DECISION

 

Pacific Aircraft Incorporated v. Pacific Aircraft Corporation

Claim Number: FA0106000097645

 

PARTIES

Complainants are Edward H. Tuton and Pacific Aircraft Incorporated, Scottsdale, AZ, USA (“Complainant”) represented by Richard Keyt, of Gallagher & Kennedy, P.A.  Respondent is Pacific Aircraft Corporation, Angeles City, PH (“Respondent”).

 

REGISTRAR AND DISPUTED DOMAIN NAMES 

The domain names at issue are <pacificaircraft.com> and <pacificaircraft.net>, registered with Network Solutions, Inc.

 

PANEL

The undersigned certifies that she has acted independently and impartially and that to the best of her knowledge she has no known conflict in serving as Panelist in this proceeding. Hon. Carolyn Marks Johnson sits as Panelist.

 

PROCEDURAL HISTORY

Complainants submitted a Complaint to the National Arbitration Forum (“the Forum”) electronically on June 11, 2001; the Forum received a hard copy of the Complaint on June 12, 2001.

 

On June 13, 2001, Network Solutions, Inc. confirmed by e-mail to the Forum that the domain names <pacificaircraft.com> and <pacificaircraft.net> are registered with Network Solutions, Inc. and that the Respondent is the current registrant of the name.  Network Solutions, Inc. has verified that Respondent is bound by the Network Solutions, Inc. 5.0 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 June 14, 2001, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of July 24, 2001 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@pacificaircraft.com and postmaster@pacificaircraft.net by e-mail.

 

A timely response was received and determined to be complete on July 24, 2001.

 

A timely Additional Submission by Complainants was received and determined to be complete on July 30, 2001.

 

On July 31, 2001, pursuant to Complainants’ request to have the dispute decided by a single-member Panel, the Forum appointed Hon. Carolyn Marks Johnson as Panelist.

 

RELIEF SOUGHT

Complainants request that the domain names be transferred from Respondent to Complainants.

 

PARTIES’ CONTENTIONS

A.     Complainants urge that Respondent registered domain names that are identical to or confusingly similar to a mark in which Complainants have rights; that Respondent has no right to or legitimate interests in the mark contained within the domain names and that Respondent registered and used the domain names in bad faith.

 

B.     The response filed on behalf of Respondent urges that Respondent acted under the permission of Complainants to register and develop the domain names in question and that it did not act in bad faith.

 

C.     Complainants replied, urging that Complainants did not give Respondent permission or a license to use their mark in a domain name and that Respondent had no authority to use Complainants’ mark in domain names.

 

FINDINGS

Complainants have been known as Pacific Aircraft Incorporated since 1991 and have sold model aircraft, ship models and plaques under that name.  Complainants incorporated January 14, 1991, in Arizona.  Complainants have spent an average of $200,000. since that time each year developing the model aircraft and ship and plaque business.  Using catalogue sales, Complainants captured an international market of some 50,000 customers.  Complainants operate in thirteen countries including the United States, France, United Kingdom, Belgium, Japan, Australia, Canada, Germany, Mexico, Austria, Italy, Switzerland and Sprain.  Complainants registered and used the domain name www.warplanes.com.

 

On March 30, 1999, Respondent registered the domain names in issue in the Philippines.  Respondent also sells model aircraft that are identical to or virtually identical to those sold by Complainants. Respondent knew that Complainants were in business under the name Pacific Aircraft Incorporated because Complainant Edward H. Tuton, the CEO of Pacific Aircraft Incorporated, also was one of the founders of Respondent, Pacific Aircraft Modeling Corporation (hereafter PAMC) and Tuton ultimately became the controlling shareholder. The PAMC Articles of Incorporation were filed in the Philippines on June 9, 1997.  Complainants assert that some of PAMC’s original shareholders are conspiring to use Respondent as a vehicle to usurp Complainants’ trade name without consent and as a means of engaging in competition with Complainants using Complainants’ own products.  Respondent also is acting to prevent Complainants from doing Internet business in their own name.

 

Complainants urge that Respondent acted in bad faith and that Respondent is not making a fair, non-commercial use of the disputed domain names. Complainants assert that the domain names that Respondent registered are tarnishing the reputation of Complainants’ mark because the website says “undr kunstrukson” on thirteen of its sixteen pages.

Complainants also urge that Respondent acted in bad faith because Respondent offered the domain names for sale for $30,000. an amount that is in excess of any registration and development expenses that Respondent could have had under these circumstances. 

 

Robert H. Amerault responded for Respondent and took the position that he was hired January 11, 1999, by two shareholders in PAMC, Brian S. Jackson and Lillian Buiza to develop the domain names at a time when Tuton did not hold a majority of the shares.  Amerault asserts that he took control of the domain names when Jackson and Buiza failed to pay him.  Amerault concedes that he offered to sell the domain names for $30,000 to Complainants and stated, without offering further proof, that the amount “was a fair price for the work I did, the expenses I incurred, plus interest and penalties for the original non-payment of services.”  Amerault alleged that at the time he was hired to develop the domain names, Tuton, Jackson and Buiza were partners.  Amerault said he acted in good faith. Amerault  urges that Complainants permitted Respondent to develop a website for each of the disputed domain names, an allegation that Complainants deny. 

 

In Complainants' additional submission, Complainant’s assert, inter alia, that the individual who filed the response is not the Respondent and therefore that Respondent has filed no valid response.  Complainants further state that Complainants have control over PAMC and that therefore Complainants should have control over the disputed domain names as well. 

 

Amerault’s response on behalf of Respondent raises a number of matters that are outside the scope of the UDRP.  See The Thread.com, LLC v. Poploff, D2000-1470 (WIPO Jan. 5, 2001) (stating that "this Panel is not a general domain name court, and the Policy is not designed to adjudicate all disputes of any kind that relate in any way to domain names”); see also Commercial Publ'g Co. v. EarthComm, Inc., FA 95013 (Nat. Arb. Forum July 20, 2000) (stating that the Policy is intended to resolve only a narrow class of cases of “abusive registrations” and does not extend to cases where a registered domain name is subject to legitimate disputes, which are relegated to the courts).  This Panel does not have the jurisdiction to decide whether Amerault has a right to recover in contract or quantum meruit for the services he alleges he gave to PAMC.

 

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 Respondent is identical or confusingly similar to a trademark or service mark in which Complainants have rights;

(2) Respondent has no rights or legitimate interests in respect of the domain name; and

(3) the domain name has been registered and is being used in bad faith.

 

Identical to and/or Confusingly Similar

Complainants have established in this proceeding their common law rights in the PACIFIC AIRCRAFT mark by virtue of continuous and extensive use of the mark in the United States and internationally.  Such rights are a sufficient basis for filing a Complaint under the UDRP.  Compare Great Plains Metromall, LLC v. Creach, FA 97044 (Nat. Arb. Forum May 18, 2001) (finding that the Uniform Domain Name Dispute Resolution Policy does not require “that a trademark be registered by a governmental authority for such rights to exist”), and Koninklijke KPN N.V. v. Telepathy Inc., D2001-0217 (WIPO May 7, 2001) (finding that the Policy does not require that the mark be registered in the country in which a Respondent operates.  It is sufficient that a Complainant can demonstrate a mark in some jurisdiction).  See also Smart Design LLC v. Hughes, D2000-0993 (WIPO Oct. 18, 2000) (holding that ICANN Policy 4(a)(i) does not require Complainant to demonstrate “exclusive rights,” but only that complainant has a bona fide basis for making the complaint in the first place).

 

Complainants contend that the <pacificaircraft.com> and <pacificaircraft.net> domain names are identical to Complainants' PACIFIC AIRCRAFT mark.  It is well settled that the addition of TLDs such as “.com” and “.net” do not defeat a claim that the domain names are identical to another's mark.  See, e.g., Rollerblade, Inc. v. McCrady, D2000-0429 (WIPO June 25, 2000) (finding that the top level of the domain name such as “net” or “com” does not affect the domain name for the purpose of determining whether it is identical or confusingly similar).

 

In addition, the Panel may find that the disputed domain names are so confusingly similar that a reasonable Internet user would assume that the domain names are somehow affiliated with Complainants.  See Treeforms, Inc. v. Cayne Indus. Sales Corp., FA 95856 (Nat. Arb. Forum Dec. 18, 2000) (finding that confusion would result when Internet users, intending to access Complainant’s web site, think that an affiliation of some sort exists between the Complainant and the Respondent, when in fact, no such relationship would exist).

 

The Panel has some concerns because the domain names in issue, <pacificaircraft.com> and <pacificaircraft.net> may be viewed as being comprised of generic descriptive and geographical terms. See Port of Helsinki v. Paragon Int’l Projects, Ltd., D2001-0002 (WIPO Feb. 12, 2001) (finding that ICANN Policy does not provide protection for geographic names); see also Travel Berkeley Springs, Inc. v. Glens Country Estate, FA 96347 (Nat. Arb. Forum Feb. 16, 2001) (finding that Complainant could not have superior right to use of “Berkeley Springs” to the exclusion of other entities, particularly where there were many other businesses that used geographic names as part of their business name).  The Panel also questions whether Complainants’ proof permits a finding that Complainants established common law rights to the PACIFIC AIRCRAFT mark under Philippine law. See Cf. Interactive Television Corp. v. Noname.com, D2000-0358 (WIPO June 26, 2000) (finding that “[S]erious questions as to whether Complainant has any proprietary rights require us to reject Complainant’s claim. The ultimate decision as to whether Complainant does or does not have proprietary rights is better left to a court or trademark office tribunal”).

 

However, looking at the totality of the circumstances here, Complainants established a right to the mark contained in its entirety within the two domain names registered by Respondent and the Panel finds that Complainants met the burden under Policy 4(a)(i) to show that the disputed domain names are identical to and/or confusingly similar to a mark in which Complainants have rights.

 

Rights to or Legitimate Interests

Complainants also established rights to and legitimate interests in the mark that is contained in its entirety in the disputed domain names that Respondent registered.  On the other hand, Amerault, appearing for Respondent, did not submit information that could support a finding that Respondent has rights in the mark contained within the disputed domain names <pacificaircraft.com> and <pacificaircraft.net>.  The record permits an inference that Amerault registered domain names for the purpose of permitting PAMC to offer competing goods using Complainants’ mark.  This is not a bona fide offering of goods or services such as would establish that Respondent has rights or legitimate interests in the disputed domain name under Policy ¶ 4(c)(i).  See, e.g., The Chip Merchant, Inc. v. Blue Star Elec., D2000-0474 (WIPO Aug. 21, 2000) (finding that Respondent’s use of the domain names to sell competing goods was an illegitimate use and not a bona fide offering of goods); see also North Coast Med., Inc. v. Allegro Med., FA 95541 (Nat. Arb. Forum Oct. 2, 2000) (finding no bona fide use where Respondent used the domain name to divert Internet users to its competing website).

 

Amerault alleges further on behalf of Respondent that two shareholders of PAMC authorized him to act on behalf of PAMC to register and develop the domain names.  Amerault urges that he acquired rights to the domain names as a result of PAMC’s non-payment.  This domain name dispute is not a proper jurisdiction to determine Amerault’s contractual or quantum meruit right to recover from PAMC for such services.  

 

Complainants have shown rights to and legitimate interests in the mark contained in its entirety within the disputed domain names. Respondent PAMC has not.  Given that result, Amerault also did not acquire rights in the mark even if every allegation that Amerault makes about his own conduct is true. 

 

Complainants further assert that Respondent is using the <pacificaircraft.com> and <pacificaircraft.net> domain names with the intent of commercial gain to misleadingly divert consumers and to tarnish Complainants' PACIFIC AIRCRAFT mark in violation of Policy ¶ 4(c)(iii).  See Kosmea Pty Ltd. v. Krpan, D2000-0948 (WIPO Oct. 3, 2000) (finding no rights in the domain name where Respondent has an intention to divert consumers of Complainant’s products to Respondent’s site by using Complainant’s mark).

 

Amerault asserts on behalf of Respondent that, inter alia, it is using the <pacificaircraft.com> and <pacificaircraft.net> domain names to offer services beyond those that compete directly with Complainants and that it has done so since it registered the disputed domain names, before any notice of this Complaint.  It claims that such a use is both a bona fide offering of goods and services pursuant to Policy ¶ 4(c)(i) and a fair use under Policy ¶ 4(c)(iii).  See IG Index PLC v. Index Trade, D2000-1124 (WIPO Oct. 16, 2000) (finding that Respondent has rights in the domain name because Respondent’s claimed use of the domain name is a “plausible explanation” to which the Panel must give weight); see also SFX Entmt., Inc. v. Cushway, D2000-0356 (WIPO July 10, 2000) (finding that Respondent had rights and legitimate interests in the domain name where he began demonstrable preparations to use the domain name in connection with a bona fide offering of goods or services); see also Tough Traveler, Ltd. v. Kelty Pack, Inc, D2000-0783 (WIPO Sept. 28, 2000) (finding that Respondent had a legitimate interest in the domain name, <kidcarrier.com>, as a generic term for a class of products that Respondent sells).  The Panel disagrees with this proposition.  Amerault allegedly registered two domain names using Complainants’ PACIFIC AIRCRAFT mark on the request of two shareholders for Complainants’ sister corporation PAMC.  Even had Amerault not been aware of Complainants’ presence, the two shareholders that allegedly authorized Amerault to act knew of Complainants and knew of Complainants’ area of commerce.  Amerault did not offer a competent challenge to Complainants’ assertion of the assignment by these shareholders to Complainant Tuton and of Complainants’ majority control of PAMC.  The Panel is entitled to assume that if Amerault could have done so, he would have. 

 

The Panel finds that Complainants established rights to and legitimate interests in the mark contained in its entirety in the domain names registered by Respondent and that Respondent failed to show any such rights and interests.  Policy 4(a)(ii).

 

Registration and Use in Bad Faith

Complainants urge that Respondent acted in bad faith in registering and using the disputed domain names and in offering to sell the domain names for $30,000.  Policy ¶ 4(b)(i).  There is ample authority to support the conclusion that selling, renting or otherwise transferring disputed domain names in excess of out-of-pocket costs constitutes bad faith.  See, e.g., Dynojet Research, Inc. v. Norman, AF-0316 (eResolution Sept. 26, 2000) (finding that the Respondent demonstrated bad faith when he requested monetary compensation beyond out of pocket costs in exchange for the registered domain name).

Amerault urges on behalf of Respondent that Amerault did not act in bad faith.  A UDRP Panel is not limited by the specified criteria set forth in Policy ¶ 4(b) when making a determination of bad faith.  See Twentieth Century Fox Film Corp. v. Risser, FA 93761 (Nat. Arb. Forum May 18, 2000) (finding that registration and use in bad faith can be inferred by the “totality of circumstances”).   In this situation, the disputed facts may lead the Panel to find that the circumstances of Respondent's continued registration and use of the <pacificaircraft.com> and <pacificaircraft.net> domain names constitute bad faith.  In fact, if Amerault’s allegations are taken as true, two shareholders of PAMC authorized Amerault to use Complainant’s mark in domain names for PAMC’s benefit.  These two shareholders have not appeared here and no one has submitted proof of their right to make this authorization.  Then, Amerault concedes that he made an effort to sell the two domain names he registered to the Complainant for $30,000, a valuable consideration that is in excess of any reasonable registration and development costs shown by Amerault in this proceeding.  These facts permit the inference that Respondent acted in bad faith.  See Gutterbolt, Inc. v. NYI Bldg. Prod. Inc., FA 96076 (Nat. Arb. Forum Dec. 29, 2000) (finding that use of a domain name as a bargaining tool in an effort to receive compensation for a failed business transaction is evidence of bad faith).

 

Amerault on behalf of Respondent denies any bad faith and claims that Amerault  was hired to register the disputed domain names and to develop websites at each domain name in good faith.  Amerault also contends that only after his client failed to pay for the services did Amerault decide to keep the <pacificaircraft.com> and <pacificaircraft.net> domain names for his own use.  See Eddy’s (Nottingham) Ltd v. Smith, D2000-0789 (WIPO Sept. 7, 2000) (finding no bad faith registration of the domain name where Respondent registered the domain name in good faith, without objection by Complainants and in the interest of promoting the Complainants’ business).  The Eddy’s factors do not apply here because the business being promoted was to be Amerault’s or Respondent’s.  While the evidence permits an inference that Amerault may have believed he was acting initially in good faith in registering domain names on behalf of PAMC, no evidence has been submitted to show that PAMC had the right to register domain names containing in their entirety Complainants’ mark and PAMC’s attempted registrations of Complainants’ mark constitute opportunistic bad faith registration of another’s mark.  If PAMC had no right, Amerault certainly had none.  In addition, once Amerault attempted to force Complainants to buy the domain names for a consideration in excess of reasonable registration and development expenses, Amerault’s bad faith was established.  

 

The Panel finds that Respondent and Amerault acted in bad faith. Policy 4(a)(iii).

 

DECISION

 

Having found that Complainants met all three Policy requirements and that the requested relief should be granted, it is ORDERED that the domain names in issue, <pacificaircraft.com> and <pacificaircraft.net>, be transferred from Respondent to Complainants.

 

 

Hon. Carolyn Marks Johnson, Panelist

 

Dated: August 14, 2001.

 

 

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