eLuxury.com, Inc. v. Mark
Sandulli
Claim Number: FA0704000960178
PARTIES
Complainant is eLuxury.com, Inc. (“Complainant”), represented by Jiyun
Cameron Lee, of Folger Levin & Kahn LLP, 275
Battery St., 23rd Floor, San Francisco, CA 94111. Respondent is Mark Sandulli (“Respondent”), represented by Joseph
P. Garrity, of Leiby, Stearns, Roberts, P.A.,
REGISTRAR AND DISPUTED DOMAIN NAME
The domain name at issue is <eluxury.mobi> (the Disputed Domain Name), registered with Go Daddy
Software, 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.
Kendall C. Reed as Panelist.
PROCEDURAL HISTORY
Complainant submitted a Complaint to the National Arbitration Forum
electronically on April 12, 2007; the
National Arbitration Forum received a hard copy of the Complaint on April 16, 2007.
On April 13, 2007, Go Daddy Software, Inc. confirmed by e-mail to
the National Arbitration Forum that the <eluxury.mobi> domain name is
registered with Go Daddy Software, Inc.
and that the Respondent is the current registrant of the name. Go Daddy
Software, Inc. has verified that Respondent is bound by the Go Daddy Software, 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 24, 2007, a Notification
of Complaint and Commencement of Administrative Proceeding (the “Commencement
Notification”), setting a deadline of May 14, 2007 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@eluxury.mobi by e-mail.
On May 14, 2007, Respondent requested, pursuant to Supplemental Rule 6,
an extension of four (4) days to respond to the Complaint due to extenuating
circumstances. On May 14, 2007, the
National Arbitration Forum, with Complainant’s consent, granted Respondent an
extension and set a new deadline of May 18, 2007 for a filing of a Response.
A timely Response was received and determined to be complete on May 18, 2007.
A timely Additional Submission was received from Complainant on May 23,
2007.
A timely Additional Submission was received from Respondent on May 29,
2007.
On May 24, 2007, pursuant to Complainant’s
request to have the dispute decided by a single-member Panel, the National
Arbitration Forum appointed Kendall C. Reed as Panelist.
RELIEF SOUGHT
Complainant requests that the domain name be transferred from
Respondent to Complainant.
PARTIES’ CONTENTIONS
A. Complainant
Complainant is a corporation with
the name eLuxury.com, Inc.
Respondent is the owner of several
Complainant is the registrant of the domain name <eluxury.com> and
operates a Website for luxury goods and designer fashions at <eluxury.com>.
Complainant engaged in several communications with Respondent in an
effort to buy the Disputed Domain Name, as follows:
On or about February 23, 2007, Emily J.
Yukich, counsel for Complainant, typed <elxury.mobi>
in her web browser. She was immediately
direct to <sedoparking.com/eluxury.mobi>, which stated:
“The domain eluxury.mobi may be for sale by
is owner!”
“Please
visit www.sedo.com to make an offer.”
At the <sedo.com> Website, Ms. Yukich
made an offer of $150 for the <eluxury.mobi>
domain name. Her offer was rejected,
with the following message:
“Unfortunately your offer was too low and has
been rejected? Please enter [an offer
that meets the minimum price of 25,000$US.”
On March 5, 2007, Ms. Yukich, wrote a letter
to Respondent offering to purchase the Disputed Domain Name for the “legitimate
and reasonable cost” of transferring it to Complainant, provided such sum was
reasonable. This letter was transmitted
via e-mail to Respondent on said date.
On March 5, 2007, Respondent responded with
an e-mail to the effect that Respondent had every right to the Disputed Domain
Name and expressing the opinion that Complainant did not seriously want to
resolve the dispute.
On March 27, 2007, Ms. Yukich wrote a letter
to Respondent in which she offered $1,000 for the Disputed Domain Name, which
was transmitted to Respondent via e-mail on said date.
On March 28, 2007, Respondent responded that
his company had every intention to develop the <eluxury.mobi> domain name into a functional website, and
expressing a willingness to sell the Disputed Domain Name if a reasonable offer
would be made.
On March 29, 2007, Ms. Yukich renewed her
offer of $1,000 for the Disputed Domain Name.
There was no further discussion on the
subject between the parties.
The Disputed Domain Name is identical to Complainant’s Trademarks.
Respondent has no rights or legitimate interest in respect of the
Disputed Domain Name because: 1) Respondent, Mark Sandulli, is not commonly
known by the Disputed Domain Name; 2) Complainant did not give a license to
Respondent; and 3) Respondent cannot demonstrate that he was using or preparing
to use the domain name in connection with a bona
fide offering of good or services, this being because Respondent’s true
intention is to sell the Disputed Domain Name to the highest bidder. Further, Complainant did not give a license to
Respondent for any use of Complainant’s Trademarks.
The Disputed Domain Name was registered and is being used in bad faith
because Respondent’s sole purpose in registering the domain name was to sell
the Disputed Domain Name for valuable consideration in excess of Respondent’s
out-of-pocket costs directly related to the domain name.
B. Respondent
The Disputed Domain Name was not registered and used in bad faith. It was registered as a portal to a collection
of luxury websites for a variety of products described by the term “luxury,”
the same as the purpose for Respondent’s website, <everythingluxury.com>. However, the .mobi gTLD is by its intent
better suited for mobile phones, and therefore, the domain name was shortened
to “eluxury” to allow for fewer text entries on a mobile phone, while allowing access to the same portal that Respondent
has been using.
No circumstances indicate that the registration was acquired primarily
for the purpose of selling, renting, or otherwise transferring the domain name
registration to the complainant or to the complainant’s competitors.
Respondent engaged in e-mail discussion with other in which the .mobi gTLD
was discussed and the advantages of using .mobi Websites in particular for
people who are traveling. These e-mails
demonstrate preparations to use the Disputed Domain Name in connection with a bona fide offering of goods or
services.
Registration of the Disputed Domain Name and the creation of a new LLC
by Respondent, E-Luxury Network, LLC, were both in furtherance of Respondent’s
intention to use Respondent’s preexisting family of luxury Websites.
Complainant’s Trademarks are generic, and therefore carry no legitimate
interests in themselves. Thus,
Respondent’s use of a domain name that is similar to Complainant’s Trademarks
cannot be held to be operating in “bad faith.”
Respondent is both a developer and speculator of domain names, which
should not be confused with being a cybersquatter. Respondent’s claim to be in the business of
domain name speculation creates a legitimate interest in a domain name based merely
on its registration or acquisition. Respondent’s
claim that is in the speculation business is supported by the information
supplied by the Complainant that the Respondent holds many registration and
offers them for sale. Therefore, a
legitimate interest attached to the domain registration at Respondent’s
registration of the name.
C.
Complainant’s
Additional Submission
The Disputed Domain Name, <eluxury.mobi>,
is identical to Complaint’s Service mark; the addition of “.mobi” is
irrelevant.
Respondent’s assertion that Complaint’s service mark, ELUXURY, is
merely descriptive or generic, and therefore a weak trademark and therefore not
subject to protection, lacks merit.
Federal registration is prima facie
evidence of a mark’s validity. Complainant’s
Trademarks are incontestable. And, an
infringing party may not defend infringement of an incontestable mark on the
ground that the mark is merely descriptive or generic.
Respondent had no rights or legitimate interesting in use of the
Disputed Domain Name. Respondent’s
creation of an LLC with a name incorporation Complainant’s service mark
provides no evidence of how he intended to use or develop the Disputed Domain
Name into a Website.
Respondent’s e-mails proffered to prove an intention to develop the
Disputed Domain Name never even mention “eluxury,” rather they discuss an
unrelated .mobi domain name and service.
These e-mails have absolutely no bearing on this dispute.
The only evidence on the issue of Respondent’s intent is that he
acquired the domain name for purposes of speculation.
Even if Respondent did intend to use the Disputed Domain Name to market
luxury goods, this would still constitute a diversion of Internet users for
commercial gain, relying on confusion between Complaint’s mark and the disputed
domain Name. Such commercial use does
not represent a bona fide offering of
goods or services under the Policy.
Complainant has proven Respondent’s bad faith registration of the
Disputed Domain Name. Respondent
acquired the Disputed Domain Name for the sole purpose of selling it for valuable
consideration in excess of Respondent’s out-of-pocket costs.
Respondent’s claim that the chose “eluxury” as a shorthand for “everythingluxury,”
does not follow because there are numerous shorthand references to “everythingluxury”
that Respondent could have used without infringing on Complainant’s Trademarks. Respondent cannot claim ignorance, because
under U.S. Law, he is held to have constructive notice of Complaint’s mark as a
matter of law.
D.
Respondent’s
Additional Submission
The Complainant’s cited cases in support of its bad faith argument do
not support its argument but in fact support a find of lack of bad faith. First, Complainant argues that a finding of
bad faith may be based on a Respondent’s use of a confusingly similar domain
name to sell competing product, or to attract users to its own commercial
website. However, not even the smallest
modicum of proof has been provided that the site is intended to compete with
the Complainant’s mark.
The Complainant is trying to reach beyond the scope of its
Trademarks. The scope of a trademark is
specified in the scope of goods listed in the trademark registration. Respondent could only be found to be acting
in bad faith if it were selling items
falling within the enumerated scope of goods and services. Complaint has failed to show any use by
respondent that its is engaging in a competing use.
Even if Respondent’s intent in registering the Disputed Domain Name
were purely speculation, this would still be a legitimate use where the
speculation is for non-infringing purposes, and Complainant has not shown an
infringing purpose. Moreover, Respondent
can engage in the development and speculation of a domain name at the same time
and both are legitimate uses where there is no infringement.
FINDINGS
Respondent registered .mobi domain names and
offers them for sale; Respondent is in the business of developing and
speculating in domain names.
Respondent registered the Disputed Domain
Name on September 26, 2006.
Respondent registered a limited liability
company with the State of
Complainant is a corporation with the name of
eLuxury.com, Inc.
Complainant is the owner of several
registered trademarks for the mark “ELUXURY,” registration numbers: 2,518,286
(registered on December 11, 2001), 2,528,471 (registered on January 8, 2002), 2,528,472
(registered on January 8, 2002), and 2,717,701 (registered on May 20, 2003).
Complainant registered the domain name <eluxury.com> and conducts an
on-line business at a Website with that name.
Respondent owns the Website <everythingluxury.com> as a portal to
a collection of luxury websites for a variety of products described by the term
“luxury,” and Respondent has a series of Websites that follow the format <e-luxury
[name].com>, such as <e-luxuryaircrafts.com>.
Respondent offered to sell the Disputed Domain Name by way of an
auction through the <sedo.com> Website.
The minimum bid was $25,000.
Complainant directly offered to Respondent to purchase the Disputed
Domain Name for $1,000, which was not accepted by Respondent.
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.
Complainant asserts that the Disputed Domain
Name is identical to Complainant’s Trademarks.
Respondent does not contest this threshold
point.
This Panel finds that the Disputed Domain
Name is identical to Complainant’s Trademarks. See
Rollerblade, Inc., v. McCrady, D2000-0429 (WIPO June 25, 2000) (finding
that the top level of the Domain Name such as “.net” or “.com” does not affect
the domain name for purpose of determining whether it is identical or
confusingly similar). See also Starkey v. Mr. Bradley, FA
874575 (Nat. Arb. Forum, February 12, 2007) (the suffix
“.mobi” should be treated the same way as “.com” and ignored when comparing the
trademark and the disputed domain name.”).
This element stands as established.
Under Policy ¶ 4(a)(ii),
Complainant must first make a prima facie
case that Respondent lacks rights and legitimate interesting in the Disputed
Domain Name, and then the burden shifts to Respondent to show that it does have
rights or legitimate interests. See Hanna-Barbera Prods., Inc., v. Entm’t
Commentaries, FA 741828 (Nat. Arb. Forum Aug. 18, 2006) (holding that the
complaint must first make a prima facie
case that the respondent lack rights and legitimate interests in the disputed
domain name under UDRP ¶ 4(a)(ii) before the burden
shifts to the respondent to show that is does have rights or legitimate
interests in an domain name); see also
AOL LLC v. Gerberg, FA 780200 (Nat. Arb. Forum Sept. 25, 2006) (“Complaint
must first make a prima facie showing that Respondent does not have rights or
legitimate interests in the subject domain names, which burden is light. If Compliant satisfies its burden, then the
burden shifts to Respondent to show that it does have rights or legitimate
interests in the subject domain names.”).
Complainant has made its prima facie case on this point.
It has come forward with evidence, accepted by this Panel, that at the
time of the registration, Respondent was not known by the Disputed Domain Name;
Respondent’s name is Mark Sandulli. See Metropolitan Life Ins. Co. v. Bonds,
FA 873143 (Nat. Arb. Forum, Feb. 16, 2007) (respondent failed to establish
legitimate interest in the domain name where the registered domain name
<mtropolitanlife.us>under “Robert Bonds”). Further, Complainant asserts, and Respondent
does not contest, that Complainant did not give Respondent a license.
As such, Complainant has met its burden.
Respondent asserts that it does have
legitimate interests in the Disputed Domain Name because Respondent began,
before notice of the complaint herein, to develop a portal for a bona fide offering of luxury items under
the Disputed Domain Name, and that such efforts are sufficient to show
demonstrable preparations to use the Disputed Domain Name as specified in
Policy ¶ 4(c)(i). In support, Respondent
provides copies of several e-mails that discuss such efforts. However, as Complainant points out, these e-mails,
while mentioning the use of a .mobi portal, do not mention the Disputed Domain
Name. Further, Respondent is clear in
its papers that it might proceed with development of such a portal, and it
might not. As such, Respondent has not
carried its burden. See Household Int’l, Inc. v. Cyntom Enters,
FA 95784 (Nat. Arb. Forum Nov. 7. 2000) (finding that the respondent’s “vague
and unsupported assertion of plans to sell household goods, supplies and
applicants over the Internet’” was insufficient to be considered proof of a
legitimate business plan); see also S.Co.
V. Doms, D2000-0184 (WIPO May 8, 2000) (“While Respondent’s June 14, 1999,
e-mail message makes reference to its global long-term development and
communication plan, there is no evidence in the record to support a
determination of Respondent’s ‘use of, or demonstrable preparations to use,’
the domain name, within the meaning of [Paragraph 4(c)(i)] of the Policy.”)
Respondent further asserts that it formed a
limited liability company named “E-Luxury Network, LLC” for the purpose of
developing a “family of luxury website” for mobile phone users, and as such was
commonly known by the Disputed Domain Name for purposes of Policy ¶
4(c)(ii). However, it is clear from the
record that this LLC was created on October 6, 2006, a few days after the
Disputes Domain Name was registered on September 26, 2006. Whereas Respondent can be said to have been
commonly known by the domain name after the LLC was created, this is not the
type of common knowledge contemplated by the Policy ¶ 4(c). The Policy contemplates something more
significantly precedent, such as a person’s name or a standing company name. The Policy contemplates that the domain name
reflect a previously existing state of affairs, not a name created at the same
time as the Disputed Domain Name and as part of the same effort to acquire the
domain name.
Respondent further asserts that its use of
the Disputed Domain Name is in connection with a bona fide offering of goods or services for purposes of Policy ¶
4(c)(i) because Respondent is a purveyor of domain
names, the Disputed Domain Name is a domain name for sale by it, and
speculation in domain names is a legitimate and bona fide business activity.
This Panel agrees that speculation in domain names is a legitimate
business activity, but this is not the type of use contemplated by Policy ¶
4(c) and which is afforded the protection of the safe harbor. The use of a domain name contemplated by
Policy ¶ 4(c) is qua domain name, which is as a functional gateway leading Internet
users to a Website. As such, the use
claimed by Respondent does not bring its activities with respect to the
Disputed Domain Name within the scope of Policy ¶ 4(c).
Complainant has carried its burden and
Respondent has not carried its burden, and as such this element stands as
established.
It is not sufficient under the Policy that
the Disputed Domain Name be identical or similar to the Complainant’s trademark
and that the Respondent’s conduct not fall within the safe harbors of Policy ¶
4(c). The Disputed Domain Name must also
have been registered and used in bad faith.
The Policy is not specific about the standard for determining bad faith,
but guidance is provided in Policy ¶ 4(b), which reads:
Evidence of Registration and Use in Bad
Faith. For purposes of Paragraph
4(a)(iii), the following circumstances, in particular but without limitation,
if found by the Panel to be present, shall be evidence of the registration and
use of a domain name in bad faith:
(i)
circumstances
indicating that you have registered or you have acquired the domain name
primarily for the purpose of selling, renting, or otherwise transferring the
domain name registration to the Complainant who is the owner of the trademark
or service mark or to a competitor of that Complainant, for valuable
consideration in excess of your documented out-of-pocket costs directly related
to the domain name; or
(ii)
you have
registered the domain name in order to prevent the owner of the trademark or
service mark from reflecting the mark in a corresponding domain name, provided
that your have engage in a pattern of such conduct;
(iii)
you have
registered the domain name primarily for the purpose of disrupting the business
of a competitor; or
(iv)
by using
the domain name, you have intentionally attempted to attract, for commercial
gain, Internet users to you web site or other on-line location, by creating a
likelihood of confusion with the Complainant’s mark as to the source,
sponsorship, affiliation, or endorsement of your website or location or of a
product or service on you website or location.
Without further discussion, this Panel finds
that the circumstances of this matter are not consistent with the circumstances
described in Policy ¶¶ 4(b) (ii), (iii), or (iv). However, as will be discussed below, this
Panel does find that the circumstances of Respondent’s registration and use of
the Disputed Domain Name are evidence of bad faith. This is because Respondent knew or should
have known about Complainant’s trademark rights, Respondent registered the
Disputed Domain Name (a domain name that is identical to Complainant’s
trademark), and offered this domain name to the Complainant for sale for a
substantial premium over Respondent’s out-of-pocket costs.
The Respondent knew or should have known
about Complainant’s trademark rights at the time it registered and used the
Disputed Domain Name. Respondent is a
purveyor of domain names, and as such has a much greater than average
understanding about the Web and the domain name system. Further, it owned several domain names of its
own that are similar (in a non-technical sense) to Complainant’s domain name (<eluxury.com>). These domain names owned by Respondent are <everythingluxury.com> and a series of domain
names in the form of <e-luxury[link name].com>, such as <e-luxuryaircrafts.com>. In addition, given Respondent’s registration
of the Disputed Domain Name, it was clearly interested in the “eluxury”
name. Under these circumstances it is
not plausible that Respondent did not know about Complainant’s domain name at
the time Respondent registered the Disputed Domain Name, and such knowledge can
be, and is, inferred.
With such knowledge, this Panel holds that
Respondent was on inquiry notice of Complainant’s trademarks. The United States Patent and Trademark Office
(USPTO TESS system) website is highly accessible and easy to use, and it is a
simple step to check. Such a simple
search would have revealed Complainant’s Trademarks. Respondent’s failure to do so is at its risk. See Drake
Bliss v. Cyberline Ent., D2001-0718 (WIPO Sept. 20, 2001) (“Respondent
claims it had no knowledge of Complainant's mark. Under
As such, Respondent was aware of
Complainant’s trademarks at the time Respondent registered the Disputed Domain
Name.
Respondent argues that the genesis of the
Disputed Domain Name was as a shortened version of its <everythingluxury.com> domain name.
Complainant counters by arguing that there are any number of shortened
versions of this domain name that are not identical to Complainant’s
trademarks, and it is therefore unlikely that the exact form of the Disputed
Domain Name was created as Respondent asserts.
This Panel agrees with Complainaint.
However, even if Respondent’s version were the more plausable, it would
not be inconsistent with the above analysis of Respondent’s knowledge about
Complainat’s Domain Name and Trademarks.
The Disputed Domain Name is identical to
Complainant’s Trademarks, as discussed above.
Respondent offered the Disputed Domain Name
for sale for a substantial premium over Respondent’s out-of-pocket costs to the
Complainant. Complainant offered
uncontested evidence that Respondent offered the Disputed Domain Name for sale
through the <sedo.com> Website.
The minimum bid was $25,000.
Complainant further offered uncontested evidence that it directly offered
to Respondent to purchase the Disputed Domain Name for $1,000, which offer was
not accepted by Respondent. This Panel
finds that both of these sums are in excess of Respondent’s out-of-pocket
expenses directly related to the domain name.
See
Booz-Allen & Hamilton. v. Servability Ltd,
D2001-0243 (WIPO April 5, 2001) (Respondent was prepared to contemplate a sale
of the name to the Complainant for more than the cost of registration. There was an alleged agreement to sell for US
$1,000. The Respondent rejected a formal
written offer at this price and wanted the price increased to US $10,000. Against the background of its acknowledged
business as a dealer in domain name, this conduct gives rise to the inference
that Respondent registered the name primarily for the purpose of selling it for
valuable consideration.”). See also ANF Investments, Ltd. v. MMBR,
FA 819167 (Nat. Arb. Forum, Dec. 15, 2006) (an offer of sale to the trademark
owner in excess of out-of-pocket costs with knowledge of complainant’s marks
was bad faith conduct for purposes of Policy ¶ 4(b)(i).)
Respondent asserts that it never offered to
sell the Disputed Domain Name “to the complainant,” and if this is correct, it
would seem that Policy ¶ 4(b)(i) would not apply to this matter. This is because Policy ¶ 4(b)(i) includes a
requirement that the Respondent offer the domain name “to the complainant.”
However, to allow this defense to a finding
of bad faith under the facts of this matter would be elevate form over
function. It is true that Respondent did
not single out Complainant in its offer to sell the Disputed Domain Name, but
it did not need to. Among all potential
buyers, Complainant was the one most likely to be attracted to the auction
because it is the most interested of any in the ownership of a domain name that
is identical to its trademarks and identical to its already existing domain
name, <eluxury.com>. As such, what
appears on the surface to be a neutral and general offer to the world is, as practical
matter, an offer which the Respondent had to know would attract the special attention
of the Complainant. For this reason the
offer was not neutral or general at all, but was an offer directed to
Complainant.
As such, the circumstances of this matter do
fall within the scope of Policy ¶ 4(b)(i).
However, even if this were not the case, this
Panel would find bad faith on the basis that the circumstances outlined in Policy
¶¶ 4(b)(i) through (iv) are not exclusive and are for guidance only. The primary goal of the Policy is to prevent
cybersquatting. Cybersquatting occurs
when a person registers a domain name that it knows or should know interferes
with another’s pre-existing trademark rights, placing the owner of the
trademarks into a position of having to buy the domain name at a premium or do
without, provided however the registrant does not have its own legitimate
interest in the domain name. That is
what happened in this matter. Respondent
registered the Disputed Domain Name, and when it did so it knew or should have
known about Complainant’s identical trademarks.
The Respondent did not have legitimate interests in the domain
name. This placed the Complainant in the
position of having to buy the domain name (and Respondent did ask for a premium
price) or do without.
Respondent’s arguments about the scope of
Complainant’s Trademarks are not relevant to Policy ¶ 4(b)(i). Likewise, the scope of Complainant’s
Trademarks is not relevant to the above discussion about cybersquatting because
the focus there is on the Disputed Domain Name itself, and not on the potential
content of any resulting Website.
As such, bad faith for purposes of the Policy
stands established.
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 <eluxury.mobi> domain name be TRANSFERRED
from Respondent to Complainant.
Kendall C. Reed, Panelist
Dated: June 7, 2007
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