Diners Club International Ltd. v. MForce
Communications
Claim Number: FA0605000708908
PARTIES
Complainant is Diners Club International Ltd. (“Complainant”), represented by Paul D. McGrady, of Greenberg Traurig, LLP, 77 West Wacker Drive, Suite 2500, Chicago, IL 60601. Respondent is MForce Communications (“Respondent”), represented by Brett E. Lewis, of Lewis & Hand, LLP, 45 Main Street, Suite 818, Brooklyn, NY 11201, USA.
REGISTRAR AND DISPUTED DOMAIN NAMES
The domain names at issue are <dinersclubwireless.com>
and <dinersclubwireless.net>, registered with Network
Solutions, Inc. on February
18, 2006 (“the disputed DINERS CLUB
domain names”), and <clubrewardswireless.com>
and <clubrewardsmobile.com>, registered with Go Daddy Software, Inc. on February 19, 2006 (“the disputed CLUB
REWARDS domain names”).
PANEL
The undersigned, David H Tatham, Hon. Tyrus R Atkinson and Steven L
Schwartz certify that they have acted independently and impartially and, to the
best of their knowledge, have no known conflict in serving as Panelists in this
proceeding.
PROCEDURAL HISTORY
Complainant submitted a Complaint to the National Arbitration Forum
(“the NAF”) electronically on May 17, 2006; the NAF received a hard copy of the
Complaint on May 19, 2006.
On May 19, 2006, Go Daddy Software, Inc. (“Go Daddy”) confirmed by
e-mail to the NAF that the <clubrewardswireless.com> and <clubrewardsmobile.com> domain names were registered with Go
Daddy and that the Respondent was the current registrant of the names. Go Daddy has verified that Respondent is
bound by the Go Daddy 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 23, 2006, Network Solutions, Inc. (“Network Solutions”) confirmed
by e-mail to the NAF that the <dinersclubwireless.com>
and <dinersclubwireless.net> domain names were registered with Network Solutions and that the
Respondent was the current registrant of the names. Network Solutions has verified that Respondent is bound by the Network
Solutions registration agreement and has thereby agreed to resolve domain name
disputes brought by third parties in accordance with the Policy.
On May 25, 2006, a Notification of Complaint and Commencement of
Administrative Proceeding (the “Commencement Notification”), setting a deadline
of June 14, 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@dinersclubwireless.com,
postmaster@dinersclubwireless.net, postmaster@clubrewardswireless.com and postmaster@clubrewardsmobile.com
by e-mail.
A Response was received on June 15, 2006 but was determined by the NAF
to be deficient because it was not timely received in hard copy format.
Timely Additional Submissions from Complainant and Respondent were received
on June 19, 2006 and June 23, 2006, respectively, and determined to be in
compliance with Supplemental Rule 7.
On June 29, 2006, pursuant to Respondent’s
request to have the dispute decided by a three-member Panel, the NAF
appointed David H. Tatham, Hon. Tyrus R. Atkinson and Steven L. Schwartz
as Panelists.
On July 13, 2005, the NAF issued an Order
extending until July 27, 2006 the time for the Panel to render its Decision.
RELIEF SOUGHT
Complainant requests that the domain names be transferred from
Respondent to Complainant.
PARTIES’ CONTENTIONS
A. Complainant
Complainant asserts that it has US registrations of the trademarks
DINERS and DINERS CLUB, as well as marks containing the ‘DINERS’ elements, and
attached to the Complaint were copies of printouts from the online records of
the USPTO for the trademarks DINERS, DINERS CLUB INTERNATIONAL (figurative),
DINERS CLUB, DINERS CLUB PRORATION, and DINERS CLUB ON THE GO. Also attached was a printout containing
brief details of Complainant’s many registrations for these trademarks around
the world.
Complainant contends that due to the extensive use of all these
trademarks, inter alia, for credit card services, credit
card user loyalty programs and travelers’ checks, they have become famous.
Complainant is a wholly owned subsidiary of Citigroup, a leading global
financial services organization. It is
a leading provider of financial services to individuals, small businesses, and
large corporations through many channels of trade, including but not limited
to, credit card services. Complainant’s
credit cards are accepted in over 200 countries, at over 7.6 million locations
around the world, at 800,000 ATMs, and are issued in 64 different local
currencies. Complainant has over 8
million individual cardholders, thousands of employees, its products are
advertised and promoted all around the world, and in 2003 its annual sales were
approximately US$30 billion.
Complainant also asserts that it has a US registration of the trademark
CLUB REWARDS and attached a printout of the online record of the USPTO for this
trademark, Reg. No. 1,630,265.
Complainant promotes it services and the goods and services of its
marketing partners through the CLUB REWARDS affinity marketing program. For several years running, this program has
been voted the best affinity marketing program in Complainant’s industry.
Complainant contends that the disputed DINERS CLUB domain names
resolved to websites that featured links promoting the competing goods and
services of others, including credit cards, and that, upon receipt of
Complainant’s initial demand, Respondent disabled these links. Complainant claimed to attach to the
Complaint printouts of pages from these websites, but in fact they were neither
attached nor referred to in the table of Exhibits.
Upon receipt of Complainant’s initial demand, Respondent revealed the
existence of the disputed CLUB REWARDS domain names, indicated that it had
registered the 5 domain names which were intended to be used for affinity
marketing programs designed to promote Complainant’s goods and services, and
that he intended to approach Complainant to enter into a business relationship
with it such that Complainant’s customers would be persuaded to buy
telecommunications services from Respondent.
When Complainant refused, Respondent cancelled one of its DINERS CLUB
domain names, is attempting to cancel the other two, and said that the disputed
CLUB REWARDS domain names would be put to use for a competing affinity rewards
program. Complainant is unaware what
had been the use – if any – of the disputed CLUB REWARDS domain names prior to
its initial demand.
With regard to the requirements of the Policy, Complainant makes the
following contentions, all of them supported by references to earlier Decisions
under the UDRP.
Similarity
The disputed domain names consist of Complainant’s trademarks DINERS
CLUB or CLUB REWARDS and the generic terms ‘wireless’ or ‘mobile.’ Complainant contends that this does nothing
to distinguish them from Complainant’s marks and that such minor alterations do
not negate their confusingly similar character.
Rights or Legitimate Interests
Complainant has not given Respondent any licence, permission, or
authorization to use any of its trademarks; he has never been commonly known by
any of Complainant’s marks or any variation thereof; he has never used any
trademark or service mark similar to any of the disputed domain names; he has
never operated any bona fide or legitimate business under any of the
disputed domain names; and he is not making a protected non-commercial or fair
use of them. Their only use has been to
direct users to competing or unaffiliated websites and to subject such users to
a series of misleading links.
Respondent has used the disputed domain names to attempt to coerce a
business relationship with Complainant and to put the disputed CLUB REWARDS
domain names to use in connection with a competing affinity rewards
program. By doing so he is disrupting
Complainant’s business and such uses are not bona fide offerings of goods or services.
Not only are the disputed domain names similar to Complainant’s
trademarks, but Respondent was clearly aware of the latter. Consequently, because Respondent had notice
of Complainant’s rights, he has no legitimate rights or interest in the
disputed domain names. Furthermore, Respondent has made it clear that his
intention in registering the disputed domain names was to capitalize on
Complainant’s goodwill in its trademarks, and in so doing either to gain direct
access to Complainant’s customers or to confuse them into conducting business
with Respondent should Complainant refuse to be coerced into a business
relationship with Respondent.
Bad Faith
Given the considerable registration and use of Complainant’s trademarks,
Respondent knew or should have known of such marks at all relevant times.
Accordingly, Respondent had actual or constructive knowledge that the disputed
domain names, which mimic and/or incorporate Complainant’s trademarks, are
confusingly similar to them and this knowledge is more than sufficient for a
finding of bad faith.
Furthermore, Respondent had actual knowledge of Complainant’s
trademarks and “it is proper to infer bad
faith registration when a [r]espondent intentionally registers a domain name he
knows to be confusingly similar to another’s mark” (citing Travelzoo Inc. v. Viper,
FA 117866 (Nat. Arb. Forum Sept. 18, 2002).
The disputed domain names have been used either (1) intentionally to
attract, for commercial gain, internet users to Respondent’s website or other
online location by creating a likelihood of confusion with Complainant’s marks
as to the source, sponsorship, affiliation, or endorsement of respondent’s
website or location or of a product or service on Respondent’s website or location
and/or (2) to disrupt the business of a competitor. This constitutes two out of four explicit examples of bad faith
under the Policy.
Respondent filed a sworn Affidavit from its principal Mr. Michael Sauer
in which he declared that his company is a bona-fide business and that he has
substantial experience in the field of marketing wireless phone services and
developing partnerships with loyalty programs. Respondent pays companies a fee
for the right to market wireless phone service to their customers. For each customer who signs up for wireless
service, the company receives a royalty.
As an incentive to sign up, the customer receives free points in the
company’s customer loyalty program.
This type of business arrangement is extremely common, and requires
minimal effort for the company with the potential for substantial revenue
returns in royalties.
In connection with its business, Respondent reserved specific domain names for use in different types of customer loyalty programs. It registered <flyfreewireless.com> for use in connection with airline marketing programs under which airline customers would be offered free airline miles for signing up for wireless phone service; and <stayfreewireless.com> for use in connection with hotel-related wireless marketing programs under which customers could literally “stay free” at participating hotels. As a catch-all for all non-travel related customer loyalty rewards programs, Respondent registered <clubrewardswireless.com>. Participants in this program could redeem loyalty points with companies outside the airline or hotel fields.
To further its business, Respondent also registered promotional domain names, such as <skymileswireless.com>, <americanexpresswireless.com>, <marriottrewardswireless.com> and <aadvantagewireless.com> for use in targeted marketing arrangements, as described above. Along with these promotional domain names, Respondent registered the two disputed DINERS CLUB domain names.
Respondent’s intent in registering
these promotional domain names was purely to reserve the relevant domain name
so that they would be available if the companies involved wished to enter into
marketing partnerships. Respondent
recently entered into several such
agreements, and is close to closing on others.
It was never Respondent’s intention to sell any of these domain names to his potential clients, or to divert traffic away from their websites, or to offer the domain names to his potential clients’ competitors or in any other bad faith manner. Nor did Respondent make any use of any such domain name in any manner. If a company objected to Respondent’s registration of a domain name that included an inherently distinctive trademarked term, it was always Mr. Sauer’s intention to give the domain name to the objecting party.
When contacted by Complainant’s attorney (Mr. McGrady), Mr. Sauer told him that Complainant could have the DINERS CLUB Domain Names. It was important to him, however, that Complainant understand that he did not register the DINERS CLUB Domain Names in bad faith, both for his professional reputation and also for the possibility of still doing business with Complainant. In the course of explaining his business model to Mr. McGrady, Mr. Sauer mentioned that he had registered the domain names <flyfreewireless.com> and <stayfreewireless.com> for use in aggregating hundreds of air travel and hotel-related loyalty programs, respectively. Along with these, he mentioned that he had registered the disputed CLUB REWARDS domain names for use in connection with aggregating a wireless rewards program for generic customer loyalty programs. After that, Mr. McGrady refused to agree to the transfer of the disputed DINERS CLUB domain names without Respondent also transferring to Complainant the disputed CLUB REWARDS domain names. Eventually, following a number of phone calls and emails from Complainant’s attorneys threatening Respondent with legal action if he did not surrender the disputed CLUB REWARDS domain names, Mr. Sauer notified Mr. McGrady that he would simply cancel the disputed DINERS CLUB domain names, so that Complainant could register them itself.
Respondent contends that it strains credulity to argue that the act of
canceling the domain names, which is a remedy available to Complainants under
the UDRP, is evidence of a bad faith act, especially when the complaining party
has refused to accept their transfer.
Respondent contends that the disputed DINERS CLUB domain names were never legitimately in dispute. From the moment that Complainant complained about their registration, Respondent offered to cooperate and transfer them to Complainant. It is clear now to Respondent that Complainant’s refusal was purely strategic. Complainant sought to bootstrap its claims to the disputed CLUB REWARDS domain names onto its claims for the Disputed DINERS CLUB domain names, in a disingenuous attempt to establish bad faith. Because Respondent’s intent with respect to the Disputed DINERS CLUB domain names was clearly not in bad faith, and because it is Respondent’s intent that matters in an inquiry under the UDRP, Respondent respectfully requests that this Panel decline to attribute any adverse significance to their registration.
Respondent contests Complainant’s claims to the disputed CLUB REWARDS domain names. His registration of them has nothing to do with Complainant and everything to do with Respondent’s business. He contends that Complainant’s request to transfer should be denied because: (i) the disputed CLUB REWARDS domain names are not confusingly similar to Complainant’s DINERS CLUB trademarks, (ii) Respondent possesses legitimate rights in and to the disputed CLUB REWARDS domain names, and (iii) Respondent registered the disputed CLUB REWARDS domain names in good faith.
Respondent also submits that a finding of reverse domain name hijacking
is warranted under the circumstances.
Respondent contends that there is no basis for transferring the
disputed CLUB REWARDS domain names to Complainant, and that the factual
allegations contained in the Complaint are not supported by an Affidavit. As such, it is well established that they
are entitled to no weight and should not be credited by this Panel. In this respect Respondent referred to two
UDRP Decisions in which the Complaint was dismissed where Complainant failed to
submit evidence to support its claims.
Complainant’s allegations are refuted by the Affidavit from Mr. Sauer, as well as by the documentary evidence. For example, Complainant contends that Respondent stated that all of the disputed domain names were to be used for affinity marketing programs to promote services to Complainant’s customers. This is simply not true. Mr. Sauer painstakingly explained to Mr. McGrady many times that the disputed CLUB REWARDS domain names had nothing to do with Complainant and were intended for unrelated use in Respondent’s wireless marketing business.
With regard to the requirements of the Policy, Respondent further contends as follows:
The disputed CLUB REWARDS domain names are not identical to
Complainant’s CLUB REWARDS trademark.
Nor are they confusingly similar thereto. They consist of the common words “club” and “rewards” and “mobile
or “wireless.” Because “club” and
“rewards” are common dictionary words, they are entitled to very limited
trademark protection, and small differences are sufficient to eliminate a
finding of confusing similarity.
Complainant does not have exclusive rights to these extremely common
words which are subject to substantial third party use in connection with
customer loyalty programs, including several in the exact same field as
Complainant.
In support of this contention, Respondent filed documentary evidence of
the following:
· nearly 1,500 trademark registrations and applications, live and dead, containing the word “reward.” He claimed that most of these are used in connection with customer loyalty programs, across industries.
· well over 14,000 trademarks using the word “club,” in one form or another, and he claimed that many of these are also associated with customer loyalty programs.
· 30 trademark registrations and applications containing both “club” and “rewards,” including RICH REWARDS CLUB, for banking services; V.I.P. REWARDS CLUB, for a casino customer loyalty program; HERITAGE CLUB REWARDS, for hotel services; POINTS CLUB REWARDS, for a customer loyalty program for grocery store shoppers; PARADISE REWARDS CLUB, for casinos; and BUDGETTRAVEL REWARDS CLUB, for a travel club.
·
A Google® search showing use of the term “Club Rewards”
in connection with customer loyalty programs, e.g. PRIORITY CLUB REWARDS VISA
SIGNATURE CARD, in connection with a credit card hotel loyalty program;
PRIORITY CLUB REWARDS, in connection with the world’s largest hotel loyalty
program; STAR CLUB REWARDS, in connection with a customer savings club; and
MARRIOTT VACATION CLUB REWARDS, for a hotel rewards program, among others.
Because Complainant provides rewards to users of its loyalty club, Complainant’s mark is used in a
descriptive manner, at best. Unlike in
the case of an arbitrary or unique designation, a one or two word difference
between marks incorporating mere common words, or possibly nothing more than a
variant of the term, may be sufficient to distinguish between them so as to
avoid confusion in the trade, and Respondent referred to a number of Decisions
in this regard.
Under the lesser standard applied to descriptive marks, the difference
between <clubrewardswireless.com> and <clubrewardsmobile.com>,
on the one hand, and “Club Rewards” on the other, is enough to avoid
confusion. This is especially true, in
the light of the abundant use of the terms “club” and “rewards” in connection
with a cornucopia of customer loyalty programs. Customers simply do not associate these words solely, exclusively
or even predominantly with Complainant.
Accordingly, customers are not likely to be confused into believing that
Complainant, a credit card company, has entered the wireless business.
Rights And Legitimate Interests
Respondent has a legitimate business, designed around offering points in customer loyalty programs as an incentive to customers to purchase wireless phone service. The disputed CLUB REWARDS domain names fit into Respondent’s plan to brand different domain names for use in different marketing programs, and Respondent has taken demonstrable steps to use them. Respondent planned to target three key generic loyalty program markets: air travel, hotels, and other. Respondent registered <clubrewardswireless.com> as the domain name for use in connection with general rewards programs, and registered <clubrewardsmobile.com> to protect it.
It is well established that the use of a domain name in connection with a bona fide offering of goods or services establishes Respondent’s legitimate interest pursuant to paragraph 4(c)(i) of the Policy.
To establish a legitimate interest, the Respondent need not actually have begun offering the services. Demonstrable preparations to use the domain name are sufficient to establish a legitimate interest. Here, there can be no doubt that Respondent has made demonstrable preparations to use the disputed CLUB REWARDS domain names. Respondent has entered into several partnerships involving “wireless” domain names, and has many more in the works. Screen shots from Respondent’s first partnership program, set to launch on July 13, 2006, were attached to Mr. Sauer’s Affidavit. These partnerships were in discussion at the time that he was first contacted by Complainant’s attorney.
In addition, several days after registering the disputed CLUB REWARDS domain names, and nearly two months before he was contacted by Complainant, Mr. Sauer created a PowerPoint presentation of his business model demonstrating his intent to use the disputed CLUB REWARDS domain names in exactly the manner he told Mr. McGrady he planned to use them: for generic wireless loyalty programs. It also clearly shows that Respondent registered the disputed DINERS CLUB domain names for possible use in a wireless loyalty program partnership with Complainant.
All of the disputed domain names contain widely used, common dictionary
words, and Respondent has a legitimate right to register them on that basis. Target Brands,
Inc. v. Eastwind Group, FA 267475 (Nat.
Arb. Forum July 9, 2004, involved the domain name
<target.org>. Declining the
requested transfer, the Panel held that “where
a domain name is generic, the first person to register it in good faith is
entitled to the domain name and this is considered a legitimate interest.”
As proof of its contention that Respondent lacks legitimate interests,
Complainant argues that Respondent pointed the disputed DINERS CLUB domain
names “to a websites [sic] featuring
links promoting competing goods and services of others, including credit
cards.” Complainant contends that
these links were “misleading” and
contends that the links were for Respondent’s “commercial gain.” These
statements are deliberately false and intended to mislead this Panel. When Respondent registered the disputed
DINERS CLUB domain names, Go Daddy automatically pointed them to a parked page,
branded with Go Daddy’s mark, and containing links to various third party
websites. Respondent was not aware of these
links, and received no financial benefit from them. When Complainant brought the links to Respondent’s attention,
Respondent had them disabled immediately and he then notified Complainant’s
counsel that the parked page was posted by Go Daddy without his knowledge. Complainant was made aware that the links at
issue were created by Go Daddy for Go Daddy’s own commercial benefit – not
Respondent’s – but has still accused Respondent of deliberately parking the domains
to mislead and divert traffic for profit. Respondent contends that the only one
engaged in misleading and diverting is Complainant.
Respondent never attempted to coerce a business relationship with Complainant, as Complainant contends. The record is devoid of any proof to support Complainant’s accusation, and is flatly disproved by the copies of the email correspondence between Mr. Sauer and Complainant’s attorney, which were annexed to the Response. Respondent offered to transfer the disputed DINERS CLUB domain names to Complainant and never tried to force a business relationship on Complainant at any time, either before or after the filing of the Complaint in this matter.
Complainant also falsely alleges that Respondent threatened to operate a “competing affinity marketing program” using the disputed CLUB REWARDS domain names. Again, there is no proof in the record to support this baseless allegation. Mr. Sauer never threatened, in his conversations with Paul McGrady, to operate an affinity program to compete with Complainant. In any event, Respondent’s marketing program is distinctly different from anything offered by Complainant. Respondent is not a credit card company, and has no intention of operating an affinity program for credit card companies with the disputed CLUB REWARDS domain names. Respondent markets wireless phone services to customers, who receive points in various loyalty programs as an incentive for signing up. As with any of the numerous loyalty programs already using the words “club” and/or “rewards” in their names, it is difficult to see how Respondent’s service would compete for customers with Complainant’s credit card service.
The fact that Complainant does not own the domain names <clubrewards.com> and <clubrewards.net> is, in the opinion of Respondent, significant. At the time of filing its Complaint, Complainant lacked rights to the .com and .net domain names identical to its CLUB REWARDS mark. If Complainant is willing to go to the lengths it has in this proceeding to hijack the disputed CLUB REWARDS domain names from Respondent, Respondent contends that it would have obtained <clubrewards.com> if it had any legitimate basis to do so. In the opinion of respondent, the fact that Complainant has failed to do so speaks volumes.
Bad Faith
Respondent’s intent was never to profit in any wrongful manner off any of Complainant’s marks. The nature of Respondent’s business requires Respondent to solicit the customers of its clients, and in so doing, to make use of their trademarks in loyalty programs. This type of use is common in the business world and wholly legitimate. For companies that Respondent identified as potentially being interested in doing business with him – many of which Respondent has high-level, professional business contacts with – Respondent registered certain domain names, that incorporated their marks, with the term “wireless” or “mobile” at the end. Again, Respondent never used any such domain name without the consent of a trademark owner, and has, in fact, entered into, and is currently negotiating, business deals with several of them. The disputed DINERS CLUB domain names fell into this category. As such, no inference of bad faith should be drawn from their registration.
Nor can any such inference be drawn about the
disputed CLUB REWARDS domain names.
They are an integral part of a legitimate business model. The fact that they are composed solely of
common descriptive words also weighs heavily against a finding of bad
faith. Absent direct proof that a
descriptive term domain name was registered solely for the purpose of profiting
from Complainant’s trademark rights, a finding of bad faith registration and
use is inappropriate.
The decisions cited by Complainant are also
inapposite. Complainant’s CLUB REWARDS
mark is a weak mark in a crowded field.
Constructive or actual knowledge of Complainant’s CLUB REWARDS mark,
alone, where Complainant’s rights are limited and Respondent’s proposed use is
not competitive, does not support a finding of bad faith. Certainly not where, as here, the Respondent
genuinely believed that such use was possible without infringement. Respondent never used the disputed CLUB
REWARDS domain names in connection with any competing service – they were
pointed by Respondent’s registrar, without Respondent’s knowledge and with no
benefit to Respondent.
Respondent did not register domain names
containing the marks of others in bad faith.
Any domain names registered were for legitimate partnership
opportunities. No efforts were made to
sell any such domain name, or to commercialize them without the consent of a
trademark holder, or to withhold them from a trademark holder. Respondent has not engaged in any pattern of
wrongdoing.
The inquiry before this Panel is not whether
Respondent registered a domain name that contained Complainant’s trademark in
it, but whether he registered a domain name that was confusingly similar to
Complainant’s mark, and with
no legitimate right to do so, and
with a bad or malicious intent to profit off from mark.
C. Complainant’s Additional
Submission
Complainant’s Additional Response categorizes the Response as being
‘confusing,’ ‘maze-like,’ and as containing ‘several novel defenses’ which are
‘far-fetched, irrelevant, or offered solely for the purposes of further
harassment of Complainant.’ Complainant
then proceeds to describe these defenses and argues their irrelevance under a
number of headings for which it invented its own wording. In the following summary we have paraphrased
these headings and, again, mostly omitted references to earlier Decisions.
“I’m a bona fide business”
Although Respondent has claimed that he has a bona fide business
and that therefore the registration of any domain name would automatically
qualify him as making a bona fide offering of goods or services under
paragraph 4(c)(i) of the Policy, such a finding would eliminate from the Policy
nearly any Respondent who took the time to incorporate or open a bank account
or otherwise make a claim that it is a bona fide business. However this is against the clear language
of the Policy, which does not call for a Panel to consider whether or not a
Respondent has a bona fide business, but whether, prior to the dispute,
he has made or has prepared to make any use of the domain name in connection
with a bona fide offering of goods or services.
“Use of a confusingly similar domain for
identical services is bona fide use”
Respondent has argued that registration and use of domain names in
conjunction with services which are identical to the services covered by Complainant’s
federally registered trademarks is a bona fide offering of goods and
services. He maintains that the disputed CLUB REWARDS domain names were
registered as “a catch-all for all
non-travel related customer loyalty programs.”
Since Complainant’s CLUB REWARDS mark is registered for, among other
things, “promoting the goods and services
of others through the use of a credit card,” Complainant’s rights are not
limited to travel related services nor are the goods promoted under the program
restricted to travel services or financial services. The program promotes a very broad range of goods and services of
others including, but not limited to, mobile phone docking stations, mobile PDA
devices such as the PALM TX, and gift certificates to retail outlets where
wireless and mobile devices can be purchased.
Past Panels have not only declined to adopt the position that an
infringing use of a well-known and registered trademark through registration
and use of a domain name consisting of that mark for competing goods or
services is a bona fide offering of goods and services, but in fact have
come to quite the opposite conclusion.
“I’m only trying to sell you something and
I’ll cooperate with you if you give up trademark rights.”
Respondent adopts the position that the registration of domain names
containing the marks of others for the purpose of soliciting the brand owner
for business and then holding the domain names hostage in order to coerce
cooperation from the brand owner is not bad faith. If the Panel were to accept this, it would create a gaping
exemption under the Policy for vendors who wish to register domain names
containing their sales’ targets marks and who then solicit customers of
trademark owners and “make use of their
trademarks in loyalty programs.”
Although Respondent has denied it, he has used the domain names in a
scheme to coerce business from complainant and he now openly admits to an
infringement plan involving not only Complainant’s marks but those of many
other brand owners as well and Complainant quoted at length from Texas Lottery Commission v. Associates in
Implants, FA 105739 (Nat.
Arb. Forum Apr. 29, 2002).
“Virtual Shredding.”
Respondent appears to be arguing that a Respondent who is caught red
handed in an infringement scheme can divorce himself from some or all of the
bad facts by attempting to cancel some or all of the domain names in dispute,
and that a Complainant should wait patiently for this ‘virtual shredding’
campaign to come to an end prior to filing its Complaint under the Policy. Regardless of Respondent’s attempts to shed
himself of two of the four damning domain names, and his further attempts to
persuade the Panel to ignore these domain names, the reality is that since the
beginning of this dispute, Respondent has used the DINERS CLUB domain names as
a carrot to attempt to bargain with Complainant first for Complainant’s
business and, when that was not forthcoming, for Complainant’s blessing for
Respondent’s registration and use of the CLUB REWARDS domain names, which also
was not forthcoming. All four of these
names are in dispute, were registered in bad faith with full knowledge of
Complainant’s rights, and all four have been used in bad faith by Respondent in
its attempts to coerce Complainant into giving Respondent access to the
goodwill associated with Complainant’s marks and to Complainant’s
customers. Complainant had a right to
file the Complaint at any time, even if Complainant’s timing was not convenient
for Respondent and its ‘virtual shredding’ campaign.
“Ignore the basis of trademark analysis.”
US case law and the well settled interpretation of the Policy makes it
clear that a federally registered, incontestable trademark is presumed valid
for the purpose of an analysis of confusion. Instead, Respondent breaks down
the CLUB REWARDS mark into its constituent elements and draws the conclusion
that, because the mark contains elements also found in a dictionary, that the
mark is by its nature descriptive. If
this were the case it would –
·
Violate the
anti-dissection rule of which the US Supreme Court, in Estate of P D Beckwith v. Commissioner of Patents, said: “the commercial impression of a trademark is
derived from it as a whole, not from its elements separated and considered in
detail.”
·
Ignore the
language of Complainant’s federal registration and the nature of the CLUB
REWARDS trademark and give credence to Respondent’s unsubstantiated allegation
that Complainant is running a club. In
fact, Complainant is a financial organization that uses it CLUB REWARDS mark in
conjunction with services for which it is registered, which services compete
directly with those offered, or to be offered, by Respondent.
·
Afford the same
level of protection to federally registered trademarks as a past Panel has
afforded to the generic term ‘grocery outlet.’
The better rule is the one held by panel after panel who has encountered
this very common argument raised by cybersquatters, namely that Complainant has
established rights in the CLUB REWARDS trademark through registration with the
USPTO. There have even been findings in
favour of a complainant on the basis of common law rights.
“You aren’t exclusive.”
Respondent asserts that there are 30 trademark registrations and
applications containing the elements ‘club’ and ‘rewards.’ Of these, 8 are dead and 13 are pending
applications and cover goods as diverse as “casinos” and “rental of women’s
handbags.” Some are design marks. If the Panel were to accept this argument it
would exclude any brand owner who owns a mark whose constituent elements have
been used in conjunction with other elements by a third party from bringing a
Complaint. By citing dead and pending
marks, Respondent would appear to be arguing that once an application
containing such elements is filed with the USPTO, a brand owner is forever
barred from using the Policy, even if the application is opposed, the
application or registration dies, or the additional elements in the mark or the
nature of the goods and services distinguish the mark from the brand owner’s
mark. If the Policy were to be limited
in this fashion, all that a cybersquatter would have to do is file a bad faith
trademark application for any mark whatsoever containing the elements of its
target brand owner’s mark and then register domain names with impunity knowing
that the brand owner’s only possible relief would be through the courts rather
than through the Policy. The final
illogical conclusion of this argument lies in Respondent’s Google search and
his attempt to use the result to exclude Complainant from using the Policy
merely because third parties have websites that are triggered by the search for
‘club rewards.’ Complainant notes that
on the first page of the Google search report, 7 out of 10 of the organic
results are references to Complainant and the goods or services offered under
its DINERS CLUB and CLUB REWARDS trademarks.
The better rule has been adopted by Panel after Panel, namely that a
Complainant need not establish exclusive rights to a mark in order to engage in
the process under the Policy. Complainant enjoys exclusive rights to its CLUB
REWARDS trademark for the services for which it is registered. The inclusion of
the generic elements ‘mobile’ and ‘wireless’, which state Respondent’s target
industry do nothing to distinguish the disputed domain names from Complainant’s
marks, especially since the mobile/wireless devices of others are promoted by
Complainant through its CLUB REWARDS program.
According to an enclosure to the Additional Submission, Complainant
contends that in Western Europe, it offers wireless notification on its
customers’ mobile devices.
The existence of Respondent’s PowerPoint presentation – whenever it was
created – is irrelevant as that plan sets forth a detailed attempt to infringe
upon Complainant’s rights through using its marks in domain names without
authorization to promote services which directly compete with Complainant’s
affinity program.
“I didn’t do it.”
Respondent tries to absolve itself from the reality that, until
contacted by Complainant, it either used, or allowed its registrar Go Daddy to
use, the disputed DINERS CLUB domain names to promote competing goods and
services of others. Respondent is
suspiciously silent on how this use occurred prior to being contacted by
Complainant. Respondent claims to be
operating a bona fide business, but it now seeks to persuade the Panel
that it should not be held responsible for this use. However this promotion of the goods of Complainant’s direct
competitors is to exclude any possible claim that its activities were a bona
fide offering of goods or services or legitimate noncommercial fair use.
“Everyone’s doing it.”
Respondent has suggested that registering domain names containing the
marks of others in order to “solicit their customers” and “make fair use of
their trademarks” is “common in the business world” and therefore “wholly
legitimate.” However, past Panels have
disagreed with this conclusion. It is
also contrary to the Lanham Act.
The existence of a registration of the domain name <clubrewards.com>
first came to Complainant’s attention during conversations between Mr. McGrady
and Mr. Sauer. Its webpage contained
content related to Complainant and its services, and illicitly promoted
Complainant’s competitors. Shortly
after learning of this domain name, Complainant filed a Complaint against it,
FA 720824. The Respondent in that case
has now disabled the domain name. The
existence of the <clubrewards.net> domain name only came to Complainant’s
attention as a result of Respondent’s response and, at the time of filing the
Additional Response, Complainant was considering its options.
“I’m a legitimate cybersquatter.”
Complainant categorizes Respondent’s actions as: registering domain
names containing registered trademarks without the authorization of their
owner, soliciting the brand owner for business, using the domain names to
coerce business from the brand owner and/or consents from the brand owner for
use of infringing domain names, allowing the domain names to be used by others
to promote competing goods and services, and refusing to transfer the domain
names to the brand owner upon demand.
Complainant then states that in Respondent’s view all of these actions:
constitute a legitimate business model, is not use of a domain name without the
consent of the owner, is not use of the domain name in connection with any
competing service, constitutes legitimate partnership opportunities, and
support the notion that Respondent has not engaged in any pattern of
wrongdoing. Complainant contends that
this argument ignores reality.
Finally, in response to Respondent’s assertion that Complainant’s
evidence be excluded because it is not supported by Affidavit, Complaint points
out that Panels have consistently held that evidentiary standards are “not as stringent as one might expect in a
judicial proceeding, since there are no formal requirements as to the
presentation of the evidence” (citing Canada
Israel Experience v. Oranim Travel Ltd., FA 215312 (Nat. Arb. Forum Jan. 30, 2004). The Panel in this case referred to the
finding in CTV Television Inc. v. ICANADA
CO., D2000-1407 (WIPO Dec. 21, 2000).
Complainant contends that an Affidavit in this case would not be useful
and that the public records, public websites, copies of e-mails exchanged
between the parties, and the admissions in Mr. Sauer’s Affidavit and its
supporting Exhibits collectively set forth facts sufficient to support the
Complaint.
D. Respondents’ Additional
Submission
Respondent notes, firstly, that
Complainant has not denied that it misrepresented its attorney’s conversations
with Mr. Sauer in the Complaint. Nor
does it offer any other material evidence in support of its factual claims
regarding those conversations. Instead,
it claims, against well settled authority, that “[n]o affidavit by Complainant in support is necessary in this matter
and as such it would not be useful.”
An affidavit vouching for the veracity of the claims made by
Complainant’s attorney would be not only useful, but essential. This is especially true where the purported
facts advanced to support Complainant’s claims have been contradicted by
Affidavit as well as documentary evidence.
Complainant chooses, instead, to twist Respondent’s Response, in much the same way that it twisted the underlying facts of this dispute in its Complaint. Rather than address any of Respondent’s arguments head-on, Complainant mischaracterizes them in terms favorable to itself. In each case, Complainant portrays Respondent as arguing for a radical departure from settled law, when Complainant, itself, seeks to turn the applicable laws and authorities on their heads. Notwithstanding Complainant’s attempts at subversion, however, this Panel may assess the relative merits of Respondent’s arguments for itself. Respondent submits that this Panel will find that – despite Complainant’s actual argument that simply registering the descriptive trademark of another as part of a domain name constitutes cybersquatting – none of the required elements of the Policy have been met.
On one point, Respondent agrees with Complainant: this is a relatively straight forward matter. On everything else, we disagree. For instance, the Response did not so much resemble a maze as a legal brief. The arguments were numbered and ordered, and correspond to the relevant elements under the UDRP. Very little sorting is necessary. The statements made in the Response are supported by Affidavit and documentary evidence. Not a single “far-fetched” defense designed to “harass” Complainant was actually cited in Complainant’s Additional Submission – a number of arguments that Respondent never made were. Respondent takes these accusations seriously. This proceeding could have a significant effect upon Respondent’s business and reputation. As such, words should not be cavalierly thrown around as if by saying them enough times they become true.
For expediency’s sake, Respondent decided to address only some of the misrepresentations contained in Complainant’s Additional Submission. Those contentions not challenged are not admitted. For the foregoing reasons, as well as the reasons stated in the Response and below, Respondent respectfully requests that this Panel deny the relief requested in the Complaint.
Identical or Confusingly Similar
Respondent never argued that “the registration and use of domain names in conjunction with services which are identical to the services covered in the Complainant’s federal registration, is a bona fide offering of goods and services.” Nor is “use as a catch-all for all non-travel related customer loyalty programs” a complete or fully-accurate description of Respondent’s proposed use of the disputed CLUB REWARDS domain names. As stated in the Response, Respondent plans to use the disputed CLUB REWARDS domain names in connection with the sale of wireless phone service. Respondent will reward customers who purchase wireless service by offering them points in various loyalty programs, with the participation of business partners in non-travel related fields. In that sense only will the disputed CLUB REWARDS domain names be used in connection with loyalty programs. Respondent is not operating an affinity program, itself, and no customer will be able to redeem loyalty points at the disputed CLUB REWARDS domain names.
As much as Complainant would like to confuse the issue, it does not use its CLUB REWARDS mark in connection with the sale of wireless services, of any kind. Complainant operates a financial services company. Its CLUB REWARDS mark is registered for “PROMOTING THE GOODS AND SERVICES OF OTHERS THROUGH USE OF A CREDIT CARD,” in International Class 35. The Trademark Manual of Examining Procedure specifically provides that Class 35 “does not include, in particular: activity of an enterprise, the primary function of which is the sale of goods…” Accordingly, Complainant’s CLUB REWARDS mark simply does not cover the sale of wireless phone service, and no reasonable customer would ever confuse the wireless cellular telephones sold by Respondent as being associated in any way with Complainant. Accordingly, Respondent’s proposed use of the disputed CLUB REWARDS domain names is not competitive with Complainant’s use of the CLUB REWARDS mark. Nor is Respondent’s proposed use even in the same International Class as the CLUB REWARDS mark.
Also absurd is Complainant’s claim to virtually unlimited trademark protection for the CLUB REWARDS mark, covering “a very broad range of goods and services of others, including but not limited to mobile phone docking stations, mobile PDA devices . . . and gift certificates to Best Buy, COMP USA and STAPLES retail outlets where wireless and mobile devices can be purchased . . .” Complainant is claiming trademark rights, not only in the operation of a loyalty program, or the marketing of the goods of others, but in the sale of such goods. As listed on Complainant’s website, these items include home essentials, Kitchen, Electronics, outdoors, sports, gifts, gourmet goods, financial services, travel needs, experiences, air travel, land and sea travel, tailored travel, personalized rewards, airline bonuses and surprises. This list is ridiculously broad, covers goods sold under the marks of others, and is well beyond the scope of Complainant’s federal registration in International Class 35. As such, this is a classic case of overreaching by a trademark owner with limited rights in a descriptive mark.
Diners Club makes further arguments concerning confusing similarity, which this Additional Submission will address:
· Nowhere in the Response does Respondent ever allege that Complainant’s CLUB REWARDS mark is invalid, or that Complainant is running a “club.” Complainant’s argument to the contrary is as red a herring as there ever was. Respondent’s contention is that the DINERS CLUB mark is descriptive, comprised of dictionary words and in a crowded field. In other words, it is a weak mark entitled to diminished protection. As such, Respondent contends that the disputed CLUB REWARDS domain names are not confusingly similar to the Diners Club CLUB REWARDS mark. This is not a novel argument under trademark law.
· Diners Club again resorts to distortion and hyperbole in an effort to minimize the appearance of third party use of its DINERS CLUB mark. As an initial matter, this is an inquiry under the Policy, not an action for trademark infringement filed in court under the Lanham Act. There are two points at issue regarding third party use of the CLUB REWARDS mark:
o First, does the substantial use of the component parts of the CLUB REWARDS mark in commerce, often in a descriptive sense and in connection with customer loyalty programs, diminish the likelihood that customers encountering the disputed CLUB REWARDS domain names will be confused? Respondent submits that because of the descriptive nature and widespread use of both “Club” and “Rewards” in connection with customer loyalty programs, and because both convey the same commercial impression, they do.
o Second, does the specific use of the entire CLUB REWARDS mark in connection with the widespread collection of services which Complainant claims to be within the scope of its trademark registration, weaken that mark sufficiently to lessen the likelihood of any confusion in a domain name context? Respondent then lists the following trademarks and answers its rhetorical question in the affirmative –
RICH REWARDS CLUB® (banking services),
HERITAGE CLUB REWARDS® (hotel services),
MARRIOTT VACATION CLUB REWARDS (hotel services), PRIORITY CLUB REWARDS (hotel services),
POINTS CLUB REWARD® (grocery shopping),
PARADISE REWARDS CLUB® (casino loyalty program), BUDGETTRAVEL REWARDS CLUB® ( travel club),
PRIORITY CLUB REWARDS VISA SIGNATURE CARD (credit card hotel loyalty
program),
STAR CLUB REWARDS (customer savings club).
o The above marks mostly contain the terms CLUB REWARDS or REWARDS CLUB, plus the addition of one or two additional words. Indeed, words like RICH, PRIORITY or POINTS are actually less likely to distinguish source than the word WIRELESS. The services covered by these marks, by and large, fall directly within the areas of rights claimed by Complainant. The third party use is substantial, open and notorious. The trademark holders are large corporations. Finally, claimed use of these marks has been explicitly approved in five cases, by the United States Patent and Trademark Office – in four cases after registration of CLUB REWARDS was granted. [Respondent did not identify them.]
In sum, Complainant has a weak mark that is easily differentiated. The addition of the word WIRELESS sufficiently distinguishes the disputed CLUB REWARDS domain names from the CLUB REWARDS mark, so as to render confusion unlikely.
Rights
And Legitimate Interests
Complainant contended that “Respondent wishes the Panel to adopt the position that if a Respondent makes claim that it is a bona fide business, any registrations of domain names such a business may make would automatically qualify as a bona fide offering of goods or services under Section 4.c.(i) of the Policy.” This is an absurd argument, not advanced by Respondent, and much easier to attack than the one that Respondent actually made. Respondent’s position is not only that it has a legitimate business, but also that the disputed CLUB REWARDS domain names are also an integral part of that business. As such, Respondent had every right to register them.
In this case, Respondent submitted evidence of demonstrable preparations of use. Respondent submitted a sworn Affidavit, as well as documentary evidence of a pending wireless loyalty program partnership and a copy of a business plan, dated February 23, 2006. The business plan evidences the intended use of the disputed CLUB REWARDS domain names, separate and apart from Complainant, in exactly the manner that Mr. Sauer has consistently stated that he intended to use them – prior to being contacted by Complainant, who has offered no reason to doubt the business plan’s authenticity, or Mr. Sauer’s sworn statements concerning its creation. In addition, as Respondent had only been in existence for a matter of weeks when first contacted by counsel for Complaint, very little time had elapsed for its business plans to be implemented. Nonetheless, Respondent had already started negotiating partnerships, at that time, and is well on his way to launching its first one. Others will follow weekly.
Bad Faith
Complainant makes several
disingenuous arguments in this regard. In its Additional Submission Respondent
addressed them as follows:
· Respondent never solicited Complainant for business, and never intended to solicit it with respect to the disputed CLUB REWARDS domain names. There is no evidence of record to support Complainant’s claims. Respondent is in the business of partnerships. In that regard, Respondent purchases awards from the company that owns the rewards or loyalty program. Respondent provides the rewards to the members of the loyalty program for free, as an incentive for buying wireless telephone service. Put another way, Respondent pays its partners, helps them to increase participation in their loyalty programs, and makes them money. It is difficult to see how anyone could possibly characterize this as bad faith intent.
· Respondent never coerced, or planned to coerce, or attempted to coerce, Complainant. There is no evidence of record to support this claim. In fact, when challenged to submit such evidence, Complainant failed to do so.
· Respondent did not plan to make use of the disputed CLUB REWARDS domain names for use in operating a loyalty program, but rather to sell wireless phone service. Customers could then receive rewards points in a loyalty program of one of Respondent’s partners. There is no evidence of record that the disputed CLUB REWARDS domain names were to be used to operate a loyalty program.
· Respondent never held any domain name “hostage.” There is no evidence of record that it did.
· Respondent was not engaged in an “infringement plan” and other references to infringement are unfounded. As this Panel is aware, trademark infringement requires actual, unauthorized confusing use of a mark in a trademark sense. Simply registering domain names, without using them, for possible use in mutually beneficial partnerships with companies at which Respondent had well-established business contacts, does not constitute infringement within the meaning of the Lanham Act or the common law. Complainant’s use of the word “infringement” in this regard is unfounded.
· Respondent offered repeatedly to transfer the disputed DINERS CLUB domain names to Complainant, but it refused to accept them without also obtaining the disputed CLUB REWARDS domain names. It is entirely disingenuous for Complainant to claim either: (i) that the disputed CLUB REWARDS domain names were in any way ever associated with Complainant in Respondent’s plans, or (ii) that Complainant was forced to cry “Uncle” before the so-called “infringing domains” – the ones that were repeatedly offered to it – were turned over.
· The “virtual shredding” argument is utterly ridiculous. Canceling the disputed DINERS CLUB domain names had everything to do with Complainant’s aggressive and unreasonable approach to this dispute – which includes their refusal to accept transfer of the disputed DINERS CLUB domain names – and nothing to do with trying to destroy evidence. Mr. Sauer grew weary of Complainant’s threats, so he openly notified them that he was canceling the DINERS CLUB domain names. What could not be shredded is the fact that the Respondent registered the disputed DINERS CLUB domain names. Diners Club could always try to tie the disputed CLUB REWARDS domain names to the disputed DINERS CLUB domain names. The inference that Complainant attempts to make is bizarre.
· The carrot and stick argument is equally absurd. To date, Mr. Sauer has not solicited Complainant for a potential partnership, much less for Complainant’s business, much less in the unsubstantiated manner that Complainant alleges. Again, there is no evidence of record to support Complainant’s fanciful claims.
· Complainant, against all evidence of record, continues to argue that Go Daddy’s pointing of the disputed CLUB REWARDS domain names constitutes evidence of bad faith. Mr. Sauer had no knowledge that Go Daddy had pointed the disputed DINERS CLUB domain names to parked pages with advertisements. Mr. Sauer asked Go Daddy to disable those links as soon as he learned of their existence. Respondent also did not profit commercially from the advertisements. Without submitting any evidence to the contrary, Complainant claims that somehow “allowing” Go Daddy to post parked pages for the disputed DINERS CLUB domain names – without knowing that Go Daddy was doing it – somehow imputes bad faith to Respondent. Even when caught with its hand in the proverbial cookie jar, Complainant cannot simply concede a point on which it is wrong, and never should have made because it is intellectually dishonest. Ethically, anyone who knows how parked page programs work, and Complainant certainly has access to this information, knows the difference between the default parked pages established by domain name registrars for the registrars’ own commercial benefit, and those to which domain name enthusiasts enlist their domain names for their own personal commercial gain. Complainant is trying to deceive the Panel into believing that there is no difference between the two, or that Respondent, even though completely unaware of Go Daddy’s use, was, nonetheless engaged in “illicit activities involving Go Daddy.”
· Complainant’s contention that it was unaware of the <clubrewards.com> registration until Mr. Sauer brought it to Paul McGrady’s attention is patently untrue. Complainant owns the <clubrewards.biz> and <clubrewards.info> domain name registrations. It registered them on November 19, 2001 and July 25, 2001, respectively. Complainant’s attorney’s email address, mcgradyp@gtlaw.com, is on both accounts. The domain name <clubrewards.com> was registered on December 24, 1997. Is Complainant’s argument that when it sought to register a domain name, it never checked to see if the .com gTLD was available? Of course it did. Complainant knew that someone else had registered <clubrewards.com>, but for at least five years did nothing about it, until it became an issue in this dispute.
· Registering domain names that contain descriptive word trademarks, alone, is not enough to satisfy the requirements of the Policy. Respondent never solicited Complainant for business and there is no support in the record for that contention. To the contrary, Respondent’s business model is a partnership model. Respondent purchases awards from the company that owns the rewards or loyalty program and gives them to the members of the loyalty program for free. In other words, Respondent pays its partners money. Respondent never coerced business from any brand owner. No domain name at issue was ever used, so there could not possibly be infringing domain names. The services offered by Respondent do not compete with Complainant, and Respondent never refused to transfer the disputed DINERS CLUB domain names, which contain the DINERS CLUB mark, and which were registered for possible use in partnership with Complainant.
Respondent concludes by arguing that Complainant filed a Complaint based on false facts, apparently hoping to win a default judgment but, once confronted, rather than cut its losses, Complainant recklessly distorted and misrepresented Respondent’s Response. Complainant seeks to paint Respondent as an “illicit,” “coercing,” “infringing,” “scheming,” “virtual shredding” cybersquatter – all without a shred of evidentiary support.
Everything that Mr. Sauer and Respondent have said and done from the date he registered the domain names at issue to the date of this Additional Submission is consistent with the Affidavit and evidence submitted herein. As stated in the Response, Respondent registered domain names for use in partnerships. Respondent planned to, and will soon, use the domain names it registered to sell wireless phone services. For large companies, Respondent reserved domain names that included company trademarks. Respondent never attempted to force or coerce any company into a business relationship. If a company wanted a trademarked domain name, it was always Respondent’s intention to transfer the name. Complainant, however, wants Respondent to transfer a descriptive domain name that has a legitimate business purpose and was not registered with Complainant in mind. Because the disputed CLUB REWARDS domain names were the best domain names available for Respondent’s proposed use, and because of Complainant’s overtly hostile and threatening tactics, Respondent declined.
FINDINGS
1.
Complainant,
Diners Club International Ltd, is a wholly owned subsidiary of Citigroup, a
leading global financial services organization. It provides financial services which include, but are not limited
to credit card services. It owns the
trademarks DINERS and DINERS CLUB which have been registered in the US since
1985 and 1965 respectively, and also in many countries around the world. It also owns the trademark CLUB REWARDS
which is the subject of an incontestable US federal registration dating from
1989 claiming first use since 1985.
2.
Respondent is a
business founded and operated by Mr. Michael Sauer. It had not commenced trading at the time the Complaint was filed
but was due to do so on July 13, 2006.
Mr. Sauer has a background in the fields of marketing wireless phone
services and created Respondent as a vehicle for developing partnerships with
third parties’ loyalty programs. For
each customer who signs up for wireless service through Respondent, the third
party receives a royalty and the customer receives free points in the third
party’s loyalty program.
3.
To further his
business plan, Respondent registered a number of domain names such as <flyfreewireless.com> or
<stayfreewireless.com>. In
addition, Respondent registered several domain names containing the names and
trademarks of third parties with whom he hoped to do business, such as the
disputed DINERS CLUB domain names, <dinersclubwireless.com>, <dinersclubwireless.net>, as well as <marriottrewardswireless.com>,
and <americanexpresswireless.com>.
4.
When the two
‘diners club’ domain names were first registered, Respondent’s registrar, Go
Daddy, Inc. placed on the site a number of click-through advertisements for
other websites which, according to Complainant, promoted the competing services
of others, including credit cards.
5.
The evidence
shows that the trademark CLUB REWARDS is not generic and that it is confusingly
similar to the domain names.
6.
Respondent has
no rights or legitimate interests in respect of any of the disputed domain
names, namely <dinersclubwireless.com>, <dinersclubwireless.net>, <clubrewardswireless.com>
and <clubrewardsmobile.com>.
7.
All of the
disputed domain names have been registered and are being used in bad faith.
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.
The Response was submitted one day after the deadline for doing so. The Panel believes it would be churlish in the extreme to reject it on this account and in any case the NAF described it as being timely. The Panel has therefore taken it fully into account.
Respondent has accused Complainant of indulging in reverse domain name hijacking. Complainant has not responded to this. According to the Rules for the Policy, reverse domain name hijacking is defined as “using the Policy in bad faith to attempt to deprive a registered domain-name holder of a domain name.” The Panel cannot see any trace bad faith in the activities of Complainant. It brought the Complainant promptly and only when it felt that its discussions with Respondent had come to a useful end. At that stage, the domain names had only been registered for a few months and Respondent had made no use of them. In the event, the Panel declines to find that this Complaint amounts to reverse domain name hijacking.
4.
Evidence not by Affidavit
Respondent has argued that the
Complaint should be denied because none of the facts therein are supported by
sworn Affidavit. Complainant has
replied that this is unnecessary. The
Panel agrees with Complainant and with the finding in Canada Israel Experience v.
Oranim Travel Ltd., FA 215312 (Nat. Arb.
Forum Jan. 30, 2004), which referred to a similar finding in CTV Television Inc. v. ICANADA CO.,
D2000-1407 (WIPO Dec. 21. 2000), namely that evidentiary standards in a domain
name dispute are not as stringent as one might expect in a judicial proceeding,
since there are no formal requirements as to the presentation of the evidence.
Complainant contends that the trademark CLUB REWARDS and the domain names <clubrewardswireless.com> and <clubrewardsmobile.com> are confusingly similar. Complainant has shown that it has rights in the name CLUB REWARDS by means of its registration of the trademark, and by virtue of its promotion and use of it in respect of an affinity marketing program. Its trademark registration became incontestable with the filing of Section 8 and 15 Affidavits with the USPTO in 2001.
Respondent on the other hand, contends that not only are its domain names neither identical nor similar to Complainant’s trademark, but that they consist of four common words. In other words, his claim is that ‘club rewards’ is a generic term, composed of two common dictionary words and that he has every right to coin and use any domain name containing them. In support of this contention Respondent has filed lists of numerous trademarks containing either of these two words and, more specifically 30 trademark applications or registrations containing both words. He also filed pages from a Google® search which contained numerous entries for ‘Club Rewards’ in connection with customer loyalty programs. Respondent does not challenge the fact that CLUB REWARDS is registered by Complainant or that the mark has become incontestable. However he does claim that the trademark is weak, that it is used in a descriptive sense, and that consumers do not associate the words ‘club rewards’ solely, exclusively, or even predominantly with Complainant.
Complainant dismisses these claims, pointing out that many of the trademarks listed by Respondent are either no longer valid, or applications and thus might never be registered. It also pointed out that many of the entries on the Google search related to its own program and it filed evidence showing that in 2006 its “Club Rewards” program had been voted the “Best Affinity Card Program,” an honor that it had gained for 9 consecutive years. In this respect, the Panel notes that this could be a rather narrow field, and we wonder how many such programs there are and so just how much competition Complainant faced in receiving this award? There are many such awards in the advertising and marketing industries and Complainant’s receipt of it might not therefore be as prestigious as it sounds. Furthermore, Complainant’s use of its CLUB REWARDS trademark does seem to be totally dependant on the user also being a paid up subscriber to Complainant’s Diner Club credit card.
This is of course a domain name dispute and the standards and tests that are used when trademarks are said to collide do not necessarily apply to the same degree. However it is worth noting that the Supreme Court of the United States held, in a court case to enjoin infringement of a registered and uncontestable trademark, that such an action may not be defended by the adverse party on the grounds that the mark is merely descriptive. See Park ‘N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189 (1985). That reasoning suggests that in domain name disputes, such as this one, where the Complainant has a registered and incontestable mark, a Respondent should not be permitted to defend the domain name dispute on the grounds that the mark is merely descriptive or generic as to the issue of rights and legitimate interests. As the Supreme Court stated, an incontestable mark that becomes generic may be cancelled at any time pursuant to the Lanham Act. That cause of action places the burden of proof on the party seeking cancellation. That is the proper method for resolving such a controversy.
Respondent relies on the holding in
Am. Online, Inc. v. Megaweb.com Inc., FA 463099 (Nat. Arb. Forum May 26,
2005): “[i]n the internet context,
consumers are aware that domain names for different Web sites are quite often
similar, because the need for language economy, and that very small differences
matter.”
However the present case is not one where the comparison is between two domain names but between domain names and an incontestable trademark registration. Respondent has not presented what this Panel can accept as ample evidence either that third parties commonly use the term ‘club rewards’ as a generic term or for programs similar to that of Complainant, or that Complainant itself uses the word descriptively.
Other Panels have considered the generic defense, and we refer to Target Brands, Inc. v. Eastwind Group, FA 267475 (Nat. Arb. Forum July 9, 2004), in which a member of the Panel in the present case examined the Respondent’s claim to have rights in the domain name <target.org> because the word ‘target’ was generic and found that in the circumstances of that case the Respondent did indeed have legitimate rights and interest in it.
The ‘generic’ question was extensively reviewed in Sony Corp. v. Times Vision, Ltd, FA 95686 (Nat. Arb. Forum Mar. 9, 2001), and in our finding below we have extensively adapted the wording of the Decision in that case. In Sony, the Panel found that its facts were more like the factual situations presented in cases such as, for example, Robus v. Suard, D2000-0941 (WIPO Dec. 6, 2000); Welltec ApS v. Gardner, D2000-1145 (WIPO Oct. 31, 2000); Mariof Corp. Oy v. Untra Fog AB, D2000-0521 (WIPO Aug. 24, 2000); and Interactive Television Corp. v. Noname.com, D2000-0521 (WIPO July 26, 2000). We shall therefore examine these cases.
In Welltec, the registered mark was “Well Tractors.” Respondent registered the domain name <welltractor.com>. Respondent contended that "welltractor" is a generic term widely used in the business sector. The Panel found that in order for genericness to be taken into account in an administrative proceeding it would be necessary to present convincing evidence showing that the words "well tractor" were obviously generic at the time of registration or that they had thereafter become generic through degeneration. Because of the registration of the mark and the lack of convincing evidence, Complainant prevailed. In Welltec, both Complainant and Respondent were in the tractor business. Complainant made tractors and Respondent used tractors to drill holes. Respondent was a prior customer of Complainant. The Panel was reluctant to permit a challenge to a registered mark on the ground that it had become generic except under obvious circumstances and with convincing evidence. The Panel considered submissions from Respondent consisting of publications that Respondent believed clearly showed that the term "well tractor" was widely used in the business sector and the oil and gas industry generally for the device. Notwithstanding such evidence, the Panel in Welltec did not find that it was sufficient to constitute the powerful showing required to make the case for an obvious generic term sufficient to prevail against a registered mark.
In the Robus case the registered mark was "WORKKAMPER." Respondent registered the domain names <workkamper.com> and <workcampers.com> among other variations. "Workkamper" was found to be a coined term, the registration of which had become incontestable. Respondent contended that "workkamper" and "workcamper" were generic terms. Respondent presented search engine printouts and RV industry web sites offered as providing evidence of usage of "workcampers" in a generic sense. The Panel found some of the results to support Respondent and some of the results otherwise, but concluded that the evidence failed to show that the trademarks had become generic.
In the Marioff case, Complainant had registered the trademark "Hi-fog" in at least 16 countries. Respondent registered the domain name "hifog.com." Respondent contended that the word "hifog" was a generic term for high-pressure water fog sprinkler systems and in support of the claim enclosed several examples that showed the generic use of the word by different professional entities among its customers. The Panel looked through the enclosures provided by Respondent and determined that the term "Hi-fog" was written by using both upper and lower case, and in some cases reference could actually be construed as a reference to Complainant’s product. In the present case, as in Marioff, some of the references could actually be construed as a reference to Complainant’s program. The Panel, in Marioff, considered the enclosures filed by Respondent and was of the opinion that those did not necessarily show that the term was used in a generic sense. Under those circumstances the Panel found that it must base its decision on the assumption that the Complainant enjoyed full and unlimited rights in the trademark Hi-fog.
The Panel’s reasoning in Welltec seems to be the correct approach in these types of cases. In the present case like the Panel in Welltec, we are reluctant to find a generic use of a registered mark except under obvious and convincing circumstances. The evidence presented by Respondent does not reach that level of proof.
The hurdle of proving that an incontestable trademark registration is generic is a high one, and the Panel does not believe that in the present case Respondent has succeeded in clearing it.
The question now turns on whether the domain names <clubrewardswireless.com> and <clubrewardsmobile.com> are confusingly similar to the trade mark CLUB REWARDS.
There have been many cases, as Complainant points out, in which it has been held that the mere addition of a common term to a trademark or service mark does not avoid a finding of confusing similarity. Complainant relies, for example, on Federated Western Prop. Inc. v. Chan, D2003-0472 (WIPO Sept. 17, 2003), in which it was found that <macysflowerclub.com> and <macysvista.com> were confusingly similar the trademark MACY’S; Citigroup Inc. v. Acme Mail, FA 241987 (Nat. Arb. Forum Apr. 12, 2004), in which it was found that <citiban.com> was confusingly similar to the trademark CITI. Respondent relies primarily on the defense that Complainant’s trademark is generic but, as we have found above, this is not the case. However he does also argue that a lesser standard of comparison should be applied in the case of descriptive trademarks.
The Panel does not agree. For example, in two decisions, both involving UGG Holdings, Inc. and Deckers Outdoor Corp. v. Paul Barclay and Barclay Holdings, Inc., FA 217320 (Nat. Arb. Forum Feb. 4, 2004) and FA 216873 (Nat. Arb. Forum Feb. 5, 2004), it was held that Complainants’ trademark UGG was confusingly similar to the following lengthy list of domain names, some of which were arguably some way removed from the trademark itself:
<ugboots.us>, <ugg.us>, <uggboots.us>, <uggs.us>, <aussieugboots.com>, <australianugs.com>, <aussieugg.com>, <discountuggboots.com>, <aussieuggboots.com>, <rousuggs.com>, <aussie-uggs.com>, <sheepskinsuggboots.com>, <aussieuggs.com>, <snuggboots.com>, <aussieughs.com>, <ugaustralia.com>, <aussieugs.com>, <ugboots.com>, <australianugboots.com>, <uggbootsonline.com>, <australianugg.com>, <uggbootstore.com>, <australianuggboots.com>, <uggsaustralia.com>, <australianuggs.com>, <uggsnrugs.com> and <australianughs.com>.
This was on the basis that the disputed domain names appropriated the Complainant’s trademark, or a phonetically identical variation thereof, and added generic or descriptive terms to the mark.
It was further held that the addition of generic or
descriptive terms to a registered trademark fails to differentiate sufficiently
the domain names from the mark under paragraph 4(a)(i) of the Policy,
especially when the added terms have a significant relationship to the goods or
services offered under the mark.
Reference was made to 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 paragraph 4(a)(i) of the
Policy was satisfied). Also referred to
was Space Imaging LLC v. Brownwell, AF-0298 (eResolution September 22,
2000) (finding confusing similarity where Respondent’s domain name combines
Complainant’s mark with a generic term that has an obvious relationship to
Complainant’s business).
We further refer to Marriott Int’l, Inc. v. Café au Lait,
FA 93670 (Nat. Arb. Forum Mar. 13, 2000), in which it was found that the
domain name <marriott-hotel.com> was confusingly similar to Complainant’s
trademark MARRIOT; while in Parfums
Christian Dior v. I. Netpower, Inc. D2000-0022 (WIPO Mar. 3, 2000), it was
found that four domain names that added the descriptive terms ‘fashion’ or
‘cosmetics’ after the trademark DIOR were confusingly similar to it.
In conclusion, the Panel finds that the disputed
CLUB REWARDS domain names are both confusingly similar to Complainant’s
trademark CLUB REWARDS.
Complainant states that Respondent is not
associated with it in any way, has never been authorized to use its trademarks,
and has never been commonly known by Complainant’s trademark CLUB REWARDS or
any variations thereof. As so often
happens in contested disputes under the Policy, both parties have made
exaggerated claims, not all of which are, or can be, true. However Complainant has certainly made out a
prima facie case in this regard, and
so the burden shifts to Respondent to establish that he does have rights or a
legitimate interest in the name.
Respondent’s arguments in this respect were
summed up by Complainant under various colourful headings in its Additional
Submission, but they boil down to the following –
·
Respondent has
a legitimate and bona fide business. The disputed CLUB REWARDS domain
names fit into his plan to brand different domain names for use in different
marketing programs, and they would be used for his ‘general awards’ program.
·
A legitimate
interest is established by the use of a domain name in connection with a bona
fide offering of goods and services.
·
To establish a
legitimate interest, a Respondent need not actually have begun offering the
services, so long as he can prove a demonstrable preparation so to do.
·
The disputed
domain names consist of widely used, common dictionary words.
·
Complainant has
made a number of unsubstantiated, misleading and even false claims about
Respondent, its actions and what occurred during the prior discussions between
him and Complainant’s attorney.
Mr. Sauer, Respondent’s principal, has an
extensive background in the marketing of wireless services and products. He plans to sell, over the internet, the
wireless services of major communications companies and he appears to have come
up with the novel idea that his customers should be rewarded for doing so by
receiving at the same time awards, (such as points or miles) in various
customer loyalty schemes. Respondent
buys the awards from the company operating the loyalty program and he then
gives them for free to his customers when they purchase his wireless services.
In order to further his plans, Respondent
registered a number of domain names, some of them generic such as
<flyfreewireless.com> and some of them incorporating the names and
trademarks of others, such as <marriottrewardswireless.com> and
<americanexpresswireless.com>. It
is Respondent’s contention that the disputed DINERS CLUB domain names fall into
the second of the above categories, and the disputed CLUB REWARDS domain names
into the first. He insists that it was
never his intention to sell any of his domain names to his potential clients,
or to divert traffic away from their websites, or to offer them to any of his
potential clients’ competitors. He only
wanted to enter into partnership agreements with the companies whose names he
had registered, and he states that if a company objected to his registration of
a domain name that included an inherently distinctive trademarked term, it was
always his intention to give the domain name to that company. When Complainant did just that, and objected
to the registration of the DINERS CLUB domain names, Respondent offered to
transfer them. However he revealed
during the course of his conversations with Complainant’s attorneys that he had
also registered the disputed CLUB REWARDS domain names and Complainant refused
to accept his offer of the DINERS CLUB domain names without the others as well.
Respondent refused, believing that the latter were merely descriptive, even
though Complainant drew his attention to their trademark registration. Hence
this dispute.
What is the Panel to make of this, in the
context of the Policy?
Respondent appears to be relying principally
on paragraph 4(c)(i) of the Policy namely that before the dispute was launched,
he had made “demonstrable preparations to
use” the disputed CLUB REWARDS domain names “in connection with a bona fide offering of goods or services.” The Panel is satisfied that Respondent
is not a cybersquatter, he is not a basically bad guy, he is an entrepreneur
who has come up with a fairly novel and viable business proposition. Apparently his first partnership was due to
launch on July 13, 2006.
However the question is not whether or not
Respondent had a bona fide business, it is whether he was using or
preparing to use the domain name
in question in connection with a bona fide offering. Respondent claimed to have made demonstrable
preparations to use the disputed CLUB REWARDS domain names, but has produced no
proof thereof.
The Panel believes that this case is on all
fours with a Decision by one of its members, Enterprise Rent-A-Car Co. v. David Mizer Enterprises, Inc. FA
622122 (Nat. Arb. Forum April 14, 2006).
In it, the Respondent had been asked to build an online auto auction for
a branch of at least one national rental car company and, “on the outside chance the relationship would have turned into
additional opportunities,” he registered the domain name
<enterpriseautoauction.com>, which included the Complainant’s well-known
name. The Panel found that “the
Respondent registered domain names containing the marks of others, including
Complainant, with the addition of the words ‘auto’ and auction’ for the purpose
of some future association with these mark holders. ……These circumstances
clearly show that Respondent has no rights or legitimate interests in the
disputed domain name.”
In the present case, Respondent has done the
same, namely to register domain names that contain famous names and marks that
do not belong to him and he is now puzzled that someone should object. One can only wonder at his apparent naivety
in registering them in the first place.
He has claimed that he had no intention of appropriating those domain
names containing the marks of others and that he would transfer them if asked. His refusal to do so in the case of the two
disputed CLUB REWARDS names, even when presented with proof that the trademark
belonged to Complainant, demonstrates the falsity of this claim. Clearly he has no rights to them or any
legitimate interest in hanging on to them.
The Panel therefore finds that paragraph
4(a)(ii) is proved.
It is clear that Respondent had actual knowledge of Complainant’s trade
mark CLUB REWARDS as it was he who drew the attention of Complainant to the
disputed CLUB REWARDS domain names. Bad faith registration can be found when a
domain name registrant uses the mark of another with knowledge of the mark
holder’s rights. See Northwest
Airlines, Inc. v. Koch, FA 95688 (Nat. Arb. Forum Oct. 27, 2000) (holding
that “the selection of a domain name
<northwest-airlines.com> which entirely incorporates the name of the
world’s fourth largest airline could not have been done in good faith”);
see also Nintendo of America Inc. v. Pokemon, D2000-1230 (WIPO Nov. 23,
2000) (finding that respondent, at the time of registration, had notice of
complainant’s trademarks and thus registered the domain name in bad faith); see also National Rifle Assoc. v. fredg.com, FA 95837 (Nat. Arb.
Forum Nov. 30, 2000) (finding bad faith where respondent registered the domain
names <friendsofnra.com>, <friendsofnra.net> and
<friendsofnra.org> with the intention of using the domain names in
connection with individual NRA fundraising, but without permission from the
complainant to use the registered marks); see also State Farm Mutual
Automobile Insurance Co. v. Northway, FA 95464 (Nat. Arb. Forum Oct. 11,
2000); Enterprise Rent-A-Car Co. v. Malakouti, FA 125370 (Nat. Arb.
Forum December 2, 2002).
It seems strange to the Panel that Respondent – a
business man who has repeatedly stressed the honesty of his intentions and his
integrity – should have registered domain names containing marks which he knew
to belong to others, before approaching their owners for the purpose of doing
business with them. He claims that this
is standard business practice and wholly legitimate, but if so it seems a
strange sort of business to be in.
Complainant has spoken of coercion and of being held hostage and these
descriptions of Respondent’s actions do not seem out of place in the circumstances,
although it is hard to imagine a corporation of Complainant’s size and standing
being coerced by a sole trade such as Mr. Sauer. In the opinion of the Panel, he would appear to have exercised,
at best, poor judgement and, at worst, calculation in his rather aggressive
business approach. Respondent’s actions
and behaviour do seem to smack of bad faith and, although not specifically
mentioned in paragraph 4(b) of the Policy, this paragraph is specifically
stated to be non- exclusive. See Cellular One Group v. Brien, D2000-0028
(WIPO Mar. 10, 2000) (finding that the criteria specified in ¶ 4(b) of the
Policy is not an exhaustive list of bad faith evidence); see also Channel Tunnel Group Ltd. v. Powell,
D2000-0038 (WIPO Mar. 17, 2000) (“[J]ust
because Respondent’s conduct does not fall within the ‘particular’
circumstances set out in [paragraph 4(b)] of the Policy, is not conclusive that
the domain name in issue was registered in and is being used in bad faith”).
However, Respondent’s actions in registering the disputed CLUB REWARDS
domain names do also appear to infringe a specific part of paragraph 4(b),
namely ¶ 4(b)(iv), which reads: “by using
the domain, you have intentionally attempted to attract, for commercial gain,
Internet users to your web site…by creating a likelihood of confusion with the
complainant’s mark as to the source, sponsorship, affiliation, or endorsement
of your web site or location or of a product or service on your web site or
location.” The Panel has already
found that CLUB REWARDS is not generic and that it is the exclusive property of
Complainant. There would certainly seem
to be a likelihood of confusion as to the sponsorship, affiliation or
endorsement of Respondent’s website by the use of this mark as part of the disputed
domain names. See G.D. Searle &
Co. v. Celebrex Drugstore, FA 123933 (Nat. Arb. Forum November 21, 2002)
(finding that the respondent registered and used the domain name in bad faith
pursuant to paragraph 4(b)(iv) of the Policy because the respondent was using
the confusingly similar domain name to attract Internet users to its commercial
website); see also Perot Systems Corp. v. Perot.net, FA 95312 (Nat. Arb.
Forum Aug. 29, 2000) (finding bad faith where the domain name in question was
obviously connected with the complainant’s well-known marks, thus creating a
likelihood of confusion strictly for commercial gain); see also eBay, Inc.
v. Progressive Life Awareness Network, D2000-0068 (WIPO Mar. 16, 2001)
(finding bad faith where the respondent was taking advantage of the recognition
that eBay has created for its mark and therefore profiting by diverting users
seeking the eBay web site to the respondent’s site).
The Panel
concludes that, in the totality of the circumstances, Respondent’s registration
and use of the disputed CLUB REWARDS domain names is indicative of bad faith
under paragraph (4)(a)(iii), of the Policy.
DECISION
Having established all three elements required under the ICANN Policy,
the Panel concludes that relief shall be GRANTED.
Accordingly, it is Ordered that the <dinersclubwireless.com>,
<dinersclubwireless.net>,
<clubrewardswireless.com> and <clubrewardsmobile.com>
domain names be TRANSFERRED from Respondent to Complainant.
David H Tatham (Chairman)
Hon. Tyrus R Atkinson
and Steven L Schwartz (Panelists)
Dated: July 27, 2006
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