WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Spirit Airlines, Inc. v Spirit Airlines Pty. Ltd
Case No. D2001-0748
1. The Parties
The Complainant is Spirit Airlines, Inc., 2800 Executive Way, Miramar, Florida 33025, U.S.A, represented by D B Hassett and D P Wasylik.
The Respondent is Spirit Airlines Pty Ltd, Level 9, 580 St. Kilda Road, Melbourne, VIC 3101, Australia, represented by Edmond William Coady.
2. The Domain Name and Registrar
The Domain Name is <spiritairlines.com>.
The Registrar is Network Solutions, Inc.
3. Procedural History
The Complaint was received by WIPO by email on June 6, 2001, and in hardcopy form on June 7, 2001. WIPO has verified that the Complaint satisfies the formal requirements of the Policy, the Rules and the Supplemental Rules and that payment was properly made. The Administrative Panel ("the Panel") is satisfied that this is the case.
The Complaint was properly notified in accordance with the Rules, paragraph 2(a). The Registrar has confirmed that <spiritairlines.com> ("the Domain Name") was registered through Network Solutions, Inc. and that Spirit Airlines Pty, Ltd. ("the Respondent") is the current registrant. The Registrar has further confirmed that the Policy is applicable to the Domain Name.
On June 14, 2001, WIPO notified the Respondent of the Complaint in the usual manner and informed the Respondent inter alia that the last day for sending its Response to the Complainant and to WIPO was July 3, 2001. No response having been received, a Notification of Respondent Default was issued on July 4, 2001. The Response was received by WIPO on July 4, 2001, by fax and in hard copy form on July 10, 2001. WIPO informed the Respondent that the Panel would decide whether or not to admit the out-of-time Response
The Panel was properly constituted. The undersigned Panelist submitted a Statement of Acceptance and Declaration of Impartiality and Independence.
No further submissions were received by WIPO or the Panel, as a consequence of which the date scheduled for the issuance of the Panel’s Decision is August 1, 2001.
The reasons given by the Respondent’s representative for failing to lodge the Response within time were (i) pressure of workload and (ii) miscalculation as a result of a failure to take into account the time change between Melbourne and Geneva. The delay has not caused prejudice to the Complainant and has not inconvenienced the Panel in any way. The Panel exercises its discretion in favour of allowing in the Response.
4. Factual Background
The Complainant is a small airline based in the United States of America. It first started using the name SPIRIT AIRLINES in 1992 and filed application with the United States Patent and Trade Mark Office for its name SPIRIT AIRLINES, INC as a service mark in November 1997. The registration came through on April 11, 2000.
On December 10, 1997, the Respondent was incorporated in Australia under the name, Spirit Airlines (Aust) Pty Limited.
On February 12, 1998, the Respondent underwent a name change to its current name. In March 1998 Unisearch Research Services Pty Limited produced a corporate plan for the Respondent.
On April 29, 1998, the Respondent registered the Domain Name.
On April 16, 1999, the Complainant’s attorneys write to the Respondent claiming infringement of the Complainant’s trade mark rights and seeking cancellation of the Domain Name. On July 1, 1999, the Respondent’s attorneys replied by way of a Without Prejudice letter, denying the allegations and, inter alia, offering to assign the Domain Name registration and a related Australian domain name and trade mark application for $200,000. The correspondence continued by post and by email through to April, 2001, but without agreement being reached.
On April 28, 2000, the Respondent renewed the registration of the Domain Name.
The Respondent has never operated an airline under the name Spirit Airlines or any similar name.
5. Parties’ Contentions
The Complainant contends that the Domain Name is identical or confusingly similar to its US service mark. The Complainant points to the fact that the Respondent has never supplied services under the name SPIRIT AIRLINES and has abandoned any intentions it might have had for doing so. It asserts that the Respondent "as a student of the US no-frills airline market" must have known of the Complainant’s superior rights in the name at the time that it registered the Domain Name. The Complainant states that that establishes that the Respondent registered the Domain Name in bad faith.
The Complainant then points to the Respondent’s demand for $200,000, which was made after the Respondent intended to change its name to a name not incorporating the name SPIRIT AIRLINES. The Complainant states that even if it were the case that the Respondent had originally had plans to launch an airline under the name SPIRIT AIRLINES, it had ceased to have any intention of doing so by the time it renewed the Domain Name registration.
In renewing the Domain Name registration the Respondent’s main intent was to extract a large sum of money from the Complainant, because by that time the Respondent was well aware of the Complainant’s claim to the Domain Name. The Complainant claims that the renewal was made in bad faith and in violation of the Policy and cites in support the decisions in Houlberg Development v, Adnet International (NAF October 27, 2000) and ABF Freight System Inc v. American Legal (Case D2000-0185).
The Respondent has admitted that its website receives thousands of hits a month from US residents looking for the Complainant. Originally, the Respondent directed those visitors to the Complainant’s website. Now the Respondent recommends visitors looking for cheap airfares in the US to visit the sites of the Respondent’s competitors, Southwest Airlines, jetBlue and Air Tran Airways. The Respondent has declined the Complainant’s request to place on its website a link to the Complainant’s website. The Complainant alleges that the Respondent is deliberately disrupting the Complainant’s business.
The Complaint concludes as follows:
"Respondent knew of the close similarity of the disputed Domain Name to Complainant’s trademark before Respondent made any preparations to use the name in connection with a bona fide offering of goods and services. Respondent has never actually provided bona fide goods and services under the auspices of the Domain Name. Even when it did re-direct U.S. customers to Complainant’s website in response to e-mail inquiries, Respondent was taking advantage of the confusion caused by its registration of the spiritairlines.com domain to garner Internet traffic and sell its ephemeral Australian air travel services to U.S. customers. See Annex J (Sample of Respondent’s e-mail response to U.S. customers who e-mailed Respondent through the spiritairlines.com website). Respondent thus intentionally attempted to attract, for commercial gain, Internet users by creating a likelihood of confusion in violation of the Policy. SeeDebbie Robs and Greg Robus v. Nicky Suard (DrivenOne, Inc.), Case No. D2000-0941 (WIPO Dec. 6, 2000) (finding a registration and use in bad faith where Respondent purposefully chose domain names confusingly similar to Complainant’s marks, even though Respondent would disclaim any connection to Complainant’s services in response to inquiries). Under these circumstances, Respondent’s use and registration of the Domain Name is in bad faith, and transfer of the Domain Name is warranted."
The Respondent states that it originally intended to launch an airline under the name SPIRIT AIRLINES and has exhibited extracts from an independently produced corporate plan evidencing its original intention to do so. The venture got delayed as a result of a fraud perpetrated upon the company. By the time the company was ready to attempt a launch, the market conditions were not favourable. The Respondent has for some time had an alternative name in mind, but denies that it has abandoned its plans to launch under the name SPIRIT AIRLINES. "The Respondent intends, at an opportune time, to resume its planned entry to the Australian air market: a capital and investment financing proposal is under consideration by financiers based in the US".
The Respondent states categorically that it is not "a student of the US no-frills airline market" and knew nothing of the Complainant when it registered the Domain Name. The Respondent points out that it had no reason to have any knowledge of the Complainant. It refers to the geographical divide between the parties’ respective spheres of operation and it exhibits an extract from the Complainant’s website being a newspaper article headlined "Spirit, the most successful small carrier you’ve never heard of, is poised to take off."
The Respondent points to the same geographical divide to support its contention that while similar, the Respondent’s name/Domain Name and the Complainant’s service mark are far from confusingly similar. There is no overlap between the parties’ businesses. Nobody seeking cheap domestic travel in the US is likely to believe that an airline offering similar services in Australia are connected.
The Respondent acknowledges that it has received a significant number of hits from persons seeking information about domestic travel within the US. Up until April 1999 it forwarded to the Complainant any hits, which it could identify as being hits intended for the Complainant. Thereafter it ceased to do so. The directors of the Respondent took exception to the Complainant’s behaviour and modified the website to include reference to the Respondent’s competitors. As a gesture of good faith the Respondent has "recently modified its website to provide a link to the Complainant’s website and is prepared to leave the link in place until it repositions itself for entry into the Australian market.
As to the claim that renewal of the Domain Name with knowledge of the Complainant’s rights constitutes bad faith registration within the meaning of paragraph 4(a)(iii) of the Policy, the Respondent dismisses one of the cited previous decisions (Houlberg) as distinguishable, but ignores the other one (ABF Freight). In relation to Houlberg the Respondent states:
"The decision of Houlberg Development v Adnet International cited by the Complainant in paragraph 12(5), is clearly distinguishable from the facts of the present case. Its use by the Complainant is to assert that renewal with actual knowledge of the Complainant’s claims is evidence of bad faith. In Houlberg, both complainant and respondent were resident within the United States; there was passive holding of the domain name by the respondent (who did not contest the administrative proceedings) and did not submit an assertion or proof of good faith; and evidence was accepted that the respondent had ‘actual’ knowledge of the trademark rights of the complainant before it renewed the domain name."
The Respondent objects to the production in evidence of the Respondent’s Without Prejudice correspondence with the Complainant’s attorneys. It points to the normal rule applying to correspondence entered into with a view to achieving an out-of-court settlement, namely that the parties to a dispute should be able to enter into such correspondence and offer compromises without fear of the correspondence being used against them in the proceedings. The Respondent argues that the same principle should apply in this administrative procedure.
The Respondent asserts that in all the circumstances the demand for $200,000 compensation for changing its name and transferring the Domain Name and the associated Australian rights was reasonable. The Respondent, acknowledging that it is still able to be flexible and reposition itself, "is willing to entertain offers from the Complainant, but is not prepared to forgo rights based on false assertions of conduct said to be in breach of the Policy."
The Response concludes as follows:
"Paragraph 12(12) of the Complaint asserts, contrary to the evidence, or unsupported by any evidence, that "Respondent was taking advantage of the confusion caused by its registration … to garner Internet traffic and sell its ephemeral Australian air travel services to U.S. customers." Reliance was placed on copy responses in Annex J. Respondent seeks to rely on all responses in Annex J., in the context of the facts recited above. The conduct of the Respondent was only directed to attracting customers to an Australian market and, by its responses, sought to avoid confusion, if any, in the minds of enquirers to its site. It is ludicrous to expect that there could be any confusion between airline travel to a destination on the east coast of America, and one within Australia (allowing for the 30 to 36 hour travel from the States to Australia before commencement of any such travel in the first place). The facts of Debbie Robus and Greg Robus v Nicky Suard, relied on by the Complainant are unrelated and the reference is fanciful in the circumstances."
6. Discussion and Findings
According to paragraph 4(a) of the Policy, the Complainant must prove that
(i) The Domain Name is identical or confusingly similar to a trade mark or service mark in which the Complainant has rights; and
(ii) The Respondent has no rights or legitimate interest in respect of the Domain Name; and
(iii) The Domain Name has been registered and is being used in bad faith.
Before addressing those three issues, the Panel is called upon to assess whether or not the Without Prejudice correspondence from the Respondent should be admissible in this administrative procedure. The Panel declines to do so. The Panel’s decision does not turn on that correspondence.
The Panel comments that if Without Prejudice correspondence is to be excluded from evidence put before panelists in these disputes, the Rules should cover the point expressly. Application of this ‘rule’ could have a material effect on the ability of complainants to prove bad faith registration and use. In the view of the Panel it is not an issue that should be dealt with on an ad hoc basis depending upon the home jurisdiction of the parties or the panelist.
Identical or confusing similarity
The Domain Name, comprising as it does the Complainant’s service mark without the concluding ", INC", is not identical to the Complainant’s service mark. Plainly, however, it is similar. Is it confusingly similar? The fact that the Respondent has received substantial numbers of hits from people evidently intending to reach the Complainant leads the Panel to conclude that it is confusingly similar.
The Panel finds that the Domain Name is confusingly similar to a service mark in which the Complainant has rights.
Rights or legitimate interest of the Respondent
Paragraph 4(c) of the Policy sets out a non-exhaustive list of circumstances, which if found by the Panel to be proved shall demonstrate a respondent’s rights or legitimate interests to the domain name for the purposes of the Policy.
Paragraph 4(c) (i) is pertinent. "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 [shall demonstrate your rights or legitimate interests to the domain name]"
The incorporation of the Respondent under a name including the name SPIRIT AIRLINES back in December 1997 and the commissioning of the corporate plan for the Respondents airline under the name SPIRIT AIRLINES in March 1998 is clear evidence of the Respondents intention to use a name corresponding to the Domain Name in relation to an offering of services at the time the Domain Name was registered (i.e. long before the Respondent received any notice of the dispute). In this case, whether or not it was a bona fide offering depends upon whether the Respondent was aware at the time of the Complainant’s rights in the name SPIRIT AIRLINES and, further, whether the Respondent knew or ought to have known that its use of the Domain Name would infringe any such rights of the Complainant.
The Panel has no reason to doubt the Respondent’s claim to have been unaware of the Complainant at that time. The Complainant acknowledges on its own website that at the relevant time it was a very low profile operation. The only basis for the Complainant’s claim that the Respondent must have been aware of the Complainant is the unsupported assertion that the Respondent is "a student of the US no-frills airline market", an assertion which the Respondent denies. On that basis the Respondent has demonstrated rights and legitimate interests in respect of the Domain Name within the meaning of paragraph 4(c)(i) of the Policy.
However, the Complainant states that the Respondent has abandoned its plans to use the name SPIRIT AIRLINES for its service offering and had taken that decision prior to renewing the Domain Name registration. The Complainant asks the Panel to review the position as at the date of renewal. True, the argument is raised by the Complainant in relation to bad faith, but if applicable to the bad faith claim, logically it must also apply in relation to the assessment of the Respondent’s rights and legitimate interests under paragraph 4(a)(ii).
The two authorities cited in support of the Complainant’s contention that bad faith renewal of a domain name is to be treated in the same way as bad faith registration are both cases in which the respondent failed to respond. In the ABF Freight decision the panelist expressly held that the original registration was in bad faith, so the finding in relation to renewal was otiose and in neither case is there any discussion as to why renewal should be treated as registration.
To the extent that those decisions can be said to be authority for the proposition that renewal is tantamount to registration, the Panel respectfully disagrees with them and declines to follow them. Renewal of a domain name registration in this respect is no different from renewal of a trade mark registration. It represents a continuation of the original registration. Were the Complainant’s argument to succeed, all ‘innocent’ registrants of domain names would be at risk of becoming branded ‘cybersquatters’ as a result of a letter of notification coming in out of the blue. Many registrants will have no satisfactory means of assessing the validity of the ‘notification’ without going to the expense of taking legal advice. This will result in undue pressure being brought upon registrants. The object of the Policy is to provide a cost effective alternative to litigation as a means of dealing with cybersquatters, i.e. in general people who have deliberately selected and registered a domain name knowing it to be the name of the Complainant. The Complainant’s argument seeks to take the Policy way beyond its original scope. Cf also WIPO Case no D2000-0026.
In this case the Complainant’s argument depends in part upon the Respondent’s alleged abandonment of its intention to use the Domain Name. The Complainant asserts that the renewal of the Domain Name was primarily with the intention of extracting a large sum of money from the Complainant. The Respondent has denied that it has abandoned its plans for the name. Clearly, the Respondent is aware that it might be worth the Complainant’s while paying a large sum of money to the Respondent for the Domain Name registration, but it seems to the Panel that the Respondent is legitimately hedging its bets. It is flexible and free to go under its originally planned name, SPIRIT AIRLINES, or another name. The Panel accepts the Respondent’s denial of abandonment.
Accordingly, even if the Panel had come to a different conclusion in relation to the ‘registration/renewal’ issue, it is evident that in this case when renewing the Domain name the Respondent maintained a continuing intention to use the name SPIRIT AIRLINES. Accordingly, for present purposes the Respondent continues to have the benefit of its original plans to provide a bona fide offering of services under or by reference to the Domain Name or a name corresponding to the Domain Name.
The Panel finds that the Complainant has failed to prove that the Respondent has no rights or legitimate interests in respect of the Domain Name.
For the above reasons the bad faith claim also fails.
The Complaint is dismissed.
Dated: July 25, 2001
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