WIPO Arbitration and Mediation Center ADMINISTRATIVE PANEL DECISION Intelligen LLC v. Converg Media LLC Case No. D2010-0246 1. The Parties
Complainant is Intelligen LLC of Jacksonville, Florida, United States of America, represented internally.
Respondent is Converg Media LLC of Olathe, Kansas, United States of America, represented by Stephen H. Sturgeon & Associates, P.C., United States of America. 2. The Domain Name and Registrar
The disputed domain name is registered with Netracorp, LLC dba Global Internet. 3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on February 18, 2010. On February 18, 2010, the Center transmitted by email to Netracorp, LLC dba Global Internet a request for registrar verification in connection with the disputed domain name. On February 18, 2010, Netracorp, LLC dba Global Internet transmitted by email to the Center its verification response disclosing registrant and contact information for the disputed domain name which differed from named Respondent and contact information in the Complaint. The Center sent an email communication to Complainant on February 23, 2010 providing the registrant and contact information disclosed by the Registrar, and inviting Complainant to submit an amendment to the Complaint. Complainant filed an amendment to the Complaint on March 1, 2010. The Center verified that the Complaint together with the amendment to 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 March 1, 2010. In accordance with the Rules, paragraph 5(a), the initial due date for Response was March 21, 2010. On March 18, 2010, Respondent's representative sent an email to the Center requesting an extension to file a Response. On March 19, 2010, the Center forwarded the email to Complainant for its comment. On the same day, Complainant transmitted an email to the Center objecting to the extension request.
On March 22, 2010, the Center informed the parties that “taking into account your stated reasons for that request, and considering the objection of the Complainant and the due date of filing a Response was Sunday, March 21, the Center will grant the extension of time until March 24, 2010”. Respondent did not submit any response.
On March 18, 2010, Complainant filed an unsolicited Supplemental Filing.
The Center appointed Frederick M. Abbott as the sole panelist in this matter on April 1, 2010. 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.
On April 12, 2010, Respondent transmitted to the Center by email a Response, requesting that the Panel accept and consider the late pleading. Respondent attributed its delay to retention of counsel, review by that counsel of Complainant's supplemental filing, as well as vacation scheduling. By email of April 12, 2010, Respondent also requested suspension of this administrative proceeding on grounds that it had petitioned the United States Patent and Trademark Office (USPTO) on April 9, 2010 to cancel Complainant's trademark registration for VIEWGUARD.
On April 12, 2010, Complainant transmitted by emails to the Center a Rebuttal to the Response, its objection to the Panel's acceptance of the Response, and its request that the Panel refrained from suspending this administrative proceeding.
By email of April 13, 2010, the Center transmitted to the parties Administrative Panel Procedural Order No. 1 (“Panel Order No. 1”), which stated in relevant part:
“Respondent has requested suspension of this proceeding based upon its April 9, 2010 filing of a petition for cancellation of Complainant's trademark registration at the United States Patent and Trademark Office. The Panel rejects Respondent's request for suspension of this proceeding in the exercise of its discretion under paragraph 18(a) of the Rules.
Complainant has requested the Panel to reject Respondent's late-filed Response. The Panel is sympathetic to Complainant's observations concerning the grounds put forward by Respondent for its late filing. The Panel notes, however, that Complainant has filed a number of supplemental submissions subsequent to the filing of the Complaint, and has requested that the Panel accept and give consideration to these filings. In the ordinary course of providing parties to a proceeding under the Policy with a fair opportunity to present their case, the Panel would afford a respondent the opportunity to address accepted supplemental filings from a complainant. The Panel accepts and will consider the supplemental filings of Complainant, and also accepts and will consider the Response and supplemental filings of Respondent. However, this determination applies solely to filings received from the parties as of the date of this Panel Order.
The Panel has undertaken a preliminary review of the documents submitted to this date. The Panel has particular interest in making a determination as to two issues of fact, and requires additional information and supporting documentation.
The Panel must determine the earliest date upon which Complainant establishes rights in its trademark. From the standpoint strictly of information set forth on its certificate of trademark registration, Complainant's presumption of trademark rights would arise on December 26, 2008, the filing date of the granted application. Complainant may also be able to establish rights in the unregistered mark dating back to its asserted dates of first use and first use in commerce (or earlier), for which it does not enjoy an automatic presumption of validity. Complainant has offered to provide evidence to substantiate a finding of unregistered trademark rights pre-dating the filing of its trademark application. Complainant is invited to submit such evidence and legal argumentation as it considers appropriate for establishing the date upon which it acquired rights (registered and/or unregistered) in the VIEWGUARD trademark.
The Panel must also make a determination as to the date upon which Respondent registered the disputed domain name. Complainant has argued that Respondent could only have registered the disputed domain name after its legal formation in 2009, and also that Respondent demonstrated lack of rights or legitimate interests and bad faith prior to that date through a predecessor entity or entities. The Panel requests that Complainant clarify the date upon which it seeks to rely for Respondent's registration of the disputed domain name.”
By email of April 18, 2010, Complainant transmitted to the Center its Response to the Panel Order No. 1.
By email of April 26, 2010, Respondent transmitted to the Center its Response to the Panel Order No. 1. 4. Factual Background
Complainant is the owner of registration on the Principal Register of the USPTO of the word and design trademark VIEWGUARD (as described in the USPTO registration, “the mark consists of two overlapping rectangles with the word “VIEWGUARD”), registration number 3,733,473, dated January 5, 2010, in international class 9, covering “computer accessories, namely, electronic display privacy filters and screen protectors, television accessories, namely, anti-glare filters”. The application for registration was filed on December 26, 2008, and claimed first use on September 29, 2006 and first use in commerce on October 19, 2006.
Complainant advertises and sells, inter alia, a privacy filter for computer displays using the VIEWGUARD mark. Complainant operates a commercial Internet website at “” and other Internet addresses (URLs), including “www.buy”, incorporating the VIEWGUARD trademark where it provides information and offers for sale its privacy filter. Complainant's privacy filter product is sold through SkyMall and various other distributors, and is in wide use in the United States. In November 2008, the founder of Complainant was selected as 2008 Emerging Entrepreneur of the Year by Entrepreneur Magazine and UPS. The news report from Entrepreneur Magazine dated November 25, 2008, stated with respect to the founder of Complainant:
“The Emerging Entrepreneur of the Year, Glenn Robertelli, not only created a business that competes with a corporate giant, but he's also done so completely on his own with a virtual, 99 percent paperless office. He started Intelligen in October 2006, which makes ViewGuard privacy filters. He's since broadened his product line and estimates 2008 sales at $2.8 million.”
Complainant was established as a limited liability company (LLC) in Florida, United States in April 2006, and transferred incorporation to Wyoming on May 20, 2008. Complainant continues to maintain its principal office in Jacksonville, Florida, United States.
Complainant has provided a copy of a PayPal receipt showing sale of one unit of its privacy filter product using its trademark on October 19, 2006. Complainant has provided evidence of its registration of the domain name on September 28, 2006. Complainant has provided a WayBack record showing the posting of four pages of content on the website identified by in December 2006, and has provided a two page website printout from December 8, 2006 showing its Viewguard product offered for sale. Complainant has provided Internet chat records showing some discussion by computer users of its product in January 2007, and a post from “cafeCommuter” from March 27, 2007 that includes responsive postings from a number of computer users discussing the relative merits of Complainant's Viewguard product along with a competing product of 3M.
Respondent Converg Media LLC is a limited liability company (LLC) formed in the state of Kansas on July 9, 2009. NetraCorp, LLC, with registered office in Olathe, Kansas, United States, the Registrar of the disputed domain name (which does business as Global Internet), appears to own and control Respondent, although Respondent has not provided evidence of such relationship. The two entities share a mailing address.
According to the Registrar's verification report, Respondent is registrant of the disputed domain name. According to that report, the “current registrant” of the disputed domain name registered it on December 4, 1998. According to a Global Internet WhoIs printout furnished by Complainant, the record of the disputed domain name was created on December 4, 1998.
Complainant and Respondent have submitted records showing that the disputed domain name was acquired by Global Internet in January 2006 through a backorder process. Complainant has submitted evidence from historical WhoIs records showing that the initial registrant of the disputed domain name (in 1998) was a Canadian entity apparently unconnected with Respondent and this proceeding. A record provided by Respondent shows the acquisition by an undisclosed party on January 11, 2006, and a record provided by Complainant shows registration by Global Internet effective at least as of January 22, 2006.
Sometime between December 20, 2009 and February 19, 2010, the registrant of the disputed domain name was changed to Respondent, Converg Media. The record of registration shows a change on February 18, 2010. For lack of better information, this might be presumed to be the date on which the registrant was changed from Global Internet to Converg Media (i.e., Respondent).
From at least September 19, 2007 to the initiation of this administrative proceeding, the registrant information for the disputed domain name was protected by various privacy shield operators.
Complainant has submitted documentary evidence showing that at least from June 2006 through October 30, 2009, the disputed domain name was used to host a link farm parking page that included links to computer monitor privacy filters. The first reference to Complainant's VIEWGUARD on the link farm parking page appeared on a record dated November 27, 2007. As of October 30, 2009, “View Guard” appeared as the most popular search result on the link farm parking page associated with the disputed domain name, and it was followed with various links to surveillance, private investigator, and security guard, among others.
At least as early as February 24, 2010, the website associated with the disputed domain name was modified to show the large font banner “Converg”, followed by “Taking your business to a higher level” in smaller font. This banner is followed by information concerning Internet security services offered by Converg Media under the name “Viewguard Security” (and subsequently “Viewguard Monitoring”). Complainant has submitted substantial evidence that the text appearing on the Converg website and purporting to offer Viewguard Security services (or Viewguard Monitoring services) was directly copied from the websites of two Internet security providers that are not associated with this proceeding (DigitalPersona and Trackur). Complainant has further provided evidence that Respondent modified certain webpage content to show that materials in fact posted in March 2010 were posted on January 15, 2010.
On January 15, 2010, Complainant transmitted a cease and desist and transfer demand addressed “To whom it may concern” to the privacy shield e-mail address associated with the disputed domain name. Respondent did not reply to that communication.
The Registration Agreement in effect between Respondent and Netracorp, LLC dba Global Internet subjects Respondent to dispute settlement under the Policy. The Policy requires that domain name registrants submit to a mandatory administrative proceeding conducted by an approved dispute resolution service provider, of which the Center is one, regarding allegations of abusive domain name registration and use. (Policy, paragraph 4(a)). 5. Parties' Contentions A. Complainant
Complainant asserts rights in the trademark VIEWGUARD based on use in commerce in United States and as evidenced by registration at the USPTO. Complainant claims that the term VIEWGUARD is inherently distinctive and that proof of secondary meaning is not required to establish common law trademark rights that date back to its first use in commerce. Complainant also argues that immediately subsequent to its first use of the VIEWGUARD term in commerce, its product obtained substantial consumer recognition, sales and industry recognition.
Complainant argues that although it was reorganized as a Wyoming corporation in 2008, it acquired trademark rights in VIEWGUARD as a Florida Corporation in 2006, and the Wyoming Corporation is lawful successor to those trademark rights.
Complainant alleges that the disputed domain name is identical to its trademark.
Complainant argues that Respondent lacks rights or legitimate interests in the disputed domain name. Complainant indicates that Respondent has not been authorized by it to use its trademark, that Respondent has not been commonly known by the disputed domain name, that Respondent does not own any trademark registrations or applications for VIEWGUARD or . Complainant alleges that Respondent cannot rely on its alleged business plan for use of the disputed domain name to establish rights or legitimate interests because evidence of such planning was generated in bad faith (i.e. by belatedly copying efforts of others).
Complainant contends that Respondent registered and is using the disputed domain name in bad faith. Complainant argues that the link farm parking page associated with the disputed domain name prior to Complainant's attempt to contact Respondent sought to take unfair advantage of Complainant's trademark by confusing Internet users who would associate the website with Complainant and its products, that links on the parking page were included to competitors of Complainant, and that Respondent used the disputed domain name for commercial gain by securing pay per click revenues from the website.
Complainant further contends that Respondent's use of privacy shields is evidence of bad faith, and that Respondent deliberately blocked access to historical records of its website activity, also evidencing bad faith.
Complainant argues that it is not true that it must have established rights in its trademark prior to Respondent's registration of the disputed domain name because the Policy does not specifically refer to the date on which the owner of the trademark or service mark acquired rights. Complainant alternatively argues that because Respondent was formed as a corporation on July 9, 2009, it could not have registered the disputed domain name prior to that date. Complainant argues that Respondent cannot claim to be a successor in interest to the prior registrant of the disputed domain name, stating:
“The Complainant expects that the Respondent will, in reply, concoct a tale in which the Respondent is some sort of ‘successor in interest' to the domain name. The Respondent's problem is that the domain name was merely used as a PPC page by the successive registrants, and the Respondent was making no trade or service mark use giving rise to any goodwill in which the Respondent can claim to be such a ‘successor'.”
Complainant requests the Panel to direct the Registrar to transfer the disputed domain name to Complainant. B. Respondent
Respondent alleges that because this proceeding does not involve a clear case of cybersquatting, the Panel should reject the Complaint.
Respondent argues that Complainant secured its trademark registration through a fraud on the USPTO because it did not exist as of the time it claims first use in commerce of the trademark.
Respondent contends that the Panel cannot determine in an administrative proceeding the bona fide nature of the evidence submitted by Complainant to establish first use in commerce of its trademark. Respondent further contends that Complainant has submitted insufficient proof to establish recognition of alleged common law rights in its trademark.
Respondent argues that it has rights or legitimate interests in the disputed domain name because it has undertaken considerable activity in order to begin utilizing the name as evidenced by the security services offered on its website.
Respondent argues that Complainant could not have established rights its trademark prior to Respondent's registration of the disputed domain name because Complainant was not in existence at that time. Respondent claims that it registered the disputed domain name on January 11, 2006. Respondent further alleges that link farm parking page information displayed on its website was directed by the registrar, and that it is not responsible for that information. Respondent notes that it has initiated a proceeding at the USPTO seeking cancellation of Complainant's trademark registration.
Respondent argues that a change in the corporate entity owning the disputed domain name, while both the transferor and transferee are under common control, does not constitute a new registration under the Policy. Because there is common control between Respondent and the immediate predecessor registrant of the disputed domain name, Respondent should be considered as registrant of the disputed domain name dating back to January 11, 2006.
Respondent requests the Panel to reject Complainant's demand for transfer of the disputed domain name. 6. Discussion and Findings
The Policy is addressed to resolving disputes concerning allegations of abusive domain name registration and use. The Panel will confine itself to making determinations necessary to resolve this administrative proceeding.
It is essential to Policy proceedings that fundamental due process requirements be met. Such requirements include that a respondent have notice of proceedings that may substantially affect its rights. The Policy and the Rules establish procedures intended to ensure that respondents are given adequate notice of proceedings commenced against them, and a reasonable opportunity to respond (see, e.g., Rules, paragraph 2(a)).
The Center transmitted the Complaint and notification of commencement of the proceeding to Respondent. Respondent delayed in submitting its Response beyond the stated due date for submission. Complainant submitted supplemental materials following the due date for submission of its Complaint and requested the Panel to accept and consider those supplemental materials. In the interest of fairness, the Panel decided to accept all the submissions of the parties. The Panel is satisfied that each party had adequate opportunity to present its position in this proceeding.
Paragraph 4(a) of the Policy sets forth three elements that must be established by a complainant to merit a finding that a respondent has engaged in abusive domain name registration and use, and to obtain relief. These elements are that:
(i) respondent's domain name is identical or confusingly similar to a trademark or service mark in which complainant has rights; and
(ii) respondent has no rights or legitimate interests in respect of the domain name; and
(iii) respondent's domain name has been registered and is being used in bad faith.
Each of the aforesaid three elements must be proved by a complainant to warrant relief. A. Identical or Confusingly Similar
Complainant has registered the word and design trademark VIEWGUARD on the Principal Register of the USPTO, and has provided substantial evidence of use of that trademark in commerce in the United States. Registration on the Principal Register establishes a presumption of rights in the trademark. The USPTO registered Complainant's trademark on January 5, 2010. Complainant filed its application for trademark registration on December 26, 2008.
Contingent on successful registration, the filing of a trademark registration application constitutes constructive use of the mark under the Lanham Act, conferring nationwide priority as of the date of application (15 U.S.C. §1057).
In its application for trademark registration, Complainant claimed first use on September 29, 2006 and first use in commerce on October 19, 2006. Such claims do not establish an evidentiary presumption (see, e.g., Dow Jones & Company, Inc. v. Idea Studios LLC dba Envent,WIPO Case No. D2009-1033, and references therein).
Respondent has alleged that Complainant engaged in fraud on the USPTO by asserting dates of first use and first use in commerce for VIEWGUARD prior to the date Complainant was established as a legal entity. Complainant has rebutted that allegation with evidence that it was formed as an LLC in Florida as of the dates it claimed first use, and subsequently was reorganized as a Wyoming LLC. Respondent has failed to persuade the Panel that there is any wrongdoing on the part of Complainant in connection with registration of its trademark.
Complainant asserts that it established unregistered or common law rights in VIEWGUARD as of September 29, 2006. Complainant has argued that VIEWGUARD is an inherently distinctive mark, and as such does not require proof of secondary meaning to establish common law or unregistered trademark rights. Complainant also has argued that consumers immediately conferred recognition on the mark following introduction of its product, and that this established rights in late 2006 or early 2007.
Respondent has argued that the term VIEWGUARD is descriptive or generic, and that Complainant must provide “substantial proof of substantial recognition of a term as being to identify the goods or services which are represented by the trademark”.
The Panel considers the term VIEWGUARD to be descriptive in connection with a computer screen privacy filter. The purpose of a privacy filter is to protect the screen of a computer from viewing by parties that the computer operator wishes to block. It is a “view guard”. The term VIEWGUARD was presumably adopted by Complainant to convey the intended use of the product to prospective purchasers.
Because in the Panel's judgment the term VIEWGUARD is descriptive, the establishment of common law or unregistered trademark rights is predicated on a showing by Complainant of secondary meaning. The evidence of secondary meaning provided by Complainant from late 2006 and early 2007 is rather modest. Based on sales volume it appears that by late 2008 Complainant's product had established substantial recognition among computer users. It is not necessary for purposes of resolving this dispute for the Panel to determine a particular date between September 29, 2006 and the date of Complainant's application for trademark registration (which establishes a presumption of nationwide rights), as the date upon which Complainant established rights in its trademark. For reasons to be discussed under the consideration of bad faith, the Panel may rely on the date of filing by Complainant of its application for trademark registration (December 26, 2008) as the date on which Complainant established trademark rights in VIEWGUARD.
The disputed domain name is identical to the trademark for purposes of the Policy.
Complainant has established that it has rights in the trademark VIEWGUARD at least from December 26, 2008, and that the disputed domain name is identical to that trademark. B. Rights or Legitimate Interests
The second element of a claim of abusive domain name registration and use is that the respondent has no rights or legitimate interests in respect of the domain name (Policy, paragraph 4(a)(ii)). The Policy enumerates several ways in which a respondent may demonstrate rights or legitimate interests:
“Any of the following circumstances, in particular but without limitation, if found by the Panel to be proved based on its evaluation of all evidence presented, shall demonstrate your rights or legitimate interests to the domain name for purposes of paragraph 4(a)(ii):
(i) before any notice to you of the dispute, your use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or
(ii) you (as an individual, business, or other organization) have been commonly known by the domain name, even if you have acquired no trademark or service mark rights; or
(iii) you are making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.” (Policy, paragraph 4(c))
Complainant has argued that Respondent has failed to establish rights or legitimate interests in the disputed domain name because Complainant did not authorize Respondent to use its trademark, Respondent was not known by the disputed domain name, and Respondent has not made legitimate noncommercial or fair use of the disputed domain name. Complainant has contended that use of the disputed domain name in connection with a link farm parking page that includes links to competitors of Complainant is not fair use of the disputed domain name. Complainant has further argued that Respondent has recently “manufactured” evidence of use of the disputed domain name in connection with a purportedly legitimate business in order to mislead the Panel regarding bona fide use of the disputed domain name. Complainant made a prima facie showing that Respondent lacks rights or legitimate interests in the disputed domain name.
Respondent has not rebutted Complainant's prima facie showing regarding lack of rights or legitimate interests in the disputed domain name. It has asserted that the Registrar is responsible for the contents of the link farm parking page, implying that Respondent's actions are distinct from those of the Registrar. At the same time, it is claiming that it is commonly controlled by the Registrar. In any case, it is well-established that operating a link farm parking page using a trademark in a domain name, and providing connection to products competitive with the trademark owner, does not establish rights or legitimate interests. See, e.g., O, Inc. v. Metro Media,WIPO Case No. DME2009-0001; Fifth Third Bancorp v. Texas International Property Associates,WIPO Case No. D2007-0537; MasterCard International Incorporated v. Paul Barbell,WIPO Case No. D2007-1139, Shaw Industries Group, Inc., and Columbia Insurance Company v. Parth Shah,WIPO Case No. D2007-1368, and Alfa Laval AB and Alfa Laval Corporate AB v. A,WIPO Case No. D2007-1881.
Respondent has attempted to demonstrate bona fide use of the disputed domain name in connection with a service. Respondent presumably seeks to rely on paragraph 4(c)(i) of the Policy providing for establishment of rights or legitimate interest based on use or preparations to use a domain name for a bona fide offer of services prior to notice of a dispute. Complainant has provided substantial evidence that Respondent has not offered a bona fide service. Instead, Respondent rather recently cut and pasted third party materials on its webpage to give the appearance of offering a service. Respondent did not refute Complainant's evidence on this point. The Panel does not consider Respondent's recent deceptive use of the disputed domain name to host a website appearing to offer, but not offering, an Internet security service to establish rights or legitimate interests.
Complainant has succeeded in demonstrating that Respondent lacks rights or legitimate interests in the disputed domain name. C. Registered and Used in Bad Faith
In order to be found to have engaged in abusive domain name registration and use, Respondent must have registered and used the disputed domain name to take unfair advantage of Complainant's rights in its trademark. Paragraph 4(b) of the Policy provides a non-exhaustive list of bad faith conduct.1
As a matter of general principle under the Policy, a respondent cannot act to take unfair advantage of a complainant's rights in a trademark before those rights arose. See, e.g., Mariposa Ltd. v. Stonecutter, Don Sawtelle,WIPO Case No. D2010-0200; Dow Jones & Company, Inc. v. Idea Studios LLC dba Envent,WIPO Case No. D2009-1033; Super-Krete International, Inc. v. Concrete Solutions, Inc.,WIPO Case No. D2008-1333; Foundation Source Philanthropic Services, Inc. v. Arlene B Gibson/Foundations That Make a Difference/Domain Discreet,WIPO Case No. D2007-0875; Symbility Solutions, Inc. v. Darren Ritchie / Symbility,WIPO Case No. D2007-0471; John Ode d/ba ODE and ODE - Optimum Digital Enterprises v. Intership Limited,WIPO Case No. D2001-0074.2
Complainant provided evidence in its Complaint to establish that Respondent was commonly controlled by the enterprise which transferred the disputed domain name to it sometime between December 20, 2009 and February 19, 2010. The transferor, Global Internet, is the Registrar of the disputed domain name. Global Internet acquired and registered the disputed domain name on or about January 11, 2006.
Complainant has not presented any theory under which it held trademark rights in VIEWGUARD as of January 11, 2006, the date the disputed domain name was registered by Global Internet. Global Internet could not have registered the disputed domain name in bad faith in relation to Complainant on January 11, 2006.
This sole panelist has previously held that transfer of a domain name between two commonly controlled enterprises does not operate to extinguish rights or legitimate interests attributable to the transferor, absent some then-unspecified special circumstance not present in that proceeding (Schweizerische Bundesbahnen SBB v. Gerrie Villon,WIPO Case No. D2009-1426). 3 The facts of the present proceeding are distinguishable in that here the alleged predecessor of Respondent did not establish rights or legitimate interests in the disputed domain name.
Business enterprises routinely transfer assets among commonly controlled enterprises. Depending upon the nature of the transaction, such actions may have legal and financial consequences. For example, the transfer of assets from a business entity formed in one national jurisdiction to a business entity formed in another national jurisdiction might generate tax consequences in one or both jurisdictions.
Under the Lanham Act, the assignee of a trademark registration succeeds to all the rights and priorities of the assignor (see McCarthy on Trademarks, 4th edition, § 18: 15. Effect of valid trademark assignment—Assignee succeeds to the assignor's rights). As McCarthy notes, “The Federal Lanham Act codifies this rule by providing that the terms ‘applicant' and ‘registrant' include the ‘legal representatives, predecessors, successors and assigns of such applicant or registrant'” (citing Lanham Act § 45, 15 U.S.C.A. § 1127 (“Applicant, Registrant”)).
As a general rule, the Panel is inclined not to treat transfers of domain name registrations between commonly controlled enterprises as new registrations. There are many reasons why business enterprises may choose to transfer assets, including domain name registrations, among commonly controlled entities for legitimate reasons, as in a common reorganization of corporate structure. If commonly controlled enterprise transfers were to extinguish pre-existing rights or legitimate interests in established in domain names, this could result in significant business disruption. Such considerations presumably underlie the rule that assignment of trademarks does not extinguish pre-existing rights or legitimate interests.
However, this does not preclude the possibility of exceptions to the general rule. There is some precedent under the Policy that a transfer of registration between commonly controlled enterprises may be deemed a new registration from the standpoint of establishing bad faith when the intention of the transferor and transferee are to engage in a bad faith use of the domain name. See, e.g., ehotel AG v. Network Technologies Polska Jasinski Lutoborski Sp.J.,WIPO Case No. D2009-0785.
The facts of the present proceeding establish that the common control transfer was undertaken with a bad faith intention.
The transferor of the disputed domain name is a domain name Registrar. It acquired the disputed domain name before Complainant established rights in a trademark. It used the disputed domain name to operate a link farm webpage that eventually was taking advantage of Complainant's trademark rights. Because the transferor/Registrar registered the disputed domain name prior to Complainant's establishment of trademark rights, the transferor/Registrar was effectively insulated from a finding of bad faith registration.
Respondent/transferee became registrant of the disputed domain name after Complainant established rights in its trademark. Respondent has not provided any explanation as to why registration of the disputed domain name was transferred from the transferor/Registrar. Respondent/transferee promptly established a website cutting and pasting information from third-party service provider websites. This did not establish rights or legitimate interests in the disputed domain name (i.e., there was no bona fide business). Respondent's website is identified by Complainant's trademark in the disputed domain name, and Internet users would be expected to visit Respondent's website based on the assumption that Complainant is source, sponsor, affiliate or endorser of the website. Respondent has gone through significant trouble and presumably has some commercial purpose for establishing its “sham” website. That purpose is plausibly to induce Complainant to purchase the disputed domain name at a price in excess of Respondent's out-of-pocket expenditures in connection with the domain name.
Respondent/transferee has not provided any explanation for its conduct, other than that it was establishing a service business, but its conduct belies that explanation.
The Panel determines that Respondent/transferee acquired the disputed domain name from the transferor/Registrar with the intention to use it in bad faith. The Panel considers this common control transfer to have been undertaken in bad faith, and to be excluded from the general rule that transfers between commonly controlled enterprises do not constitute new registrations. The Panel considers Respondent/transferee to have undertaken a new registration, and further determines that new registration was undertaken in bad faith. Specifically, Respondent/transferee acquired the disputed domain name from the commonly controlled transferor/Registrar with the intention of using it to divert Internet traffic to a website which Internet users would assume was operated by or affiliated with Complainant. It is unclear precisely how Respondent intended to monetize that Internet traffic, but the Panel presumes that it undertook its rather complex and extensive deceptive activities for commercial gain. Its monetization plan logically included inducing Complainant, the holder of the trademark embodied in the disputed domain name, to purchase it for a price in excess of Respondent's costs attributable to the domain name.
The Panel determines that Respondent registered and has used the disputed domain name in bad faith. 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 Complainant.
Frederick M. Abbott
Sole Panelist
Dated: May 7, 2010
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