WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Gigglesworld Corporation v. Mrs Jello

Case No. D2007-1189

1. The Parties

Complainant is Gigglesworld Corporation, Poughkeepsie, New York, United States of America, represented by the law firm Gallet, Dreyer & Berkey, LLP United States of America.

Respondent is Mrs Jello, Livingston, New Jersey, United States of America, represented by Ari Goldberger, United States of America.

2. The Domain Names and Registrar

The disputed domain names <giggles.com> and <giggles.org> are registered with GoDaddy.com, Inc.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on August 10, 2007. On August 14, 2007, the Center transmitted by email to GoDaddy.com, Inc. a request for registrar verification in connection with the domain names at issue, and GoDaddy.com, Inc. transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details.

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 August 23, 2007. In accordance with the Rules, paragraph 5(a), and an extension agreed to by the parties, the due date for Response was October 5, 2007. The Response was filed with the Center October 5, 2007.

Complainant requested a single-member panel. Exercising its right under paragraph 5(b)(iv) of the Rules, Respondent requested a three-member panel. The Center appointed Richard G. Lyon, Charles K. McCotter, and David E. Sorkin as panelists in this matter on November 2, 2007. The Panel finds that it was properly constituted and has jurisdiction over this proceeding. Each member of the Panel submitted his Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.

On October 18, 2007, Complainant submitted to the Center a “Reply in Support of Complaint” with a statement requesting the Panel to consider allowing it pursuant to paragraphs 10 and 12 of the Rules. The Center notified Respondent that its request would be referred to the Panel upon its appointment. Respondent initially opposed this proposed filing, reserving the right to submit a Sur-reply should the Panel allow the proposed Reply, but on November 7, 2007, Respondent submitted a proposed Sur-reply.

By order dated November 7, 2007, the Panel denied Complainant’s request to submit the Reply and denied Respondent’s application and Sur-reply as moot.¹

4. Factual Background

The parties do not seriously dispute the factual issues underlying this dispute.

Complainant sells adult novelties and sexual aids at a few retail outlets in New York State, United States of America, and over the Internet since about 1998. Complainant has advertised its wares on television and radio, in local telephone directories, and the Internet. Its principal Internet site is “www.gigglesworld.com”, and it has other domain names that redirect to this site.

In 2007, Complainant applied to the United States Patent & Trademark Office for trademark registration for GIGGLES for retail outlets and for the goods that Complainant sells.

Respondent’s business combines the acquisition of domain names that incorporate common words or phrases and the subsequent exploitation of those domain names by means of click-through revenues, advertisements appearing on the web pages established at these domain names, or subsequent resale of the domain names. Respondent uses sophisticated proprietary searching and analytical software both to select the domain names that it intends to acquire and to determine the different advertisements, categories of advertisements, and hyperlinks to be placed on its websites that are intended to maximize its revenue. In the course of its business Respondent has acquired approximately 30,000 common and descriptive domain names, either using proprietary search technology or purchasing such names from prior registrants through direct negotiation.

Respondent acquired the disputed domain names through direct negotiation with a prior registrant, purchasing the disputed domain names in October 2006 for about $80,000 US, including out-of-pocket expenses. Using its proprietary software Respondent eventually selected its “sex category” for the content of the website Respondent established after other categories turned out to be less lucrative. The first page an Internet user receives when the disputed domain name is entered is captioned “Alert! This site contains sexually explicit content” in large type followed by a standard warning about required minimum age and usage in private.

Respondent received an email from one “Tim” in November 2006, shortly after Respondent registered the disputed domain names. This person inquired about purchasing the disputed domain name, offering a price of $20,000 US. Respondent replied by insisting upon a price at least equal to its costs of acquiring the disputed domain name and related fees, plus a 15% profit. Respondent received no reply to this offer. Nothing in this email correspondence indicated that it was initiated by a representative of the Complainant. In the Complaint, Complainant confirms that the email correspondence was in fact initiated by Complainant.

5. Parties’ Contentions

A. Complainant contends as follows:

Rights in a mark. Complainant has common law rights in its GIGGLES mark by reason of continuous, active, and substantial use for adult products since 1998. This mark, though a common dictionary word, is distinctive in the trademark sense because there is no connection between the word used as a mark and the product sold thereunder. The disputed domain names are identical to this mark except for the top-level domain identifiers.

Rights or legitimate interests. Respondent has no rights or legitimate interests in the disputed domain names, as Respondent has never done business under these names and is not known by them. Nor is Respondent using the disputed domain names in connection with a bona fide offering of commercial goods or services. Respondent’s use is entirely for pay-per-click revenue and “pornography,” neither of which is legitimate. Respondent has several times been found to have “abus[ed] the domain name system.” In support of this Complainant identifies six Policy proceedings brought against Respondent, five of which resulted in decisions for the complainants.

Bad Faith. These same facts make out bad faith in registration and use. Respondent has used the disputed domain name for links to pornography; Complainant describes its site as actually “containing pornographic matter”. The similarity of the parties’ target audiences allows Respondent to take advantage of Complainant’s trademark by diverting Internet users seeking Complainant, in violation of paragraph 4(b)(iv) of the Policy. Complainant submits communications from its customers who were so diverted. Respondent’s offer to sell the disputed domain names for a sum far in excess of its costs of registration constitutes bad faith under paragraph 4(b)(i) of the Policy. The adverse Policy decisions demonstrate a pattern of “prevent[ing] the owner of the trademark or service mark from reflecting the mark in a corresponding domain name,” as provided in paragraph 4(b)(ii) of the Policy.

B. Respondent contends as follows:

Rights in a mark. Complainant has no trademark rights in the stand alone word “giggles”. Complainant is known as “gigglesworld”, not “giggles”. Complainant has no registered trademarks for GIGGLES and only applied for trademark protection well after Respondent acquired the disputed domain names.

Rights or legitimate interests. Contrary to Complainant’s assertions, none of Respondent’s activities are unlawful or per se illegitimate under the Policy. Anyone has a right to a common dictionary word as its domain name; “[t]he registration or acquisition of a common word domain name incorporating a mere common word like ‘giggles,’ in and of itself, establishes a respondent’s legitimate interest”. Complainant’s offer to purchase the dispute domain name for $20,000 US is an acknowledgement of Respondent’s legitimate interests.

Bad Faith. For similar reasons, Respondent did not register and has not used the disputed domain name in bad faith. Five adverse policy decisions are insufficient to constitute a “pattern” under paragraph 4(b)(ii) of the Policy, as respondent has registered tens of thousands of domains without issue. The adverse decisions were either wrongly decided or “represent a few errors resulting from Respondent’s automated system”. Respondent had no knowledge of Complainant or its mark when it registered the disputed domain name, and there is no basis under trademark law or the Policy to impute such knowledge to him. Respondent in fact has elaborate policies in place to avoid treading upon the rights of legitimate trademark holders and employed those policies with respect to the disputed domain names. Respondent registered the disputed domain names not to take advantage of Complainant’s mark but because of their value as consisting of a common word.

A counteroffer in response to an anonymous offer to purchase the disputed domain name is not bad faith under the Policy because Respondent had a right to the domain name and therefore a right to sell it.

Reverse domain name high jacking. Respondent characterizes the Complaint as Complainant’s “Plan B”, an alternative employed to obtain the disputed domain names after Complainant was unable to purchase them at a price it deemed appropriate. This strategy included the anonymous email correspondence with Respondent, an application for trademark protection nine years after first use in commerce and after both Respondent’s registration of the disputed domain name and Complainant’s unsuccessful effort to purchase them from Respondent.

6. Discussion and Findings

A. Identical To A Mark In Which Complainant Has Rights. Contrary to Respondent’s assertion that Complainant is known only as “gigglesworld”, evidence submitted with the Complaint or readily available using public sources such as the wayback machine and Complainant’s website indicate that Complainant has made substantial and prominent use of the individual word “giggles” to sell its products. A common law mark suffices to invoke the Policy if the Complainant provides evidence of significant association of the mark with Complainant and Complainant’s products, see WIPO Overview of WIPO Panel Views on Selected UDRP Questions (“Overview”), paragraph 1.7, and cases cited therein. This is true even if the mark is a common or “dictionary” word incapable of trademark registration. Memorydealers.com, Inc. v. Dave Talebi, WIPO Case No. D2004-0409; James Good o/a Pornreports.com v. Mark Anderson, WIPO Case No. D2004-0391. Complainant has made a satisfactory showing here.

B. Rights Or Legitimate Interest. Respondent is also mistaken in its assertion, which underlies its defense in this proceeding, that anyone has a right to a common word as his or her domain name. Both the Consensus view, Overview, paragraph 2.2, and many cases, some of them brought against Respondent, hold the contrary.² While it is true that aggregation or resale of domain names, pornography, click-through revenues, parked sites, and Internet revenue from advertising are none of them per se illegitimate under the Policy, that fact alone does not give Respondent the unqualified right to appropriate the mark of another, for such activities. Respondent’s use may be legitimate only if as a domain name aggregator, it can satisfy certain specific criteria (as discussed further below) in relation to the name that it selected, an issue that turns in this case on whether the disputed domain name was registered and used in bad faith.

C. Bad Faith. Respondent’s offer to sell the disputed domain names in the circumstances of this case does not establish registration or use in bad faith. The correspondence was initiated by Complainant’s offering a sum in excess of normal registration costs and cannot be used to stage a counteroffer said to violate paragraph 4(b)(i). At the time Respondent was unaware that the inquiry came from a mark owner, let alone Complainant. As the Panel has noted, buying and selling domain names is not by itself unlawful or determinative evidence of bad faith under the Policy.

The Panel is in no position in this case to discount the sworn statement of Respondent’s principal that he had no knowledge of Complainant, its business, or its marks. This statement is credible on its face but does not itself end the inquiry. The record includes a number of bases on which the Panel might impute such knowledge to him. The parties are located within 100 miles from each other, and Complainant advertised its goods regularly and prominently. Compare Eurochannel, Inc. (f/k/a Multithematiques, Inc.) v. Papete.com, WIPO Case No. D2005-0318. Respondent states that it “is not in the adult business” and thus has no basis for knowing about Complainant or Complainant’s business. But Respondent is in the adult business whenever it places (or causes or allows to be placed) its “sex category” content on one of its websites, as it did with the disputed domain names. By using the disputed domain names for services that target the same general audience as Complainant, Respondent has entered this business arena as Complainant’s competitor. Complainant has provided evidence of actual customer diversion. The fact that the parties are in this sense competitors weighs in favor of imputing knowledge or inferring that Respondent was in fact aware of Complainant’s mark notwithstanding its denial of such knowledge. See, e.g., HSBC Finance Corporation v. Clear Blue Sky Inc. and Domain Manager, WIPO Case No. D2007-0062; Promatic International Limited v. Name Administartion Inc., WIPO Case No. D2006-0673. On the other hand, Complainant’s mark is not well-known, much less universally known, and Complainant has not provided overwhelming evidence that an identifiable segment of the public identifies the word “giggles” with Complainant.

Respondent’s status as a domain name aggregator also arguably places it in something of a special category, as several panels have addressed whether such a business has a duty to avoid stepping on the rights of mark holders. Guided by paragraph 4(b)(ii) of the Policy, one factor these panels have examined is the extent to which the respondent has been required to transfer domain names in prior Policy proceedings. This inquiry has sometimes focused on the number of transfers; in Mobile Communication Service Inc. v. WebReg, RN, WIPO Case No. D2005-1304, seven cases were enough to constitute a pattern. In United Consumers Club, Inc. v. Texas International Property Associates, WIPO Case No. D2007-0987; Centron GmbH v. Michele Dinoia, WIPO Case No. D2006-0915; and, Eurial Poitouraine v. Compana LLC, WIPO Case No. D2004-0270, the panel appeared to base its determination at least in part on the general frequency of cases brought against those respondents; compare Janet E. Sidewater v. Worldwide Media Inc., WIPO Case No. D2006-1281 (Five cases cited; respondent had prevailed in all; no bad faith). Under either of these approaches the five cases cited by Complainant, plus the Eurochannel case cited above, while not making Respondent the “recidivist cybersquatter” of the Centron case, place it in a danger zone. In Media General Communications, Inc. v. Rare Names, WebReg, WIPO Case No. D2006-0964, the panel appeared sympathetic to Respondent’s proposed approach of measuring the number of cases or transfers against the entity’s total portfolio.

The most comprehensive analysis is found in Media General Communications,supra. There the Panel set out the following guidelines, albeit for analysis under paragraph 4(a)(ii) but equally applicable to bad faith under paragraph 4(a)(iii).³

[The business of aggregating domain names is] most likely to be deemed legitimate under the Policy when:

[1]- the respondent regularly engages in the business of registering and reselling domain names, and/or using them to display advertising links;

[2]- the respondent makes [demonstrable] good-faith efforts to avoid registering and using domain names that are identical or confusingly similar to marks held by others;

[3]- the domain name in question is a “dictionary word” or a generic or descriptive phrase;

[4]- the domain name is not identical or confusingly similar to a famous or distinctive trademark; and

[5]- there is no evidence that the respondent had actual knowledge of the complainant’s mark.

Respondent here meets the criteria set out in 1, 3, 4, and 5, though imputation of knowledge would undercut item 5. Item 2 is problematic because Respondent’s procedures will not notify it of a common law mark that consists of or includes the common word that Respondent seeks to register. Given Respondent’s stated belief that anyone has a right to a domain name consisting of a common word, this omission is almost certainly intentional and under certain circumstances could be considered to constitute willful blindness. Respondent has acknowledged that his procedures and “technology occasionally err[] and register[] trademark terms result[ing] in mistakes,” and appears to acknowledge that when that happens a finding of bad faith may be warranted. Certainly the existence and application of good faith procedures alone do not (and should not) insulate an aggregator such as Respondent against a finding of bad faith when those policies fail to find discoverable trademarks even if the failure is inadvertent.⁴

This proceeding thus presents two close and difficult issues dependent upon factual interpretation. There is a third: whether on the record in this case the Media General test is limited to registered marks. On its face it is not, though it comes from a case involving one. To the extent the Media General Communications test is not limited to registered marks, a complainant obviously still bears the burden of demonstrating on balance Respondent’s knowledge of Complainant’s common law trademark(s).

This administrative proceeding, with its limited scope and inability to develop a complete record through discovery and confrontation, is not the best forum for resolution of these matters. This is a close case not involving obvious cybersquatting. Particularly where, as here, Respondent is identifiable and subject to jurisdiction in the same country as Complainant, the national courts are far better suited for this dispute. See, eCrush.com, Inc. v. Cox, Davis & Simpsom, LLC, Mr. Ken Cox, Mr. Brian Simpson, Mr. Ron Davis, WIPO Case No. D2004-0552.

As with each other Policy element, Complainant has the burden of proof to establish registration of the disputed domain names in bad faith. The Panel finds that it has on balance failed to carry that burden in the instant proceedings.

It should be obvious from the foregoing that the Complaint was not frivolous or otherwise an abuse of the Policy. Respondent’s request for a finding of reverse domain name hijacking is accordingly denied.

7. Decision

For all the foregoing reasons, the Complaint is denied.

Dated: November 16, 2007

¹ In denying Complainant’s request the Panel stated: “Most panels agree that allowing additional pleadings should be the rare exception. The UDRP is intended to be a streamlined process (unlike formal litigation), and a panel normally should decide a case based solely upon the parties’ initial submissions. Additional pleadings should be considered only in exceptional circumstances, such as where they reflect newly discovered evidence not reasonably available to the submitting party at the time of its original submission or rebut arguments by the opposing party that the submitting party could not reasonably have anticipated. A panel should not by means of a supplemental filing provide either party a second chance to correct an omission, even a fatal omission, which the party should have included in its one permitted pleading.” The Panel found no basis for allowing the Reply or Sur-reply under this standard.

² See Eurochannel, Inc. infra.

³ One member of this Panel disagrees with the proposition that the guidelines set forth in Media General Communications are applicable to bad faith under paragraph 4(a)(iii), and accordingly declines to join in the analysis that follows, on the ground that absent direct or at least circumstantial evidence that the respondent had actual knowledge of the complainant’s mark, bad faith cannot be found regardless of the other factors.

⁴ Where as in this proceeding the failure results from a structural limitation on the procedures it would be neither unfair nor inconsistent with the language and intent of the Policy to find bad faith, which usually is evaluated on the available objective criteria rather than a subjective view of the respondent’s state of mind.