Generic Top Level Domain Name (gTLD) Decisions

The Complainant is PepsiCo, Inc., Purchase, NY, USA ("Complainant") represented by Carla C. Calcagno, of Howrey Simon Arnold & White. The Respondent is Datasphere Ltd., Addison, TX, USA ("Respondent") represented by Martin K. Thomas.

The domain name at issue is "pepsicola.com", registered with Network Solutions.

The undersigned certifies that he has acted independently and impartially and to the best of his knowledge, has no known conflict in serving as a panelist in this proceeding.

Judge Irving H. Perluss (Retired) is the Panelist.

Complainant submitted a Complaint to the National Arbitration Forum ("the Forum") electronically on February 20, 2001; the Forum received a hard copy of the Complaint on February 21, 2001.

On February 21, 2001, Network Solutions confirmed by e-mail to the Forum that the domain name "pepsicola.com" is registered with Network Solutions and that the Respondent is the current registrant of the name. Network Solutions has verified that 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 February 22, 2001, a Notification of Complaint and Commencement of Administrative Proceeding (the "Commencement Notification"), setting a deadline of March 14, 2001 by which Respondent could file a Response to the Complaint, was transmitted to Respondent via e-mail, post and fax, to all entities and persons listed on Respondent’s registration as technical, administrative and billing contacts, and to postmaster@pepsicola.com by e-mail.

A timely response was received and determined to be complete on March 14, 2001. An additional submission was received from Complainant. The text was timely, but, due to a misunderstanding, the exhibits were not. The text and the exhibits have been considered by the Panelist.

On March 26, 2001, pursuant to Complainant’s request to have the dispute decided by a One Member Panel, the Forum appointed Judge Irving H. Perluss (Retired) as Panelist.

The Complainant requests that the domain name be transferred from the Respondent to the Complainant.

A. Complainant

1. Complainant, PepsiCo, Inc. ("PepsiCo") is a famous, multi-national company, which engages, inter alia, in the manufacture and sale of soft drink concentrates and the marketing of carbonated soft drinks throughout the United States and the world.

2. Among the famous and distinctive marks owned by PepsiCo are the trademarks PEPSI and PEPSI-COLA.

3. For over 100 years, PepsiCo has continuously used the trademark PEPSI-COLA in commerce to manufacture, sell, distribute and market its flagship brand of soft drinks. Its shortened version PEPSI has been in continuous use since at least 1911, as well as in a logo form incorporating a red, blue, and white globe-shaped device (the "PEPSI logo"), since as early as 1969.

4. PepsiCo owns all rights in and to the famous and distinctive trademarks, PEPSI, PEPSI-COLA and the PEPSI logo (collectively "the PEPSI marks") and has obtained the presently valid federal trademark registrations, as follows:

5. PepsiCo sells three of the top-10 soft drinks in the U.S. and accounts for about a third of the $58 billion soft-drink market.

6. In addition, PepsiCo has expended many millions of dollars to advertise and promote PEPSI products and the PEPSI marks.

7. As a result of PepsiCo’s extensive sales, promotion and advertising, the PEPSI marks have come to represent extraordinarily valuable goodwill owned by PepsiCo and are among the best-known and most famous marks in the world.

8. In conjunction with these efforts, PepsiCo has developed an important presence on the Internet, including its website accessible through the following addresses, all of which are formatives of its famous PEPSI marks: pepsi.com, pepsiworld.com, pepsibusiness.com, pepsiretail.com, pepsifountain.com, pepsivending.com, pepsico.com, pepsicojobs.com and pepsicareer.com (collectively "the PEPSI domain names").

9. The domain name registered by Respondent, pepsicola.com, is identical and confusingly similar to the PEPSI marks in which Complainant has superior rights.

10. Respondent has no rights or legitimate interest in the domain name for the following reasons:

a. Respondent registered the domain name pepsicola.com with NSI on April 12, 1996.

b. No website is currently accessible through pepsicola.com domain name.

c. Respondent has made no efforts to develop an active website to be used in conjunction with the domain name pepsicola.com since registering the domain name in April 1996.

d. The domain name at issue is not the name of Respondent, nor can it be considered its business name or common trade name.

e. Respondent is not a licensee of PepsiCo nor is Respondent otherwise authorized to use PepsiCo’s PEPSI marks for any purpose.

f. Respondent obtained registration for the domain name pepsicola.com with full knowledge of PepsiCo’s long prior use and ownership of its famous and arbitrary PEPSI marks.

11. Respondent registered and is using the domain name in issue in bad faith for the following reasons:

a. The designation PEPSI is unique, arbitrary and fanciful such that it is unlikely that the Respondent devised the term "pepsicola" on its own. Such trademark uniqueness, together with the utilization of the PEPSI-COLA mark has created a confusingly similar domain name and should weigh in favor of finding bad faith against Respondent.

b. Respondent had actual and constructive notice of Complainant’s rights in the PEPSI marks.

c. Respondent’s registration of the domain name prevents the Complainant and rightful trademark owner from using its marks in a corresponding domain name.

d. A website operated by Respondent at the domain name "pepsicola.com" will create a likelihood of initial interest confusion as to the source, sponsorship, affiliation, or endorsement of the Complainant’s website.

e. Respondent has failed to use the domain name in conjunction with an active website for over four years.

B. Respondent

1. Respondent has made no commercial use of the domain name and, accordingly, the alleged dispute is not ripe for resolution.

2. Respondent has not acted in bad faith in that it twice informed Complainant or its representatives that Respondent would relinquish its rights in the domain name if Complainant had any interest in obtaining these rights. There has been no contact with Respondent for over four years and, accordingly, there has been acquiescence in the continued registration of the domain name. The acquiescence bars a finding of bad faith.

C. Additional Submissions

1. Respondent has not demonstrated "acquiescence" factually or legally, and it must carry the burden of proof.

2. The acquiescence defense is not appropriate for a cybersquatters, as here, and when the marks are identical by virtue of the great concern for preventing public deception.

3. Ripeness does not depend on an active website. To the contrary, a long-continued failure to create a website for a registered domain name is strong evidence of no legitimate interest and bad faith use.

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.

Preliminarily, it is to be noted that Respondent has raised two defenses i.e., lack of "use" of the domain name and thus lack of "ripeness," and acquiescence by Complainant. These defenses will be considered hereinafter.

There can be no question but that the domain name in issue is identical and confusingly similar to Complainant’s famous and distinctive marks, and the Panelist so finds and determines. See Hollywood Network, Inc. v. Video Citizen Network, FA 95897 (Nat. Arb. Forum Dec. 20, 2000) (finding that the domain name <hollywoodnetwork.tv> is identical and confusingly similar to Complainant’s HOLLYWOOD NETWORK mark because the "inclusion of the entirety of Complainant’s mark in the domain name at issue makes it confusingly similar.")

Respondent’s argument that because there has been no actual use of the domain name the issues of confusion, rights and bad faith are not ripe for decision is without merit.

To the contrary, inactivity and failure to create a website can be the indicia of bad faith. See Muggles Magical Toys, Inc. v. Muggles.org, FA 94798 (Nat. Arb. Forum July 24, 2000) (inactivity for over eighteen months is strong and persuasive evidence that Respondent has no legitimate interest in the domain name and is using the domain name in bad faith); CBS Broadcasting, Inc. v. Edward Enterprises, D2000-0242 (WIPO May 24, 2000) (citing cases supporting a finding of bad faith based on failure to link domain name to an active website).

The Panelist finds and determines that Respondent has no rights or legitimate interests in the disputed domain name.

This is because Respondent is not commonly known by the domain name, nor has Respondent used the domain name in connection with a legitimate noncommercial or fair use. See Broadcom Corp. v. Intellifone Corp., FA 96356 (Nat. Arb. Form Feb. 5, 2001) (finding no rights or legitimate interests because Respondent is not commonly known by the disputed domain name or using the domain name in connection with a legitimate or fair use); see also Nike, Inc. v. B.B. de Boer, D2000-1397 (WIPO Dec. 21, 2000) (finding no rights or legitimate interests where one "would be hard pressed to find a person who may show a right or legitimate interest" in a domain name containing Complainant’s distinct and famous NIKE trademark) or (finding that no person besides Complainant could claim a right or a legitimate interest with respect to the domain name <nike-shoes.com>).

But, Respondent urges, there was contact by letter with Complainant’s representatives, and there was a promise of a reply, but none was forthcoming. Four years have lapsed, and this creates "acquiescence."

Arguendo, the Panelist accepts Respondent’s version of the letters and response.

In the Panelist’s view, however, Respondent has not demonstrated the bar of acquiescence. It is established that acquiescence requires a finding of conduct on Complainant’s part that amounts to an assurance to the Respondent, express or implied, that Complainant would not assert its trademark rights against the Respondent. (See Restatement of the Law, Third, Unfair Competition (1995) Section 29, Comment c; Carl Zeiss Stiftung v. VEB Carl Zeiss, Jena (SDNY 1968) 293 F.Supp. 892, 917, affirmed (2d Cir. 1970) [1970] USCA2 788; 433 F.2d 686, cert. denied (1971) 403 U.S. 905.)

The silence of Complainant was not sufficient, particularly when, as required, the interest of customers in not being deceived is weighed in balance. There was no such required conduct here. (See Restatement of the Law, Third, Unfair Competition (1995) Section 31, Comment c.) (For an example of affirmative conduct fairly implying consent, see Gorstew Ltd. v. Twinsburg Travel FA 94944 (Nat. Arb. Forum, July 7, 2000).)

Section 4(b) of the Policy sets forth certain circumstances, without limitation, that shall be evidence of registration and use of a domain name in bad faith. Subparagraph (iv) of Section 4(b) provides:

The words "source, sponsorship, affiliation, or endorsement" are particularly apt here. Inevitably, the Panelist believes that consumers would conclude that the domain name in issue was endorsed and sponsored by Complainant.

In addition to the demonstration of bad faith by the application of subparagraph (iv) of Section 4(b) of the Policy, there is a legal presumption of bad faith, when Respondent reasonably should have been aware of Complainant’s trademarks, actually or constructively. How could it have not been?

In Interstellar Starship Services, Ltd. v. Epix, Inc. (CA 9^th 1999) [1999] USCA9 357; 184 F.3d 1107, 111, it was said:

Thus, the domain name in issue was registered in bad faith. Respondent, however, argues that it actually has not used the domain name in issue in bad faith and, accordingly, the name could have been used in "bad faith." Indeed, it is argued, the dispute is not ripe for resolution.

The Panelist heretofore has determined that Respondent has no rights or legitimate interest in the domain name, and that it has registered the name in bad faith. It makes no sense whatsoever to wait until it actually "uses" the name, when inevitably, when there is such use, it will create the confusion described in the Policy.

Under similar circumstances, a preliminary, mandatory injunction was granted by a federal court requiring the transfer of a domain name even though a website had not yet been opened. (Green Products Co. v. Independence By-Products Co. (N.D. Iowa 1997) 992 F.Supp. 1070.) The threatened harm is "use." See Phat Fashions v. Kruger, FA 96193 (Nat. Arb. Forum, Dec. 29, 2000); Bloomberg LP v. Schorsch, FA 96576 (Nat. Arb. Forum, Mar. 19 2001); Hungry Minds, Inc. v. Mall For Dummies, FA 96635 (Nat. Arb. Forum, Apr. 4, 2001).

In any event, there is "use" because Respondent has "passively held" the disputed domain name since its registration. See Clerical Med. Inv. Group Ltd. v. Clericalmedical.com, D2000-1228 (WIPO Nov. 28, 2000) (finding that merely holding an infringing domain name without active use can constitute use in bad faith); DCI S.A. v. Link Commercial Corp., D2000-1232 (WIPO Dec. 7, 2000) (concluding that the Respondent’s passive holding of the domain name satisfies the requirement of paragraph 4(a)(iii) of the Policy); see also Sony Kabushiki Kaisha v. Inja, Kil, D2000-1409 (WIPO Dec. 9, 2000) (finding that bad faith registration and use where it is "inconceivable that the respondent could make any active use of the disputed domain names without creating a false impression of association with the Complainant").

The Panelist finds and determines, accordingly, that Respondent registered and used the domain name in issue in bad faith, and the issue is "ripe" for decision.

Based on the above findings, conclusions and determinations, and pursuant to Rule 4(i), it is decided that the domain name "pepsicola.com" registered by Respondent Datasphere, Ltd., shall be, and the same is transferred to Complainant Pepsico, Inc.