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WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Hertz System, Inc. v. Kwan-ming Lee

Case No. D2009-1165

1. The Parties

Complainant is Hertz System, Inc. of Park Ridge, New Jersey, United States of America, represented by the law firm Howard, Phillips & Andersen, United States of America.

Respondent is Kwan-ming Lee of Ridgewood, New York, United States of America, self-represented.

2. The Domain Name and Registrar

The disputed domain name <hzcar.com> is registered with eNom.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on September 2, 2009. On September 2, 2009, the Center transmitted by email to eNom a request for registrar verification in connection with the disputed domain name. On September 2, 2009, eNom transmitted by email to the Center its verification response confirming that Respondent is listed as the registrant and providing the contact details. The Center verified that the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the "Policy" or "UDRP"), 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 Respondent of the Complaint, and the proceedings commenced on September 7, 2009. In accordance with the Rules, paragraph 5(a), the due date for Response was September 27, 2009. The Response was filed with the Center on September 27, 2009.

The Center appointed Richard G. Lyon as the sole panelist in this matter on October 2, 2009. The Panel finds that it was properly constituted and has jurisdiction over this administrative proceeding. The Panel has submitted his 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

Complainant, through an affiliate, operates a substantial automobile rental and sale business in the United States and around the world. In the United States this business dates back to the 1920s. Complainant holds registered trademarks for HERTZ in the United States dating back to 1955, and over 1,000 registered trademarks for this term in numerous countries. Complainant`s business and trademarks are well known throughout the world.

Respondent is an individual residing in New York, United States, who registered the disputed domain name in March 2002. According to the records available from the Wayback Machine at "www.archive.org", the disputed domain name resolved to an "under construction" announcement until 2004, after which it was used to display hyperlinks for pay-per-click advertising. When the Panel accessed the disputed domain name, he confirmed that a pay-per-click page very similar to those displayed by the Wayback Machine, with all of the links relating to automobiles. The first link is to "Hertz Car Rental".

5. Parties` Contentions

A. Complainant

Complainant contends as follows:

1. Complainant has rights in its many HERTZ trademarks by virtue of its international trademark registrations and continuous use of the word "Hertz" to identify its business. Other panels in Policy proceedings have found the HERTZ trademarks to be famous in the trademark sense. "Aurally [the disputed domain name] is virtually indistinguishable from ‘Hertz Car,` the name by which Hertz is commonly [known], which combines HERTZ® with the generic name of Hertz`s best-known rental product." In an application for HZCAR pending in the United States Patent and Trademark Office ("USPTO"), the USPTO has treated HZCAR as if it was HERTZ CAR. The disputed domain name is also "a predictable misspelling" of HERTZ CAR and thus is an example of typosquatting.

2. Respondent has never been authorized by Complainant to use any of Complainant`s marks, and the only use that the disputed domain name has been put is not legitimate under the Policy. It is commercial use by which Respondent earns revenues from Internet users seeking Complainant but misleadingly diverted to Respondent`s website. This use also prevents Respondent from seeking refuge under paragraph 4(c)(ii) of the Policy, as all of its use has been illegitimate under the Policy and Respondent can show no connection with Hertz except for the use of the disputed domain name.

3. Bad faith is demonstrated by the strength of Complainant`s trademarks, a fact which in some circumstances alone justifies a finding of bad faith. Under United States trademark law, and also as has been found in UDRP decisions (one of which Complainant cited in the Complaint), the public is charged with constructive knowledge of these trademarks. Use of the disputed domain name for pay-per-click sites falls squarely within paragraphs 4(b)(iii) and 4(b)(iv) of the Policy.

B. Respondent

Respondent contends as follows:

1. The disputed domain name <hzcar.com> is not confusingly similar to the word "Hertz"; furthermore, the word "Hertz" is an ordinary English word designating a unit of radio frequency.¹

2. Respondent selected the disputed domain name because it is an acronym for "‘hao zhen` (毫针filifrom needle) & ‘chun ai rong` (纯艾绒 pure moxa) [which] are two important materials in zhenjiuology".² Respondent held a license for practicing "Chinese traditional medicine" since 1979 and his selection of the disputed domain name is consistent with his intended use for that purpose. He has been unable to construct a website by reason of health problems but plans to do so when he recovers. Respondent had and has nothing to do with any pay-per-click advertising undertaken at the disputed domain name. Under his registration agreement with the registrar, the account was registered as a "layaway account". The owner of this type of account may not post a webpage and may not change any content posted by the registrar. Respondent states succinctly "I do not benefit in any way from [the disputed domain name], including so-called ‘pay-per-click`".

3. The fact that Respondent had nothing to do with the parking pages or pay-per-click revenue eliminates any basis for finding either registration or use in bad faith.

6. Discussion and Findings

This proceeding raises noteworthy issues under each of the operative elements in paragraph 4(a) of the Policy.

A. Identical or Confusingly Similar

Determining whether a disputed domain name is confusingly similar to Complainant`s trademark requires the Panel`s inquiry as limited to a "mechanical (though reasoned) comparison of the appearance, spelling, sound, and other objective characteristics of the disputed domain name against those of the mark, without regard to the content of the site." Joseph Dello Russo M.D. v. Michelle Guillaumin, WIPO Case No. D2006-1627 (footnotes omitted). As Complainant argues, the comparison and similarity may be aural. Zumiez Inc. v. Richard Jones, WIPO Case No. D2007-0024. Making this comparison in this case, though, does not, as in most cases, easily determine the issue of confusing similarity. Were the disputed domain name limited to the letters "hz", the Panel would hesitate to find similarity. Aural similarity is questionable and there is no basis for finding this two-letter combination as an obvious and intentional misspelling of the five-letter word that makes up Complainant`s trademark. This is not a case of typosquatting.

By adding the word "car" to the letters "hz", however, Respondent has created similarity with Complainant`s famous trademark. Complainant is known around the world for automobile rentals and, to this Panel`s eye and ear, HZCAR is similar to "Hertz Car" and thus to Complainant`s HERTZ trademark. Complainant has on balance established this Policy element.

B. Rights or Legitimate Interests

Complainant has made a prima facie case that Respondent lacks rights or a legitimate interest in the disputed domain name by showing that it has never authorized Respondent to use its trademarks and that Respondent has never been commonly known by the disputed domain name (other than by his registration of that domain name). Respondent counters with two defenses, but neither can establish a right or legitimate interest.

Respondent claims to have selected the disputed domain name for value as an acronym for an anglicized spelling of Chinese words that are commonly used in acupuncture, a trade he has plied for thirty years. That fact if true does not provide a defense under this Policy element. Paragraph 4(c)(i) provides that a respondent may demonstrate rights or legitimate interest by establishing that "before any notice to you of the dispute, your use of, or demonstrable preparations to use, the domain name or name corresponding to the domain name in connection with a bona fide offering of goods or services". A virtually unbroken line of Policy precedent holds that more than merely an intent to use the disputed domain name for a proper purpose does not meet this standard. The safe harbor calls for "demonstrable preparations" and Respondent here has provided no evidence of any preparations in the seven years since he registered the disputed domain name.

Respondent then disclaims all responsibility for the pay-per-click pages placed at the disputed domain name by the registrar. With limited exceptions, however, a domain name owner is responsible for the content of his website, expressly including pay-per-click advertisements that a registrar or other third party places there.³ There is nothing in this proceeding to justify a holding to the contrary under paragraph 4(a)(ii). Respondent`s denial of any benefit from pay-per-click advertising is simply untrue. Presumably the registrar factored potential revenue to be generated from advertisements or hyperlinks into its pricing for "layaway" domain names. And "commercial gain" as used in paragraph 4(b)(iv) of the Policy is not limited to commercial gain by Respondent; had Respondent wished to avoid so enriching the registrar, it could have selected a form of account that allowed him control of the site`s content. Villeroy & Boch AG v. Mario Pingerna, WIPO Case No. D2007-1912.

C. Registered and Used in Bad Faith

Until very recently a panel`s analysis of paragraph 4(a)(iii) of the Policy entailed separate temporal evaluations, that of Respondent`s intent at the time of registration and then his subsequent use of the disputed domain name. Were the Panel to follow this approach here, the reasoning in the preceding paragraph would suffice to demonstrate Respondent`s use of the disputed domain name in bad faith for purposes of paragraph 4(a)(iii) of the Policy.

Subsequent bad faith use attributable to Respondent does not, however, by itself necessarily demonstrate that Respondent registered the disputed domain name in bad faith. No use at all was made of the disputed domain name for over two years, and Respondent`s explanation for why he picked the particular name is plausible to the Panel. In this Policy proceeding, the Panel has no means to probe this question further and must limit his analysis to inferences reasonably drawn from the evidence in the record and that which is publicly available. This Panel is not prepared out of hand to dismiss Respondent`s explanation as contrived.

Again following the traditional approach, the consensus or near-consensus view requires Complainant to establish registration in bad faith by proving, by a preponderance of the evidence, that Respondent had actual knowledge of Complainant`s trademark and actively selected the trademark to target Complainant and its customers. Gold Medal Travel Group plc v. Damir Kruzicevic, WIPO Case No. D2007-1902; Janet E. Sidewater v. Worldwide Media Inc., WIPO Case No. D2006-1281. The renown of Complainant`s trademarks may allow the Panel to infer actual knowledge.⁴ Targeting is a more difficult question.

Pay-per-click content is ordinarily strong evidence of targeting. Several panels have found automatic pay-per-click hyperlinks virtually conclusive evidence of registration in bad faith. See, e.g., The Jennifer Lopez Foundation v. Jeremiah Tieman, Jennifer Lopez Net, Jennifer Lopez, Vaca Systems LLC, WIPO Case No. D2009-0057; Shangri-La International Hotel Management Limited v. NetIncome Ventures Inc., WIPO Case No. D2006-1315; Villeroy & Boch AG v. Mario Pingerna, WIPO Case No. D2007-1912; McDonald`s Corporation v. ZusCom, WIPO Case No. D2007-1353; Owens Corning v. NA, WIPO Case No. D2007-1143. These cases are to some extent factually distinguishable, however. Several were default cases. Others included obviously concocted defenses and other strong indicia of cybersquatting. Most importantly, none included the two-year time lag between registration and the offending website content, making it easy in those cases to infer bad faith registration. Under the traditional approach the panel may infer registration in bad faith from subsequent conduct, but the temporal distinction – respondent`s intent at the date of registration – must still be proven, by direct proof or panel inference.

Some other evidence may indicate bad faith at the time of registration. Respondent ignored pre-Complaint correspondence from Complainant demanding transfer of the disputed domain name, and choosing the "layaway account" agreement with eNom may indicate more than passing familiarity with domain names and the domain name system. If that be true he would likely have been aware of the opportunity to create an account over which he had control and of his responsibility for content on webpages that used domain names that he controlled. This remains speculation, of course. Seven years of inactivity undercut to some extent Respondent`s stated reason for registration. A Google search for Respondent indicates that he has at least one other domain name consisting of a string of apparently unrelated letters (<gzfdc.com>).⁵ This could cut either way, of course – it might demonstrate speculation in domain names or an innocent parking page using another Chinese acronym.

In Respondent`s favor are a plausible explanation for selecting the disputed domain name, corroborated by some evidence; no evidence that Respondent has stockpiled domain names; no attempt to sell the disputed domain name; Respondent`s appearance in this proceeding; and his refraining from employing privacy services or other means to hide his identity. To the Panel`s knowledge, Respondent (under his name or Meditech) has never been a party to any other Policy proceeding; has not attempted to sell the disputed domain name or any other domain name; or has otherwise breached the Policy. The disputed domain name is not an obvious copy of or a typosquatted combination upon Complainant`s mark; it might indeed have been selected for its value as an acronym or mnemonic.

Very recently, some panels have taken a different view of bad faith. Relying upon a slightly different reading of paragraph 4(a)(iii), and emphasizing any domain name registrant`s undertaking under paragraph 2 of the Policy,⁶ the words has been registered and is being used in bad faith are deemed a "unified concept", see, e.g., Denver Newspaper Agency v. Jobing.com LLC, NAF Claim No. 1282148. Under the "unified concept approach":

As explained in the seminal Telstra decision, "registration and use" is used in the policy as a unified concept. Even though the concept mentions both "registration" and "use," the examples provided in the Policy make clear that some types of registration alone will be sufficient to satisfy this unified concept. Telstra Corp. v. Nuclear Marshmallows, WIPO Case No. D2000-0003 (WIPO Feb. 18, 2000). For example, one type of conduct that the Policy says "shall be evidence of the registration and use of a domain name in bad faith" is "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." Policy ¶ 4(b)(ii). The Policy also says that another type of conduct that "shall be evidence of the registration and use of a domain name in bad faith" is: "by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your web site 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 web site or location or of a product or service on your web site or location." Policy ¶ 4(b)(iv). As the Telstra panel recognized, some of the listed examples only addressed registration; similarly, the example listed in Paragraph 4(b)(iv) only lists a type of use, and states that this use shall itself be evidence of []"the registration and use of a domain name in bad faith," even though the example says nothing about registration. Accordingly, because the Panel finds that the Respondent has in fact used the domain name to intentionally attract Internet users to its web site for commercial gain by creating a likelihood of confusion with the Complainant`s mark as to source, that bad faith use is itself sufficient to establish "registration and use in bad faith," even in the absence of any allegations about Respondent`s intent at the time of registration and whether Respondent had Complainant`s trademark "in mind" at the time it registered the domain name. City Views Ltd. v. Moniker Privacy Servs / Xander, Jeduyu, ALGEBRALIVE, WIPO Case No.D2009-0643 (July 3, 2009); Phillip Securities Pte Ltd v. Leong, DE-0900226 (ADNDRC July 11, [2]009); Octogen Pharmacal Co. v. Domains By Proxy, Inc. / Rich Sanders and Octogen e-Solutions, WIPO Case No. D2009-0786 (WIPO Aug.19, 2009).

Adopting the unified concept approach would provide little help in this case. This Panel is not presently prepared to read the few unified concept approach cases to say that any use in bad faith, even occasional conduct that fits squarely within one of the examples of bad faith in paragraph 4(b) of the Policy, as automatically establishing bad faith for purposes of paragraph 4(a)(iii). If it did, the clearly conjunctive language of paragraph 4(a)(iii) could be too easily circumvented. Under the unified concept approach this Panel would give less weight to a third party`s placing trademark-related advertisements on a passive website than under the traditional approach for just this reason.

The touchstone bad faith issue in this case, under either approach, turns on whether Respondent chose the disputed domain name for its value as an acronym or as an aural imitation of Respondent`s mark. On this point the evidence conflicts, but in the Panel`s view on balance favors Respondent. Complainant has not shown that Respondent is a domainer, to whom certain presumptions and obligations might apply, among them knowledge of what a registrar or Internet service provider might be permitted to do with a dormant domain name. In this case, under either the traditional or unified concept approach, the Panel believes that Complainant, which has the burden of proof on each Policy element, has not established that Respondent registered the disputed domain name in bad faith. On the evidence it does not appear to be the obvious instance of cybersquatting of the sort that the Policy was adopted to combat.

7. Decision

For all the foregoing reasons, the Complaint is denied.

Richard G. Lyon
Sole Panelist

Dated: October 14, 2009