Your Source for Domain Dispute News and Information	December 15, 2008, Vol. 9 No. 12

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Skyy Spirits LLC v. Krzenszsczynski

Intellectual Property Dispute Resolution in Second Life

New Top-Level Domain, “.tel,” Will Deter Some Cybersquatters 

Spam Volume Drops as Large Hosting Firm Goes Offline

American Automobile Association, Inc. v. Zag Media Corp.

Respondent, identified as “Zag Media Corp. c/o Whois Privacy Service,” contended that it was only managing the <aaacars.com> domain name for its customer, which Respondent referred to as “the domain owner.” After reading ICANN Rule 1 in conjunction with the FORUM’s Supplemental Rule 1(d), the Panel determined that the proper Respondent was only the individual or entity listed in the WHOIS information for the disputed domain name. Without Respondent providing any further information as to the identity of the supposed actual “domain owner,” the Panel concluded that since Respondent essentially acted solely as a proxy registration service, Respondent lacked rights and legitimate interests in the disputed domain name under Policy ¶ 4(a)(ii). The Panel then found that Respondent’s concealment of the supposed “domain owner,” combined with other holdings to supported a finding of bad faith pursuant to Policy ¶ 4(a)(iii). As a consequence, the Panel ordered the transfer of the <aaacars.com> domain name to Complainant. Am. Auto. Assoc., Inc. v. Zag Media Corp., FA 1226952 (Nat. Arb. Forum Nov. 13, 2008).

Etsy, Inc. v. Texas International Property Associates

Complainant, Etsy, Inc., brought this UDRP claim for the <etsey.com> domain name. Respondent contended that the Complainant’s Additional Submission was improper under ICANN Rule 12 because the Panel did not solicit it. This submission was accepted under FORUM ’s Supplemental Rule 7, which Respondent argued is invalid because it conflicts with the ICANN rules. The Panel disagreed and found Complainant’s filing of an Additional Submission to be proper under both ICANN Rule 12 and Supplemental Rule 7. However, the Panel determined that Respondent could not have registered the disputed domain name in bad faith pursuant to Policy ¶ 4(a)(iii) because Complainant had not established either registered or common law trademark rights and was not otherwise well known before the registration of the mark. Having failed to establish this element, the Panel declined to transfer the <etsey.com> domain name. Etsy, Inc. v. Texas Int’l Prop. Assocs., FA 1222645 (Nat. Arb. Forum Nov. 11, 2008).

Harrah's License Company, LLC v. Hawkins

Complainant, Harrah’s License Company, brought a UDRP Complaint against Respondent in regards to the <horseshoeindiana.com> domain name. Complainant claimed rights in the HORSESHOE mark evidencing registration with the United States Patent and Trademark Office.The Panel determined that the disputed domain name was confusingly similar to Complainant’s mark pursuant to Policy ¶ 4(a)(i). The Panel also found that Respondent failed to meet its burden of demonstrating rights and legitimate interests in the disputed domain name pursuant to Policy ¶ 4(a)(ii) because the disputed domain name was listed for sale through its website. Upon these same grounds, the Panel found bad faith under Policy ¶ 4(a)(iii). Accordingly, the Panel ordered the transfer the <horseshoeindiana.com> domain name to Complainant. Harrah's License Co., LLC v. Hawkins, FA 1225284 (Nat. Arb. Forum Oct. 31, 2008).

Skyy Spirits LLC v. Krzenszsczynski

Complainant, Skyy Spirits LLC, filed a UDRP Complainant against Respondent for the transfer of the <skyyvodkas.com> domain name. Respondent did not reply to the Complaint. The Panel found that Complainant had established rights in the SKYY VODKAS mark and that the disputed domain name was not adequately distinguishable from this mark under Policy ¶ 4(a)(i). However, the Panel determined that Complainant failed to establish either Policy ¶¶ 4(a)(ii) or (iii) because Complainant failed to provide any evidence of Respondent’s use to the Panel. The Panel held that a prima facie case cannot be based on allegations alone, but that supporting evidence must accompany a complaint. Based upon these evidentiary deficiencies, the Panel denied the requested relief without prejudice to refile the Complaint. Skyy Spirits LLC v. Krzenszsczynski, FA1220829 (Nat. Arb. Forum Nov. 26, 2008).

Cotterweb Enterprises Inc. v. Texas International Property Associates – NA NA

Complainant, Cotterweb Enterprises Inc., brought a UDRP claim against Respondent, Texas International Property Associates – NA NA, for the <iboxdollars.com> domain name. The Panel found Complainant had established rights in its INBOXDOLLARS mark pursuant to Policy ¶ 4(a)(i). Complainant contended that Respondent was using the disputed domain name to display links to Complainant’s competitors. Respondent stated that it was contracting with third-parties to provide the links and advertisements on the website, and therefore did not control the use of the website. The Panel found that Respondent remained responsible for the content posted to its websites and therefore was in violation of Policy ¶ 4(a)(ii). Additionally, the Panel found that Respondent engaged in bad faith registration and use under Policy ¶ 4(b)(iii), because it admitted to commercially profiting from its competing use of the disputed domain name and had previous UDRP decisions decided against it. Therefore, having established all three elements of the Policy, the Panel transferred the disputed domain name to Complainant. Cotterweb Enterps. v. Texas Int’l Prop. Assocs., FA 1227142 (Nat. Arb. Forum Nov. 20, 2008).

Second Life: The Next Frontier for Law

As reported in the March newsletter, Second Life presents the unique situation of a virtual world in which users retain rights in their creations, including both their avatars and any virtual products they create. Section 3.2 of the Second Life user agreement, which reads “ copyright and other intellectual property rights with respect to Content you create in Second Life,” has helped spawn a huge commercial enterprise. In 2007, the first Second Life millionaire emerged, and each year for the last two years, over two hundred million real U.S. dollars have exchanged hands. This explosion in commerce has also presented opportunities for attorneys and law firms. Some estimate that at least two-million dollars worth of trademark infringement occurs each year. In light of this continuing in-world copyright and trademark infringement of both products with cache in the real world, like Ferrari, and products created solely inside of the program for use in the program, how is the legal community reacting to this blending of the new, virtual reality and the real world?

For disputes between Second Life creators, Linden Lab, and its Residents, Linden Lab has created a new policy for dispute resolution. Under this agreement, Residents agree to binding arbitration for any amounts under $10,000 US dollars. Linden Lab’s FAQs on Legal Matters even specifically mention the National Arbitration Forum as a forum for bringing a claim and also uses the FORUM’s pricing. For claims for greater monetary amounts, the Resident must bring suit in San Francisco, California. But due to the ease of filing, binding arbitration is accessible to most, if not all, participants.

Yet, that policy does little for residents with claims against other residents, or for corporations with claims against residents. Individual residents began to see problems almost immediately, and ad hoc dispute resolution mechanisms began to grow. But these small groups were difficult to find, had little training, and often were not neutral. Now, attorneys and mediation groups are starting to move into Second Life. The Portuguese Ministry of Justice began a mediation and arbitration site in Second Life in 2007; the site was active at least into February 2008. The second major group entering the legal arena of Second Life is the Second Life Bar Association (“SLBA”). The SLBA provides an in-world location in which to lodge legal complaints. The SLBA is currently attempting to encourage other legal professionals to “rent” space and provide services. There is also a Second Life Patent and Trademark Office. And Linden Lab also seems likely to welcome other in-world arbitration centers to conduct virtual mediations and arbitrations.

But should someone care about the legal ramifications of what is basically a virtual reality game? For corporations, virtual reality infringement likely carries more real repercussions than they believe it could. The problem of trademark dilution may filter from the virtual world into the real world if Second Life becomes prevalent in ordinary consumers’ lives. In other words, if corporations do not actively defend their trademarks in the virtual world, they may find themselves in a weakened position in the real world. For Residents, the in-world disputes are real, and the law should be available to help resolve their disputes. However, the courts have yet to test the jurisdictional waiver in the user agreement and no one has yet reconciled the apparent dichotomy between a user’s rights to intellectual property and Second Life’s retention of rights in the Section 3.3 of the user agreement, which seems to subordinate a user’s rights to those of Linden Lab.

As the popularity and population of virtual environments expands, so too will the frequency of legal conflicts. The availability and use of virtual arbitration will likely be a great tool in solving these disputes.

New Top-Level Domain, “.tel,” to Discourage Cybersquatters

The Register, November 6, 2008: A new top-level domain (“TLD”) to be launched in December will be the first to be incompatible with advertising, making it unattractive to most cybersquatters. The “.tel” domain will not host websites, only contact information that will be sent to computers and phones, such as blackberries or iPhones requesting the information. Most cybersquatting is done by companies who earn money in pay-per-click advertising, which will be impossible with the “.tel” TLD. The domain will begin to accept applications only from trademark holders for the first two months, beginning on December 3, 2008. Link to Full Story

ICANN Drops Bad Domain Registrar on Technicality

PC World, November 13, 2008: An Estonian company that registers domain names will have its accreditation revoked, the Internet Corporation for Assigned Names and Numbers (ICANN) reported Wednesday. After EstDomains’s president was convicted of credit card fraud, money laundering, and document forgery in Estonia in February, ICANN said it was revoking the company’s accreditation because it had violated its contract, and not because of bad behavior. The registrar held domain name registrations for a trove of websites that hawked pharmaceutical products, sold bogus software, and tried to infect users’ PCs with malicious software. Link to Full Story

Spam Volume Drops as Large Hosting Firm Goes Offline

Washingtonpost.com, November 12, 2008: The volume of junk e-mail sent worldwide plummeted after a Web-hosting firm identified by the computer security community as a major host of organizations engaged in spam activity was taken offline. Experts say the drop-off in spam comes from Internet providers unplugging McColo Corp., a hosting provider in Northern California that was the home base for machines responsible for coordinating the sending of roughly 75 percent of all spam each day. Link to Full Story

US Warns China not to “Cyber-spy”

BBCnew.co.uk, November 20, 2008: In its annual report to Congress, a Congressional panel warned that China is gaining increasing access to sensitive information from US computer networks, and advised that China was aggressively pursuing cyber-warfare capabilities to gain an advantage over the U.S. in any conflict. The report emphasized that the U.S. government and U.S. economy were especially vulnerable to cyber-space attacks since both depend heavily on computers and the internet. The Chinese government has not commented on the panel’s report to Congress. Link to Full Story

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