TM Acquisition Corp. v. OnClick Solutions
Claim Number: FA0204000110771
Complainant is TM Acquisition Corp., Parsippany, NJ (“Complainant”) represented by Kathryn S. Geib. Respondent is OnClick Solutions, Shelburne, VT (“Respondent”) represented by Paul Swider.
The domain name at issue is <c21.biz>, registered with BB Online UK Limited.
The undersigned certifies that he has acted independently and impartially and to the best of his knowledge has no known conflict in serving as the Panelist in this proceeding.
G. Gervaise Davis III, Esq., is the single Panelist.
Complainant has standing to file a Start-up Trademark Opposition Policy (“STOP”) Complaint, as it timely filed the required Intellectual Property (IP) Claim Form with the Registry Operator, NeuLevel. As an IP Claimant, Complainant timely noted its intent to file a STOP Complaint against Respondent with the Registry Operator, NeuLevel and with the National Arbitration Forum (the “Forum”).
Complainant submitted a Complaint to the Forum electronically on April 22, 2002; the Forum received a hard copy of the Complaint on April 23, 2002.
On April 23, 2002, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of May 13, 2002 by which Respondent could file a Response to the Complaint, was transmitted to Respondent in compliance with paragraph 2(a) of the Rules for the Start-up Trademark Opposition Policy (the “STOP Rules”).
A timely Response was received and determined to be complete on May 13, 2002.
An Additional Submission from Complainant was received on May 20, 2002, which was considered by the Panel in addition to the original Complaint and the Response.
On May 31, 2002, pursuant to STOP Rule 6(b), the Forum appointed G. Gervaise Davis III, Esq., as the single Panelist.
Transfer of the domain name from Respondent to Complainant.
Complainant, TM Acquisition Corp., is a Delaware corporation with its principal place of business in Nevada. It is the owner of numerous CENTURY 21® Marks registered with the USPTO, including the C21® mark and the C-21® mark (“the CENTURY 21 marks”), and has licensed the CENTURY 21 Marks to Century 21 Real Estate Corporation (“Century 21”). Century 21 is a Delaware corporation with its principal place of business in New Jersey. Century 21 sub-licenses the CENTURY 21 Marks to its franchisees. TM Acquisition Corp. and Century 21 are subsidiaries of Cendant Corporation, a Delaware corporation with it principal place of business in New York. Respondent is a company doing business as OnClick Solutions in Vermont.
Pursuant to its license from TM Acquisition Corp., Century 21 has the right to use 90 registered and numerous common law marks in the United States. Of these, one (1) is for the C21 word mark, one (1) is for the C-21 word mark and five (5) are for the CENTURY 21 word mark. Century 21 is a franchisor of a system of business for the promotion and assistance of independently owned and operated real estate brokerage offices, including policies, procedures and techniques designed to enable such offices to compete more effectively in the real estate sales market. Century 21 licenses its franchisees the right to use the CENTURY 21® Marks in their real estate brokerage offices throughout the United States and has licensed the CENTURY 21 Marks to Master Franchisors operating in at least 24 other countries. At present, there are approximately 4,200 franchised offices in the USA and another approximately 2,400 franchised offices in other countries.
Century 21 has used the C21® Mark in the USA continuously in connection with the offering of real estate brokerage services since May 20, 1982 and has similarly used the CENTURY 21 marks since April 16, 1972. Over the past 30 years, Century 21 has expended many millions of dollars and significant time, resources and effort in advertising, promoting and establishing the goodwill of the CENTURY 21 Marks in association with its business. As a result, most of the CENTURY 21 Marks are distinctive and many have become incontestable and are famous. Century 21 owns at least 64 domain names; of those 17 contain the C21 mark. Century 21 operates its principal web site at <century21.com>.
The services provided by Century 21 and its franchisees are widely recognized under the C21 mark. For example, Century 21 operates a web site directed to consumers at <C21talk.com> which features its services performed under the C21 Talk Radio For The Real World mark, for which a service mark application is pending before the USPTO. Century 21 also uses the C21 mark in its <c21ls.com> domain name which is used for sales agent training services; and in its toll free line for franchisee services, 877-C21-BROKER.
Respondent is a company which provides software products and wireless technology to its clients, as shown on its web site at <onclicksolutions.com>. Because Respondent does not own any mark identical to the C21 mark and is not a licensee of the mark, prior to filing this STOP Complaint Complainant’s legal counsel sent an email to Respondent seeking an amicable resolution of its claim to the domain name at issue. Mr. Paul Swider, a representative of Respondent, and Complainant’s counsel corresponded in six (6) additional emails and one (1) telephone call. In his initial email to Complainant’s counsel, Respondent stated that he applied for the domain name for use by one of his clients who is a CENTURY 21® franchisee; however, without conferring with his client he immediately offered to transfer the domain name to Complainant for “any amount over $25,000”. Complainant declined the offer of sale but suggested that the transfer be effected in exchange for the STOP application fee of $1,150, since Century 21 had already committed to spend $1,150 on the filing of a STOP Complaint. Respondent refused this arrangement and again demanded payment of a sum in excess of $25,000. Complainant declined Respondent’s offer of sale and subsequently filed this STOP Complaint.
Complainant argues that since Respondent admits it has no right to use the name or the trademark, but merely asserts it was registered for the use of one of his clients, he has registered it without any legitimate interest in it; and because he offered to sell it to Complainant, without even consulting the client for whom it was allegedly registered, it was registered in bad faith under the STOP rules. Complainant summarizes its position as, “In sum, (1) the domain name is identical to the C21® Mark; (2) Respondent has no legitimate interest in the domain name; and (3) Respondent’s registration of the domain name is in bad faith as it was apparently acquired as a financial investment, and [Respondent] has operated in a fashion to prevent the rightful owner from reflecting the mark in a corresponding domain name.”
Respondent’s representative, Paul Swider, a layman, presents its case well under difficult circumstances and the highly technical legal constraints of the STOP Rules. In essence, Respondent argues (1) that there are a number of other “C21” marks, that it is not clear that Complainant has the exclusive right to this mark, but admits that Complainant owns a group of similar trademarks including “C21”; (2) argues that another entity owns <c21.com> and others own variants of it as to which fact Complainant has done nothing to stop these uses; (3) that while Respondent itself admittedly does not have a trademark or legal right to use the mark “C21” that it registered the domain name <c21.biz> on behalf of a client of its Internet development and software business and that this client had a legal right to use the domain as a franchisee of Complainant; and (4) that this registration was done in good faith, without expectation of financial gain from the sale of the domain or for other improper purposes.
In response to Complainant’s argument that he sought to sell the domain to Complainant during the discussions for $25,000, Respondent argues that his communications are being misinterpreted and taken out of context in that he said he did not want to sell the domain, but only indicate he felt it had a value of $25,000 if it were to be sold with or without his client’s consent. The actual text of his various communications is a part of the record, and it must be said that they are ambiguous and somewhat inconsistent. Respondent here makes the common argument of one in negotiations over a domain name in that if he says anything about price, it can be misinterpreted as an offer to sell. In his emails he said his comments about the value were not to be considered an intention to sell, even though he set a price at which it would be sold without consulting his client. Yet it seems clear that he was making an offer to sell for “any amount over $25,000” if Complainant would not give up its quest to recover the domain name.
Somewhat inconsistently, Swider states in his brief that his company has been offering wireless networking services to Century 21 franchisees since 1993, and that while he intended to transfer the domain to one of his clients “We also wanted to use the name to promote our services as well.” Later he states “If Cendant will not let the Century 21 franchisee use the name, we clearly have an alternative use. If we use the name to promote our wireless services to Century 21 franchisees it is legitimate as we are in a completely different business and we may even get approval from the President of Cendant.” This suggests that Respondent had multiple motives in registering the domain name. He seems to be arguing that his business had made preparations “for years” to use the name in his business. He does not, however, really identify how it would be used or how he planned to obtain approval from the trademark owner to do so.
Respondent summarizes its position as “(1) the domain name is identical to the C21 mark; (2) Respondent has multiple legitimate interests in the domain name; and (3) Respondent’s registration of the domain name is in the best interest of his client Century 21 Jack Associates as well as his personal investment in marketing wireless services to Century 21 franchisee offices.”
C. Additional Submissions
Complainant submitted a Supplemental Brief in response to statements made in the Response, which was considered by the Panel. The Supplement consists largely of a rebuttal of the Respondent’s arguments about the nature of the communications between the parties, and includes as further exhibits what is alleged to be the standard Century 21 Franchise agreement and some Guidelines for the Use of the Century 21 Trademarks both on and off the Internet. These Guidelines do not unequivocally prohibit the use of the C21 mark, but clearly indicate some limitations on how it can be used.
A. Complainant has established that it holds a number of registered trademarks on the mark “C21” as well as the full name “Century 21” of which “C21” is an abbreviation, which marks were registered before Respondent registered the domain name at issue.
B. The domain name at issue <c21.biz> is identical to the Complainant’s registered marks for “C21” if the extension “.biz” is disregarded.
C. The Respondent, itself, does not own or have any legitimate interest in the mark “C21” or the domain name <c21.biz>, although it claims a customer of Respondent is licensed to use such a mark, as a licensee of the Century 21 Real Estate Group, which is disputed by Complainant. Respondent also admits that it intended to use the domain itself if the client did not want to or could not use it.
D. The Respondent registered the domain name at issue as a speculative venture, either to sell the domain or to make other use of it which would deprive the Complainant of the right to use it. The domain has not been used to date, so that is not a consideration.
Paragraph 15(a) of the STOP 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 STOP Policy requires that the Complainant must prove each of the following three elements to obtain an order that a domain name should be transferred:
(1) the domain name is identical to a trademark or service mark in which the Complainant has rights; and
(2) the Respondent has no rights or legitimate interests in respect of the domain name; and
(3) the domain name has been registered or is being used in bad faith.
Due to the common authority of the ICANN policy governing both the Uniform Domain Name Dispute Resolution Policy (“UDRP”) and these STOP proceedings, the Panel will exercise its discretion to rely on relevant UDRP precedent where applicable.
Under the STOP proceedings, a STOP Complaint may only be filed when the domain name in dispute is identical to a trademark or service mark for which a Complainant has registered an Intellectual Property (IP) claim form. Therefore, every STOP proceeding necessarily involves a disputed domain name that is identical to a trademark or service mark in which a Complainant asserts rights. The existence of the “.biz” generic top-level domain (gTLD) in the disputed domain name is not a factor for purposes of determining that a disputed domain name is not identical to the mark in which the Complainant asserts rights.
Although Respondent makes some arguments about other users of the C21 mark, it is beyond dispute that Complainant has valid rights in the mark “C21” in relationship to its real estate franchising operation. It is also clear that the domain name <c21.biz> is identical to the mark because for all domain name cases the deciding Panels have ignored the gTLD extension in determining this question. See Princeton Linear Assoc., Inc. v. Copland o/b/o LAN Solutions Inc., FA 102811 (Nat. Arb. Forum Feb. 8, 2001) (finding that the “.biz” gTLD in a disputed domain name is not a factor, and hence to be ignored, when determining whether the domain name is identical to a mark in which the Complainant has asserted rights).
Respondent admits that it has no rights or legitimate interests in the domain name, itself, but argues it registered the name for use by its client CENTURY 21 Jack Associates, an admitted franchisee of Complainant. Complainant contends that even if this were a basis for registering the domain, the client of Respondent could not legally use the name in this form, since it must further identify itself as “C21JackAssociates.biz” under the franchise agreement and its Internet Guidelines for franchisees. There is substantial argument by both parties about whether the domain, as registered, could be used, and in its supplemental submission Complainant included a copy of the standard Century 21 franchise agreement and some Internet Guidelines relating to the use of the various trademarks. The Panel declines to give this argument, either way, any consideration since it is unnecessary to determine this issue, given other facts here.
The Panel is sympathetic to the concept that one acting as an agent for another with rights to the name should have some consideration, since this registration could have been done under the instructions of the principal with such rights. This Panel does not believe that registration by an agent for one with legitimate interests should, per se, be prohibited under the STOP Rules. Here, however, there are several factors that seem to mitigate strongly against Respondent’s argument.
First, there is no evidence submitted to the Panel (other than Respondent’s bald assertion that it was done for the client) that the client was ever consulted before this registration was accomplished. For example, there are no letters or written instructions to Respondent from its client asking that this name be registered for its use. It is up to the parties to provide the Panel with documentary evidence of facts alleged. Much like UDRP Panels, STOP Panels have found that a Respondent’s “unsupported, self-serving allegations alone are insufficient to establish that [the] Respondent has rights or legitimate interests in respect to the domain name at issue.” Twentieth Century Fox Film Corp. v. Benstein, FA 102962 (Nat. Arb. Forum Feb. 27, 2002) (finding the Respondent’s assertion that she registered the domain name <foxstudios.biz> in order to get a website address for her planned dance studios, without evidentiary support, was insufficient to establish that she had rights or interests in respect to the domain name at issue).
Second, Respondent acknowledges that it had multiple reasons for registering the domain, one of which was to use it itself, even though it has never done business under that name and it would have to obtain permission to use it for itself, if its client chose not to accept a transfer of it and to use it.
Third, it appears that, during the interchange of emails and phone calls, Respondent’s representative Paul Swider determined without consulting his client that the name had a value of $25,000 if sold, and indicated that he would sell it to Complainant for that amount without consultation with the client. This is not the normal action of an agent, acting only on authority of his principal. Rather it suggests to the Panel that this registration was, in fact, a speculative registration by Respondent who hoped to convince the client to use it, and if he could not, other uses would be made of it or it would be sold. The STOP Rules do not permit such speculative registration or use.
The Panel is further influenced on this issue by the decisions of other Panels that have held that only the existing rights or interests of the named Respondent may be used to satisfy the requirements of STOP Policy ¶ 4(a)(ii). In other words, an unnamed third party cannot assert its rights/interests on behalf of the Respondent in order to prevent the transfer of a domain name to the Complainant. See Seagate Tech. LLC v. TC Servs., FA 102782 (Nat. Arb. Forum Feb. 7, 2002) (finding that a Respondent cannot assert the rights of a third party to demonstrate rights or legitimate interests pursuant to STOP Policy ¶ 4(a)(ii) when that third party has not formally intervened in the proceeding); but c.f. K2r Produkte AG v. Trigano, D2000-0622 (WIPO Aug. 23, 2000) (finding that the Respondent had rights and legitimate interests in the domain name <k2r.com> under UDRP ¶ 4(a)(ii) where he registered the domain name for a website in connection with his mother’s store, “KIRK ET ROSIE RICH”).
On balance, this Panel is not convinced that Respondent has established its rights to the domain from the mere allegation that it was being done for a client, without far more evidence than is before the Panel. The Panel concludes that Respondent has failed to establish its rights to use the domain name.
The necessity of finding bad faith is perhaps the most difficult aspect of this case. It cannot be said, in the opinion of this Panel, that registering a domain name for a client with the hope of using it oneself if the first intended use does not work out is bad faith registration, in and of itself. It requires something more.
The Panel believes, however, that the facts here equal bad faith registration because of a combination of the fact (1) that Respondent clearly had made a determination to sell the domain name to Complainant if he could receive payment of at least $25,000 (which he actually communicated to counsel for Complainant), and (2) that he admits his own plans for possible use of the domain <c21.biz> for his business even though he has no present right to use the mark incorporated in the domain name. The problem with the latter set of facts is that such use would likely cause considerable confusion on the Internet because he was dealing with exactly the same group of real estate businesses that the Complainant works with. Quite clearly the only reason the name was valuable to Respondent, in his plan of operation, is because of its association with Complainant. This fact alone has been held to indicate a bad faith use or proposed use under the ICANN Rules. See, United States of America Dep. of the Navy NAVSEA v. NAVYWEB, FA 105977 (Nat. Arb. Forum May 21, 2002) (Names ordered transferred because proposed use was based on relationship of domain names to the name of Navy agency, which constituted bad faith registration.)
Other STOP Panels have previously held that, even when the domain name has not been used, bad faith under STOP Policy ¶ 4(b)(iv) can be demonstrated from the confusion that will inevitably arise when the Respondent finally uses the name. See Fluor Corp. v. Song, FA 102757 (Nat. Arb. Forum Jan. 31, 2002) (finding that, where the Respondent’s <fluor.biz> domain name was identical to the Complainant’s FLUOR mark, Internet users would likely believe an affiliation between the Respondent and Complainant); see also, Pillsbury Co. v. Prebaked Scandinavia ab, FA 102970 (Nat. Arb. Forum Jan. 31, 2002) (finding registration of a domain name identical to Complainant’s mark to be in bad faith under STOP Policy ¶ 4(b)(iv) when use of the domain name would likely cause confusion as to the affiliation between Respondent and Complainant); but, c.f. Twentieth Century Fox Film Corp. v. Benstein, FA 102962 (Nat. Arb. Forum Feb. 27, 2002) (finding no evidence of bad faith registration or use, despite Complainant’s claim that Respondent’s use of the <foxstudios.biz> domain name would create “initial interest confusion” for Internet users as well as result in dilution of Complainant’s famous FOX marks); see also, STMicroelectronics, NV v. Tower Entm’t GdbR, FA 102731 (Nat. Arb. Forum Feb. 11, 2002) (finding no bad faith despite Complainant’s assertion that “Internet users will inherently expect Complainant’s website to be hosted at the disputed domain name”).
The Panel therefore concludes that the proposed improper use of the domain by the Respondent for his own business, combined with the indirect offer to sell it to the trademark owner for far more than the actual registration cost should be considered the equivalent of bad faith registration. Actual use of the domain is not required under the STOP Rules, although it is under the regular UDRP Rules. See, STOP Rule 4(a)(3) which is in the disjunctive, relating to “registration or use.”
Accordingly, the Panel orders that the domain name <c21.biz> be transferred to Complainant. Furthermore, pursuant to the STOP Policy, subsequent challenges against this domain name shall not be permitted hereafter.
G. Gervaise Davis III, Esq., Panelist
Dated: June 14, 2002
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