WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Pepkor IP (Proprietary) Limited, Translink Services S.a.r.l. v. Domain Name Administrator/Demand Domains

Case No. D2010-1723

1. The Parties

The Complainants are Pepkor IP (Proprietary) Limited (“Pepkor”) of the Republic of South Africa (“South Africa”) and Translink Services S.a.r.l (“Translink”), which is registered in the Grand Duchy of Luxembourg.

The Respondent is Domain Name Administrator/ Demand Domains of Washington, United States of America (“USA”).

2. The Domain Name and Registrar

The disputed domain name <pep.mobi> is registered with Fushi Tarazu, Incorporated, which appears to be part of, or a subsidiary of, eNom.com.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on October 12, 2010. On October 12, 2010, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain name. On October 26, 2010, the Registrar transmitted by email to the Center its verification response, confirming that: (a) the disputed domain name is registered with it; (b) the language of the registration agreement is English; and (c) disclosing registrant and contact information for the disputed domain name, which differed from the named Respondent and contact information in the Complaint

On November 2, 2010, the Center notified the Complainants that the Registrar had informed the Center that the name of the registrant of the disputed domain name was different to the name identified in the Complaint and providing the new details to the Complainants. On November 5, 2010, the Complainants filed an amended Complaint to reflect the new information.

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 November 9, 2010. In accordance with the Rules, paragraph 5(a), the due date for Response was November 29, 2010. The Response was filed with the Center on November 29, 2010.

The Center appointed Warwick A. Rothnie as the sole panelist in this matter on December 10, 2010. 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 Complainants are subsidiary companies in the Pepkor corporate group (the “Group”).

The first operations of the Pepkor corporate group commenced in 1965 when the then Pepkor Stores Limited commenced operating a chain of retail stores in the Northern Cape province of South Africa. Since that date, the operations of the Group have expanded and the corporate group has undergone restructuring at various times.

The Group now conducts retail operations through Pepkor Retail. Pepkor Retail is a mass market retail outlet of every day items such as footwear, textiles, home wares, home appliances, cosmetics, mobile telephone “air time”, mobile telephone handsets, products and accessories. Pepkor Retail also offers insurance products to its customers in the form of funeral policies, personal accident and mobile telephone insurance. These activities are conducted from some 1,500 “PEP” stores in South Africa, Botswana, Lesotho, Namibia, Swaziland, Zambia, Mozambique, Malawi and Angola. Pepkor Retail also operates a website at “www.pepstores.com”.

To provide these services, Pepkor Retail employs approximately 15,000 people. The Group distributed over 400 million products in 220 million customer transactions in 2009. More than 60% of the blankets and school wear sold in South Africa are sold through the Group’s PEP stores. The PEP brand is also one of the largest sellers of mobile telephone handsets in South Africa, also selling more than three million minutes of mobile telephone airtime each day. There is a PEP store in every town and village in South Africa.

The Complaint contends that Pepkor’s retail operations are conducted under or by reference to the trademarks PEP, as a word mark, and various stylised forms. In addition, the Complainants have between them registered the trademark, PEP, PEP in a stylised form and with figurative elements, in international classes: 23, 24, 25, 26, 35, 36, 37, 38, 39, 40, 41 and 42 in a number of African countries¹, Poland, Portugal and Russia.

The disputed domain name was registered on September 26, 2006. That is, about the first day that domain names were available to the public for registration in the .mobi gTLD.

Prior to the Complaint being filed, the disputed domain name resolved to a website which was a fairly typical “parking” or “pay-per-click” search portal. Pages from this site have been printed out and included in the Complaint as Annexes 19 to 21.

Annex 19 to the Complaint depicts the homepage located at the disputed domain name. It states “Welcome to pep.mobi” and, under the text “Sponsored listings for Pep” lists a range of links including:

The links for Debt Problems, Funeral Plans and Change Insurance showed URLs containing domain names registered in the South African ccTLD.

The “Pep Co Za Funeral Plan” links to the website of a South African business, “Best Funeral Cover”. The link for “Pep Funeral Cover” took the Panel to a listing of websites providing insurance services including funeral insurance services, the majority of which were located in South Africa and competing with the Group’s services.

At the time of preparing this decision, the domain name did not resolve to an active website.

5. Discussion and Findings

The disputed domain name is registered in the .mobi gTLD. The registry for the .mobi gTLD has adopted the Policy for the resolution of disputes about domain names registered in the .mobi gTLD which is now effective, after the expiry of the special Sunrise period.²

Accordingly, the Complainants must establish under paragraph 4(a) of the Policy that:

(i) The disputed domain name is identical or confusingly similar to a trademark 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.

5.A. Identical or Confusingly Similar

There are two parts to this inquiry: the Complainants must demonstrate that they have rights in a trademark and, if so, the disputed domain name must be shown to be identical or confusingly similar to the trademark.

The Complainant has established ownership of at least the registered trademarks set out in section 4 above. In South Africa at least, these rights date back to 1974. The PEP and PEP trademarks cover an extensive range of goods and services including, amongst others, advertising services in International class 35, insurance services in International class 38 and communication services in International class 38.

The disputed domain name differs from those trademarks by (1) the addition of the gTLD “.mobi” and (2) in the case of some, the omission of a figurative element such as ‘italicising’ or a graphic device.

The addition of the gTLD, however, can be disregarded for the purposes of this inquiry as it is a functional requirement of the domain name system. See for example, Telstra Corporation Limited v. Ozurls, WIPO Case No. D2001-0046; Ticketmaster Corporation v. DiscoverNet, Inc., WIPO Case No. D2001-0252; and Microsoft Corporation v. J. Holiday Co., WIPO Case No. D2000-1493.

The Respondent contends that the Complainants’ trademark rights should be disregarded as in the United States “pep” is a common dictionary word and often used acronym. Hence, the Respondent contends the disputed domain name would not be considered confusingly similar to the Complainants’ marks under United States (“US”) trademark law.

The Respondent’s contentions demonstrate a misunderstanding of the nature of the inquiry under this paragraph of the Policy. The location of the respective parties, the jurisdiction of their trademarks or where the disputed domain name may be registered is not relevant here. This stage of the inquiry is concerned with a straightforward visual and oral comparison of the disputed domain name to the proven trademarks.³ The Policy aims to resolve disputes between people using the Internet who may be located, or operating, in the same jurisdiction or quite different jurisdictions. Questions about the locations of the parties’ activities or their respective fields of activity may be relevant, however, when considering the other requirements under the Policy.

In these circumstances, the Panel has no hesitation in finding that the disputed domain name is identical to the Complainants’ trademarks for PEP simpliciter and confusingly similar to those with a figurative element.

5.B. Rights or Legitimate Interests

The second requirement that the Complainant must prove is that the Respondent has no rights or legitimate interests in the disputed domain name.

A respondent may have rights or legitimate interests for the purposes of the Policy in the circumstances set in paragraph 4(c) of the Policy:

(i) before any notice to you of the dispute, your 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; or

(ii) you (as an individual, business, or other organization) have been commonly known by the domain name, even if you have acquired no trademark or service mark rights; or

(iii) you are making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.

These are examples only and not an exhaustive enumeration of the ways in which rights or legitimate interests can be shown. They do provide, however, a guide to what is contemplated as permissible under the Policy.

In this case, the Complainants contend uncontroversially that the disputed domain name is not derived from the Respondent’s own name, or a name by which it is commonly known. The Complainants also contend that they have not licensed the Respondent to use the disputed domain name, nor is the Respondent in any way connected or associated with the Pepkor group. These matters also are not controversial between the parties.

Where the parties join issue is over whether or not the Respondent is using the domain name in connection with a bona fide offering of goods or services. The Complainants contend that the Respondent is just using the disputed domain name for a collection of sponsored links to generate “pay-per-click” revenues which, the Complainants contend is not a bona fide offering of goods or services for the purposes of the Policy. To support their claim, the Complainants rely on a number of previous UDRP decisions said to support their position, including Deutsche Telekom AG v. Gary Seto WIPO Case No. D2006-0690 and The Royal Bank of Scotland Group plc, Direct Line Insurance plc and Privilege Insurance Company Limited v. Demand Domains NAF Case No. FA 714952. In rebuttal, the Respondent points out that “pep” is a common English dictionary term and at least in the USA may be a commonly used acronym. The Respondent contends that, as such, it has a legitimate, bona fide right to use generic or descriptive terms for “pay-per-click” advertising.

The Complainants’ position goes too far, insofar as they appear to contend that use of a domain name for a “pay-per-click” website is not a bona fide use for the purposes of the Policy. On the other hand, the fact that the disputed domain name may consist of, or include, a common dictionary term or acronym at least in the United States is also not conclusive on the question of bona fide use.

The Panel accepts that registration of a domain name with a view to “parking” it for re-sale or to generate pay-per-click (“PPC”) revenues (even as a holding position before resale) is not illegitimate per se. Whether or not there exists a right or legitimate interest must be determined in context including a consideration of the domain name in question, any rights that the registrant may have. Thus, there would usually be no grounds for complaint if a respondent registered a wholly descriptive term and used it solely in connection with what it describes. An example might be a registration of <hotel.com> which was being used as a search portal for hotels and related services.

The situation is different, however, where the disputed domain name has, or appears to have, been registered for its trademark significance and the “parking” is, or appears to be, intended to take advantage of that trademark significance. In such cases, panels have repeatedly found that the registrant does not have rights or legitimate interests in the domain name sufficient for the purposes of paragraph 4(b)(ii) of the Policy. See e.g. Alpine Entertainment Group, Inc. v. Walter Alvarez, WIPO Case No. D2007-1082; Express Scripts, Inc. v. Windgather Investments Ltd. / Mr. Cartwright, WIPO Case No. D2007-0267; Asian World of Martial Arts Inc. v. Texas International Property Associates, WIPO Case No. D2007-1415 and Owens Corning v. NA, WIPO Case No. D2007-1143; and Bradley D Mittman MD dba FRONTRUNNERS® v. Brendhan Hight, MDNH Inc., WIPO Case No. D2008-1946.

In this case, the Respondent does not appear to have used the disputed domain name solely or even primarily for its descriptive or generic significance. As already noted, the examples of the website included in the Annexes to the Complaint appear to target consumers in South Africa. In doing so, the Respondent sought in at least a number of instances to direct consumers to competitors of the Group and services offered under or by reference to the trademark PEP. The products in question, e.g., funeral insurance and provision of funds or financial advice, are not aptly described by the term PEP. Consistent with the decisions referred to in the immediately preceding paragraph, the Panel finds that such use is not a bona fide use for the purposes of the Policy. Accordingly, the Complainants have established this requirement of the Policy.

5.C. Registration and use in bad faith

Under the third requirement of the Policy, the Complainants must establish that the disputed domain name has been both registered and used in bad faith by the Respondent.

The Complainants’ arguments under this requirement are similar to their argument under the previous requirement. Thus, Complainants contend that the Respondent has not used the disputed domain name “to operate a proper website” and the Respondent is merely using the disputed domain name “to host a landing page designed to produce pay-per-click revenue from the sponsored links thereon.” The Complainants also seek to rely on the findings of previous panels in which the Respondent had been found to have registered and used in bad faith 18 other domain names. Additionally, the Complainants contend that bad faith is evidenced by the Respondent’s concealment of its true identity.

The Panel rejects the latter two propositions as a basis for the conclusions in this case. The use of a “privacy” service, if that was what it was, is not culpable per se. The decision in Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No. D2000-0003 is distinguishable as the respondent in that case gave fake contact details, a very different case to the present.

While the earlier decisions may assist to some extent in showing a pattern of behaviour, ultimately, the question must be whether or not the disputed domain name has been shown to have been registered and used in bad faith.

The Complainant’s contentions with regard to this element of the Policy are also similar to its arguments under the previous requirement.

Generally speaking, a finding that a domain name has been registered and is being used in bad faith requires an inference to be drawn that the respondent in question has registered and is using the domain name to take advantage of its significance as a trademark owned by (usually) the complainant.

In this case, the Respondent positively asserts that it did not know about the Complainants’ “alleged” trademark for PEP when it registered the disputed domain name. It says further that several other parties have also registered domain names containing PEP so it had no basis for assuming its registration of the disputed domain name would conflict with someone else’s rights.

That claim does not assist the Respondent here as by clause 15 of the Registration Agreement for the disputed domain name the Respondent positively represented and warranted that “neither the registration of [the] domain name nor the manner in which it is directly or indirectly used … infringes the legal rights of a third party.” Having positively made that representation, the Respondent cannot be heard afterwards to plead ignorance if it registered and is using the disputed domain name with reckless indifference to the rights of others.

A number of panels have recognised that paragraph 2 of the Policy implicitly requires some good faith effort to avoid registering and using domain names corresponding to trademarks in violation of the Policy. See e.g. Balglow Finance S.A., Fortuna Comércio e Franquias Ltda. v. Name Administration Inc. (BVI), WIPO Case No. D2008-1216; Bradley D Mittman MD dba FRONTRUNNERS® v. Brendhan Hight, MDNH Inc., WIPO Case No. D2008-1946; Aspen Holdings Inc. v. Rich Natsch, Potrero Media Corporation, WIPO Case No. D2009-0776; and BzzAgent Inc. v. BZZAGET.COM c/o Nameview Inc. Whois Identity Shield and Vertical Axis, WIPO Case No. D2010-1187. UDRP panels do not appear to have reached agreement about what those good faith efforts should be.

In the circumstances of this case, the evidence that the Respondent has sought to use the disputed domain name to target consumers in South Africa and to take advantage of the Complainants’ trademarks as discussed in section 6B, above, indicates a basis on which to infer the Respondent’s knowledge of the Complainants’ trademarks either as registered or through the extensive use detailed above. To this Panel it would be inconsistent with that use and the Respondent’s positive assertion of entitlement at the time it registered the disputed domain name as well as its obligations to have made good faith efforts consistent with paragraph 2 of the Policy to accept the Respondent’s bare denial.

If given the nature of both the Respondent’s obligations under the Policy and the use it proposed to put the disputed domain name, including in particular targeting consumers in South Africa, the Respondent did not make inquiries, as it now wishes to claim it did not, that is tantamount to turning a blind eye to the risks and proceeding without due regard to its obligations. In these circumstances, the Panel finds that the disputed domain name was registered and is being used in bad faith.

The Respondent further points out that it registered the disputed domain name in 2006 and invokes the four year “delay” in bringing this proceeding as evidence of laches, disentitling the Complainants to relief.

Whether or not laches, or delay, can defeat a complaint has recently received renewed attention following the rulings in Board of Trustees of the University of Arkansas v. FanMail.com, LLC, WIPO Case No. D2009-1139 and New York Times Company v Name Administration Inc (BVI) FA Case No. 1349045. Prior to those decision, many panels had not considered it disentitling. The first difficulty for the Respondent in this case is that it has not shown that the Complainants knew about the registration of the disputed domain name and have “sat on their hands” so to speak. Nor has the Respondent shown that it has suffered any detriment or changed its position in reliance on any alleged delay. In these circumstances, the Panel would not be prepared to deny the Complainants relief under the Policy which they have shown they are otherwise entitled to.

6. Decision

For all the foregoing reasons, in accordance with paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the domain names <pep.mobi> be transferred to the First Complainant.

Warwick A. Rothnie
Sole Panelist
Dated: January 13, 2010

¹ Namely, South Africa, Botswana, Lesotho, Swaziland, Angola, Ghana, Kenya, Madagascar, Mauritius, Mozambique, Nigeria, Tanzania, Uganda, Zambia and Zimbabwe

² See e.g. http://mtld.mobi/domain/dispute.

³ See e.g. WIPO Overview of WIPO Panel Views on Selected UDRP Questions at paragraph 1.1.