Precyse Corporation v. Punta Barajas, SA

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Precyse Corporation v. Punta Barajas, SA

Case No. D2002-0753

1. The Parties

Complainant

is Precyse Corporation, a Canadian corporation with its principal place of

business in Oakville, Ontario, Canada, represented by May M. Cheng of the law

firm Fasken Martineau DuMoulin LLP, Toronto, Ontario, Canada.

The

Respondent is Punta Barajas, SA, a Costa Rican corporation with its principal

place of business in San Jose, Costa Rica, represented by Michelle L. Wassenaar

of the law firm Dimock Stratton Clarizio LLP, Toronto, Ontario, Canada.

2. Domain Name and Registrar

The

domain name at issue (domain name) is <cyberbingo.com>. According to the whois database, the

domain name was initially registered on May 27, 1998, by a person or

entity unaffiliated with Respondent.

Respondent acquired and registered the domain name in December

2000.

The

registrar is Tucows.com Inc., Toronto, Ontario, Canada.

3. Procedural History and Jurisdiction

The WIPO

Arbitration and Mediation Center (the Center) received the Complaint on

August 9, 2002, (electronic copy), and August 13, 2002,

(hard copy). The Center verified that

the Complaint as amended satisfied 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 WIPO Supplemental

Rules). Complainant made the required

payment to the Center. The formal date

of the commencement of this administrative proceeding is

August 15, 2002.

On

August 12, 2002, the Center transmitted via email to the Registrar a

request for registrar verification in connection with this case, and the

Registrar transmitted its verification response to the Center confirming that

the Respondent Punta Barajas, SA is the registrant of and administrative and

technical contact for the domain name.

On

August 15, 2002, the Center transmitted to the Respondent a

Notification of Complaint and Commencement of the Administrative Proceeding via

courier and e-mail.

On

September 4, 2002, Respondent, through counsel, submitted its Response.

The

Complainant's designated, and Respondent concurred in, decision by a single

member panel. The Center invited Mr.

Richard G. Lyon to serve as the sole Panelist.

After

receiving Mr. Lyon's Statement of Acceptance and Declaration of Impartiality

and Independence, on September 24, 2002, the Center transmitted to the parties

a Notification of Appointment of Administrative Panel. The projected decision date is

October 9, 2002.

I find

that the Administrative Panel was properly constituted and appointed in

accordance with the Rules and Supplemental Rules, and that the panel has

jurisdiction over this dispute.

The

Administrative Panel shall issue its decision based on the Complaint, the

evidence presented, the Policy, the Rules, and Supplemental Rules.

4. Factual

Background

While

the parties frequently engage in unsupported characterization and surmise, I

believe that the following recital of the factual background is undisputed

except as noted in the third following paragraph.

Complainant's Marks. Complainant owns

trademark registrations for CYBERBINGO and design in Canada (application filed

in March 1999; registered October 2000) for computer software for use in

playing bingo on a computer), and for CYBERBINGO in the United States

(application filed May 2000; registered May 2002) in international classes

9 and 41, for use in association with 'downloadable computer software for use

in playing the game of bingo on a computer', and for entertainment services,

namely, conducting on-line bingo games.

Both certificates of registration recite, and Complainant alleges, use

in commerce since November 1996. These

two registered trademarks are referred to as the Marks. (Complaint, ¶¶12(1)-(2) and Annexes D

and E)

Complainant's Business. Complainant has

developed and licenses software for on‑line gaming. Since 1999, it has been a wholly owned

subsidiary of dot com Entertainment Group, Inc. (DCEG). DCEG is a diversified Internet software

development company, specializing in the creation and support of Internet

entertainment products and related services.

DCEG has its main office in Buffalo, New York with affiliate offices in

Toronto, Canada, St. John's, Antigua, and Barbados. Complainant has licensed DCEG to use the Marks. Complainant

registered the domain names <cyberbingo.ca> in January 2001, and

<cyberbingo.biz> in December 2001.

Complainant or DCEG own other domain names that include the word cyberbingo. (Complaint, ¶¶12(3)-(8))

The Cyberbingo Corporation, another licensee of at least one of the Marks,

has been operating a website at <cyberbingo.net> since January 2, 1997,

under license from Complainant. Complainant does not allege any affiliation

with Cyberbingo Corporation. Respondent alleges, without any proof, that Cyberbingo

Corporation was established at the direction of the officers and directors of

Complainant in Antigua, to avoid Canadian regulation.[1]

(Complaint, ¶12(6); Response, ¶21)

Respondent's Business.

Respondent's email address indicated in its registration of the domain

name is <bingoville.com> (Complaint, Annex A). At this site Respondent provides on-line bingo gaming services

to its customers. (Response, ¶25)

The Domain Name. The domain name was registered in May 1998, by an

unnamed third party (Complaint, Annex A; Response, ¶17). Neither party identifies

this entity and neither party claims any affiliation or other operating relationship

with it. Respondent purchased the domain name from the third party in December

2000, for approximately $50,000.[2] (Response,

¶17)

Dealings between Complainant/DCEG and Respondent. Two weeks after Respondent

acquired the domain name, on January 11, 2001, a DCEG representative

confirmed an agreement (the Letter Agreement[3])

between DCEG and Respondent, as follows:

We [DCEG] hereby

confirm your undertaking and commitment on behalf of [Respondent] that

[Respondent] will not go live with the URL cyberbingo.com or in any way,

shape of form use the name Cyberbingo or any alliteration thereof for any

purpose whatsoever unless you have obtained the express prior written consent

of Dot Com Entertainment Group Inc. (DCEG).

Based on reliance of this letter, Dot Com (Antigua) Ltd. (the

Licensor) has agreed to install the Software as per the license agreement

entered into between the Licensor and [Respondent] (the Licensee Agreement). In the event that the undertaking set out in

this letter is in any way breached, [Respondent] confirms that such breach will

constitute a default under the License Agreement and will result in the immediate

termination by the Licensor of the License Agreement. In the event the Licensor terminates the License Agreement,

[Respondent] agrees that neither DCEG nor the Licensor will have any liability

for any losses suffered by [Respondent] as a result thereof. (Complaint, Annex Q; Response, Annex J)

Shortly thereafter the parties exchanged email correspondence regarding possible

sale of the domain name to DCEG. DCEG declined Respondent's offer of $200,000

in cash, $300,000 in royalty credits, and other consideration. DCEG made a

counterproposal,[4] and stated that if Respondent

refused the counterproposal, DCEG didn't object to Respondent's alternative

of [Respondent] agrees not to use the [Domain N]ame and sell it on its own.

At about the same time, DCEG licensed Respondent to use its software. This

license was the subject of a press release on January 23, 2001. The software

license did not include any license to use the Marks. (Complaint, ¶¶23-24 and

Annex P; Response, ¶¶25, 27 and Annex J)

Respondent Transfers the Domain Name. On February 8,

2001, Respondent sold the domain name to Market Domains, LLC, for $250,000,

paid with a promissory note in Respondent's favor in the full amount of the

purchase price, secured by the domain name.

(Complaint, ¶30 and Annex V; Response, ¶29)

Respondent Reacquires the Domain Name. In May 2002,

Complainant discovered that the domain name was registered to CAT Internet

Services Inc., Morrisville, Pennsylvania, USA.

Complainant sent cease and desist letters to CAT and, later, its

counsel. CAT's use of the domain name

included links to gaming and casinos.

On August 2, 2002, CAT's counsel replied to Complainant that

CAT and Market Domains LLC were apparently the same entity, that CAT/Market

Domains had defaulted on the promissory note, and that Respondent had

foreclosed on the collateral and hence had reacquired the domain name. The whois database indicates that Respondent

reregistered the domain name on August 6, 2002. (Complaint, ¶¶26-30 and Annexes A, R - V;

Response, ¶29)

Respondent's Use of the Domain Name. Respondent has used the domain name as follows. The domain name resolves to a page that

contains a box with the words Enter Click Here. After clicking on the box, the user is taken to the website

www.hitboxcentral.com. This is a site

pertaining to web hosting and provides information regarding the fees charged

for web hosting. Once the tab named

HitBox Services is clicked, users are then taken to the website

www.websidestory.com. There is a

company profile on the site for WebSideStory.

The company is headquartered in San Diego, California and is described

as the world's leading provider of outsourced e-business intelligence

services. There is no allegation that

Respondent ever used the domain name as a link to Respondent's gaming

activities. (Complaint, ¶18 and Annex

N; Response, ¶34)

5. Parties' Contentions

Complainant's

contentions may be summarized as follows:

The domain name

is identical to the Marks and, and except for top-level domain designation, to

Complainant’s websites and the websites of its licensees. Complainant or its parent company has not

licensed Respondent to use the Marks, and Respondent has no legitimate interest

in the domain name. Respondent is a

direct competitor of Complainant and its licensees in the business of on-line

gaming. As such, Respondent has

registered and is using the domain name to divert Internet traffic intended for

Complainant and its licensees to Respondent’s website. Even though diversion does not go to

Respondent’s competing site, the diversion nevertheless hurts the Complainant

and its Licensees by diverting traffic intended for them to an unrelated

site. Respondent's bad faith is

illustrated by its offer to sell the domain name to Complainant's parent for

$500,000. Respondent has never been

known by the term cyberbingo. Respondent is using the domain name for

commercial purposes, and none of those purposes is legitimate or related to its

principal business. In sum, the

Respondent is obviously using the domain name in a deliberate attempt to

profit, for commercial gain, by the registration of this domain name, creating

a likelihood of confusion with the Complainant’s trade-mark and licensees’

websites or to disrupt the business activities of the Complainant and its

licensees. (Complaint, ¶35)

Respondent's

contentions maybe summarized as follows:

The domain name was

registered prior to Complainants’ substantial use of the word cyberbingo in commerce; the allegation of

a disguised related party transaction, discussed in Section 4, note 1

above, is evidence that actual use of the Marks did not occur until after that

time. As a licensee of DCEG’s software

and a provider of on-line bingo gaming, it has a legitimate interest in any

domain name relating to bingo.

Respondent has carefully refrained from using the domain name as a

gateway or click-through to its gaming activities and its use as described in

Section 4 is entirely legitimate.

Respondent has shown no evidence of diversion of customers and no

evidence of tarnishment. Respondent is

not responsible for the activities of CAT/Market Domains during the brief

interval between Respondent's ownership that that entity owned the domain

name. The Letter Agreement is in fact

DCEG’s acknowledgment that Complainant consented to Respondent’s ownership of

the domain name, provided that the domain name was not used by Respondent

without Complainant's consent (DCEG agreed to [Respondent's] ownership of

<cyberbingo.com>, provided the domain name was not used by [Respondent];

and [Respondent] agreed to allow the domain name to remain undeveloped, as long

as a software licence agreement between it and DCEG's subsidiary was

honoured.), (Response ¶31).

Complainant should be held to the bargain it stuck in the Letter

Agreement; to find bad faith would in effect allow Complainant to circumvent

its own agreement.

6. Applicable

Standards

The

Complainant must prove the elements set out in paragraph 4(a) of the

Policy. These elements are as follows:

(i) Respondent's

domain name is identical or confusingly similar to a trademark or service mark

in which the Complainant has rights; and

(ii) Respondent

has no rights or legitimate interests in respect to the domain name; and

(iii) Respondent's

domain name has been registered and is being used in bad faith.

Paragraph 4(a)(iii) is conjunctive both registration and use in bad faith must

be proven. World Wrestling Federation, Inc. v. Bosman, WIPO

Case No. D1999-0001, citing Second Staff Report on Implementation Documents

for the Uniform Dispute Resolution Policy. Complainant bears the burden of

proof on each of these elements.

7. Discussion and Findings

As discussed more fully in the Bad Faith section below, the parties' lack of

completeness in presentation and, in some instances, less than total candor

in their submissions, materially hinder my analysis in this case. I have considered

using my discretion under Rule 12 to request additional submissions, but have

determined not to do so for three reasons. First, the Policy and the Rules

clearly impose on each party an obligation to come forward in the one pleading

expressly allowed it with adequate evidence to sustain the legal conclusions

it desires. Second, I believe that sua sponte requests for additional

material should be used sparingly, and then only to permit a response to a matter

a Complainant could not reasonably have anticipated or to provide evidence on

a single discrete item.[5] Here there are

many unanswered questions and evidentiary gaps. I doubt that I could craft

an order that would yield the necessary matter and no more. Third, the parties

here share, almost equally, the blame for unsatisfactory state of the record.

In that circumstance I do not believe the Panel should be seen as assisting

either party to correct errors in its submission. It is not for a panel to

save a party from its own mistakes or the consequences that flow from them.

I shall proceed to determine the

matter on the current record.

Identity and Confusion

The

Complainant has established the first element.

The domain name incorporates verbatim the Complainant's registered

marks. Since the domain name is

identical to the Marks, there is no need for proof of confusion.

Legitimate Interest

Complainant

has made a prima facie showing that Respondent lacks a legitimate interest in

the domain name. Respondent has never

been licensed by Complainant to use the Marks, Respondent has never been known

by the word cyberbingo, and

Respondent's use of the domain name is for profit.

None of Respondent's proffered justifications overcomes this showing. While

the Letter Agreement is unclear on many issues, in no way may it be read as

Complainant's acknowledgment of Respondent's legitimate interest in the domain

name. No trademark license may be implied from a license to use the software,

and Respondent does not deny that the software license does not grant such permission

expressly. An express trademark license is required to establish a distributor's

or customer's legitimate right to use a markholder's mark in its domain name

or advertising generally.[6] Respondent's

assertion that because of its business activities it has a legitimate interest

in any domain name that includes the word bingo is a flouting of Complainant's

trademark rights and the Policy. Respondent meets none of the examples of legitimate

interest in paragraph 4(c) of the Policy.

Based

on the record before me, I find that Respondent has no legitimate interest in

the domain name.

Bad Faith

Preliminary Statement. Except for ongoing license of software and the commencement of

this proceeding, the parties’ course of dealing apparently took place in a

relatively short period of time immediately prior to

January 23, 2001, the date DCEG issued a press release announcing

that it had signed a license agreement with Respondent. These negotiations, according to both

parties' pleadings, resulted in at least two agreements: the Letter Agreement

and the software license.

The evidence indicates that

other subjects were at least discussed between the parties, including the

Respondent’s taking equity in DCEG, a proposal from each side by which DCEG

would acquire domain name from Respondent, sale or transfer of equipment, and

various conditions on which the software would be licensed. Neither party furnishes, by evidence or

summary of counsel, a coherent summary of all the terms and conditions the

parties actually agreed or the interrelationship between or among the Letter

Agreement, Software License, and possible transfer of domain name. Since each party has submitted considerable

evidence and extensive (though often confusing) arguments of competent counsel,

and each identifies some but not all of the details of the parties' business

dealings, I do not believe that this shortcoming was accidental or a result of

careless drafting by counsel. It would

have been an easy matter for either party to submit an affidavit of a principal

reciting its version of the complete dealings between the parties or copies of

the full text of the two agreements, both of which each party asserts are

relevant to this proceeding. Both

parties rely on the Letter Agreement; neither party gives the panel all of the

terms of that agreement (the Letter Agreement itself plainly is incomplete) or

its explication of what those terms allow and do not allow. Of particular relevance to my determination vel non of bad faith is the issue of

whether the Letter Agreement allowed or prohibited Respondent’s subsequent sale

of the domain name.

An intentional lack of candor infects this proceeding with doubts about the

good faith of either party. As stated in Portland Titles Limited v. Martin

Baker, WIPO Case No. DTV2000-0003:

It is crucial to the

success of this process that Complainants are open and frank with the

Panel. The process has a very narrow

focus, namely bad faith registration and use of domain names. A less than straight forward presentation of

the facts on the part of [a party] is

wholly out of place.

In deciding this matter, I

will limit my conclusions to those supported by the undisputed facts as set out

in Section 4, without making any of the inferences from those facts, or

interpretation of ambiguous or incomplete aspects of the Letter Agreement,

sought by either party. On the latter

subject, even if I had the authority to interpret ambiguous provisions in a

contract between the parties a doubtful proposition in any circumstances,

given a panel's limited jurisdiction I cannot do so on the incomplete record

before me, and will not do so when I believe that the record is intentionally

incomplete.

For the same reason I

decline to use Respondent's offer to sell the domain name to DCEG as evidence

of bad faith. Complainant's evidence on

this point is clearly taken out of context; without a complete record of the

context I cannot say whether the possible sale was legitimate or not.

Two provisions of the Letter

Agreement that are either admitted by both parties or clear on the face of the

Letter Agreement are relevant to this proceeding: (1) Respondent was not permitted to go live with the domain

name without DCEG's consent, and (2) Respondent's agreeing to this restriction

was a condition of its obtaining a license to DCEG's software.

Registration. Respondent’s argument that registration in bad

faith cannot be found because the domain name was initially registered prior

to filing for registration of the Marks and prior to any significant association

of the word cyberbingo with Respondent might succeed if Respondent had

made the May 1998 registration. But this argument avails Respondent nothing,

for its initial registration of the domain name took place in December 2000.

My evaluation of bad faith in registration will be judged based upon that date.

Paragraph 4(b) of the Policy speaks of registration by you the Respondent.

See also, Dixons Group Plc v. Abdullaah, WIPO

Case No. D2000-1406, and cases there cited. Basing an evaluation of a Respondent's

bad faith on the basis of a predecessor's filing would allow those who traffic

in domain names to evade the Policy by acquiring domain names from third parties,

whose interest in the domain names might be difficult to identify. This would

be an open invitation to cyberflying.

In December 2000, Respondent was

admittedly actually aware of Complainant’s Marks, since the registration

occurred just prior to its licensing negotiations with DCEG. On any objective basis, this is compelling

evidence of registration in bad faith.

Respondent's payment of a substantial sum to acquire domain name during

or just before these negations and Respondent’s failure to provide any

legitimate reason for acquiring the domain name (see prior section) make the

case for registration for bad faith overwhelming.

Use. The facts acknowledged by both parties also sustain a finding

of use in bad faith. Respondent is caught in a Catch 22 situation with respect

to its sale of the domain name to Market Domains. If the Letter Agreement prohibits

a sale or a transfer of the domain name, then Respondent’s intentional

breach of the agreement two weeks after obtaining a license for DCEG’s

software is an obvious act of bad faith. If on the other hand the Letter Agreement

does not prohibit a transfer, then, in the absence of a contrary contractual

provision (and there is none in the record) the requirement of obtaining Complainant’s

(or DCEG’s) consent prior to any use of the domain name applies to the

transferee.[7] Complainant immediately objected

to Market Domains/CAT's use of the domain name, and Respondent impliedly concedes

that such use, if undertaken by Respondent, would have violated the Letter Agreement

(Response, ¶29). Bad faith use is proven under either horn of the dilemma.

Clean Hands. There remains one final issue to decide: whether Complaint’s

lack of candor with the Panel constitutes conduct of the sort that disqualifies

it from relief granted by this tribunal. While there may be circumstances of

a party's misconduct that can create an estoppel in the nature of the equitable

defense of unclean hands,[8] I do not believe

it is appropriate to apply that doctrine in this case. Respondent’s lack

of candor equals that of Complainant, so accepting a clean hands defense would

unfairly benefit a party in pari delicto with Complainant. More importantly,

panels under the Policy are not courts of equity. The ordinary remedy for a

Complainant’s lack of candor is to deny otherwise reasonable inferences

from the evidence actually presented. I have imposed that remedy here.

8. Decision

For the

foregoing reasons, the Panel orders that the domain name be transferred to

Complainant.

Richard G. Lyon

Sole Panelist

Dated: October 2, 2002

[1]Respondent makes this allegation

based on its belief that licensors of on-line gaming software issue their first

license to an entity that is normally incorporated in a jurisdiction with

less stringent gambling laws, and the relationship between the first licensee

and the company is hidden through the use of trustees and off-shore organizations.

[2]All references to dollars are to United States dollars.

[3]While the evidence

is sparse on the totality of the agreements between the parties and the full

scope and meaning of the Letter Agreement, as discussed infra both parties

affirmatively assert that this letter is indeed a valid agreement between them.

[4]The exact nature of Complainant's counterproposal cannot be understood given the incomplete record (see Section

7, Preliminary Statement), but it clearly included consideration significantly

in excess of Respondent's costs of registration. It is also noteworthy that

Complainant expressed none of the indignation one might expect from an entity

that later cites Respondent's offer as evidence of bad faith.

[5]E.g.,Classmates Online,

Inc. v. John Zuccarini, individually and dba RaveClub Berlin, WIPO Case No. D2002-0635 (evidence of association of service marks with Complainant at a particular date); Wyndham International, Inc. v. Kangdong-Gu Net,

WIPO Case No. D2002-0458 (evidence of ownership

of trademarks).

[6]E.g., The Chamberlain Group, Inc. v. Martial Maitam, WIPO Case No. D2002-0338.

[7]Respondent does appear to argue that it may have the preferred side of both alternatives. It claims it can not be held responsible for the actions of Market Domain yet assumes that it was free to transfer the domain name to a third party without notice to or the consent of Complainant or DCEG. That argument is disingenuous at best and dishonest at worst.

[8]Since the unclean

hands doctrine is available under American and Canadian law, Rule 15(a) gives

me the authority to invoke it here.