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Arbitration and Mediation Center
Palace Holding, S.A. de C.V., v. Priston Entertainment Ltd.
Case No. D2003-0705
1. The Parties
The Complainant is Palace Holding, S.A. de C.V., Cancun, Mexico ("the Complainant"), represented by Curtis, Mallet-Prevost, Colt & Mosle LLP, United States of America.
The Respondent is Priston Entertainment Ltd., C/O Collin Williams and Ingrid Williams, Montreal, Canada ("the Respondent"), represented by Greenspoon Perreault, S.E.N.C., Canada.
2. The Domain Name and Registrar
The disputed domain name <moonpalace.com> ("the Domain Name") is registered with DomainPeople ("the Registrar").
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on September 6, 2003. On September 9, 2003, the Center transmitted by email to the Registrar a request for registrar verification in connection with the Domain Name. On September 16, 2003, the Registrar transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details for the administrative, billing, and technical contact.
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 September 17, 2003. In accordance with the Rules, paragraph 5(a), the due date for Response October 7, 2003. The Response was filed with the Center October 7, 2003.
The Center appointed Tony Willoughby, Mark Partridge and David E. Sorkin as panelists in this matter on November 18, 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
The Complainant is a Mexican corporation which trades under the name Palace Resorts and which owns and operates a ‘family’ of hotels all of which have the word "Palace" in their names. One of the hotels in question is called The Moon Palace.
The Complainant is the registered proprietor of Mexican and US trade mark registrations for the mark MOON PALACE. The Mexican registration is number 530400 dated August 7, 1996, and the US registration is number 2453148 dated May 22, 2001. Both registrations are in class 42 and cover, inter alia, hotels and related services. It appears that the Complainant acquired the Mexican registration from a company named Inmobiliaria Puerto Bonito SA by way of an assignment on August 20, 1999.
The Respondent is a Canadian corporation whose prime movers are Collin and Ingrid Williams. The Respondent is engaged in, inter alia, travel agency services.
In early June 1997, Collin and Ingrid Williams spent a holiday at one of the Complainant’s hotels in Mexico and became members of a vacation club operated by World Vacation Travel SA ("WVT"), an organization associated with the Complainant. By joining this club and paying over appropriate sums of money the Williamses were able to acquire vacation certificates, which they were able to pass on to their customers. The certificates provide for stays at hotels operated by the Complainant.
The WVT membership documentation confirmed to the Williamses that they were now "WVT travel agents/members" and they were each issued with WVT travel agent cards. The membership documentation confirmed to the Williamses that "as World Vacation Travel member/agent, you are also now a member of the Palace Resorts family", Palace Resorts being the trading name of the Complainant.
On June 25, 1997, the Respondent registered the Domain Name.
Continuously thereafter the Williamses have corresponded with the Complainant in relation to commissions on holidays organized via the Williamses membership of the WVT Travel Club. The holidays cover various of the Complainant’s hotels, including The Moon Palace Hotel.
Over the years the business has developed into a substantial one. In the last quarter of 1997, gross resort sales totaled US$17,000 yielding commissions of approximately US$2,500. In the first 9 months of 2003, gross resort sales totaled in excess of 1.6 million Canadian dollars yielding commissions of in excess of 375,000 Canadian dollars.
On August 27, 1997, Collin Williams filed for registration in Quebec, Canada, of the business name "Moon Palace Vacations". On February 3, 1999, Collin Williams transferred the business name to the Respondent.
The Respondent contends and the Panel is prepared to accept as fact that the business of providing holidays at the Complainant’s resort hotels has been conducted throughout by the Respondent and via a website connected to the Domain Name.
However, it is plain that while the Respondent has been trading as Moon Palace Vacations via the website at "www.moonpalace.com" since late 1997, throughout that period the Complainant was communicating not with the Respondent, but with Mr. and Mrs. Williams. There is nothing before the Panel to suggest that the Complainant will have been aware of the Respondent, its trading name or its website.
5. Parties’ Contentions
The Complainant contends that the Domain Name is identical to its trade mark MOON PALACE if one ignores the generic ".com" domain suffix.
The Complainant contends that the Respondent has no rights or legitimate interests in respect of the Domain Name. In a nutshell, the Complainant’s case is that the Respondent registered the Domain Name with full knowledge of the Complainant’s rights in the name MOON PALACE, that the Williamses membership of the WVT Vacation Club gave them no right and gave the Respondent no right to represent any kind of formal relationship with the Complainant (beyond membership of the club) and that the Respondent’s use of the Domain Name has been for commercial gain with the intention of misleading or diverting consumers from the Complainant and to damage the reputation of the Complainant. None of this, in the view of the Complainant can constitute a right or legitimate interest in respect of the Domain Name.
The Complainant contends that the Domain Name was registered and is being used in bad faith. In support, the Complainant relies on what is said above in relation to the Respondent’s rights or legitimate interests in respect of the Domain Name. Additionally, the Complainant contends that the Respondent will derive commercial gain from the fact that Internet users will believe that the Respondent’s website connected to the Domain Name is an authorized or official website for making reservations at the Complainant’s hotels.
Moreover, the Complainant observes that it has no control over the Respondent’s website and/or the use of information collected by the Respondent from confused consumers. To that extent, therefore, the Complainant’s reputation is out of its control. The Complainant also refers to the Respondent’s use of "maps" on its website which are adaptations of the Complainant’s copyright works.
The Respondent acknowledges that the Domain Name comprises the entire MOON PALACE trade mark. However, the Respondent asserts that the Complainant must establish that it acquired rights in and to the trade mark prior to the Respondent’s registration of the Domain Name. The Respondent contends that it registered the Domain Name well before the Complainant had acquired rights to the trade mark. The Respondent contends that the Complainant had no rights to the trade mark until it acquired the Mexican registration on August 20, 1999.
The Respondent contends that the material put before the Panel does not constitute evidence that the Complainant has established a reputation in the travel industry for quality services. Moreover, the Respondent contends that the Complainant has failed to provide any concrete evidence of actual confusion.
On this basis, the Respondent contends that the Complainant has "not satisfied the burden of proof to establish that the Domain Name is identical or confusingly similar to a trade mark or service mark in which the Complainant has rights."
The Complainant contends that it has rights or legitimate interests in respect of the Domain Name. It refers to the Williamses membership of the WVT Vacation Club. It points to the fact that the Complainant and the WVT Vacation Club are under common beneficial ownership. It points to the fact that the Williamses were encouraged to regard themselves as members of the Palace Resort Family and it produces evidence to show that the Williamses could reasonably assume that in being members of the WVT Vacation Club, they were in one way or another associated with the Complainant.
In those circumstances, the Respondent contends that it was not unreasonable for the Respondent to have held itself out as being associated with the Complainant.
The Respondent has produced evidence to show that it has since October 1997, conducted a significant business under the name Moon Palace Vacations and via its website connected to the Domain Name. The Respondent contends that this is a bona fide offering of services within the meaning of paragraph 4(c)(i) of the Policy.
The Respondent also contends that it is commonly known by the Domain Name (paragraph 4(c)(ii) of the Policy) given the reputation and goodwill that its business has developed since February 1998.
Finally under this head, the Complainant contends that it makes fair use of the Domain Name in the legitimate exercise of its business (paragraph 4(c)(iii) of the Policy).
It registered the Domain Name to conduct business through the website connected to the Domain Name. It contends the fact that the website, when one gets there, makes clear the distinction between the Respondent and the services associated with the Complainant. It provides a link to the Complainant’s Internet site at "www.palaceresorts.com" and it features a disclaimer.
The Respondent contends that the sole revenues generated by the business are sums emanating from the Complainant and/or WVT. It therefore has neither reason nor any commercial advantage in misleading or diverting consumers or tarnishing the trade mark.
The Respondent denies that it has ever claimed any rights of ownership in respect of the Complainant’s establishments, assets or trade marks (as alleged by the Complainant) and the Respondent further contends that by becoming members of the WVT Vacation Club, the Williamses (and therefore the Respondent) were granted an implied licence to use the trade mark and consequently to make fair use of the Domain Name.
As to the allegation of bad faith registration and use, the Respondent denies the allegation. The Respondent contends that the Domain Name was neither registered in bad faith nor was used in bad faith since (a) the Williamses were solicited by the Complainant and/or WVT to become outside sales travel agents of the Complainant and/or WVT and/or the Palace Resorts "family", and (b) the Respondent’s business is a legitimate activity for which the Complainant and/or WVT has paid, and continues to pay, the Respondent significant commissions.
The Respondent contends that the Complainant has failed to produce any evidence of actual confusion of Internet users and asserts that any such confusion is most unlikely given the clarity of the information and disclaimer on its website. The Complainant contends that any allegations of the Complainant that the Respondent has in any way behaved improperly are falsely based.
The Respondent denies that any of the matters set out in paragraph 4(b) of the Policy are applicable to the Respondent's position in the matter.
The Respondent contends that its efforts to advertise promote and sell travel to the Complainant’s hotels contradict any finding of bad faith registration and use of the Domain Name.
The Respondent contends that the Complainant is guilty of Reverse Domain Name Hijacking. In this regard the Respondent contends that the Complainant’s evidence has been selective and misleading. It contends that the Complainant knew or ought to have known that it had not acquired rights to the trade mark prior to the Respondent’s registration of the Domain Name. It contends that the Complaint was brought in circumstances where the Complainant knew of the likelihood that the Respondent possessed legitimate rights in respect of the Domain Name. It refers to the Respondent’s business which has been conducted for more than six years and it also refers to the fact that the Complainant has paid substantial commissions to the Respondent over that period and in so doing has acquiesced in the Respondent’s use of the Domain Name.
The Respondent contends that the Complainant, being aware of the substantial goodwill of the Respondent (the Respondent being among the top five outside sales travel agents of the Complainant and/or WVT and/or the Palace Resorts "family") now wants to appropriate that good will by depriving the Respondent of the Domain Name.
The Respondent contends that the Complainant’s motive in filing this Complaint is malicious and that the Complainant is acting with total disregard to the fact that (a) the Respondent has a legitimate interest in the Domain Name and (b) the Respondent did not register and does not use the Domain Name in bad faith.
The Respondent contends that the Complainant is refusing to honour several hundred travel certificates which the Complainant and/or WVT sold to the Williamses for some US$35,000 and that this is with a view to compelling the Respondent to transfer the Domain Name. The Respondent contends that the Complainant has filed the Complaint to achieve the same result.
6. Discussion and Findings
According to paragraph 4(a) of the Policy, the Complainant must prove that
(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 interest in respect of the Domain Name; and
(iii) The Domain Name has been registered in bad faith and is being used in bad faith.
If the Complaint fails, the Panel has to have regard to paragraph 15(e) of the Rules and in particular the following sentence namely:
"If after considering the submissions the Panel finds that the Complaint was brought in bad faith, for example in an attempt at reverse domain name hijacking or was brought primarily to harass the domain name holder, the Panel shall declare in its Decision that the Complaint was brought in bad faith and constitutes and abuse of the Administrative Proceeding."
Reverse Domain Name Hijacking is defined in paragraph 1 of the Rules as meaning "using the Policy in bad faith to attempt to deprive a registered domain name holder of a domain name."
A. Identical or Confusingly Similar
In assessing whether or not a domain name is identical or confusingly similar to a complainant’s trade mark, it is in most cases appropriate to ignore the generic domain suffix. Ignoring the generic domain name suffix, the Domain Name is identical to the Complainant’s trade mark.
Where, as in this case, the Domain Name is identical to the Complainant’s trade mark, it is not necessary under this head for the Complainant to establish likelihood of confusion. Accordingly, the fact, if it be a fact, that the Complainant has not, as the Respondent asserts, established likelihood of confusion has no bearing on the matter under this head.
Accordingly, the Panel finds that the Domain Name is identical to a trade mark in which the Complainant has rights.
However, before leaving this topic, there are two allegations of the Respondent which the Panel wishes to address namely:
1. The Respondent asserts that the Complainant did not acquire rights to the MOON PALACE trade mark until after the Respondent’s date of registration of the Domain Name. It is to be noted that in one of the Respondent’s exhibits, which features extracts from the Respondents website back in January 1999, the following appears:
"In 1996 Palace Resorts completed construction of the Moon Palace, the latest addition to their growing family of five star rated exclusive all inclusive Cancun resorts."
Accordingly, while it may be that the Complainant only acquired the registered rights after the date of registration of the Domain Name, it does not appear that there is any dispute that the Complainant was very closely associated with the trade mark from the outset in 1996. Certainly, in late 1997 when the Respondent commenced business, the Respondent was in no doubt that the Complainant had rights of some kind to the MOON PALACE trade mark in Mexico.
2. The Respondent denies that the Complainant has produced evidence of a reputation and goodwill in respect of the trade mark. The Panel finds this claim somewhat strange given that the Respondent asserts reputation and goodwill in its name Moon Palace Vacations, a reputation and goodwill built up through a business which is dependent entirely upon business conducted directly or indirectly with the Complainant. Accordingly, if the Respondent has a reputation and goodwill in its trading name, one would also expect the Complainant to have a reputation and goodwill in respect of all its trading names including its hotel names.
B. Rights or Legitimate Interests
For reasons given below, the majority of the Panel concludes that it is not necessary to reach a finding on this element of Complainant's claim.
The dissenting panelist, Tony Willoughby, is of the view that the Respondent
has no rights or legitimate interests in respect of the Domain Name. In his
view, if one takes X’s trade mark, knowing it to be X’s trade mark, and without
X’s permission and uses that trade mark without any addition or adornment as
a domain name for business purposes, it is almost inevitable that confusion
of some kind will result. A not insignificant number of Internet users are likely
to believe that any website or email address connected to the domain name is
an official site or address of the trade mark owner. The fact that there may
be a disclaimer on the website is of no significance. By the time that the visitor
gets there, the damage has been done and/or the registrant has achieved the
business opportunity which it might not otherwise have achieved. In the case
of email, of course, a website disclaimer is of no effect. The phenomenon of
misdirected emails is not an uncommon one. Interestingly, it features strongly
in one of the cases cited by the Respondent namely WIPO
Case No. D2002-0256 concerning the domain name <boschuk.com>.
The dissenting panelist believes that this is what has happened here and concludes that no such use of a domain name can constitute use of the domain name "in connection with a bona fide offering of services" within the meaning of paragraph 4(c)(i) of the Policy nor can it constitute fair use within the meaning of paragraph 4(c)(iii) of the Policy. Paragraph 4 (c)(ii) of the Policy is inapplicable because there is no evidence that the Respondent is commonly known as Moon Palace/the Domain Name.
C. Registered and Used in Bad Faith
The minority view of the Panel is that the Respondent has no rights or legitimate interests in respect of the Domain Name. The basis for that decision is that the taking of the Complainant’s trade mark knowing it to be the Complainant’s trade mark, without the Complainant’s permission, for use, without adornment, as a domain name to be connected to a commercial web site is likely to lead to confusion of Internet users and cannot sensibly therefore give rise to any right or interest of the kind contemplated by paragraph 4(a)(ii) of the Policy.
By the same reasoning, the minority view of the Panel is that such a registration and use of the Domain Name constitutes bad faith registration and use of the Domain Name within the meaning of paragraph 4(b)(iv) of the Policy, which reads as follows:
"(b) Evidence of registration and use in bad faith.
For the purposes of Section 4(a)(iii), the following circumstances (in particular, but without limitation) will be evidence of the registration and use of a domain name in bad faith, if they are found by the Panel that will decide the dispute to be present:
(iv) By using the Domain Name, you have intentionally attempted to attract, for commercial gain, internet users to your web site or other online location, by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your web site or location, or of a product or service on your web site or location".
In registering the Domain Name, the Respondent knew that it was the Complainant’s trade mark and selected it for the Domain Name precisely because it was the Complainant’s trade mark. The Respondent may not have been thinking in terms of trade marks at that time, but certainly the Respondent knew the name to be the name of the Complainant’s hotel.
The Respondent will have regarded the name as an attractive one because it precisely identifies the Complainant’s hotel. Anyone entering the name of the hotel into a search engine would be likely to find the Respondent’s site (connected to the Domain Name) high on the list. Many of those Internet users may not wonder or even care whether the site is an official site of the Complainant, but assuredly many will.
The minority view of the Panel is that the Respondent must have been aware of this when it registered the Domain Name. In the response, the Respondent stresses the fact that the web site makes it clear that the Respondent is not the Complainant, but the Panel visited the site and it is certainly not apparent from the home page. The home page is headed The Moon Palace and features information about all the Complainant’s family of hotels. There is no disclaimer. The detailed information about the Respondent is to be found elsewhere on the site. In any event, as indicated above, by the time one gets to the disclaimer the confusion has already occurred and the Respondent has obtained the business opportunity it might not otherwise have acquired.
In the Response, the Respondent contends that the Complainant has acquiesced to the Respondent’s use of the Domain Name. This was a point which exercised the Panel for a while. Why did the Complainant sit back and permit the Respondent to trade using the trading name "Moon Palace Vacations" and use the Domain Name as it has done? After all, it was, as the Respondent asserts, a business dependent for revenue on commissions paid by the Complainant to the Respondent. However, on examination of the papers, it is apparent that the Complainant had no reason to know of the Respondent or indeed the Respondent’s trading activity. It is plain from the correspondence exhibited to the Response that all the correspondence between the parties was, on the Respondent’s side, in the names of Collin and Ingrid Williams. The trading name Moon Palace Vacations and the Domain Name do not feature at all in that correspondence. Why was that the case? Why did the Respondent not ask that commissions be paid to it as Moon Palace Vacations? These are questions that call for answers in light of the Respondent’s assertion that the Complainant has acquiesced in the use by the Respondent of the Domain Name. If, as appears to be the case, the Complainant was not aware of any of this, how can it possibly be said that the Complainant has acquiesced?
The Panel is unable to hold that there has been any acquiescence still less any licence (implied or otherwise).
The minority view of the Panel is that the Domain Name was registered in bad faith and is being used in bad faith within the meaning of paragraph 4(b)(iv) of the Policy. A significant proportion of Internet users will have believed that the web site connected to the Domain Name is the official web site of the Complainant. The Respondent will have derived commercial gain and the Respondent will have known that this was a likely result when registering the Domain Name.
Although the majority of the Panel agrees with much of the analysis stated, we conclude that this dispute involves matters outside the intended scope of the Policy. Respondent has for several years traded as Moon Palace Vacations, through the web site at "www.moonpalace.com". During that period Respondent has sold millions of dollars worth of Complainant's travel certificates, and has received over $1 million in commissions from Complainant, making it one of Complainant's top outside sales agents. Under the circumstances, it is far from clear that Respondent's activities represent actionable trademark infringement; at most this is an instance of a legitimate dispute over trademark rights, and therefore one that is not susceptible to adjudication under the UDRP. See Second Staff Report on Implementation Documents for the Uniform Domain Dispute Resolution Policy (October 24, 1999), "www.icann.org/udrp/udrp-second-staff-report-24oct99.htm", 4.1(c) (noting that "the policy's administrative dispute-resolution procedure does not extend to cases where a registered domain name is subject to a legitimate dispute (and may legitimately be found to violate the challenger's trademark)").
This does not appear to be a case of cybersquatting, where the domain name registrant's business activities (to the extent that they exist at all) are merely a pretext designed to camouflage the registrant's intent to exploit the trademark value of a domain name. Furthermore, there is a much broader dispute between the parties in this case, one that will not and cannot be resolved in this limited forum. Making an award here would do little more than afford a temporary tactical advantage to one of the parties in that ongoing dispute.
7. Reverse Domain Name Hijacking
While the Complaint has failed on a majority decision, the Panel has not found
this an easy case to decide. The Panel is of the view that the Complainant had
a reasonable, arguable case and that the filing of the Complaint was not an
abuse of the system. The allegation of Reverse Domain Name Hijacking fails.
For all the foregoing reasons, the Complaint is denied.
Presiding and dissenting Panelist
David E. Sorkin
Dated: December 5, 2003