Action Software, Inc. v. Alphacom Distribution, Inc.

Claim Number: FA0203000105734



The Complainant is Action Software, Inc., Eastlake, OH (“Action Software” or “Complainant”) represented by Steven M. Auvil.  The Respondent is Alphacom Distribution, Inc., San Diego, CA (“Alphacom” or “Respondent”) represented by Rob G. Leach, of Charmasson & Buchaca.



The domain name at issue is <>, registered with



The undersigned certifies that he has acted independently and impartially and, to the best of his knowledge, has no known conflict in serving as Panelist in this proceeding.


Jonathan Hudis as Panelist.



Complainant submitted a Complaint to the National Arbitration Forum (“the Forum”) electronically on March 1, 2002; the Forum received a hard copy of the Complaint on March 5, 2002. The Complaint was submitted for decision in accordance with the Uniform Domain Name Dispute Resolution Policy, adopted by the Internet Corporation for Assigned Names and Numbers on August 26, 1999 and approved on October 24, 1999 (the “Policy”), and the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”), adopted by ICANN on August 26, 1999 and approved by ICANN on October 24, 1999, and the National Arbitration Forum (the “Forum”) Supplemental Rules (the “Supplemental Rules”). ICANN Rule 3(b)(i).


On March 7, 2002, confirmed by e-mail to the Forum that the domain name <> is registered with and that Respondent, along with Kiet Bland as the administrative, technical and zone contact, is the current co-registrant of the domain name. has verified that Respondent is bound by the registration agreement and has thereby agreed to resolve domain-name disputes brought by third parties in accordance with the Policy.


On March 8, 2002, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of March 28, 2002 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 by e-mail.


A timely Response was received and determined to be complete on March 28, 2002.  An Additional Submission from Complainant was received and determined to be complete on April 2, 2002.


On April 5, 2002, pursuant to Complainant’s request to have this dispute decided by a single-member Panel, the Forum solicited the interest of the undersigned to arbitrate this matter.  After clearing potential conflicts of interest, the undersigned notified the Forum on April 8, 2002, that he was available to arbitrate this dispute.  On April 9, 2002 the Forum appointed the undersigned, Jonathan Hudis, as Panelist.



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



A. Complainant


Complainant markets, among other things, computer software and adult video products.  These products are offered on DVDs and other forms of media.  Complainant registered the domain name <> on or about January 31, 1999.  Complainant’s technical contact and webmaster also registered the domain names <> and <> on or about December 21, 1999.  Registrations for each of these domain names have been renewed and are in force.


Complainant began using the alleged service mark ACTION-DVD.COM in January 1999.  Complainant states it has continuously used ACTION-DVD.COM as a service mark ever since.  The mark is prominently featured on Complainant’s web site and is incorporated into the URL


Complainant asserts not only that ACTION-DVD.COM is inherently recognizable as a trademark, but that ACTION-DVD.COM has also acquired trademark significance in the eyes of consumers.  Between November 2000 and November 2001, Complainant states it invested nearly $50,000 in advertising the ACTION-DVD.COM mark and recorded sales of more than $1,000,000.  Complainant says that as a result of this success, ACTION-DVD.COM is a strong designation of source in which Complainant owns valuable good will.


As evidence of the alleged success of the ACTION-DVD.COM “brand” and web site, Complainant submits that between 100,000 and 200,000 page views or impressions of the <> web site are recorded per day.  Additionally, according to the web page ranking service at <>, Complainant’s site has 85 inward-pointing links.  Additionally, in 2001, Complainant won an “Editor’s Choice” award from the publication Adult Video News for its <> web site.


On January 29, 2002, Complainant filed a trademark application with the U.S. Patent and Trademark Office to federally register ACTION-DVD.COM as a service mark.   There is no evidence that a registration has yet issued from this application, much less that it has been examined by the U.S. Patent and Trademark Office.  Rather, Complainant asserts service mark rights in <> based upon its common law usage rights.


Respondent’s domain name, <>, was obtained on August 10, 2000, long after Complainant’s first use and continued use of ACTION-DVD.COM as an alleged mark.  The only difference between Complainant’s alleged mark and Respondent’s domain name is the lack of a hyphen.  Therefore, says Complainant, confusing similarity is firmly established.


As initially discovered by Complainant, Respondent did not include a disclaimer on its web site of any connection between Complainant and Respondent.  Under the circumstances, Complainant submits that Respondent’s intent at the outset was to trade off Complainant’s goodwill in the alleged ACTION-DVD.COM mark and divert consumers to Respondent’s <> web site for commercial gain.


Complainant also points to Respondent’s other flagrant efforts to divert Complainant’s customers to Respondent’s adult-only web site, <>.  As early as March 2001, Internet users who typed (instead of were routed to Respondent’s <> web site.  It is well known, says Complainant, that Internet users commonly omit the “www” when trying to reach a popular web site.  Complainant contends that Respondent has been taking advantage of this situation.


Additionally, Internet users who type (instead of also are also routed to Respondent’s <> web site.    A user is also taken to this site when it clicks on a link pointing to the URL  Thus, says Complainant, Respondent has deployed two independent diversionary tactics to wrongfully attract Internet users to its own adult-content web site.  Both of these tactics misuse the DNS (Domain Name System) architecture, says Complainant, by configuring a registered domain name to two different IP addresses, one for the adult-content site and the other to a different site.


Complainant says it has used ACTION-DVD.COM throughout its existence.  In addition to prominent display on Complainant’s web site, the alleged mark is heavily advertised in association with the Complainant’s services.  This longstanding use, says Complainant, has led to an association in the relevant market between the Complainant and the designation ACTION-DVD.COM.  The Complainant and Respondent are in the video entertainment distribution business and compete head-to-head in the adult video business.


Complainant points to Respondent’s extreme measures that it has taken to divert traffic from Complainant’s web site to Respondent’s <> web site as bad faith in registering and using the <> domain name.  In other words, says Complainant, the only purpose of using the disputed domain name in this context is to misdirect consumers trying to reach Complainant’s web site.


Complainant became aware of the diversionary tactics and, through counsel, asked Respondent to cease using the infringing domain name in May 2001.  Respondent, answering both by e-mail and through counsel, denied that the web site directed or displayed adult-content material and refused to cooperate.  Moreover, as of the time Complainant discovered Respondent’s activities, Respondent failed to include a disclaimer of any connection between Complainant’s alleged ACTION-DVD.COM mark and Respondent’s use of the <> domain name. 


B. Respondent


Respondent contends that ACTION-DVD.COM is a “descriptive and generic” term not subject to trademark protection.  Respondent points to the fact that Complainant has not yet registered ACTION-DVD.COM as a trademark or service mark, despite its recent application filed with the U.S. Patent and Trademark Office.  Respondent denies that ACTION-DVD.COM has acquired secondary meaning in connection with any product or service offered by Complainant.


Respondent contends that it has rights or legitimate interests in using the contested <> domain name, because it had been using the disputed domain name in connection with a legitimate online business (selling DVDs) for 1 ½ years before being notified of the parties’ dispute.  During that time, Respondent says that it was totally unaware of Complainant or its use of the domain name and web site <>.


Respondent denies Complainant’s allegations of bad faith registration and use of the contested domain name.  Respondent denies that it sells any adult content materials at its <> web site, and denies that there exists any link between its <> web site and its other web site that sells adult videos.  Finally, Respondent contends that the diversionary actions alleged above by Complainant were a “mistake” which have since been corrected.  Moreover, Complainant points the Panel to the presence of a new disclaimer on its <> web site between Complainant and Respondent.


C. Complainant’s Additional Submission


In its Additional Submission, Complainant largely repeats the allegations contained in its original Complaint.  Complainant asserts that its allegations of trademark/service mark rights were largely un-rebutted by Respondent.


The Panel notes Complainant’s further arguments that the evidence of record belies Respondent’s claims that Respondent’s Internet-user diversionary tactics were a “mistake.”  The Panel also notes Complainant’s contentions that Respondent’s curative actions came only after Respondent’s receipt of the UDRP Complaint.



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 Complainants have 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.


In an administrative proceeding pursuant to policy, the Complainant must prove that each of these three elements are present.  ICANN Policy ¶4(a).


The following circumstances, in particular but without limitation, if found by the Panel to be present, shall be evidence of the registration and use of a domain name in bad faith:


(i)            Circumstances indicating that the registrant 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 or service mark, or to a competitor of that Complainant for valuable consideration in excess of the registrant’s documented out-of-pocket costs directly related to the domain name;


(ii)            The registrant has 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 it is shown that the registrant has engaged in a pattern of such conduct; or


(iii)            The registrant registered the domain name primarily for the purpose of disrupting the business of the competitor; or


(iv)            By using the domain name, the registrant has intentionally attempted to attract, for commercial gain, internet users to his web site 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 the registrant’s web site or location of a product or service on his web site or location. 


Policy, ¶4(b). 


On the other hand, 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 the registrant’s rights or legitimate interests to the domain name:


            (i)            Before any notice to the registrant of the dispute, its use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name, in connection with the bona fide offering of goods or services; or


            (ii)            The registrant (as an individual, business, or other organization) has been commonly known by the domain name, even if the registrant has acquired no trade mark or service mark rights; or


            (iii)            The registrant is making a legitimate non-commercial 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 ¶4(c).


It is Complainant that has the burden of proving all three elements of Paragraph 4(a) of the Policy.  Complainant’s failure to prove any one of these three elements is fatal to its claim.  See, e.g., EMoney Group, Inc. v. Eom San Sik, FA96337 (Nat Arb. Forum Mar. 26, 2001);  J.L. Wilson Co., Inc. v. Ultraviolet Resources Int’l.,  FA97148 (Nat Arb. Forum June 18, 2001).  Further, as the explanatory history to the Policy states: “excepting cases involving ‘abusive registrations’ made with bad-faith intent to profit commercially from others’ trademarks, (e.g., cyber-squatting and cyber-piracy), the adopted policy leaves the resolution of disputes to the courts ….  The adopted policy establishes a streamlined inexpensive administrative dispute-resolution procedure intended only for the relative narrow class of cases of ‘abusive registrations.’  Thus, the fact that the Policy’s administrative dispute-resolution procedure does not extend to cases where a registered domain name is subject to a legitimate dispute (and may ultimately be found to violate the challenger’s trademark) is a feature of the Policy….”  ICANN Staff Report,


Complainant’s Trademark Rights -

Identical and/or Confusingly Similar Domain Name


Respondent, Alphacom, does not and cannot seriously dispute that the domain names <> and <> are confusingly similar for purposes of the Policy. Colgate-Palmolive Co. v. Kasinga, FA94203 (Nat. Arb. Forum April 7, 2000) (“The addition of .net or .com or the absence of a space between the words is not significant in determining similarity.”).  The only difference between the domain names is the presence or absence of a hyphen.


The critical element for the Panel to decide is whether Complainant, Action Software, has sufficient trademark or service mark rights in ACTION-DVD.COM under the Policy.  The Panel finds that Complainant does not have such rights.


Action Software’s domain name (and banner used on its web site) is the combination of the elements “ACTION,” a hyphen, “DVD” and the top level domain “.COM.”  “DVD” refers to a product, among others, that Action Software sells on its web site.  “ACTION,” as Alphacom points out, is a reference to a type of genre of entertainment shown on various types of media – such as “Action Video,” “Action Film” or “Action DVD.”  The parties do not dispute that the top level domain “.COM” does not create trademark significance to a term or phrase which by itself has no trademark significance.


Generic terms refer to the genus of which a particular product or service is a species.  No matter how much money is spent on advertising a product or service in connection with generic term, and no matter how much sales success is achieved in connection with a generic term, it can never acquire trademark rights.  Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9 (2d Cir. 1976).  Even if not generic, terms or phrases can be deemed so highly descriptive as to be incapable of acquiring distinctiveness through use in the marketplace.  In re the Boston Beer Company Limited, 198 F.3d 1370, 1373.  ACTION-DVD or ACTION-DVD.COM is such a term or phrase.


The Panel appreciates the money and effort Action Software has given toward brand recognition of ACTION-DVD.COM.  However, as a matter of public policy, Action Software simply cannot remove ACTION-DVD (or a domain name containing this phrase when asserted as a “mark”) from the lexicon of apt terms or phrases that competitors must use in order describe their business.  Alphacom is such a competitor.  In fact, as alleged by Action Software, Alphacom is a “direct” competitor.


Because it cannot acquire trademark or service mark rights in ACTION-DVD.COM, Action Software has not met its burden of proof with respect to ¶ 4(a)(i) of the Policy.


Rights or Legitimate Interests


Alphacom contends that it has rights or legitimate interests in using the contested <> domain name, because it had been using the disputed domain name in connection with a legitimate online business (selling DVDs) for 1 ½ years before being notified of the parties’ dispute.  The evidence of record supports that, at least as of the time of the Response to the Complaint, Alphacom was making use of the contested domain name to describe the nature of its business of selling DVDs. LLC v. US Tours & Travel, Inc., AF-0284 (e-Resolution Sept. 9, 2000) (descriptive use of contested domain name constituted rights or legitimate interests in domain name).


At a minimum, Action Software has not met its burden of proof with respect to ¶ 4(a)(ii) of the Policy.


Registration and Use in Bad Faith


The timing of the parties’ actions also dispel Action Software’s allegations of bad faith.  Alphacom registered the contested domain name in August 2000.  Action Software did not send a letter of complaint until May 2001, and did not bring the present UDRP proceeding until March 2002.


In June 2001, Alphacom (through counsel) contested Action Software’s bad faith allegations and asserted at that time that the ACTION-DVD.COM name was a generic term.  Action Software waited until almost the end of January 2002 before filing an application to register the term with the U.S. Patent and Trademark Office.


Action Software’s persistent delays in taking action undercut its arguments that Alphacom registered and used the contested domain name in bad faith.  The Panel notes that Alphacom did not take curative actions (severing the re-routing mechanism associated with the <> domain name and its associated Internet Protocol Address; and placing a disclaimer on its web site) until after Action Software sent its complaint letter and filed its UDRP Complaint.  However, the Panel notes that Action Software took these actions notwithstanding its firm belief that ACTION-DVD or ACTION-DVD.COM were and are incapable of trademark protection.


These facts support the conclusion that Action Software has not met its burden of proof with respect to ¶ 4(a)(iii) of the Policy.



For the foregoing reasons, the Panel DENIES the relief requested in the Complaint.




Jonathan Hudis, Panelist
Dated: April 15, 2002


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