This action was brought in accordance with the ICANN Uniform Domain Name Dispute Resolution Policy, dated October 24, 1999 ("the Policy") and the ICANN Rules for Uniform Domain Name Dispute Resolution Policy, dated October 24, 1999 ("the Rules").

The Complaint was filed by e-mail on April 3, 2001, with hard copy received on April 5, 2001, naming Digital Milk, Inc. as Respondent. On May 13, 2001, Respondent submitted its response to the Complaint.

On June 25, 2001, the WIPO Arbitration and Mediation Center appointed Mark V.B. Partridge, Jonathan Hudis and David E. Sorkin as panelists.

The Panel issued Procedural Order No. 1 on July 10, 2001, seeking additional documents from Respondent. Respondent's supplemental submissions were received on July 25, 2001.

4. Factual Background

Complainant is currently engaged in production and distribution of a variety of products including beverages, gum, candy, energy bars, snowboards and clothing apparel. Complainant was initially involved in beverage production. On January 30, 1985, Complainant began selling JOLT soda in its local markets of western New York. Soon thereafter, Complainant expanded its operation and began selling JOLT soda nationwide. Complainant continues to actively advertise and market the JOLT mark on television and radio. Complainant estimates it has spent in excess of $7 million dollars in marketing and advertising the JOLT mark. Similarly, Complainant has realized in excess of $50 million dollars in sales of products associated with its JOLT mark.

On June 27, 1985, Complainant filed for trademark registration for the word JOLT with the United States Patent and Trademark Office. The mark was registered on January 28, 1986, Reg. No. 1380691. By 1992, Complaint expanded its operation internationally and had filed for trademark registrations for its mark in various countries in addition to the United States.

The domain name <jolt.com> was initially registered by Jerod Tufte. After receiving an objection from Complainant, Mr. Tufte offered the <jolt.com> domain name for sale.

Respondent claims to be an Internet investment and development firm. On or about September 3, 1999, Respondent noticed that domain name <jolt.com> was offered for sale on a web site called <domains.com>. Thereafter, Respondent purchased the disputed domain name <jolt.com> for an undisclosed amount. Respondent registered the additional domain name <jolt.net> in November 1999.

On February 10, 2000, Complainant sent a cease and desist letter to Respondent, regarding its use of the Domain Names. Respondent, in its reply, denied any bad faith intentions in its use and registration of <jolt.com> and <jolt.net>. Again, on May 23, 2000, Complainant sent a second cease and desist letter, to which Respondent replied asserting its legal rights in the Domain Names. Respondent's refusal to cooperate with Complainant's demands ultimately resulted in the initiation of this proceeding.

5. Parties' Contentions

Complainant contends that the Domain Names are identical to its mark, that Respondent has no rights or legitimate interests in the Domain Names, and that Respondent has registered and used the Domain Names in bad faith.

Respondent claims that Complainant's mark is a common word put to descriptive use, and thus Complainant has no enforceable trademark rights under the UDRP. In addition, Respondent maintains it has a legitimate interest in the Domain Names because it developed a plan for bona fide use prior to notice of this dispute. Lastly, Respondent asserts that it did not register nor use the disputed domain names in bad faith.

6. Discussion

To obtain relief under the ICANN Uniform Domain Name Dispute Resolution Policy, Paragraph 4(a) of the Policy requires the complainant to prove each of the following:

i) that 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) that the respondent has no rights or legitimate interests in the domain name; and

iii) that the domain name has been registered and used in bad faith.

A. Confusing Similarity

Complainant has demonstrated prior rights in the mark JOLT based on registration and use. The salient portion of the Domain Names is identical to Complainant's mark. Therefore, Complainant has satisfied the first element of its claim.

B. Legitimate Interests

Under the Policy, legitimate interests in a domain name may be demonstrated by showing that: (i) before any notice of this dispute, respondent used, or demonstrably prepared to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; (ii) respondent has been commonly known by the domain name, even if no trademark or service mark rights have been acquired; or (iii) respondent is making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert customers or to tarnish the trademark at issue. Policy 4(c).

Here, Respondent contends that before any notice of this dispute, it had demonstrably prepared to use domain names in connection with a bona fide offering of goods or services. Complainant asserts that Respondent's activities are a deliberate infringement of its rights and therefore cannot be bona fide offering.

Other decisions recognize that an extensive and elaborate business plan that shows Respondent's preparation to use the Domain Name in connection with a bona fide offering of goods or services may be sufficient to establish a legitimate interest in a domain name. See Titan Industries Limited v. Tanishq Corporation, WIPO Case No. D2000-1793 (March 14, 2001) (noting that business contracts and registration certificate of establishment prior to any notice of the dispute demonstrated legitimate interest in a domain name).

Here, Respondent provided evidence by way of documents and affidavits to demonstrate its preparations for bona fide use of the Domain Names:

1. Digital Milk, Inc. was incorporated on April 8, 1999.

2. In September 1999, Respondent retained Wilson Sonsini Goodrich & Rosati to conduct a screening search regarding the JOLT name for use in connection with online entertainment. Based on the results of the search, counsel advised Respondent that "we are optimistic about the prospects for availability." It appears that Complainant's mark was disclosed in the search and not viewed as a bar to Respondent's proposed use.

3. Respondent acquired the <jolt.com> domain name from the original owner on October 5, 1999, after receiving the results of the screening search.

4. Between September 1999 and November 1999, Respondent contacted potential partners, advisors and investors to whom Respondent presented its business plan involving the use of the <jolt.com> domain name for online entertainment content. The contacts are demonstrated by a substantial amount of email concerning the project between Respondent and third parties.

5. In October 1999, Respondent completed a detailed business plan identifying a management team and providing financial projections for its proposed venture, then identified as "The Jolt Network."

6. On November 20, 1999, Respondent registered the additional domain name <jolt.net> for use in connection with The Jolt Network.

7. In late January, Respondent changed the focus to its proposed venture from online entertainment content to online game shows. Respondent proceeded with further development of this idea by contacting various people as potential partners, advisors and investors.

8. On February 15, 2000, Respondent received a cease and desist letter from Complainant. In response, Respondent's counsel advised Complainant of Respondent's plan to use the name for an online entertainment network, consistent with the preparations it had undertaken during the prior six months.

Based on the record presented, this Panel finds that Respondent has presented sufficient evidence to show "demonstrable preparations to use [the Domain Names] in connection with a bona fide offering of goods or services" under Paragraph 4(c)(i) of the Policy.

Complainant suggests that Respondent's plans should be discounted because it has not in fact made use of the Domain Names for a period of approximately two years. Further, complainant suggests that Respondent's acquisition of the Domain Names is "tainted" by the bad faith of the prior owner of the <jolt.com> domain name, who offered the domain name for sale at auction and transferred it to Respondent in exchange for an equity interest in The Jolt Network.

We recognize that the circumstances surrounding the transfer of the <jolt.com> domain name to Respondent and the efforts to legitimize the registration and use of the domain name after the transfer may appear suspicious. And we are mindful that a sham business plan should not be sufficient to demonstrate a legitimate interest under the Policy (see J.P. Morgan v. Resource Marketing, WIPO Case No. D2000-0035 (March 23, 2001), and Advanced Internet Technologies v. AIT,.Inc., WIPO Case No. D2000-0597 (February 20, 2001). Nevertheless, in the context of a truncated UDRP proceeding, sufficient issues have been raised by Respondent's submissions and supplemental submissions to rebut Complainant's claim of a lack of rights or legitimate interest in the Domain Names. The UDRP contemplates the transfer of domain names only when the Complainant demonstrates all three requisites of the policy (UDRP 4(a)(i)-(iii)) by a preponderance of the evidence. Here, we conclude that Complainant has not prevailed on the second element of its claim.

Finally, Complainant suggests that it should prevail because Respondent's proposed use would infringe Complainant's prior rights. However, given the opinion of counsel and the differences in the goods and services of the parties, this does not appear to be a case of deliberate infringement. Legitimate disputes over likelihood of confusion are beyond the scope of the current Policy. See Avnet, Inc. v. Aviation Network, Inc., WIPO Case No. D2000-0046 (March 24, 2000). Thus, Complainant's remedy for infringement, should it wish to pursue it, is an action for infringement in the United States courts.

B. Bad Faith

Because Complainant has not prevailed on an essential element of its claim, we do not need to consider further the final element of bad faith.

7. Conclusion

The Panel concludes that Complainant has failed to establish that Respondent lacks any right or legitimate interest in the Domain Names <jolt.com> and <jolt.net>. Therefore, Complainant's request for transfer is denied.

Mark V. B. Partridge
Presiding Panelist

Jonathan Hudis
Panelist

David E. Sorkin
Panelist

Dated: August 1, 2001