WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Megajogos Entretenimentos Ltda. v. Vertical Axis, Inc.

Case No. D2011-2026

1. The Parties

The Complainant is Megajogos Entretenimentos Ltda. of Sao Paulo, Brazil, represented by Comparato, Nunes & Federici Advogados, Brazil.

The Respondent is Vertical Axis, Inc. of Christ Church, Barbados, represented by ESQwire.com Law Firm, United States of America.

2. The Domain Name and Registrar

The disputed domain name <megajogos.com> (the “Domain Name”) is registered with Fabulous.com.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on November 16, 2011. On November 17, 2011, the Center transmitted by email to Fabulous.com a request for registrar verification in connection with the Domain Name. On November 17, 2011, Fabulous.com 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 November 23, 2011. In accordance with the Rules, paragraph 5(a), the due date for Response December 13, 2011. The Response was filed with the Center December 13, 2011.

The Center appointed Willem J. H. Leppink, David H. Tatham and The Hon Neil Brown QC as panelists in this matter on January 20, 2012. 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.

4. Factual Background

The Domain Name was registered by Respondent on July 17, 2003.

The Complainant is the owner of the Brazilian trade mark registration consisting of the combined word/ device mark MEGAJOGOS, applied for on July 18, 2008 and registered with the Instituto Nacional de Propriedade Industrial (“INPI”) in September 28, 2010, in Brazil for various services related to games and entertainment in class 41 (the “Trademark”).

The certificate of the Trademark includes the disclaimer which is translated in the translation provided by Complainant as “granted without exclusivity in relation to the use of the “nominative element””.

5. Parties’ Contentions

A. Complainant

The Complainant is a Brazilian legal entity, part of the “MegaJogos” business group which also includes entities such as United Joy LLP (“United Joy”) and Fontec Empreendimentos Tecnológicos em Informática Ltda. (“Fontec”). All these entities are and were controlled by Mr. Marcos Araújo Fonseca, a Brazilian national. Mr. Fonseca established Fontec in 1994, in order to explore commercial opportunities in the field of computer technology solutions, including development and programming of software.

The Complainant contends that in the beginning of 1999, Mr. Fonseca had an idea for an online game community based on a portal (website) which would provide several game platforms for users to play and interact with each other as a social network. At that time, Mr. Fonseca also conceived the name and brand “MegaJogos” for his future business and, with some partners, started developing the website as well as different game platforms.

According to the Complainant, in July 2002, when the MegaJogos’ portal was almost ready, Mr. Fonseca registered the domain name <megajogos.com.br> with a Brazilian registrar. Initially the domain registration was used by Fontec. In 2005, the Complainant’s company was founded and the domain name <megajogos.com.br> was transferred to the Complainant. Today, the Complainant is still the registrant of <megajogos.com.br>.

The Complaint contends that the name and brand “MegaJogos” came from the combination of two words: “mega”, a prefix in the metric system, which also represents, in Portuguese, the notion of bigness or greatness; and “jogos” (plural form of “jogo”), which means “games” in Portuguese. Some months after the registration of the domain name, a MegaJogos’ portal using the domain name <megajogos.com.br> was officially launched.

According to the Complainant the portal became a success from the launch in 2002, with visitors from all over the world and many users who could not speak Portuguese were playing and became part of the MegaJogos community. The portal allows subscribers to play games in internet communities but not to gamble.

The Domain Name was registered one year later on July 17, 2003. The Complainant contends that it was surprised to find that it was being used a games portal including links to the Complainant’s competitors. In September 2011, Respondent used the home page connected to the Domain Name to set up a social network called “Snog”.

The Complainant contends that it (i) registered the domain name <megajogos.com.br> in 2002, (ii) has ostensibly been using the name "MegaJogos" since the launch of the MegaJogos portal in 2002 and (iii) since then, it is recognized by such name all over the world, by game fans, subscribers and the specialized media. In addition to that, the Complainant contends that it also owns the Trademark. Furthermore it contends that it is very clear that Trademark and the domain name <megajogos.com.br>, both owned by Complainant, are identical to the Domain Name.

The Complainant further contends that Respondent has no rights or legitimate interests in respect of the Domain Name, it does not offer any products or services using the Domain Name, nor is Respondent known by the name "MegaJogos". The website at the Domain Name only offers links to the Complainant’s competitors. Respondent does not own any trade mark registration relating to “MegaJogos”. According to Complainant, the use the Respondent makes of the Domain Name is unfair and there is no reason for Respondent to register a domain name in Portuguese.

Moreover, the Complainant contends that Respondent has registered the Domain Name in order to prevent Complainant from reflecting its Trademark in such corresponding domain name. Respondent is engaged in a pattern of such conduct which is evidenced by its involvement in other UDRP cases. According to Complainant, the Respondent is a company known worldwide for taking advantage of successful trademarks, names and business, to attract visitors to parked websites in domain names similar to such successful trademarks, names and businesses in order to profit from such visitors that have been attracted by such similarity. The Complainant would be prevented from internationalizing its activities because of the registration of the Domain Name by the Respondent.

The Complainant contends furthermore that Respondent has intentionally attempted to attract, for commercial gain, Internet users to the corresponding website as well as to other online locations (sponsored links), by creating a likelihood of confusion with the Complainant's mark as to the source, sponsorship, affiliation, or endorsement of said website or location or of a product or service on the Respondent’s website or location. The Respondent would benefit from users who would forget to add the ccTLD suffix “.br” in the domain name the Complainant is now using.

B. Respondent

The Respondent contends that the Domain Name was registered in 2003 and that the Complainant did not apply for the Trademark until 2008.

The Respondent rebuts the existence of a common law trademark owned by the Complainant in 2003 when the Domain Name was registered as the Complainant’s company was only incorporated in 2005.

According to the Respondent, it has rights and/or legitimate interests because the Domain Name is generic and descriptive, it has registered many other similar domain names, the links shown on the website are within the genre and there is no evidence of targeting.

The Respondent contends that there is no presumption of registration in bad faith as the Domain Name reflects a generic expression and therefore direct evidence of bad faith is needed, which is not present.

The Respondent’s contends that when registering domain names, it does not target trademarks but only generic expressions.

Respondent contends that the Complaint should be barred by the doctrine of laches because the Complainant waited more than eight years to initiate the Complaint.

6. Discussion and Findings

A. Substantive elements of the Policy

Under paragraph 4(a) of the Policy, to succeed the complainant must prove 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 was registered and is being used in bad faith.

These elements are discussed as follows, immediately following a consideration on whether the Complainant is debarred from the Complaint because of the delay between the registration of the Domain Name and filing the Complaint.

B. Preliminary issue: Application of the Doctrine of the Laches

Respondent has asserted that Complainant is debarred from bringing the Complaint because of the lengthy delay between it and the registration of the Domain Name so this is a case where the defense of laches should apply.

Panels have recognized that the doctrine or defense of laches as such does not generally apply under the Policy, and that delay (by reference to the time of the relevant registration of the disputed domain name) in bringing a complaint does not of itself prevent a complainant from filing under the Policy, or from being able to succeed under the Policy, where a complainant can establish a case on the merits under the three elements. Panels have noted that the remedies under the Policy are injunctive rather than compensatory in nature, and that a principal concern is to avoid ongoing or future confusion as to the source of communications, goods, or services.

However, panels have also noted that a delay in bringing a complaint under the Policy may make it more difficult for a complainant to establish its case on the merits, particularly in relation to the second and third elements requiring the complainant to establish that the respondent lacks rights or legitimate interests and that the respondent registered and used the domain name in bad faith. A small number of panels have also begun to acknowledge the possible applicability, in appropriate and limited circumstances, of a defense of laches under the Policy where the facts so warrant, e.g. in the decision in 2010 in New York Times Co. v. Name Admin. Inc., NAF Claim No. 1349045, in which is was said, “While laches is not expressly recognized in the UDRP Policy as a defense to a domain name complaint, some Panel decisions have recognized its availability when a particularly compelling set of facts have been present”.

Nevertheless, this panel is of the view that the Complaint is not a case for applying the doctrine of laches.

C. Identical or Confusingly Similar

It is fundamental to establishing its case under paragraph 4(a)(i) of the Policy, a complainant sufficiently demonstrate that it has rights in a trademark.

The Complainant owns the Trademark. As stated before, the certificate of the Trademark includes the explicit disclaimer which is translated in the translation provided by Complainant as “GRANTED WITHOUT EXCLUSIVITY in relation to the use of the “NOMINATIVE ELEMENT”” (emphasis added). As a result, the Trademark does not grant Complainant any exclusive rights in relation to the word element “MegaJogos”. Therefore, the Trademark only gives exclusive rights to the Complainant in relation to the figurative elements of the Trademark. As such, for purposes of the Policy, this Panel disregards the nominative component (i.e., the “MegaJogos”) of the Trademark for purposes of assessing the first element regarding confusing similarity. This, in effect, leaves on the figurative elements of the registered Trademark. The question of whether merely figurative components of a registered trademark can be considered confusingly similar to the alpha-numeric string in a domain name (perhaps on grounds of association) is a largely untested one. However, as there is not even a remote similarity between the figurative elements of the Trademark and the Domain Name, there is little need for the Panel to consider it further here and the Panel concludes that the Domain Name is not identical or confusingly similar to the Trademark.

The Complainant has not explicitly claimed an unregistered or common law trademark, but the Panel considers it to be its task to investigate – within certain limits – whether Complainant could invoke an unregistered or common law trademark in relation to “MegaJogos”.

Applying that task, the Panel concludes that because of the extensive use the Complainant has made of the name “MegaJogos”, the Complainant owns an unregistered or common law trademark today or at least had one when the Complaint was filed. It is, however, doubtful whether this unregistered or common law trademark already existed at the time of the registration of the Domain Name in 2003 and whether specifically the Complainant is entitled to the unregistered or common law trade mark rights before the Complainant’s incorporation. .

No evidence has been provided by Complainant on the use of this unregistered or common law trademark between the launch of its website in 2002 and the registration of the Domain Name by Respondent in 2003. Complainant could have provided evidence showing advertising, receipts and media comments, but has not done so. Furthermore, according to the Complainant’s contentions, Fontec, a company related to Complainant, used the Domain Name until at least 2005 and Complainant was not founded before 2005. There is no evidence that the unregistered or common law trademark rights relating to the use prior to 2005 have been assigned to Complainant, and the Panel has not been able to establish whether the unregistered or common law trade mark really existed.

There is nothing in the Policy to forbid a complainant from relying upon unregistered or common law use of, or secondary meaning for; its trademark, but it should produce some evidence thereof. A straightforward statement without proof is not sufficient. As the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition ("WIPO Overview 2.0") states in paragraph 1.7 ; “[…]Panels will be unlikely to take bald claims of trademark fame for granted.”

Nevertheless, the WIPO Overview 2.0 goes on to state in paragraph 1.4 that “[…][r]egistration of a domain name before a complainant acquires trademark rights does not prevent a finding of identity or confusing similarity under the UDRP.”. It was noted in Esquire Innovations, Inc. v. Iscrub.com/Whois Identity Shield; and Vertical Axis, Inc, Domain Administrator, WIPO Case No. D2007-0856, that paragraph 4 of the Policy does not require any particular time at which a Complainant must have rights in a trademark or service mark, it only requires that a Complainant “has” rights i.e. at the time of the Complaint. Nevertheless, this same decision goes on to point out that it has long been recognized that in such circumstances it is a different and much more difficult matter to establish that the domain name was registered in bad faith.

The fact that Complainant has unregistered or common law trademark consisting of the name “MegaJogos” now or at least at the time of the Complaint and the fact that this unregistered or common law trademark and the Domain Name are identical, are sufficient to establish that the paragraph 4(a)(i) is proved.

D. Rights or Legitimate Interests

It is well established that the burden for proving that a Respondent has no rights or legitimate interests in a disputed domain name rests with a complainant. However, this puts the complainant in the almost impossible position of proving a negative. So, when a complainant has made out a prima facie case that a respondent lacks rights and legitimate interests in a disputed domain name, it happens that the burden of production shifts to respondent to show that it does have rights or legitimate interests. See, e.g., Croatia Airlines d.d. v. Modern Empire Internet Ltd., WIPO Case No. D2003-0455, <croatiaairlines.com>, Belupo d.d. v. WACHEM d.o.o., WIPO Case No. D2004-0110, <belupo.com>, Banco Itau S.A. v. Laercio Teixeira, WIPO Case No. D2007-0912, <itaushopping.com>, Malayan Banking Berhad v. Beauty, Success & Truth International, WIPO Case No. D2008-1393, <maybank.com>, and Accor v. Eren Atesmen, WIPO Case No. D2009-0701, <accorreviews.com>.

In this case, the Panel believes that the Complainant has made out a prima facie case and so the burden falls upon the Respondent.

According to paragraph 4(c) the Policy, a respondent can demonstrate that it has legitimate rights or legitimate interests in a disputed domain name in one of three ways:

(i) That before any notice of the dispute, it has used, or made 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.

(ii) That he has been commonly known by the trademark even if it has acquired no trademark or service mark rights in it;

(iii) That it is making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the complainant’s trademark.

It is clear that paragraph 4(c)(ii) cannot apply as the Domain Name is <megajogos.com> and Respondent’s name is Vertical Axis, Inc.

As for paragraphs 4(c)(i) and (iii), Respondent’s main business, if not sole, is the registration, buying and selling of domain names.

In an unsworn Declaration dated December 9, 2011, filed with the Response, from one of the Respondent’s managers, it was stated that Respondent has filed numerous descriptive domain names including the Portuguese word “jogos”, such as <freejogos.com>, <jogosvirtual.com> and <jogoseletronicos.com>, as well as many domain names with the prefix “mega”. It also states that these domain names are usually hosted with parking services which share any advertising revenue generated therefrom.

The Respondent is not alone in having such a business model and it is, by now, a not unusual practice. In the past some, panels have held that this is insufficient to establish genuine use. See Express Scripts, Inc. v. Windgather Invs. Ltd./ Mr. Cartwright, WIPO Case No. D2007-0267 (“It is clear that no legitimate noncommercial or fair use is being made of the domain name without intent for commercial gain. The Respondent’s business is the registration and sale of expired domain names which by definition must signify that there is commercial gain involved.” ).

The same conclusion was reached in a later case, which has echoes of the present dispute. In Trade Me Ltd. v. Vertical Axis Inc., WIPO Case No. D2009-0093, it was stated, “The Respondent has been the registrant of the disputed domain name for more than seven years before the Complainant took any action. Where, as here, the disputed domain name has been for virtually all of that time parked with Hitfarm.com there is a threshold issue of whether that amounts to use or preparations to use the disputed domain name by the Respondent. Whist the issue is not beyond argument we think that a use by which the Respondent receives revenue can be use by the Respondent, even if the Respondent never as it were takes “possession” of its domain name and delegates to others the exercise of the rights attached to the domain name.”

It is worth noting that, in the above quotation, the panel believes that such use “could” be legitimate but, after further discussion, it concluded that in the particular circumstances of that case, the use did not fall within any of the definitions in paragraph 4(c) of the Policy. However, it concluded that the question of legitimacy hinged upon the question of bad faith.

Given the similarity between the facts in the above quoted case and those in the present case, this Panel will also not come to a final conclusion before considering the question of bad faith.

E. Registered and Used in Bad Faith

In the present case, as with the above quoted case, the Complainant has waited eight years before making any complaint during which time the Domain Name has likewise been parked with “Hitfarm.com”.

Paragraph 4(b) of the Policy requires that the Domain Name is registered and used in bad faith.

The Panel already concluded that there is no evidence of any unregistered or common law trademark rights existing before the date of registration of the Domain Name. Therefore, it should generally be assumed that the registration of the Domain Name would not have been in bad faith because the Respondent could not have contemplated the Complainant's then non-existent rights, unless the Respondent could clearly prove

that the Respondent has been aware of the use of the name “MegaJogos” by the Respondent or by Fontec.

If the Domain Name would have incorporated a distinctive trade mark, rather than the two dictionary words, “mega” and “jogos”, then the Panel could have considered that the Respondent had known or should have know the name as it was used by the Respondent for it website. But this situation is clearly different and the Panel cannot come to the conclusion that the Respondent was in bad faith when registering the Domain Name consisting of these two dictionary words.

The Declaration filed by Respondent’s manager very clearly shows that there was no such intent. It was declared that the Domain Name was not registered with the Complainant’s trademark in mind and that the Respondent’s company “had no knowledge of Complainant, its web site, its business name or trademark”. If this is indeed the case – and the Complainant has produced no evidence to the contrary – it is impossible to make any finding of bad faith, and so the Panel has concluded that paragraph 4(a)(iii) of the Policy has not been proved.

7. Decision

For the foregoing reasons, the Complaint is denied.

Willem J. H. Leppink
Presiding Panelist

David H. Tatham
Panelist

The Hon Neil Brown QC
Panelist
Dated: February 6, 2012