NetWise Inc. v. Netwise Systems Ltd.
Claim Number: FA0204000110787
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.
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.
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.
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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