Naomi Sadoun d/b/a Indigo Dye House, Inc.
v. Dotan Shoham a/k/a Indigo Dyehouse
Claim Number: FA0310000206314
PARTIES
Complainant
is Naomi Sadoun d/b/a Indigo Dye House, Inc., North Hollywood, CA (“Complainant”)
represented by Jennifer Dale, 7418 Fulton Avenue, North Hollywood, CA
91605. Respondent is Dotan Shoham a/k/a Indigo Dyehouse,
Los Angeles, CA (“Respondent”), represented by Michael Doland of Law Offices of Michael Doland, Inc., 12100 Wilshire Blvd., Suite 730, Los
Angeles, CA 90025.
REGISTRAR AND DISPUTED DOMAIN NAME
The
domain name at issue is <indigodyehouse.com>,
registered with Register.Com.
PANEL
The
undersigned certifies that she has acted independently and impartially and that
to the best of her knowledge she has no known conflict in serving as Panelist
in this proceeding. Hon. Carolyn Marks Johnson sits as Panelist.
PROCEDURAL HISTORY
Complainant
submitted a Complaint to the National Arbitration Forum (the “Forum”)
electronically October 28, 2003; the Forum received a hard copy of the
Complaint November 7, 2003.
On
October 29, 2003, Register.Com confirmed by e-mail to the Forum that the domain
name <indigodyehouse.com> is
registered with Register.Com and that Respondent is the current registrant of
the name. Register.Com verified that
Respondent is bound by the Register.Com 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
November 20, 2003, a Notification of Complaint and Commencement of
Administrative Proceeding (the “Commencement Notification”), setting a deadline
of December 10, 2003, by which Respondent could file a Response to the
Complaint, was transmitted to Respondent via e-mail, post and fax, to all
entities and persons listed on Respondent’s registration as technical,
administrative and billing contacts, and to postmaster@indigodyehouse.com by
e-mail.
The
Forum received a Response, timely filed, and determined to be complete December
10, 2003.
The
Panel received no Additional Submissions.
On December 23, 2003, pursuant to Complainant’s request
to have the dispute decided by a single-member
Panel, the Forum appointed Hon. Carolyn
Marks Johnson as Panelist.
RELIEF SOUGHT
Complainant
requests that the domain name be transferred from Respondent to Complainant.
PARTIES’ CONTENTIONS
A. Complainant makes the following
allegations in this proceeding:
1. Respondent registered a domain name that
is confusingly similar to a business operated by Complainant.
2. Respondent has no rights in the domain
name containing Complainant’s business name.
3. Respondent’s conduct constitutes bad
faith in registration and use of a domain name.
B. Respondent made the following points in
response:
1. Respondent has the right to register a
domain name containing the words indigo and dye.
2. Respondent had rights in the domain name
before Complainant acquired any rights in the words.
3. Respondent concedes an intent to
passively hold the domain name, conduct that provides the basis for finding bad
faith.
Preliminary Procedural Matters
In
accordance with Policy ¶ 5(b)(viii), Respondent failed to provide a signature
that certifies that the information provided in the Response is complete or
accurate. Where a party fails to comply
with this requirement, the Panel may find that the deficiency renders the
Response inadmissible. See Schott
Glas v. Necschott, D2001-0127 (WIPO Mar. 14, 2001) (choosing not to
consider the Response in light of formal deficiencies); see also Talk City
Inc. v. Robertson, D2000-0009 (WIPO Feb. 29, 2000) (concluding that no
weight would be afforded to the facts alleged in Respondent’s deficient
submission, partly because it “did not contain any certification that the
information contained in the e-mail was, ‘to the best of Respondent’s knowledge
complete and accurate’” in accordance
with Rule 5(b)(viii)); but compare Strum v. Nordic Net Exch. AB, FA
102843 (Nat. Arb. Forum Feb. 21, 2002) (“Ruling a Response inadmissible because
of formal deficiencies would be an extreme remedy not consistent with the basic
principles of due process").
Although
the Panel cites to the Response, the Panel gave the deficient Response no
weight and the Response did not determine the outcome.
FINDINGS
The
Panel finds, for the reasons set out below, that this Complaint should be
dismissed without prejudice to re-filing.
Complainant failed to meet the required threshold burden of showing
rights in a mark that was used by Respondent in a confusingly similar domain name.
Since Complainant may be able to cure these shortcomings if proof exists to
support its allegations, the Complaint is dismissed without prejudice to
Complainant’s re-filing it in a new action.
Complainant identifies itself as Naomi Sadoun d/b/a
Indigo Dye House, Inc. Complainant and Respondent conceded they had a prior
business relationship but disagree as to its nature. The parties
have an apparent dispute over ownership of Indigo Dye House, Inc., a business
that Respondent maintains it had an ownership interest in but as to which
neither party presented extrinsic proof to support their allegations.
Complainant maintains that Respondent was an employee but offered no proof to
support any of its allegations.
Respondent
registered the disputed domain name September 6, 2001, before Complainant
acquired any website, email, trademark or service mark, if any ever were
acquired. Complainant maintains this
acquisition was purchased with a company credit card for the company but the
proof Complainant offered shows a payment one year later on September 3,
2002. Respondent concedes that it
allowed Complainant to pay the renewal fee for the email account and that
Respondent apparently considered it transferred.
Respondent’s employment terminated,
apparently voluntarily, August 8, 2003.
Complainant arranged a transfer of the
domain name to its name from Register.com; but, thereafter, Respondent arranged
a second transfer back to itself.
Complainant notified Register.com by
letter dated August 20, 2003, that “Mr. Dotan Shoham is a disgruntled employee”
and that the company, Indigo Dye House, Inc.
had been unable to retrieve its email since August 18th.
Registration dated September 6, 2001, was
made on behalf of Indigo “Dyehouse” with Indigo “Dyehouse” and Dotan Shoham as
Adminstrative Contact.
A statement from American Express for
Naomi Sadoun, Indigo Dye House, Inc., contained a billing for September 3,
2002, identified to be for “REGISTER.COM WEBSITE 800-899-9723 DOMAIN REGIS” in
the amount of $38.95.
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 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;
(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.
Complainant
asserts that Respondent, a former employee of Complainant, stole the disputed
domain name that rightfully belonged to Complainant’s business, INDIGO DYE
HOUSE, INC.
Complainant did not produce extrinsic proof to establish
its business entity as either a d/b/a or a corporation. Respondent challenged Complainant’s right to
do business under an assumed name filing using the incorporated designation.
Yet, Respondent concedes that Complainant has done business under the name but
claims to have ownership rights. Respondent concedes that it registered the
domain name as a representative of the business.
The Panel finds that Complainant did not satisfy ICANN
Policy ¶ 4(a)(i) that required it to show that the domain name registered by
Respondent is identical to or confusingly similar to an entity in which
Complainant has rights.
Complainant
alleges that Respondent lacks rights and legitimate interests in the disputed domain
name because the registration of the domain name was purchased by Complainant’s
business. Further, at the time
Respondent registered the name, Respondent was acting in the scope of its
employment for Complainant. Thus,
Complainant urges that Respondent cannot have rights or legitimate interests in
a name registration that Respondent never owned. See Vinidex Pty. Ltd. v. Auinger, AF-0402 (eResolution Oct. 18, 2000)
(finding that as a former employee, Respondent knew or should have known about
the legitimate interests and rights of Complainant and, by contrast, its own
lack of interest or right in the domain name).
Additionally,
Complainant asserts that Respondent is using the domain name to divert
consumers and tarnish Complainant’s business, making any legitimate
noncommercial or fair use under Policy ¶ 4(c)(iii) unfeasible. See ABB Asea Brown Boveri Ltd. v. Quicknet, D2003-0215 (WIPO May 26, 2003)
(finding evidence Respondent had no rights or legitimate interests in the
disputed domain name because it used the name to tarnish and dilute
Complainant’s mark); see also MatchNet plc. v. MAC Trading,
D2000-0205 (WIPO May 11, 2000) (finding that it is not a bona fide offering of
goods or services to use a domain name for commercial gain by attracting Internet
users to sites that mislead consumers and tarnish Complainant’s mark).
On the face of
these documents it would appear that Respondent lacks rights and legitimate
interests in the domain name because Respondent concedes that it assumed
possession of Complainant’s domain name registration without Complainant’s
authorization. Thereafter, Respondent
gained access and control over Complainant’s account with the registrar of the
disputed domain name. See
Mgt. Plus Enters. Inc. v. MPE Tech. Servs., FA 192746 (Nat. Arb. Forum Oct.
27, 2003) (“Respondent’s use of fraud to first gain access to Complainant’s
account with [the registrar] and then to transfer the domain name registration
to itself is prima facie evidence that
Respondent lacks rights or legitimate interests in the disputed domain name”).
Further, Respondent may have engaged in fraudulent conduct to accomplish this
feat.
Respondent does not
address its improper conduct in its deficient Response. Respondent, instead, contradicts the
allegations in Complainant’s Complaint.
Although the Panel determined to give no weight to Respondent’s
Response, this does not relieve Complainant of the burden of supporting its
allegations with some proof. For
example, Complainant alleged that probable confusion exists between the domain
name and its company; but it implicitly concedes that no current confusion
exists in the marketplace regarding the domain name and its business, as
Respondent pointed out. Complainant stated
in the Complaint that ownership of the domain name “could become very
confusing to our customers [emphasis added],” and Respondent seized upon this
language as proof that no such confusion presently exists. Furthermore, Respondent noted that confusion
is even less likely because the name is used only for e-mail purposes and not
to host website content.
On the face of the allegations and Response, Complainant
probably has rights in the underlying business referenced in the domain
name. However, but for the concession
made by Respondent’s deficient Response, no proof suggests even a prima facie
showing of such probable rights. Complainant produced no extrinsic evidence to
show that Complainant has rights to or legitimate interests in a name or mark
used in the disputed domain name. To
meet Complainant’s burden, it could have produced documents showing formal
legal registration with appropriate authorities, a d/b/a filing, Letters of
Incorporation, or ongoing business records that suggest common law rights in an
active, ongoing business entity under that name.
The Panel finds that Complainant also has failed to show
that Respondent has no such rights and that, further, Respondent failed to show
rights in a mark or the domain name. The Panel’s ultimate holding in the case
should not be interpreted to suggest that the Panel believes that Respondent
has any such rights. See Lush LTD v. Lush Environs, FA 96217 (Nat. Arb. Forum Jan. 13,
2001) (finding that even when Respondent does file a Response, Complainant must
allege facts, which if true, would establish that Respondent does not have any
rights or legitimate interests in the disputed domain name); see also Graman
USA Inc. v. Shenzhen Graman Indus. Co. FA 133676 (Nat. Arb. Forum Jan. 16,
2003) (finding that absent a showing of any facts by Complainant that establish
Respondent lacks rights or legitimate interests in the disputed domain name,
the Panel may decline to transfer the disputed domain name).
Under
this showing, the Panel finds that Complainant did not satisfy ICANN Policy ¶ 4(a)(ii) to show rights in the
name or mark and did not show that Respondent has no rights or legitimate
interests.
Complainant
also alleges that Respondent registered the disputed domain name primarily to
disrupt the business of Indigo Dye House, Inc.
See Lubbock Radio Paging v.
Venture Tele-Messaging, FA 96102 (Nat. Arb. Forum Dec. 23, 2000)
(concluding that domain names were registered and used in bad faith where
Respondent and Complainant were in the same line of business in the same market
area); see also S. Exposure v. S. Exposure, Inc., FA 94864 (Nat. Arb.
Forum July 18, 2000) (finding Respondent acted in bad faith by attracting
Internet users to a website that competes with Complainant’s business); see
also DCI S.A. v. Link Com. Corp.,
D2000-1232 (WIPO Dec. 7, 2000) (concluding that Respondent’s passive holding of
the domain name satisfies the requirement of ¶ 4(a)(iii) of the Policy). However, this contention directly
contradicts Complainant’s recitation of facts that set out that Respondent
registered the domain name while it was still an employee of the business and
on behalf of the business and that Respondent then stole the name.
Moreover,
Complainant asserts that Respondent intentionally attempted to attract, for
commercial gain, Internet users to Respondent’s site by creating a likelihood
of confusion with Complainant’s mark as to the source of Respondent’s
site. See Phat Fashions v. Kruger, FA 96193 (Nat. Arb. Forum Dec. 29, 2000)
(finding bad faith under Policy ¶ 4(b)(iv) even though Respondent has not used
the domain name because “It makes no sense whatever to wait until it actually
‘uses’ the name, when inevitably, when there is such use, it will create the
confusion described in the Policy”).
Complainant did not offer proof that Respondent has engaged in any
activity at the site. In fact, the
Panel notes that only Respondent provided a basis for a holding that it engaged
in conduct that could constitute bad faith registration and use: Respondent expressed
an intent to engage in no activity at the site. Passive holding to prevent one with rights from using a name
constitutes bad faith under the Policy, especially in light of the totality of
the circumstances. See Telstra Corp. v. Nuclear Marshmallows,
D2000-0003 (WIPO Feb. 18, 2000) (stating, “it is possible, in certain
circumstances, for inactivity by the Respondent to amount to the domain name
being used in bad faith”); see also Clerical
Med. Inv. Group Ltd. v. Clericalmedical.com, D2000-1228 (WIPO Nov. 28,
2000) (finding that merely holding an infringing domain name without active use
can constitute use in bad faith); see also Mgt. Plus Enters. Inc. v. MPE Tech. Servs., FA 192746 (Nat. Arb. Forum Oct. 27, 2003) (finding Respondent
registered and used the domain name in bad faith where it fraudulently
transferred the name to itself, despite the fact that Respondent never
technically “registered” the name).
Respondent
claims that Complainant cannot succeed in arguing that Respondent registered
the mark in order to prevent the owner from reflecting the mark in a
corresponding domain name under Policy ¶ 4(b)(ii) because Complainant has not
shown itself to be the owner of any registered trademark. Respondent also argues that it has not
registered the domain name for the purpose of disrupting a business competitor
because numerous other top-level domain names corresponding to INDIGO DYE HOUSE are available
from which Complainant can choose. See
Wal-Mart Stores, Inc. v. MacLeod,
D2000-0662 (WIPO Sept. 19, 2000) (finding that the failure of Complainant to
register all possible domain names that surround its substantive mark does not
hinder Complainant’s rights in the mark. “Trademark owners are not required to
create ‘libraries’ of domain names in order to protect themselves”). Respondent asserts that it did not attempt
to attract for commercial gain, Internet users to Respondent’s website by
creating a likelihood of confusion with Complainant’s mark as to the source of
Respondent’s site because Respondent has never maintained a website
corresponding to the disputed domain name; thus, the capability of commercial
gain or confusion is not viable. See
Caterpillar Inc. v. Off Road Equip. Parts, FA 95497 (Nat. Arb. Forum Oct.
10, 2000) (refusing to find bad faith registration where Complainant failed to
submit any evidence that the domain name was registered in bad faith); see
also Graman USA Inc. v. Shenzhen Graman Indus. Co. FA 133676 (Nat. Arb.
Forum Jan. 16, 2003) (finding that general allegations of bad faith without
supporting facts or specific examples do not supply a sufficient basis upon
which the Panel may conclude that Respondent acted in bad faith); see also White Pine Soft., Inc. v. Desktop
Consulting, Inc., D2000-0539 (WIPO Aug. 31, 2000) (declining to transfer
the domain name where a full factual record has not been presented to the Panel
such that a conclusive determination can be made regarding the parties’
respective claims to the contested domain name). Respondent also argues that the ownership of a domain name of a
generic matter for the purpose of maintaining e-mail accounts, without any
other unfair trade practice or anti-competitive behavior does not form the
legal or equitable basis for ordering a transfer of a domain name. The Panel does
not address these arguments because Respondent conceded that it registered the
domain name for the company.
An
additional problem with this case is that these parties bring to this case
issues that exceed the scope of the ICANN Policy. The parties admit a prior relationship in the business but
disagree as to that relationship. The Respondent may have engaged in fraudulent
conduct in its dealings with the registrar of the domain name. The Respondent
stated an intent to bring suit over the ownership issues. These issues are breach of contract and
breach of fiduciary issues between the parties and they are matters to be
determined in a court of law and not by a UDRP Panel. See e.g. Latent
Tech. Group, Inc. v. Fritchie, FA 95285 (Nat. Arb. Forum Sept. 1, 2000)
(finding an employee’s registration of domain name in his own name and
subsequent refusal to transfer it to its employer raises issues of breach of
contract and breach of fiduciary duty that are more appropriately decided in
court, not before a UDRP Panel); cf. Thread.com,
LLC v. Poploff, D2000-1470 (WIPO Jan. 5, 2001) (refusing to transfer the
domain name and stating that the ICANN Policy does not apply because attempting
“to shoehorn what is essentially a business dispute between former partners into
a proceeding to adjudicate cybersquatting is, at its core, misguided, if not a
misuse of the Policy”).
The Panel finds that since the Panel gave no weight to
Respondent’s deficient Response, ICANN Policy ¶ 4(a)(iii), requiring a showing
of bad faith registration and use, was not satisfied.
DECISION
Having
failed to establish all three of the required elements under the ICANN Policy,
the Panel concludes that relief shall be DENIED and the Complaint
DISMISSED WITHOUT PREJUDICE TO REFILING.
Hon. Carolyn Marks
Johnson, Panelist
Dated: January 6, 2004.
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