HomeVestors of America, Inc. v. Jason Swango
Claim Number: FA1706001737084
Complainant is HomeVestors of America, Inc. (“Complainant”), represented by S. Roxanne Edwards of Klemchuk LLP, Texas, USA. Respondent is Jason Swango (“Respondent”), represented by Steven L. Rinehart, Utah, USA.
REGISTRAR AND DOMAIN NAMES
The domain names at issue are <webuyuglyhouseschesapeake.com>, <webuyuglyhousesvirginiabeach.com> and <757webuyuglyhouses.com>, (the “Domain Names”) registered with Wild West Domains, LLC and GoDaddy.com, LLC (“the Registrars”).
The undersigned certifies that he has acted independently and impartially and to the best of his knowledge has no known conflict in serving as Panelist in this proceeding.
Alan L. Limbury as Panelist.
Complainant submitted a Complaint to the Forum electronically on June 23, 2017; the Forum received payment on June 23, 2017.
On June 23, 2017 Wild West Domains, LLC confirmed by e-mail to the Forum that the <webuyuglyhouseschesapeake.com>, and <webuyuglyhousesvirginiabeach.com> domain names are registered with Wild West Domains, LLC and that Respondent is the current registrant of the names. On June 26, 2017, GoDaddy.com, LLC confirmed by e-mail to the Forum that the <757webuyuglyhouses.com> domain name is registered with GoDaddy.com, LLC and that Respondent is the current registrant of the name. The Registrars have verified that Respondent is bound by their registration agreements and has thereby agreed to resolve domain disputes brought by third parties in accordance with ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”).
On June 26, 2017 the Forum invited Complainant to remedy certain formal deficiencies in the Complaint and on June 28, 2017 Complainant submitted an Amended Complaint to the Forum.
On June 28, 2017, the Forum served the Amended Complaint and all Annexes, including a Written Notice of the Complaint, setting a deadline of July 18, 2017 by which Respondent could file a Response to the Complaint, via e-mail to all entities and persons listed on Respondent’s registrations as technical, administrative, and billing contacts, and to postmaster@webuyuglyhouseschesapeake.com, postmaster@webuyuglyhousesvirginiabeach.com, postmaster@757webuyuglyhouses.com. Also on June 28, 2017, the Written Notice of the Complaint, notifying Respondent of the e-mail addresses served and the deadline for a Response, was transmitted to Respondent via post and fax, to all entities and persons listed on Respondent’s registration as technical, administrative and billing contacts.
A timely Response was received and determined to be complete on July 18, 2017.
On July 24, 2017, Complainant filed an additional submission in a timely manner according to the Forum's Supplemental Rule #7.
On July 25, 2017, pursuant to Complainant's request to have the dispute decided by a single-member Panel, the Forum appointed Alan L. Limbury as Panelist.
On July 31, 2017, Respondent filed an additional submission in a timely manner according to the Forum's Supplemental Rule #7.
The Panel has taken the parties’ additional submissions into account.
Complainant requests that the Domain Names be transferred from Respondent to Complainant.
PARTIES' CONTENTIONS
A. Complainant
Since 1996, through over 825 franchisees in 44 States and the District of Columbia, Complainant has conducted a business that specializes in purchasing houses that are difficult to sell, frequently for cash. Complainant promotes these services using several trademarks, including the word mark WE BUY UGLY HOUSES, in which Complainant has incontestable rights due to registrations on the Principal Register of the United States Patent and Trademark Office (“USPTO”) (Reg. No. 2,999,705, registered Sep. 27, 2005 and Reg. No. 3,099,814, registered on June 6, 2006, both claiming first use in commerce on March 1, 2000).
Complainant also promotes its services through numerous domain names which add geographic descriptors to its WE BUY UGLY HOUSES MARK, including <webuyuglyhouseswashingtondc.com>,<webuyuglyhousestucson.com>,<webuyuglyhousestulsa.com>,<webuyuglyhousesfortworth.com>,
<webuyuglyhousesmiami.com>,<webuyuglyhousesrichmond.com>, <webuyuglyhousessarasota.com> (all registered on November 29, 2010) and <webuyuglyhousesnorfolk.com>, (registered on October 10, 2010).
The Domain Names are confusingly similar to Complainant’s WE BUY UGLY HOUSES mark because each simply adds a geographical term and appends the generic top-level domain (“gTLD”) “.com.” Respondent does not have rights or legitimate interests in the Domain Names, which were registered and are being used in bad faith.
As to confusing similarity, Complainant says it has numerous franchisees throughout the country and it commonly registers domains that combine geographic descriptors with Complainant’s mark, so Respondent’s registration and use of domain names comprised of geographical indicators with Complainant’s mark only increases the likelihood of confusion as it intentionally misleads consumers to believe that Respondent is an authorized franchisee for Complainant in the geographical locations of Chesapeake, VA, Virginia Beach, VA, and within the 757 local area code.
As to legitimacy, Complainant has not licensed or otherwise authorized Respondent to use its WE BUY UGLY HOUSES mark and Respondent is not commonly known by any of the Domain Names. Respondent fails to use the Domain Names in connection with a bona fide offering of goods or services or a legitimate noncommercial or fair use of the Domain Names under Policy ¶¶ 4(c)(i) and (iii). Instead, Respondent inactively holds the Domain Names and offered to sell them in excess of out-of-pocket costs.
As to bad faith, Respondent registered multiple infringing domain names in the present case and offered to sell the Domain Names in excess of out-of-pocket registration costs. Respondent had actual knowledge of Complainant’s rights in the WE BUY UGLY HOUSES mark prior to registration of the Domain Names and fails to make active use of the Domain Names.
B. Respondent
A resident of Virginia Beach, Virginia, Respondent registered the Domain Names to market cash home purchase offers without the involvement of lenders in the adjacent metropolitan areas of Chesapeake, Virginia and Virginia Beach, in the South East corner of Virginia. All three Domain Names were registered while Respondent was a licensee of We Buy Houses Marketing and was licensed to transact business for <webuyhouses.com> in the 757 area code (the South East corner of Virginia).
Respondent denies that Complainant has exclusive rights in the WE BUY UGLY HOUSES mark, saying the mark is generic or merely descriptive. The inclusion of a geographic location or reference negates confusing similarity. Although the Respondent would have had constructive notice of the mark through the USPTO prior to registering the Disputed Domains, Complainant has made no showing that Respondent had actual notice of Complainant under ¶ 4(a)(iii) of the Policy. Constructive notice is insufficient.
Respondent did not register the Domain Names in bad faith as Respondent did not initiate the offer to transfer them. Respondent did not become aware of Complainant until approximately 2016.
C. Complainant’s Additional Submission
The registrant of the <webuyhouses.com> domain name is the real estate company WBH Marketing, Inc., a direct competitor of Complainant. This does not entitle Respondent to use Complainant’s mark as part of the Domain Names.
Panels have held that constructive notice based on a registration is sufficient for a showing of bad faith and to show that a respondent does not have legitimate rights. As a licensee of a direct competitor of Complainant, Respondent was undoubtedly aware of Complainant and Complainant’s mark prior to 2016. Complainant’s extensive advertising in the geographical area in which Respondent resides and does business, as well as Complainant’s extensive online presence, supports a finding of actual knowledge.
The Domain Names were registered 12 years after Complainant first began widespread national use of Complainant’s mark and nearly 10 years after Complainant was granted its first federal trademark registration for Complainant’s mark.
To successfully invalidate the registrations for Complainant’s mark, a showing that WE BUY UGLY HOUSES has become generic would be required since incontestable registrations cannot be cancelled on the basis of descriptiveness, which is not the case here. The mark has not become the common or generic name for or synonymous with a general class of service.
Respondent is using Complainant’s well-known, duly registered, incontestable federal trademark within the Domain Names, in connection with services identical to the services Complainant provides under its mark. This is indisputable proof of bad faith.
Rather than initiating a UDRP proceeding initially, Complainant offered to purchase the Domain Names at fair market value in an effort to avoid an unnecessary dispute. Respondent’s counteroffer to sell the Domain Names shows Respondent’s intent to commercially gain from their registration by selling them for valuable consideration in excess of his documented out-of-pocket costs directly related to the Domain Names.
D. Respondent’s additional submission
Complainant seeks to divert attention away from the threshold inquiry this Panel must make: Were the Disputed Domains registered in bad faith? The expenditures/investments of Complainant in its numerous unrelated marks are irrelevant to this inquiry and to the descriptive nature of the Disputed Domains. Regardless of the Panel’s views of trademark invalidity in this matter, the Panel must still find Complainant has carried its burden with respect to bad faith registration.
Although conceding that Complainant’s marks do indeed comprise only common words in the dictionary, Complainant submits that the marks “have acquired distinctiveness through Complainant’s long-term use and extensive advertising and promotion.” However, there is no evidence submitted of acquired distinctiveness of the ‘705 and ‘814 Marks individually, which consist of only a fraction of the Complainant’s registered marks. Rather, the Complainant attempts to submit evidence that its business as a whole is well-known and profitable.
The Domain Names merely describe an investor who “buys ugly houses.” Respondent registered them because they describe the type of home in disrepair typically purchased with cash and because nearly all other gTLD variations were taken due to the very fact the taken domains are descriptive of this type of investing. Respondent registered the Disputed Domains without knowledge of Complainant and not because of any attempt to misappropriate Complainants’ goodwill.
Complainant, through numerous franchisees, purchases houses in the United States that are difficult to sell, frequently for cash. Complainant has numerous registered trademarks comprising or incorporating the words WE BUY UGLY HOUSES. Those words were disclaimed in relation to Reg. No. 2761385, registered on the USPTO Principal Register on September 9, 2003 but were not disclaimed in relation to the two registrations of relevance in this administrative proceeding, namely the words WE BUY UGLY HOUSES registered on the Principal Register of the USPTO on September 27, 2005, Reg. No. 2,999,705 for “Real estate services, namely real estate acquisition, real estate brokerage services and real estate financing services” and on June 6, 2006, Reg. No. 3,099,814 for “Real estate services, namely, real estate brokerage, and providing mortgage, title and home insurance brokerage services”.
Respondent, a resident of Virginia Beach, Virginia, registered the domain names <webuyuglyhouseschesapeake.com> and <webuyuglyhousesvirginiabeach.com> on March 20, 2012 and the domain name <757webuyuglyhouses.com> on March 12, 2015. None of the Domain Names resolves to an active website. All three Domain Names were registered while Respondent was licensed by a direct competitor of Complainant, WBH Marketing, Inc., which operates a website at “webuyhouses.com”, to market cash home purchase offers without the involvement of lenders in the South East corner of Virginia, which includes the adjacent metropolitan areas of Chesapeake, Virginia and Virginia Beach and is designated by the 757 area code.
Complainant has established all the elements entitling it to transfer of the Domain Names.
The Rules ¶15(a) 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."
Policy ¶4(a) requires that Complainant prove each of the following three elements to obtain an order that the Domain Names should be cancelled or transferred:
(1) the Domain Names registered by Respondent are identical or confusingly similar to a trademark or service mark in which Complainant has rights; and
(2) Respondent has no rights or legitimate interests in respect of the Domain Names; and
(3) the Domain Names have been registered and are being used in bad faith.
Complainant has rights in the registered trademark WE BUY UGLY HOUSES, Reg. Nos. 2,999,705 and 3,099,814.
None of the Domain Names is identical to Complainant’s mark but each of them is confusingly similar to that mark because each comprises that mark together with a geographical indication (respectively “chesapeake”, “virginiabeach” and “751”) together with the gTLD “.com”, which do nothing to distinguish the Domain Names from the mark per Policy ¶ 4(a)(i). See Doosan Corporation v. philippe champain, FA 1636675 (Forum Oct. 13, 2015) (finding that geographic designations or terms descriptive of a complainant’s business operations do not remove a domain name from the realm of confusing similarity). See also Jerry Damson, Inc. v. Tex. Int’l Prop. Assocs., FA 916991 (Forum Apr. 10, 2007) (“The mere addition of a generic top-level domain (“gTLD”) “.com” does not serve to adequately distinguish the Domain Name from the mark.”).
Complainant has established this element.
Policy ¶4(c) sets out three illustrative circumstances as examples which, if established by Respondent, shall demonstrate rights to or legitimate interests in the Domain Name for purposes of Policy ¶4(a)(ii), i.e.
(i) before any notice to the Respondent of the dispute, the use by the Respondent of, or demonstrable preparations to use, the Domain Name or a name corresponding to the Domain Name in connection with a bona fide offering of goods or services; or
(ii) the Respondent (as an individual, business or other organization) has been commonly known by the Domain Name, even if the Respondent has acquired no trademark or service mark rights; or
(iii) the Respondent is making a legitimate noncommercial 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.
Based on the evidence before the Panel, in the absence of any use of the Domain Names by Respondent or other pertinent facts, Respondent apparently is neither commonly known by any of the Domain Names nor contends to make a legitimate non-commercial or fair use of the Domain Names.
Under these circumstances, Complainant’s assertions are sufficient to constitute a prima facie showing of absence of rights or legitimate interests in respect of the Domain Names on the part of Respondent under Policy ¶ 4(a)(ii). Accordingly the burden shifts to Respondent to show that he does have rights or legitimate interests. See Hanna-Barbera Prods., Inc. v. Entm’t Commentaries, FA 741828 (Forum Aug. 18, 2006).
Respondent contends that the Domain Names are descriptive terms that have many meanings apart from use in Complainant’s WE BUY UGLY HOUSES mark. Since the mark does not specifically include a provision for “cash real estate purchase offers”, Respondent says Complainant cannot claim an exclusive right to the mark in Respondent’s area of business, so the mark should be labeled as mere descriptive terms.
Although the words comprising the mark are descriptive, the Panel considers that their registration as a mark on the USPTO Principal Register means that, for as long as it remains so registered, the mark is to be regarded as distinctive of Complainant’s services. The word UGLY immediately attracts attention because the idea of buying anything ugly is unusual. As previously mentioned, registration No. 2,999,705 is for “Real estate services, namely real estate acquisition, real estate brokerage services and real estate financing services”. The expression “real estate acquisition” is applicable to Respondent’s business of marketing cash home purchase offers.
In State Farm Mutual Automobile Insurance Company v. Rocky E. Faw (Forum FA94971) the respondent was found to have no legitimate interests in respect of the domain name where he had not used nor developed the domain name for a legitimate non-commercial or fair purpose and was not using the domain name in connection with a bona fide offering of goods or services. See also Leland Stanford Junior University v. Zedlar Transcription & Translation (Forum FA94970).
In the circumstances of this case, the Panel finds that Respondent has no rights or legitimate interests in respect of the Domain Names.
Complainant has established this element.
Registration and Use in Bad Faith
Policy ¶4(a)(iii) sets out the conjunctive requirement that Complainant establish both that Respondent has registered the Domain Names in bad faith and that Respondent is using the Domain Names in bad faith. Policy ¶4(b) sets out four illustrative circumstances, which, though not exclusive, shall be evidence of both the registration and use of the Domain Names in bad faith for purposes of Policy ¶4(a)(iii), i.e.
(i) circumstances indicating that the respondent has registered or acquired the domain name primarily for the purpose of selling, renting or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of the respondent’s documented out-of-pocket costs directly related to the domain name; or
(ii) the respondent has registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that the respondent has engaged in a pattern of such conduct; or
(iii) the respondent has registered the domain name primarily for the purpose of disrupting the business of a competitor; or
(iv) by using the domain name, the respondent has intentionally attempted to attract, for commercial gain, Internet users to its website or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of the respondent’s website or location or of a product or service on its website or location.
Because Respondent’s offer to sell two of the Domain Names to Complainant was made by way of counter-offer in December, 2016, the Panel does not accept Complainant’s submission that it is to be inferred that Respondent registered the Domain Names in 2012 and 2015 primarily for the purpose set out in Policy ¶4(b)(i). Further, since Respondent has not been shown actively to have used the Domain Names at all since their registration, the Panel does not find that the circumstances of this case fall within Policy ¶4(b)(iv).
It is common ground that, by reason of Complainant’s trademark registrations, Respondent had constructive notice of the WE BUY UGLY HOUSES mark. The parties differ as to whether constructive notice necessarily leads to a finding of bad faith. On this point the Panel shares the view of the learned panelist in Limited Stores, LLC v. Infinite Wireless, WIPO Case No. D2013-1269:
“As to the contention that the Respondent has constructive notice of the Complainant’s trade mark registration, this argument, when it works, generally only works when a respondent is located in the United States and a complainant has a federal US trade mark. In any event, this Panel takes the view that constructive knowledge and constructive bad faith are two very different concepts.
In the view of this Panel a finding that a respondent has acted in bad faith for the purposes of paragraph 4(a)(iii) of the Policy should generally only be made where the respondent has in fact acted in bad faith or where there is very cogent evidence before the Panel as to the surrounding circumstances sufficient to support an inference to that effect.”
In the present case, the Panel considers that there is very cogent evidence as to the surrounding circumstances sufficient to support an inference that Respondent has in fact acted in bad faith, for the reasons set out below.
Complainant exhibits a declaration by a former employee that Complainant spent $2,240,045 on advertising within the Norfolk, Chesapeake and Virginia Beach locations in the period 2005-2012, including $955,075 for billboards. Complainant also exhibits photographs of numerous large billboards displayed in those locations between May, 2011 and June, 2015, prominently featuring the headline “WE BUY UGLY HOUSES®.COM”.
When he registered the Domain Names, Respondent was a licensee of a competitor of Complainant and a resident of the State of Virginia, where Complainant had engaged in extensive billboard advertising.
These circumstances lead the Panel to reject Respondent’s assertion that he was unaware of Complainant until approximately 2016. The Panel finds, on the balance of probabilities, that when he registered the Domain Names, Respondent had actual knowledge of Complainant, its WE BUY UGLY HOUSES mark and its practice of registering domain names incorporating that mark in combination with a geographical indication, such as <webuyuglyhousesnorfolk.com>, registered on October 10, 2010.
Respondent’s failure to use any of the Domain Names in the years since they were registered is consistent with an intention, at the time of registration, to disrupt Complainant’s business by preventing Complainant from registering the Domain Names.
Accordingly, the Panel is satisfied, on the balance of probability, that Respondent registered the Domain Names primarily for the purpose of disrupting the business of a competitor. These circumstances are evidence, under Policy ¶4(b)(iii), that the Domain Names were both registered in bad faith and are being used in bad faith.
Complainant has established this element.
Having established all three elements required under the ICANN Policy, the Panel concludes that relief shall be GRANTED.
Accordingly, it is Ordered that the <webuyuglyhouseschesapeake.com>, <webuyuglyhousesvirginiabeach.com> and <757webuyuglyhouses.com> domain names be TRANSFERRED from Respondent to Complainant.
__________________________________________________________________
Alan L. Limbury, Panelist
Dated: August 6, 2017
Click Here to return to the main Domain Decisions Page.
Click Here to return to our Home Page