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WIPO Arbitration and Mediation Center

 

ADMINISTRATIVE PANEL DECISION

Dreamcatcher Interactive Inc. v. Happy Empire Inc.

Case No. D2003-0180

 

1. The Parties

The Complainant is Dreamcatcher Interactive Inc., 5000 Dufferin Street, Building R, North York, Ontario M3H 5T5, of Canada, represented by Bereskin & Parr of Canada.

The Respondent is Happy Empire Inc., 1521 Alton Road, Suite 362, Miami Beach, Florida 33139, of United States of America.

 

2. The Domain Name and Registrar

The disputed domain name <dreamcatcher.com> is registered with BulkRegister.com.

 

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on March 5, 2003. On March 5, 2003, the Center transmitted by email to BulkRegister.com a request for registrar verification in connection with the domain name at issue. On March 6, 2003, BulkRegister.com transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the same contact details for the administrative, billing, and technical contact as relied on in the Complaint. 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 March 7, 2003. In accordance with the Rules, paragraph 5(a), the due date for Response was March 27, 2003.

On March 28, 2003, the Complainant and the Respondent reached a form of agreement by which the Complainant agreed that the Respondent could have until April 7 to file a Response, apparently on the grounds that the Respondent had retained its lawyers "just recently." In return, the Respondent agreed that the Complainant could have one week after the submission of the Response in which to submit a Reply "to the extent permitted by WIPO."

The Response was filed with the Center on April 7, 2003.

The Complainant in due course submitted a Reply to Response ("Reply") to the Center which was received by e-mail on April 15, 2003, and hard copy on April 16, 2003. When acknowledging receipt, the Center informed the parties that the Rules did not provide for a Reply and its admission in the proceeding would depend on the Panel’s discretion.

The Respondent filed a Supplemental Response to Complaint ("Supplemental Response") on or about April 17, 2003. In acknowledging receipt, the Center once again reminded the parties that the admission of this document into the proceeding was a matter for the Panel’s discretion.

The Center appointed Warwick A. Rothnie as the Sole Panelist in this matter on April 22, 2003. Th Panelist submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7 and, accordingly, the Panel finds that it was properly constituted.

 

4. Factual Background

The Complainant commenced business in 1996 making and selling computer games or entertainment software. It has grown rapidly since that date and in 2002, was ranked the fifth fastest growing company in Canada in Profitguide.com’s survey Canada’s Fastest Growing Companies 2002. Games which it has produced include "The Cameron Files," "Gore: Ultimate Soldier," "Nancy Drew: Treasure in the Royal Tower," "Traitor’s Gate" and "The Messenger." Although not stated in the Complaint, it would appear from the copyright notices on the packaging submitted in the Complaint that most of these games were published in 2002. It claims that, by October 2002, there were between 25,000 and 27,000 visitors a day to its website, <dreamcatchergames.com>.

The Complainant has registered a stylized representation of DREAMCATCHER INTERACTIVE INC. in both Canada and the USA, for "interactive, multimedia computer-based software used for the entertainment and education of children, for interactive games, for adult entertainment, and for adult educational purposes".

The US registration is No 2,269, 434; the Canadian, No TMA504,553. The Canadian trademark was filed on November 25, 1996, and registered on November 24, 1998. The US trademark was filed on December 12, 1996, and registered on August 10, 1999. It is not clear from the copy certificate filed with the Complaint whether the first use in commerce in the USA was in October 1996 or January 1997.

The Complainant also has a more recently filed, pending European Community Trademark application for the same mark.

It is not clear from the file when the Respondent was incorporated or commenced business. Annex 2 to the Complaint indicates that the Respondent has two "Officers/Directors," a Mr. Todd Louis and a Mr. Rob Adams. The Respondent did not contest these details.

The Respondent registered the disputed domain name on September 23, 1998. It would appear that someone else had held the registration for a number of years prior to its registration by the Respondent: e-mail from bodonnell@powertrain.com to todd@shadowtrance.com, April 18, 2000, Annex 13 to the Response.

The Respondent has a website at "www.happyempire.com" where it offers for sale (a) hosting and other Internet related services and (b) an interactive game called "Pimpwar." The latter game can also be accessed directly through the Respondent’s third website at "www.pimpwar.com."

Since its registration, the disputed domain name has resolved to a website in a variety of ways. The way it has done so does not appear to be in dispute, but the parties hotly contest the inferences to be drawn from this. I shall discuss it in more detail below in section 5.B.

The parties also agree that the Complainant approached the Respondent on two occasions before this proceeding was commenced inquiring about the purchase of the disputed domain name. The first occasion occurred in August 2000, when a Mr. Zwicker from the Complainant contacted the Respondent. Mr. Zwicker was told that the name was available for a price in the "millions" of dollars. Instead, he agreed to provide the Respondent with a full library of games and in return the Respondent placed a re-direction link on the website which the disputed domain name resolved to.

Subsequently, in March 2002, Mr. Zwicker initiated a further contact. This time he was told that "the offer still stands at [US$]2.5 million after taxes." Further, if that were too high, Mr. Todd for the Respondent indicated an openness to an offer for a lease stating that "I do not want to part with the domain since I do have plans for it as previously explained to you several years ago."

 

5. Discussion and Findings

A. Preliminary matters

Before dealing with the substantive issue, it is necessary to resolve whether the Reply and/or the Supplemental Response should be admitted pursuant to the Rules, para. 10.

Taking into account the considerations that I recently set out in Atlas Copco Aktiebolag v. Accurate Air Engineering, Inc., WIPO Case No. D2003-0070 (March 24, 2003), I shall accept both documents into the evidence in this proceeding. The circumstances of this case are not on all fours with that case. Nonetheless, the parties have dealt with the matter in a sensible and pragmatic way which has promoted the objects of the Policy.

Under paragraph 4(a) of the Policy the Complainant has the burden of proof in respect of the following three elements:

(i) The domain name is identical or confusingly similar to a trademark or service mark in which the Complainant has rights; and
(ii) The Respondent has no rights or legitimate interests in respect of the domain name; and
(iii) The domain name has been registered and is being used in bad faith.

I deal with each of these elements in turn.

B. Identical or Confusingly Similar

There are two parts to this inquiry: does the Complainant have trademark rights and, if so, is the disputed domain name identical or confusingly similar to it.

As noted above, the Complainant has two trademark registrations for a stylized representation of DREAMCATCHER INTERACTIVE INC. and common law rights in Canada and the USA. I disregard, however, the pending Community Trademark application as it is an inchoate right only at this stage.

The Complainant argues that the word DREAMCATCHER is the "dominant, distinctive component" of its trademarks. The disputed domain name is, it contends, identical to that component and so confusingly similar to the mark as a whole.

On the other hand, the Respondent argues that "dream catcher" is a generic term that has been used for hundreds if not thousands of years to refer to a type of Native American object. It points to a number of other US trademark registrations that contain the words and argues that use of the term for Native American objects could not be confusing.

The question of resemblance for the purposes of the Policy requires a comparison of the disputed domain name to the trademark rights which have been proved. This is a different test to that involved in trademark law where questions of the goods or services covered by the trademark rights can be relevant to the likelihood of confusion: see for example Disney Enterprises, Inc. v. John Zuccarini, Cupcake City and Cupcake Patrol, WIPO Case No. D2001-0489 (June 19, 2001); IKB Deutsche Industriebank AG v. Bob Larkin, WIPO Case No. D2002-0420 (July 23, 2002). The question of the scope of the Complainant’s trademark rights may of course be relevant to the issues under paragraphs 4(b) and 4(c).

It is likely that persons aware of the Complainant’s trademarks would consider there is, or could well be, some form of association between the owner of the disputed domain name and the Complainant. While the distinctiveness of the trademark is not conferred just by the word DREAMCATCHER, I agree with the Complainant that it is a very significant component. It is that word which identifies the Complainant as the source of its products from any other "interactive" or multi-media business. I also accept as the Respondent points out that there are a number of other registrations containing DREAM CATCHER and that it can be a generic term referring to a type of Native American object. If the disputed domain name were something like <dreamcatcherconfectionery.com>, the risk of confusion would very low, if any. The disputed domain name, however, consists simply of the dominant, distinctive part of the Complainant’s trademark. The only additional element is the inclusion of the generic TLD, .com. That addition cannot save the disputed domain name under this head. Accordingly, I find that the disputed domain name is confusingly similar to the Complainant’s demonstrated trademark rights.

C. Rights or Legitimate Interests

The Complainant’s central allegation that the Respondent does not have any rights or legitimate interest in the disputed domain name essentially revolve around the alleged non-use of the disputed domain name despite the passing of some four and a half years. The Respondent on the other hand justifies its registration specifically on the grounds that it has used the disputed domain name in connection with a bona fide offering of goods and services or has made demonstrable preparations to do so.

As with the other elements of the Policy, the Complainant bears the onus of proof. This element of the policy, however, requires the Complainant to prove a negative. Consequently, the Complainant must provide evidence that gives rise to a prima facie case that the Respondent does not have the requisite rights or legitimate interest and, if that stage is reached, it will then fall to the Respondent to provide a credible rebuttal.

It is clear that the Complainant did not authorise the Respondent to register the disputed domain name. It is also clear that the Respondent has not commonly been known by the name "dream catcher" before this dispute arose. The Complainant also points to its trademark searches in Canada and the USA which show that the Respondent has neither applied to register, nor registered, any trademarks in those countries.

Finally, the Complainant provides evidence about how the disputed domain name has been used since the Respondent registered it. The Complainant breaks this use down into eight periods:

	Period	Usage
(a)	Sept 1997 to November 1998	Dormant
(b)	November 1999 to October 2000	Text: "Dream Catcher/Coming Soon…" Image: Native American art object, known as a "dreamcatcher"
(c)	October 2000 to April 2001	Same as November 27, 1999, with added link at bottom of page: "If you are looking for DreamCatcher computer game makers please click here" Link resolves to Complainant's website: "http://www.dreamcatchergames.com"
(d)	April to September 2001	Heading: "dreamcatcher.com/Buy the book!" with thumbnail image of cover of book by Stephen King, Dreamcatcher, several paragraphs describing Mr. King’s novel, and a link at bottom of page, "Buy Dreamcatcher!," which resolves to the website of online bookseller Amazon.com (at "http://www.amazon.com").
(e)	September to November 2001	Image of a cartoon "smiley face" with words "Happy" above, and "Empire" below.
(f)	November 2001 to January 2002	Same as September 23, 2001, with added text "Smile" below image.
(g)	January 19 to 23, 2002	Same as (f)
(h)	From January 23, 2002	Heading: "dreamcatcher.com/Looking for Dreamcatcher computer games?/Buy the book!," with thumbnail image of cover of Stephen King's book Dreamcatcher, followed by the same text and link to Amazon .com that appears on the April 19, 2001 website, described above

The Complainant notes that the link to its own website appearing during period (c) above followed communications between the Complainant and the Respondent in which the Respondent indicated it had received offers for the domain name in the "millions of dollars." That link was subsequently removed and has not operated during periods (d) to (h) above. No explanation for the removal of the link has been advanced by either side. On the basis of this history, the Complainant argues that the Respondent’s use is merely a façade to give the impression that the website was being used.

On the basis of the material in the Complaint, the Complainant has demonstrated a prima facie case of lack of rights or legitimate interest in the disputed domain name and so the onus shifted to the Respondent to rebut that conclusion.

In the Response, the Respondent claims that the evidence is clear it used and made demonstrable preparations to the disputed domain name in connection with the bona fide offering of dream catchers and other Native American crafts. The evidence offered to support this claim is as follows.

First, the Response includes a photograph of what is said to be a Native American dream catcher. The Response claims that it is a photograph of a dream catcher which was given to one of the Respondent’s two principals in 1993 by a former girlfriend. The Response claims that this particular gift inspired the idea of a business selling dream catchers and the like over the Internet.

Secondly, the Respondent cites five instances over the four and a half year period in which some kind of inquiry was made by the Respondent for the supply of craft items for sale through the proposed website. These are stated to be examples only, so I am (at least by implication) invited to infer that there were other occasions. Three of the examples given appear on their face to have been initiated by the Respondent. In the other cases, the Respondent was replying to an inquiry from someone seeking to acquire the disputed domain name. The third of the contacts initiated by the Respondent, however, took place after the Complainant made the second of its inquiries about purchasing the disputed domain name. The Respondent also includes an e-mail involving its two principals on July 7, 2002, which the Respondent says evidences its development of a shopping cart concept for its website.

The Respondent recognises itself that this history of preparations to use is at best slim. It offers a number of matters by way of further explanation in the Response at section C paragraph 7:

"The reason that it has taken some time for Respondent to develop its on-line store has to do with Mr. Louis’ work commitments. The Domain was registered in 1998 while Mr. Louis was working Las Vegas, Nevada [sic] for a website design company. Unfortunately, the company went out of business and Mr. Louis was forced to move back to Miami Beach, Florida. Mr. Louis then spent the following year and a half working as the Chief Technical Officer and Webmaster for an Internet radio station, which entailed working very long hours and left him little time for other projects. Toward the end of his tenure at the radio station, Mr. Louis began establishing a website hosting and consulting company, which is now Happy Empire, Inc. During this time, Mr. Louis would spend several weeks at a time flying between Michigan and Florida doing network administration for one of Happy Empire, Inc.’s clients. In short, Respondent has, in fact, been using and making preparations to use the Domain in connection with the sale of goods, but the process has been slowed by Mr. Louis’ work commitments. A true and correct copy of Mr. Louis’ April 17, 2000, email exchange with Bob O’Donnell explaining his plans for the Domain and his time conflicts is annexed as Annex 13. Mr. Louis’ work commitments have now lessened such that he plans to have the on-line store functioning as soon as possible."

If this explanation be accepted, it could lead to a finding that the Respondent has made out its defence based on demonstrable preparations to use the disputed domain name in connection with a bona fide offering of goods – Native American dream catchers and other crafts.

The Respondent seeks to fit the link to the "amazon.com" website within this context by claiming that the link to Stephen King’s Dreamcatcher novel was a way to make some extra money while the proposed website was under development through Amazon.com’s Associate Program. The participation in the Associate Program seems to have arisen rather adventitiously, but I do not think it can be condemned for that reason.

Annex 12 to the Response sets out a number of fee payment statements that the Respondent has received from that Program for the relevant periods. The quarterly payments are not for large amounts. The payments are made for referrals from the <dreamcatcher.com> website to "amazon.com’s" website which result in sales by <amazon.com> The sales itemized range over books, music, dvds and software. Some of the software may well be the Complainant’s games. At least one item, for example, is called Traitor’s Gate. At least some of the software items, however, are not the Respondent’s products. Some items for example are for a Freddi Fish game and Electronic Arts’ Harry Potter and the Chamber of Secrets.

The fact that use of a domain name in a particular way could constitute bona fide use under the Policy does not provide a defence under the Policy unless the domain name is used in that way or preparations for use in that way are clearly demonstrated. Here, however, the disputed domain name is actually being used in a way quite different to that claimed to give rise to a legitimate interest. The record does not allow me to make an assessment about what proportion of software are the Complainant’s products and what proportion are not. Nonetheless, I do not think the use of the disputed domain name to obtain payments for the sale of products from the Complainant’s competitors is countenanced by the Policy under the heading of a right or a legitimate interest in the domain name in connection with a bona fide offering of goods. Such use is a classic form of trade diversion.

In the circumstances, therefore, I find that the Complainant has succeeded on this issue too.

D. Registered and Used in Bad Faith

Basing itself on the offer to sell the disputed domain name for amounts in the "millions" and the rather checkered history of the websites that the disputed domain name resolves to, the Complainant contends that paragraph 4(b) of the Policy is satisfied because the Respondent registered the disputed domain name primarily for the purpose of selling, renting or otherwise transferring it to the Complainant for a consideration far in excess of the out-of-pocket expenses directly related to its registration. That is, breach of paragraph 4(b)(i) of the Policy.

In the Reply, the Complainant also invokes the Respondent’s use of the disputed domain name to generate revenue through Amazon.com’s Associate Program during periods (d) and (h). To the extent that that is advanced as an independent ground, however, it cannot succeed. Some Panelists, basing themselves on the express wording of paragraph 4(b)(iv), have been willing to find breach of paragraph 4(a)(iii) on the basis of such use alone. The preponderance of views, however, is that the Policy requires both registration in bad faith and use in bad faith. One of the more detailed discussions is Telstra Corporation Ltd v. Nuclear Marshmallows WIPO D2000-0003 (February 18, 2000). The problem for the Complainant with the payments through the Associate Program is that it did not begin until 2001, in the third year after registration. On the record in this proceeding which is confined to written submissions, it is not really possible to dispute this. Accordingly, the Complainant’s reliance on paragraph 4(b)(iv) must fail. That still leaves the Complainant’s central charge under paragraph 4(b)(i).

In rebuttal, the Respondent disputes the conclusions drawn by the Complainant and contends that its registration of the disputed domain name cannot be registration and use in bad faith since it would be perfectly legitimate for it to register and use the disputed domain name in connection with a business of selling Native American and other craft items over the Internet and that was its intention. The Respondent also argues that the Complainant is in some way estopped from challenging the Respondent. As part of this argument, the Respondent further claims that the Complainant is statute barred from bringing proceedings under the US Trademarks Act.

I do not accept the estoppel argument. First, a conclusion of registration and use of a domain name in bad faith will often be something that can be reached only by inferences drawn from the respondent’s conduct. What may appear to be a perfectly plausible explanation at an early stage may well be shown in quite a different light by subsequent events. On the Complainant’s case, that is what has happened here. Secondly, it is clear that the Respondent told the Complainant in August 2000, that the Respondent was planning to use the domain name in a way which did not compete with the Complainant. On the contrary, the Respondent agreed to include some form of re-direction link to the Complainant’s own website. Any acquiescence by the Complainant in those circumstances cannot give rise to an inference that it has agreed to the Respondent using the disputed domain name in any way it likes.

Rejection of the estoppel argument does not conclude the substance of the Complainant’s argument under paragraph 4(b)(i) of the Policy.

As I have found (for reasons explained in section 5C above), the disputed domain name is being used in bad faith. The issue this case raises is whether or not it was registered in bad faith. Both explanations of the events put forward by the parties on this issue are plausible explanations in the circumstances, but they are conflicting.

In these circumstances, paragraph 15(a) of the Rules requires me to decide the Complaint on the basis of the statements and documents submitted and in accordance with the Policy, these Rules and any rules and principles of law deemed applicable. A three member Panel considered how to apply this obligation in the case of a conflict of evidence in Dean Hill Systems Ltd v. Gregory Santana WIPO D2002-0404 (September 20, 2002). Panelist Bernstein said:

"In the face of these disputed facts, it is the Panel’s responsibility to resolve those disputes as best it can, drawing reasonable inferences when appropriate and using a preponderance of the evidence standard to make fact findings. Magnum Piering, Inc. v. Mudjackers ,WIPO Case No. D2000-1525 (January 29, 2001), at pp. 8-9; Pacific Fence & Wire Co. v. Pacific Fence and Jim Paradise, WIPO Case No. D2001-0237 (June 11, 2001) at p. 6. [1]. Although there is a higher possibility of error given the limitations of the Policy’s administrative proceedings (limitations that are deliberate given the goal of designing a quick, inexpensive and fair process for resolution of cybersquatting claims), those errors can be addressed by the parties in any subsequent litigation, should the losing party elect to pursue such a claim in court, as is its right under paragraph 4(k) of the Policy.

….

"In making these findings by inference, I acknowledge that this is a close case, and that Respondent has offered a version of events that, if accepted as true, could support the notion that he did not act in bad faith at the time of registration. I thus understand why Clive Elliott would so find, and I respect his position. But, all things considered, and using the preponderance of the evidence standard that governs these proceedings, I am persuaded by the parties’ submissions and by the documentary evidence in the record that Complainant’s version of those 1996 events is more likely true than Respondent’s version. It is not, to respond to Sally Abel’s thoughtful concurrence, that I find Respondent’s factual assertions incredible, but rather, that I find Complainant’s assertions somewhat more believable on this point."

In footnote 1, the learned Panelist said:

"1. If the dispute simply cannot be resolved, then it is appropriate to rule for respondent as the Complainant bears the burden of proof. Tribeca Film Center, Inc. v. Lorenzo Brusasco-Mackenzie ,WIPO Case No. D2000-1772 (April 10, 2001) (when it is impossible to tell from the evidence submitted whether it is more likely than not that respondent offered to sell the domain name, Complainant loses because Complainant bears the burden of proof). That is, though, a rare occurrence."

In the same case, Clive Elliott, the Presiding Member, said:

"Firstly, I should say that a panel should not decline to reach a conclusion simply because there are hotly disputed facts. Disputes of fact are inevitable in any contentious arena. I also have to say that my impression is that the Respondent has been less than frank with the Panel and the Complaint has real merit. Indeed, the result, pursuant to the majority decision, vindicates the Complainant’s position.

"I agree entirely with the view that, where reasonably possible, a panel should try to resolve disputes of fact. We are however restricted by the record and the limited jurisdiction given to us under the Policy.

….

"The question I ask is whether I am entitled to and should draw an adverse inference against the Respondent. With great respect to David Bernstein, with whom I differ on this, I do not feel able to draw such an inference.

I say this on the basis that there is no reliable evidence to allow or compel a contrary finding, other than a general suspicion that the above statements may not be entirely truthful. With respect, I feel it would be inappropriate for me to express a view on the facts, when they are so hotly contested and on the very issue which dictates whether (in my view) the relevant actions were done in good or bad faith.

"If there was reasonably cogent evidence that Mr. Santana should not be believed, I would draw the necessary inferences against him. However, I do not feel that I am able to do so in this case and he is entitled to the benefit of his declaration being taken at face value, unless and until it can be challenged in an appropriate forum."

The issue in that case for these two Panelists was rather different than in the present proceeding as it involved a question of whether the Complainant and Respondent had been in some sort of commercial relationship at the time the domain name was registered. The third Panelist resolved the case on a different basis.

The first point of principle on which both Panelists Elliott and Bernstein were agreed is that a Panel should not decline to reach a conclusion just because there are hotly contested facts. The second point is that the conflict should be resolved on a standard of the preponderance of the evidence including any inferences that can be reasonably drawn. In resolving such a dispute, however, I am restricted to the record in the manner indicated by paragraph 15(a) of the Rules. Thirdly, if the preponderance of the evidence does not fall the Complainant’s way, or there is no preponderance either way, the Complaint must fail as the Complainant has the burden of proof.

Like Panelist Elliot in Dean Hill, I have an impression that in some aspects the Respondent has been less than frank particularly about its activities after the disputed domain name was registered including its role with the Pimpwar game. I also have an impression that the Complaint has real merit. Rejection of the Respondent’s version of its purpose in registering the disputed domain name, however, requires more than a general suspicion of the kind arising in this case. The record ultimately does not permit me to carry matters beyond a general suspicion, especially as the basis for that suspicion is ultimately equivocal on the Respondent’s motives in registering the disputed domain name. Given that conclusion, it is inappropriate for me to express more detailed views.

Accordingly, I must find that the Complainant has not succeeded in establishing that the Respondent has registered and used the disputed domain name in bad faith on the limited record in this proceeding.

 

6. Decision

As the Complainant has not succeeded in establishing that the Respondent registered and uses the disputed domain name in bad faith, the Complaint is denied.

 

---

 

Warwick A. Rothnie
Sole Panelist

Dated: May 6, 2003