WIPO Domain Name Decision: D2005-0174

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

DNP, Inc. and Panoz Auto Development Co. v. PANOZ aka Stuart Carpenter, Copley Motorcars

Case No. D2005-0174

1. The Parties

The Complainants are DNP, Inc., a Georgia Corporation with a principal place of business in Braselton, Georgia, United States of America (“DNP”) and Panoz Auto Development Co., a privately held company located in Hoschton, Georgia, United States of America (“Panoz Auto” and, together with DNP, “Complainants”). Complainants are represented by Troutman Sanders LLP of Atlanta, Georgia, United States of America.

The Respondent is PANOZ aka Stuart Carpenter, Copley Motorcars, Boston, Massachusetts, United States of America.

2. The Domain Name and Registrar

The disputed domain name <panoz.com> (the “Disputed Domain Name”) is registered with Network Solutions, LLC.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on February 14, 2005. On February 15, 2005, the Center transmitted by email to Network Solutions, LLC a request for registrar verification in connection with the domain name at issue. On February 16, 2005, Network Solutions, LLC transmitted by email to the Center its verification response confirming that the Respondent, Panoz, is listed as the registrant and providing the contact details for the administrative, billing, and technical contact. The Center verified that the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy”), the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the “Supplemental Rules”).

In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on February 25, 2005. In accordance with the Rules, paragraph 5(a), the due date for Response was March 17, 2005. The Respondent did not submit any response. Accordingly, the Center notified Respondent of its default on April 11, 2005.

The Center appointed Steven Auvil as the sole panelist in this matter on May 2, 2005. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.

4. Factual Background

The following background is taken from the Complaint.

Panoz Auto is well known as a producer of, among other things, small-volume luxury sports cars and race cars. Over the course of the last 15 years, Panoz Auto has produced and sold hundreds of such cars throughout the world under the PANOZ name. In the United States, Complainants sell various models of cars in connection with the PANOZ name through a network of licensed dealers operating at approved locations. DNP owns, and Panoz Auto is the United States licensee of, the following U.S. Federal Trademark Registrations and U.S. Federal Trademark Applications consisting of the word PANOZ: Reg. No. 2,119,044 (December 9, 1997) for the mark PANOZ and associated logo for automobiles; and application serial number 78,416,950 (filed May 11, 2004) for the mark PANOZ GFORCE for automobile racing cars and parts therefore, and racing car chassis. Complainants are related corporations that have sufficient interest in the Disputed Domain Name for them to be joined in this action. See, e.g., Gannett Co., Inc. v. Henry Chan, WIPO Case No. D2004-0117 (April 8, 2004) (permitting related companies to appear as Complainants); NFL Properties, Inc. et al. v. Rusty Rahe, WIPO Case No. D2000-0128 (April 26, 2000) (permitting related companies to appear as Complainants). Complainants own e-commerce sites using the PANOZ name located on the web at “www.panozauto.com”, “www.panozmotorsports.com”, and “www.panozmotorsports.com”.

In addition to the Disputed Domain Name, Respondent owns e-commerce sites located on the web at “www.copleymotors.com” and “www.copleymotorcars.com”, identifying Copley Motorcars as promoting a luxury and sports car sales business called “Copley Motorcars” in Boston, Massachusetts.

On December 10, 1998, the Disputed Domain Name was registered by a domain name broker not affiliated with either of the Complainants or the exotic sports car industry. Complainant, Panoz Auto, entered into a Dealer Sales and Service Agreement with Respondent on March 24, 1999 (the “Dealer Agreement”). Pursuant to Article 5.1.1 of the Dealer Agreement, Respondent was required to “effectively, ethically and lawfully sell and promote the purchase, lease and use of Panoz products” (emphasis added). However, the preceding promotion obligation was limited by Article 13.5.1 of the Dealer Agreement, which granted Respondent “the non-exclusive right to display Marks in the form and manner approved by Panoz in the conduct of its dealership business.” Further, Article 13.4.2 of the Dealer Agreement provided that Respondent was not to “take any action which may adversely affect the validity of the Marks or the goodwill associated with them.” As used in the previous Articles, pursuant to the Dealer Agreement, the term “Marks” was intended to refer “to any trademarks, service marks, names and designs used in connection with products and/or services offered by Panoz Auto.”

On December 3, 1999, several months after entering into the Dealer Agreement, Respondent acquired the Disputed Domain Name from the previously-referenced domain name broker for $1,250.00. On September 24, 2002, counsel for Panoz Auto sent a cease and desist letter to Respondent (Copley Motorcars) regarding Respondent’s use of the Disputed Domain Name, which Respondent had begun using to build its Copley Motorcars business by attempting to attract Internet users looking for Panoz automobiles to Respondent’s Copley Motorcars web site.

In a response letter to counsel for Panoz Auto dated September 25, 2002 (the “September 25 Letter”), Respondent, Carpenter, offered to sell Panoz Auto the Disputed Domain Name for US$250,000.00. Respondent, Carpenter, also declared in the September 25 Letter that the Disputed Domain Name “has helped my business immeasurably.” Respondent reduced the price approximately two months later. On November 19, 2002, Respondent sent a second letter to Panoz Auto requesting (1) US$8,250 in cash, (2) a “Braham Edition #5 at standard dealer invoice, with naming rights,” and (3) the “elimination of demand to purchase an 2002 Esperante” in consideration of transferring to Panoz Auto the Disputed Domain Name.

On November 26, 2002, Complainants terminated the Dealer Agreement with Respondent. On December 22, 2004, Complainant, through counsel, sent Respondent a second cease and desist letter. Respondent never responded to this second cease and desist letter.

According to the Complaint, the Disputed Domain Name has also been used by Respondent to attract, for commercial gain, Internet users to other online locations besides the Copley Motorcars web site. Indeed, as of the date of this decision, the Disputed Domain Name is being used to divert Internet users to a home page for “The Palace” Restaurant and Saloon – a New Mexico restaurant that appears to be unaffiliated with either of the Complainants. The Complainants brought this proceeding seeking to gain control of the Disputed Domain Name.

5. Parties’ Contentions

A. Complainants

Complainants contend that the Disputed Domain Name is confusingly similar to their PANOZ mark, that Respondent has no rights or legitimate interests in the Disputed Domain Name, and that the Disputed Domain Name was registered and is being used in bad faith. Complainants contend that Respondent was using the Disputed Domain Name as a technical “pointer,” to redirect Internet users to Respondent’s “www.copleymotorcars.com” website. Complainants also contend that, as recently as December 2004, Respondent was still holding itself out on its <copleymotorcars.com> web site as an “authorized Panoz Auto Development dealer since 1998.” Complainants further contend that Respondent’s use of the Disputed Domain Name is in violation of Complainants’ trademark rights and the trademark and intellectual property covenants of Article 13.5 of the Dealer Agreement prohibiting the registration and use of the Disputed Domain Name either during or after the term of the Dealer Agreement. Complainants request that the Disputed Domain Name be transferred to Panoz Auto.

B. Respondent

Respondent did not respond to Complainants’ contentions.

6. Discussion and Findings

To obtain relief, paragraph 4(a) of the Policy requires Complainants to prove each of the following:

(1) that the domain name registered by Respondent is identical or confusingly similar to a trademark or service mark in which Complainants have rights; and

(2) that Respondent has no rights or legitimate interests in the domain name registered by Respondent; and

(3) that the domain name registered by Respondent has been registered and used in bad faith.

In view of Respondent’s failure to submit a Response, the Panel will decide this administrative proceeding on the basis of Complainants’ undisputed representations, pursuant to paragraphs 5(e), 14(a) and 15(a) of the Rules, and draw such inferences as it considers appropriate, pursuant to paragraph 14(b) of the Rules.

A. Identical or Confusingly Similar

Respondent does not dispute, and the Panel finds, that the Disputed Domain Name registered by Respondent is identical or confusingly similar to Complainants’ PANOZ mark.

B. Rights or Legitimate Interests

Under the Policy, legitimate interests in a domain name may be demonstrated by showing that: (i) before any notice of this dispute, the respondent used, or demonstrably prepared to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; (ii) the respondent has been commonly known by the domain name, even if no trademark or service mark rights have been acquired; or (iii) the respondent is making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert customers or to tarnish the trademark at issue. Policy 4(c).

While Complainants do not dispute that Respondent, Copley Motorcars, was an authorized dealer of Panoz automobiles for a period of three years, Complainants have presented compelling evidence showing that under the Dealer Agreement, Respondent was only authorized to use Complainants’ trademarks or service marks in a manner expressly approved by Complainants. Cf. Allen-Edmonds Shoe Corporation v. Takin’ Care of Business, WIPO Case No. D2002-0799 (October 10, 2002) (“Even if Respondent is acting on behalf of an ‘authorized’ dealer, …its use of Complainant’s mark would not be legitimate absent a specific agreement between Complainant and Respondent to the contrary”); See also General Electric Company v. Japan, Inc., WIPO Case No. D2001-0410 §§ 6(A), (B) (June 14, 2001) (ordering transfer of <japan-ge.com> despite Respondent’s claimed sales of GE parts). Further, the Dealer Agreement supports Complainants’ contentions that the Dealer Agreement expressly prohibited Respondent either during the term or after the term of that agreement, from incorporating a trademark or service mark affiliated with Complainants in a domain name.

However, this Panel need not interpret the Dealer Agreement in order to find that Respondent has no legitimate interests in the Disputed Domain Name. Respondent has not presented any arguments in rebuttal. Accordingly, the Panel is free to infer and does infer that Respondent has no such rights or a legitimate interest in the Disputed Domain Name. See, e.g., Pavillion Agency, Inc., Cliff Greenhouse and Keith Greenhouse v. Greenhouse Agency Ltd., and Glenn Greenhouse, WIPO Case No. D2000-1221 (December 4, 2000).

Further, Respondent has not presented any arguments or evidence that it is making a legitimate noncommercial or fair use of the Disputed Domain Name, and it does not appear that Respondent could make such a showing.

For these reasons, the Panel concludes that Respondent has no rights or legitimate interests in the Disputed Domain Name.

C. Registered and Used in Bad Faith

Finally, Complainants argue that the broker and Respondent registered and used the Disputed Domain Name in bad faith. Specifically, Complainants essentially argue that the broker’s bad faith is reflected in that the domain name broker, unaffiliated with Complainants, registered the Disputed Domain Name without Complainants’ authorization with the intent of selling it to Complainants or another party for consideration in excess of out-of-pocket costs. Moreover, Complainants argue that this same broker later sold the Disputed Domain Name to the Respondent without the knowledge or approval of the Complainants.

Complainants essentially argue that Respondent’s bad faith is reflected in the fact that, with both constructive and actual knowledge of Complainants’ trademark rights, Respondent (1) acquired the Disputed Domain Name from the broker in bad faith; (2) attempted to redirect web traffic from the Disputed Domain Name to a web site that was affiliated with an automobile retail outlet, namely Respondent’s, that sold other exotic automobiles, i.e., automobiles marketed by Complainants’ chief competitors; (3) did so in violation of the Dealer Agreement; (4) continued to use the Disputed Domain Name after being given actual notice of Complainants’ rights in and to the PANOZ marks; and (5) attempted to sell the Disputed Domain Name to Complainants, who are the lawful owners of the PANOZ marks, for monetary and other financial consideration far in excess of Respondent’s out-of-pocket costs directly related to the Disputed Domain Name. In addition, Complainants argue, nothing in the record suggests that Respondent has a bona fide reason for Respondent’s choice of domain name that is confusingly similar to Complainants’ trademarks.

The Panel is persuaded that the broker from whom Respondent purchased the Disputed Domain Name knew of Complainants’ rights in the mark PANOZ when the broker registered the Disputed Domain Name. The notice to the broker was both constructive and actual. As to constructive notice, the record indicates that Complainants’ word mark PANOZ was registered with the United States Patent and Trademark Office (“USPTO”) in 1997. Because Panoz Auto and Respondent reside in the United States, it is appropriate to apply the principle of constructive notice of Complainants’ trademark registrations established by 17 U.S.C. § 1072. See Cellular One Group v. Paul Brien, WIPO Case No. D2000-0028 (March 10, 2000) (“Since both parties are domiciled in the United States . . . the Panel will look to the principles of law in the United States.”) In addition, the Panel is also persuaded that the broker had actual notice of Complainants’ rights before registering the Disputed Domain Name. The evidence shows that Complainants began doing business under the name PANOZ approximately 15 years ago and the PANOZ automobile is widely known in the market for exotic cars. Considering (1) Respondent’s failure to submit a Response in this proceeding (which permits the Panel to draw appropriate inferences pursuant to paragraph 14(b) of the Rules); (2) the fact that the PANOZ name was widely known in the market for exotic automobiles at the time of registration of the Disputed Domain Name; (3) the fact that the broker registered the Disputed Domain Name after Complainants obtained federal trademark rights in PANOZ; and (4) the broker sold the Disputed Domain Name to Respondent at a substantial premium, the Panel is persuaded that the Disputed Domain Name was registered in bad faith. See, e.g., Royal Bank of Canada v. Namegiant.com, WIPO Case No. D2004-0642 (September 21. 2004) (ordering the transfer of disputed domain name to complainants where the panel concluded that self-described “domain name broker” registered the domain name in bad faith primarily for the purpose of resale); Ancasta International Boat Sales Limited. v. ANC-AppleStation, WIPO Case No. D2001-0155 (April 26, 2001) (Panel concluded original registrant-domain name broker registered the disputed domain name in bad faith primarily for purpose of selling to complainants for valuable consideration in excess of out-of-pocket expenses); eBay Inc. v. SGR Enterprises and Joyce Ayers, WIPO Case No. D2001-0259 (April 11, 2001) (“Actual or constructive notice knowledge of the Complainant’s rights in its trademark is a factor supporting bad faith.”); Kate Spade LLC v. Darmstadter Designs, WIPO Case No. D2001-1384 (January 3, 2002) (applying principle of constructive notice in finding bad faith). See, e.g Mary-Lynn Mondich and American Vintage Wine Biscuits, Inc. v. Shane Brown, doing business as Big Daddy’s Antiques, WIPO Case No. D2000-0004 (February 16, 2000) (passive holding of a web site creates an inference of “bad faith”).

The Panel is also persuaded that the Respondent’s acquisition of the Disputed Domain Name from the broker was in bad faith. In the present case, Respondent acquired the Disputed Domain Name from the broker for US$1,250.00 after Respondent had entered into the Dealer Agreement with Complainants. The Panel is persuaded that this evidences bad faith because the Respondent acquired the Disputed Domain Name while fully aware of the PANOZ marks and that Respondent’s use of any PANOZ mark in a domain name was in violation of the in-term provisions of the Dealer Agreement. See, e.g., Ancasta International Boat Sales Limited. v. ANC-AppleStation, WIPO Case No. D2001-0155 (April 26, 2001) (Panel concluded that original registrant-domain name broker’s transfer to respondent in dispute for the purpose of obtaining money from its sale and to avoid a dispute was “made in bad faith”).

There is no evidence in the record suggesting Respondent’s use of the Disputed Domain Name after acquisition from the domain name broker was legitimate. Considering that (1) Respondent never filed a Response submitting any evidence that Respondent has ever made any bona fide use of the Disputed Domain Name; (2) the Respondent’s use of the Disputed Domain Name violated the Dealer Agreement; (3) the PANOZ name was widely known in the market for exotic automobiles when Respondent began using the Disputed Domain Name; and (4) the Disputed Domain Name incorporates Complainants’ registered trademark, the Panel finds that there was no legitimate reason for Respondent’s choice to use the Disputed Domain Name in connection with the Copley Motorcars business. See, e.g., eBay, Inc. v. SGR Enterprises and Joyce Ayers, WIPO Case No. D2001-0259 (April 11, 2001) (“[I]t is not possible to conceive of any plausible actual or contemplated active use of the domain name by the Respondents that would be legitimate.”).

Moreover, Complainants have submitted evidence demonstrating that Respondent demanded from Complainants consideration for transferring the Disputed Domain Name far in excess of Respondent’s out-of-pocket costs. This also supports a finding of bad faith. See, National Spiritual Assembly of the Bahá’ís v. Buy This Name, WIPO Case No. D2001-1302 (December 18, 2001) (“[T]he domain name was registered with the purpose of sale to third parties, including the Complainant, in circumstances analogous to paragraph 4(b)(i): -- The domain name was registered under the name Buy This Name; the Registrar offered the domain name for sale on the web site; and when challenged the Respondent emailed the Complainant with the statement ‘this domain is $775’. The Panel takes this to be an offer for sale.”)

All of these factors demonstrate Respondent’s bad faith in registering and using the Disputed Domain Name.

For these reasons, the Panel concludes that the bad faith element of the Policy is satisfied.

7. Decision

For all the foregoing reasons, in accordance with paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the domain name <panoz.com> be transferred to Complainant, Panoz Auto.

Steven Auvil
Sole Panelist

Dated May 24, 2005