DECISION

City of Myrtle Beach v. Information Centers, Inc.

Claim Number: FA0112000103367

PARTIES

Complainant is City of Myrtle Beach, Myrtle Beach, SC (“Complainant”) represented by John C. McElwaine, of Nelson, Mullins, Riley & Scarborough, LLP.  Respondent is Information Centers, Inc., Hilton Head, SC (“Respondent”) represented by Marsha G. Gentner, of Jacobson, Price, Holman & Stern.

REGISTRAR AND DISPUTED DOMAIN NAME 

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

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.

Panelist is Judge Karl V. Fink (Retired).

PROCEDURAL HISTORY

Complainant submitted a Complaint to the National Arbitration Forum (“the Forum”) electronically on December 21, 2001; the Forum received a hard copy of the Complaint on December 26, 2001.

On December 21, 2001, Tucows, Inc. confirmed by e-mail to the Forum that the domain name <myrtlebeach.com> is registered with Tucows, Inc. and that the 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 January 8, 2002, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of January 28, 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@myrtlebeach.com by e-mail.

A timely Response was received and determined to be complete on January 28, 2002.

Complainant submitted a timely response to Respondent’s Response which was received on February 1, 2002.  Respondent made an additional submission, which was received on February 4, 2002.

All submissions were considered by the Panel.

On February 8, 2002, pursuant to Complainant’s request to have the dispute decided by a single-member Panel, the Forum appointed Judge Karl Fink (Ret.) as Panelist.

RELIEF SOUGHT

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

PARTIES’ CONTENTIONS

A. Complainant

Complainant, the City of Myrtle beach is the senior and rightful owner of the trademark “CITY OF MYRTLE BEACH.” 

The domain name at issue, <myrtlebeach.com>, is virtually identical to the Complainant’s trademark rights in “CITY OF MYRTLE BEACH”. 

Geographically descriptive marks can be protected upon proof that through usage they have become distinctive.  Complainant has used the mark “CITY OF MYRTLE BEACH” in commerce since 1957 in connection with promoting business, economic development, tourism, and a variety of services in the City of Myrtle Beach.  Complainant has received three South Carolina State Service Mark Registrations for “CITY OF MYRTLE BEACH” since 1957.

Under United States Trademark Law, acquired distinctiveness is presumed upon a proof of substantial and continuous use of the mark in commerce for five years before the claim of distinctiveness is made.  15 U.S.C. §1052(f)

Complainant has acquired distinctiveness through its substantial advertising expenditures of “CITY OF MYRTLE BEACH” and through significant unsolicited media coverage.

Prior to any notice of this dispute, the Respondent did not use nor had any intention to use the domain name in connection with any bona fide offering of goods or services.  Respondent does not own any marks contained in the words “MYRTLE BEACH” and has no connection with Myrtle Beach, South Carolina. 

On May 1, 1999, the Respondent entered into an agreement leasing the domain name to the Myrtle Beach Area Internet Cooperative, LLC (the “Cooperative”), which is related to the Complainant.

In early 1999, Skip Hoagland, on behalf of the Respondent, approached the Cooperative about renting the domain name and the license agreement was entered into where the name was rented for $36,000.00 per year.  The web page using the domain at <myrtlebeach.com> simply contains a hyperlink to the already existing <myrtlebeachlive.com> Web site.

Respondent’s purpose in registering the name was to speculatively acquire a domain name and then rent it for profit to an individual or entity that had legitimate rights to the domain name.  In at least 65 separate instances, the Respondent has appropriated domain names that are confusingly similar to others’ trademark rights.

B. Respondent

Respondent Information Centers, Inc. (“Information Centers”) is a South Carolina corporation, located in Hilton Head, South Carolina.  Calvin “Skip” Hoagland is a founder and principal of Information Centers.  For over twenty-five (25) years, Information Centers, Skip Hoagland and other entities owned or controlled by him, have been involved in the travel and tourism industry, with an emphasis on the Georgia/South Carolina coastal resort locations.  Respondent recognized the prospect of using the Internet to convey travel and tourism information to a broad market.  He registered domain names containing the names of certain cities in which he had been publishing and distributing travel and tourism information publications. 

Since Myrtle Beach is the name of a particular geographic location, the name is not eligible for trademark protection without proof that through usage it has become a unique source identifier. 

Claimant’s claim of use does not establish secondary meaning.  The Lanham Act expressly permits others to use even the registered and incontestable trademark of another where it is shown that the use is a use of a term which is descriptive of and used fairly and in good faith only to describe to users the goods or services of such party, or their geographical origin.

Respondent’s use of <myrtlebeach.com>is a fair use under the Lanham Act.  The web site is about, and provides travel, tourism and other information and resources concerning Myrtle Beach.  Respondent lawfully acquired that domain name registration from another person.  Respondent has been using the <myrtlebeach.com> domain name for a legitimate purpose – a web site devoted to travel., tourism, and chamber of commerce services relating to the geographical location, Myrtle Beach, South Carolina.  Respondent’s use of <myrtlebeach.com>is designed to bring tourism, vacationers and residents to Myrtle Beach. 

Complainant has failed to prove a single instance of bad faith registration by Respondent, let alone any indicia of bad faith with respect to the <myrtlebeach.com>domain name at issue.

Complainant acknowledges its connection to Myrtle Beach Area Internet LLC, Respondent’s licensee with respect to the <myrtlebeach.com>domain name.  The License Agreement is set to expire in a few short months.    The reasonable inference is that the licensee and the Complainant now seek to obtain the benefits of that license without the concomitant obligations.  Trademark law recognizes the principle of “licensee estoppel” barring a licensee who enters into a binding license agreement from challenging the licensor’s rights in the licensed designation.  Equity demands the application of this principle to Complainant, whose exclusive marketing agent (according to Complainant), in effect is Respondent’s licensee, and who has “cooperated” in pursuing the present Complaint.

C. Additional Submissions

Complainant

The Respondent’s arguments that the License Agreement provides a legitimate business interest are bogus.  The License Agreement did nothing more than lease the domain name.  Additionally, the Respondent’s conduct here fits a pattern of past actions where it has registered and offered for sale or lease domain names that infringe upon trademark rights in ABC, NBC, CBS, FAX and JET SKI, among others.  ICANN Policy 4 (b)(ii).

Both parties agree that the Complainant must establish secondary meaning to have a protectable trademark.  In determining secondary meaning, courts consider a variety of factors  including: (1) advertising expenditures, (2) consumer linking of the mark to the source, (3) unsolicited media coverage, 4) sales success, and (5) length and exclusivity of the mark’s use.

The Complainant annually spends approximately $30,000 on publications, newsletter and brochures to communicate information about the city services and programs to residents, tourists, and other audiences.  Examples of such publications linking the “CITY OF MYRTLE BEACH” mark to the Complainant’s services were attached to the Complaint.  These publications establish the Complainant’s use of the mark “CITY OF MYRTLE BEACH” not in a geographical sense, but as an indicator of the source of the services.

The South Carolina Secretary of State is statutorily prohibited from registering marks that are “primarily geographically descriptive” unless the mark has become “distinctive of the applicant’s goods or services.”

As the only entity using a mark containing the words “MYRTLE BEACH” and offering such services, the Complainant’s use has been substantial and exclusive for the last 44 years.

Apparently conceding that <myrtlebeach.com> is confusingly similar to ‘CITY OF MYRTLE BEACH”, the Respondent only argues that the Complainant has not established secondary meaning in the words ‘MYRTLE BEACH.”

Respondent registered <myrtlebeach.com> with the intention of selling it or renting it.  During a time period of approximately one year, instead of attempting to “develop and operated a web site” as claimed in its Response, the Respondent added the domain name, <myrtlebeach.com>, to the hoard of hundreds of others it was offering for “sale or lease.”

As discussed in the Complaint, the Respondent has never been known by or used the mark “MYRTLE BEACH.”  Thus, the Respondent has no legitimate business interest in the domain name.

The Existence of the license agreement does not provide a legitimate business interest since the license agreement did nothing more than lease the domain name.  In early 1999 when the license agreement was entered into, the Uniform Domain Name Dispute Resolution Policy was not in effect and the Complainant could not have shown the registration in the UDRP-like proceedings.

The fact that the Complainant has valid and enforceable trademark right in a geographically descriptive mark is not unusual.  There are hundreds of U.S. Patent and Trademark Office records for geographical marks registered by municipalities rather governmental entities without having to limit or disclaim rights in the geographical portion of the mark.

The fact that there are other entities that provide goods and services using a mark that contain the words “MYRTLE BEACH” is not determinative of the secondary meeting analysis.  Complainant’s mark functions as an indicator of source distinctive above all other entities because the other parties can not or do not offer services that are related to the Complainant’s services as a municipality. 

The web page using the domain name has no content.  It simply provides a link to the <myrtlebeach.com> web site, which had already been developed by the Cooperative and was in operation at the time the license agreement was entered into.  The fact that Respondent entered into a license agreement with the Cooperative which is affiliated with Complainant does not legitimize the Respondent’s actions.  The license agreement is not to use the trademark but a domain name.

Respondent

Complainant has the burden of demonstrating secondary meaning in the term MYRTLEBEACH; that is, that the primary significance to the public of that term when used in connection with travel and tourism and entertainment information and services is not in its geographic sense (the location Myrtle Beach), but rather to identify Complainant as the single source of those services.

Complainant contends that its South Carolina registrations stand as evidence of secondary meaning.  If these registrations have significance (which they do not), Complainant has produced no evidence that the state of South Carolina even raised the issue of secondary meaning, let alone considered it and/or any “evidence” presented by Complainant to show secondary meaning.

Complainant also now claims to have made “exclusive” use of MYRTLE BEACH in connection with, inter alia, “tourism promotional services…recreational services, and entertainment services.”  Respondent’s exhibits demonstrate that Complainant’s claim of exclusivity is not correct.  For example, Respondent’s Exhibit 7 shows the listing in the Myrtle Beach yellow pages of 28 entities using Myrtle Beach.  This list is not exhaustive.

As Respondent’s Exhibit 8 shows, the PTO consistently has found “MYRTLE BEACH” to be geographically descriptive and not entitled to a claim of exclusive trademark rights.

Complainant has not established that “MYRTLE BEACH” as used in <myrtlebeach.com> for a web site concerning travel and tourism  information about Myrtle Beach is confusingly similar to “City of Myrtle Beach” for municipal services.

Respondent’s evidence of its long and legitimate travel and tourism information services and business, including over the internet, is undisputed.  <myrtlebeach.com> is clearly a part of that business.

There is no evidence that Respondent purchased or has maintained the <myrtlebeach.com> domain name to extort money from Complainant or its “competitors” or to inhibit Complainant’s use of CITY OF MYRTLE BEACH (or MYRTLE BEACH LIVE), including on the Internet.  Respondent’s objective is to encourage travel and tourism to Myrtle Beach and other South Carolina coastal locations.

At the time the lease agreement was entered unto the registrar for the <myrtlebeach.com> name had a dispute resolution process.

Complainant asserts that the doctrine of licensee estoppel should not be applied to it because this is a domain name, not a trademark.  But Complainant claims trademark rights in <myrtlebeach.com>, and that Respondent’s use thereof is an infringement and violation of those rights.  Complainant cannot have it both ways.

FINDINGS

The Panel finds that the evidence of the existence of the common law mark is not sufficient to meet Complainant’s burden.  Nor is the fact that the Complainant has registered “CITY OF MYRTLE BEACH” with the state of South Carolina.  The City of Myrtle Beach is a geographical place.  There is insufficient evidence that the name has acquired any secondary meaning.  See, e.g., City of Dearborn v. Dan Mekled d/b/a ID Solutions, FA 99602 (Nat. Arb. Forum Nov. 12, 2001), finding insufficient evidence that “City of Dearborn” is a protected common law mark and, therefore, the request to transfer <cityofdearborn.com> was denied.  See also City of Salinas v. Brian Baughn, FA 97076 (Nat. Arb. Forum June 4, 2001), holding the Complainant failed to prove that the “CITY OF SALINAS” mark acquired secondary meaning such that it may claim the exclusive right to use “CITY OF SALINAS” as a trademark.

The evidence of record is not sufficient to persuade the panel that the mark CITY OF MYRTLE BEACH performs the function of a trademark as required for purposes of the Policy.  The evidence does not show that the mark distinguishes the goods or services of the Complainant, City of Myrtle Beach.  There are many organizations, both commercial and noncommercial, providing goods or services in relation to the City of Myrtle Beach using “Myrtle Beach” in their name.  The CITY OF MYRTLE BEACH does not serve as a unique source identifier and does not qualify as a trademark in which Complainant has rights under the policy.

DISCUSSION

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.

Identical and/or Confusingly Similar

The panel finds that the City of Myrtle Beach does not have a protected interest under the Policy in the name “CITY OF MYRTLE BEACH.”

Since the City of Myrtle Beach has not demonstrated it owns a mark, common or otherwise, protected under the Policy, the domain name is not identical or confusingly similar.

Rights or Legitimate Interests

No findings are necessary since Complainant has failed to establish the existence of a mark protected under the Policy.

Registration and Use in Bad Faith

No findings are necessary since Complainant has failed to establish the existence of a mark protected under the Policy.

DECISION

For the reasons stated above, the relief requested by Complainant is denied.

Judge Karl V. Fink (Retired) Panelist
Dated: March 8, 2002

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