General Mills, Inc. v. ACI
Claim Number: FA0604000697596
PARTIES
Complainant is General Mills, Inc. (“Complainant”), a Delaware corporation having its principal place of business at Minneapolis, MN 55426, represented by Carrie L. Johnson, of Fulbright & Jaworski, 2100 IDS Center, 80 S. Eighth Street, Minneapolis, MN 55402. Respondent is ACI (“Respondent”), 16047 N. 82nd Street, Scottsdale, AZ 85260.
REGISTRAR AND DISPUTED DOMAIN NAME
The domain name at issue is <kix.com>,
registered with Network Solutions, Inc.
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.
James Bridgeman as Panelist.
PROCEDURAL HISTORY
Complainant submitted a Complaint to the National Arbitration Forum
electronically on April 28, 2006; the National Arbitration Forum received a
hard copy of the Complaint on May 1, 2006.
On May 2, 2006, Network Solutions, Inc. confirmed by e-mail to the
National Arbitration Forum that the <kix.com>
domain name is registered with Network Solutions, Inc. and that the Respondent
is the current registrant of the name. Network
Solutions, Inc. has verified that Respondent is bound by the Network Solutions,
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 May 2, 2006, a Notification of Complaint and Commencement of
Administrative Proceeding (the “Commencement Notification”), setting a deadline
of May 22, 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 postmaster@kix.com by e-mail.
A timely Response was received and determined to be complete on May 22,
2006.
On
May 25, 2006, pursuant to Complainant’s request to have the dispute decided by
a single-member Panel, the National
Arbitration Forum appointed James Bridgeman as Panelist.
On May 30, 2006, an Additional
Submission was received from Complainant.
As the Additional Submission complied with Supplemental Rule 7 of
National Arbitration Forum's UDRP Supplemental Rules Supplemental Rules - Effective January 1, 2006 (the “Supplemental Rules”) it was admitted by the Panel.
On June 5, 2006 the Respondent filed an Additional Written
Statement. As the Additional Written
Statement was filed in accordance with Supplemental Rule 7 c of the
Supplemental Rules, it was admitted by the Panel.
In the exceptional circumstances, the National Arbitration Forum
granted the Panel an extension of time within which to deliver the decision.
RELIEF SOUGHT
Complainant requests that the domain name be transferred from
Respondent to Complainant.
PARTIES’ CONTENTIONS
Complaint submits that its claim is based on the following grounds:
(a) Complainant is the owner of the distinctive and famous KIX trademark. Complainant commenced use of the mark KIX in connection with breakfast cereal at least as early as 1937 and has used the mark BERRY BERRY KIX in connection with breakfast cereal since at least as early as 1992 (collectively the “KIX Marks”). Since that time, Complainant has continually used the KIX Marks in commerce in the United States and abroad.
(b) Complainant sells its KIX and BERRY BERRY KIX brand breakfast cereals in tens of thousands of retail stores worldwide. Complainant’s worldwide sales under the KIX marks ranged between $68 to 113 million US Dollars per year for the five years leading up to Respondent’s registration of the domain name in 1993 (1989-1993). During that period of time Complainant sold over 20 million cases of its KIX and BERRY BERRY KIX branded breakfast cereals. Complainant’s sales under the KIX Marks during the years since Respondent’s registration of the domain name in 1993 have continued to be in the tens of millions of dollars per year, and have totaled between $65 and 85 million US Dollars per year since 2001. Complainant has sold in excess of 15 million cases of breakfast cereal in connection with the KIX Marks since 2001.
(c) Over the years, Complainant has prominently used and promoted the KIX Marks in advertising, sales, and various other ways. Complainant has continually run television commercial spots for its KIX branded products since the early 1950s. These television campaigns alone have cost Complainant millions of dollars. Complainant has also spent millions of dollars on print advertisements since introducing its first KIX cereal in 1937. Complainant’s sales and advertising expenses under the KIX Marks have been extensive and in the millions of dollars. As a result, the KIX Marks serve to identify and indicate the source of Complainant’s goods to the consuming public, and to distinguish its goods from those of others. As a result of Complainant’s long usage and promotion of the KIX Marks, they have become well-known to, and widely recognized by consumers.
(d) Complainant owns two United States federal registrations each for the marks “KIX” and “BERRY BERRY KIX,” and owns four other registrations for the KIX Marks in Canada and Ireland. Complainant’s United States registrations are owned by General Mills IP Holdings II, LLC, a wholly owned subsidiary of Complainant.
(e) The domain name <kix.com> is identical to Complainant’s KIX trademark. See Policy ¶ 4(a)(i). The domain name <kix.com> is identical to the KIX mark because it incorporates the entirety of the mark with only the addition of the generic TLD “.com.” ICANN panels have found that the mere addition of the generic top-level domain name “.com” to the end of a trademark does not create a distinct enough impression to prevent a finding that the domain name is identical to the mark under ¶ 4(a)(i) of the Policy. See Homer TLC, Inc. v. Kang, FA 573872 (Nat. Arb. Forum Nov. 22, 2005) (finding that the domain name <hamptonbay.com> is identical to the mark HAMPTON BAY). Additionally, ICANN panels have found that when a domain name incorporates a distinctive mark in its entirety, that creates sufficient similarity between the mark and the domain name to render it confusingly similar. See InfoSpace, Inc. v. Modern Limited-Cayman Web Dev., FA 215371 (Nat. Arb. Forum Jan. 19, 2004) (finding that the domain name dogpile.org is confusingly similar to the mark DOG PILE).
(f) Respondent has no rights or legitimate interest in the domain name <kix.com>. See Policy ¶ 4(a)(ii).
(1) Respondent is not commonly known by the name “KIX,” nor does Respondent operate a business or other organization under the KIX mark or name. See Policy ¶ 4(c)(ii). Respondent is known as “ACI.” Respondent is not a licensee of Complainant, nor is Respondent authorized to use the KIX Marks for any purpose.
(2) Respondent was put on constructive notice of Complainant’s rights in the KIX Marks through Complainant’s federal registrations.
(3) Respondent is not making a legitimate non-commercial or fair use of the domain name without intent for commercial gain. Rather, Respondent is attempting to use the <kix.com> domain name for commercial gain by attempting to sell the domain name for a large profit. Respondent recently listed the domain name for auction with the Internet auction site <eBay.com>. Respondent placed the starting bid for sale of this domain name at $110,000 and offered that potential bidders could agree to “BUY IT NOW” for $130,000. Moreover, Complainant is currently offering the domain name for sale through a third party domain name sales website at <ImpressiveDomains.com> for $200,000.
(4) Moreover, Respondent has made no demonstrable preparations to use the domain name <kix.com> in connection with a bona fide offering of goods or services. See Policy ¶ 4(c)(i). At the time this Complaint was prepared, Respondent had no activity at <kix.com>. In fact, Respondent admits in its eBay auction listing for the sale of <kix.com> that “this domain name has not been used a website for 15 years.” ICANN panels have held that nonuse of a domain name cannot be considered a legitimate noncommercial or fair use under Policy ¶ 4(c)(iii). See Am. Broadcasting Cos. v. Hindawi, FA 535497 (Nat. Arb. Forum Sept. 26, 2005).
(g) Respondent registered and is using the domain name <kix.com> in bad faith. See Policy ¶ 4(b)(iii).
(1) The ICANN policy clearly explains that bad faith can be found where a respondent registered a domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant in excess of its out-of-pocket costs directly related to the domain name. See Policy ¶ 4(b)(i). Respondent has offered to sell the domain name for as much as $200,000 USD, an amount far in excess of any reasonable amount associated with registration and maintenance of the domain name since 1993.
ICANN panels have consistently found that actions such as Respondent’s offers to sell the domain name for a fee in excess of Respondent’s costs are the type of actions that constitute bad faith registration and use of a domain name. See Am. Online, Inc. v. Sekepyan, FA 621129 (Nat. Arb. Forum Feb. 15, 2006); see also Bank of Am. v. Takahashi, FA 197930 (Nat. Arb. Forum Nov. 3, 2003); see also Little Six, Inc. v. Domain For Sale, FA 96967 (Nat. Arb. Forum Apr. 30, 2001); see also Banca Popolare Friuladria S.p.A. v. Zago, D2000-0793 (WIPO Sept. 3, 2000); see also World Wrestling Fed’n Entm’t, Inc. v. Michael Bosman, D1999-001 (WIPO Jan. 14, 2000); see also Nabisco Brands Co. v. The Patron Group, Inc., D2000-0032 (WIPO Feb. 23, 2000).
(2) Moreover, Respondent registered the domain name <kix.com> on December 13, 1993 and to date has not activated a website in connection with the domain name. Respondent has passively held this domain name for at least 12–15 years. As noted above, Respondent admits in its eBay auction that the domain name has not been used for 15 years.
By failing to link the domain name to any active site, Respondent has indicated that it has no legitimate interest in the domain name <kix.com> and is using it in bad faith. See Citigroup, Inc. v. - aka Birgit Kostermann, FA 505498 (Nat. Arb. Forum Aug. 1, 2005) (inferring from the respondent’s failure to use the domain name that it had no legitimate rights or interests in the name pursuant to Policy ¶ 4(a)(ii)); see also Muggles Magical Toys, Inc. v. Muggles.org, FA 94798 (Nat. Arb. Forum July 24, 2000) (finding that inactivity for over eighteen months is strong and persuasive evidence that respondent has no legitimate interest in the domain name and is using the domain name in bad faith); see also CBS Broad. Inc. v. Edward Enter., D2000-0242 (WIPO May 24, 2000) (citing cases supporting a finding of bad faith based on failure to link domain name to an active website).
ICANN Panels have repeatedly found that passively holding a domain name is evidence of bad faith registration and use under the Policy. See Citigroup, Inc. v. - aka Birgit Kostermann, FA 505498 (Nat. Arb. Forum Aug. 1, 2005); see also 24 Hour Fitness USA, Inc. v. Hyung-Gon, FA 528837 (Nat. Arb. Forum Sept. 21, 2005); see also Am. Broadcasting Cos. v. Hindawi, FA 535497 (Nat. Arb. Forum Sept. 26, 2005) (all finding bad faith based on nonuse and passive holding and ordering the domain names transferred). Like each of the situations in the cases cited above, Respondent’s failure to use the domain name <kix.com> demonstrates bad faith under the Policy.
Finally, Respondent had actual knowledge or reasonably should have had knowledge of Complainant’s prior use and registration of the KIX Marks, as the marks are famous. Respondent also had constructive notice of Complainant’s rights in the KIX Marks as a result of Complainant’s United States trademark registrations for the KIX Marks. Respondent’s constructive knowledge (and likely actual knowledge) of Complainant’s rights in the KIX Marks at the time it registered the domain name at issue demonstrates its bad faith in registering the name. See, e.g., Am. Broadcasting Cos. v. Hindawi, FA 535497 (Nat. Arb. Forum Sept. 26, 2005); see also 24 Hour Fitness USA, Inc. v. Hyung-Gon, FA 528837 (Nat. Arb. Forum Sept. 21, 2005); see also Estate of Hunter S. Thompson v. Thompson, FA 530332 (Nat. Arb. Forum Sept. 15, 2005); see also Citigroup, Inc. v. - aka Birgit Kostermann, FA 505498 (Nat. Arb. Forum Aug. 1, 2005) (all finding that a respondent’s registration of a domain name with knowledge of the complainant’s trademark rights was bad faith registration and use under the Policy); see also Interstellar Starship Services, Ltd. v. Epix, Inc., 184 F.3d 1107, 1111 (9th Cir. 1999) (adoption of a designation with knowledge of its trademark status permits a presumption of intent to deceive).
B. Respondent
Respondent submits that “ACI” is an acronym for Automated Communications, Inc., a Sub-S corporation in Denver, Colorado that carried on business selling long distance communications from 1985 to 1997. The corporation was owned by Judy Van Essen, who is the de facto Respondent in this case.
Automated Communications, Inc. was an early entrant into web/internet-based services. In 1993, the Chief Engineer for the company registered about a dozen domain names, some of which are <freenames.net>, <ipim.net>, <telecoop.com>, <solidstatedesign.com> and the herein disputed <kix.com>. For at least 18 months prior to registration of the domain name <kix.com>, the word “KIX” had been used by Automated Communications, Inc. for a private network “blog”/communication/membership type of site. Membership fees were about $50 to sign up and $15 per month thereafter. The site was maintained for approximately six years, until which time Automated Communications, Inc was sold as an operating entity.
The purchasing company, Phoenix Network, Inc., had no interest in maintaining the web sites and Judy Van Essen as sole owner of Automated Communications, Inc. retained some of the assets of the original company, including the domain name in dispute and certain other domain names.
Responsibility for the registered domain names came under the care of Mr. Christopher Hawk. Earlier this year Mr. Hawk requested to be relieved of his responsibilities in a number of areas, including the domain name registry and they were transferred to Judy Van Essen. Shortly thereafter, Judy Van Essen “in cleaning up some paperwork” came to the conclusion that it was pointless to continue to pay annual registration fees for domain names in which she had no continuing personal interest, and so Ms. Van Essen proceeded to attempt to sell some of the domain names.
Respondent submits that while Complainant seems to be of the opinion that it is the only entity in the world that uses the acronym KIX, an MSN search produced 238,225 results, only a couple of which relate to Complainant and its cereal. The word “KIX” is used by a business engaged in the sale of shoes, by an insurance company, by a band in Florida and by a number of radio stations.
Respondent submits that Complainant does not operate its business as “kix,” nor does it engage in Internet marketing of its product under that name. The use by another individual or company of <kix.com> will not interfere with Complainant’s business in any way.
Respondent did utilize the <kix.com> domain name for a number of years, prior to the closing of Automated Communications, Inc., for commercial purposes namely, membership fees. During this time, Complainant found no conflict of interest with its trademark.
Judy Van Essen engaged a consultancy to appraise value of the domain name <kix.com> and was surprised by the value placed on the domain name by the consultants.
Respondent did not register the <kix.com> domain name in 1993 for “commercial gain,” but simply to follow the technology path of the world wide web for an existing business/site.
The domain name was in commercial use for a of number years from approximately 1991 to 1997 as a “blog”/membership/ communications site even prior to the advent of the world wide web, but has not been in active use since 1997.
The domain name <kix.com> was not registered as a domain name primarily for the purpose of selling, renting or otherwise transferring the domain name registration to the Complainant. It was registered to be used as a “blog”/membership/communications site and was used as such.
Sales of domain names far in excess of $100,000 to $200,000 are commonplace. It is disingenuous of Complainant to attempt to use the presented sale price as the reason for filing a complaint. Numerous articles have been written regarding the domain name market place. Respondent asks: had the sale price been say $3,000 would Complainant not have filed a complaint? The offer to sell the <kix.com> domain name for the stated amount was not directed to Complainant, but as a public offering.
The evidence adduced by Complainant does not prove that there has not been an activated site in connection with <kix.com>. The original “kix” site was established in 1992-1993 and was subsequently given the <kix.com>. The site was hosted by Automated Communications, Inc. itself. As a telecommunications company, it had vast resources of LAN, WAN and network switches. Automated Communications, Inc. owned an 8,000 square foot switching facility in Colorado Springs, CO with the latest Northern Telecom DMS 250 electronic switching equipment for long distance service and vast amounts of computer power in terms of LAN’s and WAN’s. Automated Communications, Inc in fact hosted other sites for a fee. Domain name registration history fits precisely with the time lines during which kix as a private site evolved into <kix.com>. The site was used for a number years prior to the sale of Automated Communications, Inc. at which time the acquiring long distance company (Phoenix Network, Inc.) had no interest in maintaining it. In support of Respondent’s claim that the domain name was used by Automated Communications, Inc., Respondent has submitted statements of fact provided by David Becklund, Human Resources Director for Automated Communications, Inc., and Christopher Hawk, a former employee.
Respondent, of course, had heard of KIX cereal. Respondent, however, did not register the domain name with Complainant’s product in mind. It was registered because the private site established by ACI by the name of “kix” existed previously.
Respondent alleges reverse domain name hi-jacking by Complainant.
C.
Complainant’s Additional Submissions
In the Additional Submission, Complainant denies reverse domain name hi-jacking.
Complainant successfully addressed the arguments presented by Respondent challenging Complainant’s rights in the KIX trademark and challenging Complainant’s assertion that the domain name was identical to Complainant’s trademark.
Complainant submitted that Respondent has not demonstrated a legitimate interest in or right to the domain name. Complainant further submitted that neither the passive holding of the domain name nor the attempts by Ms. Van Essen to sell the domain name for commercial gain can be considered a legitimate interest. Respondent has admitted that Ms. Van Essen has no “personal interest” in the domain name since Automated Communications, Inc., shut down in 1997. Moreover, use by a third party, almost ten years ago should have no bearing on whether Ms. Van Essen has a legitimate interest or right in the domain name today (emphasis supplied).
Complainant submits that both Automated Communications, Inc. and Judy Van Essen had both constructive and actual knowledge of Complainant’s rights in the KIX trademark when the domain name was first registered and subsequently renewed.
Importantly, Complainant submits that the renewal of the domain name by Respondent constitutes a registration in bad faith. See Grand Valley State Univ. v. Beekman, FA 263528 (Nat. Arb. Forum July 14, 2004); see also L.F.P. Inc. v. B and J Props., FA 109697 (Nat. Arb. Forum May 30, 2002); see also Houlberg Dev. v. Adnet Int’l, FA 95698 (Nat. Arb. Forum Oct. 27, 2000).
Furthermore, Complainant submits that in continuing to renew the registration, while she had no “personal interest” in the domain name, Respondent was passively holding the domain name and was offering the domain name for sale for sums far in excess of the out-of-pocket costs directly related to the domain name, proving a use of the domain name in bad faith for the purposes of the Policy.
D. Respondent’s
Additional Written Statement
In her Additional Written Statement, Respondent challenged the value of the cases cited by Complainant and submitted that many were decisions in cases in which no response had been filed.
Ms. Van Essen, further denied passive holding of the domain name holding as a 100% owner of Automated Communications, Inc., the use of the domain name by Automated Communications, Inc. was effectively use by Ms. Van Essen herself.
Ms. Van Essen stated that while she was aware of KIX cereal, she was not aware of the Complainant’s trademark rights.
With regard to the allegation that the renewal of the domain name amounts to a registration in bad faith, Ms. Van Essen pointed to the delay by the Complainant in asserting its claimed rights over the domain name (which she denies).
Ms. Van Essen repeated that she refutes the Complainant’s allegation that she was trying to sell the domain name to Complainant. The offer to sell the <kix.com> domain name for the stated amount was not directed to Complainant, but as a public offering.
FINDINGS
Complainant, through its subsidiary, is the owner of US trademark
registration KIX, first registered with
the USPTO on November 9, 1937 (Reg. No. 351,860) and other registrations for
the KIX trademark.
The domain name in dispute was originally registered by Automated
Communications, Inc., a Sub-S corporation owned by Judy Van Essen. The original registration pre-dated the
Policy and the registrant used the acronym “ACI.”
Automated Communications, Inc. carried on business selling long distance communications.
For a number of years, prior to 1997, the domain name in dispute was actively used by the registrant as an address for its web site. In 1997, Automated Communications, Inc. was purchased by a third party, Phoenix Network, Inc. Said Phoenix Network, Inc. did not have any interest in the domain name <kix.com> and certain other domain names that were owned by Automated Communications, Inc. Said domain names were retained personally by Judy Van Essen, who was the sole owner of the Sub S corporation.
While, in the particular circumstances of this case, given that Complainant is relying on rights in registered trademarks that it has through its subsidiary, the argument put by Ms. Van Essen that as a 100% owner of Automated Communications, Inc., the use of the domain name by Automated Communications, Inc. was effectively use by Ms. Van Essen herself has a certain logic, the Panel finds that there was a de facto change of ownership of the registration in 1997.
Judy Van Essen is therefore the controller of said domain name and the de facto respondent in these proceedings. Since 1997 said Judy Van Essen has not actively used the domain name in dispute, but has sought to sell it as an asset and has advertised the domain name for sale for substantial sums of money.
There is no evidence of any attempt at reverse
domain name hi-jacking by Complainant. All the evidence is that Complainant has
made a bona fide application.
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.
Identical or Confusingly Similar: Policy ¶ 4(a)(i).
Complainant also contends that Respondent’s <kix.com> domain name is
identical to Complainant’s KIX mark under Policy ¶ 4(a)(i), because the
disputed domain name consists of Complainant’s mark in its entirety, with the
addition of the generic top-level domain “.com.” In W. Union Holdings, Inc. v. Topiwala, D2005-0945
(WIPO Oct. 20, 2005), the panel found the respondent’s <wuib.com> domain
name to be identical to the complainant’s WUIB mark because the addition of the
generic top-level domain (gTLD) “.com” after the name WUIB is part of the
Internet address and does not add source-identifying significance. 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). Respondent’s <kix.com> domain name incorporates Complainant’s KIX
mark and only adds the generic top-level domain “.com.” In the view of this Panel, Respondent’s
disputed domain name is identical to Complainant’s mark and Complainant has
satisfied the first element of the test in Policy ¶ 4(a).
Respondent submits that Automated
Communications, Inc. was a Sub S
corporation owned by Judy Van Essen.
For the purposes of this decision the Panel has decided that Judy Van
Essen is the present owner of the registration and is the de facto
Respondent.
Respondent contends that Automated
Communications, Inc. utilized the <kix.com> domain name for
several years for the commercial purpose of generating membership fees for its
telecommunications business. Respondent
alleges and has provided evidence in the form of statements from former
employees of Automated Communications, Inc. that the company registered and used the
disputed domain name in connection with its telecommunications business until
the sale of Respondent’s business in 1997.
The evidence of use of the domain name by Automated Communications, Inc. was weak, but plausible, as Response included statements from a former director and a former employee to the effect that the domain name was so used, and the Panel has made its decision on that basis.
Consequently, on the basis of the evidence submitted, the Panel finds that the disputed domain name was initially registered and used by Automated Communications, Inc in connection with a bona fide offering of goods or services in accord with Policy ¶ 4(c)(i), and Respondent has demonstrated that ACI had rights or legitimate interests with regard to the <kix.com> domain name when the domain name was first registered. 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); see also IG Index PLC v. Index Trade, D2000-1124 (WIPO Oct. 16, 2000) (finding that the respondent has rights in the domain name because the respondent’s claimed use of the domain name is a “plausible explanation” to which the panel must give weight); see also Verkaik v. Crownonlinemedia.com, D2001-1502 (WIPO Mar. 19, 2002) (finding that the respondent’s use of the <skyart.com> domain name to sell “digital and photo images of Southwest scenes, especially the sky” bestowed rights and legitimate interests in the domain name).
For reasons expanded
upon below, the Panel takes the view that in the particular circumstances of
this case, said Judy Van Essen, the de facto Respondent has rights and a
legitimate interest in the domain name.
On the evidence, this Panel accepts
Respondent’s contention that neither Automated Communications, Inc. nor Judy
Van Essen registered the disputed domain name primarily for the purpose of
selling the domain name to Complainant.
Weak as it is, there is evidence that the <kix.com> domain name
was registered and used by Automated Communications, Inc. as
the address for a website in connection with Respondent’s telecommunications
business. That business had been using
the name KIX for its “‘blog’/
membership/ communications” network for a number of years before it registered
the <kix.com> domain name. The Respondent’s business was in an entirely different field of
activity from the breakfast cereal business for which Complainant has used the
KIX trademark.
On the evidence, therefore, Respondent had a bona fide reason to register the domain name. The use by Automated Communications, Inc. continued until 1997. It follows that the disputed domain name was not originally registered in bad faith under Policy ¶ 4(b)(i). In Mark Warner 2001 v. Larson, FA 95746 (Nat. Arb. Forum Nov. 15, 2000) the panel made a 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. See Id Software, Inc. v. Doom Gaming Connections, FA 95002 (Nat. Arb. Forum July 24, 2000) (finding that the respondent, registrant of <doom.com>, did not register or use the domain name in bad faith by placing the domain name for sale on the eBay auction website since there was no evidence of any attempt to sell during the first five years of ownership, so there could be no inference that the respondent acquired the name for the purpose of resale to the complainant or a competitor); see also 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); see also Mule Lighting, Inc. v. CPA, FA 95558 (Nat. Arb. Forum Oct. 17, 2000) (finding no bad faith where the respondent has an active website that has been in use for two years and where there was no intent to cause confusion with the complainant’s website and business).
Furthermore,
on the evidence, Respondent was
not passively holding the disputed domain name in the period from 1993 to 1997
and Complainant has not established bad faith registration or use on that
ground. See Vidiots Delight, Inc. v. Digitellum, Inc.,
D2000-1086 (WIPO Oct. 18, 2000) (finding no bad faith where the respondent was
using the domain name in connection with its business even though no website
was yet developed); see also Asphalt
Research Tech., Inc. v. Anything.com, D2000-0967 (WIPO Oct. 2, 2000)
(finding that the complainant has failed to prove that the domain name
<ezstreet.com> was registered and is being used in bad faith or held
passively for use by the respondent in bad faith).
When Automated Communications, Inc. ceased to use the domain name, Judy Van Essen acquired the domain name. She did not change the name on the registration, and while this is not good practice and would often make a registration vulnerable under the Policy, in the particular circumstances of this case, it is not fatal to the Respondent’s case.
While Judy Van Essen claims that the use by Automated Communications, Inc. was effectively use by herself, it is admitted that the domain name in dispute was not actively used by Judy Van Essen herself since she acquired the ownership personally in 1997.
As the domain name has been effectively transferred to Judy Van Essen, this Panel must decide whether, under the Policy, Complainant must establish bad faith registration:
a. on the date that the domain name was first registered by Automated Communications, Inc.; or
b. on the date when the domain name was transferred to Judy Van Essen; or
c. on a date when Judy Van Essen renewed the registration.
Complainant asserts that renewal of a domain name with knowledge of another’s rights in a trademark is registration in bad faith and cites three cases in support of its assertion viz. Grand Valley State Univ. v. Beekman, FA 263528 (Nat. Arb. Forum July 14, 2004), L.F.P. Inc. v. B and J Props., FA 109697 (Nat. Arb. Forum May 30, 2002), and Houlberg Dev. v. Adnet Int’l, FA 95698 (Nat. Arb. Forum Oct. 27, 2000).
In Grand Valley State Univ. v. Beekman, the respondent had worked as a contractor for the complainant and had knowledge of the complainant’s goodwill when he first registered the domain name.
In L.F.P. Inc. v. B and J Props., the respondent was the first registrant of the domain name. She first registered the domain name on February 11, 2000, and then renewed the registration in February 2002. The panel took the view that the respondent was engaged in passive domain name holding amounting to registration and use in bad faith. In that case the panel was satisfied that “in view of the widespread reputation of the complainant’s mark ‘HUSTLER’ – given its use began some 28 years prior to the initial registration of the disputed domain name, it would simply be preposterous to think that the Respondent was unaware of this mark at a time she initially registered (and certainly renewed) the disputed domain name.” The panel in that case found it implausible in those circumstances that the respondent had a bona fide intention to use the domain name <hustlerstore.com> to sell “home furnishings.”
In Houlberg Dev. v. Adnet Int’l, FA 95698 (Nat. Arb. Forum Oct. 27, 2000), the respondent was once again the original registrant of the domain name. There was no response filed in the proceedings, the panel made its decision on the basis of the complaint and case file only, and the complainant had had “actual” knowledge of Complainant’s asserted rights in trademark "Retail Engine" before it renewed the domain name. The panel in that case stated that “the domain name was renewed in violation of ICANN Policy ¶2(b).”
From the three cases relied upon by Complainant, it would appear that only in Houlberg Dev. v. Adnet Int’l did the panel unequivocally state that a renewal in such circumstances amounts to a registration for the purposes of the Policy.
In the Overview of WIPO Panel Views on Selected UDRP Questions
it was noted that there is a consensus view among panelists that
· the transfer of a domain name to a third party amounts to a new registration; but
· a mere renewal of a domain name does not amount to registration for the purposes of determining bad faith; and
· furthermore, for the purposes of a determination in favor of a complainant under ¶ 4(a)(iii) of the Policy, registration in bad faith must occur at the time the current registrant took possession of the domain name.
In the absence of any contrary guidance from the Policy or other documents, this Panel is satisfied to adopt and apply that consensus view in the present case.
The Panel is of the view that in the particular circumstances of this case, the relevant date is not the original registration by Automated Communications, Inc. but either the date of the subsequent acquisition of the domain name by Judy Van Essen in 1997 or, at the latest, the date on which Judy Van Essen first renewed the registration of the domain name after 1997.
The domain name is still registered in the name “ACI.” Since 1997, Judy Van Essen has been the de facto transferee of the domain name. To decide the issue the Panel must then ask if Judy Van Essen acquired the registration in 1997 or subsequently first renewed the registration in bad faith?
Complainant has made submissions on this aspect in the Additional Submissions and it is therefore possible to proceed to a determination without asking for further submissions on the point.
Complainant cites Telstra Corp. v. Nuclear Marshmallows, D2000-0003 (WIPO Feb. 18, 2000) and other cases and argues that both:
(a) the passive holding of the domain name, and
(b) the offering of the domain name for sale at a value far in excess of the reasonable costs of registration
is evidence of both registration and use in bad faith.
According to her own evidence, Judy Van Essen acquired the domain name registration as part of the residual assets of her Sub S corporation when it had been purchased by Phoenix Network, Inc. When Ms. Van Essen took over and subsequently renewed the registration, she had no plans for active use of the domain name. It was only when she was subsequently addressing her affairs that she realized that the registration potentially had commercial value. She proceeded to have it valued by a consultant and to place the registration on the market. Ms. Van Essen’s evidence is that she had no intention of establishing a web site at the address and saw the domain name as an asset to be sold for the highest price achievable.
Passive Holding: To address firstly the question of passive domain name holding, on the evidence before this Panel, there was active use of the domain name until 1997. The use was by Ms. Van Essen’s company and it is common cause that Ms. Van Essen has never actively used the domain name herself, nor has she any intention of actively using the domain name.
Complainant relies on the findings of the panel in Telstra in support of its claim that the passive holding of the domain name by Ms. Van Essen is evidence that she registered and is using the domain name in bad faith. Telstra was the first in a long line of cases that found that passive holding of a domain name can in certain circumstances be evidence that the domain name in issue was registered and is being used in bad faith. The principle was set out in the following terms in Telstra: “[I]t is possible, in certain circumstances, for inactivity by the Respondent to amount to the domain name being used in bad faith.”
Passive holding of a domain name or inactivity does not per se amount to a registration and use in bad faith. From the reasoning in Telstra, inactivity in itself amounts to a “use,” described as a “passive” use and inactivity does not as such prevent a finding that a domain name is being “used” bad faith.
A finding that a domain name was registered and is being used in bad faith on the basis of passive holding depends on the circumstances in each case.
Offering Domain Name for Sale:
In a typical case, the offering of the
domain name for sale at a value far in excess of the reasonable costs of
registration is the classic example of bad faith registration and use. In this regard, the Complainant cites both
paragraph 4(b) of the Policy and 15 U.S.C. §1125 (d) dealing with cyberpiracy
prevention. This however is not a
typical case.
Paragraph 4(b)(i) of the Policy provides that circumstances indicating that the respondent has registered or has 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 your documented out-of-pocket costs directly related to the domain name shall be evidence of registration and use of a domain name in bad faith.
In the present case, the evidence is that Ms. Van Essen acquired the domain name primarily as part of the residual assets of her company and did not have Complainant or its goodwill in mind when she personally acquired ownership and control of the registration.
Similarly, as
Complainant submits, 15 U.S.C. §1125 (d)(b)(i)(VI) provides that in determining whether a person has a
bad faith intent, a court may consider factors such as, but not limited to the person’s offer to transfer, sell,
or otherwise assign the domain name to the mark owner or any third party for
financial gain without having used, or having an intent to use, the domain name
in the bona fide offering of any goods or services, or the person’s
prior conduct indicating a pattern of such conduct.
This Panel is conscious that it is
established pursuant to the Policy and does not have jurisdiction to apply 15
U.S.C. §1125, however, it notes that 15 U.S.C. §1125 (d)(b)(ii) provides a defense in any case in
which the court determines that the person believed and had reasonable grounds
to believe that the use of the domain name was a fair use or otherwise lawful.
In the present case, on the evidence,
Ms. Van Essen believed that the unchallenged use of the <kix.com> domain name by her company from 1993 to 1997 indicated
that her acquisition of the asset was fair and lawful.
There are a number
of cases where panels have acknowledged that the owner of a domain name may
offer the domain name for sale without acting in bad faith including the
following recent decisions:
In
eMedicine.com,
Inc. v. Lim, DTV2001-0003 (WIPO Apr. 26, 2001), the domain name in issue was
<emedicine.tv>,
and the complaint
was denied where the respondent had offered to sell the domain name for $11,000,
and there
was no evidence that the respondent had engaged in a pattern of speculative
domain name registration or that her claimed reason for registering the mark
was a sham.
In
Think Service, Inc. v. Carlos, D2005-1033 (WIPO Nov. 18, 2005), the
domain name is issue was <hdi.com>.
In email correspondence the Respondent indicated that he would take the
“best offer over $35,000” for the domain name, and later (after he had been
advised of the Complainant’s intention to commence a proceeding under the
Policy as and when it obtained a registration for the HDI mark) said that he
would take $20,000. The panel was
prepared to infer that the Respondent probably did acquire the domain
name <hdi.com> for the primary purpose of selling it. But, that panel found that
paragraph 4(b)(i) of the Policy requires proof that the respondent had the
requisite intention at the time he registered or acquired the domain name. It also requires that the registrant’s
intention must have been to sell, rent, or otherwise transfer the domain name, to
the complainant or to a competitor of the complainant.
The panel in Think Service cited inter alia the following statement of the three member panel in Emilio Pucci SRL v. Mailbank.com Inc., D2000-1786 (WIPO Mar. 19, 2001), concerned with a dispute over the domain name <pucci.com>. Refusing the complaint that panel said:
“A non-exhaustive list of what may constitute bad faith is set out in paragraph 4(b) of the Policy. All the examples given involve an intent by the Respondent when registering the Domain Name to damage the Complainant or in some way ride on the back of the goodwill of the Complainant. While the list of examples of bad faith in paragraph 4(b) is expressed to be non-exhaustive, the Panel regards it as crucial to the success of a Complaint under the Policy that at the time of registration the Respondent at the very least had the Complainant in mind. Here there is no evidence that the Respondent had the Complainant in mind when registering the Domain Name. . . .”
The relevant date for the purposes of determining whether the Respondent
registered the domain name in bad faith was either the date on which Ms. Van
Essen acquired the domain name herself, or at the latest the date on which she
first subsequently renewed the registration.
On the evidence, Ms. Van Essen acquired the domain name in 1997, when she
sold her Sub S corporation to a third party.
The domain name had been registered by her Sub S corporation and
actively used in good faith for a number of years from 1993 to 1997. On the evidence, when Judy Van Essen took on
the registration she did so in good faith.
While she was aware of the fact that Complainant was the owner of a
well-known trademark KIX, she was also aware that her company, Automated
Communications, Inc., had been using the
domain name for a number of years without challenge from Complainant.
Respondent has provided evidence of this use by Automated
Communications, Inc. in the form of
statements from former employees, and while this evidence is in contrast with
Respondent’s statement on the eBay auction site that the domain name had not
been used for 15 years, she admits that this was an error and there is no
reason to disbelieve her.
There are a number of unsatisfactory aspects of Ms. Van Essen’s case,
including the weakness of her evidence on the use of the domain name in the
period up to 1997, the fact that she did not properly update the registration
but merely renewed with inaccurate information and also the fact that her
submissions contradicted her statement in the posting on eBay that the domain
name had not been used for 15 years.
The onus of proof, however,
rests on Complainant and on the evidence submitted, however weak, and this
Panel finds that, while Complainant’s case was well presented and well argued,
Complainant has failed to prove either that Respondent has no rights or legitimate interests in respect of the
domain name or that the domain name
was registered in bad faith. The
Complaint must be denied.
DECISION
Having regard to all three elements required under the ICANN Policy,
the Panel concludes that relief shall be DENIED.
James Bridgeman, Panelist
Dated: June 12, 2006
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