Complainant is Emeshel, LLC of Miami, Florida, United States of America, represented by the law firm GrayRobinson. P. A., United States of America.
Respondent is DomR of Great Neck, New York, United States of America, represented by the law firm Lewis & Lin, LLC, United States of America. 2. The Domain Name and Registrar
The disputed domain name is registered with eNom. 3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on September 21, 2011. On September 21, 2011, the Center transmitted by email to eNom a request for registrar verification in connection with the disputed domain name. On September 21, 2011, eNom 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 September 29, 2011. In accordance with the Rules, paragraph 5(a), the due date for a Response was October 20, 2011. On October 14, 2011, Respondent transmitted by email to the Center a request for extension of response due date, to which Complainant objected by its email to the Center on October 17, 2011. On October 18, 2011, the Center issued a notice to grant a limited extension to Respondent of no more than 48 hours from the time of transmission of that notice to submit its response. The Response was filed with the Center on October 21, 2011.1
The Center appointed Richard G. Lyon as the sole panelist in this matter on October 26, 2011. The Panel finds that it was properly constituted and has jurisdiction to decide 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. 4. Factual Background
The following factual matters are undisputed.
Complainant makes and sells two product lines: handmade glass and crystal house wares such as drinking glasses, carafes, and vases; and perfumes, colognes, and similar fragrances that are bottled in handmade containers. Complainant holds trademarks for EMESHEL that are registered with the United States Patent and Trademark Office (USPTO) for both lines of business. Its EMESHEL mark for glassware was granted in October 2008 based upon a claimed first use in commerce of April 2007 and its mark for fragrances was granted in June 2011 based upon a claimed first use in commerce of December 2008. Mr. Kertesz is Complainant’s chief executive officer.
Respondent is an investment company; its founder and owner is Mr. Barelli.
Apparently, Kertesz first met Barelli at a bar in Switzerland in January 2010. Their discussion led to an unwritten arrangement under which their respective companies would work together to market Complainant’s fragrances. While the parties dispute many of the details of this arrangement, they agree that Respondent was to provide marketing assistance in return for some form of compensation from Complainant.
Complainant originally registered the disputed domain name in 2006 and renewed its registration in 2009. In February 2010 ownership of the disputed domain name was transferred to Respondent. As discussed in Section 5 below, the parties dispute the circumstances of this transfer.
At some point in 2010 or 2011 the parties’ working relationship soured.
Following transfer of the disputed domain name Respondent initially used it to advertise and market Complainant’s fragrances. At some point prior to September 2011 Internet users who entered the disputed domain name into their browsers were redirected to another website owned and controlled by Complainant, . In mid-September 2011 the message at the disputed domain name was changed to read:
ACCOUNT SUSPENDED
This Account Has Been Suspended.
The parties dispute responsibility and reasons for the change.
In September 2011 the parties exchanged emails and spoke on the telephone a number of times but were unable to resolve matters between them. In one email, from Barelli to Complainant’s counsel, Respondent stated: “The amount due [from Complainant to Respondent] is USD 45’220.” 5. Parties’ Contentions
Each party’s contentions depend upon its version of disputed factual matters, so the Panel identifies, in this Section or in its Discussion and Findings, pertinent evidence provided in support of these contentions. A. Complainant
Complainant contends as follows:
1. Complainant has rights in EMESHEL by reason of its USPTO-registered trademarks. The disputed domain name is identical to Complainant’s marks.
2. Respondent was engaged to provide website development and other marketing services for Complainant; “[a]t no time was Respondent or Mr. Barelli appointed as a dealer or distributor of Complainant’s products or granted any rights in the [disputed] domain name.” The agreement between the parties was temporary (“on a trial basis”) and terminable at will by either party.
3. Respondent’s bad faith is shown by the following: Respondent “tricked” Complainant into providing a code that enabled Respondent to transfer ownership of the disputed domain name to Respondent. This transfer was effected “without the knowledge, consent or approval” of Complainant. Respondent characterizes the reference in Barelli’s email to an “amount due” as “nothing less than an offer to sell the [disputed] domain name for an exorbitant price.” Re-directing Internet users to Complainant’s domain name caused Complainant to lose business from prospective customers who might suspect a scam or who might not wish to do business with a US-based company.2 Respondent’s posting the “Account Suspended” notice gave the false impression that Complainant was not legitimate or was going out of business. B. Respondent
Respondent contends as follows:
1. Prior to addressing the merits Respondent, characterizing this matter as a dispute between business partners rather than a case of cybersquatting, asserts that this matter is a business dispute that is not suitable for resolution under the Policy.
2. Respondent, through a declaration made under penalty of perjury by Barelli, claims that it undertook significant marketing activities for Complainant – among them website development and personnel recommendations (including introducing a candidate for a marketing position whom Complainant hired) – as part of the agreement between the parties, which he calls a “partnership”. The parties’ informal arrangement included Complainant’s granting certain exclusive marketing rights to Respondent. Thus Respondent had a legitimate interest in the disputed domain name and registered and used it in good faith.
3. Barelli, declaring under penalty of perjury, contests Complainant’s characterization of (among other things) several matters relevant to this proceeding:
- The parties’ agreement was not informal or temporary; it was intended as a worldwide marketing agreement to be reduced to writing. In fact the parties exchanged several drafts of a written agreement, copies of which (one with comments from Complainant) are annexed to the Response.
- Complainant transferred ownership of the disputed domain name to Respondent at Respondent’s request in order to aid Respondent in its agreed marketing duties. Copies of emails making this request are annexed to the Response. Kertesz is shown as copied on these emails, including the one in which Complainant supplied the information necessary for transfer. Complainant thus was fully aware of and consented to the transfer. At all times Complainant was aware of the new web server managing the disputed domain name and had access to it.
- Complainant and not Respondent redirected Internet traffic to Complainant’s “www.” site.
- Respondent did not post the Account Suspended notice. This was done by the hosting company engaged by Respondent to develop the website when its bill was not paid.
- The USD 45,220 amount was Barelli’s approximation of its out-of-pocket costs incurred in performing Respondent’s duties under the joint venture. A bill from the web development company for USD 38,000 is annexed to the Response, and Barelli offers to provide evidence of additional expenditures.
4. By reason of the foregoing Respondent did not register or use the disputed domain name in bad faith. 6. Discussion and Findings A. The Policy and Business Disputes
It is true as Respondent contends that a Policy proceeding is no place to resolve legal issues that underlie a broader business dispute between the parties. UPRP proceedings have no discovery or cross-examination. An appointed panel may not be familiar with the law governing the parties (here, for example, Swiss law may be involved), and these truncated proceedings are not a suitable place for resolution of issues of contract interpretation or similar matters dependent upon national law. When litigation between the parties is already pending it may be appropriate to terminate a Policy proceeding or deny the Complaint so that all matters may be resolved by the appropriate civil court. See Rules, paragraph 18(a); Proskauer Rose LLP v. Leslie Turner,WIPO Case No. D2011-0675; Rudy Rojas v. Gary Davis,WIPO Case No. D2004-1081. It is similarly proper for a panel to defer to the national courts when it is apparent that one party, usually the complainant, has invoked the Policy simply to gain an advantage in litigation. See, e.g., Clover Gifts Inc. v. Airs Fragrance Products,WIPO Case No. D2005-0776; Rudy Rojas v. Gary Davis, supra.
The existence of a broader dispute, however, is not an automatic ground for denial of a complaint in a Policy proceeding. Sometimes cybersquatting can be proven from undisputed facts, and a complainant can properly carve the question of entitlement to a disputed domain name from other pending issues. See Applied Technology Holdings, Inc. v. u-Logic, Dan Stirling,WIPO Case No. D2010-0042,WIPO Case No. D2010-0042 (“. . . the Complaint frames only the dispute over entitlement to the disputed domain names, in terms falling expressly within the four corners of the Policy”). Prompt recovery of the disputed domain name may be needed for an ongoing business, prompting a Policy complaint that complements civil litigation over broader issues.
The present case falls more into the latter category. Policy proceedings against former distributors or sales representatives or web designers are relatively common, even though they often touch upon factual matters that may later be litigated. Neither party here has identified any court or arbitration proceedings actually pending between the parties, or even charges and countercharges that might later be asserted. Complainant is understandably desirous of recovering the disputed domain name it once owned and used as its principal web address, and there is nothing in the Complaint about the Panel’s making findings that might later assist Complainant in court. Neither party has asked the Panel to determine an issue of contract law or otherwise to exceed the brief given by the Policy, the Rules, and Respondent’s contractual undertaking to submit to a Policy proceeding. The Panel will proceed to consider whether Complainant has met its burden of proof under paragraph 4(a) of the Policy. B. Registered in Bad Faith
Turning to the merits, the Panel need address only one of the Policy’s requirements in this proceeding. The requirements of paragraph 4(a) are conjunctive, and Complainant’s failure to establish any of them results in a denial of the Complaint. Complainant has not carried its evidentiary burden to prove that Respondent’s registration of the disputed domain name was in bad faith.
Respondent presents contemporaneous evidence to support its owner’s statement, made upon penalty of perjury, that its registration of the disputed domain name was done with Complainant’s knowledge and consent as part and parcel of the parties’ division of responsibilities under their “partnership” or joint venture (to adopt Respondent’s characterization) or at-will engagement of Respondent on a trial basis (to adopt Complainant’s characterization). Respondent has provided the email communications in which transfer was sought and an invoice from the web development/hosting company for substantial development work actually undertaken. Respondent’s version of why the disputed domain name was transferred is plausible; web developers often take ownership of the disputed domain name for the website they have been engaged to develop or upgrade. It would be natural for Respondent, charged with upgrading Complainant’s website, to have immediate access to the disputed domain name at which the website was maintained.
In contrast to this proof, Complainant furnishes no evidence at all to substantiate its charges of trickery and unauthorized transfer. Its only basis for this claim is an unsupported allegation of its counsel in the Complaint. There is not even a statement, under penalty of perjury or otherwise, to this effect from Kertesz or anyone else with first-hand knowledge of the circumstances of the transfer, not even of the conclusionary statement made in the Complaint, much less of facts from which the Panel might infer deception or other impropriety.
The preponderance of the evidence, indeed all evidence before the Panel, supports Respondent’s view that its acquisition of the disputed domain name was undertaken in the ordinary course of the parties’ business dealings. Complainant has not proven that Respondent registered the disputed domain name in bad faith, so the Complaint fails. C. Complainant’s Lack of Evidence
The Panel is especially concerned at Complainant’s utter lack of proof on a matter not only crucial to the success of the Complaint but also accusing Respondent of conduct that amounts at a minimum to an intentional tort (fraud) and possibly a crime (theft). Such charges occasionally have their place in Policy proceedings; see, e.g., Edward G. Linsky v. Brian Valentine,WIPO Case No. D2006-0706 (forgery and perjury; see Panel and concurring opinions). In Linsky, however, the complainant making these claims backed them up with substantial evidence. Far more often, however, such serious allegations are hurled in the cavalier manner demonstrated in this case, sometimes by complainants3 and sometimes by respondents.4 In this Panel’s opinion a party accusing his adversary of fraud, forgery, larceny, or similar conduct had better base those claims upon credible factual allegations and clearly convincing evidence. Such charges, while easy to make, are often impossible to counter summarily, especially in an abbreviated proceeding under the Policy, and the decisions under the Policy are published. Serious damage can be done despite a panel’s efforts to avoid it. A criminal charge makes front page headlines, while subsequent dismissal of the indictment is not reported.
There is little a panel can do beyond condemning such conduct or possibly finding similar unsubstantiated charges to constitute reverse domain name hijacking (as the undersigned voted to do in the Bittorrent case cited in note 2). This Panel considers RDNH not appropriate here for a variety of reasons. But I do announce to future parties in Policy proceedings that I shall apply strict scrutiny to any such allegations, requiring at least pleading and proof with the specificity required in civil proceedings in the United States.5 I urge other panelists to adopt a similar standard. 7. Decision
For all the foregoing reasons, the Complaint is denied.
Richard G. Lyon
Sole Panelist
Dated: October 31, 2011
1 The Response was not filed within the time period provided in the Center’s extension and so, strictly speaking, was not timely filed. Unlike other extensions sought ex parte by a respondent (see, e.g., Union Square Partnership, Inc., Union Square Partnership District Management Association, Inc. v. Private Registrant and Private Registrant,WIPO Case No. D2008-1234; Mobile Communication Service Inc. v. WebReg, RN,WIPO Case No. D2005-1304), however, here the circumstances cited by Respondent appear genuine, and any delay was minimal, so the Panel in his discretion has determined to allow the Response. See Ets Ersoy Turistik Servisleri Anonim Şirketi v. ETS Yemekçi Gida Turizm San ve Tic Ltd Şti, ETS GÜVENLİK ANONİM ŞİRKETİ / InterB,WIPO Case No. D2011-0934.
2 Complainant’s products are made in Europe and it has an Hungarian affiliate. Complainant claims that many of its customers are from the Middle East and distrust doing business with a United States company.
3 Bittorrent Marketing GmbH v. AdIntensity Ltd, Adam Smith,WIPO Case No. D2007-1033 (cyberpiracy).
4 Andrew Prince v. Registrant [3197190]: Sven Echternach/Moniker Privacy Services (2579748),WIPO Case No. D2010-1661 (theft; “Such accusation and suggestion are not only difficult in such cases to assess within the ambit of the Policy process but – as is true in nearly every case in which such conduct has occurred – unhelpful to the Panel, as they clutter the record and divert attention from the Policy issues necessary to decide the case.”); Music Plus Television Network, Inc. v. Dennis Tzeng,WIPO Case No. D2007-1486 (forgery; “Furthermore, the nature of Respondent’s allegations mandates very convincing proof. Forgery is a crime, usually considered more serious than perjury or false statements (themselves no laughing matter), a charge not to be made lightly and not to be accepted absent compelling evidence.”)
5 Rule 9(b) of the Federal Rules of Civil Procedure requires that “the circumstances constituting fraud or mistake shall be pleaded with particularity.” Most states have comparable pleading rules.
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