Ruby's Diner, Inc. v. Joseph W. Popow

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Ruby’s Diner, Inc. v. Joseph W. Popow

Case No. D2001-0868

1. The Parties

Complainant is Ruby’s Diner, Inc., 110 Newport Center Drive, Suite 110, Newport

Beach, CA 92660, USA.("Ruby’s" or "Complainant").

Respondent is Joseph W. Popow, 113 Wellington Avenue, Stratford, N.J. 08084,

USA ("Mr. Popow" or "Respondent").

2. Domain Name and Registrar

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

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

VA 20170, USA. ("NSI").

3. Procedural History

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

by e-mail on July 10, 2001 and in hard copy on July 12, 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). Ruby’s made

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

administrative proceeding is July 17, 2001.

On July 13, 2001, the Center transmitted via email to NSI a request for registrar

verification in connection with this case. On July 16, 2001, NSI transmitted

via email to the Center NSI’s Verification Response, confirming that the registrant

of the Domain Name, and its administrative and billing contacts, are Joseph

W. Popow, 113 Wellington Avenue, Stratford NJ 08084; and that the domain

name registration in issue is in "Active" status and NSI’s 5 Service

Agreement is in effect.

On July 17, 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 Respondent. The Center advised that

the response was due by August 5, 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 Complainant

had elected for a single panelist to decide this matter.

No Response was received from Mr. Popow or anyone acting on his behalf, either

by the deadline or at any other time.

On August 6, 2001, the Center transmitted to Mr. Popow, via e-mail, a Notification

of Respondent Default. The Center advised Mr. Popow (a) that he had failed to

comply with the deadline for submission of his 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 Mr. Popow.

On August 15, 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 August 29, 2001.

4. Factual Background and Parties’ Contentions

a. The Trademark

The Complaint is based on Ruby’s alleged ownership of rights to the marks RUBY’S

and RUBY’S DINER, which Ruby’s claims to have used for diner-style restaurants

since 1982 in California and other parts of the United States.

Complainant owns federal registrations for RUBY’S (U.S. Trademark Reg. No.

1,631,936, January 15, 1991), RUBY’S DINER (U.S. Trademark Reg. No. 2,387,100,

September 19, 2000), and several design variations thereof for restaurant services

and related products. Copies of selected registration certificates for these

marks were provided to the Panel. Complainant also owns trademark registrations

for RUBY’S and RUBY’S DINER in a variety of foreign countries, and provided

the Panel with samples of these foreign registrations.

b. Jurisdictional Basis

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

has jurisdiction to decide the dispute. The registration agreement pursuant

to which the Domain Name was registered incorporates the Policy, a copy of which

was appended to the Complaint.

c. The Complaint

Ruby’s asserts as follows:

- Respondent Joseph Popow was employed by Ruby’s Diner from 1997 to 1999 as

a general manager at its Cherry Hill, New Jersey location.

- During his employment at Ruby’s, Mr. Popow contacted Robert Black, Manager

of Information Systems for Ruby’s, to mention that he had seen the <rubys.com>

website and to express his interest in website design.

- Mr. Popow showed Mr. Black a portion of his personal web page hosted at his

America Online account, which included information about Ruby’s Diner and the

Cherry Hill restaurant. Mr. Black cautioned Mr. Popow to be careful about using

"the Ruby’s trademarked logo."

- Without further discussion with Complainant, Mr. Popow registered <rubysdiner.com>

on December 4, 1998 and transferred some of the content from his personal web

page to the new site.

- In February 1999, Mr. Popow attended an event at which Steve Link, a District

Manager for Ruby’s Diner, was present. At this gathering, Mr. Popow told

Mr. Link about his registration of the Domain Name and stated that his intention

was to sell it to the company. Mr. Popow told Mr. Link that he planned

to offer the Domain Name for sale to Ruby’s Diner for as much as $50,000 dollars.

- Upon discovery of the Domain Name registration, Alethea Rowe, at that time

Director of Marketing for Ruby’s Diner, contacted Mr. Popow and requested that

he remove the content of his website and turn over the domain name registration

to Ruby’s Diner. Mr. Popow refused, and offered instead to sell the Domain Name

to the company for an amount to be determined later. Approximately two days

after this phone conversation, Ms. Rowe logged on to the website located at

the Domain Name and discovered that Mr. Popow had replaced its content with

a link to the Ruby’s Diner company site located at <rubys.com>. Several

days later, in another conversation with Ms. Rowe, Mr. Popow offered to sell

the Domain Name to Ruby’s for $10,000. Mr. Popow later reiterated this offer

in a telephone conversation with Doug Cavanaugh, the President of Ruby’s Diner,

Inc. During this conversation, Mr. Popow allegedly told Mr. Cavanaugh that Mr.

Popow registers domain names to supplement his income.

- Mr. Popow is no longer employed at Ruby’s Diner, yet he continues to operate

a website located at the Domain Name, the content of which consists entirely

of an offer to sell the domain name for $25,000. Specifically, the text reads:

"This domain name is FOR SALE! Rubysdiner.com. Price: $25k. Click here

to send an offer to the owner."

- Mr. Popow has registered several other domain names containing registered

trademarks, including <rubysdinersucks.com>, and <coldwellbankerelite.com>,

which contains the registered trademark COLDWELL BANKER, owned by Coldwell,

Banker & Co [1]. Mr. Popow currently lists

both of these domains for sale on the domain name brokerage site domains.com

for $25,000 and $20,000, respectively.

d. Response

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

for so doing was August 5, 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 Complainant’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 Complaint is amply supported with

sworn declarations, copies of trademark registrations, and other evidence that

persuasively supports key allegations made in the Complaint. Respondent, by

his default, has failed to rebut any of these allegations with any contrary

assertions or evidence.

In particular, by defaulting and failing to respond, Respondent 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.

The Panel finds the sworn testimony of Robert Black, Steve Link, Althea Rowe,

and Douglas Cavanaugh to be credible, unrebutted, and entitled to weight as

discussed herein.

b. Complainant’s Proof

(i) Domain Name Identical or Confusingly Similar to Trademark

Complainant has proven that it is the owner of common-law trademark rights

in the marks RUBY’S and RUBY’S DINER, going back to 1982, and that it has federal

trademark registrations for RUBY’s since 1991 and for RUBY’S DINER since 2000

[2].

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. See 15 U.S.C.

§ 1072.

In determining identity or confusing similarity under Paragraph 4(a)(i) of

the Policy, it is well established that the generic top-level domain, in this

case ".com," 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). Likewise, minor omissions of

punctuation do not sufficiently alter the trademarked word or phrase to negate

a finding of identity or confusing similarity. See, e.g., Barney’s Inc. v.

BNY Bulletin Board, WIPO Case. No. D2000-0059

(April 2, 2000) (finding <barneysnewyork.com> identical to BARNEY’S NEW

YORK within the intent of the Policy, and noting that such a conclusion is consistent

not only with the Policy but also with established U.S. trademark law). By the

same token, rubysdiner.com is identical to Complainant’s RUBY’S DINER mark.

Accordingly, the Panel need not reach the question of whether the Domain Name

is also confusingly similar to the RUBY’S mark in this context. In sum, rubysdiner.com

is identical and confusingly similar to Complainant’s registered trademarks

within the meaning of Paragraph 4(a)(i) of the Policy.

(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.

Respondent does not appear to be known by the name "Rubysdiner." Mr.

Popow has offered no evidence, and none appears of record, that he uses the

Domain Name for any legitimate business purpose unrelated to his efforts to

capitalize on its association with Complainant. Accordingly, the Panel concludes

that Respondent has no rights in the Domain Name.

While it is true that Mr. Popow is making some use of the domain name, that

use consists simply of advertising the name itself for sale. Using a domain

name as the address of a website whose sole purpose is offering the domain name

itself for sale is not recognized as a legitimate interest under the Policy.

See, e.g., Educational Testing Service v. TOEFL, WIPO

Case. No. D2000-0044 (March 16, 2000), at Section 6 ("the mere offering

of the domain name for sale to any party does not constitute a right or legitimate

interest in that name," also noting that a contrary conclusion would conflict

with paragraph 4(b)(i), which provides that such an offer of sale indicates

bad faith); World Wrestling Federation Entertainment, Inc v. Michael Bosman,

WIPO Case No. D99-0001 (January 14, 2000),

at Section 6 (finding that respondent had no rights or legitimate interest in

the domain name at issue where its sole use was for resale to the trademark

owner).

Mr. Popow’s status as a former employee of Ruby’s Diner does not alter the

conclusion that he has no rights or legitimate interest in the Domain Name.

An employee or former employee is not a licensee, and thus has no authorization

to use a company’s trademark or a confusingly similar variation thereof without

permission. The Policy contains no exception providing a special right to use

a trademark belonging to one’s employer or former employer in a domain name.

Consistent with such an interpretation, previous decisions have decisively refused

to recognize such a right or interest. See, e.g., Arab Bank for Investment

and Foreign Trade v. Sabah Mahmoud Akkou, WIPO

Case No. D2000-1399 (December 19, 2000), at Section 6 (refusing to find

"the slightest indication of a legitimate trademark interest" where

a former employee registered her employer’s trademark as a domain name); ESAT

Digifone Limited v. Michael Fitzgerald, WIPO

Case. No. D2000-0602 (August 2, 2000), at Section 6 (finding no rights or

legitimate interest where a former employee registered the employer’s trademark).

Nor does the analysis differ where a current employee is involved (as Mr. Popow

was at the time he registered the Domain Name). See, e.g., State Farm Mutual

Insurance Co. v. Reger, NAF Case. No. FA95651 (November 14, 2000) (rejecting

argument for legitimate interest where a State Farm employee registered <statefarmclaims.com>);

Weekley Homes v. Wilsher Co., NAF Case. No. FA95331 (September 2, 2000)

(ordering transfer of domain name from a Respondent who registered the name

while an employee of Complainant corporation). In any event, even if Mr. Popow

could argue (which he has not) that implied consent existed at the time he was

an employee of the company (on the theory that the Complainant was aware of

his actions and did not immediately and expressly forbid them), he no longer

would retain such right after his employment was terminated and the company

requested the restitution of control over its marks. See Cook Motor Cars

v. Soto, NAF Case. No. FA94992 (July 18, 2000) (concluding that even where

a Complainant corporation had assisted an employee in obtaining and using a

domain name containing a variation of the employer’s trademark the employee

had no rights or legitimate interest in the domain name after she left the company).

(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, Complainant has easily met its burden of establishing this type

of bad faith. On several occasions, Mr. Popow has offered the Domain Name for

sale to Complainant, who as noted above is the holder of registered trademarks

embodied within the Domain Name, for sums (first $50,000 and then $10,000) vastly

exceeding any costs Mr. Popow could have incurred in connection with the Domain

Name. Mr. Popow has continued with such conduct by advertising the domain

name for sale for $25,000 on the www.domains.com brokerage site. He makes no

other use of the Domain Name. This conduct falls squarely within the language

of paragraph 4(b)(i), and gives rise to the inference that the primary purpose

of registration was to exact payment from the trademark holder.

Such activity is deemed to constitute bad faith registration and use under

the Policy. See Educational Testing Service v. TOEFL, WIPO

Case. No. D2000-0044 (March 16, 2000), at Section 6 ("If

the Respondent’s offer for sale is determined to be in bad faith, then the registration

will also be deemed to be in bad faith."). The conclusion that Mr. Popow

has registered and used <rubysdiner.com> in bad faith makes sense both

as a literal interpretation of the clear language of the Policy, and also as

a matter of social policy. Where, as here, a respondent is "contributing

no value-added to the Internet" but rather merely attempting to exploit

the registration process, the Internet community would be better served by transferring

the domain name to the trademark owner. Id.

Complainant also contends that Respondent has engaged in the second type of

"bad faith" illustrated in Paragraph 4(b), namely registering the

domain name in order to prevent the trademark owner from reflecting its trademark

in a domain name, where respondent has "engaged in a pattern of such conduct."

By registering the Domain Name in the ".com" TLD, Respondent obviously

deprived Complainant of the opportunity to do so. Mitigating this conclusion,

however, is the fact that Complainant’s original foray into cyberspace was limited

to registering <rubys.com>, and likewise it originally chose to register

only RUBY’S as a federal trademark. Only later did Complainant wake to the realization

that it had valuable trademark rights in the mark RUBY’S DINER. Nonetheless,

under U.S. law, trademark rights inhere not in those fastest to register them

but in those who first make commercial use of them, and here that was Complainant.

Accordingly, the Panel turns to the question of whether Respondent exhibited

a "pattern" of registrations.

Complainant argues that as few as two registrations may in appropriate cases

be deemed to constitute a "pattern" under the Policy, and cites New

York Life Insurance Company v. Puthiyoth, WIPO

Case No. D2000-0812 (September 28, 2000). The Panel does not agree that

the cited decision holds that two is a "pattern." Complainant also

cites Sundor Brands v. Trenchcoat Productions, WIPO

Case No. D2000-0633 (August 21, 2000) for the proposition that the

panel in that case was "not aware of any fixed number of domain names that

must be registered before one can be said to have engaged in a ‘pattern’ of

conduct." That case, however, involved 21 registrations, not two.

Respondent registered both the Domain Name in dispute and also <coldwellbankerelite.com>

(presumably without authorization from the Coldwell Banker company, Complainant

suggests — although it offers no evidence proving this point). Without concluding

definitively that two can never constitute a "pattern," the Panel

is not bowled over by the evidence that Mr. Popow is a habitual cybersquatter

[3].

Complainant further asserts that Respondent’s registration of <rubysdinersucks.com>

is part of this "pattern"; however the Panel is reluctant either to

reach out and attempt to resolve the legitimacy of a domain name registration

not presently before it nor to opine outside the context of a more complete

record on the issue of domain names that incorporate within them a disparaging

reference to a trademark owner. Indeed, prior decisions have suggested, with

some persuasive force, that such registrations cannot easily be misinterpreted

by the public as being authorized by the trademark owner. The Panel will place

no weight on this last registration.

The Panel is left unpersuaded that Complainant has met its burden of proving

bad faith under Paragraph 4(b)(ii), although there is certainly evidence that

Mr. Popow has registered at least one other well-known trademark as a domain

name in the past. The issue, in any event, is moot because bad faith under the

first illustration has been found.

There is no allegation that the third or fourth illustrations of bad faith

apply.

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 (ii) is also applicable.

6. Decision

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

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

or confusingly similar to the Complainant’s mark; (2) Respondent 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 Respondent in bad faith.

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

requires that the registration of the <rubysdiner.com> domain name be

transferred to Ruby’s Diner, Inc.

Michael A. Albert

Sole Panelist

Dated: August 29, 2001

Footnotes:

1. The only domain name presently at issue

before this Panel is <rubysdiner.com>. Nothing herein is meant to, or

should be construed to, prejudge how any dispute over any other domain name

might be resolved.

2. That Respondent registered the Domain

Name prior to issuance of this federal registration is irrelevant. He had actual

notice of Complainant’s longstanding common-law usage of the RUBY’S DINER mark

— indeed, he worked for Ruby’s Diner.

3. Complainant cites a statement allegedly

made by Mr. Popow to one of Complainant’s affiants that Mr. Popow earns extra

money by registering domain names. Leaving aside the ambiguities in this statement,

it is in any event hearsay. While arbitrators are not bound by rules of evidence

and may in appropriate cases consider hearsay, this Panel finds little of relevance

in this statement.