Coltec North Carolina Inc. v. United Business Machines, Inc.

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Coltec North Carolina Inc. v. United Business Machines, Inc.

Case No. D2001-0577

1. The Parties

Complainant is Coltec North Carolina Inc. ("Coltec"), Four Coliseum

Centre, 2730 West Tyvola Road, Charlotte, NC 28217-4578 ("Coltec").

Respondent is United Business Machines, Inc., 2610 W. Sam Houston Parkway South,

Houston, TX 77042 ("UBM").

2. Domain Name and Registrar

The domain name in issue is: <stemco.net> (the "Domain Name").

The registrar is Network Solutions, Inc., 505 Huntmar Park Drive, Herndon,

VA 20170 ("NSI").

3. Procedural History

The WIPO Arbitration and Mediation Center (the Center) received Coltec’s complaint

by e-mail on April 20, 2001, and in hard copy on April 23, 2001. The Center

verified that the complaint satisfies the formal requirements of the ICANN Uniform

Domain Name Dispute Resolution Policy (the Policy), the Rules for Uniform Domain

Name Dispute Resolution Policy (the Rules), and the Supplemental Rules for Uniform

Domain Name Dispute Resolution Policy (the Supplemental Rules). Coltec made

the required payment to the Center. The formal date of the commencement of this

administrative proceeding is April 30, 2001.

On April 24, 2001, the Center transmitted via email to NSI a request for registrar

verification in connection with this case. On April 27, 2001, NSI transmitted

via email to the Center NSI’s Verification Response, confirming that (1) the

registrant of the <stemco.net> domain name is UBM; (2) the administrative

and billing contact is "Qureshi, Kurshid (KQ74); the technical contact

is "Dubinsky, Andrew (AD2493); and (3) the domain name registration in

issue is in "Active" status and NSI’s 5 Service Agreement is in effect.

On April 30, 2001, the Center transmitted the Notification of Complaint and

Commencement of the Administrative Proceeding, together with copies of the Complaint,

via e-mail with copy by courier (FedEx) to UBM, care of both of the contacts

listed by NSI. The Center advised that the response was due by May 19, 2001,

pointed out that the response should be in accordance with specified rules,

and described the consequences of a default if the response was not sent by

that date. The Center noted also that Coltec had elected for a single panelist

to decide this matter.

No response was received from UBM or its representatives, either by the May

19, 2001, deadline or at any other time.

On May 21, 2001, the Center transmitted to UBM, via e-mail, a Notification

of Respondent Default. The Center advised UBM (a) that UBM had failed to comply

with the deadline for submission of its response and (b) the consequences of

default, including (1) a single panelist would be appointed (the number requested

by Complainant); (2) the Panel would be informed of the default and would decide

in its sole discretion whether to consider a response if submitted later; and

(3) the Center would continue to send all case-related materials to UBM.

On May 29, 2001, the Center advised the parties (1) of the appointment of Michael

Albert, the undersigned, as the Panelist in this case; and (2) absent exceptional

circumstances, the decision was to be forwarded by the Panel to the Center by

June 11, 2001.

4. Factual Background; Parties’ Contentions

a. The Trademark

The Complaint is based on Coltec’s alleged ownership of rights to the mark

STEMCO, which Coltec or its predecessors in interest claim to have used since

at least as early as 1952.

Coltec alleges that it owns seven U.S. federal registrations for the mark STEMCO

and three U.S. federal registrations for marks containing the term STEMCO. Along

with copies of printouts from the U.S. Trademark Electronic Search System ("TESS")

of the United States Patent and Trademark Office ("USPTO"), Coltec

has also provided the Panel with a copy of the recordation with the PTO of the

assignment of each of the ten trademark registrations from their original owner

Stemco Inc. to Coltec.

The earliest of these registrations, U.S. Reg. No. 788,516, is for the word

mark STEMCO in block letters. A block-letter registration is the broadest claim

to a word mark, in that it is "not . . . restricted to any particular form

or type." Exxon Corp. v. National Foodline Corp., 579 F.2d 1244,

1247 (C.C.P.A. 1978). This registration issued in 1965, was renewed in 1985,

and is for oil and grease seals, gaskets, O-rings, and accessory parts, and

claims a date of first use in 1952. The second registration, U.S. Reg. No. 801,703,

is also for the block-letter form of the mark STEMCO, issued in 1966, was renewed

in 1986, and is for vehicular exhaust system parts, with a first-use date in

1961. Another registration, U.S. Reg. No. 1,016,820, is for vehicle brake system

parts, and was registered in 1975 with a first-use date of 1974.

Other registrations owned by Coltec for the STEMCO mark or variants thereof

cover other products in the automotive and truck parts industry. Coltec has

also provided a copy of a trademark registration for the mark STEMCO (plus design)

in Germany, Reg. No. 398-55-369, registered in 1998. (Footnote

1)

b. Jurisdictional Basis

This dispute is within the scope of the Policy, and the Administrate Panel

has jurisdiction to decide the dispute. A copy of the NSI registration agreement

is appended as Exhibit B to the Complaint. At page 4, Coltec cites the Policy

and avers that each of the three requirements of Paragraph 4(a) have been satisfied.

c. The Complaint

Coltec asserts as follows:

- That Coltec’s "worldwide commercial success and market share are the

result of its commitment to the highest quality manufacturing and service standards."

- That the STEMCO® mark under which Coltec sells its products is known

worldwide.

- That Coltec has priority of use, having used its mark since 1952 whereas

registrant’s first known use is its Domain Name registration, made in 1999.

- That Respondent’s domain name <stemco.net> is identical (when considered

apart from the generic .net suffix) to Coltec’s federally-registered trademark

STEMCO and other compound word-marks containing the stem STEMCO-, and that confusion

is therefore "unavoidable."

- That Respondent registered the <stemco.net> Domain Name on March 2,

1999 but has never engaged in any bona fide offering of goods or services in

connection with the Domain Name, and that Respondent has no rights or legitimate

interests in the <stemco.net> domain name.

- That Coltec twice wrote to UBM requesting that it cease and desist from use

of the STEMCO mark and transfer the Domain Name to Coltec but that Coltec received

no response to those letters.

- That UBM registered the Domain Name for the bad-faith purpose of selling

or otherwise transferring the domain name to Coltec or a competitor for valuable

consideration in excess of costs directly related to the Domain Name registration.

In particular, Coltec asserts that UBM offered to sell the Domain Name to Coltec

for $600,000 (six hundred thousand U.S. dollars). Coltec supports this allegation

with the Affidavit of Don Pomeroy. In this affidavit, Mr. Pomeroy avers, under

oath and penalty of perjury, that he is the Vice President of Finance &

Information Technology of Stemco Inc., affiliate and licensee of Coltec; that

Stemco Inc. has used the STEMCO mark for automotive parts since 1952; that the

STEMCO trademark is registered worldwide; that in 1999 Stemco Inc. attempted

to register the Domain Name <stemco.net> but found that it was registered

by UBM; that Mr. Pomeroy contacted Mr. Ashraf Jamal, President and Chief

Executive Officer of UBM, and asked UBM to transfer the Domain Name to Stemco

Inc. in exchange for UBM’s out of pocket costs; that Mr. Jamal stated that he

was developing a company using the Stemco name, was registered to do business

in Pakistan and Germany, and was in the business of, inter alia, auto

parts; and that he had a trademark for STEMCO. Mr. Pomeroy’s affidavit further

avers that Mr. Jamal at first informed Stemco Inc. that the Domain Name was

not for sale but subsequently reversed his position and stated that UBM would

sell it for $600,000.

- That UBM asserted an intention to engage in on-line business activity at

the <stemco.net> address that is closely related to that of Complainant,

namely in connection with automotive products, including in Germany, where UBM

asserted that it is already registered to do business. Coltec, as noted above,

has provided the Panel with a copy of its German trademark registration for

the mark STEMCO (plus design).

- That should UBM use the <stemco.net> Domain Name in connection with

automotive products, business is likely to be diverted from Coltec as a result

of confusion, and that irreparable injury is likely to result from the confusion

and Coltec’s loss of control over its mark.

In addition to copies of the trademark registration status reports from TESS,

the copy of the registration assignments, and the Pomeroy Affidavit mentioned

above, Coltec has provided the Panel with copies of two cease-and-desist letters

it avers that it sent to UBM, one dated August 7, 2000 and the second dated

September 28, 2000. Each letter was sent by counsel for Stemco Inc. to an individual

identified as the president of UBM. The letters set forth much of the above

information, as well as a request that the Domain Name be transferred to Stemco,

and warned UBM that failure to respond would result in a proceeding under the

Policy. As to the first letter, Coltec has provided the Panel with a copy of

a Receipt for Certified Mail; however it has not provided a copy of a signed

Return Receipt establishing that the letter was received. As to the second letter,

Coltec has provided a copy of the signed Return Receipt establishing that the

letter was received.

d. Response

As noted above, Respondent has provided no Response, although the deadline

for so doing expired on May 19, 2001. Accordingly, Respondent is in default.

Unlike in a U.S. court proceeding, however, a default does not automatically

result in a finding for the Complainant. Rather, under the Policy and the Rules,

it remains the Complainant’s burden to establish to the Panel that each of the

three criteria for a transfer of the Domain Name or other remedy has been met.

Under Rule 14, the effect of a default is that the Panel shall proceed to a

decision and shall draw such inferences from the default as it deems appropriate.

5. Discussion and Findings

Accordingly, the Panel now proceeds to consider this matter on the merits in

light of the complaint, the response (or lack thereof), the Policy, the Rules,

and applicable authority, which in the Panel’s view, given that this dispute

involves a domain name registered in the United States and given that both parties

appear to be U.S.-based, shall include applicable principles of U.S. trademark

law.

Paragraph 4(a) of the Policy provides that Complainant must prove, with respect

to the domain name in issue, each of the following:

(i) The domain name in issue is identical or confusingly similar to Coltec’s

trademark in issue here; and

(ii) 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.

Paragraph 4(b) of the Policy sets out four non-exclusive, but illustrative,

circumstances of acts that for purposes of Paragraph 4(a)(iii) above would be

evidence of the registration and use of a domain name in bad faith.

Paragraph 4(c) of the Policy sets out three illustrative circumstances any

one of which, if proved by respondent, would demonstrate respondent’s rights

or legitimate interests to the Domain Name for purposes of Paragraph 4(a)(ii)

above.

a. Effect of the Default

In this case, the Panel finds that, as a result of the default, Respondent

has failed to rebut any of the factual assertions that are made and supported

by evidence submitted by Complainant. The Panel does not, however, draw any

inferences from the default other than those that have been established or can

fairly be inferred from the facts presented to the Panel by the Complainant

and that, as a result of the default, have not been rebutted by any contrary

assertions or evidence.

In particular, by defaulting and failing to respond, Respondent UBM has failed

to offer the Panel any of the types of evidence set forth in Paragraph 4(c)

of the Policy from which the Panel might conclude that Respondent has any rights

or legitimate interest in the Domain Name, such as use or preparation to use

the Domain Name prior to notice of the dispute, being commonly known by the

Domain Name, or making legitimate noncommercial or fair use of the Domain Name.

In the absence of any contrary statement or evidence, and in light of the sworn

testimony of Mr. Pomeroy and the other evidence of record, the Panel finds Mr.

Pomeroy’s affidavit testimony to be credible and entitled to weight as discussed

below.

b. Complainant’s Proof

(i) Domain Name Identical or Confusingly Similar to Trademark

Complainant Coltec has proven that it is the owner of trademark rights in the

mark STEMCO, going back at common law to 1952 and continuing through the date

of the Complaint, and including several federal registrations, which have become

incontestable pursuant to the provisions of 15 U.S.C. § 1065. Complainant’s

registrations of the trademark on the Principal Register of the USPTO establish

a presumption of validity of the mark under U.S. law. See 15 U.S.C. §

1057(b); Avery Dennison v. Sumpton, 189 F.3d 868 (9th Cir.

1999). Additionally, the registration constitutes constructive notice to all

other parties of Complainant’s ownership of the trademark. 15 U.S.C. § 1072.

Coltec has further proven that the Domain Name, <stemco.net>, is identical

or confusingly similar to its trademark STEMCO. In making this comparison, it

is well established that the generic top-level domain, in this case ".net,"

must be excluded from consideration as being a generic or functional component

of the Domain Name. See Sporty's Farm v. Sportsman's Market, 202 F.3d

489, 498, (2d Cir. 2000).

The remaining term, stemco, is precisely identical to Coltec’s mark. There

is no contention by Respondent that the mark is generic or descriptive, and

indeed the incontestable nature of the registrations legally precludes any challenge

that the marks are merely descriptive. See Park ’N Fly, Inc. v. Dollar Park

& Fly, Inc., 496 U.S. 189, 105 S. Ct. 658 (1985). It appears to this

Panel that the mark is coined or arbitrary, and thus strong and distinctive

of Coltec’s goods and services in the automotive and truck products industry.

Accordingly, the likelihood of confusion, particularly if Respondent were to

carry out its threat of using the domain name in connection with competing goods

in the automotive and truck products industry, is very high.

(ii) Whether Respondent Has Rights Or Legitimate Interest In the Domain Name.

No evidence of record establishes any rights of Respondent in the Domain Name.

UBM has offered no evidence, and none appears of record, that it uses the Domain

Name, nor that it uses or has ever used the mark STEMCO in connection with its

business or for any other purpose. Although Mr. Jamal apparently made some assertion

to Mr. Pomeroy relating to UBM’s past or anticipated use of the mark (it is

unclear which), no dates are given and absent any Response or evidence from

UBM, this Panel cannot and does not find that UBM has any rights in the mark.

UBM does not appear to be known by the name "Stemco." Indeed, Complainant

has provided as an Exhibit a copy of UBM’s home page at www.ubm.com, and that

page gives no indication that Respondent makes any use of the mark Stemco or

is known by that name. The name Stemco does not appear on that page. Accordingly,

the Panel concludes that Respondent has no rights in the Domain Name.

(iii) Registration and Use in Bad Faith

Complainant’s third hurdle is to establish that Respondent has registered and

used the Domain Name in bad faith. Paragraph 4(b) of the Policy sets out four

illustrative circumstances of the registration and use of a domain name in bad

faith. The first is acquisition of 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

[registrant’s] documented out-of-pocket costs directly related to the domain

name."

In this case, there is strong evidence of this type of bad faith. The fact

that STEMCO was registered on the Principal Register of the USPTO put Respondent

on constructive notice (and it appears from the Pomeroy Affidavit that Respondent

had actual notice as well) of Complainant’s prior registration and use of the

mark. The uncontroverted Pomeroy Affidavit further establishes that UBM offered

to sell the Domain Name to Complainant for $600,000. That is the only use of

the Domain Name that Respondent appears to be making, as far as any evidence

of record indicates. In particular, as the record establishes, Respondent does

not have a web site accessible at <stemco.net>.

It is, of course, possible to make use of a domain name without having a web

site located at that address. For example, a domain name can be used for e-mail,

FTP, and other such purposes without the need to create and host a publicly-accessible

web site. This Panel therefore does not presume from the absence of a web site

that the Domain Name is going entirely unused. In fact, there are software tools

which can help determine whether certain other uses are being made of a domain

name, yet Coltec has not offered any such evidence to the Panel. The discussion

between Mr. Pomeroy and Mr. Jamal reflected in the Pomeroy Affidavit, however,

supports the inference that UBM, although it may intend to use the Domain Name

in the future, is not currently using it for any purpose other than its offer

to sell the Domain Name to Complainant, the trademark owner, for $600,000. Respondent

has not rebutted this point with any contrary evidence.

In short, UBM does not on the record appear to have made any use of the Domain

Name other than through its offer to sell the Domain Name to Coltec for a large

sum, unquestionably in excess of any costs UBM could plausibly have incurred

in connection with the registration. Accordingly, the Panel finds bad faith

of the form illustrated by the first example in Paragraph 4(b) of the Policy.

The second illustration of bad faith in the Policy occurs when the registrant

registers the domain name to prevent the trademark owner from reflecting the

mark in a corresponding domain name, particularly when Respondent has engaged

in a pattern of such conduct. Complainant has made no allegation that it has

been unable to use the trademark in a domain name. (Cf. www.stemco.com.)

Nor does Coltec allege any pattern of improper registrations by UBM. Accordingly,

the Panel does not find this illustration applicable here.

The third illustration of bad faith is registration "primarily for the

purpose of disrupting the business of a competitor." On the facts of this

case, it is a close question whether UBM can fairly be described as a "competitor"

of Coltec’s. There is little or no evidence of record that it currently competes

in the automotive or truck parts industry. The web site which Coltec has identified

and provided as an indicator of what it characterizes as UBM’s "current

field of business" appears to relate to computers and computer components

or devices, not automobile parts. On the other hand, there is evidence that

UBM has threatened to enter into competition with Coltec (see Pomeroy

Affidavit), and that it has threatened to disrupt Coltec’s business, including

by means such as sales of competing products in Germany, a country in which

Coltec has registered trademark rights to the STEMCO mark dating back at least

to 1998, under the same or a confusingly similar trademark.

The fourth illustration, use of the domain name in an effort to attract, for

commercial gain, Internet users to a competing web site, does not appear to

be applicable here, there being no active web site located at the Domain Name.

In sum, the Panel concludes that Respondent has registered and used the Domain

Name in bad faith, as exemplified at least by illustration (i) in Paragraph

4(b) of the Policy, the sufficiency of which obviates any need to determine

whether illustration (iii) is also applicable.

6. Decision

In light of the findings and analysis by the Panel, the Panel decides that

Coltec has met its burden of proving: (1) the Domain Name is identical to the

STEMCO mark; (2) UBM has no rights and no legitimate interest in respect of

the Domain Name; and (3) the Domain Name has been registered and is being used

by UBM in bad faith.

Accordingly, pursuant to Paragraph 4(i) of the Policy and Rule 15, the Panel

requires that the registration of the <stemco.net> domain name be transferred

to Coltec.

Michael A. Albert

Sole Panelist

Dated: June 6, 2001

Footnotes:

1. Pursuant to Rule 11(a), the language of this proceeding is English, inasmuch

as that is the language of the Registration Agreement pertaining to the Domain

Name. The German trademark registration was submitted by Coltec in the German

language, unaccompanied by any translation. Pursuant to Rule 11(b), it is in

the discretion of the Panel whether to accept that document or to order that

a translation into English be provided. In its discretion, and in the circumstances

of the present case, the Panel does not find it necessary to order such a translation,

inasmuch as (a) no request for such a translation or objection to the use of

the German document has been made by the Respondent; (b) existence of the German

trademark registration is not essential to the outcome of this proceeding; and

(c) the sole Panelist is sufficiently conversant with the German language as

to be able to understand the import of the document without the benefit of a

translation. (back to text)