City of Myrtle Beach v. Information
Centers, Inc.
Claim Number: FA0112000103367
PARTIES
Complainant
is City of Myrtle Beach, Myrtle
Beach, SC (“Complainant”) represented by John
C. McElwaine, of Nelson, Mullins,
Riley & Scarborough, LLP. Respondent
is Information Centers, Inc., Hilton
Head, SC (“Respondent”) represented by Marsha
G. Gentner, of Jacobson, Price,
Holman & Stern.
REGISTRAR AND DISPUTED DOMAIN NAME
The
domain name at issue is <myrtlebeach.com>,
registered with Tucows, Inc.
PANEL
The
undersigned certifies that he has acted independently and impartially and to
the best of his knowledge, has no known conflict in serving as Panelist in this
proceeding.
Panelist
is Judge Karl V. Fink (Retired).
PROCEDURAL HISTORY
Complainant
submitted a Complaint to the National Arbitration Forum (“the Forum”)
electronically on December 21, 2001; the Forum received a hard copy of the
Complaint on December 26, 2001.
On
December 21, 2001, Tucows, Inc. confirmed by e-mail to the Forum that the domain
name <myrtlebeach.com> is
registered with Tucows, Inc. and that the Respondent is the current registrant
of the name. Tucows, Inc. has verified
that Respondent is bound by the Tucows, Inc. registration agreement and has
thereby agreed to resolve domain-name disputes brought by third parties in
accordance with ICANN’s Uniform Domain Name Dispute Resolution Policy (the
“Policy”).
On
January 8, 2002, a Notification of Complaint and Commencement of Administrative
Proceeding (the “Commencement Notification”), setting a deadline of January 28,
2002 by which Respondent could file a Response to the Complaint, was
transmitted to Respondent via e-mail, post and fax, to all entities and persons
listed on Respondent’s registration as technical, administrative and billing
contacts, and to postmaster@myrtlebeach.com by e-mail.
A
timely Response was received and determined to be complete on January 28, 2002.
Complainant
submitted a timely response to Respondent’s Response which was received on
February 1, 2002. Respondent made an
additional submission, which was received on February 4, 2002.
All
submissions were considered by the Panel.
On February 8, 2002, pursuant to Complainant’s request
to have the dispute decided by a single-member
Panel, the Forum appointed Judge Karl Fink
(Ret.) as Panelist.
RELIEF SOUGHT
Complainant
requests that the domain name be transferred from Respondent to Complainant.
PARTIES’ CONTENTIONS
A.
Complainant
Complainant,
the City of Myrtle beach is the senior and rightful owner of the trademark
“CITY OF MYRTLE BEACH.”
The
domain name at issue, <myrtlebeach.com>, is virtually identical to
the Complainant’s trademark rights in “CITY OF MYRTLE BEACH”.
Geographically
descriptive marks can be protected upon proof that through usage they have
become distinctive. Complainant has
used the mark “CITY OF MYRTLE BEACH” in commerce since 1957 in connection with
promoting business, economic development, tourism, and a variety of services in
the City of Myrtle Beach. Complainant
has received three South Carolina State Service Mark Registrations for “CITY OF
MYRTLE BEACH” since 1957.
Under
United States Trademark Law, acquired distinctiveness is presumed upon a proof
of substantial and continuous use of the mark in commerce for five years before
the claim of distinctiveness is made.
15 U.S.C. §1052(f)
Complainant
has acquired distinctiveness through its substantial advertising expenditures
of “CITY OF MYRTLE BEACH” and through significant unsolicited media coverage.
Prior
to any notice of this dispute, the Respondent did not use nor had any intention
to use the domain name in connection with any bona fide offering of goods or
services. Respondent does not own any
marks contained in the words “MYRTLE BEACH” and has no connection with Myrtle
Beach, South Carolina.
On
May 1, 1999, the Respondent entered into an agreement leasing the domain name
to the Myrtle Beach Area Internet Cooperative, LLC (the “Cooperative”), which
is related to the Complainant.
In
early 1999, Skip Hoagland, on behalf of the Respondent, approached the
Cooperative about renting the domain name and the license agreement was entered
into where the name was rented for $36,000.00 per year. The web page using the domain at <myrtlebeach.com>
simply contains a hyperlink to the already existing
<myrtlebeachlive.com> Web site.
Respondent’s
purpose in registering the name was to speculatively acquire a domain name and
then rent it for profit to an individual or entity that had legitimate rights
to the domain name. In at least 65 separate
instances, the Respondent has appropriated domain names that are confusingly
similar to others’ trademark rights.
B.
Respondent
Respondent
Information Centers, Inc. (“Information Centers”) is a South Carolina
corporation, located in Hilton Head, South Carolina. Calvin “Skip” Hoagland is a founder and principal of Information
Centers. For over twenty-five (25)
years, Information Centers, Skip Hoagland and other entities owned or
controlled by him, have been involved in the travel and tourism industry, with
an emphasis on the Georgia/South Carolina coastal resort locations. Respondent recognized the prospect of using
the Internet to convey travel and tourism information to a broad market. He registered domain names containing the
names of certain cities in which he had been publishing and distributing travel
and tourism information publications.
Since
Myrtle Beach is the name of a particular geographic location, the name is not
eligible for trademark protection without proof that through usage it has
become a unique source identifier.
Claimant’s
claim of use does not establish secondary meaning. The Lanham Act expressly permits others to use even the
registered and incontestable trademark of another where it is shown that the
use is a use of a term which is descriptive of and used fairly and in good
faith only to describe to users the goods or services of such party, or their
geographical origin.
Respondent’s
use of <myrtlebeach.com>is a fair use under the Lanham Act. The web site is about, and provides travel,
tourism and other information and resources concerning Myrtle Beach. Respondent lawfully acquired that domain
name registration from another person.
Respondent has been using the <myrtlebeach.com> domain name
for a legitimate purpose – a web site devoted to travel., tourism, and chamber
of commerce services relating to the geographical location, Myrtle Beach, South
Carolina. Respondent’s use of <myrtlebeach.com>is
designed to bring tourism, vacationers and residents to Myrtle Beach.
Complainant
has failed to prove a single instance of bad faith registration by Respondent,
let alone any indicia of bad faith with respect to the <myrtlebeach.com>domain
name at issue.
Complainant
acknowledges its connection to Myrtle Beach Area Internet LLC, Respondent’s
licensee with respect to the <myrtlebeach.com>domain name. The License Agreement is set to expire in a
few short months. The reasonable
inference is that the licensee and the Complainant now seek to obtain the
benefits of that license without the concomitant obligations. Trademark law recognizes the principle of
“licensee estoppel” barring a licensee who enters into a binding license
agreement from challenging the licensor’s rights in the licensed
designation. Equity demands the
application of this principle to Complainant, whose exclusive marketing agent
(according to Complainant), in effect is Respondent’s licensee, and who has
“cooperated” in pursuing the present Complaint.
C.
Additional Submissions
The
Respondent’s arguments that the License Agreement provides a legitimate
business interest are bogus. The
License Agreement did nothing more than lease the domain name. Additionally, the Respondent’s conduct here
fits a pattern of past actions where it has registered and offered for sale or
lease domain names that infringe upon trademark rights in ABC, NBC, CBS, FAX
and JET SKI, among others. ICANN Policy
4 (b)(ii).
Both
parties agree that the Complainant must establish secondary meaning to have a
protectable trademark. In determining
secondary meaning, courts consider a variety of factors including: (1) advertising expenditures, (2)
consumer linking of the mark to the source, (3) unsolicited media coverage, 4)
sales success, and (5) length and exclusivity of the mark’s use.
The
Complainant annually spends approximately $30,000 on publications, newsletter
and brochures to communicate information about the city services and programs
to residents, tourists, and other audiences.
Examples of such publications linking the “CITY OF MYRTLE BEACH” mark to
the Complainant’s services were attached to the Complaint. These publications establish the
Complainant’s use of the mark “CITY OF MYRTLE BEACH” not in a geographical
sense, but as an indicator of the source of the services.
The
South Carolina Secretary of State is statutorily prohibited from registering
marks that are “primarily geographically descriptive” unless the mark has
become “distinctive of the applicant’s goods or services.”
As
the only entity using a mark containing the words “MYRTLE BEACH” and offering
such services, the Complainant’s use has been substantial and exclusive for the
last 44 years.
Apparently
conceding that <myrtlebeach.com> is confusingly similar to ‘CITY
OF MYRTLE BEACH”, the Respondent only argues that the Complainant has not
established secondary meaning in the words ‘MYRTLE BEACH.”
Respondent registered <myrtlebeach.com>
with the intention of selling it or renting it. During a time period of approximately one year, instead of
attempting to “develop and operated a web site” as claimed in its Response, the
Respondent added the domain name, <myrtlebeach.com>, to the hoard
of hundreds of others it was offering for “sale or lease.”
As
discussed in the Complaint, the Respondent has never been known by or used the
mark “MYRTLE BEACH.” Thus, the
Respondent has no legitimate business interest in the domain name.
The
Existence of the license agreement does not provide a legitimate business
interest since the license agreement did nothing more than lease the domain
name. In early 1999 when the license
agreement was entered into, the Uniform Domain Name Dispute Resolution Policy
was not in effect and the Complainant could not have shown the registration in
the UDRP-like proceedings.
The
fact that the Complainant has valid and enforceable trademark right in a
geographically descriptive mark is not unusual. There are hundreds of U.S. Patent and Trademark Office records
for geographical marks registered by municipalities rather governmental entities
without having to limit or disclaim rights in the geographical portion of the
mark.
The
fact that there are other entities that provide goods and services using a mark
that contain the words “MYRTLE BEACH” is not determinative of the secondary
meeting analysis. Complainant’s mark
functions as an indicator of source distinctive above all other entities
because the other parties can not or do not offer services that are related to
the Complainant’s services as a municipality.
The
web page using the domain name has no content.
It simply provides a link to the <myrtlebeach.com> web
site, which had already been developed by the Cooperative and was in operation
at the time the license agreement was entered into. The fact that Respondent entered into a license agreement with
the Cooperative which is affiliated with Complainant does not legitimize the
Respondent’s actions. The license
agreement is not to use the trademark but a domain name.
Complainant
has the burden of demonstrating secondary meaning in the term MYRTLEBEACH; that
is, that the primary significance to the public of that term when used in
connection with travel and tourism and entertainment information and services
is not in its geographic sense (the location
Myrtle Beach), but rather to identify Complainant as the single source of those
services.
Complainant
contends that its South Carolina registrations stand as evidence of secondary
meaning. If these registrations have
significance (which they do not), Complainant has produced no evidence that the
state of South Carolina even raised the issue of secondary meaning, let alone
considered it and/or any “evidence” presented by Complainant to show secondary
meaning.
Complainant
also now claims to have made “exclusive” use of MYRTLE BEACH in connection
with, inter alia, “tourism
promotional services…recreational services, and entertainment services.” Respondent’s exhibits demonstrate that
Complainant’s claim of exclusivity is not correct. For example, Respondent’s Exhibit 7 shows the listing in the
Myrtle Beach yellow pages of 28 entities using Myrtle Beach. This list is not exhaustive.
As
Respondent’s Exhibit 8 shows, the PTO consistently has found “MYRTLE BEACH” to
be geographically descriptive and not entitled to a claim of exclusive
trademark rights.
Complainant
has not established that “MYRTLE BEACH” as used in <myrtlebeach.com> for
a web site concerning travel and tourism
information about Myrtle Beach is confusingly similar to “City of Myrtle
Beach” for municipal services.
Respondent’s
evidence of its long and legitimate travel and tourism information services and
business, including over the internet, is undisputed. <myrtlebeach.com> is clearly a part of that
business.
There
is no evidence that Respondent purchased or has maintained the <myrtlebeach.com>
domain name to extort money from Complainant or its “competitors” or to
inhibit Complainant’s use of CITY OF MYRTLE BEACH (or MYRTLE BEACH LIVE),
including on the Internet. Respondent’s
objective is to encourage travel and tourism to Myrtle Beach and other South
Carolina coastal locations.
At
the time the lease agreement was entered unto the registrar for the <myrtlebeach.com>
name had a dispute resolution process.
Complainant
asserts that the doctrine of licensee estoppel should not be applied to it
because this is a domain name, not a trademark. But Complainant claims trademark rights in <myrtlebeach.com>,
and that Respondent’s use thereof is an infringement and violation of those
rights. Complainant cannot have it both
ways.
FINDINGS
The Panel finds that the evidence of the
existence of the common law mark is not sufficient to meet Complainant’s
burden. Nor is the fact that the
Complainant has registered “CITY OF MYRTLE BEACH” with the state of South
Carolina. The City of Myrtle Beach is a
geographical place. There is
insufficient evidence that the name has acquired any secondary meaning. See,
e.g., City of Dearborn v. Dan Mekled d/b/a ID Solutions, FA 99602 (Nat.
Arb. Forum Nov. 12, 2001), finding insufficient evidence that “City of
Dearborn” is a protected common law mark and, therefore, the request to
transfer <cityofdearborn.com> was denied. See also City of Salinas v.
Brian Baughn, FA 97076 (Nat. Arb. Forum June 4, 2001), holding the
Complainant failed to prove that the “CITY OF SALINAS” mark acquired secondary
meaning such that it may claim the exclusive right to use “CITY OF SALINAS” as
a trademark.
The evidence of record is not sufficient
to persuade the panel that the mark CITY OF MYRTLE BEACH performs the function
of a trademark as required for purposes of the Policy. The evidence does not show that the mark
distinguishes the goods or services of the Complainant, City of Myrtle Beach. There are many organizations, both
commercial and noncommercial, providing goods or services in relation to the
City of Myrtle Beach using “Myrtle Beach” in their name. The CITY OF MYRTLE BEACH does not serve as a
unique source identifier and does not qualify as a trademark in which
Complainant has rights under the policy.
DISCUSSION
Paragraph 15(a) of the Rules for Uniform Domain Name
Dispute Resolution Policy (the “Rules”) instructs this Panel to “decide a
complaint on the basis of the statements and documents submitted in accordance
with the Policy, these Rules and any rules and principles of law that it deems
applicable.”
Paragraph
4(a) of the Policy requires that the Complainant must prove each of the
following three elements to obtain an order that a domain name should be
cancelled or transferred:
(1)
the domain name registered by the Respondent is identical or confusingly
similar to a trademark or service mark in which the Complainant has rights;
(2)
the Respondent has no rights or legitimate interests in respect of the domain
name; and
(3)
the domain name has been registered and is being used in bad faith.
Identical and/or Confusingly Similar
The panel finds that the City of Myrtle
Beach does not have a protected interest under the Policy in the name “CITY OF
MYRTLE BEACH.”
Since the City of Myrtle Beach has not
demonstrated it owns a mark, common or otherwise, protected under the Policy,
the domain name is not identical or confusingly similar.
Rights or Legitimate Interests
No findings are necessary since
Complainant has failed to establish the existence of a mark protected under the
Policy.
Registration and Use in Bad Faith
No findings are necessary since
Complainant has failed to establish the existence of a mark protected under the
Policy.
DECISION
For the reasons stated above, the relief
requested by Complainant is denied.
Judge Karl V. Fink (Retired) Panelist
Dated: March 8, 2002