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WIPO Arbitration and Mediation Center

 

ADMINISTRATIVE PANEL DECISION

Precyse Corporation v. Punta Barajas, SA

Case No. D2002-0753

 

1. The Parties

Complainantis Precyse Corporation, a Canadian corporation with its principal place ofbusiness in Oakville, Ontario, Canada, represented by May M. Cheng of the lawfirm Fasken Martineau DuMoulin LLP, Toronto, Ontario, Canada.

TheRespondent is Punta Barajas, SA, a Costa Rican corporation with its principalplace of business in San Jose, Costa Rica, represented by Michelle L. Wassenaarof the law firm Dimock Stratton Clarizio LLP, Toronto, Ontario, Canada.

 

2. Domain Name and Registrar

Thedomain name at issue (domain name) is <cyberbingo.com>.  According to the whois database, thedomain name was initially registered on May 27, 1998, by a person orentity unaffiliated with Respondent. Respondent acquired and registered the domain name in December2000. 

Theregistrar is Tucows.com Inc., Toronto, Ontario, Canada.

 

3. Procedural History and Jurisdiction

The WIPOArbitration and Mediation Center (the Center) received the Complaint onAugust 9, 2002, (electronic copy), and August 13, 2002,(hard copy).  The Center verified thatthe Complaint as amended satisfied the formal requirements of the ICANN UniformDomain Name Dispute Resolution Policy (the Policy), the Rules for UniformDomain Name Dispute Resolution Policy (the Rules), and the Supplemental Rulesfor Uniform Domain Name Dispute Resolution Policy (the WIPO SupplementalRules).  Complainant made the requiredpayment to the Center.  The formal dateof the commencement of this administrative proceeding isAugust 15, 2002.

OnAugust 12, 2002, the Center transmitted via email to the Registrar arequest for registrar verification in connection with this case, and theRegistrar transmitted its verification response to the Center confirming thatthe Respondent Punta Barajas, SA is the registrant of and administrative andtechnical contact for the domain name.

OnAugust 15, 2002, the Center transmitted to the Respondent aNotification of Complaint and Commencement of the Administrative Proceeding viacourier and e-mail. 

OnSeptember 4, 2002, Respondent, through counsel, submitted its Response.

TheComplainant's designated, and Respondent concurred in, decision by a singlemember panel.  The Center invited Mr.Richard G. Lyon to serve as the sole Panelist.

Afterreceiving Mr. Lyon's Statement of Acceptance and Declaration of Impartialityand Independence, on September 24, 2002, the Center transmitted to the partiesa Notification of Appointment of Administrative Panel.  The projected decision date isOctober 9, 2002. 

I findthat the Administrative Panel was properly constituted and appointed inaccordance with the Rules and Supplemental Rules, and that the panel hasjurisdiction over this dispute.

TheAdministrative Panel shall issue its decision based on the Complaint, theevidence presented, the Policy, the Rules, and Supplemental Rules.

 

4. FactualBackground

Whilethe parties frequently engage in unsupported characterization and surmise, Ibelieve that the following recital of the factual background is undisputedexcept as noted in the third following paragraph. 

Complainant's Marks.  Complainant ownstrademark registrations for CYBERBINGO and design in Canada (application filedin March 1999; registered October 2000) for computer software for use inplaying bingo on a computer), and for CYBERBINGO in the United States(application filed May 2000; registered May 2002) in international classes9 and 41, for use in association with 'downloadable computer software for usein playing the game of bingo on a computer', and for entertainment services,namely, conducting on-line bingo games. Both certificates of registration recite, and Complainant alleges, usein commerce since November 1996.  Thesetwo registered trademarks are referred to as the Marks.  (Complaint, ¶¶12(1)-(2) and Annexes Dand E)

Complainant's Business.  Complainant hasdeveloped and licenses software for on‑line gaming.  Since 1999, it has been a wholly ownedsubsidiary of dot com Entertainment Group, Inc. (DCEG).  DCEG is a diversified Internet softwaredevelopment company, specializing in the creation and support of Internetentertainment products and related services. DCEG has its main office in Buffalo, New York with affiliate offices inToronto, Canada, St. John's, Antigua, and Barbados.  Complainant has licensed DCEG to use the Marks.  Complainantregistered the domain names <cyberbingo.ca> in January 2001, and<cyberbingo.biz> in December 2001. Complainant or DCEG own other domain names that include the word cyberbingo.  (Complaint, ¶¶12(3)-(8))

The Cyberbingo Corporation, another licensee of at least one of the Marks, has been operating a website at <cyberbingo.net> since January 2, 1997, under license from Complainant.  Complainant does not allege any affiliation with Cyberbingo Corporation.  Respondent alleges, without any proof, that Cyberbingo Corporation was established at the direction of the officers and directors of Complainant in Antigua, to avoid Canadian regulation.[1]  (Complaint, ¶12(6); Response, ¶21)

Respondent's Business. Respondent's email address indicated in its registration of the domainname is <bingoville.com> (Complaint, Annex A).  At this site Respondent provides on-line bingo gaming servicesto its customers.  (Response, ¶25)

The Domain Name.  The domain name was registered in May 1998, by an unnamed third party (Complaint, Annex A; Response, ¶17).  Neither party identifies this entity and neither party claims any affiliation or other operating relationship with it.  Respondent purchased the domain name from the third party in December 2000, for approximately $50,000.[2]  (Response, ¶17)

Dealings between Complainant/DCEG and Respondent.  Two weeks after Respondent acquired the domain name, on January 11, 2001, a DCEG representative confirmed an agreement (the Letter Agreement[3]) between DCEG and Respondent, as follows:

We [DCEG] herebyconfirm your undertaking and commitment on behalf of [Respondent] that[Respondent] will not go live with the URL cyberbingo.com or in any way,shape of form use the name Cyberbingo or any alliteration thereof for anypurpose whatsoever unless you have obtained the express prior written consentof Dot Com Entertainment Group Inc. (DCEG). Based on reliance of this letter, Dot Com (Antigua) Ltd. (theLicensor) has agreed to install the Software as per the license agreemententered into between the Licensor and [Respondent] (the Licensee Agreement).  In the event that the undertaking set out inthis letter is in any way breached, [Respondent] confirms that such breach willconstitute a default under the License Agreement and will result in the immediatetermination by the Licensor of the License Agreement.  In the event the Licensor terminates the License Agreement,[Respondent] agrees that neither DCEG nor the Licensor will have any liabilityfor any losses suffered by [Respondent] as a result thereof.  (Complaint, Annex Q; Response, Annex J)

Shortly thereafter the parties exchanged email correspondence regarding possible sale of the domain name to DCEG.  DCEG declined Respondent's offer of $200,000 in cash, $300,000 in royalty credits, and other consideration.  DCEG made a counterproposal,[4] and stated that if Respondent refused the counterproposal, DCEG didn't object to Respondent's alternative of [Respondent] agrees not to use the [Domain N]ame and sell it on its own.  At about the same time, DCEG licensed Respondent to use its software.  This license was the subject of a press release on January 23, 2001.  The software license did not include any license to use the Marks.  (Complaint, ¶¶23-24 and Annex P; Response, ¶¶25, 27 and Annex J)

Respondent Transfers the Domain Name.  On February 8,2001, Respondent sold the domain name to Market Domains, LLC, for $250,000,paid with a promissory note in Respondent's favor in the full amount of thepurchase price, secured by the domain name. (Complaint, ¶30 and Annex V; Response, ¶29)

Respondent Reacquires the Domain Name.  In May 2002,Complainant discovered that the domain name was registered to CAT InternetServices Inc., Morrisville, Pennsylvania, USA. Complainant sent cease and desist letters to CAT and, later, itscounsel.  CAT's use of the domain nameincluded links to gaming and casinos. On August 2, 2002, CAT's counsel replied to Complainant thatCAT and Market Domains LLC were apparently the same entity, that CAT/MarketDomains had defaulted on the promissory note, and that Respondent hadforeclosed on the collateral and hence had reacquired the domain name.  The whois database indicates that Respondentreregistered the domain name on August 6, 2002.  (Complaint, ¶¶26-30 and Annexes A, R - V;Response, ¶29)

Respondent's Use of the Domain Name.  Respondent has used the domain name as follows.  The domain name resolves to a page thatcontains a box with the words Enter Click Here.  After clicking on the box, the user is taken to the websitewww.hitboxcentral.com.  This is a sitepertaining to web hosting and provides information regarding the fees chargedfor web hosting.  Once the tab namedHitBox Services is clicked, users are then taken to the websitewww.websidestory.com.  There is acompany profile on the site for WebSideStory. The company is headquartered in San Diego, California and is describedas the world's leading provider of outsourced e-business intelligenceservices.  There is no allegation thatRespondent ever used the domain name as a link to Respondent's gamingactivities.  (Complaint, ¶18 and AnnexN; Response, ¶34)

 

5. Parties' Contentions

Complainant'scontentions may be summarized as follows:

The domain nameis identical to the Marks and, and except for top-level domain designation, toComplainant’s websites and the websites of its licensees.  Complainant or its parent company has notlicensed Respondent to use the Marks, and Respondent has no legitimate interestin the domain name.  Respondent is adirect competitor of Complainant and its licensees in the business of on-linegaming.  As such, Respondent hasregistered and is using the domain name to divert Internet traffic intended forComplainant and its licensees to Respondent’s website.  Even though diversion does not go toRespondent’s competing site, the diversion nevertheless hurts the Complainantand its Licensees by diverting traffic intended for them to an unrelatedsite.  Respondent's bad faith isillustrated by its offer to sell the domain name to Complainant's parent for$500,000.  Respondent has never beenknown by the term cyberbingo.  Respondent is using the domain name forcommercial purposes, and none of those purposes is legitimate or related to itsprincipal business.  In sum, theRespondent is obviously using the domain name in a deliberate attempt toprofit, for commercial gain, by the registration of this domain name, creatinga likelihood of confusion with the Complainant’s trade-mark and licensees’websites or to disrupt the business activities of the Complainant and itslicensees.  (Complaint, ¶35)

Respondent'scontentions maybe summarized as follows:

The domain name wasregistered prior to Complainants’ substantial use of the word cyberbingo in commerce; the allegation ofa disguised related party transaction, discussed in Section 4, note 1above, is evidence that actual use of the Marks did not occur until after thattime.  As a licensee of DCEG’s softwareand a provider of on-line bingo gaming, it has a legitimate interest in anydomain name relating to bingo. Respondent has carefully refrained from using the domain name as agateway or click-through to its gaming activities and its use as described inSection 4 is entirely legitimate. Respondent has shown no evidence of diversion of customers and noevidence of tarnishment.  Respondent isnot responsible for the activities of CAT/Market Domains during the briefinterval between Respondent's ownership that that entity owned the domainname.  The Letter Agreement is in factDCEG’s acknowledgment that Complainant consented to Respondent’s ownership ofthe domain name, provided that the domain name was not used by Respondentwithout Complainant's consent (DCEG agreed to [Respondent's] ownership of<cyberbingo.com>, provided the domain name was not used by [Respondent];and [Respondent] agreed to allow the domain name to remain undeveloped, as longas a software licence agreement between it and DCEG's subsidiary washonoured.), (Response ¶31). Complainant should be held to the bargain it stuck in the LetterAgreement; to find bad faith would in effect allow Complainant to circumventits own agreement.

 

6. ApplicableStandards

TheComplainant must prove the elements set out in paragraph 4(a) of thePolicy.  These elements are as follows:

(i) Respondent'sdomain name is identical or confusingly similar to a trademark or service markin which the Complainant has rights; and

(ii) Respondenthas no rights or legitimate interests in respect to the domain name; and

(iii) Respondent'sdomain name has been registered and is being used in bad faith.

Paragraph 4(a)(iii) is conjunctive both registration and use in bad faith must be proven.  World Wrestling Federation, Inc. v. Bosman, WIPO Case No. D1999-0001, citing Second Staff Report on Implementation Documents for the Uniform Dispute Resolution Policy.  Complainant bears the burden of proof on each of these elements. 

 

7. Discussion and Findings

As discussed more fully in the Bad Faith section below, the parties' lack of completeness in presentation and, in some instances, less than total candor in their submissions, materially hinder my analysis in this case.  I have considered using my discretion under Rule 12 to request additional submissions, but have determined not to do so for three reasons.  First, the Policy and the Rules clearly impose on each party an obligation to come forward in the one pleading expressly allowed it with adequate evidence to sustain the legal conclusions it desires.  Second, I believe that sua sponte requests for additional material should be used sparingly, and then only to permit a response to a matter a Complainant could not reasonably have anticipated or to provide evidence on a single discrete item.[5]  Here there are many unanswered questions and evidentiary gaps.  I doubt that I could craft an order that would yield the necessary matter and no more.  Third, the parties here share, almost equally, the blame for unsatisfactory state of the record.  In that circumstance I do not believe the Panel should be seen as assisting either party to correct errors in its submission.  It is not for a panel to save a party from its own mistakes or the consequences that flow from them.

I shall proceed to determine thematter on the current record.

Identity and Confusion

TheComplainant has established the first element. The domain name incorporates verbatim the Complainant's registeredmarks.  Since the domain name isidentical to the Marks, there is no need for proof of confusion.

Legitimate Interest

Complainanthas made a prima facie showing that Respondent lacks a legitimate interest inthe domain name.  Respondent has neverbeen licensed by Complainant to use the Marks, Respondent has never been knownby the word cyberbingo, andRespondent's use of the domain name is for profit. 

None of Respondent's proffered justifications overcomes this showing.  While the Letter Agreement is unclear on many issues, in no way may it be read as Complainant's acknowledgment of Respondent's legitimate interest in the domain name.  No trademark license may be implied from a license to use the software, and Respondent does not deny that the software license does not grant such permission expressly.  An express trademark license is required to establish a distributor's or customer's legitimate right to use a markholder's mark in its domain name or advertising generally.[6]  Respondent's assertion that because of its business activities it has a legitimate interest in any domain name that includes the word bingo is a flouting of Complainant's trademark rights and the Policy.  Respondent meets none of the examples of legitimate interest in paragraph 4(c) of the Policy. 

Basedon the record before me, I find that Respondent has no legitimate interest inthe domain name.

Bad Faith

Preliminary Statement.  Except for ongoing license of software and the commencement ofthis proceeding, the parties’ course of dealing apparently took place in arelatively short period of time immediately prior toJanuary 23, 2001, the date DCEG issued a press release announcingthat it had signed a license agreement with Respondent.  These negotiations, according to bothparties' pleadings, resulted in at least two agreements: the Letter Agreementand the software license. 

The evidence indicates thatother subjects were at least discussed between the parties, including theRespondent’s taking equity in DCEG, a proposal from each side by which DCEGwould acquire domain name from Respondent, sale or transfer of equipment, andvarious conditions on which the software would be licensed.  Neither party furnishes, by evidence orsummary of counsel, a coherent summary of all the terms and conditions theparties actually agreed or the interrelationship between or among the LetterAgreement, Software License, and possible transfer of domain name.  Since each party has submitted considerableevidence and extensive (though often confusing) arguments of competent counsel,and each identifies some but not all of the details of the parties' businessdealings, I do not believe that this shortcoming was accidental or a result ofcareless drafting by counsel.  It wouldhave been an easy matter for either party to submit an affidavit of a principalreciting its version of the complete dealings between the parties or copies ofthe full text of the two agreements, both of which each party asserts arerelevant to this proceeding.  Bothparties rely on the Letter Agreement; neither party gives the panel all of theterms of that agreement (the Letter Agreement itself plainly is incomplete) orits explication of what those terms allow and do not allow.  Of particular relevance to my determination vel non of bad faith is the issue ofwhether the Letter Agreement allowed or prohibited Respondent’s subsequent saleof the domain name.

An intentional lack of candor infects this proceeding with doubts about the good faith of either party.  As stated in Portland Titles Limited v. Martin Baker, WIPO Case No. DTV2000-0003:

It is crucial to thesuccess of this process that Complainants are open and frank with thePanel.  The process has a very narrowfocus, namely bad faith registration and use of domain names.  A less than straight forward presentation ofthe facts on the part of [a party] iswholly out of place.

In deciding this matter, Iwill limit my conclusions to those supported by the undisputed facts as set outin Section 4, without making any of the inferences from those facts, orinterpretation of ambiguous or incomplete aspects of the Letter Agreement,sought by either party.  On the lattersubject, even if I had the authority to interpret ambiguous provisions in acontract between the parties a doubtful proposition in any circumstances,given a panel's limited jurisdiction I cannot do so on the incomplete recordbefore me, and will not do so when I believe that the record is intentionallyincomplete.

For the same reason Idecline to use Respondent's offer to sell the domain name to DCEG as evidenceof bad faith.  Complainant's evidence onthis point is clearly taken out of context; without a complete record of thecontext I cannot say whether the possible sale was legitimate or not.

Two provisions of the LetterAgreement that are either admitted by both parties or clear on the face of theLetter Agreement are relevant to this proceeding:  (1) Respondent was not permitted to go live with the domainname without DCEG's consent, and (2) Respondent's agreeing to this restrictionwas a condition of its obtaining a license to DCEG's software. 

Registration.  Respondent’s argument that registration in bad faith cannot be found because the domain name was initially registered prior to filing for registration of the Marks and prior to any significant association of the word cyberbingo with Respondent might succeed if Respondent had made the May 1998 registration.  But this argument avails Respondent nothing, for its initial registration of the domain name took place in December 2000.  My evaluation of bad faith in registration will be judged based upon that date.  Paragraph 4(b) of the Policy speaks of registration by you the Respondent.  See also, Dixons Group Plc v. Abdullaah, WIPO Case No. D2000-1406, and cases there cited.  Basing an evaluation of a Respondent's bad faith on the basis of a predecessor's filing would allow those who traffic in domain names to evade the Policy by acquiring domain names from third parties, whose interest in the domain names might be difficult to identify.  This would be an open invitation to cyberflying.

In December 2000, Respondent wasadmittedly actually aware of Complainant’s Marks, since the registrationoccurred just prior to its licensing negotiations with DCEG.  On any objective basis, this is compellingevidence of registration in bad faith. Respondent's payment of a substantial sum to acquire domain name duringor just before these negations and Respondent’s failure to provide anylegitimate reason for acquiring the domain name (see prior section) make thecase for registration for bad faith overwhelming.

Use.  The facts acknowledged by both parties also sustain a finding of use in bad faith.  Respondent is caught in a Catch 22 situation with respect to its sale of the domain name to Market Domains.  If the Letter Agreement prohibits a sale or a transfer of the domain name, then Respondent’s intentional breach of the agreement two weeks after obtaining a license for DCEG’s software is an obvious act of bad faith.  If on the other hand the Letter Agreement does not prohibit a transfer, then, in the absence of a contrary contractual provision (and there is none in the record) the requirement of obtaining Complainant’s (or DCEG’s) consent prior to any use of the domain name applies to the transferee.[7]  Complainant immediately objected to Market Domains/CAT's use of the domain name, and Respondent impliedly concedes that such use, if undertaken by Respondent, would have violated the Letter Agreement (Response, ¶29).  Bad faith use is proven under either horn of the dilemma.

Clean Hands.  There remains one final issue to decide:  whether Complaint’s lack of candor with the Panel constitutes conduct of the sort that disqualifies it from relief granted by this tribunal.  While there may be circumstances of a party's misconduct that can create an estoppel in the nature of the equitable defense of unclean hands,[8] I do not believe it is appropriate to apply that doctrine in this case.  Respondent’s lack of candor equals that of Complainant, so accepting a clean hands defense would unfairly benefit a party in pari delicto with Complainant.  More importantly, panels under the Policy are not courts of equity.  The ordinary remedy for a Complainant’s lack of candor is to deny otherwise reasonable inferences from the evidence actually presented.  I have imposed that remedy here.

 

8. Decision

For theforegoing reasons, the Panel orders that the domain name be transferred toComplainant.

 


 

Richard G. Lyon
Sole Panelist

Dated:  October 2, 2002

 


[1]Respondent makes this allegation based on its belief that licensors of on-line gaming software issue their first license to an entity that is normally incorporated in a jurisdiction with less stringent gambling laws, and the relationship between the first licensee and the company is hidden through the use of trustees and off-shore organizations.

[2]All references to dollars are to United States dollars.

[3]While the evidence is sparse on the totality of the agreements between the parties and the full scope and meaning of the Letter Agreement, as discussed infra both parties affirmatively assert that this letter is indeed a valid agreement between them.

[4]The exact nature of Complainant's counterproposal cannot be understood given the incomplete record (see Section 7, Preliminary Statement), but it clearly included consideration significantly in excess of Respondent's costs of registration.  It is also noteworthy that Complainant expressed none of the indignation one might expect from an entity that later cites Respondent's offer as evidence of bad faith.

[5]E.g.,Classmates Online, Inc. v. John Zuccarini, individually and dba RaveClub Berlin, WIPO Case No. D2002-0635 (evidence of association of service marks with Complainant at a particular date); Wyndham International, Inc. v. Kangdong-Gu Net, WIPO Case No. D2002-0458 (evidence of ownership of trademarks).

[6]E.g., The Chamberlain Group, Inc. v. Martial Maitam, WIPO Case No. D2002-0338.

[7]Respondent does appear to argue that it may have the preferred side of both alternatives.  It claims it can not be held responsible for the actions of Market Domain yet assumes that it was free to transfer the domain name to a third party without notice to or the consent of Complainant or DCEG.  That argument is disingenuous at best and dishonest at worst.

[8]Since the unclean hands doctrine is available under American and Canadian law, Rule 15(a) gives me the authority to invoke it here.

 

Источник информации: https://internet-law.ru/intlaw/udrp/2002/d2002-0753.html

 

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