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Worst UDRP Decision Of The Year? Panel Gives Away Domain Registered Before TM Was Filed

Posted on the 17 March 2015 by Worldwide @thedomains

A one member UDRP panel has awarded a domain name purchased in 2010,  TheLightBlubStore.com, to Lumen Inc. based off a trademark filed in 2011, after the owner wanted to “reselling it for an outrageous profit. Specifically, Respondent offered to sell the disputed domain name for $18,000.00.”

Hon. Carolyn Marks Johnson was the Panelist who found the Complainant had a common law trademark right even though the Complainant did not make that argument or even a statement that they had a common law trademark right.

Complainant owns THE LIGHTBULB STORE mark through registration with the United States Patent and Trademark Office (“USPTO”) (Reg. No. 4,189,954, registered August 14, 2012, filed Dec. 15, 2011).

While Complainant failed to make assertions regarding accrual of common law rights or the commercial success of its business under the THE LIGHTBULB STORE mark, the Panel notes that Complainant’s USPTO registration lists a first use in commerce date of January 15, 2009, relevant in light of Respondent’s domain name registration in September 2010.

Instead of finding that the domain holders ownership for which predated the registered trademark the panel used the “passive holding period” against the domain owner.

The panel acknowledged the domain name was first registered 12 years ago but acquired by this domain holder in 2010, the panel found that because during the whole 12 year period the domain was “passively held” that “Respondent’s inactive use or passive holding of the disputed domain name is demonstrative of Respondent’s lack or rights or legitimate interests in the disputed domain name.”

“Complainant next argues that Respondent has no right to the disputed domain name as it was registered over 12 years ago and has never been used for a website, or to conduct business relating to light bulbs. The Panel notes that Complainant failed to provide evidence, such as screenshots, to corroborate this allegation; however, Respondent produced no evidence in the Response to counter the claim of passive holding and the Panel finds that in such circumstances Complainant’s allegation may be taken as true. The Panel finds Respondent’s inactive use or passive holding of the disputed domain name is demonstrative of Respondent’s lack or rights or legitimate interests in the disputed domain name

The Panelist found that the Complainant, had common law rights, even though “Complainant failed to make assertions regarding accrual of common law rights or the commercial success of its business under the THE LIGHTBULB STORE mark”

“The Panel notes that Complainant’s USPTO registration lists a first use in commerce date of January 15, 2009, relevant in light of Respondent’s domain name registration in September 2010.

The Panel considers such self-reported evidence at the time of the application in a federal publicly-filed document sufficient to show both date of first use and the beginning date for continuous use and accretion of adequate secondary meaning in Complainant’s mark, absent proof to the contrary; and thus Complainant’s submission shows sufficient proof to support a finding of common law rights in the THE LIGHTBULB STORE mark, dating back as far as January 15, 2009, Complainant’s first use, because it permits the presumption of continuous use from that date.”

While Respondent contends that the thelightbulbstore.com, domain name is comprised of common and generic or descriptive terms and as such cannot be found to be identical or confusingly similar to Complainant’s mark, the Panel finds that such a determination is not necessary under Policy ¶ 4(a)(i) as this portion of the Policy considers only whether Complainant has rights in the mark and whether the disputed domain name is identical or confusingly similar to Complainant’s mark.  S

Respondent also contends that the disputed domain name is comprised of common and generic/descriptive terms and thus cannot be deemed to be either identical or confusingly similar to Complainant’s mark.

Further, Respondent also contends that its disputed domain name was registered before Complainant’s alleged rights in the mark.  However, because this argument as well is not applicable under Policy ¶ 4(a)(i) per se, the argument will be considered under Policy ¶ 4(a)(iii).

The Panel finds that Complainant established rights in the mark contained in its entirety within the dispute domain name that Respondent purchased.  The Panel finds that this domain name is identical to this protected mark; Complainant satisfied the elements of ICANN Policy Policy ¶ 4(a)(i).

Complainant next argues that Respondent has no right to the disputed domain name as it was registered over 12 years ago and has never been used for a website, or to conduct business relating to light bulbs.

The Panel notes that Complainant failed to provide evidence, such as screenshots, to corroborate this allegation; however, Respondent produced no evidence in the Response to counter the claim of passive holding and the Panel finds that in such circumstances Complainant’s allegation may be taken as true.

The Panel finds Respondent’s inactive use or passive holding of the disputed domain name is demonstrative of Respondent’s lack or rights or legitimate interests in the disputed domain name pursuant to Policy ¶¶ 4(c)(i) and (iii).

Complainant also claims that a finding of Respondent’s lack of rights is further supported by Respondent ‘s efforts to sell the disputed domain name to Complainant for an amount far in excess of any costs of registration or plan of use. To support this allegation Complainant submits a copy of e-mail correspondence between alleged agents of the parties, purporting to show Respondent’s willingness to sell the disputed domain name for the amount of $18,000.00. See Compl., at Attached Ex. III.  Prior panels have held that a respondent’s willingness to sell a disputed domain name to the complainant for inflated costs suggests the respondent is without rights or legitimate interests in the name. See, e.g., George Weston Bakeries Inc. v. McBroom, FA 933276 (Nat. Arb. Forum Apr. 25, 2007) (holding that where a respondent makes a “disproportionate” offer to sell its domain name registration to the complainant for more than its out-of-pocket registration costs, there is additional evidence that the respondent lacks rights and legitimate interests in the disputed domain name).

In this case, the Panel finds that the referenced e-mail correspondence to and from this particular Respondent and this particular Complainant about this particular domain name, supports findings that Respondent lacks rights or legitimate interests in the disputed domain name pursuant to Policy ¶ 4(a)(ii).

Respondent purchased the domain name and it is established contract law that Respondent acquired  only such rights as those held by the predecessor and such liability unless that was expressly contracted away.

Respondent offers no proof of rights, transfer of rights, ownership, or disposition of liabilities. Respondent also defeats its argument in support of rights by its own argument that the alleged mark THE LIGHTBULB STORE is generic in nature. Respondent notes that a business operates in Scottsdale, Arizona, under the same name.

Respondent explains that it purchased several domain names comprised of generic terms, including  <theexitsignstore.com>, and <thebatterymart.com> and did so in connection with a plan to develop these names for use in connection with Respondent’s electrical distribution business.

If all are generic, who has any rights to them?

The record is silent as to Respondent’s business or business plan or the cost of development to date in that effort.

Exhibit D does not show such a plan, proposal, projection, cost analysis or any other proof to support the development cost of any such enterprise, especially not to the amount of $18,000.00.

It consists of a page showing three or domain names held by Respondent without further information about why they are there or what is proposed.  Respondent passively holds this domain name and the Panel presumes it is held to keep Complainant from using its own mark as fully as the Internet plan for such domain names allows a rightful owner.

The Panel finds Respondent has shown no rights to the thelightbulbstore.com domain name either by being commonly known by it or by bona fide use.

The Panel notes that Respondent claims to have purchased the disputed domain name in good faith September 27, 2010, with no intention of targeting Complainant.

The Panel notes that it is established contract law that Respondent contracted not only for rights held by the predecessor; but also acquired liabilities, unless they were exclusively handled otherwise.

Respondent has shown no exception to this established rule.

Although Respondent’s purchase date of September 27, 2010, predates Complainant’s earliest demonstrated legal rights in the THE LIGHTBULB STORE mark, namely the December 15, 2011, filing date with the USPTO, the Panel found that Complainant’s rights in the mark dated back to the date represented to the federal government in the filing process as 2009, a date that is earlier in time than Respondent’s purchase of the disputed domain name and that therefore a finding of bad faith is not precluded.

 


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