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KENCELL COMMUNICATIONS LIMITED v. Mr. Agosta M. Liko [2001] GENDND 748 (11 April 2001)

Under the ICANN Uniform Domain Name Dispute Resolution Policy

366 Madison Avenue P New York, NY 10017-3122 P Tel. (212) 949-6490 P Fax (212) 949-8859 P cprneutrals@cpradr.org P www.cpradr.org

Before Bernardo M. Cremades, Arbitrator

1. The Parties

The Complainant is KENCELL COMMUNICATIONS LIMITED, a company incorporated in Kenya, with its principal place of business at Nairobi, Kenya, and whose activity is the telecommunication services.

The Respondent is Mr. Agosta M. Liko, a Kenyan national, domiciled in Grandview, Missouri, United States.

2. The Domain Names and Registrar

The domain names at issue are <kencell.com> and <kencell.net>, both registered with Network Solutions, Inc. (NSI), in Virginia, United States.

3. Procedural History

The complaint was originally sent to CPR Institute for Dispute Resolution on February 13, 2001. However, the complainant accidentally sent the fees to a different Dispute Resolution Provider.

The date of commencement was finally fixed on March 6, 2001, once all the necessary requirements were completed with CPR. Copies of the Notification of Complaint were sent to the Complainant, the Registrar and the ICANN on the same date.

The Respondent was duly notified on March 7, 2001. He was informed that he had a twenty (20) days term to submit a response. However, the respondent chose not to do so, and the case was carried on in default of response.

On March 29, 2001 a single Panelist was appointed. The appointment and acceptance of the Panelist, Mr. Bernardo M. Cremades, was notified to the parties on April 2, 2001.

4. Factual Background

The Claimant incorporated on November 11, 1999, as Kencel Communications Limited, changing its name to KENCELL COMMUNICATIONS LIMITED on November 23, 1999, according to the Certificates from the Registrar of Companies provided by Claimant.

One day after, on November 24, 1999, Respondent registered the domain names in dispute with NSI.

On May 29, 2000, a representative of the Complainant approached the Respondent by e-mail to enquire him about the sale of the domain name <kencell.com>, in response to a sign displayed by the Respondent announcing that the domains were on sale. Several e-mails were exchanged during the next five days, by which (i) the Respondent confirmed his intention of selling the domain <kencell.com>; (ii) the Complainant offered Kshs 50,000 (650 US$) for it; (iii) the Respondent asked for 100,000 US$; and (iv) the negotiations were abandoned, although the Respondent reminded the Complainant that he would consider any subsequent offer that approached 100,000 US$.

The Complainant registered KENCELL COMMUNICATIONS LTD. as Kenyan Trademark and Service Mark no. (TMA) 50383 and (SMA) 2135, corresponding to class 38, schedule III and class 9, schedule III of the Trademarks Act, Chapter 506, Laws of Kenya, respectively. These registrations took place on July 10, 2000, although their publication in The Kenya Gazette only occurred on October 27, 2000. The marks consist of the word KENCELL in stylised letters, and the words COMMUNICATIONS LTD. below, in a lesser size. The registrations also indicate that the registration of the marks shall give no rights to the exclusive use of the words COMMUNICATIONS and LTD. separately and apart form the mark as a whole.

The Complainant sent three letters to the Respondent dated August 4, 18 and September 21, 2000, respectively, although the first of them probably was not received by the Respondent, since it was sent to the Respondent’s address in Kenya, and not in the US. In these three letter, the Complainant warned that they intended to initiate a complaint under the Rules for Uniform Domain Name Dispute, unless the Respondent surrendered the domain name <kencell.com> with reimbursement of the incurred expenses.

5. Parties Contentions

The Complainant submits that the domain names registered are identical or confusingly similar to the Complainant’s trademarks, that KENCELL COMMUNICATIONS LIMITED is a limited liability company registered under the laws of Kenya and that the name “Kencell” is used both commonly and officially as the Company logo; similarly, that the Company’s URL is www.kencell.co.ke, and that in their business and marketing development plans they have set aside various products and trade names to be used for brand awareness. In that context, the domain names registered by the Respondent, <kencell.com> and <kencell.net>, were planned to be used by the Complainant in the course of its business.

The Complainant also submits that on a worldwide basis, no other company is known as “Kencell” and/or “Kencell Communications Limited”. More specifically, that the Respondent does not have a registered company or business under the name “Kencell” nor is he an employee of the Complainant.

The Complainant also submits that the Respondent’s only purpose in registering the domain names was to resell them. Further, the Respondent contacted the Claimant to make an offer for the sale of <kencell.com> for the price of 100,000 US$. The domain names registered by the Respondent have not been given any use except the resale.

The Complainant seeks the unconditional transfer of both domain names to KENCELL COMMUNICATIONS LIMITED.

The Respondent did not reply within the required time period.

6. Discussions and Findings

It is the task for the Panelist to decide on a complaint according to the Rules established in paragraph 4(a) of the ICANN Uniform Domain Name Dispute Resolution Policy. According to this paragraph, to decide in favour of a transfer, which is the remedy sought, the Complainant must show that:

(i) the domain name is identical or confusingly similar to a trademark or service mark in which the Complainant has rights; and

(ii) the Respondent has no rights or legitimate interests in respect of the domain name; and

(iii) the domain name has been registered and used in bad faith.

These requirements are cumulative, it being necessary for the Complainant to show all three of them. Furthermore, in the third requirement, it is also necessary for the Complainant to show the bad faith both in the registration and the use of the domain name.

a) Identical or Confusingly Similar Domain Names

In this case, the first step must be determining whether the domain names <kencell.com> and <kencell.net> are identical or confusingly similar to the trademark and service mark registered by the Complainant. The Complainant has duly shown that he is the legitimate owner of the trademark and service mark KENCELL COMMUNICATION LTD. It is clear that the marks are not identical to the domain names in dispute –since the domain names do not include the words COMMUNICATIONS and LTD. However, the complete identity is irrelevant, in the case that a degree of similarity that can lead to confusion is shown.

In the marks owned by the Complainant, there is clearly a main part and a accessory part. The main part consists of the word KENCELL, in stylised letters. This part is supposed to distinguish the products and services of the complainant form those of other participants in the market. Furthermore, it is stated by the Complainant that according to his worldwide research (not challenged by the Respondent), no other company is known as KENCELL and/or KENCELL COMMUNICATIONS LIMITED. The accessory part is made up of COMMUNICATIONS and LTD. This part of the marks is not distinctive, as it contains generic terms, common to many other companies in the sector (COMMUNICATIONS) and in general (LTD.). The registration of the marks disclaims any rights to the exclusive use of the words COMMUNICATIONS and LTD. apart from the whole mark. Sensu contrario, the registration therefore grants rights to the Complainant over the word KENCELL alone.

In practical terms, the average Kenyan user would expect finding Complainant’s web site when typing the domain names in dispute, since the mark KENCELL, even thought very recently registered, has no other meaning or any relationship with other business or organization for the public. Furthermore, it has not been shown that any other organization or company worldwide uses this term in the course of its activity.

Therefore, the domain names are confusingly similar to the trademarks and service marks in which the Complainant has rights. I am supported in this decision by Jordan Grand Prix v. Sweeney (Case No. WIPO D2000-233) where it was found that the domain name <jordanf1.com> was confusingly similar to the trademark “Jordan Grand Prix”, due to the danger of confusion between the two expressions for the average person, and even for «…persons with an interest in motor-racing…».

b) Respondent’s Rights or Legitimate Interests in the Domain Name

The second step to be ascertained is the absence of rights or legitimate interests of the Respondent in respect of the domain names. The Complainant stated that the Respondent does not have a registered company or business, nor is an employee of the Complainant; similarly, the Complainant stated that the Respondent has made no use of the domain names for any legitimate activity.

Paragraph 4(c) of the ICANN Uniform Domain Name Dispute Resolution Policy gives a list of not limited circumstances that can be shown by the Respondent in order to demonstrate his legitimate interests. Therefore, the burden of proof belongs to the Respondent. However, the Respondent has failed to submit a response within the valid time limit, and therefore, has failed to demonstrate any of the circumstances contained in Paragraph 4(c) of the ICANN Uniform Domain Name Dispute Resolution Policy. The same conclusion is reached also by means of paragraphs 5(e) of the ICANN Rules for Uniform Domain Name Dispute Resolution Policy, that provides that «if a respondent does not submit a response, in the absence of exceptional circumstances, the Panel shall decide the dispute based upon the complaint». Paragraph 14 of the ICANN Rules for Uniform Domain Name Dispute Resolution Policy provides similarly. Therefore, the second of the requirements is also satisfied.

c) Domain Name Registered and Used in Bad Faith

The third condition requires that the Complainant shows that the Respondent has registered and used the domain names in bad faith. The concept of bad faith in the ICANN Uniform Domain Name Dispute Resolution Policy is different from the general concept of bad faith applied and developed in Law. This concept is conditioned by the not limited list of circumstances included in paragraph 4(b) of the ICANN Uniform Domain Name Dispute Resolution Policy, by which the Complainant may show Respondent’s bad faith both in registration and use. This circumstances are as follows:

(i) registration or acquisition of 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 Respondent’s documented out-of-pocket costs directly related to the domain name; or

(ii) registration of 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 the Respondent have engaged in a pattern of such conduct; or

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

(iv) by the use of the domain name with the intentional attempt to attract, for commercial gain, Internet users to the Respondent’s web site 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 the Respondent’s web site or location or of a product or service on the Respondent’s web site or location.

In the present case, and regarding <kencell.com>, Respondent’s only activity in respect of the domain name was putting a sign announcing that the domain was on sale. Then, once the Complainant offered him 50,000 Kshs (around 650 US$), he asked for 100,000 US$ in order to transfer the domain name.

The activity of offering a domain name for sale at a price above the cost of registration not always leads, by itself, to the conclusion of bad faith. In European Broadcasting Union v. Domain 4 sale (Case No. WIPO D2000-0737) it is stated that «…the Panel does not believe that of itself, offering a domain name for sale at a value above the cost of registration, is prima facie evidence of bad faith. Like a trade mark, a domain name is a tradable commodity, and there is no reason why a bargain should not be struck between a willing buyer and a willing seller for the legitimate transfer of a registered domain name at a value which reflects its commercial worth to the parties. However, this pre-supposes that the domain name in question has arisen independently and legitimately, and was not specifically created or registered for the purposes of eliciting a sale. That is the key criteria in establishing bad faith…». For similar reasoning, see Manchester Airport PLC v. Club Club Limited (Case No. WIPO D2000-0638). In fact, paragraph 4(b)(i) of the ICANN Uniform Domain Name Dispute Resolution Policy refers to «…the purpose of selling…» as a circumstance that shows bad faith in the registration, not in the use. Thus, the activity of selling above the cost of registration shall amount to bad faith in use when accompanied by the situation described in the mentioned paragraph 4(b)(i) of the ICANN Uniform Domain Name Dispute Resolution Policy.

In the present case, Respondent’s offering for sale of the domain <kencell.com> was clearly above the cost of registration. Furthermore, the name did not arise independently and legitimately, as it was not used from the moment of its registration except for the purpose of selling it. Therefore, it can be concluded that the Respondent registered the domain name for the sole purpose of reselling it, and so tried, at a price much higher than his registration expenses.

Bad faith in registration is strengthened by the fact that the domain name was registered by the Respondent on November 24, 1999, just thirteen days after the incorporation of the Complainant, and just one day after the change of name from “Kencel” to “Kencell”.

However, regarding the domain name <kencell.net>, no evidence has been given by the Complainant showing the requirement of bad faith. The complaint states that «…the Respondent registered the two (2) domain names for no other purpose than resale…», but there is no support for this assertion regarding <kencell.net>. Respondent’s failure to file a response can not be fully interpreted as a tacit acceptance of this assertion of bad faith, since the burden of proving this requirement belongs to the Complainant.

Nevertheless, the bad faith can be inferred from the rest of the elements shown: both domain names were registered at the same time, on November 24, 1999, just thirteen days after the incorporation of the Complainant and one day after the change of its name; the assertions of the lack of legitimate interest on the name KENCELL made for <kencell.com> are also applicable to <kencell.net>; and the Respondent has failed to show that he has used the domain name <kencell.net> in any legitimate manner. Therefore, bad faith in registration exists for both domain names as a common element.

Regarding bad faith in the use of <kencell.net>, this must be inferred even in the absence of any evidence regarding Respondent’s attempts to sell this domain name. The absence of positive action regarding the domain name is not a bar to a finding of bad faith following the doctrine established in Telstra Corporation Limited v. Nuclear Marshmallows (Case No. WIPO D2000-0003), which states that «…a domain name “being used in bad faith” is not limited to positive action; inaction is within the concept. That is to say, it is possible, in certain circumstances, for inactivity by the Respondent to amount to the domain name being used in bad faith…».

These circumstances include, according to the above mentioned case, and J. García Carrión, S.A. v. Mª José Catalán Frías (Case No. WIPO D2000-0239) the concurrence of registration in bad faith and the complete absence of evidence by the Respondent supporting a legitimate interest by which the domain name was registered and could be of any use.

Therefore, bad faith must be accepted for the registration and use of both domain names.

7. Decision

The Administrative Panel decides that the Complainant has established all of the requirements contained in paragraph 4(a) of the ICANN Uniform Domain Name Dispute Resolution Policy. Therefore, the Panel requires that the domain names <kencell.com> and <kencell.net> be transferred to the Complainant.

Bernardo M. Cremades

Single Panelist

April 11, 2001.