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WIPO Arbitration and Mediation Center

 

ADMINISTRATIVE PANEL DECISION

Starbucks Corporation and Starbucks U.S. Brands Corporation v. Duncan Freeman

Case No. D2003-0262

 

1. The Parties

The Complainants are Starbucks Corporation, Seattle, Washington, United States of America; and Starbucks U.S. Brands Corporation, Burlingame, California, United States of America (hereinafter "Complainant"), represented by Jones Day, United States of America.

The Respondent is Duncan Freeman, Atlanta, Georgia, United States of America, represented by Richard C. Freeman, III, P.C., United States of America.

 

2. The Domain Names and Registrar

The disputed domain names <frappuccino.com> and <starbuckscoffee.com> are registered with Network Solutions, Inc.

 

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on April 5, 2003. On April 7, 2003, the Center transmitted by email to Network Solutions, Inc. a request for registrar verification in connection with the domain names at issue. The Registrar transmitted by email to the Center its verification response. In response to a notification by the Center that the Complaint was administratively deficient, the Complainant filed an amendment to the Complaint on April 19, 2003. The Center verified that the Complaint together with the amendment to 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 April 23, 2003. In accordance with the Rules, paragraph 5(a), the due date for Response was June 4, 2003. The Response was filed with the Center on June 4, 2003.

The Center appointed Mark Partridge, Dan Hunter and Diane Cabell as panelists in this matter on June 25, 2003. The Panel finds that it was properly constituted. Each member of the Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.

 

4. Factual Background

Complainant operates coffee shops and sells coffee and related products under the well known STARBUCKS brand in the United States and abroad. Complainant also sells a specialty coffee-based drink under the FRAPPUCCINO brand.

The evidence submitted by Complaint shows that it began operations as a single store in Seattle in 1971 and did not open another store for 16 years. It made its initial public offering in 1992. By 2002, Complainant operated more than 5500 retail locations worldwide. Complainant introduced its FRAPPUCCINO product in 1995.

Complainant owns various trademark registrations including U.S. Trademark Registrations, Reg. No. 1,372,630 for STARBUCKS, dated November 26, 1985, and Reg. No. 2,039,849, for STARBUCKS COFFEE issued February 25, 1997, with an effective priority date of July 24, 1995. By assignment dated October 11, 1994, from Coffee Connection, Inc., Complainant acquired U.S. Trademark Registration, Reg. No. 1,745,953, for FRAPPUCCINO, issued January 12, 1993, with an effective priority date of July 22, 1991. Complainant has also registered these marks in foreign jurisdictions.

Respondent originally registered the domain name <starbuckscoffee.com> on April 4, 1997, and the domain name <frappuccino.com> on October 28, 1997.

On January 5, 1998, Complainant wrote Respondent to object to the registration of the domain names. On January 14, 1998, Respondent's father and attorney responded requesting that Complainant substantiate its claim that the domain names infringed Complainant's trademarks. On February 9, 1998, Complainant's attorney more fully explained the legal basis for its objection and offered to pay out-of-pocket expenses and actual payments for transfer of the domain names.

On February 2, 1998, Complainant, relying on the dispute policy then in effect with the registrar, Network Solutions, Inc., filed an objection to Respondent's domain names because they were identical to Complainant's marks. Accordingly, NSI suspended use of the names on March 27, 1998, and April 2, 1998. The suspension remained in effect until February 2000 when the NSI policy was replaced with the ICANN UDRP procedure used in this proceeding.

On March 4, 1998, following a telephone conversation, Complainant's counsel wrote Respondent's counsel acknowledging but rejecting Respondent's offer to transfer the domain names for $7500. The letter asserts Complainant's belief that "no such payment may legally be demanded".

On March 12, 1998, Respondent's counsel sent a letter explaining further the discussions regarding payment. Respondent's counsel states that he said Starbucks ought to consider rewarding Respondent because he prevented someone from "Senegal or Madagascar or Zanzibar" from registering the name. The letter continues:

"When you asked what such a reward ought to be, I asked you for a number that you thought would be agreeable to you client. While I recall the number $7,500.00 being mentioned, I am uncertain how/when the sum of $7500 was mentioned."

On that same date, Complainant's counsel provided its account of the discussions. Complainant's letter states:

"You asked me, 'What are you prepared to offer, other than the $100?' I said 'Nothing.' I then asked whether Duncan had a counter-offer. After some subsequent discussion, you told me that Duncan would be willing to transfer the registration of both domain names for approximately $7,500 if Starbucks did the paper work. Thus, both the concept of charging Starbucks for the domain name transfer and the amount of the proposed charge originated with you, not with me."

Respondent has submitted an affidavit in support of his Response that states:

"Affiant's telephone conversation with [counsel] in March or early April 1998 was the first that Affiant learned that there had been any discussion about the transfer or sale of the subject domain names. Affiant immediately stated that the domain names were for Affiant's use only, as a non-commercial comment site. The aforementioned domain names have never been for sale or transfer to anyone, for any reason. Affiant has never discussed the sale or transfer of said domain names with anyone."

Respondent's affidavit also states that he registered the domain names for use as a non-commercial website posting "comments, messages, recipes, prose, poetry, and related information about different coffees, coffee varieties, blends, manufacturers, processes and terminology".

Respondent further states in the affidavit that domain names were used solely for a comment site prior to suspension of the domain names in 1998. Respondent also states in his affidavit that the websites have been active as non-commercial sites several times over the past three years. The domain names currently lead to sites that are password protected and therefore apparently inaccessible to the general public. No evidence appears in the record to show the content of Respondent's websites.

As mentioned above, the NSI suspension on the domain names was lifted in February 2000. It appears, however, that Complainant took no action against the names until it filed this action on April 5, 2003.

 

5. Parties’ Contentions

A. Complainant

Complainant contends that the domain names are identical to trademarks owned and registered to Complainant.

Complainant contends that Respondent has not made any bona fide offering of goods or services under the domain name, is not known by either domain name, and has not made any fair or non-commercial use of the domain names. Therefore, it asserts that Respondent lacks any right or legitimate interest in the domain name.

Complainant finally contends that Respondent registered and used the domain names in bad faith by demanding a "reward" for transfer of the domain names and by failing to use the domain names to resolve to an active website.

B. Respondent

Respondent contends that neither domain name is derived from Complainant, but that the domain name <starbuckscoffee.com> is inspired by the name of the first mate in Herman Melville's novel Moby Dick and that frappuccino is the combination of the words "frappe and cappuccino". Respondent asserts that both names are used by third parties and are not exclusive to Complainant.

Respondent contends that it registered both domain names with the intent to use them for a non-commercial site "for posting and reading comments concerning different kinds of coffee, coffee products, and like information". Respondent asserts that the domain names have been used for an active website during the past three years.

Respondent also asserts that Complainant has waived its claims and is barred by estoppel because it failed to take any action during the years of registration other than the objection it filed with NSI in 1998 and the filing of this action in 2003.

 

6. Discussion and Findings

As an initial matter, Respondent has asserted that Complainant's claims are barred by estoppel. Complainant has not had an opportunity to respond to this defense.

The defenses of laches, acquiescence and estoppel are recognized under U.S. law as an equitable defense to claims for trademark infringement. 15 U.S.C. §1115(b)(9). The elements of the defense generally involve (1) inexcusable delay in taking action; (2) a reasonable conclusion that the delay implies consent; and (3) detrimental reliance in response to the delay.

Here, Complainant was prompt in putting Respondent on notice of its objection and in filing an objection with NSI under the predecessor dispute policy. It does appear, however, that Complainant took no action from early 2000, when the suspension under the NSI policy was lifted, until nearly three years later, when it initiated this proceeding.

Even assuming for the sake of argument that the defense is applicable here, Respondent has failed to demonstrate any detrimental reliance on the three-year period of delay. Moreover, given the action already taken by Complainant, it would not have been reasonable for Respondent to conclude that Complainant no longer objected to the Respondent's use and registration of the domain names. Accordingly, we find that Complainant's objections are not barred by its alleged delay in taking action.

A. Identical or Confusingly Similar

The disputed domain names are identical to trademarks in which Complainant has prior trademark registrations and rights.

Respondent's contentions that <starbuckscoffee.com> is derived from a Melville character and that <frappuccino.com> is derived from "frappe" and "cappuccino" do not affect Complainant's rights in those marks. Further, Respondent's evidence of third party use is insufficient to contest Complainant's trademark rights since there is no showing of that such use in anyway diminishes the public's recognition of STARBUCKS and FRAPPUCCINO as identifying Complainant as the source of coffee and related services offered under those marks.

B. Rights or Legitimate Interests

Complainant has made a prima facie showing that the Respondent lacks any rights or legitimate interests in the domain names. Respondent has not made a bona fide offering of goods or services under the domain names, does not hold any trademark registrations relating to those names, and is not generally known by those names.

Respondent claims that it has made fair, non-commercial use of the domain names but has failed to put in any evidence of that alleged use. Respondent asserts that it has used the domain names for websites providing general commentary about coffee. However, neither STARBUCKS nor FRAPPUCCINO is a descriptive or generic term used generally in connection with coffee. As such, the use of either term for general commentary about coffee would not constitute fair use of a descriptive term to describe the nature of the content proposed for Respondent's website. Respondent has also failed to show that he has made or intends to make nominative fair use of STARBUCKS or FRAPPUCCINO for legitimate comment about Complainant or Complainant's product. We therefore find that Respondent lacks any right or legitimate interest in the domain names.

C. Registered and Used in Bad Faith

Complainant's allegation of bad faith registration and use of the domain names relies primarily on Respondent's reaction to Complainant's initial objection. Complainant argues that Respondent attempted to sell the domain names for profit. Respondent claims instead that it had no intent to sell the domain names for profit and only wanted to use the domain names for sites providing non-commercial commentary about coffee.

The best evidence on these points is the actual correspondence exchanged between the parties at the time of the initial objection. In response to Complainant's objection, it appears Respondent's counsel and father proposed that Respondent should receive a "reward" for registering the domain names. When Complainant rejected that request and informed Respondent that the request for a reward could be illegal, Respondent's counsel admitted that he suggested that Complainant "consider rewarding" Respondent, but he claimed to be "uncertain how/when the sum of $7,500 was mentioned". It is also significant that Respondent's initial responses to Complainant's objection make no mention of Respondent's alleged use of the domain names for legitimate commentary.

Respondent's alleged reason for registering the domain names is not persuasive. He claims he intended to use the names for general commentary about coffee but he did not select domain names that relate generally to coffee for that purpose. Instead, he picked domain names corresponding to two registered trademarks of Complainant. Obviously, Internet users would at least initially expect that websites operated under those names were somehow associated with Complainant. Under the circumstances, Respondent's claimed reason for registration seems disingenuous at best.

On the record presented it seems more likely than not that Respondent registered and used the domain names in an attempt to profit by selling the domain names to Complainant and that the alleged purpose for registration is an afterthought or pretext. Based on Respondent's initial demand for a "reward" and the other circumstances discussed above, we find that the domain names were registered and used in bad faith.

 

7. Decision

For all the foregoing reasons, in accordance with Paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the domain names <starbuckscoffee.com> and <frappuccino.com> be transferred to the Complainant.

 

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Mark Partridge
Presiding Panelist

Dan Hunter
Panelist

Diane Cabell
Panelist

Date: July 9, 2003