Aptus Tech L.L.C. v. Name Administration Inc. (BVI)
Claim Number: FA1306001503000
Complainant is Aptus Tech LLC (“Complainant”), represented by Max Moskowitz, of Ostrolenk Faber LLP, New York, 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 <klipz.com>, registered with iRegistry Corp.
The undersigned certify that they have acted independently and impartially and to the best of their knowledge have no known conflict in serving as a Panelist in this proceeding.
Jeffrey M. Samuels, Kendall C. Reed, and David H. Bernstein, as Panelists.
Complainant submitted a Complaint to the National Arbitration Forum electronically on June 3, 2013; the National Arbitration Forum received payment on June 3, 2013.
On June 4, 2013, iRegistry Corp. confirmed by e-mail to the National Arbitration Forum that the <klipz.com> domain name is registered with iRegistry Corp. and that Respondent is the current registrant of the name. iRegistry Corp. has verified that Respondent is bound by the iRegistry Corp. 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 June 4, 2013, the Forum served the Complaint and all Annexes, including a Written Notice of the Complaint, setting a deadline of June 24, 2013 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 June 4, 2013, 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 June 24, 2013.
On July 8, 2012, pursuant to Complainant's request to have the dispute decided by a three-member Panel, the National Arbitration Forum appointed Jeffrey M. Samuels, Kendall C. Reed, and David H. Bernstein, as Panelists.
Having reviewed the communications records, the Administrative Panel (the "Panel") finds that the National Arbitration 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.
Complainant Aptus Tech LLC asserts that it has used the trademark KLIPZ since at least as early as April 30, 2011, on footwear, athletic shoes and sneakers. Complainant owns U.S. Trademark Registration No. 4,007,107 for the KLIPZ mark, as used on “footwear, athletic shoes and sneakers configured for removable and exchangeable attachment of decorative elements on parts of an outer surface thereof, the decorative elements including logos, and other indicia, of various shapes and/or color for changing the decorative appearance of the footwear, athletic shoes and sneakers; and the decorative elements being attached.” See Complaint, Exhibit A.
Complainant contends that such registration establishes its rights to the KLIPZ mark under the applicable Policy and that the disputed domain name, <klipz.com>, insofar as it wholly incorporates the KLIPZ mark, is identical to such mark. According to Complainant, “[t]he fact that Respondent may have registered the klipz.com domain name on September 24, 2004 … prior to Complainant obtaining rights in and to its KLIPZ mark is irrelevant” under paragraph 4(a)(i) of the Policy.”
Complainant maintains that Respondent has no rights or legitimate rights in the <klipz.com> domain name. There is no evidence that Respondent is commonly known by the domain name, Complainant indicates, and Respondent is not using the domain name in connection with a bona fide offering of goods or services. Complainant notes that a screenshot of the <klipz.com> domain name, as of May 28, 2013, indicates that the domain name resolves to a website with a light green banner at the top of the page with the wording “Click here to buy Klipz.com for your website name!” The “Click here” wording contains a hyperlink to a site featuring Related Links with what appears to be pay-per-click advertising links for “Business Equipment Leasing,” “Business Services,” “Company Gifts,” “Computers,” “Copiers,” “Corporate Gift Baskets,” ‘Discount Office Supply,” “Envelopes,” “Executive Gifts,” and “Fax Machines.” See Compl. Ex. C.
Complainant further asserts that there is no such thing as “klipz” and no recognized meaning of “klipz” such that Respondent could claim that it is using the term in a generic or descriptive manner. See Compl. Exs. D–E.
Complainant also points out that, on two prior occasions, Respondent has offered to sell the domain name to Complainant, which “strongly indicates that it does not have rights or legitimate interests in the domain name….”
With respect to the issue of “bad faith” registration and use, Complainant first notes that Respondent owns approximately 246,000 domain names (see Complaint, Exhibit F) and has annual revenue in excess of $20 million a year. See Compl., Ex. G. “There is no doubt that Respondent’s business exists solely for the purpose of buying and selling domain names,” Complainant asserts.
Complainant also maintains that the requisite bad faith is established by Respondent’s past willingness to sell the disputed domain name to Complainant for clearly excessive amounts. According to Complainant, Respondent, via an August 27, 2009 email, offered to sell the domain name to Complainant for no less than $80,000. See Complaint, Exhibit H. On May 28, 2013, Complainant, using a pseudonym, contacted Respondent and offered to purchase the domain name for $1,500. See Complaint, Exhibit I. That same day, Complainant was informed that Respondent had set an asking price of $38,000 for the <klipz.com> domain name. See Complaint, Exhibit J.
Respondent admits that Complainant holds a federal trademark registration for the mark KLIPZ but notes that the application that matured into such registration was filed some six years after Respondent’s registration of the disputed domain name.
Respondent points out that it has registered and used the domain name since October 2004 – five years before Complainant was formed, and seven years before Complainant’s alleged first use of the KLIPZ mark. Thus, Respondent asserts, it “clearly has the right of seniority here” and that “[t]he right of priority has been held sufficient and determinative for a finding in the respondent’s favor on the second element” of the Policy.
Respondent contends that the term “klipz” is phonetically equivalent to the generic word “clips” and notes that Complainant’s dictionary search, attached as Exhibit E to the Complaint, asks, in response to a search for the term “klipz”, “Did you mean clips.” Respondent then points out that the <klipz.com> site is used to advertise office supplies and even includes a graphic image which includes paper clips. See Response, Exhibits B and C. According to Respondent, it is “perfectly entitled to continue to use the domain name for office supplies and nowhere does the Complainant claim rights in a `KLIPZ’ mark for office supplies. The Complainant does not explain why it believes the use of a phonetic equivalent for `clips’ for such a purpose is illegitimate, unlawful, not bona fide, or infringes any cognizable right of the Complainant. The Complainant further does not explain the Complainant’s implicit belief that the Respondent is not entitled to sell anything the Respondent legitimately owns to anyone for any price.”
Respondent emphasizes that it has been using the disputed domain name for nearly a decade in connection with subject matter which, in addition to being directed connotated by the domain name itself, has nothing to do with Complainant’s use of the KLIPZ mark on footwear. Respondent contends that it has developed a substantial business in the field of internet advertising, has substantial rights in that business, and that the use of such domain names as <klipz.com> to provide revenue-earning advertisement of office supplies “is as much of a commercial service as any other search advertising service.”
With respect to the issue of “bad faith” registration and use, Respondent asserts that the suggestion that Respondent registered the <klipz.com> domain name in 2004 for the “primary purpose” of selling it to the then-nonexistent Complainant “is an insult to the intelligence of any marginally thinking person.” Respondent reiterates that Complainant did not even exist until November 2009, while the disputed domain name was registered on September 24, 2004.
Respondent also takes issue with Complainant’s assertion in its complaint that “on or around August 27, 2009,” Respondent, in response to an email from “email@example.com,” offered to sell the domain name to Complainant. Respondent notes that Complainant did not even exist as of August 27, 2009 and that Complainant makes no attempt to explain how Respondent’s willingness to entertain the offer to purchase in 2009 establishes a “primary purpose” in having acquired the domain name in 2004. Respondent contends that it was under no obligation to sell the domain name to firstname.lastname@example.org who claimed to be “starting a small business” in August 2009. “Indeed, such statement is an admission that no relevant trade or service mark existed at that time. It also demonstrates the Complainant’s full knowledge of Respondent’s senior registration and use of the domain name years before the Complainant began using such a mark in commerce, thus deliberately creating the situation on which the Complaint is premised.” (emphasis in original)
Finally, Respondent submits that this is a case of reverse domain name hijacking. In support of such assertion, Respondent contends that the complaint constitutes a “frivolous filing” and that Complainant “has further demonstrated contempt for the Policy and this Panel by making demonstrably false claims, and failure of counsel to exercise due diligence or competence.”
C. Additional Submissions
Both Complainant and Respondent filed timely additional submissions. In the view of the Panel, however, such submissions, for the most part, relate to matters previously raised or which could have been anticipated, or are irrelevant. As a result, the Panel has disregarded such additional submissions, except for the portions of Complainant’s and Respondent’s additional submissions addressing the issue of reverse domain name hijacking. As to this issue, Complainant contends that, given the fact it owns a federal trademark registration for the KLIPZ mark and Respondent has registered a domain name that incorporates such mark, Complainant’s filing is not an abuse of the Policy and no finding of reverse domain name hijacking is warranted. Respondent contends that the Complainant’s arguments are identical to those in previous proceedings in which complainants have been found to have acted in bad faith and that the Panel should therefore find that the Complainant abused the Policy by trying to “wrest control of a” legally owned domain name from its rightful owner.
The Panel finds that: (1) the disputed domain name, <klipz.com>, is identical to the KLIPZ mark and that Complainant has rights in such mark; (2) Respondent has rights or legitimate interests in the disputed domain name; (3) the disputed domain name was not registered and is not being used in bad faith; and (4) Complainant has engaged in reverse domain name hijacking.
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.
The Panel concludes that the disputed domain name, <klipz.com>, is identical to the KLIPZ trademark. As noted by Complainant, the domain name wholly incorporates the mark, merely adding the top-level domain “.com.” See Abt Elecs., Inc. v. Ricks, FA 904239 (Nat. Arb. Forum Mar. 27, 2007) (“The Panel also finds 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.”)
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 AB Svenska Spel v. Zacharov, D2003-0527 (WIPO Feb. 10, 2003) (“Paragraph 4(a) (i) of the Policy does not require that the trademark be registered prior to the domain name.”)
The Panel concludes that Respondent has rights or legitimate interests in the disputed domain name. The evidence establishes that the disputed domain name is used in connection with a website from which office supplies, including paper clips, may be purchased by clicking on a relevant link. Although “klipz” is not a word or term with a standard dictionary definition, contrary to Complainant’s assertion, the evidence, in particular, Exhibit E of the Complaint, indicates that the term “klipz” may be considered the phonetic equivalent of the term “clips.” Furthermore, since the Google AdWords results in response to the <klipz.com> domain name display links regarding office supplies, the AdWords algorithm also seems to link “klipz” with “clips”. The evidence further establishes that Complainant does not use its KLIPZ mark on or in connection with goods and/or services related to office supplies.
The Panel, thus, finds that the evidence supports a determination that Respondent is using the domain name in connection with a bona fide offering of goods or services, pursuant to Paragraph 4(c)(i) of the Policy. See Personally Cool Inc. v. Name Administration Inc. (BVI), FA 1474325 (Nat. Arb. Forum Jan. 17, 2013) (“The Panel finds that `cold front’ is a generic word relating to weather. Also, the Panel finds that the search terms used on the website linked to the disputed domain name are not related to the Complainant’s trademark or business. Therefore, the Panel finds that that Respondent is making a bona fide offering of goods or services under Policy ¶4(c)(i).”). The fact that Respondent is willing to entertain offers to sell the domain name does not defeat the bona fide nature of its use of the domain name. See Personally Cool Inc., supra. (“The Panel finds that the bona fide nature of the Respondent’s use of the disputed domain name is not affected by whether or not the Respondent is interested in selling the disputed domain name or the preferred price. If the Respondent has legitimate interests in the domain name, it has the right to sell that domain name for whatever price it deems appropriate regardless of the value that appraisers may ascribe to the domain name.”).
Complainant asserts that it first used the KLIPZ mark at least as early as April 30, 2011. Its registration for 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 Telecom Italia S.p.A. v. NetGears LLC, FA 944807 (Nat. Arb. Forum May 16, 2007) (determining the respondent could not have registered or used the disputed domain name in bad faith where the respondent registered the disputed domain name before the complainant began using the mark).
As noted in The WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition, at ¶3.1, and the cases cited therein, when a domain name is registered by the respondent before the complainant’s relied-upon trademark right is shown to have been first established (whether on a registered or unregistered basis), the registration of the domain name would not have been in bad faith because the registrant could not have contemplated the complainant’s then non-existent right.” While there are certain exceptions to this principle, e.g., where the domain name is registered shortly before or after a merger between companies but before any new trademark rights have been created or where the potential mark is the subject of substantial media attention, there is no evidence that any of the recognized exceptions is applicable in this case.
Another possible exception to the usual rule that bad faith cannot be found when the domain name is registered prior to the creation of trademark rights derives from paragraph two of the Policy, which suggests that domain name renewals made in bad faith could potentially support a finding of bad faith registration. However, such a finding is not applicable in this case given that the Complainant did not include any information or arguments regarding bad faith renewal in its submissions.
While the evidence indicates that Respondent was willing to sell the domain name to Complainant in August 2009 for a sum far in excess of the costs directly related to the domain name, as Respondent notes, Complainant did not even exist as of August 2009, and Complainant makes no attempt to explain how Respondent’s willingness to entertain the offer to purchase in 2009 establishes that it registered the domain name in 2004 primarily for the purpose of selling it to Complainant.
Moreover, for the reasons set forth above in connection with the discussion on rights or legitimate interests, the evidence does not establish that the disputed domain name is being used in bad faith.
The applicable Rules define “reverse domain name hijacking” as “using the Policy in bad faith to attempt to deprive a registered domain-name holder of a domain name.” As set forth in Personally Cool Inc., supra, examples of reverse domain name hijacking include when the complainant knew or clearly should have known at the time it filed the complaint that it could not prove one of the essential elements of the Policy. In this case, the evidence indicates that Complainant clearly knew that the disputed domain name was registered many years before it could establish rights in the KLIPZ mark and, thus, that it would not be able to establish that the disputed domain name was registered in bad faith, which is one of elements one must establish in order to prevail under the Policy. The WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition, ¶3.1, and the cases cited therein, make this point abundantly clear. The Panel, therefore, determines that Complainant has engaged in reverse domain name hijacking. See carsales.com.au Limited v. Alton L. Flanders, D2004-0047 (WIPO April 8, 2004) (“In the Panel’s view a finding of reverse domain name hijacking is warranted if the Complainant knew or should have known at the time it filed the Complaint that it could not prove one of the essential elements required by the Policy.’); Labrada Bodybuilding Nutrition, Inc. v. Glisson, FA 250232 (Nat. Arb. Forum May 28, 2004) (finding that complainant engaged in reverse domain name hijacking where it used “the Policy as a tool to simply wrest the disputed domain name in spite of its knowledge that the Complainant was not entitled to that name and hence had no colorable claim under the Policy”).
Having failed to establish all three elements required under the ICANN Policy, the Panel concludes that Complainant’s request for relief shall be DENIED. The Panel further finds that the Complainant engaged in reverse domain name hijacking.
Accordingly, it is Ordered that the <klipz.com> domain REMAIN WITH Respondent.
Jeffrey M. Samuels (Chair), Kendall C. Reed, and David H. Bernstein, Panelists
Dated: July 17, 2013
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