National Arbitration Forum

 

DECISION

 

XM Satellite Radio Inc. v. Gary Kennedy

Claim Number: FA0609000808307

 

PARTIES

Complainant is XM Satellite Radio Inc. (“Complainant”), represented by Meredith Weinberg, of Pillsbury Winthrop Shaw Pittman LLP, 2300 N. Street, NW, Washington, DC 20036.  Respondent is Gary Kennedy (“Respondent”), 3029 S. WW White Rd., San Antonio, TX 78266.

 

 

REGISTRAR AND DISPUTED DOMAIN NAMES 

The domain names at issue are <xmstations.com> and <xm-stations.com>, registered with Innerwise, Inc. d/b/a Itsyourdomain.com.

 

 

PANEL

The undersigned certifies that he or she has acted independently and impartially and to the best of his or her knowledge has no known conflict in serving as Panelist in this proceeding.

 

The Honourable Sir Ian Barker, the Honourable Carolyn M Johnson (retired) and Mr. R Glen Ayers, as Panelists.

 

 

PROCEDURAL HISTORY

Complainant submitted a Complaint to the National Arbitration Forum electronically on September 28, 2006; the National Arbitration Forum received a hard copy of the Complaint on October 2, 2006.

 

On October 2, 2006, Innerwise, Inc. d/b/a Itsyourdomain.com confirmed by e-mail to the National Arbitration Forum that the <xmstations.com> and <xm-stations.com> domain names are registered with Innerwise, Inc. d/b/a Itsyourdomain.com and that the Respondent is the current registrant of the names.  Innerwise, Inc. d/b/a Itsyourdomain.com has verified that Respondent is bound by the Innerwise, Inc. d/b/a Itsyourdomain.com 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 October 3, 2006, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of October 23, 2006 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@xmstations.com and postmaster@xm-stations.com by e-mail.

 

A timely Response was received and determined to be complete on October 19, 2006.

 

A timely Additional Submission from Complainant was received and determined to be complete on October 24, 2006.  The Respondent did not file an Additional Submission.

 

On October 30, 2006, pursuant to Respondent’s request to have the dispute decided by a three-member Panel, the National Arbitration Forum appointed The Honourable Sir Ian Barker, the Honourable Carolyn M Johnson (retired) and Mr. R Glen Ayers, as Panelists.

 

 

PRELIMINARY ISSUE

 

The Complainant requested that this proceeding be consolidated with another proceeding XM Satellite Radio Inc. v. Kyle Kennedy (FA 796199).  Under Policy ¶ 4(f) the first Panel appointed to hear a pending dispute between the party requesting consolidation and the parties sought to be consolidated has the authority to decide whether the cases should be consolidated.  The Panel appointed in XM Satellite Radio Inc. v. Kyle Kennedy declined to order consolidation on October 25, 2006.  Consequently, this present Panel must ignore the Complainant’s request for consolidation.

 

 

PARTIES’ CONTENTIONS

 

A. Complainant

 

The Complainant is a wholly-owned subsidiary of XM Satellite Radio Holdings Inc.  It owns many federally-registered trademarks and service marks for the term XM in the field of satellite radio broadcasting services.  It has used the term XM in commerce since 2001 in this field.  It has been publicly traded on NASDAQ since October 1999.

 

The Complainant provides a range of programmes for reception by radio and on the Internet to some 7 million subscribers nationwide.  Its 2005 revenues were $558.3 million.  It uses the marks widely in radio, television, print and Internet advertising.  It operates a website at the <xmradio.com> domain name.

 

The disputed domain names are confusingly similar to the Complainant’s registered marks.

 

The <xmstations.com> domain name links to no website and the <xm-stations.com> domain name is used for links to third-party sites through a hosting arrangement.  Several of these sites are links to competitors of the Complainant.

 

The Complainant gave no rights or license to the Respondent to use the disputed domain names.  Nor is the Respondent using the disputed domain names for a bona fide offering of goods or services, nor is he using the disputed domain names for a legitimate non-commercial or fair use.  Nor is he commonly known by the disputed domain names. 

 

This passive holding of one name and his use of the other through a ‘click-through’ service is indicative of the Respondent’s lack of rights.

 

The Respondent registered and is using the disputed domain names in bad faith.

 

He must have had notice of the fame of the Complainant’s marks when he registered the disputed domain names on August 14, 2006, because of the Complainant’s extensive advertising, sales and use of the marks.

 

The Respondent must have collaborated with one Kyle Kennedy who, on August 9, 2006 contacted the Respondent and demanded $175,000 to $200,000 from the Complainant for the <xmstations.com> domain name.  Mr. Kyle Kennedy then registered several more domain names, all incorporating the letters ‘xm’.  He said he wanted to “throw” these names as a “perk” at the Complainant.

 

WHOIS indicates that Kyle Kennedy was the registrant of the instant disputed domain names as of August 9, 2006.

 

 

B. Respondent

 

The Respondent acquired <xmstations.com> from Kyle Kennedy on August 14, 2006.  Kyle Kennedy had owned it since July 12, 2006.  The Respondent was the first registrant of <xm-stations.com> on August 4, 2006.

 

He has never had any dealings with the Complainant or any attorney or agent of the Complainant.

 

The Complainant has no trademark rights in the generic word “stations.”  The word is  incapable of acting as a common law trademark.  The disputed domain names are not confusingly similar to the Complainant’s marks.  The Complainant, in its advertising, promotes the word ‘channels’ but not ‘stations.’  The trademarks do not give the Complainant the right to use a generic term with the trademarks.  The Respondent has legitimate rights and interests in the disputed domain names.  There has not been enough time since the disputed domain names were registered for him to put into action his plan for their legitimate use.  He and a friend (name and telephone number given) intend to use the disputed domain names in connection with a new hair salon named “Xtreme Makeover Stations.”  His partner has a hair salon inside his club at a named address in San Antonio, Texas.  With this business venture in mind, his prospective use of the disputed domain names will not mislead or direct Internet users from the Complainant or tarnish the Complainant’s marks.

 

It is unreasonable to find ‘passive’ holding of the disputed domain names as a factor against the Respondent.  He was given a temporary parking page with IYD which controls the content of parked sites.  The Complainant has no evidence that the Respondent collaborated with Kyle Kennedy.  The Complainant’s dealings with him are irrelevant.

 

The Respondent seeks a declaration of reverse domain name hijacking against the Complainant.

 

 

C. Complainant’s Additional Submissions

 

The Respondent has failed:

 

(a)                to show that the disputed domain names are not confusingly similar;

(b)               to dispute the Complainant’s rights to the marks;

(c)                to produce credible evidence to show legitimate use;

(d)               dispute the evidence of bad faith;

(e)                to provide a credible case for reverse domain name hijacking.

 

Contrary to the Respondent’s submissions, the Panel should look at all the evidence, including the evidence concerning Kyle Kennedy.  The Respondent does not dispute the Complainant’s assertion that Kyle Kennedy and the Respondent are related.  The Complainant’s marks are federally registered and are not generic.  The Panel cannot go behind a valid trademark registration.

 

The Respondent’s explanation about the hair salon is incredible and should be rejected.  The only club situated at the address given is the “San Antonio Men’s Club.”  There is no proof of any ‘demonstrable preparations’ to use the disputed domain names.  The passive holding or holding through a parking service is not a legitimate non-commercial use of the disputed domain name.

 

The Respondent had actual and constructive notice of the Complainant’s marks through the Complainant’s wide use of them.  Kyle Kennedy had offered to sell the <xmstations.com> domain name to the Complainant in an email dated August 2, 2006.

 

An attorney for the Complainant spoke to Kyle Kennedy on August 3, 2006 when he made the offer to sell for “a reasonable price with a few minor requirements” – such as a 1-2 year subscription to XM Radio.  On August 4, 2006, he called the attorney and advised that he had received an enquiry to purchase from a third party.  It was in this conversation he made the offer to sell the one name for $175,000 - $200,000 reserving the “rights” to change the offer after he had received an appraisal of the value of the name.  Later in that day he informed the attorney that he had registered a number of other domain names, including <xm-stations.com>, all incorporating the letters ‘xm.’  The attorneys then sent him on August 8, 2006, a ‘cease and desist’ letter offering $100 for transfer costs.  As of August 9, 2006, Kyle Kennedy was the registrant of <xmstations.com>. 

 

The Complainant, on September 13 2006, filed a complaint with NAF regarding the instant domain names, plus various others incorporating the letters ‘xm’ in the belief that Kyle Kennedy owned all of them.  The WHOIS source information as at that date was privacy protected.  The protection was lifted to show Gary Kennedy as the registrant.

 

 

FINDINGS

 

The Complainant owns US federal trademarks for the expression ‘xm’.  It has since at least 2001 used the XM mark in commerce and in extensive nationwide advertising for satellite radio stations.

 

The Respondent acquired the <xmstations.com> domain name on August 9, 2006, according to a notice to him from the Registrar.  He says in his Response that the date he acquired it was August 14, 2006 but produces no documentation in support of this contention, nor does he record any price he paid for it.

 

The <xm-stations.com> domain name was first registered on August 4, 2006, the date on which Kyle Kennedy told the Complainant’s attorney that he had registered it.

 

The Respondent produced evidence that it was he who registered <xm-stations.com> on August 4, 2006.

 

 

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 disputed domain names are confusingly similar to Complainant’s XM mark as they contain Complainant’s mark in its entirety with the addition of the generic term “stations” that has an obvious relationship to Complainant’s mark.  Additionally, one of the disputed domain names also contains a hyphen.  These additions do not negate the confusing similarity between Complainant’s mark and Respondent’s disputed domain names.  See Space Imaging LLC v. Brownell, AF-0298 (eResolution Sept. 22, 2000) (finding confusing similarity where the respondent’s domain name combines the complainant’s mark with a generic term that has an obvious relationship to the complainant’s business); see also Teradyne, Inc. v. 4Tel Tech., D2000-0026 (WIPO May 9, 2000) (finding that the “addition of a hyphen to the registered mark is an insubstantial change. Both the mark and the domain name would be pronounced in the identical fashion, by eliminating the hyphen."). 

 

The Respondent contends that the disputed domain names contain the generic term “stations” and thus can not be found confusingly similar to the Complainant’s mark. The disputed domain names are confusingly similar to the mark in which the Complainant has rights – whether the disputed domain names contain common, generic terms is not relevant in a Policy ¶ 4(a)(i) analysis.  The Panel cannot second-guess the Trademark Office’s decision.

 

RESPONDENT’S RIGHTS OR LEGIMATE INTERESTS

 

The Complainant gave the Respondent no rights to use the disputed domain names. In the Panel's view,the Respondent has not demonstrated that he comes within any of the situations postulated in Paragraph 4(c) of the Policy which, if proved by him, could allow him to succeed.There is no proof of any demonstrable preparations to use the disputed domain names in connection with a legitimate business. His explanation about the hair salon lacks any documentation and, in the absence of evidence, sounds implausible. Nor is passive holding of a domain name proof of reasonable preparation for a legitimate business. In this case, as often happens, the evidence on the second and third limbs of Paragraph 4 (a) of the Policy coalesce.

The Complainant must therefore succeed on the second limb

 

 

Registration and Use in Bad Faith

 

The Panel considers that the Respondent must have had constructive notice of the Complainant’s trademark rights when he acquired both of the disputed domain names.  The Respondent does not deny the evidence of the fame of the Complainant’s mark on a national basis as being associated with a leading provider of satellite radio services.  If he had any doubt about whether the Complainant had trademark rights in the United States, a search of the trademark register would have told him the position.

 

Although it is for the Complainant to prove complicity between:

 

(a)           Kyle Kennedy who offered to sell one of the <xmstations.com> domain names to the Complainant for an outrageous sum; and

(b)          the Respondent, the circumstantial evidence is fairly powerful.

The Panel does not assume that Kyle and Gary Kennedy are related, Kennedy being a fairly common surname.  However:

 

(a)                the closeness of the dates between Kyle offering to sell to the Complainant and Gary becoming the registrant of <xmstations.com>;

(b)                the failure of Gary to provide any detail of his purchase of a domain name which was being offered for sale at such a high price; and

(c)                his registration of <xm-stations.com> on August 4, 2006

 

create an inference that Gary was privy to Kyle’s activities and therefore acting in bad faith at the time of registration of <xmstations.com>.

 

In the Panel’s view, he was also acting in bad faith when he registered <xm-stations.com> because of his constructive knowledge of the Complainant’s marks and because of his complicity with Kyle Kennedy.

 

The Respondent’s use of the <xm-stations.com> domain name to display hyperlinks to third-party websites constitutes bad faith registration and use.  The Panel finds that the Respondent is using the disputed domain name for his own commercial benefit, through the earning of click-through fees.  Additionally, the disputed domain name is capable of creating a likelihood of confusion as to Complainant’s source and affiliation with the disputed domain name and resulting website.  A finding of bad faith registration and use for this name is appropriate.  See Drs. Foster & Smith, Inc. v. Lalli, FA 95284 (Nat. Arb. Forum Aug. 21, 2000) (finding bad faith where the respondent directed Internet users seeking the complainant’s site to its own website for commercial gain); see also Perot Sys. Corp. v. Perot.net, FA 95312 (Nat. Arb. Forum Aug. 29, 2000) (finding bad faith where the domain name in question is obviously connected with the complainant’s well-known marks, thus creating a likelihood of confusion strictly for commercial gain). 

 

Bad faith registration and use is also shown by Respondent through its inactive use of the <xmstations.com> domain name.  A period of inactive use of the disputed domain name constitutes bad faith registration and use under Policy ¶ 4(a)(iii).  See Clerical Med. Inv. Group Ltd. v. Clericalmedical.com, D2000-1228 (WIPO Nov. 28, 2000) (finding that merely holding an infringing domain name without active use can constitute use in bad faith); see also Caravan Club v. Mrgsale, FA 95314 (Nat. Arb. Forum Aug. 30, 2000) (finding that the respondent made no use of the domain name or website that connects with the domain name, and that passive holding of a domain name permits an inference of registration and use in bad faith). 

 

Accordingly, the third limb has been established and the Complaint must be granted.

 

The Respondent’s claim for a declaration of reverse domain name hijacking must be denied.  This remedy is often sought as a knee-jerk reaction by disgruntled respondents.  The members of the Panel have not seen a claim for this declaration as hopeless as the current claim.   

 

 

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 <xmstations.com> and <xm-stations.com> domain names be TRANSFERRED from the Respondent to Complainant.

 

 

 

Sir Ian Barker Presiding Panelist
Hon. Carolyn M. Johnson Panelist	R Glen Ayers Panelist

 

Dated: November 13, 2006