v.
Dynasty System SDN BHD
[Indexed as:
NET2PHONE v. Dynasty System]
[Indexed as:
N2phone.com]
WIPO Arbitration
and Mediation Center
Administrative
Panel Decision
Case No. D2000-0679
Commenced:
12 July 2000
Judgment:
19 September 2000
Presiding Panelist: Clive Duncan Thorne
Domain name
- Domain name dispute resolution policy - U.S. Trademark - International
Trademarks - Confusingly similar - Web Affiliate Program
- Bad faith
registration - Bad faith use - Domain name dispute resolution policy -
Procedural - Reply and Rebuttal.
Complainant was registrant of service mark and trademark NET2PHONE in the United States and other jurisdictions. Complainant has used the mark and registered variants in connection with its international internet telephony business. Respondent was signed up in Complainants Affiliate Program for the distribution and advertisement of Complainants web site at http:www.net2phone.com. Respondent registered the domain name, N2phone.com.
Complainant
submitted a Reply to Respondents Response. Respondent objected as
the Panel had not given directions for filing a Reply. Respondent
then submitted a Rebuttal. The Panel accepted both the Reply and
Rebuttal on the grounds the Reply contained submissions that benefited
from a reply and that the Respondents submissions in the Rebuttal were
helpful.
Held,
Name Transferred to Complainant.
It is clear that the domain name N2phone.com is confusingly similar by its look, sound, and meaning, to a service mark and trademark registered and used by Complainant, NET2PHONE, INC. It was not established that Respondent has any rights or legitimate interest in respect of the domain name. Respondents participation in Complainants Web Affiliate Program is not clear evidence of a license to use or register the domain name Respondents registration of the confusingly similar domain name constituted bad faith.
Policies
referred to
Uniform Domain
Name Dispute Resolution Policy, adopted August 26, 1999.
Registration
Agreements referred to
Network Solutions,
Inc. Service Agreement, effective December 1, 1997.
Cases referred
to
London Lubricants
Application (1925 43 RPC7).
Panel Decision
referred to
[none]
Thorne, Panelist: -
1. The Parties
The Complainant
is NET2PHONE INC of 171 Main Street Hackensack, New Jersey. The Complainant
is represented by Gottlieb Rackman & Reisman PC of 270 Madison Avenue,
New York, New York, USA. The Respondent is DYNASTY SYSTEM SDN BHD, a Malaysian
registered company of 59, Jalan Pandan Indah 1/16, Pandan Indah, Kuala
Lumpur, KL, Malaysia. The Respondent is represented by itself through Mr.
Khor Kim Chucue.
2. The
Domain Name in Dispute
The domain
name in dispute is "N2phone.com" which is registered with Network Solutions
Inc.
3. Procedural
History
The Complaint
was received by the WIPO Arbitration and Mediation Center on June 26,2000.
The Panel is satisfied that the Complaint was in the correct form and that
the appropriate fee has been paid. Verification of the registration of
the domain name was sought from Network Solutions Inc on June 29, 2000,
and received on July 11, 2000. Notification of the Complaint was given
to the Respondent on July 12, 2000, and a response was received on August
6, 2000. Somewhat unusually the Complainant submitted a Reply on August
18, 2000, which was transmitted to the Respondent. On August 30, 2000,
the Respondent e-mailed the Center requesting that the Reply should be
ignored in view of the fact that the Panel (which was appointed on August
24, 2000, consisting of a single panelist Mr. Clive Duncan Thorne) had
not given directions for filing of a reply. In the event that the Panel
accepted the Reply the Respondent asked for an opportunity to file a further
statement. The Respondent subsequently submitted a Rebuttal dated August
30,2000, which was sent to the Panel on September 10, 2000.
The Panel
considers that it is prepared to accept the Reply and the Rebuttal. There
are submissions contained in the Response, which benefit from a Reply.
The Panel is also helped by the submissions contained in the Rebuttal.
The Panel is also grateful for the extensions of time granted in this case
(the original decision was scheduled for September 7, 2000,) which has
enabled it to consider the further submissions.
4. Factual
Background
Helpful evidence
as to the Complainants rights is given in the declaration of Mr. Reich
at Exhibit C to the Complaint. The Complainant Net2Phone, Inc is a Delaware
corporation that offers a variety of internet telecommunications products
and services, including services that permit users to make local and long-distance
telephone calls over the internet (commonly referred to as "Internet telephony"),
under the mark NET2PHONE. The Complainant is the leading company in the
world in the Internet telephony business and its services have become widely
and readily associated with the NET2PHONE mark. The Complainants website,
accessible at "net2phone.com" and "net2phone.net", was launched in 1995.
It is from this web site that the Complainant primarily conducts its Internet
telephony business.
Internet telephony
enables users to make high-quality, low-cost telephone calls over the Internet.
The Complainants services enable customers to call or send faxes to individuals
and businesses worldwide. The Complainants customers can use either their
personal computers or traditional telephones to originate the call. Examples
of the products and services offered by the Complainant bearing the NET2PHONE
mark can be found on the Net2Phone web site. A copy of the "net2phone.com"
home page is annexed as Exhibit D to the Complaint.
The Complainant
has developed sophisticated software applications that enable the use of
its Web-based Internet telephony services, and that software is distributed
over the Internet by Net2phone. In 1997, to expand the marketing potential
of its services, the Complainant began a worldwide reseller program by
which individuals and businesses agree to purchase and then resell certain
Net2Phone services. Specifically, authorized resellers buy services from
the Complainant and then market and sell those NET2PHONE services in their
respective countries. Currently, the Complainant has resellers selling
its services under the NET2PHONE mark in nations around the world.
Before the
Complainant became a public company in June 1999, it was a wholly owned
subsidiary company of IDT Corporation ("IDT"), a Delaware corporation.
IDT, and then the Complainant have been using the NET2PHONE mark globally
on the Internet since at least 1995. On the basis of that usage, IDT applied
for and secured the registration of NET2PHONE as a trademark with the United
States Patent and Trademark Office ("PTO"). The registration evidences
that the mark was first used by IDT on November 13, 1995. A copy of the
registration is attached as Exhibit E to the Complaint. IDT assigned all
rights in the NET2PHONE mark to the Complainant by assignment dated May
7, 1999. This assignment was filed with the Assignment Division of the
PTO on June 18, 1999. A copy of the assignment from IDT to the Complainant
and the registration reflecting the assignment from IDT to the Complainant
is also attached as Exhibit E to the Complaint.
In addition
to owning the mark NET2PHONE, the Complainant has adopted and used a family
of NET2PHONE marks to identify its various Internet telephone services.
The Complainant secured a registration in the United States for each of
the following marks: NET2PHONE in a stylized form (US Reg No 2, 393,395);
NET2PHONE & GLOBE DESIGN (US Reg No 2,329,361), NET2PHONE PRO (US Reg
No 2,306,620). A copy of each registration is annexed as Exhibit F to the
Complaint. The Complainant has been using and has pending applications
in the United States for the following marks: NET2PHONE DIRECT (Serial
No 75/796,439) and NET2PHONE INTERACTIVE (Serial No 75/796,437). References
to these applications can be found at www.uspto.gov and are also attached
as Exhibit F to the Complaint.
The Complainant
has made and is making a concerted effort to register its NET2PHONE mark
globally. Attached, as Exhibit G to the Complaint is a list of the countries
in which applications to register the NET2PHONE mark are currently pending.
This list also shows the countries where the mark has been registered.
The Complainant
has made and is making a concerted effort to register the term "NET2PHONE"
as a top-level domain name throughout all of the registries in the world.
A list of representative general Top Level Domains ("gTLDs") in which the
Complainant has registered NET2PHONE as a second level domain to date is
attached as Exhibit H to the Complaint. A list of representative country
code Top Level Domains ("ccTLDs") in which the Complainant has registered
NET2PHONE and NET2PHONEDIRECT as second level domains to date is attached
as Exhibit 1 to the Complaint. Once the Complainant secures the registration
of a ccTLD, it causes those domain names to redirect users to the web site
at "net2phone.com". For example, a user who types the domain name "net2phone.gm"
or "net2phone.com.ru" is redirected to the web page at "net2phone.com".
The NET2PHONE
mark and the Internet telephony services offered by the Complainant have
achieved wide recognition. Contributing to this wide recognition is the
fact that Net2Phone has invested considerable time and effort in developing
a "presence" on the Internet. As a result, information about Net2Phone,
and its services offered under the NET2PHONE mark, can now be obtained
through thousands of web sites, which have posted a "link" to the Complainants
web site. These links are the result of significant strategic alliances
that the Complainant has with other businesses on the Internet. In addition,
the Complainant has placed paid "banner" advertisements on other web sites
for its services under the NET2PHONE name. These activities promote the
NET2PHONE mark globally in the medium in which the services are primarily
offered on the Internet.
Furthermore,
the Net2Phone trade name and NET2PHONE mark have been the subject of extensive
unsolicited media coverage by the New York Times, the Wall Street Journal,
PC Magazine, and other media outlets available around the world. Representative
articles are attached as Exhibit J to the Complaint. Furthermore, the Complainant
has also been the recipient of a number of awards. A list of the awards
received by the Complainant is attached as Exhibit K to the Complaint.
The Complainant has also advertised its services through traditional magazines
and newspapers, as well as over the Internet. The Complainant and IDT have
advertised and promoted services in conjunction with the NET2PHONE mark
since 1995.
It is undisputed
that the Complainant has made a considerable financial investment in the
advertising, marketing and promotion of its telecommunication services
offered under the NET2PHONE mark. As a result of these efforts, the Complainant
has been successful in selling its services. Since 1996, Net2Phone has
registered over 700,000 customers worldwide and has carried over 50 million
Internet Protocol telephony minutes. Net2Phones business continues to
operate on a global scale, as evidenced by the fact that as of July 31,
1999, approximately 69% of Net2Phones customers were based outside of
the United States.
The Respondent
registered the domain name "N2phone.com" on 1 December 1997. The Respondent
avers in its Reply that on December 5, 1997, the Respondent entered into
an agreement with Aviva Sdn Bhd the Complainants appointed agent for Singapore
and Malaysia whereby Aviva agreed to grant the Respondent the exclusive
right to distribute and sell in Malaysia the Complainants Net2Phone Internet
Telephony Debit Numbers which enabled users to make inexpensive long distance
telephone calls via the Internet. A copy of the signed agreement is exhibited
as exhibit A to the Response. The agreement was terminated in February
1998.
In August
1998, the Respondent signed up with Cognigen Networks Inc, another internet
telephony services distributor whereby the Respondent would promote Cognigens
website which offered inter alia the Complainants internet service. A copy
of this agreement is annexed as Exhibit B to the Response.
On May 19,
1999, the Respondent signed up as an "affiliate" in the Complainants Net2Partners
Web Affiliate Program. The Respondent avers that it is obliged to use its
best efforts to distribute and advertise a link to the Complainants web
site located at "http:www.net2phone.com". A copy of the terms of the Affiliate
Program is annexed as Exhibit C to the Response.
Evidence of
commission payments to the Respondent from the Complainant are exhibited
at exhibit E to the Response. The Respondent maintains that it is still
an affiliate of the Complainants Net2Partners Web Affiliate Program since
the program has not been terminated. It relies on an email from the Complainant
dated 16 June 2000, and annexed as Exhibit F.
5. Submissions
The Complainant
has the burden of proof under paragraph 4(a) of the Uniform Domain Name
Dispute Resolution Policy to show:
(i) The Respondents
domain name is identical or confusingly similar to a trademark or service
mark in which the complainant has rights.
(ii) The Respondent
has no rights or legitimate interests in respect of the domain name.
(iii) The
domain name has been registered and is being used in bad faith.
The Complainant
submits that it is necessary to "generally compare the look, sound and
meaning of the disputed domain name with the look, sound and meaning of
the complainants mark". It points out that the only significant difference
between its registered trade marks "NET2PHONE" and "N2phone.com" is the
absence of the letters "et" which it argues has "little effect" in distinguishing
the marks which "compels a finding of confusing similarity".
The Respondent
denies that the two marks are confusingly similar and argues that "NET2PHONE"
is pronounced as "NET-TWO-PHONE" whereas "N2PHONE" is pronounced as "N-TWO-PHONE",
i.e. the first syllable of each is pronounced differently. It relies upon
a decision of Sargent L.J in London Lubricants Application (1925 43 RPC7)
where the learned Lord Justice stated; "the first syllable of a word is,
as a rule, far the most important for the purpose of distinction".
The Respondent
then goes on to argue that the number "2" is a common numeral over which
the Complainant cannot claim rights whilst the word "PHONE" is generic
and descriptive of the Internet telephony services.
The Panel
considers that it is not bound by rules governing trade mark infringement
and is entitled to apply its own interpretation of paragraph 4(a) of the
Policy.
It accepts
that the Complainant has trade mark registrations of "NET2PHONE" based
upon the evidence set out above. The question that it has to determine
is whether the domain name is in the Panels view "confusingly similar".
In the Panels view it is. It has compared the domain name with "NET2PHONE"
and in its judgment accepts the submission of the Complainant that the
"look, sound and meaning" of "N2phone.com" compels a finding of "confusing
similarity".
The Panel
is also supported in its view by the Respondents own submission that it
"registered the domain name "N2phone.com" to further promote the services
of the Complainant i.e. Net2Phone Inc". There would be little benefit in
doing so if there was not at least some degree of confusing similarity
between "NET2PHONE" and "N2phone.com".
The Complainant
therefore succeeds in proving this first head of paragraph 4(a).
(ii) The Respondent
has no Rights or Legitimate Interest in the Domain Name
The Complainant
argues that the Respondent has no legitimate interest in the domain name
where the owner of a mark has not licensed or otherwise permitted the Registrant
to use its mark. It points out that the Respondent registered "N2phone.com"
nearly two years after IDT and the Complainant first used the mark.
The Respondent
relies on an argument:
(a) that a
license or permission is not required to register the domain name
(b) the Complainant
is attempting to monopolize the use of a mark
(c) that it
has been marketing and promoting using the domain name as part of its dealings
with Aviva, Cognigen and the Web Affiliate Program referred to above.
It maintains
that it has legitimate interests by continuing to promote the domain name.
In its Reply
the Complainant refers to the Web Affiliate Program and argues that this
does not authorize the Respondent to use the domain name and that the Aviva
agreement did not give any right to this domain name.
In its Rebuttal
the Respondent denies the Complainants interpretation of the Affiliate
Program and the Aviva agreement. It asserts that the present proceedings
were brought because of the Complainants "dissatisfaction over its contractual
relationship with the Respondent".
The Panel
has sympathy with the view expressed in the Rebuttal; that the issues raised
with regard to the Web Affiliate Program and Aviva agreement are "better
addressed to a court, which is equipped to resolve such complicated factual
disputes". However the Panel does not consider it necessary in the absence
of a clear license provision to go into the terms of the agreements.
The Respondent
argues that it registered the domain name to promote the services of the
Complainant not that it is licensed to do so. In the absence of clear evidence
of a license to use or register the domain name the Panel is satisfied
that the Respondent has no legitimate interest in the domain name. It accepts
the submissions set out in the Complainant's reply.
(iii) Bad
Faith
Paragraph
4(b) of the Policy sets out particular circumstances which "in particular
but without limitation" shall be evidence of the registration and use of
a domain name.
The Complainant
relies upon the following as indicative of bad faith:
(a) Knowledge
of a Complainants prior use of a mark
(b) That the
Respondent ignored the issue of infringement in registering the domain
name.
(c) The lack
of any rights or legitimate interest
(d) Recognition
of a domain name's potential to cause confusion
(e) Creating
a likelihood of confusion on the basis that the domain name is used with
the intent to attract users for commercial gain.
The Respondent,
putting it simply, argues that it is not attempting to compete with the
Complainant "since the Respondent is promoting, marketing and selling the
Complainants Net2Phone services as its affiliate".
The Panel
has already reached the decision that the Web Affiliate Program does not
give a license to the Respondent. The Respondent effectively admits that
it registered the domain name to attract Internet users for commercial
gain by using it as a promotional device. By using the domain name the
Respondent is attempting to attract Internet users familiar with Net2Phone
who could be confused into thinking there was an affiliation with the Complainant.
The Panel
is satisfied in all the circumstances that the Complaint succeeds in proving
that the Respondents acts fall within paragraph 4(b)(iv) of the Policy.
6. Decision
and Findings
It follows
that the Complainant succeeds in its complaint. Accordingly the Panel orders
that the domain name "N2phone.com" be transferred to the Complainant.
The Respondent
seeks a decision that the domain name "N2phone.com" rightfully belongs
to it. The Panel cannot issue such a decision in favor of the Respondent
having found in favor of the Complainant.
Clive
Duncan Thorne
Sole
Panelist
Dated:
19 September, 2000