The WIPO Arbitration and Mediation Center (the Center) received Ruby’s complaint by e-mail on July 10, 2001 and in hard copy on July 12, 2001. The Center verified that the complaint satisfies the formal requirements of the ICANN Uniform Domain Name Dispute Resolution Policy (the Policy), the Rules for Uniform Domain Name Dispute Resolution Policy (the Rules), and the Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the Supplemental Rules). Ruby’s made the required payment to the Center. The formal date of the commencement of this administrative proceeding is July 17, 2001.

On July 13, 2001, the Center transmitted via email to NSI a request for registrar verification in connection with this case. On July 16, 2001, NSI transmitted via email to the Center NSI’s Verification Response, confirming that the registrant of the Domain Name, and its administrative and billing contacts, are Joseph W. Popow, 113 Wellington Avenue, Stratford NJ 08084; and that the domain name registration in issue is in "Active" status and NSI’s 5 Service Agreement is in effect.

On July 17, 2001, the Center transmitted the Notification of Complaint and Commencement of the Administrative Proceeding, together with copies of the Complaint, via e-mail with copy by courier (FedEx) to Respondent. The Center advised that the response was due by August 5, 2001, pointed out that the response should be in accordance with specified rules, and described the consequences of a default if the response was not sent by that date. The Center noted also that Complainant had elected for a single panelist to decide this matter.

No Response was received from Mr. Popow or anyone acting on his behalf, either by the deadline or at any other time.

On August 6, 2001, the Center transmitted to Mr. Popow, via e-mail, a Notification of Respondent Default. The Center advised Mr. Popow (a) that he had failed to comply with the deadline for submission of his Response and (b) the consequences of default, including (1) a single panelist would be appointed (the number requested by Complainant); (2) the Panel would be informed of the default and would decide in its sole discretion whether to consider a response if submitted later; and (3) the Center would continue to send all case-related materials to Mr. Popow.

On August 15, 2001, the Center advised the parties (1) of the appointment of Michael Albert, the undersigned, as the Panelist in this case; and (2) absent exceptional circumstances, the decision was to be forwarded by the Panel to the Center by August 29, 2001.

4. Factual Background and Parties’ Contentions
a. The Trademark

The Complaint is based on Ruby’s alleged ownership of rights to the marks RUBY’S and RUBY’S DINER, which Ruby’s claims to have used for diner-style restaurants since 1982 in California and other parts of the United States.

Complainant owns federal registrations for RUBY’S (U.S. Trademark Reg. No. 1,631,936, January 15, 1991), RUBY’S DINER (U.S. Trademark Reg. No. 2,387,100, September 19, 2000), and several design variations thereof for restaurant services and related products. Copies of selected registration certificates for these marks were provided to the Panel. Complainant also owns trademark registrations for RUBY’S and RUBY’S DINER in a variety of foreign countries, and provided the Panel with samples of these foreign registrations.

b. Jurisdictional Basis

This dispute is within the scope of the Policy, and the Administrative Panel has jurisdiction to decide the dispute. The registration agreement pursuant to which the Domain Name was registered incorporates the Policy, a copy of which was appended to the Complaint.

c. The Complaint

Ruby’s asserts as follows:

- Respondent Joseph Popow was employed by Ruby’s Diner from 1997 to 1999 as a general manager at its Cherry Hill, New Jersey location.

- During his employment at Ruby’s, Mr. Popow contacted Robert Black, Manager of Information Systems for Ruby’s, to mention that he had seen the <rubys.com> website and to express his interest in website design.

- Mr. Popow showed Mr. Black a portion of his personal web page hosted at his America Online account, which included information about Ruby’s Diner and the Cherry Hill restaurant. Mr. Black cautioned Mr. Popow to be careful about using "the Ruby’s trademarked logo."

- Without further discussion with Complainant, Mr. Popow registered <rubysdiner.com> on December 4, 1998 and transferred some of the content from his personal web page to the new site.

- In February 1999, Mr. Popow attended an event at which Steve Link, a District Manager for Ruby’s Diner, was present. At this gathering, Mr. Popow told Mr. Link about his registration of the Domain Name and stated that his intention was to sell it to the company. Mr. Popow told Mr. Link that he planned to offer the Domain Name for sale to Ruby’s Diner for as much as $50,000 dollars.

- Upon discovery of the Domain Name registration, Alethea Rowe, at that time Director of Marketing for Ruby’s Diner, contacted Mr. Popow and requested that he remove the content of his website and turn over the domain name registration to Ruby’s Diner. Mr. Popow refused, and offered instead to sell the Domain Name to the company for an amount to be determined later. Approximately two days after this phone conversation, Ms. Rowe logged on to the website located at the Domain Name and discovered that Mr. Popow had replaced its content with a link to the Ruby’s Diner company site located at <rubys.com>. Several days later, in another conversation with Ms. Rowe, Mr. Popow offered to sell the Domain Name to Ruby’s for $10,000. Mr. Popow later reiterated this offer in a telephone conversation with Doug Cavanaugh, the President of Ruby’s Diner, Inc. During this conversation, Mr. Popow allegedly told Mr. Cavanaugh that Mr. Popow registers domain names to supplement his income.

- Mr. Popow is no longer employed at Ruby’s Diner, yet he continues to operate a website located at the Domain Name, the content of which consists entirely of an offer to sell the domain name for $25,000. Specifically, the text reads: "This domain name is FOR SALE! Rubysdiner.com. Price: $25k. Click here to send an offer to the owner."

- Mr. Popow has registered several other domain names containing registered trademarks, including <rubysdinersucks.com>, and <coldwellbankerelite.com>, which contains the registered trademark COLDWELL BANKER, owned by Coldwell, Banker & Co [1]. Mr. Popow currently lists both of these domains for sale on the domain name brokerage site domains.com for $25,000 and $20,000, respectively.

d. Response

As noted above, Respondent has provided no Response, although the deadline for so doing was August 5, 2001. Accordingly, Respondent is in default. Unlike in a U.S. court proceeding, however, a default does not automatically result in a finding for the Complainant. Rather, under the Policy and the Rules, it remains the Complainant’s burden to establish to the Panel that each of the three criteria for a transfer of the Domain Name or other remedy has been met. Under Rule 14, the effect of a default is that the Panel shall proceed to a decision and shall draw such inferences from the default as it deems appropriate.

5. Discussion and Findings

Accordingly, the Panel now proceeds to consider this matter on the merits in light of the complaint, the response (or lack thereof), the Policy, the Rules, and applicable authority, which in the Panel’s view, given that this dispute involves a domain name registered in the United States and given that both parties appear to be U.S.-based, shall include applicable principles of U.S. trademark law.

Paragraph 4(a) of the Policy provides that Complainant must prove, with respect to the domain name in issue, each of the following:

(i) The domain name in issue is identical or confusingly similar to Complainant’s trademark in issue here; and

(ii) Respondent has no rights or legitimate interests in respect of the domain name; and

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

Paragraph 4(b) of the Policy sets out four non-exclusive, but illustrative, circumstances of acts that for purposes of Paragraph 4(a)(iii) above would be evidence of the registration and use of a domain name in bad faith.

Paragraph 4(c) of the Policy sets out three illustrative circumstances any one of which, if proved by respondent, would demonstrate respondent’s rights or legitimate interests to the Domain Name for purposes of Paragraph 4(a)(ii) above.

a. Effect of the Default

In this case, the Panel finds that, as a result of the default, Respondent has failed to rebut any of the factual assertions that are made and supported by evidence submitted by Complainant. The Complaint is amply supported with sworn declarations, copies of trademark registrations, and other evidence that persuasively supports key allegations made in the Complaint. Respondent, by his default, has failed to rebut any of these allegations with any contrary assertions or evidence.

In particular, by defaulting and failing to respond, Respondent has failed to offer the Panel any of the types of evidence set forth in Paragraph 4(c) of the Policy from which the Panel might conclude that Respondent has any rights or legitimate interest in the Domain Name, such as use or preparation to use the Domain Name prior to notice of the dispute, being commonly known by the Domain Name, or making legitimate noncommercial or fair use of the Domain Name.

The Panel finds the sworn testimony of Robert Black, Steve Link, Althea Rowe, and Douglas Cavanaugh to be credible, unrebutted, and entitled to weight as discussed herein.

b. Complainant’s Proof
(i) Domain Name Identical or Confusingly Similar to Trademark

Complainant has proven that it is the owner of common-law trademark rights in the marks RUBY’S and RUBY’S DINER, going back to 1982, and that it has federal trademark registrations for RUBY’s since 1991 and for RUBY’S DINER since 2000 [2].

Complainant’s registrations of the trademark on the Principal Register of the USPTO establish a presumption of validity of the mark under U.S. law. See 15 U.S.C. § 1057(b); Avery Dennison v. Sumpton, 189 F.3d 868 (9^th Cir. 1999). Additionally, the registration constitutes constructive notice to all other parties of Complainant’s ownership of the trademark. See 15 U.S.C. § 1072.

In determining identity or confusing similarity under Paragraph 4(a)(i) of the Policy, it is well established that the generic top-level domain, in this case ".com," must be excluded from consideration as being a generic or functional component of the Domain Name. See Sporty's Farm v. Sportsman's Market, 202 F.3d 489, 498, (2d Cir. 2000). Likewise, minor omissions of punctuation do not sufficiently alter the trademarked word or phrase to negate a finding of identity or confusing similarity. See, e.g., Barney’s Inc. v. BNY Bulletin Board, WIPO Case. No. D2000-0059 (April 2, 2000) (finding <barneysnewyork.com> identical to BARNEY’S NEW YORK within the intent of the Policy, and noting that such a conclusion is consistent not only with the Policy but also with established U.S. trademark law). By the same token, rubysdiner.com is identical to Complainant’s RUBY’S DINER mark. Accordingly, the Panel need not reach the question of whether the Domain Name is also confusingly similar to the RUBY’S mark in this context. In sum, rubysdiner.com is identical and confusingly similar to Complainant’s registered trademarks within the meaning of Paragraph 4(a)(i) of the Policy.

(ii) Whether Respondent Has Rights Or Legitimate Interest In the Domain Name

No evidence of record establishes any rights of Respondent in the Domain Name. Respondent does not appear to be known by the name "Rubysdiner." Mr. Popow has offered no evidence, and none appears of record, that he uses the Domain Name for any legitimate business purpose unrelated to his efforts to capitalize on its association with Complainant. Accordingly, the Panel concludes that Respondent has no rights in the Domain Name.

While it is true that Mr. Popow is making some use of the domain name, that use consists simply of advertising the name itself for sale. Using a domain name as the address of a website whose sole purpose is offering the domain name itself for sale is not recognized as a legitimate interest under the Policy. See, e.g., Educational Testing Service v. TOEFL, WIPO Case. No. D2000-0044 (March 16, 2000), at Section 6 ("the mere offering of the domain name for sale to any party does not constitute a right or legitimate interest in that name," also noting that a contrary conclusion would conflict with paragraph 4(b)(i), which provides that such an offer of sale indicates bad faith); World Wrestling Federation Entertainment, Inc v. Michael Bosman, WIPO Case No. D99-0001 (January 14, 2000), at Section 6 (finding that respondent had no rights or legitimate interest in the domain name at issue where its sole use was for resale to the trademark owner).

Mr. Popow’s status as a former employee of Ruby’s Diner does not alter the conclusion that he has no rights or legitimate interest in the Domain Name. An employee or former employee is not a licensee, and thus has no authorization to use a company’s trademark or a confusingly similar variation thereof without permission. The Policy contains no exception providing a special right to use a trademark belonging to one’s employer or former employer in a domain name. Consistent with such an interpretation, previous decisions have decisively refused to recognize such a right or interest. See, e.g., Arab Bank for Investment and Foreign Trade v. Sabah Mahmoud Akkou, WIPO Case No. D2000-1399 (December 19, 2000), at Section 6 (refusing to find "the slightest indication of a legitimate trademark interest" where a former employee registered her employer’s trademark as a domain name); ESAT Digifone Limited v. Michael Fitzgerald, WIPO Case. No. D2000-0602 (August 2, 2000), at Section 6 (finding no rights or legitimate interest where a former employee registered the employer’s trademark).

Nor does the analysis differ where a current employee is involved (as Mr. Popow was at the time he registered the Domain Name). See, e.g., State Farm Mutual Insurance Co. v. Reger, NAF Case. No. FA95651 (November 14, 2000) (rejecting argument for legitimate interest where a State Farm employee registered <statefarmclaims.com>); Weekley Homes v. Wilsher Co., NAF Case. No. FA95331 (September 2, 2000) (ordering transfer of domain name from a Respondent who registered the name while an employee of Complainant corporation). In any event, even if Mr. Popow could argue (which he has not) that implied consent existed at the time he was an employee of the company (on the theory that the Complainant was aware of his actions and did not immediately and expressly forbid them), he no longer would retain such right after his employment was terminated and the company requested the restitution of control over its marks. See Cook Motor Cars v. Soto, NAF Case. No. FA94992 (July 18, 2000) (concluding that even where a Complainant corporation had assisted an employee in obtaining and using a domain name containing a variation of the employer’s trademark the employee had no rights or legitimate interest in the domain name after she left the company).

(iii) Registration and Use in Bad Faith

Complainant’s third hurdle is to establish that Respondent has registered and used the Domain Name in bad faith. Paragraph 4(b) of the Policy sets out four illustrative circumstances of the registration and use of a domain name in bad faith. The first is acquisition of 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 [registrant’s] documented out-of-pocket costs directly related to the domain name."

In this case, Complainant has easily met its burden of establishing this type of bad faith. On several occasions, Mr. Popow has offered the Domain Name for sale to Complainant, who as noted above is the holder of registered trademarks embodied within the Domain Name, for sums (first $50,000 and then $10,000) vastly exceeding any costs Mr. Popow could have incurred in connection with the Domain Name. Mr. Popow has continued with such conduct by advertising the domain name for sale for $25,000 on the www.domains.com brokerage site. He makes no other use of the Domain Name. This conduct falls squarely within the language of paragraph 4(b)(i), and gives rise to the inference that the primary purpose of registration was to exact payment from the trademark holder.

Such activity is deemed to constitute bad faith registration and use under the Policy. See Educational Testing Service v. TOEFL, WIPO Case. No. D2000-0044 (March 16, 2000), at Section 6 ("If the Respondent’s offer for sale is determined to be in bad faith, then the registration will also be deemed to be in bad faith."). The conclusion that Mr. Popow has registered and used <rubysdiner.com> in bad faith makes sense both as a literal interpretation of the clear language of the Policy, and also as a matter of social policy. Where, as here, a respondent is "contributing no value-added to the Internet" but rather merely attempting to exploit the registration process, the Internet community would be better served by transferring the domain name to the trademark owner. Id.

Complainant also contends that Respondent has engaged in the second type of "bad faith" illustrated in Paragraph 4(b), namely registering the domain name in order to prevent the trademark owner from reflecting its trademark in a domain name, where respondent has "engaged in a pattern of such conduct."

By registering the Domain Name in the ".com" TLD, Respondent obviously deprived Complainant of the opportunity to do so. Mitigating this conclusion, however, is the fact that Complainant’s original foray into cyberspace was limited to registering <rubys.com>, and likewise it originally chose to register only RUBY’S as a federal trademark. Only later did Complainant wake to the realization that it had valuable trademark rights in the mark RUBY’S DINER. Nonetheless, under U.S. law, trademark rights inhere not in those fastest to register them but in those who first make commercial use of them, and here that was Complainant. Accordingly, the Panel turns to the question of whether Respondent exhibited a "pattern" of registrations.

Complainant argues that as few as two registrations may in appropriate cases be deemed to constitute a "pattern" under the Policy, and cites New York Life Insurance Company v. Puthiyoth, WIPO Case No. D2000-0812 (September 28, 2000). The Panel does not agree that the cited decision holds that two is a "pattern." Complainant also cites Sundor Brands v. Trenchcoat Productions, WIPO Case No. D2000-0633 (August 21, 2000) for the proposition that the panel in that case was "not aware of any fixed number of domain names that must be registered before one can be said to have engaged in a ‘pattern’ of conduct." That case, however, involved 21 registrations, not two.

Respondent registered both the Domain Name in dispute and also <coldwellbankerelite.com> (presumably without authorization from the Coldwell Banker company, Complainant suggests — although it offers no evidence proving this point). Without concluding definitively that two can never constitute a "pattern," the Panel is not bowled over by the evidence that Mr. Popow is a habitual cybersquatter [3].

Complainant further asserts that Respondent’s registration of <rubysdinersucks.com> is part of this "pattern"; however the Panel is reluctant either to reach out and attempt to resolve the legitimacy of a domain name registration not presently before it nor to opine outside the context of a more complete record on the issue of domain names that incorporate within them a disparaging reference to a trademark owner. Indeed, prior decisions have suggested, with some persuasive force, that such registrations cannot easily be misinterpreted by the public as being authorized by the trademark owner. The Panel will place no weight on this last registration.

The Panel is left unpersuaded that Complainant has met its burden of proving bad faith under Paragraph 4(b)(ii), although there is certainly evidence that Mr. Popow has registered at least one other well-known trademark as a domain name in the past. The issue, in any event, is moot because bad faith under the first illustration has been found.

There is no allegation that the third or fourth illustrations of bad faith apply.

In sum, the Panel concludes that Respondent has registered and used the Domain Name in bad faith, as exemplified at least by illustration (i) in Paragraph 4(b) of the Policy, the sufficiency of which obviates any need to determine whether illustration (ii) is also applicable.

6. Decision

In light of the findings and analysis by the Panel, the Panel decides that Complainant has met its burden of proving: (1) the Domain Name is identical or confusingly similar to the Complainant’s mark; (2) Respondent has no rights and no legitimate interest in respect of the Domain Name; and (3) the Domain Name has been registered and is being used by Respondent in bad faith.

Accordingly, pursuant to Paragraph 4(i) of the Policy and Rule 15, the Panel requires that the registration of the <rubysdiner.com> domain name be transferred to Ruby’s Diner, Inc.

Michael A. Albert
Sole Panelist

Dated: August 29, 2001

Footnotes:

1. The only domain name presently at issue before this Panel is <rubysdiner.com>. Nothing herein is meant to, or should be construed to, prejudge how any dispute over any other domain name might be resolved.

2. That Respondent registered the Domain Name prior to issuance of this federal registration is irrelevant. He had actual notice of Complainant’s longstanding common-law usage of the RUBY’S DINER mark — indeed, he worked for Ruby’s Diner.

3. Complainant cites a statement allegedly made by Mr. Popow to one of Complainant’s affiants that Mr. Popow earns extra money by registering domain names. Leaving aside the ambiguities in this statement, it is in any event hearsay. While arbitrators are not bound by rules of evidence and may in appropriate cases consider hearsay, this Panel finds little of relevance in this statement.