DECISION

 

The JRR Tolkien Estate Limited v. Andrzej Madloch aka American Software Factory Corp., Inc.

Claim Number: FA0310000204083

 

PARTIES

Complainant is The JRR Tolkien Estate Limited, Oxford, United Kingdom (“Complainant”) represented by James Mitchell, of Manches Solicitors, 3 Worcester Street, Oxford OX1 2PZ, United Kingdom.  Respondent is Andrzej Madloch a/k/a American Software Factory Corp., Inc., Cedar Grove, NJ, USA (“Respondent”), 549A Pompton Avenue, Suite #176, Cedar Grove, NJ, USA 07009.

 

REGISTRAR AND DISPUTED DOMAIN NAME 

The domain name at issue is <tolkien.us>, registered with Enom, Inc.

 

PANEL

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.

 

Judge Irving H. Perluss (Retired) is the Panelist.

 

PROCEDURAL HISTORY

Complainant submitted a Complaint to the National Arbitration Forum (the “Forum”) electronically on October 21, 2003; the Forum received a hard copy of the Complaint on October 23, 2003.

 

On November 3, 2003, Enom, Inc. confirmed by e-mail to the Forum that the domain name <tolkien.us> is registered with Enom, Inc. and that the Respondent is the current registrant of the name. Enom, Inc. has verified that Respondent is bound by the Enom, Inc. registration agreement and has thereby agreed to resolve domain-name disputes brought by third parties in accordance with the U. S. Department of Commerce’s usTLD Dispute Resolution Policy (the “Policy”).

 

On November 3, 2003, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of November 24, 2003 by which Respondent could file a Response to the Complaint, was transmitted to Respondent in compliance with Paragraph 2(a) of the Rules for usTLD Dispute Resolution Policy (the “Rules”).

 

A timely Response was received and determined to be complete on November 14, 2003.

 

Complainant filed a timely Additional Submission on November 19, 2003.

 

On December 1, 2003, pursuant to Complainant’s request to have the dispute decided by a single-member Panel, the Forum appointed Judge Irving H. Perluss (Retired) as Panelist.

 

RELIEF SOUGHT

Complainant requests that the domain name be transferred from Respondent to Complainant.

 

PARTIES’ CONTENTIONS

A. Complainant

            1.         The Complainant has both registered and common law trade marks in the mark TOLKIEN and common law trademark rights in the mark JRR TOLKIEN.  The Complainant also has registered trademark rights in the device mark JRRT – TOLKIEN.

 

            2.         Complainant is the owner of the registered trademark TOLKIEN which is registered in the United Kingdom, the European Union (CTM), Australia and New Zealand in classes 9 (computer software, tapes, CDs, etc.); 16 (books, publications, miscellaneous paper goods); 28 (toys and games); and 41 (various services including on-line publication and entertainment).

 

            3.         Complainant is also the owner of the registered trademark JRTT – TOLKIEN comprising a stylized device combining the letters “JRRT” (known as “the Tolkien monogram”) and the name “Tolkien.”  The mark is registered in the United States in class 16.

 

            4.         The registered [separate] marks are licensed by the Complainant to its worldwide exclusive licensee, HarperCollins, and are extensively used under that license in connection with the sale of books, audio tapes, calendars, maps and other merchandise.

 

            5.         Complainant is responsible for the administration of the copyright in the works of the late author, Professor JRR Tolkien, including The Lord of the Rings, The Hobbit, The Silmarillion, Farmer Giles of Ham, The Adventures of Tom Bombadil, The Road Goes Ever On, The Father Christmas Letters and Unfinished Tales (“the Works”).  The copyrights in the Works are owned by a number of Tolkien family trusts (“the Trusts”).  In respect of all of the Works other than The Lord of the Rings, the Complainant holds from the Trusts a sole and exclusive royalty-free license for the legal term of copyright throughout the world to sell, license and otherwise deal in and exploit any and all of the intellectual property rights in the Works.  In respect of The Lord of the Rings, the Complainant holds the sole and exclusive right and obligation for the legal term of copyright throughout the world to deal with all business relating to the intellectual property rights in the Work.

 

            6.         The Works have been widely published under the marks JRR TOLKIEN and TOLKIEN since the publication of The Hobbit in 1937.  The best known work, The Lord of the Rings, has been translated into 36 languages and an estimated 100 million copies have been sold worldwide.  Motion pictures of the first two books The Lord of the Rings were released in 2001 and 2002 with a third picture due for release in 2003.  The pictures have further boosted interest in, and sales of, the Works worldwide.

 

            7.         Complainant is engaged principally in the licensing, administration and protection of the rights in the works.  The worldwide book publishing rights and book-related merchandising rights are licensed to Harper Collins and are sub-licensed in the US to Houghton Mifflin.  The motion picture rights were licensed to United Artists in 1969 and are currently held by The Saul Zaentz Corporation and New Line Cinema.  The non-book merchandising rights are licensed to The Saul Zaentz Corporation (trading as Tolkien Enterprises) and New Line Cinema.  The revenue of the Complainant is dependent upon the fees and royalties it receives by virtue of those licensing agreements.  There is a vast and highly active worldwide market for books and other products sold under the TOLKIEN and JRR TOLKIEN brands and the Complainant and its licensees are exclusively entitled to the goodwill associated with those brands.  Complainant, accordingly, has common law trademark rights in both the marks TOLKIEN and JRR TOLKIEN and has been entitled to those marks for many years.  Both the marks are famous worldwide and have, since as early as the 1930’s, been synonymous and exclusively associated with the Works and with the books and other products of the Complainant and its licensees.

 

            8.         The disputed domain name comprises the Complainant’s mark TOLKIEN without the generic suffix “.us.”  Accordingly, the disputed domain name is identical or confusingly similar to the Complainant’s mark TOLKIEN.  The term “Tolkien” has no meaning independent of the name of the author JRR Tolkien and his works.  The disputed domain name is also confusingly similar to the Complainant’s mark JRR TOLKIEN, the only difference is the addition of the generic suffix “.us” and the initials “J R R” (these being the author’s initials).

 

            9.         The Respondent has no rights or a legitimate interest in the disputed domain name because:

 

                        (a)        Respondent is not connected with or an authorized licensee of the Complainant;

 

                        (b)        Respondent has made no use of, or demonstrable preparations to use, the disputed domain name or a name corresponding to it in connection with a bona fide offering of goods or services;

 

                        (c)         Respondent (as an individual, business, or other organization) has never been commonly known by the disputed domain name and has acquired no trademark or service mark rights in it;

 

                        (d)        The registered marks and the common law trademark rights owned or administered by the Complainant are famous marks and as such there can be no circumstances in which the Respondent could offer goods or services under it bona fide;

 

                        (e)        Respondent is not making a legitimate non-commercial or fair use of the disputed domain name.

 

            10.       The disputed domain name has been registered and used in bad faith by the Respondent because it was registered in order to prevent the Complainant from reflecting the trademarks in a corresponding domain name.  The case of Meow Media Inc. v. John Basil a/k/a American Software Factory Corp., Inc., Claim No. FA0205000113280 (Nat. Arb. Forum 20 August 2002) is evidence of the fact that the Respondent and/or his company has engaged in a pattern of such conduct.

 

            11.       The trademark is a famous mark (being the name of one of the best known English language authors of the 20th Century) and it is inconceivable that the Respondent would not be aware of this fact.  The author’s works have been published widely in the USA (with sales to date in excess of 70 million copies).

 

            12.       The fame of the author’s name and, in particular, his book The Lord of the Rings, has increased dramatically as a result of the success of the recent films of the book.  As a result, the Respondent would clearly have been aware of the existence of the trademarks and/or the Complainant’s common law rights.

 

            13.       By virtue of the widespread use and reputation of the trademark, members of the public in almost every country throughout the world (especially in the countries where JRR Tolkien’s books have been published) would believe that the entity owning the disputed domain name was the Complainant or in some way associated with the Complainant. 

 

B. Respondent

            1.         The disputed domain name <tolkien.us> is not identical or confusingly similar to the trademark or the service mark in which the Complainant has rights.  The reason is that the Complainant has neither rights to TOLKIEN trademark nor service mark in areas covered by website service located at http://www.tolkien.us.

 

            2.         Respondent uses the disputed domain name under common law as a pay-per-click search engine in the following areas which are not covered by Complainant:

 

                        (a)        IC 035. US 100 101 102. G & S:  Computer services, namely, creating indexes of information, sites, and other resources available on computer networks for others; searching and retrieving information, sites, and other resources available on computer networks; providing an online link to a variety of subjects such as entertainment, lifestyle, employment, finance, technology, travel and other general areas of information.

 

                        (b)        IC 038.  US 100 101 104. G & S:  Computer telecommunications services, namely, providing online gateway links to entertainment services, financial, sports, and general information.

 

Since the service area which is provided by website located at <Tolkien.us> is very different from those areas in which trademark exists, there is no confusion for customers.

 

            3.         American Software Factory, Inc. has used the disputed domain name as pay-per-click search engine service (IC 035.  US 100 101 102, IC 038. US 100 101 104) for a few months after more than one year of development.  <Tolkien.us> is a fully functional pay-per-click engine and has already created revenue as documented below.  Total documented and paid development’s cost was about $5,150.

 

            4.         Respondent registered the disputed domain name and used resources to develop software and a fully working search engine.  Respondent has already signed an agreement with <epilot.com> and <ahha.com> to provide with search feed.  Respondent has already made a search bid campaign for <ebay.com>.  <Ebay.com> has already paid Respondent $12,582.12 for the Respondent’s services.

 

            5.         Respondent is a US corporation which made an investment into developing software and website design and has already earned money and has paid taxes to the US government.  The disputed domain name is not protected by any trademark in areas the Respondent uses the disputed domain name.

 

            6.         Respondent stresses that the Respondent has used the disputed domain name only for a pay-per-click search engine.  The Respondent has registered the disputed domain name in good faith, invested money to develop software and website and earned money from the investment.  The Respondent pays taxes from it to the US government and employees American employees, which is important in the economic slow down.  The search engine is supposed to earn even more in the future and will help Respondent to keep all the employees Respondent has already had.

 

C. Additional Submission by Complainant

            1.         Respondent contends that the disputed domain name is not identical or confusingly similar to the trademark or service in which the Complainant has rights.  Respondent appears to argue that its services are dissimilar to the goods and services offered by the Complainant and that, as a result, the disputed domain name cannot be identical or confusingly similar to the Complainant’s trademarks.

 

            2.         Respondent refers only to registered US trademarks.  No reference is made in the Response to the Complainant’s non-US registered trademarks or its common law/unregistered trademarks or rights in relation to the name “Tolkien” either outside or within the US.  Essentially, Respondent’s contentions are based on a defense to a trademark infringement claim.

 

            3.         Complainant is not required to demonstrate that its trademarks (whether registered or unregistered, in the US or elsewhere) have been infringed.  Nor does it have to demonstrate that the Respondent has no defense to a claim of trademark infringement.  All it has to demonstrate is that the domain name is identical or confusingly similar to a trademark or trademarks in which the Complainant has rights under the Policy.

 

            4.         Complainant submits that the Respondent cannot deny that the disputed domain name is identical to its mark “Tolkien,” albeit with the addition of the generic country code suffix “.us.”

 

            5.         Respondent contends that it has been using the disputed domain name for a number of months, although it does not specify either a date when its website “went live” or a date when it commenced preparations to make a legitimate use of the disputed domain name.  Although the Response is not entirely clear, Complainant infers that Respondent believes that such use or preparations give it a legitimate right or interest in the disputed domain name and that, consequently, the disputed domain name is not being used in bad faith.

 

            6.         Presumably Respondent is attempting to argue that Paragraph 4(c)(ii) of the Policy applies in this case to give it “rights or a legitimate interest” in the disputed domain name.  To be successful in such argument, Respondent must show that “. . . before any notice to [it] of the dispute, [its] use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services.”

 

            7.         As set out in the Complaint, Complainant’s solicitors first notified Respondent of the dispute on June 26, 2003, by letter and e-mail.  As at that date, Respondent’s website was not then active.  Respondent has submitted no evidence with the Response demonstrating that the disputed domain name was being legitimately used at that time.

 

            8.         Respondent also claims that preparations had been made to use the disputed domain name for a “pay-per-click” search engine service for at least one year prior to its website “going live.”  It cites a number of figures which it claims show that it was making preparations to make a bona fide use of the disputed domain name prior to the Complainant’s solicitors’ letter and e-mail to Respondent of June 26, 2003.

 

            9.         It is not clear from the Response to what these figures relate to.  Nor is it clear that any such “development” by the Respondent or its contractors which might have taken place relates specifically and solely to this website.

 

            10.       Complainant asserts that any use of the disputed domain name which the Respondent may be able to demonstrate, or any preparations to use it, were not bona fide within the meaning of the Policy.

 

            11.       Complainant’s mark is so well-known, both worldwide and in the US, that Respondent must have been aware of it.  Respondent has no connection with Complainant or its licensees and the name “Tolkien” cannot be regarded as generic in any way.  As a result, the only reason why Respondent might want to use the name “Tolkien” is to take unfair advantage of the extensive goodwill in the name enjoyed by Complainant.  This cannot be described as a bona fide use of the disputed domain name to sell Respondent’s goods and/or services.

 

            12.       Respondent has given no reason as to why it might have chosen to register the disputed domain name.  For example, it cannot demonstrate that it is commonly known as “Tolkien.”  In the absence of a genuine explanation a to why it chose to registered this disputed domain name, Complainant asks the Panel to conclude that Respondent intended to take unfair advantage of Complainant’s goodwill and that therefore the use to which it is being put is not bona fide.

 

            13.       Further, by Respondent’s own admission, the disputed domain name is being put to a commercial use.  Given the fame of Complainant’s mark, and the absence of a genuine explanation as to why Respondent registered the mark as the disputed domain name, the conclusion must be drawn that Respondent intended to mislead the public to its website for commercial gain.

 

            14.       In the circumstances, Complainant respectfully requests that the Panel find that Respondent has made no use of the disputed domain name, or genuine preparations to use it, prior to Complainant’s solicitors’ letter and e-mail of June 26, 2003.  Alternatively, Complainant asks that the Panel find that any use to which the disputed domain name has been put by Respondent was not a bona fide use within the meaning of Paragraph 4(c)(ii) of the Policy.

 

           

 

FINDINGS AND DETERMINATIONS

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 the 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 the Respondent is identical or confusingly similar to a trademark or service mark in which the Complainant has rights;

(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.

 

Given the similarity between the Uniform Domain Name Dispute Resolution Policy (“UDRP”) and the usTLD Policy, the Panel will draw upon UDRP precedent as applicable in rendering its decision.

 

Identical and/or Confusingly Similar

      Respondent cannot here prevail for he has at least several fatal misconceptions.

 

      First, he contends that Complainant’s mark is not federally registered in the United States and thus cannot be confusingly similar to Complainant’s marks.

 

      Complainant’s mark is registered in several countries other than the United States, and this is sufficient for purposes of the Policy.  In Ballon, E-Commerce and Internet Law, Update to Chapter 11 (Glasser Legal Works 2001) Chapter 11, section 2Dii, the author states:

 

“The fist criteria essentially calls upon a complainant to allege trademark rights (recognized under any national laws) and confusion or dilution.  The showing required is much lower than what would be required in a U.S. court, where the scope of protection of a mark and issues of confusion and dilution may be hotly contested.  As a practical matter, if a name is identical or similar to a registered mark (or a common law mark where strong rights are established), most ICANN panels will find that this element has been satisfied”  (Footnote omitted; emphasis supplied.)

 

      Moreover, Respondent fails to recognize the continuing showing of films (and the publication and the republication of books) worldwide, as well as in the United States, of JRR Tolkien’s epic series of novels.[1]

 

      Thus, clearly, Complainant has established common law rights in the JRR TOLKIEN mark through its widespread use and licensing of the mark in commerce sufficient to establish secondary meaning in the mark.  See McCarthy, Trademarks and Unfair Competition, section 25:74.2 (4th ed. 2002) (The ICANN dispute resolution policy is “broad in scope” in that “the reference to a trademark or service mark ‘in which the complainant has rights’ means that ownership of a registered mark is not required – unregistered or common law trademark or service mark rights will suffice” to support a domain name Complaint under the Policy); see also Winterson v. Hogarth, D2000-0235 (WIPO May 22, 2000) (finding that ICANN Policy does not require that Complainant have rights in a registered trademark and that it is sufficient to show common law rights in holding that Complainant has common law rights to her name).

 

      Secondly, Respondent contends that it is not marketing products or services that compete with the products or services protected by Complainant’s mark.

 

      Again, Respondent is mistaken.  In McCarthy, supra, section 24:13, Professor McCarthy states:

 

“The vast majority of modern decisions have adopted the rule that competition is not necessary between the parties for there to be a likelihood of confusion.  Confusion, or the likelihood of confusion, not competition, is the real test of trademark infringement.”  (Footnotes omitted.)

 

      There can be no question but that Respondent’s use of the disputed domain name will cause confusion.

 

      Finally, Complainant is correct in its contention that the disputed domain name is identical and confusingly similar to its mark.  See Tropar Mfg. Co. v. TSB, FA 127701 (Nat. Arb. Forum Dec. 4, 2002) (finding that since the addition of the country-code “.us” fails to add any distinguishing characteristic to the domain name, the <tropar.us> domain name is identical to Complainant’s TROPAR mark).

 

      The Panelist finds and determines that the disputed domain name is identical to and confusingly similar to Complainant’s mark.

 

Rights or Legitimate Interests

      It is Respondent’s contention that he uses the disputed domain name to operate a pay-per-click search engine, operating in areas that are not protected by Complainant’s TOLKIEN mark, and thus it is evidence that he is making a bona fide offering of goods and services.  Accordingly, Respondent does have rights and a legitimate interest in the disputed domain name pursuant to the Policy.

 

      Respondent’s difficulty here, however, is with the term “bona fide.”

 

      The dictionary (Webster’s Ninth New Collegiate Dictionary [Merriam-Webster 1984, p. 166]) defines “bona fide” as “made in good faith without fraud or deceit.”

 

      As will be seen, Respondent cannot meet this standard, for the Panelist does find and determine that Respondent has acted in bad faith.

 

Registration and Use in Bad Faith

      Complainant asks a most pertinent question which has never been answered by Respondent.  “Why would you choose the world-wide famous name ‘Tolkien’ as your domain name?” particularly for a pay-per-click search engine service.

 

      Complainant can only conjecture, but the Panelist does find and determines that Respondent has acted in bad faith.  This is because Paragraph 4b(iv) of the Policy states that the following circumstances, inter alia, and without limitation, is evidence of bad faith:

 

“By using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your 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 your web site or location or of a product or service on your web site or location.”

 

      The Panelist can conceive of no other reason for Respondent’s registration and use of the disputed domain name.

 

      Moreover, in addition to the demonstration of bad faith by the application of subparagraph (iv) of Section 4b of the Policy, there is a legal presumption of bad faith, when Respondent reasonably should have been aware of Complainant’s trademarks, actually or constructively.  How could he not have been?

 

      In Interstellar Starship Services, Ltd. v. Epix, Inc. (CA 9th 1999) 184 F.3d 1107, 1111, it was said:

 

“However, ISS became aware of the ‘EPIX’ trademark when it applied for its own registration of ‘EPIX.’  Adopting a designation with knowledge of its trademark status permits a presumption of intent to deceive.  See Brookfield, 174 F.3d at 1059 (citing Official Airline Guides, Inc. v. Goss, 6 F.3d 1385 (9th Cir. 1993)).  In turn, intent to deceive is strong evidence of a likelihood of confusion.  Sleekcraft, 550 F.2d at 354.”

 

      See also Samsonite Corp. v. Colony Holding, FA 94313 (Nat. Arb. Forum Apr. 17, 2000) (finding that evidence of bad faith includes actual or constructive knowledge of a commonly known mark at the time of registration); and see also Exxon Mobil Corp. v. Fisher, D2000-1412 (WIPO Dec. 18, 2000) (finding that Respondent had actual and constructive knowledge of Complainant’s EXXON mark given the worldwide prominence of the mark and thus Respondent registered the domain name in bad faith).

 

      The Panelist finds and determines that Respondent registered and is using the disputed domain name in bad faith.

 

DECISION

Having established all three elements under the usTLD Policy, the Panel concludes that relief shall be hereby GRANTED.

 

Accordingly, it is Ordered that the <tolkien.us> domain name be TRANSFERRED from Respondent to Complainant.

 

 

 

 

JUDGE IRVING H. PERLUSS (Retired), Panelist
Dated:  December 15, 2003


[1] The Lord of the Rings:  The Return of the King, will be shown in theaters in the United States in December 2003.  It is the third of a trilogy first shown in two Decembers past.  (See Time Magazine, December 15, 2003, 68-69.)

 

 

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