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Got skin in the #domain game : Mike Mann wins #UDRP for Tergus.com

Catched.com

Domain investor, Mike Mann, won the UDRP brought against the domain Tergus.com.

Tergus means “skin” in Latin, and Mike’s company, Domain Market, wanted $35,000 dollars for it when Tergus Pharma inquired about it. Tergus is a dermatology-focused pharmaceutical company.

Tergus Pharma called the asking price “exorbitant” and filed a UDRP at the WIPO.

The domain transfer was denied.

Despite a late response by Mike Mann, the sole panelist delivered a decision favoring the Respondent, and ordered the domain Tergus.com to remain with the Respondent.

Mike Mann sells more than 1,000 domains per year, according to this case. Full details follow:

Tergus Pharma, LLC v. Domain Administrator, DomainMarket.com
Case No. D2019-1787

1. The Parties

The Complainant is Tergus Pharma, LLC, United States of America (“United States”), represented by Gearhart Law LLC, United States.

The Respondent is Domain Administrator, DomainMarket.com, United States, represented by Brian Leventhal, United States.

2. The Domain Name and Registrar

The disputed domain name <tergus.com> (the “Domain Name”) is registered with eNom, Inc. (the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on July 25, 2019. On July 25, 2019, the Center transmitted by email to the Registrar a request for registrar verification in connection with the Domain Name. On July 25, 2019, the Registrar transmitted by email to the Center its verification response disclosing registrant and contact information for the Domain Name which differed from the named Respondent and contact information in the Complaint. The Center sent an email communication to the Complainant on July 29, 2019, providing the registrant and contact information disclosed by the Registrar, and inviting the Complainant to submit an amendment to the Complaint. The Complainant filed an amendment to the Complaint on July 29, 2019.

The Center verified that the Complaint together with the amendment to the 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 (the “Supplemental Rules”).

In accordance with the Rules, paragraphs 2 and 4, the Center formally notified the Respondent of the Complaint, and the proceedings commenced on August 9, 2019. In accordance with the Rules, paragraph 5, the due date for Response was August 29, 2019. The Respondent did not submit a timely response. Accordingly, the Center notified the Respondent’s default on September 4, 2019. The Respondent then submitted a Response on September 13, 2019.

The Center appointed W. Scott Blackmer as the sole panelist in this matter on September 12, 2019. 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

The Complainant is a dermatology-focused pharmaceutical firm organized as a limited liability company under the laws of the State of North Carolina and headquartered in Durham, North Carolina, United States. (“Tergus” is Latin for “skin”, as the Complainant explains on its social media pages). The online database of the North Carolina Secretary of State shows that the Complainant was formed as a company in March 2012, and the United States Patent and Trademark Office (“USPTO”) database shows that the Complainant filed an application soon after, on May 17, 2012, to register TERGUS PHARMA as a standard character trademark, on an “intent to use” basis. The Complainant holds United States Trademark Registration Number 4463443 (registered January 7, 2014) for TERGUS PHARMA, claiming first use in commerce on August 31, 2012.

The Complainant states that it has been using the domain name <terguspharma.com> for its website since April 2012.

According to the Registrar, the Domain Name was created on October 31, 2004 and is currently registered in the name of the “Domain Administrator” of DomainMarket.com, listing a postal address in Potomac, Maryland, United States. The online database operated by the Maryland Department of Assessments and Taxation shows that DomainMarket, LLC is registered as a Maryland limited liability company formed on August 27, 2007, so it appears that the Respondent did not exist at least as a legal entity at the time the Domain Name was created. Early screenshots available through the Internet Archive’s Wayback Machine indicate that the Domain Name resolved to a pay-per-click (“PPC”) advertising portal and then was offered for sale for several years through a “premium domain name” reseller based in Bangalore, India called Metafusion.com.

Archived screenshots and the Declaration of DomainMarket, LLC owner Michael Mann indicate that the Respondent acquired the Domain Name in December 2010 and redirected it thereafter to the Respondent’s website at “www.domainmarket.com” or to another affiliated and linked website such as “www.mikemann.com”, all of which resell “premium domain names”. In some screenshots, a specific sales price is mentioned, such as USD 50,000 in July 2013, while others simply solicit offers to purchase the Domain Name. In recent years, more content has been added to the web page describing the services offered by the Respondent and the advantages of purchasing a “premium domain name”.

The Respondent’s website in its current form indicates that the Respondent is a reseller of “premium domain names”, advertising that “[t]housands of entrepreneurs, creative directors, and web developers found the perfect domain through our carefully curated list of premium domains”. Here is how the website characterizes “premium” domain names: “Premium domain names are short, memorable and indispensable in today’s competitive online business world.”

The Respondent in this proceeding has a large portfolio of domain names and has appeared in a number of other WIPO UDRP proceedings from 2017 to the present, some of them resulting in transfers of domain names that are clearly not generic. The panel in Building and Social Housing Foundation v. Domain Administrator, DomainMarket.com, WIPO Case No. D2017-0352, denied the complaint in that instance concerning the domain name <worldhabitat.org> but described the Respondent’s activities as follows:

“The Respondent is in the business of offering for sale domain names. There is evidence that it, or its associated entity, Domain Asset Holdings Inc., own many other domain names. Many of these appear to be or involve descriptive terms such as <dictionary.org> and <criminology.org>. Others, however, may be, or be similar to, registered trademarks, such as <claridge.org>.”

In Arne Jacobsen Design I/S v. Domain Administrator, DomainMarket.com, WIPO Case No. D2017-0552, the complainant succeeded in obtaining the transfer of the domain name <arnejacobsen.com>. This was also the result in Supermac’s (Holdings) Limited v. Domain Administrator, DomainMarket.com, WIPO Case No. D2018-0540 (<supermacs.com>).

On the other hand, the Respondent has prevailed in other proceedings involving a later-acquired trademark (see Shesafe Pty Ltd v. DomainMarket.com, WIPO Case No. D2017-1330) or more “generic” domain names. An example of the latter is Ground Up, Inc. v. DomainMarket.com, WIPO Case No. D2018-1944, where the disputed domain name was <groundup.com>, which the panel found to be confusingly similar to the complainant’s trademark but also a commonly used English phrase. The panel found insufficient evidence to support a finding that the Respondent was likely aware of the trademark and selected the domain name in bad faith for its trademark value as opposed to its ordinary meanings. The Respondent reported in that proceeding that it sells more than 1,000 domain names annually through the Respondent’s website, so it is hardly surprising that some of these result in disputed claims of trademark exploitation.

In the present case, as in others in which the Respondent has been involved, the Domain Name resolves to a page on the Respondent’s website headed “DomainMarket.com” and advertising the Domain Name for sale. The page currently solicits an offer rather than advertising a sales price. The page also includes general information about the advantages of “premium domains” and links to resources and services offered by the Respondent, including appraisals, search engine optimization, and secure sales transactions. A section toward the end of the page under the heading “Why Tergus.com?” seems to be filled with standard language for domain names offered for sale on the Respondent’s website and simply makes generalized assertions such as, “This domain is likely to hold and increase its value over time. […] Tergus.com is a category killer domain that may be commonly used around the world. […] Tergus.com is relatively easy to spell / highly memorable”.

What is unique on the Respondent’s page concerning the Domain Name is a “Product and Service Directory” at the bottom of the page that lists the names and locations of three of the Complainant’s entities, along with the telephone number for the Complainant’s testing laboratory in Durham, North Carolina, and the names of some of the Complainant’s officers. These are apparently taken from public filings available online, with no explanation given regarding their relevance to prospective purchasers of the Domain Name. This information did not appear in early screenshots of the website associated with the Domain Name.

The Complainant inquired on April 24, 2012 about purchasing the Domain Name but considered the broker’s asking price of USD 35,000 “exorbitant”. The Complainant had the same reaction when it inquired again in February 2018 and the Respondent declined the Complainant’s offer of USD 10,001. The email exchanges are attached to the Complaint. The Complainant did not assert trademark rights in its emails on either occasion.

5. Parties’ Contentions

A. Complainant

The Complainant asserts that the Domain Name is confusingly similar to its registered TERGUS PHARMA trademark. The Complainant argues that the Respondent has no rights or legitimate interests in the Domain Name : “The Respondent’s only interest in the Disputed Domain is the value ascribed to it by the Complainant’s marks.”

The Complainant contends that there has never been any “commercial use” of the Domain Name, as the Respondent has only offered it for sale, attempting to extort an “exorbitant” price from the Complainant, the trademark holder, depriving it of a corresponding domain name, and presumably holding out the threat of misdirecting Internet users in the future for commercial gain or causing Internet users to believe the Complainant is no longer an active company because the Domain Name is on the market. To establish bad faith in both the registration and in the subsequent use of the Domain Name, the Complainant appears to rely on the Respondent’s renewal of the Domain Name registration as recently as October 19, 2018, after the Complainant twice contacted the Respondent about purchasing the Domain Name.

B. Respondent

The Respondent submitted a Response more than two weeks after the due date and after notice of default. This submission was not accompanied by an explanation for the late filing or a petition for leave to file. Accordingly, the Response will not be taken into consideration in this Decision.

However, the Declaration of Michael Mann, the Respondent’s owner, which accompanied the Response, will be considered to the extent that it acknowledges and corroborates details concerning the Respondent’s acquisition of the Domain Name which are otherwise indicated in the Complaint or by screenshots available from the Internet Archive. This limited use of the Declaration is consistent with facts already available to the Complainant and creates no prejudice to either of the Parties, or delay.

6. Discussion and Findings

Paragraph 4(a) of the Policy provides that in order to divest a respondent of a domain name, a complainant must demonstrate each of the following:

(i) the domain name is identical or confusingly similar to a trademark or 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 domain name has been registered and is being used in bad faith.

Under paragraph 15(a) of the Rules, “A Panel shall decide a complaint on the basis of the statements and documents submitted and in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable”.

A. Identical or Confusingly Similar

The first element of a UDRP complaint “functions primarily as a standing requirement” and entails “a straightforward comparison between the complainant’s trademark and the domain name”. See WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Third Edition (“WIPO Overview 3.0”), section 1.7.

The Domain Name incorporates the distinctive portion of the Complainant’s TERGUS PHARMA mark, “tergus”, in its entirety; indeed, the trademark registration disclaims exclusive rights to the word “pharma”. As in most cases, the generic Top-Level Domain (“gTLD”) “.com” is disregarded. Id., section 1.7.

The Panel finds, therefore, that the Complainant has established the first element of the Complaint.

B. Rights or Legitimate Interests

Paragraph 4(c) of the Policy gives non-exclusive examples of instances in which the Respondents may establish rights or legitimate interests in the Domain Name, by demonstrating any of the following:

(i) before any notice to it of the dispute, the Respondent’s use of, or demonstrable preparations to use, the Domain Name or a name corresponding to the Domain Name in connection with a bona fide offering of goods or services; or

(ii) that the Respondent has been commonly known by the Domain Name, even if it has acquired no trademark or service mark rights; or

(iii) the Respondent is making a legitimate noncommercial or fair use of the Domain Name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.

Since a respondent in a UDRP proceeding is in the best position to assert rights or legitimate interests in a domain name, it is well established that after a complainant makes a prima facie case, the burden of production on this element shifts to the respondent to come forward with relevant evidence of its rights or legitimate interests in the domain name. See WIPO Overview 3.0, section 2.1.

Here, the Respondent failed to submit a timely Response, but the Complainant also arguably failed to make even a prima facie case, because the record indicates that neither the Complainant nor its mark were in existence when the Respondent acquired the Domain Name, and offered it for sale in the course of its domain resale business. In such circumstances, there can be no logical presumption that the Domain Name had value, as the Complainant contends, only to target its mark – a mark that did not yet exist. The Domain Name had potential “generic value” for a purchaser simply looking for a short string to use for a fanciful name. At the same time, the Respondent’s claim on the related website that the Domain Name is a “category killer” is untenable in that it is not clear to which category the Respondent would purport to refer.

While the Panel is inclined not to find rights or legitimate interests in the Respondent, in any event, given the Panel’s disposition below of the third Policy element, bad faith, it is unnecessary to decide whether the Respondent could have established legitimate interests in the Domain Name in this instance.

C. Registered and Used in Bad Faith

The Policy, paragraph 4(b), furnishes a non-exhaustive list of circumstances that “shall be evidence of the registration and use of a domain name in bad faith”, including the following suggested by the Complainant (in which “you” refers to the registrant of the domain name):

“(i) circumstances indicating that you have registered or you have 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 your documented out-of-pocket costs directly related to the domain name; or

(ii) you have 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 you have engaged in a pattern of such conduct; or

(iv) by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your web site 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 your web site or location or of a product or service on your web site or location.”

The Complainant’s invocation of these examples of bad faith does not withstand scrutiny, largely because the timing is wrong. The Respondent acquired the Domain Name, in December 2010 and started trying to sell it as part of its high-volume “premium domain name” resale business. The Complainant did not come into existence until 2012 and, by its own account, started using the TERGUS PHARMA mark in August 2012, obtaining a trademark registration in 2014. Thus, the Respondent could not have acquired the Domain Name in contemplation of selling it to the Complainant for a price in excess of out-of-pocket costs, or depriving the Complainant of a corresponding domain name, or trading on the Complainant’s mark.

There are cases where panels have found bad faith based on insider knowledge or advance publicity of a mark not yet in use, but there is no such evidence in the current proceeding. Absent such unusual circumstances, it is well accepted that bad faith cannot be established at the time of the registration (or acquisition) of a domain name before trademark rights exist. See WIPO Overview 3.0, section 3.8. Moreover, the clear consensus view of WIPO UDRP panels is that the mere renewal of the domain name registration is not the relevant point in time to assess if there was bad faith in the “registration” of the domain name for purposes of the Policy, paragraph 4(a)(iii). See id., section 3.9.

Of course, now that the Complainant has relevant trademark rights, the Domain Name may not be safely used by any other party in all the ways that it could be in 2010 when the Respondent acquired it, and this could affect its value. The Panel notes that at the time of this Decision, the Respondent, for whatever reasons, mentions the Complainant on the web page advertising the Domain Name on the Respondent’s website. Far from enhancing the value of the Domain Name, this may serve to warn a prudent bidder that it could be buying a lawsuit or a UDRP action.

The Panel concludes that the Complainant fails to establish the third element of the Complainant, bad faith.

D. Reverse Domain Name Hijacking

Given that the Respondent’s website references the Complainant, it is not unreasonable that the Complainant would have questioned the Respondent’s bona fide.

Accordingly, the Panel declines a finding of Reverse Domain Name Hijacking.

7. Decision

For the foregoing reasons, the Complaint is denied.

W. Scott Blackmer
Sole Panelist
Date: September 24, 2019

 


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