Phar-Mor, Inc. v Epicenter Communicatons, Inc.

PHAR-MOR, INC.
Complainant,

vs.

EPICENTER COMMUNICATIONS, INC.,
Respondent.

MAJORITY DECISION

Forum File No.: FA0003000094363

The above entitled matter came on for an administrative hearing on May 24, 2000 before Richard B. Wickersham, Andrew F. Christie and Herman D. Michels (Chair), the Arbitrators assigned to this matter, on the complaint of Phar-Mor, Inc. (Complainant), represented by David R. Posteraro, Esq. (Roetzel & Andress, attorneys for Complainant) against Epicenter Communications, Inc. (Respondent), represented by Douglas P. Ferguson, Esq. Upon the written submitted record, including the Complaint and the Response to the Complaint the following Majority Decision is rendered:

PROCEDURAL FINDINGS

Domain Name: PHARMORE.COM

Domain Name Registrar: Network Solutions, Inc.

505 Huntmar Park Drive

Herndon, Virginia 20170

Domain Name Registrant: Epicenter Communications, Inc.

Date of Domain Name Registration: April 12, 1999

Date Complaint Filed: March 27, 2000

Date Response Filed: April 19, 2000

After reviewing the Complaint and determining it to be in administrative compliance, the National Arbitration Forum (the "Forum") forwarded the Complaint to Respondent in compliance with Rule 2(a) and the administrative proceeding was commenced pursuant to Rule 4(c) in compliance with Rule 4(d). The Forum immediately notified Network Solutions, Inc., the INTERNET CORPORATION FOR ASSIGNED NAMES AND NUMBERS ("ICANN") and Respondent that the administrative proceeding had commenced. Respondent has submitted a Response to the Forum within twenty (20) days pursuant to Rule 5(a) which time has now expired. The Complaint and the Response and all Exhibits were forwarded to the Arbitrators for decision.

On April 12, 1999, Respondent registered the domain name PHARMORE.COM with the domain name registrar Network Solutions, Inc., the entity that is the registrar of the domain name. Network Solutions, Inc. verified that Respondent is the registrant for the domain name PHARMORE.COM and by registering its domain name with Network Solutions, Inc., Respondent agreed to resolve any disputes regarding its domain name through ICANN's Rules for Uniform Domain Name Dispute Resolution policy. Neither the Complainant nor the Respondent has contested the jurisdiction of the Forum or the three Arbitrators assigned to resolve this controversy.

FINDINGS OF FACT

Complainant is the owner of U.S. Trademark Registration Number 1, 994,585 for the trademark PHAR-MOR. Since January 1983, Complainant has been using the trademark PHAR-MOR in connection with various goods and services, including artificial sweeteners, unexposed photographic film, dentifrices, non-medicated hair care preparations, essential oils for personal use, cosmetics, sun tan preparations, pharmaceutical preparations, razors, dental apparatus and instruments, namely dental floss, disposable diapers, cotton balls and retail store services in the field of drug store products, health and cosmetic preparations and general merchandise. Initially the mark was used for retail store services in the field of drug store products, health and cosmetic preparations and general merchandise. As the business grew, so did Claimant's usage of the PHAR-MOR trademark. Over the years the PHAR-MOR trademark has expanded to include numerous private label consumer products, pharmaceutical goods, as well as establish Claimant's presence on the Internet.
Claimant has expended significant time, money and effort to establish public recognition of its PHAR-MOR mark as identifying it as the source of numerous high quality goods and service. Claimant uses this trademark in advertising and promoting both in print and electronic form the sale of its goods throughout the United States. Claimant advertises its goods and services under the PHAR-MOR mark and operates one hundred and thirty nine [139] retail stores in twenty four [24] states. In addition, Claimant operates three hundred two [302] retail stores. Claimant's current advertising budget for marketing its goods and services under the PHAR-MOR mark is twenty two million five hundred thousand [$22,500,000.00] dollars per annum. As a result of these efforts Claimant has established substantial good will and consumer recognition of the PHAR-MOR trademark, which has become one of Claimant's most valuable assets.
Claimant's trademark application for the mark PHAR-MOR was filed with the United States Patent and Trademark Office on May 16, 1983. This mark was registered on the principal register on August 14, 1984 and issued the registration number 1,290,511. Complainant filed a second trademark registration on December 21, 1994, to expand the protection of the PHAR-MOR mark to other goods and services. This mark was registered on the principal register on August 20, 1994 and issued the registration number 1,994,585. These two marks are in full force and effect and are currently utilized in all aspects of Claimant's business. Complainant has the exclusive right to use and to license the PHARMOR mark.
On February 24, 1996, Claimant expanded its application of the PHAR-MOR mark to the Internet, when it launched its website, WWW.PHARMOR.COM. Through this website, Claimant sells retail products, operates an on-line pharmacy, disseminates health and pharmaceutical information, maintains a portal devoted to health and medicine and offers various other health related services. As Claimant's website is an integral part of its business, third-party usage of confusingly similar domain name would cause irreparable harm to Claimant.
Respondent's domain name PHARMORE.COM is confusingly similar to Claimant's trademark or service mark in which Complainant has all rights, title and interests and consumers are likely to be confused into believing that there is some affiliation, connection, sponsorship, approval or association between Respondent and Claimant, when in fact no such affiliation or association exists. See Rule 4(a)(i).
Respondent does not have any rights or legitimate interests in respect to the domain name PHARMORE.COM. See Rule 4(a)(ii).
Respondent has not demonstrated any rights to and legitimate interest in the domain name PHARMORE.COM. Respondent has not made any active use of the said domain name and tended no evidence of any preparations towards such use. Moreover, there is no evidence that Respondent has been commonly known by the domain name PHARMORE.COM nor is there any evidence that Respondent is making a legitimate non-commercial or fair use of the domain name without intent for commercial gain to misleadingly divert customers or to tarnish the trademark or service mark at issue.
Respondent registered and used the domain name PHARMORE.COM in bad faith as evidenced by the fact that it registered the domain name on April 12, 1999 nearly sixteen years after Claimant's mark was registered by the United States Patent and Trademark Office and over two years after Claimant's registration of its domain name PHARMOR.COM on February 14, 1997. Claimant was therefore aware or should have been aware of the existence of Claimant's domain name. Moreover, the circumstances indicate that Respondent had registered or acquired the domain name PHARMORE.COM primarily for the purpose of selling, renting or otherwise transferring the domain name registration to Complainant who is the owner of the trademark or servicemark for valuable consideration in excess of Respondent's documented out-of-pocket costs directly related to the domain name. See Rule 4(a)(iii) and Rule 4(b)(i).
Respondent's registration and use of the domain name PHARMORE.COM constitute an infringement of Complainant's rights in its PHARMOR mark and has caused and will continue to cause substantial and irreparable harm to Complainant and its business reputation and good will. Complainant therefore demanded that Respondent transfer the domain name PHARMORE.COM to Complainant.

CONCLUSION

The arbitrators Richard B. Wickersham, Andrew F. Christie, and Herman D. Michels certify that they have acted independently and have no known conflict of interest to serve as Arbitrators in this proceeding. Having been duly selected and being impartial and neutral, Richard B. Wickersham and Herman D. Michels, a majority of the Arbitrators, make the following findings and conclusions:

1. The domain name PHARMORE.COM registered by Respondent on April 12, 1999 with Network Solutions, Inc. the domain name registrar is confusingly similar to Complainant's mark PHARMOR, Claimant's registered trademark and service mark registered on the principal register of the United States Patent and Trademark Office by Complainant. Complainant has all rights and interest in said PHARMOR mark.

2. Respondent does not have any rights or legitimate interests in respect to the domain name PHARMORE.COM.

3. Respondent has registered and used the domain name PHARMORE.COM in bad faith.

DECISION

Based upon the above findings and conclusions and pursuant to Rule 4 (1) of the Rules of the Uniform Domain Name Dispute Resolution Policy and the National Arbitration Forum Supplemental Rules of ICANN's Uniform Domain Resolution Policy, Richard B. Wickersham and Herman D. Michels, a majority of the Arbitrators, Order that:

1. The domain name PHARMORE.COM registered by Respondent Epicenter Communications, Inc. be transferred forthwith to Complainant Phar-Mor, Inc., and

2. Respondent Epicenter Communications, Inc. shall cease and desist from any and all use of the domain name PHARMORE.COM.

For a Majority of the Arbitrators

__________________________________________

Herman D. Michels, Chair

Dated: May 26, 2000

PHAR-MOR, INC. v EPICENTER COMMUNICATIONS, INC.

FA0003000094363

MINORITY DECISION

1. This Minority Decision is rendered upon a reading of the written record, including the Complaint and the Response to the Complaint. This Panellist has read the Majority Decision of the Panel. He agrees with and adopts the contents of that Decision up to and including paragraph 7, but respectively disagrees with the remainder of the Decision.

2. This Panellist agrees with the Majority of the Panel that Complainant has established the first two requirements under the Uniform Dispute Resolution Policy. That is to say, this Panellist agrees that the domain name <pharmore.com> is confusingly similar to Complainant's trademark PHAR-MOR. The similarity in spelling and appearance between the trademark and the domain name in the form in which it would be entered by a user (ie. <pharmore.com>, not <PharmOre.com> as argued by Respondent) is such that consumers of pharmaceutical products and services would be confused into thinking that the domain name was associated with the owner of the trademark PHAR-MOR.

3. This Panellist also agrees with the Majority of the Panel that Respondent has no rights or legitimate interests in the domain name. Respondent has not made any active use of the domain name, and tendered no evidence of any preparations by it towards such use. Given that (i) Complainant has a prior-in-time registered trademark to which the domain name is confusingly similar, (ii) Complainant has not licensed Respondent to use the trademark or a confusingly similar version of it in any way, and (iii) Respondent has not proved any of the circumstances specified in paragraph 4(c) of the Policy as being evidence of a right or legitimate interest in the domain name under the Policy, this Panellist considers that Respondent has no rights or legitimate interests in the domain name as that concept is used in the Policy.

4. This Panellist respectfully disagrees with the Majority of the Panel that the domain name was registered and is being used in bad faith by Respondent. Complainant argued that the mere act of registration of a confusingly similar domain name many years after registration of its trademark was evidence of bad faith by Respondent. This Panellist does not agree. More is required to establish that an act of registration was a registration "in bad faith", as that concept is used in the Policy.

5. Complainant further argued that bad faith registration and use by the Respondent was established by circumstances of the type identified in paragraph 4(b)(i) of the Policy (ie. by an offer to sell the domain name to Complainant for an amount in excess of out-of-pocket expenses). This Panellists finds that the evidence does not establish such circumstances. The facts are that Complainant (through its Attorney) first approached Respondent, stating:

"Phar-Mor would like you to transfer the domain name pharmore.com to them. I can initiate the request for transfer with Network Solutions. As compensation for any troubles or expense you may have incurred in registering the domain name, Phar-Mor would be willing to make a reasonable payment to your (sic) or your firm. I believe that $500-$1,000 would be fair. I welcome your thinking on the matter. … Please let me know if you are willing to transfer the domain name, and the price you would seek for its sale. I will contact you shortly."

Respondent sent no response to this communication. Some days later, Complainant through its general counsel telephoned general counsel for Respondent, asking if the domain name was for sale. Respondent's general counsel replied that he thought this was "unlikely, since Epicenter's domain name registration had been procured solely with its own website uses in mind". Complainant's general counsel indicated that Complainant was engaged in negotiations (which were ultimately successful) leading to a business alliance with more.com, and that the domain name would be of interest to the allied entities. Respondent's general counsel agreed to pass on Complainant's request for answers to the questions whether Respondent was willing to sell the domain name registration and, if so, at what price.

6. Later that day Respondent's general counsel replied by email, in which it was stated:

" I have passed on your request to Epicenter, and in doing so I learned to (sic) useful things:

1. Epicenter apparently received another unsolicited (and apparently unrelated) purchase offer for the "PharmOre" domain only shortly before it was first contacted by Mr Brzuziewski [Complainant's Attorney]. It did not reply to that offer, but the very fact that an offer was made apparently prompted Epicenter to review its plans for use of the "PharmOre" registration as well as some of the other domain registrations which it owns but which are not yet in active use. As a result of that review process, Epicenter had already concluded, by the time Mr. Brzuziewski's email arrived, that it should probably consider transferring those registrations if it received reasonable compensation for doing so.

2. Epicenter has also received an unsolicited purchase offer respecting "NetDoctor.com" (which is one of the other domains which is potentially surplus to Epicenter's needs) from a European startup company, and in prompt negotiation which took place only last week the parties apparently agreed to a price comprised of $150K cash and $250K stock in the startup company. I mention this transaction because of Epicenter conviction that it provides a useful "comparable sale". I agree. Both domains are original combinations of generic terms, without any existing goodwill in the marketplace but with the useful ability to convey to internet users a sense of the subject matter to be found at the respective websites.

In light of the foregoing, there appears to be a willingness on the part of Epicenter to consider transferring the PharmOre domain name registration. Please let me know if your company wishes to pursue that possibility."

7. The following day general counsel for Complainant emailed Respondent stating: "As I indicated to you yesterday, Phar-Mor, Inc. is very interested in pursuing the purchase of oyur (sic) client's domain name. I am only asking that you provide a price." Respondent's general counsel replied by telephone that "Epicenter was not really a motivated seller" and that if Phar-More, Inc. had an interest in the domain name "it should itself suggest a price". The next day Complainant's general counsel replied by email that "Phar-Mor, Inc. will offer $2,000 for the purchase/transfer of the referenced domain from your client", an offer which was expressed to expire in three days time. Respondent did not reply to that offer, and there was no further communication between the parties until commencement of this proceeding.

8. In reaching conclusions on the basis of this evidence, this Panellist is cognizant of the fact that Respondent's responses quoted above may well have been made with the possibility in mind that a dispute such as this one might arise in the future, and accordingly such responses may well have been thoughtfully phrased so as to give an impression of reticent or unwillingness to sell that the Respondent may not fully have been held in reality. (Of course, it is also quite possible that Complainant's enquiries were made with the possibility of this action in mind, and hence were carefully framed with a view to seeking to obtain from Respondent a clear and positive "offer of sale", which could then be used as evidence of bad faith under the Policy.) This Panellist in reading the above communications has given them an interpretation most favourable to Complainant. Even on this most favourable interpretation, this Panellist is unable to find in these communications evidence that Respondent registered the domain name "primarily for the purpose of selling, renting or otherwise transferring it to the complainant" for valuable consideration in excess of documented out-of-pocket costs, as is specified in paragraph 4(b)(i) of the Policy. Instead, this Panellist agrees with Respondent that there was in fact no offer by Respondent to sell the domain name to Complainant, but rather that there was a request by Complainant that Respondent make an offer to sell the domain name to it (a request with which Respondent did not comply) and then an offer by Complainant to buy the domain name from Respondent (an offer Respondent did not accept).

9. Finally, in seeking to establish evidence of bad faith in the registration and use of the domain name by Respondent, Complainant argued that "Epicenter has engaged in a series of bad faith registrations", so as to acquire "a stock-pile of domain names in which Epicenter has no intention to use, but are obviously available for sale". Complainant alleged that the fact that Respondent registered and sold for a profit the domain name <NetDoctor.com> was evidence of "a pattern of bad-faith registration and sale". Once again, this Panellist does not agree with Complainant's assertion. Respondent's admission of the sale of one domain name is not evidence of a "pattern" of such conduct. It is clear that a "pattern of conduct", as that phrase is used in paragraph 4(b)(ii) of the Policy, means more than one act. As Respondent eloquently put it, "One sale does not a cybersquatter make".

10. In conclusion, and contrary to the finding of the Majority of the Panel, this Panellist finds that Complainant has not established all of the three requirements necessary under the Policy for an order of the transfer of the domain name registration to it.

Dated: May 26, 2000 Andrew F. Christie, Arbitrator