Electronic Commerce Media, Inc. v. Taos Mountain
Claim Number: FA0008000095344
The Complainant is Electronic Commerce Media, Inc., Saratoga, CA, USA ("Complainant"). The Respondent is Taos Mountain, Santa Clara, CA, USA ("Respondent").
REGISTRAR AND DISPUTED DOMAIN NAME(s)
The domain name at issue is "ec.com," registered with Network Solutions Inc. ("NSI").
The Panelists, John A. Bender, Jr., David H. Bernstein and M. Scott Donahey, certify that they have acted independently and impartially, and, to the best of their knowledge, they have no known conflict in serving as the panelists in this proceeding.
Complainant submitted a Complaint to the National Arbitration Forum ("The Forum") electronically on 08/02/2000; The Forum received a hard copy of the Complaint on 08/02/2000.
On 08/03/2000, NSI confirmed by e-mail to The Forum that the domain name "ec.com" is registered with NSI and that the Respondent is the current registrant of the name. NSI has verified that Respondent is bound by the Network Solutions Service Agreement Version 5.0 and has thereby agreed to resolve domain-name disputes brought by third parties in accordance with ICANN’s UDRP.
On 08/07/2000, a Notification of Complaint and Commencement of Administrative Proceeding (the "Commencement Notification"), setting a deadline of 08/28/2000 by which Respondent could file a Response to the Complaint, was transmitted to Respondent via e-mail, post and fax, and to all entities and persons listed on Respondent’s registration as technical, administrative and billing contacts by e-mail. It was also e-mailed to email@example.com.
On September 19, 2000, pursuant to a request to have the dispute decided by a Three Member panel, The Forum appointed John A. Bender, David H. Bernstein and M. Scott Donahey as Panelists.
The Complainant requests that the domain name "ec.com" be transferred from the Respondent to the Complainant.
In August 1996, Complainant (through a predecessor-in-interest) began using the mark EC.COM in connection with a monthly printed magazine in the field of electronic commerce. The EC.COM magazine had a subscriber base of more than 40,000 subscribers, and it is estimated that EC.COM reached at least 100,000 persons each month. Complainant applied for, and was granted, federal trademark registrations for the marks "EC.COM" and "EC.COM" (stylized).
Complainant states that it suspended publication of EC.COM in 1998, due in large part to Respondent’s use of the corresponding domain name ec.com, which caused consumer confusion and negative publicity resulting from the auction. During the suspension, Complainant continued to use the marks in connection with the sale of the subscriber list for the EC.COM magazine. Moreover, Complainant’s principal stated in sworn declaration testimony that Complainant intends to re-launch publication of a printed and/or online version of EC.COM by December 2000.
Complainant contends that Respondent acquired the ec.com domain name in bad faith in order to sell it to the highest bidder, or to Complainant itself, based on the association of the domain name with Complainant’s publication. When Complainant first launched EC.COM magazine, the domain name ec.com was unavailable. In July 1997, a customer informed Complainant that the ec.com domain name was being auctioned at the website associated with the domain name. The message posted on the ec.com website read, in part:
"DOMAIN AUCTION: EC.COM
The EC.COM domain is no longer being used and is being auctioned off to the highest bidder! Current high bid is $1500. Minimum bid increment is $45.00."
Complainant contends it received a number of email communications and telephone calls from persons confused by the posting. Complainant was concerned the posting made it look like Complainant was going out of business.
Complainant contacted the registrant of the domain name, Vernon Hart, who said that he was an employee of Respondent and that he had acquired the domain name on Respondent’s behalf. Later, Complainant communicated with Alexis Tatarsky, the principal of Respondent, who also was one of the original subscribers to EC.COM magazine and thus was familiar with the trademark. Indeed, Mr. Tatarsky acknowledged to Complainant that he was well aware of Complainant’s magazine. After several communications, Complainant offered to purchase the domain name for $1,250. Respondent rejected this offer, and countered that it would allow Complainant to rent the domain name in exchange for advertising in Complainant’s magazine valued at $18,000, a sum substantially in excess of Respondent’s cost of acquiring the domain name. Complainant refused.
Respondent then discontinued public efforts to auction the domain name and pointed the domain name to Respondent’s website, www.taos.com. Respondent has for three years inappropriately held the ec.com domain without putting it to any actual commercial use, and/or withheld the domain name from Complainant for economic advantage.
Complainant further contends that Respondent has no rights or legitimate interests in the ec.com domain name. Respondent has never made any independent use of the domain name in connection with a website or to sell goods or services specific to electronic commerce. Respondent initially registered the domain name to auction it to the highest bidder or to "license" it to Complainant for free advertising in Complainant’s magazine. Respondent currently points the domain name to Respondent’s own website, where it draws traffic to Respondent’s site due to the connection between the ec.com domain name and Complainant’s EC.COM magazine.
Respondent initially contends that jurisdiction in this Administrative Proceeding is improper because Complainant is not competent to assert these claims. Complainant is a suspended California corporation and therefore lacks standing to engage in any business activities, including bringing these claims.
Turning to the merits, Respondent contends that EC.COM is not a valid trademark and Respondent has moved to cancel Complainant’s trademarks with the United States Patent and Trademark Office on the grounds of genericness or in the alternative, descriptiveness and abandonment. Documents submitted by Respondent show that the cancellation proceeding was only recently filed, and thus is still pending.
The abbreviation "EC" is synonymous with the term "electronic commerce," which is the generic term for an entire field of commerce. Even if "EC" was not generic at the time Complainant adopted it for use in connection with its magazine, it has since become generic, thereby negating any rights Complainant may have had in the term. The addition of the generic top level domain, ".com," to an otherwise unprotectable abbreviation does not render the term a protectable trademark.
Alternatively, EC.COM is merely descriptive of Complainant’s services and Complainant has failed to introduce any evidence that its mark has developed secondary meaning. Complainant has also abandoned its EC.COM trademarks because it ceased publication of its magazine in 1998. Despite Complainant’s assertion that it intends to resume publication of EC.COM magazine in four months, it has not submitted any evidence to confirm this. Complainant also abandoned its trademarks because it has been a suspended corporation for two years. Finally, Complainant’s purported use of the EC.COM trademark in connection with mailing list services began after Respondent registered the ec.com domain name; therefore, Complainant could not have obtained any trademark rights through these services which are relevant to this dispute.
Respondent contends that it has both a right to use and a legitimate interest in the ec.com domain name. The term "EC" is a generic abbreviation for electronic commerce. Respondent, therefore, has a legal right to register this domain name and resell it to another party interested in providing electronic commerce services. Respondent cites the UDRP decision regarding the domain name "craftwork.com," General Machine Products Co., Inc. v. Prime Domains, FA0001000092531, in support of this proposition.
Respondent also contends that it has a further legitimate right and interest in the ec.com domain name because it obtained the domain name with the intention of using the name in connection with its electronic commerce consulting business. Respondent had no reason to expect relevant consumers would be drawn to the site as a result of confusion with Complainant’s magazine because Complainant was not the only user of the term "EC" in commercial contexts.
Respondent neither registered nor has used the ec.com domain name in bad faith. Respondent is an established business entity which is not in the business of trafficking in domain names. In fact, Respondent has repeatedly rejected offers to purchase the ec.com domain name. Despite Complainant’s assertion that Respondent’s offer to allow Complainant to use the domain name in exchange for free advertising constitutes bad faith, Respondent is the lawful owner of this domain name which was acquired in order to promote and enhance Respondent’s then-current activities in EC consulting. Respondent, therefore, was entitled to attempt to obtain value from its asset.
Although Mr. Tatarsky was admittedly aware of Complainant’s EC.COM magazine when Respondent acquired the domain name, Respondent was entitled to purchase this domain name, and either use it or resell it, because EC.COM is a generic term and there was no intent to trade off the alleged goodwill of EC.COM magazine. Moreover, Respondent never offered the ec.com domain name for sale. Although the domain name was being auctioned at one time, the auction took place one month before Respondent acquired the domain name. At the time of the auction, ec.com was owned by Vernon Hart. Although Mr. Hart is an employee of Respondent, he initially acquired and auctioned the domain name on his own behalf before assigning the domain name to Respondent. Respondent never asked or instructed Mr. Hart to auction or offer ec.com for sale on its behalf.
This matter has been hotly contested by the parties. Not only have the parties submitted competing declarations that tell very different stories, but also, the parties have invoked Article 7 of The Forum’s Supplemental Rules to each file additional submissions, all without any request from the Panel.
With respect to the competing declarations, the Panel’s obligation is to reach a decision based on a preponderance of the evidence presented. When the parties’ evidence is contradictory and supports two different versions of the same events, the Panel’s task is to determine -- based on the declarations, the documentary evidence submitted, and common sense -- which version of the facts is likely more credible. The Panel is mindful of the fact that these are truncated proceedings, and that the parties and Panel do not have the benefit of discovery and cross-examination to support a searing search for the truth. Nevertheless, based on the evidence submitted, this Panel unanimously has agreed on a version of the events that it finds most credible, and which thus has supported its findings. Moreover, should the parties continue to disagree about these findings, they are free to pursue this dispute in alternative fora that do provide for discovery and greater opportunities to make credibility determinations.
As for the supplemental materials the parties each submitted, the Panel has decided to disregard those materials. Although Article 7 of The Forum’s Supplemental Rules purports to permit such supplemental filings, the Rule does not require a Panel to accept those materials. In fact, the Supplemental Rule could not require Panels to accept these supplemental filings because that would violate Uniform Rule 12 of the ICANN Policy, which vests the discretion to request and accept supplemental materials solely with the Panel. No provider’s Supplemental Rules can override the Policy or Uniform Rules and the discretion they vest in the Panels appointed thereunder. Because no new information or arguments were supplied within the supplemental filings, and because the Panel had no questions for the parties to address in supplemental materials, the Panel will not consider either Complainant’s reply nor Respondent’s sur-reply.
As a threshold matter, the Panel rejects Respondent’s contention that jurisdiction over this dispute is improper because Complainant is a suspended California corporation. Complainant’s corporate status is a question of California state law which the Panel is neither equipped nor willing to address. Issues which peculiarly involve individual country and/or state laws are best reserved for adjudication by a court of competent jurisdiction, and the parties are free to raise this issue in any subsequent litigation, as contemplated by Paragraph 4(k) of the ICANN Policy.
Turning to the merits, the Panel notes that Paragraph 4(a) of the Policy requires that the Complainant 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 the Respondent is identical or confusingly similar to a trademark or service mark in which the Complainant has rights;
(2) the 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 discussed below, Complainant has met its burden on each of the three factors.
Domain Name is Identical to Complainant’s Trademark
The domain name "ec.com" is, obviously, identical to Complainant’s trademark. Respondent, though, argues that Complainant has no valid rights in the EC.COM mark, and thus cannot prevail under this first factor.
Although Respondent claims that the mark ec.com is generic and/or descriptive of the term "electronic commerce" or has been abandoned, Complainant has two federal trademark registrations for the mark EC.COM which, under United States law, are prima facie evidence of the mark’s validity. Given the nature of these UDRP proceedings, a Panel should not overturn that presumption of validity (which, by necessity, includes the Trademark Office’s conclusion at the time of the registration that the mark was neither generic nor merely descriptive, but rather was distinctive) absent compelling evidence. Respondent has not come forward with such evidence. EAuto L.L.C. v. Triple S. Auto Parts d/b/a/ Kung Fu Yea Enterprises, Inc., ICANN Case No. D2000-0047.
Respondent has submitted evidence that "EC" is a common abbreviation for the term "electronic commerce." That evidence, alone, does not prove that EC is generic for electronic commerce, or that EC.COM is generic and/or merely descriptive for a magazine covering electronic commerce issues. To the contrary, this Panel does not believe that ec.com is the "genus" of a magazine covering electronic commerce. As for Respondent’s abandonment argument, the suspension of publication of the EC.COM magazine does not automatically connote abandonment of the trademark. Absent evidence of express abandonment, under United States law, abandonment is not presumed until three years of non-use. Moreover, here, Complainant has submitted affirmative evidence, by way of a sworn declaration by its president, William Sleight, that it did not intend to abandon the mark and intends to resume publication of the magazine shortly. This record, therefore, does not justify the Panel disturbing the validity of a federally-registered trademark.
Rights or Legitimate Interests
Once Complainant makes a prima facie showing that Respondent lacks any legitimate interest, the burden shifts to Respondent to come forward with evidence proving that it does have a legitimate interest or other rights in the domain name. Respondent has failed to satisfy that burden.
Respondent has not demonstrated any rights or legitimate interest in the ec.com domain name as set forth in Paragraph 4(c) or under any other circumstances. Respondent has not made any use of the domain name in connection with a bona fide offering of goods or services, nor has it submitted any evidence of demonstrable preparations to use this domain name despite having registered the domain name over three years ago. Respondent has not been commonly known by the name "EC.COM" and it has not made a legitimate noncommercial or fair use of the domain name. Educational Testing Service v. TOEFL, ICANN Case No. D2000-0044.
The craftwork.com decision on which Respondent relies for the proposition that it may legitimately register a generic or descriptive mark as a domain name for resale is distinguishable from the present case. See General Machine Products Co., Inc. v. Prime Domains, FA0001000092531. In that case, the Respondent demonstrated that it was in the business of registering "generic" domain names for resale and that it had no knowledge of the Complainant’s trademark when it registered the craftwork.com domain name. In this case, however, Respondent has admitted that it is not in the business of selling domain names and that it was aware of Complainant’s EC.COM trademark when it registered the corresponding domain name.
Registration and Use in Bad Faith
The evidence is particularly contradictory with respect to the parties’ competing allegations of good and bad faith. However, as discussed below, the Panel’s independent review of the totality of the evidence leads to the inescapable conclusion that Respondent acquired and used the ec.com domain name in bad faith.
The evidence shows that, in July 1997, Mr. Hart acquired the ec.com domain name from a third party for $1,000. It is not credible that he spent his own money and acquired it for himself; rather, the only credible explanation, which is supported by Mr. Sleight’s recollection of their discussion at the time, is that Mr. Hart was acting as an agent for his employer (the Respondent) when he acquired the domain name and then offered to sell the domain name through an auction. Those acts alone are sufficient to constitute bad faith. World Wrestling Federation v. Bosman, ICANN Case No. D99-0001.
Even if one were to credit Messrs. Hart’s and Tatarsky’s declarations on that point, though, the evidence would still support a finding of bad faith. That is because, at the time Respondent acquired the domain name from Mr. Hart (July 22, 1997), Complainant had already expressed its objections to Respondent (starting on July 11, 2000). Thus, Respondent acquired the domain name with express knowledge of Complainant’s EC.COM trademark, express knowledge of Complainant’s magazine entitled EC.COM, and express knowledge of Complainant’s contemporaneous objections. Moreover, immediately after acquiring the domain name, Respondent did not attempt to exploit the name in connection with its electronic commerce services; instead, on or about August 1, 2000, it offered to rent the name back to Complainant for consideration valued at $18,000, which was far in excess of Respondent’s acquisition costs.
In consideration of the foregoing evidence, the Panel determines that Respondent’s registration and use of the ec.com domain name was in bad faith.
Because Complainant has met its burden of showing that the domain name should be transferred, this Panel finds for the Complainant and orders the transfer of the domain name "ec.com" to Complainant. In light of the Panel’s decision, the Panel obviously rejects Respondent’s request that it find, pursuant to Rule 15(e), that the Complaint was brought in bad faith or constitutes reverse domain name hijacking.
John A. Bender, Jr.
David H. Bernstein
M. Scott Donahey
Dated: October 11, 2000
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