LALA.com UDRP ends with a Reverse Domain Name Hijacking finding for Apple

The domain LALA.com was challenged via the UDRP process, and Apple was on the receiving end.

Registered in 1996, LALA.com belonged to La La Media, a company and service acquired by Apple. In recent years, it was only being used as a mail server, with no web presence, as Apple shut down the La La service in 2010.

According to the UDRP, filed by Comercializadora de Lacteos y Derivados, S.A. de C.V. of Durango, Mexico:

“The Complainant considers the Disputed Domain Name to be identical to trademarks in which it claims to have rights. The Complainant claims to have used LALA as a trademark before the registration of the Disputed Domain Name, since as early as 1987. The Complainant further claims that Respondent has no rights or legitimate interests in respect of the Disputed Domain Name. According to the Complainant, the Respondent has not used the Disputed Domain Name in connection with a legitimate use. In addition, the Complainant claims that the Disputed Domain Name was registered and is being used in bad faith. The Complainant considers its LALA mark to be well-known and that the Respondent has registered and used the Disputed Domain Name with the bad faith intent to defraud the Complainant’s customers. Finally, the Complainant submits that the Respondent’s passive holding of the Disputed Domain Name constitutes sufficient evidence of its bad faith use and registration.”

A three member panel at the WIPO denied the domain’s transfer, and found that the Complainant has abused the administrative proceeding and engaged in reverse domain name hijacking.

Full details of this case follow:

WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Comercializadora de Lacteos y Derivados, S.A. de C.V. v. Apple Inc.
Case No. D2017-1351

1. The Parties

The Complainant is Comercializadora de Lacteos y Derivados, S.A. de C.V. of Durango, Mexico, represented by Jalife Caballero & Asociados, Mexico.

The Respondent is Apple Inc. of Cupertino, California, United States of America (“United States”), represented by Kilpatrick Townsend & Stockton LLP, United States.

2. The Domain Name and Registrar

The disputed domain name <lala.com> (the “Disputed Domain Name”) is registered with CSC Corporate Domains, Inc. (the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on July 14, 2017. On July 14, 2017, the Center transmitted by email to the Registrar a request for registrar verification in connection with the Disputed Domain Name. On the same date, the Registrar transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details.

The Center verified that 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 July 26, 2017. In accordance with the Rules, paragraph 5, the due date for Response was August 15, 2017. On August 14, 2017, the Respondent requested an extension to file its Response pursuant to paragraph 5(b) of the Rules. The Center notified the parties that the new due date for Response was August 19, 2017. The Response was filed with the Center on August 19, 2017.

The Center appointed Flip Jan Claude Petillion, Pedro W. Buchanan Smith and Tony Willoughby as panelists in this matter on October 13, 2017. The Panel finds that it was properly constituted. Each member of 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 Mexican producer of milk and dairy products. In connection with its business, the Complainant has obtained a number of trademark registrations for the LALA mark. The Complainant’s trademarks include:

– LALA, word mark, registered with the Mexican Institute of Industrial Property under No. 329,719 on July 27, 1987 in International Classes 30 and 32; and

– LALA, word mark, registered with the United States Patent and Trademark Office (“USPTO”) under No. 3,383,435 on February 12, 2008 in International Classes 29 and 32.

The Respondent is an American multinational corporation that designs, develops and sells hardware (personal computers, mobile communication devices, portable digital media players), software, peripherals, services (including online music services), networking solutions and Internet offerings.

In 2009, the Respondent acquired the online music-streaming company La La media, Inc. (“La La Media”). and all its intellectual property assets.

The Disputed Domain Name was registered on January 23, 1996. At least as early as 2005, the Respondent’s predecessor-in-interest, La La Media, acquired the Disputed Domain Name. Between June 2006 and 2009, La La Media used the Disputed Domain Name for the online music service named “LA LA”.

In 2007, La La Media filed trademark applications in the United States for the word mark LA LA. La La Media was the holder of the following trademarks which are no longer valid:

– LA LA, word mark, registered with the USPTO under No. 3,621,412 on May 19, 2009 in International Class 35, and cancelled on December 25, 2015; and

– LA LA, word mark, registered with the USPTO under No. 3,818,794 on July 13, 2010 in International Class 41, and cancelled on February 17, 2017.

Following the Respondent’s acquisition of La La Media, the LALA online music service was discontinued as of May 31, 2010 according to archived webpages associated to the Disputed Domain Name.

The Disputed Domain Name currently does not resolve to an active webpage. However, the Disputed Domain Name is connected to an email server, which is being used for “residual email services” according to the Respondent.

5. Parties’ Contentions

A. Complainant

The Complainant considers the Disputed Domain Name to be identical to trademarks in which it claims to have rights. The Complainant claims to have used LALA as a trademark before the registration of the Disputed Domain Name, since as early as 1987. The Complainant further claims that Respondent has no rights or legitimate interests in respect of the Disputed Domain Name. According to the Complainant, the Respondent has not used the Disputed Domain Name in connection with a legitimate use. In addition, the Complainant claims that the Disputed Domain Name was registered and is being used in bad faith. The Complainant considers its LALA mark to be well-known and that the Respondent has registered and used the Disputed Domain Name with the bad faith intent to defraud the Complainant’s customers. Finally, the Complainant submits that the Respondent’s passive holding of the Disputed Domain Name constitutes sufficient evidence of its bad faith use and registration.

B. Respondent

The Respondent considers that the Complainant has not demonstrated that it owns rights that predate the Respondent or its predecessor-in-interest’s registration of the Disputed Domain Name. According to the Respondent, the Complainant’s claimed rights in LALA are unproven, limited and confined to milk and dairy products and do not extend to any and all goods and services completely unrelated to the Complainant.

The Respondent submits that the Disputed Domain Name was legitimately registered and used by its predecessor-in-interest for a popular online music streaming service that operated under the LA LA brand from 2006 “and for many years thereafter”. The Respondent claims that it is making ongoing use of the Disputed Domain Name for email and that the fact that it may presently not be hosting a website at the Disputed Domain Name does not establish in and of itself that it does not have a legitimate interest or right in the Disputed Domain Name. The Respondent considers being fully within its rights to decide whether to close or reopen its LA LA service or make or cease use of the Disputed Domain Name at any time, and/or to protect any residual goodwill it may have in the underlying trademark.

Finally, the Respondent considers that there is no basis for the Complainant to claim that the Disputed Domain Name was registered and used in bad faith given the underlying facts and evidence of the matter. There is absolutely no evidence that La La Media acquired the Disputed Domain Name to take advantage of any rights that the Complainant might have had at that time for LALA in connection with milk and dairy products, according to the Respondent. Similarly, there would be no evidence that the Respondent acquired La La Media and its LALA mark and the Disputed Domain Name to take advantage of the Complainant’s claimed rights in the LALA sign. The Respondent submits that the Complainant makes a number of completely unsubstantiated and conclusory statements without evidence. The Disputed Domain Name was registered and used for an online music streaming service and for no nefarious purpose. The fact that the Respondent’s business has evolved over the years and it is presently not using to host an online music streaming service is not in and of itself proof of passive holding. It would be completely absurd, according to the Respondent, to believe that it bought La La Media and its LALA online music streaming service for millions of dollars so that it could somehow secure the Disputed Domain Name and exploit the Complainant’s alleged rights for milk and dairy products.

6. Discussion and Findings

Paragraph 15 of the Rules provides that the Panel is to decide the Complaint on the basis of the statements and documents submitted and in accordance with the Policy, the Rules and any rules and principles of law that it deems applicable.

The onus is on the Complainant to make out its case and it is apparent, both from the terms of the Policy and the decisions of past UDRP panels, that the Complainant must show that all three elements set out in paragraph 4(a) of the Policy have been established before any order can be made to transfer a domain name. As the proceedings are administrative, the standard of proof is on the balance of probabilities.

Thus, for the Complainant to succeed, it must prove, within the meaning of paragraph 4(a) of the Policy and on the balance of probabilities that:

i. the Disputed 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 Disputed Domain Name; and

iii. the Disputed Domain Name has been registered and is being used in bad faith.

The Panel will deal with each of these requirements in turn.

A. Identical or Confusingly Similar

To prove this element, the Complainant must first establish that there is a trademark or service mark in which it has rights. The Complainant has established that there are LALA trademarks in which it has rights. The trademarks have been registered and used in connection with milk and dairy products.

The Panel notes that the Disputed Domain Name <lala.com> incorporates the Complainant’s LALA trademark in its entirety.

The Panel is of the opinion that, as a matter of principle, the addition of generic Top-Level Domains (“gTLDs”) can be disregarded when comparing a domain name and a trade mark (See Bialetti Industrie S.p.A. v. Onno Brantjes, Stichting Taxaceae, WIPO Case No. D2016-1450; Canyon Bicycles GmbH v. Domains By Proxy, LLC / Rob van Eck, WIPO Case No. D2014-0206; Zions Bancorporation v. Mohammed Akik Miah, WIPO Case No. D2014-0269). The practice of disregarding the TLD in determining identity or confusing similarity is applied irrespective of the particular TLD (including with regard to “new gTLDs”); the ordinary meaning ascribed to a particular TLD would not necessarily impact assessment of the first element (See, e.g., WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Third Edition (“WIPO Overview 3.0”), section 1.11). However, in cases where the TLD corresponds to the complainant’s area of trade, the TLD may add to the confusion and signal an abusive intent to confuse Internet users, which may be relevant for the assessment under the third element. In the case at hand, there is no such link between the Complainant’s area of trade and the TLD. Therefore, the gTLD can be disregarded and the Panel considers the Disputed Domain Name to be identical to the Complainant’s LALA trademark.

Accordingly, the Complainant has made out the first of the three elements that it must establish.

B. Rights or Legitimate Interests

The second requirement the Complainant must prove is that the Respondent has no rights or legitimate interests in the Disputed Domain Name. The onus of proving this requirement, like each element, falls on the Complainant. Given the difficulty in proving a negative, however, it is usually sufficient for a complainant to make out a prima facie case that the respondent lacks rights or legitimate interests. If the complainant does establish a prima facie case, the burden of production shifts to the respondent. See, e.g., WIPO Overview 3.0, section 2.1.

The Complainant considers that the Respondent is only passively holding the Disputed Domain Name. In response, the Respondent submits that the Disputed Domain Name was legitimately registered and used by the Respondent’s predecessor-in-interest, and that it is using the Disputed Domain Name for residual email services. The Complainant did not comment on the use of the Disputed Domain Name by the Respondent’s predecessor-in-interest in connection with an online music streaming service, named “LA LA”.

Under paragraph 4(c)(i) of the Policy, the Respondent will have rights to or legitimate interests in the Disputed Domain Name if, before any notice of the dispute, it had used or made demonstrable preparations to use the Disputed Domain Name in connection with a bona fide offering of goods or services.

The Panel is of the opinion that, between June 2006 and May 2010, Respondent and its predecessor-in-interest made legitimate use of the Disputed Domain Name to offer bona fide services under its own LA LA mark. These services are unrelated to the Complainant and its LALA mark. According to the Panel, the fact that the Respondent chose to cease active use of the Disputed Domain Name does not demonstrate in itself that the Respondent has no rights or legitimate interests in the Disputed Domain Name. It is common practice for trademark holders to maintain the registration of a domain name, even if the corresponding trademark was abandoned, e.g., following a rebranding exercise. Apart from the goodwill that might be associated to the trademark, the domain name in question may have intrinsic value. In the case at hand, the Panel notes that the term “la-la” is often used as a nonsense refrain in songs or as a reference to babbling speech, and that there are many concurrent uses of the “LALA” sign as a brand. In such circumstances, a domain name holder has a legitimate interest to maintain the registration of a potentially valuable domain name.

The Panel therefore concludes that, on the basis of the evidentiary record in this proceeding, the Complainant has failed to prove the absence of rights or legitimate interests on the part of the Respondent. On the contrary, the Respondent has proven, as indicated above, the use of the Disputed Domain Name in connection with a bona fide offering of goods and services in terms of paragraph 4(c) of the Policy.

Accordingly, the Complainant has not established the second requirement under the Policy and the Complaint must be dismissed.

C. Registered and Used in Bad Faith

In view of the Panel’s findings under the second limb of the Policy, there is no need for the Panel to consider the third requirement under the Policy as all three requirements of paragraph 4(a) of the Policy must be met for a complainant to prevail.

The Panel has nevertheless examined the issue, and considers that the Complaint also fails on the third requirement under the Policy. To meet this requirement, a complainant must prove on the balance of probabilities both that the disputed domain name was registered in bad faith and that it is being used in bad faith (See, e.g., Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No. D2000-0003; Control Techniques Limited v. Lektronix Ltd, WIPO Case No. D2006-1052).

In the instant case, the Complainant provides no evidence to support its allegations that the Complainant’s LALA mark is well-known and that the Respondent has sought to defraud the Complainant’s customers. The Complainant has put these assertions forward without any supporting argumentation or evidence. Such a practice cannot be accepted, as it is the Complainant which carries the burden of proof in demonstrating bad faith by the Respondent in the registration and use of the Disputed Domain Name, and not the other way around (See Dairymaster v. Terry Duckworth, WIPO Case No. D2017-0398).

Finally, the mere fact that the Disputed Domain Name is not currently associated to an active website is not in and of itself proof of passive holding in bad faith. To establish passive holding in bad faith, UDRP panels typically review the totality of the circumstances in each case and consider a number of factors, such as (i) the degree of distinctiveness or reputation of the complainant’s mark, (ii) the failure of the respondent to submit a response or to provide any evidence of actual or contemplated good-faith use, (iii) the respondent’s concealing its identity or use of false contact details (noted to be in breach of its registration agreement), and (iv) the implausibility of any good faith use to which the domain name may be put (See, e.g., WIPO Overview 3.0, section 3.3). No such circumstances are present in the case at hand.

The Respondent has demonstrated the bona fide acquisition and use of the Disputed Domain Name without any consideration on the Complainant’s trademarks or line of business activities. Accordingly, this Panel finds that the Complainant has not shown, on the balance of probabilities, that the Disputed Domain Name was registered and is being used in bad faith.

D. Reverse Domain Name Hijacking

The Respondent has not formally requested a finding that the Complainant has engaged in Reverse Domain Name Hijacking (“RDNH”). However, following some early cases to the contrary, UDRP panels have more recently clarified that, for an RDNH finding to be made, it is not necessary for a respondent to seek an RDNH finding or prove the presence of conduct constituting RDNH (see WIPO Overview 3.0, section 4.16).

Paragraph 15(e) of the Rules provides that, if “after considering the submissions the panel finds that the complaint was brought in bad faith, for example in an attempt at RDNH or was brought primarily to harass the domain-name holder, the panel shall declare in its decision that the complaint was brought in bad faith and constitutes an abuse of the administrative proceeding.”

For this purpose, paragraph 1 of the Rules defines RDNH to be “using the Policy in bad faith to attempt to deprive a registered domain name holder of a domain name”. It is notable that RDNH is only an example of the types of situation where such a finding may be made.

Under paragraph 15(e) of the Rules, therefore, the Panel has a duty to consider and, if appropriate, make a ruling on whether the Complaint constitutes an abuse of the administrative proceeding.

The fact that a Complaint has failed does not automatically result in a finding of RDNH. In the present case, however:

(a) the Panel observes an abject failure of the Complainant to support its allegations with any evidence;

(b) the Complainant has been particularly remiss in its duties to support its allegations with evidence, given the identity of the Respondent, which should have alerted the Complainant to the need to make a proper investigation of the background; and

(c) the Respondent has submitted a copy of an internal email exchange in the Respondent’s organisation which reported that one of the Respondent’s employees had received a call from the Complainant’s CIO in which he/she demonstrated their interest to purchase the Disputed Domain Name from the Respondent in or about November 2010. The email was sent in tempore non suspecto, and the allegation about the attempted purchase of the Disputed Domain Name by the Complainant remains unrebutted. The Complainant seems not to have relied on any rights in its attempted purchase of the Disputed Domain Name prior to the filing of the Complaint, seven years later.

In these circumstances, the majority of the Panel considers it should find that the Complaint has been brought in bad faith. The Complainant was, or should have been aware, of the Respondent’s bona fide acquisition and use of the Disputed Domain Name. The attempted purchase of the Disputed Domain Name by the Complainant was initiated shortly after the Respondent decommissioned the support of La La Media’s online music platform on the Disputed Domain Name. The Complainant must have been aware, before filing the Complaint, that the Disputed Domain Name has never being used to target the Complainant or trade on its goodwill.

Accordingly, the majority of the Panel finds that the Complainant has abused the administrative proceeding and engaged in reverse domain name hijacking.

7. Decision

For the foregoing reasons, the Complaint is denied.

Flip Jan Claude Petillion
Presiding Panelist

Pedro W. Buchanan Smith
Panelist

Tony Willoughby
Panelist
Date: October 23, 2017

Panelist Pedro W. Buchanan Smith, concurring in part and dissenting in part.

I partially agree the Panel’s resolution, in the sense that the Respondent was able to demonstrate that the Disputed Domain Name was acquired and used in good faith with legitimate interests. However, I consider that Complainant’s trademark is indeed confusingly similar, if not identical, to the Disputed Domain Name, and did not fail to submit a questionable case. Therefore, the Complainant could reasonably file the claim hereunder, and the Panel should not rule that the Complainant has engaged in RDNH.

It has been the Respondent’s allegations and evidence which, in my opinion clearly unknown to the Complainant, disallowed the Complainant to meet the three-prong test set forth in paragraph 4(a) of the Policy. Nevertheless, the Complainant is definitively the holder of the very well-known LALA trademark since 1987, as clearly evidenced in its Complaint.

In this case, the decision is being adopted not by the fact that the Complainant was not able to argue and support its case, but by the fact that the Respondent was, on its side, able to support its legitimacy and bona fide use of the Disputed Domain Name. Bottom-line, in my opinion, two truths may co-exist, and the same by definition are considered as an alternative by the Policy and real life. However, the Policy requires that the case be decided, not due to the supporting evidence of the Complainant, but by the Respondent’s failure to evidence any of the three elements required by section 4(a) of Policy. The Policy and the Rules, as written, contemplate the possibility that both the Complainant and the Respondent may completely support their cases, in which case, the holder of the domain name will prevail.

Furthermore, in a situation like the one that we are dealing with, whether evidence is strongly and unequivocally supported, or lightly supported as could be done by any laymen, we panelists must at all times respect the simple rights granted to complainants by the ICANN and the Policy. In my opinion, the degree of supported or evidenced rights, should not be sufficient reason to qualify a claim as being abusive of any domain name dispute administrative proceeding.

It should be the panelists role to respect that such rights be exercised under common standards of evidence and diligence, as those that may be requested from an ordinary prudent person; and not to impose high litigation and investigation standards and costs that may be usually reached by sophisticated experts in the business field, nor in the extremely specialized information technology area. This requirement is beyond the capacity, access and understanding of most of the population. The standard required, should be that of a layman, and not of a computer and IT expert. In my opinion, the only investigation that is required as a standard of due diligence to confirm the use of the domain name under dispute, should be to confirm the current use of the domain name by accessing the applicable web page. Requiring a higher standard of diligence would be extremely burdensome and costly. Not everyone has the ability, resources and intelligence like a multi-million dollar organization.

I consider that the Complainant failed to identify the second and third elements set out in paragraph 4(a) of the Policy, as it was not be aware of the circumstances under which the Respondent may have acquired the Disputed Domain Name; and furthermore was not aware of the legitimacy under which the Respondent was entitled to use the Disputed Domain Name. There is no evidence indicating that the Complainant was aware of the above-mentioned circumstances and evidence submitted by the Respondent.

If we were to determine that any case which may lack merits, be considered an abuse of the Policy, at the sole discretion of the deciding panel, then by definition, any unsuccessful complaint, may be wrongfully considered as abusive.

We cannot, by any means consider that if a complaint fails, not by its own merits, which the complainant may have, but by the merits of the respondent which was able to prove legitimate and good faith use and registration of a domain name, and which are clearly unrelated and unknown to the complainant, be considered by definition, an abuse of the administrative proceedings contemplated by the Policy, and particularly in those cases where the complainant has title and legitimate use to its trademark, is not aware of sophisticated evidence, and therefore legitimate cause to file a complaint.

In summary, my dissent is solely on the grounds that the Complainant has not sought to abuse this proceeding in bad faith with a RDNH practice in order to harass or to detriment of the Respondent.

Majority Addendum

The majority of the Panel greatly respects the thoughtful work of our learned co-panelist, Pedro W. Buchanan, Esq., in providing his dissent. However, the majority of the Panel takes issue with the double standard he introduces for complainants, particularly in the following section of his reasoning:

“It should be the Panelists role to respect that such rights be exercised under common standards of evidence and diligence, as those that may be requested from an ordinary prudent person; and not to impose high litigation and investigation standards and costs that may be usually reached by sophisticated experts in the business field, nor in the extremely specialized information technology area. This requirement is beyond the capacity, access and understanding of most of the population. The standard required, should be that of a layman, and not of a computer and IT expert. In my opinion, the only investigation that is required as a standard of due diligence to confirm the use of the domain name under dispute, should be to confirm the current use of the domain by accessing the applicable web page. Requiring a higher standard of diligence would be extremely burdensome and costly. Not everyone has the ability, resources and intelligence like a multi-million dollar organization.”

WIPO Overview 3.0 section 4.16 provides seven reasons that panels have given for finding RDNH including:

“(ii) facts which demonstrate that the 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, including relevant facts on the website at the disputed domain name or readily available public sources such as the WhoIs database, […] (viii) basing a complaint on only the barest of allegations without any supporting evidence.”

The majority of the Panel considers that rashly accusing anybody of bad faith is an abuse of the system and relying solely on the fact that the domain name and trade mark are identical is no excuse. Different entities legitimately hold identical trade marks in different business areas and in different jurisdictions. The Complainant made no attempt to investigate the background and produced no supporting evidence. That did not refrain the Complainant from making brash and serious allegations.

The ordinary prudent person, irrespective of his/her level of sophistication, should have known that the Complaint was doomed to failure and that strong allegations, such as the ones made by the Complainant in accusing the Respondent of fraud, must be supported by evidence. Respondents regularly get condemned for not having made proper investigations before registering domain names. The majority of the Panel sees no reason why complainants who do not make proper investigations before alleging bad faith should not similarly be condemned.

Pedro W. Buchanan Smith
Panelist
Date: October 23, 2017

 

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