DECISION

Inter-tel, Inc. v Idealab!

Claim Number: FA0303000148167

PARTIES

Complainant is Inter-tel, Inc., Tempe, AZ (“Complainant”) represented by Michelle R. Whittington, Thomas V. DelRosario and Howard Sobelman of Snell & Wilmer, L.L.P. Respondent is Idealab!, Pasadena, CA (“Respondent”) represented by Brian Pass and Rita Herscovici of Brown Raysman Millstein Felder & Steiner LLP.

REGISTRAR AND DISPUTED DOMAIN NAME 

The domain name at issue is <intertel.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.

Judge Irving H. Perluss (Retired) is the Panelist.

PROCEDURAL HISTORY

Complainant submitted a Complaint to the National Arbitration Forum (the “Forum”) electronically on March 7, 2003; the Forum received a hard copy of the Complaint on March 10, 2003.

On March 12, 2003, Network Solutions, Inc. confirmed by e-mail to the Forum that the domain name <intertel.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 13, 2003, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of April 2, 2003 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@intertel.com by e-mail.

A timely Response was received and determined to be complete on April 1, 2003.

Complainant and Respondent each submitted an Additional Submission.

On April 10, 2003, pursuant to Complainant’s request to have the dispute decided by a single-member Panel, the Forum appointed Judge Irving H. Perluss (Retired) as Panelist.

RELIEF SOUGHT

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

PARTIES’ CONTENTIONS

A. Complainant

1. Since its founding in 1969, Complainant Inter-Tel has adopted and continuously used trademarks incorporating the INTER-TEL mark, as follows:

Mark	Reg. No.	Reg. Date	Goods/Services
INTER-TEL	998,103	November 12, 1974	Telephone equipment including key operated telephones and telephone switching devices, in Class 9
INTER-TEL	1,793,881	September 21, 1993	Installation and maintenance of telephone equipment and systems, in Class 37 Leasing of telephone equipment, in class 38
INTER-TEL	1,689,967	June 2, 1992	Computer software for use in management and accounting of telephone communications, in class 9
INTER-TEL VOCAL’NET	2,345,372	April 25, 2000	Computer software for managing network server operations, in class 9

2. The disputed domain name <intertel.com> was registered by Respondent on April 29, 1997.

3. The disputed domain name <intertel.com> was unused as of February 11, 2003, only redirecting users to a search engine.  The search engine is part of a service provided by Applied Semantics, known as Domain Park.

4. The disputed domain name is identical or confusingly similar to a mark in which the Complainant has rights.  Complainant’s INTER-TEL mark is legally incontestable; hence, to the extent a registered mark has become incontestable, the registration is “conclusive evidence” of the “validity of the registered mark . . . and of the registrant’s exclusive right to use the registered mark in commerce.  15 U.S.C. Section 1115(b) (emphasis added).  Thus, Complainant has strong rights in the distinctive mark.

5. The disputed domain name contains every letter of the INTER-TEL mark in its entirety without any additional letters.

6. The disputed domain name differs from Complainant’s registered trademark only through the deletion of a hyphen from Complainant’s mark to form Respondent’s domain name.  Other Panels have found that such a difference is of little consequence in finding a domain name identical to a registered mark.

7. Respondent has no rights or legitimate interests in respect of the disputed domain name.

8. Respondent did not make any use or preparations to use the domain name or any name corresponding to the domain name prior to notice of the dispute outside of the use of the Domain Park service.  Because of Complainant’s 1974 trademark registration of the INTER-TEL mark, Respondent had constructive notice of Complainant’s rights before the disputed domain name was registered.  Respondent also had actual notice at least as early as January 1997, because of a cease and desist letter from Complainant to Respondent.

9. Respondent is not, and has never been, commonly known by the domain name in dispute.  The Respondent is known by its name, “idealab!” and, upon knowledge and belief, does not sell products or services using the name INTERTEL.

10. Respondent is not making a legitimate noncommercial or fair use of the domain name.  Respondent’s use of the domain name is limited to the use of a pre-established Domain Park search engine.  The Domain Park service is clearly used solely to provide revenue to Respondent, and is thus a commercial use.

11. Respondent has made no attempt to develop the disputed <intertel.com> domain name, beyond the use of a Domain Park page, except for some previous occasions when Respondent used INTER-TEL’s trademarks and provided goods and services that overlap with those provided by Complainant.

12. The disputed domain name has been registered and used in bad faith.

13. It has been determined that the combination of registration of a domain name with knowledge of the existence of a registered trademark, coupled with a lack of plans for future use of the domain name, is indicative of bad faith.  Bad faith has been found when the Respondent registered a domain name that is essentially exactly the same as a registered trademark, made no use of the domain name, and there was a lack of connection between Respondent and Complainant.  In the present case, the Respondent’s domain name <intertel.com> differs insignificantly from Complainant’s registered trademark INTER-TEL.  In addition, despite holding the mark for over six years, Respondent has failed to make any use of the domain name besides redirecting users to a Domain Park website.  Such actions indicate a lack of plan for future use of the mark.

14. Respondent’s use of the name INTERTEL on the site linked to by <intertel.com> is likely to cause confusion.  Complainant registered and uses its INTER-TEL mark in connection with various telecommunications services.  Respondent’s use of <intertel.com> for similar services is very likely to cause consumers to believe that Complainant is the provider of the services provided on that site.

15. Various Courts of Appeal have held the use of a registered trademark as a domain name can result in a finding of likelihood of confusion and a finding of trademark infringement.  Thus, Respondent’s actions with regard to the <intertel.com> site constitute a violation of the applicable trademark laws.  A clear violation of the trademark laws of the United States of America constitutes additional evidence of Respondent’s bad faith use of the disputed domain name.

B. Respondent

1.            Since its inception, Respondent’s primary business has been the creation, development and operation of technology businesses.  As a pioneering business “incubator,” Respondent’s staff generates new ideas and new technological developments based on consumers’ needs.

2. In 1996, Respondent planned a business in the Internet telephony area.  The idea was to provide the public with easy telephone access through the Internet.  To move the idea forward, Respondent hired a well-established branding consultant, Stone Yamashita, to advise Respondent on possible names for this new Internet telephony business.

3. Respondent utilized the Stone Yamashita report, and purchased the disputed domain name for $8,000.  The Internet telephony business did not work out.

4. While Respondent’s initial idea for an Internet telephony business did not go forward, Respondent anticipates that, at some point in the future, it may pursue a business for which the disputed domain name, used in a non-infringing manner, is appropriate.

5. Even though Respondent’s second level disputed domain name, <intertel.com>, is almost identical to Complainant’s trademark “INTER-TEL,” the trademark protection afforded to Complainant (and Complainant’s use of the mark) does not encompass Respondent’s uses or intended uses of its domain name.  Complainant’s use is protected only for, or in connection with (i) telephone including key operated telephones and telephone switching devices, (ii) the installation and maintenance of telephone equipment and systems, (iii) the leasing of telephone equipment, and (iv) computer software for use in management and accounting of telephone communications and for management of network server operations.

6. There can be no consumer confusion because Complainant has not alleged any trademark protection in connection with the use of the same or similar name to provide telephony or Internet telephony services.  Complainant does not provide telephony or Internet telephony services using any of its marks.

7. Respondent has at all times had, and continues to have, legitimate interests in the <intertel.com> domain name.  Long before Respondent had any notice of the dispute at issue here, Respondent made demonstrable preparations to use the domain name “in connection with a bona fide offering of . . . services,” namely, Internet telephony services.

8. There is no evidence that Respondent registered the <intertel.com> domain name in bad faith or that it ever used, or is using, the domain name in bad faith.  To the contrary, Respondent acquired the domain name in good faith with the intention of developing its Internet telephony business.

9. There is no evidence indicating that Respondent registered or acquired the domain name “primarily for the purpose of selling, renting, or otherwise transferring the domain name registration” to the Complainant or a competitor of Complainant “for valuable consideration in excess of [Respondent’s] documented out-of-pocket costs directly related to the domain name.”

10. There is no evidence indicating that Respondent registered the <intertel.com> domain name in order to prevent Complainant from reflecting its mark in a corresponding domain name, or that Respondent is in the business of “cybersquatting,” i.e., engaging in “a pattern of such conduct.”

11. Complainant is not a “competitor” of Respondent and had Respondent proceeded to establish an Internet telephony business, as planned, Respondent would not have competed with Complainant.  Complainant sells telephone equipment and provides services in connection thereto.  Complainant has never been in the business of Internet telephony.

12. Because there is no likelihood of confusion and because Respondent has a legitimate interest in the domain name and registered it in good faith, Complainant cannot meets its burden of proof and the Complaint should be denied.

13. In filing the Complaint, Complainant has abused the administrative process, by attempting to reverse domain name hijack the <intertel.com> domain name from Respondent.

C. Complainant’s Additional Submissions

1. U.S. trademark law provides that a registered mark is prima facie

evidence of the validity of the registered mark.  15 U.S.C. Section

1115(a).  Furthermore, once a mark has been registered for five years, the mark becomes incontestable.  15 U.S.C. Section 1065.  The mark INTER-TEL is thus incontestable, as the registrations upon which this Complaint is based have been registered for more than five years.  Under trademark law, the registration of an incontestable mark is “conclusive evidence” of the “validity of the registered mark . . . and of the registrant’s exclusive right to use the registered mark in commerce.”  15 U.S.C. Section 1115(b).  Respondent admits that the domain name is “virtually identical” to Complainant’s trademark registrations.

2. Complainant does provide Internet telephony services and it engages in business that are directly competitive with the services allegedly planned to be offered under Respondent’s domain name.

3. Among the goods and services covered by Complainant’s registrations is “computer software for use in management and accounting of telephone communications” (registration number 1,689,967) and for “computer software for managing network server operations” (registration number 2,345,372).  Complainant asserts that Internet telephony service clearly includes software to manage telephone communications.  Therefore, Respondent’s alleged field of services overlaps those goods and services provided under Complainant’s mark.

4. Respondent argues that the trademark protection afforded to Complainant “does not encompass Respondent’s uses or intended uses of its domain name.”  However, that is erroneous.  Respondent asserts that its intended uses for the domain name were in the field of Internet telephony, which is different from the goods and services provided under Complainant’s mark INTER-TEL.  Complainant asserts that such a field is strongly related to the goods and services provided by Complainant under the mark INTER-TEL.  For example, telephone equipment is covered in Complainant’s first registration for INTER-TEL, obtained in 1974, and it is clear that telephone services need telephone equipment in order to operate.  Thus, Complainant’s goods and services are strongly related to those telephone services allegedly planned to be offered by Respondent.

5. There is a strong likelihood of confusion between Respondent’s domain name <intertel.com> and Complainant’s registered mark, INTER-TEL.

6. The registration of an incontestable mark is conclusive evidence of the registrant’s exclusive right to use the registered mark in commerce.  So Respondent’s use of the domain name <intertel.com> containing Complainant’s mark is bad faith.

7. Respondent claims to have acquired a domain name in good faith, relying upon a “respected, expensive branding consultancy firm in San Francisco” to find a brand name.  The hiring of a consultant does not alleviate Respondent’s requirement to ensure that its chosen domain name and business name do not infringe on existing trademark rights.

8. Respondent claims that it is not a “competitor” of Complainant.  However, Respondent’s alleged intended use of the domain name for Internet telephony is in direct competition of Complainant’s offering of IP telephony.  While Respondent claims not to have been aware of “the existence of Complainant or Complainant’s competitors” in 1996, such a claim is erroneous.  It is highly unlikely that any reasonable company would decide to enter into a field such as Internet telephony without first researching the market for such a service to determine if such a market is viable.  Any such research would have resulted in determining that Complainant directly competes in the same market.  Therefore, Complainant asserts that Respondent registered the domain name primarily to disrupt the business of a competitor, in violation of Policy ¶ 4(b)(iii).

9. At the time that the disputed domain name was chosen, Complainant had three registered trademarks for the mark INTER-TEL, the oldest of which was registered twenty-two years before Respondent chose its name. Moreover, the trademark statutes provide that the registration of a mark provides “constructive notice of the registrant’s claim of ownership thereof.”  15 U.S.C. Section 1072.  Once a mark is registered and constructive notice is given to everyone in the United States, the defense of good faith is no longer available.

10. Respondent provides no evidence that it was ever known by the name <intertel.com> or that it made a legitimate noncommercial or fair use of the domain name <intertel.com>.

11. Complainant has met its burden for proving the three elements needed to prevail under the UDRP:  (1) the domain name registered by Respondent is identical or confusingly similar to a trademark or service mark in which Complainant has rights; (2) Respondent has no legitimate interests in respect of the domain name; and (3) Respondent registered and is using the domain name in bad faith.

12. With respect to the charge of reverse domain name hijacking, Respondent never had a legitimate interest in a domain name identical to Complainant’s domain name.  As such, Respondent acquired and is using the domain name in bad faith.

D.  Respondent’s Additional Submissions

1. Complainant has failed to meet its burden, as required by Policy ¶ 4(a), to

justify the transfer of the domain name in dispute to Complainant.  Specifically, Complainant cannot meet each of the three independent requirements of Policy ¶ 4(a), namely, identical or confusingly similar mark, legitimate use or interest, and bad faith registration and use.

2. Complainant’s INTER-TEL mark was not used in connection with the provision of Internet telephony services at the time Respondent registered the <intertel.com> domain name.  Complainant applied for THE VOICE OF THE INTERNET service mark in March of 1997, almost two months after Respondent began promoting its Internet telephony business on the Internet, and over five months after Respondent acquired and registered its domain name <intertel.com> to provide Internet telephony services – services not covered by Complainant’s INTER-TEL marks or by the INTER-TEL registrations.

3. During the 1996-1997 time period, when Respondent was considering names for its new Internet telephony business, Complainant was not providing Internet telephony services using the INTER-TEL marks, nor had Complainant obtained any registrations for the INTER-TEL mark (or any other mark) that covered the provision of Internet telephony services.  Nothing in the INTER-TEL registrations existing in the 1996-1997 time period would have, or could have, put Respondent on notice that Complainant was providing similar services to those envisioned by Respondent, or using or intending to use the INTER-TEL mark in connection with such services, or that Complainant was the owner of a registered mark used in the area of Internet telephony.

4. Complainant seeks to draw the conclusion that Respondent’s use of the domain name <intertel.com> -- albeit containing a term similar to Complaint’s mark, but in a field not covered by Complainant’s registrations of the mark INTER-TEL or its actual use of the mark INTER-TEL in commerce – somehow constitutes “use” in bad faith of the domain name.  However, Complainant’s rights to use its registered marks, while exclusive, are only exclusive in the specific fields of use (in connection with the provision of goods and services) for which the registrations were obtained.  Thus, any use by Respondent to provide services other than those to which Complainant had exclusive rights could not violate Complainant’s rights.

5. Whatever Internet telephony business initiatives Complainant may now have, in the fall of 1996, when Respondent acquired and registered the <intertel.com> domain name, Complainant was not a competitor of Respondent in the Internet telephony business.  Respondent did not register the disputed domain name primarily to disrupt the business of a competitor.

6. Complainant never used or registered the INTER-TEL marks for the provision of Internet telephony services.  The only service mark used and registered by Complainant in connection with its alleged Internet telephony business was a different mark, THE VOICE OF THE INTERNET, which Complainant only started using in March of 1997, months after Respondent acquired and registered the <intertel.com> domain name in 1996.

7. Complainant has failed to meet, and cannot meet, its burden under Policy ¶ 4(a).  With full knowledge of these facts, Complainant’s pursuit of this matter constitutes an abuse of this Forum and the Policy “in bad faith to attempt to deprive” Respondent of its rightfully acquired domain name.

FINDINGS AND CONCLUSIONS

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 gravamen of Complainant’s complaint here is the same as that in Broadcom Corporation v. Olivier Taupin and Ulpenetworks (FA 146246, Nat. Arb. Forum, March 27, 2003) i.e., that the Respondent by registering the disputed domain name has infringed Complainant’s long-established trademark.

In the Broadcom  decision, after analysis predicated on the nine foundational factors of the 1983 Restatement of Torts, Section 731[1], and the eight factors considered in AMF, Inc. v. Sleekcraft Boat (9^th Cir. 1979) [1979] USCA9 691; 599 F.2d 341, 348-349,[2] the court held that there was no confusing similarity between Complainant’s mark and the disputed domain name.

This ultimately was because Complainant sold products while Respondent sold services.  Moreover, each marketed differently.

To the contrary here, not only is the disputed domain name here identical to Complainant’s mark,[3] but despite Respondent’s assertions to the contrary, the products and services offered by the parties overlap.

Respondent contends that its intended uses for the domain name are in the field of Internet telephony, which is different from the goods and services provided under Complainant’s mark INTER-TEL.  However, Complainant asserts that such a field is strongly related to the goods and services provided by Complainant under the mark INTER-TEL.  For example, telephone equipment is covered in Complainant’s first registration for INTER-TEL, obtained in 1974, and it is clear that telephone services need telephone equipment in order to operate.  Thus, the Panelist finds Complainant’s goods and services are strongly related to those telephone services allegedly planned to be offered by Respondent, and that there is confusing similarity.

Rights or Legitimate Interests

By virtue of the Panel’s finding of “likelihood of confusion,”[4] it follows that Respondent does not have legitimate interests or rights in the disputed domain name.

This conclusion is enhanced because Respondent has made no demonstrable preparations to use the <intertel.com> domain name for at least six years.  The disputed domain name resolves to a website search engine.  Such a use is neither a bona fide offering of goods or services pursuant to Policy ¶ 4(c)(i) nor a legitimate noncommercial or fair use pursuant to Policy ¶ 4(c)(iii).  See Computer Doctor Franchise Sys., Inc. v. Computer Doctor, FA 95396 (Nat. Arb. Forum Sept. 8, 2000) (finding that the Respondent’s website, which is blank but for links to other websites, is not a legitimate use of the domain names); see also Do The Hustle, LLC v. Tropic Web, D2000-0624 (WIPO Aug. 21, 2000) (finding that when Respondent declares its intent to develop a website, “[Policy Paragraph] 4(c)(i) requires Respondent to show 1) ‘demonstrable’ evidence of such preparations to use the domain name, and 2) that such preparations were undertaken ‘before any notice to [Respondent] of the dispute’”).

Further, Respondent is not commonly known by INTERTEL or <intertel.com>.  The Panel concludes that Respondent has no rights to or legitimate interests in the disputed domain name pursuant to Policy ¶ 4(c)(ii).  See Broadcom Corp. v. Intellifone Corp., FA 96356 (Nat. Arb. Forum Feb. 5, 2001) (finding no rights or legitimate interests because Respondent is not commonly known by the disputed domain name or using the domain name in connection with a legitimate or fair use).

Registration and Use in Bad Faith

Even if it is assumed that Respondent was unaware of Complainant’s mark, and relied fully on its consultant, the Panel must conclude that the registration and use of the disputed domain name was in bad faith because it has found a “likelihood of confusion,” pursuant to Policy ¶ 4(b)(iv).

Moreover, there is a legal presumption of bad faith, when Respondent reasonably should have been aware of Complainant’s trademarks, actually or constructively.[5]  In, for example, Interstellar Starship Servs., Ltd. v. Epix, Inc. (CA 9^th 1999) [1999] USCA9 357; 184 F.3d 1107, 111, the court found that:

ISS became aware of the ‘EPIX’ trademark when it applied for its own registration of ‘EPIX.’ Adopting a designation with knowledge of its trademark status permits a presumption of intent to deceive.  See also Brookfield, 174 F.3d at 1059 (citing Official Airline Guides, Inc. v. Goss, [1993] USCA9 3170; 6 F.3d 1385 (9^th Cir. 1993)).  In turn, intent to deceive is strong evidence of a likelihood of confusion.  See Sleekcraft, 599 F.2d at 354.

The Panel believes that the negotiations for the sale of the disputed domain name are not relevant. The charge of “reverse domain hijacking” is without merit.

DECISION

Having established all three elements required under ICANN Policy, the Panel concludes that relief shall be GRANTED.

Accordingly, it is Ordered that the <intertel.com> domain name be TRANSFERRED from Respondent to Complainant.

JUDGE IRVING H. PERLUSS (Retired), Panelist
Dated:

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