WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Physik Instrumente GmbH. & Co. v. Stefan Kerner and Jeremy Kerner and Magic Moments Design Limited
Case No. D2000-1001
1. The Parties
The Complainant is Physik Instrumente GmbH. & Co., a corporation organized in the Federal Republic of Germany, with place of business in Waldbronn, Germany.
The Respondents are Stefan Kerner and Jeremy Kerner, with place of business London, United Kingdom, and Magic Moments Design Limited, with place of business in London, United Kingdom.
2. The Domain Name(s) and Registrar(s)
The disputed domain name is "".
The registrar of the disputed domain name is Network Solutions, Inc., with business address in Herndon, Virginia, USA.
3. Procedural History
The essential procedural history of the administrative proceeding is as follows:
a. The Complainant initiated the proceeding by the filing of a complaint by courier mail received by the WIPO Arbitration and Mediation Center ("WIPO") on August 10, 2000, and by e-mail received by WIPO on August 17, 2000. Payment by Complainant of the requisite filing fees accompanied the courier mailing. On August 16, 2000, WIPO transmitted a Request for Registrar Verification to the registrar, Network Solutions, Inc. (with the Registrar�s Response received by WIPO on August 20, 2000). On August 23, 2000, WIPO completed its formal filing compliance requirements checklist.
b. On August 23, 2000, WIPO transmitted notification of the complaint and commencement of the proceeding to Respondents via e-mail, telefax and courier mail.
c. A response from Respondents Stefan Kerner and Jeremy Kerner was received by WIPO via courier mail on September 11, 2000. Said Respondents also transmitted the response to Complainant.
d. On September 19, 2000, WIPO invited the undersigned to serve as panelist in this administrative proceeding, subject to receipt of an executed Statement of Acceptance and Declaration of Impartiality and Independence ("Statement and Declaration"). On September 19, 2000, the undersigned transmitted by fax the executed Statement and Declaration to WIPO.
e. On September 20, 2000, Complainant and Respondents were notified by WIPO of the appointment of the undersigned sole panelist as the Administrative Panel (the "Panel") in this matter. WIPO notified the Panel that, absent exceptional circumstances, it would be required to forward its decision to WIPO by October 4, 2000. On September 20, 2000, the Panel received an electronic file in this matter by e-mail from WIPO. The Panel subsequently received a hard copy of the file in this matter by courier mail from WIPO.
f. On September 20, Complainant transmitted to the Panel (and Respondents and WIPO) a request for consideration of Reply Brief and Brief in Reply to Response of Respondents. On September 21, 2000, the Panel notified the parties (and WIPO) that it would accept and consider the Reply Brief.
g. On September 21, Respondents transmitted to the Panel (and Complainant and WIPO) a request for leave to file a response to Complainant�s Reply Brief. On September 21, the Panel notified the parties (and WIPO) that Respondents had leave until midnight September 30, 2000 to file such a response. On September 29, 2000, Respondents transmitted their response to the Panel (and Complainant and WIPO) via e-mail (with hard copy also transmitted).
The Panel has not received any requests from Complainant or Respondents regarding further submissions, waivers or extensions of deadlines, and the Panel has not found it necessary to request any further information from the parties. The proceedings have been conducted in English.
4. Factual Background
Complainant has registered the word and design mark "PI" in Germany (reg. no. 898458, date of registration October 18, 1972, date of publication Nov. 30, 1972). The design portion of Complainant�s mark as so registered is a line-drawing consisting of a trapezoid bisected horizontally by a straight line extending beyond the edges of the trapezoid on each side. The straight line is bounded on each end by a curved line giving the appearance of open- and close-parentheses. The word portion of Complainant�s mark as so registered consists of the narrow line-drawn capital letters "PI" placed just above the top of the above-described trapezoid. Complainant�s German trademark is registered in Class 9, covering apparatus for electronic-optical measurement ["Geräte für elektronisch-optische Messungen"][translation by Panel]. (Complaint, Annex 4)
Complainant has registered the word mark "PI-System" in Germany (reg. no. 898459, date of registration, October 18, 1972, date of publication November 20, 1972). Such registration is in Class 9, also covering apparatus for electronic-optical measurement. (Id.)
Complainant has registered the word mark "PIFOC" in Germany (reg. no. 396192599, date of registration November 21, 1996, date of publication, March 10, 1997. Such registration is in Class 9, covering electronically controllable mechanical positioning devices ["Elektrisch steuerbare mechanische Verstelleinrichtungen"][translation by Panel]. (Id.)
Complainant has registered the word mark "PIFOC" on the principal register of the United States Patent and Trademark Office (USPTO) (. 2,073,711, date of registration June 24, 1997). Such registration is in Class 9, covering microscope objective focusing drives and user manuals sold as a unit therewith. (Id.)
Complainant has registered the domain name "PHYSIKINSTRUMENTE.COM" and uses that name in connection with a website at Internet address "". Said domain name was registered on June 6, 1996 (Network Solutions WHOIS database response, Complaint, Exhibit 6). Complainant has also registered the domain names "POLYTECPI.COM" and "PICERAMIC.COM" (id.), and on July 3, 2000, it registered the domain name "" (Complaint, Annex 6).
Complainant uses the name "PI" on web pages at its "" site in connection with its marketing activities in relation, e.g., to NanoPositioning, MicroPositioning and Piezo Technology (id. Annexes 5, 7 and 8).
Complainant and its "sister company Polytec and the international subsidiaries" employ approximately 400 persons.
Respondents "Stefen Kerner" and "Jeremy Kerner" are the named registrants of the disputed domain name "" (Registrar�s Verification of August 20, 2000). Respondent "Magic Moments Design Ltd" is the Administrative Contact listed in Respondents� record of registration (id.). Such record of registration was created on May 16, 2000, and was last updated on May 16, 2000 (Network Solutions WHOIS database response of July 7, 2000, Complaint, Annex 1).
Respondents, the Kerners, through their majority-owned Internet consulting firm (Designercity Limited), developed a business plan for a service enterprise referred to by them as "" that would "for a fee, [provide] a personal assistant that will take care of all your personal and business organization and requirements. We provide a human interface between our customer and the good and service industry and interact in a understanding and proactive way. Simply � We save you time and in today�s world, time means money." Respondents� computer records indicate that such plan was developed in December 1999 (Response, para. 9, and Annexes 5 & 6).
In January 2000, Respondents, the Kerners, acquired the "" domain name from Transaga Software Inc. of Beaverton, Oregon, USA, for the price of fifty thousand U.S. dollars ($50,000US) (Response, para. 10 and Exhibit 2, fax from Jeremy Kerner to Andy Gadd (Barclays Bank) of January 6, 2000 directing and authorizing wire transfer; and Exhibit 7, e-mail of December 23, 1999 from Tony Evans to Stefan Kerner, discussing completed terms of sale and arrangement of payment transfer).
On February 1, 2000, Complainant sent an e-mail message to Respondents (at their Magic Moments administrative contact e-mail address) with the following text:
"Dear Sirs,
We are interested in buying the domain from you. Please contact me.
Best Regards,
Stefan Vorndran
Marketing Manager
Physik Instrument (PI) GmbH & Co." (Response, Exhibit 8)
In its Complaint, which discussed Respondents� negotiations for the sale of the disputed domain name in pejorative terms, Complainant failed to disclose that it initiated such negotiations, or to provide the text of the aforesaid message, despite the fact that Complainant provided the text of subsequent e-mail correspondence between Respondents and Complainant (beginning with an e-mail from Respondent Jeremy Kerner to Stefan Vorndran, dated February 29, 2000).
Respondents� final offer to sell the disputed domain name to Complainant was at the price of ₤100,000UK. Complainant�s highest offer was DM50,000 and its final offer was $15,000US (e-mails between Stefan Vorndran and Jeremy Kerner of March 14 and July 5, 2000). (Complaint, Exhibit 13)
As of August 7, 2000, Respondents were offering the disputed domain name for sale at the GreatD auction site with an asking price of $3,000,000 US (three million U.S. dollars). (Printout of GreatD web page of August 7, 2000, Complaint, Annex 14).
The Service Agreement in effect between Respondents and Network Solutions subjects Respondents to Network Solutions� dispute settlement policy, the Uniform Domain Name Dispute Resolution Policy, as adopted by ICANN on August 26, 1999, and with implementing documents approved by ICANN on October 24, 1999. The Uniform Domain Name Dispute Resolution Policy (the "Policy") requires that domain name registrants submit to a mandatory administrative proceeding conducted by an approved dispute resolution service provider, of which WIPO is one, regarding allegations of abusive domain name registration (Policy, para. 4(a)).
5. Parties� Contentions
A. Complainant
Complainant indicates that it is commonly known in Europe by its initials ("PI"), and indicates that this is similar to the situations of International Business Machines (and "IBM"), and Volkswagen (and "VW").
Complainant asserts that it is the holder of a trademark registration for the word and design mark "PI" in Germany in International Class 9, and that it is the holder of trademark registrations for "PIFOC" (Germany and the United States) and "PI-SYSTEM" (Germany)(See Factual Background, supra).
Complainant alleges that it holds common law trademark rights in "PI" based on its widespread use of the mark "on virtually all of the many products it offers for sale world-wide" (Complaint, para. 12.D). Complainant asserts that the marks are firmly established in the public mind with its goods.
Complainant notes that it has registered several domain names, and that its "PI" mark is used in metatags in certain of its webpages (id., para. 12.H).
Complainant alleges that the disputed domain name is confusingly similar to its registered trademarks "PI (WITH DESIGN), PI-SYSTEM and PIFOC, its common law trademark PI, and the registered internet domain names www.polytec, , , and www.." (Id., para. 12.I)
Complainant notes that the disputed domain name is currently used by Respondents to host a web page that refers to a "Magic Moments" web site and business. Magic Moments provides Internet support services. The term "PI" is not used on the website identified by Respondents� www. address. (Id., para. 12.J-M)
Complainant asserts that Respondents registered and used the disputed domain name in bad faith. According to Complainant, this is evidenced by Respondents� actual or constructive knowledge of Complainant�s trademark rights, its offer to sell the name for a substantial price (Complainant refers to "Respondents� tactics in attempting to extort a large payout from Complainant" (id., para. 12.N.5)), and their use of the disputed domain name to obstruct prospective customers from reaching Complainant, and diverting Complainant�s customers to Respondents� own web site. (Id., para. 12.N)
Complainant asserts that Respondents have no rights or legitimate interests in the disputed domain name because: (1) Complainant has exclusive rights to "use of PI as a domain"; (2) Respondents are not commonly known by the name, have not used it in connection with a bona fide offering of goods or services, and are not making legitimate or non-commercial use of the name.
Complainant states that Respondents� assertion that they did have a plan to develop the brand was not supported by evidence, that Respondents offered to sell the name shortly following its registration, and that "his statement was a ruse designed to generate a higher price for the domain name". Moreover, Complainant states that Respondents admitted to abandoning their plan. (Id., para. 12.O.)
Complainant requests that the Panel ask the Registrar to transfer the domain name "" from Respondents to it (id., para. 13).
In its Reply Brief, Complainant suggests that Respondents may have fabricated evidence submitted to the Panel on the basis that it is technically feasible to alter the internal date marks that computers place on document records (Reply Brief, at note 2).
Complainant states that Respondents indicated that they had offers for the disputed domain name in excess of offers they had actually received, so as to induce interested parties to offer larger sums to purchase it. This is alleged to constitute evidence of bad faith.
Complainant indicates that "Neither the mathematical term �pi�, nor the letters �PI� have anything whatsoever to do with the business Respondents describe.
Complainant indicates that the fact that "PI" is a commonly used trademark (as demonstrated by Respondents) "strongly suggests that Respondents spent $50,000 to acquire the PI.COM domain in the belief that one of those legitimate users would surely be willing to pay a premium price for it."
B. Respondents
Respondents state in their own words:
"Factual Background
6. "The Respondents are the founders of Designercity Limited (�Designercity�) which was established in August 1994 as a new media and internet agency. Designercity was incorporated on 26 July 1995. Designercity has established itself as a leading new media and internet consultancy which advises on all aspects of internet strategy and design. The company has gained a reputation for producing work of outstanding quality and having the ability to manage a complete internet strategy for its clients, which include leading organisations such as Tesco Supermarkets, Shell and Arsenal Football Club. �
7. "The Respondents have been involved in other internet start up businesses, the most recent (in March 2000) being G. Limited (�G�). G is a gardening internet portal covering all aspects of interest to the gardening world. G raised over �5 million in venture capital finance.
8. "In addition to the above referenced projects, the Respondents have been working on two further projects over recent months. The first was an internet radio station aimed at a worldwide audience providing a multitude of different channels. To this end, the Respondents partnered themselves with Forever Broadcasting plc, a company with an exceptional reputation in the radio industry. The Respondents proposed to use the brand �� as the name of the internet radio station and the domain was bought by the Respondents in January 2000 in anticipation of its intended use. �The Respondents subsequently incorporated the company in March 2000 and a copy of the certificate of incorporation is at [an] Exhibit [hereto]. In light of the fact that the conditions for raising internet start up finance were difficult in the spring of 2000, the Respondents decided to cancel the project in May 2000.
9. "The second new project developed by the Respondents related to an online office support internet portal which aimed at providing secretaries and executives with a range of services (such as concierge services and travel bookings). The Respondents branded this proposed internet portal �� (as in the mathematical term pronounced �pie�). At [an] Exhibit [hereto] is a copy of a paper prepared by the Respondents on 7 December 1999 setting out in detail the concept (it should be emphasised that this document was prepared at a time when the Respondents had not acquired the domain name). The document makes clear that the idea behind is to provide subscribers with a personal assistant who will take care of the subscriber�s personal and business organisational requirements. It will be noted that the 4 page document is embossed with the π symbol. The computer record for the Respondents� document is at [an] Exhibit [hereto] and notes that the document was created on Tuesday 7 December 1999 at 9.15 am (the reference to �JK� is to Jeremy Kerner; the reference to �pi� is a reference to the project). Once a document has been created on the computer system it is not possible to modify the first creation date of the document.
10. "The Respondents proceeded to purchase the domain name for US$50,000 from Transaga Software Inc of Beaverton, Oregon, United States of America the then owner of . [An] Exhibit [hereto] (the memorandum from Stefan Kerner to Andy Gadd referred to above) confirms that Mr. Gadd was asked (on 6 January 2000) to make appropriate arrangements to transfer US$50,000 to Transaga Software Inc�s bank account. At [an] Exhibit [hereto] is an exchange of e-mail correspondence between Stefan Kerner and Transaga Software Inc relating to the acquisition of the domain name. Therefore, the Respondents decided upon the name prior to acquiring the domain name in January 2000 (the domain name was not acquired on 16 May 2000 as alleged at paragraph 10 of the Complaint).
11. "Shortly after their acquisition of the domain name, the Respondents decided not to progress the internet portal any further. The Respondents� decision was influenced by the fact that the launch of G was imminent in early 2000. Further, the Respondents anticipated that they would experience difficulties raising finance due to the general difficulties faced by internet start ups looking to raise finance in early 2000.
12. "On 1 February 2000, the Complainant made contact with Magic Moments Design Limited (�Magic Moments�), the company which hosts (but does not own) the Respondents� domain name (the Respondents have no business connection with Magic Moments and it is submitted that as the mere domain name host this company has been erroneously cited as a Respondent in this action). The e-mail (which was forwarded onto Jeremy Kerner and is exhibited at [an] Exhibit [hereto] stated as follows:
�Dear Sirs,
We are interested in buying the domain from you. Please contact me
Best regards.
Stefan Vorndarn, Marketing Manager Physik Instrumente (PI) GmbH & Co�
13. "The Respondents note that the Complainant has exhibited at [an] Exhibit [hereto] of the Complaint the e-mail exchanges passing between the Complainant and the Respondents. The Respondents regret that the Complainant has not submitted a full exchange of these e-mails which would show that it was the Complainant which approached the Respondents on 1 February 2000 to purchase the domain name. In its e-mail of 1 February 2000 and in subsequent exchanges with the Respondents, the Complainant sought voluntarily and willingly to negotiate a sale of the on a regular commercial basis. This is evidenced by the fact that on 14 March 2000 the Complainant offered a maximum of DM50,000 for the domain name and on 5 July 2000 offered US$15,000 (these offers are set out in the e-mails at [an] Exhibit of the Complaint).
14. "In addition to the Complainant, a number of other organisations unconnected with the Respondents sought to acquire the domain name from the Respondents. The following examples are submitted at [an] Exhibit [hereto]:
(a) February 2000 - enquiry from Ben de Biolley (the letter of 9 February referred to in that exchange cannot currently be located);
(b) February 2000 � enquiry from an individual by the name of David Mintz;
(c) 10 March 2000 � request from Afonso Rangel of PI-Portugal Informatico;
(d) 22 August 2000 � e-mail from Graham Kenny of Europlus Research and Management in Dublin, Ireland;
(e) 24 August 2000 � letter from Phil Wharton (on behalf of a small group of mathematics enthusiasts looking for a suitable internet domain name address).
In addition, the Respondents have received unsolicited telephone calls from a number of other third parties seeking to acquire (including US based private investigators).
Policy Paragraph No. 4(a)(i)
15. "The Respondents deny that the domain name is identical or confusingly similar to a trade mark or service mark in which the Complainant has rights.
16.1. �
16.2. "It is further submitted that none of the marks cited at paragraph 12C of the Complaint are marks in which the Complainant has rights AND which are confusingly similar to the mark PI. This is self-evident in respect of the PIFOC marks (both the international registration no. 39619259 and the US registration no. 2073711) and the registered trade mark PI-SYSTEM registered in the Federal Republic of Germany (registration no. 0898459). In respect of the German registration for the PI device mark, it is submitted that the mark is heavily stylised with a geometric device mark which has in no way been adopted by the Respondents.
16.3. "If (which is not admitted) any of the Complainant�s registered marks are considered confusingly similar to the domain name, paragraph 4(a)(i) of the Policy notes that the Complainant must still prove that it has �rights� in the trade mark. It is submitted that in order to establish the existence of such �rights� reference must be made to the respective businesses of the Complainant and Respondent. Confirmation of the need to assess confusing similarity by reference to the goods/services for which the mark is registered against the use made by a third party (in order to determine the existence of a �right�) is confirmed in the EU First Council�s Directive of 21 December 1988 to approximate the laws of the Member States relating to trade marks. Recital 10 of the Directive states as follows:
�Whereas the protection afforded by the registered trade mark, the function of which in particular is to guarantee the trade mark as an indicator of origin, is absolute in the case of identity between the mark and the sign and goods or services; whereas the protection applies also in cases of similarity between the mark and the sign and the goods or services; whereas it is indispensable to give an interpretation of the concept of similarity in relation to the likelihood of confusion; whereas the likelihood of confusion, the appreciation of which depends on numerous elements and, in particular, on the recognition of the trade mark on the market, of the association which can be made with the used or registered sign, of the degree of similarity between the trade mark and the sign and between the goods and services identified, constitutes the specific condition for such protection.�
16.4. "This interpretation was endorsed by the European Court of Justice (�ECJ�) in Sabel BV v Puma AG dated 11 November 1997 (Exhibit [hereto]) at paragraph 22.
16.5. "The approach of the ECJ in Sabel v. Puma has been recognised and endorsed in proceedings under the Policy�
16.6. "It is submitted that, in the circumstances, the Complainant�s registered trade marks cannot be considered confusingly similar to the Respondents� domain name given that the Complainant and Respondents are engaged in entirely different industries (and indeed, the Respondents� proposed use of was also in connection with a business entirely unconnected with that of the Complainant).
16.7. "It is further submitted that all of the trade marks cited at paragraph 12C of the Complaint are vulnerable to cancellation for non-use (save possibly in respect of International registration no. 39619259 for PIFOC, which it is submitted is not identical or confusingly similar to the mark �Pi�). �
16.8. "The Respondents deny that the Complainant has established unregistered (common law) rights to the PI mark. The Complainant has provided no details of its goodwill in the mark by reference, for example, to sales, turnover or by way of testimony from traders in the market place. Further some of the Complainant�s materials clearly demonstrate that the mark �Pi� is not the name under which the Complainant is known (reference is made to [an] Exhibit [hereto] which refers to the full name of the Complainant, the name of the business group �The PI-Polytec Group� and various subsidiaries some of which have names that are utterly irrelevant (for example �MGM�, �PNA�, �GSG GmbH�), and others which only incorporate the letters �PI� as part of company name). Even if the Complainant has established such rights (which is not admitted), the Respondents submit that these rights have accrued only in connection with the specific goods and services in which the Complainant trades (which the Complainant itself admits at paragraph D at page 6 of the Complaint). Therefore, it is submitted that the Complainant does not have any unregistered rights in the mark PI which it could use against the Respondents.
16.9. "In this regard the Complainant appears to confuse itself with the proprietors of the well known brands IBM and VW (paragraph B at page 5 of the Complaint). However, unlike IBM and VW, it is submitted that the Complainant is not well known and indeed the Respondents had never heard of the Complainant prior to its approach to purchase the domain name (at [an] Exhibit [hereto] are declarations from each of the Respondents attesting to this fact). In this regard, the Complainant is not in a position to avail itself of Article 16 paragraph 3 of TRIPs which is both binding on Germany and the United Kingdom. Article 16 paragraph 3 of TRIPs provides that Article 6bis of the Paris Convention on the protection of well known marks is extended to afford protection to trade marks that are affixed on goods or used in relation with services �which are not similar to those in respect of which a trade mark is registered provided that the trade mark in relation to those goods or services would indicate a connection between those goods or services and the owner of the registered trade mark and provided that the interests of the owner of the registered trade mark are likely to be damages [sic] by such use.� It has been noted that the fame (or otherwise) of a mark is a relevant factor in determining whether a trade mark is confusingly similar for the purposes of the Policy. �
16.10. "Indeed, the Complainant admits in its materials that it is a very modestly sized business ([an] Exhibit [hereto] notes that the Complainant employs 120 people in Germany and together with a sister company, Polytec (a name which is not remotely similar to �pi�) and their international subsidiaries, more than 400 worldwide).
16.11. "Further evidence that any rights the Complainant has in the mark PI are extremely limited is confirmed by the fact that eight separate entities have pending or registered trade marks for the trade mark PI in the United Kingdom or the European Union and that a further ten PI trade marks in the same jurisdictions have been abandoned or have lapsed ([an] Exhibit [hereto]). The Complainant owns none of these pending or registered marks. At [an] exhibit [hereto] is a print off of all �pi� marks listed with the United States Patent and Trade Mark Office (USPTO). Of the 154 hits, 41 were for the �pi� name on its own. In order to deal with matters proportionately full checks have only been made against the first and last five �Pi� marks on the USPTO list � none of these marks are in the name of the Complainant (the results are also at [an] Exhibit [hereto]).
16.12. "It is further submitted that the Complainant�s reliance upon domain name registrations per se is irrelevant as domain name registrations create no �rights� (to use the word in paragraph 4(a)(i) of the Policy) in a name. In any event the only domain name listed at paragraph F at pages 6 and 7 of the Complaint which could be considered identical or confusingly similar to the domain is which was only registered on 3 July 2000. This domain name is clearly irrelevant as it was registered after the Respondents acquired the domain name and after the Complainant first sought to purchase the domain name from the Respondents.
Policy Paragraph No. 4(a)(ii)
17.1. "The Respondents deny that they have no rights or legitimate interests in respect of the domain name. The Respondents have demonstrated that the brand was developed by the Respondents prior to their acquisition of the domain name and in the circumstances have legitimate interests in respect of the domain name. Evidence of a demonstrable preparation to use a domain name in connection with a bona fide offering of goods and services within the meaning of paragraph 4(c)(i) of the Policy defeats any claim under the Policy�.
17.2. "The Respondents note the comments of the Complainant at paragraph O of the Complaint to the effect that the Respondents have no legitimate interests in respect of the domain name. In response the Respondents would say as follows:
(a) It is absurd to suggest that the use made by the Complainant of the PI mark entitles it �to exclusive use of pi as a domain�. As has been demonstrated above, PI is a very popular trade mark amongst a number of independent organisations. It is therefore incorrect to compare this case with the Empresa case referred to by the Complainant (case no. D2000-0164). In that case, the Tribunal supported its view that the Respondent could have no legitimate interest in the domain name in question by reference to the fact that the name was entirely invented. The footnotes to the case note that the nature of fantasy or invented words are �considered an important element in previous cases related with abusive registration of domain names� and referred in particular to the Panavision LP v Toeppen decision (945-FSupp 1296). By comparison, the name �PI�, as has been demonstrated, is a popular brand amongst numerous unconnected organistaions [sic] and is also a well known term. The Oxford English Reference Dictionary (second edition � 1996) notes that �pi� is the 16th letter of the Greek alphabet and also the symbol of the ratio of the circumference of a circle to its diameter ([an] Exhibit [hereto]).
(b) The Complainant is incorrect to suggest that the Respondents registered the domain name solely for the purposes of selling it. It was acquired so as to reflect in a domain name the name of the business which the Respondents were developing. It is further denied that Jeremy Kerner sought to �coerce� �100,000 payout. As is noted from the exchange of e-mails at [an] Exhibit [hereto] of the Complaint the Complainant and Respondents engaged in a cordial commercial negotiation which was instigated by the Complainant not the Respondents.
Policy Paragraph No. 4(a)(iii)
18. "The Respondents deny that the domain name was registered and used by them in bad faith. The Respondents� primary contention is that Rule 4(a)(iii) requires that the Respondents both registered and used the domain name in bad faith. In the first instance it is submitted that the Policy cannot apply to this action because the Respondents never registered the domain name. The submissions made below in response to the Complainant�s bad faith claims under rule 4(a)(iii) are therefore made without prejudice to the Respondents� primary contention.
18.1. "As noted from the declarations of each of the Respondents at [an] Exhibit [hereto] neither of them had heard of the Complainant before its offer to the Respondents to buy the domain name on 1 February 2000. It is submitted that it is a sine qua non of a claim of bad faith that the persons who are alleged to have acted in bad faith knew the victim or target of their actions. This is not the case in this action.
18.2. "The Respondents did not acquire the domain name �primarily� for the purpose of selling etc. the domain name to the Complainant or to a competitor of the complainant for valuable consideration in excess of the Respondent�s documented out of pocket expenses directly related to the domain name. As has been demonstrated, the sole (let alone primary) purpose of the Respondents in acquiring the domain name was in order for them to operate a legitimate business under that name. Therefore, paragraph 4(b)(i) does not apply in which case the Respondents request for more than the $50,000 which they paid for the domain name is irrelevant. In the circumstances, the Complainant�s references to the CBS case (case no. D2000-0243) is misleading in that it omits to refer to the first limb of the test under 4(b)(i) which requires acquisition for the primary purpose of selling to the Complainant or its competitor.
18.3. "The Respondents have demonstrably not prevented the Complainant from reflecting its mark in a corresponding domain name under paragraph 4(b)(ii). There is (by reference to the Claimant�s own evidence) no diversion of the domain to a site which in any way could be considered connected to or related to the Complainant. Furthermore, the Respondents have engaged in no such �pattern of conduct� as required under 4(b)(ii). Whilst the Respondents both work within the internet industry, they have jointly/personally acquired very few domain names themselves: in addition to and the Respondents bought the name and also g and both of which transferred to Greeenfingers Limited. Further, as has been demonstrated, the Respondents approach to domain name acquisition is based upon first, developing a business concept, identifying a brand, acquiring a corresponding domain name and developing a business under that name. This was the case with as well as and also g.
18.4. "The Respondents note that the Complainant does not rely upon any grounds of bad faith under paragraphs 4(b)(iii)�(iv) and the Respondents do not make any submissions in this regard accordingly.
19. "It is respectfully submitted that the Complainant has failed to make out any of the grounds required of them under paragraph 4(a) of the Policy (which specifies that the Complainant must prove each of the three elements in 4(a)). Furthermore, the Respondents have demonstrated, amongst other things, that they had rights and a legitimate interest in the domain name prior to the Complainant�s complaint. �
20. �
21. "The Respondents refer to the Tribunal�s decision in VZ VermögensZentrum AG v A (case no. D2000-0527). �
22. "It is finally submitted that the Complainant has brought these proceedings without fully understanding the purpose and intent of the Policy. It is submitted that the Policy was intended to deal with clear cases of cybersquatting (hence the overriding importance of the Complainant having to prove bad faith). Conversely, the Policy was not intended to establish entitlement to competing (legitimate) rights to the same domain name. As in most jurisdictions, the English Courts have distinguished between obvious cases of cybersquatting from those of legitimate domain name disputes. In British Telecommunications and Others v One in a Million Limited and others 1 FSR 1999 the Court confirmed that the systematic registration of well known domain names by persons unconnected with the marks they had registered in itself amounted to both trade mark infringement and passing off. By contrast the High Court in Pitman Training Ltd and another v. Nominet UK and another (22 May 1997) the Court was not prepared to intervene where two legitimate businesses fought over the rights to the domain name (no doubt on the basis that in the absence of clear cybersquatting, domain names are allocated on a first come first served basis).
23. "The Respondents also refers to the Report of the WIPO Internet Domain Name Process of 30 April 1999, on which the Policy is based. Paragraphs 165 �168 of the Policy (which was quoted in Gordon Sumner v Michael Urvan Case no. D2000 � 0596 at page 5): states that
�The preponderance of views � was in favour of restricting the scope of the procedure, at least initially, in order to deal first with the most offensive forms of predatory practices and to establish the procedure on a sound footing. Two limitations on the scope of the procedure were � favoured by these commentators. The first limitation would confine the availability of the procedure to cases of deliberate, bad faith abusive registrations�. [The second limitation related to abusive registrations by reference only to trade marks and service marks and is not relevant for present purposes].
24. "Evidence of this practice can be found in the recent decision of Easyjet Airline Company Limited v Stephen Harding (Case no. D2000 � 0398). In that case, the Tribunal had �grave reservations� about accepting at face value the Respondent�s assertions that at the time of the registration of the domain name it had never heard of the Complainant�s trade name and trade mark (unlike in this case where the Respondents have never heard of the Complainant). Nonetheless, the Tribunal found for the Respondent on the basis that there was no evidence that he had engaged in a pattern of cybersquatting conduct. In concluding, the Tribunal noted as follows:
�The Policy was designed to apply only in cases of cybersquatting. In the absence of a clear case of bad faith or a dishonest intention on the part of the Respondent, the better forum for this dispute would be the UK High Court, trade mark lists�." (Response)
In its response to Complainant�s Reply Brief, Respondents note that Complainant contacted them regarding the potential purchase of the disputed domain name shortly following their purchase of the name, and that Respondents did not respond to Complainant�s offer to purchase the name until almost two months following its purchase, and three months following their commission of their business plan to writing. Respondents assert that it is common for brand names to lack a descriptive association with products being marketed under them (such as Kodak).
6. Discussion and Findings
The Uniform Domain Name Dispute Resolution Policy (the "Policy") adopted by the Internet Corporation for Assigned Names and Numbers (ICANN) on August 26, 1999 (with implementing documents approved on October 24, 1999), is addressed to resolving disputes concerning allegations of abusive domain name registration. This sole panelist has in an earlier decision discussed the background of the administrative panel procedure, and the legal characteristics of domain names, and refers to this earlier decision for such discussion 1. The Panel will confine itself to making determinations necessary to resolve this administrative proceeding.
It is essential to dispute resolution proceedings that fundamental due process requirements be met. Such requirements include that a respondent has notice of proceedings that may substantially affect its rights. The Policy, and the Rules for Uniform Domain Name Dispute Resolution Policy (the "Rules"), establish procedures intended to assure that respondents are given adequate notice of proceedings commenced against them, and a reasonable opportunity to respond (see, e.g., para. 2(a), Rules).
In this proceeding, Respondents have furnished a detailed Response to the Complaint in a timely manner. There is no issue as to whether Respondents received adequate notice of these proceedings.
Paragraph 4(a) of the Policy sets forth three elements that must be established by a Complainant to merit a finding that a respondent has engaged in abusive domain name registration, and to obtain relief. These elements are that:
(i) respondent�s domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and
(ii) respondent has no rights or legitimate interests in respect of the domain name; and
(iii) respondent�s domain name has been registered and is being used in bad faith.
Each of the aforesaid three elements must be proved by a complainant to warrant relief.
In this proceeding, Complainant has failed to establish any of the three elements necessary for a finding of abusive domain name registration. The Panel might find against Complainant on the basis of any of these failures.
First, Complainant�s trademark registration for "PI" in Germany is for a combination word and design mark covering International Class 9 measurement equipment. Complainant holds no trademark registrations for "PI" standing alone as a word mark. Complainant�s assertion of trademark rights in the letters "PI" standing alone are based on their alleged common use in Europe to identify Complainant, and Complainant�s use of those letters on its Internet website identified by the "" address. In light of the apparent common usage of "PI" as a trademark by parties other than Complainant, both standing alone and in combination with designs, the Panel cannot assume that the German Patent Office would have granted registration for the letters "PI" standing alone.
The letters "PI" have many potential associations among consumers and users of the Internet. These include a potential association with the term "Pi" commonly used to refer to a mathematical notation, a potential association with the initials used commonly in English for "private investigator", and a potential association with a large number of third party enterprises that Respondents demonstrate have registered the letters "PI" alone or in combination with designs and other terms to identify themselves as the source of goods or services. Whether the letters "PI" standing alone have become associated with Complainant among consumers of products or services so as to create common law trademark rights is not established by the evidence submitted by Complainant in this proceeding.
Complainant�s analogy of "PI" to "IBM" and "VW" is misplaced. The "IBM" and "VW" letter trademarks are used by two of the world�s largest industrial corporations and without doubt are "well known" within the meaning of Article 6bis of the Paris Convention. If "PI" is known (or well known) in Europe to identify Complainant, it is among a discrete group of persons who are familiar with sophisticated equipment used in technical production processes. Complainant has not submitted evidence sufficient to persuade the Panel that "PI" is a well known mark. It should also be noted that neither "IBM" nor "VW" is descriptive, while "PI" is.
Respondents� "" domain name has been used to identify a website at which Internet support services are promoted under the Magic Moments Design Ltd. name. Assuming that Complainant has weak common law trademark rights in "PI" standing alone, "" does not appear to be confusingly similar in the manner in which it has been used by Respondents. Complainant offers technical equipment for sale, while Respondents are offering Internet services. There is no apparent basis for finding that users of the Internet or consumers will have initial interest or other confusion in distinguishing between Complainant and Respondents and their respective goods and services. Respondents� proposed "" personal assistant business also involves a line of business services rather distant from Complainant�s line of business.
Complainant�s registered trademarks "PIFOC" and "PI-System" are not sufficiently similar in overall impression to be confusingly similar to "".
Complainant has not established that it has rights in the trademark "PI" standing alone. If it has weak common law rights in the mark, Respondents� "" domain name is not confusingly similar since it has been used only in relation to one or more unrelated lines of services.
In order to prevail on its claim of abusive domain name registration under the Policy, Complainant must also establish that Respondent has no rights or legitimate interests in respect of the disputed domain name (Policy, para. 4(a)(ii)). The Policy expressly enumerates several ways in which a respondent may demonstrate rights or legitimate interests:
"Any of the following circumstances, in particular but without limitation, if found by the Panel to be proved based on its evaluation of all evidence presented, shall demonstrate your rights or legitimate interests to the domain name for purposes of Paragraph 4(a)(ii)
(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." (Policy, para. 4(c))
The evidence submitted by Respondents establishes demonstrable preparations to use the disputed domain name in connection with a bona fide offering of services before notice to them of this dispute 2. This includes formulation and commission to writing of a business plan by December 1999 and purchase of the disputed domain name corresponding to the name identified in the business plan by January 2000. Complainant�s initial contacts with Respondents in February 2000 did not involve notification of a dispute. Quite to the contrary, Complainant�s initial contact involved expression of a straightforward commercial interest in acquiring the "" name. Commercial negotiations toward purchase by Complainant of the name continued until mid-July 2000. There is no indication that Complainant at any point up to the filing of the Complaint in this proceeding advised Respondents that it objected to their registration or use of the disputed domain name.
Complainant has intimated that Respondents fabricated their evidence of a business plan, but has submitted no evidence to support this suggestion other than to note that it may have been technologically possible for Respondents to backdate their computer records so as to create the impression that their business plan was developed later than those records indicated.
Respondents paid $50,000 for the disputed domain name in the month following their commission of a business plan to writing. It is consistent with Respondents� version of events that they would have purchased the domain name after settling on its desirability in connection with their development of a particular business.
Complainant has failed to establish that Respondents do not have rights or legitimate interests in the disputed domain name.
Complainant has alleged that Respondents� offer to sell the disputed domain name to Respondents is evidence of bad faith. The Panel is particularly concerned that Complainant furnished written evidence of a series of e-mail messages purporting to indicate Respondents� efforts to "extort" (in Complainant�s terms) money from Complainant, yet Complainant withheld from the Panel the initial e-mail message in which Complainant initiated the negotiations by expressing its interest in purchasing the disputed domain name 3. Complainant could not have doubted the materiality of this omission to this proceeding.
In any event, Respondents have presented evidence sufficient to satisfy the Panel that they did not acquire the disputed domain name for the purpose of selling it to Complainant or a competitor. There is no evidence on the record of this proceeding to suggest that Respondents were aware of Complainant or its business prior to their purchase of the disputed domain name.
The fact that Respondents eventually sought to auction the disputed domain name for a substantial amount of money appears to reflect no more than a change in their own business plans based on changes in the Internet start-up financing market.
It is also difficult to fathom why Respondents might have sought to use the trademark of a measurement equipment company based in Germany to attract business to an Internet services business or personal services business based in the United Kingdom.
Complainant has thus failed to establish bad faith on the part of Respondents.
The Panel rejects Complainant�s request to direct the registrar to transfer the disputed domain name to it.
7. Decision
Complainant, Physik Instrumente GmbH. & Co, has failed to establish any of the three elements necessary under paragraph 4(a) of the Policy for a finding that Respondents, Stefan Kerner and Jeremy Kerner, and Magic Moments Design Limited, engaged in abusive domain name registration. The Panel therefore rejects Complainant�s claim of abusive domain name registration against Respondents, and denies its request that the Panel ask the registrar to transfer the domain name "" from Respondents to it.
Frederick M. Abbott
Sole Panelist
Dated: October 3, 2000
Footnotes:
1. See Educational Testing Service v. TOEFL, Case No. D2000-0044, decided March 16, 2000.
2. Although registration of a trademark may be sufficient to establish constructive notice at the national (or regional) level, in the present proceeding Complainant�s "PI" word and design mark is registered only in Germany, while Respondents are located in the United Kingdom. Constructive notice for Germany could not reasonably be expected to extend to the UK in the circumstances of this case. This case does not involve a Community Trade Mark that might act to extend constructive notice.
3. The initial e-mail furnished by Complainant begins with Respondents thanking Complainant "for your recent interest in the domain " (e-mail from Jeremy Kerner to Stefan Vorndran of February 29, 2000, Complaint, Annex 13). Absent Respondents� e-mail evidence showing that Complainant initiated the contact, it would not be possible to infer from Respondents� February 29 e-mail, standing alone, which party initiated the chain of correspondence.
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