We hope you will enjoy this edition of the Digest (Vol. 3.16), as we review these noteworthy recent decisions, with commentary from our General Counsel, Zak Muscovitch.
‣ Panel Gives Complainant a Second Chance and Respondent Finally Shows Up (hclsoftware .com *with commentary)
‣ Complaint Failed to Provide Requisite Evidence of Common Law Trademark Rights (paragonsecurity .com *with commentary)
‣ Deficient Complaint Dismissed, But Without Prejudice (pioneernrc .com *with commentary)
‣ Domain Name Registration May Have Been “Extraordinary Coincidence” in Absence of Additional Evidence of Bad Faith (hempfreeze .com)
‣ Respondent Passed Itself Off As Complainant with Domain Name and Infringing Website (woodenshipsus .com)
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This Digest was Prepared Using UDRP.Tools and Gerald Levine’s Treatise, Domain Name Arbitration.
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Panel Gives Complainant a Second Chance and Respondent Finally Shows Up
<hclsoftware .com>
Panelist: Mr. Nicholas J.T. Smith
Brief Facts: On March 23, 2023 the the Panel issued a Panel Order under Rule 12 of the Rules. The Panel Order sought additional material from Complainant about the relationship between the Complainants, any reputation in the HCL mark held by the Complainant at the time of registration and any other details held by Complainant regarding the use of the Domain Name between 2003 and the commencement of the proceeding including, if available, all Internet Archive Wayback Machine records showing any use of the Domain Name.
On March 29, 2023 Complainant provided an additional submission including exhibits in response to the Panel Order. The content of this material is summarized later in the decision.
On April 3, 2023 a second Panel Order was issued providing Respondent with a deadline of April 12, 2023 to provide any evidence or submissions in response to Complainant’s additional submission. On April 11, 2023 Respondent provided material in response to the second Panel Order, which the Panel has treated as a Response in this matter.
The Complainant is a global technology and software company, established in 1976 in India. It owns rights in the HCL mark through numerous trademark registrations, including the Indian trademark (filed on October 3, 1997, and registered on January 4, 2006). The disputed Domain Name was registered on December 23, 2003, by the Respondent and currently, it does not resolve to a website. The Complainant argues that prior to 2003, the Complainant had established or acquired subsidiaries trading under the HCL mark that provided IT Services and software/hardware development in various jurisdictions, and had a significant list of clients including Compaq, GM, Hitachi, Mercedes-Benz, HP, NTT, Samsung and Toshiba. As of April 2003, the Complainant had 370 clients and quarterly revenue of 4.66 billion INR (approx. USD 100 Million).
The Complainant argues that the Respondent is not actively using the Domain Name and registered it, with constructive and/or actual knowledge of the Complainant’s rights in the HCL mark. On the other hand, the Respondent argues that HCL is an abbreviation of the Respondent’s full name, Hugo Contreras Lopez and he works on the development of software systems. The Domain Name was registered while the Respondent was unemployed with the aim of offering his services as a software consultant. For a brief period in the past 20 years, the disputed Domain Name was active and used for an active site, which promoted the Respondent’s software consultancy services.
Held: At the time the Domain Name was registered, the Complainant had a significant reputation in the field of software development but no registered rights in Argentina. The Domain Name consists of the acronym “HCL” and the word “software”. The Respondent’s initials are HCL and he works in the software industry. Between 2007 and 2009, well before the present proceeding commenced and well before any contact between the parties, the Domain Name resolved to the Respondent’s Website where the Respondent offered services as a software consultant under the name “HCL Software”. The Respondent gives evidence that the Respondent’s Website became inactive after 2009 as he obtained employment with various companies later in his career.
The Respondent’s Website does not either explicitly or implicitly make any reference to the Complainant or otherwise engage in any other conduct that suggests the use of the Domain Name for the Respondent’s Website was anything other than for a bona fide offering of services. Further, while the services offered by the Complainant and the Respondent are in the software field, the scale and nature of the services offered by the respective parties are so different that it is difficult to imagine that the parties would compete in any realistic manner. For these reasons, the registration of the Domain Name was not motivated by any desire to take advantage of the reputation, the Complainant had in 2003 in the HCL mark as opposed to the use of the abbreviation HCL to represent the initials of the Respondent as a software consultant.
Complaint Denied
Complainants’ Counsel: Hope V. Shovein of Brooks Kushman P.C., Michigan, USA
Respondents’ Counsel: Self-represented
Case Comment by ICA General Counsel, Zak Muscovitch:
When should Panelists issue a Procedural Order? I wrote about this issue in Digest Volume 3.9 and stated inter alia, that as Gerald Levine notes in his treatise (at Page 576), although Rule 12 grants Panels sole discretion to request further statements of documents from either of the parties by way of procedural orders, “exercising sole discretion raises questions of fairness and it should be exercised cautiously…Incautiously, it can be viewed as giving an unfair advantage to a party who has failed to marshal a full record”.
In this case, the Respondent did not respond to the Complaint. Nevertheless, the Panelist noted that the Complainant’s evidence was inadequate. Rather than dismissing the Complaint, the Panelist issued a Procedural Order, inter alia asking the Complainant to provide more evidence regarding its common law rights and to clarify its ownership structure. The Complainant responded to the Procedural Order and the Panelist then issued a second Procedural Order giving the Respondent an opportunity to respond to the Complainant’s answer to the Procedural Order. The Respondent answered the second Procedural Order and the Panel treated it as a Response, despite the Respondent not having responded to the Complaint in the first place.
Let’s look at two issues that arose in this case from the issuance of Procedural Orders.
First, it is noteworthy that despite the Respondent not responding to the Complaint, the Panelist gave the Respondent a chance to respond to the additional material which the Complainant submitted in response to the Procedural Order. Why did the Panelist give the Respondent a chance to respond to this additional material despite having not responded to the Complaint in the first place? The reason, which the Panelist should be credited for, is because the Panelist must assume, out of an abundance of caution and fairness, that the Respondent may have conscientiously decided not to Respond to the Complaint because it was clearly inadequate as the Panelist itself observed. However, once the Complainant’s case was improved with additional material as requested by the Panelist, it would only be fair to allow the Respondent to respond to it, since in effect this created an “amended” Complaint which the Respondent should be able to respond to.
The second issue, is more fundamental. Should the Panelist have just dismissed the Complaint since it was deficient? That is what occurred in the recent Skilshare .com case, as well as the pioneernrc .com, and the ParagonSecurity .com case, both discussed below. The circumstances will of course dictate where Procedural Orders are appropriate in the Panel’s discretion, but they ought to be used sparingly. Neither the Policy nor the case law provides a bright line test for when to issue such Orders and it is difficult to conceive of a rule of general application that specifies when such Orders should be issued.
In this case, arguably both parties were disadvantaged in a sense, by the issuance of the Procedural Orders. The Respondent was disadvantaged because the Complainant was given the opportunity to improve upon its Complaint, and the Complainant was disadvantaged because the Respondent was effectively given an opportunity to respond to a Complaint that it had failed to in the first place. Nevertheless, I can see how particularly in the absence of a Response, a Panelist could be tempted to give the Complainant an opportunity to rectify its Complaint rather than dismissing the Complaint altogether. The reason is that if a Respondent didn’t respond, it seems very unlikely that it would respond to a Procedural Order so there would be “no harm” in doing so. But in this case the Respondent did, and that made things more complicated. Here, the Panelist admirably addressed this contingency by giving the Respondent an opportunity to respond to the improved Complaint, but perhaps in hindsight it would have been more prudent to just dismiss the Complaint.
Yet would that lead to unfairness for the Complainant who would generally be prohibited from refiling an improved Complaint? On one hand, the UDRP’s requirements are clear after 23 years and tens of thousands of cases and numerous secondary sources are available to guide Complainants, such that there is no excuse for filing a deficient Complaint and by so doing a Complainant has by its own fault, wasted its one opportunity to use the expedited dispute resolution procedure that is the UDRP. On the other hand, why should a Complainant be prevented from refiling a case once it learns from its dismissed Complaint? What is the rationale for that when the purpose of the UDRP is to provide an efficient remedy to Complainants? Well, one reason is that it can be unfair to Respondents who are forced to defend against a Complaint twice as a result of the Complainant’s own fault. The second reason could be that it is unfair for a Complainant to get its case essentially vetted and evaluated by an expert Panelist, just so it can then go and improve it in accordance with a Panel’s specifications.
Generally, absent exceptional circumstances and new evidence that was not available at the time of the original Complaint, refiling will not be permitted unless the original Complaint was dismissed without prejudice to refiling. But where the Complaint is deficient for a very technical reason or minor oversight, could it be fair to dismiss the Complaint without prejudice, particularly when the Respondent did not respond? There is a compelling argument that in such cases, this is the fairest approach since the Complainant will have been suitably chastised for bringing a technically faulty Complaint in the first instance and a price will have been exacted by way of a refiling fee. And since the Respondent did not respond in first instance, it has not been put to significant trouble or expense and will get a full chance to respond to the new Complaint. How about though, when the Complaint is deficient for more than a mere technical reason or more than a minor oversight, or where the Respondent did respond? Such circumstances make dismissal without prejudice generally inappropriate since it gives at-fault Complainants a second, expert-guided chance at the expense of a Respondent, and arguably is inconsistent with the streamlined, efficient procedure which contemplates a single proceeding.
Complaint Failed to Provide Requisite Evidence of Common Law Trademark Rights
Paragon Protection Ltd. v. Webhosting Department/ Candev Systems Inc., CIIDRC Case No. 20348-UDRP
<paragonsecurity .com>
Panelists: Mr. Peter Müller (Chair), Mr. Zak Muscovitch, Mr. Michael Erdle
Brief Facts: The Complainant contends that it has been using PARAGON SECURITY as a trademark and business name for its security services since around June 14, 2006, and relies on common law trademark rights in PARAGON SECURITY. In this context, the Complainant states that it has established significant and enforceable common law rights in and to the PARAGON SECURITY trademarks through over sixteen years of extensive and continuous use. It further states that the PARAGON SECURITY trademarks have achieved substantial goodwill. The Complainant argues that the Domain Name is identical or virtually identical to the Complainant’s PARAGON SECURITY trademark.
The Respondent argues that the Complainant, by its own admission, does not have a trademark registration for PARAGON SECURITY but only a recent trademark application. The Respondent states that the Complainant’s trademark application in PARAGON SECURITY is not sufficient to establish trademark rights. In addition, the Respondent contends that the Complainant lacks common law rights in PARAGON SECURITY as it has not provided the evidence of trademark rights which are required under UDRP. In this context, the Respondent also points to the fact that the Complainant’s registration of the domain name <paragonsecurity.ca> is not sufficient to establish common law trademark rights as domain names are not in themselves protected by trademark law.
Held: The Complainant provided evidence of having applied for a Canadian trademark on November 25, 2022, which is not registered. Generally, a pending trademark application does not by itself establish trademark rights within the meaning of the Policy. The Panel, therefore, needs to consider whether the Complainant owns unregistered or common law trademark rights in the term “PARAGON SECURITY”, especially in terms of Section 1.3 of the WIPO Overview 3.0.
However, the Complainant has not provided any further evidence, apart from the assertions and excerpts from the Company Register of the Province of Ontario which show the registration of the company PARAGON SECURITY LTD. and the business name PARAGON SECURITY. However, these registrations, in themselves, do not confer rights under the Policy. The Complainant has not made any claim of the secondary meaning of its company name, and no evidence has been presented to the Panel in support of such a claim. No such evidence was provided in the Complainant’s supplemental submission. Further, the excerpted printout of the Complainant’s website submitted as an attachment to one of the sworn statements is also insufficient, as it only constitutes party submissions and not supporting assertions of acquired distinctiveness. Besides, there is no evidence to demonstrate that the public perceives the alleged mark as a trademark of the Complainant.
The Panel, therefore, cannot but find that, on the record before it in these proceedings the Complainant failed to establish the first element of the Policy. Hence, the Panel does not find it necessary to make any determination with respect to the issues of whether the Respondent has a legitimate interest in the Domain Name or whether the Respondent registered or used the Domain Name in bad faith.
Complaint Denied
Complainants’ Counsel: Robert Nakano of Gardiner Roberts LLP
Respondents’ Counsel: Paul Lomic of Lomic Law
Case Comment by Ankur Raheja, Editor-in-Chief: This case is yet another recent case where the Complainant apparently failed to provide the requisite evidence of common law trademark rights (see our last issue of the Digest concerning Skilshare .com). The ICA’s General Counsel, Zak Muscovitch, was on the three-member Panel.
Deficient Complaint Dismissed, But Without Prejudice
Pioneer Natural Resources USA, Inc. v. FU, LEI, NAF Claim Number: FA2303002034572
<pioneernrc .com>
Panelist: Mr. Steven M. Levy, Esq.
Brief Facts: The Complainant owned and operated the domain <pioneernrc .com> with the Registrar “Network Solutions” from 1997 until 2022. The Complainant alleges that due to a billing issue related to a credit card and subsequent email notification failures to alert of the said billing issue, the domain renewal lapsed went to auction, and was acquired by the Respondent for the sole purpose of cybersquatting. When the Complainant realized that the domain renewal inadvertently lapsed on January 9, 2023, the issue was immediately escalated with the Domain Registrar and pursuant to further instructions, the Complainant is filing this dispute resolution to revert the ownership of the Domain Name <pioneernrc.com> to the rightful owner – Pioneer Natural Resources USA, Inc. At no point was the Complainant’s intent to allow its ownership and operation of the pioneernrc.com domain to lapse. The Respondent failed to submit a Response in this proceeding.
Held: The Complaint here, signed by an in-house employee of the Complainant, is very brief and particularly short on evidence. It does not speak to the public perception, reputation, or scope of the Complainant’s claimed mark or provide sufficient evidence of common law trademark rights to meet the above-mentioned guidelines. The Complainant asserts that it “owned and operated the domain pioneernrc.com with the Registrar ‘Network Solutions’ from 8/5/1997 until 8/5/2022” and it offers a textual list of the dates of the domain name’s initial registration and each subsequent renewal. A textual list of evidence is not proof and does not substitute for the submission of evidence itself. No submission is made here to support the Complainant’s claim to be the prior owner of the disputed Domain Name (e.g., screenshots of archived WHOIS records, screenshots of registrar pages or emails confirming registration and renewal of the domain name, etc.). The Panel is thus not in a position to confirm the Complainant’s claim based on its written assertion alone.
Further, the only evidence submitted by the Complainant, in this case, consists of a single screenshot of the <pioneernrc .com> website displaying a Pioneer Natural Resources logo and links relating to oil, gas, and energy. The screenshot bears a 2022 copyright notice and the Complainant’s name, stock ticker symbol, postal address, and telephone number. There is no indication, in this exhibit or the Complaint as to whether this screenshot was taken during the time that the Complainant claims to have owned the disputed Domain Name or after it was acquired by the Respondent. No other evidence of the Complainant’s claimed common law trademark is submitted.
Due to the inadequate nature of the Complaint and the single item of submitted evidence, the Panel has found that the required burden of proof has not been met here. Nevertheless, as the Complaint appears to have been drafted and submitted by an in-house individual at Complainant’s company who may have very limited knowledge of the Policy, and taking into account the fact that Complainant is a publicly traded company whose shareholders and others may be misled or harmed if its website has indeed been compromised, the Panel has denied this case without prejudice thus allowing Complainant to consider refiling the case, perhaps by a professional who has knowledge of and experience with UDRP cases and standards.
Complaint Denied
Complainants’ Counsel: Internally Represented
Respondents’ Counsel: No Response
Case Comment by ICA General Counsel: Here, the Panelist dismissed the deficient Complaint due to lack of evidence, but did so without prejudice so that the Complainant could refile. The Panelist relied on two factors for so doing:
a) The Complainant was not represented by a professional with knowledge and experience with the UDRP; and
b) Possibility of harm arising from misuse of the Domain Name which was inadvertently allowed to expire by a public company;
I think also, though not expressly stated, that there were likely two more factors that the Panelist likely considered, namely; c) the fact that the Respondent did not respond; and d) a sense that the Complainant was likely in the right and the Respondent’s registration was likely wrongful.
As discussed above, dismissals without prejudice can be unfair to Respondents, particularly when a Respondent has responded. Moreover, Complainants who file deficient Complaints should not generally be given a second chance to file an improved Complaint after obtaining expert guidance from a Panelist. The UDRP only contemplates a single opportunity to file, absent new evidence that was not available at the time of the filing of the original Complaint. Yet here, the Panelist exercised his discretion to nevertheless make an exception for the Complainant and specified his reasons for so doing. I do think that there is room for making a dismissal without prejudice as the Panelist did so here in what he considered appropriate and exceptional circumstances, though such dismissals without prejudice should be exceedingly rare and based upon an express rationale, lest they become commonplace and thereby subvert the original intent and established practice of the UDRP. We can see from the Panelist’s Skilshare .com case, that dismissal with prejudice continues to be the accepted general approach and that the particular circumstances of this case likely made it an exception.
Moreover, I think that the Panelist’s approach of reasonably exercising his discretion in favor of dismissal without prejudice in an exceptional case supported by a specified rationale, is generally preferable to reliance on Procedural Orders. Assuming that a Procedural Order is issued only sparingly and only in an appropriate case as well, arguably both approaches end up in the same place; namely a Complainant getting a second kick at the can in the interest of securing the just, most expeditious and least expensive determination of the dispute. Nevertheless, the difference between dismissal without prejudice and use of a Procedural Order in this context, may be that with dismissal without prejudice, an appropriate price is exacted from the Complainant for having failed to file a proper Complaint in the first place. In any event, we must remain vigilant in guarding against Panels “assisting” Complainants as a general approach, and rather leave such assistance, whether it be by way of Procedural Order or Dismissal Without Prejudice, as exceptional remedies only available in very specific and well-supported circumstances.
Domain Name Registration May Have Been “Extraordinary Coincidence” in Absence of Additional Evidence of Bad Faith
Founders Wellness LLC v. LaTisha Adams, NAF Claim Number: FA2302002032543
<hempfreeze .com>
Panelist: Mr. Debrett G. Lyons
Brief Facts: The Complainant sells products which contain hemp and cannabidiol by reference to the trademark, HEMP FREEZE. It owns rights in HEMP FREEZE before USPTO, assigned to the Complainant on January 19, 2021, originally registered on October 27, 2020. The disputed Domain Name was registered on April 26, 2018, and resolves to a website that displays links to third parties who sell hemp goods in direct competition with the Complainant. The Complainant alleges that the Respondent’s opportunistic bad faith is said to be evidenced by the registration of the disputed Domain Name on the same day the Complainant filed an application to register the trademark. The Respondent also uses the domain name in bad faith since it resolves to a website with links to goods directly competing with those sold by the Complainant under the trademark.
Held: The registration certificate issued by the USPTO states that the application was filed on December 20, 2018. However, the Complaint additionally includes further evidence which shows a previous application as having been filed on April 26, 2018. On November 27, 2018, the Complainant advised the USPTO that the trademark was first used “as early as May 21, 2018” and first used in commerce “as early as May 31, 2018”. The Panel observes that both dates still postdate the creation date of the domain name. Therefore, the evidence presented in the instant complaint requires a finding that the Respondent registered the domain name in anticipation of the Complainant acquiring trademark rights. The Panel finds, on the evidence as presented, that it was not the case.
The unamended first use dates, assuming them to be correct, postdate creation of the domain name. To the Panel’s best knowledge, new applications to the USPTO are not advertised on the day of filing. Albeit it may seem an extraordinary coincidence that the domain name was created that same day, the coincidence may be innocent, or the explanation may lay elsewhere, for example, by reason of some press release on the day of filing. However, there is no evidence of that, or of anything else to suggest mischief. In the circumstances and decided on the basis of what is before the Panel, the finding is that paragraph 4(a)(iii) of the Policy has not been established.
Complaint Denied
Complainants’ Counsel: Connor J. Christensen of Tuggle Duggins P.A., North Carolina, USA
Respondents’ Counsel: No Response
Respondent Passed Itself Off As Complainant with Domain Name and Infringing Website
Wooden Ships of Hoboken Inc. v. rong qi, WIPO Case No. D2023-0758
<woodenshipsus .com>
Panelist: Mr. Adam Taylor
Brief Facts: The Complainant supplies high-quality knitted sweaters under the mark WOODEN SHIPS since 2005 and operates the website at <wooden-ships.com> since 2016. On February 3, 2023, the Complainant applied for a trademark for WOODEN SHIPS before USPTO, claiming a “first use” date of 2005. The Complainant argues that it acquired common law trade mark rights in the term WOODEN SHIPS over the course of 18 years and has expended substantial financial and business resources in the development of its mark. The disputed Domain Name was registered on August 4, 2022. As of January 27, 2023, the disputed Domain Name resolved to a website branded, with a “Wooden Ship Productions” logo and purporting to offer sweaters for sale and included product photographs copied from the Complainant’s own site.
The Complainant alleges that the Respondent has used the disputed Domain Name to operate a fraudulent website with a business name that was confusingly similar to that of the Complainant, and which included the Complainant’s product photos, in order to mislead consumers into believing that they were buying the Complainant’s products. The Complainant further alleges that the Respondent has used the disputed Domain Name for what appears to be a scam website designed to harvest credit card or payment information for unlawful purposes.
Held: The Panel considers that given the evidence of use of the disputed Domain Name for a website impersonating the Complainant including the use of photographs of the Complainant’s products copied from the Complainant’s site, and the likelihood that the Respondent is engaging in some sort of fraud (which the Respondent has not appeared in the proceeding to dispute), the Panel readily concludes that the Respondent has intentionally created a likelihood of confusion with the Complainant’s trade mark in accordance with paragraph 4(b)(iv) of the Policy. For the above reasons, the Panel considers that the Complainant has established the third element of the Policy.
Transfer
Complainants’ Counsel: Garson, Ségal, Steinmetz, Fladgate LLP, United States
Respondents’ Counsel: No Response