WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Daedalic Entertainment GmbH v. Heng Zhong

Case No. D2015-0910

1. The Parties

The Complainant is Daedalic Entertainment GmbH of Hamburg, Germany, represented by GRAEF Rechtsanwälte, Germany.

The Respondent is Heng Zhong of Malden, Massachusetts, United States of America (“USA”).

2. The Domain Name and Registrar

The disputed domain name <daedalic.com> (the “Disputed Domain Name”) is registered with GoDaddy.com, LLC (the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on May 29, 2015. On May 29, 2015, the Center transmitted by email to the Registrar a request for registrar verification in connection with the Disputed Domain Name. On May 30, 2015, the Registrar transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details.

The Center verified that the Complaint satisfied the formal requirements of the 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 the Respondent of the Complaint, and the proceedings commenced on June 9, 2015. In accordance with the Rules, paragraph 5(a), the due date for Response was June 29, 2015. The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on June 30, 2015.

The Center appointed John Swinson as the sole panelist in this matter on July 7, 2015. 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

The Complainant is Daedalic Entertainment GmbH, a German video game producer and developer founded in 2007. It has contracted with a number of large distributors which sells its products globally. The Complainant has received a large number of awards for its games over the last seven years.

The Complainant holds a Community Trade Mark for DAEDALIC (CTM 012894598), filed on May 21, 2014 and registered on September 29, 2014 (the “Trade Mark”). The Complainant also claims common law rights in the Trade Mark. It operates a website at the domain name <daedalic.de>, at which it sells merchandise associated with its games.

The Respondent is Heng Zhong, an individual of the USA. The Respondent did not file a response to the Complaint, so the Panel has little further information about him.

The Disputed Domain Name was created on April 9, 2014. The website at the Disputed Domain Name currently resolves to a parking page featuring pay-per-click (“PPC”) links, some of which relate to computer and other games. It also contains a message stating that the Disputed Domain Name is for sale for a price of GBP 10,000.

5. Parties’ Contentions

A. Complainant

The Complainant’s contentions are as follows.

Identical or Confusingly Similar

The Complainant claims both registered and common law rights in the Trade Mark. It has provided evidence of a Community Trade Mark registration.

The Complainant submits that it has been using the Trade Mark, as well as a logo incorporating the Trade Mark, on its website at the domain name <daedalic.de> since June 2007. The website is in English (as well as German), and is aimed at international clients. The Trade Mark has no specific meaning, and is highly original and distinctive.

The Complainant submits that it has achieved fame through the success of its games. An Internet search for the Trade Mark reveals 449,000 results dealing with the Complainant. Therefore, the Complainant holds common law rights in the Trade Mark.

It is clear that the Respondent seeks to exploit the Disputed Domain Name, as it is identical to the Trade Mark.

Rights or Legitimate Interests

The Complainant submits that the Respondent has no rights or legitimate interests in respect of the Disputed Domain Name for the following reasons:

- Before any notice of the dispute, there was no evidence that the Respondent used, or made demonstrable preparations to use, the Disputed Domain Name or any other similar name in connection with a bona fide offering of goods or services.

- The Respondent has not been commonly known by the Disputed Domain Name, as the Trade Mark is a fictional name.

- The Respondent has not made a legitimate noncommercial or fair use of the Disputed Domain Name, but instead intends to misleadingly divert consumers to the Complainant’s competitors, thereby making money. The Respondent was aware of the Complainant’s rights in the Trade Mark when he purchased the Disputed Domain Name.

Registration and Use in Bad Faith

The Complainant submits that as the Respondent acquired the Disputed Domain Name recently, he must have known of the Complainant at the time of registration. An Internet search reveals close to half a million hits. Therefore, it is impossible that the Respondent was not aware of the Complainant’s rights in the Trade Mark.

The Complainant has provided evidence of an exchange between the Complainant and the Respondent, initiated by the Complainant, in which the Complainant made an offer to purchase the Disputed Domain Name for USD 500. The Respondent replied:

“Please dont kidding.

Go check daedalic.de.

Any I give you a big discount:

USD 5555 and buyer paid for the fee.

Otherwise will go back to 15000 USD”

Also, the parking page at the Disputed Domain Name contains German text, which, the Complainant submits, suggests the Respondent knows the Complainant is a German company. The Complainant submits that the Respondent’s clear intention in registering the Disputed Domain Name was to sell it rather than use it in connection with a bona fide business, which is an indication of bad faith. The offer of USD 15,000 or GBP 10,000 is far in excess of the Respondent’s out-of-pocket costs directly related to the Disputed Domain Name.

Further, the website at the Disputed Domain Name features various links which lead to websites of the Complainant’s competitors. The Complainant submits that in displaying such links, the Respondent is exploiting the Complainant’s reputation in order to divert customers to competitors’ pages, which is evidence of bad faith.

Finally, the Respondent has been involved in two prior UDRP disputes. He was ordered to transfer the relevant domain name to the complainant on both occasions.

B. Respondent

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

6. Discussion and Findings

To succeed, the Complainant must demonstrate that all of the elements enumerated in paragraph 4(a) of the Policy have been satisfied, namely:

(i) the Disputed Domain Name is identical or confusingly similar to a trade mark or service mark in which the Complainant has rights; and

(ii) the Respondent has no rights or legitimate interests in respect of the Disputed Domain Name; and

(iii) the Disputed Domain Name has been registered and is being used in bad faith.

The onus of proving these elements remains on the Complainant even though the Respondent has not filed a formal Response.

A. Procedural Issues

A respondent’s failure to file a response does not automatically result in a decision in favor of the Complainant (see, e.g., Airbus SAS, Airbus Operations GmbH v. Alesini Pablo Hernan / PrivacyProtect.org, WIPO Case No. D2013-2059). However, the Panel may draw appropriate inferences from the Respondent’s default.

B. Identical or Confusingly Similar

Paragraph 4(a)(i) of the Policy provides that the Complainant must establish that the Disputed Domain Name is identical or confusingly similar to the Trade Mark.

The Complainant holds a Trade Mark that was registered in September 2014, but it is also claiming common law rights in the Trade Mark, with a date of first use in June 2007. While the date of first use is not relevant to the first element of the Policy, it will be relevant to whether the Respondent registered and used the Disputed Domain Name in bad faith. Therefore, the Panel will also consider whether the Complainant held common law rights in the Trade Mark prior to the date the Disputed Domain Name was registered.

In order to successfully assert common law or unregistered trade mark rights, the Complainant must show that the Trade Mark has become a distinctive identifier associated with the Complainant or its goods or services (i.e., that the Trade Mark has acquired a “secondary meaning”).

The Complainant began operating in 2007. Since 2008, it has received almost 40 national and international awards in relation to its products. It is also a party to contracts with a number of high profile companies in the USA, such as Microsoft, Apple and Amazon. It offers games in the Apple Max app store, and has sold over one million units through various distributors in the last three years, including in territories such as Germany, USA, Russian Federation, United Kingdom of Great Britain and Northern Ireland, Canada, France, Australia, Spain, Poland and Brazil. An Internet search of the Complainant produces hundreds of thousands of hits.

It is clearly a well-known company in its field.

The Panel is satisfied that the Complainant has held common law rights in the Trade Mark since at least as early as 2008, when it won its first awards.

The Disputed Domain Name is identical to the Trade Mark. The Trade Mark has been wholly incorporated into the Disputed Domain Name, and no additions have been added save for the “.com” technical requirement.

The Complainant succeeds on the first element of the Policy.

C. Rights or Legitimate Interests

Paragraph 4(a)(ii) of the Policy provides that the Complainant must establish that the Respondent has no rights or legitimate interests in respect of the Disputed Domain Name. The Complainant is required to make out a prima facie case showing that the Respondent lacks rights or legitimate interests.

The Panel finds that the Complainant has made out a prima facie case for the following reasons:

- The Respondent has not used, or made demonstrable preparations to use, the Disputed Domain Name in connection with a bona fide offering of goods or services. The website at the Disputed Domain Name displays a notice stating that the Disputed Domain Name is for sale, as well as PPC links to goods and services, some of which compete with the products developed by the Complainant. In the circumstances, such use is not bona fide.

- The Respondent has not been commonly known by the Disputed Domain Name, as the Trade Mark is a fictional name that was created by the Complainant.

- The Respondent has not been making a legitimate noncommercial or fair use of the Disputed Domain Name without intent for commercial gain. The Respondent’s asking price for transfer of the Disputed Domain Name to the Complainant is greater than the likely out-of-pocket expenses directly related to the Disputed Domain Name.

The Respondent had the opportunity to demonstrate his rights or legitimate interests, but did not do so. As such, the prima facie case established by the Complainant has not been rebutted and the Complainant succeeds on the second element of the Policy.

D. Registered and Used in Bad Faith

Paragraph 4(a)(iii) of the Policy provides that the Complainant must establish that the Respondent registered and subsequently used the Disputed Domain Name in bad faith.

The Respondent registered the Disputed Domain Name on April 9, 2014, which is approximately eight years after the Complainant began operating and first used the Trade Mark. As previously discussed, the Complainant quickly became a well-known provider of electronic games. Further, the Trade Mark is not a common or generic term, but a fanciful name.

In light of this, the Panel considers it likely that the Respondent had knowledge of both the Complainant and the Trade Mark at the time the Disputed Domain Name was registered. This conclusion is reinforced by the content of the website at the Disputed Domain Name, being PPC links relating to both electronic and non-electronic games, including those which compete with the Complainant’s products. The Panel considers that the Respondent is intentionally attempting to attract, for commercial gain, Internet users to his website by creating a likelihood of confusion with the Trade Mark as to the source, sponsorship, affiliation, or endorsement of his website or of a product or service on his website. This is an indicator of bad faith under paragraph 4(b)(iv) of the Policy.

In some circumstances, where the reputation of a complainant in a given mark is significant and the mark has strong similarities to the disputed domain name, the likelihood of confusion is such that bad faith may be inferred (see, e.g., Verner Panton Design v. Fontana di Luce Corp, WIPO Case No. D2012-1909 and cases cited therein). Here, the Panel can reasonably infer that the Respondent sought to make use of the reputation of the Complainant and registered the Disputed Domain Name in bad faith.

The website at the Disputed Domain Name displays a notice that the Disputed Domain Name is for sale for GBP 10,000. In March, 2015, the Complainant approached the Respondent with an offer to purchase the Disputed Domain Name for USD 500. The Respondent rejected this offer, and instead asked for an amount of USD 5,555 plus transfer costs, “otherwise [the price would] go back to 15,000 USD”. The Complainant has provided evidence of this exchange.

Out-of-pocket costs include the costs of obtaining, registering, and maintaining a domain name. This issue of “excessive” out-of-pocket costs is considered on a case-by-case basis. In the Panel’s experience, USD 15,000, or even USD 5,555, would greatly exceed the Respondent’s out-of-pocket costs for the Disputed Domain Name. This is a further indicator of bad faith under paragraph 4(b)(i) of the Policy.

Finally, the Complainant notes that the Respondent has had UDRP complaints filed against him on two previous occasions. On both occasions, the website at the relevant domain name contained sponsored links directing Internet users to the relevant complainant’s competitors. The Respondent was unsuccessful in both of those cases (see Credit Industriel et Commercial v. Heng Zhong, WIPO Case No. D2014-1696 and Ron L. Hilton v. Heng Zhong, WIPO Case No. D2014-1325).

Given the similarity of the circumstances, the Panel considers those two previous occasions sufficient to show a pattern of conduct for the purpose of paragraph 4(b)(ii) of the Policy. However, even if two prior cases is not sufficient to establish a pattern of conduct, the Panel still considers that the findings of previous panels against the Respondent in similar circumstances further supports its conclusion in relation to bad faith registration and use.

The Complainant succeeds on the third element of the Policy.

7. Decision

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 <daedalic.com> be transferred to the Complainant.

John Swinson
Sole Panelist
Date: July 15, 2015