National Arbitration Forum

 

DECISION

 

SmartCompany, Inc. v Ziff Davis Publishing Holdings, Inc.

Claim Number: FA0502000416653

 

PARTIES

Complainant is SmartCompany, Inc. (“Complainant”), 2121 N. California Blvd., Suite 360, Walnut Creek, CA 94596.  Respondent is Ziff Davis Publishing Holdings, Inc. (“Respondent”), represented by Elizabeth A. McNamara, of Davis Wright Tremaine LLP, 1633 Broadway, New York, NY 10019.

 

REGISTRAR AND DISPUTED DOMAIN NAME 

The domain name at issue is <smartcompany.com>, registered with Emarkmonitor Inc. d/b/a Markmonitor.

 

PANEL

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.

 

Timothy D. O’Leary as Panelist.

 

PROCEDURAL HISTORY

Complainant submitted a Complaint to the National Arbitration Forum electronically on February 4, 2005; the National Arbitration Forum received a hard copy of the Complaint on February 17, 2005.

 

On February 11, 2005, Emarkmonitor Inc. d/b/a Markmonitor confirmed by e-mail to the National Arbitration Forum that the domain name <smartcompany.com> is registered with Emarkmonitor Inc. d/b/a Markmonitor and that the Respondent is the current registrant of the name.  Emarkmonitor Inc. d/b/a Markmonitor has verified that Respondent is bound by the Emarkmonitor Inc. d/b/a Markmonitor registration agreement and has thereby agreed to resolve domain-name disputes brought by third parties in accordance with ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”).

 

On February 21, 2005, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of March 14, 2005 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@smartcompany.com by e-mail.

 

A timely Response was received and determined to be complete on March 14, 2005.

 

On March 21, 2005, pursuant to Complainant’s request to have the dispute decided by a single-member Panel, the National Arbitration Forum appointed Timothy D. O’Leary as Panelist.

 

RELIEF SOUGHT

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

 

PARTIES’ CONTENTIONS

I.            Complainant Contentions

 

A.            Identical or Confusingly Similar Issue.

 

Complainant asserts common law trademark rights to the SMARTCOMPANY word mark based on having established first commercial use of the mark in September 2002 in association with Complainant’s hosted software business.  The name of Complainant’s business is “SmartCompany, Inc.” and the name of Complainant’s primary product offering is “SmartCompany.” 

 

Complainant has filed a formal trademark registration application with the United States Patent and Trademark Office (“USPTO”) in June 2003 that is still pending.

 

Complainant registered the <smartcompany.net> domain name in September 2002, and has been hosting its corporate website, products and service at that domain continuously since that time.

 

The Respondent’s domain name, <smartcompany.com>, is identical to Complainant’s trademark and company name.

 

B.            Rights or Legitimate Interests Issue.

 

Respondent should be considered as having no rights or legitimate interests in respect of the domain name that are the subject of the Complaint for the following reasons:

 

(i)         Respondent does not claim rights to the SMARTCOMPANY trademark.  In fact, Respondent abandoned the four applications it made for the trademark during the late 1990s.

 

(ii)        Complainant has made it clear to Respondent in e-mail and telephone conversations that Complainant intends to use the mark for commercial purposes, and Respondent has raised no objections.

 

(iii)       Respondent is not hosting a website at <smartcompany.com>, and never has hosted a website at <smartcompany.com> since first contacted by Complainant in September 2002. This, combined with the abandonment of the trademark applications, clearly indicates Respondent has no plans to use the domain name in connection with a bona fide offering of goods or services.

 

C.        Registration in Bad Faith Issue.

 

The domain name should be considered as having been registered and being used in bad faith for the following reasons:

 

(i)         Respondent continued to renew the domain registration year after year, even though it has never used the domain name and has abandoned four trademark applications associated with it.

 

(ii)        Respondent has renewed the domain registration twice after receiving purchase offers from Complainant.  Respondent is renewing the registration with the sole intent of profiting from the eventual sale of the domain to Complainant or one of Complainant’s competitors.

 

(iii)       Respondent has indicated to Complainant in April 2004, and in February 2005 that it would sell the domain name to Complainant for $22,500, but can provide no reasonable justification for demanding such a high price, except to say that “The smartcompany.com domain has current and future value for us, and if we are going to part with it, the price will reflect what the company believes it to be worth.”

 

II.            Respondent’s Contentions

 

A.            Identical or Confusingly Similar Issue.

 

As a matter of background, Respondent advises that Ziff Davis Publishing Holdings Inc., a wholly owned subsidiary of Ziff Davis Media Inc. (“Ziff Davis”), was created to hold the company’s intellectual property assets.  Ziff Davis is an international integrated media company focusing on the technology, video game and consumer lifestyle markets.  Particularly relevant here, Ziff Davis has published a family of publications employing the word “Smart” (or “Sm@rt”) in their titles, and, in anticipation of publishing another magazine entitled “Smart Company” or “Sm@rt Company,” acquired the domain name at issue in this proceeding.  In connection with its family of “Smart” publications, Respondent registered various trademarks and domain names, including the domain name at issue in this proceeding, <smartcompany.com> (the “Domain Name”), several years before Complainant even existed, let alone purported to call itself SmartCompany and distribute a product under this name.

 

In July 2003, a company called ZeeWare, allegedly Complainant’s predecessor, asked Respondent to assign the Domain Name to it.  When Respondent refused, Complainant -- describing itself as a “small Bay Area technology consulting company with a new product launching soon under the name of Smartcompany” -- offered to purchase the Domain Name. 

 

In conjunction with its established family of magazine titles that incorporate “smart,” Respondent registered the <smartcompany.com> domain name years before Complainant existed or claimed any trademark rights.  This undisputed fact defeats the necessary element of bad faith in this proceeding and is dispositive. 

 

Complainant has not demonstrated that the Domain Name is “identical or confusingly similar to a trademark or service mark in which the complainant has rights,” because Complainant did not have trademark rights in the alleged SMARTCOMPANY mark when the Domain Name was registered (and may not have any such rights even now).

 

Critical to any proceeding is Complainant’s ability to show that its rights in the mark or domain predate Respondent’s registration.  Paragraph 4(a)(i) of the ICANN Policy “requires the Complainant to have rights (be they strong or weak) in a trademark before the disputed domain name is registered.”  See Chiappetta v. Morales, D2002-1103 (WIPO Jan. 20, 2003).

 

In other words, for the Domain Name to be identical or confusingly similar to “a trademark or service mark in which the complainant has rights,” Complainant must have had such rights at the time of the Domain Name’s registration. The necessary predicate is entirely absent here for the reason that:

 

            (a)  Respondent registered the Domain Name in August 1996. 

 

            (b)  It was some six years later that Complainant claims first use of the mark.  Indeed, Complainant asserts common law trademark rights based on its alleged first commercial use of the mark in September 2002, and alleges that it did not incorporate until some time after that.  Complaint ¶ (5)(a).  It did not file its trademark application until June 11, 2003.

 

            (c)  Because Complainant did not have trademark rights at the time of Respondent’s registration, the first requirement of the ICANN Policy is indisputably not satisfied.  Therefore, the Forum need go no further than this dispositive element in denying the Complaint.

 

It is also significant that Complainant may not, even now, have trademark rights.  Complainant’s trademark application was actually made in the name of ZeeWare Internet Services, Inc., its alleged predecessor

 

Furthermore, Complainant only makes conclusory allegations of its use of the mark on a website, without alleging that it has sold a single product or service.

 

B.            Rights or Legitimate Interest Issue.

 

Respondent has rights and legitimate interests in the domain name.

 

Complainant’s allegation that Respondent “does not claim rights to the SmartCompany trademark” is blatantly false.  As Complainant knows, Respondent has registered and used SMARTCOMPANY and similar marks extensively.

 

A respondent’s “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” before any notice to it of the dispute, establishes its rights or legitimate interests in the domain name for purposes of these proceedings.  ICANN Policy 4(c)(i). 

 

As this Policy provision makes clear, making “demonstrable preparations to use” the Domain Name or a corresponding name satisfies the “rights or legitimate interests” requirement, even if Respondent never actually used the mark.

 

Years before Complainant purported to call itself SmartCompany, Respondent used or took demonstrable steps to use the Domain Name and corresponding names in connection with the bona fide offering of its goods or services.

 

Respondent has published several magazines with the term “Smart” or “Sm@rt” in the title, including Smart Partner, Sm@rt Partner, Sm@rt Reseller and Smart Business.

 

From 1996 through 1998, several years before Complainant even existed, Respondent filed 46 trademark registration applications for the name SM@RT COMPANY or SMARTCOMPANY in 14 countries.  The company currently has registrations in the European Community, Switzerland, Mexico, Japan and Venezuela and additional pending applications in Brazil.

 

Respondent registered the domain name, <smartcompany.com>, in anticipation of a “Smart Company” title.

 

Although Respondent has not yet published a “Sm@rt Company” or “Smart Company” magazine, it has used this term in connection with another one of its publications:  Sm@rt Reseller magazine prominently featured an annual story on “The 100 Smart Companies.”  Sm@rt Reseller was discontinued as a magazine and is now published as a periodic newsletter.

 

In contrast to Respondent’s long-term international use of SMARTCOMPANY and various similar marks, Complainant only recently changed its named from Zeeware to Smart Company, represented itself to Respondent as “a small Bay Area technology consulting company with a new product launching soon under the name of Smartcompany” and has little or no rights or legitimate interests in the Domain Name as set forth in ¶ (4)(a) supra.

 

C.        Registration in Bad Faith Issue.

 

The domain names have not been registered in bad faith.

 

Complainant cannot allege bad faith.  The undisputed evidence plainly shows that Respondent registered the Domain Name in the utmost good faith.

 

First, it is well established that bad faith does not exist where Respondent registered the Domain Name before Complainant used the name as a trademark.  Here, Complainant admits that it did not use the name “Smart Company” until long after Respondent registered the Domain Name, as discussed above.  See (4)(b)(i)(b), supra.

 

Complainant does not, and cannot, allege that Respondent has registered or acquired the Domain Name in order to resell or transfer the domain name registration to Complainant or a competitor.

 

Respondent is an international media company that produces over 40 versions of its publications in 65 countries.  See Exs. A, H.  As such, Respondent indisputably is a “bona fide entity” – not a cybersquatter who sought out Complainant or who has engaged in a “pattern of conduct” evidencing bad faith. 

 

Despite Complainant’s efforts to depict Respondent as a cybersquatter or profiteer, it was Complainant who approached Respondent to purchase the Domain Name.  Joe Zuffoletto, President and CEO of Zeeware Inc. (Complainant’s alleged predecessor), contacted Respondent in July 2003 about acquiring the Domain Name.  Respondent’s mere entrance into negotiations, initiated by Complainant, regarding the possible sale of the domain name (and its refusal to sell a Domain Name obviously valued by both parties at a price chosen unilaterally by Complainant), falls far short of showing bad faith.

 

Respondent has not registered the Domain Name to prevent Complainant from reflecting its alleged mark in a corresponding domain name.

 

Demonstrating bad faith on this basis requires a showing that Respondent has engaged in a pattern of such conduct.

 

Respondent is not a competitor of Complainant who has registered the Domain Name in an effort to disrupt its business; nor has Respondent used the Domain Name “to attract, for commercial gain, Internet users to [its] 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 [its] web site or location or of a product or service on [its] web site or location.”

 

FINDINGS AND DISCUSSION

 

A.            Identical or Confusingly Similar: Policy ¶ 4(a)(i).

 

I find that Respondent registered the disputed domain name prior to the date in which Complainant established rights in the SMARTCOMPANY mark, and I conclude that Complainant has failed to satisfy the requirements of Policy ¶ 4(a)(i).  See Ode v. Intership Ltd., D2001-0074 (WIPO May 1, 2001) (“We are of the unanimous view that the trademark must predate the domain name.”); see also Intermark Media, Inc. v. Wang Logic Corp., FA 139660 (Nat. Arb. Forum Feb. 19, 2003) (finding that any enforceable interest that the complainant may have in its common law mark did not predate the respondent’s domain name registration, therefore finding that Policy ¶ 4(a)(i) had not been satisfied). 

 

I find that Complainant is unable to satisfy the requirements of Policy ¶ 4(a)(i) because I conclude that the SMARTCOMPANY mark is composed entirely of generic terms.  See Zero Int'l Holding v. Beyonet Servs., D2000-0161 (WIPO May 12, 2000) (“Common words and descriptive terms are legitimately subject to registration as domain names on a 'first-come, first-served' basis."); see also Successful Money Mgmt. Seminars, Inc. v. Direct Mail Express, FA 96457 (Nat. Arb. Forum Mar. 7, 2001) (finding that “seminar” and “success” are generic terms to which the complainant cannot maintain exclusive rights).

 

B.        Rights and Legitimate Interests:  Policy ¶ 4(a)(ii).

I find that Respondent’s registration of the <smartcompany.com> domain name predates Complainant’s establishment of rights in the SMARTCOMPANY mark, and I conclude that Respondent has rights and legitimate in the disputed domain name pursuant to Policy ¶ 4(a)(ii).  See Parachute, Inc. v. Jones, FA 94947 (Nat. Arb. Forum July 12, 2000) (denying transfer of the domain name because the respondent’s use of the PARACHUTE mark and the domain name in question preceded any use of the service mark by the complainant).

 

Respondent asserts that it registered the <smartcompany.com> domain name in conjunction with a series of magazines it publishes using “smart” as a prefix, and is reserving the disputed domain name in the event that Respondent one day decides to publish a Smart Company magazine.  I find that Respondent’s nonuse of the disputed domain name does not necessarily indicate that Respondent lacks rights and legitimate interests in the <smartcompany.com> domain name pursuant to Policy ¶ 4(a)(ii).  See Casual Corner Group, Inc. v. Young, FA 95112 (Nat. Arb. Forum Aug. 7, 2000) (finding that the respondent has rights and legitimate interests in the domain name even though he has made no use of the website at the time of the complaint).

 

I also find that the <smartcompany.com> domain name is comprised of generic terms, and I find that Respondent has rights and legitimate interests in the disputed domain name pursuant to Policy ¶ 4(a)(ii).  See FilmNet Inc. v. Onetz, FA 96196 (Nat. Arb. Forum Feb. 12, 2001) (finding that the complainant failed to establish that the respondent did not have rights or legitimate interests in the <filmnet.com> domain name, where the disputed domain name is wholly comprised of generic words, even though the complainant is the owner of the FILMNET mark).

 

C.            Registration and Use in Bad Faith: Policy ¶ 4(a)(iii).

 

I find that Respondent’s registration of the <smartcompany.com> domain name predates Complainant’s establishment of rights in the SMARTCOMPANY mark, and I conclude that Respondent did not register and use the domain name in bad faith pursuant to Policy ¶ 4(a)(iii).  See Aspen Grove, Inc. v. Aspen Grove, D2001-0798 (WIPO October 5, 2001) (finding that it is impossible for the respondent to register disputed domain name in bad faith if the complainant's company did not exist at the time of registration).

 

I find that Respondent’s offer to sell the domain name registration to Complainant does not demonstrate bad faith registration and use pursuant to Policy ¶ 4(b)(i).  See Mark Warner 2001 v. Larson, FA 95746 (Nat. Arb. Forum Nov. 15, 2000) (finding that considering or offering to sell a domain name is insufficient to amount to bad faith under the Policy; the domain name must be registered primarily for the purpose of selling it to the owner of a trademark for an amount in excess of out-of-pocket expenses).

 

I find that Respondent has rights and legitimate interests in the disputed domain name pursuant to Policy ¶ 4(a)(ii), and I conclude that Respondent did not register and use the domain name in bad faith pursuant to Policy ¶ 4(a)(iii).  See Schering AG v. Metagen GmbH, D2000-0728 (WIPO Sept. 11, 2000) (finding that the respondent did not register or use the domain name <metagen.com> in bad faith where the respondent registered the domain name in connection with a fair business interest and no likelihood of confusion was created).

 

Furthermore, I find that Respondent’s nonuse of the disputed domain name does not necessarily constitute bad faith registration and use pursuant to Policy ¶ 4(a)(iii).  See Collegetown Relocation, LLC v. Concept Software & Tech. Inc., FA 96555 (Nat. Arb. Forum Mar. 14, 2001) (finding no bad faith use if it is conceivable that the respondent could make a legitimate, non-competitive use even if it had not yet done so).

 

Finally, I find that Respondent’s <smartcompany.com> domain name is comprised entirely of generic terms, and I conclude that Respondent did not register and use the domain name in bad faith pursuant to Policy ¶ 4(a)(iii).  See Canned Foods Inc. v. Ult. Search Inc., FA 96320 (Nat. Arb. Forum Feb. 13, 2001) (holding that where the domain name is a generic term, it is difficult to conclude that there was a deliberate attempt to confuse on behalf of the respondent, and stating that “[i]t is precisely because generic words are incapable of distinguishing one provider from another that trademark protection is denied them”).

 

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 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 and is being used in bad faith.

 

DECISION

Having failed to establish all three elements required under the ICANN Policy, the Panel concludes that relief shall be DENIED.

 

 

 

 

Timothy D. O’Leary

Panelist
Dated: April 4, 2005

 

 

 

 

 

 

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