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WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Video Images, LLC v. Stoebner, Jeff

Case No. D2004-0887

1. The Parties

The Complainant is Video Images, LLC, Indianapolis, Indiana, United States of America, represented by Dann Pecar Newman & Kleiman, PC, United States of America.

The Respondent is Jeff Stoebner, Eden Prairie, Minnesota, United States of America, represented by Blackwell Sanders Peper Martin, United States of America.

2. The Domain Name and Registrar

The disputed domain name <videoimages.com> is registered with Network Solutions, LLC.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on October 27, 2004. On October 27, 2004, the Center transmitted by email to Network Solutions, LLC a request for registrar verification in connection with the domain name at issue. On October 29, 2004, Network Solutions, LLC transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details for the administrative, billing, and technical contact. In response to a notification by the Center that the Complaint was administratively deficient, the Complainant filed an amendment to the Complaint on November 3, 2004. 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”), 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 November 15, 2004. In accordance with the Rules, Paragraph 5(a), the due date for Response was December 5, 2004. The Response was filed with the Center on December 4, 2004.

The Center appointed William R. Towns as the Sole Panelist in this matter on December 17, 2004. 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.

On December 20, 2004, the Complainant submitted without any request from the Panel a supplemental statement and additional documentation. Paragraph 12 of the Rules provides that in addition to the complaint and response, the Panel may request, in its sole discretion, further statements or documents from either of the parties. After due consideration, the Panel determined not to consider the Complainant’s supplemental submission for purposes of the Panel’s Decision in this case. The Panel’s ruling on this procedural matter is set forth in Administrative Panel Order No. 1, dated December 23, 2004, and included as an annex to the Panel’s Decision.

4. Factual Background

The Complainant, Video Images, LLC, is in the business of designing, integrating and supplying audio-visual equipment and conferencing systems. The record reflects that the Complainant has used VIDEO IMAGES as a common law trademark and/or service mark since April 1, 1999. The Complainant has registered VIDEO IMAGES as a service mark on the principle register of the United States Patent and Trademark Office¹, and an application to register VIDEO IMAGES as a trademark on the principle register has been approved and published for opposition. Both applications were filed with the United States Patent and Trademark Office on May 23, 2003.

The Respondent Jeff Stoebner is the Vice President of Sales and Marketing and Corporate Secretary for AVI Midwest. AVI Midwest is in the business of designing, integrating and supplying audio-visual equipment and conferencing systems, and is a direct competitor of the Complainant. In February 2004, AVI Midwest acquired from MCSi’s bankruptcy estate the domain name <videoimages.com>. The Response states that it was AVI Midwest’s intent to have Mr. Stoebner hold the disputed domain name on behalf of AVI Midwest, in which Audiovisual, Inc. (d/b/a/ AVI Systems) and Mr. Stoebner have an interest. The Respondent is using the domain name to direct Internet customers to the AVI Midwest website.

The disputed domain name initially was registered on June 15, 1995, by a company known as Video Images, Inc. The Complainant and Video Images, Inc. are separate entities. In early 2000, MCSi, Inc. acquired the business of Video Images, Inc., and there is evidence that MCSi used the VIDEO IMAGES mark and name in connection with one of its business units for some period of time after this acquisition. However, the parties dispute the nature and extent of MCSi’s use of the VIDEO IMAGES mark and name, and whether MCSi had abandoned the mark before the February 2004 bankruptcy transfer of the disputed domain name <videoimages.com> to the Respondent.

5. Parties’ Contentions

A. Complainant

The Complainant asserts that it has used VIDEO IMAGES as a mark in connection with designing, integrating and supplying audio-visual equipment and conferencing systems since April 1, 1999. The Complainant is in the process of registering VIDEO IMAGES as a trademark and service mark with the United States Patent and Trademark Office, and the marks have been found eligible for registration and published for opposition by the United States Patent and Trademark Office.

According to the Complainant, AVI Midwest, a direct competitor, acquired the disputed domain name in February 2004, as part of a purchase of assets from the bankruptcy estate of MCSi, Inc, which had acquired the company Video Images, Inc. in 2000. The Complainant maintains that MCSi agreed to phase out its use of “Video Images” and abandoned any rights in the VIDEO IMAGES mark and the “Video Images” name by early 2001. Accordingly, the Complainant asserts that it has exclusive rights in the VIDEO IMAGES mark.

The Complainant asserts that the disputed domain name is identical to its VIDEO IMAGES mark, and that the Respondent has no rights or legitimate interests in the domain name. The Complainant contends that because MCSi had abandoned the mark it had no rights or legitimate interests in the disputed domain name at the time the Respondent acquired the domain name in the bankruptcy sale. Thus, the Respondent obtained no rights or legitimate interests in the domain name. The Complainant further asserts that the Respondent acquired and is using the mark in bad faith to prevent the registration of the domain name by the Complainant, disrupt the Complainant’s business and to intentionally attract for gain users to the Respondent’s website by creating a likelihood of confusion with the Complainant’s mark.

For the foregoing reasons, the Complainant seeks to have the disputed domain name transferred to it.

B. Respondent

The Respondent² claims rights in both the disputed domain name and to the corresponding mark VIDEO IMAGES. According to the Response, AVI Midwest acquired rights in the VIDEO IMAGES mark and the <videoimages.com> domain name when it purchased certain assets from the bankruptcy estate of MCSi, Inc. in February 2004. The Respondent asserts that AVI Midwest is the successor in interest to MCSi and Video Images, Inc. and can claim priority in the VIDEO IMAGES mark dating back to its first use by Video Images, Inc., which predates the Complainant’s first use of the mark. Thus, the Respondent contends that any rights the Complainant has in the VIDEO IMAGES mark are junior to the Respondent’s rights as successor in interest to the original owner of the mark.

The Respondent claims to have “unassailable” rights and legitimate interests in the disputed domain name. The Respondent contends that MCSi never abandoned the VIDEO IMAGES mark and name, and alleges that MCSi’s continued to use the disputed domain name to redirect Video Images, Inc. customers to its website. Similarly, the Respondent concludes that it is making a legitimate use of the disputed domain name to direct internet users who know the Video Images name to AVI Midwest’s commercial website the Respondent denies any bad faith regarding its acquisition and use of the disputed domain name.

The Respondent further contends that the Complainant was aware of the Respondent’s rights in the disputed domain name, and aware that the Respondent was making a good faith use of the domain name when it filed the Complaint. The Respondent asserts that the Complainant is using the Policy in bad faith to attempt to deprive a registered domain name holder of a domain name – i.e., reverse domain name hijacking. The Respondent requests the Panel to declare that the Complaint was brought in bad faith and constitutes an abuse of the administrative proceeding.

6. Discussion and Findings

A. Scope of Policy

The Policy is addressed to resolving disputes concerning allegations of abusive domain name registration and use. Milwaukee Electric Tool Corporation v. Bay Verte Machinery, Inc. d/b/a The Power Tool Store, WIPO Case No. D2002-0774. Accordingly, the jurisdiction of this Panel is limited to providing a remedy in cases of “the abusive registration of domain names”. Weber-Stephen Products Co. v. Armitage Hardware, WIPO Case No. D2000-0187. See Report of the WIPO Internet Domain Name Process, Paragraphs 169 & 170. Rule 15(a) provides that the Panel shall decide a complaint on the basis of statements and documents submitted and in accordance with the Policy, the Rules and any other rules or principles of law that the Panel deems applicable.

Paragraph 4(a) of the Policy requires that the Complainant prove each of the following three elements to obtain a decision that a domain name should be either cancelled or transferred:

(i) The domain name registered by the Respondent 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 with respect to the domain name; and

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

Cancellation or transfer of the domain name are the sole remedies provided to the Complainant under the Policy, as set forth in Paragraph 4(i).

Paragraph 4(b) sets forth four situations under which the registration and use of a domain name is deemed to be in bad faith, but does not limit a finding of bad faith to only these situations.

Paragraph 4(c) in turn identifies three means through which a Respondent may establish rights or legitimate interests in the domain name. Although the Complainant bears the ultimate burden of establishing all three elements of Paragraph 4(a), a number of Panels have concluded that Paragraph 4(c) shifts the burden to the Respondent to come forward with evidence of a right or legitimate interest in the domain name, once the Complainant has made a prima facie showing. See, e.g., Document Technologies, Inc. v. International Electronic Communications Inc., WIPO Case No. D2000-0270.

B. Identical or Confusingly Similar

The Respondent concedes that the disputed domain name <videoimages.com> is identical to the Complainant’s VIDEO IMAGES mark, but contends that the Complainant has not met its burden under Paragraph 4(a)(i) of the Policy because the Complainant has not demonstrated that it has exclusive rights in the mark. The Respondent’s argument is misplaced. Paragraph 4(a)(i) does not require a complainant to prove that its rights in a mark corresponding to the disputed domain name are exclusive. See Cellular One Group v. COI Cellular One, Inc., WIPO Case No. D2000-1521.

The Complainant has established rights in the mark VIDEO IMAGES, through use and registration of the mark. The VIDEO IMAGES mark is entitled to a presumption of validity by virtue of its registration with the United States Patent and Trademark Office. See EAuto, L.L.C. v. Triple S. Auto Parts d/b/a Kung Fu Yea Enterprises, Inc., WIPO Case No. D2000-0047. The Panel further notes that under Section 33 of the Lanham Act, the registration of the VIDEO IMAGES mark on the principle register is evidence of the Complainant’s exclusive right to use the mark in commerce. 15 U.S.C. § 1115.

Accordingly, the Panel finds that the Complainant has satisfied the requirements of Paragraph 4(a)(i) of the Policy.

C. Rights or Legitimate Interests

It is evident that the Respondent knew that the Complainant, a direct competitor, claimed rights in the VIDEO IMAGES mark at the time the Respondent acquired the disputed domain name in February 2004. The Respondent could not help but have appreciated that the disputed domain name was identical to the Complainant’s mark. While it appears that MCSi, Inc., from whom the Respondent acquired the domain name, at one time used the VIDEO IMAGES mark, the Complainant has offered evidence that MCSi abandoned the VIDEO IMAGES mark and discontinued use of the name by early 2001. Nothing in the record indicates that the Respondent has been commonly known by the disputed domain name or that the Respondent has used VIDEO IMAGES as a mark. Given the foregoing, the Panel finds that the Complainant has made a prima facie showing for purposes of Paragraph 4(a)(ii) that the Respondent lacks rights or legitimate interests in the disputed domain name. See Compagnie de Saint Gobain v. Com-Union Corp., WIPO Case No. D2000-0020.³

Once a complainant makes a prima facie showing that a respondent lacks rights to the domain name at issue, the respondent must come forward with proof that it has some legitimate interest in the domain name to rebut this presumption. Document Technologies, Inc. v. International Electronic Communications Inc., WIPO Case No. D2000-0270. Pursuant to Paragraph 4(c) of the Policy, the Respondent may establish rights to or legitimate interests in the disputed domain names by demonstrating any of the following:

(i) before any notice to it of the dispute, the respondent’s 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) the respondent has been commonly known by the domain name, even if it has acquired no trademark or service mark rights; or

(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.

In this case, the Respondent asserts rights in the disputed domain name based on AVI Midwest’s purported rights in the VIDEO IMAGES mark, which the Respondent claims AVI Midwest’s acquired through the purchase of MCSi, Inc.’s assets in bankruptcy. For this to be the case, there must first have been a valid assignment of the VIDEO IMAGES mark from Video Images, Inc. to MCSi, Inc., and then a valid assignment of the mark from MCSi, Inc. to the AVI Midwest. When there is a valid assignment of a trademark, the assignee steps into the shoes of the assignor, and can claim priority in the trademark dating back to the time of the assignor’s first use. See Carnival Brand Seafood Co. v. Carnival Brands, Inc., 187 F.3d 1307 (11^th Cir. 1999).

A valid trademark assignment requires the sale of the goodwill of the underlying business associated with the mark. It is not sufficient to assign a trademark “in gross”, which means independently of the associated goodwill, and an “in gross” assignment passes no rights to the assignee. See e.g., United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90 (1918); Marshak v. Green, 746 F.2d 927 (2^nd Cir. 1984); Sands, Taylor & Wood Co. v. Quaker Oats Co., 978 F.2d 947 (7^th Cir. 1992). In addition, to demonstrate common law ownership of a mark both appropriation and actual use of the mark in trade are necessary. See Blue Bell, Inc. v. Farah Manufacturing Co., 508 F.2d 1260 (5^th Cir. 1975). Thus, the assignee of a common law trademark is obligated to purchase the associated goodwill of the underlying business and to continue to use the mark in connection with goods or services of the same basic nature as the assignor. PepsiCo., Inc. v. Grapette Co., 416 F.2d 285 (8^th Cir. 1969).

Against this legal backdrop, the Panel is not persuaded that the Respondent has acquired any common law trademark rights in the VIDEO IMAGES name. The VIDEO IMAGES trademark is conspicuously absent from the list of intangible assets acquired by the Respondent from MCSi, Inc.’s bankruptcy estate, a circumstance that tends to support the Complainant’s position that MCSi, Inc. already had abandoned the mark. Merely acquiring a domain name or even a trade name that corresponds to a mark without an effective conveyance of the underlying goodwill of the business does not pass rights in the mark.

Further, even assuming that MCSi, Inc. did not abandon the VIDEO IMAGES mark, which is far from clear,⁴ the Respondent presents no evidence of its own use of the VIDEO IMAGES mark, or of any intention to use the mark. As noted above, the assignee of a common law trademark must continue to use the mark in connection with goods or services of the same basic nature as the assignor in order to maintain rights in the mark. PepsiCo., Inc. v. Grapette Co., 416 F.2d 285 (8^th Cir. 1969). “Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated.” Zazu Designs v. L’Oreal, S.A., 979 F.2d 499 (7^th Cir. 1992).

The Panel’s analysis does not end here, however, because the Respondent claims rights or legitimate interests in the domain name based on the Respondent’s use of domain name in connection with a bona fide offering of goods or services, before the Respondent received any notice from the Complainant regarding this dispute. The record reflects the Respondent’s use of the disputed domain name to attract internet users knowledgeable of the “Video Images” name to AVI Midwest’s website before receiving notice from the Complainant regarding this dispute.

Nevertheless, the question remains whether the Respondent is using the domain name in connection with a bona fide offering of goods or services. In determining whether an offering of goods or services is bona fide under Paragraph 4(c)(i), the dispositive inquiry is whether the use of the disputed domain name in connection with the offering otherwise constitutes bad faith registration and use of the domain name under Paragraph 4(a)(iii). See, e.g., First American Funds, Inc. v. Ult. Search, Inc, WIPO Case No. D2000-1840.

The Panel concludes that the Respondent is not using the disputed domain name in connection with a bona fide offering of goods or services. The Respondent acknowledges that its sole purpose in acquiring the disputed domain name was to use it to attract to the AVI Midwest website internet users knowledgeable of the “Video Images” name. Yet, when the Respondent began using the domain name in this manner, the VIDEO IMAGES mark had been used by the Complainant for five years, and for an appreciable period of time the Complainant’s use of the mark appears to have been exclusive.⁵ Under such circumstances the conclusion is unavoidable that the Respondent is intentionally using the domain name to divert Internet users looking for the Complainant’s products or services to the AVI Midwest website, notwithstanding any claim to the contrary by the Respondent.

As observed by the Panel in Research In Motion Limited v. Dustin Picov, WIPO Case No. D2001-0492, use of a domain name so obviously connected with a complainant and its products or services by a registrant with no connection to the complainant suggests “opportunistic bad faith”. The Respondent has not shown that any goodwill which MCSi, Inc. may have had in the VIDEO IMAGES mark as of February 2004 was conveyed to AVI Midwest in the bankruptcy sale of assets. The registration by the Complainant of the VIDEO IMAGES mark with the United States Patent and Trademark Office is strong evidence of the distinctiveness of the mark respecting the Complainant’s goods and services, and federal registration is evidence that the Complainant has exclusive rights in the mark. If, as the Respondent now asserts, AVI Midwest acquired competing trademark rights in the VIDEO IMAGES name, the Panel is mystified by AVI Midwest’s failure to oppose the Complainant’s registration of the mark with the Patent and Trademark Office.⁶

The Panel finds from the totality of the circumstances that the Respondent acquired the disputed domain name primarily to disrupt the business of the Complainant, a direct competitor, and that the Respondent is using the domain name in an attempt to attract, for commercial gain, internet users to its website, by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship, affiliation, or endorsement of the Respondent’s website. This does not constitute the use of the domain name in connection with a bona fide offering of goods or services under Paragraph 4(c)(i).

Accordingly, the Panel finds that the Complainant has met its burden under Paragraph 4(a)(ii) of demonstrating that Respondent has no rights or legitimate interest with regard to the disputed domain name.

D. Registered and Used in Bad Faith

Paragraph 4(b) of the Policy states that any of the following circumstances, in particular but without limitation, shall be considered evidence of the registration or use of a domain name in bad faith:

(i) circumstances indicating that the Respondent registered or acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the Complainant (the owner of the trademark or service mark) or to a competitor of that Complainant, for valuable consideration in excess of documented out-of-pocket costs directly related to the domain name;

(ii) circumstances indicating that the Respondent registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that the Respondent has engaged in a pattern of such conduct;

(iii) circumstances indicating that the Respondent registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(iv) circumstances indicating that the Respondent intentionally is using the domain name in an attempt to attract, for commercial gain, internet users to its website or other on-line location, by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship, affiliation, or endorsement of the Respondent’s website or location or of a product or service on its website or location.

As discussed above, the Respondent by its own admission acquired and is using the disputed domain name, which is identical to the Complainant’s VIDEO IMAGES mark, to attract internet users knowledgeable of the “Video Images” name to the commercial website of AVI Midwest, a direct competitor of the Complainant. The Respondent’s claim of competing rights in the VIDEO IMAGES mark is unpersuasive, and in the Panel’s opinion, more likely than not pretextual. The Panel finds from the circumstances of this case that the Respondent registered the domain name primarily for the purpose of disrupting the business of the Complainant, and that the Respondent intentionally is using the domain name to attract, for commercial gain, internet users to the AVI Midwest website, by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship, affiliation or endorsement of the AVI Midwest website. This constitutes bad faith registration and use under Paragraphs 4(b)(iii) and 4(b)(iv) of the Policy.

Accordingly, the Panel finds the Complainant has met its burden of demonstrating the bad faith registration and use of the disputed domain name under Paragraph 4(a)(iii).

E. Reverse Domain Name Hijacking

Given the Panel’s findings as set forth above, the Panel finds no merit in the Respondent’s claim of reverse domain name hijacking.

7. Decision

For all the foregoing reasons, in accordance with Paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the domain name <videoimages.com> be transferred to the Complainant.

William R. Towns
Sole Panelist

Dated: December 31, 2004

¹ The registration of this mark occurred subsequent to the filing of the Complaint in this case, and can be accessed through the United States Patent and Trademark Office’s website.

² In the Response, “Respondent” is used to refer to both AVI Midwest and Mr. Stoebner. It is alleged AVI Midwest has rights in the mark and that Mr. Stoebner is holding the disputed domain name for AVI Midwest.

³ At this stage, the question whether the Complainant’s rights in the VIDEO IMAGES mark are exclusive comes into play. One way that a complainant can demonstrate prima facie that a respondent has no rights or legitimate interests in a domain name is to show that the complainant has exclusive rights in a mark with respect to which the domain name is identical or confusingly similar.

⁴ In connection with the abandonment issue, the Complainant and the Respondent both rely heavily upon unsworn declarations of former MCSi employees, both of whom are now employed, respectively, by the Complainant and the Respondent. Obviously, under these circumstances neither declarant can be considered disinterested. The Respondent’s declarant, now the network systems administrator for Audiovisual, Inc., provides a business card, which he claims to have used through July 2002, while employed by MCSi. The business card bears the legend “Video Images, a MCSi® Company”, and reflects use of the <videoimages.com> domain name. Nevertheless, the only symbol clearly designated as a trademark in the business card is MCSi®. And the network administrator’s declaration further suggests that, consistent with the registration of MCSi as a mark, the use of the VIDEO IMAGES mark was not part of MCSi’s long term marketing and branding strategy. In the final analysis, the Panel does not find this evidence inconsistent with MCSi, Inc.’s abandonment of the mark as of July 2002.

⁵ No business, sales, advertising or marketing records has been submitted reflective of MCSi’s continued use of “Video Images” as a mark or business name, or even MCSi’s continued use of the <videoimages.com> domain name after July 2002. While AVI’s network administrator claims that MCSi, Inc. never abandoned the disputed domain name, it is perhaps revealing that he does not make the same claim regarding the corresponding trademark.

⁶ The Complainant filed two applications to register the VIDEO IMAGES mark on May 23, 2003, well in advance of the AVI’s purchase of the bankruptcy estate assets of MCSi, Inc.