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WIPO Arbitration and Mediation Center

The Complainant is Roberta Chiappetta doing business as Discount Hydroponics, 4745 Hiers Avenue, Riverside, California 92505 United States of America.

The Respondent is C.J. Morales c/o Loreen Javiar, 5007 P. Burgos St., 3101, Bel-Air, Makati City, Philippines.

The Domain Name is <discounthydroponics.com> and the Registrar is DomainSite.com Inc., PO Box 782, Newburyport, MA 01950, United States of America.

The Complainant submitted an e-mail copy of her complaint about the disputed domain name to the WIPO Arbitration and Mediation Center (the "Center") on December 3, 2002, and a hardcopy on December 11, 2002. The Center acknowledged the Complainant's submission on December 4, 2002. The complaint was filed in accordance with the approved Rules for Uniform Domain Name Dispute Resolution Policy ("the Rules") October 24, 1999, and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy ("the Supplemental Rules") in effect as of December 1, 1999.

The Center sought verification of the disputed domain name from DomainSite.com, Inc. on December 4, 2002. On the same day DomainSite.com, Inc.'s response was received identifying the Respondent as the registrant of the disputed domain name and confirming that the Uniform Domain Name Dispute Resolution Policy ("the Policy") applies to the disputed domain name. Also, the Registrar confirmed that the domain name has been locked during the pending administrative proceeding.

The Center sent the complaint to the Respondent on December 13, 2002, by hard copy and e-mail. Delivery of the hard copy did not take place due to an "incorrect address". The Center’s communication informed the Respondent of a "Notification of Complaint and Commencement of Administrative Proceeding" and that the last day for a response was January 2, 2003.

The Respondent emailed a response to the Center on December 30, 2002. The Center acknowledged receipt on January 3, 2003. A hard copy was received by the Center on January 6, 2003.

Following an invitation from the Center to serve as a panelist, the Panel member submitted his "Statement of Acceptance and Declaration of Impartiality and Independence" to the Center on January 9, 2003, and was formally appointed on the same day.

The Panel has not received any additional submissions. The Panel agrees with the Center’s assessment concerning the complaint’s compliance with the formal requirements including proper notification to the Respondent and the payment by the Complainant of the appropriate fee for a decision by a single panelist.

The proceedings were conducted in English and the Panel's decision is scheduled to issue on January 23, 2003.

The complainant is an individual who together with another has done business under the name Discount Hydroponics registered under the California Business and Professional Code.

On March 13, 2002, the Complainant filed an application to the United States Patents and Trademarks Office (USPTO) for the mark Discount Hydroponics. The application was for goods and services used in connection with the retailing of agricultural supplies, featuring hydroponic and organic equipment and supplies. The application indicated that the mark has been in continuous use since October 1, 1999. At the time of the dispute notification the trademark was still pending.

The disputed domain name was originally acquired on March 27, 2001, by a third party involved in retailing hydroponic equipment in California. The website remained dormant until December 22, 2001, when it contained a link to another website. On February 13, 2002, the Complainant objected to the third party registering her Discount Hydroponics business name as a domain name and demanded its transfer. On March 21, 2002, the Complainant filed an action in the United States District Court for the Central District of California concerning the registration by the third party of the disputed domain name. That matter was settled pursuant to an agreement whereby the third party agreed to transfer the disputed domain name to the Complainant. The appropriate transfer document was notarized on April 5, 2002.

At some stage the disputed domain name became available to the public and on August 14, 2002, the Respondent registered the disputed domain name. It has remained inactive since then.

On October 16, 2002, the Complainant's representative emailed the Respondent a cease and desist letter referring to misappropriating the Complainant's registered trade name and a pending trademark application. The email requested the disputed domain name to be transferred to the Complainant.

The Complainant's trademark was registered on December 31, 2002, in the USPTO's Supplementary Register.

The Complainant contends that:

- The domain name is identical to her trademark or at least confusingly similar in that it involves all of the same letters in the exact same order. The mark Discount Hydroponics has been registered in a supplemental register maintained by the USPTO.

- The Respondent has no rights or legitimate interests in respect of the domain name because the Complainant obtained the rights from the original registrant as a result of an earlier settlement agreement. The Complainant states that following the settlement agreement she timely submitted an application for transfer of the domain name to the Registrar Network Solutions who failed to process it before the expiry of the registration.

- The Respondent registered the disputed domain name in bad faith for the apparent primary purpose of disrupting the business of Discount Hydroponics. The domain name has not been attached to any active website and the Respondent has refused to respond to attempts to contact it.

The Respondent contends that:

- The assertion that the Complainant has a federal trademark for Discount Hydroponics, or that a federal trademark even exists for the name is false and misrepresenting. A status check on December 30, 2002, revealed that the Complainant's trademark is a pending application only, the USPTO stating that the current status of which is "Final review prior to publication has been completed, application will be published for opposition".

- The trademark name "Discount Hydroponics" and the words "Discount" and "Hydroponics" are descriptive in nature and not specific to a unique product or service and therefore good reason exists to believe that the trademark application will face serious objection from within the Hydroponics business community when published for opposition. Also, other traders use the same or similar trade names.

- The Respondent has the same rights and legitimate interests in respect of the disputed domain name that any legitimately registered user of a domain would. The Respondent used a readily available and legal tool "www.snapnames.com" to acquire the domain name on 14 August 2002. The Complainant's settlement agreement has nothing to do with the Respondent. If the Complainant neglected to follow the proper procedures to insure transfer of the domain in accordance with an agreement she had with some third party, this is not the responsibility of the Respondent.

- The Respondent knew nothing of Discount Hydroponics, Roberta Chiappetta or any pending actions between the Complainant and the previous registrant prior to October 16, 2002, when contacted by the Complainant's representative.

- The Respondent has no interest in disrupting the business of Discount Hydroponics stating that its business interests are located primarily outside the Unites States.

- The Respondent does have legitimate use for the name.

- The Complainant's assertion that the domain name has not been attached to any active website is correct as the website for the name is actively in development and therefore has not been released.

- The Complainant's implication that more than one attempt to contact the Respondent is a misrepresentation of the facts.

In accordance with the Policy, the Complainant must prove that: (i) the Respondent's domain name is identical or confusingly similar to a trademark 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 Respondent's domain name have been registered and is being used in bad faith.

Two matters need to be addressed. First, whether or not the disputed domain name is identical or confusingly similar to the Complainant's trademark and, secondly, whether or not the Complainant has rights in the trademark.

With respect to the first matter the disputed domain name <discounthydroponics.com> represents the combined words of the Complainant's trademark. The Panel finds that it is identical and therefore meets the first requirement.

The second matter of the Complainant's rights in the trademark is more complex to resolve as two important issues need to be addressed regarding the Complainant's trademark. First, does a mark have to predate the registration of the disputed domain name, and secondly, does a mark registered in the USPTO's Supplemental Register provide the Complainant with any rights?

The Complainant's trademark Discount Hydroponics was registered by the USPTO in its Supplemental Register on December 31, 2002, (over three months after the domain name was registered on August 14, 2002) and the dispute was notified on December 4, 2002.

There is widespread support for the view that Paragraph 4a (i) of the Policy requires the Complainant to have rights (be they strong or weak) in a trademark before the disputed domain name is registered. See John Ode d/ba ODE and ODE - Optimum Digital Enterprises v. Intership Limited, WIPO Case No. D2001-0074 which states that "the trademark must predate the domain name" and cites 11 cases supporting the view that a trademark that did not exist at the time the disputed domain name was registered cannot serve as the basis for a claim under the ICANN Policy. This Panelist supports that view but notes that there are opposing views expressed in Digital Vision, Ltd. V. Advanced Chemill Systems, WIPO Case No. D2001-0827 (Paragraph 4a(i) of the Policy does not require that the trademark be registered prior to the domain name) and expressed by one of the three Panelists in Firstgate Internet A.G. v. David Soung, WIPO Case No. D2000-1311.

Of course, registration is not the only determinant for proving the Complainant has rights in a trademark. In some situations common law rights may exist. However, in this case no evidence has been provided and the descriptive nature of the words in the mark suggests that it would be difficult to prove.

The second point that needs to be addressed is whether or not a trademark registered in the USPTO's Supplemental Register confers any rights. In America's Community Bankers Corporation v. Charles R. Wing and Wind Broadcasting, Inc., WIPO Case No. D2000-1780 the case was made that "Relying solely upon the Complainant's registrations on the Supplemental Register, the Panel must conclude that the marks…are descriptive terms that have not acquired distinctiveness. Accordingly, the Panel finds that the Complainant has not proven the first prong of the UDRP, which provides that the complainant must have rights in the mark upon which the complaint is based." In another case, CyberTrader, Inc. v. Gregory Bushell, WIPO Case No. D2001-1019, the Panelist states that the Supplemental Register "provides the Complainant with no protectable rights" in its marks. In his opinion descriptive marks are not eligible for federal trademark protection absent a showing of secondary meaning. Also, in that case reference was made to pending trademark applications: "Mere applications for registration do not prove any protectable rights". Finally, the aspect of possible common law rights were covered in John Gard v. Francesesco Spina, WIPO Case No.DBIZ2002-00167 where the view regarding marks registered in the Supplemental Register was put as follows "…not only does the mere application to register give rise to no rights, the fact that the registration in the Supplemental Register is evidence that there were no rights at common law at the time of the application."

In view of the above, the Panel finds that while Respondent's domain name is identical to the Complainant's trademark, the Complainant has no rights in the trademark and cannot succeed in meeting Paragraph 4a (i) of the Policy requirements.

The Complainant's submission states that the Respondent has no rights or legitimate interests in the disputed domain name and bases her claim on a legal settlement agreement between her and the domain name's previous owner. That agreement required the previous domain name owner of <discounthydroponics.com> to transmit a signed and notarized Registrant Name Change Agreement to the Complainant. This presumable took place in April or May 2002.

The Complainant states that the documents for transfer were timely submitted to the Registrar Network Solutions "which failed to process it before the expiry of the registration". The fact that the Respondent was able to register the domain name in August 2002, demonstrates that no name change had been processed. The Complainant suggests that the domain name registration expired allowing it to become publicly available. This appears to have occurred sometime after the settlement agreement in April 2002, and before the Respondent's registration in August 2002. It is not for the Panel to speculate on why the name change requested by the Complainant's settlement agreement did not occur or what action, if any, was subsequently taken by the Complainant with the relevant Registrar. The fact is that the domain name became publicly available. It is not the purpose of these administrative procedures to resolve processing issues rightfully lying between the Complainant and the Registrar.

While the onus is on the Complainant to prove each element of Paragraph 4a of the Policy, Paragraph 4c sets out how a Respondent can demonstrate rights or legitimate interests in the disputed domain name. The ways include, but are not limited to:

(i) "before any notice to you of the dispute, your use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or

(ii) you (as an individual, business, or an organization) have been commonly known by the domain name, even if you have acquired no trademark or service mark rights: or

(iii) you are making a legitimate non-commercial 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".

Unfortunately, neither the Complainant nor the Respondent has addressed any of the above ways of demonstrating rights to or legitimate interests in the domain name. No evidence was provided concerning the use of the domain name with a bona fide offering of goods and services. Also, there is no evidence before the Panel that indicates that the Respondent is commonly known by the domain name or that there has been legitimate non-commercial or fair use of the domain name.

The Complainant believes her rights were acquired through her settlement agreement with the original owner of the domain name even though it was not formally registered in her name. No other evidence is provided.

The Respondent believes that its rights were acquired through its legitimate acquisition of the domain name and states that it has a legitimate use for the name. The Respondent states that preparation to use the website is "actively in development". The Respondent implies that its use will be associated with its business interests which are primarily outside the United States. Unfortunately, no evidence of the preparation was provided nor was any indication given as to what are the Respondent's business interests.

The lack of evidence by both parties means the Panel has to rely on the requirement in Paragraph 4a of the Policy where it is stated "the Complainant must prove that each of these elements are present". The Complainant has not done so in this case and, therefore, the Panel finds that the Complainant's assertion that the Respondent has no rights or legitimate interest has not been proven.

To succeed under Paragraph 4a (iii) of the Policy the Complainant has to prove that the disputed domain name was registered and used in bad faith. Bad faith has to occur at the time of registration and continue in the use of the domain name.

As indicated above, abundant authority exists stating that bad faith cannot occur if the trademark is registered after the date of the domain name application or where no common law trademark exists. In this case not only was the trademark registered nearly four months after the domain name application but the registration is in the USPTO's Supplemental Register which does not confer protectable rights.

The Complainant asserts that the Respondent registered the disputed domain name for the apparent primary purpose of disrupting the Complainant's hydroponics business. No evidence has been provided. On the other hand, the Respondent simply states that it has no interest in disrupting the Complainant's business and that its interests are located primarily outside the United States.

No evidence has been provided to demonstrate that any of the four circumstances of bad faith set out in Paragraph 4b of the Policy exist in this case. Based on the information before the Panelist the Respondent has not sought to sell the domain name to the Complainant or to a competitor, has no pattern of engaging in preventing trademark owners from reflecting their marks in corresponding domain names or intentionally attempting to attract for commercial gain Internet users to the site by creating confusion with the Complainant's mark.

In some domain name disputes, especially where the trademark involved is distinctive and has a well recognized reputation, passive holding has been held to indicate bad faith (see Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No. D2000-0003). Here no such case can be made because the trademark on which the Complainant is relying lacks distinctiveness and reputation and while no use of the website had been made by the Respondent in the five months it has now been held, the Respondent claims that active development is taking place.

In view of the above, the Panel finds that the Complainant has failed to prove that the disputed domain name has been registered and used in bad faith.

Based on the statements and documents submitted and in accordance with the Policy and Rules, the Panel has decided that the Complainant failed to prove that it has protectable rights in its trademark, that the Respondent lacked rights and legitimate interests in the domain name and that there was bad faith registration and use on the part of the Respondent.

Accordingly, the Complainant's request to transfer the disputed domain name <discounthydroponics.com> is denied.

Ross Wilson
Sole Panelist

Dated: January 20, 2003