Source: https://dnattorney.com/dn-resources/healy-v-kuhlen/
Timestamp: 2019-04-25 17:50:06+00:00

Document:
Domain Name - Domain Name Dispute Resolution Policy - U.S. Trademark - Identical - Confusingly Similar - Bad Faith Use - Demonstrable Preparations for Use of Domain Name - Perfunctory Preparations Sufficient - Web site Not Developed -Valuable Consideration in Excess of Out of Pocket Costs.
Complainant owned U.S. Trademark DVD NEWS and registered the domain name DVDNEWS.NET. Complainant published a newsletter with that name. Respondent registered disputed domain name in the name of his employer one year before Complainant registered the Trademark. Two years after the registration of the trademark, Respondent left his job and the employer transferred the disputed name to him. Respondent offered the disputed name, and many other DVD related names, for sale for valuable consideration in excess of out of pocket expenses. Respondent made preparations for use of the domain name before the first commercial use of the mark and before notice of the claim.
Held, Name Not Transferred to the Complainant.
The domain name is virtually identical to Complainants Trade Mark. Perfunctory preparations for use of the domain name are sufficient to establish bona fides use of the domain name. The fact that Respondents registration of the domain name prevents the complainant from using the domain name corresponding to her registered trademark for her Internet services cannot not amount to bad faith under the Policy unless Respondent is shown to have engaged in a pattern of such conduct. There is no such evidence here. Respondents registration of the domain name effectively predates Complainants registration and use of the trademark DVD NEWS. No question of constructive notice of a registered mark under 17 U.S.C. § 1072 arises.
Ellenbogen v. Pearson, Case No. D00-0001 (WIPO February 17, 2000).
J. Crew Intl, Inc. v. crew.com, Case No. D2000-0054 (WIPO April 20, 2000).
Lumena s-ka so.o. v. Express Ventures Ltd., FA00030000094375 (Nat. Arb. Forum).
Royal Bank of Canada v. Xross, AF-0133 (eResolution).
Shirmax Retail Ltd. v. CES Marketing Group, Inc., AF-0104 (eResolution).
This is an administrative proceeding pursuant to the Uniform Domain Name Dispute Resolution Policy ("the Policy") of the Internet Corporation for Assigned Names and Numbers ("ICANN"), in accordance with the ICANN Rules for the Policy ("the Rules") and the Supplemental Rules for the Policy ("the Supplemental Rules") of the WIPO Arbitration and Mediation Center ("the Center").
The complainant is Maureen A. Healy, doing business as Corbell Publishing, of 4676 Admiralty Way, Marina Del Rey, California, United States of America. The respondent is Andreas Kuhlen of Rue du Clos 14, Geneva CH-1208, Switzerland.
The disputed domain is dvdnews.com and the registrar is Network Solutions Inc., of Herndon, Virginia, USA.
The complaint was received by the Center in hard copy on June 29, 2000, and acknowledged on July 3, 2000, when registration details were sought from the registrar. On July 5, 2000, a hard copy of the complaint was received from the complainant, registration details were confirmed by the registrar and the Center satisfied itself that the complainant had complied with all formal requirements, including payment of the prescribed fee.
On July 6, 2000, the Center acknowledged receipt of the email copy of the complaint, formally notified the respondent by post/courier, fax and email of the complaint and of the commencement of this administrative proceeding and sent copies to the complainant, the registrar and ICANN.
The respondent sought and, with the complainants consent, obtained an extension of time to file the response. The Center extended time initially until August 6, 2000, (a Sunday) and subsequently until August 7, 2000. The response was received on August 3, 2000, and acknowledged by the Center on August 4, 2000.
On August 16, 2000, the complainant lodged a reply and requested the panel to exercise its discretion to consider it. On August 21, 2000, the respondent lodged a "Reply to Complainants Reply to Respondents Response" and asked that, if the panel should consider taking into account the complainants reply, the panel should also consider the respondents reply to it. The Center acknowledged both documents noting that such further submissions are not envisaged by the Uniform Dispute Resolution Procedure and Rules and do not form part of the official case file. The Center said they would be sent to the panel and it was in the discretion of the panel whether to take them into account.
On August 17, 2000, the Center invited Alan L. Limbury to serve as panelist. On August 18, 2000, Mr. Limbury submitted a Statement of Acceptance and Declaration of Impartiality and Independence and the Center transmitted the case file to the panel and notified the parties of the projected decision date of August 31, 2000.
The language of the proceeding was English.
The panel is satisfied that the complaint was filed in accordance with the requirements of the Rules and Supplemental Rules; payment was properly made; the panel agrees with the Centers assessment concerning the complaints compliance with the formal requirements; the complaint was properly notified in accordance with paragraph 2(a) of the Rules; the response was filed within the time that had been properly extended and the administrative panel was properly constituted.
The panel takes into account the complainants reply because it deals with matter raised in the response which could not have been addressed in the complaint. The panel does not take into account the respondents response to the complainants reply because it either repeats the response or raises matters which should have been put in the response to the complaint.
Since March 1997, the complainant has published to the home video industry, primarily in the United States) a newsletter called DVD NEWS. It has approximately 2,000 readers each week. Over 175,000 copies have been sold. It has an annual subscription base of over 200 persons and businesses. Initially available in print, as of March 1999, DVD NEWS also became available online to subscribers and has over 50 online subscriptions.
The complainant has expended substantial sums in advertising and promoting its services under the DVD NEWS mark. In addition, she is the owner of the domain name dvdnews.net and is currently in the process of developing a website at that location devoted to advertising and promoting DVD NEWS.
The complainant is the owner of the US service mark Registration No. 2,124,483 for DVD NEWS for "newsletters devoted to the home video industry" on the supplemental register of the United States Patent and Trademark Office. This mark was registered on December 23, 1997. The certificate of registration shows the first use in commerce as March 10, 1997. [The certificate also shows "First use 3-10-0977". In the absence of any evidence to support this, the panel takes the entry to be a misprint].
The respondent registered the disputed domain name dvdnews.com on December 2, 1996, in the name of his then employer, Quaestus, of Route de Malagnou 38A, Geneva, GE CH-1208. The respondent was the administrative, technical and billing contact. It appears the respondent was allowed by Quaestus to use its DNS servers in connection with the domain name.
In like manner the respondent also registered the domain names dvdmarket.com on November 29, 1996, and dvdindex.com on January 23, 1997.
In March 1997, the respondent created a document entitled DVD Web Sites Strategy as part of a DVD Web Site Project. This envisaged use of the domain names mentioned on a list later sent to the complainants attorneys as participating in a "DVD Web", "where DVD information and DVD news and different services will be aggregated to form a central community around the evolving DVD".
Updates at December 23, 1996, March 25, 1997, and July 18, 1998 of the dvdnews.com homepage show the respondent worked on the idea of using the site to offer free DVD news for consumers and linking the site to dvdindex.com and dvdmarket.com. Each version carries the tag "dvdnews.com - by Andreas Kuhlen - All Rights Reserved" and uses the email address kuhlen@quaestus.ch.
In September 1999, the respondent quit his job with Quaestus in order to participate in a full-time MBA course offered by the University of the West of England at Bristol. As a consequence, late in 1999, the respondent and Quaestus entered into Network Solutions Registrant Name Change Agreement, (which recited that the respondent had applied to Network Solutions for registration) as a consequence of which the respondent replaced Quaestus as the registrant of the disputed domain name. It appears similar arrangements were made with respect to the other domain names the respondent had registered in the name of Quaestus.
Also in consequence of quitting his job with Quaestus, the respondent had to find another domain name server. He chose to use the DNS server of GreatDomains.com, which describes itself as "The Internets Marketplace for Domain Names and Websites".
The complainant discovered the respondents registration of the disputed domain name, which appeared from Network Solutions Whois database to have been registered by the respondent on February 5, 2000, and became aware that GreatDomains.com was offering the domain name for sale on its web site, with a listed price of $26,800.
"Thank you for your interest in dvdnews.com.
However, your client would need to add two more zeros for a transfer.
I have other dvd-related domains that are less expensive, like dvdmarket.com. If you wish I can send you a list"
That list, which the respondent sent to the complainants attorneys, showed an "indicative minimum price in US dollars" of $47,800 for dvdnews.com and that, as of April 17, 2000, it was for sale subject to a pending offer. The list included dvdindex.com at $4,800 as available for sale and dvdmarket.com at $26,750 as subject to a pending offer. Other names listed for sale were dvd4barter.com, dvdagent.com, dvdalert.com, dvdbarter.com and dvdrating.com.
The respondent registered the domain name on February 5, 2000, long after the complainant had established trademark rights in and registered the mark DVD NEWS.
The domain name dvdnews.com is virtually identical to the complainants registered mark DVD NEWS. Indeed, as blank spaces cannot be used in a domain name, there is no other form in which to use the mark DVD NEWS for a corresponding domain name.
The respondent has not used the domain name for any purpose other than to auction it for sale to the highest bidder. Indeed, he has registered multiple domain names solely for this purpose -- a practice known as speculation in domain names. This tribunal has already found that such practice does not constitute legitimate interest or use in a domain name, and, in fact, constitutes abusive registration. See e.g., J. Crew Intl, Inc. v. crew.com, Case No. D2000-0054 (April 20, 2000). The respondent is not otherwise using the domain name in connection with an active website, nor, upon information and belief, does he have any demonstrable plan for the bona fide use of the domain name.
It is also clear that the respondent has registered and is using the domain name in bad faith. Listing a domain name for sale through a domain name broker for the purpose of selling it for valuable consideration in excess of out-of-pocket costs supports a finding of bad faith use. See e.g., Ellenbogen v. Pearson, Case No. D00-0001 (February 17, 2000). Moreover, the fact that the respondent has engaged in the practice of speculating in domain names, as evidenced by his offers to sell various domain names for sums substantially in excess of the costs associated with registering such domains, also shows his bad faith registration and use of the domain name. See e.g., J. Crew Intl, Inc., supra.
In addition, the fact that the respondents registration of the domain name prevents the complainant from using the domain name corresponding to her registered trademark for her internet services also supports a finding of bad faith. See e.g., J. Crew Intl, Inc., supra.
The respondent should also be charged with bad faith since his registration of the domain name postdates the complainants registration and use of the trademark DVD NEWS. U.S. trademark law provides that a person is charged with constructive notice of a registered mark. See 17 U.S.C. § 1072.
The respondent registered dvdnews.com on December 2, 1996, not on February 5, 2000, as claimed by the complainant.
The respondent also registered dvdmarket.com and dvdindex.com in order to establish informative and commercial offerings around the DVD. The respondent registered the three domain names initially under the company name "Quaestus", at which he was allowed to use the DNS servers and he used the Quaestus web server to host some pages under these domains at intervals from 1996 to 1999. The respondent anticipated that DVD would have a substantial impact on the consumer market, but preferred to wait until DVD would hit the mainstream market to dedicate more effort in the building of the DVD webs.
The respondent chose to take the web pages offline during the time of his studies and temporarily to use the DNS server of Greatdomains.com, which is provided at no cost. The primary reason for listing the domains on Greatdomains.com was for taking advantage of this free DNS parking until the respondent finished his MBA course and would have the time necessary to develop his vision of a one-stop destination for DVDs on the Web consisting of information and services offered through dvdmarket.com, dvdnews.com, and dvdindex.com.
The respondent refused the complainants offer of March 29, 2000, to purchase the disputed domain name for $500 with an ironic undertone, stating that "their client would need to add two more zeros" to that sum for a transfer. The respondent did not intend to bargain about a price, because it was not the respondents primary intention to sell dvdnews.com. Instead, upon request by the complainants attorneys, on April 17, 2000, he sent a list of 7 other DVD-related domains, which he had registered with the intent of combining them with the services to be offered at dvdmarket.com, dvdnews.com, and dvdindex.com.
After studying e-commerce and marketing related issues more deeply in the course of the MBA programme, the respondent felt that it might be a better business strategy to concentrate on the three core domains (dvdmarket.com, dvdnews.com, and dvdindex.com), because this would help to build brand awareness with future customers. Thus the respondent was disposed to offer the other DVD-related domains for sale. Procter and Gamble has changed its branding strategy in a similar way, offering nearly 100 of generic domain names for sale at Greatdomains.com at the end of June 2000.
The respondent acknowledges that the domain dvdnews.com is virtually identical to the mark the complainant registered. As exemplified by similar cases (e.g. case number AF-0283, by e-Resolution.ca, on newportnews.com,) use of a domain name that does not confuse customers of the complainant when seeing the domain name used in conjunction with the actual web site does not constitute trademark infringement. This is clearly the case with dvdnews.com, which the complainant plans to use solely for a newsletter devoted to the home video industry, whereas the respondents use is closer to the generic meaning of the domain; providing news about DVDs.
The complainants claim to have exclusive rights to use the term dvdnews in its domain name is doubtful. The domain dvdnews is merely descriptive of "news about DVDs". The term dvdnews is generic.
It is not true that the respondent has not used the domain name for a legitimate purpose. After registering the domain on December 2, 1996, the respondent made several online trials with the domain dvdnews.com. The respondent had anticipated that DVD would have a substantial impact on the consumer market, but preferred to wait for a good timing to dedicate more resources to building the DVD online presence, as outlined in the respondents DVD Web site strategy. The dvdnews.com site had active DNS entries on February 13, 1997. The homepage of dvdnews.com in December 1996, March 1997, and July 1998, demonstrates the respondents bona fide use of the domain name prior to the complainants registration of its mark. The respondent has never engaged in the practice of cybersquatting. The total of eight domain names he had registered are all of generic nature and related to the DVD theme. The primary reason for their registration was creating a "web of DVD sites" or a DVD community.
The respondent has not registered and used the domain name in bad faith. The respondent registered and used the domain name long before (December 2, 1996) the complainant registered her word mark with the United States Patent and Trademark Office (December 23, 1997)!
It was the complainant who approached the respondent to ask for a sale of the domain name on March 29, 2000. The primary reason for temporarily using Greatdomains.com was for keeping active DNS entries for the domains, a service which is provided free at Greatdomains.com. With the insight gained during the MBA course, the respondent felt that it might be a better business strategy to concentrate on the three core domains (dvdmarket.com, dvdnews.com, and dvdindex.com), because this would help to build brand awareness with future customers. This is why he was disposed to offer some of the other DVD-related domains for sale. By featuring these DVD-related domains on Greatdomains.com the respondent had also hoped that he could get in touch with other people involved in DVD web projects in order to explore mutual opportunities for cooperation (portal, linking strategy, etc.). The primary use of Greatdomains.com was never to sell domain names for sums substantially in excess of the registration costs. Currently, the respondent is searching for a new provider to host the web pages for his DVD domains.
The domain name was not registered in order to prevent the complainant from reflecting the mark in a corresponding domain name, since the respondent registered the domain prior to the complainants first commercial use or registration of its mark.
The respondent is not a competitor of the complainant because the respondents prior and intended use of the domain is based on business model targeting the general public interested in DVDs, not solely the home video industry (the complainants target audience), and even after the complainant launched her publication DVD NEWS the respondent has never attempted to cause any confusion with the complainants publications, in fact he was not even aware of their existence.
The domain name was not registered by the respondent in an intentional attempt to attract, for commercial gain, Internet users to the respondents web site or other on-line location, because neither the complainants publication nor their service mark existed at the time of the registration!
Contrary to the respondents claims, the respondent did not use the domain name in connection with any bona fide offering of goods or services prior to the complainants use or registration of DVD NEWS. Indeed, the respondents website was "under construction" from December 1996 to March 1997. Accordingly, the respondent was not actually offering any goods or services at his website during that time. In fact, the respondent does not appear to have used the domain name in connection with any goods or services until July 1998 -- long after the complainant had begun using the DVD NEWS mark (i.e., March 10, 1997). Moreover, it is questionable whether the respondent ever actually used the domain name in connection with any bona fide offering of goods or services as he does not provide any specimens, sales figures or other evidence showing use of the mark in commerce.
The respondents claim that he was only "parking" the domain name at the website GREATDOMAIN.COM to take advantage of their free DNS server and that his demand for $50,000 for the domain name was an "ironic" gesture "because "it was not [his] primary intention to sell [domain name]" is also disingenuous. The respondent was auctioning the domain name for sale at Great Domains.COM for $26,800. Moreover, the respondent sent the complainants attorneys a list of domain names that he was selling, which included DVDNEWS.COM as well as other "DVD" domains names. As of April 17, 2000, the respondent was offering the domain name for sale for nearly $48,000! The other domain names on the list were being offered by the respondent for between $4,000 to $26,750. It is beyond dispute that these sums are substantially in excess of the costs incurred by the respondent in registering these domain names.
The complainants registration belies the respondents claims that DVD NEWS is generic and/or descriptive since generic terms are not registrable. Moreover, due to substantial advertising, promotion and sales, DVD NEWS has acquired secondary meaning and has come to be associated in the minds of a substantial portion of the consuming public with the source of the DVD NEWS newsletter, i.e., the complainant. Accordingly, any use of the domain name -- which, as the respondent concedes, is identical to the complainants mark -- in connection with providing news about DVDs is likely to cause confusion among the consuming public as to the source of the respondents goods and/or services.
The domain name dvdnews.com is virtually identical to the complainants registered service mark DVD NEWS. This has been held in numerous cases to be sufficient for the purposes of paragraph 4(a)(i) of the Policy.
"(i) before any notice to you of the dispute, your use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services;"
Even perfunctory preparations have been held to suffice for this purpose: Shirmax Retail Ltd. v. CES Marketing Group, Inc., AF-0104; Lumena s-ka so.o. v. Express Ventures Ltd., FA00030000094375 and Royal Bank of Canada v. Xross, AF-0133.
Before the respondent had notice of this dispute (in July 2000) he registered the disputed domain name. It was initially registered by the respondent in December 1996, in the name of his then employer and subsequently transferred to him in late 1999/early 2000. In her reply, the complainant acknowledged that between December 1996 and March 1997 (while still registered in the name of Quaestus) the website was that of the respondent.
Between December 1996 and July 1998, the respondent made preparations to use the domain name in connection with a proposed offering of services involving the provision of information about DVD. Some of these preparations took place before the complainants first use in commerce (in March 1997) of the trademark which it subsequently registered. Some preparations took place after that first trade mark use. All took place before notice to the respondent of this dispute. The panel finds all of these preparations to have been in good faith.
Accordingly the complainant has failed to establish element 4(a)(ii).
The panel does not accept the respondents assertion that his business strategy was to concentrate on the three core domains (dvdmarket.com, dvdnews.com, and dvdindex.com), to help to build brand awareness with future customers because the assertion is inconsistent with all three of those names appearing on the list of names available for sale which he gave to the complainant.
The respondent offered to sell the disputed domain name to the complainant for an amount vastly in excess of registration costs, by responding as he did to the complainants offer of $500 (the respondents conduct is to be considered objectively and not by reference to his professed ironic intent) and by including the disputed domain name on the list of names available for sale that he sent to the complainant. But these offers took place years after registration of the disputed domain name. Likewise, by listing the disputed domain name with GreatDomains.com, the respondent offered the name for sale to anyone. But this also took place years after first registration.
Paragraph 4(b)(i) of the Policy provides it is evidence of bad faith registration and use if there is proved registration primarily for the purpose of profiting from sale, rent or transfer at a profit to the trademark owner or its competitor. An offer, subsequent to registration, to sell at a profit may evidence registration for that purpose. But no such finding is appropriate in the circumstances of this case, where absence of legitimate interest is not shown and registration took place years before the first use in commerce of the complainants trademark and years before the first offering for sale of the domain name.
The panel respectfully declines to find this case to be on all fours with Ellenbogan v. Pearson (D00-0001) where the domain name was registered 3 ½ years before first use of the mark and was listed (it is not clear how soon after registration) on GreatDomains.com. Although no response was filed, the respondent made it clear he wished to be rid of any association with the name and had been trying to get rid of it for over a year. The panels finding of bad faith registration facilitated an outcome desired by both parties.
The fact that the respondents registration of the domain name prevents the complainant from using the domain name corresponding to her registered trademark for her Internet services cannot not amount to bad faith under the Policy unless the respondent is shown to have engaged in a pattern of such conduct. There is no such evidence here.
The respondents registration of the domain name effectively predates the complainants registration and use of the trademark DVD NEWS. No question of constructive notice of a registered mark under 17 U.S.C. § 1072 arises.
The complainant has failed to establish bad faith registration and use.
Pursuant to paragraphs 4(i) of the Policy and 15 of the Rules, the complaint is rejected.

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