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Lydian Capital Advisors, LLC v. Aldo Aquino/Lydian Capital Advisors SA [2005] GENDND 287 (24 April 2005)

World Intellectual Property Organization

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Lydian Capital Advisors, LLC v. Aldo Aquino/Lydian Capital Advisors SA

Case No. D2005-0260

1. The Parties

The Complainant is Lydian Capital Advisors, LLC, East Westport, Connecticut, United States of America, represented by Katten Muchin Zavis Rosenman, Attorneys of New York, United States of America.

The Respondent is Aldo Aquino/Lydian Capital Advisors SA, Geneva, Switzerland, represented by Lenz & Staehelin, Attorneys of Geneva, Switzerland.

2. The Domain Name and Registrar

The disputed domain name <lydiancapitaladv.com> is registered with TLDs Inc., d/b/a SRSplus.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on March 10, 2005. On March 11, 2005, the Center transmitted by email to SRSplus a request for registrar verification in connection with the domain name at issue. On March 16, 2005, SRSplus 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. The Center verified that 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 March 17, 2005. In accordance with the Rules, paragraph 5(a), the due date for Response was April 6, 2005. The Response was filed with the Center on April 6, 2005.

The Center appointed Debrett G. Lyons as the sole panelist in this matter on April 14, 2005. 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

Since 1999, the Complainant has been in the business of providing financial and investment services. It is the proprietor of the following US Federal trade mark registrations:

LYDIAN CAPITAL ADVISORS Reg. No. 2,906,168 Class 36

LYDIAN ASSET MANAGEMENT Reg. No. 2,903,114 Class 36

Both registrations are on the Principal Register and claim a date of first use in commerce of September 1, 1999. Both exclude banking and lending services from their monopoly and carry disclaimers to the exclusive use of the words “Capital Advisors” and “Asset Management”, respectively.

The Complainant claims to be the owner of the domain names <lydiancapital.com> and <lydiancapital.net>, both registered on May 14, 1999 (see further below). No active website attaches to these domain names.

The Respondent is based in Geneva and was incorporated in July 2003, to provide financial and investment advisory services for private equity and venture capital investments. It registered the disputed domain name on August 25, 2003.

The Complainant first sent demand letters to the Respondent in October 2004, requiring it to change its corporate name and transfer the disputed domain name. Correspondence between the parties’ attorneys up until February 2005, remained formal with the Respondent maintaining its good faith right and entitlement to continue trading under its corporate name and to legitimate ownership of the domain name.

Finally, a good faith meeting set up in Geneva on March 10, 2005, by the parties’ representatives to discuss the name dispute terminated prematurely when it was disclosed that the UDRP Complaint was to be filed that same day.

5. Parties’ Contentions

A. Complainant

The Complainant argues that the disputed domain name is confusingly similar to the marks it has registered since the distinctive, central element, “lydian”, is present in each. It also claims long and extensive use of its marks in commerce together with a significant on-line presence such that the word “lydian” has become well known in association with the Complainant’s business.

The Complainant then argues that the domain name was registered and is being used in bad faith by the Respondent. It argues that the Respondent had constructive notice of its trade mark rights by reason of the prior US Federal applications. The Complainant also reasons that the Respondent was on actual notice of its rights by virtue of the demand letters sent by its representatives prior to institution of these proceedings.

Additionally, the Complainant identifies four other indicia of bad faith registration of the domain name. First, it argues that correspondence from the Respondent’s attorneys shows that the Respondent was aware of the Complainant’s rights at least five years prior to registration of the domain name. Secondly, it argues that the founder of the Respondent was previously involved with a publicly listed Irish company and should have been aware of the Complainant’s Irish subsidiary which also incorporated the word “lydian” in its trading style. Thirdly, the Complainant alleges to have been conducting business in Switzerland since 1999; it gave a presentation to potential Swiss investors on April 27, 1999, and afterwards conducted investment services on behalf of Swiss-based investors such as JP Morgan, Harcourt Investments Limited, HSBC Republic Bank (Suisse) S.A. and others. The Complainant therefore argues that that parties have overlapping business territories and that the Respondent’s use of the domain name infringes the Complainant’s rights. And, finally, that since 2004, the Complainant alleges it has received emails from its clients and investors who attempted to contact the Respondent in the belief that it was affiliated with it.

In conclusion, the Complainant posits that it is not possible to conceive of any plausible circumstance where the Respondent could have co-incidentally registered the domain name without first knowing of the Complainant’s company. Accordingly, the Complainant petitions the Panel for transfer of the domain name.

B. Respondent

The Respondent challenges the Complainant’s claimed rights in the mark, the allegations of confusing similarity, and each of the asserted indications of bad faith.

The Respondent points to the fact that the Complainant has not provided any proof of reputation and goodwill in the LYDIAN mark in the United States or elsewhere. It points to the fact that when it commenced business, the Complainant held pending applications its trade marks which only later matured to registration. The Respondent denies that the Complainant has a significant on-line presence, pointing to the fact that neither of the domain names referred to above resolves to an active website. Moreover, the Respondent argues that no weight can be accorded to those domain names in any event as they are registered to Lydian Capital of 163 East 81^st, 7C, New York and there is no proof of how that entity might be connected (if at all) to the Complainant.

As it touches both the question of exclusive rights and the question of confusing similarity, the Respondent replies that the word “lydian” is not an arbitrary, invented word, but the adjectival form of an ancient country name, “lydian”, being an area in Asia Minor once known for its trading wealth and reputedly responsible for the first minted coins. The Respondent points to the fact that this word forms a part of a number of trade marks, registered to separate entities.

For these reasons, the Respondent submits that there is no exclusive association between the word “lydian” and the Complainant and none which has arisen through demonstrated marketplace usage.

The Respondent goes on to argue that the words “Capital Advisors” are entirely generic as shown both by the mandatory disclaimer in US Federal trade mark registration no. 2,906,168 and an internet search against those two words which results in over 77,000 hits. It follows, says the Respondent, that there can be no real confusion between the domain name and the mark.

The Respondent submits that it has a legitimate interest in the domain name because (i) its corporate activity is entirely consistent with and described by the industry term, “Capital Advisors”; (ii) the adoption of “lydian” was an allusion to the place name Lydia and its association with wealth and finance; (iii) the disputed domain name is a slight abridgement of the Respondent’s company name and was registered just one month after its incorporation; (iv) since August 2003, the domain name has been used in a bona fide way to present the Respondent’s business; all of this occurring before the Respondent received any notice of the disputed claims.

As to the allegations of registration and use in bad faith, the Respondent replies as follows:

i. Prior filed trade mark applications do not alone constitute constructive notice of the Complainant’s proprietary rights;

ii. A bad faith registration requires actual notice of the Complainant’s rights at the time the disputed domain name was registered, not merely prior to the time of filing of the Complaint;

iii. The letter from the Respondent’s representatives did not admit prior knowledge of the Complainant’s 1999 registered domain names but merely averred to their existence;

iv. Complainant’s listed activities in Ireland only date from March 2004, after the time of adoption of the disputed name;

v. The alleged business presence of the Complainant in Switzerland since 1999, is instead associated with the enterprise, Lydian Overseas Partners Ltd, and the documentation provided in evidence is addressed to particular third parties and not the Respondent nor the investment business community at large;

vi. Complainant’s claims of client and investor confusion are not supported by any evidence.

Without making a special petition, the Respondent refers to Paragraph 15(e) of the Rules which allows the Panel in its decision to declare that a complaint was brought in bad faith and constitutes an abuse of the administrative proceeding.

6. Discussion and Findings

The UDRP was not conceived as a prescriptive code to settle trade mark disputes. There are numerous laws, conventions and fora all better suited to that task. It should be noted in this respect that the focus of the UDRP is on rights or legitimate interests (or the lack thereof) in respect of the domain name, and not necessarily the underlying mark. Instead, the aim of the UDRP is to stop bad-faith registration of domain names and that is at the heart of most UDRP proceedings, including the present one. Therefore, the Panel will first address the bad faith element.

Registered and Used in Bad Faith

There is no evidence that the Respondent “copied” the name “lydian” from the Complainant. Nor is there evidence that the Respondent was aware of the Complainant at the time it registered the domain name. Indeed, there is no conclusive evidence that the Respondent became aware of the Complainant’s business before October 2004, when it received the first of the Complainant’s two demand letters.

The Panel finds it useful to extract a portion from one of those letters to the Respondent:

“We are concerned that you may have registered the Infringing Site in bad faith, for one or more of the intended purposes: (1) to resell the Infringing Site for valuable consideration; (2) to prevent Lydian [the Complainant] from using its valuable mark in connection with the domain name; (3) to disrupt the business of Lydian; and/or (4) to attract, for commercial gain, Internet users to website or online addresses owned or affiliated with you or others by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of your websites, products or services.”

There is no evidence whatsoever that the Respondent registered the domain name with the intention to resell it. There is nothing in its actions or on its website to suggest it later formed that intention and it did nothing at any stage to court the attention of the Complainant or promote a purchase offer from the Complainant or others.

The Respondent has not prevented the Complainant from securing the more obvious choice of domain names <lydiancapital.com> and <lydiancapital.net> and, as the Respondent points out, neither of those domains points to an active website although they have been registered for over 5 years.

It follows from the preceding paragraph that it is highly unlikely the Respondent registered an arguably less intuitive domain name, 5 years later, in an attempt to disrupt the Complainant’s business.

Finally, although the Complainant has provided no evidence of the confusion it alleges (and indeed any actual confusion, if it arose, may only exist because the Complainant itself has no on-line presence), there is nothing elsewhere in the evidence to suggest that the disputed name was registered by the Respondent to secure a commercial gain from internet users.

Accordingly, none of these concerns expressed on behalf of the Complainant cause the Panel to lean towards a bad faith finding.

Turning to the direct arguments made by the parties, the Panel makes the preliminary observation that there is nothing put forward which is inconsistent with a conclusion that the Respondent simply struck on the same name. The Complainant submits that it is not possible to conceive of any plausible circumstance where the Respondent could have co-incidentally registered the domain name without first knowing of the Complainant’s company. The Panel respectfully disagrees. Notwithstanding the fact that the Complainant’s two US service mark registrations sit on the Principal Register (carrying with it the implication that the USPTO regards the word “lydian” as having a threshold level of inherent distinctiveness), the Panel through its own effort observes that this word appears frequently on a number of country trade mark registers in connection with class 36 services. It is enough to say that it enjoys a degree of international currency as a sign used in connection with financial and investment services.

Against those comments it is noteworthy that trade mark law is littered with disputes arising from the good faith adoption by two parties of the same sign. As mentioned above, the UDRP is not the mechanism to determine absolute entitlement to a mark, nor indeed is it the ideal code in these circumstances to resolve proprietorship of a corresponding domain name also in dispute. It is primarily concerned with the connected but more limited discovery of bad faith registration and in this instance the Panel finds none. The Panel is of the view that the inferences of bad faith raised by the Complainant are entirely answered and rebutted by the Respondent.

Identical or Confusingly Similar / Rights or Legitimate Interests

Because the Complainant does not meet its burden of persuasion on the issue of bad faith, it is not necessary for the Panel to conclude as to the first and the second element of the Policy.

7. Decision

For all the foregoing reasons, the Complaint is denied.

Debrett G. Lyons
Sole Panelist

Dated: April 24, 2005