The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on May 15, 2008. On May 16, 2008, the Center transmitted by email to Network Solutions, LLC a request for registrar verification in connection with the domain names at issue. On May 16, 2008, Network Solutions, LLC transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details. The Center verified that the Complaint satisfied 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 on May 27, 2008. In accordance with the Rules, paragraph 5(a), the due date for Response was June 16, 2008. The Response was filed with the Center on June 13, 2008.

The Center appointed William R. Towns as the sole panelist in this matter on June 23, 2008. The Panel finds that it was properly constituted. 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.

4. Factual Background

The Complainant is in the business of selling educational toys. The Complainant owns several valid and subsisting trademark registrations for DICOVERY TOYS and DISCOVERY-TOYS issued by the United States Patent and Trademark Office (USPTO). The Respondent, a real estate marketing company, holds the registrations for the disputed domain names <discoverytoy.com>, <discoverytoys.com>, and <discoverytoys.org>. Based on information provided in the concerned registrar’s WHOIS records, the Respondent registered the <discoverytoys.com> on November 7, 1995, <discoverytoy.com> on April 30, 1998, and <discoverytoys.org> on July 15, 2000.

The disputed domain names <discoverytoys.com> and <discoverytoys.org> resolve to a parked website furnished by Network Solutions LLC featuring links to various third party websites, including websites where educational toys are advertised or offered for sale. Some of these websites sell the Complainant’s products; others sell competing products. The domain name <discoverytoy.com> does not currently resolve to an active website.

5. Parties’ Contentions

A. Complainant

The Complainant describes itself as a leading direct sales educational toy company serving the United States of America and Canada for more than 30 years. The Complainant presents evidence of four valid and subsisting trademark registrations issued by the USPTO for DISCOVERY TOYS and DISCOVERY-TOYS between March 1983 and December 1987.

The Complainant contends that disputed domain names are identical to its marks, and asserts that the Respondent has no rights or legitimate interests in the disputed domain names. The Complainant alleges that the Respondent acquired the disputed domain names for resale, and alleges that in July 2005 the Respondent offered to sell the disputed domain names to the Complainant for $150,000.00, including the sum of $135,000.00 for the <discoverytoys.com> domain name. The Complainant maintains it did not respond to this offer. In view of the foregoing, the Complainant contends that the Respondent registered and is using the domain names in bad faith.

B. Respondent

The Response identifies the Respondent as Joan Barnes, who is the president of Marketing Specifics, Incorporated, the Respondent identified in the Complaint.¹ According to the Response, Ms. Barnes entered into an agreement with the Complainant in 1995, which the Complainant reneged upon a short time thereafter, to be the Complainant’s exclusive online distributor of its products. It is alleged that the Complainant was paid $1,500.00 as consideration, and that this money was not returned when the Complainant reneged on the arrangement. The Response further alleges that in connection with the distribution rights the Respondent was authorized by the Complainant to register and use the domain name <discoverytoys.com>. The Response alleges that the Complainant unsuccessfully pursued a lawsuit seeking to acquire the disputed domain names.

According to the Response, the disputed domain names have never been used with an active website, since the Complainant reneged on the distribution agreement while the website intended for use with the distributorship was still in development. The Respondent denies that any attempts have been made to sell or otherwise transfer the disputed domain names to any third parties. The Respondent further denies ever soliciting the Complainant to buy the domain names, and maintains that any offer to sell the domain names to the Complainant was made in response to the Complainant’s demands.

The Respondent claims that it has incurred more than $135,000.00 in acquiring, maintaining, and subsequently defending the <discoverytoys.com> domain name from the Complainant efforts to obtain them. Accordingly, the Respondent concludes it is entitled to recover these costs from the Complainant in exchange for the transfer of the disputed domain names. The Response alleges that the Complainant unsuccessfully pursued a lawsuit seeking to acquire the disputed domain names, and accuses the Complainant of reverse domain name hijacking in bringing this proceeding.

6. Discussion and Findings

A. Scope of the Policy

The Policy is addressed to resolving disputes concerning allegations of abusive domain name registration and use. Milwaukee Electric Tool Corporation v. Bay Verte Machinery, Inc. d/b/a The Power Tool Store, WIPO Case No. D2002-0774. Accordingly, the jurisdiction of this Panel is limited to providing a remedy in cases of “the abusive registration of domain names”, also known as “cybersquatting”. Weber-Stephen Products Co. v. Armitage Hardware, WIPO Case No. D2000-0187. See, Report of the WIPO Internet Domain Name Process, paragraphs 169 and 170. Paragraph 15(a) of the Rules provides that the Panel shall decide a complaint on the basis of statements and documents submitted and in accordance with the Policy, the Rules and any other rules or principles of law that the Panel deems applicable.

Paragraph 4(a) of the Policy requires that the Complainant prove each of the following three elements to obtain a decision that a domain name should be either cancelled or transferred:

(i) 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) The Respondent has no rights or legitimate interests with respect to the domain name; and

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

Cancellation or transfer are the sole remedies provided to a complainant under the Policy, as set forth in paragraph 4(i).

Paragraph 4(b) of the Policy sets forth four situations under which the registration and use of a domain name is deemed to be in bad faith, but does not limit a finding of bad faith to only these situations.

Paragraph 4(c) of the Policy in turn identifies three means through which a respondent may establish rights or legitimate interests in the domain name. Although the complainant bears the ultimate burden of establishing all three elements of paragraph 4(a) of the Policy, panels have recognized that this could result in the often impossible task of proving a negative, requiring information that is primarily if not exclusively within the knowledge of the respondent. Thus the consensus view is that paragraph 4(c) shifts the burden to the respondent to come forward with evidence of a right or legitimate interest in the domain name, once the complainant has made a prima facie showing. See, e.g., Document Technologies, Inc. v. International Electronic Communications Inc., WIPO Case No. D2000-0270.

B. Identical or Confusingly Similar

The Complainant has presented uncontested evidence of its registration and use of the DISCOVERY TOYS and DISCOVERY-TOYS marks in the United States of America. At a minimum, the Complainant’s marks are entitled to a presumption of validity by virtue of their registration with the United States Patent and Trademark Office. See EAuto, L.L.C. v. Triple S. Auto Parts d/b/a Kung Fu Yea Enterprises, Inc., WIPO Case No. D2000-0047.

Under paragraph 4(a)(i) of the Policy the question of identity or confusing similarity is evaluated and based on a comparison of the complainant’s mark and the alphanumeric string constituting the domain name at issue. Magnum Piering, Inc. v. The Mudjackers and Garwood S. Wilson, Sr.,WIPO Case No. D2000-1525. Applying this standard, the Panel finds that the disputed domain names <discoverytoys.com> and <discoverytoys.org> are identical to the Complainant’s marks. The disputed domain name <discoverytoy.com> is virtually identical to the Complainant’s marks, differing only by the omission of the letter “s” in “toys”, a distinction that does not serve to dispel confusing similarity.

Indeed, this latter registration is strongly indicative of “typosquatting” – a form of cybersquatting in which a respondent registers and uses a domain name that is a common misspelling or predictable mistyping of a distinctive mark in order to take advantage of typographical errors made by Internet users seeking the complainant’s commercial website. See Wachovia Corporation v. American Consumers First, WIPO Case No. D2004-0150; Red Bull GmbH v. Grey Design, WIPO Case No. D2001-1035.

Accordingly, the Panel finds that the Complainant has satisfied the requirements of paragraph 4(a)(i) of the Policy.

C. Rights or Legitimate Interests

As noted above, once the Complainant makes a prima facie showing under paragraph 4(a)(ii) of the Policy, paragraph 4(c) shifts the burden to the Respondent to come forward with evidence of rights or legitimate interests in the disputed domain names. The Panel concludes based on the record before it that a prima facie showing under paragraph 4(a)(ii) has been made. The Respondent has registered three domain names, two of which are identical to the Complainant’s marks, and one which is evocative of a form of abusive domain name registration commonly known as “typosquatting.” The Complaint alleges that the Respondent has sought to sell the disputed domain names to the Complainant for an amount greatly in excess of any reasonably expectable out-of-pocket expenses incurred by the Respondent in relation to the domain names. The record further reflects the Respondent’s use of two of the disputed domain names to redirect Internet users to a website containing advertising links, including links to third-party websites offering products that compete with those of the Complainant.

Pursuant to paragraph 4(c) of the Policy, the Respondent may establish rights to or legitimate interests in the disputed domain name by demonstrating any of the following:

(i) before any notice to her of the dispute, the respondent’s 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; or

(ii) the respondent has been commonly known by the domain name, even if she has acquired no trademark or service mark rights; or

(iii) the respondent is making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.

The Respondent asserts rights or legitimate interests in the disputed domain names based on an online distribution agreement allegedly entered into between the Respondent and the Complainant in 1995. In connection with this agreement, the Respondent also alleges that the Complainant authorized the Respondent to register and use the <discoverytoys.com> domain name. The Respondent’s allegations, however, find no support in the record. The Respondent has provided no documents evidencing the alleged distribution agreement or otherwise supporting its allegation that the Complainant authorized the Respondent to register and use the Complainant’s mark as a domain name.

Further, the Respondent indicates that the agreement on which it relies was unilaterally terminated by the Complainant after a brief period in 1995. According to the concerned registrar’s WHOIS records, the Respondent did not register the disputed domain names <discoverytoy.com> and <discoverytoys.org> until April 1998 and July 2000, respectively. Under such circumstances, the Respondent cannot plausibly claim rights or legitimate interests in these domain names relying on unsubstantiated allegations of an agreement that the Respondent concedes was terminated by the Complainant years before these registrations were made. And while the <discoverytoys.com> domain name was registered in November 1995 according to the WHOIS records, the Respondent has provided no evidence that such registration occurred prior to the termination of the alleged agreement upon which the Respondent’s claim of legitimacy rests.

The Respondent also has provided no evidence of use or demonstrable preparations to use the disputed domain name <discovertoys.com> in connection with any online offering regarding the Complainant’s products. Further, there is no evidence that the Respondent has been commonly known by the disputed domain names or that the Respondent has attempted any legitimate noncommercial or fair use of the domain names. In short, after a careful review of the record in this case, the Panel finds nothing to support the Respondent’s assertion of rights or legitimate interests in the disputed domain names under paragraph 4(c) of the Policy.²

Accordingly, the Panel concludes that the Complainant has satisfied the requirements of paragraph 4(a)(ii) of the Policy.

D. Registered and Used in Bad Faith

Paragraph 4(b) of the Policy states that any of the following circumstances, in particular but without limitation, shall be considered evidence of the registration and use of a domain name in bad faith:

(i) circumstances indicating that the respondent registered or acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant (the owner of the trademark or service mark) or to a competitor of that complainant, for valuable consideration in excess of documented out-of-pocket costs directly related to the domain name; or

(ii) circumstances indicating that the respondent registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that the respondent has engaged in a pattern of such conduct; or

(iii) circumstances indicating that the respondent registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(iv) circumstances indicating that the respondent intentionally is using the domain name in an attempt to attract, for commercial gain, Internet users to its website or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of the respondent’s website or location or of a product or service on its website or location.

The examples of bad faith registration and use set forth in paragraph 4(b) of the Policy are not meant to be exhaustive of all circumstances from which such bad faith may be found. See Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No. D2000-0003. The overriding objective of the Policy is to curb the abusive registration of domain names in circumstances where the registrant is seeking to profit from and exploit the trademark of another. Match.com, LP v. Bill Zag and NWLAWS.ORG, WIPO Case No. D2004-0230.

The Panel concludes from the totality of circumstances in this case that the Respondent registered and is using the disputed domain names in bad faith. There can be no question based on the record before this Panel that the Respondent was well aware of the Complainant and the Complainant’s rights in its DISCOVERY TOYS and DISCOVERY-TOYS marks. With such awareness, the Respondent registered the disputed domain names, all of which are identical or confusingly similar to the Complainant’s marks. The Respondent has failed to demonstrate rights or legitimate interests in any of these domain names. The Panel also concludes that the Respondent has engaged in typosquatting, an abusive practice that a number of prior panels decision have found to constitute bad faith under the Policy. See, e.g., Red Bull GmbH v. Grey Design, WIPO Case No. D2001-1035; Playboy Enterprises International Inc. v. SAND WebNames – For Sale, WIPO Case No. D2001-0094; Telstra Corp. Ltd. v. Warren Bolton Consulting Pty. Ltd., WIPO Case No. D2000-1293.

The Respondent claims not to have used the disputed domain names with any active websites, but two of the disputed domain names currently redirect Internet users to a website containing advertising links to other commercial websites, including links to third-party websites offering for sale educational toys competing with the Complainant’s products. However, even the Respondent’s passive holding of the disputed domain names would not preclude a determination of bad faith registration and use in the circumstances of this case. As noted in Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No. D2000-0003, passive holding of a domain name can be considered as bad faith where it is not possible to conceive of any plausible actual or contemplated active use of the disputed domain name that would not be illegitimate. See also Salomon Smith Barney, Inc. v. Salomon Internet Services, WIPO Case No. D2000-0668. For the reasons discussed above, this Panel cannot in the circumstances of this case conceive of any plausible actual or contemplated use of the disputed domain name by the Respondent that would be legitimate.

Accordingly, the Panel finds that the Complainant has satisfied the requirements of paragraph 4(a)(iii) of the Policy.

E. Reverse Domain Name Hijacking

In view of the foregoing, the Panel considers that the Respondent’s claim of reverse domain name hijacking must fail.

7. Decision

For all the foregoing reasons, in accordance with Paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the domain names, <discoverytoy.com>, <discoverytoys.com>, and <discoverytoys.org>, be transferred to the Complainant.

William R. Towns
Sole Panelist

Dated: July 7, 2008

¹ The domain name registrations identify Marketing Specifics, Incorporated as the registrant of the disputed domain names, which was verified by the concerned registrar, Network Solutions, LLC, prior to the commencement of proceedings herein.

² The Panel notes that the Respondent alleges that the Complainant unsuccessfully sued to obtain a transfer of the disputed domain names. The Respondent also claims to have incurred about $135,000.00 in defending its rights in the <discoverytoys.com> domain name from the Complainant’s efforts to obtain the domain name. However, the Respondent has not identified for the benefit of the Panel any court proceedings involving the disputed domain names, nor provided the Panel with any supporting documentation, such as a judgment or other judicial determination regarding the Respondent’s rights or legitimate interests in the disputed domain names. Nor has the Respondent provided the Panel with any support for its claim to have incurred $135,000.00 of expenses in connection with the <discoverytoys.com> domain name.