Innovative Merchant Solutions, LLC v. S
and S Bankcard Systems
Claim Number: FA0204000109721
PARTIES
Complainant
is Innovative Merchant Solutions, LLC,
Caabasas, CA (“Complainant”) represented by Bernard R. Gans, of Jeffer,
Mangels, Butler & Marmaro LLP.
Respondent is S and S Bankcard
Systems, Agoura Hills, CA (“Respondent”) represented by Gregory P. Goonan, of Musick, Peeler & Garrett LLP.
REGISTRAR AND DISPUTED DOMAIN NAMES
The
domain names at issue are <innovativemerchantsolutions.biz>,
<innovativemerchantsolutions.info>, and <innovativemerchant.biz>,
registered with Verisign - Network
Solutions, 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.
Alan
L. Limbury as Panelist.
PROCEDURAL HISTORY
Complainant
submitted a Complaint to the National Arbitration Forum (“the Forum”)
electronically on April 16, 2002; the Forum received a hard copy of the
Complaint on April 22, 2002.
On
April 24, 2002, Verisign - Network Solutions, Inc. confirmed by e-mail to the
Forum that the domain names <innovativemerchantsolutions.biz>,
<innovativemerchantsolutions.info>, and <innovativemerchant.biz>
are registered with Verisign - Network Solutions, Inc. and that the Respondent
is the current registrant of the names.
Verisign - Network Solutions, Inc. has verified that Respondent is bound
by the Verisign - Network Solutions, 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
April 29, 2002, a Notification of Complaint and Commencement of Administrative
Proceeding (the “Commencement Notification”), setting a deadline of May 20,
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@innovativemerchantsolutions.biz,
postmaster@innovativemerchantsolutions.info, and
postmaster@innovativemerchant.biz by e-mail.
A
timely Response was received and determined to be complete on May 20, 2002.
Complainant
submitted a timely Additional Submission on May 28, 2002.
On May 31, 2002, pursuant to Complainant’s request to
have the dispute decided by a single-member
Panel, the Forum appointed Alan L. Limbury
as Panelist.
RELIEF SOUGHT
Complainant
requests that the domain names be transferred from Respondent to Complainant.
PARTIES’ CONTENTIONS
A.
Complainant
Complainant
has common law trademark rights in and a pending federal trademark application
for INNOVATIVE MERCHANT SOLUTIONS, which has been used in connection with
providing credit and debit card authorization, processing and settlement
services since October 1999, as has Complainant’s domain name
<innovativemerchant.com>.
The
disputed domain names are confusingly similar to Complainant’s mark. Respondent has no rights or legitimate
interest in the disputed domain names, which were registered and are being used
in bad faith.
Complainant
has filed suit in the United States District Court for the Central District of
California against Respondent and Jeff Skelton, Respondent’s President, for, inter
alia, violation of the Anticybersquatting Consumer Protection Act, federal
false designation of origin/false impression of association, and California
trademark dilution. The case is styled Innovative
Merchant Solutions, LLC v. AMH Processing Inc., dba S & S Bankcard Systems,
et al., Case No. CV 02-2050 LGB (PJWx).
The action is based upon Respondent’s infringing use of the disputed
domain names and is currently pending.
B.
Respondent
One
of the remedies sought by Complainant though its District Court lawsuit is the
transfer to it of the disputed domain names.
Accordingly, the issue whether Complainant has any rights in its
purported mark will be decided in that case. It would therefore be a complete
waste of time and resources for the Panel to decide the issues raised in this
proceeding, especially since (a) it is not possible to develop a full
evidentiary record in this proceeding and (b) Respondent will challenge any
adverse decision by the Panel by an appropriate filing in the District Court
case.
The
Panel is asked to suspend or terminate this proceeding pursuant to Rule 18(a) of the Rules for Uniform Domain Name Dispute
Resolution Policy (the “Rules”).
The
parties are competitors with a history of bad feeling between them.
Complainant
has no rights in the term “innovative merchant solutions”. Respondent has a
right and legitimate interest in the disputed domain names as descriptive of
Respondent’s competing services.
Respondent did not register the disputed domain names in bad faith and
has not used them in bad faith.
C.
Additional Submission
The
Policy and Rules and the Forum’s Supplemental rules and procedures are
specifically designed to address exactly the type of dispute presented here.
There is no reason why the Panel cannot decide the issue presented in the
Complaint based on the evidentiary material submitted by the parties.
FINDINGS
It is inappropriate to consider the
merits of this dispute. The proceeding is terminated under Rule 18(a). The
Complaint was brought primarily to harass Respondent.
DISCUSSION
Rule 15(a) 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.” Accordingly the fact that evidentiary materials submitted by the
parties may not be as extensive as those usually provided to a court is not an
impediment to the making of a decision by a Panel under the Policy.
Paragraph
4(a) of the Policy requires that 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 Respondent
is identical or confusingly similar to a trademark or service mark in which
Complainant has rights;
(2) 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.
As
in AmeriPlan Corp v. Shane Gilbert d/b/a NewWave Solutions, Inc. (FA
105737) (Nat. Arb. Forum, Apr. 22, 2002), the Panel has decided not to consider
the case on its merits and does not consider these three elements. In that case
the three-member Panel held:
Under Section 5 of the Policy, disputes
outside of the narrow framework set out in Section 4 of the Policy
"... shall be resolved through any court ... available." While
Section 5 primarily seems to be concerned with using a UDRP forum to settle
matters unrelated, or indirectly related, to issues concerning domain name
registration and use, a complainant or respondent should not be permitted to
use a UDRP claim to boot strap decisions regarding more senior disputes between
the parties. This is especially so when, as here, an action is already pending
in a Court of competent jurisdiction.
….
Rendering a decision on the merits when
there is already a court action pending does violence to the one function of
the UDRP - to reduce the cost and effort required to resolve domain name disputes
issues by offering a simplified mechanism in lieu of litigation. Instead of
minimizing the amount of effort (time and money) needed to resolve a dispute,
filing a UDRP proceeding when the parties' dispute is already in front of a
court, adds to that effort.
We are also of the view that the Policy
at Section 4(k) has some application here. When evidence of a court proceeding
is submitted ICANN "will not implement the Administrative Panel's
decision, and ... take no further action until . . ." the court proceeding
is resolved. No purpose is served by our rendering a decision on the merits to
transfer the domain name, or have it remain, when as here, a decision regarding
the domain name will have no practical consequence.
Section
4(k) of the Policy is consistent with the notion that determinations under the
Policy are subordinate to those of competent
courts:
“The mandatory administrative proceeding requirements
set forth in Paragraph 4 shall not prevent either you [the registrant] or
the Complainant from submitting the dispute to a court of competent
jurisdiction for independent resolution before such mandatory administrative
proceeding is commenced or after such proceeding is concluded.”
Rule 18(a) provides:
“in the
event of any legal proceeding initiated prior to or during an administrative
proceeding in respect of a domain-name dispute that is the subject of the
complaint, the Panel shall have the discretion to decide whether to suspend or
terminate the administrative proceeding, or to proceed to a decision”.
Because
the legal proceedings initiated by Complainant against Respondent in the United
States District Court prior to the commencement of this administrative
proceeding seek the same relief, namely the transfer to Complainant of the
three disputed domain names, and raise the same issue presented for decision by
the Panel, namely whether Respondent is entitled to remain the registrant of
the disputed domain names, the Panel decides to exercise its discretion to
terminate these proceedings.
Further,
given that Complainant chose to submit the same issues between it and
Respondent for resolution by a court, in proceedings that were pending at the
time of the initiation of this administrative proceeding, and having regard to
the fact that the parties are competitors with a history of bad feeling between
them, the Panel finds that the Complaint was brought primarily to harass the
domain-name holder.
DECISION
Pursuant to Rule 15(e), the Panel
declares that the Complaint was brought in bad faith and constitutes an abuse
of the administrative proceeding. The Complaint is dismissed.
Alan L. Limbury, Panelist
Dated: June 4, 2002
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