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WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Nix Solutions Ltd. Limited Liability Company v. WhoisGuard Protected / Shaun Ferguson

Case No. D2014-1475

1. The Parties

The Complainant is Nix Solutions Ltd. Limited Liability Company of Kharkiv, Ukraine, represented by Juscutum Attorneys Association, Ukraine.

The Respondents are WhoisGuard Protected of Panama, Republic of Panama and Shaun Ferguson of Toronto, Ontario, Canada, self-represented.

2. The Domain Names and Registrar

The disputed domain names <nixsolutions-sucks.com> and <nixsolutionssucks.com> (the "Domain Names") are registered with eNom (the "Registrar").

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on August 28, 2014. On August 28, 2014, the Center transmitted by email to the Registrar a request for registrar verification in connection with the Domain Names. On September 2, 2014, the Registrar transmitted by email to the Center its verification response confirming that the Respondent Shaun Ferguson is listed as the registrant of both Domain Names and providing the contact details. The Complainant filed an amendment to the Complaint with the Center by email on September 12, 2014 amending the desired remedy in this proceeding to be the transfer of the Domain Names to the Complainant.

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 on September 16, 2014. In accordance with the Rules, paragraph 5(a), the due date for Response was October 6, 2014. The Response was filed with the Center on September 17, 2014. The Complainant filed a Supplemental Filing with the Center on September 25, 2014 and the Respondent filed two Supplemental Filings with the Center – the first on September 25, 2014 and the second on September 27, 2014.

The Center appointed W. Scott Blackmer as the sole panelist in this matter on September 29, 2014. 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 Complainant is a limited liability company organized under the laws of Ukraine and based in Kharkiv, Ukraine. The Complainant provides custom software development, technical support, and information technology consulting services. The Complainant operates a website, in English and Russian versions, at "www.nixsolutions.com". The website clearly targets a global market, promoting the benefits of IT offshoring in Eastern Europe and advertising that the Complainant has completed more than 2600 international projects.

The Complaint attaches a copy of the exclusive license that the Complainant obtained in January 2008 to use the trademark NIX, which was registered in Ukraine (Registration No. 84541) on November 12, 2007. This registration remains in effect, according to the online database operated by the Ukrainian Institute of Industrial Property.

The Domain Names were both registered on October 14, 2013 in the name of the domain privacy service WhoisGuard Protected / WhoisGuard, Inc. The Domain Names both resolve to an English-language criticism website (the "Respondent's website") headed "Beware of Nixsolutions Ltd." The website states that the Complainant is owned by an Israeli software company, United Softhouse Ltd., and that both companies "scammed a former client out of millions of dollars." A single paragraph recites, in general terms, a number of criticisms about the Complainant's work and its ethics. The website goes on to display photographs and contact details for individuals associated with the Complainant, under the heading, "List of Scammers and Thieves". The website also publishes a legal complaint of more than 50 pages, plus more than 100 footnotes, against the Complainant. The legal complaint is redacted so that it does not display the name of the complaining party, its legal counsel, or the court; indeed, there is no caption or docket number indicating that the complaint actually has been filed in a court of law. The website itself does not identify the person operating the website, providing only a contact email address at "[…]@nixsolutionssucks.com". Recent updates to the website refer to the current UDRP proceeding and display copies of the filings in this proceeding, in each instance redacting the name of the Respondent and the WIPO case number.

Counsel for the Complainant ascertained that the Domain Names were registered through a reseller, Namecheap, Inc., which also hosts the website associated with the Domain Names. In correspondence with counsel for the Complainant, counsel for Namecheap, Inc. declined to block the website but ultimately identified the Respondent Mr. Ferguson as the owner of the Domain Names. WhoisGuard Protected has claimed no interest in the Domain Names and has not submitted a filing in this proceeding. The Registrar's WhoIs database currently shows Mr. Ferguson as the registrant, and Mr. Ferguson has submitted a Response and Supplemental Filings in this proceeding. Accordingly, the Panel will hereafter refer to Mr. Ferguson alone as the Respondent.

The Respondent appears to be an individual residing in Toronto, Ontario, Canada. The Response does not otherwise identify the Respondent or furnish details about his business. From the Response and the legal complaint published on the Respondent's website, it appears that the Respondent found the Complainant through the US-based "www.elance.com" website, which allows freelancers and clients to find each other and handle payments through an escrow service. The Response indicates, and the Complainant does not dispute, that the Respondent did business with the Complainant over a period of four years and then terminated their relationship in 2013.

5. Parties' Contentions

A. Complainant

The Complainant argues that the Domain Names are confusingly similar to its NIX mark and that the Respondent has no rights or legitimate interests in using confusingly similar Domain Names.

The Complainant contends that the Respondent's right to criticize the Complainant does not extend to using Domain Names that are likely to mislead Internet users, especially those who are not fluent in English, as to source or affiliation.

The Complainant cites this allegedly deliberate confusion as evidence of bad faith. The Complainant finds supporting evidence for this inference in the Respondent's use of the Domain Names for a website disparaging the Complainant with unsupported allegations (such as a claim that the Complainant is involved in developing pornographic websites), disclosing photographs and information about the Complainant's employees, and offering to pay for information about the Complainant's employees.

B. Respondent

The Respondent questions the Complainant's standing to assert a UDRP claim based on a mark that is not registered in North America and that is not unique. The Respondent asserts further that Internet users would recognize that adding the word "sucks" to the company name indicates criticism of the Complainant, so that there is no significant likelihood of confusion as to source or affiliation.

The Respondent claims a right to use the Complainant's name and mark, with the disparaging word "sucks" added to avoid confusion, for Domain Names associated with a website factually criticizing the Complainant.

6. Discussion and Findings

Paragraph 4(a) of the Policy provides that in order to divest a respondent of a disputed domain name, a complainant must demonstrate each of the following:

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

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

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

Under paragraph 15(a) of the Rules, "A Panel shall decide a complaint on the basis of the statements and documents submitted and in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable."

A. Supplemental Filings

The Complainant filed a Supplemental Filing with the Center on September 25, 2014, refuting the Respondent's contention that the Complaint should be rejected because the Complainant's mark is not registered "in the United States". The Complainant also noted that the Respondent's website was modified after the Complaint was filed, adding the redacted legal complaint and deleting some extreme and untrue accusations, such as "NIX Solutions doesn't abide by laws in their own country and are now facing jail time and fines." The Complainant also argued that some of the information on the Respondent's website concerning the Complainant's employees, such as email, Skype, and ICQ addresses, are not widely available, as claimed in the Response.

The Respondent sent an email to the Center on September 25, 2014, asking the Center to reject the Complainant's Supplemental Filing because "it merely regurgitates the same arguments" made in the Complaint. On September 27, 2014, the Respondent sent a longer email "as a supplemental filing in response to the Complainant's supplemental filing." This email reiterates the Respondent's argument that its website is devoted to factual criticism of the Complainant and some of its employees. It also argues further the point that confusion as to source is unlikely, because Internet users interested in the Complainant can be expected to understand enough English to know that "sucks" is derogatory: "the international language of commerce is English", the Complainant's website is predominantly in English, and its "portfolio" pages list predominantly English-speaking clients and English-language websites and mobile apps.

The Rules and Supplemental Rules provide only for a complaint and a response, within strict time and word limits. There is no explicit provision for additional filings except for further statements or documents provided in response to a request from the Panel itself (Rules, paragraph 12). Paragraph 10 of the Rules directs the Panel to conduct the proceeding "with due expedition" and empowers the Panel to "determine the admissibility, relevance, materiality and weight of the evidence." Panels are consequently reluctant to countenance delay through additional rounds of pleading and require some showing of "exceptional circumstances" to accept supplemental filings as part of the record in a UDRP proceeding. Panels typically accept Supplemental Filings only to consider new evidence or provide a fair opportunity to respond to new arguments. See WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition ("WIPO Overview 2.0"), paragraph 4.2. "Exceptional circumstances" involve matters that arise after the initial pleading was filed and which could not reasonably have been anticipated at that time. See, e.g., Digital Ceramic Systems Limited v. Baltea SRL, WIPO Case No. D2012-1198; Mani Brothers, LLC v. Lincoln Gasking, WIPO Case No. D2008-0097.

The Panel does not find such "exceptional circumstances" in this proceeding. The respective Supplemental Filings do not offer material, newly discovered facts, nor do they address pertinent arguments that could not reasonably have been anticipated. Consequently, the Panel declines to accept any of the supplemental filings for consideration in the record of this proceeding.

B. Identical or Confusingly Similar

It is not disputed that the Complainant is licensed to use the registered trademark NIX, an apparently arbitrary mark that begins the string comprising both of the Domain Names.

The Respondent objects that the mark is not registered in North America and that "Nix" is used in other company names and domain names. These facts are not germane to the first element of the Complaint, however. The Policy requires that the Complainant have rights in a mark; it does not require that the mark be registered or used in the Respondent's country, although that may be relevant in assessing the Respondent's claimed legitimate interests or putative bad faith.

The Respondent also contends that the Domain Names are not "confusingly" similar to the Complainant's mark, because the relevant audience understands English well enough to know that "sucks" is derogatory and therefore not likely to be used by the Complainant itself.

This is not a new issue. WIPO Overview 2.0, paragraph 1.3, characterizes the "consensus view" of WIPO panels in "sucks" cases as follows:

"Generally, a domain name consisting of a trademark and a negative or pejorative term (such as [trademark]sucks.com) would be considered confusingly similar to the complainant's trademark for the purpose of satisfying the standing requirement under the first element of the UDRP (with the merits of such cases typically falling to be decided under subsequent elements). Panels have recognized that inclusion of a subsidiary word to the dominant feature of a mark at issue typically does not serve to obviate confusion for purposes of the UDRP's first element threshold requirement, and/or that there may be a particular risk of confusion among Internet users whose first language is not the language of the domain name . . . "

While many or most Internet users are likely to notice and understand the pejorative sense of "sucks" at the end of both Domain Names, there is a significant possibility that some users will not – especially considering that the relevant audience here includes potential Ukrainian and Russian job candidates and customers.

The Panel emphasizes that the first element of the Complaint is a threshold "standing" requirement. See WIPO Overview 2.0, paragraph 1.2. The question of deliberate confusion will be addressed further below in connection with the second and third elements of the Complaint, but the Panel concludes that the Domain Names are confusingly similar to the Complainant's registered mark for purposes of the first element of the Complaint.

C. Rights or Legitimate Interests

Paragraph 4(c) of the Policy gives non-exclusive examples of instances in which the Respondent may establish rights or legitimate interests in the Domain Names, including this one on which the Respondent relies:

"(iii) [the Respondent is] making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue."

It is undisputed that the Respondent's website is noncommercial. There is no evidence in the record that the Respondent is a competitor of the Complainant or allied with a competitor. The website does not offer or advertise any goods or services provided by the Respondent, who is not even identified on the website, and it does not display any third-party advertising. The website appears to exist only to protest the manner in which the Complainant conducts its business, warning other potential customers against the Complainant and soliciting information and support from others who have "also experienced poor service and wrongdoing at the hands of Nixsolutions".

The Respondent claims, therefore, that it makes only "legitimate noncommercial or fair use" of the Domain Names, as they are employed only for a website criticizing the Complainant's business practices, based on the Respondent's own experience in dealing with the Complainant and its named employees over a period of four years.

The Respondent contends that this use of the Domain Names is legally protected as an exercise of the right to free speech, citing the First Amendment to the United States Constitution. This citation is not necessarily apposite, since the Respondent appears to be an individual residing in Canada. The Domain Name Registration Agreements invokes US and California law to govern "any dispute over a domain name registration", but that provision does not confer US federal or state constitutional rights on the registrant or foreclose the possibility of legal claims and defenses arising in other jurisdictions concerning the use of the Domain Names. The registration agreements also include a representation and warranty that the registrant will not use the Domain Names in a manner that "infringes the legal rights of a third party". Such rights could arise in jurisdictions other than California or the US – as do the Complainant's Ukrainian trademark rights.

The Panel notes that freedom of speech or expression is protected in Canada (Canadian Charter of Rights and Freedoms, sec. 2) and Ukraine (Constitution of 2004, reinstated in 2014, Art. 34) as well as in the US. But it is not an unqualified right in any of these jurisdictions. It must be balanced, for example, with legal protections in each of those countries for the reputation, privacy, and trademarks of others, as discussed further below.

With regard to trademark rights, the Respondent argues (citing US judicial decisions) that it is legitimate to refer to a company's name and mark, even in domain names, for the purpose of criticizing the company, as long as it is reasonably clear that the company itself is not the source. US courts have held that such "nominative use" of a mark may be necessary in some cases to identify the company or products that are the subject of protected criticism. The Respondent argues that the pejorative word "sucks" in each of the Domain Names, as well as the plainly critical heading and content of the associated website, avoids giving a false impression that the Domain Names and website are owned by the Complainant.

The Complainant concedes the "Respondent's right to criticize" but argues that this does not extend to registering and using Domain Names that are identical or confusingly similar to the Complainant's mark and company name. The Complainant argues that some Internet users, especially those who are not fluent in English, will at least initially confuse the Domain Names and the associated website with the Complainant's online presence.

As reported in WIPO Overview 2.0, paragraph 2.4, UDRP decisions reflect "two main views" on the question "Can a criticism site generate rights and legitimate interests?". Some decisions (the first view) hold that the right to criticize simply does not extend to registering and using a domain name that is identical or confusingly similar to a trademark, while others (the second view) conclude that "the respondent has a legitimate interest in using the trademark as part of the domain name of a criticism site if such use is fair and noncommercial", even if the domain name itself does not connote criticism. See also WIPO Legal Index, sec. II.B.4.b.(i), "Criticism & Commentary".

The second approach is often taken "in cases involving only US parties or the selection of a US mutual jurisdiction", perhaps because the balancing of free speech and trademark rights is fairly well established in US case law. Here, the Complainant is a Ukrainian company, while the Respondent is a Canadian resident. The Namecheap Domain Name Registration Agreement is governed by "the laws of the United States of America and the State of California." Accordingly, both parties have cited US and California statutes and jurisprudence, although, as explained above, the Panel does not find these controlling apart from disputes over the registration agreement itself. But as in the US, the law in Canada and Ukraine also protects both free speech and trademark rights; there is similarly a need, in cases involving parties from those jurisdictions, to consider how trademark protection limits the exercise of free speech and vice versa.

The Panel observes that even UDRP decisions following the first view, essentially denying that free speech rights extend to the nominative use of a mark in a domain name used for a criticism website, sometimes find that such use is nevertheless legitimate "[w]here the domain name comprises the protected trademark plus an additional, typically derogatory term (e.g., <trademarksucks.tld>)." WIPO Overview 2.0, paragraph 2.4. That is the case here. Some UDRP decisions have also taken other factors into account, such as whether the domain name has been registered genuinely for the purpose of criticism, the registrant believes the criticism to be well-founded and lacks intent for commercial gain, it is immediately apparent to a visitor that the website is not operated by the trademark owner, and the respondent has not attempted to register "all or most of the obvious domain names reasonably suitable for the owner of the mark", thus denying the trademark holder the use of a corresponding domain name. The Panel finds that all of these factors support the Respondent's claims in this case to a legitimate interest in registering and using the Domain Names for a criticism website.

The Panel concludes that the likelihood of confusion as to source or sponsorship in this case, while sufficient to meet the threshold requirement for standing under the first element of the Complaint, is relatively slight. The Complainant's business and its own website predominantly target an English-speaking market in which "sucks" would be understood as a derogatory term that is unlikely to be used by the Complainant for its own websites. The Respondent's website does not mimic the Complainant's website, and its content is clearly critical of the Complainant. The slight likelihood of initial interest confusion, readily corrected once an Internet user reaches the website itself, does not outweigh the Respondent's legitimate interest in referring to the Complainant by its company name, Nix Solutions, in both Domain Names. While the first part of the company name, NIX, is also trademarked, this is clearly not a case where a respondent uses a similar domain name to trade on the commercial value of a mark. Rather, the company name appears in the Domain Names, along with a derogatory term, to signal an outside source of commentary about that company. In these circumstances, the Panel concludes that the Respondent has a legitimate interest in naming the Complainant (and incidentally including the Complainant's mark) in the Domain Names, accompanied by the significant addition of the pejorative term "sucks".

The Complainant also argues that the Respondent's website does not reflect legitimate noncommercial or fair use, because the content includes unsupported allegations against the Complainant. A UDRP proceeding, however, is not an appropriate or practical forum for ascertaining the truthfulness of the allegations published on the Respondent's website. It suffices for UDRP purposes to determine whether the website is genuinely devoted to a free speech purpose such as commentary and criticism, rather than serving as "primarily a pretext for commercial advantage." See WIPO Overview 2.0, paragraph 2.4. Here, there is no indication of commercial advantage for the Respondent, and the Respondent's website appears to be genuinely focused on criticism of the Complainant.

Moreover, the record does not establish that the website content is unlawful and therefore not to be considered "legitimate noncommercial or fair use" within the meaning of the Policy. Certain statements on the Respondent's website could be characterized as actionable defamation under the law of California, Ontario, or Ukraine -- unless they were found to be truthful. See California Civil Code sec. 45 (defining libel as a "false and unprivileged" publication); Ontario Libel and Slander Act, R.S.O. 1990, secs. 22-24 (recognizing the defenses of "justification" and "fair comment"), Ukraine Civil Code (2003), Arts. 201, 299 (protecting business reputation), Supreme Court of Ukraine Resolution "on judicial practice in cases of protection of honor and dignity of the individual and business reputation of physical and legal persons", Arts. 14, 15 (2009) (the claimant must show that the disseminated information is false). In the Panel's view, the truth or falsity of the disparaging statements made on the Respondent's website is a determination better left to a court, following evidentiary discovery and the examination of witnesses; it is not one suited to the limited scope and procedures of a UDRP proceeding.

The Complainant also argues that the Respondent illegitimately exposes personal information about the Complainant's employees and offers to pay for more information about them, undermining the Respondent's claim to "legitimate" or "fair" use. It is not evident from the record in this proceeding, however, that the Respondent has violated any applicable laws. The employee information published on the website consists of photographs, job titles, and contact details, which the Respondent claims to have taken from publicly available sources. It appears that the photos and contact details data were in most instances copied from the individuals' own public Facebook, Linked-In, or ICQ profiles (some of these have since been removed), and the website offers to pay only for "verifiable public information". The Complaint states that this activity violates the laws of both Ukraine and California but offers no supporting legal citation or argumentation. It is not clear on this record that the Respondent's website, apparently operated from Canada, is subject to the law of either California or Ukraine, or that it violates applicable Canadian privacy laws. In any event, the inclusion of these particular items does not change the overall character of the Respondent's website as one devoted to criticism and commentary, in which the Respondent can claim a legitimate interest.

The Panel concludes that the second element of the Complaint has not been established.

D. Registered and Used in Bad Faith

Although the Panel's conclusion on the second element of the Complaint is dispositive, the Panel will state for the record its conclusions on the third element of the Complaint as well.

The Policy, paragraph 4(b), offers a nonexclusive list of circumstances that "shall be evidence of the registration and use of a domain name in bad faith." None of these examples fits the facts of this case: the record does not suggest that the Respondent acquired the Domain Names principally for the purpose of selling them to the Complainant or a competitor, registered them to prevent the Complainant from having a domain name corresponding to its mark, sought to disrupt the business of a competitor, or intended to mislead Internet users for commercial gain.

Instead, the Complainant infers bad faith from the Respondent's use of Domain Names incorporating the Complainant's mark without permission, the "unsupported" allegations published on the Respondent's website, and the Respondent's disclosure of information about the Complainant's employees. All of those issues are addressed above, in connection with the second element of the Complaint. The Panel finds that (a) that the Respondent has a legitimate, noncommercial interest in using Domain Names including the Complainant's company name for genuine criticism of the Complainant, regardless of whether the Complainant (or a court) would agree with the Respondent's critical remarks, and (b) the Respondent took reasonable steps to avoid confusion with the Complainant, both in the Domain Names and in the associated website content. The Respondent also has not been shown, on this record, to have violated any applicable laws by using the Domain Names in this manner. Hence, the Panel does not find that the Domain Names were registered and used in bad faith within the meaning of the Policy.

The Panel concludes that the third element of the Complaint has not been established.

7. Decision

For the foregoing reasons, the Complaint is denied.

W. Scott Blackmer
Sole Panelist
Date: October 7, 2014