media owned the disputed domain as of April 21, 2014 when Complainant's representative Bill Chandler attempted to purchase the disputed domain name. At that time, as the correspondence submitted by Complainant shows, a representative of Captive Media had several communications with Mr. Chandler about the disputed domain name and whether it was for sale. The communications appear to have ended on April 24, 2014 with "David Lahoti" refusing to sell the disputed domain name. Shortly thereafter, Complainant filed its United States trademark application for the WATERSOFT mark on May 6, 2014 and on or about August 18, 2014 the listed registrant for the disputed domain name changed to Futurespark, although the contact address and telephone number used for the disputed domain name stayed the same as that used for Captive Media.
On or about November 5, 2014, the WhoIs information for the disputed domain name changed to show the registrant as Virtual Point (the Respondent) using a different street address, but maintaining the same telephone number. On or about August 13, 2015, almost two months after Complainant's United States application to register the WATERSOFT mark issued to registration on June 6, 2015, Complainant's representative again contacted Respondent about purchasing the disputed domain name. The communications which lasted for several days thereafter referred back to the prior 2014 communications, thereby suggesting that Respondent and Captive Media or the parties operating these entities were likely related (a point that Respondent also maintains in its complaint in the Federal Action and which Complainant appears to concede in the Complaint). As it appears that Captive Media became the listed registrant of the disputed domain name on or about November 25, 2012, it appears, based on what evidence has been provided, that Respondent has controlled the disputed domain name since at least that time.
7. Discussion and Findings
Under paragraph 4(a) of the Policy, to succeed Complainant must satisfy the Panel that:
(i) the disputed domain name is identical or confusingly similar to a trademark or service mark in which Complainant has rights;
(ii) Respondent has no rights or legitimate interests in respect of the disputed domain name; and
(iii) the disputed domain name was registered and is being used in bad faith.
A. Identical or Confusingly Similar
Ownership of a trademark registration is generally sufficient evidence that a complainant has the requisite rights in a mark for purposes of paragraph 4(a)(i) of the Policy. WIPO Overview 3.0, section 1.2.1. Complainant has provided evidence that it owns a registration for the WATERSOFT mark and that it is currently making use of the WATERSOFT mark in connection with its water treatment and softener products.
With Complainant's rights in the WATERSOFT mark established, the remaining question under the first element of the Policy is whether the disputed domain name (typically disregarding the generic Top-Level Domain ".com") is identical or confusingly similar with Complainant's mark. See B & H Foto & Electronics Corp. v. Domains by Proxy, Inc. / Joseph Gross, WIPO Case No. D2010-0842. In the instant proceeding, the disputed domain name is identical to Complainant's WATERSOFT mark as it incorporates and consists solely of the WATERSOFT mark in its entirety. The Panel therefore finds that Complainant has satisfied the requirements of paragraph 4(a)(i) of the Policy in establishing rights in the WATERSOFT mark and in showing that the disputed domain name is identical or confusingly similar to that trademark.
B. Rights or Legitimate Interests
In view of the Panel's finding under the next element of paragraph 4(a) of the Policy, it is unnecessary for the Panel to address Respondent's rights or legitimate interests.
C. Registered and Used in Bad Faith
Given the limited evidence submitted in this matter by the Parties, which is discussed above, the Panel concludes that Complainant has not established that Respondent has registered and used the disputed domain name in bad faith. Given the actual evidence in the matter, as opposed to unsubstantiated factual allegations, it appears that Respondent registered the disputed domain name before Complainant acquired rights in the WATERSOFT mark. Under such circumstances, Respondent could not have registered the disputed domain name in bad faith.
While the result might be different if Complainant had provided evidence regarding its use of WATERSOFT going back to 1980, or supporting its contention that it had acquired Amtrol Inc.'s rights in WATERSOFT, Complainant would still face a second hurdle. The WATERSOFT mark consists of the common terms "water" and "soft." Such combination when used with water softening products is arguably descriptive or could be seen by consumers as referring to the process of water softening. However, no evidence was submitted by Complainant showing the extent of Complainant's use of the WATERSOFT mark over many years, or supporting the contention that at the time Respondent registered the disputed domain name consumers perceived the WATERSOFT mark as uniquely associated with Complainant and its products. Indeed, while Complainant claims there is "continual confusion" over the association of the disputed domain name with Complainant, no evidence of any such confusion was provided by Complainant. Moreover, there is no evidence in the record from which to draw an inference that Respondent, through its predecessor, acquired the disputed domain name in 2012 for the purpose of taking advantage of Complainant's rights in the WATERSOFT mark – particularly given that Respondent also registered a number of other domain names based on common terms in combination with the word "soft" (which can refer to software), including by way of example <oilsoft.com>, <jewelsoft.com> and <dollarsoft.com>.
But even if the Panel assumes that Complainant acquired Amtrol Inc.'s rights in 2008 and thus has rights going back to at least 1988, there is no evidence in the record regarding Amtrol Inc.'s use of the WATERSOFT mark, that the WATERSOFT was uniquely associated with Amtrol Inc.'s WATERSOFT products from 1988 to 2008 or that Respondent had in fact targeted Amtrol Inc. and its WATERSOFT mark when it registered the disputed domain name — particularly if Respondent acquired the disputed domain name in 2006 (as Respondent contends), at least a year before Amtrol Inc. obtained its first trademark registration for the WATERSOFT mark.
In sum, while the evidence submitted by Complainant regarding the current attempts by Respondent to sell the disputed domain name could suggest that Respondent is using the disputed domain name in bad faith, Complainant on the record before the Panel has failed to prove that Respondent registered the disputed domain name in bad faith. Thus, Complainant has not satisfied its burden of proving the conjunctive requirement of the third element of bad faith registration and use. In coming to this conclusion, the Panel again emphasizes that its decision is limited to what was presented to the Panel and that on a more robust or fully litigated record the result might be different.
8. Reverse Domain Name Hijacking
While Respondent has made a claim that Complainant has engaged in Reverse Domain Name Hijacking, the Panel declines to make such a finding. The Panel cannot conclude that the Complaint was brought in bad faith or to harass Respondent. A finding that Complainant did not sufficiently prove its case does not equate to Reverse Domain Name Hijacking. Here, there are a number of factual allegations that if properly supported with evidence could change the outcome. Thus, as the Parties are now embroiled in litigation, it will be for the court to determine whether or not Complainant succeeds on its claims or has engaged in Reverse Domain Name Hijacking.
For the foregoing reasons, the Complaint is denied.
Date: October 29, 2017