Trans Continental Records, Inc. v. Compana LLC

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Trans Continental Records, Inc. v. Compana LLC

Case No. D2002-0105

1. The Parties

The Complainant is Trans Continental Records, Inc., is a Florida corporation

having a place of business at Orlando, Florida, United States of America.

Represented by Edward J. Naughton of Holland & Knight LLP,

10 St. James Ave., Boston, MA 02116, United States of

America.

The Respondent is Compana LLC, Post Office Box 111501,Carrollton,

Texas 75011-1501, United States of America. Represented by its president,

Jeffrey Baron.

2. The Domain Name and Registrar

The domain name at issue is <LFO.com>. The domain name is registered

with Secura GmbH, located at Am Alten Posthof 4-6, 50667 Köln, Germany.

3. Procedural Background

Complainant filed its Complaint under the ICANN Uniform Domain Name Dispute

Resolution Policy (the "Policy") with the World Intellectual Property

Organization Arbitration and Mediation Center (the "Center") by

hardcopy on January 31, 2001 and by e-mail on February 20, 2002.

On February 28, 2002, the Center formally commenced this

proceeding. Respondent timely filed a Response by e-mail on March 20, 2002.

The Complainant elected a single-member Administrative Panel, and the Respondent

acceded.

On April 5, 2002, after clearing for potential conflicts, the Center appointed

the Panel. Because of transmission difficulties, the hard copy of the Response,

with exhibits, was not received by the Panel until April 11, 2002,

and the hard copy of the Complaint exhibits was not received by the Panel

until April 29, 2002.

Complainant sought leave on April 17, 2002, to file a supplemental

submission consisting of a citation to a recent United States federal Court

of Appeals decision. Because that decision was released on April 3, 2002,

well after the Complaint was filed, and because Complainant promptly submitted

it to the Panel and did so without rearguing the merits of the case, the Panel

accepts the submission. See Pet Warehouse v. Pets.Com, Inc., WIPO

Case No. D2000-0105 (April 13, 2000).

4. Factual Background

Complainant is a record company, among whose musical groups is the Lyte

Funky Ones, popularly known as "LFO." Complainant owns the trademark

rights associated with LFO, which has sold nearly 1.75 million albums and

over 2.5 million singles since April 1996. Several of LFO’s singles

have had significant success on American popular radio, and the group has

received extensive media coverage in both the mainstream press and teen-

and pre-teen-oriented periodicals targeting LFO’s fan base. LFO has toured

Europe and the U.S. extensively since 1996, including as the headline act

for the Nickolodeon cable network’s Summer 2000 "All That and More"

music festival. Merchandise bearing the LFO logo has generated revenues

in excess of $900,000. Complainant has filed an application with the U.S.

Patent and Trademark Office for registration of the LFO mark for various

entertainment-related goods and services, including posters, backpacks and

clothing.

Complainant was the registrant of <LFO.com> from September 23, 1998

until September 23, 2000, when the registration expired.

Respondent registers generic and short, memorable names for use in an email

business.

5. Parties’ Allegations

Complainant alleges that the domain name at issue is identical to or confusingly

similar with the name of its musical group LFO, and that Respondent has

no rights or legitimate interests in respect of the domain name at issue.

According to Complainant, Respondent has no trademark registrations comprised

in whole or in part of the name, does not carry on a bona fide business

under a name corresponding to the domain name, and is not commonly known

by any name that includes "LFO." Respondent uses the domain name

only to resolve to a third-party search engine.

Complainant further alleges that Respondent’s registration and use of the

domain name is in bad faith because Respondent has attempted to profit from

the registration of the domain name. When Complainant discovered that Respondent

had registered the domain name, Complainant offered to purchase it for $3,000.

Respondent rejected the offer but invited a higher one. In addition, Complainant

alleges that Respondent has demonstrated bad faith by passively holding

and "warehousing" the domain name, preventing Complainant from

reflecting its mark in a corresponding domain name. Complainant states that

Respondent has engaged in a pattern of such conduct, by registering domain

names including <agile.com>, <clockwise.com>, <greenlawn.com>,

and <insulator.com>. "AGILE," "CLOCKWISE," "GREENLAWN,"

and "INSULATOR" are all registered as marks in certain categories

with the U.S. Patent and Trademark Office.

Complainant also alleges that Respondent acted in bad faith because it

intended to cause confusion based on the fact that Complainant owned <LFO.com>

for two years and fans of the musical group became accustomed to visiting

that site. This, according to Complainant, leads to initial interest confusion,

which is a violation of the Lanham Act. Finally, Complainant alleges that

Respondent acted in bad faith because its registration has prevented and

disrupted Complainant’s business by making it more difficult for fans of

LFO to find information about them and products bearing their name.

Respondent alleges that it was unaware of Complainant’s unregistered trademark

or its previous registration of the domain name, and registered it only

on December 15, 2000, three months after Complainant’s registration

lapsed. Its business model, Respondent states, is to register generic and

short, memorable names for use in a "vanity"-type email business.

Respondent also contests Complainant’s rights in the LFO mark because an

opposition to Complainant’s application is pending at the Trademark Trial

and Appeal Board.

Respondent claims that it has rights or legitimate interests in the domain

name at issue because LFO is a short, generic letter combination and Complainant

may not claim exclusive rights therein. See, e.g., Philippe Tenenhaus

v. Telepathy, Inc., NAF Case No. FA0003000094355) (May 17, 2000)

(<daf.com> was generic or acronymic term available to multiple parties

and therefore not registered or used in bad faith); Kis v. Anything.com,

WIPO Case No. D2000-0770 (November 20, 2000)

(same for <kis.com>). LFO, among other uses, is an acronym for "Low

Frequency Oscillation," and, according to Respondent, the initials of numerous

organizations and individuals. Moreover, Respondent claims, it does not use

the domain name for its trademark value, but for its value as a short, three-letter

combination. Because of the rarity of such combinations (all are registered,

as are all two-letter domain names and all allowed one-letter domain names),

they have commercial value independent of any trademark value. While it might

not be legitimate to register <ibm.com> because of the overwhelming fame

of IBM, Respondent suggests, a mere acronym of the name of a musical group without

widespread fame or secondary meaning cannot be appropriated by one trademark

owner.

In furtherance of its business model, Respondent states that it has registered

numerous domain names allowing customers to match their profession, surname

or initials, and lists as examples of its registered domain names <mcCoy.com>,

<cindi.com>, <abigail.com>, <mickie.com>, <interns.com>,

<gra.com>, <hko.net>, <icy.com>, <wce.com>, and

<yte.com>. Respondent states that, prior to registering <LFO.com>

and prior to any notice from Complainant, it invested in a dedicated web

server and began negotiations with software developers to complete the email

software applications necessary to its business. Thus, Respondent contends

that it has demonstrated preparations to use the domain name in a bona fide

business, as part of a business model that numerous Panels have conceded

is legitimate (including one evaluating Respondent itself).

Respondent disputes Complainant’s allegations of bad faith. Respondent

submits that it never offered to sell this domain name or any other, but

merely rejected Complainant’s unsolicited offer through counsel and granted

Complainant’s counsel permission to communicate directly with Respondent.

Respondent also claims that it has not tried to prevent markholders from

using domain names or disrupt their businesses and that it has not attempted

to attract Internet users by creating a likelihood of confusion with Complainant’s

mark.

6. Discussion and Findings

The burden for the Complainant under paragraph 4(a) of the Policy is to

prove:

(i) That the domain name registered by the Respondent is identical

or confusingly similar to a trademark or service mark in which the Complainant

has rights;

(ii) That the Respondent has no rights or legitimate interests in

respect of the domain name; and

(iii) That the domain name has been registered and used in bad faith.

In this case, the first element has been established. Complainant has submitted

sufficient evidence to establish common-law rights in the initialism "LFO."

The mere fact that an opposition proceeding has been filed against its application

to register that mark in the U.S. Patent and Trademark Office does nothing

to undermine the showing of common law rights (particularly where Respondent

has identified neither the opposer nor the grounds for the opposition).

The relative strength or weakness of Complainant’s rights are not relevant

to the first factor once Complainant has shown sufficient interest in the

mark to establish some trademark rights.

Complainant has failed, however, to establish the second and third elements

of the Policy. Use of short terms that may be appropriate for a vanity email

business, or even for sale, is a legitimate business model. See, e.g.,

International Raelian Religion and Raelian Religion of France v. Mailbank.com

Inc., WIPO Case No. D2000-1210 (April 4, 2001)

(<rael.com>); General Machine Products Company, Inc. v. Prime Domains,

NAF Case No. FA0001000092531 (March 16, 2000) (<craftwork.com>).

In response to Complainant’s prima facie case that Respondent lacked a

legitimate interest, Respondent produced evidence that it prepared to use

the domain name, among others, in that type of business. The Panel is disturbed,

however, by the apparent inactivity of Respondent’s supposed business model.

Respondent’s evidence that it prepared to operate an email business is from

early 2001, and currently its domain names simply resolve to a search engine.

If it would have mattered to the decision in this case, the Panel would

have sought additional information from the Respondent to explain the delay.

Given the Panel’s definitive ruling on the third factor, though, the Panel

determined that there was no reason to delay this matter by seeking supplemental

submissions.

Significantly, Respondent certifies that it was unaware of Complainant’s

rights. That the LFO mark is unregistered and that Respondent registered

the domain name some months after Complainant’s registration had lapsed,

apparently in the ordinary course of its business, provides no reason for

the Panel to question the credibility of Respondent’s certification. If

it had registered a generic domain name in good faith for use in a vanity-type

email business, Respondent was entitled to reject Complainant’s offer to

transfer the domain name and even to offer it for sale (as its communication

with Complainant seems to have suggested by stating that Respondent was

uninterested in selling the name "under the terms [Complainant] offered").

Thus, Complainant has not met its burden of showing that the domain name

was registered and used in bad faith.

The Panel specifically rejects Complainant’s borderline frivolous argument

that Respondent’s registration of <agile.com>, <clockwise.com>,

<greenlawn.com>, and <insulator.com>, among others, shows a pattern

of cybersquatting. Even setting aside the decision in Agile Software Corp.

v. Compana LLC, WIPO Case No. D2001-0545

(July 23, 2001), which determined that Respondent’s registration of

<agile.com> was not in violation of the Policy, these terms are all dictionary

terms with obvious generic meanings. That they may be distinctive as applied

to particular goods and services, as "Apple" is when applied to computers,

is no evidence of bad faith. See, e.g., Etam, plc v. Alberta Hot Rods,

WIPO Case No. D2000-1654 (January 31, 2001)

(<tammy.com> legitimately registered because it contained a common female

name); Zero International Holding GmbH v. Beyonet Services, WIPO

Case No. D2000-0161 (May 12, 2000) (<zero.com> legitimately

registered because "zero" is a short, common word); Shirmax Retail

Ltd. v. CES Marketing Group, eResolution Case No. AF-0104 (March 20, 2000)

(<thyme.com>; same).

In addition, the Panel rejects Complainant’s argument that Respondent attempted

to create a likelihood of confusion merely because former visitors to <LFO.com>

might return there, expecting Complainant’s site to be there still. While

re-registering a domain name corresponding to an inherently distinctive

or uniquely famous mark because of the expectation that former visitors

would return and be confused or diverted can surely qualify as bad faith,

see SlashCity v. Domain For Sale, NAF Case No. FA0108000098823

(October 1, 2001), the Panel will not infer such intent merely

because the Respondent registered a short, lapsed domain name. An automatic

presumption of bad faith intent to cause confusion, or initial interest

confusion, stemming from a registrant’s taking over a lapsed registration

would essentially give registrants a right of recapture beyond that set

forth in their contracts with domain name registrars. The UDRP is not a

proper vehicle for such a change.

It may be that Complainant could develop evidence of bad faith and lack

of legitimate interest in a legal proceeding that would allow more evidentiary

development. The Policy, however, was not designed to transfer domain names

in every case that a trademark owner might ultimately win. On the record

before it, the Panel cannot say that Complainant has shown that Respondent

lacked a legitimate interest and registered and used the domain name in

bad faith.

7. Decision

Complainant has failed to establish two of the three elements of the Policy:

that Respondent lacks legitimate rights or interests in the domain name

<LFO.com>, and that Respondent registered and is using the domain

name in bad faith. The Panel therefore denies the Complainant’s request

that the domain name be transferred from Respondent to Complainant.

David H. Bernstein

Sole Panelist

Dated: April 30, 2002

More cases by this complainant

• Trans Continental Records, Inc. — D2005-0791 · Terminated