UDRP complaint for Kanal.com denied – US mark doesn’t have common-law rights in France

The UDRP complaint for the domain name Kanal.com was denied at the National Arbitration Forum. Respondent from France denied having targeted Complainant or its mark when he registered the domain name. Complainant did not even exist in corporate form at that time. Complainant from New York was incorporated in 2005 while the domain was registered in 2004. Complainant contacted Respondent regarding the domain name in 2005, at which time Respondent offered to sell the domain name for $30,000.

None of the evidence offered by Complainant was sufficient to show common-law rights in the mark. Respondent is located in France, and the domain name corresponds to a common word and a geographical term as well as to Complainant’s name and mark. The Panel found it extremely unlikely that Respondent had any knowledge of Complainant, its founder, or its mark when he registered the domain name—let alone that his intent was to target any of them thereby. The domain name therefore could not have been registered in bad faith, and Complainant failed to prove the 3rd element of the UDRP.

The complainant made some good arguments on behalf of the Respondent:
The Complainant admitted that Respondent is using the domain to advertise and promote the municipality of Kanal ob Soči in Slovenia. The Complainant further stated that even if one could find that Respondent originally registered the domain name in good faith, Respondent has subsequently used it in bad faith, since Respondent has used it for advertising purposes in a way that infringes on Complainant’s mark.

This statement alone was enough to dismiss the complaint as no panel could find that the Respondent registered the domain in bad faith.

The 3-member panel didn’t make a Reverse Domain Name Hijacking (RDNH) finding.

Here are all the details:

Complainant was Kanal, Inc. from New York. Respondent was Séb Schmitt (Domain Admin) from France.

Complainant submitted the Complaint to the National Arbitration Forum on January 2, 2013. The National Arbitration Forum pursuant to Respondent’s request to have the dispute decided by a three-member Panel, the National Arbitration Forum appointed Debrett G. Lyons, Douglas M. Isenberg, and David E. Sorkin (presiding) as Panelists.

Respondent registered the Kanal.com domain name on February 20, 2004.

PARTIES’ CONTENTIONS

A. Complainant

Complainant is a New York corporation that is the registrant of the U.S. trademark KANAL, registration number 4,220,349, for advertising and business management consultancy services. Complainant was incorporated in 2005, but claims common-law rights in the KANAL mark dating back to August 9, 2002, based upon prior use of the mark by Gaurrav Kanal, the incorporator of Kanal, Inc., who transferred his rights in the mark to Complainant.

Respondent is the registrant of <kanal.com>, a domain name that is identical and confusingly similar to Complainant’s mark. Complainant contends that Respondent registered the domain name on February 20, 2004, and is using it to advertise and promote the municipality of Kanal ob Soči in Slovenia.  Complainant asserts that its rights in the KANAL mark are superior to any rights of Respondent because of Complainant’s pre-existing common-law rights.  Complainant further alleges that for several years following Respondent’s registration of the domain name, it resolved only to a generic landing page, and that only after Complainant contacted Respondent in 2011 did Respondent begin using the domain name in connection with Kanal ob Soči, which Respondent incorrectly refers to as “Kanal.” Complainant notes that Respondent is located in France rather than Slovenia, and contends that Respondent’s use of the domain name does not qualify as a fair or legitimate use.  On these grounds Complainant argues that Respondent has no rights or legitimate interests in the disputed domain name.

Complainant further alleges that the disputed domain name has been registered and is being used in bad faith.  Complainant states that Respondent must have registered the domain name for the purpose of selling it for an excessive amount of money, based upon the fact that Respondent did not use the name for several years after registering it.  Complainant relates that it contacted Respondent regarding the domain name in 2005, at which time Respondent offered to sell the domain name for $30,000.  Complainant states that it has identified more than 1,000 other domain names registered by Respondent, indicating that Respondent is engaged in a pattern of registering domain names in order to prevent trademark owners from reflecting their marks in corresponding domain names. Complainant further states that even if one could find that Respondent originally registered the domain name in good faith, Respondent has subsequently used it in bad faith, since Respondent has used it for advertising purposes in a way that infringes on Complainant’s mark. In support thereof Complainant notes that a U.S. statute, 15 U.S.C. § 1125(d)(1)(A), imposes liability upon one who uses a domain name in bad faith even if the domain name was registered and previously used in good faith.

B. Respondent

Respondent identifies himself as an individual named Séb Schmitt, a resident of France.  Respondent accuses Complainant of engaging in attempted reverse domain name hijacking.  Respondent notes that Complainant was not incorporated until 2005, at which time it registered the domain name <kanalinc.com>, and states that his registration of the disputed domain name <kanal.com> predates those events by a year.  Respondent accuses Complainant of falsely claiming earlier first use and common-law rights in order to strengthen its case against Respondent. Respondent further alleges that Complainant’s trademark rights are geographically limited, and do not extend to France, where Respondent is located.  Respondent asserts that Complainant is a one-person company with current annual revenues of less than $1 million, and presumably had much lower revenues at the time that Respondent registered the disputed domain name.

Respondent claims that he has rights or legitimate interests in the domain name, in part because “kanal” is a French dictionary word meaning “channel” and is used to refer to TV channels in many countries, and because the town of Kanal ob Soči is commonly shortened to Kanal.  Respondent contends that he has a right to the disputed domain name because of its generic nature.

Finally, Respondent denies that the disputed domain name was registered and is being used in bad faith. He states that he could not have registered the domain name in bad faith in 2004 because Complainant did not even exist at that time.  He further states that the domain name has never been used in a manner related to Complainant’s business, and that he has turned down several purchase offers for the domain name.

Respondent asks the Panel to find that Complainant has engaged in reverse domain name hijacking, as the Complaint was brought in bad faith and constitutes an abuse of the administrative proceeding.

PANEL’S DISCUSSION

The Panel found in favor of the Complainant in the first element of the UDRP: Complainant holds a United States trademark registration for KANAL, and the disputed domain name is comprised of that term and the top-level domain “.com”.  As the top-level domain is normally disregarded for purposes of assessing identicality or confusing similarity under paragraph 4(a)(i) of the Policy, e.g., Abt Elecs., Inc. v. Ricks, FA 904239 (Nat. Arb. Forum Mar. 27, 2007), the disputed domain name is identical to a mark in which Complainant has rights.

The Panel didn’t make a decision in the second element of the UDRP: Yet it is not so clear in this case that Respondent’s website is “merely a pretext designed to camouflage the registrant’s intent to exploit the trademark value of a domain name,” As the question of rights or legitimate interests here turns largely upon Respondent’s intent, and the Panel’s findings as to bad faith are dispositive of the matter, the Panel elects to resolve the matter on that issue without deciding the rights/interests issue.

The Panel found in favor of the Respondent in the third element of the UDRP:

Respondent denies having targeted Respondent or its mark when he registered the domain name in 2004.  Complainant did not even exist in corporate form at that time.  Complainant’s name and mark correspond to the surname of its founder, who may well have been doing business under the mark prior to 2004.  However, none of the evidence offered by Complainant is sufficient to show common-law rights in the mark.  Respondent is located in France, and the domain name corresponds to a common word and a geographical term as well as to Complainant’s name and mark.  Under the circumstances it appears extremely unlikely that Respondent had any knowledge of Complainant, its founder, or its mark when he registered the domain name—let alone that his intent was to target any of them thereby.  The domain name therefore could not have been registered in bad faith, and Complainant has failed to prove this element.

The Panel concluded that relief shall be DENIED.