General Media Communications, Inc. v. Crazy Troll c/o CrazyTroll.com
Claim Number: FA0602000651676
Complainant is General Media Communications, Inc. (“Complainant”), represented by Jo-Jean M. Panton, of General Media Communications, Inc., 6800 Broken Sound Parkway NW, Suite 100, Boca Raton, FL 33487. Respondent is Crazy Troll c/o CrazyTroll.com (“Respondent”), represented by Asika Patel, 1840 Coral Way, Fourth Floor, Miami, FL 33126.
REGISTRAR AND DISPUTED DOMAIN NAME
The domain name at issue is <penthouseboutique.com>, registered with Enom, Inc.
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.
G. Gervaise Davis III, as the Panelist.
Complainant submitted a Complaint to the National Arbitration Forum electronically on February 28, 2006; the National Arbitration Forum received a hard copy of the Complaint on March 3, 2006.
On February 28, 2006, Enom, Inc. confirmed by e-mail to the National Arbitration Forum that the <penthouseboutique.com> domain name is registered with Enom, Inc. and that 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 ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”).
On March 9, 2006, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of March 29, 2006 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 email@example.com by e-mail.
On March 29, 2006, Respondent submitted a request for additional time to submit a response pursuant to National Arbitration Forum Supplemental Rule #6. An Extension of Time to Respond was issued, setting a new deadline of April 10, 2006 by which Respondent could file a Response to the Complaint.
An electronic copy of the Response was received on April 12, 2006. The Response was received after the response deadline and no hard copy was received. Therefore, the Response is not considered to be in compliance with ICANN Rule 5(a). However, in light of other issues of non-compliance by Complainant, itself, the Panel has elected to consider the Response, as filed. The Panel has the discretion as to whether to accept and to consider late or defective filings in making its Decision. See Telstra Corp. v. Chu, D2000-0423 (WIPO June 21, 2000).
An Additional Submission was received from Complainant on April 18, 2006, which was determined to be deficient for lack of exhibits and completeness. The Panel has chosen to consider this Additional Submission in its Decision, since further hard copies and exhibits were subsequently received on April 18 and 19, 2006 and it was accompanied by additional fees as required by the Supplemental Rules.
An Additional Submission from Respondent was received on April 24, 2006, which was timely and complete, so that this Submission was also considered by the Panel
On April 17, 2006, pursuant to Complainant’s request to have the dispute decided by a single-member Panel, the National Arbitration Forum appointed G. Gervaise Davis III as the single Panelist.
On May 2, 2006, pursuant to the Forum Rules, an Order was entered extending to May 10, 2006, the date on which the Decision is to be rendered, due to the multiple additional filings by the Parties and the necessity to provide them to the Panel in a usable format.
On May 10, 2006, pursuant to the Forum Rules, a further Order extending time for the Decision to be rendered was entered, extending the time to May 12, 2006, based on extenuating circumstances.
Complainant requests that the domain name be transferred from Respondent to Complainant.
The Contentions of the Parties set out here by the Panel have been shortened considerably from the actual multiple pleadings and extensive exhibits, since they are long, complex, and rather convoluted. The briefs and exhibits filed weigh well over five pounds and contain more than 650 pages. There are numerous exhibits attached to the briefs and pleadings of the Parties, consisting of agreements, printouts of web pages and many other items.
Furthermore, as pointed out by Respondent, both the initial and supplemental pleadings of Complainant appear to have omitted or misstated many material and significant facts required to understand the factual background of this case. Because of this failure of Complainant to comply with the spirit of UDRP Rule 3(b)(xiv) which requires that "Complainant certif[y] that the information contained in this Complaint is to the best of Complainant's knowledge complete and accurate,” the Panel necessarily made extensive reference to the multiple exhibits to fully comprehend the applicable facts. This is an important issue commented on in some detail in the Discussion section and the Findings section.
Initial Filings By The Parties
TRADEMARK RIGHTS OF COMPLAINANT:
Complainant and its predecessors have been the publisher of an adult entertainment magazine, PENTHOUSE, since 1969. In connection with that magazine and other merchandising and licensing activities, they have utilized both word and design marks encompassing the term PENTHOUSE for many years, to the point that is has become a well recognized and famous mark, which as to some registrations has become uncontestable under 15 U.S.C. Sections 1065 and 1115(b).
Since its first publication, PENTHOUSE has generated many millions of dollars in sales, and Complainant has leveraged that popularity to expand the PENTHOUSE brand into numerous other product and services segments, including the provision of online adult entertainment services at its PENTHOUSE branded websites, accessible at <penthouse.com> and <penthousestore.com>, and the provision of PENTHOUSE branded products at two Penthouse Boutique retail stores located in Connecticut.
Complainant says it can demonstrate its rights in the PENTHOUSE mark through its numerous trademark registrations with the United States Patent and Trademark Office (“USPTO”). Complainant presents evidence of its federal trademark registrations with the USPTO, and contends that it first registered the PENTHOUSE mark with the USPTO on November 18, 1969 (Reg. No. 880,922). Subsequently, it registered other marks for various classes of merchandise and services, all in conjunction with the PENTHOUSE mark and formatives thereof. Suffice it to say that there nearly twenty such active marks of Complainant.
Complainant claims it has established common law rights in the PENTHOUSE BOUTIQUE mark as a result of Complainant’s continuous and substantial use of the mark in connection with its two retail stores in Connecticut that offer Complainant’s adult entertainment products and services. Complainant states that it has been consistently using the PENTHOUSE BOUTIQUE mark with regard to its retail store services since August 1, 2003. Consequently, Complainant argues that such use demonstrates Complainant’s rights in the mark, which predate Respondent’s registration of the <penthouseboutique.com> domain name on October 11, 2004. [Panel Note: Only in its Supplemental filing does Complainant explain that it apparently has never operated these stores, itself, which are run by third parties under a license from Complainant.]
Complainant filed a U.S. Trademark Application for the Penthouse Boutique mark on June 19, 2003, under Serial Number 76/526068, for the following services: Retail store services, featuring adult products, namely, videos and DVD’s, magazines, lotions, oils and novelties. This mark was finally registered May 17, 2005, after a number of required extensions and filings with the USPTO. [The Panel notes that this allegation is somewhat misleading in that the original filing was an “Intent to Use Application.” and not an actual application to register an existing trademark; the necessary Statement of Use was not filed until February 3, 2005, and it alleges a date of first use of August 1, 2003, so that the application merely dates back to June 19, 2003 by operation of law. Complainant also fails to disclose that the mark is a stylized design with words, and not a word mark, which fact has been held significant in some domain name disputes.]
Finally, Complainant contends that Respondent’s <penthouseboutique.com> domain name is confusingly similar to Complainant’s PENTHOUSE marks, and will result in misleading the public because of the famous and well known, unique character of the PENTHOUSE marks. It says Respondent’s unauthorized use of the PENTHOUSE marks to market and promote internet services including adult content services is not merely likely, but certain, to cause confusion in the minds of members of the relevant trade and public, causing them to believe mistakenly that Complainant has licensed, authorized, sponsored or otherwise affiliated itself with Respondent and its goods and services, when this is not the case.
RIGHTS OF RESPONDENT:
Complainant asserts that Respondent has no rights or legitimate interests in respect to the domain name, because it is not a licensee or authorized to use the PENTHOUSE name for any purpose. Respondent has not used the <penthouseboutique.com> domain name in connection with the bona fide offering of goods or services. Nor can Respondent’s use be defended on any other basis: Respondent is using the subject domain name to trade on Complainant’s PENTHOUSE marks for commercial purposes, namely to link visitors to other competing adult content websites. Such diversionary use of a confusingly similar domain name is neither a use in connection with a bona fide offering of goods or services pursuant to Policy ¶4(c)(i) nor a legitimate noncommercial or fair use of the disputed domain name pursuant to Policy ¶4(c)(iii).
BAD FAITH REGISTRATION AND USE:
Complainant asserts that Respondent registered the <penthouseboutique.com> domain name in bad faith with the calculated intent (a) to illegally capitalize, benefit from and trade on the international reputation and substantial goodwill built up and represented by the PENTHOUSE marks by providing links to Internet services including adult content services, a clear and flagrant violation of Complainant’s exclusive PENTHOUSE trademark rights; (b) to prevent Complainant from using the <penthouseboutique.com> domain name in connection with its own business; and (c) to disrupt Complainant’s business.
Complainant says that Respondent registered and is using the subject domain name in bad faith for the impermissible purposes of usurping website visitors from Complainant’s website for its own commercial gain, obstructing Complainant’s own use of the subject domain, and disrupting Complainant’s business, all with constructive and actual knowledge of Complainant’s exclusive and extensive PENTHOUSE Marks and the goodwill represented thereby.
By virtue of Complainant’s federal trademark registrations, it claims Respondent had constructive knowledge of Complainant’s exclusive rights in the PENTHOUSE marks prior to registering and using the subject domain name. In addition, Complainant asserts that Respondent had actual knowledge of Complainant’s PENTHOUSE brand given the brand’s fame established through decades of use.
On January 27, 2006, Complainant notified Respondent via e-mail and postal mail sent to the address identified in the WHOIS record that Respondent’s use of the subject domain name dilutes the distinctive quality of the PENTHOUSE marks, violates the Federal Trademark Dilution Act and the Federal Anticybersquatting Consumer Protection Act, and constitutes federal and state trademark infringement, unfair competition, and deceptive trade practices. Complainant also requested that Respondent agree to transfer immediately the <penthouseboutique.com> domain name to Complainant.
Complaint further claims, as of the date of filing the Complaint, “Respondent neither has responded to Complainant’s January 27, 2006 email and correspondence nor taken any action to transfer the penthouseboutique.com domain to Complainant. As of the date of the Complaint, the penthouseboutique.com domain still provides links to a variety of internet services including adult-content services.”
In brief, Respondent acknowledges that it acquired the subject domain name on October 11, 2004, in an expired domain name auction conducted by, or subject to the rules of, Network Solutions, Inc. (“NSI”), knowing that it had previously been registered by a third party, but that it had expired on December 7, 2003 (nearly a year previously) without renewal or apparent efforts at renewal by the previous owner(s). At that time and until the receipt of the Complaint in this Proceeding, Respondent says it was unaware that the domain had originally been registered and held by Complainant, or that Complainant later owned, or owns, a registered trademark involving the same two words, albeit in the form of a design mark.
Respondent first received a formal demand to transfer from Complainant on April 14, 2005; a whole series of significant events discussed below then occurred; and finally it received formal notice of this Proceeding, dated March 9, 2006 from the Forum, based on an amended filing by Complainant on March 3, 2006. It acknowledges that it is subject to the UDRP Rules and this Proceeding and makes the following assertions, by way of defense:
TRADEMARK RIGHTS OF COMPLAINANT
The gist of Respondent’s defenses relating to the trademark rights of Complainant turn on its assertions that (1) NSI, with whom Complainant apparently originally registered the expired domain name at issue, maintains in its Service Agreement elaborate rules and regulations concerning expiration and subsequent sale of expired domain names, which preclude claims from the original registrant for the resale of the domain name to a third party after a stated period of time; (2) the domain was not at the time of purchase and registration by Respondent identical to a registered trademark, since the PTO registration did not become effective until May 17, 2005, some seven months after the October 11, 2004 domain registration of the name by Respondent; (3) the prior existing registered trademarks of Complainant were not identical nor confusingly similar to the domain name, and there are numerous other Penthouse third party marks covering many uses and goods which marks do not belong to Complainant; (4) Respondent was not aware of any conflicting trademark at the time of registration or its proposed use, and all events did not, and does not, feel that selling clothing over the Internet would conflict with marks of Penthouse magazine; and (5) the intended use, selling clothing at retail, is not a similar field of use to the adult content goods, like magazines, lotions and adult videos, that Penthouse contends would cause confusion with its trademarks.
RIGHTS OF RESPONDENT:
Respondent contends it purchased the domain for use selling clothing to Internet users, and submitted evidence that it had previously sold (and currently still sells) numerous items of merchandise on the Internet under its other domain names, <crazytroll.com>, <totalhorror.com>, and <toyman4ever.com>, further details of which were submitted in its Supplemental filing, mentioned below. It did not purchase the domain, nor intentionally use it, to confuse the public nor divert users from any businesses of Complainant, nor did it purchase the domain to sell it to Complainant, nor did it purchase it to damage or divert business from Complainant, nor to do any other of the prohibited actions listed in the UDRP.
Respondent contends that because it purchased the domain from the expired domain names auction, subject to the NSI rules on expired domains, and because it did so without actual or constructive knowledge of the prior ownership by Complainant of either the domain or a common law or registered trademark, it had every reasonable right to believe that it had the legitimate rights to register and use it for selling clothing, and no reason to believe it conflicted with Complainant nor any other entity or person. In purchasing the domain name, Respondent relied on the NSI rules as giving it authority to use the domain purchased at the auction.
It further contends that since there are numerous other Penthouse registered trademarks which do not belong to Complainant, it had no reason to believe that Complainant, even if it had known of Complainant’s claims, could preclude it from using a domain name that includes the word “Penthouse” to sell clothing on the Internet.
BAD FAITH REGISTRATION AND USE:
For the same reasons that Respondent felt it had the right to purchase and register the domain name, and to use it, Respondent asserts that it did not register it or attempt to use it in bad faith. It reiterates that it made no attempt to disrupt Complainant’s business, to demand money for or attempt to sell it to Complainant, or otherwise do any of the prohibited actions under the UDRP. It simply registered it to sell clothing on the Internet, as it does with other merchandise under its other registered domains.
With respect to use of the domain, Respondent alleges that because of continuing demands by Complainant commencing on April 14, 2005, and a subsequent demand by the operators of a retail store in Connecticut to transfer it to them in a sale, Respondent has never used it for any purpose other than to advertise expired domain names and error websites, after a short period of time when it listed various merchandise and numerous links to different websites, including some that sold adult content merchandise or items. It claims it was unaware, until contacted by Complainant, that its website linked to adult content and that, promptly upon demand by Complainant, all such links to adult content or merchandise were removed. It contends that because of these conflicting demands, it decided not to pursue its original use, for the time being, until these demands for transfer were resolved. This Proceeding is evidence that such demands continue.
BAD FAITH BY COMPLAINANT AND REVERSE DOMAIN NAME HIJACKING:
Respondent contends that Complainant failed to disclose in its UDRP Complaint and to the Panel the significant facts that the parties had previously engaged in a series of emails and contacts, initiated by Complainant, commencing on April 14, 2005, during which Complainant claimed to be the owner of a conflicting and infringed trademark and demanded transfer of the domain to it. In doing so, Complainant did not advise Respondent that it was the previous owner of the domain, but relying on its alleged trademarks Complainant demanded that Respondent (1) transfer the domain name; (2) confirm that it owns no other domain names with the mark Penthouse; and (3) agree that it will not assist third parties in registering any domain names with the mark Penthouse. Soon thereafter, Respondent agreed to transfer the domain, without compensation, but it declined to execute the proffered transfer agreement because it violated ICANN Policy and Respondent’s Service Agreement. On April 26, 2005 Respondent received another demand that it sign the Agreement and transfer the domain, not disclose that it had signed the transfer agreement, and that it give up all rights to contest Complainant’s marks or domains.
On or about June 6, 2005 Complainant advised Respondent that it was waiting for the executed domain transfer agreement, list of all domains utilizing the mark Penthouse, and an offer [from Respondent] that would reasonably reimburse Respondent for the transfer and purchase of the subject domain name. At no time during this exchange of correspondence did Complainant advise Respondent that it had given up its rights or permitted the <penthouseboutique.com> domain to expire, which it previously used, or that it had filed an application to register “Penthouse Boutique” as a trademark with the PTO.
As Respondent can reconstruct, no communications took place between Complainant and Respondent between June 6, 2005 and January 27, 2006. On January 27, 2006, again Respondent received an email from Complainant requesting Respondent to transfer the subject domain name. Respondent advised Complainant that it would transfer the domain name on the condition that Respondent would not be required to execute a domain transfer agreement that violated its Service Agreement and ICANN Policy.
In January or February 2006, a third party, Penthouse Boutique, a Connecticut retail entity that sells adult content products advised Respondent that it owned the rights to the subject domain name and offered Respondent a monetary sum for the purchase of <penthouseboutique.com>. Penthouse Boutique advised that it would not require Respondent to execute a domain transfer agreement. Respondent was unaware that this third party storeowner was a licensee of Complainant, and it was not told of this, or of the trademark registration by Complainant.
Respondent was subsequently advised that Penthouse Boutique did not have authority to purchase the subject domain name from Respondent and could not settle this matter on Complainant’s behalf. Respondent was reluctant to transfer the subject domain name to Complainant without an agreement releasing Respondent from any and all claims arising from the subject domain name because of these conflicting demands of different parties.
Based on this undisclosed history of highly relevant negotiations over the transfer of the domain, all of which occurred before the filing of the UDRP Complaint, Respondent contends that Complainant “misrepresents to the Panel that Respondent failed to respond to its inquiries [and] previous requests that Respondent transfer the subject domain name.” [Para. 36, Response] And it argues that Complainant’s use of the UDRP system is in bad faith and an attempt to deprive Respondent, a legitimate registered domain name holder, of <penthouseboutique.com>. Respondent claims that Complainant’s conduct constitutes reverse domain name hijacking under ICANN Policy and the Anticybersquatting Consumer Protection Act (“ACPA”) which provides protection from overreaching trademark owners. 15 U.S.C. § 1114(2)(D)(v).
In support of its reverse domain name hijacking claim, Respondent cites and discusses in some detail the applicability to this case of Goldline Int’l, Inc. v. Gold Line, D2000-1151 (WIPO Jan. 4, 2001) and G.A. Modefine S.A. v. A.R. Mani, D2001-0537 (WIPO July 20, 2001), both cases where the Complainant failed to disclose that the parties were negotiating settlement and the settlement terms proposed by the Respondent were considered fair and reasonable, or where the Respondent had made clear why the Complainant had no basis for a UDRP complaint and still proceeded to file.
Finally, it summarizes the basis for its bad faith assertions against Complainant, as it states:
Here, the Complainant failed to disclose [to the Panel] any of the negotiations that took place between the parties between April 2005 and the date this Complaint was filed. . . . Respondent was willing to transfer the subject domain name on the condition that it would not be required to sign a domain transfer agreement that violated its Service Agreement and ICANN Policy. Further, Penthouse Boutique [had] advised Respondent that it had rights and interest in the subject domain name. Respondent was therefore reluctant in transferring the domain name without an agreement releasing Respondent from all third party claims arising from the subject domain name. Respondent at no time requested a monetary sum from Complainant for the subject domain name. . . . Penthouse Boutique offered to purchase the subject domain name from Respondent for a monetary sum. Finally, [Complainant] does not have rights and interests in the subject domain name because it failed to notify NSI that it did not want the subject domain name transferred to a third party. Accordingly, this Panel should find that the filing of this Complaint constitutes reverse domain hijacking. [Para. 40, Response].
Additional Submissions By The Parties
C. Complainant Supplemental
The Supplemental filing reargues the issues of confusing similarity of the mark and the domain name, and the assertion that its 2003 filing with the PTO was constructive notice to Respondent of Complainant’s claim to the mark.
The Supplemental argues that Respondent has not provided any “concrete evidence” that it has rights to or legitimate interests in the domain name at issue, and has failed to prove that it actually intended to have a bona fide offering of goods or services. It reiterates the claim that the website directed viewers to adult content links and claims that when Respondent removed such links, after objection by Complainant, this was an admission of Respondent’s bad faith. It further argues that even if Respondent planned to sell clothing from the website, it did not need to use the word PENTHOUSE in its name to do so, and planned to do so only to divert customers from Complainant’s businesses.
Complainant does not deny that Respondent offered to transfer the domain without compensation, but reargues, again, the bad faith registration and use facts, stating that case law does not require a registrant to demand money for transfer of the name in order to constitute bad faith, and reiterates that simply because the PENTHOUSE name was famous, Respondent had to be on notice of a potential conflict simply because it was well known, and therefore it must have registered the domain in bad faith, as a matter of law.
Complainant devotes more than half of the Supplemental filing to attacking the legal and factual basis for Respondent’s claim that Complainant, by omitting material facts about the previous negotiations between the parties and the demand by a third party for a transfer, was guilty of abusive use of the UDRP process and is a Reverse Domain Name Hijacker. First, it does so by attempting to distinguish the cases cited by Respondent, and arguing that Respondent provided no evidence of communications between the parties and no proof that the proceedings were commenced in bad faith. Second, it argues that Complainant has a right to protect itself from infringements, but apparently without any obligation to disclose previous settlement negotiations or the nature of its demands on Respondent for such settlement prior to its filing this Proceeding.
Next, it says the fact a third party, the Connecticut retail store operator claimed rights in the domain, and offered to purchase it from Respondent, is not relevant. Complainant discloses here for the first time that the store operators are mere licensees of it, that Complainant itself does not and apparently never has operated the stores, and it provides a redacted copy of purported licensing agreements for both Connecticut stores to use the Penthouse name. [Panel Note: Both such Agreements refer to use of the term “Penthouse Boutique” as the name for the stores, as a “trade name,” and not as a trademark, which the Panel deems significant. See Discussion, below].
It also claims that Respondent has provided no legal authority for the premise that a Complainant who fails to advise the Panel of material facts, such as a series of failed negotiations between the parties, is guilty of bad faith under the UDRP. It disputes the applicability of the two cases cited in Respondent’s Response, attempting to distinguish them. It claims that “only a few letters were exchanged between the parties prior to filing the Complaint, none of which contained offers from Complainant.” [Para. 28, Supplemental Complaint]. However, it does attach to the Supplemental a purported Transfer Agreement, dated March 2006, which it says does not violate ICANN Policy or Respondent’s Service Agreement. [Exhibit 4]. Complainant also says that Respondent never communicated its objections to the proposed Agreement nor the basis for them, and has failed to introduce evidence to support this allegation. It further claims that at no time did Complainant offer to pay anything for the domain at issue.
It further argues that the fact that Respondent repeatedly agreed to transfer the domain to Complainant, on condition that it not violate its rights or agreements, is evidence that it does not believe it has or had rights to register or use the domain name. [Panel Note: This argument ignores the well established legal principle that offers in compromise are never admissible as evidence of guilt, for strong public policy reasons. See, for example, Fed. Rules of Evid., Rule 408]
Finally, it argues in some detail that the NSI Policies and Rules for expired domains which authorizes transfer of the domain to a third party after a period of time, “does not entitle a third party to violate Complainant’s trademark rights.” It contends that the two provisions or concepts are not inconsistent and that the NSI rules do not give Respondent the right to use an infringing domain name.
D. Respondent Supplemental
Respondent, in its Supplemental filing, again argues that the NSI rules support its argument that once Complainant fails to notify NSI of a desire not to transfer the domain name to others, it has waived the right to object to its use by the transferee, quoting from the NSI Rules. It also argues that because of the delays of Complainant in notifying Respondent of an alleged infringement, it consented to the transfer and use of the domain name by Respondent.
It devotes most of the Supplemental to its position that this entire proceeding could have been avoided, and the name would have been transferred to Complainant, long ago, without a written agreement and without compensation to Respondent, if Complainant had simply accepted Respondent’s offer to do so in 2005. Instead, Complainant insisted on a detailed Transfer Agreement, and that in Complainant’s Supplemental comments, it again fails to disclose to the Panel that there was a second, much more objectionable Transfer Agreement demanded of Gene Heu, the apparent owner of Respondent’s business. [This Agreement is attached to Respondent’s Supplemental as Exhibit B]. That agreement would have imposed on Heu a preclusion of the right to register or use any domain name using the word Penthouse, whether or not it conflicted with or infringed Complainant’s registered marks. It would also have required him to police Complainant’s marks and to notify them of expired or other marks available with the word Penthouse in them. The proposed agreement also clearly indicates that Complainant, in spite of stating in its briefs that it never offered to pay anything for the domain name, did in fact offer $150 for any transfer of names with the Penthouse name in them during the term of the second agreement it demanded that Heu sign.
Respondent reiterates that it would have executed a transfer agreement if it did not have these unreasonable policing and other provisions, and without compensation, and that it tried repeatedly to convey this to Complainant, who continued to press for such uncalled for provisions and written transfer agreements from Respondent and Heu. This, says Respondent, is further evidence that this UDRP proceeding is brought in bad faith and supports Respondent’s position that Complainant is abusing the process and is a Reverse Domain Name Hijacker. It again cites as authority several decisions it says supports its position, both of which turned on the failure of the complainant in those cases failing to disclose to the Panel and to take into consideration the nature of the negotiations and the facts of these disputes, before filing the UDRP case and without disclosure of the facts.
Respondent points out that there are at least 40 other registered marks including the term “Penthouse,” including at least one that is used to sell clothing. None of these marks 40 belong to Complainant. Respondent cites at least three cases, such as Sporty’s Farm v. Sportsman’s Market, 202 F.3d 489 (2nd Cir. 2000) (where the domain name owner sold Christmas trees and the trademark owner sold aviation supplies and equipment), as evidence that many other Panels have denied relief on the basis that the goods were not similar enough to create consumer confusion, even where there was a registered trademark.
Finally, Respondent again asserts that it registered the name solely for the purpose of selling clothing on the Internet; was unaware of any potential conflict or trademark; made no effort to sell the name to Complainant, nor to divert or harm Complainant’s business, nor did any of the things that are common indicia of bad faith registration and use of a domain name. Based on this, Respondent again claims it is innocent of any bad faith and argues that Complainant brought the Proceeding in bad faith, and that by Complainant omitting material facts, documents and other information about the Respondent’s efforts to resolve the matter, Complainant is guilty of abusive use of the UDRP and Reverse Domain Name Hijacking.
In sum, Respondent claims it is not a cybersquatter or abusive registrant of the domain, and that the UDRP Rules do not protect Complainant, and that the Complaint should be dismissed.
A. Identical or Similar to Complainant’s Trademark; Likelihood of Confusion:
The subject domain is legally identical to the PENTHOUSE BOUTIQUE 2005 registered trademark, although as noted in the Discussion section, there are other legal issues that may make this point irrelevant for purposes of this Decision. See Pomellato S.p.A v. Tonetti, D2000-0493 (WIPO July 7, 2000) (finding <pomellato.com> identical to the complainant’s mark because the generic top-level domain (gTLD) “.com” after the name POMELLATO is not relevant); see also Sony Kabushiki Kaisha v. Inja, Kil, D2000-1409 (WIPO Dec. 9, 2000) (finding that “[n]either the addition of an ordinary descriptive word . . . nor the suffix ‘.com’ detract from the overall impression of the dominant part of the name in each case, namely the trademark SONY” and thus Policy ¶ 4(a)(i) is satisfied); see also Body Shop Int’l PLC v. CPIC NET, D2000-1214 (WIPO Nov. 26, 2000).
The Panel recognizes that given the strong “family of marks” registered by Complainant over the years, which use the words PENTHOUSE and formatives thereof, there is at least a possibility of confusion due to the similarity of the subject domain name <penthouseboutique.com> to the family of PENTHOUSE word marks under the principles of trademark dilution, no matter what use it is put to. See Toys R Us v. Akkaoui, 40 U.S.P.Q.2d 1836 (N.D. Cal. 1996), granting injunctive relief to protect a “family of marks” in a dilution proceeding. However, as noted in the Discussion, this is not a Finding or matter which is normally dealt with in an ICANN/UDRP proceeding, so this Panel makes no finding that there is or could be confusion between the domain and the marks. See Mattel, Inc. v. Knox, FA 245916 (Nat. Arb. Forum Apr. 21, 2004) (“Complainant asserts claims under the ACPA and the anti-dilution portion of the Lanham Act, as well as alleging that it has proceeded with the UDRP to protect its trademark rights. The Panel finds that this Complaint is outside of the scope of the UDRP.”)
The Panel does not believe that Complainant has, nor could it, establish it has or ever had a prior common law trademark in the combined words “Penthouse Boutique,” both because of the short time it was used, and because of the limited nature of its use only as the names of two retail stores in Connecticut, starting first in August 2003 and 2005 for the second. Cf. Tuxedos By Rose v. Nunez, FA 95248 (Nat. Arb. Forum Aug. 17, 2000), where it was found that common law rights in a mark exist where its use was continuous and ongoing, and secondary meaning was well established. Neither of those conditions were met in the instant case. Furthermore, even Complainant, in its own licensing agreements, treats the use of the words “Penthouse Boutique” as store or trade names and not trademarks. [Exhibit 1, ¶5.04(a)]. The same agreement required Complainant to file for a trademark registration promptly after execution of the agreement, suggesting that it recognized it had none, prior to operation of the store for at least a period of time. As is stated in Candy Direct, Inc. v. itsalldirect2u.com, FA 514784 (Nat. Arb. Forum July 13, 2005), mere use of two words as a business name is not sufficient to establish trademark rights. The Panel, therefore, finds that no common law rights attached to the mark during the periods at issue.
B. Respondent Rights or Interests In Domain Name:
The Panel finds that Respondent, on balance, has established that it registered the domain name at issue, in good faith and not abusively, for the intended purpose of selling clothing on the Internet. The Panel finds that because Respondent acquired a domain name that had apparently been abandoned by its previous owner for some period of time, and acquired it for a legitimate use of retailing clothing over the Internet, it reasonably believed it was free to use it. There is no evidence that Respondent or its owner are legally trained or that they had reason to believe use of it might constitute a trademark infringement of a mark that did not complete the pending trademark registration process until nearly a year after first registration of the domain.
Complainant General Media Communications, Inc., is not entitled to preclude all other uses of the term “Penthouse,” as is indicated by the fact that there are nearly 40 other live Penthouse and formatives registered with the PTO. It can only do so if the use is found reasonably likely to confuse the consuming public. 15 U.S.C. §1114(1)(a). However, to preclude Respondent’s use on this basis, Complainant would have to prevail in a formal trademark dilution proceeding, since the UDRP does not provide relief on such basis.
The fact that the disputed domain did not yet come into active use for this purpose, due to the threats by Complainant and by a third party claimant, is understandable on the facts. The Panel, therefore, finds that Respondent had, at the time of registration, a legitimate right to register and, thereafter, a right use the domain name for its planned business under governing UDRP Rules and Policies. Respondent has established to the satisfaction of the Panel that it previously sold and still sells various items of merchandise on the Internet, a perfectly legal enterprise.
C. Registration and Use In Bad Faith By Respondent:
The Panel, for the reasons set forth in the Discussion, finds that Respondent did not register or use the domain name in bad faith. To the contrary, the Panel feels that under the circumstances Respondent had no reason to believe it was improper or illegal, and once it was contacted by Complainant, it acted in good faith in trying to resolve the issues raised in a prompt and reasonable manner, which included its offer to transfer the domain to Complainant, without demanding compensation, if a reasonable transfer agreement were to be presented and signed by the parties, or if it could simply be transferred without such an agreement. Complainant apparently refused to accept such a resolution of the issues, which has resulted in this totally unnecessary Proceeding.
D. Abuse of UDRP Rules; Reverse Domain Name Hijacking:
Based upon (1) Complainant’s lack of candor in both its initial and supplemental filings, and its failure to provide the Panel with highly significant facts and documents relative to the case, and (2) the fact that its demands in order to accept a requested transfer, made on Respondent and its owner (who was otherwise willing to transfer the domain name), were manifestly unreasonable, the Panel finds that Complainant has wrongfully attempted a Reverse Domain Name Hijacking by virtue of its abuse of the arbitration proceeding. See Curb King Borderline Edging Inc. v. Edgetec Int’l Pty., FA 105892 (Nat. Arb. Forum May 10, 2002) (finding that, when the Complainant is aware of facts that bear a direct relation to the dispute and fails to include them in its complaint, the complainant’s omission constitutes an abuse of the administrative proceeding, warranting a finding of reverse domain name hijacking); see also G.A. Modefine S.A. v. A.R. Mani, D2001-0537 (WIPO July 20, 2001) (finding that the complainant, by omitting several relevant facts that would have undermined its position, had brought the complaint in bad faith, which constituted an abuse of the administrative proceeding rules); see also Qtrade Canada Inc. v. Bank of Hydro, AF-0169 (eResolution, June 19, 2000) (finding that the complaint was brought in bad faith given where the complainant spent one year trying to buy the name from the respondent and over-stated to the panel the status of its pending trademark application). While the facts in each of these cases are somewhat different than the instant case, the legal principles are the same, and the Panel believes they govern this case as well.
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.
Paragraph 15(e) of the UDRP Rules also instructs the Panel “If after considering the submissions the Panel finds that the complaint was brought in bad faith, . . . the Panel shall declare in its decision that the complaint was brought in bad faith and constitutes an abuse of the administrative proceeding.”
As indicated in the Findings section, the Panel agrees with Complainant that the domain at issue is substantially identical, for all practical purposes, to the registered trademark on the design mark, PENTHOUSE BOUTIQUE, Registration Number 2,952,697, effective May 17, 2005, owned by Complainant. To that extent, Complainant has established the first required element of its case, but there are a number of other aspects of this element that the Panel feels are important to comment upon, since they also relate to the other two required elements of proof under the UDRP Rules.
Although this mark is the result of an original filing on June 19, 2003, according to the USPTO website, which is an open, public record, that filing was an Intent to Use Application (“ITU”), which was for a Class 42 field of use, covering Retail Store Services “featuring adult products, namely videos, DVDs, magazines, oils, notions and novelties.” As an ITU, it does not ripen into a full claim for issuance of a registration until a Statement of Use (“SOU”) is filed, indicating the final nature of the use and the date such use commenced. Complainant did not file the SOU until February 3, 2005, at which time it claimed to have commenced first use on August 1, 2003. Not surprisingly, Complainant did not acknowledge these limitations, which adversely affects its case.
Strangely and inconsistently with this claimed date of first use, according to the public records of the PTO, the General Counsel of Complainant filed, on July 29, 2004, an Extension Request which seeks further time to file the SOU at a later date, which suggests that use had not actually commenced as of that date, if it was necessary to have more time to prove actual use. As the USPTO Website explains: “An Extension Request is a sworn statement signed by the owner or a person authorized to sign on behalf of the owner, stating that the applicant still has a bona fide intention to use the mark in commerce, and needs additional time to use the mark in commerce.” [Emphasis added] See http://www.uspto.gov/web/offices/tac/doc/basic/addreq.htm.
Given that the GC was not able, as of that date, to establish actual use, it is perhaps not unreasonable to assume that Respondent was unaware of any conflict between a future, to be registered mark and its desired domain. It was only less than three months after this continuing extension request, on October 11, 2004, that Respondent registered or acquired the domain at the auction. It was not until four months after Respondent acquired the name that the SOU was filed, and then two months after that when Complainant first contacted Respondent and demanded transfer because of an alleged infringement. These calendar events raise, in the mind of the Panel, and in defense of Respondent’s claimed good faith lack of knowledge of the mark, some strong reservations as to whether the PTO filings could reasonably constitute either actual or constructive notice of the claim to the mark or even the existence of the mark.
The question of whether the domain is confusingly similar to the mark is an issue of fact that is normally determined in a fact intensive court trial, or in a dilution proceeding. Given the claimed limited scope of use of the mark, adult products, it is highly possible that the trier(s) of fact would have concluded that mere incidentally linking to adult content websites is insufficient to find it confusingly similar, even if Respondent had intentionally created or used such links. In fact, Respondent denies that it knew of the links until pointed out by Complainant, and Complainant provided no evidence that it did know of them. That, and the other factual disputes in the instant case, is one of the many sound reasons why other Panels have declined to rule or grant transfers of domain names in cases that were essentially based on a dilution claim, as here.
Complainant makes a great deal of the fact it holds many trademarks incorporating the word “Penthouse,” yet it is not the only holder of Penthouse formative marks. Respondent showed that there were at least 40 other such marks. Thus, this highly relevant question of fact is beyond the scope of this proceeding and any decision by this Panel. See CafePress.com v. Fragomele, FA 428848 (Nat. Arb. Forum Apr. 27, 2005) (“An ICANN panel is solely entrusted under the Policy with determining questions of cybersquatting which is a highly focused and specific form of trademark infringement. Issues such as trademark infringement lie completely outside the narrow confines of cybersquatting and hence the very limited jurisdiction of any ICANN panel. Accordingly, the Panel leaves all such issues for resolution by appropriate judicial tribunals.”); see also Register.com, Inc. v. Wolfgang Reile et al, FA 208576 (Nat. Arb. Forum Jan. 27, 2004) (finding that issues of trademark infringement are not within the purview of any ICANN proceeding and are best left for court adjudication in light of the very limited and focused jurisdiction afforded to ICANN panels under the Policy and the summary and nature of ICANN proceedings).
The Panel has already commented on the basis for its Finding that Complainant has no common law rights to the trade name, PENTHOUSE BOUTIQUE, and that it could not possibly acquire them in such a short period of time. The Complainant, therefore, cannot rely on this supplemental support for its position, either.
The Panel’s finding on this essential element, in favor of Respondent, means that under the UDRP Complainant has lost its case for transfer, and the Panel could stop here. However, as there are many other disputed aspects of this issue, further comments seem appropriate, beyond those in the Findings.
The essence of the reasons for Respondent prevailing on this element arise from the twin facts that with the many other users of the Penthouse name, including at least one other party selling clothing, Complainant’s claim to exclusive use of the word “Penthouse” is highly questionable; and the fact that the circumstances of Respondent’s acquisition of the domain would lead most layman to believe in good faith that they had the right to use the domain. This is buttressed by Respondent’s undisputed assertion that it was already selling other goods on the Internet, under other domain names, and that it acquired the new domain to sell clothing, items that were not similar to those sold on its other Internet domains. None of the items sold on the other domains were adult content, and there is no evidence that what Respondent planned to sell on the new domain would be. Exemplars of the items sold are shown on Exhibit A to the Respondent’s Supplemental filing.
There are legions of domain name cases holding that a party has the right to acquire a domain name for a specific purpose, even though others may also be operating a similar business. Often the legitimacy turns on continuing an established business or a license to operate a business under the name, but there is no requirement that this be the exclusive manner in which such a right occurs.
Dealing for a moment with Respondent’s argument that the NSI Expired Domains Rules gave it the right to use the domain, notwithstanding objections from the former owner, the Panel wishes to make clear that this premise is not shared by the Panel. At most the NSI rules provided NSI and the purchasers of the expired domains with protection from suit by the former owner(s) who might try to reclaim the expired domains. The Panel agrees with Complainant that, notwithstanding such rules, the purchaser of a domain name that is found to be dilutive or infringing of a registered trademark might find himself or itself in litigation and the trademark owner might prevail. Complainant, however, is not saved by this interpretation, since it is irrelevant here.
As pointed out in the previous section, a UDRP proceeding is not an infringement trial, no matter how hard a Complainant might wish to make it such. ICANN established the UDRP rules solely to deal with abusive registrations (discussed further in the next section) and not to try infringement disputes. See Commercial Publ’g Co. v. EarthComm., Inc., FA 95013 (Nat. Arb. Forum July 20, 2000) (finding that the Policy’s administrative procedure is “intended only for the relatively narrow class of cases of ‘abusive registrations’ . . . The [P]olicy relegates all ‘legitimate disputes’ to the courts”); see also Mattel, Inc. v. Knox, FA 245916 (Nat. Arb. Forum Apr. 21, 2004) (“Complainant asserts claims under the ACPA and the anti-dilution portion of the Lanham Act, as well as alleging that it has proceeded with the UDRP to protect its trademark rights. The Panel finds that this Complaint is outside of the scope of the UDRP.”). This Panel agrees with these cases.
The Panel found, above, that the Registrant did not either register or use the domain name at issue in bad faith, and briefly explained why it so found. As with the second element under the UDRP, the fact that Complainant did not prevail, means the disputed domain will not transfer. However, to make the basis for these Findings abundantly clear, a bit more needs to be said.
The Panel has already commented on the circumstances of registration and the expired domains auction issues, and the assumptions of Respondent arising from the NSI rules. We deal here solely with the facts in the UDRP policy and rules which suggest bad faith registration and use on the part of Registrant/Respondent. The Respondent, in the Contentions section, set forth in great detail the course of negotiations between the parties over the demanded transfer, and the fact these negotiations were omitted from the Complaint, so we will not detail them again here.
Under the UDRP Policy, Paragraph 4(a)(iii), Complainant can normally only establish bad faith and abusive registration, if and only if it shows that Respondent either (1) registered or acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of documented out-of-pocket costs directly related to the domain name; or (2) registration of the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that the registrant has engaged in a pattern of such conduct; or (3) registration of the domain name primarily for the purpose of disrupting the business of a competitor; or
(4) by using the domain name, the registrant intentionally attempted 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 registrant’s web site or location or of a product or service on the web site or location.
The fact that Respondent almost immediately agreed to transfer the domain to Complainant, without cost, when faced with a claim of infringement, and its conduct in negotiations during that period, almost scream “NO” to any claim the domain was acquired for any abusive purposes, but especially number (1). Similarly, there is no evidence here that Respondent acquired this domain to prevent Complainant from using it. In fact, Complainant itself owned it at one time and let it expire for more than a year. Thus, there is no basis under item (2). There is also not a shred of evidence to support item (3), so that we are left only with the claim of Complainant that item (4) is applicable because there were a few links on the website that initially redirected users to adult content websites or merchandise which could mislead Internet users as to the source.
The Panel calls attention to the requirement in the words “intentionally attempted to attract” viewers to the site, found in the Policy statement. Aside from suppositions forwarded by Complainant on this element, there is virtually no evidence of intent to mislead the public by use of this domain name by Respondent. Complainant’s first argument is that it believes Respondent would not have registered the name for use, unless it thought the association with Penthouse would benefit its sales. It provides no evidence of this supposition, other than the famous nature of it own trademarks, which is not evidence but mere supposition as to the intent and the value of these marks to Respondent. The Panel feels that this is insufficient to meet an intent requirement. Normally, such intent is shown by extensive use on the website or in the metatags of the site of the mark claimed to be misused. Given the uncontested statements of Respondent that it registered the domain for the purpose of selling clothing, and the fact that other than some adult content type clothing or toys Complainant’s merchandise does not generally include clothing, this seems a very weak argument.
The argument that the domain website had some links to adult content or adult merchandise has more merit and requires a bit of analysis and comment. Looking at the type of web content in the exhibits showing the <penthouseboutique.com> pages, it seems clear to the Panel that these are exactly the sort of generic referral links used by ISPs and Internet services that are used as “placeholders,” to bring some revenue in from click thorough’s to those sites, when a domain is parked or not in use for a specific purpose. Neither Complainant nor Respondent explained who or how the site was hosted in the meantime, but absent that, the Panel can and does take judicial notice of industry practices in this regard. Furthermore, Respondent contends, without much argument from Complainant, that such links were removed promptly upon demand by the Complainant, and that they do not exist now. It also seems likely that if this were the intent of Respondent, it is unlikely it would have almost immediately offered to transfer the domain to Complainant when it received the first notice or demand for transfer.
Respondent has already explained, and the Panel accepts this explanation, that the domain was never placed in actual use due to the conflicting demands of Complainant and the party which turned out to be a licensee of Complainant. Therefore, there is no evidence of bad faith use. The UDRP requires both bad faith registration and use, so it is the opinion of the Panel that Complainant has not established this third element. UDRP Rule 4(a)(3).
Bad Faith and Abuse of Reverse Domain Name Hijacking
UDRP Rule 3(b)(xiv) requires that "Complainant certif[y] that the information contained in th[e] Complaint is to the best of Complainant's knowledge complete and accurate, that th[e] Complaint is not being presented for any improper purpose, such as to harass, and that the assertions in this Complaint are warranted under these Rules and under applicable law, as it now exists or as it may be extended by a good-faith and reasonable argument." [Emphasis added].
This Rule is essentially a certification and expansion of the duty of candor incorporated in ABA Model Rules of Professional Conduct 3.3 and Florida Rules of Professional Conduct 4-3.3, entitled “Duty of Candor Toward The Tribunal,” both of which require a party not to attempt to mislead the judge or tribunal before whom a case is being tried. A party can be misleading either by making affirmatively false or incomplete statements, or by intentionally or negligently omitting material facts that would significantly change the interpretation of events by the tribunal or panel trying or arbitrating a case. All these rules have as their goal a fair and complete decision on disputed matters before the tribunal. This fair trial cannot be accomplished if a party does not follow the procedural rules in good faith, or presents information which is not complete nor accurate in its pleadings or briefs, or in the exhibits attached to pleadings.
Presentation of false or misleading information in a Complaint or any pleading under the UDRP is a serious abuse of the arbitration process, which process is intended to quickly and inexpensively resolve domain name disputes without the formalities of a trial. For this reason, UDRP Rule 15(e) requires the Panel to make specific findings of bad faith and abuse of the proceedings where this occurs. A series of cases, some of which were cited by Respondent in its argument, make this clear. See G.A. Modefine S.A. v. A.R. Mani, D2001-0537 (WIPO July 20, 2001) (finding that the complainant, by omitting several relevant facts that would have undermined its position, had brought the complaint in bad faith, which constituted an abuse of the administrative proceeding); see alsoCurb King Borderline Edging Inc. v. Edgetec Int’l Pty., FA 105892 (Nat. Arb. Forum May 10, 2002) (finding that, when the complainant is aware of facts that bear a direct relation to the dispute and fails to include them in its complaint, the complainant’s omission constitutes an abuse of the administrative proceeding, warranting a finding of reverse domain name hijacking); see also Qtrade Canada Inc. v. Bank of Hydro, AF-0169 (eResolution June 19, 2000) (finding that the complaint was brought in bad faith given the fact the complainant spent one year trying to buy the name from the respondent and over-stated to the panel the status of its pending trademark application); see also, http://www.gigalaw.com/articles/2002-all/hollander-2002-03-all.html, on the purpose and effect of Rule 15(e).
Complainant, in this case, inexplicably failed to disclose in its initial Complaint that a whole series of emails and letters were interchanged between the parties between April 2005 and the date on which this Complaint was filed, during which Respondent offered several times to transfer the domain name to Complainant, without charge, in order to resolve the allegedly improper registration and infringement. Respondent only asked that either there be no written transfer agreement or that, at least, it not contain the oppressive and unnecessary provisions which Respondent objected to in the draft agreements submitted to it by Complainant’s counsel. The initial Complaint omits to mention this exchange, the offers by Respondent to resolve the dispute, the language of the agreements which it proposed, and even misrepresented to this Panel the fact of the exchange by stating in its brief that as of the date of filing the Complaint, “Respondent neither has responded to Complainant’s January 27, 2006 email and correspondence nor taken any action to transfer the penthouseboutique.com domain to Complainant.” This statement could easily mislead the Panel, since it falsely suggests that Respondent was acting in bad faith and had made no efforts to resolve the dispute, by Complainant’s omission to acknowledge the entire course of these negotiations, exactly as in the cases cited above.
Complainant compounds its initially misleading statements, by stating in Paragraph 28 of its Supplemental brief that “There were no lengthy [settlement] negotiations going on between Complainant and Respondent. Moreover, only a few letters were exchanged between the parties prior to filing the Complaint.” While one might argue what constitutes “lengthy negotiations” or “only a few letters,” the fact that Respondent during that exchange of correspondence had offered a complete resolution of the dispute by transferring the domain to Complainant, without cost or the necessity of any agreement, is undoubtedly the most significant set of facts in the entire dispute. If Complainant had accepted this bona fide offer of transfer, this entire proceeding would have become totally unnecessary. Furthermore, to omit these material facts and then suggest to the Panel that Respondent is the one acting in bad faith is an unacceptable and misleading assertion. The Panel could well have been misled by these statements, had Respondent not pointed out what actually happened, and then submitted documentary evidence to support his position.
Moreover, Complainant’s Supplemental brief argues that there was nothing unreasonable about its proposed Transfer Agreement, which it attached as Exhibit 4 to the Supplemental brief. The problem is, as pointed out by Respondent in its Supplemental brief, Exhibit 4 was only one of several related Transfer Agreements that Complainant apparently demanded be signed by Heu, the domain owner. Respondent attached as its Exhibit B, “GMCI draft of July 21, 2005,” which GMCI proposed be signed by Gene Heu, apparently the owner of Respondent and the named contact in the WHOIS registration information, as shown in Respondent’s Exhibit D to its Response.
This second such transfer agreement contained a series of oppressive and unacceptable provisions binding Heu, personally, which would have made him police domain activities and take other actions which were manifestly unreasonable conditions, far beyond the terms of the ICANN/UDRP Rules which provide that a deemed infringer is not acting in bad faith so long as he, she or it promptly agrees to transfer the domain to the trademark owner “in exchange for valuable consideration [not] in excess of [the] documented out-of-pocket costs directly related to the domain name.” Policy ¶ 4(b)(i). The Policy does not require a Respondent to warrant anything or agree to anything except to transfer the conflicting domain for its out of pocket expenses. Respondent also included copies of correspondence in which it made clear it was not willing to sign such agreement that went beyond its obligations under its Service Agreements and the ICANN/UDRP Policies. Yet, Complainant’s Supplemental brief contends, in Paragraph 33, that it was never advised that Respondent objected to the agreements, as violating its Service Agreement and the Policy. This latter assertion appears to be untrue, based on the documents Respondent provided the Panel.
It is especially difficult for a UDRP Panel to determine the reasons for what appears to be material omissions and misleading assertions made in briefs and pleadings, because an ICANN/UDRP case is intended to provide expedited relief and the case is handled without a trial. In a full blown trial there would be an opportunity to hear and evaluate the integrity of the witnesses and to have explanations for the context in which documents were prepared and offered in evidence, and where parties could explain inconsistencies in evidence and briefs. Here the Panel can only act on what is before it, and in this case conclude from the significant omissions of material evidence and conflicting assertions, that it forms the basis for the required Finding, set out above, that Complainant has wrongfully attempted a Reverse Domain Name Hijacking by virtue of its abuse of the arbitration proceeding through its omission of material facts and its apparent intentional or negligent misstatement of some of the most significant and material facts in its briefs and exhibits, even when presented with a chance to correct the omissions and errors when pointed out by Respondent. Rule 15(e) expressly requires this Finding be made by the Panel, under these circumstances. See the supporting cases cited, supra.
As only the first of three elements of proof required under the ICANN/UDRP Policy was established by Complainant, the Panel orders that the relief requested shall be DENIED, and directs that NO transfer or cancellation of the domain name at issue take place.
The Complainant is guilty of abuse of the administrative proceeding process, since the Complaint was brought and conducted by it in bad faith, for the reasons, and based on the evidence noted above in the Findings and the Discussion sections.
G. GERVAISE DAVIS III, Panelist
Dated: May 26, 2006
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