The Complainant is PlasmaNet, Inc., New York of United States of America, represented by Amster, Rothstein & Ebenstein of United States of America.

The Respondent is John Zuccarini, PA, of United States of America.

The disputed domain name <frelotto.com> is registered with CSL Computer Service Langenbach GmbH dba Joker.com.

The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on December 2, 2002. On December 4, 2002, the Center transmitted by email to CSL Computer Service Langenbach GmbH dba Joker.com a request for registrar verification in connection with the domain name at issue. On December 6, 2002, CSL Computer Service Langenbach GmbH dba Joker.com transmitted by email to the Center its verification response confirming that the Respondent 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 December 9, 2002. On December 19, 2002, there was an Amendment to the Notification of Complaint and, on December 20, 2002, the Respondent requested an extension for filing a Response. This extension was granted and, in accordance with the Rules, paragraph 5(a), the revised due date for Response became January 18, 2003. The Response was filed with the Center on January 18, 2003.

The Center appointed Justin Hughes as the sole Panelist in this matter on January 29, 2003. 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.

The basics of this dispute include the following key facts: (a) that Complainant obtained their <freelotto.com> domain name and began use of said domain name for a lottery site shortly thereafter, as early as June 1, 1999; (b) that Respondent obtained its <frelotto.com> domain name on November 28, 1999; (c) that Respondent uses the <frelotto.com> domain name for a pornography site; (d) that Complainant has three United States trademark registrations for variations on FREE LOTTO, including a trademark registration for <freelotto.com>.

The Complainant is the owner of three trademarks federally registered in the United States, FREELOTTO, <freelotto.com>, and FREE LOTTO and Design; the Complaint states that these marks are famous. The Complainant conducts a popular, cost-free online game site at "www.freelotto.com" which has received substantial media coverage, has been widely advertised through banner advertising, and has attracted tens of millions of users (Complaint at 6-7). The Complainant launched its game site on or about June 1, 1999. [Although there is at least a superficial discrepancy in the WHOIS records as to when "www.freelotto.com" became Complainant’s domain name, the Panel accepts the June 1999 date for purposes of analysis here.]

The Complainant claims that Respondent’s domain name <frelotto.com> is confusingly similar to Complainant’s trademarks, that Respondent’s activities at "www.frelotto.com" tarnish Complainant’s trademarks (Complaint at 8-9), that Respondent has no rights to <frelotto.com>, and that Respondent registered and is using <frelotto.com> in bad faith.

The Respondent raises several points, including the following:

The Respondent argues that to prove bad faith registration and use under Rule 4 of the UDRP, the Complainant must prove either that the domain name was registered specifically to sell to the Complainant or that the value of the domain name derives exclusively from the fame of the Complainant’s mark (Response at 2). The Panel does not accept this inaccurately narrow understanding of bad faith under Rule 4.

The Respondent also argues that FREE LOTTO is a "generic trademark" (Response at 2). Whatever kind of creature a "generic trademark" might be, it is not necessary to resolution of this matter. More to the point, the Respondent states that he registered the domain name "because it is a misspelling of the common generic term ‘free lotto.’" (Response at 3).

As an initial matter, it may be useful to emphasize what this case is not about.

First, this case is not about Mr. Zuccarini’s long history of cybersquatting on other trademarks. At first glance, the Complaint attempts to paint Zuccarini’s culpability by prior decisions, but, in fact, the Complainant has been restrained in citing the substantial body of court and UDRP decisions against Mr. Zuccarini. Given the wave of decisions against Mr. Zuccarini and his continuing activities, it appears that he has come to treat adverse UDRP decisions simply as a cost of doing business.

Second, this case is not about "www.frelotto.com" being used as a pornography site. Complainant has made clear their objection to pornography being available via "www.frelotto.com" (Complaint at 3, 8-9). But the Complaint misconstrues Rule 4(c)(iii). Rule 4(c)(iii) establishes only that "intent . . . to tarnish the trademark at issue" undoes the possibility of a "noncommercial or fair use of the domain name" being evidence of the Respondent having legitimate interests in the domain name. Rule 4(c)(iii) does not establish tarnishment – or dilution in general –as a grounds for ordering cancellation or transfer of a domain name.

Moreover, it is not for a UDRP panel to opine on whether a commercial activity is a "legitimate interest" where that activity is legal in many jurisdictions. This is true of pornography as much as of gambling. National College Athletic Association v. Rosemary Giancola, WIPO Case No. D2000-0836 (November 28, 2000), (concluding UDRP "is not the appropriate venue for a debate on the legitimacy of gambling.") If there is a wrong here, it is the same kind of wrong that would arise if Microsoft sold software products at "www.dosney.com." Selling software may be perfectly fine, but it is not fine for Microsoft to be intentionally selling its software a key-slip away from someone else’s previously established trademark.

Instead, this case is about two distinct propositions. The first proposition is that domain names that are minimal typographical errors from established trademarks are a blatant form of cybersquatting. The second proposition is that a party which subsequently establishes trademark rights in a word or phrase should not be able to retroactively unseat a domain name holder who chose his domain names before the trademark rights had been established. To prevail in a UDRP action, Paragraph 4(a) of the Policy requires that the Complainant must prove each of the following:

(i) The domain name in issue is identical or confusingly similar to the Trade Mark; and
(ii) The Respondent has no right or legitimate interest in respect of the Domain Name; and
(iii) The Domain Name has been registered and is being used in bad faith.

The resolution of this dispute turns on analysis which could reasonably be subsumed under either 4(a)(i) or 4(a)(iii). See John Ode d/ba ODE and ODE - Optimum Digital Enterprises v. Intership Limited, WIPO Case No. D2001-0074 (May 1, 2001). The Panel has chosen to provide the analysis under 4(a)(iii).

The Panel concludes that the misspelling "frelotto" is confusingly similar to "freelotto," confusingly similar to each of the Complainant’s registered trademarks and confusingly similar to any common law trademark rights that would have arisen for FREE LOTTO, FREELOTTO, or "www.freelotto.com." For purposes of the remainder of this decision, the Complainant’s combined trademark rights, both under common law and these registrations, are treated collectively as FREE LOTTO.

The Panel concludes that the Respondent has no rights or legitimate interests in the domain name. The Respondent has no rights of an intellectual property nature related to <frelotto.com>. The question remains whether Respondent could have a "legitimate interest" in conducting commercial activities unrelated to lotteries at a domain name that is intentionally a minor misspelling of the phrase "free lotto." While persons should remain free to choose arbitrary and fanciful domain names for their online activities (that is, there is no obligation that a domain name relate logically to the activity), the intentional choice of a slight misspelling of a known domain name in industry A in order to draw customers to industry B should not be a "legitimate interest" under the UDRP.

The Complaint states two facts (a) that Complainant began using the FREELOTTO trademark in June 1999 [Complaint at 6-7] and (b) that Complainant has received U.S. Patent and Trademark Office (USPTO) registration of various FREELOTTO trademarks beginning on April 3, 2001. The last of these trademarks registrations was for <freelotto.com>, which is also the closest to Respondent’s domain name. The <freelotto.com> registration was not issued until August 13, 2002 – four months before this UDRP was initiated.

The Complaint, however, is silent on one key point: when did Complainant’s trademark rights in FREELOTTO arise? Complainant would implicitly have the Panel reason that because of (b), the trademark rights arose of the date of (a). Unfortunately, there has been no such showing.

If Complainant had any trademark rights between June 1999 and April 2001, those rights were based on common law trademark doctrines. The UDRP is crafted in a sufficiently broad way as to permit Complainants to proceed successfully on common law trademark rights. While trademark rights can exist prior to registration in other countries besides the United States (See, e.g. Canadian Trade-Marks Act, R.S.C., c. T-13, §§19- 20), such trademark rights are rare in many countries and an overly broad understanding of Anglo-American common law trademark rights would give individuals and entities in common law jurisdictions a significant advantage over individuals and entities in jurisdictions such as Spain and Argentina (See, respectively, Spanish Trademark Act 17/2001 (December 7, 2001); Argentine Trademark Law N° 22.362, Article 4; Orefice Hermanos S.R.L. c/ Megyeri y Cia (Argentine Court of Appeals, LL April 26, 1965, T. 119 at 276) (holding that in Argentine "trademark system ownership of a trademark is not acquired through use but through registration.")

The Complainant has not presented any evidence that the USPTO treated FREELOTTO as a suggestive name for a cost-free lottery. In the absence of such evidence, the Panelist concludes that under American trademark law the words "free lotto" would be treated as a descriptive term and eligible for trademark rights only after acquiring secondary meaning. [This may explain why, with Complainant’s federal trademark registrations, there was a period of 2 to 3.5 years between the initial application (March 26, 1999) and the granting of the trademark (April 3, 2001, and August 13, 2002), public application history available at "www.tarr.uspto.gov."]

Unlike with a "technical trademark," the trademark rights associated with a descriptive term granted federal trademark registration do not arise as of the time of first use in commerce. J. Thomas McCarthy, McCarthy on Trademarks, § 16.12 at 16-41 and 16-42 (Third edition, 1996). Thus, the question remains: when did Complainant first have any trademark rights to FREE LOTTO? The Federal Circuit’s discussion in the America OnLine v. AT&T case bears on this problem:

The farther a would-be mark falls from the heartland of common meaning and usage, the more "distinctive" the would-be mark can become. At one level, this determination of word meaning and usage can be a question of law, but at another, it becomes a factual question as to what the relevant public perceives. 243 F.3d at 821.

As used by the Complainant since June 1999 FREE LOTTO is sufficiently close to the "heartland of common meaning" for those words that it has a relatively low level of distinctiveness and the factual question – what the relevant public perceived in November 1999 -- is left completely unaddressed by the Complaint and its supporting documentation.

The Complaint describes media attention that the "www.freelotto.com" website received in January 2000 and April 2001 (Complaint at 7), but both dates are months after Respondent obtained "www.frelotto.com." While the Complaint makes other assertions about media coverage, banner ad advertisements, and site traffic, none of this provides the chronological details that would allow the Panel to conclude that Complainant had successfully taken a descriptive term and imbued it with secondary meaning in the relevant market by November 1999.

Although not obliged to do so, the Panel conducted its own research to try to find indicia of substantial awareness of either the "www.freelotto.com" site or the FREE LOTTO trademark by November 1999. The earliest stories in major newspapers about <freelotto.com> do not begin until November 1999 and there are only three such stories before November 28, 1999. The trade press did not start to report on <freelotto.com> until April 2000. The PlasmaNet website did not award its first $1 million dollar prize until the week of November 8, 1999. Darnell Little, Shakeup at Wingspan, Chicago Tribune, November 17, 1999, at N1. The panel accepts that the "www.freelotto" site was live on June 1, 2002, based on the Complaint’s (somewhat ambiguous) statement that "PlasmaNet launched its website in June, 1999." Complaint at 7. (But the Panel notes that the WHOIS at both Verisign and Register.com both indicate that the record for the domain name <freelotto.com> dates to November 3, 1999, not June 1999.) Assuming that "www.freelotto.com" went live in June 1999, there is no convincing evidence before the Panel that FREE LOTTO had acquired secondary meaning as of November 28, 1999.

This is a critical difference between the facts before this Panel and the decision in Shields v. Zuccarini, 254 F.3d 476 (3d. Cir. 2001). In that case, Mr. Zuccarini had taken a series of domain names that were slight misspellings of Shield’s JOE CARTOON trade name and the <joecartoon.com> domain name. But Shields had been "market[ing] his cartoons under the ‘Joe Cartoon’ label for the past fifteen years," 254 F.3d at 479, had registered his domain name over two years before Zuccarini’s registrations, and had already won substantial attention from Internet media, Id. [In addition, FREE LOTTO is a far more descriptive term for free lottery services than the more suggestive JOE CARTOON for particular animations.]

There is already a substantial body of UDRP decisions concluding that, in the absence of special circumstances as discussed below, a trademark that did not exist at the time the disputed domain name was registered cannot serve as the basis for a claim under ICANN’s dispute resolution system. See John Ode d/ba ODE and ODE - Optimum Digital Enterprises v. Intership Limited, WIPO Case No. D2001-0074 (May 1, 2001), (three member panel of "unanimous view that the trademark must predate the domain name"); e-Duction, Inc. v. John Zuccarini, d/b/a The Cupcake Party & Cupcake Movies, WIPO Case No. D2000-1369 (February 5, 2001); Open Systems Computing AS v. Alberto degli Alessandri, WIPO Case No. D2000-1393 (December 11, 2000); Telaxis Communications Corp. v. William E. Minkle, WIPO Case No. D2000-0005 (Respondent registered domain name when "[c]omplainant . . . had no trademarks, domain names or websites using the phrase "telaxis"); Meteor Mobile Communications v. Frank Dittmar, WIPO Case No. D2000-0524 (July 17, 2000), (registration substantially predated both the incorporation of the Complainant and its registration of the trading name METEOR); Foreight Corp. v. Servos, No. AF-0473 (eResolution, December 15, 2000), (domain name was registered "well before Complainant began to use the mark TradeSite").

The only things that differentiate the present case from these previous decisions is that (a) the Complainant began its use in commerce before the Respondent’s domain name was registered, and (b) the Complainant filed a U.S. trademark application before the Respondent’s domain name was registered. But the first use in commerce of a descriptive phrase does not establish trademark rights as of that date. Similarly, a trademark application for a descriptive phrase does not establish trademark rights. If it did, the UDRP Panel would be replacing its own judgment for that of the USPTO as to when or if a particularly descriptive phrase acquires secondary meaning.

A precise reading of Rule 4 requires that the Respondent both register and use the domain name in bad faith. The Panel adopts the reasoning of the Panel in e-Duction, Inc. v. John Zuccarini, d/b/a The Cupcake Party & Cupcake Movies, supra:

In the broader context of the Policy, though, it is clear that both bad faith use and bad faith registration are required. Policy paragraph 4(a)(iii); World Wide Wrestling Federation v. Bosman, Case No. D1999-0001 (WIPO January 14, 2000); Bandon Dunes L.P. v. DefaultData.com, Case No. D2000-0431 (WIPO July 13, 2000); Interep National Radio Sales, Inc. v. Technical Staffing Corp., Case No. D2000-0175 (WIPO May 26, 2000). Although bad faith use may, in appropriate cases, give rise to an inference of bad faith registration, such an inference cannot be made where, as here, Complainant’s mark was not yet in existence at the time of the domain name registration.

There is no evidence in the submissions of the parties that the Respondent had any type of insider knowledge of the Complainant’s activities or business model which might justify a finding of bad faith in the domain name registration, even if the domain name registration preceded the existence of trademark rights. See ExecuJet Holdings Ltd. v. Air Alpha America, Inc., Case No. D2002-0669 (WIPO October 7, 2002), (finding no bad faith in registration, but speculating on conditions where such bad faith might be found).

Thus on the record before the Panel, it appears that when Zuccarini acquired <frelotto.com>, he was typosquatting on someone else’s domain name, but not necessarily cybersquatting on someone else’s trademark. There has been no showing that Zuccarini registered <frelotto.com> in bad faith because there has been no showing that there were trademark rights toward which he could act in bad faith in November 1999.

For the above reasons, the Complaint is denied.