1st Dec 2009

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Hostess Brands, Inc. f/k/a Interstate Bakeries Corporation v. Domain Capital

Case No. D2009-1357

1. The Parties

Complainant is Hostess Brands, Inc. f/k/a Interstate Bakeries Corporation of Irving, Texas, United States of America, represented internally.

Respondent is Domain Capital of Fort Lee, New Jersey, United States of America, represented by ESQwire.com Law Firm, United States of America.

2. The Domain Name and Registrar

The disputed domain name <hostess.com> (the “Domain Name”) is registered with Moniker Online Services, LLC.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on October 13, 2009. On that same date, the Center transmitted by email to Moniker Online Services, LLC a request for registrar verification in connection with the Domain Name. On October 13, 2009, Moniker Online Services, LLC transmitted by email to the Center its verification response confirming that Respondent is listed as the registrant and providing the contact details. In response to a notification by the Center that the Complaint was administratively deficient, Complainant filed an amendment to the Complaint on October 20, 2009. 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”). Complainant submitted an unsolicited Second amendment to the Complaint on November 3, 2009.

In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified Respondent of the Complaint, and the proceedings commenced on October 21, 2009. In accordance with the Rules, paragraph 5(a), the due date for Response was November 10, 2009. The Response was filed with the Center on November 11, 2009.

The Center appointed Christopher S. Gibson as the sole panelist in this matter on November 16, 2009. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.

4. Factual Background

Complainant, Interstate Bakeries Corporation, is one of the United States’ largest commercial bakers and distributors of fresh-baked bread and sweet goods under well-known brands such as HOSTESS and WONDER. For over a century, Complainant has made cakes and breads and sold them using the HOSTESS trademark, including Twinkies, Ding Dongs, Ho Ho’s, Suzy Q’s, and Snow Balls.

Since the year 1919, Complainant has held numerous word and design mark registrations for the trademark HOSTESS, which is well-known in the United States.

The Domain Name was registered on May 27, 1997 and, as of the date of this decision, does not resolve to a website.

The Domain Name was purchased by Respondent at a domain name auction in New York City on June 7, 2007.

5. Parties’ Contentions

A. Complainant

Complainant claims that it has rights in the Domain Name because the Domain Name is identical or confusingly similar to several of its trademarks. In particular, the Domain Name consists entirely of the word “hostess” with no other qualifying words. The Domain Name is therefore identical to, and wholly incorporates, Complainant’s trademark.

Complainant maintains that Respondent has registered thousands of domain names and is currently the registered owner of over 3,000 domain names. In regards to the Domain Name, Complainant alleges that it has not been used for over two years, since August 2007.

At the time the Domain Name was registered, Complainant’s Hostess products had a high-profile and extensive reputation in the United States. Complainant states that Respondent is not a licensee of Complainant and Complainant has never consented to the registration or use of the Domain Name. Moreover, Respondent has not been commonly known by the Domain Name, nor has it acquired any trademark rights in the Domain Name. Given that the Domain Name wholly incorporates Complainant’s HOSTESS mark, Complainant argues that it is reasonable to infer that Respondent had Complainant in mind when the Domain Name was registered and with the intention of capitalizing on Complainant’s goodwill for commercial gain. Complainant maintains that Respondent is not using the Domain Name in connection with a bona fide offering of goods or services or for the purpose of making legitimate noncommercial or fair use. Instead, Complainant alleges that Respondent’s prior use of the Domain Name was intended for commercial gain to the extent that Respondent hoped to divert Internet users seeking information about Complainant’s products to Respondent’s own website.

Although Respondent may assert that “hostess” is a dictionary word and therefore Respondent’s use is acceptable, Complainant asserts that this argument must fail because even dictionary words can be protected, as here, where Complainant has held the trademark registration for decades. Use which intentionally trades on the fame of another cannot constitute a bona fide offering of goods or services. To conclude otherwise would mean that a respondent could rely on intentional infringement to demonstrate a legitimate interest.

Complainant alleges that Respondent registered and has used the Domain Name in bad faith. Respondent has been the subject of two UDRP complaints before and, indeed, on two occasions, the panelist has found against Respondent. On about August 29, 2007, Complainant claims that Respondent pulled down its website for the Domain Name. Respondent alleges, upon information or belief, that Respondent operated this shell or dummy website for the purpose of having a placeholder until Complainant sought to purchase the Domain Name. After the two adverse UDRP decisions were handed down against Respondent, Complainant alleges that Respondent elected to remove its placeholder website just a few weeks after. Complainant argues that the timing of Respondent’s actions was not coincidental but instead evidence of bad faith.

Complainant explains that it has been in bankruptcy for over four years and had not been in position to bring legal action against Respondent. After emerging from bankruptcy in February of this year, Complainant now seeks the Domain Name that it believes rightfully belongs to it. Complainant states that in mid-September, Complainant sought to purchase the Domain Name through an intermediary for $5000. Complainant states that this attempt failed and the intermediary indicated that the Domain Name owner would not start negotiation for anything less than $20,000. Complainant concludes that, given these facts and circumstances, no reasonable inference can be drawn other than that Respondent’s use of the Domain Name is in bad faith.

B. Respondent

Respondent states that it is in the business of financing domain names for third-parties through lease-buyback agreements, and that it financed purchase of the Domain Name by a third-party for $44,000 at a domain name auction in New York City on June 7, 2007. Respondent explains that it is listed as the registrant of the Domain Name in order to secure its ownership interest in the Domain Name. Respondent also states that it is not authorized to disclose the identity of the party who actually purchased the Domain Name.

Respondent states the Domain Name is solely composed of the common word “hostess,” which is subject to substantial third-party use. A Google search yielded many millions of results when certain terms were excluded to avoid references to Complainant. Respondent also observes that there are 22 third-party registered U.S. trademarks which incorporate the word “hostess,” including 7 for that word standing alone (pertaining to meats, communications controllers, toilet and plumbing fixtures, support hose, wax paper and carpet cleaner).

Respondent asserts that it did not register the Domain Name with Complainant’s trademark in mind, and would not have entered into a financing arrangement for the Domain Name if it believed its registration would violate the trademark rights of another party. Respondent also claims it did not register the Domain Name with the intent to sell it to Complainant, to disrupt Complainant’s business, to prevent Complainant from owning a domain name incorporating its trademark, or to confuse consumers seeking Complainant’s website.

Respondent, supported by the affidavit of Mr. G Freeman, its chief operating officer (“COO”), also states that it did not receive an offer of $5,000 from Complainant for purchase of the Domain Name, nor did Respondent make a counter-offer of $20,000 for Complainant to purchase the Domain Name. Respondent asserts that it is unaware of any such communications having taken place between anyone within its organization or with the third-party purchaser of the Domain Name. Respondent has absolutely no knowledge of these sales negotiations. In any event, even if Respondent had made such a counter-offer, it would not constitute bad faith under the Policy because anyone has the right to sell a domain name that was registered based on its descriptive meaning. According to Respondent, this not only fails to constitute bad faith, but the sale of domain names can constitute a legitimate business.

While Respondent takes no position with respect to the enforceability of Complainant’s trademarks, it claims that it does have a legitimate interest in the Domain Name. According to Respondent, the registration of domain names incorporating wholly common words like “hostess,” ipso facto, establishes Respondent’s legitimate interest provided the Domain Name was not registered with a trademark in mind. Respondent claims that it believed in good faith that registration of the Domain Name was legitimate because it contained a common word to which Complainant does not enjoy exclusive use. Moreover, Respondent argues there is no evidence to support a finding that Complainant’s mark was targeted in connection with the Domain Name’s purchase.

Respondent also claims there is no evidence of bad faith registration or use. Again, Respondent emphasizes that the Domain Name was purchased at auction because it incorporated a common word, pursuant to a lease-buyback agreement that was lawful. Respondent argues that absent any proof that the Domain Name was registered for the purpose of profiting from Complainant’s trademark rights, there can be no finding of bad faith registration and use. There is no evidence that Respondent registered the Domain Name to profit from Complainant’s mark. Again, there is tremendous third-party use of the word “hostess,” and accordingly it cannot be inferred that Respondent registered the Domain Name to target Complainant’s trademark.

With respect to the two cases in which adverse UDRP decision were handed down against Respondent, Respondent explains that in each of those cases, Respondent had leased the disputed domain names to third parties whose use of the domain names, along with other circumstances, ran afoul of the Policy. However, in the instant case, there is no allegation of bad faith use. There is no allegation that Respondent has ever used the Domain Name in connection with the goods and services covered by Complainant’s trademarks. Moreover, Respondent states that Complainant is mistaken in its allegation that Respondent pulled down its website on August 29, 2007. The website had been operated by the prior registrant of the Domain Name before the Domain Name was sold at auction on June 7, 2007. Accordingly, Respondent argues that Complainant failed to demonstrate that the Domain Name was registered or used in bad faith.

6. Discussion and Findings

Paragraph 15(a) of the Rules instructs the Panel to decide the complaint on the basis of the statements and documents submitted and in accordance with the Policy, the Rules and any rules and principles of law that it deems applicable.

Under paragraph 4(a) of the Policy, Complainant must prove each of the following:

(i) the Domain Name is identical or confusingly similar to Complainant’s trademark;

(ii) Respondent has no rights or legitimate interests in respect of the Domain Name; and

(iii) the Domain Name has been registered and is being used in bad faith.

Paragraph 4(b) of the Policy sets out four illustrative circumstances which for the purposes of paragraph 4(a)(iii) are evidence of the registration and use of a domain name in bad faith. Paragraph 4(c) of the Policy sets out three illustrative circumstances, any one of which if proved by Respondent may be evidence of Respondent’s rights to or legitimate interests in the Domain Name for the purpose of paragraph 4(a)(ii) above.

A. Identical or Confusingly Similar

Complainant is required under paragraph 4(a)(i) of the Policy to prove that the Domain Name is identical or confusingly similar to a trademark in which Complainant has rights. The Panel finds that the Domain Name is identical to Complainant’s well-known HOSTESS trademark, because it entirely incorporates this mark and merely adds the top-level domain “.com,” which is not relevant for determining whether a domain name is identical or confusingly similar to a trademark. Bradford & Bingley Plc v. Registrant info@fasionID.com 987654321, WIPO Case No. D2002-0499 (Aug. 16, 2002) (“When comparing a challenged domain name and a trademark, the addition of the .com suffix is irrelevant for the purpose of determining whether the domain name is identical or confusingly similar to a trademark.”).

The Panel finds that paragraph 4(a)(i) of the Policy has been met.

B. Rights or Legitimate Interests

Complainant must prove that Respondent has no rights or legitimate interests in the Domain Name. Once a complainant makes a prima facie showing that a respondent has no rights or legitimate interests, the burden shifts to the respondent to rebut this showing. The burden of proof, however, remains with the complainant. Online Buddies Inc. v. Domain Capital, WIPO Case No. D2007-0541 (July 12, 2007).

As noted above, Complainant contends that, at the time the Domain Name was registered, Complainant’s HOSTESS trademark and products had an extensive reputation in the United States. Respondent is not a licensee of Complainant, nor has Complainant ever consented to the use of its HOSTESS trademark by Respondent in a domain name. Moreover, Respondent is not commonly known by the Domain Name, nor has Respondent acquired any trademark rights in the Domain Name. Complainant maintains that Respondent has not used the Domain Name in connection with a bona fide offering of goods or services or for the purpose of making legitimate noncommercial or fair use. Instead, Complainant alleges that (i) given the Domain Name wholly incorporates Complainant’s HOSTESS mark, it is reasonable to infer that Respondent had Complainant in mind when the Domain Name was registered with the intention of capitalizing on Complainant’s goodwill for commercial gain, and (ii) Respondent prior use of the Domain Name was intended for commercial gain to the extent that Respondent hoped to divert Internet users seeking information about Complainant’s products to Respondent’s own website.

The Panel finds these facts and allegations, in the Panel’s view most of which are undisputed (except for the allegations in the last sentence immediately above), are more than sufficient to establish Complainant’s prima facie showing that Respondent has no rights or legitimate interests in the Domain Name, thereby shifting the burden to Respondent.

Pursuant to paragraph 4(c) of the Policy, “[a]ny 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 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.”

As discussed above, Respondent states that it is in the business of financing domain names purchases for third-parties through lease-buyback agreements and that, although it is listed as the Domain Name registrant, it actually financed the purchase of the Domain Name for a third-party at a domain name auction in June 2007. Respondent has provided a declaration of its COO and a reference in an online publication, DN Journal, to support this claim. These circumstances in isolation, however, do not establish any rights or legitimate interest in the Domain Name on the part of Respondent. In addition, they do not establish any rights or legitimate interest on the part of the putative third-party, for whom Respondent states it registered the Domain Name.

Respondent makes no claim that it, or the putative third-party purchaser of the Domain Name, (i) made any use, or demonstrable preparations to use, the Domain Name in connection with a bona fide offering of goods or services; (ii) has been commonly known by the Domain Name, or (iii) is making a legitimate noncommercial or fair use of the Domain Name. Rather, Respondent’s primary argument for asserting that it has rights or legitimate interests in the Domain Name is that the word “hostess” is a common word subject to substantial third-party use. Thus, according to Respondent, registration of the Domain Name incorporating a common word, ipso facto, establishes Respondent’s legitimate interest, provided the Domain Name was not registered with a trademark in mind.

The Panel disagrees with this view. There has been no use of the Domain Name since the date of its purchase by Respondent, and no indication of any plans or preparations to use the Domain Name. Similarly, if the Domain Name was registered by Respondent on behalf of an anonymous third-party, Respondent has made no showing that the third-party has any rights or legitimate interests in the Domain Name based on its current or intended use, or based on some other circumstance pertinent to that third-party. The consensus view as set forth in the WIPO Overview of WIPO Panel Views on Selected UDRP Questions provides helpful guidance on this point:

Consensus view: If the complainant makes a prima facie case that the respondent has no rights or legitimate interests, and the respondent fails to show one of the three circumstances under Paragraph 4(c) of the Policy, then the respondent may lack a legitimate interest in the domain name, even if it is a domain name comprised of a generic word(s).”

The Panel finds that paragraph 4(a)(ii) of the Policy has been satisfied.

C. Registered and Used in Bad Faith

Paragraph 4(b) of the Policy sets forth four criteria that are to be considered as evidence of the registration and use of a domain name in bad faith:

(i) circumstances indicating that you have registered or you have acquired the domain 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 or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name; or

(ii) you have registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that you have engaged in a pattern of such conduct; or

(iii) you have registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(iv) by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your website or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your website or location or of a product.

These criteria are not exclusive and the Panel may conclude that Respondent acted in bad faith where other circumstances reveal the bad faith nature of the registration and use of a domain name.

As indicated above, Complainant’s main arguments regarding Respondent alleged bad faith are as follows:

(i) given the Domain Name wholly incorporates Complainant’s HOSTESS mark, it is reasonable to infer that Respondent had Complainant in mind when the Domain Name was registered with the intention of capitalizing on Complainant’s goodwill for commercial gain;

(ii) Respondent’s prior use of the Domain Name was intended for commercial gain to the extent that Respondent hoped to divert Internet users seeking information about Complainant’s products to Respondent’s own website;

(iii) Complainant emphasizes that Respondent has been the subject of two prior adverse bad faith decisions, and the timing to remove a placeholder website associated with the Domain Name – just a few weeks after the second decision – was not coincidental but instead evidence of bad faith; and

(iv) Complainant states that in mid-September, it sought to purchase the Domain Name through an intermediary for $5000, but the intermediary indicated that the Domain Name owner would not start negotiation for anything less than $20,000.

Complainant concludes that, given these facts and circumstances, no reasonable inference can be drawn other than that Respondent’s use of the Domain Name is in bad faith.

Against these points, Respondent has put in the declaration of Mr. G Freeman, Respondent’s COO, which is proffered “under penalty of law for making false statements.” After describing Respondent’s business and explaining that the Domain Name was purchased by a third-party at an auction (although listed in Respondent’s name), he states that Respondent registered the Domain Name:

“because it incorporates a common word,” [and] “[w]e did not register the Disputed Domain Name with the intent to sell to Complainant, to disrupt Complainant’s business, or to confuse consumers seeking to find Complainant’s web site. We did not register the Domain to prevent Complainant from owning a domain name incorporating its trademark”.

While these statements may be viewed as self-serving and perhaps do not reveal the true intent of the third-party for whom Respondent registered the Domain Name, nonetheless, there is no sufficient evidence in the record to suggest that Respondent or the putative Domain Name purchaser targeted Complainant’s trademark when the Domain Name was purchased in June 2007. Although the Domain Name is identical to Complainant’s well-known trademark, Respondent is correct when it emphasizes that “hostess” is also a common word subject to substantial third-party use. Without any further evidence of specifically targeting Complainant and its trademarks, or use of the Domain Name in a manner that supports a finding of seeking to profit from Complainant’s mark, this Panel cannot, on the balance of the probabilities, adopt the inferences which Complainant urges.

As for Complainant’s argument that Respondent’s prior use of the Domain Name was intended for commercial gain to the extent that Respondent hoped to divert Internet users seeking information about Complainant’s products to Respondent’s own website, Complainant has provided no evidence that Respondent has used the Domain Name in this way. Indeed, Respondent has emphasized that there is no allegation that Respondent has ever used the Domain Name in connection with the goods and services covered by Complainant’s trademarks. Hence, Complainant goes too far in making such an unsupported assertion.

Regarding Complainant’s argument that Respondent has been the subject of two prior adverse UDRP decisions, in each of those cases the panels found that it was the Respondent’s use of the disputed domain names, or the third-party purchaser’s use of the disputed domain names, which gave rise to a finding of bad faith. Here, by contrast, Respondent and the putative third-party purchaser have made no use of the Domain Name at all. If Respondent or the third-party purchaser would use the Domain Name in commercial matters related to the foods industry, it would in this Panel’s view possibly trigger concerns of bad faith use and possibly trademark infringement under United States trademark law. However, on the facts before the Panel, there has been no showing of use of the Domain Name since the time of its purchase.

Finally, with respect to Complainant’s allegation that it sought to purchase the Domain Name through an intermediary for USD5000, but that a counter-demand was made by Respondent (or the third-party) for USD20,000 or more, we have a direct and specific denial from Respondent, supported by the declaration of Respondent’s COO which was made “under penalty of law for making false statements.” He declares that:

“We did not receive a $5,000 offer to purchase the Disputed Domain from Complainant and we made no counter-offer to purchase the Disputed Domain for $20,000. We are unaware of any such communications having taken place with anyone in our organization or with the party who purchased the Disputed Domain and entered into the lease/buyback agreement with [Respondent].”

The Panel is not in a position to question or discredit this specific denial on the part of Respondent. However, if Respondent, in the future, would attempt to extract a significant sum from Complainant for purchase of this Domain Name identical to Complainant’s HOSTESS trademark, these circumstances may provide support for application of the Policy’s paragraph 4(b), indicating bad faith when a respondent “registered or […] acquired the domain 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.…”

For the foregoing reasons, and on the basis of the specific facts and circumstances in this case, the Panel finds that Complainant has failed to demonstrate that paragraph 4(a)(iii) of the Policy has been satisfied.

7. Decision

For all the foregoing reasons, the Complaint is denied.


Christopher S. Gibson
Sole Panelist

Dated: December 1, 2009