WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Netvault Ltd v. SV Computers and Sunil Walia a/k/a Baldev S. Ahluwalia
Case No. D2000-0095
1. The Parties
The Complainant is Netvault Ltd, a United Kingdom company with its principal place of business in Poole, Dorset, England ("the Complainant").
The Respondent is Sunil Walia, trading as SV Computers in the state of New York ("the Respondent").
2. The Domain Name and Registrar
The domain name the subject of this dispute is "<netvault.com"> ("the Domain Name"), which was first registered on 7 November 7, 1996.
The Registrar of the domain name is Network Solutions Inc. of Herndon, Virginia, USA ("the Registrar").
3. Procedural History
A Complaint pursuant to the Uniform Domain Name Dispute Resolution Policy ("the Policy"), the Rules for Uniform Domain Name Dispute Resolution Policy ("the Rules"), both implemented by ICANN on 24 October 24, 1999, and the WIPO Supplemental Rules for Uniform Domain Name Disputes Resolution Policy (‘"the Supplemental Rules"), was received by WIPO in electronic format on 24 February 24, 2000, and in hard copy on 28 February 28, 2000. Payment in the required amount was made by the Complainant.
An Acknowledgment of Receipt (Complaint) was sent to the Complainant [please confirm date that acknowledgement of receipt of complaint sent to Complainant on February 25, 2000.].
On 29 February 29, 2000, a Request for Registrar Verification was sent to the Registrar, requesting confirmation that it had received a hard copy of the Complaint from the Complainant, that the domain name was currently registered with it and that the Policy was in effect, providing full details of the holder of the Domain Name and advising the current status of the Domain Name.
On 29 February 29, 2000, the Registrar responded, confirming that it was in receipt of a copy of the Complaint from the Complainant and that the domain name was currently registered with it. It provided a copy of the requested Whois details and advised that the Domain Name was on "Active" status. It stated that the Policy was in effect by virtue of the Registrar’s 4.0 Service Agreement.
On 1 March 1, 2000, the Complaint was checked by WIPO for compliance with the Policy, the Rules and with the Supplemental Rules, and was verified as being satisfactory.
On 1 March 1, 2000, the formal requirements having been met, a Notification of Complaint and Commencement of Administrative Proceeding was sent to the Respondent by email, fax and courier and also to the Complainant, the Registrar and ICANN, advising that the Response was due by 20 March 20, 2000.
On 14 April 14, 2000, WIPO invited Clive Elliott ("the Presiding Panelist") to serve as the Presiding Panelist in this Administrative Proceeding.
On 17 March 17, 2000, a Response pursuant to the Policy and the Rules was received by WIPO as a hard copy and on March 20, 2000, by electronic format. [please confirm whether received by electronic format]
On 20 March 20, 2000, an Acknowledgment of Receipt (Response) was sent to the Respondent.
On April 19, 2000, after receiving their completed and signed Statements of Acceptance and Declarations of Impartiality and Independence, the Center notified the parties of the appointment of a three-arbitrator panel consisting of Mr. Clive Elliott as the Presiding Panelist, and Mr. Andrew Bridges and Mr. Paul DeCicco as Panelists.
On 13 April 13, 2000, a Request for Declaration and Impartiality and Independence was transmitted to the Presiding Panelist.
On 18 April 18, 2000, a Statement of Acceptance and Declaration of Impartiality and Independence was received by WIPO from the Presiding Panelist.
On 15 May 15, 2000, the Panelists discussed the matter by way of teleconference. The Panel formed the view that it would benefit from receiving further information, prior to making a decision. Accordingly, it invited the Respondent to provide a declaration setting out, in detail, the following:
All expenses relating to the investment in the website on which the "<netvault.com"> domain name was used or proposed to be used and/or in relation to the domain name "<netvault.com">; such declaration to clearly identify and particulariseparticularize all expenses associated with this activity.
Whether and if so how the above website was either commercialisedcommercialized or implemented and in particular whether the website was implemented/used or modified or migrated to another website and/or domain name.
When and how the Respondent or his associates first became aware of the NETVAULT ® name or brand; and
Details of all domain names applied for or registered by the Respondent or his associates along with any information relevant to the domain name/s so applied for or registered and the basis for so applying for or registering these domain names.
The Respondent was given until 30 May 30, 2000, to provide the requested declaration, with the Panel being given one week after the receipt of the declaration of the Respondent to give its decision.
The Respondent declined to provide further information, as requested. Accordingly, the Panel has made its decision on the information currently before it but also taking into account the Respondent’s decision not to provide the further information requested.
Having reviewed the communication records the Presiding Panelist is satisfied that the formal requirements of the Administrative Proceeding have been satisfied.
4. Factual Background – Complainant
The Complainant asserts:
Netvault markets and sells its software under the registered trade marktrademark NETVAULT®.
Until recently, Netvault was part of the Willow Group an international group of companies specializing in the management of data-storage and other services for computer systems.
The trade marktrademark NETVAULT® was first adopted and used in connection with network data-storage software by American Telephone and Telegraph Company ("AT&T").
On 31 May 31, 1991, AT&T filed an application with the United States Patent and Trade mark Office ("USPTO") for registration on the Principal Register of the mark NETVAULT for "computer programs for data backup and recovery; namely, remote backup and recovery over a telecommunications network, in class 9 (US Cl. 38).
In 1992, Willow Ltd, Netvault’s predecessor company, entered into a partnership with AT&T to enhance its NETVAULT® product by combining it with library management software developed by Willow Ltd.
NETVAULT® was registered by USPTO on 12 October 12, 1993 (Principal Register, Registration No. 1,798,519).
By an assignment agreement dated 20 May 20, 1997, the Complainant acquired all right, title and interest in and to the NETVAULT® mark, together with the goodwill of the business connected with the use and symbolized by the mark, and the registration thereof. NetVault recorded its assignment with the USPTO and the registration is presently valid and subsisting, unrevoked and uncancelled.
NetVault continues to be engaged in the business of developing, manufacturing and selling its high-performance data-storage management software.
NetVault is recognized internationally as the leading developer of archiving software for computer systems based on Unix and Windows NT operating systems. NetVault has researched and designed products for, and in partnership with major manufacturers including AT&T and NCR.
NetVault is currently seeking to expand its market to include a broader range of customers which currently include the United States, Europe and Asia.
NetVault has invested substantially in advertising and promoting its products under the NETVAULT® name and mark.
NetVault has developed and maintains an Internet website at www.netvault.co.uk providing information about the company and its products.
NetVault has developed and enjoys an excellent business reputation and exceptional goodwill in the computer industry associated with the its NETVAULT® mark.
During the period from 7 November 7, 1996, when the registration of the domain name "<netvault.com"> was made by the Respondent, the Respondent did not post any content at the "<netvault.com"> address and visitors to the site were told that the site was "under construction".
On 15 May 15, 1998, the Complainant contacted the Respondent and inquired about his intended use of the domain name "<netvault.com"> and an offer to purchase the domain name was made to the Respondent for $750.00 for the transfer of the domain name. The Respondent did not respond to this offer.
On 1 July 1, 1998, the Complainant by way of its solicitor sent a "cease and desist" letter to the Respondent to which it acknowledged receipt but did not substantially respond. A further letter was sent by the Complainant to the Respondent on 13 May 13, 1999, to which the Respondent responded on 15 July 15, 1999, with an offer to sell the domain name for US$100,000.
5. Factual Background – Respondent
The Respondent asserts:
The Respondent registered the domain name <"netvault.com"> with Network Solutions on 7 November 7, 1996.
No company or organisationorganization with the name NetVault Limited existed in the United States of America on 7 November 7, 1996;
No company or organisationorganization with the name NetVault Limited exists in the United States at the time of the Respondent’s response;
The Complainant company was first established on May 20, 1997, in the United Kingdom by the Willow Group.
The Complainant does not have any employees or an office in the United States of America.
AT&T held a limited trade mark for a data storage product named "netvault" in 1991.
The use of the trade mark is for, and is limitedto "computer programs for data backup and recovery: namely, remote backup and recovery over a telecommunications or computer network" in class 9 (US Cl. 38);
AT&T formed an agreement with a company called Willow Ltd in 1992 but the trade mark "NETVAULT®" was always the property of AT&T and remained the property of AT&T until May 20, 1997.
AT&T never registered or asserted their right to the domain name "<netvault.com>".
AT&T never filed a complaint with the Respondent, Network Solutions or in a court of competent jurisdiction asserting their right to the domain name "<netvault.com>";
The estimated costs of time and resources in the development of the domain name "<netvault.com"> website amounts to over US$100,000.
The Respondent’s offer to sell the domain name was done in good faith in order to resolve this dispute.
The domain name "<netvault.com"> was registered for the purpose of establishing an Internet company dedicated to providing a secure Internet site hosting and consulting services and was never envisioned as a site to sell goods or products of any kind of computer related software or hardware.
It is necessary to consider the facts of this case against the Uniform Domain Name Resolution Policy and in particular paragraph 4(a). Dealing with each of the requirements in turn:
Paragraph 4(a)(i) – Whether the domain name is identical or confusingly similar to a trade marktrademark or service mark in which the Complainant has rights.
The respondent’s second level domain name ist identical to the complainant’s trademark.
Paragraph 4(a)(ii) – Does the Respondent have any right or legitimate interest in respect of the domain name.
The Respondent furnished no evidence of any right or legitimate interest in respect of the domain name. Documents furnished with the Respondent’s original response, consisting of alleged printouts of a fledgling website, demonstrate an insufficient basis for a claim that the Respondent had a right or legitimate interest in the name. (The request is discussed more fully in the context of bad faith in connection with Paragraph 4(a)(iii)). Because the Panel considered this a close issue, it asked the Respondent for additional evident to substantiate his allegations of intent.
The Respondent failed to provide any. The Panel therefore concludes that the Respondent did not have any rights of legitimate interest in respect of the domain name.
Paragraph 4(a)(iii) – Has the domain name been registered and has been used in bad faith.
It is common ground that the NETVAULT® trade mark was registered at the USPTO on October 12, 1993, by American Telephone & Telegraph Company (AT&T) for specified computer programs and that the Complainant acquired all right, title and interest in and to the NETVAULT® trade mark by an assignment agreement on May 20, 1997.
While the trade marktrademark registration is in class 9 covering computer program for data backup and recovery, this is stated to be in relation to "remote backup and recovery over a telecommunications or computer network". Furthermore, Exhibit F of the Complaint annexes the register sheet for the trade marktrademark registration, which was first used in commerce in the USA in 1993.
The Complainant asserts that NetVault is recognisedrecognized internationally as the leading developer of backup and archiving software for computer systems based on the Unix and Windows NT operating systems and that these products are marketed and sold worldwide, particularly in the USA, Europe and Asia. It is also stated that the company NetVault has developed and enjoys an excellent business reputation and exceptional goodwill in the computer industry, which are associated with its NETVAULT® name and mark.
These assertions are supported in an affidavit of Fabrice Helliker. In paragraph 8 of the affidavit it is stated that 9,135 new users accessed NetVault’s website during the period February 1, 1990 to January 31, 2000.
In response, the Respondent states (paragraph 1(D) of Response) that the Complainant sells almost all of its software to Original Equipment Manufacturers (OEM’s), instead of the public at large and it denies that the NETVAULT® trade marktrademark is famous. It also submits that it is highly unlikely that the public at large have the knowledge of the trade marktrademark NETVAULT®.
Significantly, the Respondent does not deny or dispute that when the "<netvault.com"> domain name was registered on November 7, 1996:
1) 1. That AT&T had a reputation and goodwill in the NETVAULT® trade marktrademark and/or name, at least in relation to computer software products; or
2) 2. That the Respondent was unaware of the use of the NETVAULT® trade mark by AT&T.
In paragraph 1(B) of the Response, the Respondent states he made good faith efforts to ensure that he was not registering a company name, which was already owned and registered as a business name. The domain name "<netvault.com"> was registered supposedly for the purpose of establishing an Internet company dedicated to providing secure Internet site hosting and consulting services (Response, paragraph 2(A))..
Given this, some evidence as to whether the Respondent conducted a search of the US PTO records to ascertain whether this would amount to an infringement of existing rights would have been helpful. The record is, however, silent on this issue.
Given that the Respondent had not denied knowledge of the NETVAULT® name/trade marktrademark in 1996 and the fact that various searches were conducted to ascertain the company name situation, the prima facie view of the panel was that, in 1996, it was quite possible that the Respondent was aware of the Netvault product and/or the NETVAULT® trade marktrademark. Accordingly, the Panelists invited the Respondent to deal with this issue and in particular to advise whether it was aware of the NETVAULT® name or brand. A denial, under oath, that the Respondent had any knowledge of the NETVAULT® brand or name at the date of application of the domain name would have been a highly material consideration. The failure to respond to the Panel’s invitation,invitation must similarly be taken into account.
In conclusion, while the Complainant’s evidence on the nature and extent of the goodwill and reputation in the NETVAULT® name and trade marktrademark, particularly in the USA, could have been more comprehensive, the evidence, coupled with the existence of the trade mark registration, is sufficient to meet the burden of proof imposed on the Complainant.
If, as has been found, the Respondent was likely to have known of the Complainant or its predecessor in title’s interest in the NETVAULT® name or trade marktrademark and absent a satisfactory explanation as to why the "<netvault.com"> name was chosen in the first place, it is held that the domain name was registered by the Respondent in bad faith.
Likewise, it is common ground that the Respondent offered to sell the domain name to the Complainant for US$100,000. This appeared to be in excess of the out-of-pocket cost of the domain name. Once again the Respondent was given the opportunity to justify and explain the position. The Respondent’s failure to identify and particulariseparticularize all expenses associated with the development of its website suggests that the amount of US$100,000 could not be directly attributed to the development of the Respondent’s website and/or the "<netvalult.com"> domain name. Just as the Respondent’s explanation may have been sufficient to lead to a different conclusion, the Panel feels it must equally take into account the Respondent’s failure to adequately identify and explain its statements about the development of its website.
As to the Respondent’s evidence that it has expended in excess of this amount of money in developing the Netvault website, this evidence is of limited weight. The Respondent has clearly been trading under names other than Netvault and any efforts to develop a website must have primarily been in relation to the website itself and not to the domain name which can be replaced in the website. The Respondent’s failure to provide evidence as to how the website was either commercialisedcommercialized or implemented must also be taken into account by the Panel.
Finally, there is no evidence indicating that the Respondent’s efforts to develop the website occurred before the Complainant objected to the use of the "<netvault.com"> domain name.
The Panel has given this matter careful consideration. It is clearly a finely balanced matter. It is partly for this reason that the Panel sought further comment and information from the Respondent.
If the Respondent had chosen to submit such further information and/or comment, the Panel may well have concluded that the Complainant had failed to shift the onus of proof.
However, the Panel is of the view that the Respondent’s failure to even attempt to address the issues raised by the Panel must be taken into account in the ultimate balancing exercise it has to undertake.
Finally, we do not wish our comments on the issue of web site development expenses to imply in any way, that more-than-out-of pocket sale offers are bad per se. Our decision is dependent on the particular facts of this case and the absence of a satisfactory explanation.
Having carefully considered the matter in the light of the evidence filed and also taking into account the Respondent’s failure to lodge evidence/comments clearly seen as important by the Panel, the Panel concludes that the Complainant has satisfactorily made out its case. Accordingly, the domain name should be transferred to the Complainant.
Andrew Bridges Paul DeCicco
Dated: July 7 , 2000
DISSENT by Panelist
Panelist Paul Michael DeCicco respectfully dissents from the Panel’s decision. The Complainant fails to prove, pursuant to paragraph 4(a)(ii) of the Uniform Domain Name Dispute Resolution Policy (UDRP or "the Policy") that the Respondent has "no rights or legitimate interests in respect of the domain name" and further fails to prove pursuant to paragraph 4(a)(iii) of the Policy that the "domain name has been registered and is being used in bad faith." Since the presence of each element is independently necessary to find for the Complainant, the status quo should not be upset and the domain name should remain with the Respondent.
Rights or Legitimate Interest
The Respondent has rights or legitimate interests in the domain name <netvault.com>. "Rights" in Internet domain names arise from the executory bi-lateral contract between registrant and registrar (the Registration Agreement) which is part-and- parcel to every domain name registration. The Registration Agreement defines the rights and duties of the respective parties regarding the domain name and incorporates the UDRP by reference. Under UDRP paragraph 2, the registrant agrees and warrants as a condition of registration, that: (a) the statements that the registrant made in its Registration Agreement are complete and accurate; (b) to the registrant’s knowledge, the registration of the domain name will not infringe upon or otherwise violate the rights of any third party; (c) the registrant is not registering the domain name for an unlawful purpose; and (d) the registrant will not knowingly use the domain name in violation of any applicable laws or regulations. There is no prerequisite that a person or entity seeking to register a domain name possess trademark rights in the prospective name.
Here the Respondent’s intended "use" for the domain name is to refer a commercial website. The intended services related to such website appear to this panelist to be outside the class of goods for which the Complainant holds rights. The majority finds otherwise. But no matter, the Registration Agreement/UDRP does not stand or fall on whether or not the domain name objectively (directly or indirectly via linked or hosted content) infringes on another’s trademark rights; and there is no persuasive evidence which shows Respondent to have breached UDRP paragraph 2. By virtue of the Registration Agreement, the Respondent has rights in the domain name "netvault.com". While a breach of that agreement by the Respondent would divest the Respondent of such rights, the terms and conditions of that agreement do not appear to have been breached.
Since Complainant has not made out a prima fascia case as to Paragraph 4(a)(ii), it is not necessary for the Respondent to put forth affirmative evidence pursuant to Paragraph 4(c) et seq. showing Respondent’s rights or legitimate interests in the domain name for purposes of Paragraph 4(a)(ii). Respondent therefore has rights or legitimate interests with respect to the domain name.
Registration and Use In Bad Faith
The Complainant additionally fails to prove that the Respondent "registered and used" the domain name in bad faith as required by UDRP 4(a)(iii) if the domain name is to be transferred. Importantly, the domain name was never "used" by the Respondent and thus its "use" in "bad faith" is logically precluded.
Nevertheless and without regard to the domain name registrant’s right to use the domain name in a manner which does not conflict with the rights of Complainant, the Complainant moved ex-parte via NSI’s (former) dispute resolution policy to have the domain name put on hold, succeeded in doing so, and thereby interfered with the business interests of the Respondent--no matter how "fledgling" they might have been. The only "basis" for Complainant’s action was its (non-famous) trademark registration in a name lexically identical to the target domain name. If "bad faith" is present in this case, it may vest with the Complainant who attempts to extend its trademark rights to areas where it has no such rights.
Even if Respondent somehow "used" the domain name, there still is no evidence of "use . . . in bad faith." The UDRP expressly sets out at 4(b)(i)-(iv) four circumstances which "if found by the Panel to be present, shall be evidence of the registration and use of a domain name in bad faith." Policy Para. 4(b). Only the first "circumstance" warrants discussion.
As indicative of "bad faith" the Policy at Para. 4(b)(i) allows for:
(i) circumstances indicating that you have registered or you have acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name;
That Respondent may have offered to sell the domain name to the Complainant for US $100,000 is not indicative of this "circumstance." Offers of compromise after a dispute has arisen should not be considered as evidence pursuant to Rule 408 of the Federal Rules of Evidence as made applicable by Rules for Uniform Domain Name Dispute Resolution Policy Para. 10(d) (the "Rules"). Moreover, allowing Complainants to offer such evidence encourages mark holders to bait domain name registrants (who may or may not also be trademark holders) into "negotiations" aimed primarily at conjuring up evidence to be used in a UDRP (or other) proceeding. Any "offer" to transfer a domain name for consideration in this context is neither competent evidence of bad faith, nor of anything else for that matter. Furthermore, in light of the relative obscurity of the NETVAULT mark and the timing of a single "offer" to sell the domain name years after registration, it seems illogical to hold that the Respondent’s primary purpose in registering the domain name was to sell it to the Complainant.
The Majority considers the Respondent’s reasons for registering "netvault.com" as relevant to its determination. Although an "explanation of why the domain name "netvault.com" was chosen" by the registrant might be dispositive of "bad faith" registration, the absence of such an explanation does not lead to the adverse inference that it was. Even if Respondent knew prior to registering "netvault.com" that Complainant possessed a trademark in NETVAULT, Respondent may still legitimately register that trademarked name providing that the domain name is used either in a non-commercial sense, fair use sense, or as intended here in association with products or services outside the class of goods for which the Complainant has trademark rights. See UDRP Para. 2.
Registering a domain name where, as here, there are reasonable scenarios under which the domain name may be legitimately used and where as here, there is no clear indication that the registrant (or other interested party) was competing or intended to compete in the same trademark space as the Complainant, cannot give rise to a finding of bad faith. This remains true even if:
… the Respondent was likely to have known of the Complainant or its predecessor in title’s interest in the NETVAULT® name or trademark and absent a satisfactory explanation as to why the "netvault.com" name was chosen in the first place . . .
Decision, page 7___.
Indeed, the Respondent explained its purpose in registering the domain name "netvault.com" --to provide secure web hosting services. Except for a necessary dependence on computers (most endeavors are likewise dependant), this panelist sees little commonality between the services being offered by Complainant and those intended to be offered by the Respondent. But even if this were not the case, unless there is a clear "bad faith" infringement of a complainant’s non-famous mark by a respondent, the bald finding of a trademark dispute between the parties or even a colorable infringement by a respondent, without more, does not urge that either Policy Para. 4(a)(ii) (the respondent has no rights or legitimate interests in the domain name--discussed above), or Policy Para. 4(a)(iii) (the respondent has registered and is using the domain name in bad faith) is satisfied.
Trademark rights are not "rights in gross." The UDRP must not provide a mechanism for anyone without rights or with rights limited in commercial scope and/or geographic reach to wrestle domain names away those who may or may not have trademark rights in such name, but who nevertheless can reasonably use its domain name in a manner which does not impermissibly interfere with another’s rights. When the UDRP is formally applied, its single remedy--transferring registration--appears to be proper only where the intentional act of registering and using a domain name is premised on the intentionally unfair or illegal capitalizing on, and/or disadvantaging of, a trademark holder’s (or other’s) rights or interests. The case now before the Panel, is not such a case.
For the reasons stated above, the dissenting Panelist finds that the Complainant fails to prove that the Respondent has been divested of the domain name rights granted to him under the Registration Agreement. The Respondent maintains at least some rights or legitimate interest in the domain name "netvault.com". Policy Para. 4(a)(ii) does not operate to the Respondent’s disfavor.
Additionally, the dissenting Panelist finds that the Complainant does not prove that the domain name "has been registered and is being used" in bad faith as required by Policy Para. 4(b)(ii). The Complainant having failed to meet its burden, the domain name "netvault.com" should remain registered to the Respondent.
Paul Michael DeCicco, Esq.
Dated: July 19, 2000
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