ifranchise.com

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

The iFranchise Group v. Jay Bean / MDNH, Inc. / Moniker Privacy Services [23658]

Case No. D2007-1438

1. The Parties

Complainant is The iFranchise Group, Illinois, United States of America.

Respondent is Jay Bean / MDNH, Inc. / Moniker Privacy Services [23658], Las Vegas, NEVADA, United States of America / Beach, Florida, United States of America.

2. The Domain Name and Registrar

The disputed domain name <ifranchise.com> is registered with Moniker Online Services, LLC.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on September 28, 2007. On October 2, 2007, the Center transmitted by email to Moniker Online Services, LLC a request for registrar verification in connection with the domain name at issue. On October 3, 2007, Moniker Online Services, LLC. transmitted by email to the Center its verification response disclosing registrant and contact information for the disputed domain name which differed from the named Respondent and contact information in the Complaint. The Center sent a Notice of Change in Registrant Information to Complainant on October 5, 2007, providing the registrant and contact information disclosed by the Registrar, and inviting Complainant to submit an amendment to the Complaint. Complaint filed an amended Complaint (the “Complaint”) on October 10, 2007 satisfying the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy”), the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for Uniform Domain Name 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 October 16, 2007. In accordance with the Rules, paragraph 5(a), the due date for Response November 5, 2007. The Response was filed with the Center on November 5, 2007.

The Center appointed M. Scott Donahey, Richard W. Page and Nelson A. Diaz as panelists in this matter on November 28, 2007. The Panel finds that it was properly constituted. Each member of 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.

On December 3, 2007, the Panel issued Procedural Order No. 1. The Order stated the Panel had elected to accept a Supplemental filing submitted by Complainant and provided Respondent the opportunity to submit a supplemental response by December 13, 2007. The date for the Panel’s decision in this case was extended to December 18, 2007.

On December 7, 2007, Respondent submitted its Supplemental Response.

On December 21, 2007, the date for the Panel’s decision in this case was extended to January 2, 2008.

4. Factual Background

At the time of the filing of the original Complaint, the domain name at issue was registered in the name of Moniker Privacy Services. It is impossible to determine from the record precisely when Moniker Privacy Services registered the domain name at issue. Complaint, Annex A.

Following the filing of the original Complaint, the registrant information was changed by the registrar to show the registrant as Jay Bean,MDNH, Inc., and giving contact information for this registrant. Notice of Change in Registrant Information, WIPO Center to Complainant, October 5, 2007.

The domain name at issue was originally registered on November 11, 1999, apparently by Name Development Ltd. Complaint, p. 5; Supplemental Response, pp. 3-5.

Respondent MDNH, Inc. was formed as a corporation under the laws of the state of Delaware on November 16, 2004. Complainant’s Supplemental Submission, Annex A.

Pursuant to an Asset Purchase Agreement dated November 19, 2004, Marchex, Inc. acquired all of the assets of the going business of Name Development Ltd., which assets included the domain name <ifranchise.com>. Supplemental Response, pp. 3-5 and Annex C.

The Panel attempted to conduct a historical review of the web site to which the domain name at issue has resolved over time, but Respondent has used robot.txt to block access to the historical records. Thus the Panel was unable to ascertain when and how the domain name was used by Respondent’s predecessors-in-interest, nor when Respondent began to use the domain name at issue.

The Panel is forced to assume that at some time following the formation of Respondent MDNH, Inc. and the acquisition by Marchex, Inc. of the domain name at issue that Marchex, Inc. transferred the domain name at issue to Respondent. However no evidence of such transfer was produced to the Panel, nor was the transfer discussed in any of the pleadings.

Respondent uses the domain name at issue to resolve to a web site to provide paid advertising links on the Internet to franchise-related advertisers, including links to direct competitors of Complainant. Complaint, Exhibits I, J, and K; Response, p. 8.

Complainant has a service mark issued on the Supplemental Register of the United States Patent and Trademark Office (“USPTO”) for the mark IFRANCHISE. The registration issued on June 19, 2001, and shows a first use on September 1, 1999, and a first use in commerce on November 1, 1999.

Complainant has also applied to the USPTO for a service mark for the mark IFRANCHISE GROUP. This application was made April 11, 2006 and shows a first use on September 1, 1999, and a first use in commerce on November 1, 1999. The USPTO required that Complainant disclaim the wording “ifranchise” as merely descriptive of Complainant’s services, which Complainant declined to do. On July 17, 2007, a final office action refusing to register the mark was mailed to Complainant by the USPTO. Complaint, Exhibit F; Response, Exhibit A; and review of USPTO materials online.

Complainant is not relying on the registrations issued and applied for, but rather on the contention that the mark IFRANCHISE is suggestive and therefore inherently distinctive or that it has acquired secondary meaning. Complainant’s Supplemental Submission, at 4-6.

Complainant has worked with more than 30 Fortune 2000 companies and with 98 of the world’s top 200 franchisors. Complainant has sold nearly 20 million dollars worth of services in connection with its marks and has spent over $1.7 million in advertising and promoting the services it provides in connection with its marks.

Respondent is not generally known by the domain name at issue, and Complainant has not licensed or otherwise permitted Respondent to use the IFRANCHISE marks. Complaint, pp. 6-7.

5. Parties’ Contentions

A. Complainant

Complainant contends that it has rights in the service mark IFRANCHISE and that the domain name at issue is confusingly similar to that mark. Complainant further contends that Respondent has no rights or legitimate interests in respect of the domain name at issue. Finally, Complainant contends that Respondent “registered” the domain name for purposes of the UDRP no earlier than November 16, 2004, when Respondent was formed, and that at the time it knew or should have known of Complainant’s use of the IFRANCHISE mark, and that therefore Respondent’s registration and use of the domain name at issue was done in bad faith.

B. Respondent

Respondent argues that Complainant does not have cognizable interests in the service mark IFRANCHISE, since its initial registration on the Supplemental Register indicated that the USPTO found the mark not to be distinctive and since the USPTO finally rejected Complainant’s application for the IFRANCHISE GROUP mark, because of Complainant’s failure to disclaim any interest in the IFRANCHISE portion of the mark as merely descriptive. Respondent argues that it has rights and legitimate interests in the use of the domain name at issue, because the term “ifranchise” is merely descriptive. Respondent argues that it has been using the domain name at issue embodying a descriptive term in good faith, and that Respondent acquired the name in the purchase of an ongoing business, and therefore Respondent should be able to claim the initial registration date of its predecessor in interest for purposes of the UDRP. Respondent argues that Complainant intentionally attempted to mislead the Panel, and Respondent requests a finding of Reverse Domain Name Hijacking.

6. Discussion and Findings

A. The Level of Discourse

The tone and content of much of the papers submitted fall below the level of civilized discourse. Some of the attacks are ad hominem, and many of the arguments are so vitriolic as to obscure the point that is being made. The Panel regards such efforts as unprofessional and unhelpful. It serves only to make the Panel’s task more difficult and does not assist the Panel in its attempts to reach a correct and just decision. It is hoped that in the future counsel will refrain from such argument.

B. The Proper Party or Parties Respondent

Respondent employed a privacy service to shield the identity of the domain name registrant from the general public. As a result the Complainant named the privacy service listed in the Whois as the respondent in its original Complaint. This is of course contemplated under the Rules 2(a)(i). Complainant, at the invitation of the provider, later amended its Complaint to name the Respondent which the Registrar identified as the registrant after the Complaint had been filed. This leads to the question, where a privacy service is listed as the domain name registrant at the time the complaint is filed, but that following the filing, the registrant is identified as someone other than the privacy service, should the panel treat the privacy service, the underlying registrant, or both as the proper party respondent?

1. Potential Uses of Privacy Services

The use of privacy services is a fairly recent phenomenon. Commentators and panelists have noted the potentially legitimate reasons that a domain name registrant may wish to employ a privacy service: 1) ease of account management and re-registration (especially where the registrant has registered a portfolio of domain names), 2) the avoidance of identity theft, and 3) the evasion of spam. Divex Limited v. ZJ, Sam Chang and Tim NG, WIPO Case No. D2007-0861. As Respondent points out in the present case, another benefit may be the ability to maintain the confidentiality of a registration strategy, such as the registration of numerous domain names related to a specific industry (such as travel, or goods and services available in a specific geographical area).

However, privacy services may also have unsatisfactory or even illegitimate uses, such as to delay UDRP proceedings (Gaylord Entertainment Company v. Nevis Domains LLC, WIPO Case No. D2006-0523) or to facilitate cyberflight (HSBC Finance Corporation v. Clear Blue Sky Inc. and Domain Manager, WIPO Case No. D2007-0062). Obviously, it greatly inhibits and may completely prevent communication between an IP rights owner and a domain name registrant which might resolve the dispute over the registration and use of the domain name short of filing a UDRP complaint. As one learned panelist has noted:

[P]ermitting registrants to mask their identity makes it difficult for trademark owners to determine whether the registrant “registered the domain name primarily for the purpose of disrupting the business of a competitor,” Policy paragraph 4(b)(iii), or whether the registrant “engaged in a pattern” of registering domain names “in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name.” Policy paragraph 4(b)(ii).

2. Privacy Services were Neither Existent nor Contemplated at the Time that the UDRP was Adopted

It is fair to say that at the time the UDRP was adopted, the widespread use of privacy services was not anticipated. In the First WIPO Domain Name Process, WIPO recommended that “the provision of accurate and reliable contact details be a condition of registration of a domain name imposed by the domain name registration agreement. Final Report of the First WIPO Internet Domain Name Process, April 30, 1999 (“First WIPO DN Report”), paragraph 66. Registrars indeed included that requirement in their registration agreements. See, e.g., Forte Communications, Inc. v. Service for Life, WIPO Case No. D2004-0613. In paragraph 75 of the First WIPO DN Report, WIPO recommended that:

The domain name registration agreement contains a requirement that the domain name applicant provide accurate and reliable contact details consisting of:

-- the full name of the applicant;

-- the applicant’s postal address, including street address or post office box, city, State or Province, postal code and country;

-- the applicant’s e-mail address;

-- the applicant’s voice telephone number;

-- the applicant’s facsimile number, if available;

-- where the applicant is an organization, association or corporation, the name of an authorized person (or office) for administrative or legal contact purposes.

Indeed, ICANN included these requirements in Sections III,D,1 and 7 of the Registrar Accreditation Policy (adopted March 4, 1999).

3. Misleading or Incomplete Contact Information in WHOIS

Beginning with one of the seminal UDRP cases, Telstra Corporation, Ltd. v. Nuclear Marshmallows, WIPO Case No. D2000-0003, and continuing through the following five years, panelists have consistently held that the provision of false contact information constituted indicia of or evidence of bad faith. A.H. Belo Corporation v. King TV and 5 Kings, WIPO Case No. D2000-1336; Ticketmaster Corporation v. Dmitri Prem, WIPO Case No. D2000-1550; Oakley, Inc. v. Kenneth Watson, WIPO Case No. D200-1658; France Manche v. Cimagotipo S.L., WIPO Case No. D2001-0771; Weetabix Limited v. Mr. J. Clarke, WIPO Case No. D2001-0771; Wachovia Corporation v. Peter Harrington, WIPO Case No. D2002-0775; Action Instruments, Inc. v. Technology Associates, Inc., WIPO Case No. D2003-0024; Forte Communications, Inc. v. Service for Life, WIPO Case No. D2004-0613.

4. Determining the Proper Respondent

Users of privacy services point out that they provide correct contact information, they merely shield such information from public scrutiny for many of the reasons previously noted. While this may be true, such shielding of information has created difficulties for both providers and panelists (and indeed filing parties themselves) in determining whether the proper party respondent has been identified in the complaint and whom to treat as the domain name registrant for the purpose of analyzing whether the domain name has been registered and is being used in bad faith.

When a registrar is contacted by the provider:¹ the registrar a) sometimes unreasonably delays in providing the contact information of the underlying registrant (Fifth Third Bankcorp v. Secure WHOIS Information Services, WIPO Case No. D2006-0696; Gaylord Entertainment Company v. Nevis Domains LLC, WIPO Case No. D2006-0523); b) sometimes promptly provides the proper contact information of the underlying registrant, but does not change the identifying information contained in the WHOIS (WWF-World Wide Fund for Nature, aka WWF International v. Moniker Online Services LLC and Gregory Ricks, WIPO Case No. D2006-0975); c) sometimes changes the registration information contained in the WHOIS to reflect the identity and contact information of the listed registrant (Microsoft Corporation v. WHOIS Privacy Protection Service/Lee Xongwei, WIPO Case No. D2005-0881); or, 4) sometimes fails to respond to the provider or to the complaint. Building Trade 1868 Kft. v. RegisterFly.com, WIPO Case No. D2006-0396. Where information is available to the WIPO Center through either a change in the registration information or through a communication from the registrar to the provider, the WIPO Center generally requests that the complainant amend its complaint to add the underlying registrant as an additional respondent.

A panel must decide who is the registrant of the domain name for purposes of the application of the Policy. In a case in which a Panel had only the name of the privacy service as registrant, the Panel considered other available evidence in order to determine the actual identity of the registrant, and the Panel thereafter elected to treat the acts of the party whom it had determined to be the actual registrant as the acts of the Respondent privacy service. Building Trade 1868 Kft. v. RegisterFly.com,WIPO Case No. D2006-0396. In cases where information is provided, either from a change in the WHOIS information or from a communication to the provider by the registrar or the privacy service as to the identity of the underlying registrant panels have 1) treated the underlying registrant and the respondent jointly as respondent (Ohio Savings Bank v. 1&1 Internet, Inc. and David Rosenblum, WIPO Case No. D2006-0881; TDS Telecommunications Corporation v. Registrant [20758] Nevis Domains and Registrant [117460] Moniker Privacy Services, WIPO Case No. D2006-1620) or 2) elected to disregard the privacy service entirely and to analyze only the acts of the underlying registrant. Costco Wholesale Corporation and Costco Wholesale Membership Inc. v. Yezican Industires and Domains by Proxy, Inc., WIPO Case No. D2007-0638; Xtraplus Corporation v. Flawless Computers, WIPO Case No. D2007-0070.

5. Determination of Proper Party Respondent

In the present case, where the provision of the information by the registrar was provided and was not unduly delayed, the Panel elects to treat MDNH, Inc. as the proper party respondent for purposes of its analysis.

6. When Did “Registration” by Respondent Occur for Purposes of the UDRP?

Respondent could not have registered the domain name before Respondent existed, and its existence began on November 16, 2004. Moreover, we know that Marchex, Inc. did not acquire the domain name until sometime after November 19, 2004, in an acquisition of the ongoing business of Name Development Ltd. The Asset Purchase Agreement between Marchex, Inc. and Name Development Ltd. provided that the transaction was to close within two business days after satisfaction or waiver of certain conditions set forth in the Asset Purchase Agreement. Supplemental Response, Annex C, Asset Purchase Agreement, Section 1.9, at p. 5. No evidence was produced to the Panel as to the closing or as to the satisfaction or waiver of the stated conditions.

Respondent argued that it acquired the domain name at issue from the original registrant in a purchase of an ongoing business, and that domain names acquired in this type of acquisition should be treated as if the Respondent, as the purchaser of an ongoing business, should be entitled to the date of original registration by its predecessor for purposes of the UDRP. This argument must fail on two bases.

First, the general rule established by panels is that a subsequent acquirer of a domain name is held to have “registered” that domain name for purposes of the Policy as of the date of acquisition of the registration rights. HSBC Finance Corporation v. Clear Blue Sky Inc. and Domain Manager, WIPO Case No. D2007-0062 (“[T]he transfer of a domain name to a third party amounts to a new registration, requiring the issue of bad faith registration to be determined at the time the current registrant took possession of the domain name.”). The Panel sees no reason why an acquisition of assets should be treated any differently.

Parties frequently acquire intellectual property interests in an acquisition of assets. Parties also acquire technologies or compositions that may infringe the intellectual property of others. Parties must and do protect themselves by securing representations and warranties from the selling parties that the intellectual property rights and technologies do not infringe the intellectual property of others. It appears that Marchex, Inc. attempted to secure such protection for itself in the Asset Purchase Agreement. Supplemental Response, Annex C, Asset Purchase Agreement, § 2.11(f), p. 16. If Respondent were the acquiring party in the Asset Purchase Agreement in this case, it could so have protected itself.

However, Respondent was not the acquirer of an ongoing business. Marchex, Inc. was the acquirer. It is unclear when and from whom and in what type of transaction Respondent acquired the registration rights to the domain name at issue. So even were Respondent’s arguments as to the purchase of an ongoing business persuasive, which they are not, Respondent must fail. The Panel holds that for purposes of the UDRP Respondent acquired the domain name at some unknown time after November 19, 2004.

C. Identical or Confusingly Similar

There is no dispute that the domain name at issue is confusingly similar to the service mark claimed by Complainant. The dispute is whether Complainant has rights in the mark.

1. Does Complainant Have Rights in a Mark?

Complainant basically concedes that it is not relying on the USPTO registration or on the Supplemental Registration. This concession is well made. “Registration on the Supplemental Register is an indication that the mark has not acquired distinctiveness, at least at the time of the registration. Although registration on the Supplemental Register is not a deemed admission of a lack of acquired distinctiveness, 15 U.S.C. Sec. 1095, the applicant (Complainant in this case), in order to press its rights, if any, in the mark against others must establish through record evidence that the mark has acquired distinctiveness.” Kip Cashmore v. URLPro, WIPO Case No. D2004-1023.

Complainant argues that the mark is suggestive and thus distinctive. However, as recently as July 2007, the USPTO determined that the mark is not distinctive, but merely descriptive. It is a rare situation in which a determination by a national panel charged with the issuance of trademarks may be second guessed by a UDRP panel. This is not one of those cases.

While Complainant has produced statements of advertising revenues expended and revenues realized in conjunction with use of the alleged mark, the Panel must also be cognizant that the USPTO has refused to find that the mark is distinctive, not once, but twice, and most recently in July 2007. The Panel believes that on the record before it and in the expedited process that the UDRP provides, it would be presumptive indeed to effectively overrule determinations made by the USPTO in lengthy administrative proceedings by experts in the law of the jurisdiction. Accordingly, the Panel determines that Complainant has failed to prove that it has rights in a mark.

D. Registered and Used in Bad Faith

Although not necessary to a determination of this matter, the Panel felt that it might prove helpful to provide the parties with its views on 1) the use of privacy services, and 2) the use of robot.txt to prevent anyone (including the Panel) from reviewing the historical use of a disputed domain name. In concentrating on these two issues, the Panel acknowledges that it is not considering the many other allegations of bad faith advanced by Complainant in this case.

Action Instruments, Inc. v. Technology Associates, WIPO Case No. D2003-0024.

1. Use of Privacy Service

The Panel agrees with the general proposition that the use of a privacy service, in and of itself, is not an indication of bad faith. WWF-World Wide Fund for Nature aka WWF International v. Moniker Online Services LLC and Gregory Ricks, WIPO Case No. D2006-0975. However the Panel also agrees with those Panel decisions that hold that the manner in which a privacy service is used can constitute a factor indicating bad faith. Fifth Third Bancorp v. Secure Whois Information Service, WIPO Case No. D2006-0696 (The provision of incomplete contact information to the privacy service and the concealment of the underlying registrant upon the institution of a UDRP proceeding are indicia of bad faith); TDS Telecommunications Corporation v. Registrant [20758] Nevis Domains and Registrant [117460] Moniker Privacy Services, WIPO Case No. D2006-1620 (Failure to respond to a cease and desist letter addressed to the privacy service as registrant of record and requesting the true identity of the registrant may be evidence of bad faith); HSBC Finance Corporation v. Clear Blue Sky Inc. and Domain Manager, WIPO Case No. D2007-0062 (Identification by privacy service of second privacy service as underlying registrant of the domain name constitutes cyberflight and bad faith); Gaylord Entertainment Company v. Nevis Domains LLC, WIPO Case No. D2006-0523 (Undue delay in response to provider’s request to confirm registrant of domain name where registrant listed in WHOIS is a privacy service is indication of bad faith).

2. Use of robots.txt

Panels frequently reference the Wayback Machine in order to determine how a domain name has been used in the past. Karl’s Sales and Service Company, LLC v. LaPorte Holdings, Inc., WIPO Case No. D2004-0929; National Football League v. Thomas Trainer, WIPO Case No. D2006-1440; La Francaise des Jeux v. Domain Drop S.A., WIPO Case No. D2007-1157. More properly known as the Internet Archive, the Wayback Machine is a non-profit organization that constructs a library of web pages that have appeared on the Internet over time. It maintains these historical web pages in an archive which is accessible to the public. To research a particular domain name, one simply goes to “www.archive.org” and enters the domain name that one is researching in the Wayback Machine browser.

A web site operator can instruct automated systems not to crawl their sites, or create specific rules for different automated crawlers, or specify files or directories which cannot be crawled. This information is contained in a file called robots.txt. Compliance with robots.txt by operators of automated crawlers is strictly voluntary.

The Internet Archive (aka the Wayback Machine) uses Alexa to crawl the web. Alexa respects robots.txt instructions, and even does so retroactively. If a web site operator sets up robots.txt on its site, the Alexa crawlers will not only stop visiting that site, but will also mark all previously gathered files as unavailable. Thus, a domain name owner can prevent the public generally, including a UDRP Panel, from accessing the history of the way a web site to which a domain name resolves has been used.

Increasingly, sophisticated respondents are employing robots.txt to prevent access to the historical use of a domain name involved in a UDRP proceeding. The employment of robots.txt is often employed after a UDRP complaint has been filed. Robots.txt has been employed in the present case, and when the Panel attempted to review the history of the use of the domain name at issue, its access to the historical web pages was blocked.

It is the opinion of the Panel that absent convincing justification for the employment of robots.txt in a given case, the use of the device may be considered as an attempt by the domain name owner and operator to block access by the panel to relevant evidence. In such a case, it is the Panel’s view that a panel is entitled to assume that reasonable factual allegations that a complainant has made as to the historical use of the web site to which the domain name at issue resolves are true and that the use of robots.txt in the particular case may be considered as an indicia of bad faith.

E. Reverse Domain Name Hijacking

Respondent requested a finding of reverse domain name hijacking, citing misleading statements made by Complainant. However, the Panel finds that both parties engaged in incomplete and/or inaccurate statements.

Moreover, it is difficult for a complainant to make its case against a respondent whose identity is not known, because the respondent has elected to use a privacy service. As discussed, supra, it is difficult for a complainant to formulate its case in the face of a privacy service as registrant. Finally, the inability of the complainant to communicate with the underlying registrant of the domain name makes amicable settlement of these disputes short of filing a UDRP action very difficult, if not impossible.

Finally the use by Respondent of robots.txt which prevents the Panel from accessing the historical record maintained by the Wayback Machine does not suggest that Complainant’s conduct is out of balance.

Accordingly, the Panel declines to find that Complainant is guilty of reverse domain name hijacking.

7. Decision

For all the foregoing reasons, the Complaint is denied, and the Panel does not find reverse domain name hijacking.

Nelson A. Diaz
Panelist

Dated: December 18, 2007

¹ The Provider in this case being the WIPO Center, which goes to the trouble of seeking the most up to date registrant information from the registrar through issuing and following up on registrar verification requests.