ADMINISTRATIVE PANEL DECISION
Under the ICANN Uniform Domain Name Dispute Resolution
The complainant in this proceeding is SHIRMAX RETAIL LTD./DÉTAILLANTS SHIRMAX LTÉE ("Shirmax") of Montreal, Quebec, Canada. The respondent is CES MARKETING GROUP INC. ("CES"), of Vancouver, British Columbia, Canada. The domain name at issue is thyme.com, registered by the respondent with Network Solutions, Inc. ("NSI"), of Herndon, Virginia, USA. The complaint was brought pursuant to the Uniform Domain Name Dispute Resolution Policy ("ICANN Policy"), <http://www.icann.org/udrp/udrp-policy-24oct99.htm>, which was adopted by the Internet Corporation for Assigned Names and Numbers on October 24, 1999.
Pursuant to paragraph 4(d) of the ICANN Policy, Shirmax selected the Disputes.org/eResolution Consortium as the ICANN-approved administrative dispute resolution service provider to administer this proceeding. The complaint submitted by Shirmax was received electronically and in hard copy by eResolution on February 3, 2000. eResolution verified the formal sufficiency of the complaint and forwarded it to CES on February 7, 2000, the commencement date of this proceeding. eResolution subsequently granted CES's request for a brief extension of the time permitted for its response, and CES filed its response electronically on March 2, 2000, and in hard copy on March 9, 2000.
Neither party having requested a three-member panel, eResolution selected David E. Sorkin from the Disputes.org/eResolution Consortium list of arbitrators to serve as the sole panelist in this proceeding. On March 14, 2000, eResolution notified the parties, NSI, and ICANN of the panel appointment and that barring exceptional circumstances a decision would be handed down by March 28, 2000.
Shirmax markets maternity clothing and other merchandise under the names Thyme and Thyme Maternity/Thyme Maternité. In 1994 Shirmax was granted a Canadian trademark registration for the trademark THYME, used in association with maternity clothing and other products and services. Shirmax also has registration applications currently pending before the Canadian Intellectual Property Office for THYME MATERNITY & Design and THYME MATERNITÉ & Design.
CES registered the domain name thyme.com in 1996. Shirmax does not allege that CES was aware of Shirmax or its activities at that time. With its complaint Shirmax submitted a list of fifty domain names that have been registered by CES. Most of the domain names on this list are relatively generic (e.g., decimals.com, default.com, dill.com, and doughnut.com). CES also submitted a list of about twenty domain names that it has registered, most of which are similarly generic, although only a few domain names appear on both lists.
For some time until September 1999 (the duration of this period is not clear from the record), CES used the domain name thyme.com on the web to redirect HTTP requests to a different site, at the domain name cesmarketing.com. That web site described CES's business as "the development and marketing of valuable Internet domain names" and invited persons interested in CES's plans for a particular domain name to contact the company.
Prior to August 3, 1999, Shirmax submitted a complaint to NSI alleging that the domain name thyme.com was identical to a federally registered trademark owned by Shirmax. NSI notified CES of the complaint and on September 17, 1999, having received no response to its notice, NSI placed the domain name on "hold" status pursuant to its then-current domain name dispute policy. On some date thereafter—presumably when the ICANN Policy was adopted—NSI apparently notified Shirmax that it intended to remove the domain name from "hold" status and permit CES to resume using it unless Shirmax filed a complaint under the new ICANN Policy.
Under the ICANN Policy, a complainant has the obligation to prove that the domain name at issue is identical or confusingly similar to the complainant's trademark; that the respondent has no rights or legitimate interests in the domain name; and that the domain name has been registered and is being used in bad faith. ICANN Policy, para. 4(a). If the complainant successfully proves all three elements, then this panel has the authority to require the cancellation of the respondent's domain name registration, or to order that it be transferred to the complainant. Ibid. para. 4(i). The panel also may consider and address whether the complaint was brought in an attempt at "reverse domain name hijacking" or otherwise in bad faith. ICANN Rules for Uniform Domain Name Dispute Resolution Policy (Oct. 24, 1999) ("ICANN Rules"), <http://www.icann.org/udrp/udrp-rules-24oct99.htm>, para. 15(e).
1. Identity or Confusing Similarity
Paragraph 4(a)(i) of the ICANN Policy requires that the domain name be identical or confusingly similar to the complainant's trademark. Shirmax contends that the domain name thyme.com is identical to its trademark THYME, and confusingly similar to its pending trademarks THYME MATERNITY & Design and THYME MATERNITÉ & Design. CES submits that under Canadian trademark law, mere identicality is insufficient to support a conclusion that two marks are confusing, and encourages this panel to interpret paragraph 4(a)(i) in the conjunctive rather than the disjunctive. CES further argues that Shirmax's pending trademark applications are not relevant because the dates of first use are subsequent to CES's registration of the domain name thyme.com.
The panel declines CES's invitation to stray from the clear language of the ICANN Policy. Mere identicality of a domain name with a registered trademark is sufficient to meet the first element of the test, even if there is no likelihood of confusion whatsoever.
In the strictest sense, the domain name thyme.com is not identical to the trademark THYME. Letter case does not appear to be significant in either term, but the former includes a top-level domain, ".com", while the word "thyme" stands alone in the latter. However, where the addition of a top-level domain is the only difference—and especially where, as here, the top-level domain that appears in the domain name is the one that most closely describes the nature of the trademark (i.e., ".com" representing a commercial enterprise)—such virtual identicality seems sufficient to satisfy the requirement.
Because the identicality requirement is satisfied with regard to the trademark THYME, the panel need not address the parties' arguments concerning Shirmax's pending trademarks, THYME MATERNITY & Design and THYME MATERNITÉ & Design.
2. Rights or Legitimate Interests
Paragraph 4(a)(ii) of the ICANN Policy asks whether the respondent has any rights or legitimate interests in respect of the domain name. Paragraph 4(c) provides examples of circumstances that can demonstrate the existence of such rights or legitimate interests: (1) use of, or preparations to use, the domain name in connection with a bona fide offering of goods or services; (2) the fact that the respondent has commonly been known by the domain name; and (3) legitimate noncommercial or fair use of the domain name.
Shirmax argues that CES fails this test because it has never used the domain name thyme.com in bona fide commerce and has never been commonly known by the domain name. CES claims that it had made preparations to use thyme.com for the bona fide offering of goods or services, supporting this claim by pointing to other web sites that it has developed, and by presenting a list of other, related domain names that it has registered and intends to develop in conjunction with thyme.com. CES further argues that a mere idea for a bona fide business application is sufficient, and that CES should not be punished for lacking the resources to develop a definitive business plan at the time that it registered the domain name.
Where the domain name and trademark in question are generic—and in particular where they comprise no more than a single, short, common word—the rights/interests inquiry is more likely to favor the domain name owner. The ICANN Policy is very narrow in scope; it covers only clear cases of "cybersquatting" and "cyberpiracy," not every dispute that might arise over a domain name. See, e.g., Second Staff Report on Implementation Documents for the Uniform Dispute Resolution Policy (Oct. 24, 1999), <http://www.icann.org/udrp/udrp-second-staff-report-24oct99.htm>, para. 4.1(c).
The panel finds that the admittedly perfunctory preparations made by CES for use of the domain name thyme.com in bona fide commerce are sufficient to demonstrate the rights or legitimate interests required by paragraph 4(a)(ii). In addition, given the generic nature of the domain name, CES has at least a tenable argument that its use on the web merely for the purpose of redirecting visitors to a different site constitutes a legitimate fair use, as long as this use is not misleading to consumers and does not tarnish a trademark.
The panel concludes that Shirmax has failed to meet its burden to show that CES possesses no rights or legitimate interests in the domain name.
3. Bad Faith Registration and Use
The third element set forth in paragraph 4(a) of the ICANN Policy requires the complainant to prove that the domain name was registered and is being used in bad faith. (Because the domain name is currently on "hold" status, the panel will assess whether the domain name was being used in bad faith immediately before it was placed on "hold" in September 1999.)
Paragraph 4(b) of the policy sets forth four examples of circumstances in which the registration and use of a domain name may be found to be in bad faith: (1) the respondent has registered or acquired the domain name primarily for the purpose of selling it to the complainant or to a competitor of the complainant at a profit; (2) the respondent registered the domain name to prevent the complainant from reflecting its trademark in a corresponding domain name and has engaged in a pattern of similar conduct; (3) the respondent registered the domain name primarily to disrupt a competitor's business; and (4) the respondent's use of the domain name intentionally attempts to attract Internet users for commercial gain by creating a likelihood of confusion with the complainant's trademark.
The requirement of bad faith registration and use in paragraph 4(a)(iii) is stated in the conjunctive. Registration in bad faith is insufficient if the respondent does not use the domain name in bad faith, and conversely, use in bad faith is insufficient if the respondent originally registered the domain name for a permissible purpose. The first three examples in paragraph 4(b) all refer to registration for various illegitimate purposes as evidence of registration and use in bad faith; but in each instance bad faith use may well be implicit in the act of registering a domain name, since all of the improper purposes mentioned can be accomplished merely by passively holding a domain name.
The fourth example (paragraph 4(b)(iv)), however, refers only to improper use, and does not appear to require that the domain name also have been registered in bad faith. This example thus appears to conflict with the rule set forth in paragraph 4(a)(iii). The language of paragraph 4(a)(iii) is clear, and the only reasonable interpretations are to regard the fourth example as a narrow exception to the preceding subparagraph's conjunctive rule, or to apply the conjunctive rule as it is written and disregard the example entirely.
Shirmax points to the statements that appeared on the cesmarketing.com web site as evidence that CES is engaged in "the business of registering domain names and selling them to the highest bidder." Shirmax also offers evidence of e-mail correspondence between the parties that took place in February of 1999, in which CES declined Shirmax's offer to purchase the domain name for a sum of US$2,500. (It is not clear from the record which party initiated this ultimately unsuccessful negotiation.)
It does appear that CES is involved in the business of registering domain names with the intent to resell them for a profit. If the domain name at issue were a coined trademark such as Panavision, evidence to this effect might well be sufficient to demonstrate bad faith registration and use. Thyme.com, however, involves a generic term, and there is no evidence that CES registered the domain name with the intent of capitalizing on Shirmax's trademark interests, or even that CES was aware of Shirmax's existence when it registered the domain name in 1996. Indeed, the only evidence as to CES's intent in registering thyme.com supports the conclusion that CES selected the name because "thyme" refers to an herb. (CES also registered the domain names dill.com and mineralwater.com on the same date as thyme.com.) Shirmax has offered no evidence to contradict this claim, and the panel therefore finds that Shirmax has failed to sustain its burden of proving that CES registered the domain name in bad faith.
Even if the fourth example (paragraph (4(b)(iv)) is to be viewed as an exception to the bad faith registration requirement, the panel finds that exception inapplicable here. CES did use the domain name thyme.com to attract Internet users for commercial gain, but there is no contention that it did so by creating a likelihood of confusion with Shirmax's trademark.
The panel therefore concludes that Shirmax has failed to prove the third element set forth in paragraph 4(a) of the ICANN Policy.
4. Reverse Domain Name Hijacking
In light of the panel's conclusion that Shirmax is unable to prove two of the three elements set forth in the applicable rule, it seems appropriate to consider whether Shirmax brought the complaint in bad faith. "If after considering the submissions the Panel finds that the complaint was brought in bad faith, for example in an attempt at Reverse Domain Name Hijacking or was brought primarily to harass the domain-name holder, the Panel shall declare in its decision that the complaint was brought in bad faith and constitutes an abuse of the administrative proceeding." ICANN Rules, para. 15(e). "Reverse Domain Name Hijacking" is defined rather circularly as "using the Policy in bad faith to attempt to deprive a registered domain-name holder of a domain name." Ibid. para. 1.
Although the applicable policy and rules are quite vague on what constitutes bad faith in bringing a complaint, it seems logical that bad faith should be found if the complainant has an obvious interest in obtaining the respondent's domain name for its own use, yet lacks even a plausible argument on each of the elements set forth in paragraph 4(a) of the ICANN Policy. In this proceeding, Shirmax clearly is interested in obtaining the domain name thyme.com from CES, but has made no creditable attempt to show that CES registered thyme.com in bad faith, as required by paragraph 4(a)(iii) of the policy.
Nonetheless, two procedural circumstances dissuade this panel from finding bad faith on Shirmax's part. First, the apparent conflict discussed previously between the conjunctive language of paragraph 4(a)(iii) and the example of bad faith use in paragraph 4(b)(iv) may have led Shirmax to believe that it was not required to demonstrate bad faith registration of the domain name. Second, at the time the complaint was submitted, the domain name was still on "hold" status pursuant to NSI's prior domain name dispute policy, and Shirmax was required to file a complaint under the ICANN Policy to preserve the "hold" status. Shirmax apparently had a valid claim against CES under NSI's prior policy, and does not deserve to be admonished here merely for seeking to retain the advantageous position it was able to attain under that policy.
For the reasons set forth above, the panel concludes that Shirmax has proved only one of the three elements set forth in paragraph 4(a) of the ICANN Policy, and therefore determines that the relief sought by Shirmax should not be granted.
20 March 2000
(s) David E. Sorkin