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MDU Resources Group, Inc. v.Swarthmore Associates, LLC [2002] GENDND 302 (26 February 2002)


National Arbitration Forum

START-UP TRADEMARK OPPOSITION POLICY

DECISION

MDU Resources Group, Inc. v. Swarthmore Associates, LLC

Claim Number: FA0112000102957

PARTIES

Complainant is MDU Resources Group, Inc., Bismarck, ND (“Complainant”) represented by Marty A. Francis, Esquire of Thelen Reid & Priest, LLP. Respondent is Swarthmore Associates, LLC, Pacific Palisades, CA (“Respondent”) represented by John  C. Kirkland, Esquire of Greenberg Traurig, LLP.

REGISTRAR AND DISPUTED DOMAIN NAME 

The domain name at issue is <mdu.biz>, registered with PSI-Japan.

PANEL

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

M. KELLY TILLERY, ESQUIRE as Panelist.

PROCEDURAL HISTORY

Complainant has standing to file a Start-up Trademark Opposition Policy (“STOP”) Complaint, as it timely filed the required Intellectual Property (IP) Claim Form with the Registry Operator, NeuLevel.  As an IP Claimant, Complainant timely noted its intent to file a STOP Complaint against Respondent with the Registry Operator, NeuLevel and with the National Arbitration Forum (the “Forum”).

Complainant submitted a Complaint to the Forum electronically on December 14, 2001; the Forum received a hard copy of the Complaint on December 17, 2001.

On December 20, 2001, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of January 9, 2002 by which Respondent could file a Response to the Complaint, was transmitted to Respondent in compliance with paragraph 2(a) of the Rules for the Start-up Trademark Opposition Policy (the “STOP Rules”).

A timely Response was received and determined to be complete on January 9, 2002.

Complainant submitted a timely Additional Submission pursuant to Forum Supplemental Rule 7 on January 14, 2002.  Respondent also submitted a timely Additional Submission pursuant to Supplemental Rule 7 on January 18, 2002.

On February 5, 2002, pursuant to STOP Rule 6(b), the Forum appointed M. KELLY TILLERY, ESQUIRE as the single Panelist.

RELIEF SOUGHT

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

PARTIES’ CONTENTIONS

A. Complainant

Complainant contends that it owns eight (8) service marks registered with the United States Patent and Trademark Office as follows:

MARK             REGISTRATION#                 REGISTRATION DATE      

MDU                           234,1183                                 4/11/00

MDU                           233,8542                                 4/4/00

MDU                           234,1184                                 4/11/00

MDU (stylized)             233,8546                                 4/4/00

MDU (stylized)             234,5391                                 4/25/00

MDU (stylized)             234,5392                                 4/25/00

MDU (stylized)             239,1306                                 10/3/00

MDU                           239,9522                                 10/31/00

Complainant is in the business of producing and distributing electricity and all of the registrations relate to this activity.

Complainant contends that an Internet search and online government record search reveals no evidence that Respondent has ever used the term “MDU” as a trademark for any goods or services and that there is no active site associated with the domain name in question.

Complainant contends that public records show that Respondent is a California limited liability company established on June 1, 2001 and that the agent and partner of record for Respondent is John Kirkland, Esquire, who is also Counsel for Respondent in this action and the Administrative Contact for purposes of its domain name in question.

Complainant contends that Respondent has no trademark registration or pending Applications incorporating the term “MDU” with the United States Patent and Trademark Office.

Complainant contends that its Trademark Investigator found nothing indicating that Respondent has entitlement to use the name or mark “MDU”, that there is no telephone directory listing for Respondent in Pacific Palisades, California, that 754 Swarthmore, Pacific Palisades, California, Respondent’s address is also the residential address of John Kirkland, Esquire, Counsel for Respondent and Respondent’s Administrative Contact.

Complainant contends that Respondent has no common law rights in the term “MDU” and that Respondent is not currently in business utilizing same.

Complainant contends that the domain name at issue was registered and/or is being used in bad faith.  Complainant contends that this is so because Respondent has no apparent trademark rights in the term “MDU”, Respondent had constructive notice of Complainant’s trademark rights due to the USPTO registrations and that it is reasonable to assume that Respondent had actual knowledge of the trademark rights of Complainant because Complainant has operated a website at the address <mdu.com> for several years.  Complainant contends that if Respondent did not conduct an appropriate search to determine whether anyone else had rights in the “MDU” mark, that such failure constitutes bad faith.

Complainant contends that despite Respondent’s constructive notice of Complainant’s trademark rights and Respondent’s likely actual notice of Complainant rights, Respondent registered the domain name in question and represented in its Application that the domain name will not infringe upon or otherwise violate the rights of any third party.

Complainant contends that it’s representative informed Counsel for Respondent that Complainant owns trademark rights in “MDU”, operates a website at <mdu.com> and wanted to acquire the domain name in dispute.  Complainant contends that Respondent’s representative, Mr. Kirkland, responded that he registered a “block” of domain names for various clients, that he could not recall for which client this domain name was registered and that he would inquire and respond to the undersigned.  The next day Mr. Kirkland left a voicemail indicating that should Complainant desire to acquire the domain name, Complainant should put its best offer in writing as soon as possible. 

Complainant contends that this constitutes an invitation for an offer to purchase the domain for valuable consideration in excess of Respondent’s documented out of pocket costs directly related to the domain name.

B. Respondent

Respondent contends that its usage of the common initials “MDU” in its domain name does not infringement any legitimate trademarks of Complainant in that Respondent is using “MDU” as initials for its own website “mduniversity” which is directed to medical school students.

Respondent contends that Complainant is not famous or widely recognized and that they are not the only company that uses the very common initials “MDU.” 

Respondent contends that the three letters “MDU” are commonly used initials for many, many things and that there are other companies who own trademarks for “MDU” in other classes.  Respondent contends that the services to be provided by it under the <mdu.biz> domain name are in a different international trademark class and cover completely different services than those of Complainant.

Respondent contends that it has filed an Intent to Use Trademark Application (#780,98771) for the mark <mdu.biz> in Class 41 covering Internet Educational Services, specifically the operation of an Internet website providing medical school textbooks and related services for the education of medical students. 

Respondent contends that since the services offered by Respondent and Complainant are completely different, there is no likelihood of confusion and therefore no trademark infringement.

Respondent contends that it acquired the domain in question for the purpose of operating its own online business.  Respondent contends that prior to the registration of the domain name and long before any notice to Respondent of this dispute, Respondent began preparations to use the domain name in connection with a bona fide offering of goods and services.  Respondent has provided a preliminary website design as an Exhibit.

Respondent contends that all it must do is to establish legitimate interest in respect of a domain name is to have a business concept. Respondent contends that its “mduniversity” is an absolutely legitimate business concept which Respondent has every right to commercially exploit.

Respondent contends that Plaintiff has failed to produce any documentary or other evidence establishing bad faith by Respondent.  Respondent contends that prior to registration of the <mdu.biz> domain name, Respondent’s Counsel conducted a full trademark search and advised Complainant that it was legally entitled to use “MDU” in its domain name.  Respondent contends that it acted on reasonable reliance on the advice of its counsel and therefore cannot be said to have acted in bad faith.

Respondent contends that it did not register the domain name in order to prevent  Complainant from reflecting its trademark in a corresponding domain name.  Respondent contends on the contrary that Complainant already has a domain name <mdu.com> that reflects its trademark.

Respondent contends that it did not register the domain name primarily for purposes of selling the domain name registration to Complainant or any competitor of Complainant for valuable consideration in excess of Respondent’s documented out of pocket costs directly related to the domain name.  Respondent contends that it was in fact Complainant who contacted Respondent and made an unsolicited offer to buy the domain name.

Respondent contends that it advised Complainant that Respondent had acquired the domain name for the purpose of operating Respondent’s own online business and had no particular interest in selling it.  Respondent further contends that it did not register the domain name primarily for the purpose of disrupting the business of Complainant for Respondent and Complainant are not competitors at all. 

Respondent contends that it did not register the domain name to intentionally attempt to attract, for commercial gain, Internet users to Respondent’s website by creating a likelihood of confusion with Complainant’s mark as to the source, sponsorship, affiliation or endorsement of Respondent’s website.  Respondent contends that its market is very narrow-medical students and that Respondent would in no way benefit from any confusion if there were to be any at all.

Respondent also requests that the Panel make a finding  of “reverse domain name hijacking.”

C. Additional Submissions

Complainant

Complainant contends that Respondent is not “using” MDU in any sense at all since there is no active website.  Complainant contends that Respondent’s “mdunversity” appears to be a transparent ruse that further supports the bad faith of Respondent.  Complainant points out that Respondent’s USPTO Intent to Use Application was filed on December 17, 2001 after the service of the Complaint in this action and thus does not support Respondent’s claim of intent to operate such a business prior to the filing of the Complaint.

Complainant contends that Exhibit “A” to Respondent’s response is not what Respondent contends it is, but is rather a “hurried effort to create evidence after the fact.”  Complainant contends that Respondent’s “initial website design” is merely a homepage of only two (2) paragraphs that are specific to the stated business plan followed by two alphabetical lists of courses and topics.  The remainder of this site is boilerplate website language.  Complainant contends that the numerous internal inconsistencies and contextually inappropriate elements in Respondent’s alleged “initial website design” betray that it is a hurried retrofit of language from a different website and it strongly suggests that Respondent did not make a bona fide preparation to use the domain name before notice of this dispute. 

Complainant contends that Respondent has offered no evidence in support of its claim that its counsel did a full trademark search and advised Respondent that it was entitled to use “MDU.”  Complainant contends that its Counsel requested of Respondent copies of any such trademark searches but that Respondent refused to provide same.

Complainant contends that it is not required to prove trademark infringement but rather only the three (3) elements of the STOP Policy. 

Complainant contends that Respondent’s “mdunversity” is merely artifice and/or a gimmick and is evidence of Respondent not being candid with the Panel or Complainant and further evidence of Respondent’s bad faith.

Complainant contends that there is no evidence of record to support a claim of “reverse domain name hijacking.” 

Respondent

Respondent contends that Complainant has merely made wild and unsupported accusations seeking to place the burden on Respondent to prove a negative.

Respondent contends that it is developing a bona fide business use for the domain name and that is initial website design is appropriate and proper.  Respondent contends that it is entitled to a reasonable amount of time to develop the business based upon its domain name.

Respondent further contends that Complainant has failed to submit any evidence of Respondent’s alleged bad faith.  Respondent contends that a Memorandum of Respondent’s Counsel advising Respondent before the domain name application was filed that it conducted a full trademark search and Respondent was legally entitled to use “MDU” in its domain name is attached as Exhibit “A”.

Respondent contends that Complainant acted in bad faith in bringing the Complaint because it made no good faith effort to contact Respondent and amicably resolve any alleged issues before filing the Complaint, Complainant lied about its true intentions falsely stating that it wanted to purchase the domain name when in fact it was attempting to manufacture evidence against Respondent and lastly that Complainant’s Complaint is frivolous and could not possibly be asserted in good faith.

Thus, Respondent requests a finding of “reverse domain name hijacking” be made.

FINDINGS

1)   Complainant has met its burden to prove by a preponderance of the competent, credible and admissible evidence that the domain name in question is identical to service marks in which Complainant has rights.

2)   Complainant has met its burden to prove by a preponderance of the credible, competent and admissible evidence that Respondent has no rights or legitimate rights in respect of the domain name.

3)   Complainant has met is burden to prove by a preponderance of the credible, competent and admissible evidence that the domain name has been registered or is being used in bad faith.

DISCUSSION

Paragraph 15(a) of the STOP 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 STOP Policy requires that Complainant must prove each of the following three elements to obtain an order that a domain name should be transferred:

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

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

(3) the domain name has been registered or is being used in bad faith.

Due to the common authority of the ICANN policy governing both the Uniform Domain Name Dispute Resolution Policy (“UDRP”) and these STOP proceedings, the Panel will exercise its discretion to rely on relevant UDRP precedent where applicable.

Under the STOP proceedings, a STOP Complaint may only be filed when the domain name in dispute is identical to a trademark or service mark for which a Complainant has registered an Intellectual Property (IP) claim form.  Therefore, every STOP proceeding necessarily involves a disputed domain name that is identical to a trademark or service mark in which a Complainant asserts rights.  The existence of the “.biz” generic top-level domain (gTLD) in the disputed domain name is not a factor for purposes of determining that a disputed domain name is not identical to the mark in which the Complainant asserts rights.

COMPLAINANT’S RIGHTS IN THE MARK

Complainant has presented evidence that it owns four (4) valid, live Federally-registered service marks for “MDU” and four (4) valid, live Federally-registered service marks for stylized versions of “MDU.”  Respondent does not dispute this.  Neither does Respondent dispute that those registered service marks for “MDU” are identical to the domain name in question.  Respondent merely contends that for a variety of reasons Respondent’s use of “MDU” does not infringe on the marks of Complainant.  This Arbitrator need not decide that issue for the STOP Policy only requires that a Complainant prove that the domain name is identical to a trademark or service mark in which the Complainant has rights, not that the domain name infringes on any such trademark. 

Under these circumstances, Complainant has met its burden to prove by a preponderance of the competent, admissible and credible evidence that the domain name in question is in fact identical to service marks in which Complainant has rights.

RIGHTS OR LEGITIMATE INTERESTS

The facts of record regarding Respondent’s “use” are curious.  Respondent is a California limited liability company.  The agent and partner of record for Respondent is John C. Kirkland, Esquire, who is also Counsel of Record for Respondent in this proceeding and Respondent’s Administrative Contact for purposes of its domain name registration.  The official address of Respondent is also the residence of John C. Kirkland, Esquire.  The name of no other person appears in connection with or on behalf of Respondent Swarthmore Associates, LLC in any Exhibit or Pleading presented in this matter.  While Respondent’s Pleadings and at least one Exhibit have Mr. Kirkland referring to his client, Respondent, in the third person, this Arbitrator can only conclude from all of the submissions that Swarthmore Associates, LLC is in fact synonymous with John C. Kirkland, Esquire.  Of course, there is nothing whatsoever improper about this or in Mr. Kirkland representing an entity in which he has some or all interest.  However, it does require that the credibility of all matters submitted on behalf of Respondent be judged solely by the credibility of Mr. Kirkland himself.

Respondent attempts to establish that before it had notice of this dispute, it made demonstrable preparations to use the domain name in connection with a bona fide offering of goods and services.  A number of facts of Record make this very difficult to believe: (1) Mr. Kirkland’s response to the telephone inquiry of Complainant’s Counsel, (2) that there is no telephone listing for Respondent is Pacific Palisades, California, (3) that there is no other person apparently involved in Respondent’s business, (4) that there is no identification of who designed the “initial website design” or when, (5) that Exhibit “B” purportedly dated June 15, 2001 to Respondent’s Additional Submission is from Mr. Kirkland’s law firm (not an individual lawyer) to Swarthmore Associates, L.L.C., (6) that Respondent’s Intent to Use Application was filed after service of this Complaint, and (7) that Respondent’s “initial web design” is very brief and appears hurriedly cobbled together.

Based upon the Record, this Arbitrator cannot conclude that there is sufficient credible evidence of record to support Respondent’s contention.

Under these circumstances, Complainant has met its burden to prove by a preponderance of the competent, credible and admissible evidence that Respondent has no rights or legitimate interests in respect of the domain name.

REGISTRATION OR USE IN BAD FAITH

While Respondent cleverly responded to inquiries of Complainant’s Counsel regarding purchase of the domain name, this Panelist does not believe the responses were quite clever enough.  On the contrary, the responses and what appear to be manufactured documents and claims are evidence that Respondent registered the domain name primarily for the purpose of selling, renting or otherwise transferring the domain name registration to Complainant or to another for valuable consideration in excess of Respondent’s documented out of pocket costs directly related to the domain name.  See STOP Rule 4(b)(i).

Under these circumstances, Complainant has met its burden to prove by a preponderance of the competent, credible and admissible evidence that Respondent registered the domain name in bad faith.

DECISION

                  The domain name <mdu.biz> shall be transferred from Respondent to Complainant.

M. KELLY TILLERY, ESQUIRE, Panelist

Philadelphia, PA
Dated: February 26, 2002


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