Sam Kholi v. Kaizen Systems Inc. / TargetCW / Samer Khouli
Claim Number: FA1008001339859
PARTIES
Complainant is Sam Kholi (“Complainant”), represented by Jeff Adzima California, USA. Respondent is Kaizen Systems Inc. / TargetCW / Samer Khouli (“Respondent”), California, USA.
REGISTRAR AND DISPUTED DOMAIN NAMES
The domain names at issue are <payrolling.com>, <timeq.com>, and <shipwithsam.com>, registered with eNom, Inc.
PANEL
The undersigned certify that they have acted independently and impartially and that to the best of their knowledge they have no known conflict in serving as Panelist in this proceeding. The Panelists are: Honorable Hong Oo Baak, Kendall Reed, Esq., and Hon. Carolyn Marks Johnson, who writes for the Panel.
PROCEDURAL HISTORY
Complainant submitted a Complaint to the National Arbitration Forum electronically August 9, 2010.
On August 10, 2010, eNom, Inc. confirmed by e-mail to the National Arbitration Forum that the <payrolling.com>, <timeq.com>, and <shipwithsam.com> domain names are registered with eNom, Inc. and that the Respondent is the current registrant of the names. eNom, Inc. verified that Respondent is bound by the eNom, Inc. registration agreement and thereby has agreed to resolve domain-name disputes brought by third parties in accordance with ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”).
On August 19, 2010, the Forum served the Complaint and all Annexes, including a Written Notice of the Complaint, setting a deadline of September 8, 2010, by which Respondent could file a Response to the Complaint, via e-mail to all entities and persons listed on Respondent’s registration as technical, administrative, and billing contacts, and to postmaster@payrolling.com, postmaster@timeq.com, and postmaster@shipwithsam.com by e-mail. Also on August 19, 2010, the Written Notice of the Complaint, notifying Respondent of the email addresses served and the deadline for a Response was transmitted to Respondent via post and fax, to all entities and persons listed on Respondent’s registration as technical, administrative and billing contacts.
A timely Response was received and determined to be complete September 8, 2010.
Complainant’s Additional Submission was received September 13, 2010, and was determined to be in compliance with Supplemental Rule 7.
On September 29, 2010, pursuant to Complainant’s request to have the dispute decided by a three-member Panel, the National Arbitration Forum appointed Honorable Hong Oo Baak, Kendall Reed, Esq., and Hon. Carolyn Marks Johnson, who writes for the Panel.
RELIEF SOUGHT
Complainant requests that the domain names be transferred from Respondent to Complainant.
PARTIES’ CONTENTIONS
A. Complainant makes the following points in the Complaint:
1. Respondent registered <payrolling.com> a domain name used by Complainant in commerce since 1997 in the various areas of “contingent workforce costs.”
2. Respondent registered <timeq.com> a domain name used by Complainant as a “secondary company” in conjunction with its use of <payrolling.com>.
3. Respondent registered <shipwithsam.com >, a domain name used by Complainant in commerce and that is owned by <payrolling.com>.
4. Complainant is the “rightful owner” of the disputed domain names; and Respondent has “not made any illegitimate [sic] uses of the domain names.”
5. Complainant alleges that Respondent has refused to transfer the domain names to the Complainant despite legitimate requests to do so.
6. Complainant alleges that Respondent has not made a good faith administration of the domain names.
B. Respondent makes the following points in the Response:
1. Respondent filed a letter Response in which it stated that Samer Khouli, President of TargetCW acquired the <shipwithsam.com> domain name “a couple years ago.”
2. Respondent stated that <timeq.com> was a “”software and website designed and developed by Kaizen Systems, Inc. …[and] …” were owned by Kaizen and used by Payrolling.com.”
3. Respondent stated that “I no longer worked … for Complainant.”
4. Respondent did not address the issues of identicality or confusing similarity; did not address rights to or interests other than the above statements; and did not address bad faith.
5. Respondent attached a copy of litigation papers.
C. Complainant made the following points in its Additional Submission:
1. Samer Khouli was an employee of Payrolling.com and ultimately became President of operations.
2. The lawsuit between these parties does not affect the domain name dispute.
FINDINGS
Complainant failed to establish rights in the <payrolling.com>. <timeq.com> and <shipwithsam.com domain names under an ICANN Policy ¶ 4(a)(i) analysis.
Given the Panel’s holding as to rights pursuant to the analysis under ICANN Policy ¶ 4(a)(i), the Panel does not reach the remaining two Policy sections at issue here.
DISCUSSION
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 Complainant to prove each of the following three elements to obtain an order that a domain name should be cancelled or transferred:
(1) the domain names registered by Respondent are identical to or confusingly similar to a trademark or service mark in which the Complainant has rights;
(2) Respondent has no rights or legitimate interests in respect of the domain name; and
(3) the domain names have been registered and are being used in bad faith.
Three preliminary issues are before the Panel in the instant proceeding, the matter of multiple Respondents, Respondent’s alleged consent to transfer the domain names to the named Complainant, and the issue of whether or not this dispute is actually a contract or business dispute that is outside the scope of the UDRP. The Panel reviews each of these before making a determination to proceed on the merits:
Preliminary Issue: Multiple Respondents
Complainant has alleged that the entities that control the domain names at issue are effectively controlled by the same person and/or entity, which is operating under several aliases. Paragraph 3(c) of the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”) provides that a “complaint may relate to more than one domain name, provided that the domain names are registered by the same domain name holder.”
In the instant proceeding, Complainant alleged that the entities that control the domain names at issue are effectively controlled by the same person and/or entity, which is operating under several aliases. Paragraph 3(c) of the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”) provides that a “complaint may relate to more than one domain name, provided that the domain names are registered by the same domain name holder.” Complainant contends that all of the disputed domain names feature the same contact information, listing 3040 McGraw St., San Diego, CA 92117, as the current address. Complainant alleges that the email addresses listed in the WHOIS information resolve to the same person, Samer Khouli. Complainant further claims that Target CW and Kaizen Systems Inc. show ownership by the same person, Samer Khouli.
The Panel finds that Respondent, in its Response, acts as if it owns all three of the disputed domain names.
The Panel finds as well that Complainant presented sufficient evidence that the disputed domain names are controlled by the same entity and thus chooses to proceed with the instant proceedings.
Preliminary Issue: Consent to Transfer
Respondent consents to transfer the <shipwithsam.com> domain name to Complainant. However, after the initiation of this proceeding, eNom, Inc. placed a hold on Respondent’s account and therefore Respondent cannot transfer the disputed domain name while this proceeding is still pending.
However, Complainant has not implicitly consented in its Complaint to the transfer of the disputed domain name without a decision on the merits by the Panel. Further, the “consent-to-transfer” approach is one way for cybersquatters to avoid adverse findings against them. In Graebel Van Lines, Inc. v. Texas International Property Associates, FA 1195954 (Nat. Arb. Forum July 17, 2008), the panel stated that:
Respondent has admitted in his response to the complaint of Complainant that it is ready to offer the transfer without inviting the decision of the Panel in accordance with the Policy. However, in the facts of this case, the Panel is of the view that the transfer of the disputed domain name deserves to be along with the findings in accordance with the Policy.
Therefore, the Panel elects to decide the case under the elements of the UDRP.
Preliminary Issue: Business/Contractual Dispute Outside the Scope of the UDRP
Respondent alleges that it registered the disputed domain names independently from Complainant but that it allowed Complainant and other companies to use the disputed domain names. Respondent argues that it provided the domain names and allowed Complainant to host its software on the resolving websites. Respondent also contends that it stopped working for and with Complainant, which led to the current dispute and that a court proceeding is on-going between Complainant and Respondent about rights in the software and personal information that Respondent had access to when working with Complainant. Respondent identified the case with the following: Superior Court of the State of California Case No. 37-2010-00099084-CU-BT-CTL.
Complainant argues that Respondent was an employee of Complainant but left Complainant’s employment. Complainant’s Additional Submission concedes that the court proceedings are on-going but maintains that the court proceeding is separate from this current UDRP proceedings.
The Panel finds for a number of reasons that this is a business and/or contractual dispute between two companies that falls outside the scope of the UDRP. In Love v. Barnett, FA 944826 (Nat. Arb. Forum May 14, 2007), the panel stated:
A dispute, such as the present one, between parties who each have at least a prima facie case for rights in the disputed domain names is outside the scope of the Policy … the present case appears to hinge mostly on a business or civil dispute between the parties, with possible causes of action for breach of contract or fiduciary duty. Thus, the majority holds that the subject matter is outside the scope of the UDRP and dismisses the Complaint.
In Love, the panel was concerned with possible causes of action for breach of contract. Respondent points out that these causes of action are currently active cases that are pending with the courts. According to the panel in Love, complex cases such as the one presented here may be better decided by the courts than by a UDRP panel:
When the parties differ markedly with respect to the basic facts, and there is no clear and conclusive written evidence, it is difficult for a Panel operating under the Rules to determine which presentation of the facts is more credible. National courts are better equipped to take evidence and to evaluate its credibility.
The panel in Luvilon Industries NV v. Top Serve Tennis Pty Ltd., DAU2005-0004 (WIPO Sept. 6, 2005) concurred with this reasoning:
[The Policy’s purpose is to] combat abusive domain name registrations and not to provide a prescriptive code for resolving more complex trade mark disputes .… The issues between the parties are not limited to the law of trade marks. There are other intellectual property issues. There are serious contractual issues. There are questions of governing law and proper forum if the matter were litigated. Were all the issues fully ventilated before a Court of competent jurisdiction, there may be findings of implied contractual terms, minimum termination period, breach of contract, estoppels or other equitable defenses. So far as the facts fit within trade mark law, there may be arguments of infringement, validity of the registrations, ownership of goodwill, local reputation, consent, acquiescence, and so on.
However, the Panel has discretion to determine whether or not it has jurisdiction over this dispute. The Panel finds sufficient evidence before it to decide the dispute under the UDRP, and has determined to proceed with the case and consider the contentions of Complainant and Respondent as outlined below. See Weber-Stephen Prod. Co. v. Armitage Hardware, D2000-0187 (WIPO May 11, 2000) (“Like any other tribunal, however, this Panel can determine whether it has jurisdiction only from the facts and arguments presented to it. In this case, Complainant did allege bad-faith use and registration of the domain name at issue. Had Complainant proved those allegations, there would be no proper question as to this Panel’s jurisdiction.”); see also Draw-Tite, Inc. v. Plattsburgh Spring Inc., D2000-0017 (WIPO Mar. 14, 2000) (“This Panel well recognizes that its jurisdiction is limited to providing a remedy in cases of ‘the abusive registration of domain names,’ or ‘Cybersquatting’ ... Like any other tribunal, however, this Panel can determine whether it has jurisdiction only from the facts and arguments presented to it. In this case, Complainant did allege bad-faith use and registration of the domain name at issue. Had Complainant proved those allegations, there would be no proper question as to this Panel’s jurisdiction.”).
Complainant does not assert that Complainant has registered the PAYROLLING.COM, TIMEQ.COM and SHIPWITHSAM.COM marks with a federal trademark authority. The Panel finds that governmental trademark registration is not always necessary to establish rights under Policy ¶ 4(a)(i). Previous panels have determined that a federal registration is not required so long as the Complainant can establish common law rights through proof of sufficient secondary meaning associated with the mark. See SeekAmerica Networks Inc. v. Masood, D2000-0131 (WIPO Apr. 13, 2000) (finding that the Rules do not require that the complainant’s trademark or service mark be registered by a government authority or agency for such rights to exist); see also Artistic Pursuit LLC v. calcuttawebdevelopers.com, FA 894477 (Nat. Arb. Forum Mar. 8, 2007) (finding that Policy ¶ 4(a)(i) does not require a trademark registration if a complainant can establish common law rights in its mark).
Complainant claims that it began using the PAYROLLING.COM mark in 1997 in connection with its contingent workforce costs services. Complainant alleges that it provides its services to companies such as Cricket Communications, Google, and Nokia under its PAYROLLING.COM mark. Complainant asserts that it uses the TIMEQ.COM mark in conjunction with its PAYROLLING.COM mark. Complainant contends that it has also used the TIMEQ.COM mark since it began using the PAYROLLING.COM mark. According to Complainant, Complainant uses the SHIPWITHSAM.COM mark to provide trucking and transportation services. Complainant claims that SHIPWITHSAM.COM is a fictitious business name owned by Complainant.
The Panel finds that Complainant did not support these allegations with extrinsic proof of these operations by Complainant. Thus the Panel finds that Complainant provided no evidence of secondary meaning with respect to <shipwithsam.com> and <timeq.com> and no factual evidence to support that secondary meaning was acquired during the alleged period of use since 1997 for <payrolling.com>. Without some showing of the development of secondary meaning, Complainant cannot establish common law rights in the PAYROLLING.COM, TIMEQ.COM, and SHIPWITHSAM.COM marks through continuous and extensive commercial use predating Respondent’s registration of the disputed domain name under Policy ¶ 4(a)(i). See Kahn Dev. Co. v. RealtyPROshop.com, FA 568350 (Nat. Arb. Forum June 23, 2006) (holding that the complainant’s VILLAGE AT SANDHILL mark acquired secondary meaning among local consumers sufficient to establish common law rights where the complainant had been continuously and extensively promoting a real estate development under the mark for several years); see also Quality Custom Cabinetry, Inc. v. Cabinet Wholesalers, Inc., FA 115349 (Nat. Arb. Forum Sept. 7, 2002) (finding that the complainant established common law rights in the mark through continuous use of the mark since 1995 for the purpose of Policy ¶ 4(a)(i)).
The Panel thus finds that Complainant failed to satisfy the threshold requirement of showing rights in the marks that it maintains are contained within the disputed domain names; and without first establishing such rights, Complainant cannot prevail in this proceeding.
The Panel finds, therefore, that Complainant failed to satisfy the elements of ICANN Policy ¶ 4(a)(i).
Given the ruling of the Panel as to ICANN Policy ¶ 4(a)(i), the Panel does not address the other two elements of the Policy. See Creative Curb v. Edgetec Int’l Pty. Ltd., FA 116765 (Nat. Arb. Forum Sept. 20, 2002)(finding that because the complainant must prove all three elements under the Policy, the complainant’s failure to prove one of the elements makes further inquiry into the remaining element unnecessary); see also Hugo Daniel Barbaca Behinha v. Whois Guard Protected, FA 836538 (Nat. Arb. Forum Dec. 28, 2001) (deciding not to inquire into the respondent’s rights or legitimate interests or its registration and use in bad faith where the complainant could not satisfy the requirements of Policy ¶ 4(a)(i)).
Given the ruling of the Panel as to ICANN Policy ¶ 4(a)(i), the Panel does not address the other two elements of the Policy. See Creative Curb v. Edgetec Int’l Pty. Ltd., FA 116765 (Nat. Arb. Forum Sept. 20, 2002)(finding that because the complainant must prove all three elements under the Policy, the complainant’s failure to prove one of the elements makes further inquiry into the remaining element unnecessary); see also Hugo Daniel Barbaca Behinha v. Whois Guard Protected, FA 836538 (Nat. Arb. Forum Dec. 28, 2001) (deciding not to inquire into the respondent’s rights or legitimate interests or its registration and use in bad faith where the complainant could not satisfy the requirements of Policy ¶ 4(a)(i)).
DECISION
The Panel finds that Complainant failed to meet its burden and that the disputed domain names should NOT be TRANSFERRED or CANCELLED as a result of this proceeding.
Accordingly, it is Ordered that the <payrolling.com>, <timeq.com>, and <shipwithsam.com> domain names NOT be TRANSFERRED or CANCELLED at this time as a result of this Proceeding.
Hon. Carolyn Marks Johnson
Hon. Hong Oo Baak Kendall Reed, Esq.
Panelists
Dated: October 11, 2010
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