Walter Arnstein, Inc. d/b/a The Natural Sapphire Company v. TransPacific Software Pvt. Ltd.
Claim Number: FA1104001381438
Complainant is Walter Arnstein, Inc. d/b/a The Natural Sapphire Company (“Complainant”), represented by Erin M. Hickey of Fish & Richardson P.C., New York, USA. Respondent is TransPacific Software Pvt. Ltd (“Respondent”), represented by Prashant Telang of TransPacific Software Pvt. Ltd, India.
REGISTRAR AND DISPUTED DOMAIN NAME
The domain name at issue is <naturalsapphirecompany.com>, registered with Tucows Inc.
The undersigned certifies that he or she has acted independently and impartially and to the best of his or her knowledge has no known conflict in serving as Panelist in this proceeding.
R. Glen Ayers served as Panelist.
Complainant submitted a Complaint to the National Arbitration Forum electronically on April 1, 2011; the National Arbitration Forum received payment on April 1, 2011.
On April 1, 2011, Tucows Inc. confirmed by e-mail to the National Arbitration Forum that the <naturalsapphirecompany.com> domain name is registered with Tucows Inc. and that Respondent is the current registrant of the name. Tucows Inc. has verified that Respondent is bound by the Tucows Inc. registration agreement and has thereby agreed to resolve domain disputes brought by third parties in accordance with ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”).
On April 1, 2011, the Forum served the Complaint and all Annexes, including a Written Notice of the Complaint, setting a deadline of April 21, 2011 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@naturalsapphirecompany.com. Also on April 1, 2011, 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 on April 18, 2011.
Complainant’s Additional Submission was received on April 21, 2011 and deemed compliant with Supplemental Rule 7.
An Additional Submission was filed by Respondent on April 27, 2011 and deemed compliant with Supplemental Rule 7.
On April 26, 2011, pursuant to Complainant's request to have the dispute decided by a single-member Panel, the National Arbitration Forum appointed R. Glen Ayers as Panelist.
Complainant requests that the domain name be transferred from Respondent to Complainant.
A. Complainant
The Complainant, Walter Arnstein, Inc., asserts that it holds a common law trademark in “the Natural Sapphire Company,” which was adopted as a trade name in 2004. It then registered a domain name <naturalsapphirecompany.com>.
Thereafter, Complainant used the name “the Natural Sapphire Company” in commerce in the United States, and has used it continuously after December 31, 2004.
Complainant asserts that this name was used extensively in advertising and as an identifier of its goods and services.
Complainant asserts that advertisements using that name appeared in print, on the Internet, and in other media, including the New York Times, ABC News and so forth. This utilization gives the Complainant “valid law common law rights in its mark The Natural Sapphire Company long before Respondent hijacked the registration of the domain name on or about January 31, 2011.”
Complainant asserts that it hired the Respondent in 2004 to purchase a number of domain names including the domain name at issue.
Complainant asserts that the purchase of the domain name was paid for by Complainant’s credit card, but that unknown to it and fraudulently, Respondent actually registered the ownership of the domain name improperly, so that the domain name was registered to Respondent.
Complainant asserts that Respondent has attempted to extort money and harass Complainant. It asserts that Respondent has “wrongfully attempted to transfer” the domain name.
Complainant asserts that, in March, Respondent “hijacked the Domain Name to redirect users interested in Natural Sapphire to a website listing links to forums in which Respondent, posing as customers of Natural Sapphire, has posted false, disparaging and malicious statements about Complainant.”
Complainant asserts that it holds a common law trademark and that the mark is identical to or confusingly similar to the domain name.
Complainant goes onto cite facts to show its common law rights in the mark.
Complainant then asserts that Respondent has no rights in the domain name. First it says that the Respondent has never been known by the domain name and next it says that Respondent has not used the domain name “in connection with the bonafied offering of goods or services. . . .”
Complainant goes on to assert fraudulent use of the domain name “in connection with the scheme to deceive Complainant’s employees and to redirect customers to a website containing “false, disparaging and malicious statements. . . .”
Complainant asserts that Respondent actually redirected internet users to its Respondent’s website which contains the false and malicious statements.
Complainant also asserts that Respondent is trying to sell the domain name for $7,000.
Next, Complainant discusses the facts which show that the Respondent is not known by the domain name. Here, the evidence also shows, says Complainant, that the domain name was purchased by Respondent but acting only as agent for Complainant.
Complainant, in discussing registration and use of the domain name in bad faith, alleges that the domain name has been used to redirect consumers to a website containing false and malicious information. Also, Respondent asserts that the domain name has been used by Respondent to redirect consumers to Respondent’s own website, which apparently is a business competitor of Complainant. The Complainant states that the Respondent’s registration of the domain name in Respondent’s name certainly shows that Respondent was aware that the domain name incorporated a mark. Finally, Complainant asserts (again) that Respondent is trying to sell the Domain Name.
B. Respondent
In response, Respondent, by its Director Prashant Telang, states that the Complaint contains “widespread, unsubstantiated, and preposterous & [sic] personal allegations which have no bearing on the core issue of Domain Name ownership.”
Respondent asserts that an officer of Complainant approached Respondent in the year 2003 “to develop an E-retailing solution for its company. . . .”
Thereafter, Respondent secured the domain name in contention. Respondent admits that Respondent paid for the registration with Complaint’s credit card.
However, Respondent asserts that Complainant had no intention of establishing “any company by the name The Natural Sapphire Company.”
At that time, says Respondent, the company was being operated as Walter Arnstein, Inc. and had a website of the same name.
Respondent says that Complainant then was charged with unethical acts and barred from certain retail activities and therefore decided to use the Internet as a “loop hole.”
Thereafter, the Complainant was never interested, says Respondent, in the domain name.
Respondent also complains of unauthorized activity in the domain name registration.
Respondent alleges “domain theft” and states that it reported the attempted domain theft to the domain registrar.
Respondent asserts that although it owned or its director owned the domain name, it allowed Complainant to use the name as a courtesy.
Respondent asserts that “The Natural Sapphire Company” is an illegal entity and that the name itself is “highly generic. . . .”
Respondent asserts that the Complainant was well aware of the ownership of the domain name throughout the business relationship.
Then, as the core of its defense, Respondent asserts that Complainant and its principals were attempting to “smuggle out/steal patented technology of TransPacific through bribing its two employees.”
Respondent states that it has filed a criminal complaint in India and that it has complained to other Indian police agencies.
In the context of the utilization of an email address, <evan@thenaturalsapphirecompany.com>, there are numerous allegations about Mr. Guttman (“Evan”) including allegations that he is a drug addict and other allegations that do not need to be repeated.
The Respondent asserts that the Complainant is a cyber “squatter”.
Respondent asserts that it registered the domain name before Complainant started using the name “The Natural Sapphire Company.”
As to rights of the name, Respondent states that it or its director were the original registrants and have maintained the domain name at their own expense for the past seven years.
Respondent denies that it is using the domain name in bad faith. It states that redirecting users to a webpage containing critical remarks about Complainant is appropriate, because there are postings on the Internet very critical of Complainant and its business practices.
C. Additional Submissions
1. Complainant’s Additional Submission.
Complainant timely filed an Additional Submission which has been considered. Complainant’s Response reiterates the agency relationship between the Complainant and Respondent. In addition, there is an attempt to rebut the various scurrilous statements made on a point by point basis.
2. Respondent’s Additional Submission.
Respondent’s Additional Submission asserts that Complaint is a blatant liar and reasserts the criminal conspiracy.
Respondent also reasserts that “The Natural Sapphire Company” is not a legal entity and did not apply for trademark registration until March 18, 2011.
Respondent asserts again that this is a highly generic name.
Overall, the Supplemental Response is an attempt to rebut the Complainant’s Supplemental filing.
Preliminary Issue: Concurrent Court Proceedings
Respondent asserts that criminal cases have been filed against Complainant and two of its employees. The Panel finds that the pending criminal cases are related to the disputed domain name and the relationship between Complainant and Respondent; in situations where concurrent court proceedings are pending, as is the situation with respect to the instant Complaint, the UDRP filing can proceed. See eProperty Direct LLC v. Miller, FA 836419 (Nat. Arb. Forum Jan. 3, 2007) (holding that the panel could decide the dispute under Rule 18(a) of the Policy “since the legal proceedings referred to by the parties appear to be concluded and Orders made. Moreover,… those Orders do not touch directly on the disposition of the disputed domain name or on the parties’ intellectual property rights.”); see also Western Florida Lighting v. Ramirez, D2008-1122 (WIPO Oct. 2, 2008) (deciding to proceed under the UDRP despite concurrent court proceedings because “the Panel does not find that it is necessary or advantageous to await a judicial determination of the issues raised in the federal litigation in order to reach a decision strictly under the Policy. This administrative proceeding under the Policy concerns only control of the Domain Name, not any of the other remedies at issue in the federal litigation. It is not binding on the court, and it does not preclude the prosecution of any claims, defenses, or counterclaims in the federal litigation”); see also Mary’s Futons, Inc. v. Tex. Int’l Prop. Assocs., FA 1012059 (Nat. Arb. Forum Aug. 13, 2007) (choosing to proceed under the UDRP despite concurrent court proceedings for multiple reasons, including that the proceedings appeared to be filed in a court that did not commonly adjudicate intellectual property issues and that the court proceedings were filed by the respondent on the same day the response in these proceedings was filed).
Preliminary Issue: Business/Contractual Dispute Outside the Scope of the UDRP
Respondent also contends that it was hired by Complainant to register domain names and develop Internet software for Complainant’s online jewelry business. Respondent also argues that it alerted Complainant of its intention to register the disputed domain name under its own name and that Complainant did not object to this assertion.
Complainant alleges that it hired Respondent to register a number of domain names, including, the <naturalsapphirecompany.com> domain name. In the Complaint and Complainant’s Additional Submission, Complainant alleges that Respondent registered the domain name on behalf of Complainant and used Complainant’s corporate credit card to complete the transaction. At a later point and before 2006, Respondent transferred the disputed domain name to himself, without Complainant’s knowledge or permission.
In this instance, the Panel finds 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 name 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 Panels have held that the subject matter or core of such case is outside the scope of the UDRP and that the Complaint should be dismissed.
In Love, the panel was concerned with possible causes of action for breach of contract. In this case, however, Respondent points out that these causes of action are currently active cases that are pending with the Indian 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.
Based upon the reasoning outlined in the aforementioned cases and the record, the Panel concludes that the instant dispute contains a question of contractual interpretation, and thus falls outside the scope of the UDRP. Once the Panel makes such a finding, the Panel may dismiss the Complaint. See Everingham Bros. Bait Co. v. Contigo Visual, FA 440219 (Nat. Arb. Forum Apr. 27, 2005) (“The Panel finds that this matter is outside the scope of the Policy because it involves a business dispute between two parties. The UDRP was implemented to address abusive cyber squatting, not contractual or legitimate business disputes.”); see also Fuze Beverage, LLC v. CGEYE, Inc., FA 844252 (Nat. Arb. Forum Jan. 8, 2007) (“The Complaint before us describes what appears to be a common-form claim of breach of contract or breach of fiduciary duty. It is not the kind of controversy, grounded exclusively in abusive cyber-squatting, that the Policy was designed to address.”); see also Frazier Winery LLC v. Hernandez, FA 841081 (Nat. Arb. Forum Dec. 27, 2006) (holding that disputes arising out of a business relationship between the complainant and respondent regarding control over the domain name registration are outside the scope of the UDRP Policy).
This dispute cannot be resolved by simply determining whether domain name and asserted mark are identical; whether Respondent has rights in the name; or, whether Respondent has used the asserted mark in bad faith. Therefore, the Panel has decided to dismiss this case.
Note
Complainant alleged only common law rights in the THE NATURAL SAPPHIRE COMPANY going back to March 30, 2004. Complainant provided evidence that on that date the domain name <naturalsapphirecompany.com> was registered and that this domain was used to sell Complainant’s jewelry products and services under it’s the NATURAL SAPPHIRE COMPANY mark.
The Panel is concerned that Complainant has not satisfied Policy ¶ 4(a)(i) because it has failed to clearly establish rights in a trademark. The evidence concerning the existence of a common law mark is quite weak. While this decision does not reach the issue, when a Complainant fails to establish a common law mark, the Panel may decline to analyze 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 Bejinha v. Whois Guard Protected, FA 836538 (Nat. Arb. Forum Dec. 28, 2006) (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)).
Paragraph 15(a) of 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 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 Respondent is identical or confusingly similar to a trademark or service mark in which Complainant has rights; and
(2) 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.
Because the Panel has determined to dismiss this case, it does not reach these issues.
Having determined that this case presents matters beyond the scope of the UDRP, the Panel concludes that relief shall be DENIED AND THE CASE DISMISSED.
R. Glen Ayers, Panelist
Dated: 5/12/2011
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