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Autoshop 2 Di Battaglia Ferruccio C. S.N.C v. Willamette RF Inc. [2004] GENDND 829 (2 June 2004)

1. The Parties

The Complainant is Autoshop 2 Di Battaglia Ferruccio C. S.N.C, Montebelluna, Treviso, Italy, represented by Studio Legale Jacobacci e Associati, Italy.

The Respondent is Willamette RF Inc., Corvallis, Oregon, United States of America.

2. The Domain Name and Registrar

The disputed domain name <speedup.com> is registered with Network Solutions, Inc. Registrar.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on April 1, 2004. On April 2, 2004, the Center transmitted by email to Network Solutions, Inc. Registrar a request for registrar verification in connection with the disputed domain name. On April 7, 2004, Network Solutions, Inc. Registrar 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, billing, and technical contact. In response to a notification by the Center on April 8, 2004, that the Complaint was administratively deficient, the Complainant filed an amendment to the Complaint on April 20, 2004. 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”). The Administrative Panel (the “Panel”) is satisfied that this is the case.

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 21, 2004. In accordance with the Rules, paragraph 5(a), the due date for Response was May 11, 2004. The Response was filed with the Center on May 11, 2004.

The Center appointed David Taylor as the sole panelist in this matter on May 19, 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.

4. Factual Background

The non-contested facts in the present case are as follows:

The Complainant, Autoshop 2 Di Battaglia Ferruccio C. S.N.C (“Autoshop 2”) is in the business of providing products and accessories for cars and motorcycles and is the owner of a number of trademarks for the words SPEED UP, copies of which were provided to the Panel:

- SPEED UP Italian trademark registration No. 722232 of February 24, 1998.

- SPEED UP Italian trademark registration No. 807721 of May 16, 2000.

- SPEED UP International trademark registration No. 679968 covering Germany, Austria, Benelux, Bulgaria, China, Croatia, Spain, Russia, France, Hungary, Liechtenstein, Poland, Portugal, Czech Republic, Romania, Slovakia, Slovenia, Switzerland and former Yugoslavia of August 1, 1997.

- SPEED UP Japanese trademark registration No. 148208/1997.

The Complainant specifies the nature of the goods and services for Italian trademark registration No. 807721 “dating back to May 16, 2000, for products and accessories for cars and motorcycles, such as helmets, gloves, tracksuits, car radios, telephone apparatus for vehicle, revolution counters, motorcycles, motorbikes, motor vehicles, gear boxes for vehicles, motorcycle’s and car’s spare parts, etc”.

The Complainant specifies that the Japanese trademark registration No. 148208/1997 covers “books, publications and magazines”.

The Complainant also states that its trademarks “are actually used for the publication of catalogues of the products sold by the company, which are distributed through Italy” and documentary evidence of the same was provided to the Panel in the form of Speed Up catalogues for the years 1996, 2000/2001, 2001/2002, 2002/2003 and 2003/2004.

The Complainant also has a registered domain name <espeedup.com> with an operating website. The Panel has identified that this domain name was registered on November 25, 1999.

The Respondent registered the disputed domain name <speedup.com> on February 8, 1999.

5. Parties’ Contentions

A. Complainant

According to the information provided by the Complainant, but not evidenced, between 1999 and 2003 the Complainant purchased advertising throughout the world, in which the mark SPEED UP was prominently displayed in magazines such as “Suisse Car,” “Opgezet” “Tipo” and “Le Volant”, the latter apparently being the most renowned Japanese car magazine. To date, the Complainant claims to have spent a total of approximately €1,025,000.00 on advertising and in 2003, the Complainant claims to have spent approximately €300,000.00 on marketing services specifically directed toward promoting and strengthening its mark SPEED UP.

The Complainant submits that as the result of its substantial investment of money, time and effort in developing and manufacturing quality products and in advertising and marketing these products under the mark SPEED UP, the Complainant has acquired a reputation for high-quality products and services within its field. As an example of this, the Complainant claims that from 1999 to 2003 sales have increased by 390 % to €4,197,000 during 2003.

The Complainant further contends that 73.5 % of the 2003 sales were made through the Internet, while during 1999 this percentage was only 9.1 % demonstrating the importance of Internet sales to its business today.

The Complainant contends that the disputed domain name <speedup.com> is confusingly similar/virtually identical to its registered trademarks and that as such it is inconceivable that the Respondent “may not have been aware of the trademarks of the Complainant” and that therefore the registration of the disputed domain name can only have occurred in bad faith.

The Complainant contends that the Respondent has no rights or legitimate interests in the disputed domain name due to there being no evidence prior to the dispute that the Respondent has used, or made demonstrable preparation to use, the disputed domain name in connection with a bona fide offering goods and services.

The Complainant contends that the Respondent has never been commonly known by the domain name, nor has he carried out business under the domain name.

The Complainant further contends that the disputed domain name is being used in bad faith under the principle of inaction amounting to bad faith use. This was acknowledged in Telstra Corporation v. Nuclear Marshmallows, WIPO Case No. D2000-0003 that registration of a domain name together with inaction can constitute bad faith use in certain circumstances. The Complainant quotes a substantial part of this decision and refers to numerous other decisions quoting the Telstra case:

- Ingersoll-Rand Co. v. Frank Gully, d/b/a Advcomren, WIPO Case No. D2000-0021: “under the proper facts and circumstances even the inaction can constitute bad faith use”;

- InfoSpace.com, Inc. v. Tenenbaum Ofer, WIPO Case No. D2000-0075: “The passive holding of a domain name for any of these purposes [indicated by Paragraph 4(b)] may be sufficient to meet the use requirement of Paragraph 4(B). See Telstra Corporation Limited v. Nuclear Marshmallows, Case No. D2000-0003”;

- VEDA GmbH v. Mr. Nicholas Silverstone, WIPO Case No. D2002-1040: “There is no evidence that the Respondent has made any attempt to use the disputed domain names. Thus, as is well-settled under the ICANN UDRP, the Panel finds that the Respondent’s passive holding of these famous trademarks for this period of time without any use is enough to constitute bad faith registration and use (as in Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No. D2000-0003 where the Panel found the respondent’s passive holding of a domain name containing a famous trademark amounted to bad faith registration and use). The Panel is aware that passive holding is not one of the specifically listed bad faith grounds under the Policy, paragraphs 4(b)(i-iv), but paragraph 15(a) of the Rules gives the Panel the latitude to find other bad faith grounds where appropriate. The Panel finds the Complainant has satisfied its burden of proof under the Policy, paragraph 4(a)(iii)”;

- Association of British Travel Agents Ltd. v. Sterling Group Ltd., WIPO Case No. D2000-0086: “The concept of a domain name being used in bad faith is not limited to positive action: inaction is within the concept”;

- Marconi Data Systems, Inc. v. IRG Coins and Ink Source, Inc., WIPO Case No. D2000-0090: “The well reasoned opinion by the Panel in the case Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No.D2000-0003, has established that inaction in the presence of particular circumstances can constitute bad faith use - particular circumstances include failure to provide evidence of a good faith use”;

- Advanced Micro Devices, Inc, v. [No Name], WIPO Case No. D2000-0515: “It has been held that the passive holding of a domain name can give rise to a finding of ‘bad faith’ registration and use”;

- Teledesic LLC v. McDougal Design, WIPO Case No. D2000-0620: “In Telstra it was established that “inaction” can constitute bad faith use, and the Telstra decision has since been cited for that proposition and followed by subsequent Panels”;

- Clinica Corachan, S.A. v. Fc Team Car, S.L., WIPO Case No. D2000-0723: “El uso ya ha sido tratado en otros casos como utilización de mala fe” (“Non-use has already been regarded in other cases as use in bad faith”; domain name transferred, quoting Telstra);

- Compaq Computer Corporation v. Boris Beric, WIPO Case No. D2000-0042: “Indeed there is no evidence whatsoever that the Respondent has any actual or contemplated good faith use of the domain names”.

B. Respondent

The Respondent acknowledges that the disputed domain name is similar to the trademarks of the Complainant. However the Respondent argues that there are a great number of parties with potential rights to such routinely combined words as “speed” and “up”, including itself.

The Respondent provides evidence of the other rights in the form of a list of 8 United States service mark registrations for SPEEDUP and crucially one of these registrations is by the Respondent itself for the service mark SPEEDUP. In addition, and in response to the Complaint, the Respondent provides a copy of a registered Italian trademark no 686376 registered on January 12, 1998, for the words SPEED UP with design.

The Respondent contends that the proper course of action for the Complainant would have been to file a Notice of Opposition to the Respondent’s United States service mark application at the given time.

The Respondent contends that in view of its United States service mark registration for SPEEDUP it has a clear legitimate interest in the disputed domain name. The service mark in question was filed on March 22, 2000, and registered on December 16, 2003, under no 76007496 covering: “Computer services, namely providing computational services with the receipt and processing of data supplied and the transmission of results via global computer and telecommunications networks”.

The Respondent provides considerable details as to the reason for its registration of the disputed domain name on February 8, 1999, which it contends was in order to implement a distributed-memory parallel processing “super computing” service, the domain name then available being thought to succinctly capture the key benefit of the proposed service.

The Respondent contends that it planned to provide the ability for customers in the electronics and pharmaceutical industries to access certain computer resources via a website at “www.speedup.com”.

The Respondent contends that the “bursting” of the high technology stock bubble in 2000 forced its aforementioned project and thus the use of the disputed domain name to be lowered in priority as it fought for survival. The Respondent however contends that development continued, though slowly, and this is verifiable by the fact that it continued with its application for the United States registered service mark SPEEDUP completed in 2003.

The Respondent contends that having survived in the market that eliminated a number of competitors it is now in a position to finish the project and the disputed domain name and registered service mark are necessary elements of this.

Concerning whether the disputed domain name was registered and is being used in bad faith the Complainant contends that it was indeed unaware of the Complainant’s existence in 1999 when it acquired the disputed domain name. The Complainant states that it conducted an electronic search for the term SPEEDUP with the United States Patent and Registry prior to applying for the service mark and at the time such search confirmed that the Complainant had no trade or service mark registration for this term in the United States and indeed does not today.

The Complainant contends that the evidence provided by the Complainant, i.e. sample magazines, provide no evidence that the Complainant concentrated any advertising efforts on the United States where the Respondent is located.

The Complainant further contends that the advertising revenue specified by the Complainant is in any event moderate and, based upon the fact sales have increased by 390% between 1999 and 2003, this suggests that the actual advertising budget in 1999 was correspondingly smaller and thus based on this it is almost impossible for the Respondent to have noticed any such advertising by the Complainant.

The Respondent then proceeds to comment on the various cases cited by the Complainant in support of its assertions underlining why they are not applicable in the present case.

6. Discussion and Findings

The Panel has reviewed the contentions of both parties in the Complaint and the Response together with the documents exhibited and annexed thereto.

According to paragraph 4(a) of the Policy, the Complainant must prove that:

(i) The domain name is identical or confusingly similar to a trademark 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.

Paragraph 4(b) of the Policy sets out four non-exclusive circumstances or acts that would be evidence of the registration and use of a domain name in bad faith for the purposes of paragraph 4(a)(iii) above.

Paragraph 4(c) of the Policy sets out three non-exhaustive circumstances, any one of which, if proved by the Respondent, would demonstrate the Respondent’s rights or legitimate interests in the domain name for purposes of paragraph 4(a)(ii).

A. Identical or Confusingly Similar

The Panel finds that the Complainant has clearly demonstrated that it has registered trademark and/or service mark rights in the name SPEED UP by the registrations of its Italian, International and Japanese trademark registrations.

The disputed domain name comprises the Complainant’s trademark and/or service mark in its entirety.

The Panel finds that the disputed domain name is confusingly similar to the registered trademarks in which the Complainant has rights.

B. Rights or Legitimate Interests

Paragraph 4(c) of the Policy sets out a non-exhaustive list of circumstances, which, if shown by the Respondent to be present, are considered as suitable evidence of the Respondent’s rights or legitimate interests in respect of the disputed domain name. However, the primary burden is on the Complainant to show that the Respondent has no such rights or legitimate interests. Once the Complainant has made out a prima facie case, it is for the Respondent to demonstrate the contrary.

The Complainant states in the Complaint that the Respondent has no rights or legitimate interests in the domain names. The fact that the Complainant’s registered trademark rights are included in the disputed domain name without any authorization or license from the Complainant is such a prima facie case.

The Panel finds that although the Complainant contends that the Respondent has never been commonly known by the domain name, nor did he do business under the domain name, it does not contend that the Respondent has no trademark or service mark rights. Indeed the Respondent has demonstrated ownership of registered trademark rights, which in the view of the Panel, the Complainant should potentially have identified prior to filing the Complaint.

In the view of the Panel, therefore, the Respondent clearly has rights and legitimate interests in the disputed domain name granted under United States law, the jurisdiction where the Respondent is based.

The UDRP procedure is not the proper venue for a discussion of the relative merits of conflicting trademark or service mark registrations in different jurisdictions, however the Panel has the following comments:

- The fact that the Respondent’s registered trademark rights are in another jurisdiction to that of the Complainant is irrelevant.

- It is potentially possible for a domain name registrant when challenged by a trademark owner to seek to establish (retroactively) legitimate use simply by filing a fresh trademark application in a jurisdiction other than those where the Complainant’s trademark is registered. Indeed the owner of any contested domain name will be able to find at least one jurisdiction where the trademark or service mark in question is not registered. However, the Panel is satisfied on the evidence that this is not the case here, and the facts in the present case clearly show that the Respondent filed for its United States service mark in 2000, in the jurisdiction where it is based, well in advance of the date of this Complaint, and at a time when the Complainant had little, if any, publicity in the United States.

In addition, paragraph 4(c)(i) of the Policy recognizes the following as supporting a Respondent’s rights or legitimate interests in a Domain Name: “before any notice to you of the dispute, your use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services”. The Panel accepts the submissions by the Respondent concerning the preparations to use the disputed domain name and reasons why it has not done so to date.

The Panel finds that the Respondent has clear rights and legitimate interests in the disputed domain name in view of its existing registered service mark SPEEDUP No. 76007496 and in addition has satisfied the Panel that it has made demonstrable preparations to use the disputed domain name before it had notice of any claim against it. The Complaint therefore fails under paragraph 4(c)(i) and 4(c)(ii) of the Policy.

C. Registered and Used in Bad Faith

The Complainant has failed to meet the requirement of paragraph 4(a)(ii) of the Policy and so it is not strictly necessary to address the issue of bad faith arising under paragraph 4(a)(iii) of the Policy. However, for the following reasons, the Panel finds that the Complaint also fails under this head of the Policy.

Paragraph 4(b) of the Policy sets out a non-exhaustive list of circumstances which for the purposes of paragraph 4(a)(iii) of the Policy would, if the Panel finds them to be present, constitute evidence of bad faith registration and use:

(i) circumstances indicating that the Respondent has registered or acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the Complainant who is the owner of the trademark or service mark or to a competitor of that Complainant, for valuable consideration in excess of documented out-of-pocket costs directly related to the domain name; or

(ii) registration of domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that the Respondent has engaged in a pattern of such conduct; or

(iii) the Respondent has registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(iv) by using the domain name, the Respondent has intentionally attempted to attract, for commercial gain, Internet users to its website or other on-line location, by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your website or location or of a product or service on your website or location.

The Panel notes that the Complainant does not seek to claim that any of these circumstances are actually present, however the list is non-exhaustive, so the Complainant is certainly not obliged to claim these in order to succeed.

The Complainant’s case is that the Respondent’s registration of the disputed domain name was registered and used in bad faith for two reasons: (1) There was “no way that the Respondent may not have been aware of the trademarks of the Complainant” i.e. that the Respondent has constructive notice of the Complainant’s registered trademark rights and (2) the absence of use indicates passive holding as found in Telstra. The Respondent on the other hand states that he was unaware of the Complainant’s trademarks, and that his absence of use is in no way passive holding.

(1) The claim that there is constructive notice of the Complainant’s trademark rights.

The Panel is of the view that the Respondent’s evidence confirms that it did not have actual or constructive notice of the trademark rights of the Complainant in other jurisdictions.

- The Panel finds that there is no indication that the Respondent was aware of the Complainant’s trademarks and thus the Respondent did not have actual notice of the rights. Moreover, the searches carried out by the Respondent before the United States Patent and Trademark Registry did not identify any application or registration of a trademark or service mark by the Complainant.

- The Panel is of the view that the Respondent did not have any constructive notice of the Complainant’s trademark rights. There is very little, if any, evidence that the Complainant was seriously targeting the United States market during 1999 to 2003 with its advertising. To this end the sample magazines provided by the Complainant underline the fact that the target market for the Complainant’s products are mainly European. Moreover, the Complainant itself states that its trademarks “are actually used for the publication of catalogues of the products sold by the company, which are distributed through Italy”. Furthermore, were the Complainant to have been very interested in the United States market it might have considered the possibility of a suitable United States service mark application and at this point may well have become aware of the existence of the Respondent.

The Panel finds that the Respondent has been diligent in its trademark application carrying out an availability search in its own jurisdiction and there is no obligation for it to carry out such a search in any number of other jurisdictions, as such a search would be prohibitively expensive. In any event, in the view of this Panel the mere registration of one or several trademarks in one jurisdiction is not sufficient to establish bad faith, other circumstances are necessary, such as those set out in paragraph 4(b) of the Policy.

Indeed the Panel concludes that it is likely that the Complainant was aware of the existence of the Respondent and the Respondent’s registration of the disputed domain name <speedup.com> at the time of the Complainant’s own registration of the slightly different domain name <espeedup.com> on November 25, 1999, some 9 months after the Respondent had registered <speedup.com>.

(2) The claim that the absence of use indicates passive holding as found in Telstra.

As to this second argument by the Complainant, namely that since the Respondent does not have the domain name currently in operation, it is acting in “bad faith”. It is true that the main case cited by the Complainant Telstra Corporation v. Nuclear Marshmallows, WIPO Case No. D2000-0003 did indeed establish the principle that registration of a domain name together with inaction may amount to bad faith registration and use in certain circumstances and this case has been followed in a number of subsequent cases. The Complainant cites a number of these subsequent cases, listed earlier in section 5, and with which the Complainant seeks support for the assertion that the passive holding in the present case amounts to use in bad faith. However in the view of the Panel we are dealing here with a situation of taking Telstra too far as the principle does not apply to every case of passive holding.

The Telstra decision was a well-reasoned decision and a number of Panelists have adopted its approach to plug a hole in the Policy where it can be ascertained that a Respondent has indeed registered a domain name in bad faith but may not actually be using it. However, the Telstra case was a fact intensive case and the principle that inaction may constitute bad faith is nevertheless dependent upon the specific facts and circumstances of the case. In the Telstra decision four particular circumstances swayed the Panel:

“7.12 The Administrative Panel has considered whether, in the circumstances of this particular Complaint, the passive holding of the domain name by the Respondent amounts to the Respondent acting in bad faith. It concludes that it does. The particular circumstances of this case which lead to this conclusion are:

(i) the Complainant’s trademark has a strong reputation and is widely known, as evidenced by its substantial use in Australia and in other countries,

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

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

(iv) the Respondent has 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 is 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”.

In the present case before the Panel, none of these specified circumstances appear to apply. Taking (i) to (iv) in turn:

(i) While the Complainant may very well be known within the business of providing specific products and accessories for cars and motorcycles in Italy and certain other countries across Europe and Japan, the reputation of their trademarks do not appear to have as strong a reputation as a corporation such as Telstra. Moreover the mark in question in the Telstra case was an extremely famous mark in the geographical area of both the Complainant and the Respondent, which is clearly not the situation here.

(ii) The Respondent has on the contrary provided verifiable evidence of contemplated bona fide use.

(iii) The Complainant has made no assertion that the Respondent has done anything to conceal its true identity.

(iv) The Complainant has made no assertion that the Respondent has “actively provided, and failed to correct, false contact details, in breach of its registration agreement”.

Thus in view of the above we do not have a situation as in Telstra where: “it is 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”.

The Panel therefore concludes that the Telstra proposition that the passive holding of a domain name can amount to bad faith registration and use does not apply to the facts of this case. None of the specific circumstances set out in Telstra are present, nor indeed any other circumstances or evidence of the registration of the disputed domain name in bad faith. The Respondent’s passive holding of the domain name in this particular case does not therefore satisfy the requirement of paragraph 4(a)(iii), that the domain name is not being used in bad faith by the Respondent.

7. Decision

For all the foregoing reasons, the Panel decides that although the Complainant has proved that the domain name is identical to a trademark in which it has rights, it has failed to prove the absence of rights or legitimate interests or registration and use in bad faith on the part of the Respondent under paragraph 4 of the Policy. Accordingly, the Complaint is denied.

David Taylor
Sole Panelist

Dated: June 2, 2004