WIPO Arbitration and Mediation Center ADMINISTRATIVE PANEL DECISION Eastman Sporto Group LLC v. Jim and Kenny Case No. D2009-1688 1. The Parties
Complainant is Eastman Sporto Group LLC, of New York, New York, United States of America, represented by the law firm Kenyon & Kenyon, United States of America.
Respondent is Jim and Kenny of Portland, Oregon, United States of America, represented by Jim Leissner, United States of America. 2. The Domain Name and Registrar
The disputed domain name is registered with GoD, Inc. 3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on December 9, 2009. On December 10, and 11 2009, the Center transmitted by email to GoD, Inc. a request for registrar verification in connection with the disputed domain name. On December 11, 2009, GoD, Inc. transmitted by email to the Center its verification response confirming that Respondent is listed as the registrant and providing the contact details
The Center verified that the 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 Respondent of the Complaint, and the proceedings commenced on December 15, 2009. In accordance with the Rules, paragraph 5(a), the due date for Response was January 4, 2010; by agreement of the parties this was extended to January 11, 2010. The Response was filed with the Center on January 12, 2010.
The Center appointed Richard G. Lyon as the sole panelist in this matter on January 29, 2010. The Panel finds that it was properly constituted and has jurisdiction over this administrative proceeding. The Panel has submitted his Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.
On February 10, 2010, the Panel issued Procedural Order No. 1, requesting Respondent to confirm the most recent date on which it renewed the disputed domain name. Respondent notified the Center on February 14, 2010 that its most recent renewal occurred on October 23, 2009. 4. Factual Background
Complainant makes and sells many products, including footwear for athletic and outdoor use, under the brand SPORTO. Complainant holds many trademarks for SPORTO registered with the United States Patent and Trademark Office (USPTO). Several of these date back to the 1960s and claim use in commerce since 1951.
Respondent registered the disputed domain name in 1997. According to the archives at “” the site was first used in 1998, at which time it was used in connection with training classes offered by Respondent. Content changed in 2001, when the site contained statistical data on stream flow conditions obtained from a governmental agency. In 2004 the site's entire content read: “THIS DOMAIN HAS JUST BEEN REGISTERED FOR ONE OF OUR CUSTOMERS! DOMAIN REGISTRATION AND WEBHOSTING AT MOST COMPETITIVE PRICES! [signed] 1&1 Internet Inc.”1 The site owner has blocked the archives from revealing content from November 2006 through September 2007; after that date no content is displayed. At some times during this time period the disputed domain name resolved to a generic pay-per-click site offering links to shoes and footwear.2 When the Panel accessed the disputed domain name he was automatically re-directed to at which a site apparently operated by that company offered for sale seven pictured models of shoes and boots. Each such merchandise was identified as a Sporto product and Complainant's name and logo (including a distinctive graphic design that is part of some of Complainant's trademarks) is displayed prominently.3
Complainant has never licensed Respondent to sell its products or otherwise to use its trademarks.
On August 21, 2009, Respondent offered to sell the disputed domain name to a third party for USD100,800. This third party was apparently acting on Complainant's behalf. 5. Parties' Contentions A. Complainant
The Panel summarizes Complainant's contentions as follows:
1. Complainant holds valid trademark rights in SPORTO by reason of its many USPTO-registered marks. Except for the top-level domain .com the disputed domain name is identical to these marks.
2. Complainant has never authorized Respondent to use its marks. Respondent has never been known by the disputed domain name. Respondent's current use of the disputed domain name, to resolve to a site selling competitive products, is not legitimate under the Policy. Respondent had constructive notice, and probably actual notice as well, of Complainant's marks. These marks have been used continuously in commerce for more than fifty years and have achieved widespread fame.
3. Four factual bases illustrate Respondent's bad faith in registration and use: (a) use of Complainant's “clearly distinctive trademarks;” (b) Respondent's offer to sell the disputed domain name for an amount far in excess of its costs of registration; (c) Respondent's use of the disputed domain name for a pay-per-click site with links related to Complainant's mark and products; and (d) Respondent “can make no reasonable argument that its use is sports related or related to any creative or commercial endeavor.” B. Respondent
The Panel summarizes Respondent's contentions as follows:
1. While Respondent does not (and perforce cannot) directly contest identity of the disputed domain name and Complainant's marks, it does deny any confusion and notes that it has operated an active website at the disputed domain name for thirteen years without complaint. Respondent also questions Complainant's right to trademark protection for a “dictionary word.”
2. Respondent cites several legitimate uses in the thirteen years he has owned the disputed domain name. In addition to the uses listed in Section 4, Respondent claims to have operated a sports information service called Online Sports, and offers what he describes as a business plan for this business dated September 1997.
3. All of Respondent's uses of the disputed domain name have been undertaken in good faith and do not compete or interfere with Complainant. Respondent had no knowledge of Complainant or its marks in 1997 when it registered the disputed domain name. “Sporto” is a dictionary word in certain foreign languages and a common colloquial word in English and Respondent chose it for that reason. 6. Discussion and Findings
This is a difficult case to resolve for several reasons, including a recent spate of UDRP panel opinions under a modified approach to determining bad faith under paragraph 4(a)(iii) of the Policy. A. Identical or Confusingly Similar
Complainant has demonstrated longstanding trademark rights in the word SPORTO, and the disputed domain name is identical to this term. When the two are identical no showing of confusion is required. Complainant has carried its burden of proof under this Policy head. B. Rights or Legitimate Interests
The evidence shows that Respondent has used the disputed domain name sporadically between 1997 and 2008 for businesses that do not compete with Complainant and that such use in no way can be said to have played off any goodwill attaching to Complainant's marks. Such use in the Panel's opinion does not establish that Respondent is now or was ever “commonly known” by SPORTO (see Policy, paragraph 4(c)(ii)), but was under Policy precedent adequate to bring Respondent within the safe harbor of paragraph 4(c)(i).
So far as the record reflects, however, all use since 2008 has not been legitimate; on the contrary, it has been activity routinely found to be cybersquatting: a standard pay-per-click page with hyperlinks based upon the mark owner's (Complainant's) name and industry, followed by a site that purports to sell Complainant's products or products directly competitive with Complainant's products.
As discussed more fully in subsection C below, until last year Respondent's pre-2008 use of the disputed domain name may have established a defense to the charge of no rights or legitimate interest (although the absence of such bona fide use today might nullify such defense for the purpose of the second element of the Policy). Furthermore, recent cases that advance a different approach to determination of bad faith under paragraph 4(a)(iii) of the Policy may also undercut that defense on the present facts. Because those cases address Policy language regarding bad faith, the Panel will consider them under that Policy head. C. Registered and Used in Bad Faith
Paragraph 4(a)(iii) of the Policy reads as follows:
“You are required to submit to a mandatory administrative proceeding in the event that a third party (a "complainant") asserts to the applicable Provider, in compliance with the Rules of Procedure, that:
. . . .
(iii) your domain name has been registered and is being used in bad faith.” The Traditional Approach
Until last year's decision in City Views Limited v. Moniker Privacy Services / Xander, Jeduyu, ALGEBRALIVE,WIPO Case No. D2009-0643 (“Mummygold”), panels had considered the requirements of “registration and use” to be conjunctive, requiring a panel to consider both bad faith first at the date of registration, and to examine whether the respondent's use was in bad faith. To establish registration in bad faith the complainant ordinarily must have proven that the respondent, at the time of registration, knew of the complainant and its mark and selected the mark to take advantage of whatever renown attached to that mark. These cases generally (although not always) involved separate analyses of facts pertaining to different points in time. Cases in which clear bad faith use was shown absent a showing of bad faith registration still resulted in a denial of the complaint because there was no evidence of (or sufficient grounds from which to infer) knowledge and targeting at the time of registration. This two-pronged approach became well-settled precedent. While not expressly included in the WIPO Overview of WIPO Panel Views on Selected UDRP Questions (“WIPO Overview”), paragraph 3.1 impliedly adopts it:
“3.1 Can bad faith be found if the disputed domain name was registered before the trademark was registered/common law trademark rights were acquired?
Consensus view: Normally speaking, when a domain name is registered before a trademark right is established, the registration of the domain name was not in bad faith because the registrant could not have contemplated the complainant's non-existent right.” (Citations and Exception omitted)4
Bad faith in registration, under the traditional approach, may be proven inferentially.5 The most cited example of this is Telstra Corporation Limited v. Nuclear Marshmallows,WIPO Case No. D2000-0003, in which bad faith in registration was inferred from a combination of the respondent's selection of a famous and distinctive mark and lengthy non-use of the domain name. Some of the other bases for an inference of bad faith are set out in Net2phone Inc v. Delta Three Inc.,WIPO Case No. D2007-0644, fn. 5-11 and accompanying text. All of these cases, however, turned on Respondent's state of mind at the time of registration.6 The Mummygold approach
The panels who decided Mummygold and its progeny,7 however, advance a different view of paragraph 4(a)(iii), and treat “registered and used the domain name in bad faith” as a “unified concept”. Under this method of analysis (the “Mummygold approach”) a panel may determine that registration in bad faith under paragraph 4(a)(iii) may be established “retroactively” by subsequent bad faith use. (Mummygold; Octogen)
The Mummygold cases cite two Policy provisions in support of this approach. The first is a registrant's representation and warranty in paragraph 2:
“2. Your Representations. By applying to register a domain name, or by asking us to maintain or renew a domain name registration, you hereby represent and warrant to us that (a) the statements that you made in your Registration Agreement are complete and accurate; (b) to your knowledge, the registration of the domain name will not infringe upon or otherwise violate the rights of any third party; (c) you are not registering the domain name for an unlawful purpose; and (d) you will not knowingly use the domain name in violation of any applicable laws or regulations. It is your responsibility to determine whether your domain name registration infringes or violates someone else's rights.”
The Octogen panel interpreted this paragraph as follows: “this provision not only imposes a duty on the part of the registrant to conduct an investigation at the time of registration, but also includes a representation and warranty by the registrant that it will not now or in the future use the domain name in violation of any laws or regulations. This effectively imposes on the registrant a continuing duty to ensure that the domain name is not used in violation of another's rights and clearly covers intellectual property rights and the laws protecting them, including copyright and trademark. This representation and warranty is not limited to the moment at which the registrant registers the domain name; rather, it extends to any use of the domain name in the future.” (Emphasis in original)
The second Policy underpinning is the set of non-exclusive examples of “evidence of registration and use in bad faith” set out in paragraph 4(b) of the Policy. The first three of these refer only to registration; the fourth refers only to use. Again quoting from Octogen, “Under paragraph 4(b)(iv) of the Policy a respondent that uses the domain name to attract Internet users to its website or online location by creating a likelihood of confusion with the complainant's mark and its sponsorship of the website is acting in bad faith, without reference to the respondent's state of mind at the time that the registrant registered the domain name. Clearly, as under the Telstra analysis, in this Panel's view bad faith registration can be deemed to have occurred even without regard to the state of mind of the registrant at the time of registration, if the domain name is subsequently used to trade on the goodwill of the mark holder, just as bad faith use can occur without regard to the fact that the domain name at issue has not been (or has been ‘passively') used.”
The Mummygold approach has not to date been universally accepted. The panel in Validas, LLC v. SMVS Consultancy Private Limited,WIPO Case No. D2009-1413, ably critiques, and declines to follow, the Mummygold approach.8 This Panel views Mummygold's unified concept notion with skepticism. As this Panel sees it, the argument that paragraph 2 places upon a registrant a continuous obligation to avoid “infringing” use is to some extent inconsistent with ordinary principles of contract law. Representations and warranties are usually one-off statements, made as of a particular date. They may be repeated, to be sure, and they may impose upon their maker a continuing obligation. In this Panel's view, however, extending paragraph 2 to impose upon a registrant an affirmative duty continuously to monitor (for example) subsequently issued trademarks and modify website content accordingly would run counter to several principles that underscore the UDRP system, most notably simplicity and limiting use of the Policy to a narrow class of cases in which cybersquatting has been proven. To this Panel it seems that, taken to an extreme the Mummygold approach might without any action by the registrant render illegitimate (for purposes of the Policy) an activity at a website that had been in use for years without grounds for complaint – a result that would go farther than United States trademark law. More importantly, that result might clash with other express Policy provisions, such as certain of the safe-harbor provisions of paragraph 4(a)(ii) and 4(c).
In this Panel's assessment, the most formidable obstacle to the Mummygold approach is the language of paragraph 4(a)(iii) itself. The operative verbs in that provision are clearly conjunctive – registered and used. The Internet Corporation for Assigned Names and Numbers (ICANN), when it adopted the Policy and the Rules, apparently made a conscious decision at the time of adoption to require two distinct “infringing” acts. (To be sure, that decision was taken at a time when the Policy was a new instrument, and without the benefit of hindsight of ten years of its subsequent operation.) The two distinct inquiries required under the UDRP have been criticized as a shortcoming that can countenance unscrupulous conduct, and has led in a few cases to a respondent that engaged in abusive use getting away with it because of insufficient proof of abusive registration. Several subsequently adopted Policy counterparts have declined to require bad faith in both registration and use for transfer.9
Equally formidable an obstacle, in this Panel's opinion, is the (until recently) unbroken line of precedent, starting with some of the earliest cases decided under the Policy and followed regularly to the present, that has interpreted paragraph 4(a)(iii) as clearly and unequivocally requiring a showing of both registration and use. Development of a body of Policy panel “jurisprudence” has been a commendable objective in which much effort has and continues to be invested; see, e.g., WIPO Overview, paragraph 4.1 (emphasis supplied):
“Consensus view: The UDRP does not operate on a strict doctrine of precedent. However panels consider it desirable that their decisions are consistent with prior panel decisions dealing with similar fact situations. This ensures that the UDRP system operates in a fair, effective and predictable manner for all parties.”
As this Panel sees it, whether intended or not, the Mummygold approach could impact an otherwise settled rule of decision on which “all parties” have relied for a decade. That rule of decision moreover defines a fundamental element of the Policy, and departing from our precedent in this matter could modify substantially Complainant's burden of proof especially under the third element of the Policy. That change in some cases could be the equivalent of an amendment to the Policy, in effect comparable to substitution of “or” for “and” in paragraph 4(a)(iii), that would result in changes in some subsequent cases.10 As noted, if fully extended (assuming a complainant had proven the other elements of the Policy) it might result in transfer of a domain name without any action by its owner, simply because someone subsequently acquired or registered a trademark. It could encourage mark owners to overreach in Policy proceedings, something the traditional approach discourages. It could cause substantial changes to those who have built businesses in buying and selling domain names relying upon our precedent. They are among the “all parties” entitled to “a fair, effective and predictable manner” of resolution of Policy disputes. Substantially for the reasons expressed by the Validas panel, and those listed above, this Panel for now declines to adopt the “unified concept” approach of the Mummygold case.
This Panel stated of the Mummygold approach in Hertz System, Inc. v. Kwan-ming Lee,WIPO Case No. D2009-1165: “This Panel is not presently prepared to read the few unified concept approach cases to say that any use in bad faith, even occasional conduct that fits squarely within one of the examples of bad faith in paragraph 4(b) of the Policy, as automatically establishing bad faith for purposes of paragraph 4(a)(iii). If it did, the clearly conjunctive language of paragraph 4(a)(iii) could be too easily circumvented.” I shall go farther here: unless bad faith use subsequently to registration forms a basis for an inference of Respondent's bad faith at the time of registration, it cannot alone satisfy the complainant's burden of proof under paragraph 4(a)(iii) of the Policy. Renewal of a Domain Name Registration
The conjunctive language of paragraph 4(a)(iii) is plain. Equally clear, on this Panel's reading, is the introductory clause of paragraph 2 that sets its applicability as a matter of contract. A registrant provides his undertaking “By applying to register a domain name, or by asking [a registrar] to maintain or renew a domain name registration.” This, unlike the covenant-type interpretation necessary for the Mummygold approach, is a typical one-time representation as of a discrete date, or rather successive discrete dates. Paragraph 2 does not distinguish among the initial date of registration and subsequent requests for renewal – the undertaking by its terms applies as of all such dates.
This reading may conflict with another line of precedent dating back to the Policy's early days, one that also finds its place as a Consensus View in the WIPO Overview, paragraph 3.7:
“Does the renewal of the registration of a domain name amount to a registration for the purposes of determining whether the domain name was registered in bad faith?
Consensus view: While the transfer of a domain name to a third party does amount to a new registration, a mere renewal of a domain name does not amount to registration for the purposes of determining bad faith. Registration in bad faith must occur at the time the current registrant took possession of the domain name.”
The first case setting out this view is Teradyne, Inc.Teradyne, Inc. [sic] v. 4Tel Technology,WIPO Case No. D2000-0026. The panel in Teradyne held that the conjunctive nature of paragraph 4(a)(iii) trumped the introductory clause of paragraph 2. Unlike separate analyses of registration and use, there have been comparatively few subsequent cases expressly addressing this question. All this Panel has found have followed the Teradyne rule, usually without much further analysis. See Smart Design Llc v. Carolyn Hughes,WIPO Case No. D2000-0993; Substance Abuse Management, Inc. v. Screen Actors Modesl [sic] International, Inc. (SAMI ),WIPO Case No. D2001-0782; G Limited v. Bestinfo,WIPO Case No. D2004-0320; PAA Laboratories GmbH v. Printing Arts America,WIPO Case No. D2004-0338. The Panel in PAA Laboratories did so however only in deference to Policy precedent:
“In making its finding, the Panel wishes to clarify that its decision under this element is based on the need for consistency and comity in domain name dispute ‘jurisprudence'. Were it not for the persuasive force of the cited decisions, this Panel would have expressed the view that paragraph 2 of the Policy demonstrates that references to ‘registration' in the Policy were probably intended to be references to ‘registration' or ‘renewal of registration.' Absent the consistency of approach which has found favour with numerous earlier panels, this Panel would have seen no good reason for a renewal not to be considered as equivalent to ‘registration' in the context of the objectives of the Policy. If the renewal had not been effected the disputed domain name would have lapsed and been available to others. The abusive refreshing of the original registration is an act which this Panel considers should be an act of a kind encompassed by paragraph 4(a)(iii) of the Policy. The benefit of an original good faith registration should not be perpetual to the point where it can cloak successors in title and successors in ‘possession' long after the original registration would have expired.”
This Panel shares those reservations. For the reasons given in the last sentence of the quotation from PAA Laboratories, I doubt that ICANN intended that all renewals could be made without regard to a registrant's paragraph 2 undertaking. It is for that reason that panels (including this one) have in some cases found a transfer of ownership even among related entities to be a new or fresh registration for Policy purposes, see ehotel AG v. Network Technologies Polska Jasinski Lutoborski Sp.J.,WIPO Case No. D2009-0785 (“It might be argued that the conclusion in this case is unfair to Mr. Lutoborski or the Respondent. If a respondent has registered a domain name for a legitimate business purpose, and another business comes along that chooses to use the same name, should he not be allowed to take advantage of that fact? The answer to that question depends upon how exactly the domain name is used. If he merely intends to continue to do what he has always legitimately done, then it is difficult to see how that continued use could be characterised as use in bad faith. The problem is that the Mr. Lutoborski did not do this. Instead, he effectively abandoned his own prior use and actively sought to associate the Domain Name with the Complainant's business. This combined with the subsequent transfer of the Domain Name proved fatal to his case.”); BME, LLC. v. Gregory Ricks / Gee Whiz Domains Privacy Service,WIPO Case No. D2008-0882.11 And treating a renewal the same as a registration comports with the language – very plain and direct language – of paragraph 2.
In this Panel's view, the facts and circumstances of the present case provide a more compelling scenario than PAA Laboratories for revisiting the Teradyne rule. There the respondent's use of the domain name changed because of changed business circumstances (insolvency) not related to the domain name, and it could have been argued that respondent's subsequent offer to sell it (the act found to be use in bad faith) was part of the ordinary course of winding up the earlier business. Here, at the time of its most recent renewal last year Respondent's use of the disputed domain name had become prototypical cybersquatting and in no way related to any of Respondent's businesses. The change came about not through intervening circumstances unrelated to Respondent's prior good faith use but by Respondent's conscious choice to change website content. If Respondent's paragraph 2 representation and warranty were given in October 2009 it would have been knowingly false. To summarize, in this Panel's assessment:
- Respondent intentionally changed its use of the disputed domain name.
- The new use is unrelated to Respondent's earlier business.
- The new use is textbook cybersquatting.
- The new use occurred prior to the renewal held to be a registration subject to for purposes of paragraph 4(a)(iii).
- There has been no legitimate use since renewal.
The present case illustrates the problem that can arise from adhering rotely to Teradyne: so long as a Respondent that originally registered a domain name in good faith retains ownership it is free continuously and flagrantly to exploit Complainant's trademark – license it to a competitor, perhaps – without fear of a Policy proceeding. These consequences could of course be said to flow in part from the conjunctive language of paragraph 4(a)(iii). Yet in this Panel's considered opinion it is not unreasonable to temper those consequences by giving the plain language of paragraph 2 equal standing with the plain language of paragraph 4(a)(iii).
Even though included as a Consensus View in the WIPO Overview this Panel's assessment is that the Teradyne rule enjoys comparatively less precedential support than the traditional rule of interpreting paragraph 4(a)(iii). As noted, the cases are few and most simply endorse the Teredyne case without extended discussion, and the most thoughtful discussion, in PAA Laboratories, questions the original rationale for the rule. This Panel's qualifying its application in the stark circumstances of the present case should have considerably less impact on UDRP proceedings and participants' conduct than (for example) adopting the Mummygold approach.
This may not be a “binary” choice – that a renewal will always be treated as a new registration. In other circumstances it might well be appropriate to continue to find otherwise “infringing” use still within the safe harbors of paragraphs 4(c)(i) or 4(c)(ii). The obvious case that comes to mind is when the respondent had nothing to do with the intervening circumstances that changed things – a trademark is registered after initial registration but before renewal, and the use to which the respondent puts the domain name remains materially unchanged, for example. That is a matter for panels in future cases.
Based upon the record in this proceeding, the Panel deems Respondent's 2009 renewal of the disputed domain name to be the date on which to measure whether the disputed domain name was registered and used in bad faith for purposes of paragraph 4(a)(iii), and finds that the Respondent registered and used the disputed domain name in bad faith. The Panel further finds that Respondent's use of it to redirect to a website that includes hyperlinks to Complainant's competitors not legitimate under paragraph 4(a)(ii). 7. Decision
For all the foregoing reasons, in accordance with Paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the domain name, be transferred to the Complainant.
Richard G. Lyon
Sole Panelist
Dated: March 1, 2010
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