Legitimacy and Good Faith Undermined by Knowledge of Complainant and its Trademark

Posted on May 21, 2012 by Gmlevine

Speculating, offering to sell and monetizing domain names composed or dictionary words and descriptive phrases without more are not actionable under the Policy even if respondent fails the right or legitimate interest test. The more is proof of intent at the time of registration to take advantage of complainant’s reputation in the marketplace. Bad faith is undermined or bolstered by respondent’s attempt (if it appears) to rebut complainant’s prima facie case. If rebuttal fails, bad faith principally rests on respondent’s knowledge of (or willful blindness to) complainant and its trademark and the content of the domain name. Knowledge is awareness of the complainant and its trademark, but there must also be targeting.

The point about abusive registration is underscored in FACI Industries v. BuyDomains.com, Inventory Management, D2012-0146 (WIPO April13, 2012). FACHI is a registered trademark. The Respondent asserted that it had the right to register and use the domain name for the following reasons:

[1] the term “faci” is “not only a common acronym, but also a common surname and a dictionary term subject to a diversity of third party use” ….

[2] numerous entities unrelated to Complainant have registered and are using domain names containing the term “faci.”

The Panel’s summary of Respondent’s response continues, “[s]ince the term ‘faci’ is ‘no more than a common acronym, a surname, or dictionary term in three languages,’ Respondent [claims it] was entitled to register and use the Domain Name on a ‘first come, first served’ basis.” These arguments beg the issue.

Although in Fachi Industries Respondent’s argument touches the usual stations of defense it is not ultimately persuasive against Complainant’s two-level demonstration that 1) the trademark existed prior to the registration of the domain name and was well-known in the market in which Respondent is located; and 2) the website “speaks” (metaphorically) against Respondent’s good faith by containing links to Complainant’s competitors. To the extent that “fachi” may be generic, strong trademarks are not weakened by their compositions.

The pivotal question is awareness. The Panel concluded that there was sufficient evidence in the record to find that Respondent was aware of Complainant’s FACI mark when it registered the domain name. While it is true that domain name speculation and sale of domain names can be legitimate interests there is always a crucial qualifier. If respondent is unaware, could not have been aware and there is no factual support otherwise, and the website speaks to the truth of respondent’s denial, then complainant fails to demonstrate abusive registration. The Panel noted

the fact that other people and entities make use of the term “faci” in various contexts does not by itself legitimize Respondent’s activities vis-à-vis this Domain Name. Respondent asserts that it has rights and legitimate interests in the Domain Name because “faci” “is no more than a common acronym, a surname, or dictionary term in three languages”, however, as found in prior UDRP decisions, use of a domain name to resolve to a PPC or splash page is not of itself a legitimate use because the Respondent is not using the Domain Name in any way that is related to its generic meaning. “The mere fact that a word identical to the Domain Name exists as a defined dictionary term does not give rise to any rights or legitimate interests in the name on the part of a respondent who uses it in ways like this that are not tied to the generic meaning of that word.”

The underlying premise is clear: “Someone else actually named ‘faci’ or actually using ‘faci’ in some connection might have an easy time establishing rights or legitimate interests in the Domain Name, but Respondent has no such interest.” Legitimacy, and ultimately bad faith, cannot be excused merely because what the respondent does is lawful. Domain names eagerly sought after by trademark owners are assets like any other and the fact that they may be expensive to acquire is not grounds for forfeiture. But, a respondent “may [not] defend against a claim under paragraph 4(b)(i) … by arguing that parties in addition to Complainant were also offered the opportunity to buy the Domain Name,” citing Sabanci v. iu, D2003-0498 (WIPO July 23, 2003). In Sabanci, Respondent purchased the domain name and immediately offered it for sale. One of its arguments was “In any determination of bad faith, the word ‘use’ necessarily refers to an active behavior and the absence of any behavior may not be considered as a ‘use’, neither as a ‘bad faith use’.” This, of course, is not the law. Not resolving to an active website does not redefine the conduct. A “squatter” is using the domain name by squatting. As in real estate, so in cyber law no right is established by trespass.

Posted in Abusive intent, Complainant "in mind", Cybersquatting, Denial of knowledge, Evidence, Knowledge, Para. 4(b)(i) of the Policy, Targeting, Trademark in mind | Tagged , , , , , | Leave a comment

Acquired Distinctiveness Through 5 or More Years of Use

Posted on May 14, 2012 by Gmlevine

Words and phrases in common use are attractive equally to purveyors and domainers. That one has a trademark does not disqualify the other from registering an identical or confusingly similar composition as long as proof fails to demonstrate bad faith. While registration confers distinctiveness, trademarks on the lower rung acquire this virtue over time. Trademarks qualified for registration under Section 2(f) of the Lanham Act (15 U.S.C. §1052(f)) for example are concededly generic or descriptive. This being the case, it is equally true that as a trademark descends in rank it has less protection. PetsMed Express Inc. v. JLB a/k/a Joseph Brinton, D2009-0179 (WIPO April 6, 2009) (“The Policy was not intended to permit a party who elects to register or use a common or descriptive term as a trademark to bar others from using the common term in a domain name, unless it is clear that the use involved is seeking to capitalize on the goodwill created by the trademark owner.”).

Viewed in this light distinctiveness is a fluid concept. In the UDRP context, domain names composed of common words or descriptive string employed for their common meanings infringe complainant’s right only on evidence that respondent intended to take advantage of complainant’s existing reputation in the marketplace. British Sky Broadcasting Group Plc. and British Sky Broadcasting Limited v. Global Access, D2009-0817 (WIPO August 26, 2009). As a result, while potential use by many of common words and descriptive strings may be an argument in favor of a respondent’s good faith, the test is whether respondent targeted complainant’s trademark in particular, and that is determined either from the resolving website’s content or the parties’ geographic or product/service proximity.

Whether a respondent acted in bad faith depends on its intentions, which in turn can be determined from its business operation and further inferred from its use of the domain name. “If the Complainant’s mark [PETMEDS] were highly distinctive or famous, that conclusion would be nearly unavoidable.” These principles are reinforced in a new proceeding by PetsMed Express against a different respondent, Brian Schiffman, Inc., D2012-0326 (WIPO April 4, 2012). It lost the first time for the same reasons as the second. The Panel notes in the second proceeding that

“Pet meds,” referring to pet medications, appears to be widely used as a descriptive term, and it is found in numerous domain names, including <directpetmeds.com>, <discount-petmeds.net>, <discountpetmeds.info>, <royalpetmeds.com>, <petmeds supplies.com>, <petmedsreviews.com>, <all-pet-meds.com>, <pet-med.biz>, <petmedsonline.info>, <nationalpet meds.com>, <petmedsonline.org>, <onlinepetmeds.info>, <petmedstore.net>, <petmedstore.com>, <dogspetmeds.com>, <petmeds online.org>, <petmedoutlet.com>, and <petmed shop.net>. This suggests that many retailers of pet medications find the term useful for its descriptive value rather than its trademark value. (Emphasis added).

There is no question that the Respondent had knowledge of the Complainant, but that is not dispositive either of lacking rights or legitimate interests or of abusive registration. But, as noted above, the mark is neither “highly” distinctive nor famous. Furthermore, competition is not grounds for forfeiture.

Posted in Abusive intent, Affixes / suffixes, Common expressions, Cybersquatting, Generic/Descriptive terms, Legitimate use, Para. 4(a)(ii) of the Policy, Para. 4(a)(iii) of the Policy, Para. 4(c)(i) of the Policy, Targeting / Not targeting | Tagged , , | Leave a comment

Common Word Trademarks Owned by Major Brand Complainants: How Protectable?

Posted on May 7, 2012 by Gmlevine

Common word trademarks, PRICELESS for example, are no less common for being owned by a major brand complainant and no more protectable from others using identical or confusingly similar words in their ordinary senses than if they were owned by parties of no market stature. As a complainant’s choice descends the scale, the less protectable the trademark. It is not as though common words never ascend in strength. They can when selected as arbitrary signs. The distinctiveness of APPLE, ORANGE and BLACKBERRY (to take only fruit names) is not because the owners are recognized in the marketplace as sources of produce.

The point about commonness and weakness is made in a duo of decisions by the same Panel, Mastercard International Incorporated v. Wesley Wobles, D2011-2311 (WIPO March 8, 2012) () and Mastercard International Incorporated v. Education, Ersin Namli, D2011-2312 (WIPO March 8, 2012) (). Complainant claims PRICELESS is one of a family of trademarks. The Panel dismissed both complaints. The fact that Complainant in its MASTERCARD identity is internationally famous is irrelevant.

Whereas the adjectival phrase MASTERCARD is strong – more suggestive than descriptive – PRIVILEGE is weak. It is not made strong by association. Furthermore, Complainant’s certified services are in the financial sector. In its application to the USPTO, Mastercard describes its services as follows:

Financial services, namely, providing credit card, debit card [charge card and stored value smart card services, prepaid telephone calling card services, cash disbursement,] and transaction authorization and settlement services.

In a recently filed registered trademark, PRICELESS NEW YORK (not referred to in either of these cases) the Complainant describes its services as follows:

Promoting the goods and services of others by means of coupons, discounts, advertisements, rewards and incentives generated in connection with the use of credit and debit cards, electronic links to merchant and retailer web sites, and through promotional contests.

The Panel notes that implicit in Complainant’s claim are two assertions:

(1) that the PRICELESS family of marks is associated with some of the areas represented by third-party links on Respondent’s website, which, according to the Complaint, are “hotel reservations, restaurant coupons, and tours”; or (2) that the PRICELESS family of marks is broadly associated with virtually any promotion of goods and services on the Internet – by “merchant and retailer web sites.”

If it were so that Complainant’s trademark by its implicit range could prevent anyone from using “priceless,” then (in effect) it would take control of the word coupled or not with any product or service. Implicit in the argument is that no one else can employ “priceless.” The Panel was not persuaded:

Although hotel reservations, restaurant coupons, and tours may be among the millions of things that might be obtained through use of Complainant’s trademarked products and services, the Panel finds that the Complaint in this proceeding has not established that the PRICELESS family of marks is associated in the trademark sense with “hotel reservations, restaurant coupons, and tours.”

Mastercard in its new application for PRICELESS NEW YORK and Respondents in their domain names with other geographic locations are all using “priceless” either as a qualifier to describe the value of the location (New York is priceless) or goods and services in New York are “priceless”).  In this use no one has a monopoly on the qualifier standing alone.  Respondents do not violate any third-party rights.

Posted in Abusive intent, Complainant "in mind", Cybersquatting / Not cybersquatting, Likelihood of confusion, Para. 4(a)(ii) of the Policy, Paragraph 4(c) of the Policy, Reputation in the marketplace, Speculating / Monetizing, Targeting / Not targeting, UDRP Rule 10(d) (evidence) | Tagged , , , | Leave a comment

UDRP is Niche Forum for Cybersquatting, Not Trademark Infringement

Posted on April 28, 2012 by Gmlevine

The UDRP is not a general court for trademark infringement, but a niche forum for a particular kind of infringement. It authorizes a Panel to determine whether a domain name incorporating a complainant’s trademark violates the terms of a respondent’s registration, i.e. that it “will not infringe upon or otherwise violate the rights of any third-party.” Paragraph 2 of the Policy. The registration agreement is similarly worded. The Panel is not authorized to rule on whether the registration and use of the domain name is a trademark infringement.

The distinction between a violation of a third-party’s trademark rights and a trademark infringement is subtle and not always clear, but it is important to understand the outer limits of the UDRP. Some light is shed on the distinction in two cases by the same panelist, Sunovion Pharmaceuticals Inc. v. ProCommerce, LLC, D2012-0232 (WIPO March 28, 2012) and Sunovion Pharmaceuticals Inc. v. Gadd Formulas, LLC, D2012-0234 (WIPO March 28, 2012). Respondents did not respond in either case.

While the Respondents in the two cases are different, the Complainant alleges that both are controlled by a third party who it is currently suing in the United States District Court for the District of Massachusetts. In that case Complainant asserts claims of trademark infringement, unfair competition, and trademark dilution under United States federal law and Massachusetts state law. It alleges that the defendant Health Science Nutrition Inc. “owns and/or operates websites” at which Lunexor is sold, including the disputed domain names in the proceedings,(ProCommerce) and(Gadd). Complainant owns the trademark, LUNESTA, which is also the name of a prescription sleep drug.

Only the first four letters, “lune” are identical. The question is whether the aural similarity (which is “not obvious”) has any meaning:

The Panel does believe that Complainant has demonstrated aural similarity, however, based upon the apparent phonetic pronunciations – “lu-NES-ta” and “lu-NEX-or”. For purposes of the Policy – and for reasons set out below the Panel expressly disclaims any opinion on whether the aural similarity has significance under United States trademark law – Complainant has shown, in the view of the Panel, that the disputed domain name is confusingly similar to a mark in which Complainant has rights.

The Complainant itself points to the problem in these cases. Respondent actually sells a product by the name “Lunexor,” which is identical to the dominant feature of the disputed domain name. This would appear to support Respondent’s right or legitimate interest in the domain name. However,

Complainant seeks to avoid this conclusion on one basis only: that Respondent’s choice (or Respondent’s principal’s choice, as alleged in the Massachusetts lawsuit) was done solely to sell a product that infringes Complainant’s mark under national (U.S. federal or Massachusetts state) law, i.e., that Respondent is selling an “infringing product”.

The implication is that the similarity between the domain name and trademark is not mere happenstance because the Respondents’ product is infringing. As presented, the “infringement” is outside the scope of the Policy. “At this point all the Panel has to rely upon are Complainant’s allegations in this proceeding and in the Massachusetts lawsuit.” The Panel notes

For reasons that should be obvious to those familiar with the UDRP process, this proceeding is not the place – and certainly should not be the first place – for a declaration that a particular product infringes (or not) another party’s trademark…. An action for infringement (or contesting a trademark application in the USPTO … involves different legal standards and calls for a broader record, with factual and expert evidence on many topics of marginal (if that) relevance to the Policy standards.

In a UDRP proceeding, even if the evidence is persuasive of product infringement, complainant would “not automatically make out a claim for cybersquatting, and vice versa.”

Posted in Abusive intent, Action in court of law, Complex facts / Not cybersquattting, Cybersquatting / Not cybersquatting, Domain names, Judicial proceedings, Lanham Act, Para. 4(a)(iii) of the Policy, Paragraph 4(b) of the Policy, Paragraph 4(c) of the Policy, Registration Agreement, UDRP Rule 10(d) (evidence), UDRP Rule 18(a), UDRP Rule 4(k), Within / Outside Scope | Tagged , , | Leave a comment

Refusing to Relinquish Domain Name After Termination of Distribution Agreement

Posted on April 21, 2012 by Gmlevine

The conjunctive rule for proving bad faith weighs heavily on manufacturers who entered into distribution arrangements authorizing use of their trademarks in domain names without anticipating the consequences of termination. The issue is illustrated in Danshar (1963) Ltd. v. Joey Gilbert/ Daisy Li, D2011-2304 (WIPO March 11, 2012) (Complainant acquired the business for which Respondent without formal contract was an authorized distributor). Complainant’s burden is not satisfied by withdrawing permission prior to commencement of proceedings. Proof of authorized registration is fatal to complainant’s case.

If respondent registered the domain name pursuant to a licensing agreement without complainant expressly reserving right for its return at the expiration of the contract, then the respondent’s continued use after termination of its business relationship is either arguably legitimate for the reason that the registration was in good faith, The Prudential Insurance Company of America v. Sheri Jones, FA0510000584625 (Nat. Arb. Forum December 19, 2005) )); Miss Universe L.P., LLLP v. A Visual Group, D2005-0738 (WIPO August 29, 2005), or (because authorization refutes registration in bad faith) beyond the scope of the Policy.

The result is similar when a respondent registers a domain name with the explicit permission of complainant who later withdraws it, or the contract is silent on the post-termination use of the domain name. Continued use may be in bad faith but not registration. Green Tyre Company Plc. v. Shannon Group, D2005-0877 (WIPO October 5, 2005). The respondent may lack rights or legitimate interests, but complainant is trumped by its authorization. The Respondent in Danshar continued using the domain name to sell competitive products:

The redirection of the disputed domain name to a website selling products competitive with the Complainant’s MINERAL CARE brand is plainly use in bad faith (in the absence of rights or legitimate interests). That is a necessary finding, but not sufficient in itself to establish this requirement as there must also be registration in bad faith.

Panels have recognized that respondents whose rights have expired may nevertheless continue to have a legitimate interest. Loss of portal could be particularly harmful to respondents with inventories and customers to service in which the factual circumstances support a legitimate interest that overrides complainant’s right. International E-Z UP, Inc. v. PNH Enterprises, Inc., FA0609000808341 (Nat. Arb. Forum November 15, 2006) (“Respondent is not claiming a legitimate interest that comes from a right to resell Complainant’s goods, but a legitimate interest in maintaining its reputation and avoiding disruption.”). The Panelist in E-Z UP noted that respondent”is merely unwinding the detail that comes from having stock already acquired that it must dispose of…. [It] is not claiming a legitimate interest that comes from a right to resell Complainant’s goods, but a legitimate interest in maintaining its reputation and avoiding disruption” (Emphasis added). The Panel acknowledged: “Clearly this interest cannot last forever…. [But it] seems contrary to common sense and all business practice to deny that these situations give rise to interests that are legitimate.”

The complainant’s “right” to prevent a respondent from continuing its use of an infringing domain name is barred by the conjunctive rule. The Panel notes in Danshar that some panelists “have been willing to rule that a registration was in bad faith where the respondent’s continued use of the domain name was inconsistent with the terms on which the domain name had been registered.” They would hold an authorized registration in bad faith on the fiction that had the later circumstances been contemplated by the parties at the time of the registration it would have been bad faith. Subjective intent is inferred. However, the logic of this view is undercut by too many subjunctives. The view has not gained traction, anymore than the theory of retrospective bad faith which it resembles.

Posted in Authorized use, Distributor / reseller, Post termination, Reseller / Distributor, Targeting / Not targeting | Tagged , , , , | Leave a comment