DECISION

Exult, Inc. v. Walter Long

Claim Number: FA0205000113263

PARTIES

Complainant is Exult, Inc., Irvine, CA (“Complainant”).  Respondent is Walter Long, Newbury Port, MA (“Respondent”).

REGISTRAR AND DISPUTED DOMAIN NAME 

The domain name at issue is <exult.com>, registered with Tucows, Inc.

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.

Anne M. Wallace, Q.C., Honourable Carolyn M. Johnson and Richard Page as Panelists.

PROCEDURAL HISTORY

Complainant submitted a Complaint to the National Arbitration Forum (the “Forum”) electronically on May 6, 2002; the Forum received a hard copy of the Complaint on May 9, 2002.

On May 7, 2002, Tucows, Inc. confirmed by e-mail to the Forum that the domain name <exult.com> is registered with Tucows, Inc. and that Respondent is the current registrant of the name.  Tucows, Inc. has verified that Respondent is bound by the Tucows, Inc. 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 May 9, 2002, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of May 29, 2002 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@exult.com by e-mail.

Having received no Response from Respondent, using the same contact details and methods as were used for the Commencement Notification, the Forum transmitted to the parties a Notification of Respondent Default.

On June 27, 2002, pursuant to Complainant’s request to have the dispute decided by a three-member Panel, the Forum appointed Anne M. Wallace, Q.C., Honourable Carolyn M. Johnson and Richard Page as Panelists.

Having reviewed the communications records, the Administrative Panel (the “Panel”) finds that the Forum has discharged its responsibility under Paragraph 2(a) of the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”) “to employ reasonably available means calculated to achieve actual notice to Respondent.”  Therefore, the Panel may issue its decision based on the documents submitted and in accordance with the ICANN Policy, ICANN Rules, the Forum’s Supplemental Rules and any rules and principles of law that the Panel deems applicable, without the benefit of any Response from Respondent.

RELIEF SOUGHT

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

PARTIES’ CONTENTIONS

A. Complainant

Complainant owns a U.S. Patent and Trademark Office (“USPTO”) registration listed on the Principal Register for the EXULT service mark, Reg. No. 2,439,480, acquired March 27, 2001. Complainant first used the mark in commerce on August, 27, 1999. Complainant is a publicly-traded corporation (Nasdaq: EXLT) with 2001 revenue documented at approximately $272.5 million. Complainant has invested millions of dollars in developing, advertising, promoting and delivering its services under its EXULT mark.

Complainant asserts that the Disputed Domain Name <Exult.com> is identical to Complainant’s mark EXULT. 

Respondent has registered 296 domain names, including the Disputed Domain Name. Material in evidence shows that Respondent admittedly speculates in domain names. All of these domain names route to the same web server IP addresses

Respondent’s web site has no commercial, educational, philanthropic, or other “legitimate” content.  It is simply a dummy warehouse site to which he routes his domain names.  Through affiliates, Respondent has owned the Disputed Domain Name for at least two years, but has manifested no preparation to do anything with it other than route it to an obscene web site.  Respondent owns a corporation, Domains, Inc., that through the DBA “domains.com” serves as the administrative, technical and billing contact for all 296 domain names.  This is a dormant shell corporation which, according to Dun & Bradstreet, has conducted no commercial activity. 

There is no relationship between Respondent and the name “Exult.”  Nothing about Respondent’s web site bears any rational relationship to the word exult.  The trademark search conducted by Complainant in connection with its federal registration of the mark EXULT did not reveal any use by Respondent of the mark.  A Google search under Exult does not produce any results that appear to be associated with Respondent.  The name “Exult” does not appear in any public records associated with Respondent.  There is no directory listing for “Exult” in Respondent’s area of residence.  Other efforts by Complainant to uncover an association between Respondent and the name Exult have similarly demonstrated that Respondent is not known in any way by the Disputed Domain Name.

Respondent’s only use of the Disputed Domain Name – to route to his web site – does not constitute “fair use.”  “Exult” is not an appropriately descriptive term for Respondent or his web site.  Respondent’s use of the word “exult” as a link to his web site is not a form of protected free speech, particularly in light of the fact that it routes to pornographic content.  Respondent’s activities do not include any critiques, criticisms, parodies, or the like. 

Complainant is aware that there are other ways Respondent could attempt to demonstrate a legitimate interest in the Disputed Domain Name, and accordingly Complainant notes that it has no relationship to Respondent and has not given Respondent permission to use the Disputed Domain Name.  Further, other Panels have held that non-use of domain names, or use of domain names to route to pornography, are inconsistent with “legitimate” or “bona fide” rights or interests.  

Complainant does not know the identity of the original registrant of the Disputed Domain Name, but it is clear that Respondent acquired the Disputed Domain Name between July and September of 2001. It is clear that a series of other registrants affiliated with Respondent acquired the Disputed Domain Name beginning in early 2000.  Each of these registrants listed Domains.com as the Administrative and Billing Contact, and Domains.com is the DBA for Registrant’s corporation, Domains, Inc.. Complainant established common law rights in the mark EXULT in August 1999, before the acquisition of the Disputed Domain Name by each of these registrants.  Further, when Respondent acquired the Disputed Domain Name after July 31, 2001, Respondent had at least constructive notice of Complainant’s service mark rights in the name EXULT by virtue of Complainant’s federal registration dating back to March 2001. 

Respondent renewed registration of the Disputed Domain Name in January 2002.  Section 2 of the Policy required Respondent to determine whether his registration of the Disputed Domain Name infringed third party rights, and provided that Respondent’s renewal constituted Respondent’s representation that, to his knowledge, registration of the Disputed Domain Name did not infringe any third party rights.  Respondent breached the Policy because either he renewed registration knowing about Complainant’s rights to the mark EXULT, or he failed to conduct even a cursory trademark search, which would have revealed Complainant’s rights.  Accordingly, because the Policy treats renewals as tantamount to registrations and Respondent violated the Policy when he renewed his registration, his registration should be deemed to be in bad faith.

Early in 2000, before Complainant knew that Respondent speculates in domain names, Complainant's counsel inquired about purchasing the Disputed Domain Name and in response Respondent negotiated to sell the Disputed Domain Name to Complainant for $100,000. This sale was never consummated, but it does prove that Respondent’s motives included sale of the Disputed Domain Name.  In light of the fact that Respondent has done nothing else with the Disputed Domain Name, and Respondent’s self-professed status as a domain name speculator it stands to reason that sale is Respondent’s primary – indeed only – motive.  Further, the price named by Respondent, $100,000, is wildly in excess of Respondent’s costs to register the Disputed Domain Name. 

Proving that Respondent’s intention was to sell the Disputed Domain Name to Complainant in particular would require mind reading.  Suffice to say that Respondent had actual or constructive knowledge of Complainant from previous negotiations to sell the Disputed Domain Name to Complainant and from Complainant’s federal service mark registration.  The mark EXULT is fanciful and no other potential purchasers are apparent.  Respondent did in fact negotiate to sell the Disputed Domain Name to Complainant and Respondent's price was excessive.  Accordingly, because Respondent acquired the Disputed Domain Name to sell it, Complainant is the obvious potential purchaser and Respondent did indeed negotiate to sell to Complainant, it is reasonable to infer that Respondent’s motive was to sell to Complainant.  Therefore, Complainant submits that Respondent's conduct meets the test for bad faith under Policy Section 4(b)(i).

Further, even if Respondent were ignorant of Complainant’s identity, that would not mitigate the bad faith of Respondent’s actions.  He may have selected his 296 domain names at random, but just as he hopes to capitalize on the goodwill that others develop in marks corresponding to his domain names, he must accept the consequences of acquiring domain names that infringe the service marks of others.

Complainant has shown that Respondent is a domain name speculator with no demonstrable plan to use the Disputed Domain Name.  Respondent acquired the Disputed Domain Name between July and September 2001.  At the time of this acquisition, Respondent had constructive notice of Complainant’s service mark rights in the mark EXULT by virtue of Complainant’s federal registration dating to March 2001.  Respondent’s registration of at least 296 domain names, and his undifferentiated warehousing of them in the same manner as the Disputed Domain Name, should suffice as evidence of Respondent’s pattern of speculative domain name registration. Respondent’s registration of the Disputed Domain Name prevents Complainant from having the domain name <Exult.com> to correspond to its registered mark EXULT.  These circumstances amply demonstrate that Respondent’s domain name speculation activities are intended to and do interfere with trademark rights, and accordingly, the Panel should conclude that Respondent has registered and is using the Disputed Domain Name in bad faith under Policy Section 4(b)(ii). 

Respondent's use of the Disputed Domain Name serves no legitimate purpose, but it does cause confusion and tarnish Complainant's reputation.  Someone trying to conduct legitimate Internet business involving Complainant without knowing Complainant's address would first try <Exult.com>, where Respondent's site is encountered.  The inevitable reaction is confusion as to whether the user has Complainant's correct corporate name, revulsion at the content, and a negative impression of Complainant for being associated with such content, or for tolerating it in association with Complainant's corporate name.  Complainant asserts this is not a mere coincidence – it is an intentional effort by Respondent to embarrass Complainant by confusing persons seeking Complainant via the Internet.

Respondent's motive is unquestionably commercial gain.  He is a self-proclaimed domain name speculator and he has negotiated to sell the Disputed Domain Name to Complainant for $100,000. Commercial gain through sale is the only plausible explanation for Respondent's ownership of the Disputed Domain Name, particularly given the absence of any other use over a long period.  Respondent’s strategy is to capitalize upon Complainant’s goodwill.  He does this by using the Disputed Domain Name to draw persons seeking to reach Complainant via the Internet to an offensive web site, thereby tarnishing Complainant's reputation.  Respondent hopes this will coerce Complainant to purchase the Disputed Domain Name from Respondent in order to preserve the substantial goodwill Complainant has developed in the mark EXULT.  Therefore, Complainant submits that Respondent’s conduct meets the test for bad faith under Policy Section 4(b)(iv).

Finally, Complainant asserts that, in addition to the elements set forth in the Policy, a common sense assessment of Respondent's conduct leads to the conclusion that he registered or acquired and is using the Disputed Domain Name in bad faith within the meaning of the Policy.

Panels have relied upon conduct like Respondent's as a basis for finding bad faith registration and use.  In doing so, Panels do not always require that bad faith registration and use be shown discretely by separate conduct, but rather consider all the facts and circumstances in the aggregate and assess the Respondent’s conduct in light of the Policy’s objective of controlling abusive domain name practices. 

B. Respondent

Respondent did not file a Response in these proceedings.

FINDINGS

The majority of this Panel finds that while the Disputed Domain Name is identical to Complainant’s service mark, Respondent has a legitimate interest in the domain name.

DISCUSSION

Paragraph 15(a) of 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.”

In view of Respondent's failure to submit a Response, the Panel shall decide this administrative proceeding on the basis of the Complainant's undisputed representations pursuant to paragraphs 5(e), 14(a) and 15(a) of the Rules and draw such inferences it considers appropriate pursuant to paragraph 14(b) of the Rules.

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; and

(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

Complainant owns a registered service mark for EXULT which was registered March 29, 2001. Complainant has been using the service mark in its business since August 1999. The Disputed Domain Name is <Exult.com>. Therefore, the first element is met in that the domain name is identical to a service mark in which the Complainant has rights.

Rights or Legitimate Interests

While the Panel acknowledges Complainant’s arguments with respect to this element, we find, for the reasons which follow, that Respondent does have a legitimate interest in the domain name within the meaning of the Policy.

EXULT is a generic English language word. The WhoIs page lists the initial registration date of <Exult.com> as January 18, 1997. Complainant never began using the service mark EXULT until August of 1999 and did not acquire the USPTO registration until March of 2001. It is clear that Respondent’s registration of the name, which reflects a generic word, occurred before Complainant established any rights in the EXULT mark, common law or pursuant to the USPTO’s registration procedure. Respondent, therefore has a legitimate interest in the contested domain name because it registered <exult.com> before Complainant established rights in the mark. We agree with the Panel in Ode v. Intership Ltd., D2001-0074 (WIPO May 1, 2001) where they stated that, “We are of the unanimous view that the trademark must predate the domain name.”

­In light of our conclusion on this point, it is not necessary that we address Complainant’s other submissions under this element.

Registration and Use in Bad Faith

In light of the Panel’s findings above, it is not necessary to deal with the arguments with respect to bad faith.

The Panel wishes to point out that in making our decision, we are applying the elements of the Policy. We make no finding as to whether, in trademark law, Complainant may have a legitimate case against Respondent.

DECISION

The Complaint of Exult, Inc. is therefore dismissed.

Anne M. Wallace, Q.C.

Honourable Carolyn M. Jonhson

Panelists

DISSENT

I do not believe that Respondent established rights or legitimate interests when he purchased or otherwise received the Disputed Domain Name during the time period between July and September 2001.  Complainant had already registered its trademark registration.

During prior negotiations to sell in early 2000, Respondent had already involved himself.  When he later acquired the Disputed Domain Name he had actual knowledge of the common law rights and the registered trademark of Complainant, thus supporting a further finding of bad faith.

I would rule for Complainant and transfer the disputed domain name.

Richard Page

Panelist

Dated: July 29, 2002

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