The Complainant is Hôpitaux Universitaires de Genève of Geneva, Switzerland, represented by LHA avocats, Switzerland.
The Respondent is Aydin Karadeniz of Santa Monica, California, United States of America (“USA”), represented by Wiley Rein LLP, USA.
The disputed domain names <hug.com>, <hug.net> and <hug.org> (the “Domain Names”) are registered with GoDaddy.com, LLC (the “Registrar”).
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on August 9, 2016 in respect of the Domain Names <hug.com> and <hug.net>. The Center transmitted a verification request regarding these Domain Names to the Registrar the same day. The Registrar replied the same day, stating that it had received a copy of the Complaint, that these Domain Names are registered with it, that the Respondent is the registrant, that the Uniform Domain Name Dispute Resolution Policy (the “Policy” or “UDRP”) applies, that these Domain Names would remain locked during this proceeding subject to expiry, that the language of the registration agreement is English, that the Domain Name <hug.com> has been registered to this registrant since at least February 19, 2015 and would expire on July 19, 2017; and that the Domain Name <hug.net> has been registered to this registrant since at least February 19, 2015 and would expire on January 31, 2017. The Registrar provided the full contact details held on its WhoIs database in respect of these Domain Names.
On August 12, 2016 the Complainant filed an amended Complaint adding the Domain Name <hug.org> and withdrew a separate complaint that it had made in respect of this Domain Name. The Center sent a further verification request to the Registrar in respect of this Domain Name on August 17, 2016. The Registrar replied the same day. Although the same Respondent, Aydin Karadeniz, was named as the Respondent in the amended Complaint, the Registrar’s response observed that Domains by Proxy, LLC, is not the registrant and that the registrant is Aydin Karadeniz. The Registrar stated that the Domain Name <hug.org> had been registered to this registrant since at least August 9, 2016 and would expire on January 31, 2017. The rest of the Registrar’s response was similar to the response to the first verification request.
The Center verified that the amended Complaint satisfied the formal requirements of the 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 paragraphs 2 and 4 of the Rules, the Center formally notified the Respondent of the Complaint, and the proceedings commenced on August 19, 2016. In accordance with paragraph 5 of the Rules, the due date for Response was September 8, 2016. The Response was filed with the Center September 8, 2016. The Respondent requested a three member Panel in the Response and paid the required fee. The Complainant paid the required supplemental fee for a three member Panel.
The Complainant sent an unsolicited supplemental submission to the Center on September 27, 2016, which the Center copied to the Respondent. The Respondent sent an unsolicited response to this submission to the Center and the Respondent on September 28, 2016
The Center appointed Jonathan Turner, François Dessemontet and Tony Willoughby as panelists in this matter on September 27, 2016, in accordance with the procedure specified in paragraph 6(e) of the Rules. 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 paragraph 7 of the Rules.
The Complainant is a group of public hospitals in Geneva created in 1995 following the merger of several public hospitals. It provides nearly 60,000 hospital stays and nearly 1 million ambulatory treatments each year. It employs nearly 11,000 staff, including over 1,700 doctors and over 4,800 nurses. Its annual turnover is nearly CHF 1.8 billion.
The Complainant filed an application on August 28, 1995 to register a logo containing the upper case letters HUG as a trademark in Switzerland; this mark was registered on January 30, 1997, and was renewed in 2005, but expired without renewal on August 28, 2015. The Complainant filed a further application on July 27, 2015 to register a logo consisting of the upper case letters HUG in a sans serif font, laterally overlapping one another; this mark was registered in Switzerland on November 26, 2015.
At the date of the Complaint, all three Domain Names were directed to web pages which merely offered them for sale, using the words “This premium domain name is available for purchase!” followed my some bullet points extolling the benefit of a good domain name and accompanied by a form headed “MAKE AN OFFER!” to be completed by an interested potential purchaser.
On February 10, 2015 the Respondent wrote to the Complainant stating “My company decided to sell it’s domain portfolio and one of the domain names we are selling is HUG.com. HUG.com is a short, premium domain name. I wanted to contact you to see if Hopitaux Universitaires de Geneve would be interested in buying this premium domain name?” (In quoting from this and subsequent correspondence the Panel has retained misspellings in the original text.)
The Complainant wrote back the same day: “Thanks for your message, could you give me more informations: / at what price you sell this domain? / please send me a document to prove domain ownership / I should speak tomorrow with my manager to give you a response”.
The Respondent replied the same day, saying “Thank you for your response. I am sending this response from my @hug.com email account in order to demonstrate you a quick proof of the domain ownership. If you would like to receive additional documents, I would be happy to send you as further proof. We currently own HUG.com, HUG.net, HUG.org, HUG.fr, HUG.Es and some more domain names. We are selling HUG.com, HUG.net and HUG.org as a bundle transaction. This is the first time such a premium domain name like HUG.com is available in the market for an acquisition. We’ve started promoting the sale of this domain name since the past week and we’ve already received multiple offers. We are currently entertaining offers in 7 figures. If Geneva University Hospital is interested in owning this domain portfolio, please submit an offer in 7 figures…”
The Respondent wrote again on February 18, 2015, saying “I wanted to follow up with you to see if Geneva University Hospital is interested in buying this domain name? We have received a serious offer from another buyer this week. Before we complete a transaction with another company, I wanted to contact you. Please let me know if Geneva University Hospital will make an offer for HUG.com?”
The Complainant replied: “We could be interested in buying this domain name but we need to received additional documents and have a fix price. Once I receided this price, I should propose a buying plan for HUG.com, HUG.net, HUG.org. I’m waiting for your answer.”
Subsequently, a domain name broker sent an email to the Complainant on July 20, 2015, with a request that it be forwarded to “Management Level”, saying: “Our firm noticed that your hospitals use hug-ge.ch HUG.com is currently for sale and I thought that – HÔPITAUX UNIVERSITAIRES GENÈVE – might see value in owning this brand. We have already talked to Mr Franck Schneider and we just wanted to check what the Senior Management thinks about this opportunity …” A chasing email was sent to the Complainant on July 23, 2015.
The Complainant replied on August 4, 2015: “The price you ask is not possible for us … come back if you have a more reasonable price with 4 zeros max.” The broker reverted on August 6, 2016: “appreciate your feedback. Unfortunately the seller of HUG.COM has already received offers with 5 zeroes. Wanted to make you aware though that HUG.ORG is owned by the same seller and .ORG is the most common extension for non-profit organizations and entities … We believe the HUG.ORG would be a perfect fit for a hospital like yours. Would HUG.ORG be of interest?”
The broker followed up with a further email on August 18, 2015, saying: “Thank you for your patience. I was told that the seller will consider high offers with 4 zeros for HUG.ORG Would this be within your budget?” He sent a further chasing email on September 3, 2015, to which the Complainant replied: “Hi, just make an offer and we will say yes or no…”
The broker responded: “The seller is looking to get USD 83,000 for HUG.ORG. Would that work on your end, Sylvia?” He sent a further chaser on September 14, 2015, to which the hospital replied: “No… too expensive we where expecting under 50,000 – at your price I will not go to my boss to ask I know it will be a no!” The broker wrote back the same day: “I understand… My suggestion in this case would be to submit an initial offer in the USD 30,000 to $50,000 range, so we can present it to the seller for consideration. Would that work for you?”
It appears that the correspondence then ceased until February 22, 2016, when the Complainant wrote again to the broker saying: “I am coming back to know if HUG.org is still free. If yes We propose USD 10,000 for it”. The broker replied: “We do not think the owner will be interested for this amount, but we are glad to submit the offer and let you know in any case”. He wrote again the following day: “We presented your offer to the owner of hug.org. His final and best price for hug.org is USD 39,000. This price would cover all fees, including the escrow.com standard fee, which will ensure a safe transaction. If you are interested in moving forward, simply reply to this email and we will let you know the next steps.”
As mentioned above, this Complaint was subsequently filed with the Center on August 9, 2016, apparently without any further correspondence.
Under the UDRP and the Rules, parties have no express right to submit additional arguments or evidence. However, the Panel may, in its sole discretion, request further statements or documents from the parties under paragraph 12 of the Rules; and a party’s unsolicited submission may be regarded as an invitation to the Panel to exercise this discretion.
The principles which should be applied in exercising this discretion have been considered in numerous UDRP cases: see, for example, the decisions cited in paragraph 4.2 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition (“WIPO Overview 2.0”). UDRP panels have generally held that additional evidence or submissions should only be admitted in exceptional circumstances, such as where the party could not reasonably have known the existence or relevance of the further material when it made its primary submission. A fairly strict approach is desirable in view of the purpose of the Policy and Rules of providing an expeditious and relatively inexpensive procedure for determining domain name disputes. Furthermore, if further material is admitted, it should be limited in extent and the other party should be given an opportunity to reply where necessary to ensure equality and fairness in accordance with paragraph 10(b) of the Rules.
In this case, the Complainant’s supplemental submission runs to just over a page and draws attention to some gaps in the evidence provided in the Response. Given its limited scope, the Panel exercises its discretion to admit it. The Respondent’s supplemental submission replies to the points made in the Complainant’s supplemental submission and provides a further document relevant to one of the alleged gaps in the evidence in the Response. In the circumstances and having regarding to the considerations in paragraph 10(b) of the Rules, the Panel admits the Respondent’s supplemental submission.
The Complainant contends that the dominant part of the Domain Names is identical to its trademark HUG in which it has exclusive rights through its current trademark registration, replacing the earlier registration filed in 1995, and through use.
The Complainant submits that the Respondent has no rights or legitimate interests in respect of the Domain Names. It states that it has not authorized the Respondent to use its trademarks, that there is no evidence that the Respondent has used the Domain Names or any corresponding name in connection with a bona fide offering of goods or services, and that the Respondent has not provided any substantive content on the Internet located by the Domain Names, apart from stating that they are available for purchase.
The Complainant alleges that the Domain Names were registered and are being used by the Respondent in bad faith. The Complainant infers from the absence of any other use that the Domain Names were registered by the Respondent for the purpose of sale. According to the Complainant, it is clear that the Respondent has tried to sell the Domain Names to the Complainant for sums in excess of the Respondent’s out-of-pocket costs.
The Complainant requests a decision that the Domain Names be transferred to it.
The Respondent denies that the Domain Names are identical or confusingly similar to a trademark in which the Complainant has rights. The Respondent points out that the trademark granted on the Complainant’s original application in 1995 expired on August 28, 2015, and that the Complainant’s only live registration was filed after the Respondent acquired the Domain Names. According to the Respondent, the Complainant has not provided any evidence of trademark rights in HUG alone prior to his registration of the Domain Names.
The Respondent maintains that he has rights or legitimate interests in respect of the Domain Names. He states that he acquired the Domain Names in 2014, together with numerous other domain names containing the word “hug”, for use in connection with a search engine which he planned to develop. His evidence is that he paid USD 403,585 for <hug.com>, USD 6,490 for <hug.net> and USD 10,200 for <hug.org> and he provides copies of closing statements of the escrow agent Escrow.com apparently confirming this. Although these statements appear to identify the buyer as Burak Karadeniz rather than Aydin Karadeniz, the Respondent explains in his supplemental submission that his brother’s account was used. The supplemental submission also exhibits a copy of an email from Bank of America to the Respondent apparently confirming the transfer of USD 403,585 as recorded in the Escrow.com statement in respect of <hug.com>.
The Respondent states that he had no knowledge of the Complainant or its claimed use of the mark HUG when he acquired the Domain Names. He says he acquired the Domain Names for the common English meaning of the word “hug”.
The Respondent provides evidence of various steps taken in 2014 and 2015 with a view to launching the business, including filing articles of incorporation of Hug.com in California (which he exhibits), hiring employees (copies of recruitment advertisements are exhibited), renting office space (a copy of the agreement is provided), posting a “coming soon” page at “www.hug.com” (the Archive.org record is annexed), and applying to register “HUG” as a trademark at the United States Patent and Trademark Office (“USPTO”) for “Computer services, namely, providing search engines for obtaining data on a global computer network; Providing a website featuring non-downloadable software for providing search engines to obtain data from third party social networking sites and data featured on the mobile web”.
The Respondent states that his plans to develop a search engine proved unsustainable and that he decided to dissolve Hug.com and liquidate its assets, including the valuable Domain Names.
The Respondent also denies that the Domain Names were registered or are being used in bad faith. Having acquired them for his own business, and not for the purpose of selling them to the Complainant, he asserts that he is entitled to resell them even at a high price reflecting the value that is placed on domain names of this nature.
The Respondent alleges that the Complaint is an attempt to use the UDRP in bad faith to deprive him of the Domain Names and constitutes an abuse of the administrative procedure. He submits that the Complainant and its counsel had a duty to undertake some investigation before certifying and filing the Complaint, and that any investigation would have discovered publicly available documents showing the Respondent’s preparations to use the Domain Names. He says that the Complainant is invoking the UDRP as a “plan b” following the failure of commercial negotiations to acquire one or more of the Domain Names from the Respondent. He draws attention to the Complainant’s failure to assert a trademark claim before filing the Complaint. Accordingly, the Respondent considers that there should be a finding of reverse domain name hijacking.
In accordance with paragraph 4(a) of the Policy, the Complainant must prove: (i) that the Domain Names are identical or confusingly similar to a mark in which it has rights; (ii) that the Respondent has no rights or legitimate interests in respect of the Domain Names; and (iii) that the Domain Names were registered and are being used in bad faith.
In accordance with paragraph 15(e) of the Rules, if the Panel finds that the Complaint was brought in bad faith, for example in an attempt at reverse domain name hijacking, or was brought primarily to harass the domain-name holder, the Panel shall declare in its decision that the Complaint was brought in bad faith and constitutes an abuse of the administrative proceeding. Reverse domain name hijacking is itself defined in paragraph 1 of the Rules as using the Policy in bad faith to attempt to deprive the registered domain-name holder of a domain name.
The Panel considers each of these issues in turn.
It is well established that the first requirement of the UDRP must be assessed as at the date of the dispute, irrespective of whether the respondent claims to have prior rights. The condition is that the disputed domain name is identical or confusingly similar to a mark in which the complainant has rights, not that it is identical or confusingly similar to a mark in which the complainant had rights when the disputed domain name was registered or acquired by the respondent. Priority of the respondent’s rights is an important consideration in relation to the second and third requirements of the UDRP, but irrelevant to the first requirement. This is clear from the language of the UDRP and has been affirmed in many UDRP panel decisions, as summarized in paragraph 1.4 of the WIPO Overview 2.0.
In this case the Panel finds that the Complainant currently has registered rights in the logo consisting of the upper case letters HUG in a sans serif font laterally overlapping one another. In addition, the Panel considers that within the Geneva area, it is likely that a significant proportion of the public understand the letters HUG as denoting the Complainant, having regard to the scale and significance of the health services that it provides. Accordingly the Panel is prepared to find that the Complainant also has unregistered rights in the mark consisting of the letters HUG.
As the Respondent points out, the Second-Level Domain (“SLD”) of the Domain Names is a common English word while the mark is registered by the Complainant as a logo. However, in all cases it is necessary to compare the domain name with the Complainant’s mark as a whole, taking into account the mark’s use and reputation. In this case, the Panel considers that a significant number of people living in the Geneva area are likely to associate the Domain Names specifically with the Complainant, since the Complainant is probably very well known under the name HUG in this area and English is not the first language of the majority of this population.
In these circumstances, the Panel finds that the Domain Names are confusingly similar to the Complainant’s marks and that the first requirement for a valid complaint under the UDRP is satisfied.
Unless the exhibited documents are forgeries, the evidence shows that the Respondent paid substantial sums to acquire the Domain Names and made demonstrable preparations to use them for a bona fide offering of Internet services before notice of any dispute with the Complainant. If so, the Respondent has rights or legitimate interests in the Domain Names in accordance with paragraph 4(c)(i) of the UDRP.
The Panel has been able to verify from its own searches on the relevant websites that a corporation under the name “Hug.com” was registered in California on the application of a person with the Respondent’s name filed on August 4, 2014, and has since been dissolved; and that an application was made in the name of this company to register the mark “HUG” at the USPTO on August 25, 2014, for the services stated in the Response, that this application was published for opposition on January 20, 2015, and that it was abandoned on October 19, 2015. The Panel has also verified that the pages recorded by the Internet Archive at “www.hug.com” between September 23, 2014 and March 16, 2015, are in the form of the “Coming Soon” page exhibited by the Respondent.
It does not necessarily follow that other documents produced by the Respondent are genuine, but the Respondent’s account is not so implausible as to warrant the rejection of such an elaborate series of apparently consistent documents.
In these circumstances, the Panel finds that the Complainant has not proved that the Respondent has no rights or legitimate interests in the Domain Names. The second requirement of the UDRP is not satisfied.
On the basis that the documents exhibited by the Respondent are genuine, it appears that the Respondent paid over USD 400,000 to acquire the Domain Name <hug.com> in 2014. It is inconceivable that the Respondent intended to resell this Domain Name to the Complainant or a competitor of the Complainant at a price that would return a profit over this outlay, let alone one at such a margin as would justify the considerable risk being taken. Noone would realistically harbour an expectation that public hospitals would pay this kind of sum for a domain name.
In these circumstances, the Panel cannot infer from the Respondent’s subsequent interest in selling to the Complainant either the three Domain Names together for a very substantial sum or the Domain Name <hug.org> on its own for a rather smaller sum, that the Respondent acquired the Domain Names with this intent. Accordingly, the presumption in paragraph 4(b)(i) of the UDRP does not apply.
Nor can it be inferred from the available material that the Respondent acquired the Domain Names in order to prevent the Complainant from registering a domain name corresponding to its mark or to disrupt the Complainant’s business. In the Panel’s view, it would make no sense to spend sums of money of this magnitude for these purposes.
In all the circumstances, the Panel finds that the Complainant has not proved that the Domain Names were registered in bad faith. Furthermore, if (as appears to be the case) the Domain Names were acquired legitimately by the Respondent and not to target the Complainant, his attempt to resell them to the Complainant at substantial prices does not constitute a use of them in bad faith. Nor has it been established that the Respondent has used the Domain Names to attract Internet users to his website by creating a likelihood of confusion with the Complainant, or that he has made any other use of the Domain Names in bad faith.
The Panel concludes that the Complainant has failed to prove that the Domain Names were registered and are being used in bad faith. The third requirement of the UDRP is not satisfied.
In view of the Panel’s findings that the second and third requirements of the UDRP are not satisfied, the Complaint must be rejected.
The rejection of a Complaint for failure to satisfy one or more of the requirements of the UDRP does not of itself justify a finding of reverse domain name hijacking. Such a finding is only appropriate where the Panel finds that the Complaint was brought in bad faith. On this issue the view of the majority of the Panel (Jonathan Turner and Tony Willoughby) is as follows:
In this case, the Complainant negotiated over an extended period for the acquisition either of the three Domain Names together or (in the later period) of the Domain Name <hug.org> on its own, in a manner which suggested that the Complainant recognized that the Respondent had probably registered them legitimately. At no time prior to eventually filing the Complaint did the Complainant suggest that the Respondent was not entitled to the Domain Names and must therefore transfer them for a nominal amount. The Complainant’s eventual offer of USD 10,000 for the Domain Name <hug.org> on its own was a relatively low amount but was not nominal. Nor has the Complainant provided any evidence or explanation of a change in its understanding of the position.
In these circumstances, it appears to the majority of the Panel that the Complainant launched the Complaint without a real belief in its justification, as a plan b when it could not purchase the Domain Names at a price that was acceptable to it, in the hope of getting the Domain Names more cheaply than it could by purchasing them.
Furthermore, on the one hand, the Complainant did not send any cease-and-desist letter or put any allegation of misconduct to the Respondent before filing the Complaint; and, on the other hand, it does not appear that the Complainant carried out any investigation itself before filing the Complaint that might have revealed whether the Respondent was acting in good or bad faith. This suggests at best a reckless disregard of the respondent’s possible entitlement to retain the disputed domain name.
However, the Panel’s majority decision on this topic does not depend solely upon that view of a complainant’s obligations. In this particular case the nature of the negotiations (set out in some detail in section 4 above) make it clear that at no time did the Complainant believe that the Respondent was acting in bad faith, which is a necessary precondition for success in a proceeding under the UDRP.
In all the circumstances, the Panel finds by a majority that this Complaint was brought in bad faith and must so declare.
For the foregoing reasons, the Complaint is denied.
The Panel finds by a majority that the Complaint was brought in bad faith and constitutes an abuse of the administrative proceeding.
Jonathan Turner
Presiding Panelist
François Dessemontet
Panelist
Tony Willoughby
Panelist
Date: October 10, 2016
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