DECISION

Texas Lottery Commission v. Associates in Implants

Claim Number: FA0203000105739

PARTIES

The Complainant is Texas Lottery Commission, Austin, TX (“Complainant”) represented by Dwayne K. Goetzel.  The Respondent is J. Kurpis Associates in Implants, Ridgewood, NJ (“Respondent”) represented by Edward M. Weisz, of Cohen, Pontani, Lieberman & Pavane.

REGISTRAR AND DISPUTED DOMAIN NAME 

The domain name at issue is <txlottery.com>, registered with Network Solutions, 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.

Alan L. Limbury as Panelist.

PROCEDURAL HISTORY

Complainant submitted a Complaint to the National Arbitration Forum (“the Forum”) electronically on March 4, 2002; the Forum received a hard copy of the Complaint on March 6, 2002.

On March 7, 2002, Network Solutions, Inc. confirmed by e-mail to the Forum that the domain name <txlottery.com> is registered with Network Solutions, Inc. and that the Respondent is the current registrant of the name.  Network Solutions, Inc. has verified that Respondent is bound by the Network Solutions, 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 March 8, 2002, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of March 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@txlottery.com by e-mail.

A timely Response was received and determined to be complete on April 8, 2002.

On April 15, 2002 the Complainant filed an additional submission, to which Respondent filed a Response on April 17, 2002.

On April 17, 2002, pursuant to Complainant’s request to have the dispute decided by a single-member Panel, the Forum appointed Alan L. Limbury as Panelist.

RELIEF SOUGHT

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

PARTIES’ CONTENTIONS

A. Complainant

The disputed domain name is confusingly similar to Complainant’s trademarks TEXAS LOTTERY and TEXAS LOTTERY AND DESIGN.  Repondent has no rights or legitimate interests in respect to the disputed domain name, which was registered and is being used in bad faith.

B. Respondent

Complainant has not established that it had any rights in either trademark before the disputed domain name was registered. Respondent has a legitimate interest in the disputed domain name, which Respondent obtained in good faith

C. Additional Submissions

Complainant

Complainant had substantial common law rights in its mark TEXAS LOTTERY before the disputed domain name was registered. 

Respondent

The U.S. PTO has not recognized Complainant’s rights in its trademark TEXAS LOTTERY. Complainant has not put forth any evidence that Respondent registered the disputed domain name in bad faith.

FINDINGS

Complainant, a Texas State Agency, is and has been for years prior to 1996 the only entity authorized to sell electronic and non-electronic lottery tickets in that State, pursuant to Texas Government Code §§ 466.014-015. It commenced use of the trademark TEXAS LOTTERY on May 18, 1992 and has used it continuously and substantially exclusively since then, spending over $100 million in advertising promoting that mark between 1992 and 1996 and generating over $11 billion in sales under that mark from 1992 to 1996.

On July 20, 1992 Complainant applied to register the trademark TEXAS LOTTERY AND DEVICE with the U.S. PTO and that mark was registered on March 9, 1993, with a disclaimer of the exclusive right to use “TEXAS LOTTERY” apart from the mark as shown, (ie. including the design). On September 27, 2001 Complainant applied to register TEXAS LOTTERY with the U.S. PTO as a word mark. That application remains pending.

By May 2, 1996 Complainant had acquired common law rights in the mark TEXAS LOTTERY and that mark was very well known in Texas and elsewhere in the United States.

May 2, 1996 was the date on which Respondent registered the disputed domain name <txlottery.com>, for the purpose of offering lottery tickets and related goods and services from that domain name address (in anticipation that evolving laws and attitudes towards lotteries and online gaming will soon allow Respondent to do so) and in the meantime to disseminate information about online gaming and to launch lobbying efforts, particularly in the State of Texas, to legalize online lottery sales.

Respondent has also registered the following domain names all of which, prior to the commencement of this proceeding, contained “coming soon” information, and which, since the commencement of this proceeding, offer opportunities to participate in a petition seeking online lottery sales:

                                    <malottery.com>         on April 30, 1996

                                    <njlottery.com>           on April 30, 1996

                                    <nylottery.com>          on April 30, 1996

                                    <azlottery.com>           on April 30, 1996

                                    <ctlottery.com>           on April 30, 1996

                                    <ohlottery.com>          on October 10, 1996

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 test of confusing similarity under the Policy is confined to a comparison of the disputed domain name and the trademark alone, independent of the other marketing and use factors usually considered in trademark infringement or unfair competition cases:  BWT Brands, Inc and British American Tobacco (Brands), Inc v. NABR, D2001-1480  (WIPO Mar. 26, 2002); Koninklijke Philips Electronics N.V. v. In Seo Kim, D2001-1195 (WIPO Nov. 12, 2001); Energy Source Inc. v. Your Energy Source, FA 96364 (Nat. Arb. Forum Feb. 19, 2001 ); Vivendi Universal v. Sallen, D2001-1121 (WIPO Nov. 7, 2001) and the cases there cited.

See also the similar approach adopted by the U.S. Federal court in Northern Light Technology, Inc. v. Northern Lights Club 2000 U.S. Dist. LEXIS 4732 (D. Mass. Mar 31, 2000). In Microsoft Corp. v. Microsof.com aka Tarek Ahmed, D2000-0548 (WIPO July 21, 2000) contributing factors to the likelihood of confusion were held to be the visual similarity between the domain name and the complainant’s mark and the mark being strong and immediately recognizable.

The Panel finds the disputed domain name to be confusingly similar to Complainant’s common law mark TEXAS LOTTERY, having regard to the common use of TX as an abbreviation for Texas and as the postcode for that State. See Microsoft Corp. v. Montrose Corp., D2000-1568 (WIPO Jan. 25, 2001) (finding the domain name <ms-office-2000.com> confusingly similar to Complainant’s mark even though the word MICROSOFT is abbreviated); see also Minnesota State Lottery v. Mendes, FA 96701 (Nat. Arb. Forum Apr. 2, 2001) (finding the domain name <mnlottery.com> confusingly similar to the mark MINNESOTA STATE LOTTERY).

Complainant has established this element of its case.

Rights or Legitimate Interests

Complainant has not authorized Respondent’s use in a domain name of its mark or a mark confusingly similar thereto. Respondent is not known by the disputed domain name. Respondent has used the disputed domain name only to post a “holding” message.

These circumstances are sufficient to constitute a prima facie showing by Complainant of absence of rights or legitimate interest in the disputed domain name on the part of Respondent.  The evidentiary burden therefore shifts to Respondent to show by concrete evidence that it does have rights or legitimate interests in that name: Do The Hustle, LLC v. Tropic Web, D2000-0624 (WIPO Aug. 21, 2000) and the cases there cited.

In State Farm Mutual Auto. Ins. Co. v. Faw, FA 94971 (Nat. Arb. Forum July 12, 2000) the respondent was found to have no legitimate interests in respect of the domain name where he had not used nor developed the domain name for a legitimate non-commercial or fair purpose and was not using the domain name in connection with a bona fide offering of goods or services. See also Leland Stanford Junior University v. Zedlar Transcription & Translation, FA 94970 (Nat. Arb. Forum July 11, 2000).

Respondent has shown no preparations, prior to this dispute, to use the disputed domain name and admits its use for its intended purpose would be illegal, because only Complainant is authorized to offer lottery tickets in Texas. The Panel finds Respondent was aware of these circumstances at the time of registration of the disputed domain name, since Respondent has displayed knowledge of the Congressional ban in the 1800s on interstate lotteries and of recent moves to have this ban lifted. 

Respondent’s intention to launch lobbying efforts, by means of the disputed domain name, particularly in the State of Texas, indicate an awareness of the likelihood that the use of the letters TX in the disputed domain name would be understood as referring to that State. Under these circumstances and having regard to the enormous sums spent by Complainant since 1992 in promoting its common law mark TEXAS LOTTERY, the Panel finds Respondent was aware of that mark prior to registering the disputed domain name and was aware that any use of the disputed domain name in connection with lotteries and Texas would be to trade off the fame of Complainant’s mark. Use which intentionally trades on the fame of another cannot constitute a ‘bona fide’ offering of goods or services: Madonna Ciccone, p/k/a Madonna v. Dan Parisi and “Madonna.com,” D2000-0847 (WIPO Oct. 12, 2000).

The Panel finds Respondent has not shown a legitimate interest in the disputed domain name and that Complainant has established this element of its case.

Registration and Use in Bad Faith

None of the circumstances in paragraph 4(b) of the Policy is established. That paragraph is not exhaustive, however.

In SportSoft Golf, Inc. v. Hale Irwin’s Golfers’ Passport, FA 94956 (Nat. Arb. Forum July 11, 2000) a finding of bad faith was made where the respondent “knew or should have known” of the registration and use of the trade mark prior to registering the domain name. Likewise Marriott International, Inc. v. John Marriot, FA 94737 (Nat. Arb. Forum June 15, 2000); Canada Inc. v. Sandro Ursino, AF-0211 (eResolution July 3, 2000) and Centeon L.L.C./Aventis Behring L.L.C. v. Ebiotech.com, FA 95037 (Nat. Arb. Forum July 20, 2000). Here the Panel has found Respondent had actual knowledge of Complainant’s common law mark at the time of Registration of the disputed domain name, knew any use of the domain name for the purpose of a lottery available in Texas would be illegal and knew people would likely be misled into thinking his site was associated with Complainant.

Under these circumstances the Panel finds the disputed domain name was registered in bad faith.

It is common ground that Respondent has not used the disputed domain name, save for an innocuous “holding” notice at the web site. However, the ‘use’ requirement has been found not to require positive action, inaction being within the concept: Telstra Corp. Ltd. v. Nuclear Marshmallows, D2000-0003 (WIPO Feb. 18, 2000); Barney’s, Inc. v. BNY Bulletin Board, D2000-0059 (WIPO Apr. 2, 2000); CBS Broadcasting, Inc. v. Toeppen,  D2000-0400 (WIPO July 6, 2000); Video Networks Ltd. v. King, D2000-0487 (WIPO July 20, 2000); Recordati S.P.A. v. Domain Name Clearing Co., D2000-0194 (WIPO July 21, 2000) and Revlon Consumer Products Corporation v. Yoram Yosef aka Joe Goldman, D2000-0468 (WIPO July 27, 2000).

The leading case on passive use, Telstra Corp. Ltd. v. Nuclear Marshmallows, D2000-0003 (WIPO Feb.18, 2000) emphasized that all the circumstances of the case must be considered. In that case passive holding was held to amount to acting in bad faith where:

(i)      the Complainant’s trademark had a strong reputation and was widely known;

(ii)     the Respondent provided no evidence of any actual or contemplated good faith use by it of the domain name;

(iii)    the Respondent had taken active steps to conceal its true identity, by operating under a name that is not a registered business name;

(iv)     the Respondent had actively provided, and failed to correct, false contact details, in breach of its registration agreement, and

(v)      taking into account all of the above, it was not possible to conceive of any plausible actual or contemplated active use of the domain name by the Respondent that would not be illegitimate, such as by being a passing off, an infringement of consumer protection legislation, or an infringement of the Complainant’s rights under trademark law.

Here there is no question of any false contact information or concealment. However, Complainant’s trademark is distinctive and well-known in Texas, where Respondent proposes to make available its lottery business, and elsewhere. The descriptive nature of the disputed domain name is such that it cannot be used in relation to lotteries in Texas without infringing Complainant’s rights nor can it be used in Texas or elsewhere in the United States in connection with non-lottery related services without misleading the public. Respondent has been waiting, in circumstances in which it cannot legitimately use the disputed domain name for the purpose for which Respondent says it was registered. Since registering the disputed domain name in 1996 Respondent has taken no steps to obtain the necessary regulatory approval to operate a lottery that would be available in Texas. Under these circumstances the Panel finds Respondent’s passive use is in bad faith.

Further, In light of Respondent’s choice of domain name with knowledge (as the Panel has found) of Complainants’ mark and reputation in the lottery industry and Respondent’s expressed intention to use the domain name to provide online lottery services (which would be available in Texas) if he can obtain a licence to do so, the Panel finds the Respondent is using the domain name (albeit passively) in order to advance his aim of obtaining such a licence, knowing that the domain name represents the goodwill of Complainant and that, while Respondent remains the registrant of the disputed domain name, Complainant may be coerced into dealing with Respondent when it comes to granting such a licence. The Panel finds such use to be use in bad faith. See Gilmour, et al v.  Cenicolla, D2000-1459  (WIPO Dec. 15, 2000).

Complainant has established this element of its case.

DECISION

Pursuant to Paragraphs 4(i) of the Policy and 15 of the Rules, the Panel directs that the domain name <txlottery.com> be transferred to the Complainant.

___________________________________________________

Alan L. Limbury, Panelist
Dated: April 29, 2002

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