Ethereum trademark leads to cryptocurrency domain loss via UDRP

If you’re investing in crypto-domains, think again when registering “Ethereum” keywords: it’s a trademark.

Swiss company Stiftung Ethereum (Foundation Ethereum) owns a registered trademark with the USPTO in the US for ETHEREUM, and for the following classes:

IC 009. US 021 023 026 036 038. G & S: Computer software platforms for developing, building, and operating distributed applications. FIRST USE: 20131123. FIRST USE IN COMMERCE: 20141205

In other words, any use of this trademarked term in domains would be considered a potential UDRP, as in the case of the domain ProjectEthereum.com.

The domain’s registrant is operating a pyramid scheme, according to the UDRP, taking advantage of the cryptocurrency’s popularity and fame.

There was no response from the Respondent, and in the end, John J. Upchurch, Panelist, ordered the domain ProjectEthereum.com to be transferred to the Complainant, Stiftung Ethereum.

Full details on this UDRP decision follow.

Stiftung Ethereum (Foundation Ethereum) v. DOMAIN PRIVACY SERVICE FBO REGISTRANT

Claim Number: FA1708001746664

PARTIES

Complainant is Stiftung Ethereum (Foundation Ethereum) (“Complainant”), represented by Colleen M. Raimond of Nixon Peabody LLP, New York, USA. Respondent is DOMAIN PRIVACY SERVICE FBO REGISTRANT

(“Respondent”), Utah, USA.

REGISTRAR AND DISPUTED DOMAIN NAME

The domain name at issue is <projectethereum.com>, registered with FastDomain Inc.

PANEL

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

John J. Upchurch as Panelist.

PROCEDURAL HISTORY

Complainant submitted a Complaint to the Forum electronically on August 29, 2017; the Forum received payment on August 29, 2017.

On August 29, 2017, FastDomain Inc. confirmed by e-mail to the Forum that the <projectethereum.com> domain name is registered with FastDomain Inc. and that Respondent is the current registrant of the name. FastDomain Inc. has verified that Respondent is bound by the FastDomain Inc. 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 August 30, 2017, the Forum served the Complaint and all Annexes, including a Written Notice of the Complaint, setting a deadline of September 19, 2017 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@projectethereum.com. Also on August 30, 2017, the 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.

Having received no response from Respondent, the Forum transmitted to the parties a Notification of Respondent Default.

On September 21, 2017, pursuant to Complainant’s request to have the dispute decided by a single-member Panel, the Forum appointed John J. Upchurch 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. Therefore, the Panel may issue its decision based on the documents submitted and in accordance with the ICANN Policy, ICANN Rules, the Forum’s Supplemental Rules and any rules and principles of law that the Panel deems applicable, without the benefit of any response from Respondent.

RELIEF SOUGHT

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

PARTIES’ CONTENTIONS

A. Complainant:

1. Complainant, Stiftung Ethereum, uses the ETHEREUM mark to provide and market its products and services. Complainant registered the ETHEREUM mark with the United State Patent and Trademark Office

(“USPTO”) (e.g., Reg. No. 5,110,579, registered on Dec. 27, 2016). See Compl. at Attached Ex. H. Respondent’s <projectethereum.com> is identical or confusingly similar to Complainant’s ETHEREUM mark as the disputed domain name includes the mark in its entirety, adding the descriptive term “project” and the generic top-level domain (“gTLD”) “.com.”

2. Respondent does not have rights or legitimate interests in the disputed domain name. Respondent is not commonly known by the disputed domain name. Complainant has not granted Respondent permission or license to use the ETHEREUM mark for any purpose. Respondent is not using the disputed domain name to make a bona fide offering of goods or services, or a legitimate non-commercial or fair use. Respondent’s <projectethereum.com> resolves to a website that operates an illegal pyramid scheme. See Compl., at Attached Ex. J.

3. Respondent registered and is using the disputed domain name in bad faith. Respondent is using the <projectethereum.com> domain name to disrupt Complainant’s business by redirecting internet users to a website hosting illegal activity. Respondent must have had actual or constructive notice of Complainant’s mark.

A. Respondent:

1. Respondent failed to submit a Response in this proceeding.

FINDINGS

1. Respondent’s <projectethereum.com> domain name is confusingly similar to Complainant’s ETHEREUM mark.

2. Respondent does not have any rights or legitimate interests in the <projectethereum.com> domain name.

3. Respondent registered or used the <projectethereum.com> domain name in 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.

In view of Respondent’s failure to submit a response, the Panel shall decide this administrative proceeding on the basis of Complainant’s undisputed representations pursuant to paragraphs 5(f), 14(a) and 15(a) of the Rules and draw such inferences it considers appropriate pursuant to paragraph 14(b) of the Rules. The Panel is entitled to accept all reasonable allegations and inferences set forth in the Complaint as true unless the evidence is clearly contradictory. See Vertical Solutions Mgmt., Inc. v. webnet-marketing, inc., FA 95095 (Forum July 31, 2000) (holding that the respondent’s failure to respond allows all reasonable inferences of fact in the allegations of the complaint to be deemed true); see also Talk City, Inc. v. Robertson, D2000-0009 (WIPO Feb. 29, 2000)

(“In the absence of a response, it is appropriate to accept as true all allegations of the Complaint.”).

Identical and/or Confusingly Similar

Complainant claims rights in the ETHEREUM mark based upon its registration with the USPTO (Reg. No. 5,110,579, registered Dec. 27, 2016). See Compl. at Attached Ex. H. Registration with USPTO is sufficient to establish rights in a mark pursuant to Policy ¶ 4(a)(i). See Haas Automation, Inc. v. Jim Fraser, FA 1627211 (Forum Aug. 4, 2015) (finding that Complainant’s USPTO registrations for the HAAS mark sufficiently demonstrate its rights in the mark under Policy ¶ 4(a)(i)). Therefore, the Panel finds that Complainant has rights in the ETHEREUM mark per Policy ¶ 4(a)(i).

Complainant asserts that <projectethereum.com> is confusingly similar to the ETHEREUM mark as it contains the mark in its entirety and adds the descriptive term “project” along with the gTLD “.com.” Panels have consistently found that slight differences between domain names and registered marks, such as the addition of words that describe the goods or services in connection with the mark or removal of a space, are irrelevant and do not distinguish the domain name from the mark incorporated therein. See Traditional Medicinals, Inc. v. Flippa Chick, FA1006001328702 (Forum July 15, 2010) (“Respondent’s disputed domain name contains Complainant’s SMOOTH MOVE mark in its entirety after removing the space separating the terms of the mark, adds the descriptive terms ‘herbal tea’ and adds the generic top-level domain (‘gTLD’) ‘.com.’ The Panel finds that the addition of descriptive terms creates a confusing similarity between the disputed domain name and Complainant’s mark.”). Similarly, the addition of a gTLD is irrelevant in determining whether the disputed domain name is confusingly similar. See Trip Network Inc. v. Alviera, FA 914943 (Forum Mar. 27, 2007) (concluding that the affixation of a gTLD to a domain name is irrelevant to a Policy ¶ 4(a)(i) analysis). The Panel agrees with Complainant and find that the <projectethereum.com> does not contain changes that would sufficiently distinguish it from the ETHEREUM mark under Policy ¶ 4(a)(i).

Rights or Legitimate Interests

Complainant must first make a prima facie case that Respondent lacks rights and legitimate interests in the disputed domain name under Policy ¶ 4(a)(ii), and then the burden shifts to Respondent to show it does have rights or legitimate interests. See Hanna-Barbera Prods., Inc. v. Entm’t Commentaries, FA 741828 (Forum Aug. 18, 2006) (holding that the complainant must first make a prima facie case that the respondent lacks rights and legitimate interests in the disputed domain name under UDRP ¶ 4(a)(ii) before the burden shifts to the respondent to show that it does have rights or legitimate interests in a domain name); see also AOL LLC v. Gerberg, FA 780200 (Forum Sept. 25, 2006)

(“Complainant must first make a prima facie showing that Respondent does not have rights or legitimate interest in the subject domain names, which burden is light. If Complainant satisfies its burden, then the burden shifts to Respondent to show that it does have rights or legitimate interests in the subject domain names.”).

Complainant argues that Respondent has no rights or legitimate interests in <projectethereum.com> as Respondent is not commonly known by the disputed domain name, nor has Complainant authorized Respondent to use the ETHEREUM mark in any way. Where a response is lacking, WHOIS information can support a finding that a respondent is not commonly known by the disputed domain name. See Alaska Air Group, Inc. and its subsidiary, Alaska Airlines v. Song Bin, FA1408001574905 (Forum Sept. 17, 2014) (holding that the respondent was not commonly known by the disputed domain name as demonstrated by the WHOIS information and based on the fact that the complainant had not licensed or authorized the respondent to use its ALASKA AIRLINES mark.). The WHOIS information of record identifies Respondent as “Domain privacy service fbo registrant.” Additionally, lack of evidence in the record to indicate that the respondent had been authorized to register a domain name using a complainant’s mark supports a finding that Respondent does not have rights or legitimate interests in the disputed domain name. See Navistar International Corporation v. N Rahmany, FA1505001620789 (Forum June 8, 2015) (finding that the respondent was not commonly known by the disputed domain name where the complainant had never authorized the respondent to incorporate its NAVISTAR mark in any domain name registration). The Panel therefore finds under Policy ¶ 4(c)(ii) that Respondent has not been commonly known by the disputed domain name.

Complainant further argues Respondent’s lack of rights or legitimate interests in the disputed domain name is evinced by their failure to use the name for bona fide offering of goods or services or legitimate noncommercial or fair use. Complainant contends that Respondent’s <projectethereum.com> is attempting to attract, for commercial gain, Internet users to its website, by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship, affiliation, and endorsement of the website. Panels have found that a domain name confusingly similar to Complainant’s mark in attempt to mislead visitors to thinking the website belongs to Complainant for commercial gain is not a legitimate noncommercial or fair use of the domain name or a bona fide offering of goods and services. See Ripple Labs Inc. v. NGYEN NGOC PHUONG THAO, FA 1741737 (Forum Aug. 21, 2017) (“Respondent uses the [disputed] domain name to divert Internet users to Respondent’s website… confusing them into believing that some sort of affiliation exists between it and Complainant… [which] is neither a bona fide offering of goods or services under Policy ¶ 4(c)(i) nor a legitimate noncommercial or fair use under Policy ¶ 4(c)(iii).”). Respondent is using the disputed domain name to generally confuse Internet users that Respondent’s website and related services are authorized by, endorsed by, sponsored by, or otherwise affiliated with Complainant. Therefore, the Panel agrees that such a use is not in connection with a bona fide offering of goods or services.

In addition, Complainant argues that Respondent is using the <projectethereum.com> for an illegal pyramid scheme. Panels have consistently found that an illegal use of a disputed domain name is not a legitimate noncommercial or fair use of the domain name or a bona fide offering of goods and services. See Eli Lilly and Company v. Aaron Brown et al., FA1703001719909 (Forum 2017) (“Panels have agreed that the marketing of illegal products evinces no rights or legitimate interests.”). Here, Respondent’s website shows that people give money to Respondent and then recruit others to do the same. See Compl. at Attached Ex. J. It appears that Respondent is exploiting the goodwill and consumer trust around Complainant’s ETHEREUM mark to aid in its illegal pyramid scheme.

Registration and Use in Bad Faith

Complainant argues that Respondent’s registration and use of the <projectethereum.com> domain name was in bad faith. Complainant alleges that Respondent use of the disputed domain name to make money off of Ethereum’s famous mark by duping consumers into paying extra money for Complainant’s cryptocurrency disrupts Complainant’s business. Using a confusingly similar domain name to disrupt complainant’s business for commercial gain is evidence of bad faith under Policy ¶ 4(b)(iv). See Paul Frank Indus. LLC v. LiYong Yong / Li yong yong, FA1401001538923 (Forum 2014) (holding that when a domain is registered incorporating another’s mark to make the sale of counterfeit goods or services more lucrative, the domain is registered “to take commercial advantage of Internet users mistakes, demonstrating bad faith under Policy ¶ 4(b)(iv).”) Therefore, the Panel finds the use of bad faith under Policy ¶ 4(b)(iv).

Complainant argues that Respondent failed to respond to a cease and desist letter. Panels have found that failing to respond to a cease and desist letter constitutes bad faith. See Seiko Epson Corporation v. Ashish Sen, FA 1702054 (Forum Dec. 12, 2016) (finding that failing to respond to a cease-and-desist demand letter constitutes bad faith). Here, after learning of the <projectethereum.com> domain name, Complainant’s counsel sent a cease and desist letter to Respondent via e-mail requesting that Respondent cease all use of <projectethereum.com> and transfer the domain name to Complainant. See Compl. at Attached Ex. K. Respondent did not respond to this letter. Therefore, the Panel finds a registration and use in bad faith.

Finally, Complainant claims that Respondent had actual or constructive knowledge of Complainant’s mark. However, the Panel may disregard arguments of bad faith based on constructive notice as UDRP case precedent declines to find bad faith as a result of constructive knowledge. See The Way Int’l, Inc. v. Diamond Peters, D2003-0264 (WIPO May 29, 2003) (“As to constructive knowledge, the Panel takes the view that there is no place for such a concept under the Policy.”). The Panel agrees with Complainant, however, that Respondent had actual knowledge of Complainant’s rights in the mark prior to registering the disputed domain name and find that actual knowledge does adequately evince bad faith under Policy ¶ 4(a)(iii). See Univision Comm’cns Inc. v. Norte, FA 1000079 (Forum Aug. 16, 2007) (rejecting the respondent’s contention that it did not register the disputed domain name in bad faith since the panel found that the respondent had knowledge of the complainant’s rights in the UNIVISION mark when registering the disputed domain name). Complainant contends that Respondent must have had actual knowledge of the ETHEREUM mark and business because of the Complainant’s famous mark and global reputation and is the subject of substantial consumer recognition and goodwill. Additionally, Respondent entered a disclaimer on its website stating that “Project Ethereum is not and has never claimed to be, in any way, affiliated with the Ethereum Foundation.” See Compl. at Attached Ex. L. This shows actual knowledge because it proves Respondent is aware that its use is likely to cause consumer confusion. See Enterprise Holdings, Inc. v. Tulip Trading Company, FA1707001739558 (Forum 2017) (“where the overall circumstances of a case point to the respondent’s bad faith, the mere existence of a disclaimer cannot cure such bad faith. In such cases, panels may consider respondent’s use of a disclaimer as an admission by the respondent that users may be confused.”). The Panel agrees with Complainant and find that Respondent did have actual knowledge of Complainant’s mark, demonstrating bad faith under Policy ¶ 4(a)(iii).

DECISION

Having established all three elements required under the ICANN Policy, the Panel concludes that relief shall be GRANTED.

Accordingly, it is Ordered that the <projectethereum.com> domain name be TRANSFERRED from Respondent to Complainant.

John J. Upchurch, Panelist

Dated: October 4, 2017

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