WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
1099 Pro, Inc. v. Convey Compliance Systems, Inc.
Case No. D2003-0033
1. The Parties
The Complainant is 1099 Pro, Inc. of California, United States of America, represented by Rozsa & Chen, LLP of United States of America. The Respondent is Convey Compliance Systems, Inc. of Minnesota, United States of America, appearing pro se.
2. The Domain Name and Registrar
This dispute concerns , a domain name registered with Network Solutions, Inc. ("the domain name").
3. Procedural History
Complainant filed this Complaint with the WIPO Arbitration and Mediation Center (the "Center") on January 16, 2003, and filed an amended Complaint on January 24, 2003. On January 16, 2003, the Center transmitted by email to Network Solutions, Inc. a request for its verification in connection with the domain name at issue. On January 22, 2003, Network Solutions, Inc. confirmed via email to the Center that the Respondent is listed as the registrant and provided its administrative, billing, and technical contact information. The Center verified that the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the "Policy"), the Rules for Uniform Domain Name Dispute Resolution Policy (the "Rules"), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy.
On February 3, 2003, the Center commenced this proceeding and, in accordance with paragraphs 2(b) and 4(a) of the Rules, notified Respondent of the Complaint. As per paragraph 5(a) of the Rules, the Respondent was given until February 23, 2003 to answer. Having received no response, the Center issued a Notification of Respondent Default on March 5, 2003. Respondent replied to this Notification with an emailed response on the same day and filed an Amended Response on March 13, 2003. The Center notified the Respondent that its Response was untimely and that the Panel would decide whether to accept it.
The Center appointed David H. Bernstein, Frederick M. Abbott, and Sally Abel as Panelists in this matter on March 13, 2003. The Panel finds that it was properly constituted. Each member of the Panel has submitted a Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.
4. Factual Background
The Complainant is the owner of Registration No. 2,078,036, registered with the United States Patent and Trademark Office for the mark 1099 PRO, used in connection with the creation and sale of computer software tax programs. Complainant applied to register the mark on October 23, 1995; the registration issued on July 8, 1997. Complainant also owns the domain name , which was created and registered on July 28, 1995.
There is a contentious history between the parties. Both Respondent and Complainant market computer software tax programs, which allow customers to compile and file IRS 1099 tax forms. In 2000, Respondent�s former VP of Sales & Marketing defected to Complainant. Respondent claimed its former employee stole its client list and breached the non-disclosure clause of his contract and his fiduciary duties. Respondent accused Complainant of inducing this conduct and filed suit against both Complainant and the former employee in the State of Minnesota District Court, Fourth Judicial District, on January 8, 2001. While this suit was pending, Respondent registered the domain name on February 23, 2001. The case settled on May 7, 2001, apparently without any provision regarding the domain name.
Respondent uses the website at as a "service to the 1099/W-2 tax filing industry and [as] . . . the site where professionals can go to receive regulatory compliance information[,] . . . . ask compliance questions and network with other tax professionals." In addition to providing tax-related information, the website advertises regulatory compliance conferences, compliance bulletins, and state reporting catalogs. This website also includes links to Respondent�s "" website and advertisements for Respondent�s tax software programs.
5. Parties� Contentions
A. Complainant
Complainant alleges that Respondent�s registration and use of the domain name violates its rights in the trademark 1099 PRO. Specifically, Complainant alleges that the domain name is confusingly similar to its 1099 PRO trademark and, given that the parties are in direct competition, Respondent�s use of the domain name is likely to cause consumer confusion. Complainant further argues that the Respondent has no legitimate interest in the domain name because it was registered with knowledge of Complainant�s trademark and Complainant�s registration and use of . Complainant further alleges that the dissimilarity between the domain name and Respondent�s corporate name � Convey Compliance Systems, Inc. � is evidence of its lack of legitimate interest in the domain name. Finally, Complainant asserts that Respondent acted in bad faith by registering and using a domain name that is confusingly similar to the Complainant�s domain name and trademark, causing confusion as to the source of the products and ownership of the "" website.
B. Respondent
In its late-filed Amended Response, Respondent asserts that the Complaint is unfounded and unsubstantiated. Respondent suggests that that Complainant�s mark is generic. Respondent also disputes the allegation that its domain name was chosen to confuse or in bad faith. Respondent points out that its sponsorship of the website is indicated in an "About Us" link. Respondent claims to have chosen the domain name because it refers to the primary community of users that Respondent intends to serve. The registration of the domain name, according to Respondent, coincided with a "renewed focus on tax compliance, . . . product compliance and compliance training." Respondent asserts that the purpose of the "" website is to engage in relationship marketing with its customer base. Respondent asserts that few individuals enter its "" website from "due to limited sales & marketing advertising" on the latter website. If this Complaint is successful, however, Respondent claims it will incur substantial financial damages from lost regulatory compliance conference registration revenues, compliance bulletin and state reporting catalog sales.
6. Discussion and Findings
A. Respondent�s Late Submissions
Before reaching the merits, the Panel must decide whether to consider Respondent�s March 5 and March 13, 2003 responses, both of which were sent after the deadline for response. Under the Rules, this determination is solely within the discretion of the Panel: Paragraph 10(a) and (d) of the Rules; see also WIPO Notification of Complaint and Commencement of Administrative Proceeding ("Notification of Commencement") at paragraph 6 ("The Administrative Panel will not be required to consider a late-filed Response, but will have the discretion to decide whether to do so.").
In the early days of the Policy, some panels were willing to accept late-filed responses if they were submitted prior to the appointment of the panel on the theory that the Rules were still relatively new and some flexibility should be shown, especially when there was no prejudice. See, e.g., Talk City, Inc. v. Michael Robertson, WIPO Case No. D2000-0009 (February 29, 2000). Now, more than three years later, the Internet community has had a wealth of experience with the Rules, making it appropriate to revisit this approach.
On this question, there is a split amongst the Panel. In one Panelist�s view, default proceedings under the Policy should be avoided when it is reasonable to do so, taking into account paragraph 10(b) of the Rules providing that, "[t]he Panel shall ensure that the Parties are treated with equality and that each Party is given a fair opportunity to present its case." In this proceeding, since there is no apparent prejudice to Complainant from an initial Response filed on the date of the default notification, followed by an Amended Response one week later, one Panelist would accept the Amended Response.
The majority, however, believes that it is important to apply the Rules as written, absent a good reason. Otherwise, parties will feel free to disregard deadlines and Respondents will regularly submit late responses. Thus, absent good cause, the majority of the Panel holds that late-filed responses should be disregarded. [1]
The question in this case, then, is whether Respondent has shown good cause for its tardiness. Respondent explains that the lateness of its March 5th response was due to the "fact that [it is] in the busiest time of our season" and because it believed that a response was only necessary after the Center "informed us that [the Center] feel[s] that [1099 Pro, Inc.] ha[s] a legitimate case to steal our "" user community." In the cover letter to its March 13, 2003 Amended Response, Respondent apologized for its late response and reiterated its claim of having been confused by the Center�s notification.
Respondent�s assertions of confusion as to the proper procedures cannot be accepted at face value. The Center�s Notification of Commencement, sent to Respondent on February 3, 2003 clearly states:
"Deadlines. Within 20 calendar days from the date of commencement of this administrative proceeding you must submit to the Complainant and to us a Response according to the requirements that are described in the Rules, Paragraph 5 and the Supplemental Rules. The last day for sending your Response to the Complainant and to us is February 23, 2003."
Notification of Commencement at paragraph 5. The Rules, to which Respondent was referred in the Notification of Commencement, are similarly clear. See paragraph 5(a) of the Rules ("Within twenty (20) days of the date of commencement of the administrative proceeding the Respondent shall submit a response to the Provider."). Accordingly, a majority of the Panel determines that Respondent has not shown good cause.
Moreover, even if the Panel were to consider these late-filed responses, we could not accord any weight to the facts alleged therein. Neither Respondent�s e-mail nor the Amended Response contained any certification that the information proffered was "to the best of Respondent�s knowledge complete and accurate." Paragraph 5(b)(viii) of the Rules. Without the benefit of this certification, it is not appropriate to accept the factual assertions contained in those submissions. Although the Panel is granted discretion to consider late responses, it is not granted similar discretion to waive the certification requirement in paragraph 5(b)(viii) of the Rules. See Talk City, Inc., WIPO Case No. D2000-0009.
Under different circumstances, this Panel might be inclined to permit a pro se Respondent to amend its response solely for the purpose of adding a certification. In this instance, given that the Panel has, in any event, refused to consider the Response, there is no basis to even consider such a question. Moreover, even if the Panel did consider the factual assertions in Respondent�s late-filed responses, it would not provide any assistance; to the contrary, the Responses tend to support Complainant�s case more than Respondent�s defense.
For all these reasons, a majority of the Panel concludes that Respondent�s late-filed Responses are to be disregarded.
B. Merits of the Complaint
In order to succeed in its claim, Complainant must demonstrate that all of the elements enumerated in paragraph 4(a) of the Policy have been satisfied:
(i) The domain name is identical or confusingly similar to a trademark or service mark in which the Complainant has rights;
(ii) Respondent has no rights or legitimate interests with respect to the domain name; and,
(iii) The domain name has been registered and used in bad faith.
For the reasons stated below, Complainant meets this burden.
(i) Identical or Confusingly Similar
Ownership of a US trademark registration is prima facie evidence of validity, and can be rebutted only with compelling evidence that the mark is generic or has been abandoned. EAuto, L.L.C. v. Triple S. Auto Parts d/b/a Kung Fu Yea Enterprises, Inc., WIPO Case No. D2000-0047 (March 24, 2000). In the absence of an accepted Response, Complainant�s allegations are sufficient to prove ownership of the 1099 PRO trademark. [2]
The second part of this inquiry is whether the domain name is confusingly similar to Complainant�s 1099 PRO registered mark. Pro is a common abbreviation for professional. Webster�s Collegiate Dictionary 937 (9th ed. 1983). Because Complainant and Respondent market their tax software programs to the same specialized customer pool, there is an increased risk of confusion over these essentially synonymous names. See Arrowhead Capital Management v. Arrowhead Capital Management, LLC, NAF File No. 94920 (July 12, 2000), (finding and confusingly similar because the abbreviation "cap" and the word "capital" have synonymous meanings for those involved in investing and financial management). The addition of a gTLD such as ".com" provides no legally cognizable distinction. See, e.g., J.P. Morgan v. Resource Marketing, WIPO Case No. D2000-0035 (March 23, 2000). Accordingly, Complainant meets the first factor.
(ii) Rights or Legitimate Interests
The Respondent has no rights or legitimate interest in . Paragraph 4(c) of the Policy sets forth three nonexclusive circumstances which, if found by the Panel to be proved based on its evaluation of all evidence presented, demonstrate a Respondent�s rights or legitimate interests to the domain name in question:
(i) before any notice to Respondent of the dispute, Respondent�s use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or
(ii) Respondent (as an individual, business, or other organization) has been commonly known by the domain name, even if he has acquired no trademark or service mark rights; or
(iii) Respondent is making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.
Respondent was well aware of Complainant and its 1099 PRO trademark prior to its registration of the domain name. Respondent had no preexisting connection to the disputed domain name, and is not known as 1099 Professionals. There is thus no legitimate interest under subparagraphs (i) or (ii).
The only conceivable legitimate interest here would be a claim of fair use under subparagraph (iii). In this case, though, Respondent is not using the website at for legitimate noncommercial or fair use purposes. is very much a commercial venture. Respondent uses its "" website to sell subscriptions to its tax compliance publications and to advertise conferences, for which Respondent charges registration fees. More important, for these purposes, Respondent uses this website to advertise its other services and provides links to its "" website, where Respondent sells tax software in direct competition with Complainant. Under the circumstances, particularly the parties� directly competitive and previously litigious relationship, and the fact that Respondent obtained the domain name in the midst of that prior litigation, fair use cannot be found.
(iii) Registered and Used in Bad Faith
The final element that Complainant must prove is that the domain name has been registered and is being used in bad faith. The parties are in direct competition. They have exchanged accusations over an employee�s defection and the alleged theft of a client list. Those accusations escalated into litigation. In the midst of that litigation, Respondent registered a domain name that is confusingly similar to Complainant�s 1099 PRO mark. A fair inference from the contentious history of these parties is that the domain name was registered for vindictive purposes and in bad faith.
Moreover, the Panel also finds that Complainant has proven bad faith under paragraph 4(b)(iv) of the Policy, which provides that Respondent has registered and used a domain name in bad faith if it has "us[ed] the domain name . . . [to] intentionally attempt[] to attract, for commercial gain, Internet users to [its] web site or other on-line location, by creating a likelihood of confusion with the Complainant�s mark as to the source, sponsorship, affiliation, or endorsement of [the] web site . . . or . . . a product or service on [that] web site or location." Respondent�s commercial offerings at the "" website appear designed to cause such confusion and diversion.
7. Decision
For all the foregoing reasons, in accordance with paragraph 4(i) of the Policy and 15 of the Rules, the Panel orders that the domain name be transferred to the Complainant.
David H. Bernstein
Presiding Panelist
Frederick M. Abbott
Panelist
Sally M. Abel
Panelist
Dated: April 1, 2003
Footnotes:
1. This ruling does not mean that Respondents who file late responses have no recourse. First, even in the absence of a response, the Complainant still must bear the burden of proof and panels have ruled for defaulting Respondents when Complainants have failed to do so. E.g., Action Instruments, Inc. v. Technology Associates, WIPO Case No. D2003-0024 (March 6, 2003); Land Sachsen-Anhalt v. Skander Bouhaouala, WIPO Case No. D2002-0273 (July 8, 2002); Rodale, Inc. v. Cambridge, WIPO Case No. DBIZ2002-00153 (June 28, 2002) (finding reverse domain name hijacking); S v. Internet Action Consulting, WIPO Case No. D2000-0439 (July 28, 2000); EAuto, L.L.C. v. EAuto Parts, WIPO Case No. D2000-0096 (April 9, 2000). Second, Respondents always have the ability to seek judicial review of a decision with which they disagree. Paragraph 4(k) of the Policy.
2. Consideration of the Amended Response would not alter this analysis. Respondent does not explicitly claim that the trademark is generic in its Amended Response. Instead, it alleges that there are "11,000 and 7,000 " and that "this simple fact alone supports our contention that the Complaint should be thrown out for having absolutely no merit whatsoever." This unsupported and unexplained assertion would be insufficient to meet the presumption of validity created by the registration of the mark.
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