BREAKTHROUGH SOFTWARE, INC.
v.
GORDON-HUIGEN ENTERPRISES
[Indexed as: Breakthrough Software v. Gordon-Huigen]
[Indexed as: Shopzone.com]
eSolution
Administrative Panel Decision
Case File AF-0122
Commenced: 23 February 2000
Judgment: 13 April 2000
Presiding Panelist: Jean-François Buffoni
Domain name - Domain name dispute resolution policy - U.S. Trademark U.S. Service Mark - Confusingly similar - Date of first use - Preparation to use - Bad faith registration - Bad faith use Legitimate Interests Bona fide offering of goods and services - Reverse Domain Name Hijacking.
On June 30, 1996, Respondent registered the domain name shopzone.com with Network Solutions. Complainant obtained registration of the trademark SHOPZONE on December 21, 1999. This registration indicates July 14, 1998 as the date of first use of the SHOPZONE trademark.
Held, Name Not Transferred to Complainant
There is no dispute that the domain name shopzone.com is identical to the trademark SHOPZONE.
Long before any notice of the dispute to Respondent, Respondent had demonstrably prepared to use the domain name shopzone.com as well as the business name, The Shopzone, in connection with a bona fide offering of goods or services. The Respondent therefore has rights and legitimate interests. The issue of rights to and legitimate interests in the domain name must be assessed as it existed before any notice to the Respondent of the dispute.
Breakthrough contends that Huigen's bad faith is demonstrated by 4 facts: 1) according to Breakthrough's version, Huigen rejected Breakthrough's $10,000 proposal; 2) Huigen allegedly falls under the ACTPA; 3) Huigen is not using and did not indicate to Breakthough that he intended to use the domain name for sale of goods or services; 4) Huigen failed to respond to the January 7, 2000 cease and desist letter.
The panel finds that none of the facts alleged would fall within any of the four examples supplied by paragraph 4(b) of the ICANN Rules and, in any event, none of these three facts in any way constitutes evidence of bad faith. As for the reference to the ACTPA, irrespective of the question whether that act in general or the cited factor in particular are applicable to the present administrative proceeding, the panel finds that Complainant has not proven the essential elements.
The Panel considers whether Complainant brought the Complaint in bad faith. "Reverse Domain Name Hijacking" is defined in paragraph 1 of the ICANN Rules as "using the Policy in bad faith to attempt to deprive a registered domain-name holder of a domain name."
This panel finds no elements of bad faith on Complainant's part. Firstly, Complainant's trademark registration for the trademark SHOPZONE coupled with Respondent's alleged lack of actual use of its domain name shopzone.com and tradename, The Shopzone, might have led Breakthrough to a bona fide conclusion that its legal position under the ICANN Rules was better than it was in reality. Secondly, the ICANN Rules having been adopted quite recently it would be appropriate to give Complainant the benefit of the doubt.
Policies referred to
Anti CyberSquatting Consumer Protection Act of 1999 (ACTPA), or 15 U.S.C.
§ 1125(d)
Uniform Domain Name Dispute Resolution Policy
Rules for Uniform Domain Name Dispute Resolution Policy
Supplemental Rules for Uniform Domain Name Dispute Resolution Policy
Panel Decision referred to
--
Buffoni, Panelist: -
1. The Parties and Contested Domain Name
The complainant Breakthrough Software, Inc. (Breakthrough) of
San Jose, California,
USA brought the present complaint against the respondent Gordon-Huigen
Enterprises (Huigen) of Burbank, California, USA. The domain name at issue
is shopzone.com registered by Huigen. The complaint was brought pursuant
to the Uniform Domain Name Dispute Resolution Policy (ICANN policy), adopted
by the Internet Corporation for Assigned Names and Numbers on October 24,
1999.
2. Procedural history
The electronic version of the complaint form was filed on-line through
eResolution's
website on February 10, 2000. The hardcopy of the complaint form was
received on
February 15, 2000. Payment was received on February 23, 2000.
Upon receiving all the required information, eResolution's Clerk proceeded to the required administrative inquiry. The inquiry lead the Clerk of eResolution to the following conclusions: the Registrar is Networks Solutions, the Whois database contains all the required contact information. The contested domain name resolves to an inactive Web page and the complaint is administratively compliant.
The Clerk then proceeded to send a copy of the complaint form and the required cover sheet in accordance with paragraph 2(a) of the ICANN's Rules for Uniform Domain Name Dispute Resolution Policy.
The Clerk forwarded the complaint to the respondent on February 23, 2000. That date is the commencement date of the administrative proceeding.
On February 25, 2000, the Clerk's office notified the complainant, the
respondent, the
concerned Registrar, and ICANN of the date of commencement of the administrative
proceeding.
On March 5, 2000, the respondent asked for an extension until March
19, 2000 to
submit his response.
On March 9, 2000, the Clerk's Office granted the delay.
On March 17, 2000, the Respondent submitted, via eResolution website,
his response.
The signed version of the response was received on March 21, 2000.
On March 29, 2000, the Clerk's Office contacted Mr. Jean-François Buffoni, and requested for him to act as panelist in this case.
On March 30, 2000, Mr. Jean-François Buffoni accepted to act
as panelist in this case
and filed the necessary Declaration of Independence and Impartiality.
On March 31, 2000, the Clerk's Office forwarded a user name and a password
to Mr.
Jean-François Buffoni allowing him to access the complaint form
and the evidence
through eResolution's Automated Docket Management System.
On March 31, 2000, the parties were notified that Mr. Jean-François Buffoni had been appointed and that a decision was to be, save exceptional circumstances, handed down on April 14, 2000.
3. Factual Background
On June 26, 1996, Huigen and his wife Elise Gordon registered with the
Recorder's
Office of Los Angeles County, California, a "Fictitious Business Name
Statement" for
various business names including "The Shopzone."
On June 30, 1996, Huigen registered the domain name shopzone.com with
Network
Solutions.
On April 14, 1998, Breakthrough filed a trademark application with the
United States
Patent and Trademark Office (USPTO) for the registration on its Principal
Register of
the trademark SHOPZONE for computer software enabling the user to create
a website with an on-line store, which will be a site on the Internet,
for the purchase of goods or services featuring catalog lookups, a simulated
shopping cart, discussion groups, electronic forms, and database connectivity,
in International Class 9. This application resulted in registration number
2,301,588 on December 21, 1999. This registration indicates July 14, 1998
as the date of first use of the SHOPZONE trademark.
In 1999, Mr. Joshua Weisberg (Weisberg), vice-president of Marketing
and Business
Development for Breakthough contacted Huigen to see if Breakthrough
could purchase
the domain name from him. According to Breakthrough, Weisberg asked
Huigen how much he wanted for the name, Huigen replied he was thinking
of $50,000, Weisberg
then stated that Breakthrough was willing to pay $10,000 and Huigen
said it was not
enough. According to Huigen, Weisberg offered $5,000 rather than $10,000.
Huigen
denies having ever mentioned $50,000 or stating that the amount offered
was not enough, adding that he is not and never was interested in selling
the domain name. Be it as it may, the parties did not come to an agreement.
On January 7, 2000, Breakthrough's attorney, Daniel R. Richardson of
San Francisco,
California, USA, sent to Huigen a cease and desist letter claiming
violation of Breakthrough's trademark SHOPZONE, requesting that Huigen
cease use of the shopzone.com domain name and immediately surrender and
assign all rights and interests in this name and its registration to Breakthrough.
This letter has remained unanswered.
4. The Parties' Contentions
Breakthrough asserts that the domain name shopzone.com is identical
or confusingly
similar to the trademark SHOPZONE, that Huigen has no rights or legitimate
interest in
respect of the domain name shopzone.com and that this domain name has
been registered and is being used in bad faith. Huigen denies that there
is any copy or similarity or that there would be any confusion in the marketplace.
He further contends that he had and still has rights and legitimate interests
in the domain name shopzone.com. Finally, Huigen rejects all claims of
bad faith.
5. Discussion and Findings
Under the ICANN Policy paragraph 4(a),
a complainant has the obligation to prove each
of the following: i) that the domain name at issue is identical or
confusingly similar to the
complainant's trademark; ii) that the respondent has no rights or legitimate
interests in
the domain name; and iii) that the domain name has been registered
and is being used in bad faith. The ICANN Policy in paragraph 4(b) provides
four examples of circumstances which, for the purposes of paragraph 4(a)(iii),
supra, are clear evidence of the registration and use of a domain name
in bad faith. The ICANN Policy at paragraph 4(c) sets out three examples
of defences which, if proved by respondent, shall demonstrate respondent's
rights or legitimate interests to the domain name for purposes of paragraph
4(a)(ii), supra. If the complainant successfully proves all three elements
of paragraph 4(a), then this panel has the authority under paragraph 4(i)
to require the cancellation of the respondent's domain name registration,
or to order that it be transferred to the complainant. According to paragraph
15(e), the panel also may consider whether the complaint was brought in
an attempt at "reverse domain name hijacking" or otherwise in bad faith.
1. Identity or Confusing Similarity
Paragraph 4(a)(i) of the ICANN policy requires that the domain name
be identical or
confusingly similar to the complainant's trademark.
Breakthrough asserts that Huigen's domain name shopzone.com is identical
to its own
SHOPZONE trademark, that the marks are the same in spelling, sound
and connotation and would create a likelihood of confusion in the marketplace,
and that Huigen does not
presently have a website on the Internet using this domain name.
Huigen does not respond to the allegation that the domain name shopzone.com
is the
same as the trademark SHOPZONE in spelling, sound and connotation.
He acknowledges however that the domain name shopzone.com is not currently
in operation. But he asserts that the business model for shopzone.com is
a marketplace for facilitating the transfer of goods and services which
is different from Breakthough's software which is contemplated by the SHOPZONE
trademark registration. Huigen puts forward a number of additional arguments
in support of his view that the shopzone.com website, when in operation,
will not cause confusion in the marketplace with Breakthrough's products
or services.
As pointed out above, there is no dispute that the domain name shopzone.com is identical to the trademark SHOPZONE. Of course, the presence of the top-level domain ".com" in the domain name is of no consequence in the instant case. The same applies to the fact that the domain name is displayed in lowercase letters as opposed to the trademark which is displayed in upper-case letters in the USPTO Registration. The panel therefore finds that the identity test of paragraph 4(a)(i) of the ICANN policy has been satisfied. Since the complainant must, under paragraph 4(a)(i), prove only that the domain name and trademark are identical or confusingly similar, the panel need not address the issue of alleged confusing similarity.
2. Rights or Legitimate Interests
Paragraph 4(a)(ii) of the ICANN policy raises the issue whether the
respondent has any
rights or legitimate interests in respect of the domain name. Paragraph
4(c) sets out three examples of circumstances which demonstrate the existence
of such rights or legitimate interests of the respondent in the domain's
name. These examples are not exhaustive.
Breakthrough contends that when it contacted Huigen to see how the domain
name was
being used, the latter could not identify any trademark or other use
of the name.
Breakthrough adds that Huigen is not using the name for any trade purposes,
that is it is
not being used for the sale of goods or services.
Huigen replies in essence that the adoption in June 1996 of the domain
name shopzone.com and the registration of the corresponding fictitious
business name The
Shopzone predate by almost two years the filing of Breakthough's trademark
application
in April 1998. By that time, the Whois Database had been displaying
the shopzone.com
domain name registration for over 21 months. Huigen further points
out that the Whois
database also shows a registration of September 1998 for another domain
name,
shopzone.net belonging to a third party. Huigen draws the conclusion
that Breakthrough
had no intention of branding its SHOPZONE software through the use
of a top level domain containing the SHOPZONE trademark.
As seen above, paragraph 4(c) sets out three non-exhaustive examples
of situations which, if proven, shall demonstrate the respondent's rights
or legitimate interests to the
domain name for the purposes of paragraph 4(a)(ii).
The first example, which can be found at paragraph 4(c)(i), appears
to be the closest to
the present case. It contemplates the fact that the respondent, before
any notice to him
of the dispute, has used or made demonstrable preparations to use,
the domain name
or a name corresponding to the domain name in connection with a bona
fide offering of
goods or services.
In the present case, the panel finds that, long before any notice of
the dispute to Huigen,
he had demonstrably prepared to use the domain name shopzone.com as
well as the
business name The Shopzone in connection with a bona fide offering
of goods or services.
One could argue that, from June 1996 until notice of the dispute in
early 2000, the
preparation time to actually use the domain name and the corresponding
business name is rather long. However, that fact in itself is not sufficient
to defeat Huigen's rights or legitimate interests in the domain name. Firstly,
the issue of rights to and legitimate interests in the domain name must
be assessed as it existed before any notice to the
respondent of the dispute. That time frame includes more particularly
the time at which
the respondent registered the domain name and the corresponding business
name, that
is June 1996, close to two years before the complainant filed its SHOPZONE
trademark
application. The complainant has adduced no evidence to contradict
this very straightforward fact. Secondly, even if respondent were not to
fall squarely within the four
corners of the first example in question, it must not be forgotten
that the three examples
outlined in paragraph 4(c) are just examples and are expressly said
not to be exhaustive. Thirdly, although paragraph 4(c) of the ICANN rules
provides the respondent with instances demonstrating his rights to and
legitimate interests in the domain name in
issue, and therefore provides examples of conclusive defences to the
complaint, the
burden of proof still rests on the complainant's shoulders to prove
that the respondent
has no rights or legitimate interests.
Having found that Huigen, long before any notice of the dispute to him,
had demonstrably prepared to use the domain name shopzone.com as well as
the business
name The Shopzone in connection with a bona fide offering of goods
or services, the
panel therefore concludes that the respondent has demonstrated his
rights to and legitimate interests in the contested domain name and the
complainant has failed to
discharge its burden to prove the second essential element of the complaint.
3. Bad Faith Registration and Use
Strictly speaking, since the complainant has failed to prove the second essential element of the complaint, the panel need not address the issue of bad faith registration and use. Nevertheless, the panel finds it expedient to summarily dispose of that issue as well.
Paragraph 4(a)(iii) raises the issue whether the domain name has been
registered and
is being used in bad faith. Paragraph 4(b) supplies a non-exhaustive
list of four examples of situations which, if any of them is found by the
panel to be present, shall be evidence of the registration and use of a
domain name in bad faith.
Breakthrough contends that Huigen's bad faith is demonstrated by:
1. the fact that, according to Breakthrough's
version, Huigen rejected
Breakthrough's $10,000 proposal;
2. the fact that Huigen allegedly falls under
the Anti CyberSquatting Consumer
Protection Act of 1999 (ACTPA), or 15 U.S.C.
§ 1125(d). Under terms of this act,
a person is liable in a civil action by the
owner of the mark if the person has a bad
faith intent to profit from the mark. This
act cites a number of criteria under which a
court or arbitrator may determine the bad
faith of the domain holder. One of these
factors is: "(VI) the person's offer to transfer,
sell, or otherwise assign the domain
name to the mark owner or any third party
for financial gain without having used, or
having an intent to use, the domain name in
the bona fide offering of any goods or
services, or the person's prior conduct indicating
a pattern of such conduct;
3. the fact that Huigen is not using and did
not indicate to Breakthough that he
intended to use the domain name for sale of
goods or services;
4. the fact that Huigen failed to respond to
the January 7, 2000 cease and desist
letter.
It appears to the panel that none of the facts alleged under paragraph
a, c and d above
would fall within any of the four examples supplied by paragraph 4(b)
of the ICANN Rules and, in any event, none of these three facts in any
way constitutes evidence of bad faith. As for the reference to ACTPA, irrespective
of the question whether that act in general or the cited factor in particular
are applicable to the present administrative proceeding, the panel finds
that Breakthrough has not proven its essential elements. Without limitation,
it has not proven that Huigen has in fact offered its domain name to
Breakthrough or that Huigen's prior conduct indicated a pattern of
the reprehensible
conduct in question. Therefore, the panel finds that the complainant
has also failed to
prove the third essential element set forth in paragraph 4(a) of the
ICANN policy.
4. Reverse Domain Name Highjacking
In light of the panel's conclusion that Breakthrough has not proven
two of the three
elements set forth in the applicable rule, it seems appropriate to
consider whether
Breakthrough brought the complaint in bad faith. Paragraph 15(e) of
the ICANN Rules
provides, "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
an abuse of the
administrative proceeding." "Reverse Domain Name Hijacking" is defined
in paragraph
1 of the ICANN Rules as "using the Policy in bad faith to attempt to
deprive a registered
domain-name holder of a domain name."
This panel finds no elements of bad faith on Breakthrough's part. Firstly,
Breakthrough's
trademark registration for the trademark SHOPZONE coupled with Huigen's
alleged
lack of actual use of its domain name shopzone.com and tradename The
Shopzone might have led Breakthrough to a bona fide conclusion that its
legal position under the ICANN Rules was better than it was in reality.
Secondly, the ICANN Rules having been adopted quite recently, that is only
a few months before Breakthrough filed the present complaint, it would
be appropriate, in this very particular instance, to give Breakthrough
the benefit of the doubt.
6. Conclusions
For the reasons set forth above, the panel concludes that Breakthrough
has proved only one of the three elements set forth in paragraph 4(a) of
the ICANN policy, and therefore decides that the relief sought by Breakthrough
should not be granted.
MONTREAL (Quebec),
Canada, April 13, 1999.
(s) Jean-François Buffoni
Lead Panelist
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