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WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
SMS Demag AG v. Seung Gon, Kim
Case No. D2000-1434
1. The Parties
The Complainant is SMS Demag AG, a German corporation of Eduard-Schloeman-Str 4, D-40237, Dusseldorf, Germany. The Complainant is represented by Mr Lance J Lieberman of Cohen, Pontani, Liebermann & Pavane of New York, USA.
The Respondent is Seung Gon, Kim of 204-04-506, Lucky Apt, Jangsung-dong 1354, Bug-Gu, Pohana, Korea. The Respondent represents himself. The disputed domain name is registered in the name of SMS Demag Co. Ltd ("the Company"). However, the Complainant alleges, and the Respondent concedes, that registration of the domain name by the company was "a mistake" and that Seung Gon, Kim is the correct Respondent.
2. The Domain Name and Registrar
The disputed domain names are <smsdemag.com> and <sms-demag.com>. The Registrar is Network Solutions Inc., of Herndon, Virginia, USA ("the Registrar").
3. Procedural History
This is an administrative proceeding pursuant to the Uniform Domain Name Dispute Resolution Policy ("the Policy") adopted by the Internet Corporation for Assigned Names and Numbers ("ICANN") on August 26, 1999, in accordance with the Rules for the Policy, approved by ICANN on October 24, 1999 ("the Rules") and the Supplemental Rules for the Policy ("the Supplemental Rules") of the WIPO Arbitration and Mediation Center ("the Center").
The Complaint was received by the Center on October 20, 2000 (electronically) and October 23, 2000 (hard copy). The Complainant requested a three member panel.
On October 26, 2000, the Center sought registration details from the Registrar. On October 29, 2000, the Registrar advised that the registrant of the disputed domain name is the Company; the Administrative, Technical, Zone and Billing Contact is Seung Gon, Kim at the above address; the Registrar’s 5.0 Service Agreement is in effect (which incorporates the Policy and requires the registrant to submit to a properly initiated complaint under the Policy); that the status of the disputed domain names are "active".
On November 1, 2000 the Center satisfied itself that the Complainant had complied with all formal requirements, including payment of the prescribed fee. It formally notified the Respondent by post/courier, facsimile and email of the Complaint and of the commencement of this administrative proceeding and sent copies to the Complainant, the Registrar and ICANN.
The formal date of the commencement of the proceeding was accordingly November 1, 2000. The last day specified in the notice for a Response was November 20, 2000. The deadline for Response was extended to December 6, 2000. On December 4, 2000 a Response was filed by email and on December 8, 2000 in hard copy. In his Response, the Respondent alleged reverse domain name hijacking by the Complainant.
On January 9, 2001 the Center notified the parties of the appointment of the panel, all three members having submitted a Statement of Acceptance and Declaration of Impartiality. The Center nominated January 22, 2001 as the date by which, absent exceptional circumstances, the Panel is required to forward its decision to the Center.
The language of the proceeding is English.
The Panel is satisfied that the Complaint was filed in accordance with the requirements of the 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 specified by the Rules and the three member administrative panel was properly constituted.
4. Factual Background
SMS Demag AG was officially formed on September 1, 1999 when SMS Schloemann-Siemag AG formally merged with the metallurgical division of Mannesmann Demag AG. SMS Schloemann-Siemag AG was established 125 years ago, and Demag, the predecessor of Mannesmann Demag AG, dates back to 1926. SMS Demag AG is a world leader in the engineering of industrial plants and equipment for the steel, aluminium and copper industries. The new company offers complete steelworks, continuous casting, rolling mills and tube technology used in a wide variety of manufacturing and engineering fields. SMS Demag has offices in forty-six (46) countries on six (6) continents, employing over 6,600 people worldwide. In 1998-1999, its combined total worldwide sales – i.e., the 1999 sales of SMS Schloemann-Siemag AG and Mannesmann Demag AG before the merger, plus the sales of SMS Demag after the merger, were approximately $7360 million D Marks. SMS Schloemann-Siemag AG and its predecessors in interest, have exclusively used the SMS trademark in connection with the sale of various industrial machinery and related services since 1980. Since that time, it has continuously used the SMS mark worldwide and in 1981 applied for and subsequently obtained U.S. Trademark Registration No. 1330533 for this mark. SMS Schloemann-Siemag AG obtained a German registration of its SMS trademark in 1981 (German Trademark Registration No. DT01018260).
Mannesmann Demag AG and its predecessors in interest have exclusively used the trademark DEMAG since 1913 in connection with various industrial machinery and related services. Since that time, it has continuously used the DEMAG mark worldwide. In 1913, 1914 and 1995, it applied for a subsequently obtained U.S. Trademark Registrations No. 0094274, No. 0099145, No. 0099289 and No. 2029904 for this mark and stylized versions thereof. Mannesmann Demag AG and its predecessors also obtained German trademark registrations for the DEMAG mark and stylized version thereof in 1911, 1918, 1920, 1982 and 1997. (German Trademark Registrations No. DD141776, No. DE39717146, No. DT00141776, No. DT00224279, No. DT00253944 and No. DT01036654). Mannesmann Demag AG and its predecessors obtained trademark registrations for the DEMAG mark in over 30 additional countries.
As a result of the exclusive, continuous and worldwide use of the SMS and DEMAG marks, these marks are famous and distinctive throughout the world, particularly in the metallurgical and engineering industries.
The merger of SMS Schloemann-Siemag AG and Mannesmann Demag AG was announced on December 14, 1998 in a formal written press release which stated that the new company would operate under the name SMS Demag AG. The press release was, in turn, reported by various news agencies on December 15, 1998. SMS Demag AG has not yet filed for registration of the SMS DEMAG mark: it has used its trade name openly and conspicuously to identify and "brand" its goods and services since the formation of SMS Demag AG in September 1999.
SMS Schloemann-Siemag has customers worldwide, including in South Korea. One such customer is Pohang Iron & Steel Co. ("POSCO"), located at 1 Koedong-dong, Nam-Ku, Pohang City, Kyoungsangbuk-do, 790-600, Korea. Respondent has been and continues to be an employee of POSCO since at least 1997, which includes the time during which SMS Schloemann-Siemag AG and Mannesmann Demag AG discussed and finally announced their intentions to merge and form the Complainant corporation. The Respondent registered the two disputed domain names on December 16, 1998 under "SMS Demag Co., Ltd.," an entity which does not represent any ongoing or existing business. The disputed domain names have never been used to deliver content on the internet.
The Respondent on April 20, 2000 sent an unsolicited letter by facsimile to the Complainant’s Korean agent CTC Clover Trading Co., Ltd offering to sell the disputed domain names <smsdemag.com> and <sms-demag.com> to Complainant SMS Demag AG for $1,200,000 USD. The fax was sent from POSCO’s fax number. In response, Complainant asked POSCO to intervene on its behalf to request that the Respondent surrender the domain names. He refused.
5. Parties’ Contentions
A. Identity or Confusing Similarity
The Complainant alleges that the disputed domain names are a combination of the registered marks which SMS and Demag both have used worldwide for years. It also alleges that the disputed domain names are identical to the common-law mark used by the Complainant since the merger.
The Respondent alleges that the marks are not identical but are similar. He alleges, however, that they are not confusingly similar because the marks are applicable to industrial machinery and related services whereas the disputed domain names are for the sale of computer software and related services. Further, that there exist other internet domain names identical to the Complainant’s marks, e.g. the sites <sms.to>, <sms.net>, <sms.cs.com> and <demag.comcom>. Also that many identical and similar marks registered in both the United States and Korea, have included the letters SMS or Demag. Further, the disputed domain names are generic, not able to be the subject of trademark infringement claims.
A. Legitimacy of Respondent’s Use
The Complainant alleges that the Respondent has no rights to use its marks. Further, that the Respondent, as an employee of a large customer of SMS would have been aware of the proposed merger. He registered the domain names in the name of a company with the name of the merged entity two days after the merger was announced.
The Respondent alleges in a lengthy document:
(a) Since 1995, after graduating with a degree in Computer & Communications engineering, he and four others planned to develop software and manage computer systems and networks.
(b) At the end of 1998, he and his colleagues formed SMS Demag Co. Ltd to develop the software. The name represented "System Management Software for Damage Eliminable Magician" – a title allegedly appropriate to the distinctive software which the Respondent wished to develop.
(c) In January 1999, the company name was changed to Nkiaka Corporation "for a better impression of information technology related nature of the company to investors".
(d) Although the company name was changed, the members of the company continued to retain the disputed domain names "as expression of distinction of Nkia’s products".
(e) After the foundation of Nkia, to which the Respondent is technical adviser, the Respondent opened a homepage "offering contents in the explanation of SMS Demag which is the distinctive feature of the product and the fact that product development had been in progress". The Respondent claimed that the homepage had attracted visitors.
(f) Nkia registered a domain name <nkia.co.kr> in Japan in January 2000 at which "Omniworker", Nkia’s first product, was developed. Nkia’s homepage was intended to be made accessible from the disputed domain names. However, due to the Respondent’s mistake, switching the disputed domain names to the Nkia homepage has not been possible since May 2000.
(g) Omiworker, developed by Nkia, has had publicity in the "Electronic Times" of March 27, 2000.
(h) SMS Demag AG was not registered until September 1, 2000 and therefore no infringement of the combined marks is possible.
C. Bad Faith
The Complainant alleges that bad faith registration can be inferred from the coincidence of the registration of the disputed domain names two days after a proposed merger of SMS and Demag was announced. The inference is all the stronger because the Respondent was at the time an employee of one of SMS’s very large customers. It alleges further that the fact that there was no meaningful website for the domain names is proof of bad faith use, as is the Respondent’s offer to sell the domain names for an exorbitant price.
The Respondent alleges that he registered the domain names and the Company, unaware of the proposed merger, but that the registration of the Company was "a mistake and not intended". Also, the Respondent’s business has nothing to do with the Complainant’s. That the failure of accessibility for the domain names since May 2000 was due to an error.
6. Discussion and Findings
To qualify for cancellation or transfer, a complainant must prove each element of paragraph 4(a) of the Policy, namely:
(i) the disputed domain names are identical or confusingly similar to a trademark or service mark in which the Complainant has rights;
(ii) the Respondent has no rights or legitimate interests in respect of the domain names; and
(iii) the disputed domain names have been registered and are being used in bad faith.
The Panel considers that the disputed domain names are identical to a combination of the registered marks of the Complainant. The claim for infringement of an unregistered mark is hardly sustainable since the formal merger of SMS Demag did not occur until September 1, 2000.
Paragraph 4(c) of the Policy sets out, without limitation, circumstances which, if proved, establish the registrant’s rights or legitimate interests to the disputed domain names. The Complainant has the onus of proof on this, as on all issues. The Complainant has not given the Respondent any rights to use the disputed domain names.
The critical question is whether the Respondent was aware of the Complainant’s marks before he registered the domain names.
The Panel finds that the Respondent’s explanation defies credibility. He was quite
entitled to set up a computer business such as Nkia, but was not entitled to use
the Complainant’s marks when doing so. The Panel considers that the co-incidence
of the registration of the domain names – by a company called SMS Demag Co. Ltd
– two days after the proposed merger is compelling evidence. Particularly,when the
Respondent was an employee of a large customer of SMSDemag.The Panel considers
the second element proved. The explanation for the letters SMSDemag is far-fetched.
The Panel considers that the domain names are registered and are being used in bad faith. Registration shortly after a merger announcement of a name which reflects the projected new entity is a well-known example of opportunistic cybersquatting. (See WIPO Decisions London Metal Exchange Ltd v. Hussain D2000-1388 and Pharmacia & Upjohn AB v. Monsantopharmacia.com Inc D2000-0446).
The Panel is sceptical about the Respondent’s reason for there being no website access accorded by the disputed domain names. However, bad faith use is clearly demonstrated by the Respondent’s offer to sell the disputed domain names to the Complainant at an enormous price.
The Panel is unimpressed with the Respondent’s claim of reverse domain name hijacking which has no substance and which is rejected.
The Panel determines that:
(a) The disputed domain names are identical to the Complainant’s marks.
(b) The Respondent has no rights or legitimate interests in respect of the domain names.
(c) The disputed domain names have been registered and are being used in bad faith.
(d) There is no justification in the Respondent’s claim of reverse domain name hijacking.
The Registrar is required to transfer the domain names <smsdemag.com> and <sms-demag.com> to the Complainant.
Hon. Sir Ian Barker QC
Thomas Hoeren Moon Sung Lee
Dated: January 19, 2001