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Pony Express U.S.A., Inc. v. Servlet, Inc. / Bruce Cornett [2004] GENDND 714 (21 June 2004)

1. The Parties

The Complainant is Pony Express U.S.A., Inc., Boca Raton, Florida, United States of America, represented by Justin Zimmerman, United States of America.

The Respondent is Servlet, Inc. / Bruce Cornett, Yellow Springs, Ohio, United States of America.

2. The Domain Name and Registrar

The disputed domain name <ponyexpress.com> is registered with Domain Bank, Inc.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on March 29, 2004. On March 31, 2004, the Center transmitted by e-mail to Domain Bank, Inc., a request for registrar verification in connection with the domain name at issue. On March 31, 2004, Domain Bank, Inc., transmitted by e-mail to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details for the administrative, billing, and technical contact. The Center verified that the Complaint together with the amendment to the Complaint 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 April 8, 2004. In accordance with the Rules, Paragraph 5(a), the due date for Response was April 28, 2004. The Response was filed with the Center April 28, 2004.

The Center appointed Nicolas Ulmer, Frederick M. Abbott and David E. Sorkin as panelists in this matter on May 21, 2004. The Panel finds that it was properly constituted. Each member of 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.

Thereafter both Complainant and Respondent solicited the right to make supplemental filings, which were accepted and transmitted to the Panelists, and considered in rendering this decision.

4. Factual Background

A. Complainant

Complainant, Pony Express U.S.A Inc., is a corporation with its principal place of business in Florida, USA, registered or traded on the “over the counter” (“OTC”) exchange. It claims to be the “original” pony express, tracing its lineage to the fabled horseback delivery service of the same name in America’s “wild west.” Complainant is, notably, in the business of delivering documents and valuables and transportation services.

B. Respondent

Respondent is a California corporation with its principal or primary place of business in Ohio, USA. Respondent is involved, notably, in the provision of various Internet and e-mail related services, including software development.

C. Factual Background

This case primarily concerns a rather distended series of negotiations in the August 2002 – May 2003 period between the parties concerning, inter alia, the disputed domain name, the structure and amount of payment from Complainant to Respondent for the same, and at some points at least, possible collaboration between them.

It is undisputed that Complainant has acquired U.S. Trademarks No. 1011950 named THE PONY EXPRESS, registered on May 27, 1975; No. 0708532 named THE PONY EXPRESS registered on December 13, 1960; and No. 1011218 named PONY EXPRESS registered on May 20, 1975. These trademarks are based on use in IC Category 039: the transportation of money and valuables.

The Complainant has also apparently made an application to the U.S. Patent and Trademark Office (“USPTO”) to register PONY EXPRESS No. 78272213 in categories 100, 101, 104 – electronic transmission of certified copies of documents; and provision of wireless access to the Internet. Respondent submits that should Complainant successfully prosecute such application, then it will initiate opposition proceedings to the same. Respondent, for its part, submits that it has made an application, and was recently issued a serial No. 78409203 for the mark PONYEXPRESS in International Class 038: secure transmission of electronic mail and documents, from the USPTO.

The disputed domain name site was last updated in 1999, and currently diverts to another site owned or controlled by Respondent. Respondent submits pleading and information to the effect that the disputed domain name was their first Internet “start-up,” selling “permanent” e-mail addresses. It was thereafter “placed on hold” due to an unrelated dispute, and Respondent has subsequently regained control of it.

As noted above there was extensive negotiation and correspondence between the parties concerning, inter alia, the transfer or “renting” of the disputed domain name. There were repeated offers made in this connection, and draft agreements were drawn up. This apparently culminated in a April-May 2003 offer which Complainant quantified as being worth US $225,000 in Complainant’s stock and US $4,500 in compensation for Respondent’s legal fees. Respondent appears to have negotiated avidly but consistently turned down offers as they did not represent sufficient liquidity, and that because its counsel advised that the offers of stock were not clearly compatible with U.S. Security and Exchange Commission (“SEC”) regulations.

After the filing of the Complaint in this matter Respondent apparently spoke to Complainant and advised that it had a work plan for re-deploying the disputed domain name in cooperation with another Internet-related company specialised in blocking SPAM. Complainant wrote to warn against such a course.

5. Parties’ Contentions

Complainant contends that Respondent makes impermissible use of the disputed domain name as it is identical, or confusingly similar, with its registered trademarks, and that a true confusion has resulted. Complainant further contends that Respondent makes no bona fide offerings of goods or services under the disputed domain name. Finally, Complainant asserts that Respondent’s repeated demands for different and higher compensation for the disputed domain name evidence registration and use of the same in bad faith.

Respondent does not deny Complainant’s ownership of its three previously registered marks, but counters that it does not engage in business in the categories for which they were registered.

Respondent also submits evidence for the proposition that various permutations on the term “Pony Express” have been widely and openly used by many other businesses in the United States.

Thereupon Respondent claims that it has legitimate rights of its own to the disputed domain name and has indeed used it in connection with bona fide offers of services, i.e., the sale of “permanent” e-mail addresses, which is still one of its lines of business. Respondent further contends that its rights to and legitimate use of the domain name is clear from the context and content of their negotiations.

Respondent also asserts that the history of the communications between the parties amply demonstrates its good faith, and that Complainant has de facto admitted the same in writing.

Finally, Respondent asserts a brief counterclaim for “reverse domain name hijacking,” asserting that the Complaint was brought in bad faith for the purpose of harassing Respondent.

The facts are further discussed, where pertinent, in the decision below.

6. Discussion and Findings

In order to qualify for a remedy, the Complainant must prove each of the three elements set out in Paragraph 4(a) of the Policy. We take these up in turn.

A. Identical or Confusingly Similar

Complainant and Respondent have exchanged extensive claims and counterclaims regarding the extent, if any, of Complainant’s rights in the trademarks, including in regard to the scope of rights as to particular lines of business. Complainant holds registrations at the USPTO for at least some of the claimed marks, and should enjoy a rebuttable presumption of exclusive rights with respect to such registered marks. Neither the strength or scope of Complainant’s trademark rights will necessarily be relevant to that determination. See e.g., Corbis Corp. v. Zest, NAF Case No. FA 98441 (2001). However, among the counterclaims made by Respondent is that the marks have become generic based, inter alia, upon evidence of wide use by third parties (including in a historical context). The Panel does not find it necessary finally to resolve the competing claims regarding the extent of Complainant’s rights in the marks or whether the disputed domain is identical or confusingly similar to the claimed marks. Regardless of the extent of Complainant’s rights in the marks it does not succeed in this proceeding, as it does not meet its burden under the other elements of the Policy’s test.

B. Rights or Legitimate Interests

There is evidence that Respondent had and has legitimate interests and rights in the disputed domain name. It is uncontested that Respondent made use of the same in 1995-96 in connection with a bona fide offer, of e-mail services. Indeed Complainant, perhaps unwittingly, de facto recognised Respondent’s rights when, it wrote to Respondent that “… you are our namesake. We would hope that you have success in using the name, just so long as it is not used for purposes of transporting or delivering packages or letters.” (Annex 2 to Answer, emphasis added)

This and other evidence also goes to demonstrating that Respondent was not acting in bad faith, as briefly discussed below.

C. Registered and Used in Bad Faith

The Policy makes clear that the Complainant must meet the burden of showing that the disputed domain name was both registered and used in bad faith. (Policy, Paragraph 4(a)(iii)). Here Complainant does not allege any facts showing that the 1995 registration of the domain name was in bad faith. There is, notably, no evidence that in 1995 Respondent intended to sell the disputed domain name to Complainant (or a third party), that Respondent engaged in a pattern of registering the trademarks of others, that Respondent attempted to interfere with the business of Complainant, or that Respondent attempted to cause confusion as to the sponsorship of its website for commercial gain. Respondent points out that it did initially make use of and developed the domain name for the bona fide sale of “permanent” e-mail accounts and then diverted the same business through another domain name. Although the evidence on this point is not 100% clear, the correspondence between the parties does tend to sustain it. The Policy cites such activity as indicia of the Respondent’s bona fide use. (Policy, Paragraph 4(c)(i)).

Complainant’s principal argument as to bad faith is that the pattern of negotiation between the parties demonstrates that Respondent “never intended to complete the deal [i.e., sale of the domain name] without being grossly over compensated in cash.” It is true that the stated amount of the final, rejected, offer for the domain name (US $225,000 in stock and US $4,500 in legal fees) would far exceed the normal costs of registering the same. It is also clear that Respondent bargained hard for cash. But the actual cash value, and legality, of the stock offer was seriously questioned. Respondent made clear that it wanted cash, but also explained “[f]rom our perspective the number has to justify abandoning our work plan for the site.” (Annex 2). There are also indications that, initially at least some genre of “joint venture” was envisioned between the Parties, with Complainant picking up, and further developing, Respondent’s electronic communications plans for the site. Indeed, Respondent alleges that Complainant, particularly in its current trademark application, is impermissibly making use of information and concepts transmitted to it by Respondent in the course of their negotiations. Finally, in these negotiations Complainant made quasi-admissions that are not consistent with its current allegations of bad faith. For instance, its e-mail of September 15, 2003, to Respondent, Complainant wrote “I never questioned your figure of $100,000, as I believe that you truly think ponyexpress.com is worth that much.” Later, seeking to revive negotiations, Complainant wrote that it could tolerate the current situation or Respondent can “pick up the deal we offered in the first place. The choice is yours. No hard feelings in any event.”

The complex, and somewhat confusing, pattern here does not fit Paragraph 4(a) of the Policy, nor the exemplary circumstances listed in Paragraph 4(b). Complainant has not met its burden of showing bad faith registration and use by Respondent.

7. Reverse Hijacking

Respondent asks the Panel to make a finding of reverse domain name hijacking. Respondent’s entire submission on this point reads: “Respondent believes the factual evidence presented above clearly demonstrates that the complaint was brought in bad faith for the purposes of harassing the Respondent to force transfer of the domain name.”

Such a claim proceeds from and is cognisable under the Rules and Paragraph 15(e) thereof, which Rules define “Reverse Domain Name Hijacking” as: “using the Policy in bad faith to attempt to deprive a registered domain name user of a domain name.” Paragraph 15(e) of the Rules further indicates that Reverse Domain Name Hijacking is but one example of a bad faith complaint. Such bad faith can also be found where the Panel determines, for example, that the case was brought “primarily to harass the domain name holder.” The burden of demonstrating and proving such claims falls to the Respondent, and the mere lack of success of the Complaint will not be enough. See Sustainable Forestry Management Limited v. SFM.com and James M. van Johns “Infa dot Net” Web Services, WIPO Case No. D2002-0535.

In the instant case Complainant has, notably, failed to demonstrate Respondent’s bad faith, and there are strong indications in the record that Complainant did not, prior to the Complaint, consider Respondent to be in bad faith. It may well be that the Complaint was born of Complainant’s frustration in its long unsuccessful negotiations to obtain a transfer of the disputed domain name in consideration of its stock. But that is somewhat speculative and does not, ipso facto, constitute bad faith by Complainant. It is also clear that Complainant has a considerable investment in the “Pony Express” name, and has both existing trademarks and a disputed application for a further trademark in the same. There is also some, albeit minor, evidence of actual marketplace confusion between the parties. These facts are not sufficient for Respondent to show its “unassailable rights” or “clear lack of bad faith registration” such as might support the reverse hijacking claim. See Fondation Le Corbusier v. Monsieur Bernard Weber, Madame Heidi Weber, WIPO Case No. D2003-0251, and many citations therein.

Respondent’s reverse domain name hijacking claim is most laconic, and not specifically supported or explained. Nor are the facts here plead sufficient, or sufficiently clear, to support Respondent’s request and counterclaim. In light of the foregoing it cannot be said that Respondent has met its burden, and the Panel declines to make a finding of Complainant’s bad faith.

8. Decision

For all the foregoing reasons:

1. The Complaint is denied and dismissed; and

2. The Respondent’s request for a declaration of Reverse Domain Name Hijacking is denied.

Nicolas Ulmer
Presiding Panelist

Frederick M. Abbott
Panelist

David E. Sorkin
Panelist

Date: June 21, 2004