WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Hobbex AB v. Vertical Axis Inc., Domain Administrator / Whois Privacy Services Pty Ltd

Case No. D2013-2111

1. The Parties

The Complainant is Hobbex AB of Borås, Sweden, represented by Domain and Intellectual Property Consultants, DIPCON AB, Sweden.

The Respondent is Vertical Axis Inc., Domain Administrator of Christ Church, Barbados / Whois Privacy Services Pty Ltd. of Fortitude Valley, Queensland, Australia, represented by ESQwire.com PC, United States of America.

2. The Domain Name and Registrar

The disputed domain name <hobbex.com> is registered with Fabulous.com (the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on December 5, 2013. On December 5, 2013, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain name. On December 6, 2013, the Registrar transmitted by email to the Center its verification response disclosing registrant and contact information for the disputed domain name which differed from the named Respondent and contact information in the Complaint. The Center sent an email communication to the Complainant on December 9, 2013 providing the registrant and contact information disclosed by the Registrar, and inviting the Complainant to submit an amendment to the Complaint. The Complainant filed an amended Complaint on December 9, 2013.

The Center verified that the amended 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 December 13, 2013. In accordance with the Rules, paragraph 5(a), the due date for Response January 2, 2014. The Response was filed with the Center on January 6, 2014 and on January 7, 2014 a Petition for Consideration was received.

The Center appointed Warwick A. Rothnie, Anders Janson and Neil A. Smith as panelists in this matter on February 11, 2014. 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 Complainant is a Swedish company that sells a variety of toys, radio controlled craft or vehicles and other hobby products. It has stores across Sweden and sells online in Sweden and Norway. The business has been carried on by reference to HOBBEX for some 50 years.

It has registered as a trademark Swedish Trademark No.0381572:

for a range of goods in International Classes 8, 9, 13, 15, 25 and 28. The application for this trademark was filed on February 20, 2006 and it was registered on June 16, 2006.

The Respondent registered the disputed domain name on February 1, 2002. It is in the business of registering domain names which it says are descriptive terms. It hosts the disputed domain name and others it has registered through “Hitfarm.com” which it says is a service that places pay-per-click (PPC) advertising links based on a Google advertiser feed on hosted domain names, sharing the advertising revenue with the domain name owners.

According to the Respondent, it plays no role in the selection of the links placed on the website. The links actually displayed may vary according to the country where the browser is located. Accordingly, the screenshot included in the Response (generated after the Complaint was notified) shows links under topics including:

- Term Life Insurance

- Health Insurance

- Travel Insurance

- Dental Plans

- Business Insurance

- Online Courses

- Business Schools

- Home Degree

- Distance Learning

- Colleges

- Work from Home.

On the other hand, when accessed from Sweden before the Complainant’s representatives sent a cease and desist letter to the Respondent the website contained links to various online shopping sites offering products of the same kind as, but not sourced from, the Complainant.

5. Discussion and Findings

Paragraph 4(a) of the Policy provides that in order to divest the Respondent of the disputed domain name, the Complainant must demonstrate each of the following:

(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.

Paragraph 15(a) of the Rules directs the Panel to decide the complaint on the basis of the statements and documents submitted and in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable.

A. Extension of time to file Response

The Response was due to be filed on January 2, 2014 and was in fact filed on January 6, 2014. Accordingly, the Respondent has sought an extension of time pursuant to paragraphs 10(b) and (c) of the Rules.

In support of the request, the Respondent’s attorney has filed a declaration stating that the reason for the late filing was through no fault of the Respondent. Rather, the attorney’s offices were closed due to the New Year holiday and a severe snow storm and cold front. The extreme weather caused power to be cut off to the region where the attorney was located and was not restored until late in the evening on January 5, 2014.

Having regard to the circumstances and the prompt filing of the Response on January 6, 2014, the Panel grants the extension of time requested pursuant to paragraph 10(c) of the Rules and, accordingly, the Response is admitted as part of the record in the proceeding.

B. Identical or Confusingly Similar

The first element that the Complainant must establish is that the disputed domain name is identical with, or confusingly similar to, the Complainant’s trademark rights.

There are two parts to this inquiry: the Complainant must demonstrate that it has 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 proven ownership of Swedish Trademark No. 0381572. Given the length and extent of use, it is also likely that the Complainant would have protectable rights under Swedish law as an unregistered trademark including under the Swedish law concerning misleading market practices.

On the question of identity or confusing similarity, what is required is simply a comparison and assessment of the disputed domain name itself to the Complainant’s trademark: see for example, Disney Enterprises, Inc. v. John Zuccarini, Cupcake City and Cupcake Patrol, WIPO Case No. D2001-0489; IKB Deutsche Industriebank AG v. Bob Larkin, WIPO Case No. D2002-0420. This is different to the question under trademark law which can require an assessment of the nature of the goods or services protected and those for which any impugned use is involved, geographical location or timing. Such matters, if relevant, may fall for consideration under the other elements of the Policy.

In undertaking that comparison, it is permissible in the present circumstances to disregard the “.com” component of the disputed domain name as a functional aspect of the domain name system: Telstra Corporation Limited v. Ozurls, WIPO Case No. D2001-0046, Ticketmaster Corporation v. DiscoverNet Inc., WIPO Case No. D2001-0252.

In the present case, the remaining component of the disputed domain name, “hobbex”, is identical to the corresponding element in the Complainant’s trademark. Plainly, “hobbex” is the dominant or most striking element of the trademark. Given the presence of the strapline in the trademark, however, the disputed domain name cannot be said to be identical to the Complainant’s trademark.

Accordingly, the Panel finds that the Complainant has established that the disputed domain name is confusingly similar to the Complainant’s trademark and the requirement under the first limb of the Policy is satisfied.

C. Rights or Legitimate Interests

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

Paragraph 4(c) of the Policy provides that the following circumstances can be situations in which a respondent has rights or legitimate interests in a disputed domain name:

(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 illustrative only and are not an exhaustive listing of the situations in which a respondent can show rights or legitimate interests in a domain name.

The onus of proving this requirement, like each element, falls on the Complainant. Panels have recognized the difficulties inherent in disproving a negative, however, especially in circumstances where much of the relevant information is in, or likely to be in, the possession of the respondent. Accordingly, it is usually sufficient for a complainant to raise a prima facie case against the respondent under this head and an evidential burden will shift to the respondent to rebut that prima facie case. See e.g., WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition (“WIPO Overview 2.0”), paragraph 2.1.

The Complainant states that it has not licensed or otherwise permitted the Respondent to use the trademark in the disputed domain name. The Complainant also points out that the disputed domain name is not derived from the Respondent’s name and, given the use of the disputed domain name to generate Pay-Per-Click (“PPC”) revenues, paragraph 4(c)(iii) of the Policy does not apply. Further, the Complainant points to the links on the Respondent’s website to businesses competing with the Complainant to defeat reliance on paragraph 4(c)(i).

The Respondent does not dispute it has no licence or permission from the Complainant, but contends it does not need one. The Respondent notes, as is undoubtedly the case, that the use of domain names to generate PPC revenues is not per se in contravention of the Policy. It says it had no knowledge or awareness of the Complainant or the Complainant’s trademark when it registered the disputed domain name. Instead, it says it registered the disputed domain name “because ‘hobbex.com’ is a typographical variation of the common English work – hobby followed by “ex” standing for “exhibit” or “exhibition” to which [it] believed no party could claim exclusive rights.”

In support of that claim, it points out that it has registered many generic or descriptive domain names based on the word “hobby” such as:

“<aviationhobby.com>; <crafthobbyshopss.com>; <crafthobbysupply.com>; <creativehobby.com>; <directhobby.com>; <discounthobbys.com>; <discounthobbyshop.com>; <electrichobbystore.com>; <hobbiesandcrafts.com>; <hobbiestores.com>; <hobbycars.com>; <hobbyclasses.com>; <hobbyclay.com>; <hobbycollectible.com>; <hobbycrafters.com>; <hobbyenthusiasts.com>; <hobbygarend.com>; <hobbyrooms.com>; <hobbyshopsonline.com>; <hobbysupplyshops.com>; <internethobbys.com>; and <secrethobby.com>.”

and, further, it has registered many domain names that incorporate typographical variations of generic dictionary words such as:

“<aircondioners.com>; <airelines.com>; <alibama.com>; <ambassy.com>; <andriods.com>; <arilines.com>; <asthama.com>; <asume.com>; <attoreys.com>; <attornie.com>; <batterys.com>; <benifets.com>; <bibile.com>; <calandar.com>; <catolic.com>; <classifields.com>; <colllege.net>; <cometology.com>; <convertion.com>; <copuons.com>; <coupoons.com>; <creidtcards.com>; <cristian.com>; <deoderant.com>; <disabilty.com>; <disibility.com>; <facuet.com>; <fitnes.com>; <flemarket.com>; <freemuisc.com>; <furnitute.com>; <headaces.com>; <hemorroid.com>; <lotery.com>; <moblephones.com>; <partysuplies.com>; <partysuply.com>; <pattent.com>; <promdrsses.com>; <reantals.com>; <recepie.com>; <reigions.com>; <resaraunt.com>; <restauraunts.com>; <resteurant.com>; <saphires.com>; and <satifaction.com>.”

While recognizing that the use of a domain name for PPC revenue generation may be a legitimate activity for the purposes of the Policy, panels have repeatedly rejected the proposition that there is an absolute right to operate a PPC landing page based on a domain name which has as its primary meaning a descriptive term. Rather, as the three member panel observed in Balglow Finance S.A., Fortuna Comércio e Franquias Ltda. v. Name Administration Inc. (BVI), WIPO Case No. D2008-1216:

“[…] those who register domain names in large numbers for targeted advertising, often using automated programs and processes, cannot simply turn a blind eye to the possibility that the names they are registering will infringe or violate third-party trademark rights. See, e.g., Grundfos A/S v. Texas International Property Associates, WIPO Case No. D2007-1448; mVisible Technologies Inc. v. Navigation Catalyst Systems, Inc., WIPO Case No. D2007-1141; Mobile Communication Service Inc. v. WebReg, RN, WIPO Case No. D2005-1304.”

The learned three member Panel explained:

“These Panel decisions are firmly grounded in an appreciation that paragraph 2 of the Policy requires registrants to make reasonable efforts to ensure they are not infringing upon third-party rights. See, e.g., Terroni Inc. v. Gioacchino Zerbo, WIPO Case No. D2008-0666. Moreover, as has been recognized in both Asian World of Martial Arts Inc., supra, and mVisible Technologies Inc., supra, many domain names have both dictionary word meanings and trademark-related meanings. The disputed domain name at issue here falls into this category. Bringing to bear the force of these Panel decisions in the context of this case, where the Respondent has not indicated that it explored the possibility of third-party rights before registering the disputed domain name, the Panel concludes that to establish rights or legitimate interests in the domain name the Respondent must come forward with credible evidence that the disputed domain name was registered because of its attraction as a generic or descriptive term, and not because of its value corresponding to a trademark, and credible evidence that there has been no use of the domain name inconsistent therewith. See Media General Communications, Inc. v. Rarenames, WebReg, supra.

“Simply stated, to demonstrate rights or legitimate interests under paragraph 4(c) of the Policy, it is not sufficient for the Respondent merely to show that the domain name has a commonly understood or descriptive meaning, while turning a blind eye to the use of the domain name with a pay-per-click landing page containing links to ads that relate at least in part to a trademark (as opposed to merely the generic or descriptive meaning of the domain name). See Champagne Lanson v. Development Services/MailPlanet.com, Inc., WIPO Case No. D2006-0006. While the Panel acknowledges that the Respondent has used the disputed domain name to target paid advertising keyed to the domain name’s generic or descriptive meaning, the domain name also has been used to attract paid advertising that appears in part related to the CHILLI BEANS trademark (as opposed to any merely generic or descriptive meaning). In the Panel’s opinion, it is immaterial that this may be the result of the Respondent’s use of an automated relevance-matching system and advertising retrieval software that even the Respondent acknowledges is incapable of distinguishing between the generic or descriptive meaning and any trademark-related meaning. Ultimately, the Respondent is responsible for the content on its website. See, e.g., Grundfos A/S, supra; Grisoft, s.r.o. v. Original Web Ventures Inc., WIPO Case No. D2006-1381.”

See also WIPO Overview 2.0, paragraph 2.6.

Turning to the present case, the Panel observes that the disputed domain name is not in fact a descriptive or dictionary term. It is an invented or coined term – according to the Respondent being a combination of “hobby” and “exhibit” or “exhibition”. That itself is a distinguishing factor from the “hobby” and “typographical” examples advanced by the Respondent and set out above. In addition, all of the “hobby” examples include both syllables of the word and all of the “typographical” examples are obviously misspellings of the descriptive term or phrase rather than portmanteau constructions. Further, the Complainant has submitted evidence showing that, before the Complainant sent a cease and desist letter to the Respondent, the website featured links in Swedish to businesses in the same line as the Complainant, but which were not associated with the Complainant.

The Respondent says that the links vary from country to country and, in any event, it has no control over what links are placed. As noted above, the illustration included in the Response features links for a range of activities which appear to be wholly outside the Complainant’s field. The illustration, however, is of the website after the Complaint had been filed. Moreover, the links do not appear to have anything to do with the asserted descriptive meaning or association of the disputed domain name. Further, as the extracts from Balglow Finance S.A., Fortuna Comércio e Franquias Ltda. v. Name Administration Inc. (BVI), supra, show, a Respondent cannot absolve itself of any responsibility for the selection of links by leaving that to the unconstrained choice of the website host or PPC service provider.

In these circumstances, the Panel finds that the Complainant has established a prima facie case that the Respondent does not have rights or legitimate interests in the disputed domain name under the Policy and, further, the Respondent’s justification of its position does not rebut that case. Accordingly, the Panel finds that the Complainant has established the second limb under the Policy.

D. Registered and Used in Bad Faith

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

The use of the disputed domain name for a landing page for PPC links to businesses in the Complainant’s field but not associated with it satisfies in this case the requirement of use in bad faith.

The Panel also accepts that typically a finding of registration in bad faith requires demonstration, either explicitly or circumstantially, that the Respondent did have some awareness of the complainant’s trademark before registering the disputed domain name.

On this part of the case, the Respondent has filed a declaration by the Respondent’s director of finance declaring that the disputed domain name was registered without any knowledge of the Complainant, its website, its business name or trademark and, as noted above, stating that the disputed domain name was registered for its purely descriptive significance. The Respondent also points out that it registered the disputed domain name four years before the Complainant registered its trademark.

In finding registration and use of the domain name <chillibeans.com> in bad faith, the learned three member panel in Balglow Finance S.A., Fortuna Comércio e Franquias Ltda. v. Name Administration Inc. (BVI), supra, noted:

“There are circumstances, however, where an unwavering adherence to conventional wisdom may unduly and unnecessarily frustrate the fundamental purposes of the Policy. This is clearly the teaching of Panel decisions holding that that those who register domain names in large numbers for targeted advertising through the use of automated programs and processes cannot be willfully blind to the possibility that the names they are registering will infringe or violate third-party trademark rights. See, e.g., Grundfos A/S; mVisible Technologies Inc.; and, Mobile Communication Service Inc. v. WebReg, RN, supra.

Indeed, the application of conventional wisdom to what once might have been considered an unconventional use of a domain name, but which today has become increasingly commonplace, would in effect render paragraph 2 of the Policy a nullity in such cases. As noted by the panel in Mobile Communication Service Inc. v. WebReg, RN, supra, where a respondent registers large swaths of domain names through the use of automated programs that snap up domain names as they become available, with no attention whatsoever to whether they may be identical or confusingly similar to trademarks, such practices may support a finding that the respondent is engaged in a pattern of conduct that deprives trademark owners of the ability to register domain names reflecting their marks.

Under such circumstances, a claim of ‘no actual knowledge’ may not obviate a respondent's ‘willful blindness’ to the existence of such third-party rights. Rather, those who register domain names in large numbers for targeted advertising through automated programs and processes must make reasonable good faith efforts to avoid registering and using domain names that are identical or confusingly similar to marks held by others. See, e.g., Grundfos A/S, supra. In this Panel's view, whether such good faith efforts have been undertaken by a respondent in any give case is best determined from the pertinent facts and circumstances reflected in the record of that case, bearing in mind that the burden of proof respecting all three elements of the Policy always rests with the complainant.”

See also WIPO Overview 2.0, paragraph 3.8.

The Respondent does not claim to have made any attempt to ascertain whether its use of the disputed domain name would or could infringe another’s trademark rights. Rather, it states that it believed no one could claim exclusive rights in the term “hobbex” because of its descriptive nature.

The Complainant, however, was using its trademark for many years before it secured its registration.

Further, as explained above, the Panel does not accept that the disputed domain name is a purely descriptive term and notes further that, even on the Respondent’s case, the disputed domain name is not in fact being used for its claimed descriptive significance. Moreover, there is clear evidence that the disputed domain name was being used before any objection was raised by the Complainant to take advantage of the trademark significance of the term “hobbex”.

In these circumstances consistently with the approach of many previous panels dealing with such cases, the Panel finds that the Complainant has established that the disputed domain name has been registered and is being used in bad faith.

Insofar as the Respondent invokes delay or laches, that is also not typically a defence: WIPO Overview 2.0, paragraph 4.10. Further, where, as here, the term in question is a coined term and not a descriptive term and there is no evidence that the Respondent has relied to its detriment on the Complainant’s inaction,¹ the Panel would not treat this case as an exception to the usual rule.

6. 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 <hobbex.com> be transferred to the Complainant.

Warwick A. Rothnie
Presiding Panelist

Anders Janson
Panelist

Neil A. Smith
Panelist (dissenting)

Date: March 2, 2014

Dissenting Opinion

I respectfully dissent, on the ground that I do not believe the Complainant has sustained its burden of proving that the disputed domain name was registered in bad faith. While the Complainant has proven ownership of Swedish Trademark No. 0381572, such registration was filed for and made many years after the registration of the domain name at issue, on February 1, 2002. The application for this trademark was filed on February 20, 2006 and it was registered on June 16, 2006. This dispute here was initiated in late 2013.

The majority assumes that “Given the length and extent of use, it is also likely that the Complainant would have protectable rights under Swedish law as an unregistered trademark including under the Swedish law concerning misleading market practices.”

However, while such unregistered trademark rights might exist under Swedish law, I do not know this to be the case, and, particularly, the Complainant has not made this argument or cited any Swedish authority for the proposition of law. I cannot presume that even if such is within what I would call the “common law” of Sweden, I cannot find that the Respondent should have or would have had such knowledge of the rights of mere user of a mark in Sweden, so as to make its acquisition of the domain name in bad faith under the Policy here.

When the domain name was registered, the HOBBEX trademark was not yet registered in Sweden. It is one thing to presume, perhaps, that registration is in bad faith if an identical trademark has been previously registered in a country different from that of the applicant or owner. I cannot extend that assumption to the mere use of a trademark, even for a long time, in a faraway country. As the panel noted in Trade Me Limited v. Vertical Axis, Inc., WIPO Case No. D2009-0093: “Certainly no trademark search in July 2001 would have revealed the Complainant's trademarks since they were not registered until early 2004. And whilst we think it would not suffice for the purposes of the Policy, there is nothing in the provided record to establish that the Respondent actually knew, reasonably should have known, or could have any constructive notice of the Complainant's common law rights in the trademark TRADEME mark at the time the Respondent acquired the disputed domain name.” See also Powerfilm, Inc. v. Port Media, NAF Claim No. 0912327 (finding in favor of the respondent where trademark registration post-dated the respondent’s registration of the domain name); and Proto Software, Inc. v. Vertical Axis, Inc., WIPO Case No. D2006-0905 (holding that the complainant cannot demonstrate bad faith registration of the disputed domain name where the disputed domain name was registered approximately three (3) years prior to the application for registration of the complainant’s trademark).

Here we have a sworn statement filed here on behalf of the Respondent that it was unaware of the Complainant and its use at the time of the acquisition of the domain name, which states, in part: “We did not register the Disputed Domain with Complainant’s trademark in mind and had no knowledge of Complainant, its website, its business name or trademark when we registered the domain name almost twelve (12) years ago.” Declaration of L. Wilfred-Boyce.

While I do not find the strict application of equitable laches, I agree with the Respondent that it is notable that the Complainant waited almost twelve years (6 years from the date it registered its trademark in Sweden) to initiate this Complaint. As previous panels have noted, such a long delay in taking action can raise an inference that the Complainant did not truly believe the disputed domain name was registered in bad faith. See Rolling Stone LLC v. Robbins Carnegie Inc., NAF Claim No. 0318048 (delay could indicate that Complainant “did not seriously believe” that the respondent had violated the Policy.); see also Bosco Prod., Inc. v. Bosco email Servs., NAF Claim No. 94828 (“Without determining if the passage of considerable time would alone bar Complainant from relief in this proceeding, the Panel notes that Complainant does not explain why it has waited nearly four years to try and resolve [the domain name dispute].”); New Piper Aircraft, Inc. v. Piper.com, supra (the complainant’s failure to initiate a suit in over two years indicated that the complainant did not believe that the respondent intended to attract customers through confusion).

Accordingly, I would find that Complainant has failed to demonstrate that the disputed domain name was registered in bad faith, and would deny the Complaint on this basis.

Neil A. Smith
Panelist (dissenting)
Date: March 2, 2014

¹ Fisher v. Brooker [2009] UKHL 41 (the Procul Harum case).