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WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

8647844 Canada Inc. o/a eSteamCanada v. Registration Private, Domains By Proxy, LLC / Shadi Chaaraoui, SCHAAR

Case No. D2016-0777

1. The Parties

The Complainant is 8647844 Canada Inc. o/a eSteamCanada of Winchester, Ontario, Canada, represented by Andrews Robichaud P.C., Canada.

The Respondent is Registration Private, Domains By Proxy, LLC of Scottsdale, Arizona, United States of America / Shadi Chaaraoui, SCHAAR of Ottawa, Ontario, Canada, self-represented.

2. The Domain Name and Registrar

The disputed domain name <esteamcanada.com> 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 April 19, 2016. On April 20, 2016, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain name. On April 20, 2016, 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 and 4, the Center formally notified the Respondent of the Complaint, and the proceedings commenced on May 4, 2016. In accordance with the Rules, paragraph 5, the due date for Response was May 24, 2016. The Response was filed with the Center on May 4, 2016.

On May 27, 2016, the Center received a Supplemental Filing from the Complainant. The Center acknowledged its receipt, and informed the parties that it would be forwarded to the Panel, once appointed, who would have the discretion to accept or reject it. In response to the Complainant's Supplemental Filing, the Respondent submitted an email to the Center on May 27, 2016.

The Center appointed Christopher J. Pibus as the sole panelist in this matter on June 13, 2016. 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.

The Panel issued a Panel Order No.1 on June 17, 2016 to both the Complainant and the Respondent requesting copies of emails exchanged with the Registrar GoDaddy in connection with the transfer of the disputed domain name. The Respondent sent an email on June 19, 2016, but did not attach any copies of emails. The Complainant provided a response to the Panel Order No. 1 on June 21, 2016, attaching emails it had exchanged with GoDaddy. The Panel then issued Panel Order No. 2 on June 23, 2016, requesting GoDaddy to provide copies of its exchanges with the Complainant and others relating to the disputed domain name transfer to the Respondent. GoDaddy did not respond to the Panel Order No. 2.

4. Factual Background

The Complainant operates a business selling e-cigarettes, vapes and vaping accessories. The Complainant's founders' Steven Moreau and Kaitlyn Moreau began operating the business in October, 2012 under the name VenLyn Corporation. On October 10, 2012, the Moreau's filed a trademark application for the mark E-STEAM and that application was registered on May 23, 2014 under Canadian Trademark Registration No. TMA 878,531. The Moreaus subsequently assigned the E-STEAM registration to the Complainant.

The Complainant opened three stores in Ottawa, Ontario, Canada under the name "e-Steam" in January, 2013. The e-Steam stores sold electronic cigarettes and related goods, all under the E-STEAM trademark.

In September, 2013, the Complainant opened six additional stores throughout Ontario, Canada and created a company called 8647844 Canada Inc. o/a e-Steam, which is the named Complainant in this proceeding.

The Moreaus previously registered the disputed domain name <esteamcanada.com> in October, 2012. In 2014, the Moreaus transferred the disputed domain name <esteamcanada.com> to the Complainant.

The Complainant's business continued to grow and the Complainant registered several other domain names, including: <esteamkanata.com>; <esteamgloucester.com>; <esteamorleans.com>; <esteamglebe.com>; <esteamkingston.com>; <esteamottawacentral.com>; <esteamhuntclub.com>; <esteamarnprior.com>; <esteamcarletonplace.com>; <esteampembroke.com>; <esteamcornwall.com>; and <esteametobicoke.com>.

In June 2014, the Complainant hired the Respondent, Shadi Chaaroui. The Respondent's title was Vice-President of Online Sales for its Web Sales Department. The Respondent's job included responsibility for online sales and web renewals. In particular, the Respondent was responsible for managing the Complainant's websites and domain names, including the disputed domain name.

On February 16, 2016, the Complainant attempted to log into the Complainant's GoDaddy.com account and discovered that the disputed domain name had been transferred to the Respondent.

On February 18, 2016, the Complainant terminated the Respondent's employment. The Complainant now submits that the termination occurred because of the unauthorized transfer of the disputed domain name, but its letter of termination makes no reference to this issue.

On February 19, 2016, the Respondent filed an application for the trademark ESTEAMCANADA with the Canadian Trademarks Office under Serial No. 1,768,675.

5. Parties' Contentions

A. Complainant

Identical or Confusingly Similar

The Complainant contends that the disputed domain name <esteamcanada.com> is confusingly similar to the Complainant's registered trademark for the mark E-STEAM. The Complainant submits the addition of the geographical element "Canada" does not distinguish the disputed domain name from the Complainant's registered trademark. Accordingly, the Complainant submits that the disputed domain name is confusingly similar to the Complainant's E-STEAM trademark under the Policy.

Rights or Legitimate Interests

The Complainant submits that the Respondent was an employee of the Complainant, when he transferred the disputed domain name to himself without authorization. The Complainant did not license or permit the transfer of the disputed domain name to the Respondent and did not permit the Respondent to use the disputed domain name in association with a website which offers for sale and sells identical products as the Complainant. The Complainant also submits that the Respondent is not commonly known by the "e-stream" name or trademark. The Complainant contends that this use does not constitute a bona fide offering of goods and/or services under the Policy.

Registered and Used in Bad Faith

The Complainant submits that the Respondent knew about the Complainant's rights in the E-STEAM mark, because the Respondent was an employee of the Complainant at the time he transferred the disputed domain name to himself. The Complainant submits that the Respondent is a disgruntled employee, who knew his employment was about to be terminated and transferred the disputed domain name as a preemptive measure. The Complainant also submits that the Respondent is using the disputed domain name in connection with a website that sells identical products to those of the Complainant. The Complainant further contends that the Respondent is using the disputed domain name to attract Internet users for commercial gain, and to interfere with the Complainant's business.

Lastly, the Complainant contends that the Respondent has failed to respond to the Complainant's demands that he transfer the disputed domain name back to the Complainant.

B. Respondent

The Respondent submits that he entered into a contractual agreement in June, 2014 with the Complainant wherein the Respondent was to receive a profit sharing bonus of 25 per cent of all profits generated from Web Sales, paid monthly, in addition to his annual salary. The Respondent contends that he has never received any profit sharing bonus, that the Complainant deliberately altered accounting records to show the company was operating at a loss, and did not accurately report profits to Revenue Canada, the appropriate tax agency. The Respondent submits that the Complainant advised him there was a risk that the Complainant's company would need to file for bankruptcy and that Steven Moreau transferred the disputed domain name to the Respondent to protect that asset from bankruptcy procedures, and in recognition of what the Respondent was owed by way of the profit sharing bonus. The Respondent requests the Panel to make a finding of Reverse Domain Name Hijacking.

6. Discussion and Findings

According to paragraph 4(a) of the Policy, in order to succeed, the Complainant must establish each of the following elements:

(i) The disputed domain name is identical or confusingly similar to the trademark or service mark in which the Complainant has rights;

(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

A. Identical or Confusingly Similar

The Panel finds that the Complainant does have registered trademark rights in the mark E-STEAM by virtue of its Trademark Registration No. TMA 878,531.

The Panel further finds that the disputed domain name <esteamcanada.com> is confusingly similar to the Complainant's registered trademark E-STEAM. The addition of the geographical term "Canada" does not serve to distinguish the disputed domain name from the E-STEAM trademark.

Accordingly, the Panel finds that the Complainant has satisfied the first requirement under paragraph 4(a) of the Policy.

B. Rights or Legitimate Interests; Registered and Used in Bad Faith

The Complainant claims that it never authorized the transfer or initiated the transfer of the disputed domain name to the Respondent. The Respondent on the other hand has alleged that the Complainant did in fact initiate the transfer of the disputed domain name to protect it from possible bankruptcy proceedings and to provide compensation to the Respondent. There is documentary evidence on this point: the Respondent has provided a copy of an email that is purported to be from the Complainant, Steven Moreau, confirming the authorized transfer of the disputed domain name. The Complainant disputes the veracity of this document, noting that the Respondent was employed as a website expert and domain name manager, and was therefore capable of fabricating this kind of email evidence. In normal circumstances, the submission of a document such as this email would be compelling evidence, however, the Panel is troubled by the absence of other documents outlining what was communicated by the parties to the Registrar GoDaddy. It appears that the Complainant never itself communicated to GoDaddy about the transfer until after the fact, when it complained. The Panel finds that both the Respondent and GoDaddy have been uncooperative in providing relevant documents that would have shed necessary light on this issue. GoDaddy's refusal to respond to Panel Order No. 2 is particularly unhelpful.

The Panel is also troubled by certain statements made by the Complainant in light of the chronology of events. The Complainant has not contested the "Lay Off Letter" submitted by the Respondent, which leads the Panel to accept that it is in fact a true copy of the Respondent's termination letter. Yet, the Complaint states "…the Complainant informed the Respondent that as a result of the unauthorized and unlawful acquisition of the Disputed Domain Name, the Complainant was terminating the Respondent's employment." In fact, the letter which was dated February 18, 2916 stated that the Respondent was being laid off and that the termination was not a reflection of his job performance. This is obviously inconsistent. Further, the evidence the Complainant provided in response to the Panel Order No. 1 confirms that the Complainant knew of the transfer of the disputed domain name on February 16, 2016, but 2 days later on February 18, 2016, laid off the Respondent for reasons other than for the "unlawful and unauthorized" transfer of the disputed domain name.

After reading all of the materials submitted by both the Complainant and the Respondent, the Panel is disturbed by the gaps in the documentary record, the inconsistencies in the submissions made by both parties, and the crucial credibility issue that arises in connection with the disputed transfer email from Mr. Moreau.

Based on the limited record filed in this proceeding, the Panel is not satisfied that the Complainant has met its burden in these proceedings. In another forum, with a fuller evidentiary record and cross-examination of the witnesses, a different result may well be reached.

Accordingly, the Panel finds that the Complainant has not satisfied the second and third requirements under paragraph 4(a) of the Policy.

7. Reverse Domain Name Hijacking

As there is a legitimate disagreement between the Parties, the Panel does not consider this a case of Reverse Domain Name Hijacking.

8. Decision

For the foregoing reasons, the Complaint is denied.

Christopher J. Pibus
Sole Panelist
Date: July 11, 2016

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