WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

National Securities Corporation v. Registration Private, Domains By Proxy, LLC / Ridgeway Support, Richard (Rick) Garber

Case No. D2018-0290

1. The Parties

The Complainant is National Securities Corporation of Seattle, Washington, United States of America (“USA” or “US”), represented by Eversheds Sutherland (US) LLP, USA.

The Respondents are Registration Private, Domains By Proxy, LLC of Scottsdale, Arizona, USA / Ridgeway Support of New Woodstock, New York, USA, Richard (Rick) Garber of New Woodstock, New York, USA, self-represented.

2. The Domain Name and Registrar

The disputed domain name <nationalsecuritiescorp.com> (the “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 February 9, 2018. On February 9, 2018, the Center transmitted by email to the Registrar a request for registrar verification in connection with the Domain Name. On February 12, 2018, the Registrar transmitted by email to the Center its verification response disclosing registrant and contact information for the Domain Name which differed from the named Respondent and contact information in the Complaint. The Center sent an email communication to the Complainant on February 13, 2018, 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 amendment to the Complaint on February 13, 2018.

The Center verified that the Complaint together with the amendment to 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 February 14, 2018. In accordance with the Rules, paragraph 5, the due date for Response was March 6, 2018. The Response was filed with the Center on March 5, 2018.

The Center appointed W. Scott Blackmer as the sole panelist in this matter on March 12, 2018. 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 a business corporation organized under the laws of the US State of Washington, with its principal place of business in Seattle, Washington, USA. The Complainant’s parent corporation, National Holdings Corporation, is publicly traded on the NASDAQ stock exchange. According to the Complaint and the Complainant’s website at “www.nationalsecurities.com”, the Complainant and its affiliates comprise “one of the United States’ largest independent financial firms offering investment banking services, insurance, wealth management, tax and estate planning for corporations and individuals since 1947,” with more than 1,100 employees and registered representatives, including financial advisors, located across the USA.

The Complainant claims NATIONAL SECURITIES and NATIONAL SECURITIES CORPORATION as unregistered, common law marks (the “NATIONAL SECURITIES marks”) that the company has used in commerce since its inception in 1947. The Complainant states that it has operated a website with the domain name <nationalsecurities.com> since February 1997. The record includes an archived screenshot of the website associated with that domain name from May 1998, and such pages appear through the years since on the Internet Archive’s Wayback Machine. Some pages are headed with a logo prominently featuring the name “National Securities” over the word “Corporation”, all in a distinctive font, while others are headed with a logo using only the words “National Securities” without the word “Corporation”. The Complaint, the Complainant’s website, and securities regulatory filings show that the Complainant is well-established in the US financial services marketplace, with over USD 10 billion in assets under management and 2017 revenues of USD 189.9 million, spending more than USD 461,000 for advertising under the NATIONAL SECURITIES marks in 2017.

In late 2015, the Complainant acquired two stock brokerages, Ridgeway & Conger, Inc. (“Ridgeway & Conger”) and Adirondack Trading Group LLC (“Adirondack”). The Respondent Richard (Rick) Garber was an employee of Ridgeway & Conger, and his wife Leigh Garber was president of that firm and also president of Adirondack. According to the Complaint, Mr. Garber took an adversarial posture toward the acquisition and “harassed” the Complainant’s employees, and the Complainant ultimately conditioned payment of some contractual benefits under the acquisition agreement on Mr. Garber refraining from such conduct. Ms. Garber was also moved to a non-supervisorial role after January 12, 2016, when she became the subject of an enforcement complaint by the Financial Industry Regulatory Authority (FINRA), a securities industry self-regulatory organization established under authority of federal law.

The Garbers’ employment with the Complainant terminated in July 2016. It appears from correspondence with the Center that Ms. Garber is now employed with another securities brokerage firm and that Mr. Garber operates a business called “12th Member”, which offers voice-over-Internet protocol (VOIP) telephone services to business and residential customers.

The Domain Name was registered on January 3, 2018 in the name of a domain privacy service. Following notice of the Complaint in this proceeding, the Registrar identified the registrant as Ridgeway Support of New Woodstock, New York, USA. No such entity appears as a licensed domestic or foreign business entity in the online database operated by the New York State Department of State. The postal address given for Ridgeway Support is the same address in New Woodstock, New York given for Mr. Garber’s current business, “12th Member Communications and Compliance”, on its website at “www.12thmember.com”. Ridgeway & Conger, Inc. was, as described above, the name of one of the brokerage firms acquired by the Complainant in which the Garbers had interests.

On January 5, 2018, Mr. Garber sent an email to the Complainant’s general counsel revealing that Mr. Garber was the individual who had acquired the Domain Name: “On 1/4/18 i become legal owner [sic] www.nationalsecuritiescorp.com.” In an email to the Center dated February 16, 2018, after the Complaint was filed in this proceeding, Mr. Garber explained that he had attempted to make changes in the reference to Ridgeway (presumably as the name of the registrant) but had been locked out by the Registrar. He also stated that the Complainant had not purchased the name “Ridgeway & Conger”.

Mr. Garber has claimed responsibility for the Domain Name and has submitted materials that he asks to have considered as a Response in this proceeding. The domain privacy service has expressed no interest in the Domain Name. In view of the facts recounted above, the Panel finds that the registrant Ridgeway Support is merely an alter ego for Richard (Rick) Garber. Accordingly, Mr. Garber will be referred to hereafter as the sole Respondent in this Decision.

The Respondent’s January 5, 2018 email to the Complainant also referred to money owed for “the use our sunguard system [sic]” and other “monies due” and said the “threats by national against Leigh Garber must end”. The email suggested that the Garbers might complain to the “labor board” or “state attorneys office” about “nationals [sic] actions on the sale of our assets” and offered to consider a settlement instead. Further emails from Mr. Garber to the Complainant in January 2018 announced that he turned over an “outstanding invoice” to a collection agency, demanded a “full accounting” for Ms. Garber’s “overrides” on certain accounts, and questioned the Complainant’s practices in recruiting brokers. A January 23, 2018 email from Mr. Garber to the Complainant attached a two-sentence “cease and desist” form letter with the Domain Name in the reference line. The letter threatened “legal action” if the Complainant did not cease “this activity” within one day. Neither the email nor the form letter specified “this activity”. The parties do not mention any actual pending litigation or arbitration proceedings, although the Respondent’s February 16, 2018 email to the Center “requests” that “this matter” be resolved only by FINRA arbitration.

At the time of this Decision, the Domain Name resolves to a single, incomplete web page headed “National Securities Corp”, with the tagline, “Financial firms AUTOMATE your BUSINESS TODAY”, followed by “Coming Soon”. The logo that appears on the web page does not mimic the Complainant’s logo. The page includes contact details and business hours, as well as non-functioning buttons for “Features”: “Web Design and Development”, “Cloud Hosting”, “Email Send & Mailers”, “Trackable Phone Numbers”, “SMS Marketing”, and “Digital Marketing”. The page does not link to Mr. Garber’s “12th Member” VOIP business or its website, although the telephone number given as the contact number is the same as the telephone number on the 12th Member website. The page does not include third-party advertising.

5. Parties’ Contentions

A. Complainant

The Complainant asserts that the Domain Name is confusingly similar to its National Securities marks and that the Respondent has no permission to use the marks in the Domain Name, and no other rights or legitimate interests in the Domain Name.

The Complainant argues that the Respondent registered and used the Domain Name in bad faith, fully aware of the Complainant’s marks as a former employee with grievances, in an attempt to create confusion as to source and affiliation, either for gain or to harass the Complainant. The Complainant concludes:

“It is simply not possible to conceive of any plausible actual or contemplated active use of the Disputed Domain by the Respondent that would be legitimate. All plausible uses would be illegitimate, such as by passing off, infringing, harassing, or fraudulent use of the domain.”

B. Respondent

The Respondent communicated first a request that this UDRP proceeding be set aside in favor of FINRA arbitration, as mentioned above. There is no evidence that the Respondent has initiated such arbitration. The Respondent then submitted as a response four handwritten pages with attached exhibits. The Panel accepts this submission as a Response but notes that it lacks the required certification of completeness and accuracy (Rule 5(c)(viii)), which the Panel takes into account in weighing the credibility of the Respondent’s statements. (The Panel also takes into account the fact that the Respondent is not represented by legal counsel.)

The Respondent points out that the Complainant has no NATIONAL SECURITIES trademarks registered in the US, New York State, or Washington State. The Respondent also implicitly challenges the Complainant’s claims of confusing similarity, observing that many other companies use the names “national” and “securities” in domain names and emphasizing that the Respondent’s website offers different services (such as website development and SMS marketing) than the Complainant’s investment and insurance products. The Respondent states as “reasons for using” the Domain Name: (1) potential clients want to be known as national firms and (2) the Respondent is marketing to securities firms, banks, and insurance companies.

The Respondent points to steps taken to establish a bona fide business offering using the Domain Name, including agreements for website design and development, cloud hosting, email and texting, surveying potential clients, recruiting and hiring a sales team, establishing the “coming soon” page and a customer portal for future clients. The Respondent also reports that he notified the Complainant about registering the Domain Name and waited several days before publishing the “coming soon” page.

The Respondent concludes, “I feel that I should continue to use the name and domain … My domain is for a legitimate business – that is totally different” than the Complainant’s.

6. Discussion and Findings

Paragraph 4(a) of the Policy provides that in order to divest a respondent of a disputed domain name, a 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.

Under paragraph 15(a) of the Rules, “A Panel shall decide a 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. Identical or Confusingly Similar

The UDRP Complaint must be grounded on a trademark or service mark. The Policy is not restricted to registered trademarks, but claims based on an unregistered or “common law” mark require a showing that the mark has become a distinctive identifier that consumers associate with the Complainant’s goods or services (a quality referred to as “acquired distinctiveness” or “secondary meaning”). See WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Third Edition (“WIPO Overview 3.0”), section 1.3. Relevant evidence for this quality includes the nature and duration of the mark, the volume of sales under the mark, the extent of advertising, and the degree of public recognition. Id.

Here, the Panel finds persuasive evidence in the record that the Complainant’s name NATIONAL SECURITIES CORPORATION and a short form of that name, NATIONAL SECURITIES, have acquired distinctiveness in association with a variety of financial services in a nationwide market in the US over a period of some 60 years, reinforced by an online presence in the past 20 years. The record includes evidence of substantial advertising and sales under the marks, which are used by leading, publicly traded financial services group.

The Domain Name incorporates the NATIONAL SECURITIES mark (excluding the intervening space between the two words, which is not technically possible to include in a URL address in the DNS system) and substitutes the common abbreviation “corp” for the word “corporation” that appears in the mark NATIONAL SECURITIES CORPORATION. This generic addition does not avoid confusion.

The first element of a UDRP complaint “serves essentially as a standing requirement” and entails “a straightforward visual or aural comparison of the trademark with the alphanumeric string in the domain name”. See WIPO Overview 3.0, section 1.7. The Panel concludes under this test that the Domain Name is confusingly similar for purposes of the first element of the Policy.

B. Rights or Legitimate Interests

Paragraph 4(c) of the Policy gives non-exclusive examples of instances in which the Respondent may establish rights or legitimate interests in the Domain Name, by demonstrating any of the following:

(i) before any notice to it of the dispute, the Respondent’s 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) that the Respondent has been commonly known by the Domain Name, even if it has acquired no trademark or service mark rights; or

(iii) the Respondent 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 trademark or service mark at issue.

Since a respondent in a UDRP proceeding is in the best position to assert rights or legitimate interests in a disputed domain name, it is well established that after a complainant makes a prima facie case, the burden of production on this element shifts to the respondent to come forward with relevant evidence of its rights or legitimate interests in the domain name. See WIPO Overview 3.0, section 2.1.

Here, the Complainant has demonstrated common law trademark rights and confusing similarity, and the Complainant denies authorizing the Respondent to use the NATIONAL SECURITIES marks in the Domain Name, so the burden falls to the Respondent to demonstrate rights or legitimate interests in the Domain Name. The Respondent has no corresponding mark and is not known by a corresponding name, but the Respondent argues that it has been making preparations for a legitimate commercial use of the Domain Name relevant to its generic sense, appealing to potential clients in national financial services markets such as securities, banking, and insurance firms. Logically, the argument only applies to the first of these, as the others are not “securities” firms. In any event, this rationale is persuasive only if it is more likely than not that the Respondent selected the Domain Name for its generic rather than its trademark value. As this assessment depends on the same facts that are used to evaluate the third element, bad faith, it is treated jointly with that element below.

C. Registered and Used in Bad Faith

The Policy, paragraph 4(b), furnishes a non-exhaustive list of circumstances that “shall be evidence of the registration and use of a domain name in bad faith”, including the following (in which “you” refers to the registrant of the domain name):

“(i) circumstances indicating that you have registered or you have acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name; or…

(iii) you have registered the domain name primarily for the purpose of disrupting the business of a competitor; or…

(iv) by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your website or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your website or location or of a product or service on your website or location.”

The Complainant demonstrates the Respondent’s animus toward the Complainant with a history of contention since the acquisition of the brokerages associated with the Garbers and infers that the Respondent harbored an intent ultimately to gain from misleading Internet users or meant to harass the Complainant further. The Respondent counters that he simply chose the Domain Name for its generic value and gave the Complainant fair notice before posting a “coming soon” page.

The Response continues by attaching media stories about complaints concerning certain of the Complainant’s employees, to challenge the Complainant’s “public image”. These are not material to the Respondent’s motivations in registering and using the Domain Name, as the Respondent has not used the Domain Name, or prepared to use it, for a noncommercial criticism site.

The Panel finds ample evidence that the Respondent, as a former employee with ongoing grievances against the Complainant, was aware of the trademark value of the Domain Name and more likely than not selected the Domain Name for its trademark rather than generic value. The Respondent’s VOIP business already operated under a different name and through a different website. The reasons offered in the Response for choosing the Domain Name do not align well with the incomplete website the Respondent published and the Respondent’s preparations to offer website development, digital messaging, and related services. These do not appear to be focused on “securities” firms. Moreover, the Respondent promptly informed the Complainant that he had acquired the Domain Name and then in the same email demanded “monies due” and threatened various legal actions unless the parties reached a settlement. Thus, it appears likely that the Respondent registered the Domain Name and immediately used it as leverage in the Garbers’ dispute with the Complainant, to add pressure for a settlement because of the potentially disruptive value of the Domain Name. In addition, the Respondent would be aware that any website he associated with the Domain Name is likely to attract visitors familiar with his former employer’s well-known brand, misleading Internet users for commercial gain as described in the Policy, paragraph 4(b)(iv).

In the light of all these circumstances, the Panel finds bad faith within the meaning of the Policy, and the Panel also rejects the Respondent’s claim to rights or legitimate interests in the Domain Name.

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 Domain Name <nationalsecuritiescorp.com> be transferred to the Complainant.

W. Scott Blackmer
Sole Panelist
Date: March 23, 2018