Case No. DAU2006-0001

1. The Parties

Complainant is PayBurst Financial Technologies and its founder and managing partner, Gregory Fx Iannacci, both of Stoneham, Massachusetts, United States of America.

Respondent is Virgin Blue Airlines Pty Ltd of Spring Hill, Queensland, Australia, represented by Clayton Utz, Australia.

2. The Domain Name and Registrar

The disputed domain name <velocityrewards.com.au> is registered with Melbourne IT Ltd.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on January 9, 2006. On January 9, 2006, the Center transmitted by email to Melbourne IT Ltd a request for registrar verification in connection with the domain name at issue. On January 10, 2006, Melbourne IT Ltd transmitted by email to the Center its verification response confirming that Respondent is listed as the registrant and providing the contact details for the administrative, billing, and technical contact. In response to a notification by the Center that the Complaint was administratively deficient, Complainant filed an amendment to the Complaint on January 20, 2006. The Center verified that the Complaint together with the amendment to the Complaint satisfied the formal requirements of the .au Dispute Resolution Policy (the “Policy”), the Rules for .au Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for .au Domain Name Dispute Resolution Policy (the “Supplemental Rules”).

In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified Respondent of the Complaint, and the proceedings commenced on January 26, 2006. In accordance with the Rules, paragraph 5(a), the due date for the Response was February 15, 2006. The Response was filed with the Center on February 14, 2006.

The Center appointed Alan L. Limbury, Keith Gymer and Mary Padbury as panelists in this matter on March 2, 2006. 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

On September 21, 2004, PayBurst Financial Technologies registered the domain name <velocityrewards.com>. On August 5, 2005, Respondent registered the disputed domain name <velocityrewards.com.au>.

Between August 7, 2005 and October 30, 2005, unsuccessful negotiations with Mr. Iannacci for the possible sale of the domain name <velocityrewards.com> took place, initiated by an individual purporting to be a member of ‘a two man operation based in Melbourne, Australia’. In fact, as was long suspected by Complainant (even, it seems, during the negotiations) but not revealed until the filing of the Response, the individual had been engaged by Respondent to acquire the domain name on its behalf.

On August 10, 2005, Respondent applied to register VELOCITY as a trademark in Australia in connection with a range of services including management, organization, operation and supervision of loyalty schemes or programs; the supply of benefits in connection with loyalty and incentive schemes; loyalty programs involving discounts or incentives; financial services associated with promotional incentive schemes and loyalty schemes; and the supply of benefits in connection with transportation and travel. That application has been accepted but has not yet matured to registration.

On September 5, 2005, a company was incorporated in Queensland which soon after changed its name to Velocity Rewards Pty Ltd. Its sole shareholder is Virgin Australia Holdings Pty Limited, the parent company of Respondent.

On November 16, 2005, public use commenced of a website at “www.velocityrewards.com.au” with the launch of a loyalty program, known as Velocity, whereby flyers may earn and redeem points on Virgin Blue, Virgin Atlantic, Emirates, Pacific Blue and Polynesian Blue flights and on Europcar vehicle hire, and may earn points by the use of National Australia Bank credit cards. The program is run by Velocity Rewards Pty Limited. Copyright in the material on the website is claimed by that company. Print advertising material prepared before the launch claimed the website is ‘operated by Velocity Rewards Pty Ltd’. Television advertising scripts prepared before the launch to promote the program carried the slogan ‘Join free online at velocityrewards.com.au’.

Following the launch of the Velocity loyalty program, Complainant made several complaints about the disputed domain name, the first being on November 17, 2005. This took the form of a letter to Sir Richard Branson, Chairman of Virgin Group Ltd. in London. The second was on November 25, 2005, to Velocity Rewards Pty Ltd, enclosing a copy of the first letter. That complaint drew a response from Velocity Rewards Pty Ltd noting Complainant’s concerns regarding dilution of its trademark and confusion in the market place; stating that it is not unusual for similar domain names to be operated by unrelated companies in different jurisdictions and concluding that neither company has cause for concern. On November 30, 2005, Complainant sent a complaint by email to Respondent as registrant of the disputed domain name, enclosing copies of both previous letters. As mentioned, the formal Complaint in this proceeding was filed on January 9, 2006.

5. Parties’ Contentions

A. Complainant

Complainant says it actively employs the VELOCITY REWARDS trademark and service mark in commerce by associating it with payment, incentive and loyalty program applications. International intellectual property protection for the mark has been claimed since 2004. The mark covers goods and services which include “at a minimum” incentive, reward, loyalty, payment and advertising classification services “without limitation”. Respondent’s use of this mark is also identical since it is being associated with its consumer loyalty program.

The disputed domain name is identical to Complainant’s mark.

Respondent has no rights or legitimate interests in respect to the disputed domain name because Complainant’s mark is well known, in current, active use, with further international uses in mind; the unsuccessful negotiations provide circumstantial evidence of Respondent’s preparation to use the disputed domain name or a name corresponding thereto in connection with an offering of goods or services for commercial purposes; Respondent has never been commonly known by the disputed domain name and has not been identified as having acquired any legitimate trademark or service mark rights; and Respondent is making an illegitimate commercial use of the disputed domain name, with intent for commercial gain to divert consumers and impair or assume Complainant’s mark. Respondent is trading on the goodwill of Complainant’s mark.

The disputed domain name was registered and is subsequently being used in bad faith because the registration has the explicit effect of preventing Complainant from reflecting its name and mark in a corresponding country-code domain in Australia; Respondent either condoned bad faith principles by failing to perform rudimentary due diligence before the public release of the disputed domain name or, if due diligence was performed, intentionally chose to ignore the results and acted in bad faith by releasing the disputed domain name to the public regardless of the compromise to Complainant’s intellectual property rights; Respondent made misrepresentations in its application to register the disputed domain name and is presently using that domain name in bad faith, willfully engaging in harmful and disruptive activities which affect the business activities of Complainant; by using the disputed domain name, Respondent and its affiliates have advanced their harmful ambitions to attract, for commercial gain, Internet users to their Australian web site and such use has created confusion with Complainant’s mark and web site as to the source, sponsor, mission, affiliation and endorsement of Respondent’s web site and of a product or service on that web site that is equivalent to Complainant’s goods and services.

B. Respondent

Respondent denies all of Complainant’s assertions, particularly that Complainant has shown that it has any trademark rights. Respondent has found no Australian or international trademark registration in the name of Complainant for VELOCITY REWARDS and says Complainant was not using “Velocity Rewards” as a trademark when Respondent registered the disputed domain name. Rather, Complainant conducts its (start up) business using the PAYBRAIN and PAYBURST marks and has no goodwill in the VELOCITY REWARDS trademark. Without registration or use in Australia, Complainant has no rights in the mark in Australia. Even if Complainant is using the VELOCITY REWARDS mark, such use is confined to the United States of America and does not entitle Complainant to international protection.

Respondent says it has licensed its sister company, Velocity Rewards Pty Ltd, to use Respondent’s VELOCITY trademark to operate its customer loyalty program. The goodwill that has been generated in that mark as a result of the operation of that program (including the activities of the partners in that program) has no association with and is not as a result of the activities of Complainant.

Respondent claims rights and a legitimate interest in the disputed domain name arising out of its ownership in Australia of the mark VELOCITY and the bona fide operation and promotion, by its sister company (as licensee of that mark), of the loyalty program conducted under that mark, involving use of the website reached through the disputed domain name and significant expenditure on the part of Respondent and its program partners. It says preparations began in at least May 2005, and that over 300,000 applications to participate in the loyalty program have been received to date.

Respondent denies bad faith registration or use of the disputed domain name. It says it became aware of Complainant only after the creation of the VELOCITY brand and upon investigating available domain names, when it discovered that the domain name <velocityrewards.com> was not available and that it was redirected to “www.paybrain.com”. VELOCITY REWARDS did not appear to be used in relation to a reward scheme or for any other goods or services and did not appear to be of importance to the activities of Complainant. Hence Respondent, having already registered the disputed domain name, engaged a contractor to seek to acquire the <velocityrewards.com> domain name from Complainant. Respondent denies that the negotiations were conducted in bad faith.

6. Discussion and Findings

Under paragraph 15(a) of the Rules, a Panel must decide a 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 that it deems applicable.

Complainant has the onus of proving three elements:

(i) the domain name is identical or confusingly similar to a name, trademark or service mark 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 or subsequently used in bad faith.

For the purposes of the first element, a “name … in which complainant has rights” refers to a complainant’s company, business or other legal or trading name, as registered with the relevant Australian government authority; or complainant’s personal name.

A. Rights in a name or mark

Complainant does not claim to have an eligible name for the purposes of the Policy. It claims common law rights in the trademark VELOCITY REWARDS.

Although Complainant itself provided no evidence to support its claim to have used VELOCITY REWARDS as a trademark; nor that those words have become distinctive of its services; nor that Complainant has protectable goodwill in the words as a consequence of that alleged use, there is before the Panel, at page 1 of Annexure 2 to the Response, a printout made on September 30, 2005, of a page of Complainant’s PayBrain website. That page contains the words “VELOCITY REWARDS ™” and displays a copyright notice dated “2004-2005”. There is also a notice on that page: “PayBrain is only available in the United States at this time”.

Further, at page 5 of that Annexure, a page printed from Complainant’s PayBurst website on August 28, 2005, there appears the slogan: “Accelerate your benefit programs with Velocity Rewards™”.

Upon this limited evidence, the Panel is prepared to proceed on the basis that Complainant has at least some minimal common law rights in the United States of America in the VELOCITY REWARDS mark. In so doing, the Panel is mindful that the outcome in this case turns on other elements, which Complainant has failed to establish.

B. Identical or Confusingly Similar

As with the Uniform Domain Name Dispute Resolution Policy, “essential” or “virtual” identity is sufficient for the purposes of the Policy: The Stanley Works and Stanley Logistics, Inc. v. Camp Creek Co., Inc., WIPO Case No. D2000-0113; America Online, Inc. v. Anson Chan, WIPO Case No. D2001-0004; Disney Enterprises, Inc. v. John Zuccarini, Cupcake City and Cupcake Patrol, WIPO Case No. D2001-0489.

The disputed domain name wholly incorporates Complainant’s mark VELOCITY REWARDS. The addition of the suffix “.com.au” does not serve to distinguish the domain name from the mark: BT Financial Group Pty Limited v. Basketball Times Pty Ltd, WIPO Case No. DAU2004-0001; GE Capital Finance Australasia Pty v. Dental Financial Services Pty Ltd, WIPO Case No. DAU2004-0007. The domain name is essentially identical to the mark.

Complainant has established this element.

C. Rights or Legitimate Interests

Strictly speaking, notice of this dispute was not given to Respondent until November 30, 2005. However, on November 25, 2005, notice was given to Respondent’s licensee entrusted with the running of Respondent’s loyalty program, which made a substantive response. The date of the earlier notice to Virgin Group Ltd in the United Kingdom should be disregarded because the Australian loyalty program and Respondent’s airline are operated independently of the Virgin Group Ltd London office.

The Panel finds that, prior to notice of this dispute (whether the relevant date be November 25 or 30, 2006) Respondent had prepared for months to use both the mark VELOCITY and the disputed domain name in connection with an offering of services and had made bona fide use of that mark and of the domain name for that purpose.

This is plainly a case in which Respondent has, and is entitled to, its own rights and legitimate interests in Australia in the disputed domain name, independent of whatever rights Complainant may have in the United States of America. Given the full circumstances of this case, there is nothing illegitimate or lacking in bona fides in adopting (even knowingly) the same name for an Australian-based business under the <.com.au> country code, when it is clear that the <.com> user is not trading in Australia and shows no evidence of having established any reputation and goodwill which could reasonably be claimed to extend to Australia.

Complainant has failed to establish this element of its case.

D. Registered or Used in Bad Faith

The disputed domain name was registered before the negotiations to acquire the <.com> domain name commenced and was clearly done in furtherance of Respondent’s legitimate plans to introduce its bona fide loyalty program. Although the negotiations were conducted without revealing Respondent’s identity and ended in acrimony, there was nothing about them that inherently constitutes bad faith. The use to which the disputed domain name has been put has likewise been in furtherance of Respondent’s bona fide loyalty program. The fact that Complainant and Respondent may each be using their domain names in relation to rewards schemes (albeit in somewhat different ways and in different jurisdictions) is also hardly surprising, given the ordinary descriptive meaning of “rewards”. Respondent has legitimately adopted and used the trademark VELOCITY in Australia for its loyalty program as described above. The combination of this mark with “rewards” in the disputed domain name is therefore entirely logical in the circumstances. There is no element of bad faith involved.

The only evidence of confusion appears to be instances of Internet users attempting to find Respondent’s loyalty program mistakenly entering the <.com> domain instead of the <.com.au> name. This contradicts Complainant’s claim that Respondent is seeking to divert users from Complainant to Respondent.

Complainant has failed to establish this element of its case.

7. Decision

For all the foregoing reasons, the Panel finds that Complainant has failed to prove all the necessary elements required under the Policy and the Complaint is denied.

Alan L. Limbury Presiding Panelist
Keith Gymer Panelist	Mary Padbury Panelist

Dated: March 16, 2006