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WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
The David J. Joseph Company v. Richard F. Barry
Case No. D2000-1418
1. The Parties
1.1 The Complainant is The David J. Joseph Company having a business address of 300 Pike Street, Cincinnati, Ohio 45202, U.S.A.
1.2 The Respondent is Richard F. Barry having an address of 207 Skylark Way, Napa, California 94558, U.S.A.
2. The Domain Name and Registrar
2.1 The disputed domain name is "scrapconnect.com."
2.2 The registrar of the disputed domain name is Register.com having a business address in New York, New York, USA.
3. Procedural History
3.1 Complainant initiated the proceeding by filing a complaint, received by the WIPO Arbitration and Mediation Center ("WIPO") on October 18, 2000 by e-mai and on October 23, 2000 in hardcopy.
3.2 On November 1, 2000, all formal requirements for the establishment of the complaint were checked by WIPO and found to be in compliance with the ICANN 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 Domain Name Dispute Resolution Policy (the "Supplemental Rules"). The Panel accepts the WIPO checklist as evidence of proper compliance with the Policy, Rules, and Supplemental Rules.
3.3 On November 3, 2000, WIPO transmitted notification of the complaint and commencement of the proceedings to Respondent via e-mail, facsimile, and courier mail.
3.4 On November 22, 2000, WIPO received the Response from Respondent by e-mail and on November 27, 2000 in hardcopy.
3.5 On December 1, 2000, WIPO invited the undersigned to serve as panelist in this administrative proceeding, subject to receipt of an executed Statement of Acceptance and Declaration of Impartiality and Independence ("Statement and Declaration"). On December 1, 2000, the undersigned transmitted by facsimile the executed Statement and Declaration to WIPO.
3.6 On December 7, 2000, Complainant and Respondent were notified by WIPO of the appointment of the undersigned sole panelist as the Administrative Panel (the "Panel") in this matter. WIPO notified the Panel that, absent exceptional circumstances it would be required to forward its decision to WIPO by December 20, 2000.
3.7 On December 15, 2000, the Panel requested an extension of time to forward its decision, which WIPO granted extending the period up to and including January 2, 2001.
The Panel has not received any further requests from Complainant or Respondent regarding further submissions, waivers or extensions of deadlines, and the Panel has not found it necessary to request any further information from the parties. The proceedings have been conducted in English.
4. Factual Background
4.1 Complainant is an iron and steel scrap company dealing with metal recycling and scrap substitutes and also transportation.
4.2 Complainant operates web sites at "djjscrap.com," which is an Internet-based tracking service branded "ScrapConnect." The ScrapConnect system allows suppliers and buyers to monitor and track information regarding orders, shipments, and payments.
4.3 Complainant owns the domain names "scrapconnect.cc" and "scrapconnect.net," registered March 7, 2000 and May 28, 2000, respectively.
4.4 Complainant filed a trademark application for the mark SCRAPCONNECT with the U.S. Patent and Trademark Office ("USPTO") on June 22, 2000 alleging the date of first use of the mark anywhere and in commerce as November 30, 1998. The application is still pending with the USPTO.
4.5 The Whois information for the domain name at issue indicates that Respondent registered the "scrapconnect.com" domain name on October 12, 1999.
5. Parties’ Contentions
Complainant states in pertinent part:
"In 1997, DJJ conceived of a new and unique Internet-based tracking service for DJJ customers, which is branded "ScrapConnect." The ScrapConnect system allows DJJ suppliers and buyers to monitor and track information regarding their orders, shipments and payments."
"The ScrapConnect service has been promoted widely in the scrap industry and is associated and identified exclusively with DJJ. DJJ is the only scrap company to date to offer any Internet information service like ScrapConnect to its customers."
"In the spring of 2000, DJJ discovered that the domain name scrapconnect.com (hereinafter "the Domain Name") was registered by Respondent Richard F. Barry (hereinafter "Respondent") in October 1999. Annex 10 paragraph 5. The address www.scrapconnect.com accesses an apparently inactive website for Scrapiron.com. The only function offered by the Scrapiron website is to "Contact Us" at the email@example.com email address. Annex 15 (printout of website screen)."
"In May 2000, Mike Aronhalt, Manager of I.T., Infrastructure for DJJ, contacted Respondent by email to inquire about purchasing the scrapconnect.com domain name rather than incur the cost and expense of challenging Respondent’s rights to the name. The initial emails Mr. Aronhalt sent to Respondent did not identify his employment with the DJJ company. Annex 10 paragraphs 3-4. Mr. Aronhalt offered to buy the name for $1,000. Annex 16. Although Respondent initially denied any interest in selling, he was open to a deal when Mr. Aronhalt contacted him again on July 3, 2000. Annexes 16-17."
"A series of negotiations ensued between Mr. Aronhalt and Respondent through mid-September. Annexes 17-19. To Mr. Aronhalt’s offer of $1,000, Respondent stated on July 19, 2000, "I’m not ruling it out . . . ." Annex 17. In correspondence with Mr. Aronhalt, Respondent admitted that he owned and might sell 37 different domain names related to scrap, including scrapiron.com, scrap-iron.com, scrapdirect.com, scrapconnect.com, scrapironexchange.com, scrapmarkets.com, ironore.com, scrapirononline.com, scrapmetalonline.com, minimills.com, mini-mills.com, scrapsubstitutes.com, mini-mill.com, scrapirondirect.com, scrapironconnect.com, escrapiron.com, scrapmetalsexchange.com, scrapmetaldirect.com, scrapmetalconnect.com, ferrousmetal.com, emetalscrap.com, scrap-broker.com, scrap-metals.com, scrap-steel.com, scrap-trader.com, e-scrapmetal.com, scraptraders.com, scrap-dealer.com, scrapmatch.com, e-scrapiron.com, scraplinks.com, scraplynx.com, scrap-link.com, ferroscrap.com and scraplinx.com. Annex 17."
"Respondent suggested that Mr. Aronhalt "make me an offer" for the whole group of names. Annex 17. On July 28, 2000, Mr. Aronhalt offered to buy the entire group for $5,000. Annex 17."
"On August 12, 2000, Mr. Aronhalt had not heard from Respondent and sent an amended offer. He renewed the initial $1,000 offer for just scrapconnect.com and offered, in the alternative, to pay $5,000 for six particular names, leaving the remaining group free for Respondent to sell elsewhere. Annex 18."
"Respondent’s reply on August 15, 2000 evidenced continued interest in these offers: "Thanks for your continued interest. Let me think on it a while." Annex 18. At no time had Respondent made any specific counteroffer, and at no time did he indicate that the alternative offers of $1,000 or $5,000 were amounts beneath his consideration. Mr. Aronhalt did not contact Respondent again at this time." "After more than three weeks, on September 11, 2000, Respondent initiated contact and asked, "You still interested in scrapconnect.com?" Mr. Aronhalt repeated his last offer. Annex 19. Respondent replied the following day, "Thanks for the feedback." Annex 20. After hearing nothing more for the next week, Mr. Aronhalt sent the first email mentioning DJJ to Respondent on September 18. Informing Respondent that DJJ had been using the name ScrapConnect and held trademark rights in it, Mr. Aronhalt asked him to counter the last offer if it was not adequate. He also mentioned that DJJ owns the domain names scrapconnect.net and scrapconnect.cc. Annex 20."
"Upon learning of DJJ’s trademark rights in the name ScrapConnect, Respondent dramatically altered his position in the negotiations to that point. Annex 10 paragraph 15. On September 19, 2000, he suggested that he might buy DJJ’s domain names of scrapconnect.net and scrapconnect.cc, although he claimed no rights in them and made no offer for them. Alternatively, he offered to sell the single name of scrapconnect.com for $1.15 million dollars. He also began copying attorneys on his emails, and challenged the legal basis of DJJ’s trademark rights. Annex 21."
"On September 21, 2000, Senior Vice President Gary Muzzillo, DJJ’s Chief Information Officer, wrote to Respondent to further explain DJJ’s rights in ScrapConnect and the potential confusion caused by Respondent’s website and to counter Respondent’s exorbitant offer. DJJ made a final offer of $7,500 to Respondent which he promptly rejected. Annex 22."
"There is no evidence that Respondent has or intends to employ the name "ScrapConnect" in any legitimate use related to the scrap metal or any other business activity. Nor has Respondent ever claimed any such intent during his email discussions with DJJ. Annex 10 paragraph 17."
Respondent states in pertinent part:
"Beginning in March 1998, [Respondent] Barry started developing a business involving the sale of scrap materials in the plastics, glass, rubber, paper, used equipment, batteries, textiles, wood and iron industries. As part of Barry=s planning and research, he developed several trademarks for his business, including ScrapConnect, ScrapDirect, Scrap Broker, Scrap Trader, ScrapMarkets, ScrapSubstitutes and Scrap Dealer. Response Annex 1 paragraphs 5-7 (Declaration of Richard Barry)."
"Barry first began using the trademark AScrapConnect@ in April 1998, in connection with the business. Response Annex 1 paragraphs 4, 7-8; Response Annex 5 & 3 (Declaration of Bradford E. Willmore); Response Annex 6 & 3 (Declaration of Kevin J. Kendrick). Beginning in April 1998, Barry contacted several investment bankers and venture capitalists concerning funding his business, including Bradford E. Willmore, an investment banker and founding partner of WWC Capital, LLC, and Kevin J. Kendrick, Vice President with the Technology Ventures Group at Bechtel Enterprises Holdings, Inc."
"In April 1998, Barry discussed with these individuals his business and sought to obtain financing for the business through them, and discussed with them several different trademarks that he had developed for use in this business, including the trademark AScrapConnect.@ Response Annex 1 paragraphs 7-8; Response Annex 5 paragraph 3; Response Annex 6 paragraph 3."
"In the summer of 1998, Barry began drafting a business plan for his scrap business that was focused on the scrap iron industry. This business plan did not address Barry=s ongoing interest in developing a scrap business involving scrap in industries other than metals. Barry circulated this business plan to individuals who expressed interest in working with him or funding this business. Response Annex 1 paragraph 10; Response Annex 2 (draft business plan); Response Annex 5 paragraph 3; Response Annex 6 paragraph 4; Response Annex 7 paragraph 2 (Declaration of William Garvey)."
"In October 1998, Barry purchased the domain name scrapiron.com."
"In October 1999, Barry registered a number of domain names that reflected the trademarks he had previously developed for his business. One of those trademarks was ScrapConnect, and the domain name that he registered at that time was ScrapConnect.com. Response Annex 1 paragraph 11-12."
"From late 1999 through the present, Barry spent a great deal of time working on his business and corresponded and met with numerous individuals active or interested in the scrap iron industry; attended trade shows in the industry (such as the Institute of Scrap Recycling Industry=s (ISRI) annual trade show in March 2000); and met with journalists who focused on the scrap iron industry (such as Gloria T. LaRue, Editor-in-Chief of American Metal Market, a daily newspaper of the metals industry). Response Annex 1 paragraph 13."
"During this time period, Barry had business dealings with Scott Brenner, a product manager at Scrapsite.net, concerning how to work together in developing a market place for the scrap iron industry."
"In early 2000, Barry had detailed conversations and meetings with Robert A. Garvey, who until December 1999 had been Chairman and Chief Executive Officer of the Birmingham Steel Corporation, a $700 million company and a leading operator of mini-mills that produce steel and steel products, and previously had served as President of North Star Steel for a 12-year period during which North Star Steel became the second largest mini-mill in the United States. Barry asked Garvey to become chief executive officer of his company, and for many months Garvey and Barry spoke regularly about working together in an online business concerning scrap metals. Barry informed both Brenner and Garvey of his trademark, "ScrapConnect." Response Annex 1 paragraphs 14-15; Response Annex 7 paragraphs 1-3; Response Annex 8 paragraphs 1-3 (Declaration of Scott Brenner)."
"Barry made no efforts to sell the ScrapConnect.com domain name, as he had a bona fide intent to use this domain name in his scrap iron business. Response Annex 1 paragraph 43. However, commencing on May 28, 2000, Complainant, through one of its employees, Mike Aronhalt, began unsolicited contacts with Barry in an attempt to induce Barry to sell the ScrapConnect.com domain name. During these contacts, Complainant deceptively did not disclose Complainant’s identity, and had the employee use a non-company email address in order to hide Complainant’s identity. Response Annex 1 paragraph 16."
"When Barry received this inquiry from Aronhalt, he was working with his scrap iron business and had no interest in selling the domain name scrapconnect.com. Barry responded the same day by email that he was presently not interested in selling. Response Annex 1 paragraph 17; Complaint Annex 16."
"Despite Barry’s statement that he was not interested in selling the domain name, Aronhalt sent additional emails to Barry in an attempt to convince him to sell the domain name. Response Annex 1 paragraph 18; Complaint Annex 16."
"At about this time, there was a downturn in the stock market concerning Internet startups, and Barry became concerned about the viability of his business. Despite planning an IPO for the business, Barry’s investors decided not to go forward, and Barry’s scrap iron business ended shortly thereafter due to a lack of capital. Though Barry had not sought to sell any of the assets of his business, such as the domain names that he had registered for that business, in light of the new stock market situation and the withdrawal of Barry’s investors, he decided to explore Aronhalt’s offer and see if Aronhalt was offering a reasonable price for the sale of his domain name. Thus, two weeks later, on July 17, 2000, Barry sent an email to Aronhalt that he was willing to entertain offers. Response Annex 1 paragraph 19; Complaint Annex 17."
"On July 18, 2000, Aronhalt sent Barry an email offering $1,000 for the domain name. Response Annex 1 paragraph 20; Complaint Annex 17. Barry did not make any monetary counteroffer to Aronhalt. Instead, Barry informed Aronhalt that he had a portfolio of 37 domain names pertaining to Ascrap,@ and that he might be interested in selling them as a portfolio. In a series of emails, Aronhalt stated that he would purchase the entire portfolio for $5,000. Response Annex 1 paragraphs 21-26 & Complaint Annex 17."
"Barry did not reply to Aronhalt’s email offer, as he had decided that he probably was not interested in selling the domain names, which were assets of his business. Aronhalt sent several additional unsolicited emails to Barry, requesting that Barry sell the domain names. Barry was not interested in selling the domain names, and thus did not respond directly to these unsolicited emails. Response Annex 1 paragraph 27-29; Response Annex 3."
"When on August 12, 2000, Aronhalt sent yet another unsolicited email with a further offer to purchase the domain name, Barry still felt that he did not want to sell the domain names, but in order not to close off this avenue in case he changed his mind at some later time, he sent an email stating Let me think on it a while. Response Annex 1 && 30-31; Complaint Annex 18."
"Barry then did some research to see if he could determine why Aronhalt wanted to buy scrapconnect.com, and was not content to use some other similar domain name. His research showed that Aronhalt was an employee of The David J. Joseph Corporation. Barry was incensed that Aronhalt and Complainant had tried to deceive him and not disclose that Complainant was the entity trying to purchase the domain name. In order to show Complainant and Aronhalt that he had uncovered their deception, Barry sent an email to Aronhalt using not just his disguised email address (firstname.lastname@example.org), but also Aronhalt’s email addresses at Complainant: email@example.com. Response Annex 1 paragraphs 32-34; Response Annex 4; Complaint Annex 19."
"On September 19, 2000, Aronhalt, realizing that Barry had uncovered his deception, sent Barry an email in which for the first time Aronhalt admitted that the was acting on behalf of Complainant. Response Annex 1 paragraph 35; Complaint Annex 20."
"Barry was very angry at Aronhalt and Complainant for their attempted deception, and on September 19, 2000, sent an indignant email to Aronhalt and several other senior executives at Complainant, in which he sarcastically chastised them for the deceptive manner in which they had dealt with him. While Barry did state in this email that he would sell the scrapconnect.com domain name for $1,150,000, this was not a serious demand, as Barry knew the domain name was not worth this amount. Barry did so only to let Complainant know, in a sarcastic manner, that he was not interested in selling the domain name. Response Annex 1 paragraph 36; Complaint Annex 21."
"On September 21, 2000, Gary Muzzillo, Complainant’s Senior Vice President, sent an email to Barry, in which he made an offer to purchase the scrapconnect.com domain name for $7,500. Response Annex 1 paragraph& 37; Complaint Annex 22."
"Complainant made no further contact with Barry, until service of the complaint in this proceeding. Never, prior to filing the Complaint, did Complainant ever state to Barry that his use of the scrapconnect.com domain name infringed on any purported trademark rights of Complainant in the term "ScrapConnect," nor did Complainant ever ask Barry about Barry’s trademark rights in the mark AScrapConnect@ or when Barry first started using the mark. Response Annex 1 paragraphs 38-39."
"Barry, prior to the filing of the Complaint in this matter (and thus clearly prior to Barry’s registration of the scrapconnect.com domain name), was never aware that Complainant used the term "ScrapConnect" in its business. Response Annex 1 paragraphs 40, 42."
"Barry has never, at any time, sought to siphon business away from Complainant through the use of the scrapconnect.com domain name, never sought to confuse customers of Complainant into believing that his domain name was somehow affiliated with Complainant or had its approval. Barry did not register the domain name with any intent of selling the domain name, preventing Complainant from using the mark, disrupting the business of Complainant, or attracting visitors to a website by creating a likelihood of confusion with any trademark of Complainant. Response Annex 1 paragraph 42."
"Barry has never sold a domain name to anyone and never solicited the sale of any domain name. Barry has never used the scrapconnect.com domain name for a website, and never used the domain name commercially. Barry never posted any advertisements at that domain name address, charged a user’s fee, or did anything else at that domain name to make money. While, for a short period of time, users who typed the address www.scrapconnect.com into their browsers saw a screen which said only "www.Scrapiron.com." Contact us." "Old Industry meets the New Economy." "Soon," nothing else was ever posted at the DNS address for www.scrapconnect.com."
"At the present time, since Barry did not obtain the necessary funding for his business involving scrap iron, no screen or posting is currently available at the DNS address for www.scrapconnect.com. Barry is planning on using this domain name for an anticipated business involving scrap materials in an industry other than scrap iron. Response Annex 1 paragraphs 43-44."
6. Discussion and Findings
6.1 The Uniform Domain Name Dispute Resolution Policy (the "Policy"), adopted by the Internet Corporation for Assigned Names and Numbers (ICANN) on August 26, 1999, (with implementing documents approved on October 24, 1999), is addressed to resolving disputes concerning allegations of abusive domain name registration. The Panel will confine itself to making determinations necessary to resolve this administrative proceeding.
6.2 Paragraph 4(a) of the Policy sets forth three elements that must be established by a Complainant to merit a finding that a Respondent has engaged in abusive domain name registration, and to obtain relief. These elements are that:
(i) Respondent’s domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and
(ii) Respondent has no rights or legitimate interests in respect of the domain name; and
(iii) Respondent’s domain name has been registered and is being used in bad faith.
In the administrative proceeding, the complainant must prove that each of these three elements are present.
6.3 Complainant asserts that the domain name "scrapconnnect.com" is identical or confusingly similar to Complainant’s trademark SCRAPCONNECT.
6.4 Complainant has also proffered evidence of its use of the SCRAPCONNECT mark and its pending federal trademark application.
6.5 The Panel finds the "scrapconnect.com" domain name is identical to the SCRAPCONNECT trademark, and that the Complainant has established it has rights in the trademark, pursuant to paragraph 4(a)(i) of the Policy.
6.6 Paragraph 4(c) of the Policy lists several factors, without limitation, that if found by the Panel to be present, shall demonstrate the Respondent’s rights to and legitimate interests in the domain name. In particular, paragraph 4(c)(i) states:
(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.
6.7 Respondent registered the "scrapconnect.com" domain name on October 12, 1999 but only received notice of the present dispute "[i]n early 2000." Respondent has provided substantial evidence of his demonstrable preparations to use the domain name with a business involving the sale of scrap materials prior to receiving notice of the present dispute.
6.8 The Panel finds that the Respondent has provided evidence sufficient to rebut the Complainant’s allegations. The Panel finds that the Respondent has shown it has rights or legitimate interests in respect of the domain name "scrapconnect.com," pursuant to paragraph 4(c)(i) of the Policy.
6.9 As noted in the Second Staff Report on Implementation Documents for the Policy, "[i]t should be emphasized that a finding of legitimate right under paragraph 4(c) means only that the streamlined dispute-resolution procedure is not available and that the dispute is a ‘legitimate’ one that should be decided by the courts." See Metabolife International v. Spectrum Labs, WIPO Case No. D2000-0509, July 23, 2000.
6.10 Paragraph 4(b) of the Policy lists several factors, without limitation, that if found by the Panel to be present, shall be evidence of the registration and use of a domain name in bad faith.
6.11 Because the Panel has determined that Respondent has a right or legitimate interest in respect of the domain name at issue, there is no need to determine whether the Respondent has registered and is using the domain name at issue in bad faith. See Plan Express Inc. v. Plan Express, WIPO Case No. D2000-0565, July 17, 2000.
As the Complainant, The David J. Joseph Company, has not proven that the Respondent, Richard F. Barry, has no rights or legitimate interests in respect of the domain name "scrapconnect.com" (Policy, paragraph 4(a)(ii)), the Complainant’s request for transfer to it of the domain name "scrapconnect.com" is denied.
R. Eric Gaum
Dated: January 2, 2001