[Indexed as: Geniebooks.com v Merritt]
[Indexed as: GENIEBOOKS.COM]
WIPO Arbitration and Mediation Center
Administrative Panel Decision
Case No. D2000-0266
Commenced: 19 April 2000
Judgment: 26 July 2000
Presiding Panelist: Thomas L. Creel
Domain name - Domain name registration - Bad faith - Competitor using domain name - Identical - No legitimate use - No trademark - Common law trademark rights - No intent to use name - No fair use - Application of United States laws - United States trademark law - United States common law - To announce litigation is not legitimate use.
Complainant is an electronic publishing and electronic book distribution company. Since at least as early as December 9, 1999, the geniebooks.com name has been used to refer to the geniebooks.com business in contacts with third persons. By January 7, 2000, a deal was being closed on behalf of geniebooks.com with a major software publisher. On December 8, 1999, Complainant submitted a reservation for the geniebooks.com URL. However, the reservation was not confirmed and Complainant was not aware the reservation had been unsuccessful.
Held, Name transferred.
Paragraph 4(a)(i) requires that Respondents domain name is identical or confusingly similar to a trademark or service mark in which Complainant has rights. Respondent contends that Complainant has not met this requirement because Complainant lacks trademark rights in the geniebooks.com mark because Complainant has made no showing as to any trademark registration.
Since all parties are domiciled in the United States, to the extent that it would assist the Panel in determining whether Complainant has met its burden as established by Paragraph 4(a) of the Policy, the Panel will look to the principles of the law of the United States. Under United States law the fact that the Complainant does not have a registered mark does not end the trademark or service mark rights analysis. Actual use in commerce establishes protectable trademark rights under United States common law. The "use in commerce" standard requires (a) a bona fide use of a trademark or service mark in the ordinary course of trade, and (b) not made merely to reserve a right in a mark. The evidence shows that the name used is identical or confusingly similar to Complainants mark.
The evidence presented shows that Respondent never attempted to use the domain name in connection with offering any goods or services, nor any business of any kind. Respondent does not deny this.
Respondent offers two asserted "legitimate" uses. First, he says his ownership interests are superior to Complainants in the geniebooks.com Corporation. Second, he urges that the use of the domain name to advise "John Does" of the litigation is such legitimate use. Neither basis is appropriate.
To allow a dissident shareholder or purported shareholder to appropriate a domain name of an existing corporation is not fair use and is not a noncommercial or fair use without intent for commercial gain. Respondent has other fora for addressing the respective ownership rights to the domain name, such as in the Oregon shareholders action. Judicial procedures and other procedures provide perfectly adequate means to perfect service and to advise interested parties about litigations. Adoption of anothers mark as a domain name in its totality is not appropriate or required to provide such notice.
The evidence presented by the parties demonstrates that the Respondent did both register and use the domain name in bad faith. At the time Respondent registered the domain name, Complainant was using the mark geniebooks.com corporation in direct competition with the RoxyBooks.com corporation. Complainant had used the term geniebooks.com in connection with outside persons since at least as early as December 9, 1999. Respondent was aware of this use.
On January 14, 2000, Respondent was sent a copy of an email from Mr. Van Dyk to RoxyBooks.coms president, together with the draft agreement, using the term geniebooks.com. On that same day, Respondent, in bad faith, registered geniebooks.com with Register.com, Inc. in his own name. Respondent had no intention of using the geniebooks.com name. Rather than any legitimate use of the name for Respondents own business, the use was in bad faith to try to resolve a corporate management dispute at RoxyBooks.com and to keep Complainant from using the name in a competitive company.
Policies referred to
Uniform Domain Name Dispute Resolution Policy, adopted August 26, 1999
Registration Agreements referred to
--
Cases referred to
William E Merritt v. Geniebooks.com Corporation, RoxyBooks.com Corporation, Christopher R. Van Dyk, Roxann Caraway, Ed Hutson, Jim Tate and John Does 1 through 20.
Walt Disney Productions v. Kusan, Inc., 204 U.S.P.Q. 284, 287 (1979).
Hotel Corp. of America v. Inn America, Inc., 153 U.S.P.Q. 574, 575 (1967).
Panel Decision referred to
Campagnie de Saint Gobain v. Com-Union Corp., ICANN Case No. D2000-0020 (WIPO).
Frank Wagner & Son v. Cindy Mahan a/k/a Cindy Maham, an individual, Case No. D2000-0261 (WIPO).
Creel, Panelist -
1. The Parties
Complainant is geniebooks.com (hereinafter "geniebooks.com") a Washington
corporation, with its principal place of business in Seattle, Washington,
U.S.A. Respondent is William E. Merritt, 1431 SE Knight Street, Portland,
OR 97202, U.S.A. (hereinafter "Merritt").
2. The Domain Name and Registrar
The domain name at issue is geniebooks.com registered with Register.com,
Inc.
3. Procedural History
The procedural history of this dispute is set forth in the Panels
earlier decision allowing Respondent to file a response even though the
time to respond had passed. This was because of failure of proper service.
The history will not be repeated here. Suffice it to say here only that
the matter is now appropriate for the Panel to decide. All necessary formalities
and procedures have been accomplished.
4. Factual Background
geniebooks.com Formation and Use of the Name
geniebooks.com is an electronic publishing and electronic book distribution
company headquartered in Seattle, Washington. geniebooks.com was conceived
of by Chris Van Dyk, also the companys incorporator. Mr. Van Dyk filed
an extensive declaration in this case, affirming most of the facts set
forth in this section. Mr. Merritt filed no responsive declaration. He
relied only on a brief and his unverified Complaint against Van Dyk, geniebooks.com,
Roxybooks.com and others in a shareholders derivative action. Most of
the facts asserted by Mr. Van Dyk as to adoption and use of geniebooks.com
are uncontested.
Prior to his involvement with geniebooks.com, Van Dyk was President
and Chief Administrative Officer of RoxyBooks.com corporation ("Roxy").
Roxy is also in the electronic publishing and electronic book distribution
business. On November 11, 1999, by motion presented to the Executive Management
Committee of Roxy by Respondent, William E. Merritt, Van Dyk was relieved
of his duties as President & CAO of Roxy. In a Board of Directors meeting
on November 15, 1999, Van Dyk was nominated to a newly created position
of Vice President of Finance, but due to serious differences in opinion
with respect to Merritts business plans related to Roxy, Van Dyk declined
the nomination and resigned his position as president.
On or about November 20, 1999, Van Dyk met with at least one person
who worked directly with him at Roxy about creating a new company. At least
as early as November 27, 1999, Van Dyk had developed a preliminary strategy
and workplan for the development of the new company, named geniebooks.com
Corporation.
The geniebooks.com name was inspired by Van Dyks wife, Jeanne (pronounced
like Genie). Van Dyk changed the spelling because "Genie" is an Anglicization
of the Arabic jenni and a French word derived from the Latin "genius" which
translates roughly to mean the prevailing spirit or guardian knowledge
of the place or home. The idea behind the name was that geniebooks.com
is the genius domus, engendering and informing the spirit of knowledge
through the electronic books that will be delivered to readers from the
geniebooks.com website.
Since at least as early as December 9, 1999, Van Dyk has used the geniebooks.com
name to refer to the geniebooks.com business in contacts with third persons,
e.g., potential investors. Further, by January 7, 2000, Van Dyk had negotiated
and was closing a deal on behalf of geniebooks.com with a major software
publisher.
On December 8, 1999, Van Dyk submitted a reservation for the geniebooks.com
URL to Network Solutions Inc. ("NSI"). However, due to what appears to
be a technical problem at NSI, the reservation was not confirmed, nor was
Van Dyks credit card charged for a reservation. NSI did not provide Complainant
with any notice of a problem. Thus, Complainant was not aware the reservation
had been unsuccessful.
On January 13, 2000, Thomas Finnelly, Vice-President of geniebooks.com
filed the Articles of Incorporation and a Registered Agent Consent (the
"Articles") on behalf of geniebooks.com. He requested and paid for expedited
filing. Despite the request for expedited service, geniebooks.com was not
incorporated until January 19, 2000, because the Secretary of State wanted
to change the corporate address from a P.O. Box to a street address.
From December to mid-January, Jim Tate (CEO of geniebooks.com) and
Van Dyk met and worked with website and software developers, developing
the organization that would in turn develop and build the software infrastructure
for the geniebooks.com website (the "Website"). They planned to launch
the Website approximately two months after securing initial capital for
the company. Their primary task was creating the legal documents -- the
Offering Memorandum -- which would enable them to legally raise said capital.
On January 17, 2000, Van Dyk substantially completed the Offering Memorandum.
Van Dyk/geniebooks.com and Merritt/Roxy Interaction
Between November 1999 and January 2000, Van Dyk was negotiating with
Roxy regarding a termination agreement (the "Termination Agreement") so
that Van Dyk could pursue geniebooks.com. Specifically, Van Dyk was corresponding
with Ricardo Fleischfresser, who until the week of January 17, 1999 1 and
subsequent to Van Dyks termination, was the President of Roxy. By Friday
January 14, 2000, Van Dyk and Fleischfresser were in the final stages of
drafting the Agreement. Van Dyk sent Fleischfresser a copy of the proposed
Agreement by email. In the body of the email Van Dyk indicated that geniebooks.com
was to be a party to the agreement and commented on other minor changes
to the Agreement.
On January 18, 2000, Van Dyk met with Ricardo Fleischfresser of Roxy
on behalf of Roxy shareholders, who, together with Van Dyk, owned over
50% of Roxy. Meetings occurred on that and the following day to work out
the terms of a tender offer and purchase agreement for Roxy. William Merritt
was informed of this proposal, including the involvement of geniebooks.com,
on January 19, 2000. The Majority Members, and all other shareholders with
the exception of Merritt and two minor shareholders accepted the proposal
and geniebooks.com now owns approximately 72% of Roxy common stock. Merritt
was and remains hostile to the purchase.
Respondent claims that:
"..., these activities are not effective to divest Respondent of his
ownership in the underlying business and, consequently, Respondent is the
sole, real owner of Geniebooks. Accordingly, Respondent filed suit in the
Circuit Court of the State of Oregon for the County of Multnomah, Case
Number 0002 01511, captioned William E Merritt v. Geniebooks.com Corporation,
RoxyBooks.com Corporation, Christopher R. Van Dyk, Roxann Caraway, Ed Hutson,
Jim Tate and John Does 1 through 20.
That suit was filed in February 2000. Respondent there alleges that
all stock in Geniebooks should be held in constructive trust for RoxyBooks
and its shareholders.
Respondent Was Adverse to Geniebooks.com and Was Aware of its Activities.
Respondent was aware of the formation of geniebooks.com and was adverse
to it as he considered geniebooks.com a competitor to Roxy 2. He claims
in his Complaint that Geniebooks is a direct competitor to RoxyBooks. He
also there asserts that:
"[s]tarting in late November, 1999, and continuing through the present,
Van Dyk set up, owned and ran Geniebooks DBA, a business he established
to compete with RoxyBooks. When Geniebooks DBA was incorporated under the
name Geniebooks.com Corporation, Van Dyk became president and chairman
of the board of directors of Geniebooks."
Respondent was informed of the existence of geniebooks.com and Van
Dyks specific plans with respect to geniebooks.com at least as early as
January 14, 2000. As noted above, RoxyBooks.com was sent an e-mail and
the draft Separation Agreement on January 14, 2000, which showed Van Dyk
was using the geniebooks.com name. Although he does not appear as a recipient
in the email attached as part of Exhibit E, William Merritt was sent a
copy of the email and the attached Agreement at the same time. See Van
Dyk Declaration, ¶ 5 and Exhibit F to the Complaint.
On that same day (January 14, 2000), Respondent registered Geniebooks.com
as his own domain name. He did so in the context of the on-going dispute
between him and Van Dyk; not in connection with any offering of goods or
services. As Respondent described the situation in a letter on RoxyBooks.com
letterhead which he signed as "Chairman, RoxyBooks.com Corporation,
"I reserved the geniebooks.com URL on 14 January 00. Since genieBooks.com
Corporation was not even formed until 19 January 00 -- in obvious response
to my having already registered the name -- its clear that you people
are trying to pirate a business name that belongs to me. So, this is my
demand that you immediately cease using the genieBooks name. In this regard,
unless you can show me some convincing evidence that the existence of the
genieBooks company substantially predates my registering the URL, I suggest
we hash out in court who among us owns both names. This is going to make
a fascinating test case. Its the kind of thing that might go all the way
to the supreme court and make all of us famous." (Emphasis in original.)
5. Parties Contentions
Complainant has requested that the domain name be transferred to Complainant
because:
(1) the domain name Geniebooks.com is identical or confusingly
similar to a trademark or service mark in which the Complainant has rights;
(2) Respondent has no rights or legitimate interests in respect
of the domain name; and
(3) the domain name was registered and is being used in bad faith.
Respondent responds to these assertions that:
(1) Complainant has no trademarks or service marks. At most, Geniebooks.com
is only a company name adopted when Van Dyk was approaching potential investors.
(2) Respondent has a legitimate right to the domain name because his
ownership interest in the Geniebooks.com company is superior to and displaces
the other reputed shareholders. Additionally, since Respondent must serve
the "John Does" with his Complaint, the webpage allows the John Does to
find out about the lawsuit.
(3) There was no bad faith because Respondent had the right to protect
his and RoxyBooks interests by registering this name. He did so before
Complainant had established trademark rights. He also alleges he has been
using the domain name for the good faith purposes of giving notice to John
Doe defendants named in the litigation.
6. Discussion and Findings
The Policy is addressed to resolving disputes concerning allegations
of abusive domain name registration.
Paragraph 4(a) of the Policy establishes three elements that must be
established by a Complainant to merit a finding that a Respondent has engaged
in abusive domain name registration, and to obtain relief. These elements
are that:
(i) Respondents 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 of
the domain name; and
(iii) Respondents domain name has been registered and is being used
in bad faith.
Each of the aforesaid three elements must be proved by a complainant
to warrant relief. They will be addressed separately below:
The Domain Name, Trademarks and Service Marks
Paragraph 4(a)(i) requires that Respondents domain name is identical
or confusingly similar to a trademark or service mark in which the Complainant
has rights. The Respondent contends that Complainant has not met this requirement
because the Complainant lacks trademark rights in the geniebooks.com mark,
pointing out that Complainant has made no showing as to any trademark registration.
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." Since all parties are domiciled in the United States,
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 will look to the principles of the law of the United
States. Complainant was requested by the Panel to provide supplemental
legal authority showing that its activities meet the requirements of Policy
paragraph 4(a)(i). It provided no authority in response to that request.
Under United States law the fact that the Complainant does not have
a registered mark does not end the trademark or service mark rights analysis.
Actual use in commerce, without more, establishes protectable trademark
rights under United States common law 3. The "use in commerce" standard
requires (a) a bona fide use of a trademark or service mark in the ordinary
course of trade, and (b) not made merely to reserve a right in a mark 4.
Respondents Complaint in the Oregon litigation admits such common
law use of geniebooks.com by Complainant in connection with goods and services.
It refers to Complainant as a "direct competitor" with RoxyBooks, starting
at least in November 1999, before Respondent registered the domain name.
It also specifically alleges:
"Starting in late November 1999, and continuing through the present,
Van Dyk and Geniebooks have directly competed with RoxyBooks in the business
of posting and selling electronic copies of books on the World Wide Web."
Geniebooks.com has also offered a signed declaration showing uses of
the mark geniebooks.com in the ordinary course of trade. Complainant has
had business contacts with investors and secured financing for the company
using the mark geniebooks.com; has incorporated under the name geniebooks.com
in Washington State; has worked with website and software developers using
the mark geniebooks.com; and has entered into a signed agreement with Online
Web Ventures to provide web hosting for geniebooks.com. There is no need
for evidence of an actual sale to establish trademark rights, as long as
the company is not merely trying to reserve a right in a mark 5. Here it
is clear that geniebooks.com is not merely trying to reserve a mark, but
has used and intends to continuously use the mark in the ordinary course
of its trade as an electronic book publisher.
Respondent contends that Complainants assertion is simply that Respondent
has registered Complainants business name (not a trade or service mark)
as a domain name, and cites to Frank Wagner & Son v. Cindy Mahan for
authority that this is insufficient 6. However, it is established that
the name of a company may also be a trademark 7. In Frank Wagner &
Son, the Complainant presented no evidence of the establishment of common
law trademark rights to the panel. Hence, the panel had no choice but to
rely on the fact that the mark was not registered and reject the notion
that the Complainant in that case had established rights in the mark. Here
that is not the case. The Respondents Complaint admits trade or service
mark use and Complainants declaration presents activities sufficient to
establish common law trademark or service mark rights.
The evidence presented demonstrates that the domain name geniebooks.com
is identical or confusingly similar to Complainants geniebooks.com mark.
Therefore, the requirement of Paragraph 4(a)(i) is met.
Rights or Legitimate Interests in Respect of the Domain Name
Paragraph 4(c) of the Policy enumerates how a respondent may establish
rights to and legitimate interests in a domain name. The evidence presented
shows that Respondent never attempted to use the domain name in connection
with offering any goods or services, nor any business of any kind. Respondent
does not deny this. Therefore, subparagraphs (i) and (ii) of Para. 4(c)
are inapplicable. Paragraph 4(c)(iii) does describe a circumstance under
which a Respondent can demonstrate such rights and interests even without
a commercial use. This is where "you are making a legitimate noncommercial
or fair use of the domain name, without intent for commercial gain to misleading
divert consumers or to tarnish the trademark or service mark at issue."
Respondent offers two asserted "legitimate" uses. First, he says his
ownership interests are superior to Complainants in the geniebooks.com
Corporation. Second, he urges that the use of the domain name to advise
"John Does" of the litigation is such legitimate use. Neither basis is
appropriate.
This section is meant to cover such "fair uses" as have long been recognized
under the law, e.g., use of descriptive words in a descriptive sense, use
of a geographic mark to tell customers of location, use of a personal name,
etc. To allow a dissident shareholder or purported shareholder to appropriate
a domain name of an existing corporation is not such a use and certainly
is not a noncommercial or fair use without intent for commercial gain.
Additionally, Respondent has other, more appropriate fora for addressing
the respective ownership rights to the domain name, such as in the Oregon
shareholders action. If Respondent is correct, that Court can address
relief as to ownership of the domain name.
Likewise, and for the same reasons, the purported use of the domain
name for advising John Does in the existing litigation is insufficient.
Judicial procedures and other procedures provide perfectly adequate means
to perfect service and to advise interested parties about litigations.
Adoption of anothers mark as a domain name in its totality is not appropriate
or required to provide such notice. Arbitrators applying the ICANN Policy
have
recognized this principle in analogous contexts. As the arbitrator said
in Campagnie de Saint Gobain v. Com-Union Corp., ICANN Case No. D2000-0020.
"[i]t goes without saying that shareholders or other interested parties
have the right to voice opinions, concerns and criticism with respect to
a listed company and that the Internet constitutes an ideal vehicle for
such activities. The issue at hand is however not as a Respondent seems
to contend, the freedom of speech and expression but the mere choice of
the domain name used to exercise this inalienable freedom of speech and
expression. When registering the Domain Name, Respondent knowingly chose
a name which is identical and limited to the trademark of Complainant.
. . . Respondent could have chosen a domain name adequately reflecting
both the object and independent nature of its site, as evidenced today
in thousands of domain names. By failing to do so, and by knowingly choosing
a domain name which solely consists of Complainants trademark, Respondent
has intentionally created a situation which is at odds with the legal rights
and obligations of the parties."
The evidence shows that Respondent merely registered this domain name
as a tactical move in the struggle between Complainant and Respondent for
control of RoxyBooks.com and/or to preclude the competitor or potential
competitor geniebooks.com from using the name on the Internet. For example,
Respondents letter of March 4, 2000 demanding an immediate cessation of
the use of the Geniebooks.com name makes no reference whatsoever to any
right or legitimate interest of Respondent with respect to use of the domain
name. Rather, Respondent speaks about reservation of the domain name only
in the context of the ongoing business struggle for control of the RoxyBooks.com
corporation.
Therefore, the requirement of paragraph 4(a)(ii) has been proved by
Complainant.
Bad Faith
The third element Complainant must prove is in the conjunctive: the
domain name "has been registered" and "is being used in bad faith." The
evidence presented by the parties demonstrates that the Respondent did
both register and use the domain name in bad faith.
As to the original registration, Respondents Complaint admits that,
at the time Respondent registered the domain name, Complainant was using
the mark geniebooks.com corporation in direct competition with the RoxyBooks.com
corporation. The evidence also shows that Complainant had used the term
geniebooks.com in connection with outside persons since at least as early
as December 9, 1999, and had submitted a reservation for the geniebooks.com
URL with Networks Solutions prior to Respondents registration. Furthermore,
Respondent was aware of this use. During the negotiations of Mr. Van Dyks
Termination Agreement with Roxy, on January 14, 2000, Respondent was sent
a copy of an email from Mr. Van Dyk to RoxyBooks.coms president, together
with the draft agreement, using the term geniebooks.com. On that same day,
Respondent, in bad faith, registered geniebooks.com with Register.com,
Inc. in his own name. No lawsuit was pending then, so notification of John
Does could hot have been a basis for the initial registration.
Likewise, considering all of the evidence, I find that Complainant
has shown that Respondent is using the domain name in bad faith. As noted,
at the time of registration Respondent had no intention of using the geniebooks.com
name. Rather than any legitimate use of the name for Respondents own business,
the use was in bad faith to try to resolve a corporate management dispute
at RoxyBooks.com and to keep Van Dyke from using the name in a competitive
company.
The letter of March 4, 2000, on the letterhead of RoxyBooks.com and
signed "William E. Merritt, Chairman, RoxyBooks.com Corporation," says
that "Ive reserved the Genie.com URL on 14 Jan. 00. Since genieBooks.com
Corporation was not even formed until 19 Jan. 00-in obvious response to
my having already registered the name-its clear that you people are trying
to pirate a business name that belongs to me." He goes on to demand immediate
cessation of the use of the geniebooks.com name. It is apparent that the
registration by the chairman of one competitor of his competitors business
name and use of that name is done in bad faith. See the Policy, para. 4(b)(iii)
providing that registration and use of a domain name primarily for the
purpose of disrupting the business of a competitor is evidence of bad faith.
Therefore, the requirement of paragraph 4(a)(iii) has been proved by
Complainant.
7. Decision
Claimant has proved the necessary elements that the names are identical
or confusingly similar to its trade or service marks, that Respondent has
no rights or legitimate interests in the domain name and that Respondent
registered the domain name in bad faith and is using it in bad faith. Therefore,
the remedy requested by Complainant is granted. Respondent is required
to transfer the domain name geniebooks.com to Complainant.
Thomas L. Creel
Presiding Panelist
Dated: July 26, 2000
Footnotes:
1. Sic. See Van Dyk Declaration of March 20, 2000,
¶ 5.
2. Respondent has described himself as "Chairman,
RoxyBooks.com Corporation."
3. Jerome Gilson, Trademark Protection and Practice,
§3.02[2].
4. Gilson, supra note 1.
5. See Walt Disney Productions v. Kusan, Inc.,
204 U.S.P.Q. 284, 287 (1979).
6. Frank Wagner & Son v. Cindy Mahan a/k/a
Cindy Maham, an individual, Case No. D2000-0261.
7. See Hotel Corp. of America v. Inn America, Inc.,
153 U.S.P.Q. 574, 575 (1967).
Domain Name Transferred