Innovative Merchant Solutions, LLC v. S and S Bankcard Systems

Claim Number: FA0204000109721



Complainant is Innovative Merchant Solutions, LLC, Caabasas, CA (“Complainant”) represented by Bernard R. Gans, of Jeffer, Mangels, Butler & Marmaro LLP.  Respondent is S and S Bankcard Systems, Agoura Hills, CA (“Respondent”) represented by Gregory P. Goonan, of Musick, Peeler & Garrett LLP.



The domain names at issue are <>, <>, and <>, registered with Verisign - Network Solutions, Inc.



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 National Arbitration Forum (“the Forum”) electronically on April 16, 2002; the Forum received a hard copy of the Complaint on April 22, 2002.


On April 24, 2002, Verisign - Network Solutions, Inc. confirmed by e-mail to the Forum that the domain names <>, <>, and <> are registered with Verisign - Network Solutions, Inc. and that the Respondent is the current registrant of the names.  Verisign - Network Solutions, Inc. has verified that Respondent is bound by the Verisign - Network Solutions, Inc. 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 April 29, 2002, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of May 20, 2002 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,, and by e-mail.


A timely Response was received and determined to be complete on May 20, 2002.


Complainant submitted a timely Additional Submission on May 28, 2002.


On May 31, 2002, pursuant to Complainant’s request to have the dispute decided by a single-member Panel, the Forum appointed Alan L. Limbury as Panelist.



Complainant requests that the domain names be transferred from Respondent to Complainant.



A. Complainant

Complainant has common law trademark rights in and a pending federal trademark application for INNOVATIVE MERCHANT SOLUTIONS, which has been used in connection with providing credit and debit card authorization, processing and settlement services since October 1999, as has Complainant’s domain name <>.


The disputed domain names are confusingly similar to Complainant’s mark.  Respondent has no rights or legitimate interest in the disputed domain names, which were registered and are being used in bad faith.


Complainant has filed suit in the United States District Court for the Central District of California against Respondent and Jeff Skelton, Respondent’s President, for, inter alia, violation of the Anticybersquatting Consumer Protection Act, federal false designation of origin/false impression of association, and California trademark dilution.  The case is styled Innovative Merchant Solutions, LLC v. AMH Processing Inc., dba S & S Bankcard Systems, et al., Case No. CV 02-2050 LGB (PJWx).  The action is based upon Respondent’s infringing use of the disputed domain names and is currently pending.


B. Respondent

One of the remedies sought by Complainant though its District Court lawsuit is the transfer to it of the disputed domain names.  Accordingly, the issue whether Complainant has any rights in its purported mark will be decided in that case. It would therefore be a complete waste of time and resources for the Panel to decide the issues raised in this proceeding, especially since (a) it is not possible to develop a full evidentiary record in this proceeding and (b) Respondent will challenge any adverse decision by the Panel by an appropriate filing in the District Court case.


The Panel is asked to suspend or terminate this proceeding pursuant to Rule 18(a) of the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”).


The parties are competitors with a history of bad feeling between them.


Complainant has no rights in the term “innovative merchant solutions”. Respondent has a right and legitimate interest in the disputed domain names as descriptive of Respondent’s competing services.  Respondent did not register the disputed domain names in bad faith and has not used them in bad faith.


C. Additional Submission


The Policy and Rules and the Forum’s Supplemental rules and procedures are specifically designed to address exactly the type of dispute presented here. There is no reason why the Panel cannot decide the issue presented in the Complaint based on the evidentiary material submitted by the parties.



It is inappropriate to consider the merits of this dispute. The proceeding is terminated under Rule 18(a). The Complaint was brought primarily to harass Respondent.



Rule 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.” Accordingly the fact that evidentiary materials submitted by the parties may not be as extensive as those usually provided to a court is not an impediment to the making of a decision by a Panel under the Policy.


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;


(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.


As in AmeriPlan Corp v. Shane Gilbert d/b/a NewWave Solutions, Inc. (FA 105737) (Nat. Arb. Forum, Apr. 22, 2002), the Panel has decided not to consider the case on its merits and does not consider these three elements. In that case the three-member Panel held:


Under Section 5 of the Policy, disputes outside of the narrow framework set out in Section 4 of the Policy  "... shall be resolved through any court ... available." While Section 5 primarily seems to be concerned with using a UDRP forum to settle matters unrelated, or indirectly related, to issues concerning domain name registration and use, a complainant or respondent should not be permitted to use a UDRP claim to boot strap decisions regarding more senior disputes between the parties. This is especially so when, as here, an action is already pending in a Court of competent jurisdiction.


Rendering a decision on the merits when there is already a court action pending does violence to the one function of the UDRP - to reduce the cost and effort required to resolve domain name disputes issues by offering a simplified mechanism in lieu of litigation. Instead of minimizing the amount of effort (time and money) needed to resolve a dispute, filing a UDRP proceeding when the parties' dispute is already in front of a court, adds to that effort.

We are also of the view that the Policy at Section 4(k) has some application here. When evidence of a court proceeding is submitted ICANN "will not implement the Administrative Panel's decision, and ... take no further action until . . ." the court proceeding is resolved. No purpose is served by our rendering a decision on the merits to transfer the domain name, or have it remain, when as here, a decision regarding the domain name will have no practical consequence.


Section 4(k) of the Policy is consistent with the notion that determinations under the

Policy are subordinate to those of competent courts:


“The mandatory administrative proceeding requirements set forth in Paragraph 4 shall not prevent either you [the registrant] or the Complainant from submitting the dispute to a court of competent jurisdiction for independent resolution before such mandatory administrative proceeding is commenced or after such proceeding is concluded.”


Rule 18(a) provides:


“in the event of any legal proceeding initiated prior to or during an administrative proceeding in respect of a domain-name dispute that is the subject of the complaint, the Panel shall have the discretion to decide whether to suspend or terminate the administrative proceeding, or to proceed to a decision”.


Because the legal proceedings initiated by Complainant against Respondent in the United States District Court prior to the commencement of this administrative proceeding seek the same relief, namely the transfer to Complainant of the three disputed domain names, and raise the same issue presented for decision by the Panel, namely whether Respondent is entitled to remain the registrant of the disputed domain names, the Panel decides to exercise its discretion to terminate these proceedings.


Further, given that Complainant chose to submit the same issues between it and Respondent for resolution by a court, in proceedings that were pending at the time of the initiation of this administrative proceeding, and having regard to the fact that the parties are competitors with a history of bad feeling between them, the Panel finds that the Complaint was brought primarily to harass the domain-name holder.




Pursuant to Rule 15(e), the Panel declares that the Complaint was brought in bad faith and constitutes an abuse of the administrative proceeding. The Complaint is dismissed.




Alan L. Limbury, Panelist
Dated: June 4, 2002




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