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Deutsche Telekom AG v. Oded Zucker [2004] GENDND 1483 (18 November 2004)

World Intellectual Property Organization

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Deutsche Telekom AG v. Oded Zucker

Case No. D2004-0749

1. The Parties

The Complainant is Deutsche Telekom AG, Bonn, Germany, represented by Lovells, Germany.

The Respondent is Oded Zucker, Ra`anana, Israel, represented by Amit, Pollak, Matalon & Ben-Naftali, Erez & Co., Israel.

2. The Domain Names and Registrar

The disputed domain names <t-shops.net> and <tshops.net> (the “Domain Names”) are both registered with Register.com (the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) by email on September 15, 2004. The Center transmitted its request for registrar verification to the Registrar by email the same day. The Registrar responded the same day confirming that it was the Registrar of both Domain Names, that the Respondent was the registrant, that the Domain Names would remain locked during this proceeding, that the Uniform Domain Name Dispute Resolution Policy (the “Policy”) applied to the registrations, and that the registration agreement was in English and contained a submission by the Respondent to the jurisdiction of the courts at the location of the Registrar’s principal office. The Registrar also provided the contact details in respect of the registration on its Whois database.

The Registrar further stated in this response that it had not received a copy of the Complaint, although the Complaint itself states that it had been sent by email to the Registrar. If there was a failure by the Complainant to send a copy of the Complaint to the Registrar as required by paragraph 4(b) of the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the “Supplemental Rules”), the deficiency was immaterial, particularly as a copy of the Complaint was sent to the Registrar by the Center when it formally notified the Complaint to the Respondent. The Panel therefore waives any deficiency which may have occurred in complying with paragraph 4(b) of the Supplemental Rules.

The Center verified that the Complaint satisfied the formal requirements of the Policy, the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”), and the Supplemental Rules, and formally notified it to the Respondent on September 22, 2004, in accordance with the Rules, paragraphs 2(a) and 4(a). This proceeding accordingly commenced on September 22, 2004, and, in accordance with the Rules, paragraph 5(a), the due date for the Response was October 12, 2004. The Respondent applied for an extension of time for the Response in view of the Jewish High Holy Days and festival of Sukkot. The Center extended the time for the Response to October 27, 2004. The Response was duly filed with the Center on October 27, 2004.

The Center appointed Jonathan Turner as the sole panelist in this matter on November 8, 2004. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.

The Respondent has contested the application of the Policy to this dispute and compliance of the Complaint with paragraph 11(a) of the Rules concerning the language of the proceeding. Subject to these points (which are addressed below) and the possible non-compliance with paragraph 4(b) of the Supplemental Rules (which has been waived above), the Panel is satisfied that the Complaint complied with applicable formal requirements, was duly notified to the Respondent, and has been submitted to a properly appointed Panel in accordance with the Policy, the Rules and the Supplemental Rules.

4. Factual Background

The Complainant is a major telecommunications company with divisions called “T-Mobile”, “T-Online”, “T-Systems” and “T-com”. The Respondent is an individual.

By an agreement signed by the Respondent on January 30, 2002, and by the Complainant on February 13, 2002, the Respondent agreed to transfer the domain name <my-t.net> to the Complainant for a consideration of €66,000. Clause 5 of this contract provided

“Future Registrations

“The seller [the Respondent] undertakes worldwide to cease and desist from using or registering marks/designations/names/domains with the component

‘my-t’ or confusingly similar marks/designations/names/domains”.

The Respondent registered the Domain Names in dispute on February 19, 2002. The Respondent has not so far made any active use of the Domain Names and they currently resolve to a standard holding web page provided by the Registrar.

By letter of February 27, 2004, the Complainant’s lawyers wrote to the Respondent complaining about the registration of the Domain Names and threatening proceedings under the Policy or legal proceedings unless the Respondent transferred the Domain Names immediately to the Complainant. Following a telephone conversation, the Respondent’s lawyers replied to the Complainant’s lawyers by email of March 4, 2004, proposing an amicable settlement under which the Respondent would transfer the Domain Names to the Complainant and the Complainant would transfer consideration to the Respondent “in an acceptable amount”.

By letter of March 11, 2004, the Complainant’s lawyers offered €500 for immediate transfer of the Domain Names. By email of March 17, 2004, the Respondent’s lawyers reiterated that the Respondent disputed the Complainant’s claims and stated, “The registration of the domain names by [the Respondent] was performed in connection with a well-reasoned, sustainable business plan to initiate a venture that is, in general, connected to trade in tea products and related merchandise”. They went on to propose a “significant philanthropic contribution to a worthy, relevant humanitarian institution or goal” as a substitute for the Respondent receiving adequate compensation for the transfer of the Domain Names.

The Complainant’s lawyers replied by email the same day inquiring as to the amount of the contribution which the Respondent wished the Complainant to make. By email of April 19, 2004, the Respondent’s lawyers proposed a contribution of €50,000 and suggested that the Respondent draw up a list of institutions from which the Complainant could select a suitable recipient. By email of July 27, 2004, the Complainant’s lawyers stated that the Complainant’s original offer of €500 was more than generous and that if the Domain Names were not transferred, legal proceedings to recover the Domain Names would be commenced.

5. Parties’ Contentions

A. Complainant

The Complainant contends that the Domain Names are confusingly similar to its trademark “T-SHOP” which it has registered as a national mark in Germany, a Community mark in the European Union, and an international mark in a number of countries, in each case for a variety of goods or services.

The Complainant alleges that the Respondent has no rights or legitimate interests in respect of the Domain Names since it has not made any bona fide use of them or of any corresponding name.

Finally, the Complainant maintains that the Respondent registered and is using the Domain Names in bad faith, in particular for the purpose of sale to the Complainant for valuable consideration in excess of the cost of registration. According to the Complainant, in the telephone call between the Complainant’s lawyer’s letter of February 27, 2004, and the Respondent’s lawyer’s reply of March 4, 2004, the Respondent’s lawyer stated that the Respondent was only willing to transfer the Domain Names in return for financial consideration.

The Complainant further infers that this was the primary purpose of registering the Domain Names from the fact that they were registered very shortly after the Complainant paid the Respondent a substantial sum of money for the domain name <my-t.net>, the absence of any genuine use of the Domain Names since they were registered some 2½ years ago, and the correspondence summarized above.

B. Respondent

The Respondent contends first that the Complainant has not produced evidence that he has submitted to the Policy and that any such submission would be invalid under applicable Israeli, New York or German law

The Respondent further submits that the Panel is not authorized to determine this dispute since it is of a contractual nature relating to the scope of the agreement between the parties in 2002, which (the Respondent argues) replaces the Policy as between the parties.

The Respondent also objects to the Complaint on the ground that its Annexes C and E (giving details of the Complainant’s trademarks) are in German, contrary to paragraph 11(a) of the Rules.

As regards the substantive requirements of the Policy (if applicable), the Respondent contends that the Complainant’s rights do not extend to Israel (where the Respondent resides) or the US (where the Registrar is located), that the marks are generic and not entitled to international protection, and that they do not extend to foods or beverages. The Respondent argues that he would be entitled to use the Domain Names for goods and services related to tea, and hence that they are not confusingly similar to any marks in which the Complainant has rights.

The Respondent further contends that the Complainant has not proved that he does not have rights or legitimate interests in respect of the Domain Names. In this respect, the Respondent refers to the statement in his lawyer’s letter that he registered the Domain Names “in connection with a well-reasoned, sustainable business plan to initiate a venture that is, in general, connected to trade in tea products and related merchandise”, and adds that mere brokerage of Domain Names is not prohibited by the Policy.

The Respondent denies that he registered the Domain Names primarily for the purpose of sale to the Complainant or for any of the other purposes indicated in the examples of evidence of bad faith in paragraph 4(b) of the Policy. According to the Response, the Respondent was not aware that the Complainant owned the registered trademarks on which it relies at the date of the registration. The Respondent points out that he did not approach the Complainant in the two years following his registration of the Domain Names before he received a letter from the Complainant’s lawyer; and that he offered to transfer the Domain Names if the Complainant made a donation to a worthy institution.

The Respondent also submits that the Complaint should be dismissed on the grounds of laches, estoppel resulting from the 2002 agreement, and abuse of the Policy to obtain a monopoly in generic domain names beginning with “t”.

6. Discussion and Findings

A. Submission to the Policy

The Respondent’s first contention, that the Complainant has failed to prove that the Respondent submitted to the Policy, is without merit. The Complaint expressly states that the registration agreement, pursuant to which the Domain Names were registered, incorporated the Policy. This has also been verified by the Registrar. Furthermore, all Registrars are contractually bound to the Internet Corporation for Assigned Names and Numbers (ICANN) to incorporate the Policy in their registration agreements. There is no evidence that the Registrar has failed to comply with this requirement. In these circumstances, the Panel is satisfied that the Respondent submitted to the Policy when he registered the Domain Names.

The Respondent’s next contention is that any submission by him to the Policy was invalid under the applicable law. The Respondent suggests that the applicable law was Israeli. The Panel is not satisfied that this is correct; it is more likely that the registration agreement was expressed to be governed by New York law. In any event, the Panel is wholly unpersuaded that the Respondent has made out any case of invalidity of the Policy or his submission to it under any law which might apply.

The Respondent is right to observe that the Policy consists of standard terms imposed on any registrant of a domain name in a generic top level domain (gTLD). However, this cannot be sufficient in itself to invalidate the Policy, since all legal systems recognize standard form contracts (and see also Inter-Power A.K. Corporation v. Entreprises Larry Inc., WIPO Case No D2004-0240 <compresseurquebec.com> to this effect). There must be some additional factor to justify holding an agreement invalid. The only such factor identified by the Respondent is a contention that the Policy compels the referral of a dispute to a particular forum designated at the discretion of the party arranging the contract.

This contention is incorrect. The Panels which determine disputes under the Policy are composed of independent experts appointed by dispute resolution service providers accredited by ICANN. Furthermore, paragraph 4(k) of the Policy expressly provides that neither the registrant nor a complainant is prevented from submitting the dispute to a court of competent jurisdiction for independent resolution before or after an administrative proceeding under the Policy. Indeed, paragraph 3(b)(xiii) of the Rules facilitates the submission of the dispute to an appropriate court by requiring the complainant to submit in the complaint to the jurisdiction of a court at the location of the registrant or the principal office of the Registrar. Paragraph 4(k) of the Policy further provides that a determination of the Panel that a domain name should be transferred or cancelled will not be implemented if the registrant provides evidence to the Registrar within ten days of the determination that the dispute has been submitted to the relevant court. In the view of the Panel, these provisions are eminently fair to the registrant.

The Respondent has not put forward any other basis for impugning the Policy or its inclusion in the registration agreement. On the other hand, the Panel notes that the Policy is based on recommendations of the World Intellectual Property Organisation developed through an extensive process of international consultations in which a wide variety of internet stakeholders participated. The Policy addresses an important need to provide an efficient remedy against abuses of the system of allocation of internet domain names on a first-come, first-served basis. The Panel has no doubt that the Policy would withstand forensic scrutiny in any appropriate Court. The Panel unhesitatingly rejects the Respondent’s challenge to the validity of his submission to the Policy in the registration agreement.

B. Contractual dispute

The Respondent contends that the Panel is not authorized to determine this dispute since it is of a contractual nature relating to the scope of the agreement between the parties in 2002, which (the Respondent argues) replaces the Policy as between the parties.

This appears to comprise two separate arguments: first, that the 2002 agreement has replaced the Policy as between the parties; and second, that in view of the 2002 agreement, the requirements of the Policy are not satisfied in this case.

As to the first argument, the Respondent agreed to comply with the Policy in relation to the Domain Names in the registration agreement made between himself and the Registrar. The Registrar has a real interest in the proper operation of the Policy, which reduces its risk of exposure to litigation. There is no justification for depriving the Registrar of its contractual right that the Policy be applied on the basis of an antecedent agreement to which it was not a party and of which it was, no doubt, unaware.

In any event, the Panel cannot accept the Respondent’s argument that the true meaning and effect of the 2002 agreement between the parties is to prevent the Complainant from objecting to use or registration by the Respondent of any marks, designations, names or domains not covered by its clause 5, quoted above. If the Respondent is right, he could now set up a business called “Deutsche Telekom” with impunity. This cannot have been intended by the parties. Whether the governing law of this agreement is Israeli or German, the Panel is sure that it cannot be interpreted as the Respondent suggests. The Panel rejects the Respondent’s argument that the 2002 agreement overrides the Policy in relation to the Domain Names.

As to the second argument, it is undoubtedly correct that contractual relations between the parties can give rise to a legitimate interest of the registrant or can negate bad faith, so that a dispute in that sense falls outside the Policy. The cases cited by the Respondent are examples of this. However, the question here is not whether the Policy is excluded by the agreement, but rather whether the specific requirements of the Policy are satisfied having regard to the agreement and all other relevant circumstances. This is addressed below in considering the specific requirements of the Policy.

C. Language

The Respondent correctly points out that the language of this proceeding is English in accordance with paragraph 11(a) of the Rules, but that Annexes C and E to the Complaint are largely in German.

However, the Policy does not require all materials to be submitted in the language of the Proceedings. On the contrary, paragraph 11(b) of the Rules gives the Panel a discretionary power to order that documents submitted in other languages be accompanied by a translation into the language of the proceeding.

Annexes C and E to the Complaint contain details of the Complainant’s trademarks. Annex C merely lists the numbers and marks of various registrations other than “T-Shop”. Annex E contains fuller details of the Complainant’s “T-Shop” registrations. The marks, relevant dates, ownership and classes of goods and services can all be discerned by translating a small number of words from the German. Some of the details are also set out in English in the main body of the Complaint.

Although further work would be required to produce full translations of the specifications of goods and services (except in the case of the international registration where the specification is in English), this was not necessary to enable the Respondent to address the Complaint. Indeed, the only point on the specifications of goods and services of relevance to the Respondent’s case is that they do not cover beverages or food; and this is apparent from the fact that the registrations do not cover international classes 29-31.

In these circumstances, the Panel considers that the Respondent does not suffer any real prejudice from Annexes C and E being in German. The Panel therefore declines to make an order to provide translations under paragraph 11(b) of the Rules.

D. Requirements of the Policy

In accordance with the Policy, paragraph 4(a), to succeed in this proceeding, the complainant must prove (a) that the domain name is identical or confusingly similar to a trademark in which it has rights, (b) that the respondent has no rights or legitimate interests in respect of the domain name, and (c) that the domain name was registered and is being used in bad faith. These requirements will now be considered in turn.

E. Identical or Confusingly Similar to Complainant’s mark

It is clear, and not disputed, that the Complainant has registered “T-Shop” as a trademark in a number of countries in respect of a variety of goods and services. However, the Respondent points out that the mark has not been registered in Israel or the United States, and he contends that there is no evidence that the Complainant has acquired common law rights in these countries or that “T-Shop” is a famous mark entitled to protection in countries where it is not registered.

The internet is an international medium and it has been held in numerous decisions that a complainant can rely on trade mark rights in countries other than those of the respondent or registrar: see e.g. WIPO Cases Nos. D2000-0796 <funskool.com>; D2001-0154 <kcts.com>; D2001-1051 <icqauto.com>; D2001-1092 <sembcorp.com>; D2003-0920 <anchorbeer.com>; D2003-0963 <4-degree.com>.

In any case, neither party in this case suggests that the Respondent intends to restrict his use of the Domain Names to countries where the Complainant does not have rights. According to the Complainant, the Respondent intends to exploit them by sale to the Complainant; if this is correct (a point which is discussed below), the Respondent’s intention is directed towards Germany and other countries where the Complainant has rights. According to the Respondent, he intends to use the Domain Names for a venture connected to trade in tea products and related merchandise. Even if credence is attached to this (also discussed below), it may be noted that he does not suggest that the business would be limited to countries where the Complainant does not have rights.

The Panel therefore rejects the Respondent’s contention based on the territoriality of the Complainant’s rights.

The Respondent further contends that the mark “T-SHOP” is generic, being phonetically equivalent to “teashop”, and that the Complainant’s evidence is insufficient to establish secondary meaning. However, in the Panel’s view the registrations of the mark should be presumed valid unless the contrary is shown. This approach accords with the legal position in the European Union and probably other countries where the mark is registered, and the Panel deems this principle applicable under paragraph 15(a) of the Rules. A similar approach has been adopted in other decisions under the Policy; see e.g. WIPO Cases Nos. D2000-0047 <eautolamps.com>; D2001-1367 <banco.com>; and D2003-0645 <britishmeat.com>.

The Panel is not persuaded that the presumption of validity of the Complainant’s “T SHOP” registrations is displaced by the considerations identified in the Response. On the contrary, it appears to the Panel that this mark is inherently distinctive in relation to the goods and services for which it is registered, with the possible exception of clothing in Class 25. The Panel rejects the Respondent’s contention based on the supposed generic character of the mark.

The Respondent next relies on the fact that the Complainant’s mark is not registered for foods or beverages. However, in the context of the Policy, it is appropriate to assess whether the Domain Names are confusingly similar to the Complainant’s mark on the basis of a comparison between the names and mark, without considering whether the Domain Names are or could be used in a way which avoids or might avoid confusion: see WIPO Cases Nos. D2000-0068 <myinfospace.com>; D2000-1525 <magnumpiering.com>; D2001-1367 <banco.com>.

This approach is particularly appropriate where the Complainant’s case is that the Respondent registered the Domain Names primarily for the purpose of selling it to the Complainant. The Policy would be largely ineffective to control this typical abuse if the Respondent could dispute the first requirement of the Policy on the basis that he is using or could use the Domain Names in a way which avoids confusion.

Applying a name for mark comparison, the Panel considers that the Domain Names are confusingly similar to the Complainant’s registered “T-SHOP” marks. They differ only in the addition of the gTLD suffix and the letter “s”, and (in one case) the omission of a hyphen. Accordingly, the Panel concludes that the first requirement of the Policy is satisfied.

F. Rights or Legitimate Interests

It is clear, and not disputed, that the Respondent has made no active use of the Domain Names since they were registered more than 2½ years ago. Nor has the Respondent used any corresponding name in relation to any genuine commercial or other activity.

The Respondent asserts that he registered the Domain Names “in connection with a well-reasoned, sustainable business plan to initiate a venture that is, in general, connected to trade in tea products and related merchandise”. However, he has produced no evidence of the alleged plan or of any steps to progress it.

Nor, in the Panel’s view, can the 2002 agreement between the parties be interpreted as conferring rights on the Respondent in respect of the Domain Names.

In these circumstances, the Panel is satisfied that the Respondent has no rights or legitimate interests in respect of the Domain Names.

G. Registered and Used in Bad Faith

The Complainant contends that the Respondent registered the Domain Names primarily for the purpose of selling them to the Complainant for valuable consideration in excess of his expenses. If this was the case, it would constitute evidence of registration and use in bad faith in accordance with paragraph 4(b)(i) of the Policy. However, the Respondent denies it, claiming that he was unaware of the Complainant’s rights or interests in the name “T-Shop”, and that he registered the Domain Names in connection with the alleged venture mentioned above.

The Panel considers the following facts and matters to be of relevance in evaluating these rival contentions:

(a) The Respondent registered the Domain Names immediately after agreeing to transfer the domain name <my-t.net> to the Complainant for a consideration of €66,000.

(b) The Respondent must have been aware and conscious at this time of the Complainant’s use of names beginning with “T”. The Respondent either knew that the Complainant was using the name “T-Shop” or at least contemplated that it might wish to do so.

(c) The Respondent would also have been aware that a company such as the Complainant would seek to protect names in which it was interested by registering trade marks.

(d) The Respondent made no attempt to check whether the Complainant had trade mark rights in the name “T-Shop” or whether it objected to his registration or use of the Domain Names.

(e) The vagueness of the description of the Respondent’s alleged venture and the absence of any evidence of any plans or preparations to realize it in over 2½ years since the Domain Names were registered, despite his describing it as “well-reasoned”, indicate that it is probably not a bona fide venture.

(f) The 2002 agreement between the parties did not permit the Respondent to register or use the Domain Names.

(g) The Complainant did not object to the Domain Names for over two years following their registration. On the other hand, the Complainant gave no indication to the Respondent that it consented to their registration.

(h) It is clear from the correspondence that there was a telephone conversation between the parties’ lawyers following the Complainant’s lawyer’s letter of complaint of February 27, 2004. The Respondent does not provide any account of what was said in this conversation. The Panel accepts the Complainant’s account, that the Respondent’s lawyer informed the Complainant’s lawyer that the Respondent was only willing to transfer the Domain Names in return for financial consideration.

(i) Following this conversation, the Respondent’s lawyer’s wrote to the Complainant’s lawyer proposing an amicable settlement under which the Domain Names would be transferred to the Complainant for a consideration to be paid to the Respondent “in an acceptable amount”.

(j) The Respondent rejected the Complainant’s offer of €500 for transfer of the Domain Names and proposed a significant philanthropic contribution to a worthy, relevant humanitarian institution or goal. Even if taken at face value, this is also evidence of bad faith within the meaning of the Policy. Philanthropic contributions may be meritorious, but forcing companies to make them by registering domain names confusingly similar to their marks constitutes a misuse of the domain name system.

In all the circumstances, the Panel is satisfied that the Domain Names were registered and are being used in bad faith, in particular for the purpose of sale to the Complainant for valuable consideration in excess of the costs of registration. The third requirement of the Policy is satisfied.

H. Laches and estoppel

The Respondent contends that the Complaint should be rejected on the grounds of laches or estoppel, since the Complainant did not object to the Domain Names until over two years after they were registered. The Respondent points out that the Complainant registered other gTLD domain names with identical second level domains (SLDs) in 2002 and submits that it must have noticed then, if not before, that the Domain Names were already taken by the Respondent. He also argues that the Complainant is estopped because it failed to ensure that the agreement extended to the Domain Names.

It has generally been held that laches or estoppel do not provide a separate defence in proceedings under the Policy, although they may sometimes be relevant in considering whether the requirements of the Policy have been satisfied: see e.g. WIPO Cases Nos. D2002-0616 <alberteinstein.com>; D2003-0447 <commercialappeal.com>; D2003-0453 <paulekacreations.com>; D2003-0645 <britishmeat.com>; NAF Cases Nos. FA0310000198898 <usajobs.com>; FA0312000215312 <israel4free.com>. D2003-0544 <iogen.com>, cited by the Respondent, is at best equivocal on the point. This Panel concurs with the view that laches or estoppel do not provide a separate defence.

However, even if laches or estoppel could provide a separate defence, the Panel considers that it is not made out in this case, in the absence of any evidence that the Respondent has incurred any expenditure or other detriment in reliance upon the Complainant’s acquiescence.

I. Abuse of policy

The Respondent contends that the Complaint should be denied because the Complainant is abusing the Policy to obtain monopoly protection of all TLDs with SLDs of the type <T-description> regardless of whether it uses corresponding marks.

This contention is not made out on the evidence and, even if it were, it would not provide a separate defence under the Policy.

7. Decision

For all the foregoing reasons, in accordance with Paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the Domain Names, <t-shops.net> and <tshops.net>, be transferred to the Complainant.

Jonathan Turner
Sole Panelist

Date: November 18, 2004