WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Net2phone Inc v. Delta Three Inc.

Case No. D2007-0644

1. The Parties

The Complainant is Net2phone Inc, Newark, New Jersey, United States of America, represented by MAQS Law Firm Advokatbyrå AB, Sweden.

The Respondent is Delta Three Inc., New York, New York, United States of America, represented by the law firm Davis & Gilbert LLP, United States of America.

2. The Domain Name and Registrar

The disputed domain name <pc2phone.com> is registered with Network Solutions, LLC.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on April 27, 2007. On May 1, 2007, the Center transmitted by email to Network Solutions, LLC a request for registrar verification in connection with the domain name at issue. On May 1 and May 3, 2007, Network Solutions, LLC 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 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 May 9, 2007. In accordance with the Rules, paragraph 5(a), the due date for Response was May 29, 2007. The Response was filed with the Center on May 30, 2007.¹

The Center appointed Richard G. Lyon as the sole panelist in this matter on June 12, 2007. The Panel finds that it was properly constituted. The Panel has submitted his 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 facts are undisputed or found by the Panel based upon the parties’ evidence. Certain factual assertions that are not supported by evidence are identified as such.

Both parties provide telephony services that use voice over internet protocols (VOIP) – based technology. Although neither party provides evidence to support its allegations, both claim to have been in business since the mid-1990s; for purposes of this decision, the Panel will assume that this is true. One genre of VOIP services is telephony from personal computers to telephones, known colloquially in the telephony industry as “PC to Phone”, or, to use a common substitution in internet-based businesses, “PC2Phone”. The use of the numeral 2 for “to” is a frequent phrase-shortener and marketing gimmick in the argot of telephony and computers. Indeed Complainant employs this convention in its corporate name Net2Phone, Inc., and its principal website “www.net2phone.com”.

Complainant claims to have used the “pc2phone” phrase to describe some of its services or those of its predecessor in interest since either 1995 (Complaint, p. 7) or July 1996 (id., pp. 8, 11). It holds a service mark for PC2PHONE registered on the Supplemental Register of the United States Patent & Trademark Office (USPTO) in October 2002. This registration claims the July 1996 date as first use in commerce.

Respondent claims without supporting evidence to have offered “pc2phone” (i.e., personal computer to telephone) services since 1996 as well.² Respondent registered the disputed domain name in September 1997 but made no use of it until September 2002. From that date to the present an internet user entering the disputed domain name into his or her browser is connected to a webpage at which Respondent offers its products and services.

5. Parties’ Contentions

A. Complainant

Complainant contends as follows:

By reason of its federally-registered PC2PHONE service mark Complainant has rights in a mark sufficient to invoke the Policy. The disputed domain name is identical to this mark.

Respondent lacks rights and legitimate interest in the disputed domain name. It has never used the phrase “pc2phone” in its business name. Its continuous use of the disputed domain name to sell services competitive with Complainant’s services is “an intentional act to operate and to dilute the famous and distinctive mark . . . of Complainant”, and to mislead the general public as to the source or original provider of Respondent’s services.

Respondent’s use of Complainant’s “famous” trademark, when Respondent has no relationship to that mark or its owner, is itself sufficient evidence of bad faith registration and use. Respondent did not register the disputed domain name until December 1997, after Complainant’s first use of the phrase as a mark in July 1996, and did not create a web page at the disputed domain name for six years after Complainant’s first use. Complainant is therefore a “senior user” of its mark. In light of these facts, Respondent “was fully aware of the Complainant’s ownership of the ‘pc2phone’ trademark, products, services and brand names” when it began using the disputed domain name for an active website in 2002 and, therefore, registered and used it “having full and complete knowledge of the Complainant’s vested rights in the mark”. Such registration and use were done intentionally to attract internet users for commercial gain by diverting users to an entity completely different from the one intended, contrary to paragraph 4(a)(iii) of the Policy.

B. Respondent

Respondent contests Complainant’s conclusions under each operative paragraph of the Policy, asserting that:

Complainant had no enforceable trademark rights in the phrase “pc2phone” in 1997, when Respondent registered the disputed domain name. Its rights did not mature until 2002 and even then remained insufficient to invoke the Policy because the mark is registered only on the USPTO’s Supplemental Register. Under established Policy precedent a registration on the supplemental register does not give Complainant grounds to invoke the Policy absent a showing of identification with Complainant or “secondary meaning”. The phrase “pc2phone” is a descriptive term common in telephony and Complainant has demonstrated no distinctiveness or secondary meaning in its mark. In fact, there are “hundreds of thousands” of third parties that use this phrase to describe their products. Complainant has presented no evidence of use of the phrase in 1996.

Because the disputed domain name incorporates a common phrase, and one commonly used in the business in which Respondent is engaged, Respondent had a right or legitimate interest in it when it registered the disputed domain name in 1997. Respondent is using the disputed domain name “only in its non-trademark sense to describe” the services that it offers; such use had been found to be legitimate in many cases under the Policy.

Under paragraph 4(a)(iii) of the Policy, Complainant must establish both registration and use in bad faith. Complainant cannot prove registration in bad faith because it did not have enforceable trademark rights in the PC2PHONE phrase until 1999 at the earliest, when it applied for registration of its mark in the USPTO. Complainant’s mark is descriptive and Complainant has admitted this by a 2007 application in the USPTO under Section 2(f) of the Lanham Act, 15 USC §1052(f). There could be no bad faith in registration until Complainant’s trademark was actually registered by the USPTO; trademark applications, standing alone, or registration on the Supplemental Register would have been insufficient even to confer constructive notice under United States of America trademark law.

6. Discussion and Findings

Complainants must prove with competent evidence the elements set out in paragraph 4(a) of the Policy. These elements are as follows:

(i) The disputed domain name is identical or confusingly similar to a trademark or service mark in which Complainant has rights; and

(ii) Respondent has no rights or legitimate interests in respect to the disputed domain name; and

(iii) The disputed domain name has been registered and is being used in bad faith.

Complainant has the burden of proof on each element.

A. Identical or Confusingly Similar to Trademark Rights

Because of the Panel’s finding below under paragraphs 4(a)(ii) and 4(a)(iii) of the Policy, it is not strictly necessary to decide whether Complainant has met the requirements of paragraph 4(a)(i). The Panel chooses to address this issue because Respondent’s mistaken argument, that lack of enforceable trademark rights at the time of registration of the disputed domain name means no right to invoke the Policy, has become relatively common in Policy proceedings. Perhaps another rejection of it will mean that fewer future panels may have to speak to this contention.

There is a well-established consensus that the test of whether a Complainant has rights in a mark sufficient to invoke the Policy is applied on the date the Complaint is filed, not the date Respondent registered the disputed domain name. See for example cases cited in the WIPO Overview of WIPO Panel Views on Selected UDRP Questions (“Overview”), paragraph 1.4; see also, e.g., Salt River Community Gaming Enterprises (d/b/a Casino Arizona) v. Fort McDowell Casino, WIPO Case No. D2007-0416. Complainant clearly meets that test as of the date the Complaint was filed in this proceeding by means of its federally-registered United States of America trademark, even though it is on the Supplemental Register.

B. Rights or Legitimate Interests and Registered and Used in Bad Faith

Respondent is also mistaken in its assertion that because the disputed domain name incorporates a phrase common in the parties’ industry Respondent automatically has as much right as Complainant to incorporate it in a domain name. If Complainant can prove (a) use of a mark to identify its goods or services, and (b) Respondent’s knowledge of that mark as a Complainant’s service identifier, the Complainant has made out its prima facie case under paragraph 4(a)(ii) of the Policy, and the burden of proof shifts to Respondent to prove that its use was legitimate, either by proving applicability of one of the safe harbors in paragraph 4(b) of the Policy or otherwise. Similarly, registration and use in bad faith under paragraph 4(a)(iii) of the Policy may in appropriate cases be presumed from knowing use of a competitor’s mark. That is so even if the mark in question is “descriptive” or “generic” under applicable trademark law³ or whether the mark ultimately matures to registration in the applicable government trademark authority.⁴

Some of the circumstances in the record suggest that Respondent might have been aware of Complainant’s mark in 1997. The parties are and apparently were in 1997 direct competitors for similar services, their headquarters are geographically close to each other, and Respondent did not use the disputed domain name for five years. But the operative word in the preceding paragraph is prove. Complainant has furnished no evidence that would enable the Panel to conclude on balance that Respondent was or should have been aware of Complainant’s use of its PC2PHONE mark in September 1997 when Respondent registered the disputed domain name.

In a Policy proceeding, in which live testimony and cross-examination are not available to the fact-finder, a respondent’s knowledge of the complainant’s mark may be accomplished in a number of ways: by admission,⁵ in limited circumstances by constructive notice akin to that allowed under United States trademark law,⁶ in limited circumstances by placing a duty of inquiry upon the respondent,⁷ or by proof of facts from which the panel may infer actual knowledge. Examples of this last category include proof of a famous mark,⁸ proof of a mark’s widespread use and association with the complainant,⁹ prior business dealings between the parties,¹⁰ or other proof of facts under which actual knowledge is obvious.¹¹ These examples are by no means exclusive; the proof will vary with the circumstances of the particular case. But appropriate proof – not merely counsel’s allegations or a recital of desired conclusions – is always required.

Complainant presents no evidence to support its counsel’s assertion that the PC2PHONE mark was famous, or of any use of the mark prior to 1997. The available evidence from the USPTO’s public database strongly indicates the contrary. Because the mark has descriptive elements, it has been used by many companies, as verified by Respondent’s evidence, a fact that undermines Complainant’s unsupported assertion of fame or unique identification with Complainant.¹²

None of the conduct ordinarily accompanying cybersquatting appears in the record – there has been no pattern of registering competitors’ marks as domain names, no offer of the disputed domain name for sale, no deceptive content on Respondent’s website. On the evidence before the Panel, it appears equally as likely that Respondent selected the disputed domain name to describe one of its services, without knowledge of Complainant’s mark, than that Respondent did so to take advantage of Complainant’s mark and customer base. Without doubt the available evidence is insufficient to allow the Panel in 2007 to infer Respondent’s actual knowledge of Complainant’s mark almost ten years earlier.¹³

Complainant bears the burden of proof under each Policy element, and it has not carried that burden under paragraphs 4(a)(ii) or 4(a)(iii) of the Policy.

7. Decision

For all the foregoing reasons, the Complaint is denied.

Richard G. Lyon
Sole Panelist

Dated: June 26, 2007

¹ As the Response was filed only one day late, the Panel will in its discretion accept and consider it in its determination of this matter. See Rules, paragraph 10(c); Mobile Communication Service Inc. v. WebReg, RN, WIPO Case No. D2005-1304.

² Respondent has submitted as an exhibit a brochure in which this phrase is used to describe some of its services. The brochure is undated and there is no evidence of use since 1996. However in the absence of evidence to the contrary, the Panel will assume the statement of Respondent's counsel to be true.

³ E.g., Net2Phone Inc. v. Mr. Algaram, MPT Communications Ltd., WIPO Case No. D2007-0545; Memorydealers.com, Inc. v. Dave Talebi, WIPO Case No. D2004-0409 (“Any intentional use of a competitor’s mark, even a 'weak' mark, to attract, divert, or mislead the competitor’s customers is not legitimate use.”); James Good o/a Pornreports.com v. Mark Anderson, WIPO Case No. D2004-0391.

⁴ E.g., Teresa Christie, d/b/a The Mackinac Island Florist v. James Porcaro d/b/a Weber’s Mackinac Island Florist, WIPO Case No. D2001-0653.

⁵ E.g., Julie & Jason, Inc. d/b/a The Mah Jongg Maven v. Faye Scher d/b/a Where the Winds Blow, WIPO Case No. D2005-0073; Paule Ka v. Paula Korenek, WIPO Case No. D2003-0453.

⁶ E.g., The Sportsman’s Guide, Inc. v. Modern Limited, Cayman Islands, WIPO Case No. D2003-0305.

⁷ This duty is usually limited to respondents that register large numbers of domain names. See, e.g., Centron GmbH v. Michele Dinoia, WIPO Case No. D2006-0915.

⁸ E.g., Imperial College of Science, Technology and Medicine v. Oxford University, WIPO Case No. D2002-1050.

⁹ E.g., Classmates Online, Inc. v. John Zuccarini, individually and dba RaveClub Berlin, WIPO Case No. D2002-0635.

¹⁰ E.g., InMed Diagnostic Services, LLC, InMed Diagnostic Services of S.C., LLC, InMed Diagnostic Services of MA, LLC and InMed Diagnostic Services of IL, LLC v. James Harrison, WIPO Case No. D2006-1230.

¹¹ E.g., Salt River Community Gaming Enterprises (d/b/a Casino Arizona) v. Fort McDowell Casino, WIPO Case No. D2007-0416.

¹² Even counsel's assertions provide little basis for a finding that PC2PHONE, as opposed to Complainant's NET2PHONE mark and corporate name, ever achieved a particular identification with Complainant. Counsel often uses the two marks interchangeably, a use of language that is both confusing and misleading. There is (and could be) no claim in this proceeding that the disputed domain name is confusingly similar to NET2PHONE, a mark that apparently has achieved some market recognition. See Net2Phone Inc. v. Mr. Algaram, MPT Communications Ltd., WIPO Case No. D2007-0545.

¹³ Complainant sent Respondent a cease-and-desist letter in April 2007, shortly before commencing this proceeding. There is nothing in the record to indicate any earlier notice of this dispute.