WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

The Proprietors of Strata Plan No. 36, A Turks and Caicos Corporation v. Gift2Gift Corp.

Case No. D2010-2180

1. The Parties

The Complainant is The Proprietors of Strata Plan No. 36, A Turks and Caicos Corporation, Turks & Caicos Islands, Overseas Territory of the United Kingdom of Great Britain and Northern Ireland, represented by Jenkins Marzban Logan LLP, Canada.

The Respondent is Gift2Gift Corp., Vancouver, British Columbia, Canada, represented by John Berryhill, United States of America.

2. The Domain Name and Registrar

The disputed domain name <coralgardens.com> is registered with DomainPeople, Inc. (the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on December 14, 2010. On December 15 and 17, 2010, the Center transmitted by email to DomainPeople, Inc. a request for registrar verification in connection with the disputed domain name. On December 17, 2010, the Registrar transmitted by email to the Center its verification response confirming that:

(a) the disputed domain name is registered with it;

(b) the Respondent is listed as the registrant and providing the contact details; and

(c) English is the language of the registration agreement.

The Center verified that the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy” or “UDRP”), 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 December 22, 2010. In accordance with the Rules, paragraph 5(a), the due date for Response January 11, 2011. The Response was received by the Center on January 12, 2011.

The Center appointed Warwick A. Rothnie, Antony Gold and Frederick M. Abbott as panelists in this matter on February 11, 2011. 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 January 18, 2011, the Complainant submitted an unsolicited supplemental filing.

On February 12, 2011, the Respondent submitted an unsolicited supplemental filing.

On February 16, 2011, the Complainant submitted a second unsolicited supplemental filing.

4. Factual Background

The Complainant is a body corporate administering the strata plan for a condominium (which appears to be largely a holiday resort in the exotic, tropical West Indies) known as "Coral Gardens" or “Coral Gardens Resort”.

The disputed domain name was originally registered on June 30, 1998 by “Coral Gardens”. The precise legal entity which registered the disputed domain name is unclear, but it is clear that it was registered by either a member of the Karnehm family or one of their corporate vehicles.

Around the same time as the disputed domain name was first registered, the Karnehm family began developing a tract of land on Grace Bay Beach in the Turks and Caicos Islands, as a condominium resort adjacent to a reef known as the coral gardens. At that time, the Karnehms subdivided land comprising the resort by registration of Strata Plan No. 36 and the Complainant came into existence to administer that.

Following registration of the strata plan, units were sold to the public and the purchasers became shareholders or members of the Complainant. The Karnehm family maintain ownership of some units in the resort, apparently being the largest owner, but not a majority owner.

In 2001, the Karnehm family incorporated White House Condominium Management Ltd as the holiday and rental manager for the resort.

From registration of the disputed domain name until 2005, the disputed domain name resolved to a website promoting the Coral Gardens resort only.

Disputes developed between the Karnehms and White House Condominium Management Ltd, on the one hand, and the other shareholders in the Complainant in 2005.

The precise chronological order is not entirely clear from the documents, but there appear to have been two key developments.

The Karnehms began developing and promoting a new resort, initially described as “Coral Gardens Villas – Phase 3 Development” adjacent to the Coral Gardens resort. It was a separate development from and not part of Strata Plan No. 36. Very early on it became known as the “Reef Residences Resort”. White House Condominium Management Ltd was also engaged to manage rental of units at the Reef Residences.

Around this time, the use of the disputed domain name changed to promote, or promote also, accommodation at the Reef Residences Resort.

In March 2005, the Complainant's "predecessor" applied to register the Turks and Caicos Islands trade mark. White House Condominium Management Ltd opposed registration of that trademark in April 2005. In May 2005, White House Condominium Management Ltd changed its name to Coral Gardens Resort Management Ltd. Ultimately, the Court of Appeal for the Turks and Caicos Islands rejected the opposition and upheld registration of ”Coral Gardens” in respect of condominium complex services in the Complainant's name in August 2007. This registered trademark, No. 13,879 is still valid and subsisting.

In 2006, the members of the Complainant, by majority, voted to terminate the appointment of White House Condominium Management Ltd (now known as Coral Gardens Resort Management Ltd) as manager of the Complainant's resort. This is said to have occurred in February 2006, on 90 days' notice; although actual transfer did not take place until September 2006.

On December 16, 2008, the Complainant secured registration in the United States of America (“USA”) of Trademark No. 3,546,491 “Coral Gardens” in respect of real estate management services in International Class 36 and providing temporary lodging services in International Class 43.

Requests had been made for the transfer of the disputed domain name to the Complainant in 2005 and 2006 and following the Court of Appeal decision. These were rejected. Following registration of the trademark in the USA, a formal letter of demand seeking transfer was sent on January 13, 2009. That demand was also unsuccessful.

On May 3, 2009, the registration of the disputed domain name was transferred to the Respondent using a different, non-US based registrar. It is not contentious between the parties that this was done, on legal advice, to avoid the courts in the USA having jurisdiction. The administrative contact for the disputed domain name following transfer is a member of the Karnehm family. Her husband is the Chief Operating Officer of the Respondent.

On May 15, 2009, the Complainant brought proceedings in the US Federal Court, amongst other things, seeking transfer of the disputed domain name. These proceedings were summarily dismissed for want of personal jurisdiction over the named respondents.

On October 1, 2010, the Complainant applied to register its trademark in Canada. That application is still pending.

The disputed domain name continues to resolve to a website which promotes holiday and rental accommodation at both the Coral Gardens Resort and the Reef Residences Resort.

5. Discussion and Findings

For the Complaint to succeed, under paragraph 4(a) of the Policy, the Complainant must prove that:

(i) the disputed domain name 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 in respect of the disputed domain name; and

(iii) the disputed domain name was registered in bad faith and is being used in bad faith.

Paragraph 15(a) of the Rules directs the Panel to decide the complaint on the basis of the statements and documents submitted and in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable.

Before turning to the substantive issues, however, there are a number of procedural issues that must be resolved.

Supplemental filings

First, both parties have sought to file unsolicited supplemental filings.

The Rules provide for a Complaint and a Response. By paragraph 12 of the Rules, the Panel may request in its sole discretion further statements or documents from either party. Otherwise, the admission of unsolicited filings is in the discretion of the Panel, bearing in mind its obligation to treat the parties equally and to give them a fair opportunity to present their respective cases. It is also important to bear in mind that as a matter of practice proceedings are conducted on the papers and an important object of the Policy is to ensure that proceedings are conducted with due expedition.

The Complainant’s first supplemental filing essentially draws attention to factual errors made in the Response. Having regard to that nature of this material and the objects of the Policy, the Panel admits this filing.

The Respondent’s supplemental filing falls into two broad parts. The first part addresses the factual errors pointed out in the Complainant’s first supplemental filing and consistently with the Panel’s approach to the Complainant’s first supplemental filing is also admitted. The second part seeks to put in issue the Complainant’s standing to bring the Complaint. The detail of this part is not by way of reply and should have been dealt with in the Response. Accordingly, the Panel would ordinarily not admit it. For the reasons discussed below, however, it would not have altered the Panel’s views if it were admitted.

The Presiding Panelist has read the Complainant’s second supplemental filing. Its content is fairly characterized in its second paragraph:

“This matter was addressed in the Complaint, and the Complainant in this submission seeks only to bring to the panel’s attention the relevant parts of the Complaint.”

Having regard to the nature of this second supplemental filing, it is excluded.

Complainant’s standing

In its supplemental filing, the Respondent seeks to challenge the Complainant’s standing to bring the Complaint. In support of that challenge, it has filed (1) an opinion of a Mr Brian Trowbridge who is described as “an attorney licensed in Turks and Caicos” and (2) a copy of the Turks and Caicos Strata Title Ordinance.

The Panel notes that, in the trademark opposition proceedings referred to above, the Court of Appeal ruled that it was perfectly proper for the Complainant to be registered as the owner of the trademark under Turks and Caicos law. The Panel is not prepared to go behind the ruling of the Court of Appeal. Accordingly, this challenge to the Complainant’s standing is rejected.

Joinder of additional respondents

The Response seeks to join various members of the Karnehm family and one of their companies, the unsuccessful opponent to the registration of the Complainant’s trademark in the Turks and Caicos Islands, to the proceeding.

As noted above, it was originally registered to “Coral Gardens” through Network Solutions Inc. in 1998 when domain names in the .com gTLD could be registered only through Network Solutions Inc. Following receipt of the Complainant’s letter of demand in January 2009, the Karnehm family received advice that the domain name should be transferred to a registrar located outside the United States of America so that they would not be exposed to personal jurisdiction in US federal courts.

Following that advice, Leanne Karnehm instructed her husband to arrange the transfer. Ms Karnehm’s husband is the Chief Operating Officer of the Respondent Gift2Gift Ltd. Apparently, he used that company’s account with the domain name registrar it uses to effect the transfer. The transfer was effected on May 3, 2009, slightly less than two weeks before the Complainant commenced its ultimately unsuccessful proceedings in a US Federal Court. (The Response inaccurately states that transfer occurred after dismissal of the proceedings in the US Federal Court). According to the Response, the registration in the Respondent’s name was an accident of convenience. Even so, Ms Karnehm was designated as the administrative, technical and billing contacts. The way in which the disputed domain name has been used since the transfer has not changed from the way it was used immediately before the transfer.

The Response contends that the “Karnehm interests” are the true, beneficial “owners” of the disputed domain name or, alternatively, that Gift2Gift Ltd is the licensor of the disputed domain name to the “Karnehm interests” within the meaning of paragraph 3.7.7.3 of the ICANN Registrar Accreditation Agreement.

Paragraph 1 of the Rules defines the respondent to a complaint as “the holder of a domain-name registration against which a complaint is initiated.”

No other rules formally permit joinder of additional respondents. The Panel notes, however, that paragraphs 3(c) and 10(e) of the Rules have been interpreted by panels as permitting in some cases the joinder of disputes about multiple domain names registered in the names of different formal respondents. See e.g.Speedo Holdings B.V. v. Programmer, Miss Kathy Beckerson, John Smitt, Matthew Simmons,WIPO Case No. D2010-0281 and PHE, Inc. v. Aisha Haider, WIPO Case No. D2007-0992.

The Panel also notes that other panels have been able to address the substantive arguments that the Respondent(s) wish to run in this case under considerations of registration and use in bad faith. See e.g.ehotel AG v. Network Technologies Polska Jasinski Lutoborski Sp.J.,WIPO Case No. D2009-0785 at [6.22]-[6.23], Eastman Sporto Group LLC v. Jim and Kenny,WIPO Case No. D2009-1688 and Intelligen LLC v. Converg Media LLC,WIPO Case No. D2010-0246.

The rule laid down in paragraph 1 of the Rules provides a generally clear and testable standard.

The Registrar has confirmed that Gift2Gift is the Registrant of the disputed domain name. Thus, it is correctly identifed as the Respondent in this proceeding. Normally, the Panel would only take into account the position of the Registrant when considering (in particular) the question of whether the disputed domain name has been registered and used in bad faith. However, in the light of the facts and matters outlined below, the Panel has concluded that it is also appropriate to have regard to what the Respondent has termed "the Karnehm interests" when it considers this issue.

A. Identical or Confusingly Similar

There are two parts to this inquiry: the Complainant must demonstrate that it has rights in a trademark and, if so, the disputed domain name must be shown to be identical or confusingly similar to the trademark.

The Complainant has clearly established ownership of registered trademarks (1) in Turks and Caicos Islands and (2) the USA. The former was registered on August 14, 2007 and the latter on December 16, 2008.

As it is merely an inchoate right, however, the Panel does not take into account the pending Canadian trademark application filed on October 1, 2010.

The addition of the gTLD to the disputed domain name can be disregarded for the purposes of this inquiry as it is a functional requirement of the domain name system. See for example, Telstra Corporation Limited v. Ozurls, WIPO Case No. D2001-0046; Ticketmaster Corporation v. DiscoverNet, Inc., WIPO Case No. D2001-0252; Microsoft Corporation v. J. Holiday Co., WIPO Case No. D2000-1493.

The disputed domain name is (disregarding the gTLD) therefore identical to the Complainant’s proved rights. Moreover, there is evidence of confusion in fact. The Complainant has submitted evidence of several complaints from consumers who booked accommodation through the website at the disputed domain name thinking they would be staying at the Coral Gardens Resort when their rooms were in fact at the Reef Residences resort. In addition, the publisher of the Fodor guide has rejected the Complainant’s listing as a result of the confusion.

Accordingly, the Panel finds the first ground proved.

B. Rights or Legitimate Interests

The second requirement that the Complainant must prove is that the Respondent has no rights or legitimate interests in the disputed domain name.

In view of the Panel’s determination in favor of Respondent on the element of bad faith, as indicated under the following heading,the Panel need not and therefore does not address the element of rights or legitimate interests.

C. Registered and Used in Bad Faith

Under the third requirement of the Policy, the Complainant must establish that the disputed domain name has been both registered and used in bad faith by the Respondent.

The Complainant contends that the transfer of the disputed domain name to Gift2Gift Ltd in May 2009 constituted a re-registration which was in bad faith as it was in defiance of, and with knowledge of, the Complainant’s rights. Broadly, the Response seeks to counter this argument by joinder of the persons it says are the true owners of the disputed domain name or its contention that the transfer is akin to changes in the register to correct typographical errors or deal with matters such as a change of address or formal corporate name.

The Panel notes that earlier panels have recognized some qualifications on the usual rule that a transfer of registration counts as a re-registration as a result of which it may be appropriate to assess whether or not there has been a registration in bad faith earlier than the date of transfer. There has been, or may have been, different reasons advanced by different panels to reach this conclusion. So for example, the learned panelist (and member of the present Panel) in Intelligen LLC v. Converg Media LLC,WIPO Case No. D2010-0246 considered that a transfer between commonly controlled entities might be a case for qualification. The learned panelist in ehotel AG v. Network Technologies Polska Jasinski Lutoborski Sp.J., WIPO Case No. D2009-0785 considered that a transfer between commonly controlled entities could still give rise to a finding of bad faith, but appears to have considered that at least some cases where the use after transfer continued as it had been before transfer would not attract the usual rule. In both cases, the panelists found bad faith.

In this proceeding, it is clear on the record that use of the disputed domain name following transfer to Gift2Gift Ltd continued in the same way as it had for several years before the transfer. Also, Ms Leanne Karnehm was the administrative, technical and billing contact. In these circumstances, the Panel finds that the transfer was simply a continuation of the prior user. Accordingly, in the circumstances of this case, the characterization of the registration of the disputed domain name falls to be determined when the Karnehm family’s interests originally registered the disputed domain name.

When the Karnehm family’s interests registered the disputed domain name, it could not be said it was in bad faith. In fact, it appears from the record in this case that there was no use that might be considered in bad faith for something in the order of seven years after registration when the Karnehm family’s company began using the disputed domain name to promote their (then) new, unrelated development, the Reef Residences Resort.

Some panels have found that a registration which was initially in good faith could be deemed to have been in bad faith by reason of subsequent conduct. Examples where that has been found to occur include cases where distributors were able to register a domain name incorporating their supplier’s trademark but have refused to relinquish it when their distributorship terminated or where web designers or hosts have registered domain names on behalf of customers. The learned panelist in Greyson International, Inc. v. William Loncar, WIPO Case No. D2003-0805 explained the rationale of those cases as:

“the rationale of the panel decisions cited in the preceding paragraph appears to be as follows: The domain name was registered by the distributor/web designer for the distributor/web designer's use under certain conditions or for certain discrete purposes. If the conditions no longer obtain or the use exceeds the specified purposes, registration in bad faith may be inferred, because the complained-of use (e. g., use after the distributor has been terminated or after the web designer has completed its specified tasks), if contemplated by the parties at the time of the registration[13] would have been bad faith.”

See e.g.UVA Solar GmbH & Co Kg v. Mads Kragh, WIPO Case No. D2001-0373; R&M Italia SpA, Tycon Technoglass Srl v. EnQuip Technologies Group, Inc., WIPO Case No. D2007-1477.

In the end, however, consistent with decisions of the learned panelists in Greyson International above, Finlandia-Uistin Oy v. Juha P. Raatikainen, WIPO Case No. D2007-0570 and SPECS Surface Nano Analysis GmbH v. Rickmer Kose / Domain Name Administrator, PrivacyProtect.org,WIPO Case No. D2010-1173, for the reasons they give, what must be tested is the registrant’s intentions at the time of actual registration. Given the sharpness of the debate when the Policy was adopted over whether paragraph 4(a)(iii) should be expressed to operate conjunctively or disjunctively, allowing subsequent conduct to override actual intentions at the time of registration, as opposed to providing an inference about what those intentions were, would appear impermissible.

Accordingly, the Panel finds that the disputed domain name was not registered in bad faith.

6. Decision

For all the foregoing reasons, the Complaint is denied.

Warwick A. Rothnie
Presiding Panelist

Antony Gold
Panelist

Frederick M. Abbott
Panelist

Dated: February 25, 2011