Another Reverse #Domain Name Hijacking verdict, after #Verdant .com #UDRP fails

RDNH finding.

The UDRP brought against the aged domain, Verdant.com, has failed at the WIPO.

Registered in 1996, the domain is in use by its registrant, along with a silent variant, VRDT.com.

In fact, Verdant.com has been used as a forwarding domain to the four letter brand, and that’s the reason the Respondent acquired it in the first place.

Meanwhile, the Complainant in this case, Verdant Services, Inc. of Seattle, Washington, claimed that their 2017 trademark application should be good enough of a reason to get the domain. That trademark application is still pending.

Not so fast, said the Respondent, who acquired the domain in 2012:

“Respondent also claims to have superior rights in the VERDANT mark. Respondent maintains that it uses the Domain Name to conduct its business, that it regularly refers to <verdant.com> and the trade name “Verdant” in its business, and that it has full right and authority to the Domain Name and trade name “Verdant” in connection with its green technology corporation. Respondent claims to have common law trademark rights in VERDANT for its business and states that the trade name “Verdant” was integral to Respondent’s corporate identity.”

David H. Bernstein, sole panelist at the WIPO, stated the following, regarding the possibility of a “bad faith” registration:

“Nor can Complainant’s arguments be accepted as evidence of bad faith use. Respondent has used the Domain Name for a legitimate business that is unrelated to Complainant or its line of business. Maintaining a website that uses the same mark in this context cannot possibly constitute bad faith.”

In denying the domain’s transfer to the Complainant, Mr. Bernstein also found them guilty of Reverse Domain Name Hijacking:

“In light of the inadequate allegations promulgated by Complainant, the Panel finds that Complainant brought this proceeding in a bad faith attempt to hijack a domain name that, Complainant had to know, was neither registered nor used in bad faith. The Panel therefore finds Complainant guilty of Reverse Domain Name Hijacking.”

Full details of this UDRP decision for Verdant.com follow:

WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Verdant Services, Inc. v. Michael Sheikh, VRDT Corporation
Case No. D2018-0856

1. The Parties

Complainant is Verdant Services, Inc. of Seattle, Washington, United States of America (“United States”), represented by Carstens & Cahoon, LLP, United States.

Respondent is Michael Sheikh, VRDT Corporation of Rancho Cucamonga, California, United States, internally represented.

2. The Domain Name and Registrar

The disputed domain name <verdant.com> (the “Domain Name”) is registered with GoDaddy.com, LLC (the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on April 13, 2018. On April 16, 2018, the Center received an amended Complaint. On April 17, 2018, the Center transmitted by email to the Registrar a request for registrar verification in connection with the Domain Name. On April 18, 2018, the Registrar transmitted by email to the Center its verification response confirming that Respondent is listed as the registrant and providing the contact details.

The Center verified that the Complaint together with the amended Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy” or “UDRP”), the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy.

In accordance with the Rules, paragraphs 2 and 4, the Center formally notified Respondent of the Complaint, and the proceedings commenced on April 24, 2018. In accordance with the Rules, paragraph 5, the due date for Response was May 14, 2018. Upon request of Respondent, the due date for Response was automatically extended to May 18, 2018 in accordance with the Rules, paragraph 5(b). The Response was filed with the Center on May 18, 2018.

The Center appointed David H. Bernstein as the sole panelist in this matter on June 1, 2018. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.

4. Factual Background

Complainant is a provider of consulting, hosting, and software solution services. It has used the VERDANT trademark in connection to its goods and services since 2009. On December 5, 2017, Complainant filed applications with the United States Patent and Trademark Office (“USPTO”), Serial Nos. 87/708/262 and 87/708,270, to register the VERDANT trademark in International Classes 9, 35, and 42 for goods and services related to its consulting, hosting, and software solution services. The Panel has determined by reviewing the website of the USPTO that those applications were published on April 24, 2018 and that no oppositions or requests for extension of time were filed by the May 24, 2018 deadline for opposition. Accordingly, the marks will proceed to registration in the coming months.

Respondent is a company focused on renewable energy solutions including battery, wind, and solar technologies. It was originally formed in 2011 as “Verdant Automotive.” Respondent later changed its name as it expanded into new areas of business, but continued using the VERDANT mark, including in connection with its license to commercialize patent-protected advanced lithium-ion battery technologies. Respondent is referred to as “Verdant” by other websites and uses the trade name “Verdant” throughout its internal and external branding and identity initiatives.

When Respondent became a publically-traded company, the Financial Industry Regulatory Authority (“FINRA”) assigned Respondent the trading symbol “VRDT,” in light of Respondent’s trade name “Verdant.” In 2015, Respondent decided to return to private-company status, and therefore de-registered with the Securities and Exchange Commission (“SEC”). Respondent continues to operate under the trade name “Verdant” as a private company. Through its subsidiary, Verdant Energy Storage LLC, Respondent remains active in a joint venture to commercialize its patented technology worldwide.

In 2012, Respondent acquired the Domain Name. Respondent believes the seller had owned the Domain Name continuously since its registration on May 28, 1996 through the sale to Respondent. Respondent continues to use the Domain Name to redirect Internet users to its main website at “www.vdrt.com”, on which the VERDANT trademark is prominently displayed in the upper left hand corner.

On May 5, 2017, five years after Respondent purchased the Domain Name, Complainant asked Respondent if it would be interested in selling the Domain Name. Respondent indicated that it paid USD 80,000 for the Domain Name and did not want to sell it for a loss. The record does not indicate whether Complainant thereafter made an offer to purchase the Domain Name.

5. Parties’ Contentions

A. Complainant

Complainant contends that (i) the Domain Name is identical or confusingly similar to Complainant’s trademarks; (ii) Respondent has no rights or legitimate interests in the Domain Name; and (iii) Respondent registered and is using the Domain Name in bad faith.

Complainant owns the trademark VERDANT and claims to have the exclusive right to use and license the VERDANT mark for goods and services associated with its consulting, hosting, and software solutions services. Complainant contends that it has invested large sums of money into its trademark. The Domain Name is identical to Complainant’s trademark.

Complainant avers that Respondent is not related to Complainant and that Respondent does not have permission from Complainant to use the VERDANT mark. The Domain Name is used only to redirect Internet users to Respondent’s main website at “www.vdrt.com”. This website’s news page has not been updated since January 2015 and, other than through its redirection, Complainant contends, <verdant.com> has not been used on its own in connection with any business or bona fide offering of goods or services. Complainant also maintains that Respondent has abandoned any claims it may have had to the VERDANT trademark and that it no longer operates as a business. Consequently, Respondent has no legitimate rights to the Domain Name.

Complainant further maintains that Respondent registered and uses the Domain Name in bad faith. The automatic redirection, Complainant contends, is for a defunct corporation with a revoked SEC registration. Complainant tried to buy the Domain Name from Respondent in 2017, without success. Because Complainant sought to acquire the Domain Name, Respondent knew that Complainant existed and had an interest in the trademark corresponding to the Domain Name.

When it registered the Domain Name, Respondent agreed (pursuant to paragraph 2 of the Policy) not to infringe on the trademark rights of others (which necessarily would include Complainant). Complainant thus contends that Respondent has an ongoing responsibility not to interfere with Complainant’s trademark by using the Domain Name in ways that might confuse Internet users or that might create the misimpression that Complainant does not provide bona fide services. The outdated website, Complainant contends, also tarnishes Complainant’s reputation and interferes with its delivery of services. The combination of website inactivity and fraudulent representations to the concerned registrar amount to bad faith use by Respondent.

B. Respondent

Respondent contends that (i) Complainant does not own rights in the trademark VERDANT and in any event the Domain Name is not confusingly similar to Complainant’s trademark because there is no confusion, (ii) that it does have a legitimate right and interest in the Domain Name, and (iii) that its registration, past use, and current use of the Domain Name was and is not in bad faith.

Respondent asserts that VERDANT is a generic term and that, because it is registered by numerous third parties for other goods and services, Complainant’s alleged rights in the trademark are “dubious.” Respondent also claims that the Domain Name is not confusingly similar because Complainant’s trademark applications were limited to just three classes, all of which are distinct from Respondent’s use of the term.

Respondent also claims to have superior rights in the VERDANT mark. Respondent maintains that it uses the Domain Name to conduct its business, that it regularly refers to <verdant.com> and the trade name “Verdant” in its business, and that it has full right and authority to the Domain Name and trade name “Verdant” in connection with its green technology corporation. Respondent claims to have common law trademark rights in VERDANT for its business and states that the trade name “Verdant” was integral to Respondent’s corporate identity. Respondent, founded in 2011, acquired the Domain Name in 2012 after the prior registrant sold it. Its purchase of the Domain Name was in direct furtherance of Respondent’s business and reputation as a source of green technology. When Respondent determined it no longer needed to be a public company, it de-registered with the SEC, but it did not abandon its businesses or its trademark; rather, it became a private company that continued to use the name “Verdant.” Respondent continues to conduct business under the trade name “Verdant,” including through the joint venture it operates through its subsidiary Verdant Energy Storage LLC.

Respondent contends that its registration and continued use of the Domain Name is not in bad faith. Respondent maintains that it is not defunct and that its use of the Domain Name to redirect Internet users to its main website is legitimate and consistent with commercial norms. Respondent did not try to create confusion with any other company’s trademark and it provides goods and services unrelated to Complainant’s. Further, confusion is not likely because the parties offer very different services. There are also a multitude of other businesses using the trade name “Verdant,” one of which was the predecessor in interest to this Domain Name. Respondent asserts that the predecessor transferred its superior rights in the Domain Name to Respondent. Further, Respondent has not made any fraudulent representations to the registrar of the Domain Name.

6. Discussion and Findings

To prevail in an administrative proceeding under the UDRP, a complainant must show that all of the elements of paragraph 4(a) of the Policy have been satisfied:

(i) the domain name is identical or confusingly similar to a trademark or trade service mark in which the complainant has rights, and

(ii) the respondent has no rights or legitimate interests in respect of the domain name; and

(iii) the respondent registered and is using the domain name in bad faith.

Complainant bears the burden of proof with respect to each of the aforementioned elements.

A. Identical or Confusingly Similar

Complainant must demonstrate that (1) it has rights in the VERDANT mark, and (2) the Domain Name is identical or confusingly similar to those marks. The Panel finds that Complainant has met this burden.

Complainant has offered sufficient evidence to establish that it owns common law rights in the VERDANT mark. Complainant has provided consulting, hosting and software solutions services under the name “Verdant Services” since 2009. In addition, Complainant has applied to register the VERDANT mark and those registrations will issue shortly. Although the registrations have not yet issued, all necessary filings have been completed, and no one has opposed, which means that the registrations will necessarily be issued in the coming months. As such, it is appropriate to consider these forthcoming registrations as prima facie evidence of Complainant’s trademark rights.

The Domain Name is identical to the VERDANT trademark.

Respondent’s arguments to the contrary are without merit. Although Respondent says that Complainant’s rights in the mark are “dubious” and that Respondent intends to challenge those rights at the USPTO, Respondent offers no assertions of fact that call Complainant’s rights in the mark into question. The facts that Complainant only registered in three classes, that other entities use a mark that consists of or includes VERDANT for other goods or services, and that Complainant only recently applied to register the mark, are all entirely consistent with a finding that Complainant owns this mark.

Also without merit is Respondent’s argument that the Domain Name is not confusingly similar to the VERDANT mark because there is no actual consumer confusion given the different services provided by the parties. As explained in the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Third Edition (“WIPO Overview 3.0”), the “identical or confusingly similar” standard of the UDRP looks only at “a reasoned but relatively straightforward comparison between the complainant’s trademark and the disputed domain name . . . to assess whether the mark is recognizable within the disputed domain name.” WIPO Overview 3.0, section 1.7 (“While each case is judged on its own merits, in cases where a domain name incorporates the entirety of a trademark, or where at least a dominant feature of the relevant mark is recognizable in the domain name, the domain name will normally be considered confusingly similar to that mark for purposes of UDRP standing”). Applying that test to the Domain Name here, it is apparent that the Domain Name (disregarding for these purposes the generic Top-Level Domain) replicates in its entirety the trademark.

Accordingly, Complainant has prevailed under the first factor. The Panel finds that the Domain Name is identical to a trademark in which Complainant has rights in accordance with paragraph 4(a)(i) of the Policy.

B. Rights or Legitimate Interests

Paragraph 4(c) of the Policy lists three non-exhaustive factors that may be relevant to the assessment of whether a respondent can be said to have rights to or legitimate interests in a disputed domain name. These factors include (i) use of the domain name “in connection with a bona fide offering of goods and services”; (ii) demonstration that respondent has been “commonly known by the domain name”; or (iii) “legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or services mark at issue.”

Complainant must make a prima facie showing that Respondent has no rights or legitimate interests in respect of the Domain Name. Once shown, Respondent must provide evidence to rebut that showing, though the burden of proof always remains on Complainant. Document Technologies, Inc. v. International Electronic Communications Inc., WIPO Case No. D2000-0270.

The Complaint essentially acknowledges that Respondent has used the VERDANT mark in connection with its business in the past, but suggests that Respondent no longer has any present interest in the Domain Name because its business is defunct, it abandoned the VERDANT trademark, and the Domain Name automatically redirects Internet users to the “www.vrdt.com” website. Respondent, however, has effectively rebutted those assertions with evidence that it is not defunct, that it still operates (albeit as a private company rather than a publically-owned company), and that it continues to use the VERDANT trademark in connection with its business. Although the materials that Respondent submitted appear to date from 2012 and 2014 (based on the copyright notice on the brochure), Respondent has certified in its Response that it continues to operate, and Complainant has not come forth with any evidence to undermine the veracity of that certification.

As for the automatic redirection, there is nothing nefarious or illegitimate about that; as Respondent points out, redirection is common for companies that own multiple domain names and want to redirect all that traffic to their main website.

The Panel does not, though, accept Respondent’s suggestion that it somehow has prior trademark rights because the seller of the Domain Name transferred its trademark rights to Respondent. The purchase of a domain name does not automatically bring with it an assignment of trademark rights. In the absence of any evidence that the prior owner assigned its trademark rights to Respondent, Respondent has failed to establish that its rights predate its own first use, in 2011. However, this does not undermine the finding that Respondent has established rights and legitimate interests in this Domain Name during the period when it owned the Domain Name.

The Panel therefore finds that Complainant has failed to establish that Respondent lacks “rights or legitimate interests” under paragraph (4)(a)(ii) of the Policy.

C. Registered and Used in Bad Faith

Paragraph 4(b) of the Policy sets forth a set of non-exhaustive grounds which may evidence bad-faith registration and use of a domain name. This list includes (i) acquiring the domain name in order to sell, rent, or otherwise transfer the domain name registration to the complainant who is the owner of the trademark or service mark, or to a competitor of that complainant, for valuable consideration in excess of the documented costs of the domain name; (ii) registering the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a domain name in accordance with a pattern of such conduct; (iii) registering the domain name primarily for the purpose of disrupting the business of a competitor, (iv) attempting to attract, for commercial gain, Internet users by creating confusion between complainant’s mark and respondent’s.

Complainant has failed to demonstrate any possible bad faith by Respondent.

First, there is no evidence whatsoever of bad faith registration. Complainant does not allege any facts that would support a finding that Respondent was aware of Complainant’s mark when it acquired the Domain Name in 2012; at the time, Complainant had not applied to register its mark and Complainant provides no evidence of its fame or other evidence that could support a finding that Respondent acquired the Domain Name in bad faith to take advantage of Complainant’s trademark rights. Indeed, Complainant appears to acknowledge Respondent acquired the Domain Name to use in connection with Respondent’s business; it submits old printouts of Respondent’s “www.vrdt.com” website showing prominent use of the VERDANT trademark on the website.

To the extent Complainant address bad faith registration at all, Complainant’s argument for bad faith registration appears to rest on paragraph 2 of the Policy. Complainant appears to argue that Respondent’s registration was in bad faith because, at the time of registration, it represented that the registration would not infringe upon or otherwise violate the rights of any third party. Complainant does not argue that Respondent’s representation was inaccurate at the time; rather, Complainant appears to assert that the paragraph 2 representation creates a continuous obligation to avoid infringement and that, once Respondent learned of Complainant’s rights (when Complainant tried to purchase the Domain Name), Respondent was then on notice of Complainant’s rights and its continued use of the Domain Name to redirect users to <vrdt.com> was bad faith that somehow rendered the registration in bad faith as well.

That argument cannot possibly be accepted. Bad faith registration measures a respondent’s conduct at the time of registration. It is distinct from bad faith use, which measures what the respondent did with the domain name after registration. Indeed, the subsequent renewal of a domain name is generally not considered a new registration that resets the time period for considering whether the registration was in bad faith. See generally the WIPO Overview 3.0, section 3.9; see also id., section 3.2.1 (noting that, under the consensus view, UDRP panels have definitively rejected the concept of “retroactive” bad faith registration).

Nor can Complainant’s arguments be accepted as evidence of bad faith use. Respondent has used the Domain Name for a legitimate business that is unrelated to Complainant or its line of business. Maintaining a website that uses the same mark in this context cannot possibly constitute bad faith.

Equally without merit is Complainant’s argument that Respondent’s use of the Domain Name to redirect Internet users to its main website constitutes bad faith use. As noted above, redirection is a common practice for companies that own multiple domain names and want to redirect all that traffic to their main website. It is true that UDRP panels in some other cases have found that using a website solely for the purposes of redirecting traffic to another of respondent’s websites for commercial gain could constitute bad faith, but those cases are distinguishable. In those cases, the respondent did not have a right or legitimate interest in the trademark in question and the products, goods and services associated with the two organizations were confusingly similar, Molmed S.p.A. v. Prof. Asif Ahmed, WIPO Case No. D2001-0177, or the respondent was taking advantage of a well-known trademark to redirect customers elsewhere. Revlon Consumer Products Corporation v. Moniker Privacy Services / Janice Liburd, WIPO Case No. D2011-0315. No such similarity or confusion exists here; rather, the redirection is conducted on behalf of a respondent that has a legitimate interest in the mark.

Accordingly, the Panel finds that Respondent did not register or use the Domain Name in bad faith.

D. Reverse Domain Name Hijacking

Reverse Domain Name Hijacking is defined in paragraph 1 of the Rules as “using the Policy in bad faith to attempt to deprive a registered domain-name holder of a domain name.” Such a finding is warranted where there is evidence that Complainant “clearly ought to have known it could not succeed under any fair interpretation of facts reasonably available prior to the filing of the complaint.” WIPO Overview 3.0, section 4.16.

On its face, this Complaint did not state a claim for transfer under the Policy. Complainant’s evidence established that Respondent had made a bona fide use of the Domain Name in the past, that Respondent’s acquisition of the Domain Name in 2012 therefore could not possibly have been in bad faith, and that Respondent was not in fact defunct (since Respondent responded to Complainant’s emails as recently as November 2017). The Complaint was also legally deficient to the extent it was essentially arguing for retroactive bad faith, a concept that has firmly been rejected as set out in the WIPO Overview 3.0. Alternatively, if Complainant did not intend to argue for retroactive bad faith (since that part of the Complaint is somewhat unclear in its reasoning), then the Complaint was devoid of any allegations whatsoever establishing bad faith registration. And, the Complaint included no facts that establish bad faith use.

The weakness of the Complaint was all the more apparent once Respondent responded, with evidence not only of its good faith registration and its legitimate interest in the VERDANT mark, but also with evidence of its business interests that continue to operate under the name. These are facts that should have been readily apparent to Complainant, had Complainant investigated Respondent’s use prior to filing the Complaint. In light of the Complainant’s knowledge of Respondent’s prior bona fide use of the Domain Name and the other facts discussed above, it was improper for Complainant to file a challenge and claim that Respondent was defunct without adequate investigation of the true facts.

In light of the inadequate allegations promulgated by Complainant, the Panel finds that Complainant brought this proceeding in a bad faith attempt to hijack a domain name that, Complainant had to know, was neither registered nor used in bad faith. The Panel therefore finds Complainant guilty of Reverse Domain Name Hijacking.

7. Decision

For the foregoing reasons, the Complaint is denied.

David H. Bernstein
Sole Panelist
Date: June 15, 2018


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Comments

One Response to “Another Reverse #Domain Name Hijacking verdict, after #Verdant .com #UDRP fails”
  1. Anon says:

    Wow! Remind me to never hire Carstens & Cahoon, LLP as my IP attorneys!

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