Greyson International, Inc. v. William Loncar

WIPO

Arbitration and Mediation Center

ADMINISTRATIVE PANEL

DECISION

Greyson International, Inc. v. William Loncar

Case No. D2003-0805

1. The Parties

The Complainant is Greyson International, Inc., a Delaware (United States of

America) corporation, represented by Bradley J. Gross of the law firm Becker

& Poliakoff, P.A., Fort Lauderdale, Florida, United States of America.

The Respondent is William Loncar, an individual residing in East Amherst, New

York, United States of America. Mr. Loncar submitted a Response on his own behalf.

2. The Domain Name and Registrar

The disputed domain name <greysoninternational.com> (the "Domain Name")

is registered with Network Solutions, Inc. (the "Registrar").

3. Procedural History and Jurisdiction

The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center")

on October 10, 2003. On October 13, 2003, the Center[1]

transmitted by email to the Registrar a request for registrar verification in

connection with the Domain Name, and the Registrar transmitted by email its

verification response, confirming that the Respondent is listed as the registrant

and providing the contact details for the administrative, billing, and technical

contact.

Also on October 13, 2003, the Complainant filed a superseding Amended Complaint

with the Center. The Center verified that the Amended 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 (the "Supplemental Rules"). As the Response answers the Amended

Complaint, for simplicity I refer to the Amended Complaint as the "Complaint."

In accordance with Rules 2(a) and 4(a), the Center formally notified the Respondent

of the Complaint, and the proceedings commenced, on October 21, 2003. In accordance

with Rule 5(a), the due date for Response was November 10, 2003. The Response

was filed with the Center on November 5, 2003[2].

On October 24, 2003, Complainant submitted to the Center a "Supplemental Pleading

to Amended Complaint." Complainant made this submission to add as evidence two

emails sent by Respondent to Complainant's management shortly after Respondent

received the Complaint. In my discretion under Rule 12, I grant Complainant's

request to make the additional submission and will consider the additional evidentiary

material in making my decision.

On November 12, 2003, the Center appointed Richard G. Lyon as the sole panelist

in this matter. The Panel has submitted a Statement of Acceptance and Declaration

of Impartiality and Independence, as required by the Center to ensure compliance

with Rule 7.

On December 1, 2003, the Center's Case Manager advised the parties that, in

accordance with Rule 10(c), the date by which the Administrative Panel is required

to forward its decision to the Center has been extended to December 8, 2003.

I find that the Panel was properly constituted and has jurisdiction over the

dispute.

4. Factual Background

Undisputed Facts[3]. Complainant sells cosmetic

products and began doing business sometime in 1997. It brands its products with

its corporate name, and sells them using international media outlets in the

United States and Canada. Some of its sales are on a website it owns, "www.jennifergreyson.com".

It advertises its products in national media in North America and on the Internet.

Complainant has not registered its corporate name as a trademark; there is no

allegation that it owns any registered marks.

Respondent is an investor and promoter of investment opportunities for accredited

investors[4]. He makes use of another website

he owns, "www.portfolioadvantage.net" in his business. At this website accredited

investors may review investment opportunities.

Respondent (or members of Respondent's family) are minority stockholders of

Complainant.

Since July 2003, Respondent has used the website using the Domain Name, <greysoninternational.com>

(the "Website"), as a forum for criticism of Complainant and Complainant's management[5].

Sometimes the dialogue is typical of what one would expect from an investor

or investment advisor: questions about the company's progress in the marketplace

or about the financial figures the company had distributed to its stockholders

and prospective investors. At other times it includes intemperate language and

personal attacks on the trustworthiness and integrity of Complainant's management.

Respondent has on occasion used eye-catching figures with no apparent relevance

to the subject matter of the posting[6].

Respondent registered Domain Name in April 2002, and has used it for the Website

since at least September 2002. Since July 2003, the Website has contained a

link to the "www.portfolioadvantage.net" website owned by Respondent[7].

Respondent intentionally used Complainant's corporate name for the Website,

and on occasion used Complainant's corporate logo in the text contained on the

site. The metadata for the Website[8] confirm

that the Greyson name is embedded at the left hand margin. As a result anyone

seeking information about Complainant on the Internet would almost certainly

find the Website[9].

Respondent posted the following statement prominently on the first page of

the Website:

"This site is not affiliated with Greyson International, Inc.

This site is an unofficial information source for current shareholders

Greyson International, Inc."

Additional Facts Alleged by Respondent; The Complaint refers only to material

contained on the Website beginning in July 2003. Respondent, however, makes

additional allegations that he established the Website "with the consent and

knowledge of Complainant" as a means of attracting investors for the Complainant.

Among Respondent's submissions are postings on the Website in 2002, of an opportunity

to download a prospectus for sale of Complainant's stock; analyses prepared

by Respondent or a third party urging an investment in Complainant's securities;

email correspondence with Complainant's management about possible investors

in Complainant, including email lists of possible investors; and email communications

with internet marketers for distribution of investment or promotional materials

on the Complainant's behalf. I discuss these allegations and Respondent's supporting

evidence in greater detail below.

5. Parties' Contentions

A. Complainant

The Complainant's allegations may be summarized as follows:

Identity.

The Domain Name is identical to Complainant's corporate name, which the Complainant

uses in the marketplace to promote its products. Even if not a registered mark,

"[Complainant's] corporate name enjoys strong trademark protection, as it has

been inextricably linked with the skin care products that it sells." (Complaint,

¶11- A)

No rights or legitimate interests: Quoting from the Complaint (¶¶11B

(2-4):

2. The Respondent has never been licensed, authorized or otherwise permitted

to use Greyson's corporate name or trademark for any purpose. Respondent has

never been commonly known by the names "Greyson" or "Greyson International".

On the other hand, Complainant has been using its corporate name on an international

basis since 1997.

3. The Respondent does not use the domain name in connection with a bona fide

offering of goods or services. Instead, the Respondent's use of the domain name

tarnishes Greyson's valuable intellectual property rights in its trademark.

4. The Respondent's use of the domain name is neither a legitimate non-commercial

use nor a fair use of the domain name. As further discussed below, Respondent's

primary purpose in securing the domain name is to promote his own commercial

enterprise, PortfolioAdvantage.net.

Bad Faith.

Respondent's bad faith is demonstrated by the fact that the "most prominent"

feature of the Website is its link to Respondent's other website, "www.portfolioadvantage.net".

This is intentional diversion of Complainant's customers to Respondent's Website,

primarily to promote his investment advisory business by means of the hyperlink,

and demonstrates use of the Domain Name primarily for commercial purposes. Respondent's

investment business is not related to the cosmetic industry. Moreover, Respondent's

use since July 2003, has been highly critical of Complainant and its management.

In an email correspondence with Complainant, attached to the Complaint, Respondent

has threatened to "destroy" Complainant using the Company's name and trade name

for this campaign is clear evidence of bad faith. In the emails sent after commencement

of this proceeding, Respondent in scatological and anti-Semitic language accuses

Complainant's management of fraud, incompetence, and vendetta, and makes the

statement "Wait until you see what I have planned [for the Website.] It will

make the current site a walk in the park." This is "clear and unambiguous" evidence

of bad faith.

B. Respondent

The Respondent's contentions may be summarized as follows:

Identity.

Although Respondent belittles the Complainant's success in the marketplace,

he does not challenge the factual assertion that Complainant has used its company

name for marketing products.

Legitimate Interests.

According to Respondent he registered the Domain Name and established the website

with "the knowledge and consent" of Complainant, to promote Complainant to accredited

investors, presumably including his own clientele. His activities in late 2002,

and intentional use of Complainant's name were therefore done for a legitimate

business purpose – raising capital for Complainant and, as noted, undertaken

with Complainant's consent.

Bad Faith.

Respondent denies any bad faith, with respect to either his 2002 marketing

activities or his subsequent use of the website as an information source for

Complainant's stockholders. Respondent claims that all confidential information

of Complainant posted on the Website is password-protected. Much of Respondent's

proffered evidence is a defense of his version of the Complainant's business

and management and the truth of the information on the Website, and attacks

on the information distributed directly by Complainant to its stockholders.

6. Standard for Decision.

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

(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.

Complainant bears the burden of proof on each of these elements. In this case

the Panel must comment on what ought to be obvious, that proof consists

of evidence, not a party's allegations or conjecture.

7. Discussion and Findings.

Identical or Confusingly Similar

Complainant's evidence (as opposed to allegations) on use of its company name

as a brand is sparse. But Respondent does not contest Complainant's use of its

corporate name as the principal brand for its products. A trademark need not

be registered to serve as the basis for a complaint under the Policy. E.g.,

Emmanuel Vincent Seal trading as Complete Sports Betting v. Ron Basset,

WIPO Case No. D2002-1058. Under United

States law trademark rights accrue through use, not registration, and enough

use has been shown to establish this element of the Policy.

Rights or Legitimate Interests; Registered and Used in Bad Faith

As is often true in disputes under the Policy, facts that establish the legitimacy

vel non of a respondent's use of the domain name also determine whether

that respondent has acted in bad faith. The panel therefore considers these

two elements of the Policy together.

In this case it is once again necessary to distinguish between allegations

and conclusions drawn by a party or its counsel, on the one hand, and evidence

from which a Panel may make the necessary determination of whether these particular

elements of the Policy have been proven, on the other. Two aspects of this case

complicate my task considerably. The first of these is all too common in cases

in which the parties genuinely contest whether a respondent's use of another's

mark in a domain name is legitimate: Each party (or its counsel) offers allegations

or evidence that is ambiguous or depends upon which party the Panel chooses

to believe, then draws its desired conclusions from evidence or allegations

that to an objective third party (i.e., a panelist) are considerably

less persuasive.

The parties' contrasting statements about whether Complainant authorized Respondent

to use its corporate name for the Website well illustrate this phenomenon. Not

surprisingly each party's allegations on this subject are unequivocal.

Complainant asserts that "Respondent has never been licensed, authorized or

otherwise permitted to use Greyson's corporate name or trademark for any purpose."

(Complaint ¶11B-2) Respondent counters that its registration and use of the

website in 2002 was done "with the consent and knowledge of [Complainant]."

(Response, ¶¶2, 3, 6). Equally not surprisingly, the parties' evidence

is by no means so clear. Complainant submits no evidence at all with respect

to Respondent's use of the Domain Name and Website prior to July 2003. None

of the evidence submitted by Respondent is a straightforward or unqualified

license, right to use, or grant of permission of any kind.

Respondent has, though, submitted evidence that, if believed, is consistent

with his allegations of acting, in 2002 at least, on Complainant's behalf. Annex

1A to the Response is a page from the Website that permits downloading an offering

memorandum and subscription agreement for Greyson securities and includes a

summary description of Complainant and its business plan. Respondent has submitted

copies of emails between himself and representatives of Complainant (including

its top management and counsel) that certainly can be read as an exchange of

information about Respondent's soliciting possible investors in Greyson.

Without the benefit of testimony and "the chastening process of cross-examination"[10]

the panel has no way of knowing whether Respondent's statements are true or

complete, or whether in full context they support the unqualified conclusion

he pleads so confidently. He has presented a plausible explanation, however,

and Complainant has offered no evidence to the contrary.

Another fact reinforces Respondent's version of events. Respondent registered

the Domain Name in May 2002, and used it for the Website as early as September

2002. Even without determining the veracity or import of the email correspondence

that Respondent has submitted, Complainant undeniably was aware of the Website

and Respondent's activities no later than fourth quarter 2002. Yet Complainant

did not institute these proceedings until October 2003, after the parties' disagreement

over management of Complainant became heated and available on the Website. Complainant's

knowledge, combined with the utter lack of any evidence of misuse before July

2003, is relevant for two purposes in deciding this case[11].

It gives some credence to Respondent's less than completely supported factual

assertions, and it illustrates that there is no proof of any kind that Respondent

registered the Domain Name in bad faith.

Neither party has offered any evidence even to suggest that, at the time the

domain name was registered, Respondent undertook the act of registration intentionally

to acquire the Domain Name for some purpose condemned by the Policy, such as

offering it for sale or to divert the Complainant's customers. The only allegation

on registration comes from Respondent, who claims he registered the Domain Name

with the knowledge and consent with Complainant. There is some evidence to support

this. Complainant offers no factual allegation to the contrary; its factual

allegations of bad faith all describe Respondent's use of the domain name subsequently

to July 2003.

Under some decisions, as well as the literal language of Paragraph 4(a)(iii),

this would end the case. Paragraph 4(a)(iii) is conjunctive both registration

and use in bad faith must be proven[12].

Numerous panels have applied this language strictly, to deny complaints in similar

circumstances. See, e.g., International Lasy Ltd. v. Cameleon Informatique

et Robotique Inc., WIPO Case No. D2003-0701;

Urbani Tartufi s.n.c. v. Urbani U.S.A., WIPO

Case No. D2003-0090; Magic Marine v. Ames, WIPO

Case No. D2002-0991; Celebrity Signatures International, Inc. v. Hera's

Inc. Iris Linder, WIPO Case No. D2002-0936;

Milwaukee Electric Tool Corp. v. Bay Verte Machinery, Inc., WIPO

Case No. D2002-0774; Media Image, Inc. v. Casual Day.com,

WIPO Case No. D2002-0322; e-Duction,

Inc. v. Zuccarini, WIPO Case No. D2000-1369.

This is not a uniform rule of decision, however. Recognizing that such a strict

interpretation of the Policy's language would preclude use of the Policy in

circumstances where Complainant and Respondent were at one time in an amicable

business relationship that subsequently turned sour, some panels have found

bad faith in registration based upon a respondent's actions after the parties'

falling out. These cases usually involve one of two sets of circumstances. First,

a distributor or sales agent has registered a domain name incorporating its

supplier's trademark, and the supplier made no objection until the distributorship

relationship ended, then invoked the Policy to prevent the distributor's continued

use of its trademark in the domain name. See, e.g., EDIFIL, S.A. v. Dominguez,

WIPO Case No. D2003-0485; Hesco Bastion Ltd.

v. The Trading Force Ltd., WIPO Case No.

D2002-1038. Second, a web designer includes among its services the registration

of the domain name to be used for the website to be designed, and registers

that domain name in its own rather than its principal's name. At some point

after the website has been developed, and almost always after some type of business

dispute between the web designer and the customer, the customer objects to the

web designer's retaining the domain name incorporating the customer's mark.

Examples of this are Nova Bank v. Iris, WIPO

Case No. D2003-0366; Primedia Magazine Finance Inc. v. Next Level Productions,

WIPO Case No. D2001-0616; Microsoft

Corporation v. Cupcake City, WIPO Case

No. D2000-0818.

Although not articulated exactly this way, the rationale of the panel decisions

cited in the preceding paragraph appears to be as follows: The domain name was

registered by the distributor/web designer for the distributor/web designer's

use under certain conditions or for certain discrete purposes. If the conditions

no longer obtain or the use exceeds the specified purposes, registration in

bad faith may be inferred, because the complained-of use (e.g., use after

the distributor has been terminated or after the web designer has completed

its specified tasks), if contemplated by the parties at the time of the registration[13]

would have been bad faith. In this decision the Panel refers to this line of

cases as the "Consent to Register" cases or theory.

Because of the facts of this particular case, the "Consent to Register" theory

is not applicable[14].

There are other instances in which a panel may infer registration in bad faith

from subsequent conduct. The "warehousing" doctrine first set out in

Telstra Corporation Ltd. v. Nuclear Marshmallows, WIPO

Case No. D2000-0003, is one example. Under that doctrine a panel may infer

from lengthy non-use of a domain name that incorporates another's trademark

that the respondent initially registered the domain name in bad faith as defined

by the Policy. Under the warehousing doctrine, however, there is an inference

of bad faith at the time of registration. That is not true of the Consent

to Register theory; indeed, it is usually an acknowledged fact that, at the

time of registration, the respondent registered the domain name with the complainant's

knowledge and without objection. Unless there is clear evidence that at the

time of registration the respondent intended to exceed his brief, the Panel

does not see how a finding of registration in bad faith can be squared with

the Policy's plain language. Stated conversely, the Panel does not believe that

a respondent should be presumed to have registered a domain name in bad faith

solely because he subsequently used the domain name in bad faith[15].

There is no evidence here to support an inference of bad faith at the time

of registration. The only evidence comes from Respondent, who claims to have

acted generally with the Complainant's consent. Complainant made no objection

for almost a year. Unlike several of the cases in which the Consent to Register

theory was applied, there is no evidence from which the Panel could infer the

existence or terms of any agreement between the parties that limited Respondent's

use of the Domain Name or Website[16].

Strict interpretation of the Policy's language in cases such as these avoids

interposing a panel into a broader business dispute between the parties to the

proceeding. As discussed more fully below, that is plainly the case here.

The Panel concludes that the Complainant has failed to carry its burden of

proof on the second and third elements of the Policy. The evidence offered by

Complainant falls considerably short of what is required under the Policy to

establish that Respondent never had a right to use the Domain Name or that the

Domain Name was registered in bad faith[17].

The second phenomenon that this case exemplifies is less common but more serious

than the first: Both parties treat this administrative proceeding as a means

for resolving (or at least broadcasting) a broader dispute between them[18].

As a result both parties have cluttered the record with material at once difficult

to understand in the limited context of my jurisdiction under the Policy and

utterly irrelevant to my decision. The Policy is intended to provide a relatively

speedy and inexpensive method to remedy cybersquatting. It is not a means for

resolving any other disputes.

Complainant, perhaps justifiably, objects to Respondent's criticism. It is

not without a remedy or a forum in which to seek that remedy. The evidence submitted

by Complainant might support civil claims for trademark infringement, breach

of fiduciary duty, breach of contract, disparagement, or defamation – in a court

of law, not in this limited administrative proceeding.

7. Decision

The Complaint is denied.

Richard G. Lyon

Sole Panelist

Dated: December 3, 2003

1. In reply to the Center's email inquiry,

Complainant provided a comparison of the Amended Complaint against the original

Complaint. The changes were corrections of clerical errors and the addition

of certain evidence and argument of counsel.

2. Several annexes to the Response were submitted

separately, from November 5 through November 12, 2003, probably because of their

length.

3. Respondent denies elements of these allegations,

but material he submits as annexes reveals that he does not in fact contest

them.

4. In the United States an accredited investor

is an individual who meets certain objective criteria, set by the Securities

and Exchange Commission (SEC), of wealth and financial sophistication. Among

other things, an accredited investor may in the proper circumstances purchase

securities that are not registered with the SEC.

5. Respondent's stated intent is "to

use this vehicle [the Website] as a platform to encourage dialog between the

management of Greyson International and the investors."

6. Two of these submitted as annexes to the

Complaint or Response are a photograph of several bare-breasted women and a

cartoon of a naked woman with the caption "Do you remember the old TV show

'To Tell the Truth'? Will the real Harvey Tauman [CEO of Complainant] please

stand up?" While both of these images bear no relevance to the accompanying

text and are certainly provocative, they do not merit the description of "pornography"

given them by Complainant.

7. The Panel confirmed the existence of this

hyperlink on November 19, 2003.

8. Complaint, Annex 7.

9. A Google® search using "Greyson"

submitted by Complainant (Annex 11) indicates that the Website was fifth on

the list of over 5000 matches. Respondent acknowledges his intent to attract

people interested in Complainant. (Response, 2-7)

10. Autera v. Robinson, 419 F.2d 1197,

1201-1202 (D.C. Cir. 1969).

11. Complainant's delay does not establish

any form of estoppel, as Respondent has not shown any detrimental reliance on

the delay. The Panel refers to the delay only for the probative value stated

above.

12. World Wrestling Federation, Inc. v.

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

Documents for the Uniform Dispute Resolution Policy.

13. Or perhaps at the time of the contract

between Complainant and Respondent.

14. The Panel notes his skepticism of the

Consent to Register theory as a matter of general interpretation under the Policy,

as in my view it requires an extension of the Policy's clear language.

15. There may be other evidence that will

justify such a inference. For example, a web designer who misused several clients'

domain names could be said to have engaged in a pattern of conduct that justifies

a finding of bad faith at the time of registration.

16. Utensilerie Associate S.p.A. v. C &

M, WIPO Case No. D2003-0159, and Net2Phone, Inc. v. WorldCall International

Ltd., WIPO Case No. D2002-0142, are examples of distributor/agent cases in which

a panel ordered transfer because of a contractual restriction.

17. For good and obvious reasons none of

my findings or commentary is res judicata or collateral estoppel in any subsequent

proceeding between Complainant and Respondent. Grove Broadcasting Co. Ltd. v.

Telesystems Comm. Ltd., WIPO Case No. D2000-0703. The panel wishes to emphasize

that his finding that Complainant has not carried its evidentiary burden should

never be read as endorsing Respondent's conduct or the truth or falsity of either

party's submissions.

18. While this ordinarily occurs in the

context of a supplier and its former distributor, occasionally (as here) the

UDRP proceeding is brought in the midst of broader business disputes. E.g.,

Bootie Brewing Co. v. Ward, WIPO Case No. D2003-0185; Precyse Corp. v. Punta

Barajas, SA, WIPO Case No. D2002-0753.