NetWise Inc. v. Netwise Systems Ltd.
Claim Number: FA0204000110787
PARTIES
Complainant
is NetWise Inc., St. Louis, MO, USA
(“Complainant”) represented by Donald J.
Rogers. Respondent is Netwise Systems Ltd., Mytchett Surrey,
UNITED KINGDOM (“Respondent”) represented by Stephen H. Sturgeon, of Law
Offices Of Stephen H. Sturgeon & Associates, PC.
The
domain name at issue is <netwise.biz>,
registered with Virtual Internet, PLC.
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.
G.
Gervaise Davis III, Esq., as 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 23, 2002; the Forum
received a hard copy of the Complaint on April 23, 2002.
On
May 14, 2002, a Notification of Complaint and Commencement of Administrative
Proceeding (the “Commencement Notification”), setting a deadline of June 3,
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
late Response was received and determined to be complete on June 16, 2002.
On
June 24, 2002, the Forum received an Additional Submission from
Complainant. The Additional Submission
was not compliant with Forum Supplemental Rule 7, as it was received late and
not accompanied by the required filing fee.
On
June 27, 2002 the Forum received an Additional Submission from Respondent. This filing also failed to comply with Forum
Supplemental Rule 7 for the same reasons as Complainant’s Additional
Submission.
On June 28, 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.
A.
Complainant
The
Complaint is based on the common law service mark NETWISE for products and
services related to the information technology industry. Complainant offers complete consulting and
design engineering services as well as implementation, training, and continuing
support services. Complainant has used
this mark in connection with its business, since July 13, 1996. Complainant
has invested a substantial effort over a long period of time, including the
expenditure of substantial dollars, to develop good will in trade names and
trademarks to cause consumers throughout the United States to recognize the
NETWISE mark as distinctly designating Complainant’s products and
services. Complainant included detailed
evidence of how the mark was used in its business as Exhibits. As a result of Complainant’s long and
continuous use of this service mark, the Netwise mark has acquired substantial
goodwill and recognition among consumers that is associated with Complainant’s
business.
Complainant
does not have a federal registration for NETWISE. However, a federal registration is not required to prevail in a
domain name dispute under the STOP Rules.
The Rules are broad in scope and a reference to a trademark or service
mark “in which complainant has rights” indicates that unregistered or common
law trademark or service mark rights will suffice to support a domain name
complaint under STOP. See e.g. David Taylor Cadillac/Buick Co. v.
Spider Webs Ltd., FA 95832 (Nat.
Arb. Forum Nov. 30, 2000)(transferred domain name to Complainant with common
law rights in the mark DAVID TAYLOR CADILLAC, which it had used for 25
years). It is a basic tenet of
trademark law that it is not registration, but actual use of a designation as a
mark that creates rights and priority over others. 2 McCARTHY ON TRADEMARKS AND UNFAIR COMPETITION, §16:1, at 16-3
(4th ed. 2000). State common
law is the initial source of trademark protection for unregistered marks. Lanham Act Section 43(a) provides an
additional and overlapping source of protection. Thus, a person may have exclusive trademark rights under both
state and federal law without registering a mark.
Paragraph
4(a) under the STOP Policy requires Complainant to prove each of the following
three elements in order to demonstrate that a domain name should be
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; and
2. the Respondent has no rights or
legitimate interest in respect of the domain name; and
3. the domain name has been registered and
is being used in bad faith.
Complainant
argues under these tests:
[a.] Identical and/or Confusingly Similar:
The
domain name is identical to the service marks in which the Complainant has
rights under STOP Policy ¶4(a)(i). The
Domain Name is identical in its substantive part to the NETWISE marks in which
Complainant has rights. The Domain Name
is merely a combination of the Complainant’s mark, “NETWISE” and the URL
suffix, .biz.
[b.] No Rights or Legitimate Interests:
The
Respondent has no rights or legitimate interests in respect of the domain name
under STOP Policy ¶4(a)(ii).
The
Respondent is not the owner or beneficiary of a mark that is identical to the
domain name. See STOP Policy 4(c)(i).
There is no indication that the Respondent is using or has made any
demonstrable preparations to use the domain name in connection with a bona fide
offering of goods or services.
Furthermore the Respondent is not commonly known solely as
“Netwise”. Respondent clearly refers to
itself as “Netwise Systems” Complainant submitted samples of material from
Respondent’s website and news articles that illustrate how Respondent refers to
itself as “Netwise Systems”and not “Netwise”).
See STOP Policy 4(c)(iii); see also Sears, Roebuck and Co. v. Hanna Law
Office, D2000-0669 (WIPO Sept. 8, 2000)(finding that the Respondent had no
rights in the domain name because (1) the Respondent did not use the domain
name in connection with a bona fide offering of goods and services, (2) the
Respondent was not commonly known by the mark, and (3) the Respondent was not
using the domain name in connection with a noncommercial purpose). Undoubtedly, Respondent could have attempted
to register a domain name such as <netwisesystems.biz> or
<netwise_systems.biz> that would directly correspond with the name for
which it is commonly known. Instead
Respondent has deliberately attempted to divert traffic from Complainant, a
competitor, by registering Complainant’s trademark.
[c.] Registration and Use in Bad Faith:
The
Respondent registered and is using the domain name <netwise.biz>
in bad faith under STOP Policy ¶4(a)(iii).
The
Complainant has been using the service marks in connection with its business
since July 13, 1996. In addition, Complainant has registered and
used the following domains names in good faith: <netwise.net>, and <planetnetwise.net>. Further, an affiliate of Complainant,
Netwise Communications, Inc. has registered the following domain names in good
faith: <netwisecomm.net>,
and <netwisecommunications.net>.
Clearly,
at the time of registration, Respondent had or should have had actual or
constructive knowledge of Complainant’s service marks. A simple search of the Internet would have
informed the Respondent of the existence of Complainant and of its rights in
the NETWISE mark. Despite such
knowledge (or willful disregard of Respondent to take such minimal efforts to
obtain such knowledge), Respondent continued to register the domain name
without Complainant’s permission.
Clearly this is an effort to prevent Complainant from reflecting the
mark in a corresponding domain name and constitutes a conduct in violation of
STOP Policy 4(b)(ii) and is evidence of registration in bad faith. See David Taylor Cadillac/Buick Co. v. Spider
Webs Ltd., FA 95832 (Nat. Arb.
Forum Nov. 30, 2000), citing Samsonite
Corp. v. Colony Holding, FA 94313 (Nat. Arb. Forum, April 17,
2000)(evidence of bad faith includes actual or constructive knowledge of
commonly known mark at the time of registration).
Further,
Respondent registered the domain name <netwise.biz> to disrupt and
interfere with and commercially gain from Complainant’s business by confusing
and misdirecting consumers who are seeking Complainant’s business on-line to a
different and totally unrelated web site owned and controlled by Respondent,
thus causing significant damage to Complainant’s business. The STOP Policy prohibits Respondents from
registering and using a domain name to:
“intentionally
attempt to attract, for commercial gain, internet users to [Respondent’s] 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 [Respondent’s] web site or location or of a product or service on
[Respondent’s] web site or location.” See
STOP Policy 4(b)(iv).
Bad
faith use of a domain name includes using the domain name as a means to route
users to another site of the registrant. See Eddie Bauer, Inc. v. Paul White d/b/a
Spider, Inc., AF-0246(2000). This
confusion may result regardless of whether the content on Respondent’s web site
is commercial or non-commercial. See State Farm Mutual Automobile Insurance
Company v. Kyle Northway, FA 95464 (Nat. Arb. Forum Oct. 11, 2000)(finding
that the Respondent registered the domain name <statefarmnews.com> in bad
faith because Respondent intended to use Complainant’s marks to attract the
public to the web site without permission from Complainant, despite
Respondent’s argument that it intended only to provide objective news about
State Farm Insurance).
Respondent’s
holding of a domain name that is identical to Complainant’s mark, without more,
constitutes bad faith use because it enables the Respondent to attract users to
its web site by trading on the recognition of Complainant’s mark. See
InfoSpace.com, Inc. v. Tenebaum Ofer, D2000-0075 (WIPO Feb. 23, 2000); Sanrio Co., Ltd. v. Neric Lau,
D2000-0172 (WIPO Mar. 21, 2000); Embratel
v. Kevin McCarthy, D2000-0164 (WIPO Mar. 22, 2000)(passive holding of
domain name with knowledge of damage it could cause the trademark owner
constitutes bad faith use). See also UDRP §4(b)(iv). Indeed, the notion that mere passive holding
of a domain name can constitute “use” in bad faith has now become a basic tenet
of the UDRP case law. See, e.g., Guerlain S.A. v. Peikang,
D2000-0055 (WIPO Feb. 16, 2000).
Respondent’s
above-described activities constitute unfair competition with Complainant and
an infringement of its rights in the NETWISE mark. The activities of the Respondent as complained of herein have
caused, and unless enjoined, will continue to cause substantial and irreparable
harm to Complainant and its business reputation and goodwill.
B.
Respondent
First,
Respondent seeks to have its late Response accepted for a number of reasons
mostly related to the inexperience of Respondent’s management in dealing with
legal matters. [The Panel by including this section, accepts the late filing,
since it does not prejudice the Complainant for reasons expressed below].
Essentially,
Respondent next argues that the whole purpose of the STOP Policy was to prevent
abusive registrations, citing cases, and that there is no evidence provided by
Complainant here that shows any abusive activity or reasons for registration of
the disputed domain name. It then
explains its position on the various issues as noted herein.
Factually,
it is asserted that Respondent has been doing business in the U.K. since 1994
under the name Netwise Systems Ltd., and that accordingly it has common law
trademark rights in the term “Netwise”. Respondent includes a number of
exhibits consisting of documents
demonstrating the formation and existence of the company in the U.K. and its
operation under the Netwise name. It
also asserts that Complainant has produced no evidence that it has any
trademark rights in its own name, merely asserting it has such rights and
showing some copies of website contents.
It disputes the allegation that Respondent has no rights in the disputed
domain name and argues that Complainant has produced no evidence on this issue
beyond mere assertions of counsel.
Similarly, it argues that there is no evidence of bad faith registration
under any of the standard tests provided in the STOP Policy, and that
Complainant has produced none.
In
sum, it disputes all the essential evidence and issues dealt with in
Complainant’s Complaint, and provides its own countervailing evidence in some
detail. The Panel believes it
unnecessary to go into more detail, as the argument is dealt with below in the
FINDINGS and the DECISION of the Panel.
C.
Additional Submissions
In
an additional submission by Complainant, which was itself received after the
deadline and without the proper fees, Complainant makes a number of
supplemental arguments, including arguing that the initial Response should be
rejected since it was late. The Panel
considered the arguments, but feels that they add little to the case and that
the late Response was not prejudicial to Complainant.
Respondent
also filed a late Supplemental Response, without the required fee, which
was considered, but likewise added
little to the case. Essentially, it argues that the Complainant’s late
Supplemental Response should be refused.
Since the late Response was accepted, the Panel accepts both Additional
Submissions for whatever value they may have had even though they were both late. The Panel hopes, however, that other
litigants will make more effort to comply with the Rules, and avoid such
filings since these additional documents rarely contribute to the final
decision.
A.
Complainant owns a common law U. S. mark in the coined word “Netwise,”
as part of its corporate name, NetWise, Inc., which is substantially identical
to the disputed domain name <netwise.biz> for the reasons expressed
below.
B.
Respondent also has rights or legitimate interests in a similar
formative of the coined words “Netwise,” in that it has been using the business
name “Netwise Systems Ltd.” for some years in England.
C.
Both of the names used by Complainant and Respondent are both trade
names and are used a manner akin to trademarks, even though not registered
formally as trademarks.
D.
Respondent did not register or use the disputed domain name in bad
faith.
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.
Even
though Complainant does not have a registered mark, it has here provided
substantial evidence that it has used a common law mark “NetWise” for a number
of years, which evidence meets the requirements of the STOP Policy concerning
ownership of a mark identical to the contested domain name. The fact that the
mark does not include the .biz extension is irrelevant under existing case law,
so that <netwise.biz> is identical to the common law mark for this
purpose.
Much
like UDRP claims, a Complainant may establish rights in its mark at common
law. See Crazy Creek Prods., Inc. v.
Siemen’s Bus. Servs., FA 102795 (Nat. Arb. Forum Feb. 12, 2002) (finding
that the Complainant satisfied STOP Policy ¶ 4(a)(i) by demonstrating its
common law rights in the CRAZY CREEK mark); but cf. Efutures.com, LLC v.
Canon Trading Co., FA 103056 (Nat. Arb. Forum Feb. 27, 2002) (finding that,
in light of the U.S. Patent and Trademark Office’s refusal to register
Complainant’s mark because of the mark’s generic-ness, the Complainant did not
establish “protectable rights” in its EFUTURES mark at common law); see also
Vietnam Venture Group v. cosmos consulting gmbh, FA 102601 (Nat. Arb. Forum
Feb. 6, 2002) (dismissing the Complaint because (1) the Complainant did not
hold a registered trademark in VVG, and (2) the Complainant did not demonstrate
sufficiently strong identification of its mark such that there would be
recognition among Internet users that the VVG mark identified goods or services
unique to the Complainant).
This is a difficult decision for
Complainant to prevail on the facts here, since neither litigant has an actual
registered trademark, while each has clearly been using its business name or
trade name in a trademark-like manner referencing its business. Just as Complainant can rely on the general
rules of trademark law, and the specifics of STOP Policy rules permitting
informal trademark use to justify protection, Respondent here demonstrates in
its Response and the exhibits significant evidence that it, too, has been using
this made-up word in such manner that it has a legitimate interest in it from
use of it that predates the registration of the disputed domain name. The Panel
believes that this is sufficient evidence to establish Respondent’s right to
use the term as a domain name.
STOP
Policy ¶ 4(c)(iii) expressly provides that the Respondent may demonstrate its
rights or interests by proving that the Respondent (as an individual, business,
or other organization) has been commonly known by the domain name, even though
it has acquired no trademark or service mark rights. Contrary to Complainant’s argument, the Panel does not accept the
assertion that because there are also other modifying words in Respondent’s
business name that this precludes Respondent’s claim to this right.
The
Panel believes that there is a more fundamental, common sense reason that
Complainant cannot establish that it has some unique right to use of this mark
or term for a domain name, which would deny Respondent the use of it. The fact of the matter is that the term
“NetWise” is merely an invented e-commerce term that means that one is wise to
the ways of the Internet, as may be seen from examining any of the thousands of
websites that use this term. As a quick
test, the Panel found more than 46,500 references to this term on the Google
search engine and nearly the same number listed on other engines. Interestingly, these references are not even
unique to English language sites in the U.S., the U.K. and Canada, but they are
found and actually commonly used in sites located in Belgium, Brazil, Denmark,
Sweden, Turkey and Venezuela, for example.
As such, the term is so clearly generic that it is a poor trademark,
which may explain why there are only six U.S. applications for registrations
for the mark – none of which includes either party here.
Having determined that Respondent does
have rights and legitimate interests in the domain name, the issue of bad faith
is unnecessary to determine; however, for the sake of completeness, the Panel
includes a few other comments on this issue.
Even if Complainant had established that
Respondent had no rights to use the name, it still would have failed to
establish bad faith here because of a fundamental tenet relating to the
establishment of the additional gTLD’s like .biz. The whole purpose of these new formatives of domain names was to
provide a means for other businesses to use a domain name similar to those of
businesses already using the same name under the .com, .net and .org TLD’s. Just as the owner of the <netwise.com>
domain, apparently does not object to the use by Complainant of the
<netwise.net> domain, and similarly <netwise.org> is used by
another party, the whole intent of ICANN in establishing the new gTLD’s was to
give room for more businesses using the same name or mark in a domain
name. See, what is essentially the
“legislative history” concerning the purpose of these new gTLD’s quoted in more
detail in Newport Corp. v. Newport Elecs.
Inc., FA 114325 (Nat. Arb. Forum July 8, 2002), to the effect that “Addition of new gTLDs will allow different
companies to have the same second-level domain name in different TLDs. Those businesses will have to compete based
on price, quality and service, rather than the happenstance of which company
locked up the most desirable domain name first.”
Thus, Respondent was not acting in bad
faith when registering this domain name, even though it might conceivably cause
confusion if the two companies were operating in the identical market, although that is unlikely here since
one is in the U.S. and the other in the U.K.
There are already many, many other “Netwise” businesses in both
countries, as the search referred to above indicates, and there are apparently
hundreds if not thousands of other businesses using the term or mark “Netwise”
in other countries. As a result, the
Panel does not believe that Complainant’s arguments, without strong, specific
evidence of bad faith could have prevailed here, even if Respondent had no
rights to the domain name.
DECISION
Transfer
of the domain name at issue <netwise.biz> is denied, and
the Complaint is dismissed.
Further, under the STOP Policy, this results in a ruling that subsequent
challenges against this domain name shall NOT be permitted by other
parties.
G. GERVAISE DAVIS III, Esq., Panelist
Dated: July 10, 2002
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