Source: https://www.wipo.int/amc/en/domains/decisions/html/2005/d2005-0038.html
Timestamp: 2019-04-21 08:09:43+00:00

Document:
The Complainant is Valve Corporation, Bellevue, Washington, United States of America, represented by Preston Gates & Ellis, LLP, United States of America.
The Respondent is ValveNET, Inc., Charles Morrin, Houston, Texas, United States of America.
The disputed domain name <valve.com> is registered with Network Solutions, LLC.
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on January 12, 2005. On January 14, 2005, the Center transmitted by email to Network Solutions, LLC a request for registrar verification in connection with the domain name at issue. On January 14, 2005, Network Solutions, LLC transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details for the administrative, billing, and technical contact. The Center verified that the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy”), the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the “Supplemental Rules”).
In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on January 18, 2005. In accordance with the Rules, paragraph 5(a), the due date for Response was February�7, 2005. The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on February 9, 2005. On February 11, 2005, the Respondent communicated by email with the Center, indicating a desire to submit a response. The Respondent was advised by the Center on February 14, 2005, that any late response submitted to the Center would by transmitted to the Panel, subject to the Panel’s determination whether to admit or consider the late response, or to order further procedural steps.
The Center appointed William R. Towns as the sole panelist in this matter on February�14, 2005. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.
After receiving and reviewing the case file, the Panel determined that additional information was necessary to its deliberations, and to this end an Administrative Panel Order was issued requesting further information. The parties have provided such further submissions as they deem appropriate, and the Administrative Record is closed.
The Complainant is an entertainment software company founded in September 1996, by a group of veteran Microsoft executives and engineers. The company has produced a string of commercially successful and critically acclaimed software games, the first of which, Half-Life, was released in November 1998.1 The Complainant has obtained multiple registrations of the VALVE mark with the United States Patent and Trademark Office relating to computer software and game programs. The first of these registrations was issued on December 1, 1998. The trademark registration indicates that the date of the Complainant’s first use of “VALVE” was August 24, 1996. The first use of the VALVE mark in commerce occurred on December 18, 1997. 2 The Complainant has confirmed that its first use of “VALVE” for any purpose occurred on August 24, 1996.
The Respondent3 registered the disputed domain name <valve.com> on August�18,�1995. The domain name resolves to a website maintained by the Respondent, “www.valve.com”, described as a “free web site for information on industrial/commercial flow control valves and related products/services.” 4 It appears that the Respondent launched this website a short time after registering the domain name, as the website contains a copyright legend dated 1996. Through a hyperlink to “ValveNET, Inc.” on the website’s home page, the Respondent offers email access and website hosting for flow control related companies, utilizing the <valve.com> domain. Other hyperlinks lead to pages under construction, where the Respondent offers to display interested companies’ products and services. Apparently there have been no takers. The website reflects it was last updated by the Respondent on April 4, 1999.
The Respondent indicated that he should be concluding discussions with other parties regarding the sale of the domain name by mid-January 2005, and requested a response from the Complainant before then. According to the Respondent, the Complainant offered to purchase the domain name on December 30, 2004, for the sum of $5,000.00. The Complaint in this matter subsequently was filed with the Center on January�12,�2005, and appears to have been the first notice to the Respondent of this dispute.
The Complainant asserts that it has used the VALVE mark since August 24, 1996, in connection with the development and marketing of its computer game programs. The Complainant describes itself as one of the world’s leading developers of computer software games, which have been the subject of awards and accolades within the gaming community.
The Complainant has filed and obtained multiple registrations for the VALVE mark with the United States Patent and Trademark Office in respect of computer game programs and related computer software (collectively referred to as the “VALVE registrations”). The earliest of these registrations was granted on December 1, 1998.6 Complainant is the owner of all right, title and interest in and to the VALVE registrations, which are valid and subsisting, in full force and effect, and by virtue of federal registration, presumptively valid under the Policy. See Busy Body, Inc. v. Fitness Outlet Inc., WIPO Case No. D2000-0127.
The disputed domain name is identical or confusingly similar to the Complainant’s registered VALVE trademark. See Paccar Inc. v. Telescan Technologies, L.L.C., 115 F. Supp. 772 (E.D. Mich. 2000); Quixtar Investments Inc. v. Dennis Hoffman, WIPO Case No. D2000-0253. The Complainant further asserts that the Respondent has no rights or legitimate interests in respect of the disputed domain name. There is no relationship between the Complainant and the Respondent. The Complainant has not licensed Respondent to use its trademark, and no other permission or consent has been granted the Respondent to use the Complainant’s trademark or to apply for any domain name incorporating this mark. According to the Complainant, the Respondent, while having adopted the name ValveNET, Inc., has never been commonly known by the disputed domain name.
The Complainant also alleges that the Respondent is not using the disputed domain name in connection with a bona fide offering of goods or services. Even assuming that the Respondent registered the domain name with the wish to develop a portal for the valve industry, which the Complainant disputes, by the Respondent’s own admission he has long since abandoned any such interest. Further, while the Respondent’s website purports to provide links to other sites providing flow control information, in fact the links all lead to parking pages. Merely including a link to an unrelated commercial site does not constitute use of a disputed domain name in connection with a bona fide offering of goods or services. PRIMEDIA Magazine Finance, Inc. v. Manzo, WIPO Case No. D2001-1258.
The Complainant argues that the domain name was registered and is being used by the Respondent in bad faith. Respondent has obviously been aware of Complainant’s company and trademark rights for some time, and it is clear that Respondent’s primary goal is to sell the <valve.com> domain name to Complainant for valuable consideration in excess of the Respondent’s out-of-pocket costs directly related to the domain name. Respondent is making no active use of the domain name, and the Respondent’s “passive holding” of a domain name can indicate bad faith registration and use, particularly when other factors tending to show bad faith are present. See, e.g., Telstra Corporation Limited. v. Nuclear Marshmallows, WIPO Case No. D2000-0003. According to the Complainant, the Respondent’s attempts to coerce Complainant into paying an exorbitant price for a domain name the Respondent acknowledges is identical to the Complainant’s mark, by dropping veiled threats that he would sell the domain name to one of Complainant’s competitors if his price is not met, is palpable evidence of such bad faith.
The Respondent did not formally reply to the Complaint within the time provided under the Policy and Rules. However, in email communications with the Complainant preceding the filing of the Complaint, the Respondent indicated that his original intention in registering the disputed domain name in 1995, was to use <valve.com> as a portal website in relation to the flow control industry, an undertaking which “other things” had prevented him from pursuing. He also noted being approached by the Complainant in 1998 or 1999, regarding the availability of the domain name.
In a supplemental response requested by the Panel’s Administrative Order, the Respondent claims that the website to which the disputed domain name resolves has existed for more than nine years. The Respondent contends that the lack of any substantial changes or additions to the website since April 1999, should not be construed as an abandonment of either the website or the Respondent’s original goal of creating an industrial/commercial valve portal site. Further, the Respondent asserts that the website provides Internet visibility for ValveNET, Inc., and has enabled the company to come into contact with potential overseas customers.
Regarding the Complainant’s position that the Respondent is attempting to extort an exorbitant price for a domain name because it is identical to the Complainant’s mark, the Respondent asserts that, based on an appraisal obtained from GreatDomains.com in February 2000, the disputed domain name has a value of at least $75,000 to $100,000. The Respondent indicates he obtained the appraisal in the hopes of attracting investors to fund the creation of the portal website, but that he has never been able to do so due to constraints on his time and lack of funding. He asks the Panel to consider why, if his primary purpose in registering the domain name was to sell it, the domain name has never been advertised for sale on the website it resolves to. Finally, because the website to which <valve.com> resolves reflects that it is provided by ValveNET, Inc., the Respondent urges that over the years the company has come to be commonly known by the domain name.
The Policy is addressed to resolving disputes concerning allegations of abusive domain name registration and use. Milwaukee Electric Tool Corporation v. Bay Verte Machinery, Inc. d/b/a The Power Tool Store, WIPO Case No.�D2002-0774. Accordingly, the jurisdiction of this Panel is limited to providing a remedy in cases of “the abusive registration of domain names”, also known as “cybersquatting”. Weber-Stephen Products Co. v. Armitage Hardware, WIPO Case No.�D2000-0187. See Report of the WIPO Internet Domain Name Process, Paragraphs�169 & 170. Rule 15(a) provides that the Panel shall decide a complaint on the basis of statements and documents submitted and in accordance with the Policy, the Rules and any other rules or principles of law that the Panel deems applicable.
The Respondent acknowledges that the disputed domain name <valve.com> is identical to the Complainant’s VALVE mark. On that issue there is no dispute. The Panel notes, however, that the Respondent registered the disputed domain name more than a year before the Complainant’s first use of the VALVE mark, and several years before the Complainant’s initial federal registration of the mark. Thus, it is clear that the Complainant had established no trademark rights in the VALVE mark at the time the Respondent registered the disputed domain name. Under such circumstances, can the Complainant meet its burden of proof under Paragraph 4(a)(i) of the Policy?
Paragraph 4(a)(i) does not expressly require that a complainant demonstrate that it had rights in a trademark or service mark prior to the respondent’s registration of the disputed domain name. Instead, the Policy refers to the complainant’s ownership of trademark rights in the present tense. See PC Mall, Inc. v. Pygmy Computer Systems, Inc., WIPO Case No. D2004-0437. In recognition of this, a number of cases have held that a complainant can have rights in a trademark or service mark corresponding to the domain name even where those rights first arose after the registration of the domain name. See, e.g., Digital Vision, Ltd. v. Advanced Chemill Systems, WIPO Case No. D2001-0827; Kangwon Land, Inc. v. Bong Woo Chun (K.W.L. Inc), WIPO Case No. D2003-0320; AB Svenska Spel v. Andrey Zacharov, WIPO Case No. D2003-0527; Iogen Corporation v. Iogen, WIPO Case No. D2003-0544; Madrid 2012, S.A. v. Scott Martin-MadridMan Websites, WIPO Case No. D2003-0598. Still, not all Panels have embraced this interpretation of Paragraph 4(a)(i). See Roberta Chiappata dba Discount Hydroponics v. C.J. Morales, WIPO Case No. D2002-1103.
This Panel is persuaded that Paragraph 4(a)(i) embodies no requirement that the complainant’s trademark rights must have arisen before the disputed domain name was registered. Thus, the Panel finds in this case that the disputed domain name is identical or confusingly similar to the Complainant’s mark under Paragraph 4(a)(i) of the Policy. While the Panel concludes that this factor is not relevant in determining whether a complainant has established rights in a mark to which the domain name is identical or confusingly similar, it is indeed relevant for purposes of Paragraphs 4(a)(ii) and 4(a)(iii) of the Policy, as is addressed below. See, e.g., N�ofumomais, Cl�nica de Homeopatia Antitab�gica, Lda. v. Re-Surgir - Consultores em Desenvolvimento Individual e Organizacional, Lda., WIPO Case No. D2004-0399.
In asserting that the Respondent lacks rights or legitimate interests in the disputed domain name, the Complainant argues that the Respondent long since discontinued any active use of the website to which the domain name resolves, and is merely holding the domain name passively, while blatantly attempting to coerce the Complainant into paying an exorbitant amount for the domain name, which the Respondent acknowledges is identical to the Complainant’s mark. The Respondent has been aware of the Complainant and its mark since at least 1998, and the Complainant concludes that the Respondent’s claim to have registered the domain name to create a valve industry web portal is pretextual, and that the Respondent’s true intent in registering the domain name, even if he was unaware of the Complainant’s mark at the time of the registration, was the hope that someday he could capitalize on the trademark or service mark value inherent in the domain name by selling the domain name at an exorbitant price.
The Policy is designed to curb the abusive registration of domain names in circumstances where the registrant is seeking to profit from and exploit the trademark of another. Match.com, LP v. Bill Zag and NWLAWS.ORG, WIPO Case No. D2004-0230. In the Panel’s opinion, the circumstances set forth in the Complaint are sufficiently evocative of cybersquatting to require the Respondent to come forward with evidence under Paragraph 4(c) of the Policy demonstrating rights to or legitimate interests in the disputed domain name. While the Panel does not believe that the Respondent has made a sufficient showing that ValveNET, Inc. has been commonly known by the disputed domain name, there clearly is evidence in the record regarding the Respondent’s use of the domain name, prior to any notice of the dispute,7 in connection with a website on which the Respondent has and continues to offer email and website hosting and to offer to display the products and services of flow control related companies.
This showing, without more, however, is not sufficient to establish the Respondent’s rights or legitimate interests in the disputed domain name under the Policy. Paragraph�4(c)(i) requires that the Respondent’s use of the domain name be in connection with a bona fide offering of goods or services. In determining whether an offering of goods or services is bona fide under Paragraph�4(c)(i), the critical question often becomes whether the use of the disputed domain name in connection with the offering otherwise constitutes bad faith registration or use of the domain name under Paragraphs�4(a)(iii). See, e.g., First American Funds, Inc. v. Ult.Search, Inc, WIPO Case No. D2000-1840 (for offering under Paragraph�4(c)(i) to be considered bona fide, domain name use must be in good faith under Paragraph�4(a)(iii)). The bad faith issue is addressed below.
As discussed above, the Complainant asserts that the particular circumstances in this case are indicative of the Respondent’s bad faith registration of the disputed domain name under Paragraph 4(c)(i). The Complainant’s bad faith argument essentially is that the Respondent’s purported use of the domain name in connection with a portal website for the flow control industry is pretextual, as evidenced by the lack of any actual use of the website for that purpose, and as revealed by the Respondent’s recent attempts to capitalize on the trademark or service mark value inherent in the domain name by selling the domain name to the Complainant or one of its competitors at an exorbitant price.
The Respondent’s opportunistic conduct as noted above notwithstanding, under Paragraph 4(b)(i) the offer to sell a domain name does not constitute bad faith unless the seller registered the mark primarily for the purpose of capitalizing on the trademark or service mark value inherent in the name by selling it to the mark owner or its competitors. Under the Policy, it remains the Complainant’s burden to establish such bad faith registration. See Allocation Network GmbH v. Steve Gregory, WIPO Case No.�D2000-0016. Selling a domain name, even at an exorbitant price, is not per se prohibited by the Policy. Rather, selling of domain names is prohibited by the Policy only if the other elements of the Policy are also violated. Match.com, LP v. Bill Zag and NWLAWS.ORG, WIPO Case No. D2004-0230; Manchester Airport PLC v. Club Club Limited, WIPO Case No. D2000-0638.
The Complainant argues that the Respondent’s bad faith registration of the domain name may be inferred from the Respondent’s failure to make any active use of the website to which the domain name resolves. The Respondent’s website clearly is not a functional portal, and the website has not been updated since April 1999. The Complainant thus asserts that the Respondent is engaged in the passive holding of the domain name, which under certain circumstances may support an inference of bad faith. See Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No.�D2000-0003.
The Complainant’s reliance upon Telstra in the circumstances of this case is misplaced. As noted in the Telstra decision, Paragraph 4(a)(iii) clearly requires bad faith registration and use of a domain name before the Policy can be invoked. This requirement is “satisfied only if the Complainant proves that the registration was undertaken in bad faith and that the circumstances of the case are such that Respondent is continuing to act in bad faith.” Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No.�D2000-0003 (emphasis in original). Under the Telstra analysis, passive holding of a domain name may support a finding of bad faith use where it is not possible to conceive of any plausible actual or contemplated active use of the disputed domain name that would not be illegitimate. But a finding that the domain name “has been registered in bad faith” can be reached in reliance upon Telstra only where the totality of the circumstances persuades the Panel that the primary motive for the respondent’s acquisition of the disputed domain name was cybersquatting.
The critical circumstances that supported a conclusion of bad faith registration in Telstra are absent in this case. In Telstra, the complainant’s mark had a strong reputation and was well known at the time of the registration of the domain name, a fact which the respondent was aware of. The TELSTRA mark was an invented word and not susceptible to use in a generic sense. The Telstra Panel also noted that the respondent in that case had taken active steps to conceal its true identity, including actively providing false contact information to the domain name registrar, and the respondent had provided no evidence whatsoever of any actual or contemplated good faith use of the domain name. The totality of such factors led the Telstra Panel to conclude that there was no conceivable use for which the Respondent could have registered the domain name that “would not be illegitimate, such as by being a passing off, an infringement of consumer protection legislation, or an infringement of the Complainant’s rights under trademark law.” Id.
This Panel is not persuaded by the totality of the circumstances in this case that the Respondent’s primary motive for the registration of the disputed domain name was cybersquatting. When the Respondent registered the disputed domain name <valve.com> on August 18, 1995, the Complainant clearly had not established any rights in its VALVE mark. In fact, the Complainant would not even come into corporate existence until more than a year after the registration, nor make any use of the mark prior to August 24, 1996. And while the VALVE mark may be distinctive in relation to the Complainant’s computer software and game programs, it nonetheless is a common English word frequently used in its generic sense, a sense clearly conveyed by the Respondent’s use of the domain name for some nine years in relation to a website directed to the flow control industry.
The primary rule in relation to domain name registrations is “first come, first served,” to which the UDRP provides a narrow exception. But it is not a per se breach of the Policy to register another’s trademark as a domain name where the trademark also is a generic word. Macmillan Publishers Limited, Macmillan Magazines Limited and HM Publishers Holdings Limited v. Telepathy, Inc, WIPO Case No. D2002-0658. The Complainant has provided no evidence that the Respondent has engaged in an abusive pattern of registering domain names to prevent trademark owners from reflecting their marks in corresponding domain names, or that the Respondent registered the disputed domain name primarily for the purpose of disrupting the Complainant’s business, or to attract internet users to the Respondent’s website by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship, affiliation, or endorsement of the Respondent’s website.8 Under the totality of the circumstances presented in this case, the Panel is unable to conclude that when the Respondent registered the disputed domain name more than nine years ago, he did so primarily for the purpose of attempting to profit from the goodwill associated with the Complainant’s mark. See Match.com, LP v. Bill Zag and NWLAWS.ORG, WIPO Case No. D2004-0230.
The Panel recognizes that the overriding objective of the Policy is to prevent abusive domain name registration and use for the benefit of legitimate trademark owners. The Panel also notes that the examples of bad faith registration and use set forth in Paragraph�4(b) are not meant to be exhaustive of all circumstances from which such bad faith may be found, and for this reason Panelists should closely scrutinize the circumstances of a respondent’s behavior. See Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No.�D2000-0003. Nevertheless, it is paramount that Panelists decide cases based on the very limited scope of the Policy. Match.com, LP v. Bill Zag and NWLAWS.ORG, WIPO Case No. D2004-0230. The Policy provides a remedy only in cases where the complainant proves that the domain name “has been registered and is being used in bad faith”. Paragraph 4(a)(iii) (emphasis added). For the reasons set forth above, the Complainant has not met its burden under Paragraph 4(a)(iii) in this case.
1 This source of this information is the Complainant’s Press Kit, which may be accessed from the Complainant’s website, “www.valvesoftware.com”. The Complainant registered the corresponding domain name, <valvesoftware.com>, on October 6, 1996, according to information contained in the InterNIC Whois database.
2 USPTO Reg. No. 2,207,625, for the mark VALVE and Design, was issued on December 1, 1998 to Valve, L.L.C., and subsequently assigned to the Complainant. The corresponding trademark application was filed on April 27, 1997, initially on an intent-to-use basis. The Complainant is wholly owned by Valve, L.L.C., according to the Complainant’s Press Kit.
3 The domain name was registered by ValveNET, Inc. Charles Morrin is listed as the administrative contact. The Complaint identifies ValveNET, Inc. and Charles Morrin collectively as the Respondent.
4 See Complaint, Exh. D. On the website, ValveNET, Inc. is represented as “the only internet presence provider dedicated exclusively to the flow control industry”.
5 The above referenced email communications have been reproduced as Exh. C to the Complaint.
6 The Complaint refers to (1) Registration No. 2,207,625 for VALVE and Design on December 1, 1998, in respect of “computer game software”; (2) Registration No. 2,404,074, for VALVE on November 14,�2000, in respect of “computer game programs; computer software used to create three dimensional multimedia environments for use in creating computer game programs”; and (3) Registration No. 2,702,217, for VALVE HAMMER EDITOR on April 1, 2003, in respect of “computer software for use in creating, editing and viewing three dimensional computer graphics and environments”.
7 There is no evidence in the record that the Respondent had received any notice of this dispute until being served with the Complaint on January 18, 2005. The Complainant appears to acknowledge contacting the Respondent concerning the domain name in 1998, but apparently did not issue any cease and desist letter to the Respondent between the time of this first contact and the filing of the Complaint on January�12, 2005.
8 The Complainant suggests that the Respondent should be found in bad faith under Paragraph 4(c)(iv) because he is offering to sell the domain name to one of the Complainant’s competitors, who might then use the domain name to attract internet users to its website by creating a likelihood of confusion with the Complainant’s mark. Paragraph 4(c)(iv) applies only in situations where a respondent intentionally seeks to attract Internet users to its website by creating a false association between the complainant’s mark and the respondent’s website. There is no evidence of such in the record.

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