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Overstock.com Inc. v. Larus H. List [2004] GENDND 538 (28 May 2004)

1. The Parties

The Complainant is Overstock.com Inc. of Salt Lake City, Utah, United States of America, represented by Bracewell & Patterson, LLP of San Antonio, Texas, United States of America.

The Respondent is Larus H. List of Akureyri, Iceland.

2. The Domain Name and Registrar

The disputed domain name <0verstock.com> (the number “0” followed by verstock.com) is registered with Tucows Inc.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) by email on March 19, 2004, and in the requisite number of hard copies on March 22, 2004. On March 19, 2004, the Center transmitted by email to Tucows Inc. a request for registrar verification in connection with the domain name at issue. On March 19, 2004, Tucows Inc. transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details for the administrative and technical contact. The Center verified that the Complainant satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy”), the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the “Supplemental Rules”).

In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on March 26, 2004. In conformity with the Rules, paragraph 5(a), the due date for Response was April 15, 2004. The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on May 3, 2004.

The Center appointed Reynaldo Urtiaga Escobar as the sole panelist in this matter on May 14, 2004. The Panel finds that it was properly constituted. 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.

There is no controversy that English is the language of these proceedings as it is the language of the domain name registration agreement.

4. Factual Background

Complainant is the owner of the United States trademark registration 2,503,246 for the service mark OVERSTOCK.COM registered October 30, 2001, in international class 35 for use in relation to on-line wholesale and retail store services featuring general merchandise. Complainant asserts to having used its service mark nationwide in the United States and in a number of other countries since at least as early as 1999.

To promote its business, Complainant advertises its services and merchandise through its own website for which it registered the domain name <overstock.com> with Network Solutions Inc. on February 11, 1999.

For its part, Respondent registered the domain name that is the subject of this dispute on November 3, 2001.

Having found out about Respondent’s registration of the domain name at issue and noting that the Respondent was claiming affiliate commissions for diverting traffic to Complainant’s own website, on November 17, 2003, Complainant wrote a cease and desist letter objecting to Respondent’s activities, considering them in violation of Complainant’s statutory and common law rights with respect to the service mark OVERSTOCK.COM. In its letter, Complainant requested that Respondent cease and desist from using and/or forfeit or transfer the disputed domain name in exchange for a full release.

Given Respondent’s lack of response to the above-mentioned letter, as stated therein, Complainant proceeded to take legal action, namely the filing of the UDRP Complaint which gave rise to the present dispute.

5. Parties’ Contentions

A. Complainant

In essence, Complainant’s main submissions can be summarized as follows:

i) The domain name at issue is identical or confusingly similar to Complainant’s service mark;

ii) Respondent’s registration of the disputed domain name results in public confusion, serious dilution by tarnishment to the mark and false advertising, as the existence of the domain name in controversy tends to mislead consumers and produce irreparable harm to the goodwill of Complainant’s service mark and trade name;

iii) to the best of Complainant’s knowledge, having carried out a trademark investigation, Respondent has no rights or legitimate interests in respect of the disputed domain name;

iv) Respondent has no registration of a mark similar to Complainant’s OVERSTOCK.COM service mark;

v) Respondent’s practice of claiming affiliate commission fees for directing Internet traffic from his website to Complainant’s constitutes evidence of the domain name’s registration and use in bad faith;

vi) Respondent acted in bad faith by registering the disputed domain name approximately two years and nine months after Complainant registered its own domain name;

vii) Respondent has threatened to direct traffic to a website other than to the website of Complainant if the latter does not continue to pay him affiliate fees or purchase the disputed domain name.

B. Respondent

No counter-arguments were submitted on behalf of Respondent.

6. Discussion and Findings

Preliminary

It is worth noting that given Respondent’s failure to submit a Response, the Panel may accept all reasonable and supported allegations and inferences in the Complaint as true. See Charles Jourdan Holding AG v. AAIM, WIPO Case No. D2000-0403 (finding it appropriate for the Panel to draw adverse inferences from Respondent’s failure to reply to the Complaint) and also Vertical Solutions Management, Inc. v. webnet-marketing, inc., NAF Case No. 95095 (holding that Respondent’s failure to respond allows all reasonable inferences of fact in the allegations of Complainant to be deemed true).

General

According to paragraph 4(a) of the Policy, in order to succeed with its claim, Complainant must prove that each of the three following elements is present:

(i) The Domain Name is identical or confusingly similar to a trade mark or service mark in which the Complainant has rights; and

(ii) The Respondent has no rights or legitimate interests in respect of the Domain Name; and

(iii) The Domain Name has been registered and is being used in bad faith

A. Identity or Confusing Similarity

Turning to the relevant question of this part, on its face, it is evident that the domain name at issue is not only confusingly similar but virtually identical [The Stanley Works and Stanley Logistics, Inc. v. Camp Creek Co., Inc., WIPO Case No. D2000-0113; Stella D’oro Biscuit Co., Inc. v. The Patron Group Inc., WIPO Case No. D2000-0012] to Complainant’s mark as to visual appearance, overall impression, sound, connotation and commercial impression.

Indeed, the fact that Respondent had intentionally misspelled Complainant’s service mark and domain name by employing a number “0” in place of the letter “O” contained in Complainant’s registered signs is by all means inconsequential and Respondent’s conduct in this case squarely fits in with the so-called practice of “typosquatting,” which has been reprehended by numerous Panels. See, for instance, Nintendo of America Inc. v. Max Maximus, WIPO Case No. D2000-0588 (finding confusion to exist between the mark GAME BOY and the domain name GAMEB0Y, which was spelled with the number zero in place of the letter “o” as in the present case); also Bank for International Settlements v. BIS, WIPO Case No. D2003-0986 (holding that Respondent’s domain name <bankforinternationalsettlement> was “identical” to Complainant’s name and mark BANK FOR INTERNATIONAL SETTLEMENTS).

Accordingly, this Panel finds that the Complainant has proven the first threshold of paragraph 4(a) of the Policy.

B. Legitimacy of Respondent’s Interest

Having performed a trademark investigation, Complainant asserts that Respondent has no rights to any trademarks consisting of the term “overstock.com.”

In view of this and in line with other prior decisions, the Panel is satisfied that Complainant has shown prima facie evidence with respect to this element of the Policy, thus shifting the burden of proof on Respondent. Anti Flirt S.A. and Mr. Jacques Amsellem v. WCVC, WIPO Case No. D2000-1553; and Intocast AG v. Lee Daeyoon, WIPO Case No. D2000-1467.

In this vein, the Panel chooses to view Respondent’s failure to submit a Response to the Complaint as evidence that it lacks rights or legitimate interests in the disputed domain name. See Pavillion Agency, Inc., Cliff Greenhouse and Keith Greenhouse v. Greenhouse Agency Ltd., and Glenn Greenhouse, WIPO Case No. D2000-1221 (finding that Respondent’s failure to respond can be construed as an admission that they have no legitimate interest in the domain names); Canadian Imperial Bank of Commerce v. D3M Virtual Reality Inc and D3M Domain Sales, eResolution Case No. AF-0336 (finding no rights or legitimate interests where no such right or interest was immediately apparent to the Panel and Respondent did not come forward to suggest any right or interest it may have possessed).

Regardless of the foregoing, it is well-settled that the practice of misdirecting Internet traffic for commercial gain (i.e., by claiming affiliate commissions as undisputedly submitted by Complainant in the present case) can neither be regarded as a bona fide offering of goods or services, nor a legitimate non-commercial or fair use of a domain name. See Cancer Treatment Centers of America, Inc. (CTCA) v. Henry Chan, WIPO Case No. D2003-0611 and Yahoo! Inc., GeoCities, HotJobs.com, Ltd., and Launch Media, Inc. v. Henry Chan, NAF Case No. 162050.

Accordingly, this Panel concludes that the Complainant has demonstrated the second limb of paragraph 4(a) of the Policy.

C. Registration and Use in Bad Faith

Complainant sets out uncontested evidence and argument in support of its contention that Respondent’s reliance on the goodwill surrounding the OVERSTOCK.COM service mark to misdirect Internet users to a website unrelated to Complainant and to then redirect them to Complainant’s own website in exchange for an affiliate fee equates to bad faith use and registration of the domain name in issue. See Kmart of Michigan, Inc. v. Azra Khan, NAF Case No. 127708 (finding that if Respondent profits from its diversionary use of Complainant’s mark when the domain name resolves to commercial websites and Respondent fails to contest the Complaint, it may be concluded that Respondent is using the domain name in bad faith pursuant to Policy 4(b)(iv).

Moreover, the Panel sides with Complainant’s submission of Respondent’s bad faith on the basis of the latter’s registration of the disputed domain name almost three years after Complainant’s registration of his domain name and the filing of his trademark application. In the Panel’s view, Respondent’s behavior can only strengthen the hypothesis that by willfully choosing to misspell Complainant’s service mark and domain name, it is proven that he knew of the existence of Complainant’s rights [SADD, Inc. v. Steven Weber, et al, WIPO Case No. D2000-0170], hence constituting evidence of his bad faith in registering and using a confusing domain name without any legitimate right or interest whatsoever.

In sum, the facts show that Respondent has registered and used the domain name to intentionally attempt to attract for commercial gain, Internet users to its website by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship, affiliation or endorsement of Respondent’s website, falling under the illustrative situation provided for in paragraph 4(b)(iv) of the Policy evidencing registration and use in bad faith.

The Panel thus finds that Policy 4(a)(iii) has been satisfied.

7. Decision

In light of all the foregoing, this Panel concludes that the Complainant has met its burden as established by paragraph 4(a) of the Policy. Accordingly, the Panel orders that the domain name <0verstock.com> (the number “0” followed by verstock.com) be transferred to the Complainant.

Reynaldo Urtiaga Escobar
Sole Panelist

Dated: May 28, 2004