WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

ADAC e.V. v. Domain Administrator, Original Web Ventures Inc.

Case No. D2013-0411

1. The Parties

The Complainant is ADAC e.V. of München, Germany, represented by Boehmert & Boehmert, Germany.

The Respondent is Domain Administrator, Original Web Ventures Inc. of Kanata, Ontario, Canada, represented by The Muscovitch Law Firm, Canada.

2. The Domain Name and Registrar

The disputed domain name <adac.net> (“the Domain Name”) is registered with Rebel.com Corp. (the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on February 28, 2013. On February 28, 2013, the Center transmitted by email to the Registrar a request for registrar verification in connection with the Domain Name. On March 1, 2013, the Registrar transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details. In response to a notification by the Center that the Complaint was administratively deficient, the Complainant filed an amendment to the Complaint on March 6, 2013.

The Center verified that the Complaint together with the amendment to the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy” or “UDRP”), 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 March 8, 2013. In accordance with the Rules, paragraph 5(a), the due date for Response March 28, 2013. The Response was filed with the Center March 28, 2013.

On April 29, 2013 the Complainant submitted a supplemental filing to the Center, to which the Respondent objected on the same date. The Center informed the parties that it would be in the sole discretion of the Panel to determine whether to consider and/or admit the supplemental filing in rendering its decision, and whether to order further procedural steps, if any.

The Center appointed Karen Fong, Edoardo Fano and Diane Cabell as panelists in this matter on May 14, 2013. The Panel finds that it was properly constituted. Each member of 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. Preliminary Procedural Ruling

Under the Policy and the Rules, parties have no right to submit additional arguments or evidence. Following the filing of the Response, on April 29, 2013, the Complainant submitted a supplemental filing to the Center. Paragraph 15(a) of 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”. Panels therefore have discretion whether to accept an unsolicited supplemental filing from either party.

The purpose of the UDRP is to provide for a quick and inexpensive way to resolve domain name disputes. Each party has one opportunity to put forward its entire case. The Complainant being the initiator of the proceedings has an obligation to anticipate the possible arguments that the Respondent may put forward as there is no other opportunity to file additional evidence or legal arguments. It is only in exceptional circumstances that a Panel will allow additional evidence to be filed. These exceptional circumstances generally involve matters that arise after the initial pleading was filed and which could not have been anticipated at that times. This does not appear to be the case here.

The Complainant, in its application to the Center to file additional evidence, did not provide any reason why such additional evidence would be relevant to the case and why it was unable to provide that information in the complaint. Prior to the proceedings, the parties had an exchange of correspondence. The Complainant should have anticipated the arguments that the Respondent was likely to raise. Hence it is not an appropriate case for any more additional evidence and arguments to be considered. The Panel rules not to accept the supplemental filing by the Complainant.

5. Factual Background

The Complainant is Europe’s largest automobile club and the second largest automobile club in the world with a current membership of more than 18 million. It was founded in 1903 and is known by its current name ADAC since 1911. ADAC is the acronym for “Allgemeiner Deutscher Automobil-Club e.V”. The Complainant provides emergency roadside assistance, travel planning, insurance, financing and car rental services as well as print/online information about travelling and automobiles. The Complainant’s magazine “ADAC Motorwelt” is the most widely distributed magazine in Germany with approximately 18 million readers. The Complainant also engages in international motor sports events such as “ADAC GT Masters and ADAC Formel Masters”.

The Complainant owns trade mark registrations for ADAC in Germany, many other countries in Europe as well as China. The earliest trade mark registration for ADAC filed in evidence by the Complainant (that is still existing) is 1991. It also owns many domain names which incorporate the ADAC trade mark including <adac.de>, <adac.asia>, <adac.eu>, <adac.info> and <adac.mobi>.

The Respondent is in the business of dealing in exclusively generic and descriptive domain names. The Domain Name was originally created in August 18, 2002. It was acquired by the Respondent on August 17, 2011 as part of a package of 3,000 generic and descriptive domain names. The Domain Name connects to a parking pay-per-click (“PPC”) website (“the Website”) which automatically generates sponsored listings with links to third-party websites. At the time of the filing of the Complaint, the descriptions of the links were “Bad Credit Fix”, “Business Franchises”, “Business Programs”, “Business Software”, “Commodity Trading”, “Conference Calls”, “Domain Hosting”, “Equity Loans”, “Fashion” and “Financial Planning”. The sponsored links on the Website which were connected to third party websites offering financing services included “ING-DiBa Kredit” – at “www.ing-diba.de,” “Kredit zu Top Konditionen” – at “www.nonsbank.de” and “Auto Credit Center” – at “www.autocredit.com”. The Domain Name is also for sale on the “www.domainnamessales.com” website. The minimum bid requested was USD 35,100.

6. Parties’ Contentions

A. Complainant

The Complainant submits that the Domain Name is identical to the mark ADAC in which it has rights. It contends that prima facie the Respondent does not have rights or legitimate interests as the Respondent acquired the Domain Name well after the Complainant’s trade marks were registered. There is no relationship between the Complainant and the Respondent which would give rise to any licence, permission or authorization for the Respondent to register or use the name. Further the Respondent has not published any real content on the Website and has no plans to do so.

With respect to bad faith, the Complainant contends that the Respondent registered the Domain Name in bad faith. The Complainant has built up an international reputation in the name ADAC over the past 90 years. Irrespective of the Respondent’s actual awareness of the Complainant’s name or trade mark, paragraph 2 of the Policy imposes an obligation on a registrant to determine whether a domain name registration infringes any third party rights. A respondent that willfully closes his eyes to interfering with third party rights registers a domain name in bad faith. A Google search would have easily revealed the Complainant.

The Complainant further contends that the Respondent is using the Domain Name in bad faith. The Respondent is using it primarily for the purpose of selling it to the Complainant or one of its competitors. In addition, it is also using the Domain Name with the aim of taking advantage of the existing rights in the ADAC mark, by attracting Internet users to the Website to generate PPC advertising revenues. Using Sedo, domain name value indicator tool which calculates the value of the domain name, the Domain Name has up to 823,000 global monthly searches and may earn up to EUR 0.67 revenue per click. The Respondent has therefore intentionally attempted to attract, for commercial gain, Internet users to the Website by creating a likelihood of confusion with the Complainant’s mark as to the endorsement of the Website and of services on the Website. The Respondent asking for USD 35,100 for the sale of the Domain Name indicates that the Respondent is aware of the Complainant’s trade mark and its value as a domain name. The price is far in excess of its acquisition cost which shows bad faith.

B. Respondent

The Respondent does not dispute that the Complainant has proven the first element of the Policy. With respect to rights or legitimate interests, the Respondent contends the following:

(a) The Complainant has not provided any evidence to show that ADAC is world famous such that the majority of Internet users will assume that the Domain Name is owned, endorsed, controlled by the Complainant or is affiliated with the Complainant’s trade marks although it concedes that ADAC is famous in Germany and possibly in some neighbouring countries.

(b) There are other entities that use the acronym ADAC. For example, The Abu Dhabi Airports Company owns and operates “www.adac.com”.

(c) Outside of Germany, the acronym ADAC refers to many other companies and organizations including “Alcohol and Drug Assessment Centre”, “Anxiety Disorders Association of Canada” and “Advances in Data Analysis and Classification”.

(d) The Complainant does not own many of the country top level domains for ADAC.

(e) The Complainant has no trade mark registrations in Canada where the Respondent operates.

(f) There are many companies and organizations that co-exist and use ADAC as an acronym.

(g) Domain names that include two, three and four letters that lend themselves to any number of enterprises are generic.

(h) The first person to register a domain name consisting of a generic word in good faith is entitled to it.

(i) Domain names consisting of two, three and four letter domain names where numerous parties hold trade marks even if registered by domain names speculators can constitutes legitimate interests.

(j) Alternatively, speculating and investing in generic and descriptive domain names can confer legitimate interest.

(k) The Respondent has a legitimate interest in the Domain Name as it is a bona fide dealer of descriptive and generic names.

As for whether the Domain Name was registered and used in good faith, the Respondent contends that the Domain Name was registered in good faith as no one in the Respondent’s company has ever heard of the Complainant prior to the notice of the dispute. Further, there is no evidence of any reputation of the Complainant or its marks in Canada where the Respondent is based. A Google.ca search from a computer connected to the Internet in Canada reveals that the Complainant’s web site is just one of numerous other ADACs in the search results. There is no evidence that the Respondent has turned a blind eye to the Complainant’s trade marks.

Even if the Respondent had conducted a trade mark search in Canada or the United States prior to registering the Domain Name, it would not have seen the Complainant’s mark. There is no obligation for a respondent to search records of foreign trade mark offices and that foreign trade mark registrations do not put domestic domain name registrants on constructive notice of foreign trade marks. Even if the Respondent was aware of the Complainant’s marks prior to the registering of the Domain Name, it does not matter in this case as there are so many actual and potential uses for the Domain Name as an attractive domain name corresponding to a ubiquitous acronym. The Domain Name was acquired as a batch of 3,000 domain names of other generic or descriptive domain names. It was therefore very unlikely that the Respondent registered this particular Domain Name with the Complainant in mind. In the case of the Domain Name composed of solely a four letter acronym, absent direct proof that the generic Domain Name was registered solely for the purpose of profiting from the Complainant’s trade mark rights, there can be no finding of bad faith.

There is no evidence that the Respondent registered the Domain Name to target the Complainant. The Respondent never approached the Complainant to try to sell the Domain Name nor intentionally attempt to interfere with the Complainant’s business or interfere with its trade marks. The fact that the Respondent had parked the Domain Name does not constitute bad faith registration even though it may constitute bad faith use. PPC websites are not in and of themselves unlawful or illegitimate. In any event the Complainant has not shown evidence that the PPC links relate to the Complainant’s services. The Respondent is in the business of purchasing generic and descriptive domain names. The Domain Name was acquired alongside many others and the intention was to register generic domain names in good faith.

The Respondent submits that the general offer to sell a domain name to the general public is not bad faith. The Respondent never solicited the Complainant. Where a general asking price for a potentially valuable domain name was not set to take advantage of the trade mark owners’ rights, no bad faith may be found. Where a respondent has a legitimate interest in a generic or descriptive name, it has the right to sell the domain name for whatever asking price it deems appropriate. The Complainant’s contention that the Respondent is engaged in registering famous marks is without merit and evidence as it only names two, both of which are also surnames.

7. Discussion and Findings

A. General

According to paragraph 4(a) of the Policy, for this Complaint to succeed in relation to the Domain Name, the Complainant must prove each of the following, namely that:

(i) The Domain Name is identical or confusingly similar to a trade mark or service mark in which the Complainant has rights; and

(ii) The Respondent has no rights or legitimate interests in respect of the Domain Name; and

(iii) The Domain Name was registered and is being used in bad faith.

B. Identical or Confusingly Similar

The Domain Name is identical to the mark ADAC in which the Complainant has registered rights. For the purpose of this requirement, it is well established that the generic “.net” suffix should be discounted. The Panel accordingly concludes that this requirement is satisfied.

C. Rights or Legitimate Interests

It is well established that, as it is put in paragraph 2.1 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition (“WIPO Overview 2.0”), a complainant is required to make out a prima facie case that the respondent lacks rights or legitimate interests. Once such prima facie case is made, the burden of production shifts to the respondent to come forward with appropriate allegations or evidence demonstrating rights or legitimate interests in the domain name. If the respondent does come forward with some allegations or evidence of relevant rights or legitimate interests, the panel weighs all the evidence, with the burden of proof always remaining on the complainant.

The Complainant has made the requisite prima facie case against the Respondent. The burden of coming forward with evidence of rights or a legitimate interest thus shifts to the Respondent. The Respondent argues that its registration of the Domain Name which consists of a generic word in good faith gives rise to a legitimate interest. Alternatively, its business of being a bona fide dealer of descriptive and generic names confers legitimate interests on the Respondent in relation to the Domain Name.

The Respondent registers domain names (including the Domain Name) that consist of ordinary dictionary words, common terms, proper names, surnames and acronyms for the purpose of marketing them to the public or to develop them in house. These domain names including the Domain Name are also used to generate PPC or referral revenue through sponsored advertising links as well as for the purpose of sale. The Domain Name was acquired as part of a bulk batch of 3,000 names. The Respondent would therefore have been unlikely to have considered each one of these individually and have knowledge of them when it made its selection to register the domain names. The processes by which the domain names are subsequently connected to parking pages and the advertising links selected are automated. The Respondent has said in its evidence that it is the Respondent’s practice to avoid any infringement of other party’s trade mark rights. There have been no details provided about the processes put in place to ensure that the descriptive and generic names acquired in bulk do not infringe a third party’s trade mark right, since such names especially surnames and acronyms could be trade marks belonging to third parties. The only information provided is that in order to avoid infringements, the Respondent requests that the sponsored links advertisements are of a general nature. The Respondent also regularly reviews the Respondent’s domain name and advertising feeds to proactively take steps to avoid third party infringements. No details have been provided of how the review is done and what criteria it looks at to decide whether third party rights are infringed.

The fact that a domain name consists of a dictionary word or phrase does not automatically give rise to a legitimate interest. This is made clear in paragraph 2.2 of the WIPO Overview 2.0. A respondent will still need to either be able to show one of the three circumstances in paragraph 4(c) of the Policy or some other legitimate interests:

“Factors a panel tends to look for when assessing whether there may be rights or legitimate interests would include the status and fame of the trademark, whether the respondent has registered other domain names containing dictionary words or phrases, and whether the domain name is used in connection with a purpose relating to its generic or descriptive meaning (e.g., a respondent may well have a right to a domain name “apple” if it uses it for a genuine site for apples but not if the site is aimed at selling computers or MP3 players, for example, or an inappropriate other purpose). Panels have recognized that mere registration of a domain name, even one that is comprised of a confirmed dictionary word or phrase (which may be generic with respect to certain goods or services), may not of itself confer rights or legitimate interests in the domain name. Normally, in order to find rights or legitimate interests in a domain name based on the generic or dictionary meaning of a word or phrase contained therein, the domain name would need to be genuinely used or at least demonstrably intended for such use in connection with the relied-upon meaning (and not, for example, to trade off third-party rights in such word or phrase).”

The Respondent has emphasised that one of the key issues in this case is that the Complainant has not provided evidence to show that ADAC is well-known internationally and that it is exclusively associated with the Complainant. The Respondent contends that it has not heard of the Complainant and there are other organisations and companies which share the acronym “ADAC”, there is no bad faith on its part and the registration of the generic domain name gives it a legitimate interest.

As other have UDRP panels have also commented, at the time the Policy was drafted, the practice of bulk transfers and automated processes for sponsored advertising was yet to come into being and hence this is not specifically addressed in the Policy. In recent years, panels have dealt with the issue of imputing bad faith intent on the part of registrants who are involved in such practices by requiring due diligence on the part of the registrant in order to satisfy paragraph 2 of the Policy which provides that it is the registrant’s responsibility to determine whether its domain name registration infringes or violates someone else’s rights. This includes trade mark or search engine searches prior to purchase as failure to do so may give rise to an inference of knowledge and be evidence of bad faith under paragraph 4(a)(iii) of the Policy (mVisible Technologies Inc v. Navigation Catalyst Systems, Inc, WIPO Case No. D2007-1141). Lack of due diligence on the part of a sophisticated domainer may also constitute “willful blindness” (Grundfos A/S v Texas International Property Associates, WIPO Case No. 2007-1448).

In this case, the Respondent has not submitted evidence as to what due diligence practices it has put in place. The analysis on whether ADAC is well-known internationally or whether others also may have rights in ADAC were conducted after the dispute. The Google search conducted through a computer connected to the Internet in Canada does reveal the Complainant as the third listing on the first page of the results. Had the Respondent conducted a search as part of its due diligence, it would have known that it is likely that the Complainant may have trade mark rights in ADAC. It could then have conducted the relevant trade mark searches. Although the Respondent is based in Canada, as far as the Panel is aware, it is not confining its business of trading in domain names to Canada, it therefore should put in place the necessary searches to ensure that it does not violate the trade mark rights of third parties who are based outside of Canada. The fact that other parties may also have independent rights to the trade mark should have alerted the Respondent that if it registers the Domain Name or continues to use it, it does so at its own risk. Ordinary dictionary words, surnames and acronyms are valuable. However if the value is due to the fact that it is the trade mark of a third party or a number of third parties, then the registration for the purpose of sale does take unfair advantage of that trade mark use and could amount to bad faith. The Respondent is in the business of trading in such domain names. It therefore is incumbent on it to ensure that it puts in place the necessary checks to deal with third party rights in order that it is acting in good faith to confer upon it legitimate interests in a particular domain name. It has not done so in this case.

The majority of the Panel finds that the Respondent has failed to establish that it has rights or legitimate interests in the Domain Name.

D. Registered and Used in Bad Faith

To succeed under the Policy, the Complainant must show that the Domain Name has been both registered and used in bad faith. It is a double requirement.

The date to consider whether registration was in bad faith is the date that the Domain Name was transferred to the Respondent. In this respect, the Panel repeats what it has said above under Rights or Legitimate Interests above in relation to the Respondent’s practice of bulk acquisition of domain names and its failure to do the necessary due diligence. In this case, the majority of the Panel finds that the Respondent should have known that the Domain Name incorporates a third party’s trade mark and therefore is treated as having knowingly acquired and registered the Domain Name in bad faith.

The Respondent uses the Domain Name in two respects. Firstly, the Domain Name is being offered for sale to the general public. Secondly, the Respondent uses the Domain Name to generate PPC and other advertising revenue.

The offer for sale of the Domain Name to members of the public on a website includes the Complainant and its competitors. For the reasons above, the Respondent should have known that the Domain Name incorporates the trade mark of the Complainant as well as other third parties. The purchase price of the 3,000 domain names was USD 700,000. It follows that the offer price for the Domain Name is considerably higher than the Respondent’s out of pocket expenses in acquiring the Domain Name and therefore amounts to bad faith use under paragraph 4(b)(i) of the Policy.

With respect to the PPC links, whilst such use may be permissible in relation to domain names which consist of common words and links where it is related to the generic meaning of the Domain Name and there is no capitalization on trade mark value, this is not the case here. The Respondent should have known that the Domain Name incorporates the Complainant’s trade mark and the use of the Domain Name was unfair use resulting in misleading diversion. This shows a clear intention on the part of the Respondent to attract for commercial gain Internet users to the Website by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship, affiliation or endorsement of the Website. This amounts to bad faith under paragraph 4(b)(iv) of the Policy.

The majority of the Panel concludes that the Respondent’s registration and use of the Domain Name are in bad faith.

8. Dissenting

Acronyms and initials should be treated the same as generic words because they also have multiple fair uses; many users adopt them as shorter references for different phrases. Some acronyms and initials may be trademarked, however the fact that they can be legally adopted by so many non-infringing users makes it harder to prove that there was any bad faith directed toward any particular mark owner. I see nothing in the evidence here that shows the Complainant was targeted at the time the Domain Name was registered and bad faith is required not only in use but also in registration.

Short domain names consisting of initials/acronyms are far more valuable than other domain names because of their many possible fair uses and due to the brevity of the domain name. If we are to claim that the price asked is excessive, we should require some proof that it is far above the actual market value for such an asset.

It also seems unreasonable to ask domain name registrants to search every trade mark database in the entire world simply to avoid a possible bad faith assertion; rather it is for the Complainant to show that acts of bad faith actually occurred.

9. Decision

For the foregoing reasons, in accordance with paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the Domain Name <adac.net> be transferred to the Complainant.

Karen Fong
Presiding Panelist

Edoardo Fano
Panelist

Diane Cabell
Panelist (Dissenting)

Date: June 3, 2013