WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Firstgate Internet A.G. .v. David Soung
Case No. D2000-1311
1. The Parties
The Complainant is Firstgate Internet A.G. of Im Media Park 5, 50670 Köln, Germany.
The Respondent is David Soung of 398 Columbus Avenue, Boston, Massachusetts 02116, United States of America.
2. The Domain Name and Registrar
The domain name at issue is:
and the Registrar is:
Network Solutions, Inc.
3. Procedural History
The WIPO Arbitration and Mediation Center (the "Center") received the Complaint on October 16, 2000, [electronic version] and on October 4, 2000, [hard copy]. The Center verified that the Complaint satisfies the formal requirements of the ICANN Uniform Domain Name Dispute Resolution Policy (the "Policy"), the Rules for Uniform Domain Name Dispute Resolution Policy (the "Rules"), and the Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the "Supplemental Rules"). The Complainant made the required payment to the Center.
The formal date of the commencement of this administrative proceeding is November 10, 2000.
On October 16, 2000, the Center transmitted via email to Network Solutions, Inc. ("NSI") a Request for Registrar Verification in connection with this case and on October 20, 2000, NSI transmitted by email to the Center its verification response confirming that the registrant is David Soung and that the contact for both administrative and billing purposes is also David Soung.
Having verified that the Complaint satisfied the formal requirements of the Policy and the Rules, the Center transmitted on November 10, 2000, to:
postmaster@;
nextnet@; and to
namehost@
a Notification of Complaint and Commencement of the Administrative Proceeding. The Center advised that the Response was due by November 29, 2000. On the same day the Center transmitted by fax and by mail copies of the foregoing documents to:
David Soung
398 Columbus Avenue #285
Boston
MA02116
United States of America
and to
Network Solutions, Inc
505 Huntmar Park Drive
Herndon,
VA20170
United States of America
A Response was received from the Respondent on November 26, 2000, [electronic version] and on November 29, 2000, [hard copy]. Acknowledgement of Receipt of Response was sent by the Center on December 1, 2000, to the Respondent using the same contact details and methods as were used for the Notification of Complaint and Commencement of the Administrative Proceedings.
Having received on December 14, 2000, and January 3, 2001, respectively from Mr. Peter Chrocziel, Mr. Thomas L. Creel and Mr. David Perkins Declarations of Impartiality and Independence and Statements of Acceptance, the Center transmitted to the parties a Notification of Appointment of Administrative Panel and Projected Decision Date, in which Mr. Peter Chrocziel and Mr. Thomas L. Creel were appointed Panelists and Mr. David Perkins was appointed as the Presiding Panelist. The Projected Decision Date was January 22, 2001. The Panel finds that the Administrative Panel was properly constituted and appointed in accordance with the Rules and the Supplemental Rules.
Having reviewed the communication records in the case file, the Administrative Panel finds that the Center has discharged its responsibility under paragraph 2(a) of the Rules "to employ reasonably available means calculated to achieve actual notice to Respondents". Therefore, the Administrative Panel shall issue its Decision based upon the Complaint, the Response, the Policy, the Rules and the Supplemental Rules.
4. Factual background
4.1 The Complainant
4.1.1 Incorporation of the Complainant
The Complainant, Firstgate Internet AG of Cologne, Germany was incorporated on December 16, 1999.
4.1.2 Registration of the Complainant's Website
In anticipation of founding the Complainant, its Chief Executive Office, Norbert Stangl stated that on September 9, 1999, he registered the domain name .
4.1.3 Use of the Complainant's Website
Use of the Complainant's website using the domain name commenced on October 3, 1999, by Mr. Stangl, since both he and Rainer Schmitt [the Complainant's Chief Operating Officer] state that the limited liability company was not incorporated until December 16, 1999, (supra).
4.1.4 The Complainant's Business
The Complainant develops micro payment systems for digital products and services offered on the Internet through cellular and conventional phones. It is also involved in the sale and marketing on the Internet of digital products of all kinds. For example, these would appear to include providing the placing and retrieval of announcements and the provision of music, news, stock market quotations etc. The Complaint states that use of the FIRSTGATE name as a business name and as a trade name began on the date of its incorporation December 16, 1999, and that it "� began other uses in connection with its business in February 2000". The Complaint exhibits an advertisement placed by the Complainant using the FIRSTGATE name and mark in a magazine, Internet World for September 2000.
4.1.5 The Genesis of the Complainant's Name
Mr. Schmitt states that FIRSTGATE was chosen as the Complainant's corporate and trading name and has been applied for as a trademark because
"�it offers Internet merchants their first opportunity to receive payment for use of the digital contents of their websites, similar to a gatekeeper or toll collector."
4.1.6 The Complainant's TradeMark Applications
Country
Application No:
Mark
Class(es)
Application Date
European Community Trademark [CTM]
001573757
FIRST GATE INTERNET AG (words and logo)
35, 36, 38 and 42
May 19, 2000
United States of America
76-085,832
FIRSTGATE
35, 36, 38 and 42
July 11, 2000
United States of America
76-085,833
FIRSTGATE
CLICK & BUY
35, 36, 38 and 42
July 11, 2000
4.2 The Respondent
4.2.1 Mr. Soung's Activities
The Response states that the Respondent, Mr. Soung has made a hobby of computer games including Internet based games. The Response further states that Mr. Soung registered the domain name in issue on March 6, 2000 in order to protect his plan to develop his own computer game on an Internet based website.
4.2.2 The Genesis of the Domain Name in Issue
The Response explains that Mr. Soung decided to structure his site on a series of gate passageways. This was because he knew from experience that computer games are based on levels, otherwise known as gates. Those playing the game aim to win each level and progress to the next level, the step from one level to another being commonly known as a gate or gatekeeper. The gate is the obstacle, which can prevent the player passing from one level to another. It is, therefore, important for the player to pass the first gate.
4.2.3 The Response states that the concept of a gate is so common that many computer games sites use the word gate. The Response gives 6 examples, including and .
5. The Parties' Contentions
5.1. The Complainant
5.1.1 The Complainant contends that the domain name in issue is identical to the Complainant's FIRSTGATE name and mark, that the Respondent has no rights or legitimate interests in respect of that domain name and that it was registered and is being used in bad faith.
5.1.2 The Complainant's rights in the FIRSTGATE mark
First, the Complainant asserts ownership of the FIRSTGATE trademark by virtue of:
� its worldwide use of that mark;
� its use of the domain name; and
� its CTM and US trademark applications filed respectively in May and July 2000 [see above]
Second, the suffix .com is to be ignored for the purposes of paragraph 4a(i) of the Policy.
Third, FIRSTGATE is not a generic word nor is it descriptive of the Complainant's services.
Fourth, persons seeking to find the Complainant will naturally look under the domain name in issue and, whether or not the Respondent intends to cause confusion and disruption to the Complainant's business, confusion will inevitably arise.
5.1.3 Rights or Legitimate Interests
The domain name in issue does not resolve to an active website, despite the fact that it was registered in March 2000, some 8 months before the Complaint was filed.
5.1.4 Registered and Used in Bad Faith
First, the Respondent owns over 50 domain names, none of which are being actively used for websites. Those domain names include:
Second, when Mr. Schmitt of the Complainant attempted to access the domain name in issue on June 8, 2000, he was taken to the Great D website where the domain name in issue was stated to be for sale. There followed an exchange of emails between the Complainant and Great Domains and Mr. Schmitt of the Complainant offered US$10,000.00 to purchase the domain name. Eventually, the Complainant [using the email address, Ray Smith] contacted the Respondent directly and on June 15, 2000, the Respondent replied:
"Hello Mr. Smith
The domain name has been appraised with the potential of being worth $160,000 a year from now. My asking price would be $50,000. It has other potential buyers so I would not negotiate the price. If you are still interested in, please call me back. Thanks.
David"
The same day, Mr. Schmitt replied:
"Hello David,
50,000 $ is a lot of money for me, but anyway when can we fix the deal. Do you want to have the money in cash or by check. How should we proceed? Please call me or write an email.
Thanks
Ray"
But, despite reminders sent later in June and July, the Complainant says that the Respondent never replied. This is, in fact, incorrect [see below].
Third, the Respondent is a cybersquatter who buys domain names solely for the purpose of selling them for valuable consideration in excess of his documented out of pocket costs directly related to such domain names.
Fourth, because there is a pattern of conduct in the Respondent registering multiple domain names selected for their sales potential, rather than for the purpose of himself using them as domain names for websites, this evidences that the Respondent has registered the domain name in issue in order to prevent the Complainant from reflecting that mark as its domain name.
Fifth, that the Respondent is in breach of his warranty under paragraph 2 of the Policy that registration of the domain name in issue will not infringe the rights of any third party. In making that representation and warranty the Respondent had a duty before registering the domain name in issue first to have conducted an Internet search which would have put him on notice of the Complainant's rights in the FIRSTGATE name and mark.
5.2 The Respondent
The Respondent deals with each of the elements of paragraph 4(a) of the Policy in turn.
5.2.1 The Complainant's TradeMark
First, gate is generic to Computer Game Sites. The Response stated that the concept of a gate is so common that many computer games sites use the word gate. The Response gives 6 examples, including and .
Second, first and gate are generic to Computer Games. The Response identifies 7 examples, including First Strike and Timegate.
Third, gate is commonly used by game systems such as GAMEBOY, NINETENDO etc. Here the Response gives 40 examples, including Gate of Thunder and Golden Gate.
Fourth, there are numerous US computer software trademarks and trademark applications, which incorporate the word gate. The Response illustrates use of gate in US trademarks for computer software by some 12 entities, namely:
Country
Registration No
Mark
Class(es)
Application & Registration Date
United States
2,283,642
ONEGATE
9
Applied for February 14, 1997
Registered October 5, 1998
United States
App. 75-587,038
ONEGATE TO THE NET
9
Applied for November 12, 1998
United States
2,194,326
GATEONE
?
Applied for April 18, 1997
Registered October 6, 1998
United States
App. 75-726,003
BRIGHTGATE
35
Applied for June 10, 19??
United States
App. 75-809,551
FREIGHTGATE
35
Applied for September 28, 1999
United States
App. 78-007,176
SOFTGATE
9
Applied for May 7, 2000
United States
2,159,433
T-GATE
9
Applied for May 1, 1996
Granted May 19, 1998
United States
1,488,905
SMARTGATE
9
Applied for June 17, 1986
Granted May 17, 1988
United States
2,038,157
NETGATE
9
Applied for April 18, 1995
Granted February 18, 1997
United States
2,349,206
STARGATE COMMUNICATIONS
38
Applied for February 24, 1997
Registered May 16, 2000
Country
Registration No
Mark
Class(es)
Application & Registration Date
United States
App. 75-767,943
STARGATE COMPUTERS
9
Applied for July 30, 1999
United States
App. 76-046,278
STARGATE GLOBAL STRATEGIES
38
Applied for May 10, 2000
United States
App. 75-673,586
MISTIGATE
9
Applied for April 2, 1999
United States
App.75-541,560
INSTAGATE
9
Applied for August 21, 1998
United States
App. 76-126,625
WONDERGATE
9: 28: 38: 41 & 42
Applied for September 8, 2000
United States
326,683
STONEGATE
25
Applied for March 13, 1935
Granted July 30, 1935
5.2.2 Rights or Legitimate Interests
In April 2000, the Respondent sought a partner to develop his ideas for the game site and has been developing the game site in his spare time. It is unrealistic to have expected the Respondent to have developed that site by the time he was first put on notice of the Complainant's existence in June 2000. Unlike the Complainant's website which merely promotes materials for its customers, designing and programming a computer game into a website is complex and takes many months. The Respondent relies upon his demonstrable preparations to use the domain name in issue in connection with bona fide computer game websites prior to being put on notice in June 2000, of the Complaint.
5.2.3 Registration and Use in Bad Faith
First, the Complainant's business is quite dissimilar to a computer game site and public confusion will plainly not arise. By analogy, identical trademarks are permitted to be registered by different proprietors for different goods and services. Here, the trade channels are very different.
Second, FIRSTGATE is not a notorious mark such that there may be greater likelihood of confusion.
Third, there are already third party FIRSTGATE or phonetically equivalent trade marks and domain names.
For example:US trademark registration 1,592,855 FIRSTGATE [Class 9 for computer programs etc] of 1st Desk Systems Inc first used in commerce in September 1987,
US trademark application 75-355,148 FIRSTGATE [Class 38 for computer telephony integration gateway services which enables telephone users to communicate among each other in voice, data and/or image through the global computer network] of ITSERVE INC, first used in commerce October 1, 1997,
the domain name owned by U Need Solutions registered on April 21, 1999,
the domain name owned by SuperNet Technology Group registered on August 31, 1999,
the domain name owned by BISP Advertising registered April 10, 2000,
the domain names and owned by GP GMBH registered in February 18, 2000.
Fourth, at the time the domain name in issue was registered on March 6, 2000, the Respondent had no knowledge of the Complainant. This is hardly surprising since the Complainant was not incorporated (and therefore not an entity) until December 16, 1999, and did not begin trading until that date from Germany. Certainly, the Complainant had no registered trade mark for FIRSTGATE nor even a trademark application at that time, the CTM and US applications being filed in May and July 2000, respectively. Further, at the time of applying for its US trademarks on July 11, 2000, the Complainant by its own admission had made no use of the FIRSTGATE mark in the United States but had only an intention to use.
Fifth, the existence of the domain name in issue cannot as a fact, prevent the Complainant from reflecting its FIRSTGATE name / mark in a corresponding domain name. Further, the domain name in issue is not disrupting the business of a competitor, since the parties are not competitors - one is developing a computer games website and the other has developed a micro payments system for digital products - and the Complainant has actually registered as domain names and on June 16, 2000, and on March 27, 2000.
Sixth, the Respondent exhibits an email of March 29, 2000, from valuing the domain name in issue at US$50,000.00, explaining that the purpose of having that valuation made was to assess the suitability of that name for his computer game site project. By responding to Ray Smith on June 15, 2000, who the Respondent had no reason to connect to the Complainant or any corporation, with a price of US$50,000.000 the Respondent's intention was to dissuade the Complainant from pursuing his request. The Respondent's failure to answer the subsequent emails from the Complainant is, the Respondent submits, evidence of his lack of interest in selling the domain name in issue. In any event, the figure of US$50,000.00 was no more than the Respondent had been advised was the market value of the domain name.
Finally, the Respondent exhibits an email from Mr. Schmitt of August 6, 2000, wherein he threatens - without justification and, therefore, in bad faith - the Respondent with litigation if he refuses to sell the domain name in issue for US$10,000.00, stating that the Complainant has assets of US$100 million.
"So I would not play with our attorneys anymore."
That email was, it appears, provoked by the Respondent's email of August 4, 2000, wherein he stated in plain terms
"Hello,
I was not aware firstgate is a trademark. I registered my domain name for a game site and it's not for sale."
6. Discussion and Findings
6.1 Under paragraph 4a of the Policy, the Complainant must prove three distinct elements in order to succeed with a claim for transfer of a domain name, namely;
- that the domain name is identical or confusingly similar to a trademark or service mark in which the Complainant has rights; and
- that the Respondent has no rights or legitimate interests in respect of the domain name; and
- that the domain name has been registered and is being used in bad faith.
6.2 Rights in a Trade Mark
6.2.1 At the date when the domain name in issue was registered, March 6, 2000, the Complainant had no registered trademark rights, nor even had the Complainant filed trademark applications for FIRSTGATE.
6.2.2 Had the Complainant established common law or other equivalent unregistered trademark rights prior to March 6, 2000? The Complainant says that it had, as it began trading using that name and the domain name from the date of its incorporation on December 16, 1999.
6.2.3 The Panel received from the Center a Complaint in different form from the hard copy version with exhibits that followed subsequently. The first version of the Complaint, which would appear to have been a draft, states in paragraph 7:
"The Complainant began active use of its web site on April 4, 2000."
In the preceding paragraph 5 the Complaint reads:
"Complainant had been using the coined trademark FIRSTGATE since 10th of 03.04.2000, - in connection with its business and as a trade name."
6.2.4 These statements are, clearly, at variance with the signed Declaration of Rainer Schmitt of the Complainant. Norbert Stangl's Declaration is silent on the date of first use by the Complainant. In fact, he stops short of verifying Mr. Schmitt's declaration. What Mr. Stangl says is:
"6. Use of the web site began on October 3, 1999.
7. The domain name is currently [i.e. October 2000,] being used by Firstgate Internet A.G."
Further, there is no evidence exhibited to the Complaint of use of the mark FIRSTGATE or of the domain name before the advertisement in the September 2000, issue of the publication, Internet World.
6.2.5 There is, therefore, some doubt in the Panel's minds as to when, in fact, the Complainant first used the FIRSTGATE mark. Further, the impression from Mr. Schmitt's declaration is that it was not until June 8, 2000, that the Complainant became aware of the domain name in issue. The Respondent has, however, pointed to the Complainant's registration on March 27, 2000, - 3 weeks after registration of the domain name in issue - of .
6.2.6 Whilst the domain name in issue is identical to the mark FIRSTGATE in which the Complainant claims to have had rights prior to March 6, 2000, the Panel is not convinced. Further, only one of the three trademark applications [paragraph 4.1.6 above] is for the wordmark FIRSTGATE simpliciter. The CTM application is for the mark FIRST GATE INTERNET AG and the second US application for the mark FIRSTGATE CLICK & BUY.
6.2.7 Whilst the Panel agree that this issue is not necessary to its Decision, given its view on the Complainant's failure to satisfy the third element of paragraph 4(a) of the Policy, they disagree as to when trademark rights must exist for the requirements of paragraph 4 (a)(i) of the Policy. The Presiding Panelist and Panelist Chrocziel believe that such trademark rights must be in existence at the time the domain name is registered, i.e. here March 6, 2000. Panelist Creel believes that such trademark rights need only exist at the time of the Complaint.
6.2.8 Panelist Creel agrees that normally trademark rights would be in existence at the time of the alleged bad faith domain name registration because knowledge of what the Complainant is doing or about to do is a necessary part of the bad faith determination required under paragraph 4a(iii). The basic underlying principle of the entire ICANN procedure is that it applies to someone who has, with knowledge of what a third party is doing or about to do, registered a name or term in bad faith. Actual trademark rights need not exist at that time, however. The only thing that must be in existence then is bad faith. Trademark rights could be inchoate then. But they must exist when the Complaint is filed for Paragraph 4(a)(i) to be met.
6.2.9 As support for his position, Panelist Creel first notes that there is nothing in the Policy, which requires the Complainant's trademark rights to be in existence when the domain name was registered. Indeed, paragraph 4(a) uses the present tense verb which is consistent with only requiring trademark rights upon filing the Complainant, but not necessarily earlier ("your domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights"). If trademark rights were to be required at the time of the domain name registration, paragraph 4a(i) would have read: "in which Complainant had rights at the time the domain name was registered."
6.2.10 Second, to adopt this construction of the Policy would exclude fact
patterns involving bad faith registration, which the Policy should cover. For example, consider the following hypothetical. A first competitor illegally learns that a second competitor is about to adopt a particular term for use in its business, as a trademark or otherwise. The first competitor in bad faith registers that term as its own domain name. The second competitor then does develop the term as its trademark. However, when the second competitor tries to register the trademark as a domain name, it learns that the first competitor has already registered it. In Panelist Creel's view, even though there was no existing trademark at the time of the domain name registration, the Policy would apply and upon application, the domain name should be transferred to the second competitor. See also G Corp. v. William E. Merritt, Case No D 2000-0266 for a case somewhat similar to this hypothetical where a violation of the Policy was found.
6.3 Rights or Legitimate Interests
6.3.1 There is no third party evidence to corroborate the Respondent's version that prior to June 13, 2000, [the first email from Mr. Schmitt to the Respondent] he had made demonstrable preparations to use the domain name in issue in connection with a bona fide project to develop a computer game website. The email from of March 29, 2000, appraising the market value of the domain name in issue at US$50,000.00 makes no reference to its value in relation to such a website. Further, the Respondent does not deny nor explain why as at June 2000, the domain name was posted for sale with GreatD.
6.3.2 The Panel finds the issue finely balanced but not necessary to its Decision in this administrative proceeding having regard to its finding in relation to the third limb of paragraph 4(a) of the Policy (see, below).
6.4 Registered and Used in Bad Faith
6.4.1 In the Panel's view, there is nothing in the evidence to indicate registration in bad faith. Given the chronology of events it is not credible that the Respondent knew of the incorporation and activities of nascent Complainant company in Germany some 2� months before the registration of the domain name in issue. The Complainant has offered no evidence of an international, let alone national, press / media campaign surrounding the incorporation of the Complainant in mid December 1999. (There may, also, be some doubt as to whether the Complainant began trading at a later date in April 2000).
6.4.2 Nor is it reasonable to expect the Respondent to have searched for prior registered national domain names. Indeed, there is no evidence as to whether the domain name was transferred from Mr. Stangl to the Complainant by March 6, 2000. A search made in U by the Presiding Panelist indicates that Mr. Stangl still remains named as the owner.
6.4.3 Many of the 50 domain names registered by the Respondent do not appear to the Panel to incorporate trademarks belonging to third parties. They are generic. For example, ; ; and . Certainly, there is no evidence as at March 6, 2000, - when the domain name in issue was registered - that FIRSTGATE was a well known trademark of the Complainant and hence a potential target for a cybersquatter.
6.4.4 Therefore, as between the parties to this administrative proceeding, the Panel cannot accept on the evidence before it that the Respondent registered the domain name in issue in bad faith. For this reason, the Complaint must fail.
7. Decision
For the foregoing reasons, the Panel decides that the Complainant has failed to satisfy the elements of paragraph 4a(iii) of the Policy and accordingly, the Complaint fails.
David Perkins
Presiding Panelist
Peter Chrocziel
Panelist
Thomas L. Creel
Panelist
Dated: January 29, 2001
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