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WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Magellan Development Group, LLC v. Walter and Shelley Stunard,

Case No. D2007-0025

 

1. The Parties

Complainant is Magellan Development Group, LLC (“Complainant”), a corporation established under the laws of the State of Illinois, Chicago, Illinois, United States of America, represented by Sonnenschein Nath & Rosenthal, United States of America

Respondents are Walter and Shelley Stundard (“Respondents”), Chicago, Illinois, United States of America, represented by Robert D. Butters, Untied States of America.

2. The Domain Names and Registrar

The Domain Names at issue are <lakeshoreeast.net> and <lakeshoreeast.org> (the “Domain Names”). The current registrar is Go Daddy Software Inc. (the “Registrar”) Scottsdale, Arizona, United States of America.

3. Procedural History

On January 8, 2007, the WIPO Arbitration and Mediation Center (the “Center”) received a copy of the Complaint of Complainant via email.

On January 10, 2007, after the Center sent a Request for Verification to the Registrar requesting verification of registration data, the Registrar confirmed, inter alia, that it is the registrar of the Domain Names and that the Domain Names are registered in the Respondents’ name.

The Center verified that the Complaint satisfies 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 Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the “Supplemental Rules”).

On January 16, 2007, the Center sent a Notification of Complaint and Commencement of Administrative Proceeding to the Respondents together with copies of the Complaint, with a copy to the Complainant. This notification was sent by the methods required under paragraph 2(a) of the Rules.

On February 2, 2007, the Center received the Response of Respondents via email. On February 6, 2007, the Center received the Response of Respondents in hardcopy.

On February 20, 2007, after the Center received a completed and signed Statement of Acceptance and Declaration of Impartiality and Independence from Richard W. Page (the “Panel”), the Center notified the parties of the appointment of a single member Panel.

Each party has filed a supplemental submission with the Center which has been accepted and will be considered by the Panel.

4. Factual Background

Complainant develops and sells mixed-use real estate in the United States of America. Complainant markets its developments under the name “Lakeshore East”. Complainant began use of variations of the phrase “Lakeshore East” at least as early as 2000. It has continued use of the phrase “Lakeshore East” as its brand for real estate development in the United States of America, and in Chicago in particular.

Complainant owns five pending United States federal trademark applications using the phrase LAKESHORE EAST pertaining, among other things, to real estate services, together with health resort and beauty spa services. Complainant claims common law rights in the phrase LAKESHORE EAST (the “LAKESHORE EAST Mark”). Complainant actively advertises, promotes and sells its branded “Lakeshore East” development properties on its website, located at “www.lakeshoreeast.com” and by way of other advertising and marketing efforts.

Complainant has given the name “Lakeshore East” to a number of its developments. Complainant has engaged in an active program of attempting to protect its claimed trademarks, by contacting perceived infringers. Its communications with Respondents prior to and during this proceeding are in furtherance of Complainant’s program to protect its claimed LAKESHORE EAST Mark.

Respondents registered the disputed Domain Names in January 2004 and have offered to sell homes in the Complainant’s developments under the name “Lakeshore East”. At the time the homes were neither completed, nor were they offered for sale by anyone other that the Complainant as developer. In May 2006, Complainant discovered Respondents use of “Lakeshore East” and demanded that Respondents cease and desist use of the phrase “Lakeshore East”. Respondents have removed the content from the websites to which the Domain Names resolved, but have refused to transfer the Domain Names to Complainant.

For over ten (10) years, Respondents have been real estate sales people duly licensed in good standing under the laws of the State of Illinois. For nearly two (2) years, the Respondents have been affiliated as independent contractors with Rubloff Residential Properties (“Rubloff”). Respondents conduct their real estate brokerage business from the Rubloff office located at 400 East Randolph Drive, Chicago, which is in what Respondents term the “Lakeshore East” neighborhood. During their real estate brokerage careers, the Respondents have concentrated on the listing and selling of residential condominium units in the buildings located in and around the Lakeshore East neighborhood. Respondents only rarely listed or sold real estate located north of the Chicago River. The sellers served by Respondents own their units in fee simple and are not obligated to list their units for resale with any real estate company specified by the Complainant. Respondents have occasionally represented purchasers of “new” units, but ordinarily represent purchasers or sellers of resale units. Respondents promote their business by the promoting themselves as long time permanent residents of the neighborhoods in which their clientele resides.

 

5. Parties’ Contentions

A. Complainant’s contentions

i. Complainant contends that it has applications for trademark registrations in the LAKESHORE EAST Mark and has established common law trademark rights through secondary association in the LAKESHORE EAST Mark. Complainant alleges that through its continuous use of the claimed LAKESHORE EAST Mark since 2000, the Mark has become a major brand for real estate development in the United States of America, and in Chicago in particular.

ii. Complainant argues that the Domain Names are confusingly similar to the LAKESHORE EAST Mark, pursuant to Paragraph 4(a)(i) of the Policy, because they wholly incorporate the trademark LAKESHORE EAST with the addition of generic “.net” or “.org” extensions. Complainant also asserts that sound of the Domain Names is identical to the LAKESHORE EAST Mark.

iii. Complainant contends that Respondents have no rights or legitimate interests in the Domain Names, pursuant to Paragraph 4(a)(ii), and that Respondents have failed to demonstrate any of the three circumstances that constitute rights to or legitimate interests in the Domain Names.

Respondents cannot demonstrate rights or legitimate interest in the Domain Names under Paragraph 4(c)(i) because they have not made use, or demonstrable preparations to use, the Domain Names in connection with the bona fide offering of goods or services. Complainant argues that providing services which are confusingly similar to attract customers are not bona fide.

Respondents cannot demonstrate rights or legitimate interests in the Domain Names under Paragraph 4(c)(ii) because they are not commonly known under either of the Domain Names. Complainant contends that Respondents have no connection or affiliation with Complainant, and have not received any license or consent, express or implied, to use the LAKESHORE EAST Mark in a domain name or in any other manner.

Respondents cannot demonstrate rights or legitimate interests in the Domain Names under Paragraph 4(c)(iii) because they are not making a legitimate noncommercial or fair use of the Domain Names without the intent to (a) derive commercial gain, (b) misleadingly divert consumers, or (c) tarnish the trademark at issue. Complainant asserts that Respondents’ actions are commercial in that Respondents are attempting to sell real estate and the actions misleadingly divert consumers because of confusing similarity with the LAKESHORE EAST Mark.

iv. Complainant contends that Respondents registered and are using the Domain Names in bad faith in violation of Paragraph 4(a)(iii).

Complainant alleges that Respondents registered the Domain Names to prevent the Complainant from reflecting the Mark in a corresponding domain name. Complainant alleges that Respondents’ actions constitute bad faith under Paragraphs 4(b)(ii) and (iii) of the Policy, which state: (ii) you have registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that you have engaged in a pattern of such conduct; or (iii) you have registered the domain name primarily for the purpose of disrupting the business of a competitor.

Complainant alleges that the actions and commercial purpose of Respondents also satisfy the bad faith elements of Paragraph 4(b)(iv) of the Policy which states: (iv) by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your website or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your website or location or of a product.

Complainant further contends that the actions of the Respondents after they were notified of the Complainant’s claims provide further evidence of Respondents’ bad faith. The Respondents did not contact the Complainant or otherwise respond to the contacts from the Complainant. In addition, they then parked an empty website with the content stripped with Go Daddy Software, Inc. as the Registrar to keep the Complainant from having access to those Domain Names.

B. Respondents’ contentions

i. Respondents dispute that Complainant has common law trademark rights in the phrase “Lakeshore East” because the phrase refers to a geographical area in the East Loop of Chicago in which the various buildings developed by the Complainant are located. Respondents allege that the Complainant’s use of “Lakeshore East” is geographically descriptive. Respondents allege that Complainant’s do not use “Lakeshore East” in relation to any real estate services being rendered, rather to the phrase describes the geographical location where the buildings Complainant has developed are located.

Respondents further allege that Complainant’s website has a “neighborhood” page where an Internet user clicks on “maps” one of which is labeled “View the Lakeshore East neighborhood.” On which are presented the geographical boundaries of the neighborhood within the East Loop of Chicago. For Complainant to establish common law trademark rights, it must show the existence of secondary meaning. For a geographical name to acquire secondary association is a very high burden which burden Complainant bears.

Respondents alleged that the United States Patent and Trademark Office (“USPTO”) has pushed back Complainant’s trademark applications, demonstrating that Complainant has no trademark rights.

ii. Respondents assert that the Domain Names are not identical or confusingly similar to the LAKESHORE EAST Mark because a reasonable person would not assume the Domain Names are actually being used or sponsored by Complainant. Respondents claim to have accurately described on their website, before the content was removed, the role of Complainant as developers of certain buildings in the LAKESHORE EAST neighborhood.

The website of Respondents clearly identifies Complainant as the developer of certain of the units being offered for sale. Respondents assert that nothing in their website was intended to create confusion as to the source of the website being sponsored by or affiliated with Complainant.

iii. Respondents assert that they have rights to or legitimate interests in the Domain Names because Complainant has placed information about all, or substantially all, of its available units in the Multiple Listing Service (“MLS”) of Northern Illinois, which means that Complainant is extending an offer of cooperation and compensation to the Respondents to market the Complainant’s units to Respondents’ buyer clientele. Consequently the Complainant has expressly authorized the Respondents to find purchasers for new unit in the Complainant’s buildings by using the Mark.

Respondents state that the disputed Domain Names are intended to promote the neighborhoods in which Respondents do business. The disputed Domain Names were registered for the purpose of generating leads for potential clients surfing the web to find properties for sale within the “Lakeshore East” neighborhood. Respondents assert that use of the geographical description is a “fair use” of any trademark which Complainant might have.

iv. Respondents deny that they registered or used the Domain Names in bad faith. Paragraph 4(b) suggests four types of evidence of bad faith registration, none of which apply:

Respondents argue that Paragraph 4(b)(ii) does not apply because the registration of the Domain Names does not prevent the Complainant from reflecting the mark in a corresponding domain name. It also has not engaged in a pattern of registering domain names to prevent the trademark owner from reflecting the Mark in a corresponding domain name.

Respondents argue that Paragraph 4(b)(iii) does not apply because Respondents are in no way trying to disrupt the business of Complainant.

There is no evidence of bad faith based on Paragraph 4(b)(iv) because Respondents are not diverting Internet User to their website by confusion or other misleading statement.

6. Discussion and Findings

Paragraph 15(a) of the Rules instructs the Panel as to the principles the Panel is to use in determining the dispute: “A Panel shall decide a complaint on the basis of the statements and documents submitted in accordance with the Policy, these Rules, and any rules and principles of law that it deems applicable.”

Because both the Complainant and Respondents are domiciled in the United States of America and United States of America courts have recent experience with similar disputes, to the extent that it would assist the Panel in determining whether the Complainant has met its burden as established by Paragraph 4(a) of the Policy, the Panel shall look to rules and principles of law set out in decisions of the courts of the United States. See Tribeca Film Center, Inc. v. Brusasco-Mackenzie, WIPO Case No. D2000-1772 (April 10, 2001).

Paragraph 4(a) of the Policy directs that Complainant must prove each of the following:

i) that the domain names registered by Respondents are identical or confusingly similar to a trademark or service mark in which the Complainant has rights; and,

ii) that Respondents have no legitimate interests in respect of the domain name; and,

iii) that the domain names have been registered and are being used in bad faith.

A. Identical or Confusingly Similar

i) Enforceable Trademark Rights

The USPTO appears to have refused Complainant’s request for registration of the LAKESHORE EAST Mark because of the likelihood of confusion with an existing registration. The USPTO office action does not appear to consider as a basis for rejection the applications that “Lakeshore East” is geographically descriptive. The status of these applications appears to be unresolved at this particular time. Therefore, the Complainant cannot take advantage of any doctrine that registrations serve as prima facie evidence of Complainant’s ownership and the validity of the claimed LAKESHORE EAST Mark. However, the failure of the USPTO to register the LAKESHORE EAST Mark does not mean that the Complainant has no common law trademark rights. Complainant needs to show that it has acquired secondary association to enjoy common law trademark rights in the phrase “Lakeshore East”.

To establish common law rights in a geographic phrase, it is necessary to show use of that name has acquired secondary meaning or association. The name must be or have become an indication of the source of goods or services supplied in trade or commerce and that, as a result of such use, the name has become distinctive of that source. Secondary meaning is the consumer’s association of the mark with a particular source or sponsor and is established out of long association of the name with the business, whereby the name and the business have become synonymous in the mind of the public, submerging the primary meaning of the name in favor of its meaning as a word identifying that business. See Visser v. Macrese et al., 214 Cal. App. 2d 249, 253, 29 Cal. Rptr. 367, 369 (Cal. Dist. Ct. App. 4^th 1963); see also Levis Strauss & Co. v. Blue Bell, Inc., 778 F.2d 1352, 1354 (9^th Cir. 1991) (en banc). In assessing secondary meaning, one must consider a variety of factors, including, but not limited to, (1) advertising expenditures, (2) consumer ... linking [of] the mark to the source, (3) unsolicited media coverage of the product, (4) sales success, ... and [(5)] length and exclusivity of the marks use. Paco Sport, Ltd. v. Paco Rabanne Parfums, 86 F.Supp. 2d 305, 313 (S.D.N.Y. 2000) (quoting Centaur Communications, Ltd. v. A/S/M Communications, Inc., 830 F.2d 1217, 1222 (2d. Cir. 1987).

The Panel finds that Complainant’s numerous developments under the name “Lakeshore East” and its proactive efforts to protect the LAKESHORE EAST Mark demonstrate secondary association. This finding is also supported by the descriptions Respondents’ website content that clearly identify Complainant as the developer of many of the units being offered for sale. The parties appear to agree that Complainant was instrumental in the development and naming of the “Lakeshore East” development. Complainant has given the name “Lakeshore East” to a number of its developments in the “neighborhood” which Respondents now claim as a geographically descriptive phrase. This intimate involvement in the development and naming of the “neighborhood” is sufficient to make a showing of secondary association.

In addition, Complainant has engaged in an active program of attempting to protect its claimed trademarks, by contacting perceived infringers. Its communications with Respondents prior to and during this proceeding are in furtherance of Complainant’s program to protect its claimed LAKESHORE EAST Mark. The fact that others residing or selling property in the neighborhood now refer to not only Complainant’s developments but the entire “neighborhood” as LAKESHORE EAST does not defeat the secondary association which the Panel believes has been shown by Complainant.

The Panel finds that Complainant has made a sufficient showing to meet the burden that an arguably geographical location has acquired secondary association. Therefore for purposes of this proceeding, the Complainant has enforceable common law rights in the LAKESHORE EAST Mark.

ii) Identity or Confusing Similarity

Complainant further contends that the Domain Names are identical with and confusingly similar to the trademark pursuant to the Policy paragraph 4(a)(i).

Respondents assert that the Domain Names are not identical or confusingly similar to the LAKESHORE EAST Mark because a reasonable person would not assume the Domain Names are actually being used or sponsored by Complainant. Respondents claim to have accurately described on their website, before the content was removed, the role of Complainant as developers of certain buildings in the “Lakeshore East” neighborhood.

As numerous courts and prior UDRP panels have recognized, the incorporation of a trademark in its entirety is sufficient to establish that a domain name is identical or confusingly similar to the complainant’s mark. See Paccar Inc. v. Telescan Technologies, L.L.C., 115 F. Supp. 772 (E.D. Mich. 2000) (finding that <peterbuilttrucks.com>, <kenworthtrucks.com> and similar domain names are not appreciably different from the trademarks PETERBUILT and KENWORTH); Quixar Investments Inc. v. Dennis Hoffman, WIPO Case No. D2000-0253 (May 29, 2000) (finding that QUIXTAR and <quixtarmortgage.com> are legally identical). The addition of other terms in the domain name does not affect a finding that the domain name is identical or confusingly similar to the complainant’s trademark.

Contrary to the Respondents’ contention, the owner of trademark rights does not have to show “likelihood of confusion”, as that term is used in trademark infringement jurisprudence, to establish that a domain name incorporating a trademark in its entirety is identical or confusingly similar for purposes of this first factor. Under Paragraph 4(a)(i), the question of identity and confusing similarity is evaluated solely based on a comparison between the complainant’s trademark and the alphanumeric string constituting the domain name at issue. See Magnum Piering, Inc. v. The Mudjackers and Garwood S. Wilson, Sr., WIPO Case No. D2000-1525 (January 29, 2001). It thus is irrelevant, for purposes of evaluating the first factor, whether consumers would avoid confusion by reviewing the content of Respondents’ website.

Respondents argue that they accurately described the fact that Complainant’s were the developer’s of the “Lakeshore East” development. This is not sufficient to dispel the confusion created by use of the entire LAKESHORE EAST Mark in the disputed Domain Names.

The Panel notes that the entirety of the LAKESHORE EAST Mark is included in the Domain Names with the exception of the “.net” and “.org” extensions.

Generally, a user of a mark “may not avoid likely confusion by appropriating another’s entire mark and adding descriptive or non-distinctive matter to it.” See 3 J. Thomas McCarthy, McCarthy on Trademarks & Unfair Competition § 23:50 (4^th ed. 1998).

The addition of the phrases “.net” and “.org” are non-distinctive because it is a gTLD required for registration of a domain name.

Therefore, the Panel finds that the Domain Names are confusingly similar to the LAKESHORE EAST Mark pursuant to the Policy paragraph 4(a)(i).

B. Rights or Legitimate Interest

Complainant contends that Respondents have no rights or legitimate interests in the Domain Names, pursuant to Paragraph 4(a)(ii), and that Respondents have failed to demonstrate any of the three circumstances that constitute rights to or legitimate interests in the Domain Names.

Paragraph 4(a)(ii) requires the Complainant to prove that the Respondents have no rights to or legitimate interests in the Domain Names. Once a Complainant establishes a prima facie showing that none of the three circumstances establishing legitimate interests or rights apply, the burden of production on this factor shifts to the Respondent to rebut the showing. The burden of proof, however, remains with Complainant to prove each of the three elements of Paragraph 4(a). See Document Technologies, Inc. v. International Electronic Communications, Inc., WIPO Case No. D2000-0270 (June 6, 2000).

Complainant in its allegations above has come forward with sufficient evidence to establish its prima facie showing that Respondents lack legitimate interests or rights.

Respondents assert that they have rights to or legitimate interests in the Domain Names because Complainant has placed information about all, or substantially all, of its available units in the MLS, which means that Complainant is extending an offer of cooperation and compensation to the Respondents to market the Complainant’s units to Respondents’ buyer clientele. Consequently, according to Respondents, the Complainant has expressly authorized the Respondents to find purchasers for new unit in the Complainant’s buildings by using the LAKESHORE EAST Mark.

Respondents have failed to provide any language from the MLS which states that the listing of properties contains a waiver of trademark rights or authorization for other parties to use trademarks. Therefore, the Panel finds that the listing of properties on the MLS is not sufficient permission for Respondents to use otherwise protectable common law trademarks.

Respondents further argue that the disputed Domain Names are intended to promote the neighborhoods in which Respondents do business. The disputed Domain Names were registered for the purpose of generating leads for potential clients surfing the web to find properties for sale within the “Lakeshore East” neighborhood. Respondents assert that use of the geographical description is a “fair use” of any trademark which Complainant might have. Paragraph 4(c)(iii) would protect Respondents if they are making a legitimate noncommercial or “fair use” of the Domain Names without the intent to (a) derive commercial gain, (b) misleadingly divert consumers, or (c) tarnish the trademark at issue.

The Panel finds that Respondents are engaged in commercial activity and were trying to misleadingly divert consumers to their website through use of the Domain Names, prior to stripping the content from the websites and parking them with the Registrar.

Therefore, the Panel finds that Respondents have no rights or legitimate interest in the Domain Names pursuant to the Policy paragraph 4(a)(ii).

C. Bad Faith

Complainant contends that Respondents registered and are using the Domain Names in bad faith in violation of the Policy paragraph 4(a)(iii).

The Policy paragraph 4(b) sets forth four nonexclusive criteria for Complainant to show bad faith registration and use of domain names:

(i) circumstances indicating that you have registered or you have acquired 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 your documented out-of-pocket costs directly related to the domain name; or

(ii) you have registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that you have engaged in a pattern of such conduct; or

(iii) you have registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(iv) by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your website or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your website or location or of a product or service on your website or location.

Complainant alleges, and the Panel agrees, among other bases, that the actions and commercial purpose of Respondents also satisfy the bad faith elements of Paragraph 4(b)(iv) which states: (iv) by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your website or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your website or location or of a product.

Complainant further contends, and the Panel agrees, that the actions of the Respondents after they were notified of the Complainants’ claims provide further evidence of Respondents’ bad faith. The Respondents did not contact the Complainant or otherwise respond to the contacts from the Complainant. In addition, they then parked an empty website with the content stripped with Go Daddy Software, Inc. as the Registrar to keep the Complainant from having access to those Domain Names.

The Panel finds that Complainant has established the elements of bad faith under the Policy paragraph 4(a)(iii).

7. Decision

The Panel concludes (a) that the Domain Names <lakeshoreeast.net> and <lakeshoreeast.org> are confusingly similar to Complainant’s common law rights in the LAKESHORE EAST Mark, (b) that Respondents have no rights or legitimate interest in the Domain Names and (c) that Respondents registered and used the Domain Names in bad faith. 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 <lakeshoreeast.net> and <lakeshoreeast.org> be transferred to Complainant.

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Richard W. Page
Sole Panelist

Dated: March 9, 2007