DECISION

 

Schering Corporation v. NGS Enterprises, LTD

Claim Number: FA0309000198013

 

PARTIES

Complainant is Schering Corporation, Kenilworth, NJ (“Complainant”) represented by David J. Kera, of Oblon, Spivak, McClelland, Maier & Neustadt, P.C., 1940 Duke Street, Alexandria, VA  22314-3454.  Respondent is NGS Enterprises, LTD, Miami Beach, FL (“Respondent”) represented by Mark Blake, 6849 Fairview Road, Charlotte, NC  28210.

 

REGISTRAR AND DISPUTED DOMAIN NAMES

The domain names at issue are <reditabs.com> and <readytabs.com> (the “Domain Names”), registered with Stargate.Com, Inc. (the “Registrar”).

 

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.

 

Michael A. Albert as Panelist.

 

PROCEDURAL HISTORY

Complainant submitted a Complaint to the National Arbitration Forum (the “Forum”) electronically on September 24, 2003; the Forum received a hard copy of the Complaint on September 25, 2003.

 

On September 25, 2003, the Registrar confirmed by e-mail to the Forum that the Domain Names are registered with it, and that Respondent is the current registrant of the Domain Names.  The Registrar has verified that Respondent is bound by the Registrar’s 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 September 29, 2003, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of October 20, 2003 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@reditabs.com and postmaster@readytabs.com by e-mail.

 

A timely Response was received and determined by the Forum to be complete on October 15, 2003.[1]

 

On October 24, 2003, pursuant to Complainant’s request to have the dispute decided by a single-member Panel, the Forum appointed Michael A. Albert as Panelist.

 

A brief (one-page) additional submission was transmitted by Respondent on October 28, 2003, after expiration of the time period set forth in the Forum’s Supplemental Rule 7.  Accordingly, the Panel in its discretion could choose not to consider Respondent’s additional submission. See Rules 10, 14, 15; Supplemental Rule 8.  In this case, the Panel need not (and does not) exercise this discretion.  Respondent’s additional submission, although considered, is found to be unpersuasive and does not impact the Panel’s decision to transfer the Domain Names to Complainant.[2]

 

RELIEF SOUGHT

Complainant requests that the Domain Names be transferred from Respondent to Complainant.

 

PARTIES’ CONTENTIONS

A. Complainant asserts as follows:

 

-           Complainant began using the mark REDITABS at least as early as 1997, and owns United States federal registrations for REDITABS for goods including “rapidly disintegrating tablets in the nature of a carrier preparation used as a component for a pharmaceutical preparation.”

 

-           Complainant has hundreds of millions of dollars in sales of antihistamine drugs under the REDITABS mark on an annual basis, and extensively advertises the same.

 

-           The REDITABS mark has become famous.

 

-           Respondent registered the Domain Names on March 28, 2002.

 

-           Respondent is not licensed by Complainant to use the REDITABS mark.

 

-           Respondent used the domain name <reditabs.com> to sell Viagra®-related tablets.

 

-           In July 2002, Complainant attempted to contact Respondent through the e-mail address listed on the <reditabs.com> web site, but received no response.

 

-           In October 2002, Complainant contacted Respondent’s counsel, who communicated an offer for Respondent to cease using the REDITABS mark, phase out use of the <reditabs.com> domain name, and use the <readytabs.com> domain name instead.

 

-           In November 2002, Respondent caused the <readytabs.com> domain name to resolve to the web site previously posted at <reditabs.com>, advertising Viagra®-related tablets.

 

-           Complainant explained that use of the <readytabs.com> domain by Respondent was unacceptable to Complainant because it is still a phonetic equivalent of Complainant’s REDITABS mark.

 

-           In April 2003, after having previously agreed to transfer the <reditabs.com> domain name to Complainant and choose a replacement mark, Respondent changed its position and demanded $30,000 compensation for such transfer.

 

-           Respondent has no legitimate rights or interests in respect of the Domain Names.

 

-           Before notice to Respondent of this dispute, Respondent did not use, or make demonstrable preparations to use, the Domain Names in connection with a bona fide offering of goods or services.

 

-           Respondent is not making a legitimate non-commercial or fair use of the Domain Names without intent for commercial gain misleadingly to divert consumers.

 

-           Respondent has not been commonly known by the Domain Names.

 

-           Respondent registered and used the Domain Names in bad faith, as reflected by an intentional attempt to attract Internet users to its web site by creating a likelihood of confusion with Complainant, the fact that Respondent had constructive and/or actual notice of Complainant’s rights before registering the Domain Names, Respondent’s refusal to follow through on an agreement to transfer the <reditabs.com> domain name to Complainant, and its demand for $30,000 in compensation for the same.

 

B. Respondent asserts as follows:

 

-           Respondent admits that Complainant is the owner of a valid trademark in REDITABS.

 

-           Respondent is not a competitor of Complainant, as Complainant uses REDITABS for antihistamines and Respondent does not sell antihistamines.

 

-           Respondent did not intend to mislead and divert consumers to its website.

 

-           Complainant has failed to provide evidence that consumers were in fact diverted.

 

-           Complainant has failed to provide evidence that Respondent is not making a legitimate or non-commercial fair use of the Domain Names.

 

-           Complainant’s annual report does not mention REDITABS.

 

-           Complainant “has not bothered” to register the domain names <reditabs.net> and <readytabs.net>.

 

C. Additional Submissions

As noted above, Respondent’s additional submission was reviewed by the Panel, but is not considered to be persuasive.

 

FINDINGS

Complainant provides evidence of United States federal trademark registrations for the mark REDITABS, including Registration No. 2,097,797 (September 16, 1997) for rapidly disintegrating tablets in the nature of a carrier preparation used as a component for a pharmaceutical preparation.

 

Complainant extensively advertises its products under the REDITABS mark, resulting in hundreds of millions of dollars in sales.

 

Respondent registered the Domain Names on March 28, 2002, and, at various times, used web sites at both Domain Names to sell Viagra®-related tablets.

 

Respondent has not been commonly known by the Domain Names.

 

Respondent’s use of the Domain Names has been commercial in nature.

 

Prior to registering the Domain Names, Respondent was under at least constructive notice of Complainant’s rights in the REDITABS mark.

 

Respondent’s use of the Domain Names has not been in connection with a bona fide offering of goods or services.

 

Respondent sought to sell the <reditabs.com> domain name to Complainant for $30,000.

 

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

 

Complainant has proven that it is the owner of trademark rights in the mark REDITABS.  Complainant’s registrations of its mark on the Principal Register of the USPTO establish a presumption of validity of the marks under United States law. See 15 U.S.C. § 1057(b); Avery Dennison v. Sumpton, 189 F.3d 868 (9th Cir. 1999).[3]  Additionally, the registrations constitute constructive notice to all other parties of Complainant’s ownership of the marks. See 15 U.S.C. § 1072.

 

In comparing Complainant’s mark to the Domain Name, it is well established that the generic top-level domain, in this case “.com,” must be excluded from consideration as being a generic or functional component of the Domain Name. See Sporty’s Farm v. Sportsman's Market, 202 F.3d 489, 498, (2d Cir. 2000).  The same is true of the prefix “www”.  See Reuters Ltd. v. Global Net 2000, Inc., D2000-0441 (WIPO July 13, 2000) (<wwwreuters.com> held confusingly similar to mark REUTERS).

 

The remaining term in the first of the two Domain Names, reditabs, is identical to Complainant’s registered trademark REDITABS.

 

The remaining term in the second of the two Domain Names, readytabs, is phonetically equivalent to Complainant’s REDITABS mark.  As such, it is confusingly similar with REDITABS. E.g., Dunkin’ Donuts, Inc. v. RandomThinkers, D2001-0104 (WIPO Mar. 21, 2001) (domain name <dunkindoughnuts.com> phonetically equivalent to, and confusingly similar to, DUNKIN’ DONUTS mark); Hewlett-Packard Co. v. Cupcake City, FA 93562 (Nat. Arb. Forum Apr. 7, 2000) (domain name <hewlittpackard.com> held phonetically identical to, and confusingly similar to, complainant’s mark HEWLETT PACKARD).

 

Accordingly, the Panel finds that Complainant has demonstrated Policy ¶ 4(a)(i).

 

Rights or Legitimate Interests

 

Complainant contends that Respondent has not been commonly known by the Domain Names, rendering Policy ¶ 4(c)(ii) inapplicable to this dispute, and Respondent does not contest this point.

 

Complainant also contends that Respondent has not made a legitimate non-commercial or fair use of the Domain Names, without intent for commercial gain to misleadingly divert consumers.  Complainant therefore argues that Policy ¶ 4(c)(iii) does not shield Respondent in this case.  Respondent does not show any such fair use, but contests this point on the grounds that Complainant has not come forward with sufficient evidence to disprove a “legitimate, non-commercial or fair use” by Respondent.  Without deciding the question of who bears the burden of proof on this point, the Panel concludes that Respondent’s use (selling Viagra®-related tablets) is plainly commercial in nature, such that Policy ¶ 4(c)(iii) is in fact inapplicable to this dispute.

 

The remaining factor to be considered, Policy ¶ 4(c)(i), is whether, before any notice to it of this dispute, Respondent used, or made demonstrable preparations to use, the Domain Names in connection with a bona fide offering of goods or services.  This factor presents a somewhat closer question, as Respondent indisputably put the Domain Names to some use marketing Viagra®-related tablets.  Precedent interpreting Policy ¶ 4(c)(i), however, establishes that such use was not in fact bona fide.

 

Prior to registering the Domain Names, Respondent was under at least constructive – if not actual – notice of Complainant’s rights in the REDITABS mark, which the Panel finds has achieved a significant degree of renown.  Under these circumstances, using Domain Names confusingly similar to the REDITABS mark to sell a competing product[4] in an apparent effort to trade on Complainant’s good will is not a bona fide use that creates a “legitimate interest.”  E.g., Computerized Sec. Sys., Inc. v. Hu, FA 157321 (Nat. Arb. Forum June 23, 2003) (the respondent’s appropriation of the complainant’s mark to market competing products held not to constitute a bona fide offering of goods and services).

 

Finally, some panels have found that a respondent’s willingness to sell the domain names to the Complainant independently evidences a lack of rights or legitimate interest therein.  E.g., Am. Nat’l Red Cross v. Domains, FA 143684 (Nat. Arb. Forum Mar. 4, 2003) (“Respondent’s lack of rights and legitimate interests in the domain name is further evidenced by Respondent’s attempt to sell its domain name registration to Complainant, the rightful holder of the RED CROSS mark.”).  This Panel is not prepared to hold that a willingness to sell a domain name necessarily establishes the lack of rights or legitimate interest in it.  It is possible to register and use a domain name in good faith, to make a legitimate use of it, and nonetheless to be willing to sell it if the price is right. Here, however, the facts give Complainant a stronger argument than merely the presence of an offer to sell.  In correspondence, Respondent twice conceded that it “had to” cease use of the Domain Names. (Ex. 20 and 22 to Complaint).  The Panel finds these admissions to add weight to Complainant’s showing that Respondent never possessed (or even thought it possessed) rights or legitimate interests in respect of the Domain Names.

 

Accordingly, the Panel finds that Complainant has made the showing required by Policy ¶ 4(a)(ii).

 

Registration and Use in Bad Faith

 

Complainant has established bad faith registration and use of the Domain Names in several ways.  First, Respondent reneged on a commitment to effectuate a transfer.  In that respect, this case is similar to First Team Sports, Inc. v. Verrengia, FA 96948 (Nat. Arb. Forum May 1, 2001), in which the panel found as follows:  “Based on correspondence provided by Complainant, it is evident to the Panel that Respondent indicated to Complainant that he was willing to transfer at least one of the domain names.  However, when Complainant’s attorneys drafted transfer documents, Respondent never effectuated the transfer.  Leading Complainant to believe that a transfer is imminent, but failing to perfect the transfer is evidence of bad faith registration and use.”

 

Second, Respondent’s notice (at least constructive) of Complainant’s rights in the REDITABS mark further evidences that the Domain Names were registered and used in bad faith. Digi Int’l v. DDI Sys., FA 124506 (Nat. Arb. Forum Oct. 24, 2002) (“[T]here is a legal presumption of bad faith, when Respondent reasonably should have been aware of Complainant’s trademarks, actually or constructively.”).

 

A finding of bad faith is particularly appropriate in light of Respondent’s use of the Domain Names to attract Internet users to its site (posted at both of the Domain Names) to sell products in competition with those offered by Complainant under its REDITABS mark. Computerized Sec. Sys., supra (finding that the respondent’s use of the <saflock.com> domain name to offer goods competing with the complainant’s illustrated bad faith).

 

Finally, it is undisputed that Respondent offered to sell at least one of the Domain Names to Complainant for $30,000 – a sum that is substantially in excess of Respondent’s documented out-of-pocket expenses directly related thereto.  Registering a domain name primarily for the purpose of selling it to a trademark owner at a price in excess of expenses is a classic example of bad faith. E.g., Cream Pie Club v. Halford, FA 95235 (Nat. Arb. Forum Aug. 17, 2000) (finding bad faith where respondent offered to sell the domain name to the complainant for $125,000).  While offering to sell a domain name does not, standing alone, prove intent to offer it for sale at the time of registration, the facts and circumstances of this case suggest that such an intent may well have been present here.  Taken together with the reasons discussed above, the Panel is persuaded that the Domain Names were registered and used in bad faith.

 

Accordingly, the Panel finds that Complainant has made the showing required by Policy ¶ 4(a)(iii).

 

DECISION

Having established all three elements required under the ICANN Policy, the Panel concludes that relief shall be GRANTED.

 

Accordingly, it is Ordered that the Domain Names be TRANSFERRED from Respondent to Complainant.

 

 

 

 

Michael A. Albert, Panelist
Dated: November 7, 2003

 

 

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