Berlitz Investment Corporation v. Stefan Tinculescu

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Berlitz Investment Corp. v. Stefan Tinculescu

Case No. D2003-0465

1. The Parties

Complainant is Berlitz Investment Corporation, Wilmington, Delaware, United States of America

("Berlitz" or "Complainant").

Respondent is Stefan Tinculescu, Staten Island, New York, United States of America

("Tinculescu" or "Respondent").

2. Domain Name and Registrar

The domain name at issue is: <berlitzsucks.com> (the "domain name").

The registrar is Network Solutions, Inc. (the "Registrar").

3. Procedural History

The WIPO Arbitration and Mediation Center (the "Center") received

the Complaint by e-mail on June 17, 2003, and in hard copy on June 18, 2003.

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 WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy

(the "Supplemental Rules"). Complainant made the required payment

to the Center.

On June 18, 2003, the Center transmitted via e-mail to the Registrar

a request for registrar verification in connection with this case

[1]. On June 24, 2003, the Registrar transmitted

via e-mail to the Center its response, stating (inter alia) that (1)

the domain name was registered through it; (2) Respondent is the current registrant

of the domain name; and (3) the domain name will remain locked during this administrative

proceeding.

On June 25, 2003, the Center transmitted the Notification of Complaint

and Commencement of Administrative Proceeding, together with a copy of the Complaint,

via e-mail with copy by courier and facsimile to Respondent and via e-mail to

the Registrar. The Center advised that Respondent’s Response was due by July 15, 2003,

pointed out that the Response should be in accordance with the Rules and the

Supplemental Rules, and described the consequences of a default if the Response

was not sent by the due date. The Center also noted that Complainant had elected

for a single panelist to decide this matter.

The requirements of Paragraph 2(a) of the Rules having been satisfied, the

formal date of the commencement of this administrative proceeding, pursuant

to Paragraph 4(c) of the Rules, is June 25, 2003.

On July 15, 2003, Respondent sent an e-mail to the Center requesting

a copy of a document referenced in the Complaint, and seeking an extension of

time to respond to the Complaint due to an alleged "limited access to an

Internet connection." [2] The Center

promptly forwarded Respondent’s e-mail to Complainant and invited Complainant

to comment thereon. On July 16, 2003, Complainant’s representative

responded to the Center, opposing any grant of an extension to Respondent on

the ground that Respondent had not established an "exceptional circumstance"

justifying an extension [3]. On July 18, 2003,

the Center notified Respondent that his request for an extension had been granted,

and provided Respondent with a new response deadline of July 25, 2003.

No Response was received from Respondent by the July 25, 2003, deadline.

On July 28, 2003, the Center transmitted to Respondent, via e-mail,

a Notification of Respondent Default. The Center advised Respondent that (a)

Respondent had failed to comply with the deadline for submission of its Response

and (b) the consequences of default, including (1) that a single panelist would

be appointed (per Complainant’s request); (2) that the panel would be informed

of Respondent’s default and would decide, in its sole discretion, whether to

consider a Response if submitted later; and (3) notwithstanding the default,

the Center would continue to send all case-related materials to Respondent.

No Response was ever received from Respondent [4].

On August 1, 2003, the Center advised the parties, in accordance

with Paragraph 6(f) of the Rules, of the appointment of Michael Albert,

the undersigned, as the Panelist in this case. Pursuant to Paragraph 15(b) of

the Rules, the Center further informed the parties that, absent exceptional

circumstances, the panel would forward a decision to the Center by August 15, 2003.

On August 1, 2003, the Center transmitted the case file to the panel.

On August 15, 2003, the Center informed the parties that the date

for decision of this matter had been extended to August 22, 2003.

4. Factual Background; Parties’ Contentions

a. The Trademark

The Complaint is based on Complainant’s alleged ownership of rights in the

mark BERLITZ, which Complainant maintains is either identical or confusingly

similar to the domain name. Complainant uses the BERLITZ mark for language instruction

and related goods and services. Complainant claims to have first used the BERLITZ

mark in the year 1878.

Complainant owns registrations in numerous jurisdictions, including several

United States federal registrations, for the mark BERLITZ. Complainant

provided the panel with registration certificates for a number of these marks,

including U.S. Trademark Registration No. 2,320,901.

U.S. Reg. No. 2,320,901 is for the word mark BERLITZ 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 2000 for a list of goods including teaching, instructional, and educational

materials used in connection with language instruction, and claims a date of

first use in 1878.

b. Jurisdictional Basis

The dispute is within the scope of the Policy, and the panel has jurisdiction

to decide the dispute. The Registrar’s registration agreement incorporates the

Policy by reference.

On Page 6 of its Complaint, Complainant avers that each of the three requirements

of Paragraph 4(a) of the Policy have been satisfied.

c. The Complaint

Complainant asserts as follows:

- Complainant advertises and sells its goods and services related to language

instruction throughout the world under the mark BERLITZ and through its website

at "www.berlitz.com".

- Complainant has promoted the BERLITZ mark continuously and extensively since

1878. In 2001, Complainant spent over $18 million in advertising and promotion,

and realized sales of goods and services bearing the BERLITZ mark of approximately

$500 million.

- Complainant owns numerous registrations for the BERLITZ mark in many jurisdictions

around the world, including in the United States.

- Complainant is the registrant of several BERLITZ-related domain names, including

<berlitz.com>, which resolves to its principal website.

- Respondent is a former employee of Complainant who is unhappy about the manner

in which his employment ended.

- Respondent launched an Internet website at the domain name in 2002,

in an effort to extract money from Complainant, to disrupt Complainant’s business,

and to disparage Complainant.

- On January 2, 2003, Complainant filed suit against Respondent in

the United States District Court for the Western District of New York.

The court in that case found several of the statements placed by Respondent

on the website at the domain name to be "inflammatory," "libel

per se" and defamatory "on their face."

- The court issued a temporary restraining order prohibiting Respondent from

continuing to make these statements on the website at the domain name. Respondent

did not comply with the court’s order, and the website was taken down by the

ISP when notice of the order was provided to it. The court subsequently issued

an order making the injunction permanent.

- The domain name is confusingly similar to Complainant’s BERLITZ mark, despite

the addition of the word "sucks."

- Respondent has no rights or legitimate interests in the domain name.

- Respondent registered and is using the domain name in bad faith. Respondent’s

bad faith includes, inter alia, attempting to coerce Complainant into

a settlement; attempting to sell the domain name to Complainant for a sum in

excess of his documented out-of-pocket costs; and violating the aforementioned

court’s restraining order by continuing to publish prohibited content on the

website at the domain name.

d. The Response

As noted above, Respondent is in default pursuant to Paragraph 5(e) and 14

of the Rules, and Paragraph 7(c) of the Supplemental Rules because no Response

was received from Respondent by the applicable deadline.

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

result in a finding for Complainant. Rather, under Paragraph 4(a) of the Policy,

it remains Complainant’s burden to establish that all three of the required

criteria for a transfer of the domain name or other remedy have been met.

Under Paragraphs 5(e) and 14(a) of the Rules, the effect of a default by Respondent

is that the panel shall proceed to a decision on the Complaint. Under Paragraph

14(b), the panel is empowered to draw such inferences from Respondent’s default

as it considers appropriate under the circumstances.

5. Discussion and Findings

a. Regulations Applicable to Consideration of the Merits

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, the Supplemental

Rules, and other applicable legal authority, pursuant to Paragraph 15(a) of

the Rules. In the panel’s view, given that both parties to this dispute appear

to be based in the United States, applicable authority shall include relevant

principles of United States trademark law.

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

respect to the domain name, each of the following:

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

Complainant has rights; 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 or 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 in the domain name for purposes of Paragraph 4(a)(ii).

b. 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 by 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 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.

Moreover, as discussed below, Respondent has failed to provide any exculpatory

information or reasoning that might have led the panel to question Complainant’s

argument that Respondent has acted in bad faith.

c. Complainant’s Proof

(i) Domain Name Identical or Confusingly Similar to Trademark

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

Complainant’s registrations of its marks on the Principal Register of the USPTO

establish a presumption of validity of the marks under United States law. See

15 U.S.C. § 1057(b); Avery Dennison v. Sumpton, 189 F.3d 868 (9th

Cir. 1999). Additionally, the registrations constitute constructive notice to

all other parties of Complainant’s ownership of the marks. See 15 U.S.C. § 1072.

In comparing Complainant’s mark to the domain name, 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).

The remaining term, berlitzsucks, consists solely of Complainant’s trademark

BERLITZ, plus the derogatory term "sucks."

Complainant avers that the trend among panels is toward finding confusing similarity

in such cases. E.g., Bayer Aktiengesellschaft v. Dangos & Partners,

WIPO Case No. D2002-1115 (February 3, 2003)

(surveying cases and noting that confusing similarity has been found in the

"majority" of decisions addressing domain names consisting of a well-known

mark plus the term "sucks").

The discussion in Bayer notwithstanding, this panel is not entirely

convinced. Numerous previous panels have concluded that appending a critical

term (such as "sucks") to a trademark in a domain name automatically

signals that the corresponding website is intended for parody or criticism,

and eliminates any significant risk that the public will be confused into believing

that the trademark owner owns or is affiliated with the domain name. E.g., Qwest

Communications International, Inc. v. DefaultData.com a/k/a Brian Wick,

WIPO Case No. D2003-0002 (March 2, 2003)

("This is not like cases in which words or phrases such as ‘sucks,’ ‘frauds,’

‘scams,’ ‘criminals,’ or ‘complaints’ are appended to a trade name, causing

the domain name itself to signal parody or criticism.") (emphasis added);

Arthur Guinness Son & Co. (Dublin) Limited, Guinness Anchor Berhad v.

Josh.com.my a.k.a. Josh Lim, WIPO Case

No. D2002-1117 (January 24, 2003) ("This is not the same

as cases where Respondents have created sites critical of a particular trademark

owner by incorporating some satirical or even pejorative element in the domain

name, as in the ‘sucks’ cases. In the latter, it is clear that the domain

name leads to an ‘attack’ site.") (emphasis added); see also Action

Instruments, Inc. v. Technology Associates, WIPO

Case No. D2003-0024 (March 6, 2003) ("[S]everal panels have

found that, if the domain name does not itself describe the critical nature

of the website by including a phrase such as ‘sucks,’ the use of the domain

name may be misleading and thus ineligible for protection as a fair use.").

The Sixth Circuit Court of Appeals recently held that, by signaling a parody

or criticism, a critical term in a domain name obviates confusion. Taubman

Co. v. Webfeats, 319 F.3d 770, 778 (6th Cir. 2003) (finding that "<taubmansucks.com>

removes any confusion as to source. We find no possibility of confusion and

no Lanham Act violation."). Trademark owners, indeed, are highly unlikely

to disparage or parody their own goods or services.

As the Sixth Circuit also noted in Taubman, use of another’s trademark

or corporate name in a domain name for purposes of parody or criticism may well

be a form of expression protected under the First Amendment. Id.

Moreover, the established trademark law doctrine of "nominative fair use"

recognizes that where one cannot avoid using an otherwise protectable trademark

to identify another party for a legitimate purpose (such as parody or criticism),

the use is a protected form of speech and cannot be suppressed under the Lanham

Act. See, e.g., The New Kids On The Block v. News America Publishing

Inc., 971 F.2d 302 (9th Cir. 1991).

Accordingly, Respondent might well have been able to advance a powerful argument

that he has used the mark BERLITZ to truthfully designate the identity of the

company that he intended to criticize (i.e., Complainant). In appropriate circumstances,

this panel might well find such critical usage of another’s trademark within

a domain name to be a "nominative fair use."

Respondent, however, has not advanced any such argument – or indeed any argument

at all – in this case. After requesting and obtaining an extension of time to

respond, it failed to respond at all. While a default does not automatically

result in a judgment for the complainant, who at all times bears the burden

of proving its case, it does leave the panel without any factual basis to conclude

either (a) that a defense of nominative fair use should succeed, or (b) that

Respondent’s critical use of the mark BERLITZ in combination with the word "sucks"

in the domain name is not likely to cause confusion, on the facts peculiar to

this case.

As explained in the Complaint, Complainant’s core business is teaching English

to customers who do not speak it. Accordingly, Complainant contends that many

of its customers (and potential customers) are "presumptively incapable

of … appreciating the nuances of American slang." This plausible factual

assertion by Complainant is unrebutted by Respondent, and accordingly is credited

by the panel.

Thus, customers or potential customers of Complainant who search for Complainant

on the Internet and are directed to <berlitzsucks.com> may not know that

it is not associated with Complainant. Cf. Asda Group Ltd. v. Mr Paul Kilgour,

WIPO Case No. D2002-0857 (November 11, 2002)

(confusion between <asdasucks.net> and mark ASDA unlikely where "the

panel has examined the Complainant’s website for signs of a foreign clientele

and has found nothing of relevance … Internet users unfamiliar with the English

language, yet aware of the existence of Asda are unlikely to exist in significant

numbers.").

The panel need not decide today whether confusion on the part non-English-speaking

Internet users would always be likely where a particular domain name consists

of a trademark combined with the word "sucks." Some panels have apparently

traveled down that path, see, e.g., Bayer ("Internet users are not

always fluent in English or at least not sufficiently fluent to perceive that

the term ‘sucks’ is used to denigrate, criticize and disparage, and that it

is therefore a pejorative term, which should immediately disassociate the domain

name to which it is appended from the Complainant’s trademark forming part of

the domain name."); Vivendi Universal v. Mr. Jay David Sallen and

GO247.COM,INC., WIPO Case No. D2001-1121

(November 7, 2001) ("[N]ot all Internet users speak English as

their mother tongue."; <vivendiuniversalsucks.com> held confusingly

similar to mark VIVENDI UNIVERSAL); Koninklijke Philips Electronics N.V.

v. In Seo Kim, WIPO Case No. D2001-1195

(November 12, 2001) ("Not all Internet users are English speaking

or familiar with the use of ‘sucks’ to indicate a site used for denigration";

<philipssucks.com> held confusingly similar to mark PHILIPS), but this

panel remains skeptical.

Nevertheless, the peculiar facts of this case (Complainant’s core business

catering almost exclusively to individuals who do not speak English as a first

language) - combined with Respondent’s failure to advance any reasoning or argument

why confusion of such individuals is unlikely - lead the panel to conclude that

Complainant has sufficiently established confusingly similarity under the Policy.

(ii) Whether Respondent Has Rights or Legitimate Interest in the Domain Name

There is no evidence in the record that Respondent has any rights or legitimate

interest in the domain name. Complainant states that Respondent has no rights

or legitimate interest in the domain name. This contention is unrebutted, and

the panel finds it credible.

The panel concludes that none of the three illustrative circumstances set forth

in Paragraph 4(c) of the Policy demonstrate any rights or legitimate interest

in the domain name on the part of Respondent. First, Respondent’s prior use

of the website at the domain name (i.e., before the website was taken down pursuant

to a court order) to disparage Complainant was not a "bona fide

offering of goods or services," as a federal court has effectively already

ruled in its injunctive orders.

Second, Respondent has not been "commonly known by the domain name."

Third, Respondent is not "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." Indeed,

a court of competent jurisdiction has already concluded that Respondent’s prior

use of the domain name was intended to tarnish Complainant and its BERLITZ mark.

It is not this panel’s prerogative to ignore such a court ruling, and absent

a Response there is no factual predicate upon which to do so. Respondent could

perhaps have presented an argument differentiating "criticism" of

Complainant with the domain name from "tarnishment" of Complainant

and its mark; but he did not do so, and this panel will not sua sponte

disregard the finding of a United States federal court.

In sum, the federal registration of Complainant’s BERLITZ mark, coupled with

Respondent’s obvious awareness of Complainant’s rights in the mark (as a former

employee of Complainant), the arguments and proof presented by Complainant,

the findings of the United States District Court for the Western District of

New York, and Respondent’s failure to advance any of the defenses provided in

Paragraph 4(c) of the Policy, lead this panel to conclude that Respondent has

no rights or legitimate interest 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

or registration 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 submitted (at Annex 5 to the Complaint) a copy of

a "settlement offer" posted by Respondent on the website at the domain

name in which Respondent offered to surrender the domain name if Complainant,

inter alia, (a) made a donation to the American Civil Liberties Union

of at least an amount equal to a one-year domain name registration fee; and

(b) published an advertisement of Respondent’s formulation in the New York Times.

The panel concludes that this demand meets the criteria of Paragraph 4(b)(i)

of the Policy. "It is immaterial that the Registrant requested [that] the

payment be made to a charity," Direct Line Group Ltd, Direct Line Insurance

plc, Direct Line Financial Services Ltd , Direct Line Life Insurance Company

Ltd, Direct Line Unit Trusts Ltd, Direct Line Group Services Ltd v. Purge I.T.,

Purge I.T. Ltd., WIPO Case No. D2000-0583

(August 13, 2000), for such a donation is still "valuable consideration"

to the registrant if so desired by him. Likewise, the proposed New York Times

advertisement demanded by Respondent in this case constitutes "valuable

consideration" as well. Respondent’s attempt to transfer the domain name

to Complainant in return for such consideration evidences bad faith under 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 does not allege that this was Respondent’s

intention in registering the domain name, and indeed Complainant has not been

prevented from registering the mark BERLITZ as a domain name. 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, there is no evidence that Respondent is a competitor of Complainant. Accordingly,

the panel need not reach the question of whether Respondent’s registration of

the domain name has disrupted Complainant’s business.

The fourth illustrative example of bad faith in the Policy is a respondent’s

use of the domain name in an effort to attract, for commercial gain, Internet

users to the respondent’s website by creating a likelihood of confusion with

the complainant’s mark.

The panel does not find this illustration directly applicable, because it does

not appear that Respondent intended to (or did) gain commercially from the attraction

of Internet users to the website at the domain name.

The panel does, however, find additional evidence of bad faith in this case

[5]. In particular, as Complainant points

out, Respondent ignored a court order to remove disparaging content from the

website at the domain name. The content was finally removed by the ISP when

Complainant served the ISP with a copy of the court order. The panel concludes

that failing to heed a court order regarding the domain name, issued by a court

of competent jurisdiction, is further evidence of Respondent’s bad faith under

the Policy.

In sum, the panel concludes that Respondent has registered and used the domain

name in bad faith pursuant to Paragraph 4(b) of the Policy. Legitimate defenses

may well exist in defense of "criticism" domain names of this nature,

whether from the perspective of trademark law’s "nominative fair use"

doctrine, or the protections accorded to criticism and parody both by the Policy

and by U.S. law. Respondent, however, failed to advance any such defense, and

additionally acted in violation of a court order.

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 confusingly

similar to Complainant’s trademark BERLITZ; (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 15 of the Rules,

the panel requires that the domain name be transferred to Complainant.

Michael A. Albert

Sole Panelist

Dated: August 22, 2003

Footnotes:

1. When no response to this first request

was received, the Center sent a reminder e-mail to the Registrar on June 23, 2003.

2. Respondent did not copy Complainant on

this e-mail as required by Rule 2(h)(iii) (although the Complainant was copied

on the Center’s acknowledgement). Although the Respondent’s oversight in this

regard does not impact the panel’s decision in this case, the panel notes that

it considers failure to comply with Paragraph 2(h)(iii) of the Rules to be a

serious matter.

3. Complainant appears to have been referring

to the standard set forth in Paragraph 14(a) of the Rules.

4. The Center’s July 18, 2003 e-mail

to Respondent extending the response deadline, was returned because it was too

large (it included an attached copy of the document previously requested by

Respondent). On August 1, 2003, the Center forwarded its July 18,

2003 e-mail to Respondent without the attachment. The August 1 e-mail appears

to have been received. However, Respondent neither filed a Response nor requested

a further extension of time.

5. Paragraph 4(b) of the Policy expressly

states that the four illustrations of bad faith are "without limitation"

to other activity that can also lead to a conclusion that Respondent has registered

and used the domain name in bad faith.

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