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Marine Toys for Tots Foundation v. Jim Gayles [2001] GENDND 562 (20 March 2001)

WIPO Arbitration and Mediation Center

Complainant is Marine Toys for Tots Foundation ("Complainant" or "Marine Toys"), a New York not-for-profit corporation located at 715 Broadway Street, P.O. Box 1947, Quantico, Virginia 22134 USA.

Respondent is Jim Gayles aka Jim Gales dba Signature Payment Systems ("Respondent" or "Gayles") with a mailing address at P.O. Box 8254, Fort Meyers, Florida 33916 USA.

The domain name at issue is "toysfortots.com" (the "Domain Name"). The registrar is Network Solutions, Inc. (the "Registrar") located at 505 Huntmar Park Drive, Herndon, Virginia, 20170 USA.

On January 18, 2001, the WIPO Arbitration and Mediation Center (the "Center") received a copy of the Complaint via email. On January 22, 2001, the Center received hardcopies of the Complaint. On January 23, 2001, the Center sent an Acknowledgment of Receipt of Complaint to Complainant.

On January 26, 2001, after the Center sent a Request for Verification to the Registrar requesting verification of registration data, the Registrar confirmed, inter alia, that it is the registrar of the Domain Name and that the Domain Name is registered in the Respondent's name.

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

On January 29, 2001, the Center advised the Complainant that it had tendered insufficient fees. On February 5, 2001, the Center received additional fees from the Complainant.

On February 6, 2001, the Center sent a Notification of Complaint and Commencement of Administrative Proceeding to the Respondent together with copies of the Complaint with Amendment, with a copy to the Complainant. This notification was sent by the methods required under paragraph 2(a) of the Rules.

On March 2, 2001, the Center advised Respondent that it was in default for failing to file its Response. No Response has been received.

On March 6, 2001, after the Center received a completed and signed Statement of Acceptance and Declaration of Impartiality and Independence from Richard W. Page (the "Sole Panelist"), the Center notified the parties of the appointment of a single-arbitrator panel consisting of the Sole Panelist.

Complainant, through its predecessors, is the owner of all intellectual property rights in and to the TOYS FOR TOTS service mark and owns U.S. Registration No. 1,680,712 for TOYS FOR TOTS in connection with "soliciting donations for use in purchasing toys for distribution to children by the United States Marine Corps Reserve" and U.S. Registration Nos. 1, 929,756 and 1,946,913 for TOYS FOR TOTS in connection with "charitable fundraising services."

In connection with its TOYS FOR TOTS service mark, Complainant solicits donations for use in purchasing toys for needy children during the holiday season. Complainant, through its predecessors, has used the TOYS FOR TOTS mark since at least 1948, and, through substantial and sustained advertising efforts, has endowed the mark with great value. The date of first use for the TOYS FOR TOTS mark, October 1, 1948, is well before the creation date of the disputed domain name, that is - March 2, 1998.

Complainant maintains a significant presence on the Internet through its website located at "toysfortots.org".

Gayles had only limited authority to use Complainant’s TOYS FOR TOTS mark, pursuant to licensing agreements with Complainant, subject to Complainant’s express approval, for terms that expired on January 1, 1999, March 1, 1999, and February 1, 2000, respectively.

On February 27, 1998, Gayles entered into a licensing agreement with Complainant for a term from March 3, 1998 until January 1, 1999. This agreement authorized Respondents to use TOYS FOR TOTS in association with corporate sponsorship activities, marketing, promotion and a webpage only for the term of the contract. Respondents agreed that Complainant had the right to review and approve uses of TOYS FOR TOTS, and expressly acknowledged that Complainant "is the right owner of the name and logo ‘Toys for Tots’." The licensing agreement signed by Respondents contained a merger clause providing that "[t]his agreement represents the entire understanding of the parties."

On June 4, 1998, Gayles entered into a substantially similar licensing agreement with Complainant for a term from June 4, 1998 until March 1, 1999. This licensing agreement also provided that Respondents’ authority to use TOYS FOR TOTS expired with the agreement, that Complainant had the right to review and approve Respondents’ uses of TOYS FOR TOTS and that Respondents acknowledged Complainant’s ownership of the TOYS FOR TOTS name and logo.

By letter dated March 11, 1999, Complainant informed Respondents that their continued use of TOYS FOR TOTS was unauthorized under the initial licensing agreement and demanded that they cease all use of TOYS FOR TOTS, and that they make royalty payments due under that agreement.

Gayles replied by telephone on March 16, 1999, requesting additional time to use the TOYS FOR TOTS mark. On March 21, 1999, as a result of Gayles' request for additional time to use the TOYS FOR TOTS mark, Complainant and Gayles entered into a third licensing agreement substantially similar in terms to the first two licensing agreements, with a term from March 22, 1999 until February 1, 2000.

On January 29, 2000 Complainant received an email from "Jean" at "ToysForTots@aol.com", apparently on behalf of Respondents, indicating that "we are looking into the possible sale of the web page domain name."

Complainant has tried repeatedly by email, mail, telephone, and facsimile to reach Respondents since February 2, 2000. Aside from a telephone call from J. Gayles in mid-February, 2000, indicating that the Signature Group had been sold to William Pringle of Brainstormers Inc. in the Fall of 1999 and providing inaccurate contact information, Complainant has heard nothing from Respondents.

By certified letters dated June 22, 2000, and August 16, 2000, counsel for Complainant informed Gayles that his continued unauthorized use of "toysfortots.com" violated Complainant’s rights and demanded that Gayles transfer the domain name to Complainant. Complainant has received no response.

A. Complainant contends that it has numerous registrations of the service mark TOYS FOR TOTS. Complainant further contends that the Domain Name is identical with and confusingly similar to the TOYS FOR TOTS mark pursuant to the Policy paragraph 4(a)(i).

Complainant contends that Respondent has no rights or legitimate interest in the Domain Name pursuant to the Policy paragraph 4(a)(ii).

Complainant contends that Respondent registered and is using the Domain Name in bad faith in violation of the Policy paragraph 4(a)(iii).

B. Respondent failed to contest Complainant’s assertion that it has numerous registrations in the TOYS FOR TOTS mark or that the Domain Name is identical with and confusingly similar to the mark.

Respondent failed to contest Complainant’s assertion that Respondent has no rights or legitimate interest in the Domain Name.

Respondent failed to contest Complainant’s assertion that Respondent registered and used the Domain Name in bad faith.

Paragraph 15(a) of the Rules instructs the Panel as to the principles the Panel is to use in determining the dispute: "A Panel shall 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."

Since both the Complainant and Respondent are domiciled in the United States, and since United States’ courts have recent experience with similar disputes, to the extent that it would assist the Panel in determining whether the Complainant has met its burden as established by Paragraph 4(a) of the Policy, the Panel shall look to rules and principles of law set out in decisions of the courts of the United States.

Even though Respondent has failed to file a Response or to contest Complainant’s assertions, the Sole Panelist will review the evidence proffered by Complainant to verify that the essential elements of the claims are met.

Paragraph 4(a) of the Policy directs that the Complainant must prove each of the following:

i) that the domain name registered by the Respondent is identical or confusingly similar to a trademark or service mark in which the Complainant has rights; and,

ii) that the Respondent has no legitimate interests in respect of the domain name; and,

iii) that the domain name has been registered and is being used in bad faith.

Complainant contends that it has numerous registrations of the service mark TOYS FOR TOTS and that its registrations are valid and subsisting and serve as prima facie evidence of its ownership and the validity of the TOYS FOR TOTS mark. 15 U.S.C. § 1115. Complainant’s registrations are incontestable and conclusive evidence of Complainant’s ownership of the mark and exclusive right to use the mark in connection with the stated services. 15 U.S.C. §§ 1065 and 1115(b).

Respondent has not contested the assertions by Complainant that it has valid registrations of the TOYS FOR TOTS mark. Therefore, the Sole Panelist finds that Complainant, for purposes of this proceeding, has enforceable rights in the TOYS FOR TOTS mark.

Complainant further contends that the Domain Name is identical with and confusingly similar to the TOYS FOR TOTS service mark pursuant to the Policy paragraph 4(a)(i).

Respondent has not contested the assertions by Complainant that the Domain Name is confusingly similar to the TOYS FOR TOTS mark.

The Sole Panelist notes that the entirety of the TOYS FOR TOTS mark is included in the Domain Name.

Generally, a user of a mark "may not avoid likely confusion by appropriating another's entire mark and adding descriptive or non-distinctive matter to it." 3 J. Thomas McCarthy, McCarthy on Trademarks & Unfair Competition § 23:50 (4^th ed. 1998). The deletion of the spaces between the words in the mark is not distinctive.

Therefore, the Sole Panelist finds that the Domain Name is confusingly similar to the TOYS FOR TOTS mark pursuant to the Policy paragraph 4(a)(i)

Rights or Legitimate Interest.

Complainant contends that Respondent has no rights or legitimate interest in the Domain Names pursuant to the Policy paragraph 4(a)(ii).

Respondent was granted a series of licenses to use the TOYS FOR TOTS mark. The most recent of these licenses expired on February 1, 2000. Therefore, Respondent has no relationship with or permission from Complainant for the use of the TOYS FOR TOTS mark.

The Policy paragraph 4(c) allows three nonexclusive methods for the Sole Panelist to conclude that it has rights or a legitimate interest in the Domain Name:

(i) before any notice to you [Respondent] of the dispute, your use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or

(ii) you [Respondent] (as an individual, business, or other organization) have been commonly known by the domain name, even if you have acquired no trademark or service mark rights; or

(iii) you [Respondent] are 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.

The file contains no evidence that the use of the Domain Name meets the elements for any of the nonexclusive methods provided for in the Policy paragraph 4(c). Therefore, the Sole Panelist finds that Respondent has no rights or legitimate interest in the Domain Name pursuant to the Policy paragraph 4(a)(ii).

Bad Faith.

Complainant contends that Respondent registered and is using the Domain Name in bad faith in violation of the Policy paragraph 4(a)(iii).

The Policy paragraph 4(b) sets forth four nonexclusive criteria for Complainant to show bad faith registration and use of domain names:

(i) circumstances indicating that you have registered or you have acquired 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 your documented out-of-pocket costs directly related to the domain name; or

(ii) you have registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that you have engaged in a pattern of such conduct; or

(iii) you have registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(iv) by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your website or other on-line location, by creating a likelihood of confusion with the complainant's mark as to the source, sponsorship, affiliation, or endorsement of your website or location or of a product

Complainant has not shown the presence of any of the criteria set forth in the Policy paragraph 4(b).

The four criteria set forth in the Policy paragraph 4(b) are nonexclusive. Telstra Corporation Limited v. Nuclear Marshmellows, WIPO Case No. D2000-0003. In addition to these criteria, other factors alone or in combination can support a finding of bad faith.

Complainant alleges that Respondent is not making legitimate noncommercial or fair use of the domain name "toysfortots.com". In fact, the website to which the Domain Name resolves is not in use, but leads only to a disabled webpage.

One such factor is that Respondent has made no use of the Domain Name. Complainant alleges that Respondent has not developed any active website at "www.toysfortots.com" or made any other use of the Domain Name "toysfortots.com". See Telstra Corp. v. Nuclear Marshmallows, D2000-0003 (WIPO February 18, 2000).

In Telstra it was established that registration together with "inaction" and other facts can constitute bad faith use, and the Telstra decision has since been cited for that proposition and followed by subsequent Panels. Ingersoll-Rand v. Frank Gully, d/b/a Advcomren, WIPO Case No. D2000-0021; Guerlain, S.A. v. Peikang, WIPO Case No. D2000-0055; Compaq Computer Corp. v. Boris Beric, WIPO Case No. D2000-0042; Sanrio Co. Ltd. and Sanrio, Inc. v. Lau, WIPO Case No. D2000-0172; 3636275 Canada, dba eResolution v. eResolution.com, WIPO Case No. D2000-0110; Marconi Data Systems, Inc. v. IRG Coins and Ink Source, Inc., WIPO Case No. D2000-0090; Stralfors AB v. P D S AB, WIPO Case No. D2000-0112; InfoSpace.com, Inc. v. Ofer, WIPO Case No. D2000-0075.

To quote a prior Panel decision, "[B]ecause Respondent is contributing no value-added to the Internet -- it is merely attempting to exploit a general rule of registration -- the broad community of Internet users will be better served by transferring the domain name to a party with a legitimate use for it." Educational Testing Service v. TOEFL, ICANN Case No. D2000-0044.

See also, Leland Stanford Junior Univ. v. Zedlar Transcription & Translation, FA 0006000094970 (NAF July 11, 2000); Revlon Consumer Prods. Corp. v. Yosef, D2000-0468 (WIPO July 27, 2000) (citing cases where panel found inaction constitutes bad faith).

In World Wrestling Federation Entertainment Inc (WWFE) v. Rooij, WIPO Case No. D2000-0290 (June 20, 2000) the Panel made a finding of bad faith based on the fact that the domain name website had not been developed, stating "the concept of a domain name being used in bad faith is not limited to positive action; inaction is within the concepts." Id. at 10.15. See also, Mondich v. Brown, WIPO Case No. D00-0004 (February 16, 2000) (bad faith evidenced by "failure for a substantial period of time to make good faith use of the domain name for [respondent's] business");

In the present case, the Domain Name was registered on March 2, 1998. The Domain Name has not yet been used for any legitimate purpose. The lack of any legitimate, good faith use suggests bad faith.

A second factor found to support a finding of bad faith is Respondent’s knowledge of the Complainant’s mark. Respondent was a licensee of this mark for several years and has actual knowledge of its existence.

Furthermore, Respondent registered the "toysfortots.com" Domain Name on March 2,1998, long after Complainant registered the TOYS FOR TOTS mark. Respondent had constructive notice of the TOYS FOR TOTS mark, as a trademark search on the date of the registration of the Domain Name would have revealed Complainant’s registration of the TOYS FOR TOTS mark in the United States.

Actual or constructive knowledge of the Complainant’s rights in the trademark is a factor supporting bad faith. See Expedia, Inc. v. European Travel Network, D2000-0137 (WIPO April 18, 2000); Document Technologies v. International Electronic Communications, Inc., D2000-0270 (WIPO June 6, 2000) (Respondent’s knowledge of complainant’s mark at the time of registration of the domain name suggests bad faith).

A third factor is Respondent’s refusal to voluntarily transfer the contested Domain Name. Complainant alleges that substantial communications took place with Respondent. Since the expiration of the license to use the mark, Respondent has failed to respond to Complainant and had refused Complainant’s requests to transfer the Domain Name.

The evidence establishes: (i) inaction by Respondent in the use the Domain Name to post any content on the Internet or for any other legitimate purpose; (ii) actual and constructive knowledge by Respondent of Complainant’s rights in the mark upon the registration of the Domain Name; and (iii) Respondent’s failure to positively respond to Complainant’s request for transfer. Based upon this evidence, the Sole Panelist finds that Complainant has shown sufficient facts to support a finding that the Domain Name was registered and used in bad faith pursuant to the Policy paragraph 4(a)(iii).

The Sole Panelist concludes (a) that the Domain Name "toysfortots.com" is confusingly similar to Complainant’s registered service mark TOYS FOR TOTS, (b) that Respondent has no rights or legitimate interest in the Domain Name and (c) that Respondent registered and used the Domain Name in bad faith. Therefore, pursuant to paragraphs 4(i) of the Policy and 15 of the Rules, the Sole Panelist orders that the Domain Name be transferred to the Marine Toys for Tots Foundation.

Richard W. Page
Sole Panelist

March 20, 2001