1099 Pro, Inc. v. Convey Compliance Systems, Inc.

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

1099 Pro, Inc. v. Convey Compliance Systems, Inc.

Case No. D2003-0033

1. The Parties

The Complainant is 1099 Pro, Inc. of California, United States of America,

represented by Rozsa & Chen, LLP of United States of America. The Respondent

is Convey Compliance Systems, Inc. of Minnesota, United States of America, appearing

pro se.

2. The Domain Name and Registrar

This dispute concerns <1099professionals.com>, a domain name registered

with Network Solutions, Inc. ("the domain name").

3. Procedural History

Complainant filed this Complaint with the WIPO Arbitration and Mediation Center

(the "Center") on January 16, 2003, and filed an amended Complaint

on January 24, 2003. On January 16, 2003, the Center transmitted

by email to Network Solutions, Inc. a request for its verification in connection

with the domain name at issue. On January 22, 2003, Network Solutions,

Inc. confirmed via email to the Center that the Respondent is listed as the

registrant and provided its administrative, billing, and technical contact information.

The Center verified that the Complaint satisfied the formal requirements of

the Uniform Domain Name Dispute Resolution Policy (the "Policy"),

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

and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy.

On February 3, 2003, the Center commenced this proceeding and, in accordance

with paragraphs 2(b) and 4(a) of the Rules, notified Respondent of the

Complaint. As per paragraph 5(a) of the Rules, the Respondent was given

until February 23, 2003 to answer. Having received no response, the

Center issued a Notification of Respondent Default on March 5, 2003.

Respondent replied to this Notification with an emailed response on the same

day and filed an Amended Response on March 13, 2003. The Center notified

the Respondent that its Response was untimely and that the Panel would decide

whether to accept it.

The Center appointed David H. Bernstein, Frederick M. Abbott, and Sally Abel

as Panelists in this matter on March 13, 2003. The Panel finds that it was properly

constituted. Each member of the Panel has submitted a Statement of Acceptance

and Declaration of Impartiality and Independence, as required by the Center

to ensure compliance with the Rules, paragraph 7.

4. Factual Background

The Complainant is the owner of Registration No. 2,078,036, registered with

the United States Patent and Trademark Office for the mark 1099 PRO, used in

connection with the creation and sale of computer software tax programs. Complainant

applied to register the mark on October 23, 1995; the registration issued on

July 8, 1997. Complainant also owns the domain name <1099pro.com>,

which was created and registered on July 28, 1995.

There is a contentious history between the parties. Both Respondent and Complainant

market computer software tax programs, which allow customers to compile and

file IRS 1099 tax forms. In 2000, Respondent’s former VP of Sales &

Marketing defected to Complainant. Respondent claimed its former employee stole

its client list and breached the non-disclosure clause of his contract and his

fiduciary duties. Respondent accused Complainant of inducing this conduct and

filed suit against both Complainant and the former employee in the State of

Minnesota District Court, Fourth Judicial District, on January 8, 2001.

While this suit was pending, Respondent registered the domain name on February

23, 2001. The case settled on May 7, 2001, apparently without any provision

regarding the domain name.

Respondent uses the website at <1099professionals.com> as a "service

to the 1099/W-2 tax filing industry and [as] . . . the site where professionals

can go to receive regulatory compliance information[,] . . . . ask compliance

questions and network with other tax professionals." In addition to providing

tax-related information, the website advertises regulatory compliance conferences,

compliance bulletins, and state reporting catalogs. This website also includes

links to Respondent’s "1099convey.com" website and advertisements

for Respondent’s tax software programs.

5. Parties’ Contentions

A. Complainant

Complainant alleges that Respondent’s registration and use of the domain name

violates its rights in the trademark 1099 PRO. Specifically, Complainant alleges

that the domain name is confusingly similar to its 1099 PRO trademark and, given

that the parties are in direct competition, Respondent’s use of the domain name

is likely to cause consumer confusion. Complainant further argues that the Respondent

has no legitimate interest in the domain name because it was registered with

knowledge of Complainant’s trademark and Complainant’s registration and use

of <1099pro.com>. Complainant further alleges that the dissimilarity between

the domain name and Respondent’s corporate name – Convey Compliance Systems,

Inc. – is evidence of its lack of legitimate interest in the domain name. Finally,

Complainant asserts that Respondent acted in bad faith by registering and using

a domain name that is confusingly similar to the Complainant’s domain name and

trademark, causing confusion as to the source of the products and ownership

of the "1099professionals.com" website.

B. Respondent

In its late-filed Amended Response, Respondent asserts that the Complaint is

unfounded and unsubstantiated. Respondent suggests that that Complainant’s mark

is generic. Respondent also disputes the allegation that its domain name was

chosen to confuse or in bad faith. Respondent points out that its sponsorship

of the website is indicated in an "About Us" link. Respondent claims

to have chosen the domain name because it refers to the primary community of

users that Respondent intends to serve. The registration of the domain name,

according to Respondent, coincided with a "renewed focus on tax compliance,

. . . product compliance and compliance training." Respondent asserts that

the purpose of the "1099professionals.com" website is to engage in

relationship marketing with its customer base. Respondent asserts that few individuals

enter its "1099convey.com" website from <1099professionals.com>

"due to limited sales & marketing advertising" on the latter website.

If this Complaint is successful, however, Respondent claims it will incur substantial

financial damages from lost regulatory compliance conference registration revenues,

compliance bulletin and state reporting catalog sales.

6. Discussion and Findings

A. Respondent’s Late Submissions

Before reaching the merits, the Panel must decide whether to consider Respondent’s

March 5 and March 13, 2003 responses, both of which were sent

after the deadline for response. Under the Rules, this determination is solely

within the discretion of the Panel: Paragraph 10(a) and (d) of the Rules; see

also WIPO Notification of Complaint and Commencement of Administrative Proceeding

("Notification of Commencement") at paragraph 6 ("The Administrative

Panel will not be required to consider a late-filed Response, but will have

the discretion to decide whether to do so.").

In the early days of the Policy, some panels were willing to accept late-filed

responses if they were submitted prior to the appointment of the panel on the

theory that the Rules were still relatively new and some flexibility should

be shown, especially when there was no prejudice. See, e.g., Talk

City, Inc. v. Michael Robertson, WIPO

Case No. D2000-0009 (February 29, 2000). Now, more than three

years later, the Internet community has had a wealth of experience with the

Rules, making it appropriate to revisit this approach.

On this question, there is a split amongst the Panel. In one Panelist’s view,

default proceedings under the Policy should be avoided when it is reasonable

to do so, taking into account paragraph 10(b) of the Rules providing that, "[t]he

Panel shall ensure that the Parties are treated with equality and that each

Party is given a fair opportunity to present its case." In this proceeding,

since there is no apparent prejudice to Complainant from an initial Response

filed on the date of the default notification, followed by an Amended Response

one week later, one Panelist would accept the Amended Response.

The majority, however, believes that it is important to apply the Rules as

written, absent a good reason. Otherwise, parties will feel free to disregard

deadlines and Respondents will regularly submit late responses. Thus, absent

good cause, the majority of the Panel holds that late-filed responses should

be disregarded. [1]

The question in this case, then, is whether Respondent has shown good cause

for its tardiness. Respondent explains that the lateness of its March 5th response

was due to the "fact that [it is] in the busiest time of our season"

and because it believed that a response was only necessary after the Center

"informed us that [the Center] feel[s] that [1099 Pro, Inc.] ha[s]

a legitimate case to steal our "1099professionals.com" user community."

In the cover letter to its March 13, 2003 Amended Response, Respondent

apologized for its late response and reiterated its claim of having been confused

by the Center’s notification.

Respondent’s assertions of confusion as to the proper procedures cannot be

accepted at face value. The Center’s Notification of Commencement, sent to Respondent

on February 3, 2003 clearly states:

"Deadlines. Within 20 calendar days from the date of commencement

of this administrative proceeding you must submit to the Complainant and to

us a Response according to the requirements that are described in the Rules,

Paragraph 5 and the Supplemental Rules. The last day for sending your Response

to the Complainant and to us is February 23, 2003."

Notification of Commencement at paragraph 5. The Rules, to which Respondent

was referred in the Notification of Commencement, are similarly clear. See

paragraph 5(a) of the Rules ("Within twenty (20) days of the date of commencement

of the administrative proceeding the Respondent shall submit a response to the

Provider."). Accordingly, a majority of the Panel determines that Respondent

has not shown good cause.

Moreover, even if the Panel were to consider these late-filed responses, we

could not accord any weight to the facts alleged therein. Neither Respondent’s

e-mail nor the Amended Response contained any certification that the information

proffered was "to the best of Respondent’s knowledge complete and accurate."

Paragraph 5(b)(viii) of the Rules. Without the benefit of this certification,

it is not appropriate to accept the factual assertions contained in those submissions.

Although the Panel is granted discretion to consider late responses, it is not

granted similar discretion to waive the certification requirement in paragraph

5(b)(viii) of the Rules. See Talk City, Inc., WIPO

Case No. D2000-0009.

Under different circumstances, this Panel might be inclined to permit a pro

se Respondent to amend its response solely for the purpose of adding a certification.

In this instance, given that the Panel has, in any event, refused to consider

the Response, there is no basis to even consider such a question. Moreover,

even if the Panel did consider the factual assertions in Respondent’s late-filed

responses, it would not provide any assistance; to the contrary, the Responses

tend to support Complainant’s case more than Respondent’s defense.

For all these reasons, a majority of the Panel concludes that Respondent’s

late-filed Responses are to be disregarded.

B. Merits of the Complaint

In order to succeed in its claim, Complainant must demonstrate that all of

the elements enumerated in paragraph 4(a) of the Policy have been satisfied:

(i) The domain name is identical or confusingly similar to a trademark or

service mark in which the Complainant has rights;

(ii) Respondent has no rights or legitimate interests with respect to the

domain name; and,

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

For the reasons stated below, Complainant meets this burden.

(i) Identical or Confusingly Similar

Ownership of a US trademark registration is prima facie evidence of validity,

and can be rebutted only with compelling evidence that the mark is generic or

has been abandoned. EAuto, L.L.C. v. Triple S. Auto Parts d/b/a Kung Fu Yea

Enterprises, Inc., WIPO Case No.

D2000-0047 (March 24, 2000). In the absence of an accepted Response,

Complainant’s allegations are sufficient to prove ownership of the 1099 PRO

trademark. [2]

The second part of this inquiry is whether the domain name is confusingly similar

to Complainant’s 1099 PRO registered mark. Pro is a common abbreviation for

professional. Webster’s Collegiate Dictionary 937 (9th ed. 1983). Because

Complainant and Respondent market their tax software programs to the same specialized

customer pool, there is an increased risk of confusion over these essentially

synonymous names. See Arrowhead Capital Management v. Arrowhead Capital

Management, LLC, NAF File No. 94920 (July 12, 2000), (finding <arrowheadcap.com>

and <arrowheadcaptial.com> confusingly similar because the abbreviation

"cap" and the word "capital" have synonymous meanings for

those involved in investing and financial management). The addition of a gTLD

such as ".com" provides no legally cognizable distinction. See,

e.g., J.P. Morgan v. Resource Marketing, WIPO

Case No. D2000-0035 (March 23, 2000). Accordingly, Complainant

meets the first factor.

(ii) Rights or Legitimate Interests

The Respondent has no rights or legitimate interest in <1099professionals.com>.

Paragraph 4(c) of the Policy sets forth three nonexclusive circumstances which,

if found by the Panel to be proved based on its evaluation of all evidence presented,

demonstrate a Respondent’s rights or legitimate interests to the domain name

in question:

(i) before any notice to Respondent of the dispute, Respondent’s use of, or

demonstrable preparations to use, the domain name or a name corresponding to

the domain name in connection with a bona fide offering of goods or services;

or

(ii) Respondent (as an individual, business, or other organization) has been

commonly known by the domain name, even if he has acquired no trademark or service

mark rights; or

(iii) Respondent is making a legitimate noncommercial or fair use of the domain

name, without intent for commercial gain to misleadingly divert consumers or

to tarnish the trademark or service mark at issue.

Respondent was well aware of Complainant and its 1099 PRO trademark prior to

its registration of the domain name. Respondent had no preexisting connection

to the disputed domain name, and is not known as 1099 Professionals. There is

thus no legitimate interest under subparagraphs (i) or (ii).

The only conceivable legitimate interest here would be a claim of fair use

under subparagraph (iii). In this case, though, Respondent is not using the

website at <1099professionals.com> for legitimate noncommercial or fair

use purposes. <1099professionals.com> is very much a commercial venture.

Respondent uses its "1099professionals.com" website to sell subscriptions

to its tax compliance publications and to advertise conferences, for which Respondent

charges registration fees. More important, for these purposes, Respondent uses

this website to advertise its other services and provides links to its "1099convey.com"

website, where Respondent sells tax software in direct competition with Complainant.

Under the circumstances, particularly the parties’ directly competitive and

previously litigious relationship, and the fact that Respondent obtained the

domain name in the midst of that prior litigation, fair use cannot be found.

(iii) Registered and Used in Bad Faith

The final element that Complainant must prove is that the domain name has been

registered and is being used in bad faith. The parties are in direct competition.

They have exchanged accusations over an employee’s defection and the alleged

theft of a client list. Those accusations escalated into litigation. In the

midst of that litigation, Respondent registered a domain name that is confusingly

similar to Complainant’s 1099 PRO mark. A fair inference from the contentious

history of these parties is that the domain name was registered for vindictive

purposes and in bad faith.

Moreover, the Panel also finds that Complainant has proven bad faith under

paragraph 4(b)(iv) of the Policy, which provides that Respondent has registered

and used a domain name in bad faith if it has "us[ed] the domain name .

. . [to] intentionally attempt[] to attract, for commercial gain, Internet users

to [its] web site or other on-line location, by creating a likelihood of confusion

with the Complainant’s mark as to the source, sponsorship, affiliation, or endorsement

of [the] web site . . . or . . . a product or service on [that] web site or

location." Respondent’s commercial offerings at the "1099professionals.com"

website appear designed to cause such confusion and diversion.

7. Decision

For all the foregoing reasons, in accordance with paragraph 4(i) of the Policy

and 15 of the Rules, the Panel orders that the domain name <1099professionals.com>

be transferred to the Complainant.

David H. Bernstein

Presiding Panelist

Frederick M. Abbott

Panelist

Sally M. Abel

Panelist

Dated: April 1, 2003

Footnotes:

1. This ruling does not mean that Respondents

who file late responses have no recourse. First, even in the absence of a response,

the Complainant still must bear the burden of proof and panels have ruled for

defaulting Respondents when Complainants have failed to do so. E.g., Action

Instruments, Inc. v. Technology Associates, WIPO

Case No. D2003-0024 (March 6, 2003); Land Sachsen-Anhalt v. Skander Bouhaouala,

WIPO Case No. D2002-0273 (July 8, 2002);

Rodale, Inc. v. Cambridge, WIPO

Case No. DBIZ2002-00153 (June 28, 2002) (finding reverse domain

name hijacking); Shopping.com v. Internet Action Consulting, WIPO

Case No. D2000-0439 (July 28, 2000); EAuto, L.L.C. v. EAuto Parts,

WIPO Case No. D2000-0096 (April 9, 2000).

Second, Respondents always have the ability to seek judicial review of a decision

with which they disagree. Paragraph 4(k) of the Policy.

2. Consideration of the Amended Response

would not alter this analysis. Respondent does not explicitly claim that the

trademark is generic in its Amended Response. Instead, it alleges that there

are "11,000 <namepro.com> and 7,000 <nameprofessionals.com>"

and that "this simple fact alone supports our contention that the Complaint

should be thrown out for having absolutely no merit whatsoever." This unsupported

and unexplained assertion would be insufficient to meet the presumption of validity

created by the registration of the mark.