WIPO Arbitration and Mediation Center ADMINISTRATIVE PANEL DECISION SATA Internacional - Serviços E Transportes Aéros, S.A. v. FlySata.Com Inc., Mr. Luiz Henrique Conceição Case No. D2009-0349 1. The Parties
The Complainant is SATA Internacional - Serviços E Transportes Aéros, S.A. of Açores, Portugal, represented by Cameron MacKendrick LLP, Canada.
The Respondent is FlySata.Com Inc., Mr. Luiz Henrique Conceição of Etobicoke, Ontario, Canada, represented by Lang Michener LLP, Canada. 2. The Domain Names and Registrar
The disputed domain names, and (the “Domain Names”), are registered with NameScout Corp. (the “Registrar”). 3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on March 16, 2009. On March 18, 2009, the Center transmitted by email to the Registrar a request for registrar verification in connection with the Domain Names. On March 19, 2009, the Registrar transmitted by email to the Center its verification response, disclosing registrant and contact information for the Domain Names which differed from the named Respondent and contact information in the Complaint. The Center sent an email communication to the Complainant on March 23, 2009, providing the registrant and contact information disclosed by the Registrar and inviting the Complainant to submit an amendment to the Complaint. In the same email, the Center has also notified the Complainant that the Complaint was administrative deficient (excessive word count). The Complainant filed an amended Complaint on March 27, 2009.
The Center verified that the Complaint together with the amended Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy” or “UDRP”), the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the “Supplemental Rules”).
In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on April 2, 2009. In accordance with the Rules, paragraph 5(a), the due date for Response was April 22, 2009. The Response was filed with the Center on April 22, 2009.
The Center appointed Tony Willoughby as the sole panelist in this matter on May 1, 2009. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.
The subject of the Complaint Deficiency Notice referred to above was the word count of the Complaint, which was excessive. The issue merits comment, because the exhibits to the Complaint are very substantial as are the exhibits to the Response. In addition both parties have felt it necessary to file further substantial submissions with exhibits. The Complainant's further submission with exhibits is dated May 5, 2009 and the Respondent's further submission with exhibits is dated May 14, 2009. The papers before the Panel are voluminous.
The Panel was minded to reject the Complainant's further submission, but the Complainant's reason for filing its further submission was to correct alleged errors in the Response and since the Response cast an entirely new light on the factual background to the Complaint, the Panel felt it right to admit it. Having admitted that further submission into the proceedings, it was only right to permit the Respondent to file a further response. 4. Factual Background
The Complainant, a company incorporated in Portugal, is a member of a group of companies, SATA Grupo, which owns a number of trade marks incorporating the acronym SATA, which is an acronym for Sociedade Açoreano de Transportes Aeros, being the name of both an airline and a tour operator within the group. The earliest of the trade mark registrations date back to 1984.
The Respondent raises issues as to the Complainant's rights in respect of those trade marks, there being no trade mark registrations in the name of the Complainant and the Complainant not being the parent company of the group. However, there is ample evidence before the Panel, not challenged by the Respondent, to the effect that the Complainant has conducted substantial business under and by reference to those trade marks or some of them. For the purposes of this administrative proceeding the Panel finds as a fact that the Complainant has acquired SATA-related trade mark rights in Canada whether it be by way of licences from its parent and/or sister companies in Grupo SATA or through its long and extensive use of those marks in Canada, thereby giving rise to unregistered trade mark rights at common law.
The evidence of the Complainant is provided in large part by way of an affidavit of a Mr. Orlando Medeiros, an officer and director of SATA Express, a position he has held since 1986 apart from a break between 1991 and 1997. He is also an accredited accountant and a director and shareholder of OBM Accounting Inc. (“OBM”), an Ontario corporation specializing in the preparation of financial statements, tax returns and the like.
The Respondent is a company incorporated in Ontario in 2006 of which Mr. Luiz Conceição is the President and the Director. Mr. Conceição is also the President and Director of another Ontario company, Studio One Productions Inc. (“Studio One”), which was the registrant of the Domain Names until early 2009 and which until 2008 had been the advertising agency in Canada for the Complainant's sister company, SATA Express.
The Domain Names were registered by Studio One on August 26, 2003.
On May 3, 2004 Mr. Conceição on behalf of Studio One and Mr. Orlando Medeiros on behalf of SATA Express signed a letter agreement relating to the parties' obligations in relation to websites connected to the Domain Names. The websites were to be owned by Studio One and were to feature travel information relating to Grupo SATA flights, bookings and related matters.
On November 1, 2006 the Respondent was incorporated in Canada. Mr. Medeiros' company, OBM, filed the incorporation documents of the Respondent. Mr. Medeiros is Mr. Conceição's accountant as well as being the accountant to Studio One and the Respondent.
On May 12, 2008 lawyers representing SATA Express wrote to Mr. Conceição purporting to terminate “whatever agreement may have arisen from [the] May 3, 2004 document”. On the same day the Complainant's representatives wrote to Mr. Conceição offering him his out-of-pocket expenses in return for transfer of the Domain Name. This letter appears to have been prompted by an indication from Mr. Conceição to the Complainant that he would be prepared to transfer the Domain Names to the Complainant if a satisfactory offer was received.
By a letter dated “May 2008” the lawyers for Studio One responded to the first of the above letters of May 12, 2008 disagreeing with SATA Express's “interpretation of the facts” and indicating reliance upon the May 3, 2004 agreement. By a similarly dated letter the same lawyers responded to the Complainant's representatives rejecting the Complainant's offer for the Domain Names.
The correspondence continued through June and July, 2008 with the Complainant's representatives warning Mr. Conceição that he had no rights to transfer the Domain Names to any third party. On August 21, 2008 the Complainant's representatives wrote to Mr. Conceição setting out the Complainant's rights and those of Grupo SATA objecting to the use by Studio One of SATA-related trade marks on the website and alleging trade mark infringement and passing off. The letter demands that those marks are removed from the website.
On a date unknown in early 2009 the Domain Names were transferred to the Respondent. 5. Parties' Contentions A. Complainant
The Complainant contends that the Domain Names are identical or confusingly similar to trade marks in which it has rights (See section 4 above).
The Complainant contends that neither Studio One, the previous registrant of the Domain Names, nor the Respondent has any rights or legitimate interests in respect of the Domain Names. The Complainant contends that the May 3, 2004 letter agreement was signed by Mr. Medeiros under pressure and that in any event neither Mr. Medeiros nor SATA Express had any authority to enter into that agreement.
Finally the Complainant contends that the Domain Names were registered and are being used in bad faith either on the basis that the Domain Names were registered for sale at a profit to the Complainant or a third party (paragraph 4(b)(i) of the Policy) or on the basis that the Respondent's intention was to block the Complainant. B. Respondent
The Respondent challenges the Complainant's claims to relevant trade mark rights.
The Respondent (in the person of Mr. Conceição) asserts that he has rights and legitimate interests in respect of the Domain Names. He asserts that with the knowledge and approval of SATA Express he registered the Domain Names in the name of his company, Studio One, for use in the project that he had been discussing with SATA Express, the Flysata Project. The Respondent relies upon the work done in development of the website and for the benefit of the Respondent, which he asserts is a spin off from Studio One intended to take the Flysata Project forward.
Mr. Conceição denies that the Domain Names were registered and are being used in bad faith. He asserts that everything in relation to the Domain Names and the Flysata Project was done with the knowledge of SATA Express and Mr. Medeiros. He asserts that he transferred the Domain Names from Studio One to the Respondent in the face of threats of legal action against Studio One and to ensure that the Domain Names were held by the company which was always intended to take the Flysata Project forward. He asserts that as soon as he received the letters from the Complainant's representatives in May, 2008, he took the site down.
The Respondent contends that this is not the sort of case that the Policy was set up to deal with. It is a case for the Ontario court.
Finally, the Respondent contends that the Complaint was brought in bad faith and constitutes an abuse of this administrative proceeding. The detail of this complaint will be dealt with below. 6. Discussion and Findings A. General
According to paragraph 4(a) of the Policy, the Complainant must prove that
(i) The Domain Names are identical or confusingly similar to a trade mark or service mark in which the Complainant has rights; and
(ii) The Respondent has no rights or legitimate interest in respect of the Domain Names; and
(iii) The Domain Names have been registered in bad faith and are being used in bad faith.
If the Complaint fails, the Panel has to have regard to paragraph 15(e) of the Rules and in particular the following sentence namely:
“If after considering the submissions the Panel finds that the complaint was brought in bad faith, for example in an attempt at Reverse Domain Name Hijacking or was brought primarily to harass the domain name holder, the Panel shall declare in its decision that the complaint was brought in bad faith and constitutes and abuse of the administrative proceeding.”
Reverse Domain Name Hijacking is defined in paragraph 1 of the Rules as meaning “using the Policy in bad faith to attempt to deprive a registered domain name holder of a domain name.” B. Identical or Confusingly Similar
As explained in section 4 above, the Panel finds that the Complainant has trade mark rights in Canada in respect of the acronym SATA in various forms and combinations.
The Panel finds that the Domain Names, both of which feature the SATA acronym as a prominent and integral part, are confusingly similar to trade marks in which the Complainant has rights. C. Rights or Legitimate Interests
In light of the Panel's finding under the next head, it is unnecessary for the Panel to address this issue. D. Registered and Used in Bad Faith
The Policy was designed to address a very narrow category of domain name dispute, namely cybersquatting, the deliberate bad faith registration of another's trade mark as or as part of a domain name with a view to causing damage or disruption to the trade mark owner or with a view to exploiting the trade mark owner's rights unfairly for profit.
To succeed under the Policy the Complainant must establish to the satisfaction of the Panel that the Respondent both registered the Domain Names in bad faith and is using them in bad faith. In light of the Panel's finding below in relation to bad faith registration of the Domain Names, it has not been necessary for the Panel to consider in any detail the Complainant's allegations as to the use of the Domain Names.
Why did the Respondent register the Domain Names?
The Complainant contends that the Domain Names were registered for the purpose of selling them at a profit to the Complainant or a third party (paragraph 4(b)(i) of the Policy) or with a view to blocking the Complainant from registering them.
The Respondent, F Inc., acquired the Domain Names in the early part of this year after it was apparent to the previous registrant, Studio One, that the Complainant objected to Studio One's ownership and use of the Domain Names. Ordinarily, this might be regarded as a case of cyberflying and indicative of bad faith intent on the part of the person pulling the strings. However, this is no ordinary situation.
In this case the person pulling the strings insofar as the Domain Names are concerned is Mr. Conceição, who is the President and Director of both Studio One and the Respondent. He denies that the transfer is indicative of any bad faith. He says that he transferred the Domain Names to the Respondent following receipt of threats of legal action from the Complainant's representatives against Studio One, because it had always been intended that the Domain Names would be used by the Respondent for the purpose of the Flysata Project. Mr. Conceição asserts that the Respondent had been set up in 2006 for that purpose with the knowledge of the Complainant or at any rate Mr. Orlando Medeiros, the Complainant's principal witness and Mr. Conceição's accountant. Mr. Conceição wanted the Domain Names to be in the right hands if and when a court action was commenced.
While the timing of the transfer is puzzling given that what might reasonably have been regarded as threatening letters from the Complainant's representatives were received several months earlier, the Panel is satisfied that the transfer of the Domain Names to the Respondent was not actuated by any bad faith intent. The Panel is also satisfied that in assessing bad faith, the factual background needs to be looked at in the round from the moment that the Domain Names were first registered in 2003.
In 2003 Mr. Conceição and his company, Studio One, were working closely with SATA Express, a sister company of the Complainant, as SATA Express's Canadian advertising agents. They had been working for SATA Express in that capacity for about 15 years. One of the people at SATA Express with whom Mr. Conceição worked for much of that time was Mr. Medeiros, an officer and director of that company. It is worthy of note that not only was Mr. Medeiros a director of SATA Express, he was also a practising accountant and was in fact Mr. Conceição's personal accountant and the accountant to Studio One. Mr. Medeiros is the person who has supported the Complaint with a personal affidavit providing the vast bulk of the evidence against Mr. Conceição and his companies, Studio One and the Respondent.
The Domain Names were registered in the name of Studio One, SATA Express's advertising agency, on August 26, 2003. The Panel is not entirely clear precisely who knew what at the time of registration of the Domain Names. What is not in doubt however is that Mr. Medeiros knew from around 2001-2 that Mr. Conceição was working on a proposal for a website to be developed jointly by SATA Express and Studio One for connection to the Domain Names (paragraph 41 of Mr. Medeiros' affidavit).
Mr. Medeiros says that he warned Mr. Conceição at the time that Grupo SATA would object to the proposal, but according to him Mr. Conceição said that he would go ahead and register the Domain Names anyway in order to stop anyone else getting them. Mr. Conceição disputes that version of events, but if it is true, there would certainly be a strong argument that for Mr. Conceição to have gone ahead and registered the Domain Names in the face of that warning was a potentially abusive act. There are no contemporaneous documents to support the stories of either party. Were it not for the following events the Panel would have had some sympathy with the Complainant's position.
About 9 months after the registration of the Domain Names by Studio One, on May 3, 2004 Mr. Conceição writes a letter to SATA Express and the Complainant in which he sets out the terms of an agreement relating to the development by Studio One of websites connected to the Domain Names. The letter talks of ownership by Studio One of the websites, but does not mention ownership of the Domain Names. In light of Mr. Medeiros' evidence to the Panel as to his reaction when Mr. Conceição first mentioned the idea to him (see the previous paragraph), one would have expected him to reply rejecting the idea out of hand or at the very least saying that he would have to consult the Complainant in the matter. He certainly did not do the latter. Whether or not he did the former, the Panel does not know. What he did in fact do was to countersign the letter “approbado”.
Mr. Medeiros says that he signed the letter unwillingly and under pressure. He says that he only did it in order to dissuade Mr. Conceição from transferring the Domain Names to someone else. It seems to the Panel an unlikely scenario. If that is the true reason why he signed it, why did not the Complainant, whom he must surely have informed, immediately take the matter up with Mr. Conceição, perhaps by launching a complaint under the Policy? At the very least one would have expected a letter of complaint, but nothing of that kind has been produced to the Panel.
The Complainant makes great play of the fact that Mr. Medeiros did not sign the letter on behalf of the Complainant. He only signed on behalf of SATA Express. The Panel is not competent to assess the significance of Mr. Medeiros's signature under Canadian law and does not seek to do so. For the Panel, the significance of Mr. Medeiros's signature is the effect that it would have had on Mr. Conceição and Studio One. On its face that signature must have reassured Mr. Conceição and Studio One that the Flysata Project was up and running. It certainly did not constitute a flag to Mr. Conceição and his company that anything was amiss.
The situation becomes even more bizarre, albeit consistent with Mr. Conceição's stated belief that everything was above board and on course. In November 2006, Mr. Conceição incorporates the Respondent, a company whose name features one of the Domain Names and the Complainant's principal trade mark. Who does he use to file the incorporation documents? None other than Mr. Medeiros, his accountant and a director of SATA Express.
The Panel has insufficient verifiable information before him to state with certainty that Mr. Medeiros had a close and detailed knowledge of everything that his accountancy business was doing for Mr. Conceição and his companies. It might just be that this work was carried out by another individual within his accounting business. However, given Mr. Medeiros' involvement in the Flysata Project as evidenced by his signature of the May 3, 2004 letter, it seems very odd to the Panel that Mr. Medeiros would have known nothing of the matter. Nonetheless, in this regard the significant point for the Panel is that if Mr. Conceição was doing anything that he thought to be underhand or wrong, it is most unlikely that he would have used Mr. Medeiros' company to undertake the work for him. Mr. Conceição says that the Respondent was formed to take the Flysata Project forward and there is nothing before the Panel to show either that that was unlikely to be the case or that Mr. Medeiros or anyone else took objection at the time.
In the result, the Panel is not satisfied that the Domain Names were registered in bad faith by Studio One. On this evidence, if the transfer of the Domain Names had not taken place earlier this year and they were still held in the name of Studio One, the Panel would have dismissed it, it being necessary for a successful complainant to prove both bad faith registration and bad faith use.
The Panel now returns to the transfer of the Domain Names to the Respondent. The Complainant's argument being that whatever rights or legitimate interests Studio One may have had in respect of the Domain Names, the same cannot be said of the Respondent.
The Panel has already determined above that the transfer of the Domain Names to the Respondent was not actuated by any intention to distance the Domain Names from their history. It was not a case of cyberflight. The Panel sees no reason why for the purposes of this administrative proceeding the Respondent should not be able to ‘inherit' from the previous registrant the lack of any proof of bad faith intent in registration of the Domain Names. Both the previous registrant and the Respondent are effectively sister companies under common ownership and control and the Respondent's reason for the transfer was understandable, if misguided.
The Complainant has failed to satisfy the Panel that the Domain Names were registered in bad faith. In the result the Complaint fails.
The Panel regards this as a fair result in the particular circumstances of this case. There is a very substantial history to the matter. The evidence in this proceeding is as detailed and voluminous as any that the Panel has come across over the last 9 years of adjudicating disputes under the Policy. There are marked conflicts of fact, which a proceeding of this kind cannot sensibly address, there being no scope for full discovery and cross-examination of witnesses in proceedings under the Policy. The Panel agrees with the Respondent that if this dispute is incapable of amicable resolution between the parties, it has to be a matter for the Ontario court.
In coming to this conclusion, for the reasons given, the Panel has concentrated on the motives of Studio One and Mr. Conceição at the date of registration of the Domain Names. Nothing that has happened since November 2006 has any relevance to that issue. Nothing that has happened since can explain with any degree of certainty, the absence of any evidence of the Complaint being raised at time of registration of the Domain Names, the absence of any contemporaneous document to counter the natural reaction to Mr. Medeiros' signature of the May 3, 2004 letter agreement, the absence of any explanation as to why Mr. Medeiros and/or his accountancy business felt it appropriate to act for the Respondent in any capacity if what Mr. Conceição was doing ran counter to the interests of the Complainant and/or SATA Express, the company of which Mr. Medeiros was a director. The only possible significance of subsequent events insofar as registration of the Domain Names is concerned is the extent to which they might have coloured the Panel's view of Mr. Conceição's motives for transferring the Domain Names to the Respondent; however the Panel has accepted the Respondent's explanation. E. Complaint was brought in bad faith and is an abuse
The Respondent contends that it was an abuse of the process for the Complainant to lodge this Complaint in circumstances where it must have known that the Complaint was wholly unsuited to a proceeding under the Policy. In support of this allegation of abuse the Respondent relies heavily upon the absence of any reference to the Respondent in Mr. Medeiros' affidavit and the absence of any reference to it elsewhere in the evidence despite Mr. Conceição having alerted a Ms Blétière of Grupo SATA to its existence in an email to her of February 4, 2008.
It is, of course, crucially important in administrative proceedings of this kind that the evidence in the Complaint does not omit any material facts within the Complainant's knowledge. More often that not, respondents do not respond, which means that in those cases the only evidence before the Panel is the Complaint. In those cases the Panel only hears one side of the story, so it is important that that story is fair and not distorted by material omission.
As will be apparent from what is said above there are a number of aspects of the Complainant's evidence that the Panel finds surprising. However, the Panel does find it extraordinary that no mention of the Respondent was made in the Complaint and is unimpressed with Mr. Medeiros's explanation in paragraph 18(p) of his second affidavit that “he owes professional obligations of confidentiality to Mr. Conceição and his companies such as Studio One Productions Inc. and F Inc.” If he is to put himself forward as a witness for the Complainant, he owes a duty to the Complainant and the Panel to provide proper disclosure. If, as would appear to be the case, he has conflicts of interest, there are well-tried ways and means of resolving them without there being any call for omitting relevant evidence.
However, while the Panel is sympathetic to the Respondent's feeling of outrage, the Panel is also conscious that there are large gaps in the evidence generally, gaps which the Panel would wish to explore further before making a positive finding under this head. There has already been an abundance of filings and counter-findings and in the view of the Panel encouraging the parties to file further submissions on this topic would serve no useful purpose.
It is also the case that Mr. Conceição and/or his companies have registered domain names and company names featuring the principal trade mark of Grupo SATA; the companies in that group clearly have a legitimate interest in protecting their trade marks. The most extraordinary thing of all is that they appear to have permitted the current situation to arise. The Panel is satisfied that the Complainant's primary purpose in launching the Complaint was to secure its trade marks rather than to harass the Respondent unfairly.
The Panel regrets that greater care was not taken in the evidence put before the Panel in the Complaint, but is not satisfied on the evidence before him that it would be safe to conclude that the Complaint was brought in bad faith or was brought primarily to harass the domain name holder. 7. Decision
For all the foregoing reasons, the Complaint is denied.
Tony Willoughby
Sole Panelist
Dated: May 18, 2009
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