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WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Freedom Flag, Inc., dba Falls Flag & Banner Co. v. Flags Unlimited
Case No. D2002-0478
1. The Parties
The Complainant is Freedom Flag, Inc., dba Falls Flag & Banner Co. ("Complainant"). Complainant is incorporated in the State of Ohio, United States of America and has its principal place of business at 192 E. Cuyahoga Falls Avenue, Akron, Ohio 44310, United States of America.
The Respondent is Flags Unlimited, Tim Mohney ("Respondent"), with an address of 2035 28th St. SE, Grand Rapids, Michigan 49508, United States of America.
2. The Domain Names and Registrar
The domain name at issue is <waverite.com> (the "Domain Name"), which is registered with Network Solutions, Inc., of 505 Huntmar Park Drive, Herndon, Virginia 20170, United States of America (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").
A complaint was submitted to the Center by the Complainant on May 21, 2002. The Center acknowledged receipt of the complaint on May 23, 2002. On May 24, 2002, the Registrar verified that the domain name was registered to the Respondent, that the domain name is subject to the Policy, and that the domain name is currently active. On May 31, 2002, the Center conducted its review and verified that the complaint satisfies the formal requirements set out in the Policy, the Rules and Supplemental Rules. On this same date, the Center informed Respondent that an administrative proceeding had been commenced against it and set the date for reply as June 24, 2002. The Respondent did not submit a response. On June 24, 2002, a Notification of Default was sent to the Respondent. On July 10, 2002, having received Mr. Arif Hyder Ali’s Declaration of Impartiality and Independence and his Statement of Acceptance, the WIPO Center transmitted a copy of the complaint to Mr. Ali. The date of decision was set for July 24, 2002. On July 19, 2002, pursuant to Rule 10 C, and due to a delay in shipping the electronic case file to the Panel by courier, the decision date was extended to July 31, 2002. On July 23, 2002, in accordance with Paragraph 12 of the Policy, the Panel requested the Complainant to provide further documentation evidencing its common law or other rights in the contested name "WAVE-RITE" prior to the date of August 12, 1999. On July 24, 2002, the Complainant submitted its additional evidence in response to the Panel’s request.
4. Factual Background
Complainant owns the trademark "WAVE-RITE" (the "Mark") that is registered with the U.S. Patent and Trademark Office ("USPTO"). The Complainant submitted a copy of the following U.S. trademark registration:
WAVE-RITE (stylized form), U.S. Registration No. 2,425,141 for the goods and services in International Class 020 described as "flagpoles," (registration date – January 30, 2001);
The Whois database shows that Respondent registered the Domain Name with the Registrar on August 12, 1999.
5. Parties’ Contentions
A. The Complainant
Complainant contends that the Domain Name infringes on Complainant’s rights because it is identical or confusingly similar to Complainant’s Mark, the Respondent has no rights or legitimate interest in the Domain Name, and because Respondent registered the Domain Name in bad faith. Consequently, Complainant requests that the Domain Name be transferred to the Complainant. Specifically Complainant states:
(a) that the Domain Name is phonetically identical or confusingly similar to Complainant’s Mark.
(b) that Respondent has no rights or legitimate interests in the Domain Name.
(c) that Respondent’s registration of the Domain Name is in bad faith.
Complainant urges that it is clear that the registration is in bad faith because, inter alia: (a) the Domain Name was registered primarily for the purpose of disrupting the business of the Complainant; (b) Respondent’s acquisition of the Domain Name occurred some ten days after negotiations between the Respondent and the Complainant terminated due to a difference of opinion on the value of a sale; (c) as a result of the Respondent’s activities, Internet users may mistakenly enter the Respondent’s disputed Domain Name site instead of their obviously intended location; (d) and finally that Respondent uses the Domain Name to intentionally attract, for commercial gain, Internet users to his website by creating a likelihood of confusion with the Complainant’s Mark as to the source and/or endorsement of Respondent’s website and the advertisements of the services offered at that site.
Respondent did not submit a Response.
6. Discussions and Findings
As a preliminary matter, the Panel finds that the Center’s formalities compliance review was performed correctly and that the Complaint and Notification of Respondent default were properly notified to Respondent. The Panel finds that Respondent had proper notice of this Administrative Proceeding.
Paragraph 15(a) of the Rules provides the following instructions: "A Panel shall decide a complaint based on the basis of the statements and documents submitted in accordance with the Policy, these Rules, and any rules and principles of law that it deems applicable." As the Respondent did not submit a response, the Panel will render its decision based on prior WIPO decisions and the Complaint.
The Panel further notes the guidance provided in Paragraph 14(b) of the Rules: "If a Party, in the absence of exceptional circumstances, does not comply with any provision of, or requirement under, these Rules or any request from the Panel, the Panel shall draw such inferences therefrom as it considers appropriate."
Paragraph 4(a) of the Policy "directs" that the burden is on the Complainant to establish each of the following elements:
(i) that the Respondent’s domain name is identical or confusingly similar to a trademark or service mark in which Complainant has rights;
(ii) that Respondent has no rights or legitimate interests in respect to the domain name; and
(iii) that Respondent’s domain name has been registered and used in bad faith.
Each of these elements is discussed below.
A. Similarity of Complainant’s Trademarks and Respondent’s Domain Name
Complainant asserts that the Respondent’s Domain Name is identical or confusingly similar to a trademark or service mark in which Complainant has rights. The Panel finds that the Complainant has rights in the mark "WAVE-RITE" for the goods and services in International Class 020 described as "flagpoles". Respondent’s domain name is <waverite.com>.
It is well established that the hyphen is to be ignored in comparing the trademark and the domain name that is the subject of the dispute. See InfoSpace.com, Inc. v. Tenenbaum Ofer, WIPO Case No. D2000-0075; Columbia Sportswear Company v. Mahlon Keeler, WIPO Case No. D2000-0206. In light of this rule it is clear that the Domain Name is identical to the Mark in which Complainant has rights.
The Panel finds for Complainant on element (i).
B. Respondent’s Rights or Legitimate Interests in the Domain Name
The Panel next examines whether the Respondent has any rights or a legitimate interest in the Domain Name, with reference to the guiding criteria set forth in Paragraph 4(c) of the Policy. Those guidelines consider whether:
(i) before any notice to the Respondent, the Respondent was using, or was making 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; or
(ii) the Respondent has been commonly known by the Domain Name, even if the holder has acquired no trademark or service mark rights; or
(iii) the Respondent is making a legitimate or non-commercial fair use of the Domain Name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.
As the Policy points out, these factors are not exhaustive of all the circumstances that may establish rights or a legitimate interest.
The Domain Name is <waverite.com>. The Respondent’s name is Flags Unlimited. The Domain Name does not therefore reflect the name of Respondent’s corporate identity. Moreover, Respondent does not appear to have any rights to any trade names or trademarks consisting in whole or in part of the Mark. There is nothing to show that Respondent is commonly known by the Domain Name.
The Panel has visited the <waverite.com> web site and has found that it automatically redirects the internet user to the Respondent’s own web site, <rightwayflag.com>. There, the Respondent sells flags in direct competition to the Complainant. This is in no way a legitimate non-commercial fair use of the name. In addition, while the Respondent is certainly offering goods and services, namely flags, and has seemingly done so since August 12, 1999 (hence before knowledge of the dispute), it cannot be said in light of the discussion in Paragraph C below, that such offering of goods and services is bona fide.
There are a number of panel decisions in which the question of the bona fide use of the domain name under paragraph 4(c)(i) has been considered. See First American Funds Inc v. Ult.Search, Inc., WIPO Case No. D2000-1840. The majority in the First American Case supra said, "Although the Policy draws a clear distinction between the requirement of showing absence of legitimate right or interest in paragraph 4(a)(ii), and the showing of bad faith registration and use in paragraph 4(a)(iii), in reality it is difficult to separate the consideration of the one from the other. Absence of any right or interest on the part of Respondent may be of assistance in determining bad faith registration and use, and bad faith registration and use may be of assistance in determining the legitimacy of the claimed right or interest". See also Scholastic Inc., v. Applied Software Solutions Inc., WIPO Case No. D2000-1629; Quixtar Investments Inc. v. Dennis Hoffman, WIPO Case No. D2000-0253.
The Panel does not accept that Respondent was unaware of Complainant's use of the word "WAVE-RITE". The flags that both Complainant and Respondent are in the business of selling are designed to be tangle-free, a notion reflected in the names: "WAVERITE" (i.e. ‘wave right’ indicating a flag will always fly properly) and "RIGHTWAYFLAG" (similarly indicating that the flag will remain upright and proper at all times). The fact that these ideas are so similar in concept and that the internet user is automatically redirected to the Respondent’s own website on entering <waverite.com> indicates to the Panel that there was at least some prior knowledge on the part of the Respondent when he began to offer goods and services of flags through the Domain Name. It is well-settled under the Policy that knowingly infringing use of a trademark to offer goods and services is not a bona fide offering under the Policy. See Chanel Inc. v. Estco Technology, WIPO Case No. D2000-0413. The Panel believes, on the balance of probability, that in registering the Domain Name, Respondent was motivated by a desire to benefit from the reputation of the name "WAVE-RITE".
The Respondent has foregone the opportunity to provide any evidence to support a finding of legitimate use, and the Panel is unable to identify any reason which would allow the Respondent to claim any right or legitimate interest in respect of the Domain Name. The Panel therefore concludes that Respondent's adoption and use of the domain name was not bona fide and did not constitute use of the domain name in the bona fide offering of goods or services within the meaning of paragraph 4(c)(i) of the Policy.
The Panel is mindful however, of the fact that Complainant’s registration of the mark "WAVE-RITE" on January 30, 2001, occurred some sixteen months after Respondent’s registration of the domain name <waverite.com> on August 12, 1999. Hence, at the time that the Domain Name was registered, the Complainant had not registered the Mark in any jurisdiction. Nowhere does the Policy contain a restriction that specifically limits its reach to only registered marks. Whether the Complainant has rights to an unregistered mark and hence a protectable interest under the Policy lies with national trademark law that governs the Respondent's actions that are the subject of the Complaint. Under American law, rights accrue in unregistered, so-called "common law", marks as a result of usage, though limited by geographic and product markets in which the mark is used.
Numerous panels have upheld the protectable status of unregistered marks in the United States under the Policy. See Bennett Coleman & Co. Ltd. v. Steven S Lalwani and Bennett Coleman & Co. Ltd. v. Long Distance Telephone Company, WIPO Case Nos. D2000-0014 and 2000-0015; SeekAmerica Networks, Inc. v. Tariq Masood and Solo Signs, WIPO Case No. D2000-0131; Cho Yong Pil v. ImageLand, Inc., WIPO Case No. D2000-0229); American Home Products Corporation v. Healthy Futures, WIPO Case No. D2000-0454.
Hence, if a Complainant displays a suitable demonstration of prior continuous use in a given unregistered mark over a sufficiently long period to evidence the acquisition of common law rights in that mark, then those rights are capable of protection under paragraph 4(a) of the Policy to the same extent as are those stemming from registered marks. Complainant has submitted three separate pieces of evidence, namely ‘jpg’ images of a newspaper article from the Hudson Hub dated May 10, 1992, an invoice from the Finance Department of the City of Cuyahoga Falls dated June 20, 1994, and a packing slip dated May 24, 2002, to support its contention that it had established common law rights in the Mark since 1992. The Panel has made diligent inquires to ascertain the veracity of this evidence, including direct communication with the Hudson Hub and the Finance Department of Cuyahoga Falls, and can find nothing to suggest that they are otherwise than genuine. In the absence of the Respondent’s input into this matter, and based on 15(a) of the Rules, the Panel believes that on probability, the evidence is sufficient to establish the Complainant’s common law rights in the Mark since 1992.
The Panel, therefore, finds in favor of the Complainant on element (ii).
C. Bad Faith Registration
In deciding whether the Respondent registered the Domain Name in bad faith, paragraph 4(b) of the Policy sets out certain non-exclusive factors that should be considered. These include evidence of whether:
(i) Respondent registered or acquired the Domain Name primarily for the purpose of selling, renting, or otherwise transferring the Domain Name registration to the Complainant who is the owner of the trademark or service mark for valuable consideration in excess of the documented out-of-pocket costs directly related to the domain name;
(ii) Respondent registered the Domain Name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding Domain Name, provided Respondent has engaged in a pattern of such conduct;
(iii) Respondent has registered the Domain Name primarily for the purpose of disrupting the business of a competitor; or
(iv) Respondent has intentionally attempted to attract, for commercial gain, Internet users to its web site, by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship, affiliation, or endorsement one of Complainant’s products or services.
The Complainant cites a number of issues which it claims proves the Respondent’s bad faith: (a) the Domain Name was registered primarily for the purpose of disrupting the business of the Complainant; (b) Respondent’s acquisition of the Domain Name occurred some ten days after negotiations between the Respondent and the Complainant terminated due to a difference of opinion on the value of a sale; (c) as a result of the Respondent’s activities, internet users may mistakenly enter the Respondent’s disputed domain name site instead of their obviously intended location; (d) and finally that Respondent uses Domain Name to intentionally attract, for commercial gain, internet users to his website by creating a likelihood of confusion with the Complainant’s Mark as to the source and/or endorsement of Respondent’s website and the advertisements of the services offered at that site.
The Panel concludes that the element of bad faith is manifest. As stated supra, <waverite.com> automatically redirects internet users to Respondent’s own website <rightwayflag.com>. It is well-settled that registration and use of a domain name to re-direct Internet users to websites of competing organizations constitutes bad faith use and registration. See Zwack Unicum Rt. v. Erica J. Duna, WIPO Case No. D2000-0037. In light of this clear demonstration of bad faith by the Respondent, and in the absence of any response by Respondent, the Panel finds there is no need to discuss the Complainant’s other allegations under 4(b) of the Policy. There can be no other conclusion, based on the evidence before the Panel, other than that the Respondent registered and is using the Domain Name in bad faith.
For the foregoing reasons, the Panel decides:
1. That the Domain Name registered by Respondent is identical or confusingly similar to the Mark in which Complainant has rights;
2. That the Respondent has no rights or legitimate interest with respect to the Domain Name; and
3. That the Domain name has been registered and is being used in bad faith.
Accordingly, pursuant to paragraph 4(i) of the Policy, the Panel requires that the registration of the domain name <waverite.com> be transferred to the Complainant.
Arif Hyder Ali
Date: July 30, 2002