LocalMonero Co., Limited v. W CHAN
Claim Number: FA1712001761479
Complainant is LocalMonero Co., Limited (“Complainant”), represented by Steven L. Rinehart, Utah, USA. Respondent is W CHAN (“Respondent”), represented by Cordelia Payne of Maple & Black Law Limited, United Kingdom.
REGISTRAR AND DISPUTED DOMAIN NAME
The domain name at issue is <localmonero.com>, registered with eNom, LLC (the “Disputed Domain Name”).
The undersigned certifies that he or she has acted independently and impartially and to the best of his or her knowledge has no known conflict in serving as Panelist in this proceeding.
Kendall C. Reed as Panelist.
Complainant submitted a Complaint to the Forum electronically on December 5, 2017; the Forum received payment on December 5, 2017.
On December 6, 2017, eNom, LLC confirmed by e-mail to the Forum that the <localmonero.com> domain name is registered with eNom, LLC and that Respondent is the current registrant of the name. eNom, LLC has verified that Respondent is bound by the eNom, LLC registration agreement 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 December 7, 2017, the Forum served the Complaint and all Annexes, including a Written Notice of the Complaint, setting a deadline of January 22, 2018 by which Respondent could file a Response to the Complaint, via e-mail to all entities and persons listed on Respondent’s registration as technical, administrative, and billing contacts, and to postmaster@localmonero.com. Also on December 7, 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 January 19, 2018.
A timely Additional Submission was received from the Complainant on January 24, 2018.
A timely Additional Submission was received from the Respondent on January 29, 2018.
On January 24, 2018, pursuant to Complainant's request to have the dispute decided by a single-member Panel, the Forum appointed Kendall C. Reed as Panelist.
Having reviewed the communications records, the Administrative Panel (the "Panel") finds that the Forum has discharged its responsibility under Paragraph 2(a) of the Rules for Uniform Domain Name Dispute Resolution Policy (the "Rules") "to employ reasonably available means calculated to achieve actual notice to Respondent" through submission of Electronic and Written Notices, as defined in Rule 1 and Rule 2.
Complainant requests that the domain name be transferred from Respondent to Complainant.
A. Complainant
On August 29, 2017, Complainant was incorporated in Hong Kong for the purpose of offering an online digital currency escrow and trading platform for users worldwide.
On August 25, 2017, Complainant launched its online platform using the gTLD <localmonero.co>.
Since the launch of its services, Complainant has grown to service thousands of clients in over 80 countries.
In or about early September 2017, Complainant filed trademark applications for the mark LOCALMONERO (the “Complainant’s Mark”) in the United States Patent and Trademark Office and the European Union Intellectual Property Office (“EUIPO”), and on November 10, 2017, Complainant filed a trademark application in the Russia Federation.
Additionally, Complainant has acquired common law trademark rights in the Complainant’s Mark as a result of the following:
Complainant, its services, and the Complainant’s Mark have been the subject of five articles in the online press, including an August 25, 2017 article in crypto coins.com, an August 29, 2017 article in vice.com, an August 30, 2017 article in clean desk.com, and August 30, 2017 article in International Business Times, and in August 31, 2017 article in the Mekel website. Additionally, Complainant, it services, and the Complainant’s Mark have been the subject of two social media posts, both on August 25, 2017, in Reddit and Twitter. Further, Complainant has expended considerable sums of money advertising its services under the Complainant’s Mark.
The Disputed Domain Name is confusingly similar to the Complainant’s Mark in that the Disputed Domain Name wholly incorporates the Complainant’s Mark, with the exception of the gTLD.
Respondent does not have rights or legitimate interests in the Disputed Domain Name. Complainant did not give Respondent permission to use Complainant’s Mark. Further, Respondent registered the Disputed Domain Name knowing that it infringes on the Complainant’s Mark, and Respondent is using the Disputed Domain Name to intentionally attempt to divert Internet users to Respondent’s website on which is sold directly competitive services.
Respondent registered and is using the disputed domain name in bad faith. Respondent registered the Disputed Domain Name after Complainant developed common law rights in the Complainant’s Mark. Respondent is using the Disputed Domain Name to redirect to Respondent’s website on which is offered services directly competitive to those offered by Complainant. As such, Respondent is profiting from passing itself off as Complainant.
B. Respondent
Policy Paragraph 4(a)(i).
Whereas Respondent admits that the Disputed Domain Name is confusingly similar or identical to the Complainant’s Mark, Complainant has failed to establish that it has rights in the Complainant’s Mark for purposes of the Policy.
The trademark applications referenced by Complainant do not establish trademark rights for purposes of the Policy.
Complainant has failed to provide any evidence to establish that the Complainant’s Mark has become recognized as a distinctive identifier of its business in any part of the world, that is that the Complainant’s Mark has developed secondary meaning. The articles referenced by Complainant are nothing more than press reports about Complainant’s new business in the general arena of cryptocurrencies, and Complainant’s assertion that it has spent considerable sums in advertising its services is unsupported by any evidence.
To compound Complainant’s failure in this regard, the Complainant’s Mark is descriptive, which would require an even higher level of evidence to establish secondary meaning. Complainant’s Mark is descriptive because the expression “local monero” (which comprises the complainant’s Mark) is used in the marketplace to describe dealing with Monero (a type of cryptocurrency) locally as opposed to trading on a traditional, or so-called centralized exchange. This is the descriptive sense in which both Complainant and Respondent are using these expressions.
Policy paragraph 4(a)(ii).
Complainant argues that Respondent has no rights or legitimate interests in respect of the Disputed Domain Name because Respondent is “intentionally attempting to divert Internet users”; however, Complainant provides no evidence to support this argument. As is discussed further below with respect to the issue of bad faith, Respondent’s interests in and use of the Disputed Domain Name are legitimate and are not in bad faith.
Policy Paragraph 4(a)(iii).
Respondent did not acquire nor is it using the Disputed Domain Name for any reason listed in Policy Paragraph 4(a)(iii), but rather acquired it because it is descriptive of Respondent’s pre-existing business in the cryptocurrency marketplace and a popular search term for users looking for businesses like Respondent’s. Further, Respondent is developing a blog/informal website to be used in connection with the Disputed Domain Name about trading in and using local Monero.
C. Complainant’s Additional Submission
The EUIPO has issued a registration for the Complainant’s Mark, and as such, all of Respondent’s arguments about distinctiveness are defeated. Further, because of this EUIPO registration, evidence of common law trademark status is not necessary.
Nevertheless, Complainant’s Mark did achieve common law status. In addition to the evidence to this effect presented in the Complaint, Complainant has additionally been connected with the Complainant’s Mark in the marketplace by not less than 29 third-party social media postings and hundreds of Twitter posting.
Further, confusion in the market place has occurred between Complainant and Respondent as a result of Respondent’s use of the Disputed Domain Name, and Complainant has been forced to combat this confusion on a number of occasions, as evidenced by a number of social media postings.
With respect to Respondent’s bad faith, Respondent’s reference to its intention to, “…create a blog or informal website to educate, help, and advise users to trade Monero locally” has never happened. Rather Respondent has used the Disputed Domain Name to redirect potential customers to its own competing website, which is prima facia bad faith.
Respondent acknowledges in the Response registering the Disputed Domain Name on November 17, 2017, well after Complainant accrued rights. Respondent also acknowledges redirecting the Disputed Domain Name to its competing site beginning the very day Respondent registered the Disputed Domain Name.
D. Respondent’s Additional Submission
Complainant’s EUIPO trademark registration issued on December 20 2017, which was after the date on which Complainant’s complaint was filed on December 7 2017.
The additional evidence submitted in the Complainant’s Additional Submission are all from the social media sites Reddit and Twitter and simply show Complainant’s own social media feed about its business.
Complainant continues not to be able to substantiate its claim that its use of the Complainant’s Mark is recognized as a badge of origin by third parties nor that it has incurred expenditures of considerable sums of money on advertising, promotional activities, and design in order to achieve that end.
The Disputed Domain Name was registered by its previous proprietor on 22 August 2016. Complainant’s business didn’t launch until a year later. Given the descriptive nature of the Disputed Domain Name and therefore its value in relation to a business trading in local monero, Respondent avers that Complainant should have considered the fact that the Disputed Domain Name was already taken before it launched a business under the Complainant’s Mark.
Respondent reaffirms that the Disputed Domain Name was registered for its legitimate interests in the Disputed Domain Name as described in the Response and that discussions that took place between the parties in early September do not show bad faith but a genuine and bona fide, commercial offer for the Complainant to share the use of a domain name that describes the activities provided by both Complainant and Respondent
DISCUSSION
Paragraph 15(a) of 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 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 Complainant has rights; and
(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.
To establish the first element of the Policy, Complainant must establish two conclusions. The first is that Complainant has rights in a trademark or service mark, and the second is that the Disputed Domain Name must be identical or confusingly similar to said trademark or service mark.
The Complainant is the owner of a trademark registration for the trademark LOCALMONERO issued by the European Union Intellectual Property Offices (“EUIPO”), number 017176701, registered on December 18, 2017 (the “Complainant’s Mark”). This is sufficient to establish rights in a trademark for purposes of the Policy. See Metro. Life Ins. C. v. Bonds, FA 873143 (Forum Feb. 16, 2007)(finding that a USPTO trademark registration adequately demonstrates complainant’s rights in a mark under policy ¶ 4(a)(i)).
It is not relevant for purposes of the first element of the Policy when the trademark registration was issued with respect to the date on which the Respondent registered the Disputed Domain Name. See Aptus Tech L.L.C. v. Name Administration Inc. (BVI), FA 503000 (Forum July 17, 2013)(The Panel further finds that Complainant, through evidence of its ownership of a U.S. registration for the KLIPZ mark, as well as its use of such mark, has rights in the KLIPZ trademark. As both parties recognize, the fact that Complainant obtained rights in the KLIPZ trademark subsequent to registration of the disputed domain name is irrelevant for purposes of this element of the policy.”) See also AB Svenska Spel v. Zacharov, D2003-0527 (WIPO Feb .10, 2003)(“Paragraph 4(a)(i) of the Policy does not require that the trademark we registered prior to the domain name.”)
Respondent admits in its Response that the Disputed Domain Name is identical or confusingly similar to the Complainant’s Mark.
As such, Complainant has established the first element of the Policy.
To establish the second element of the Policy, Complainant must establish that Respondent has no rights or legitimate interests in respect of the Disputed Domain Name. In order to accomplish this, Complainant must first make a prima facie case that Respondent lacks rights and legitimate interests in the Disputed Domain Name under Policy¶4(a)(ii), then the burden shifts to Respondent to show that it does have rights or legitimate interests. See Advanced International Marketing Corporation v. AA-1 Corp, FA 780200 (Forum Nov. 2, 2011) (finding that a complainant must offer some evidence to make its prima facie case and satisfy Policy ¶ 4(a)(ii)); see also Neal & Massey Holdings Limited v. Gregory Ricks, FA 1549327 (Forum Apr. 12, 2014) (“Under Policy ¶ 4(a)(ii), Complainant must first make out a prima facie case showing that Respondent lacks rights and legitimate interests in respect of an at-issue domain name and then the burden, in effect, shifts to Respondent to come forward with evidence of its rights or legitimate interests”).
Complainant argues that Respondent has no rights or legitimate interests in the Disputed Domain Name because Complainant did not authorize the Respondent to use the Complainant’s Mark in any way. The Panel accepts as conclusive Complainant’s assertion on this point.
Complainant further argues Respondent’s lack of rights or legitimate interests in the Disputed Domain Name is demonstrated by its failure to use the name to make a bona fide offering of goods or services or for a legitimate noncommercial or fair use. Complainant contends instead that the Disputed Domain Name resolves to Respondent’s own website and that such use is not indicative of rights or legitimate interests per Policy ¶ 4(c)(i) or (iii). See General Motors LLC v. MIKE LEE, FA 1659965 (Forum Mar. 10, 2016) (finding that “use of a domain to sell products and/or services that compete directly with a complainant’s business does not constitute a bona fide offering of goods or services pursuant to Policy ¶ 4(c)(i) or a legitimate noncommercial or fair use pursuant to Policy ¶ 4(c)(iii).”). Specifically, Complainant contends that the domain name resolves to Respondent’s website at <liberalcoins.com>, which directly competes with Complainant’s business. As this issue involves questions of bad faith, the Panel discusses it below.
As such, the Panel finds that Complaint has established its prima facia case.
Respondent argues that it has not committed bad faith and is using the Disputed Domain Name for several legitimate and bona fide purposes under this second element of the Policy, including Respondent’s asserted intended purpose to use the Disputed Domain Name to “…create a blog or informal website to educate, help and advice user to trade Monero locally.” And Respondent continues, “The Respondent’s intention for the blog was to compliment the Respondent’s existing business at <liberlcoins.com> where users can actually trade in local Monero.” As this issue concerns bad faith, the Panel discusses it below.
Because the Panel finds below that Respondent did not act in bad faith under the Policy in acquiring the Disputed Domain Name, Respondent has established that it does have rights and legitimate interests in respect to the Disputed Domain Name. As such, Respondent has carried its burden under this second element of the Policy.
The Complainant has not established the second element of the Policy.
The gravamen of Complainant’s claim with respect to bad faith is that Respondent registered and used the Disputed Domain Name to impersonate and trade on the goodwill of the Complaint’s Mark – “In short, the Respondent is resolving the Disputed Domain [Name] to a competing website from which the Respondent is profiting by impersonating the Complainant” (Complaint at page 7). The website to which the Complainant refers is Respondent’s website at <liberalcoins.com>, on which appears the statement, inter alia, “Buy and sell Bitcoins and Altcoins - Instant & Secure – We support local Bitcoin, DASH, Monero, and Litecoin Trades” (Complainant’s Annex S).
As such, Complaint’s claim with respect to bad faith rests on Policy Paragraph 4(b)(iv), which reads in pertinent part: “by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your website…by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your website…or of a…service on your website…”
For purposes of the analysis of Respondent’s conduct in this regard, the critical date is the date on which Respondent first acquired the Disputed Domain Name, and the critical question is whether on this date Complainant had trademark rights in the Complaint’s Mark. It is axiomatic that Respondent could not have committed bad faith before the Complainant acquired rights in the Complainant’s Mark. See Aptus Tech L.L.C. v. Name Administration Inc. (BVI), FA 503000 (Forum July 17, 2013)(“Complainant asserts that it first used the KLIPZ mark at least as early as April 30, 2011. Its registration of the mark issued on March 30, 2010. The disputed domain name was registered on September 24, 2004. Under these facts, it is inconceivable that Respondent may be found to have registered the domain name in bad faith.”); see also Platterz v. Andrew Melcher, FA 1729887 (Forum Jun. 19, 2017) (“Whatever the merits of Complainant’s arguments that Respondent is using the Domain Name in bad faith, those arguments are irrelevant, as a complainant must prove both bad faith registration and bad faith use in order to prevail.”)
According to Respondent, it acquired the Disputed Domain Name from another on November 17, 2017 (Response at page 9). For its part, Complainant is unsure about the date on which Respondent acquired the Disputed Domain Name because the WHOIS record includes several references to apparent transfers involving anonymous registrants, but Respondent believes that the date was somewhere between November 7, 2017 and November 26, 2017 (Complaint at page 6). Respondent’s Annex 2 includes a “Closing Statement” from Escrow.com, which handled the escrow for Respondent’s purchase of the Disputed Domain Name (Domain Agents as intermediary). This Closing Statement shows the “Closing Date” to be November 21, 2017. The Panel relies on this Closing Statement and finds that the date was November 21, 2017.
As such, the critical threshold question can be restated as whether Complainant had trademark rights in the Complainant’s Mark on or before November 21, 2017.
Complainant filed trademark applications for the Complainant’s Mark in September 2017 with the United States Patent and Trademark Office and the EUIPO. Complainant also filed a trademark application with the trademark office of the Russian Federation in Early November; however, trademark applications do not confer trademark rights for purposes of the Policy, and as such, these applications cannot be the source of Complainant’s trademark rights as of November 21, 2018. The EUIPO registration for the Complainant’s Mark issued on December 18, 2017, and as such, this registration cannot be the source of Complaint’s trademark rights as of November 21, 2017. Consequently, if Complainant did have trademark rights as of November 21, 2017, these rights could only have been common law in nature. Complainant argues that it did have such rights, and Respondent argues that Complainant did not have such rights.
With respect to the development of common law rights, Complainant states that it began using the Complainant’s Mark on August 25, 2018 with the launch of its online platform using the gTLD <localmonero.com> (Complaint at page 4). Complainant alleges that it immediately developed and built valuable goodwill and a strong reputation in the LOCALMONERO Mark by aggressively adverting its services online through links on other popular website, cost-per-click advertising, affiliated advertising program, web portals, banner ads, and emails. Further, Complaint argues that:
“Since its inception, the Complainant has grown to service thousands of clients in over 80 countries worldwide. The complainant’s online platform was the culmination of thousands of hours of work and preparation. Within days of launching, the complaint was servicing dozens of clients daily.”
As additional evidentiary support, the plaintiff points to six articles in the online press that appeared between August 25, 2017 and August 31, 2017 that discussed the launch of Complainant’s website and service offerings. Complainant also points to two social media posts, both dated August 25, 2017, the first on Reddit and the second on Twitter, that announced Complainant’s online platform and that it was open for business. The Complainant further asserts that it expended considerable sums of money on adverting, promotional activities in advertising its services, all of which created the necessary connection in the minds of consumers between the Complainant’s Mark and Complainant. In its Additional Submission, the Complainant provides further evidence in the form of 29 social media posts by third-parties identify the Complaint by the Complainant’s Mark, and it identifies 4 instances of customer confusion, although a number of these occurrences are clearly after November 17, 2017.
Respondent counters that, as an initial matter, Complainant must present compelling evidence to establish secondary meaning because of the descriptive nature of the Complainant’s Mark and contends that Complainant does not meet this heightened burden. See Chicago Rest. & Entm’t Guide, Inc. v. Polat, FA 1310901 (Forum Apr. 22, 2010) (failing to find common law rights as “the claimed mark is comprised of two common and generic, descriptive or geographic terms, requiring very strong evidence in order to establish secondary meaning” and Complainant failed to provide the required evidence to show secondary meaning); see also CW & Associates Consulting and Recruiting Inc. v. Lynda Pitchford / ITSR, FA 1619758 (Forum June 29, 2015) (finding Complainant failed to establish common law rights, stating, “Complainant has failed to provide evidence of any sales figures or advertising expenditures or any indication of the extent of use aside from what may be implied from the business name registration and placement of the name(s) on social media. There is no evidence to show that the public is aware of the claimed marks at all, much less a public association of the claimed ETS marks with the Complainant. Mere use of social media alone is not acceptable proof of secondary meaning, a/k/a/ acquired distinctiveness, in the mind of the general public.”).
The Panel agrees with Respondent and finds that the Complainant’s Mark in its common law form, that is without regard to the later issued EUIPS registration, is descriptive. The Complainant’s Mark consists of two elements, the word “local” and the word “monero.” In the context in which both Complainant and Respondent operate, the word “local” means cryptocurrency transactions based on buyers and sellers being from the same county of residence. The word “monero” refers to a type of cryptocurrency. Both meanings can be seen from the articles referenced by the Complainant in its Complaint, Annexes H through L. Complainant’s website is a platform for locally buying and selling monero, and as such, the Complainant is using of these words in accordance with their common meanings.
The Panel agrees with Respondent and finds that Complainant has failed to provide sufficient evidence of secondary meaning to meet the required high burden. The period of use before November 21, 2017 was only approximately two months. The noted media articles are all near in time to Complainant’s product launch and are few in number. The social medial postings are similarly few in number. No proof is provided to support the claimed cross-links, advertising activities, and advertising expenditures.
As such, Complainant did not have a common law trademark as of the time Respondent acquired the Disputed Domain Name, and as such, Respondent could not have committed bad faith in acquiring the Disputed Domain Name.
The Complainant has not established the third element of the Policy.
Having not established all three elements required under the ICANN Policy, the Panel concludes that relief shall be DENIED.
Accordingly, it is Ordered that the <localmonero.com> domain name REMAIN WITH Respondent.
Kendall C. Reed, Panelist
Dated: February 7, 2018
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