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WIPO Arbitration and
PAA Laboratories GmbH v. Printing Arts America
Case No. D2004-0338
1. The Parties
The Complainant is PAA Laboratories GmbH, Pasching, Austria, represented by Gassauer-Fleissner Rechtsanwдlte GmbH, Austria.
The Respondent is Printing Arts America, San Diego, California, United States
2. The Domain Name and Registrar
The disputed domain name <paa.com> is registered with Network Solutions,
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on May 7, 2004. On May 7, 2004, the Center transmitted by email to Network Solutions, LLC a request for registrar verification in connection with the domain name at issue. On May 17, 2004, Network Solutions, LLC transmitted by email to the Center its verification response confirming that the above-named Respondent is listed as the registrant and providing the contact details for the administrative, billing, and technical contact as Mr. Jim Carluccio at a New Jersey USA address and with an email address in the ‘ix’ sub-domain of netcom.com. 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 (the “Supplemental Rules”).
In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally
notified the Respondent of the Complaint, and the proceedings commenced on May
19, 2004. In accordance with the Rules, paragraph 5(a), the due date for Response
was June 8, 2004. On June 7, 2004, the Center received an email from a person
describing herself as the Office manager of Pilgrim Advisors, Inc (“PAI”)
attaching “our response to the arbitration procedures for WIPO
Case No. D2004-0338 along with supporting documentation”. A cc addressee
of that email was James Carluccio at the email address reported by Network Solutions
as the contact email address for the Respondent.
The Center appointed Philip N. Argy as the sole panelist in this matter on June 29, 2004. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.
A preliminary issue that arises is the status of the June 7, 2004, communication from PAI. Under paragraph 1 of the Rules the “Respondent” in administrative proceedings under the Policy is the holder of the domain name registration. As noted above, Network Solutions reports Printing Arts America as that holder. There is no mention of PAI in the Registrar’s verification nor in the WHOIS entry for the disputed domain name. The Panel must therefore decide whether, for the purposes of clause 5(a) of the Rules, the Respondent has submitted a response. The Panel takes the view that no response to the Complaint has been filed by or on behalf of the Respondent.
Paragraph 5(e) of the Rules is to the effect that “[I]f a Respondent does not submit a response, in the absence of exceptional circumstances, the Panel shall decide the dispute based upon the complaint”. In the Panel’s view exceptional circumstances do here exist, namely, the bankrupt status of the Respondent and the assertion in the June 7, 2004, communication from PAI that it had acquired the domain name in December 2003, for valuable consideration without notice. Accordingly, the Panel proposes to consider the contents of that communication in deciding this dispute. Except where otherwise indicated, references hereafter to the “Submission” are references to the letter attached to PAI’s June 7, 2004 communication.
Subsequent to drafting this decision, on Saturday July 10, 2004, the Panel received a message from the Center advising that a Supplemental filing had been received from the Complainant. In accordance with this Panel’s usual approach, the Center was requested to forward the Supplemental filing for the Panel’s consideration in order to determine whether it should be taken into account. In this Panel’s often previously expressed view, supplemental filings should ordinarily not be taken into account except in exceptional circumstances. Those circumstances would include the Complainant’s objective inability to anticipate and deal with arguments made in the Response. In this case the Panel accepts that the Complainant could not have anticipated a submission from an organisation that was not the Respondent. However, the Panel also notes that the Complainant took nearly a month to prepare its supplemental filing and gave no notice that it wished to do so until well after the Panel’s appointment, and well after the Panel had prepared the initial draft of this decision. The supplemental filing was only received by the Panel in Sydney, Australia the day before the Panel decision was submitted to the Center. It purports to be a “counter statement according to Article 43 WIPO arbitration rules”. However, that rule only applies in an arbitration in which a respondent has made a counterclaim. That is not the case in this proceeding. And in any event, the WIPO Arbitration Rules (see Articles 2 and 3) do not apply to administrative proceedings under the Policy.
On balance, on this occasion, the Panel declines to take into account the Complainant’s
4. Factual Background
The following facts, taken from the material before the Panel, are unchallenged.
The Complainant was founded in Austria on July 26, 1982. It specializes in the manufacturing and world-wide distribution of biologic reagents needed by the cell culture and diagnostic biotechnology communities. Complainant’s customers are cell culture researchers, molecular biologists and biopharmaceutical manufacturers of diagnostics and therapeutics. Complainant processes and manufactures animal and human sera, synthetic media, serum-free and protein-free media, biochemical supplements and reagents, all of which used as cell nutrients in cell culture technology.
Complainant is the registered proprietor of Austrian trademark “PAA” in class five of the Nice classification with a priority date of September 22, 2003, and has its primary website at “www.paa.at”. Complainant also extensively uses “PAA” on its products and advertising material in a stylised way.
The Respondent registered the disputed domain name on August 2, 1997. It has no relationship with the Complainant and did not have the Complainant’s permission to register the disputed domain name. PAI was retained by the Respondent as restructuring consultants during the period from December 1, 2001, through to November 30, 2002. When the Respondent closed its corporate headquarters in July 2002, it shut down its corporate website but continued to use the domain name for electronic mail for its corporate officers. PAI hosted and administered the Respondent’s corporate email system until September 2003, but received no payment for that service after November 2002. During the period August 2002, to December 2003, the Respondent tried to sell the disputed domain name but was unable to obtain “acceptable terms”. The disputed domain name was most recently renewed in October 2003. PAI agreed with the Respondent and its creditors to “provide its services through the completion of the liquidation process in return for either payment of fees incurred during the process or in return for the paa.com name. Upon completion of the liquidation process, the [Respondent] and its creditors chose to compensate [PAI] with the transfer of the domain name as opposed to cash compensation for the fees incurred that were well in excess of US$60,000. While this agreement was reached in late 2003, final paperwork on the sale was received in January 2004.”.
The Submission comprised a letter dated June 7, 2004, on PAI’s letterhead.
It was signed by “James S. Carluccio” in that person’s capacity
as “Managing Director” of PAI. That letter in turn attached a document
entitled Bill of Sale by which the Respondent allegedly assigned to PAI as of
December 5, 2003, “all of [Respondent’s] right title and interest
in and to the [disputed domain name]” and PAI acknowledged that Respondent
was “making no representation or warranty with respect to the [disputed
domain name] and accepts such domain name AS IS” (capitalisation emphasis
5. Parties’ Contentions
The Complainant provided substantial evidence to demonstrate its rights in “PAA” and the status of “PAA” as a trademark. It is unnecessary to recite all of that material here since it is unchallenged. Essentially that material comprised trade mark registration records together with evidence that the Complainant was well known as “PAA”. This is discussed further in section 6 below.
The Complaint then addressed paragraph 4(a)(ii) of the Policy by asserting that the disputed domain name had not been used by the Respondent since 1997, and that no preparations for its use were made. Complainant noted that its rights date back to July 26, 1982, “while Respondent having been founded not before that date, is in liquidation at least since January 13, 2003”. The Complainant confirmed that the Respondent has no relationship with or permission from Complainant for the use of the Trademark “PAA” and then asserted that “Respondent has neither been commonly known by the domain name or the sign “PAA” nor has acquired any trademark or service mark rights. As Respondent is in liquidation, no future use of the domain has to be expected”.
In support of its contention that paragraph 4(a)(iii) of the Policy was made out the Complainant first recited verbatim a series of email exchanges covering the period from January to March 2003, and suggested that the exchanges demonstrated that “the domain name is used in bad faith and that Respondent’s only interest is selling the domain name registration for valuable consideration”.
In summary, the exchange of correspondence amounts to this. On January 13, 2003, the Complainant contacted Mr. Carluccio in his capacity as the administrative and technical contact of Respondent, asking for assignment of the domain name <paa.com> to Complainant. Mr. Carluccio advised that the Respondent was in the process of liquidation and forwarded the e-mail to Mr. Nat Buonfiglio, the chief financial officer of Respondent. Mr. Buonfiglio then stated that he was “accepting bids” for the domain name <paa.com>. The Complainant offered a sum of US$500 for the disputed domain name on January 15, 2003. After a number of further email exchanges this offer was implicitly rejected by the Respondent’s counter offer to sell the disputed domain name for more than US$5,000.
The Complaint goes on to note that the disputed domain name would have expired on October 13, 2003, but “although being in liquidation, Respondent renewed the registration until 2008. From October 2003 to December 2003, Complainant by its legal counsel sent letters to Respondent, to Mr. Buonfiglio and to Mr. Carluccio making a last attempt to acquire the domain name <paa.com>. On January 8, 2004, Mr. Carluccio responded by e-mail:
“Thank you for expressing interest in the domain name. My apologies for the untimely reply to your email. Unfortunately the domain name paa.com is not available for sale; we have plans for reactivation of the web site in the near future.”
Until today, no activation of the web-site has occurred. Respondent is preventing Complainant from reflecting its trademark in a corresponding domain name. In particular the most recent renewal of the domain registration which occurred just in the process of liquidation of Respondent and in awareness of Complainant’s interest of using the domain name on its own was made in bad faith.”
In addition to the unchallenged facts recited in section 4, the Submission asserted that the disputed domain name was actively used as both a web site and email destination for the Respondent since 1997, and remained active until September 2003. At no point during this time did Complainant suggest that it had rights to the name or suggest that Respondent was in any way infringing or harming Complainant. The domain name <www.paa.at> was not registered until September 2003, 6 years after the Respondent began using the disputed domain name.
PAI claims to be a professional services company that in no way competes or infringes on Complainant’s business model. “We believe that PA should be allowed, as Printing Arts America was, to own and use the paa.com name.”
The Submission then notes that the Complainant:
“was well aware of [Respondent’s] attempts to sell the <paa.com>
domain name and had every opportunity to acquire the domain name during the
liquidation process. However, the unorthodox approach used to contact [Respondent’s]
Chief Financial Officer (emails from third parties not associated with the company)
and the minimal amount of this offer, resulted in the [Respondent’s] decision
to sell the domain name to [PAI] as the best disposition of this asset. We believe
this complaint is without merit. [Complainant], having failed to purchase the
domain name in a fair and open auction (an auction in which the complaining
party failed to even directly identify themselves as a qualified bidder), now
resorts to arbitration. We believe this approach is an attempt to force [PAI]
to incur additional expenses defending its ownership of the domain name in the
hope that [PAI] will somehow abandon its ownership of the name to avoid the
arbitration process. We will not. [Complainant] now seeks to usurp through arbitration
a domain name it did not value highly enough to even bid on in an open auction
6. Discussion and Findings
The Complainant bears the onus of proving each of the elements of paragraph 4(a) of the Policy before the Panel can make an order in the Complainant’s favour. These elements are:
(i) that the disputed domain name is identical or confusingly similar to a trademark or service mark in which the Complainant has rights; and
(ii) that the Respondent has no rights or legitimate interest in respect of the disputed domain name; and
(iii) that the disputed domain name was registered and is being used in bad
A. Identical or Confusingly Similar
The Complaint went to considerable lengths to cite Austrian statute and case law and numerous prior decisions under the Policy in support of its rights to PAA. The Panel is well satisfied that PAA is a trademark in which Complainant has both formal trade mark rights and also common law rights and substantial goodwill. Both this and other panels have frequently noted that the gTLD “.com” is almost never a distinguishing feature of domain names at that level. This Panel’s view is that the disputed domain name is identical to a trademark in which the Complainant has rights and is in any event confusingly similar thereto. Thus paragraph 4(a)(i) of the Policy is made out.
B. Rights or Legitimate Interests
The Respondent is on all accounts liquidated, although its precise corporate status is unclear. On any view, since at least the Bill of Sale was executed “as of” December 5, 2003, it has had no interest in the disputed domain name since it assigned whatever interest that it had to PAI. Thus, as at the date of the Complaint and today, the Respondent self evidently has no rights or legitimate interests in respect of the disputed domain name. Indeed the Submission proves that fact. Accordingly, paragraph 4(a)(ii) is made out on the evidence before the Panel.
C. Registered and Used in Bad Faith
Many complainants overlook the Policy’s requirement to show both that the disputed domain name was registered in bad faith AND that it is being used in bad faith. Here the Complainant has adduced no evidence that the disputed domain name was originally registered in bad faith. It is clear from the Submission and from what is recorded by the Wayback Machine (“www.archive.org”) that the Respondent did indeed run a legitimate site at the disputed domain name for many years and that the disputed domain name simply comprised an acronym of the Respondent’s corporate name. The Complainant has not shown that the original registration of the disputed domain name was in bad faith and the Panel in fact finds that the original registration was not in bad faith. The failure of the Respondent’s business is not an act of bad faith and cannot convert a bona fide registration into a bad faith registration, even if the use of the disputed domain name post liquidation has that character.
In Teradyne, Inc. Teradyne, Inc. v. 4Tel Technology, WIPO
Case No. D2000-0026, the Panel considered the rationale behind the Policy
and, in particular, its aim to target “abusive” registrations. The
Panel there considered the deliberations underlying the Policy in these terms,
in a context not dissimilar to that of the present case (save for one aspect
that is discussed later):
“Rather than the classic cybersquatting model of a Registrant who registers the trademark of another, hoping to profit from the trademark owner’s desire to reflect its trademark in a corresponding domain name, we have here a company which registered a domain name to reflect the name of its own business, which seeks to sell that domain name to others for profit now that its business has dissolved.
There is some support in the Report of the WIPO Internet Domain Name Process, for the proposition that a domain name originally registered in good faith can become an abusive registration by changing circumstances. Specifically, paragraph 197 of the Report reads as follows:
The WIPO Interim Report recommended that a time bar to the bringing of claims in respect of domain names (for example, a bar on claims where the domain name registration has been unchallenged for a designated period of years) should not be introduced. It was considered that such a measure would not take into account that the underlying use of a domain name may evolve over time (with the consequence that the use of a domain name may become infringing through, for example, the offering for sale of goods of a different sort to those previously offered on the website); that any related intellectual property rights held by the domain name holder may lapse; and that a time bar would in any event be undesirable in cases of bad faith. (Italics added.)
However, close examination reveals it was not the intent of paragraph 197 to extend the definition of “abusive registration” to include domain names originally registered in good faith. First of all, paragraph 197 itself contemplates not that the domain name will become an abusive registration, but rather that the domain name “may become infringing” (italics added). Second, the clarifying language in the following paragraph, paragraph 198, makes clear that the reference to “infringing” rather than “abusive” in paragraph 197 was intentional; and was not intended to create abusive registrations where none existed originally:
The comments received on this question by WIPO were addressed to an administrative procedure with comprehensive jurisdiction over all intellectual property disputes relating to domain name registrations. Since the scope of the procedure is now limited to cases of bad faith, abusive registrations, we consider that the interim recommendation should apply with more force. It is usual for time bars in legal proceedings not to be applicable to cases of bad faith.
Read in conjunction with paragraph 198, it becomes clear that paragraph 197’s reference to “infringing”, was intended to apply to the wider category of trademark infringement disputes, not to the narrow category of abusive registration. A conscious decision was made that UDRP proceedings be limited to abusive registrations. The question whether domain names registered in good faith become infringing is outside the scope of this inquiry. Further support for this interpretation is contained in the example of “bad faith” contained in § 4(b)(i) of the Policy, which contemplates that the domain name must have been registered or acquired “primarily for the purpose of selling, renting or otherwise transferring” the domain name. In this case, it is clear that the domain name was not registered or acquired for this purpose. This Panel is not ready to extend the Policy to cover cases clearly intended to be outside its scope. That is a task for ICANN, or for the courts.”
Since the Teradyne decision a number of Panels have considered the issue and have come to the view that it should be followed. If there had been no further history, the Complainant therefore could not have succeeded. However, the renewal of the registration of the disputed domain name in October 2003, for a period of five years has a rather different character. By that time it was clear that the Respondent’s business had failed, and the only objective reason for the renewal of the disputed domain name was to give the Respondent (or whatever remnant of the Respondent existed) some rights which it might be able to ‘sell’. If the Panel were to take the view that each renewal of a domain name is equivalent to a fresh registration, then the Panel inclines to the view that that renewal had the requisite character of bad faith. For the purposes of this case, the Panel also considers that paragraph 4(b)(i) of the Policy would apply if “registered” could mean “renewed”.
A search of the WIPO case database (“http://www.wipo.int/amc/en/cgi-bin/domains/search/legalindex?lang=eng&cmd=search&legal=11800.11850&legal=11840”)
reveals no cases that have been indexed to the effect that abusive renewals
(or transfers) have been considered equivalent to abusive registration. Most
recently in Gamer.tv Limited v. Bestinfo, WIPO
Case No. D2004-0320, the Panel did have cause to consider this issue
and to review part of the Teradyne case cited above. The learned Panel
in that case said this:
“To the Panel, the issue in this case does not
relate to the good faith registration of a domain name but to whether or not
a renewal of a domain name made in bad faith is subject to the Policy. At first
this seems to be the case because Paragraph 2 of the Policy, which deals with
the applicant’s representations and warranties, states “By applying
to register a domain name, or by asking us to maintain or renew domain
name registration, you hereby represent and warrant to us that…(b) to
your knowledge, the registration of the domain name will not infringe upon or
otherwise violate the rights of any third party…” [Italics added].
However, at no point after that does the Policy again refer to the circumstances
of renewal nor does it seem reasonable from the context of Paragraph 4 and the
background leading to its formulation, could the word “registration”
be considered a collective word for both registration and renewal. A detailed
discussion on this aspect based on the Report of the WIPO Internet Domain Name
Process, April 1999 can be found in Teradyne, Inc.Teradyne, Inc.[sic] v.
4Tel Technology, WIPO Case No. D2000-0026.
Whether the Policy allows domain name renewals to
be treated in the same way as registrations has been considered before. In Smart
Design Llc v. Carolyn Hughes, WIPO Case
No. D2000-0993 the respondent’s original registration was made in
good faith but the renewal was not. The panel found that “a registration
of a domain name that at conception did not breach Rule 4(a)(iii) but is found
later to be used in bad faith does not fall foul of Rule 4(a)(iii)”. Similarly,
in Substance Abuse Management, Inc. v. Screen Actors Modesl [sic] International,
Inc. (SAMI ), WIPO Case No. D2001-0782
the panel stated that “If a domain name was registered in good faith,
it cannot, by changed circumstances, the passage of years, or intervening events,
later be deemed to have been registered in bad faith”.
In Teradyne Inc.Teradyne, Inc. [sic] v. 4tel Technology,
WIPO Case No. D2000-0026 the respondent
registered a domain name to reflect its own business name but subsequently sought
to sell the name for profit when its business dissolved. The panel found that
to decide the case on the subsequent bad faith action would “extend the
Policy to cover cases clearly intended to be outside its scope.” Similarly,
in Telaxis Communications Corp. v. William E. Minkle, WIPO
Case No. D2000-0005, while the case was not a renewal situation, the circumstances
were that the Respondent registered the disputed domain name in good faith but
subsequently began to use it in bad faith. It was held that because the registration
was made in good faith the requirement of Paragraph 4(a)(iii) was not met.
In view of the above the Panel finds that the Complainant’s claim fails because the Complainant has argued that Respondent’s original registration was probably not made in bad faith and because the actual issue of bad faith renewal falls outside the scope of the Policy.”
In making its finding, the Panel wishes to clarify that its decision under this element is based on the need for consistency and comity in domain name dispute “jurisprudence”. Were it not for the persuasive force of the cited decisions, this Panel would have expressed the view that paragraph 2 of the Policy demonstrates that references to “registration” in the Policy were probably intended to be references to “registration or renewal of registration.”. Absent the consistency of approach which has found favour with numerous earlier panels, this Panel would have seen no good reason for a renewal not to be considered as equivalent to “registration” in the context of the objectives of the Policy. If the renewal had not been effected the disputed domain name would have lapsed and been available to others. The abusive refreshing of the original registration is an act which this Panel considers should be an act of a kind encompassed by paragraph 4(a)(iii) of the Policy. The benefit of an original good faith registration should not be perpetual to the point where it can cloak successors in title and successors in “possession” long after the original registration would have expired.
Since the Policy has been in force, other ccTLD dispute resolution policies have been adopted in circumstances where the operation of the Policy had been able to be observed. In particular, the auDRP is an adaptation of the UDRP which has been adopted in Australia for all domains within the .au space. Significantly, paragraph 4(a)(iii) of the auDRP requires only that a Complainant prove that the disputed domain name “has been registered or subsequently used in bad faith”. The report of the Dispute Resolution Working Group (DRWG) responsible for the auDRP had the following to say at Note 4 of its report (“http://www.auda.org.au/pdf/drwg-audrp-final.pdf”):
“The UDRP requires a complainant to assert that their domain name has been registered and is being used in bad faith. UDRP decisions to date have shown that the wording of this clause … protects a respondent who did not register the domain name in bad faith, but has subsequently used it in bad faith. The DRWG has replaced “and” with “or subsequently” to avoid these difficulties.”
In all the circumstances the Panel has to bend to the weight of UDRP authority
and reluctantly accept that the bad faith renewal of the disputed domain name
in October 2003, by the Respondent was not a bad faith registration for the
purposes of paragraph 4(a)(iii) or 4(b)(I) of the Policy. Accordingly, the Complainant
is unable to make out that element of the Policy and the Complaint must be denied.
For the foregoing reasons, the Complaint is denied.
Philip N. Argy
Dated: July 13, 2004