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WIPO Arbitration and Mediation Center

 

ADMINISTRATIVE PANEL DECISION

Clover Gifts Inc. v. Airs Fragrance Products

Case No. D2005-0776

 

1. The Parties

The Complainant is Clover Gifts Inc., Carson City, Nevada, United States of America, represented by the law firm Watson Rounds, Reno, Nevada, United States of America.

The Respondent is Airs Fragrance Products Inc, Blaine, Washington, United States of America, represented by Jeffrey Greger, Arlington, Virginia, United States of America.

 

2. The Domain Name and Registrar

The disputed domain name <airsworld.com> (the “Domain Name”) is registered with Network Solutions, LLC.

 

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on July 19, 2005. On July 20, 2005, the Center transmitted by email to Network Solutions, LLC a request for registrar verification in connection with the Domain Name. July 22, 2005, Network Solutions, LLC 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 on August 10, 2005. In accordance with the Rules, paragraph 5(a), the due date for Response was September 7, 2005. Respondent submitted its Response on that date.

The Center appointed Richard G. Lyon as the Sole Panelist in this matter on September 23, 2005. The Panel finds that it was properly constituted. 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

In cases in which the parties make conflicting factual presentations, in this section the Panel identifies factual matters that are either undisputed or not dependent upon the credibility of individuals submitting evidence on behalf of either party. Disputed factual matters are set forth in Section 5, Parties’ Contentions.

Complainant is the registered owner of trademark “AIRS” in the United States Patent and Trademark Office and the Canadian Intellectual Property Office. Both trademark offices note assignments of this mark from one Mine Hakim in June 2003. Hakim was the original applicant for and owner of trademark in the United States and Canada prior to these assignments.

In August 2005, Hakim executed a document entitled “General Assignment” in favor of Complainant. This assignment included all of Hakim’s right, title, and interest in, among other things, “Registered Trade Names: AIRS [others omitted]”.

Hakim was once an employee of and equity owner in Complainant. She transferred her shares in Complainant in June 2003. Hakim is now an employee of and equity owner in Respondent.

Complainant registered the Domain Name with DirectNic on September 12, 2003. Respondent now owns the Domain Name, which is now registered with Network Solutions. Hakim is listed as the administrative and billing contact for the Domain Name. Respondent submits no evidence of registration of the Domain Name with any registrar. Respondent, Hakim’s current employer, uses the Domain Name for the sale of perfumes and fragrances.

Following commencement of this proceeding, Respondent filed a civil suit against Complainant in the United States District Court for the District of Nevada. In this action Respondent asserts claims for fraud, tortuous interference with business relationships, and unfair competition. Among the relief sought is a declaration that the 2003 general assignment is void. Complainant has counterclaimed for, among other things, a declaration of its ownership of the AIRS marks and alleged claims for unfair competition, breach of contract, and deceptive trade practices.

 

5. Parties’ Contentions

A. Complainant

Confusingly similar to a mark in which Complainant has rights. Complainant is the registered owner in the United States and Canada of the trademark “AIRS” for perfumes and fragrances, as evidenced by the PTO and CIPO registrations. Hakim assigned them to Complainant in June 2003 pursuant to a “General Assignment” that is an exhibit to the Complaint. The addition of the generic word world does not obviate any similarity with Complainant’s registered mark.

Rights or Legitimate Interests. Respondent obtained the Domain Name by fraud. According to the Complaint and the sworn testimony of one of Complainant’s officers, Hakim both “presented false information” to the then-registrar DirectNic, which transferred the Domain Name to Hakim, who in turn registered it with the current registrar. Because Respondent obtained the Domain Name by fraud, any right or interest in it is not legitimate.

Bad Faith. Fraud by Respondent’s agent, Hakim, is conclusive proof Respondent’s registration of the Domain Name and bad faith. Respondent’s continued use of the Domain Name for her business, which competes directly with Complainant, is conclusive evidence of use in bad faith.

B. Respondent

Rights in a Mark. Respondent acknowledges Hakim’s executing an assignment of all intellectual property rights to Complainant, but asserts that the assignment was null and void for two reasons. First, Hakim was “forced. . . on two different occasions to execute documentation back at the signing of her intellectual property rights under duress and threats of physical violence”. Complainant’s documentary evidence of the assignment has various inconsistencies that are cited as evidence of duress. Second, as a legal matter, because there is no consideration recited in the assignment for intellectual property rights, and because the general assignment executed by Hakim does not expressly include the goodwill associated with any of the intellectual property assigned, as a matter of United States trademark law the assignments are “void ab initio”. Therefore Hakim retains ownership in the two registered AIRS trademarks. Moreover, Complainant has provided no evidence of its use of the mark, while Respondent or Hakim has used it continuously since 2000.

Legitimate Interests. Hakim registered owns a company entitled “AIRSWORLD, Ltd.” in November 2000, before the commencement of this proceeding. In December 2000, by an assignment from a company called Airs International, Inc., Hakim also acquired the Domain Name. Respondent submits a corporate resolution of her company AIRSWORLD, Ltd of various assets including “all registered Domain Names including but not limited to <airsworld.com>. Respondent has continuously used the name Airs World to sell her or her employer’s products. All these matters illustrate Hakim’s or Respondent’s rights in the name embodied in the Domain Name. Furthermore, Complainant has not established by competent evidence (or indeed any evidence) that it has any business whatsoever. Without such evidence, Respondent’s continuous use “may support a colorable claim of rights and some priority.” in the Domain Name.

Bad Faith. Respondent cites the 2000 assignment of the Domain Name to her as evidence that she neither registered nor used the Domain Name in bad faith.

 

6. Discussion and Findings

The Complainant must prove the elements set out in paragraph 4(a) of the Policy. These elements are as follows:

(i) Respondent’s Domain Name is identical or confusingly similar to a trademark or service mark in which the Complainant has rights; and

(ii) Respondent has no rights or legitimate interests in respect to the Domain Name; and

(iii) Respondent’s Domain Name has been registered and is being used in bad faith.

The Complainant bears the burden of proof on each of these elements.

One noteworthy feature of this case is that both parties have submitted evidence, including sworn testimony that is credible at least on its face, of their respective positions. Both assert and supply evidence in considerable detail. Both parties are represented by counsel. In light of these facts, the evidentiary gaps and unanswered legal issues in both parties’ submissions, some of which are discussed below, can only be the result of each party’s intentionally presenting its case in considerably less than full context in a manner intended to prevail in this proceeding. In short, neither party has come across with the full story.¹

Some of these gaps and questions are as follows. In this recital the Panel intends equal criticism of both parties.

- Although both assignments took place at about the same time, Hakim contests her assignment of intellectual property rights but not of her ownership interest in Complainant.

- The “duress” that is said to have forced Hakim’s intellectual property assignment occurred in or immediately prior to June 2003. Hakim took no legal action (in a trademark office or in court) until two years later. As a matter of law, a party asserting duress must act promptly after the duress is removed to revoke the action taken under duress. Its time to do so is measured in hours or days, not years.

- Complainant refers to Respondent as a competitor but provides no evidence whatever of any business activities of its own.

- Hakim, either through Respondent or otherwise, has continuously since her purported assignment sold perfumes under the AIRSWORLD name. Complainant took no action until the commencement of this proceeding, notwithstanding its registration of the trademark assignments in the United States and Canadian trademark offices two years earlier.

- In an otherwise detailed presentation, neither Respondent nor Hakim supplies details of the “physical threats” or “duress” that Hakim claims forced her to execute the two assignments.

- While Respondent asserts use of the Domain Name continuously since 2000, neither it nor Hakim even alleges much less provides evidence to support registration of the disputed Domain Name until 2003. Neither Respondent nor Hakim denies Complainant allegations (which are supported by credible evidence) that Respondent obtained transfer of the Domain Name by providing false information to the prior registrar.

- Complainant was able to obtain in 2003 a domain name that, according to Respondent’s allegations, had been registered since 1996.

For two reasons fundamental to efficient use of the Policy, the Panel must deny the Complaint in this proceeding.

First, the Panel’s determination under each of the provisions of the Policy turns on credibility of testimony and other evidentiary matters that this Panel, in this very limited administrative proceeding, lacks power to investigate or evaluate. Both sides have made presentations that in a default case would be credible on their face.

For example, panels have regularly held that a panel is not entitled to set aside or ignore a valid registration in a national trademark office. If the Panel were to follow that line of cases, Complainant would clearly have satisfied paragraph 4(a)(i) of the Policy. There is documentary evidence to support Complainant’s assertions that Hakim foreswore any interest in the AIRS trademark and the Domain Name, that, if accepted by the Panel, makes any use of them by her subsequently to the assignment illegitimate, thus satisfying paragraph 4(a)(ii) of the Policy. Neither Respondent nor Hakim has presented any evidence to counter Complainant’s sworn testimony that Respondent obtained the Domain Name by fraud, thus establishing bad faith.

On the other hand, Respondent’s legal argument that the assignment is invalid because it does not include the goodwill appurtenant to the trademarks is not makeweight, and Respondent or Hakim has presented uncontradicted testimony that she has used the AIRS marks to conduct her business continuously since 2000. If the Panel were to accept that argument or testimony, Respondent’s use would be legitimate and within the safe harbor of paragraph 4(c)(ii) of the Policy.

To determine all that occurred, the Panel requires cross-examination and personal evaluation of witnesses’ credibility, neither of which it has available under the Policy. See, e.g., Custom Bilt Metals v. Conquest Consulting, WIPO Case No. D2004-0023; Bootie Brewing Company v. Deanna D. Ward and Grabebottie Inc., WIPO Case No. D2003-0185.

Second, this is not a simple case of cybersquatting. There clearly exists a much broader dispute between parties and, very likely, their respective principals. The Policy was not intended for resolution of such disputes. These are matters for civil litigation. Respondent’s pending action against Complainant, in Complainant’s home district, is the forum in which these matters should be determined. See, e.g., Lockheed Martin Corporation v. Lynn Dixon, WIPO Case No. D2005-0045; Greyson International, Inc. v. William Loncar, WIPO Case No. D2003-0805.

In denying the complaint, the Panel repeats that its intention is to leave the parties as it found them, without any suggestion that either party makes the stronger case or presents more credible evidence than the other. Complainant has the burden of proof in this proceeding. Because of the factual issues presented, which the Panel simply is unable to resolve, Complainant has not met that burden, and so the Policy requires that the complaint be denied.²

 

7. Decision

For the foregoing reasons, the Complaint is denied.

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Richard G. Lyon
Sole Panelist

Dated: October 3, 2005

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¹ Neither party’s factual recital in this proceeding is as detailed as its factual allegations in the Nevada federal lawsuit.

² This is also not a case in which Respondent prevails merely by denying Complainant’s assertions or by throwing up enough evidence as to raise some doubts of credibility. Both parties have presented a credible case, though both are tarnished by their incomplete and slanted presentations.