DAO.com UDRP: Allegations of theft and a powerful acronym

DAO stands for Decentralized Autonomous Organization and in the era of blockchain, smart contracts, and crypto it’s one powerful acronym.

The matching domain name, DAO.com, was the focus of a UDRP between two Chinese individuals.The domain was acquired in 2010 from Rick Latona’s outfit DigiPawn.

Daodao Holding LLC and its operators alleged that the domain was in their possession from 2010 until 2013, when it was inexplicably transferred to a business partner, whom they identified as the Respondent.

The Respondent, as an entity formed in Delaware, disputed the Complainant’s claims, stating that they acquired the domain from the founders of the Daodao Group and that the Complainant is not related to that group. The Respondent noted that the Complainant is submitting false evidence in an attempt to hijack the domain name.

The Forum (NAF) panelist’s statement involved the following:

Given the above, there is no evidence of circumstances indicating that Respondent registered or acquired the domain name for the purpose of transferring it to Complainant;  or that  Respondent registered the domain name in order to prevent the owner of the trademark from reflecting the trademark in the domain name; or that Respondent registered the domain name to disrupt a competitor’s business; or that Respondent intentionally attempted to attract Internet users by creating a likelihood of confusion with Complainant’s trademark.

Final decision: Deny transfer of the domain DAO.com to the Complainant.

The domain transfer was denied.

Daodao Holding LLC v. niezhenxiang

Claim Number: FA2201001979244

PARTIES

Complainant is Daodao Holding LLC and Daodao Group Company Limited (“Complainant”), represented by May Ruoying Mei of Daodao Holding LLC, Delaware, USA. Respondent is Nie Zhenxiang (“Respondent”), represented by Jeffrey J. McMahan, Vermont, USA.

REGISTRAR AND DISPUTED DOMAIN NAME

The domain name at issue is , registered with Alibaba Cloud Computing (Beijing) Co., Ltd..

PANEL

The undersigned certifies that he has acted independently and impartially and to the best of his knowledge has no known conflict in serving as Panelist in this proceeding.

Fernando Triana, Esq., as Panelist.

PROCEDURAL HISTORY

Complainant submitted a Complaint to the Forum electronically on January 6, 2022; the Forum received payment on January 6, 2022. The Complaint was submitted in English.

On January 7, 2022, Alibaba Cloud Computing (Beijing) Co., Ltd. confirmed by e-mail to the Forum that the disputed domain name is registered with Alibaba Cloud Computing (Beijing) Co., Ltd. and that Respondent is the current registrant of the name. Alibaba Cloud Computing (Beijing) Co., Ltd. has verified that Respondent is bound by the Alibaba Cloud Computing (Beijing) Co., Ltd. registration agreement and has thereby agreed to resolve domain disputes brought by third parties in accordance with ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”).

On January 13, 2022, the Forum served the English language Complaint and all Annexes, including a Chinese and English language Written Notice of the Complaint, setting a deadline of February 2, 2022 by which Respondent could file a Response to the Complaint, via e-mail to all entities and persons listed on Respondent’s registration as technical, administrative, and billing contacts, and to postmaster@dao.com. Also on January 13, 2022, the Chinese and English language Written Notice of the Complaint, notifying Respondent of the e-mail addresses served and the deadline for a Response, was transmitted to Respondent via post and fax, to all entities and persons listed on Respondent’s registration as technical, administrative and billing contacts.

A timely Response was received and determined to be complete on February 1, 2022.

On February 8, 2022, an Additional Submission was filed by Complainant.

On February 14, 2022, an Additional Submission was filed by Respondent.

On February 15, 2022, a Second Supplemental Submission was filed by Complainant.

On February 16, 2022, a Second Supplemental Response was filed by Respondent.

On February 7, 2022, pursuant to Complainant’s request to have the dispute decided by a single-member Panel, the Forum appointed Fernando Triana, Esq., as Panelist.

Having reviewed the communications records, the Administrative Panel (the “Panel”) finds that the Forum has discharged its responsibility under Paragraph 2(a) of the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”) “to employ reasonably available means calculated to achieve actual notice to Respondent” through submission of Electronic and Written Notices, as defined in Rule 1 and Rule 2.

RELIEF SOUGHT

Complainant requests that the domain name be transferred from Respondent to Complainant.

Preliminary Issue: Language of Proceeding

Complainant has alleged that because Respondent is conversant and proficient in English, the proceeding should be conducted in English. The Panel has the discretion under UDRP Rule 11(a) it has the discretion to determine the appropriate language of the proceedings taking into consideration the particular circumstances of the administrative proceeding. See FilmNet Inc. v. Onetz, FA 96196 (Forum Feb. 12, 2001) (finding it appropriate to conduct the proceeding in English under Rule 11, despite Korean being designated as the required language in the registration agreement because the respondent submitted a response in English after receiving the complaint in Korean and English). Complainant contends the proceedings should be in English since Respondent has sent emails to the Forum in English, the domain name consists of English characters, and it would be an undue burden and delay for Complainant to translate documents.

Pursuant to UDRP Rule 11(a), the Panel finds that persuasive evidence that both parties are conversant and proficient in the English language. After considering the circumstance of the present case, the Panel decides that the proceeding should be in English.

PRELIMINARY ISSUE: MULTIPLE COMPLAINANTS

Paragraph 3(a) of the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”) provides that “[a]ny person or entity may initiate an administrative proceeding by submitting a complaint.” The Forum’s Supplemental Rule 1(e) defines “The Party Initiating a Complaint Concerning a Domain Name Registration” as a “single person or entity claiming to have rights in the domain name, or multiple persons or entities who have a sufficient nexus who can each claim to have rights to all domain names listed in the Complaint.”

While it appears that a single Complainant filed this proceeding, in its Complaint Complainant argues there two Complainants in this matter: Daodao Holding LLC and Daodao Group Company Limited. Complainant argues both companies have common co-owners and investors, and joint ownership of intellectual property through license. Complainant also asserts Daodao Group Company Limited is a wholly-owned subsidiary of Daodao Holding LLC.

The Panel will accept Complainant’s assertion and will treat both Complainants as a single entity.

PARTIES’ CONTENTIONS

A. Complainant

a. Complainant has common law trademark rights in the DAO mark through the establishment of secondary meaning through the continuous use of the mark in business and the promotion of the mark since January of 2011.

b. Complainant carried out a lot of publicity and exposure of the DAO mark and had it become the distinctive identifier which consumers associate with the Complainant’s e-commerce services.

c. The first Complainant is an investment company based in Delaware US while the second Complainant is a company operating E-commerce business in Hangzhou China. Both companies have common co-owners and investors, and joint ownership of intellectual property through license. The second Complainant is a wholly owned subsidiary of the first Complainant.

d. Complainant established a B2C e-commerce website for the Chinese market in Hangzhou with the domain name daodaoly.com.

e. In December 2010, the Complainant purchased the disputed domain name from Lars Simon of Germany through the domain name broker DigiPawn Inc (now renamed as Latona’s LLC).

f. In January 2011, Complainant changed the domain name of B2C e-commerce website from daodaoly.com to dao.com.

g. Complainant’s DAO e-commerce website was closed due to losses in early of 2013.

h. On February 23, 2013 the registrant was changed to Nie Zhenxiang.

i. Complainant never sold the disputed domain name to others, nor authorized others to use the disputed domain name. The disputed domain name was never expired or deleted.

j. Complainant sent demand letters to the Respondent many times in 2019 and 2020 through email and contact form provided by the Registrar, and never got reply.

B. Respondent

a. Complainant is a Delaware corporation that was incorporated on November 29, 2021, one month before filing this complaint.

b. The evidence of trademark use submitted by Complainant consists entirely of advertising, a website and photos all of which relate to Daodao Group Co., Ltd., an independent Chinese registered company that has no relationship or affiliation with the Complainant. Daodao Group was formed in 2003.

c. Daodao Group, owned the registration to the domain name from 2010 until 2011, at which time Daodao Group transferred the domain name registration to Respondent.

d. Daodao Group acquired the domain name in December 2010 from Lars Simon in Germany.

e. Daodao Group has never had, in 2010 or since then, any sort of business relationship or affiliation with Complainant.

f. Complainant’s allegations of common law rights to the mark DAO are unsubstantiated.

g. Daodao Group has had a business relationship with the Respondent related to the Daodao Group’s business activities and, in 2011, Daodao Group transferred the domain name to her in connection with that business relationship. Respondent’s ownership of the domain name is in good faith.

h. Neither the Respondent nor Mr. Fang has any knowledge of attempts by Complainant to contact the Respondent or DaoDao Group.

C. First Additional Submissions

a. Complainant

i. The first Complainant and the second Complainant has very close relationship. The owner of the first Complainant, Fang Weihua, is majority shareholder with 90% shares of the second Complainant.

ii. The second Complainant’s E-commerce website was stilling running in 2011.

iii. There is no business relationship between the second Complainant and Respondent.

iv. The Respondent is a stage prop used by the thief who stole the disputed domain name to cover up his true identity. The Respondent attempts to mislead the panel by making false statements and forging a declaration of the owner of two Complainants.

b. Respondent

i. As can be seen by the notarized declaration of Weihua Fang attached as Exhibit G, the declaration provided by Complainant is not a valid declaration and appears to be a forgery.

ii. Contrary to the Complainant’s allegation that Respondent is a “stage prop” and engaged in theft, Respondent is an actual person who holds the domain name under proper arrangements and in good faith.

iii. Complainant appears to be abusing the domain name dispute resolution system by submitting false evidence in an attempt to hijack the domain name.

D. Second Additional Submissions

a. Complainant

i. Respondent claimed that the Respondent’s notarization of a statement was performed by a governmental official and the notarization document was delivered from the Ministry of Justice. The fact is that China’s notary institution or office is a non-profit organization supervised by justice department of local government. The staff working in the notary institution or office is not a governmental official, and the notarization document was issued and delivered by the notary institution or office instead of the Ministry of Justice.

ii. Respondent used the same trick of declaration again and again to prove the right in the disputed domain name.

b. Respondent

i. The notarization is conclusive evidence that the signatory to the statement is Weihua Fang.

ii. Complainant has not and cannot verify the claims that it has made as to who it is and what rights it has.

iii. Complainant’s request for transfer should be denied and it should be held to have engaged in reverse domain name hijacking.

E. Third Additional Submissions

a. Complainant

i. Respondent claimed her right and “good faith” in the disputed domain name through five declarations, which not only have no corresponding evidence to corroborate them, but also obviously do not conform to the most basic common sense.

ii. The Respondent purchased signature notarization service twice in a week for “Weihua Fang” at Hangzhou Internet Notary Public Office(www.netnotary.org.cn).

iii. After Meng Xiaoyang, a former employee of the second Complainant, stole the disputed domain name through unauthorized transfer, he used his mother Nie Zhenxiang, an elderly lady and not well enough, as a live stage prop to cover up his true identity.

iv. The important reason to register the first Complainant, Daodao Holding, is that US law protect unregistered common right trademark and US is the country of .com registry. Due to Pandemic, the processing of the company registration documents was postponed, and they were not submitted to the secretary of state of the state of Delaware until November 2021. Nevertheless, the company name was already reserved in advance. In the past two years, the Complainant emailed the Respondent with three different sender names, Mr. Fang, Daodao Group or Daodao Holding, to require the return of the disputed domain name.

v. The second Complainant, Daodao Group, already stopped operation and fired all employees in Hangzhou, China, but owned a lot of money to several creditors. It sold all the fixed assets to pay off its debts. At present, only the trademark that the creditor doesn’t want, and the stolen domain name are left, and the owner already gave those to the first Complainant, Daodao Holding.

b. Respondent

i. Respondent has provided verifiable evidence that:

– Complainant is a Delaware limited liability company created days before filing the complaint.

– Complainant is not Daodao Group Company Limited and Complainant does not have, and never had, any rights to the trademark “DAO” or the domain name dao.com. In fact, the evidence of trademark and domain name use submitted by Complainant is falsely associated with Complainant.

– The declarations filed on behalf of Respondent were in fact filed by Weihua Fang, who is the Chairman of Daodao Group Company Liimited.

– The declaration filed by Complainant and purportedly signed by Weihua Fang is not verified and cannot be verified.

ii. Complainant cannot prove that it has or ever had any rights in the trademark “DAO” or the domain name dao.com. Complainant is engaging in reverse domain name hijacking.

FINDINGS

1. Complainant does not prove to have common law rights over the trademark dao or dao.com through the establishment of secondary meaning.

2. Complainant does not provide any evidence of lack of rights or legitimate interests of Respondent.

3. Complainant does not prove Respondent’s bad faith.

DISCUSSION

Paragraph 15(a) of the Rules instructs this Panel to “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.”

Paragraph 4(a) of the Policy requires that Complainant must prove each of the following three elements to obtain an order that a domain name should be cancelled or transferred:

(1) the domain name registered by Respondent is identical or confusingly similar to a trademark or service mark in which Complainant has rights; and

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

(3) the domain name has been registered and is being used in bad faith.

Identical and/or Confusingly Similar

Complainant contends to be the owner of the trademark DAO through the establishment of secondary meaning due to the continuous use of the trademark in business since January of 2011.

Existence of a trademark or service mark in which the Complainant has rights

Firstly, it is important to point out that Paragraph 4(a) of the Policy requires the existence of a trademark or a service mark. The industrial property rights are only acquired by registration before the competent office in a number of many jurisdictions of the world.

The worldwide-accepted definition of a trademark, involves the concept of distinctive force as the most relevant element. Said force gives the sign the capability to identify the products or services of its owner and differentiate them from the product and services of other participants in the market.

When a sign is registered as a mark, it is surrounded by a presumption of sufficient distinctive force, and the owner is granted with an exclusive right over the mark, which entitles him to prevent any third party from using the registered sign or any other sign confusingly similar to it.

However, the UDRP does not discriminate between registered and unregistered trademarks[i] and thus, it is well established that a Complainant does not require owning a registered trademark to invoke the Policy. It is sufficient in certain common law jurisdictions, such as the United States of America, that Complainant has rights over an unregistered trademark as to deserve legal protection, based solely on its use in commerce.

In this case, Complainant alleges to have common law rights over the trademark DAO.

To prove its common law rights, Complainant files:

1. Exhibit 1: Homepage of DAO website

2. Exhibit 2: About us page of DAO website

3. Exhibit 3: Website logo

4. Exhibit 4: Publicity and display

5. Exhibit 5: Billboard on office building

6. Exhibit 6: Sign of offline service stores

7. Exhibit 7: Commodity distribution vehicles

Concerning the evidence filed by Complainant, the Panel does not find a relation between the photos or screenshots to Complainant. The Panel notes that the alleged homepage, does not include the domain name. Respondent questioned the veracity of the evidence and Complainant never disagree with said questioning.

Thus, the information provided as evidence is incomplete and unverifiable.

Moreover, concerning common law rights, WIPO Jurisprudential Overview 3.0 requires the following:

“To establish unregistered or common law trademark rights for purposes of the UDRP, the complainant must show that its mark has become a distinctive identifier which consumers associate with the complainant’s goods and/or services.

Relevant evidence demonstrating such acquired distinctiveness (also referred to as secondary meaning) includes a range of factors such as (i) the duration and nature of use of the mark, (ii) the amount of sales under the mark, (iii) the nature and extent of advertising using the mark, (iv) the degree of actual public (e.g., consumer, industry, media) recognition, and (v) consumer surveys”.

In the current case, Complainant did not provide any evidence concerning the duration and nature of use of the mark. The mere mention of the dates of the creation, is not enough to prove this requirement.

There is no document supporting or even a mention concerning the amount of sales under the trademark.

The evidence filed does not allow the Panel to gather the nature and extent of advertising using the trademark. Some photographs of a truck and a billboard as well as a screenshot, are not enough to conclude the extent of the advertising.

Complainant never even mentions the consumers. Hence, there is not evidence of the degree of actual public.

Finally, there are not consumer surveys, or any other relevant document or evidence related to the use of the trademark.

Consequently, neither the use nor the secondary meaning of the expression DAO was proven by Complainant.

Therefore, the Panel concludes that Complainant has not demonstrated rights in the trademark DAO for purposes of Paragraph 4(a)(i) of the Policy.

Registration and Use in Bad Faith

According to paragraph 4(b) of the Policy, the following circumstances, in particular but without limitation, if found by the Panel to be present, shall be evidence of the registration and use of a domain name in bad faith:

(1) Circumstances indicating that Respondent has registered or has acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring 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 Respondent’s documented out-of-pocket costs directly related to the domain name; or

(2) Respondent has registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that Respondent has engaged in a pattern of such conduct; or

(3) Respondent has registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(4) By using the domain name, Respondent has intentionally attempted to attract, for commercial gain, Internet users to his/her website or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of his/her website or location or of a product or service on his/her website or location.

The Panel did not find any evidence supporting the registration or use in bad faith. Complainant argued to have sent cease and desist letters to Respondent, nonetheless, there is no evidence of such attempt in the files.

In fact, most of Complainant’s arguments are unsubstantiated. While Respondent fought Complainant’s contentions with notarized documents or legal documents, Complainant merely attacked the notarization with arguments without referring to the content of the document or proving its assertions by any other mean.

Given the above, there is no evidence of circumstances indicating that Respondent registered or acquired the domain name for the purpose of transferring it to Complainant; or that Respondent registered the domain name in order to prevent the owner of the trademark from reflecting the trademark in the domain name; or that Respondent registered the domain name to disrupt a competitor’s business; or that Respondent intentionally attempted to attract Internet users by creating a likelihood of confusion with Complainant’s trademark.

Therefore, the Panel concludes that Complainant has not demonstrated evidence of the registration and use of a domain name in bad faith of Paragraph 4(a)(iii) of the Policy.

Rights or Legitimate Interests

Where complainant fails to establish an element necessary for a finding of abusive domain name registration and use it is unnecessary to proceed further in analyzing the remaining elements of the Policy.

Here, the Panel has found that Complainant does not have rights over the expression DAO and that Complainant failed to prove that Respondent acted in bad faith. See Creative Curb v. Edgetec Int’l Pty. Ltd., FA 116765 (Forum Sept. 20, 2002) (finding that because the complainant must prove all three elements under the Policy, the complainant’s failure to prove one of the elements makes further inquiry into the remaining element unnecessary); also Netservice, Inc. v. Ryan Howard / Howard Technologies, Ltd., FA1721637 (Forum Apr. 17, 2017).

DECISION

Having not established all three elements required under the ICANN Policy, the Panel concludes that relief shall be DENIED.

Accordingly, it is Ordered that the disputed domain name REMAIN WITH Respondent.

Fernando Triana, Esq., Panelist

Dated: February 22, 2022

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