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WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Lance John Picton v. KK Factory Seconds Online / Dean James Mackin

Case No. DAU2007-0005

1. The Parties

The Complainant is Lance John Picton, T/A Factorysecondsonline.com.au, North Albury, New South Wales, Australia.

The Respondent is KK Factory Seconds Online / Dean James Mackin, T/A F1 Internet Services; F1 Computers; Factor Y Seconds & Computers, Glendenning, New South Wales, Australia,

2. The Domain Name and Registrar

The disputed domain name <factoryseconds.com.au> is registered with NameScout Corp.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on July 10, 2007. On July 12, 2007, the Center transmitted by email to NameScout Corp. a request for registrar verification in connection with the domain name at issue. Between July 13 and August 8, 2007, NameScout Corp. transmitted by emails to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details. In response to a notification by the Center, the Complainant filed an amendment to the Complaint on August 14, 2007. The Center verified that the Complaint together with the amendment to the Complaint satisfied the formal requirements of the .au Dispute Resolution Policy (the “Policy”), the Rules for the .au Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for the .au 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 August 27, 2007. In accordance with the Rules, paragraph 5(a), the due date for a Response was September 16, 2007. The Response was filed with the Center on September 16, 2007.

The Center appointed James A. Barker as the sole panelist in this matter on September 26, 2007. 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.

Between September 16-20, 2007, the parties each filed a number of supplemental submissions.

4. Factual Background

The following facts appear to the Panel to be uncontested.

The Complainant is the owner of two trademarks, registered in Australia, that incorporate the words “Factory Seconds”. Those marks were filed on June 15, 2007, but not accepted for registration until after the filing of the Complaint. The first mark is for a stylized representation of those words, where the word “factory” appears in blue, and the word “seconds” appears in orange, with the letter “o” of that second word being depicted by a computer mouse. The second mark contains the same letters presented in the same way, but with the addition of the words in smaller type “Where Seconds Come First”.

The Complainant is the owner of a portfolio of domain names that include the words “factory seconds” or variations of them. These include domain names such as <factorysecond.com>, <factorysecondsonline.com> and <factoryseconds.net.au>. Although the Complainant did not provide evidence of it, it appears to the Panel that those domain names resolve to a website which features the Complainant’s registered mark, and the statement “Coming soon!” and a phone number to call “For all enquiries prior to launch date”. As these statements indicate, at the date of this decision, the Complainant’s website appears to be under construction.

The Respondent registered the disputed domain name on May, 1998.

The Respondent is in the business of selling new and used computers. At the date of this decision, the disputed domain name reverted to a website for “F1 Computers”, which offers various computers and associated products for sale, under a heading “New, Used and Factory Second PC’s”.

The Respondent provided evidence, from the Australian Securities & Investments Commission’s website, of having registered business names in the state of New South Wales for both “F1 Computers” and “Factor Y Seconds & Computers”.

5. Parties’ Contentions

A. Complainant

The following is summarised from the Complaint:

The disputed domain name is identical or confusingly similar to the Complainant’s New South Wales registered business name (‘Factorysecondsonline.com.au’). The disputed domain name is also identical or confusingly similar to the Complainant’s registered trademarks.

The Respondent has no rights or legitimate interests in the disputed domain name. The Respondent does not meet the requirements described in auDA’s ‘Published Policy No: 2005-02 Guidelines for Accredited Registrars on the Interpretation of Policy Rules for Open 2LDs’. The Respondent also breached his registration agreement by not updating a lapsed business name registration in which the disputed domain name was originally registered.

So far as the Complainant is aware, there is no evidence of the Respondent conducting a business under, or, of the Respondent being commonly known by the disputed domain name, nor is there any evidence to suggest that the Respondent has used the disputed domain name in connection with any bona fide offering of goods or services. So far as the Complainant is aware, the Respondent is not making a legitimate non-commercial or fair use of the disputed domain name.

For somewhat similar reasons, the Complainant contended that the Respondent registered and subsequently used the disputed domain name in bad faith. The Complainant also asserts that the disputed domain name does not revert to an active website, and therefore contends that the Respondent is passively holding it.

B. Respondent

The following is summarised from the Response.

The Complainant neglected to mention that he contacted the Respondent by telephone back in April or May of 2007 and offered him $2000 AUS for the disputed domain name. When that first offer was refused he offered $4000 AUS. (The Respondent also refused that second offer.)

The Complainant’s trademarks have not been registered. Further, those trademarks incorporate generic terms and graphic elements. The generic term “factory seconds” cannot be registered as a trademark.

A business name is a ‘trading as’ account and the trading entity is the Respondent. The Respondent have been actively trading for ten or more years in factory second, new and used PC’s. Further if the Complainant wishes to use <www.archive.org> it will further show that over the last 10 years the Respondent’s web sites change almost every year which demonstrates an active business and not just a stagnant one page “coming soon” site as can be seen on the Complainant’s web site.

The disputed domain name has always been a redirected to other URL’s of the Respondent, usually the <www.computersales.com.au> site but much earlier the <www.f1.net.au> web site. Both of those domain names were used as the Respondent’s primary web sites for the sale of new, used and factory second PC’s as well as web site hosting, Internet access, web site design and a host of other services.

6. Discussion and Findings

For the Complaint to succeed, under paragraph 4(a) of the Policy, the Complainant must prove that:

(i) the disputed domain name is identical or confusingly similar to a name, 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 was registered in bad faith or was subsequently used in bad faith.

The Complainant must prove all of these three elements, which are discussed in turn below, immediately after consideration of the parties’ supplemental filings.

The Policy is substantially similar to the Uniform Domain Name Dispute Resolution Policy (UDRP) and, as such, the Panel has drawn on authority concerning the UDRP, in relation to similar terms of the Policy.

A. Supplemental Filings

In this case, both the Complainant and the Respondent filed a number of supplemental submissions in connection with their case. Neither the Policy nor the Rules explicitly provide for supplemental filings to be made by either party. A Panel has a discretion to admit or invite further filings under the paragraph 10(a), (b) and (d), and paragraph 12 of the Rules. The Panel takes the approach, taken by many previous panels, that such supplementary filings should not be admitted as a general rule. The Panel found that there was sufficient evidence to make a decision on the basis of the Complaint and Response. As such, the Panel did not admit the supplementary filings.

B. Identical or Confusingly Similar

The Complainant succeeds on this first element.

Trademark rights identified in the amended Complaint

In relation to the Complainant’s trademark rights, the Policy does not explicitly identify the time at which a Complainant must have those rights. But it is clearly implicit in paragraph 4 of the Policy that the Complainant should have those rights when the Complaint is first filed. When the Complaint was first filed, the Complainant had only made an application for the registration of its marks. It was only between its first filing of the Complaint, and the filing of its amended Complaint, that the Complainant’s marks were accepted for registration.

Paragraph 3(b)(viii) of the Rules requires (among other things) that the Complaint specify “the name(s), trademark(s) or service mark(s) on which the complaint is based”. Paragraph 4(b) of the Rules provides that, if the provider (in this case, the Center):

“finds the complaint to be administratively deficient, it shall promptly notify the Complainant and the Respondent of the nature of the deficiencies identified. The Complainant shall have five (5) calendar days within which to correct any such deficiencies..”. (emphasis added)

In this case, after the first filing of the Complaint, the Center notified the parties that the Complaint was administratively deficient, because it did not identify the correct respondent. (It identified only Mr. Dean James Mackin, rather than the business under which the disputed domain name was registered: ‘KK Factory Seconds Online’.) On August 14, 2007, the Complainant filed an amended Complaint which corrected that notified deficiency. The Complainant was not advised of any other administrative deficiency because there was none.

However, in submitting the amended Complaint, the Complainant also took the opportunity to make a further amendment. That further amendment was not in relation to an administrative deficiency notified under paragraph 4(b) of the Rules. The Complainant amended his Complaint to include the statement, in relation to what had been his trademark applications, that “The above Trade Mark applications have been accepted for registration by the Trade Marks Office..”. Arguably, the Rules do not provide for this type of amendment, which is more than a mere correction of an administrative deficiency as notified by the Center.

Despite this, the Panel has considered the amended Complaint as a whole. Under paragraph 10 of the Rules, it is ultimately up to the Panel to determine the admissibility of the evidence, and ensure that the parties are treated with equality and given a fair opportunity to present their case. If the Complainant has breached the Rules in this respect, it is a breach that seems more of a technical one. It is not a breach that appears to have created any particular unfairness to the Respondent’s capacity to present its case. As the Complainant has failed to make his case under the second and third elements of the Policy (see below), the issue is academic to the outcome in this particular case.

Identical to Complainant’s mark

The Panel finds that the disputed domain name is identical to the Complainant’s registered mark for FACTORY SECONDS.

The Respondent argues that the disputed domain name is not identical or confusingly similar to the Complainant’s mark, because the Complainant’s mark contains graphic elements. However, graphic elements, not being reproducible in a domain name, need not be considered when assessing identity or confusing similarity. (See Sweeps Vacuum & Repair Center, Inc. v. Nett Corp., WIPO Case No. D2001-0031. For a more recent statement to this effect, see BORGES, S.A., TANIO, S.A.U. v. James English, WIPO Case No. D2007-0477, and the cases cited in that one.)

In this case, the word elements of the Complainant’s registered mark are clearly identical to the disputed domain name. The generic nature of the Complainant’s marks, while putting them at the weaker end of the spectrum, are not relevant to this comparison.

Complainant’s business name

The Complainant also argues that the disputed domain name is identical or confusingly similar to his business name (‘Factorysecondsonline.com.au’). For the reasons set out above, it is not necessary for the Panel to make any particular finding in this respect.

C. Rights or Legitimate Interests

The Complaint clearly fails on this second element.

The Complainant argues that the Respondent has not fulfilled the criteria “described in auDA’s Published Policy No: 2005-02 Guidelines for Accredited Registrars on the Interpretation of Policy Rules for Open 2LDs”. But this has no relevance. In any case, those guidelines (and they are only “guidelines”) are directed to registrars – they have no binding application to the Respondent.

The Complainant also argues that the Respondent is not eligible to hold the disputed domain name because of the Respondent’s failure to comply with the Registrar’s requirements for registrant’s warranties. The Complainant argues that the Respondent’s registered business name (‘KK Factory Seconds Online’) lapsed in 2001. From this, the Complainant argues that the Respondent breached its registration agreement, which requires the registrant to warrant that information it provides to the registrar is accurate and complete, and will be updated. The implication the Complainant seems to be making (although not stated explicitly) is that the Respondent could not have a legitimate interest at the point at which the Respondent’s registration agreement was breached.

Breaches of a registration agreement have, in some prior cases, been taken into account by panels e.g. in determining the separate ground of whether a respondent has acted in bad faith. (See e.g. Banco Bilbao Vizcaya Argentaria, S.A. v. N/A, WIPO Case No. D2003-0996.) However, breach of a registration agreement is not determinative in itself. In this Panel’s view such a breach would need to be significant; for example, part of a pattern of deceptive conduct. There is no such evidence in this case. The Respondent plausibly claims that its breach of the registration agreement arose merely by an administrative mistake. There is no evidence that suggests that the Respondent is being deceptive or disingenuous on this point.

Finally, the Complainant argues that “as far as the complainant is aware there is no evidence of the respondent(s) conducting business under, or…being commonly known by the disputed domain name”.

But even a casual look at the Respondent’s website suggests otherwise. Paragraph 4(c)(i) of the Policy provides that a Respondent may demonstrate its rights or legitimate interests by evidence that, before any notice to the Respondent of the dispute, the Respondent used the disputed domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services. This does not require that a Respondent does business under the exact term incorporated in the domain name. It only requires that the Respondent used the disputed domain name “in connection with a bona fide offering”.

This is what the Respondent has done. The Respondent provided evidence of having a legitimate business trading in computers, both on-line and via a shop. The disputed domain name has a reasonable connection with the nature of that business. Although the Complainant states that the disputed domain name did not resolve to an active website when the Complaint was filed, the Complainant provides no evidence of this (for example, a copy of the web search). The Respondent, more plausibly, counters that the disputed domain name merely reverted to its website at “www.f1.net.au”. This does not mean that the disputed domain name reverted to an ‘inactive’ website – only that it did not revert to a website located at the disputed domain name itself.

The Respondent’s use might not be bona fide if, for example, there was evidence that the Respondent registered the disputed domain name to capitalise on the goodwill of the Complainant’s trademark. However, the Respondent first registered the disputed domain name in 1998. There is no evidence that the Complainant was in business at that time, let alone had any trademark rights. Indeed, there is no evidence in this case that the Complainant conducted any business at all before June 2007. The only evidence offered by the Complainant in this respect is that he has made preparations to establish a business-related website, which is not yet operational. There is also no evidence that the Complainant’s marks have goodwill that is distinctively associated with the Complainant. Those marks were only registered in June 2007. And, as noted below, the marks incorporate a highly generic term which provides a stronger basis for a finding of the Respondent’s legitimate interest.

D. Registered or Used in Bad Faith

The Complaint also fails on this third element, for similar reasons to those set out above. The Complainant has not established any of the examples of bad faith set out in paragraph 4(b) of the Policy, nor any other grounds of bad faith.

The Complaint appears factually wrong in its assertion that the disputed domain name does not resolve to any active website. It follows that the Complainant’s allegation of passive holding against the Respondent cannot be made out. Even if it could (and there is no such persuasive evidence) passive holding is not, in itself, evidence of bad faith.

In this connection, it is relevant that the disputed domain name incorporates terms which are (at least in Australia where both the parties reside) highly generic. “Factory seconds” commonly refer to goods sold or on-sold from the factory at a discount, for example, because of a minor defect in otherwise serviceable goods. Taking into account the nature of the Respondent’s business, it seems reasonably clear that the Respondent may have chosen the disputed domain name simply for its generic meaning. No doubt the Complainant selected its marks for the same reason.

7. Decision

For all the foregoing reasons, the Complaint is denied.

James A. Barker
Sole Panelist

Dated: October 10, 2007