Halo Innovations, Inc. v. Name Administration Inc. (BVI)
Claim Number: FA1009001344653
Complainant is Halo Innovations, Inc. ("Complainant"), represented by Sarah G. Voeller of Hamre, Schumann, Mueller & Larson, P.C., Minnesota, USA. Respondent is Name Administration Inc. (BVI) ("Respondent"), represented by John Berryhill, Pennsylvania, USA.
REGISTRAR AND DISPUTED DOMAIN NAME
The domain name at issue is <sleepsack.com> (“the disputed domain name”), which is registered with IREGISTRY CORP. (“IREGISTRY”)
The undersigned, Messrs. David H Tatham, David Sorkin and M Kelly Tillery certify that they have acted independently and impartially and to the best of their knowledge have no known conflict in serving as Panelists in this proceeding.
Complainant submitted a Complaint to the National Arbitration Forum (“the Forum”) electronically on September 2, 2010; the Forum received payment on September 3, 2010.
On September 3, 2010, IREGISTRY confirmed by e-mail to the Forum that the disputed domain name <sleepsack.com> was registered with it and that Respondent is the current registrant of the name. IREGISTRY has also verified that Respondent is bound by its registration agreement and has thereby agreed to resolve domain-name disputes brought by third parties in accorance with ICANN's Uniform Domain Name Dispute Resolution Policy (the "Policy").
On September 9, 2010, the Forum served the Complaint and all Annexes, including a Written Notice of the Complaint, setting a deadline of September 29, 2010 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 firstname.lastname@example.org. Also on September 9, 2010, the Written Notice of the Complaint, notifying Respondent of the email 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 September 30, 2010.
An Additional Submission, which was deemed to be timely and in accordance with the Forum’s Supplemental Rule 7 was received from Complainant on October 5, 2010.
On October 11, 2010 pursuant to Complainant's request to have the dispute decided by a 3-member Panel, the Forum appointed David H Tatham, David Sorkin and M Kelly Tillery as Panelists.
A Joint Request to stay the proceedings for 10 days was received on October 11, 2010 and granted until October 21, 2010. A Request to lift this stay was received from Complainant on October 20, 2010. It was granted on October 21, 2010.
An Additional Submission from Respondent, which was deemed to be timely and in accordance with the Forum’s Supplemental Rule 7 was received from Respondent on October 21, 2010. The case then proceeded, with a Decision date set for November 4, 2010.
Complainant requests that the domain name be transferred from Respondent to Complainant.
Complainant contends that it is a manufacturer and retailer of sleep-related products and that it has used the name SLEEPSACK since 2001 for several products, including wearable blankets and infant sleepwear. These have been sold throughout the world, not just in the USA.
Complainant has a trademark registration at the USPTO for SLEEPSACK, No 3,765,713 in respect of “Infant sleepwear” which was filed on August 26, 2002 but not registered until March 30, 2010.
Complainant contends that its trademark is identical to the disputed domain name <sleepsack.com> which was registered on June 24, 2003, but not acquired by Respondent until June 29, 2006. Also, the website at the disputed domain name has links to several retail stores that sell infant sleepwear, as well as featuring a shopping category with links to stores which sell infant sleepwear in competition with Complainant.
Complainant contends that Respondent has made no legitimate use of the disputed domain name. Indeed Respondent’s only use is to provide a search engine/advertising site that contains automatically generated links to websites of various companies and organizations unrelated to itself.
Complainant further contends that Respondent has no legitimate right or interest in the disputed domain name because –
· Respondent’s name is Name Administration, Inc. so it is not commonly known by the disputed domain name.
· Respondent use of the disputed domain name is not bona fide as it is likely that it is receiving compensation when users click on the various links displayed at the website, and it has frequently been held that such use is not bona fide.
· It has also been frequently held that those who register domain names in large numbers using automated programs and processes – as Respondent does – cannot turn a blind eye to the possibility that the name they are registering might infringe or violate third party trademark rights.
Complainant also accuses Respondent of having registered the disputed domain name in bad faith. As proof thereof, Complainant recounts how, through the services of Godaddy’s Domain Name Buy Service it attempted to buy the disputed domain name for $5,000 but was told that Respondent was only willing to sell the name for a minimum of $18,000. This amount, Complainant alleges, is well in excess of Respondent’s out-of-pocket expenses in registering the disputed domain name, is contrary to the Policy, and clear evidence of bad faith.
Furthermore, Complainant contends that, by maintaining a website with links to third-party sellers of Complainant’s products as well as to those of Complainant’s competitors, the disputed domain name was registered for the primary purpose of disrupting Complainant’s business under its SLEEPSACK trademark, and this is further evidence of bad faith.
Moreover bad faith has been found when a Respondent diverts users, who might be searching for a Complainant, to its own website thus profiting from any click-through fees generated as a result.
Respondent denies that its domain name, which was first registered in 2003, could be held to be similar to Complainant’s trademark because the latter was not registered until 2010.
Respondent then details the history of Complainant’s trademark application which was filed in 2002, but suspended 6 months later by the USPTO as there were two earlier pending applications for SLEEP SACK. One of these was later abandoned but the other matured into a registration for articles of clothing and was then cited against Complainant’s application. However the latter proceeded to advertisement when its goods were limited to “infant sleepwear. Upon advertisement, the application received two oppositions. There then ensued 4 years of litigation between Complainant and the owner of one of the opposing marks which was eventually dismissed after the parties reached a settlement.
Thus, according to Respondent, Complainant’s claim that its trademark is confusingly similar to the disputed domain name is premised on the notion that its trademark application should have provided due notice to Respondent – a foreign company – when the latter registered the disputed domain name in 2003. However at that time, Complainant did not actually possess an enforceable trademark right.
Furthermore, the word ‘sleepsack’ is a term in common use for an item of camping equipment, namely a sleeping bag. Indeed the USPTO itself held thus when, in 2006 it was only prepared to register the trademark SILK SLEEP SACK No. 3,266,810 with a disclaimer to the words SLEEP SACK which the USPTO considered to be generic for sleeping bag goods. Respondent annexed to its Response an abundance of further evidence for the generic use of the term ‘sleep sack’.
With regard to Complainant’s claim that it has no legitimate rights to the disputed domain name, Respondent contends that its use of the name is entirely bona fide. It acquired the name in June 2003 in an auction of expired or abandoned domain names, and annexed to the Response an archive showing the consistent use of the name since then in relation to camping and related items. Respondent also pointed out that this use is apparent from one of Complainant’s own exhibits showing how the website currently appears, which displays the phrase “sleepsack.com – The Leading Sleeping Bags Site On The net”.
Respondent contends that a visitor to its site would firstly see the above phrase, then be confronted by a series of links to camping gear and mobile homes, but if he ignored that and clicked on the link to ‘children’s clothing’ and, if persistent, picked through these to find sleepwear he just might be confused into thinking that the site was actually operated by Complainant for the purpose of promoting its “Sleepsack” infant sleepwear. Respondent contends that not only is this a stretch, but it flies in the face of common sense and common practice for internet users.
Respondent alleges that, in the seven years that it has operated its site at the disputed domain name, the maximum source of revenue from it has been in connection with camping gear or mobile homes.
With regard to the charge of bad faith, Respondent contends that Complainant has provided no factual basis from which to conclude that it knew or should have known of either Complainant or Complainant’s trademark. The latter may have been filed before the disputed domain name was registered, but the mere filing of a trademark application provides neither any right, nor any duty, of notice and Complainant has failed to establish that Respondent knew or should have known that its domain name registration could have been in bad faith.
Respondent has no record whatsoever of making a counter-offer of $18,000 in response to the short and anonymous offer to buy the disputed domain name for $5,000 which it received from GoDaddy, and suggests that it was GoDaddy who inflated the price as an attempt to fatten its own commission.
Indeed, Complainant’s offer of $5,000 for the disputed domain name, was in itself way above any out-pocket expenses that might have been incurred in registering it.
C. Additional Submissions
Both parties filed Additional Submissions which are summarized below.
Complainant reiterates that the word SLEEPSACK is not generic – as Respondent claims – because it is the subject of a US trademark registration of the word which is a legal presumption of validity. In addition, Complainant points to its common law rights in the name stemming from its substantial use of it since 2001. Since that time it has had millions of dollars of sales and spent millions of dollars on advertising its ‘Sleepsack’ product. It contends that its ‘Sleepsack’ wearable blanket is the nation’s best selling wearable blanket for babies.
Respondent should have had constructive notice of Complainant’s rights in the name by virtue of this extensive use, and constructive or imputed notice is especially true for entities – such as Respondent – who register vast numbers of domain names. Indeed, Complainant refers to a case in which the Respondent in the present case was the Respondent, and in which it was concluded that it could not be willfully blind to the Complainant’s earlier rights.
Complainant contends that Respondent had a duty of inquiry before registering the disputed domain name and that even a cursory search would have revealed a pending US Federal trademark application with an earlier priority date.
Complainant reiterates that Respondent is using its trademark to attract users to Respondent’s website where they can follow links to several third-party sites each of them unrelated to Complainant. It contends that this is done for commercial benefit and is neither a bona fide offering of goods or services nor legitimate non-commercial or fair use.
Other charges leveled at Respondent are that it aims to disrupt Complainant’s activities and that consumers could become confused as to the source, sponsorship, affiliation or endorsement of Respondent’s website.
Complainant alleges that Respondent is a sophisticated user of the Internet, the owner of a large number of domain names, and the respondent in a number of domain name disputes.
With regard to its offer to purchase the disputed domain name for $5,000, Complainant contends that anonymous offers to purchase domain names happen all the time and have, on occasions, resulted in a finding of bad faith under the Policy. Complainant does not accept that the counter-offer of $18,000 was an attempt by GoDaddy to drive up the price.
Respondent denies that it should have had constructive notice of Complainant’s rights in the name ‘Sleepsack’ by virtue of the fact that Complainant had a pending trademark application when it registered the disputed domain name. In any case, a claimed date of first use is not necessarily accepted without proof in an inter partes proceeding. Had Respondent made the search suggested by Complainant it would only have found that there was a pending application for the trademark SLEEPSACK which had been suspended on the basis of confusing similarity with two other marks.
As for Complainant’s alleged common law rights, Respondent contends that Complainant has provided no evidence thereof.
Respondent also points out that, contrary to an allegation in Complainant’s Additional Submission, in fact in one of the cases listed by Complainant in which Respondent in this case was the respondent, the Complaint was actually denied, while another is actually still pending. Respondent claims that despite registering many domain names, it has never been ordered to transfer one as a result of a Proceeding under the Policy.
Complainant is a manufacturer and retailer of sleep-related products, including a wearable blanket for babies under the trademark SLEEPSACK.
Respondent is a company registered in the British Virgin Islands, but operating in Cayman. It is the owner of a great many domain names.
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.
There is no doubt that the disputed domain name <sleepsack.com> and Complainant’s trademark SLEEPSACK are identical for, when comparing a domain name with a trademark for similarity, it is customary to ignore any top level domain names such as <.com> or <.net>, see Abt Electronics., Inc. v. Gregory Ricks, FA 904239 (NAF March 27, 2007) in which the Panel found that “Respondent’s <abt.com> domain name is identical to Complainant’s ABT mark since addition of a generic top-level domain (“gTLD”) is irrelevant when conducting a Policy ¶ 4(a)(i) analysis.”); see also Rollerblade, Inc. v. McCrady, D2000-0429 (WIPO June 25, 2000) in which it was found 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; and
Paragraph 4(a)(i), quoted above, refers to the fact that a Complainant must have rights in a trademark or service mark and Complainant has referred to its US Federal registration of SLEEPSACK No. 3,765,713 for “infant sleepwear”. In the opinion of the Panel this should be sufficient for a positive finding under paragraph 4(a)(i). For example, it was said in Expedia, Inc. v. Tan, FA 991075 (NAF June 29, 2007) that “As the [complainant’s] mark is registered with the USPTO, [the] complainant has met the requirements of Policy ¶ 4(a)(i).”). The Panel also believes that the relevant date of Complainant’s rights in its SLEEPSACK trademark is its filing date, namely August 26, 2001, as was held in Hershey Co. v. Reaves, FA 967818 (NAF June 8, 2007) where it was found that the complainant’s rights in the KISSES trademark through registration of the mark with the USPTO “date back to the filing date of the trademark application”.
It was also held in AB Svenska Spel v. Zacharov, D2003-0527 (WIPO October 2, 2003) as well as in other cases that the Policy does not require a complainant to have registered its trademark prior to the Respondent’s registration of the domain name under paragraph 4(a)(i) of the Policy but that this might be relevant to an assessment of bad faith under paragraph (a)(iii)); see Clear!Blue Holdings, L.L.C. v. NaviSite, Inc., FA 888071 (NAF March 5, 2007) where it was said that “Although the domain name in dispute was first registered in 1996, four years before Complainant’s alleged first use of the mark, the Panel finds that Complainant can still establish rights in the CLEAR BLUE marks under Policy ¶ 4(a)(i).”
However Respondent disagrees, and points out, at some length, that this trademark had to go through a number of hoops before being registered and that, although it was filed in 2002 it was not registered until March 2010 which is only a few months before this dispute was filed in October 2010. One can only speculate on the reasons for this delay.
According to Respondent, in between the filing of the trademark application and its registration it was initially suspended on account of the fact that there were two earlier and allegedly similar trademarks. However the application was eventually accepted and advertised, but it then attracted two oppositions, one of which spawned a lawsuit which went on for four years before finally being settled.
In the meantime, Complainant apparently used its trademark and so acquired common law rights in the name. However there is little or no concrete evidence of this, only a copy of Complainant’s website and a copy of a Google search.
Respondent has annexed a wealth of evidence in support of its argument that the disputed domain name is comprised of a common or generic term, and although this may be true and although Respondent hints at taking some measures in the future to strike the trademark registration off the Register, the fact remains that Complaint does have a valid trademark registration for SLEEPSACK. Complainant’s trademark application may have taken a long time to be registered but, as was said above, under paragraph 4(a)(i) of the Policy it is only necessary to consider whether Complainant has rights in the mark and whether the disputed domain name is identical or confusingly similar to Complainant’s mark. The Panel has decided that in this case, Complainant does have rights in SLEEPSACK and that it is identical to the disputed domain name, and therefore finds that paragraph 4(a)(i) is proved.
It is well established that a Complainant must first make out a prima facie case that Respondent lacks rights and legitimate interests in the disputed domain name under paragraph 4(a)(ii) of the Policy, and then the burden shifts to Respondent to show that it does have rights or legitimate interests. See Hanna-Barbera Productions, Inc. v. Entertainment Commentaries, FA 741828 (NAF August 18, 2006) in which it was held that the complainant must first make a prima facie case that the respondent lacks rights and legitimate interests in the disputed domain name under paragraph 4(a)(ii) of the Policy before the burden shifts to the respondent to show that it does have rights or legitimate interests in a domain name. See AOL LLC v. Jordan Gerberg, FA 780200 (NAF September 25, 2006) where the Panel said: “Complainant must first make a prima facie showing that Respondent does not have rights or legitimate interest in the subject domain names, which burden is light. If Complainant satisfies its burden, then the burden shifts to Respondent to show that it does have rights or legitimate interests in the subject domain names”.
In this instance, the Panel accepts that Complainant has made out a prima facie case.
Respondent has been using the disputed domain name for seven years. Complainant alleges that this use is not legitimate because the disputed domain name only resolves to a click-through website which earns fees for Respondent. It is quite true that some Panels have found such use to be not bona fide but in this particular case that is not something with which this Panel agrees.
Annexed to the Response was a page from the Wayback Archive which purported to display a complete history of how the main page for the website at the disputed domain name had appeared since 2003. The Panel could not open this but despite Rule 15(a) of the Rules which states that a Complaint should be decided “on the basis of the statements and documents submitted” the Panel took up Respondent’s invitation to undertake an independent inspection of these records and confirmed that in 2003 the website did contain links to outdoor equipment sites – including sleeping bags – and motor homes. Also, as Respondent says, use of the site as a portal for finding products relating to camping or motor homes can be seen from the current page, which even carries a slogan at the top saying “sleepsack.com – The Leading Sleeping Bags Site On The Net”.
The Panel believes that Respondent’s use of the disputed domain name to display links to camping goods is a bona fide offering of goods or services pursuant to paragraph 4(c)(i) of the Policy. See McMullen Argus Publishing Inc. v. Jay Bean Moniker Privacy Services., D2007-0676 (WIPO July 24, 2007) in which it was held that “pay-per-click websites are not in and of themselves unlawful or illegitimate”); see also INVESTools Inc v. KingWeb Inc., FA 598845 (NAF January 9, 2006) where it was held that the respondent’s use of the disputed domain name to operate a web directory with links to investment-related websites in competition with the complainant constituted a bona fide offering of goods or services within the meaning of paragraph 4(c)(i) of the Policy.
Consequently the Panel finds that Respondent does have rights and legitimate interests in the disputed domain name, and that paragraph 4(a)(ii) has not been proved.
Following on from the above finding, there is strictly no need for the Panel to consider the question of bad faith but, for the record, the Panel finds no bad faith in the actions of Respondent and so paragraph 4(a)(iii) is also not proved.
In Sanitech Corporation v. Paton, FA 935273 (NAF April 30, 2007) it was held that paragraph 4(a)(iii) of the Policy requires bad faith registration and use, so where a respondent initially registered the disputed domain name in good faith, the panel should deny the transfer of the disputed domain name to the complainant); see also It Takes 2 v. C.,J., FA 384923 (NAF February 15, 2005) where it was said:"[I]n the absence of any evidence of knowledge on the part of Respondent of Complainant, its mark or its services at the time Respondent acquired the domain name, the Panel finds Complainant has failed to establish registration in bad faith.".
Respondent contends that the <sleepsack.com> domain name is comprised entirely of common terms that have many meanings and that the registration and use of a domain name comprising such common terms is not necessarily done in bad faith. This is not necessarily conducive to a finding of bad faith. See Zero International Holding v. Beyonet Services., D2000-0161 (WIPO May 12, 2000) in which it was said that "Common words and descriptive terms are legitimately subject to registration as domain names on a 'first-come, first-served' basis."; also in Target Brands, Inc. v. Eastwind Group, FA 267475 (NAF July 9, 2004) it was held that the respondent’s registration and use of the <target.org> domain name was not in bad faith because the complainant’s TARGET mark is a generic term); also in Miller Brewing Co. v. Hong, FA 192732 (NAF December 8, 2003) the Panel found that because the respondent was using the <highlife.com> domain name, a generic phrase, in connection with a search engine, the respondent did not register and was not using the disputed domain name in bad faith.
However, as noted above, Respondent is using the disputed domain name to display links to camping goods and it was held in Lee Procurement Solutions Co. v. getLocalNews.com, Inc., FA 366270 (NAFJanuary 7, 2005)that “Respondent's rights and legitimate interests in the domain name pursuant to Policy ¶ 4(a)(ii), allow a finding that there was no bad faith registration or use under Policy ¶ 4(a)(iii).”Also, in The Vanguard Group Inc. v. Investors FastTrack, FA 863257 (NAF January 18, 2007) it was said that “Because Respondent has rights and legitimate interests in the disputed domain name, his registration is not in bad faith.”.
As for the alleged offer by Respondent to sell the disputed domain name for $18,000 the Panel prefers to believe Respondent’s story that it simply rejected an anonymous offer through GoDaddy’s Domain Buy Servicer without making any counter offer. This is not therefore evidence of bad faith on the part of Respondent.
Having established only one of the three elements required under the ICANN Policy, the Panel concludes that relief shall be DENIED.
Accordingly, it is Ordered that the <sleepsack.com> domain name should REMAIN WITH Respondent.
David H Tatham, David Sorkin and M Kelly Tillery, Panelists
Dated: November 3, 2010
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