12th Sep 2001

DECISION

 Corbis Corporation v. Zest

Claim Number: FA0107000098441

 

PARTIES

Complainant is Corbis Corporation, Bellevue, WA (“Complainant”) represented by Robert J. Glance, of Merchant & Gould P.C. Respondent is Zest, Taegu, KOREA (“Respondent”) Ari Goldberger, of ESQwire.com Law Firm.

 

REGISTRAR AND DISPUTED DOMAIN NAME 

The domain name at issue is <digitalstock.com>, registered with Melbourne IT.

 

PANEL

The undersigned certifies that they have acted independently and impartially and to the best of their knowledge, have no known conflict in serving as Panelists in this proceeding.

 

  1. Glen Ayers, Chair, Patrick J. Hines, and David Sorkin were selected as Panelists.

 

PROCEDURAL HISTORY

Complainant submitted a Complaint to the National Arbitration Forum (“the Forum”) electronically on July 31, 2001; the Forum received a hard copy of the Complaint on July 31, 2001.

 

On July 31, 2001, Melbourne IT confirmed by e-mail to the Forum that the domain name <digitalstock.com> is registered with Melbourne IT and that the Respondent is the current registrant of the name. Melbourne IT has verified that Respondent is bound by the Melbourne IT registration agreement and has thereby agreed to resolve domain-name disputes brought by third parties in accordance with ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”).

 

On August 1, 2001, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of August 21, 2001 by which Respondent could file a Response to the Complaint, was transmitted to Respondent via e-mail, post and fax, to all entities and persons listed on Respondent’s registration as technical, administrative and billing contacts, and to postmaster@digitalstock.com by e-mail.

 

A timely response was received and determined to be complete on August 21, 2001.

 

Complainant timely filed an Additional Submission, “Complainant’s Additional Response.”

 

On August 30, 2001, pursuant to Respondent’s request to have the dispute decided by a three-member Panel, the Forum appointed R. Glen Ayers, Chair, Patrick J. Hines, and David Sorkin as Panelists.

 

RELIEF SOUGHT

Complainant requests that the domain name be transferred from Respondent to Complainant.

 

PARTIES’ CONTENTIONS

  1. Complainant

Complainant has provided evidence that it (or its predecessor in interest) has used the trademark “Digital Stock” since 1993 and that the mark was registered in 1998 with the U. S. Patent and Trademark Office. That mark is obviously identical to the domain name.

 

Complainant states that the Respondent has no rights in the name for it “has no association, presence, brand awareness, right or legitimate interest” in the name. Complainant also says that Respondent has made no use of the name “in connection with a bona fide offering of goods or services.”

 

The Complainant alleges that the domain name has been registered and used in bad faith and has disrupted the Complainant’s business by misdirecting customers, even though Respondent is not a competitor. Evidence of misdirection has been provided.

 

Complainant provides correspondence to show that it gave notice of the problem to Respondent and that Respondent offered to sell the domain name for $30,000, even though Respondent had stated that it only had $20,000 invested. Complainant disputes this last sum: “Notably, neither Respondent’s website prior to the dispute or after the dispute indicate than any amount close to $20,000 was spent ….”

 

  1. Respondent

Respondent replies that the mark contains two generic terms which provide no “enforceable rights under the UDRP.” It also alleges that it has a legitimate interest; that it planned to use the site for offering online securities information and has launched such a site.

 

Respondent denies any bad faith, alleging that the mark is but two descriptive words and that there is no evidence that the domain name was acquired for resale to the Complainant or to prevent Complainant’s use or to disrupt Complainant’s business. Complainant is accused of “cyberbullying.”

 

Respondent notes that the mark is not registered in Korea, where Respondent is located. Respondent, by affidavit, denies it had any knowledge of the mark prior to registration of the domain name. Respondent also notes that Complainant approached it about buying the name; clearly, Respondent did not initially solicit Complainant.

 

Much of Respondent’s argument focuses on the weakness of the mark. Respondent cites a number of relevant ICANN decisions on this point.

 

Respondent points out that Complainant had registered this particular domain name but had let the registration lapse.

 

Respondent goes on to assert that it has a legitimate interest in the domain name, for it had intended, at the time of registration, to go on to establish a web site related to the financial (stock) markets.

 

Respondent elaborates on the “bad faith” issues, pointing out that it had no knowledge of Complainant prior to registration and that none of the “bad faith” factors are relevant. As to offering the domain for sale, Respondent asserts that the Complainant approached the Respondent, citing decisions that decline to find “bad faith” in cases where Respondent did not initiate a proposed sale.

 

  1. Additional Submissions

In “Complainant’s Additional Response” (which was timely filed), the Complaint focuses first on whether Respondent’s affidavits were competent, not having been filed under penalty of perjury. Complainant next attempts to rebut Respondent’s arguments about the generic nature of the words making up the mark and the “weakness” of the registration of the mark.

 

Complainant points out that the Respondent had made no use of the domain name prior to the dispute.

 

Finally, Complainant offers evidence of distinctiveness and secondary meaning, as well as evidence that the mark has been circulated in publications around the world.

 

FINDINGS

THE PANEL HAS DECIDED THAT THIS CASE RAISES TWO PARTICULARLY IMPORTANT AND TROUBLING ISSUES AND HAS ATTEMPTED TO RESOLVE THOSE ISSUES IN THIS OPINION:

 

(1)               May a weak trademark be the basis for a claim under the UDRP?

 

(2)               What results should flow from registration (by a different party) of a lapsed domain name?

 

First, the Respondent has asserted, with citations to opinions, that this Panel may find that the Complainant’s mark consists of generic terms and that the mark is weak.   Therefore, Respondent would have the panel find that Complainant holds no rights in the mark and has not met its burden of showing that it holds a mark that is “identical to” the domain name.

 

Second, the Respondent has shown that the Complainant had originally registered the domain name and had allowed the registration to lapse.

 

Both issues are being raised with some frequency in ICANN adjudications. The Panel believes that both issues should be addressed and resolved as much as is possible in the context of a multi-Panelist arbitration.

 

VALIDITY OF MARKS: “Identical To Or Confusingly Similar”

 

There is no doubt that the mark and domain name are identical. Respondent argues, with ample support in the arbitration decision cases, that this Panel has the power to find that an allegedly weak mark may be ignored.

 

This Panel does not agree. These proceedings are not held before a tribunal competent to challenge the validity of a properly registered mark. In the parlance of legal circles in the United States of America, “this is not a United States District Court.” Therefore, the Panel declines to examine the underlying validity of a mark properly registered in the United States of America or, for that matter, in any other country.  In our opinion, a registered mark is a registered mark for purposes of establishing the first of the three tests used to determine domain name disputes. Respectfully, but forcefully, we disagree with and decline to follow those cases cited by Respondent. While the use of a domain name which is identical to a registered mark may not be actionable under the Policies and Rules, it is inappropriate to ignore the registration even when the mark is allegedly weak or has allegedly been improvidently granted.

 

Where a Complainant, as here, demonstrates that it holds a registered mark that is identical to the domain name, it has met its burden under the first of the three tests used by this Panel under the ICANN Rules and Policies.

 

A Respondent can certainly attack the strength of the mark in cases where the domain name is not identical but is merely similar, because the strength of the mark may be relevant to the likelihood of confusion.

 

The Panel also holds that Respondent may certainly assert the nature and relative strength of the mark in the context of “rights in the domain name” and “bad faith.” the Panel, as a whole, however, holds that prior registration does not help the Complainant, although it may be able to otherwise show that Respondent has no rights in the domain name and/or acted in bad faith.

 

WHERE THE DOMAIN NAME REGISTRATION HAS LAPSED: “Rights” and “Bad Faith”

 

The Panel also holds that Respondent may certainly assert the nature and relative strength of the mark in the context of “rights in the domain name” and “bad faith.” and The Panel, as a whole, however, holds that prior registration does not help the Complainant, although it may be able to otherwise show that Respondent has no rights in the domain name and/or acted in bad faith.

 

Here, Complainant does not dispute that it was the first to register the domain name and that it allowed the registration to lapse. It has not alleged that Respondent was in any way responsible for that lapse.

 

One of the Panelists, the Chair, would hold that a party that has lost an Internet domain name due to renewal lapse should ordinarily have no recourse under the UDRP and would choose to follow cases which have previously held as much. National Kidney Foundation v. Los Girasoles/Jorge Clapes, AF-0293 (eResolution Aug. 31, 2000) (“Once the complainant’s registration had lapsed, the contested domain name became available ….”); Fiske Industries v. Supreme Interactive, AF-0257 (eResolution Aug. 7, 2000) (decision for Respondent where Complainant “had previously registered the Domain Name at issue, but failed to timely renew that registration through an administrative error”). 

 

The Panel, as a whole, however, holds that prior registration does not help the Complainant, although it may be able to otherwise show that Respondent has no rights in the name and bad faith. We do reject the reasoning of cases holding that we may find “bad faith” simply because Respondent took advantage of the lapse in registration. See In Test Corp. v. Service point, FA 95291 (Nat. Arb. Forum Aug. 30, 2000) (finding that where the domain name has been previously used by the Complainant, subsequent registration of the domain name by anyone else indicates bad faith, absent evidence to the contrary); see also BAA PLC v. Spektrum Media Inc., D2000-1179 (WIPO Oct. 17, 2000) (finding bad faith where Respondent took advantage of the Complainant’s failure to renew a domain name).

 

We also strongly disagree that prior registration should ordinarily be considered as a factor favorable to the Complainant. See American Anti-Vivisection Soc’y v. “Infa dot Net” Web Serv., FA 95685 (Nat. Arb. Forum Nov. 6, 2000) (finding that Complainant’s prior registration of the same domain name is a factor in considering Respondent’s rights or legitimate interest in the domain name). There may be some cases, for example, where the registrant was aware of the prior use by the holder of a mark and was aware of the mark and might be found to be attempting to disrupt or compete; in the alternative, there may be cases where the registrant was somehow involved in the failure to renew.

 

In ordinary cases, the existence of a prior registration that has lapsed is entirely irrelevant to the questions of legitimate interests and bad faith. This is so even if the subsequent registrant was aware that the domain name had previously been registered to another party, and even if the subsequent registration occurred very soon after the domain name was returned to the pool of available names.

 

In lapsed registration cases, the “bad faith” issue should be dispositive. It will usually not be necessary to address the other issues. 

 

Consider the facts in this case. The domain name and the mark are identical. Respondent had no identifiable rights in the name when it registered the domain name or thereafter, or at least prior to dispute raised by the Complainant’s correspondence.

 

But, we hold that it cannot ordinarily be “bad faith” to register a lapsed name where the Respondent is not using the name to compete with the Complainant, misdirect its customers, or disrupt its business. 

 

Again, consider the facts of this case. First, the mark was not registered in Korea. Respondent has made some showing, even though the affidavit was not submitted under penalty of perjury, that it had no knowledge of the Complainant or its mark.

 

Second, the Complainant had let the name lapse; from this we can infer that the prior holder of the name was abandoning any interest in the domain name. So, even if Respondent knew of the prior registration and the Complainant’s prior use, there is no evidence of “bad faith.”

 

Finally, the Complainant contacted the Respondent, which makes the Complainant’s burden somewhat higher where the allegation is that the Respondent registered the name “primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark ….” ICANN Policy ¶ 4.(b).(i). Certainly, however, the Panel is aware of how the world works. Respondents are frequently sophisticated enough to wait until the Complainant makes contact. 

 

That said, the only evidence of bad faith here is that Respondent demanded what seems to be a very large sum of money for surrender of the domain name. It has not attempted to compete with the Complainant nor has it tried to disrupt its commerce.

 

However, the Policy and Rules require evidence of both registration and use in “bad faith.” Here, there is absolutely no evidence of bad faith registration.

 

The Panel also believes that the very fact that a domain name has lapsed could allow a party to register the domain name without a trademark search, even in the hope that some person might wish to buy the name.

 

The Panel holds that a domain registrant who knows a domain name has been abandoned should be more confident, not less so, that there is no competing trademark claim relating to the domain name; a person in the position of Respondent should be more confident than a registrant who selects a previously unregistered name.

 

There is an element of “finders keepers, losers weepers” in this decision. We believe that is as it should be.

 

In sum, where a party registers a lapsed domain name, and it is not attempting to use the name to compete with the mark holder or disrupt its business, we believe that ordinarily the trademark holder should be denied relief, whether the mark is a common law or registered mark, whether the mark is “strong” or “weak.”

 

We certainly recognize that domain name pirates may be lurking like buzzards to pick off “good” names which lapse. But that is true in any area of intellectual property. Failure to renew or extend those property rights, failure to protect marks and copyrights, and the like allow third parties to take advantage of the owner’s lack of diligence.

 

One of the members of this Panel previously issued an opinion, Garth Brooks vCommbine.comLLC, FA 96097 (Nat Arb. Forum Jan. 3, 2001), in which an opposite result was reached. That opinion may be distinguished. The “Garth Brooks” mark, though a common law mark, is strong and distinctive. Both parties were in the United States of America, and the Respondent had a history of buying and selling domain names. However, the author of that opinion agrees, to the extent this opinion disagrees with his prior opinion, that the Brooks case should be considered superceded. 

 

DISCUSSION

Paragraph 15(a) of the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”) instructs this Panel to “decide a complaint on the basis of the statements and documents submitted in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable.”

 

Paragraph 4(a) of the Policy requires that the Complainant must prove each of the following three elements to obtain an order that a domain name should be cancelled or transferred:

 

(1)        the domain name registered by the Respondent is identical or confusingly similar to a trademark or service mark in which the Complainant has rights;

 

(2)        the Respondent has no rights or legitimate interests in respect of the domain name; and

(3)        the domain name has been registered and is being used in bad faith.

 

Identical and/or Confusingly Similar

The mark and domain name are identical.

 

Rights or Legitimate Interests

Respondent has no rights or legitimate interests in the name, for it never used the name prior to notice of the dispute and it is not otherwise known by the name.

 

Registration and Use in Bad Faith

For the reasons stated above, Respondent did not act in bad faith by the registration and use of the domain name.

 

DECISION

The domain name shall not be transferred.

 

 

  1. Glen Ayers, Chair; David E. Sorkin; and Jay Hines, Panelists

 

Dated: September 12, 2001