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PARTIES
The Complainant is Ultrafem Inc., San Diego, CA, USA (“Complainant”)
represented by Peter Reichertz, of Arent Fox Kintner Plotkin & Kahn,
PLLC. The Respondent is Warren R. Royal, Woodstock, GA, USA (“Respondent”)
represented by Ari Goldberger, of ESQwire.com Law Firm.
REGISTRAR AND DISPUTED DOMAIN NAME
The domain name at issue is <instead.com>, registered with Network
Solutions.
PANEL
The undersigned certify that they have acted independently and impartially
and to the best of their knowledge have no known conflict in serving as
Panelists in this proceeding.
The Honorable Charles K. McCotter, Jr. (Ret.), the Honorable James Carmody
(Ret.), and Mr. Milton Mueller as Panelists.
PROCEDURAL HISTORY
The Complainant submitted a Complaint to the National Arbitration Forum
(“the Forum”) electronically on June 19, 2001; the Forum received a hard
copy of the Complaint on June 20, 2001.
On June 22, 2001, Network Solutions confirmed by e-mail to the Forum
that the domain name <instead.com> is registered with Network Solutions
and that the Respondent is the current registrant of the name. Network
Solutions has verified that the Respondent is bound by the Network Solutions
5.0 registration agreement and has thereby agreed to resolve domain name
disputes brought by third parties in accordance with ICANN’s Uniform Domain
Name Dispute Resolution Policy (the “Policy”).
On June 25, 2001, a Notification of Complaint and Commencement of Administrative
Proceeding (the “Commencement Notification”), setting a deadline of July
16, 2001 by which the Respondent could file a Response to the Complaint,
was transmitted to the Respondent via e-mail, post and fax, to all entities
and persons listed on the Respondent’s registration as technical, administrative
and billing contacts, and to postmaster@instead.com by e-mail.
A timely response was received and determined to be complete on July
16, 2001.
On July 25, 2001, pursuant to the Respondent’s request to have the dispute
decided by a three-member Panel, the Forum appointed the Honorable Charles
K. McCotter, Jr. (Ret.), the Honorable James Carmody (Ret.), and Mr. Milton
Mueller as Panelist.
RELIEF SOUGHT
The Complainant requests that the domain name be transferred from the
Respondent to the Complainant.
SPECIAL CIRCUMSTANCES
The Complainant lists the Respondent as Warren R. Royal. Royal
has not filed a response; however, Instead.com, Inc. has filed a response
contending that Royal has transferred all his rights to it through its
principal, Lawrence Tasady. The Complainant challenges the standing
of Instead.com, Inc. to file a response contending that only the registered
holder of the domain name has standing to respond. Since Royal is
the holder of the domain name, Royal is properly designated as the Respondent.
However, since Royal transferred his interest in the domain name to it,
Instead.com, Inc. has standing to respond. The Panel also concludes
that the use of the domain name by both Royal and Instead.com, Inc. is
relevant to the inquiry.
PARTIES’ CONTENTIONS
A. Complainant
The trademark INSTEAD is a registered trademark (the “Mark”) and has
been used exclusively in commerce by the Complainant since 1996 in connection
with the sale of its feminine products. Royal registered the domain
name, which is identical to the Mark, long after the Mark was registered
and used as a trademark. Neither does Royal nor Instead.com Inc.
have a clear legitimate interest in the domain name. Instead.com,
Inc. does not have a legitimate purpose in the domain name by simply claiming
use for an ecological friendly consumer products retail web site and portal.
The registration by Instead.com, Inc. of the domain name with the GreatDomains.com
auction web site without any showing on behalf of Royal or Instead.com,
Inc. of additional use since its registration nearly three years ago, is
sufficient evidence that the domain name was acquired primarily for the
purpose of selling, renting or transferring and thereby preventing the
Complainant from reflecting its Mark in a domain name. Additionally,
the Complainant’s conversations with the domain name registrant and owner
of record, Royal, concerning the sale of the domain name, coupled with
the offered sale through GreatDomains for $80,000, satisfies the requirements
of bad faith registration and use under the UDRP. Finally, any attempt
by Instead.com, Inc. to now show legitimate use due to the incorporation
of a business without use is not a legitimate purpose.
B. Respondent
The term “instead” is a common word that means “alternatively” or “rather
than.” The first to register a common word domain name is entitled
to keep it absent specific evidence that the disputed domain name was registered
in bad faith. Instead.com, Inc. has a clear legitimate interest in
<instead.com> because it obtained it to use for an ecological friendly
consumer products retail web site and portal. There is no evidence
that the domain name was acquired primarily for the purpose of selling,
renting or transferring to the Complainant; to prevent the Complainant
from reflecting its trademark in a domain name; or to disrupt the Complainant’s
business or attract customer’s seeking to purchase its products.
Instead.com, Inc. merely purchased a common word domain name and long before
this dispute, made demonstrable efforts to use for the sale of bona fide
products. Accordingly, there can be no finding of bad faith registration
and use.
FINDINGS
1. This complaint is based upon the Complainant’s registrations for
the following trademarks:
a. INSTEAD, Reg. No. 2026125, in International Class 10, used in connection
with menstrual fluid collection device, based on a first use date of March
1, 1996.
b. INSTEAD, Reg. No. 2056353, in International Class 10, used in connection
with menstrual fluid collection device, based on a first use date of August
5, 1996.
2. The disputed domain name was registered by Warren R. Royal, on July
15, 1998. Since registration of the domain name nearly three years
ago, the domain name has not been used in connection with a web site.
3. In June 1999, Laurence Tasaday purchased the disputed domain name
from Royal for $5,000. On June 6, 1999, Royal signed and notarized
a Registrant Name Change Agreement (“RNCA”) in which he transferred the
domain name to Laurence Tasaday. Tasaday obtained a NIC-tracking
number (NIC-990713.3905), which he placed on the RNCA and faxed to Network
Solutions. Tasaday did not know until this matter was instituted
that the disputed domain name had not been properly transferred.
The RNCA was not processed because Tasaday failed to sign it.
4. Tasaday is the founder and President of Instead.com, Inc. On
June 15, 1999, Tasaday established the Colorado corporation Instead.com,
Inc. Instead.com, Inc. is the owner, but not registered holder, of
the disputed domain name.
5. Tasaday purchased the disputed domain name to use for Instead.com,
Inc., an ecological friendly retail web site to sell ‘eco-friendly” products.
6. In March 2001, the Complainant contacted Royal concerning the domain
name. Royal explained to the Complainant that unless the Complainant
was “serious” about negotiating for the domain name, it was not worth Royal’s
time. Royal then stated that he was the registrant of over 1300 domains
and that if one looks at “greatdomains.com,” not many domains sell for
under $100,000. The Respondent further explained that “serious” meant
around $50,000 to $100,000.
7. Royal is the registrant of more than fifty (50) domain names.
Furthermore, Royal’s name and address is listed as the administrative and
technical contact for additional domain name registrations.
8. Instead.com, Inc. is listed as the administrative and billing contact
information for the disputed domain name. Neither Royal, Tassady,
nor Instead.com, Inc. intentionally caused the registrant information for
the disputed domain name to be incorrect. The Respondent
provided clear and correct administrative and billing contact information
for the WHOIS database.
9. Instead.com, Inc. prepared a business plan setting forth Instead.com,
Inc.’s ambitious goal of catering to what it projected as a $12 billion
retail market for eco-products by 2004.
10. While Instead.com, Inc. raised initial funding, it has run out of
capital and has not been able to acquire additional necessary funding due
to the downturn in the Internet economy. Instead.com, Inc. is continuing
its efforts to secure funding. Because Instead.com, Inc. was unable
to raise additional funds through conventional channels, but still desired
to launch its eco-products web site, it listed the disputed domain name
for sale on the Great Domains auction site in the Summer of 2000, for the
purpose of raising money to fund the venture. If the disputed domain
name were sold, Instead.com, Inc. would register an alternative domain
name to use.
11. Instead.com, Inc. owns only one domain name <instead.com>.
12. “Instead” is a common word meaning “a substitute or an equivalent,”
as in Having planned to drive, we walked instead. The Complainant
uses “instead” in a descriptive manner to mean that its softcup menstrual
fluid device is a substitute, or alternative, to standard tampons or pads.
13. The word “instead” is subject to substantial third-party use.
It is incorporated in 29 active U.S. registered trademark applications.
An Altavista search for the word “INSTEAD” resulted in over 10 million
web pages containing this common word.
DISCUSSION
Paragraph 15(a) of the Rules for Uniform Domain Name Dispute Resolution
Policy (the “Rules”) instructs this Panel to “decide a complaint on the
basis of the statements and documents submitted in accordance with the
Policy, these Rules and any rules and principles of law that it deems applicable.”
Paragraph 4(a) of the Policy requires that the Complainant must prove
each of the following three elements to obtain an order that a domain name
should be cancelled or transferred:
(1) the domain name registered by the Respondent is identical
or confusingly similar to a trademark or service mark in which the Complainant
has rights;
(2) the Respondent has no rights or legitimate interests in respect
of the domain name; and
(3) the domain name has been registered and is being used in
bad faith.
Identical and/or Confusingly Similar
There is no dispute that the Complainant’s registered trademark, INSTEAD,
and the domain name <instead.com> are identical. Because the Complainant’s
Mark and the domain name are identical, the first factor is met.
Rights or Legitimate Interests
Instead.com, Inc. has a legitimate interest in the domain name.
The <instead.com> domain name is generic, and is a commonly used word.
See Successful Money Mgmt. Seminars, Inc. v. Direct Mail Express, FA 96457
(Nat. Arb. Forum Mar. 7, 2001) (finding that seminar and success are generic
terms to which Complainant cannot maintain exclusive rights); see also
Rollerblade, Inc. v. CBNO and Redican, D2000-0427 (WIPO Aug. 24, 2000)
(finding that “[G]enericness, if established, will defeat a claim of trademark
rights, even in a mark which is the subject of an incontestable registration”);
see also CRS Tech. Corp. v. CondeNet, Inc., FA 93547 (Nat. Arb. Forum Mar.
28, 2000). (“This is not the case in which [Respondent] selected
a domain name incorporating a famous or distinctive mark that, it should
have known it was not entitled to use. Rather, [Respondent] selected
as its domain name a mark that is somewhat descriptive and is meant to
communicate some aspect of the services provided. . . In these circumstances,
the first to register a domain name containing a generic or descriptive
mark should prevail absent bad faith and a lack of legitimate interest.”)
Instead.com, Inc. purchased the domain name to use for an ecological
friendly retail web site. Instead.com, Inc. prepared a business plan
and raised some initial funding, but has not been able to acquire necessary
funding due to the downturn in the Internet economy. The company
is continuing its efforts to secure funding. Instead.com, Inc. has
undergone extensive preparations to use the disputed domain name and has
prepared a comprehensive business plan, and therefore has rights and legitimate
interests in the <instead.com> domain name pursuant to Policy ¶
4(c)(i). See Casual Corner Group, Inc. v. Young, FA 95112 (Nat. Arb.
Forum Aug. 7, 2000) (finding that Respondent has rights and legitimate
interests in the domain name even though he has made no use of the website
at the time of the Complaint); see also Smart Design LLC v. Hughes, D2000-0993
(WIPO Oct. 18, 2000) (finding rights and legitimate interests in the domain
name where Respondent sought to develop a bona fide business use for the
domain name). Instead.com, Inc. has made use of the domain name beyond
mere passive holding.
While it is true that Instead.com, Inc. has offered to sell the disputed
domain name on the Great Domains auction site, the intent to sell a common
word domain name, itself, can constitute a legitimate interest, where there
is no evidence the Respondent registered it to sell to a trademark holder.
Newstoday Printers and Publishers (P) Ltd. v. InetU, Inc., D2001-0085 (WIPO
May 23, 2001). (Even if Respondent’s business were to comprise the
registration for sale of generic domain names either generally or to its
customers that would not be an illegitimate use of the domain name).
See also Audiopont, Inc. v. eCorp, D2001-0509 (WIPO June 14, 2001) (“Indeed,
speculation in domain names without any intent to profit from others’ trademark
rights may itself constitute a bona fide activity under paragraph 4(c)(i)”).
Registration and Use in Bad Faith
A bad faith showing would require the Complainant to prove that the
Respondent registered <instead.com> specifically to sell to the Complainant,
or that the value of "instead" as a domain derived exclusively from the
fame of its trademark. Neither has been proven in this case.
In the absence of an intent to capitalize on the Complainant’s trademark
interest, the Complainant cannot assert an exclusive right over a domain
name that is a common, generic term. Therefore, it does not constitute
bad faith for a company making a legitimate use of a domain name to attempt
to sell the domain name.
Many precedents uphold the principle that registering a generic term
with intent to benefit from its economic value in the secondary market
is a legitimate use as long as no bad faith is involved. The UDRP
was not drafted to eliminate the secondary market in domain names, it was
only intended to stop deliberate cybersquatting on trademarks. See
Lumena s-ka zo.o. v. Express Ventures LTD, FA 94375 (Nat. Arb. Forum May
11, 2000) (finding no bad faith where the domain name involves a generic
term, and there is no direct evidence that Respondent registered the domain
name with the intent of capitalizing on Complainant’s trademark interest);
Perricone v. Hirst, FA 95104 (Nat. Arb. Forum Sept. 1, 2000) (“Respondent
is legally entitled to sell generic or merely descriptive domain names”);
Etam, plc v. Alberta Hot Rods, D2000-1654 (WIPO Jan. 31, 2001). (“Respondent’s
offer to sell the domain name does not constitute bad faith, in light of
the fact that it has a legitimate interest in the domain name.”)
DECISION
Based upon the above findings and conclusions, we find in favor of
the Respondent. Therefore, the relief requested by the Complainant
pursuant to Paragraph 4.i of the Policy is Denied. The Respondent
shall not be required to transfer to the Complainant the domain name <instead.com>.
Charles K. McCotter, Jr.,
Panel Chair
Dated: August 2, 2001
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