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WIPO Arbitration and Mediation Center

 

ADMINISTRATIVE PANEL DECISION

Berlitz Investment Corp. v. Stefan Tinculescu

Case No. D2003-0465

 

1. The Parties

Complainant is Berlitz Investment Corporation, Wilmington, Delaware, United States of America ("Berlitz" or "Complainant").

Respondent is Stefan Tinculescu, Staten Island, New York, United States of America ("Tinculescu" or "Respondent").

 

2. Domain Name and Registrar

The domain name at issue is: <berlitzsucks.com> (the "domain name").

The registrar is Network Solutions, Inc. (the "Registrar").

 

3. Procedural History

The WIPO Arbitration and Mediation Center (the "Center") received the Complaint by e-mail on June 17, 2003, and in hard copy on June 18, 2003. The Center verified that the Complaint satisfies the formal requirements of the ICANN 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"). Complainant made the required payment to the Center.

On June 18, 2003, the Center transmitted via e-mail to the Registrar a request for registrar verification in connection with this case [1]. On June 24, 2003, the Registrar transmitted via e-mail to the Center its response, stating (inter alia) that (1) the domain name was registered through it; (2) Respondent is the current registrant of the domain name; and (3) the domain name will remain locked during this administrative proceeding.

On June 25, 2003, the Center transmitted the Notification of Complaint and Commencement of Administrative Proceeding, together with a copy of the Complaint, via e-mail with copy by courier and facsimile to Respondent and via e-mail to the Registrar. The Center advised that Respondent’s Response was due by July 15, 2003, pointed out that the Response should be in accordance with the Rules and the Supplemental Rules, and described the consequences of a default if the Response was not sent by the due date. The Center also noted that Complainant had elected for a single panelist to decide this matter.

The requirements of Paragraph 2(a) of the Rules having been satisfied, the formal date of the commencement of this administrative proceeding, pursuant to Paragraph 4(c) of the Rules, is June 25, 2003.

On July 15, 2003, Respondent sent an e-mail to the Center requesting a copy of a document referenced in the Complaint, and seeking an extension of time to respond to the Complaint due to an alleged "limited access to an Internet connection." [2] The Center promptly forwarded Respondent’s e-mail to Complainant and invited Complainant to comment thereon. On July 16, 2003, Complainant’s representative responded to the Center, opposing any grant of an extension to Respondent on the ground that Respondent had not established an "exceptional circumstance" justifying an extension [3]. On July 18, 2003, the Center notified Respondent that his request for an extension had been granted, and provided Respondent with a new response deadline of July 25, 2003.

No Response was received from Respondent by the July 25, 2003, deadline. On July 28, 2003, the Center transmitted to Respondent, via e-mail, a Notification of Respondent Default. The Center advised Respondent that (a) Respondent had failed to comply with the deadline for submission of its Response and (b) the consequences of default, including (1) that a single panelist would be appointed (per Complainant’s request); (2) that the panel would be informed of Respondent’s default and would decide, in its sole discretion, whether to consider a Response if submitted later; and (3) notwithstanding the default, the Center would continue to send all case-related materials to Respondent.

No Response was ever received from Respondent [4].

On August 1, 2003, the Center advised the parties, in accordance with Paragraph 6(f) of the Rules, of the appointment of Michael Albert, the undersigned, as the Panelist in this case. Pursuant to Paragraph 15(b) of the Rules, the Center further informed the parties that, absent exceptional circumstances, the panel would forward a decision to the Center by August 15, 2003.

On August 1, 2003, the Center transmitted the case file to the panel.

On August 15, 2003, the Center informed the parties that the date for decision of this matter had been extended to August 22, 2003.

 

4. Factual Background; Parties’ Contentions

a. The Trademark

The Complaint is based on Complainant’s alleged ownership of rights in the mark BERLITZ, which Complainant maintains is either identical or confusingly similar to the domain name. Complainant uses the BERLITZ mark for language instruction and related goods and services. Complainant claims to have first used the BERLITZ mark in the year 1878.

Complainant owns registrations in numerous jurisdictions, including several United States federal registrations, for the mark BERLITZ. Complainant provided the panel with registration certificates for a number of these marks, including U.S. Trademark Registration No. 2,320,901.

U.S. Reg. No. 2,320,901 is for the word mark BERLITZ in block letters. A block-letter registration is the broadest claim to a word mark, in that it is "not … restricted to any particular form or type." Exxon Corp. v. National Foodline Corp., 579 F.2d 1244, 1247 (C.C.P.A. 1978). This registration issued in 2000 for a list of goods including teaching, instructional, and educational materials used in connection with language instruction, and claims a date of first use in 1878.

b. Jurisdictional Basis

The dispute is within the scope of the Policy, and the panel has jurisdiction to decide the dispute. The Registrar’s registration agreement incorporates the Policy by reference.

On Page 6 of its Complaint, Complainant avers that each of the three requirements of Paragraph 4(a) of the Policy have been satisfied.

c. The Complaint

Complainant asserts as follows:

- Complainant advertises and sells its goods and services related to language instruction throughout the world under the mark BERLITZ and through its website at "www.berlitz.com".

- Complainant has promoted the BERLITZ mark continuously and extensively since 1878. In 2001, Complainant spent over $18 million in advertising and promotion, and realized sales of goods and services bearing the BERLITZ mark of approximately $500 million.

- Complainant owns numerous registrations for the BERLITZ mark in many jurisdictions around the world, including in the United States.

- Complainant is the registrant of several BERLITZ-related domain names, including <berlitz.com>, which resolves to its principal website.

- Respondent is a former employee of Complainant who is unhappy about the manner in which his employment ended.

- Respondent launched an Internet website at the domain name in 2002, in an effort to extract money from Complainant, to disrupt Complainant’s business, and to disparage Complainant.

- On January 2, 2003, Complainant filed suit against Respondent in the United States District Court for the Western District of New York. The court in that case found several of the statements placed by Respondent on the website at the domain name to be "inflammatory," "libel per se" and defamatory "on their face."

- The court issued a temporary restraining order prohibiting Respondent from continuing to make these statements on the website at the domain name. Respondent did not comply with the court’s order, and the website was taken down by the ISP when notice of the order was provided to it. The court subsequently issued an order making the injunction permanent.

- The domain name is confusingly similar to Complainant’s BERLITZ mark, despite the addition of the word "sucks."

- Respondent has no rights or legitimate interests in the domain name.

- Respondent registered and is using the domain name in bad faith. Respondent’s bad faith includes, inter alia, attempting to coerce Complainant into a settlement; attempting to sell the domain name to Complainant for a sum in excess of his documented out-of-pocket costs; and violating the aforementioned court’s restraining order by continuing to publish prohibited content on the website at the domain name.

d. The Response

As noted above, Respondent is in default pursuant to Paragraph 5(e) and 14 of the Rules, and Paragraph 7(c) of the Supplemental Rules because no Response was received from Respondent by the applicable deadline.

Unlike in a U.S. court proceeding, however, a default does not automatically result in a finding for Complainant. Rather, under Paragraph 4(a) of the Policy, it remains Complainant’s burden to establish that all three of the required criteria for a transfer of the domain name or other remedy have been met.

Under Paragraphs 5(e) and 14(a) of the Rules, the effect of a default by Respondent is that the panel shall proceed to a decision on the Complaint. Under Paragraph 14(b), the panel is empowered to draw such inferences from Respondent’s default as it considers appropriate under the circumstances.

 

5. Discussion and Findings

a. Regulations Applicable to Consideration of the Merits

The panel now proceeds to consider this matter on the merits in light of the Complaint, the Response (or lack thereof), the Policy, the Rules, the Supplemental Rules, and other applicable legal authority, pursuant to Paragraph 15(a) of the Rules. In the panel’s view, given that both parties to this dispute appear to be based in the United States, applicable authority shall include relevant principles of United States trademark law.

Paragraph 4(a) of the Policy provides that Complainant must prove, with respect to the domain name, each of the following:

(i) The domain name is identical or confusingly similar to a trademark in which Complainant has rights; and

(ii) 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.

Paragraph 4(b) of the Policy sets out four non-exclusive, but illustrative, circumstances or acts that for purposes of Paragraph 4(a)(iii) above would be evidence of the registration and use of a domain name in bad faith.

Paragraph 4(c) of the Policy sets out three illustrative circumstances, any one of which, if proved by Respondent, would demonstrate Respondent’s rights or legitimate interests in the domain name for purposes of Paragraph 4(a)(ii).

b. Effect of the Default

In this case, the panel finds that as a result of the default, Respondent has failed to rebut any of the factual assertions that are made and supported by evidence submitted by Complainant. The panel does not, however, draw any inferences from the default other than those that have been established or can fairly be inferred from the facts presented by Complainant and that, as a result of the default, have not been rebutted by any contrary assertions or evidence.

In particular, by defaulting and failing to respond, Respondent has failed to offer the panel any of the types of evidence set forth in Paragraph 4(c) of the Policy from which the panel might conclude that Respondent has any rights or legitimate interest in the domain name, such as use or preparation to use the domain name prior to notice of the dispute, being commonly known by the domain name, or making legitimate noncommercial or fair use of the domain name.

Moreover, as discussed below, Respondent has failed to provide any exculpatory information or reasoning that might have led the panel to question Complainant’s argument that Respondent has acted in bad faith.

c. Complainant’s Proof

(i) Domain Name Identical or Confusingly Similar to Trademark

Complainant has proven that it is the owner of rights in the trademark BERLITZ. Complainant’s registrations of its marks on the Principal Register of the USPTO establish a presumption of validity of the marks under United States law. See 15 U.S.C. § 1057(b); Avery Dennison v. Sumpton, 189 F.3d 868 (9th Cir. 1999). Additionally, the registrations constitute constructive notice to all other parties of Complainant’s ownership of the marks. See 15 U.S.C. § 1072.

In comparing Complainant’s mark to the domain name, it is well established that the generic top-level domain, in this case ".com," must be excluded from consideration as being a generic or functional component of the domain name. See Sporty's Farm v. Sportsman's Market, 202 F.3d 489, 498, (2d Cir. 2000).

The remaining term, berlitzsucks, consists solely of Complainant’s trademark BERLITZ, plus the derogatory term "sucks."

Complainant avers that the trend among panels is toward finding confusing similarity in such cases. E.g., Bayer Aktiengesellschaft v. Dangos & Partners, WIPO Case No. D2002-1115 (February 3, 2003) (surveying cases and noting that confusing similarity has been found in the "majority" of decisions addressing domain names consisting of a well-known mark plus the term "sucks").

The discussion in Bayer notwithstanding, this panel is not entirely convinced. Numerous previous panels have concluded that appending a critical term (such as "sucks") to a trademark in a domain name automatically signals that the corresponding website is intended for parody or criticism, and eliminates any significant risk that the public will be confused into believing that the trademark owner owns or is affiliated with the domain name. E.g., Qwest Communications International, Inc. v. DefaultData.com a/k/a Brian Wick, WIPO Case No. D2003-0002 (March 2, 2003) ("This is not like cases in which words or phrases such as ‘sucks,’ ‘frauds,’ ‘scams,’ ‘criminals,’ or ‘complaints’ are appended to a trade name, causing the domain name itself to signal parody or criticism.") (emphasis added); Arthur Guinness Son & Co. (Dublin) Limited, Guinness Anchor Berhad v. Josh.com.my a.k.a. Josh Lim, WIPO Case No. D2002-1117 (January 24, 2003) ("This is not the same as cases where Respondents have created sites critical of a particular trademark owner by incorporating some satirical or even pejorative element in the domain name, as in the ‘sucks’ cases. In the latter, it is clear that the domain name leads to an ‘attack’ site.") (emphasis added); see also Action Instruments, Inc. v. Technology Associates, WIPO Case No. D2003-0024 (March 6, 2003) ("[S]everal panels have found that, if the domain name does not itself describe the critical nature of the website by including a phrase such as ‘sucks,’ the use of the domain name may be misleading and thus ineligible for protection as a fair use.").

The Sixth Circuit Court of Appeals recently held that, by signaling a parody or criticism, a critical term in a domain name obviates confusion. Taubman Co. v. Webfeats, 319 F.3d 770, 778 (6th Cir. 2003) (finding that "<taubmansucks.com> removes any confusion as to source. We find no possibility of confusion and no Lanham Act violation."). Trademark owners, indeed, are highly unlikely to disparage or parody their own goods or services.

As the Sixth Circuit also noted in Taubman, use of another’s trademark or corporate name in a domain name for purposes of parody or criticism may well be a form of expression protected under the First Amendment. Id.

Moreover, the established trademark law doctrine of "nominative fair use" recognizes that where one cannot avoid using an otherwise protectable trademark to identify another party for a legitimate purpose (such as parody or criticism), the use is a protected form of speech and cannot be suppressed under the Lanham Act. See, e.g., The New Kids On The Block v. News America Publishing Inc., 971 F.2d 302 (9th Cir. 1991).

Accordingly, Respondent might well have been able to advance a powerful argument that he has used the mark BERLITZ to truthfully designate the identity of the company that he intended to criticize (i.e., Complainant). In appropriate circumstances, this panel might well find such critical usage of another’s trademark within a domain name to be a "nominative fair use."

Respondent, however, has not advanced any such argument – or indeed any argument at all – in this case. After requesting and obtaining an extension of time to respond, it failed to respond at all. While a default does not automatically result in a judgment for the complainant, who at all times bears the burden of proving its case, it does leave the panel without any factual basis to conclude either (a) that a defense of nominative fair use should succeed, or (b) that Respondent’s critical use of the mark BERLITZ in combination with the word "sucks" in the domain name is not likely to cause confusion, on the facts peculiar to this case.

As explained in the Complaint, Complainant’s core business is teaching English to customers who do not speak it. Accordingly, Complainant contends that many of its customers (and potential customers) are "presumptively incapable of … appreciating the nuances of American slang." This plausible factual assertion by Complainant is unrebutted by Respondent, and accordingly is credited by the panel.

Thus, customers or potential customers of Complainant who search for Complainant on the Internet and are directed to <berlitzsucks.com> may not know that it is not associated with Complainant. Cf. Asda Group Ltd. v. Mr Paul Kilgour, WIPO Case No. D2002-0857 (November 11, 2002) (confusion between <asdasucks.net> and mark ASDA unlikely where "the panel has examined the Complainant’s website for signs of a foreign clientele and has found nothing of relevance … Internet users unfamiliar with the English language, yet aware of the existence of Asda are unlikely to exist in significant numbers.").

The panel need not decide today whether confusion on the part non-English-speaking Internet users would always be likely where a particular domain name consists of a trademark combined with the word "sucks." Some panels have apparently traveled down that path, see, e.g., Bayer ("Internet users are not always fluent in English or at least not sufficiently fluent to perceive that the term ‘sucks’ is used to denigrate, criticize and disparage, and that it is therefore a pejorative term, which should immediately disassociate the domain name to which it is appended from the Complainant’s trademark forming part of the domain name."); Vivendi Universal v. Mr. Jay David Sallen and GO247.COM,INC., WIPO Case No. D2001-1121 (November 7, 2001) ("[N]ot all Internet users speak English as their mother tongue."; <vivendiuniversalsucks.com> held confusingly similar to mark VIVENDI UNIVERSAL); Koninklijke Philips Electronics N.V. v. In Seo Kim, WIPO Case No. D2001-1195 (November 12, 2001) ("Not all Internet users are English speaking or familiar with the use of ‘sucks’ to indicate a site used for denigration"; <philipssucks.com> held confusingly similar to mark PHILIPS), but this panel remains skeptical.

Nevertheless, the peculiar facts of this case (Complainant’s core business catering almost exclusively to individuals who do not speak English as a first language) - combined with Respondent’s failure to advance any reasoning or argument why confusion of such individuals is unlikely - lead the panel to conclude that Complainant has sufficiently established confusingly similarity under the Policy.

(ii) Whether Respondent Has Rights or Legitimate Interest in the Domain Name

There is no evidence in the record that Respondent has any rights or legitimate interest in the domain name. Complainant states that Respondent has no rights or legitimate interest in the domain name. This contention is unrebutted, and the panel finds it credible.

The panel concludes that none of the three illustrative circumstances set forth in Paragraph 4(c) of the Policy demonstrate any rights or legitimate interest in the domain name on the part of Respondent. First, Respondent’s prior use of the website at the domain name (i.e., before the website was taken down pursuant to a court order) to disparage Complainant was not a "bona fide offering of goods or services," as a federal court has effectively already ruled in its injunctive orders.

Second, Respondent has not been "commonly known by the domain name."

Third, Respondent is not "making a legitimate noncommercial or 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." Indeed, a court of competent jurisdiction has already concluded that Respondent’s prior use of the domain name was intended to tarnish Complainant and its BERLITZ mark. It is not this panel’s prerogative to ignore such a court ruling, and absent a Response there is no factual predicate upon which to do so. Respondent could perhaps have presented an argument differentiating "criticism" of Complainant with the domain name from "tarnishment" of Complainant and its mark; but he did not do so, and this panel will not sua sponte disregard the finding of a United States federal court.

In sum, the federal registration of Complainant’s BERLITZ mark, coupled with Respondent’s obvious awareness of Complainant’s rights in the mark (as a former employee of Complainant), the arguments and proof presented by Complainant, the findings of the United States District Court for the Western District of New York, and Respondent’s failure to advance any of the defenses provided in Paragraph 4(c) of the Policy, lead this panel to conclude that Respondent has no rights or legitimate interest in the domain name.

(iii) Registration and Use in Bad Faith

Complainant’s third hurdle is to establish that Respondent has registered and used the domain name in bad faith.

Paragraph 4(b) of the Policy sets out four illustrative circumstances of the registration and use of a domain name in bad faith. The first is acquisition or registration of 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 or to a competitor of that complainant, for valuable consideration in excess of [registrant’s] documented out-of-pocket costs directly related to the domain name."

In this case, Complainant submitted (at Annex 5 to the Complaint) a copy of a "settlement offer" posted by Respondent on the website at the domain name in which Respondent offered to surrender the domain name if Complainant, inter alia, (a) made a donation to the American Civil Liberties Union of at least an amount equal to a one-year domain name registration fee; and (b) published an advertisement of Respondent’s formulation in the New York Times.

The panel concludes that this demand meets the criteria of Paragraph 4(b)(i) of the Policy. "It is immaterial that the Registrant requested [that] the payment be made to a charity," Direct Line Group Ltd, Direct Line Insurance plc, Direct Line Financial Services Ltd , Direct Line Life Insurance Company Ltd, Direct Line Unit Trusts Ltd, Direct Line Group Services Ltd v. Purge I.T., Purge I.T. Ltd., WIPO Case No. D2000-0583 (August 13, 2000), for such a donation is still "valuable consideration" to the registrant if so desired by him. Likewise, the proposed New York Times advertisement demanded by Respondent in this case constitutes "valuable consideration" as well. Respondent’s attempt to transfer the domain name to Complainant in return for such consideration evidences bad faith under the Policy.

The second illustration of bad faith in the Policy occurs when the registrant registers the domain name to prevent the trademark owner from reflecting the mark in a corresponding domain name, particularly when Respondent has engaged in a pattern of such conduct. Complainant does not allege that this was Respondent’s intention in registering the domain name, and indeed Complainant has not been prevented from registering the mark BERLITZ as a domain name. Accordingly, the panel does not find this illustration applicable here.

The third illustration of bad faith is registration "primarily for the purpose of disrupting the business of a competitor." On the facts of this case, there is no evidence that Respondent is a competitor of Complainant. Accordingly, the panel need not reach the question of whether Respondent’s registration of the domain name has disrupted Complainant’s business.

The fourth illustrative example of bad faith in the Policy is a respondent’s use of the domain name in an effort to attract, for commercial gain, Internet users to the respondent’s website by creating a likelihood of confusion with the complainant’s mark.

The panel does not find this illustration directly applicable, because it does not appear that Respondent intended to (or did) gain commercially from the attraction of Internet users to the website at the domain name.

The panel does, however, find additional evidence of bad faith in this case [5]. In particular, as Complainant points out, Respondent ignored a court order to remove disparaging content from the website at the domain name. The content was finally removed by the ISP when Complainant served the ISP with a copy of the court order. The panel concludes that failing to heed a court order regarding the domain name, issued by a court of competent jurisdiction, is further evidence of Respondent’s bad faith under the Policy.

In sum, the panel concludes that Respondent has registered and used the domain name in bad faith pursuant to Paragraph 4(b) of the Policy. Legitimate defenses may well exist in defense of "criticism" domain names of this nature, whether from the perspective of trademark law’s "nominative fair use" doctrine, or the protections accorded to criticism and parody both by the Policy and by U.S. law. Respondent, however, failed to advance any such defense, and additionally acted in violation of a court order.

 

6. Decision

In light of the findings and analysis by the panel, the panel decides that Complainant has met its burden of proving: (1) the domain name is confusingly similar to Complainant’s trademark BERLITZ; (2) Respondent has no rights and no legitimate interest in respect of the domain name; and (3) the domain name has been registered and is being used by Respondent in bad faith.

Accordingly, pursuant to Paragraph 4(i) of the Policy and 15 of the Rules, the panel requires that the domain name be transferred to Complainant.

 

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Michael A. Albert
Sole Panelist

Dated: August 22, 2003

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Footnotes:

1. When no response to this first request was received, the Center sent a reminder e-mail to the Registrar on June 23, 2003.

2. Respondent did not copy Complainant on this e-mail as required by Rule 2(h)(iii) (although the Complainant was copied on the Center’s acknowledgement). Although the Respondent’s oversight in this regard does not impact the panel’s decision in this case, the panel notes that it considers failure to comply with Paragraph 2(h)(iii) of the Rules to be a serious matter.

3. Complainant appears to have been referring to the standard set forth in Paragraph 14(a) of the Rules.

4. The Center’s July 18, 2003 e-mail to Respondent extending the response deadline, was returned because it was too large (it included an attached copy of the document previously requested by Respondent). On August 1, 2003, the Center forwarded its July 18, 2003 e-mail to Respondent without the attachment. The August 1 e-mail appears to have been received. However, Respondent neither filed a Response nor requested a further extension of time.

5. Paragraph 4(b) of the Policy expressly states that the four illustrations of bad faith are "without limitation" to other activity that can also lead to a conclusion that Respondent has registered and used the domain name in bad faith.