The Complainant is BERNINA International AG of Steckborn, Switzerland, represented by PYTHON, Switzerland.
The Respondent is Domain Administrator, Name Administration Inc. (BVI) of Grand Cayman, Cayman Islands, Overseas Territory of the United Kingdom of Great Britain and Northern Ireland, represented by John Berryhill, Ph.d., Esq., United States of America.
The disputed domain name <bernette.com> is registered with Uniregistrar Corp (the "Registrar").
The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on September 6, 2016. On September 7, 2016, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain name. On September 8, 2016, the Registrar 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" 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 and 4, the Center formally notified the Respondent of the Complaint, and the proceedings commenced on September 12, 2016. In accordance with the Rules, paragraph 5, the due date for Response was October 2, 2016. The Respondent filed a request for an additional four calendar days to file the Response. In accordance with paragraph 5(b) of the Rules, the Center granted the extension of time. The Response was filed with the Center October 6, 2016.
The Center appointed Adam Taylor, David H. Bernstein and Richard G. Lyon as panelists in this matter on October 26, 2016. 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.
The Complainant, incorporated in Switzerland, has been selling sewing machines branded "Bernette" since 1985.
The Complainant owns numerous trade marks worldwide for the term BERNETTE including, by way of example, Swiss trade mark no. 328231, filed February 5, 1979 in class 7 and international trade mark no. 542659, dated September 7, 1989, in classes 7, 8, 9, 10, 11, 16, 20, 21, 23, 24, 26 and 28.
The Respondent acquired the disputed domain name in 2007 in an Internet auction.
Screenshots provided by the Complainant show that, since at least 2010, the disputed domain name has been used for a landing page with the following subject headings: "Baby", "Change Name", "Domain", "First Names", "Genealogy", "Infant", "Internet Domain Name", "Internet Name", "Name Label" and "Name Ring". A purchase enquiry link has also appeared on the site since at least 2013.
The Complainant made purchase enquiries for the disputed domain name in 2010 and 2015. On the second occasion, the Respondent responded with a price of USD 26,000.
On August 16, 2016, following a further purchase enquiry by the Complainant, this time using a pseudonym, a broker acting for the Respondent emailed in response on behalf of its client saying that "based on this being both a surname and female first name, along with other criteria, they have determined a value of $29,000 USD".
On August 17, 2016, the Complainant's lawyer sent an enquiry using his personal email address saying "I would like to buy the domain name bernette.com". A broker responded with a quote of USD 29,000. Although the record is not entirely clear, it appears that, over the next few days, the lawyer made similar enquiries and received similar responses from different brokers each time.
Ultimately, using his professional email address, the Complainant's lawyer emailed the Respondent on or about August 19, 2016, asserting his client's trade mark rights. He said that his client did not have a budget in the region USD 29,000 but was prepared to pay "a reasonable amount in order to cover your client's expenses".
On August 19, 2016, the Respondent's lawyer emailed in response reiterating that the disputed domain name had been registered and used for nine years due to its primary significance as a surname and female first name and drawing attention to the fact that the website advertising results related to personal names. He observed that the Respondent's use of the disputed domain name was unrelated to sewing machines. He highlighted the history of enquiries relating to the disputed domain name emanating from the Complainant, none of which included any assertion of trade mark rights. He pointed out the Respondent had never solicited any purchase offer from the Complainant and asserted that the Complainant was engaged in a crude entrapment strategy of the kind which generally failed under the UDRP and drew attention to some supporting UDRP decisions. He pointed out that one of these cases, involving the Respondent, demonstrated that the Respondent owned and offered for sale a substantial number of domain names corresponding to personal names. He invited the Complainant to either negotiate to buy the disputed domain name or to file a UDRP proceeding.
A summary of the Complainant's contentions is as follows:
The Complainant is virtually the exclusive owner of trade mark registrations for BERNETTE worldwide.
The disputed domain name is identical to the Complainant's trade mark.
The Complainant is not aware of any rights or legitimate interests of the Respondent in respect of the disputed domain name.
The Respondent has no registered trade mark for BERNETTE.
The Respondent claims that it registered the disputed domain name as a surname and female first name but the Respondent's own name is "Name Administration Inc".
The Respondent's only use of the disputed domain name has been to offer it for sale.
The disputed domain name was registered and is being used in bad faith.
The disputed domain name was acquired primarily for the purpose of sale to the Complainant in accordance with paragraph 4(b)(i) of the Policy.
The Respondent "must have been aware" of the Complainant's trade mark at the time of acquisition of the disputed domain name in 2007 as the Complainant is a world-leading manufacturer of sewing machines and owns many trade marks worldwide for BERNETTE, dating back to 1978.
The Respondent obtained the disputed domain name from "apparently dubious Asian sources".
The Respondent's only clear use of the disputed domain name has been to offer it for sale. While the site includes links to other websites, those topics, such as "Domain", "Internet Domain Name", "Change Name" and "Name Label", also relate to the sale of domain names. The links constitute token use designed to give the impression that the Respondent possesses legitimate interests.
Use of a privacy or proxy service can constitute bad faith. The Respondent claimed to act for a client but has not revealed the client's identity. In particular, the Complainant received emails from brokers at Uniregistry.com and DomainNameSales.com claiming to represent "the current owner of bernette.com". The concealment of the owner's identity indicates bad faith.
The Respondent's proposed sale price of USD 29,000 exceeds the Respondent's out-of-pocket expenses directly related to the disputed domain name.
The Respondent attempted to attract Internet users to its website, for commercial gain, by creating a likelihood of confusion with the Complainant's mark in accordance with paragraph 4(b)(iv) of the Policy.
Google Switzerland searches bring up many websites relating to the Complainant's products. Due to the well-known nature of the Complainant's trade mark, Internet users will be attracted and confused by the disputed domain name, which is identical to the Complainant's trade mark and does not include any additional elements to avoid the risk of confusion and dilution.
It would have been easy for the Respondent to include a disclaimer on its website but it has not done so.
The Respondent owns over 240,000 domain names. The Respondent and the Registrar are affiliated entities. They are "stockpiling" domain names via a network of companies at an offshore location without disclosing the beneficial owner's identity. Such circumstances indicate bad faith. The Respondent's only interest is in selling domain names and by operating offshore the Respondent is trying to hide by erecting legal hurdles against trade mark owners.
A summary of the Respondent's contentions is as follows:
The Complainant has demonstrated registered trade mark rights in the term "Bernette" for sewing machines.
Screenshots show the disputed domain name being used for advertising links suggestive of personal names and naming subjects since well before the Complainant raised any dispute.
Evidence shows that "Bernette" is a common female first name and a surname, having its origin in the Germanic "Bern" for "bear". It is also used by various businesses unrelated to the Complainant.
Many Internet users type in their own name or a proposed baby name as a ".com" name out of curiosity. The purpose of the Respondent's "personal name lander", used by the Respondent for many personal name domain names, is to highlight commercial resources about names, naming, genealogy, and so on and the enquiry link also signals that the name is available for purchase for the reasons collectively suggested by the search topics posted to the page.
The effectiveness of the strategy is shown by the fact that the disputed domain name has attracted enquiries from some 14 parties unconnected with the Complainant.
The Complainant has spammed the Respondent's enquiry form with multiple enquiries for several years, never asserting any trade mark rights.
The Complainant's trade mark does not prevent the Respondent from using the disputed domain name in connection with its significance as a personal name. The Respondent does not use or offer the disputed domain name for sale in relation to sewing machines.
Accordingly, the Complainant has failed to carry its burden of establishing the second element of the Policy.
The Respondent is very well known to UDRP panels, its business having been extensively discussed in numerous UDRP decisions and it has been properly and consistently identified as the registrant of the disputed domain name.
The Respondent, and the Registrar, are owned by Frank Schilling, a well-known member of the Cayman business community. These businesses are not "offshore" in the pejorative fashion suggested by the Complainant and there is no concealment of identity.
The disputed domain name was registered to a Korean registrant before the Respondent acquired it via an expired domain names auction. The Respondent had no dealings with any prior registrant in acquiring the disputed domain name. The Complainant's assertions are untrue. The language used is also inappropriate.
The correspondence elicited by the Complainant's counsel from different brokers was a consequence of repeated sales enquiries to the Respondent. Such "Plan B" tactical use of the Policy is a regular and frowned-upon feature of proceedings under the Policy.
Despite the Respondent's pre-dispute correspondence, the Complaint did not include the Complainant's purchase enquiries, and merely submitted the alleged "offers of sale" obtained in response.
This type of "Plan B" approach – using the Policy as a backup when solicited negotiations are deemed unsatisfactory by a mark owner is evidence of reverse domain name hijacking.
It is not in dispute that the Complainant has acquired rights in the mark BERNETTE by virtue of its registered trade marks for that term.
The disputed domain name is identical to the Complainant's trade mark, disregarding the generic Top-Level Domain.
The Panel therefore finds that the Complainant has established the first element of paragraph 4(a) of the Policy.
It is unnecessary to consider this element in light of the Panel's conclusion below under the third element.
In the Panel's view, the Complainant has fallen well short of establishing registration and use in bad faith.
The Complainant relies principally on paragraph 4(b)(i) of the Policy, which requires registration "primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant".
While some of the Complainant's trade mark registrations predate the Respondent's acquisition of the disputed domain name in 2007, there is nonetheless no evidence that the Respondent knew or was likely to have been aware of the Complainant's mark on acquisition of the disputed domain name.
The Complainant has produced some Google Switzerland searches in which the Complainant features prominently as well as some brochures – but there is nothing demonstrating the scale of its activities or the extent of its alleged worldwide reputation. The Complainant declined to produce evidence of its sales figures, saying that they were confidential, but it indicated that it would nonetheless submit them if considered essential by the Panel. However, if the Complainant wanted the Panel to consider certain evidence, then it should have produced it in conjunction with its pleading. It should not rely on the possibility that the Panel might decide to request further evidence (which it declines to do). In any case, the Complainant could surely have produced other non-confidential evidence of scale or reputation had it wished to so. That said, it is unlikely that such evidence would have tipped the balance in the Complainant's favour, given the other matters set out below.
The Respondent has established that the term "Bernette" is used both as a female first name and a surname, albeit a comparatively rare one.
The Respondent has provided evidence that its registration and use of the disputed domain name is part of a pattern whereby it has registered many other domain names comprising personal names and then offered them for sale via a website at the relevant domain name in conjunction with a landing page with subject headings similar to those used in this case, which are broadly relevant to personal names.
In any case, as mentioned above, there is nothing suggestive of use by the Respondent of the disputed domain name in a manner related to sewing machines – which might have indicated relevant knowledge on the part of the Respondent.
The Complainant relies on what it describes as "the proposed sale price" of USD 29,000. However, selling property or a contractual right to which one has rights is not necessarily bad faith; context is key. Here, there is no evidence that the Respondent was purposefully trying to sell the disputed domain name to the Complainant to take advantage of the Complainant's trade mark rights. Nor was this offer, made in response to a general, anonymous inquiry, evidence that the Respondent's acquisition of the disputed domain name, some nine years earlier, was for the purpose of sale to the Complainant – which is a fact that the Complainant must establish if the Complainant wants to prove bad faith registration as to its trade mark rights under paragraph 4(b)(i) of the Policy.
The Complainant's argument based on paragraph 4(b)(iv) of the Policy also fails, not least because there is nothing to show that the Respondent created a likelihood of confusion, "intentionally" or otherwise. For reasons explained above, there is no evidence indicating that the Respondent was likely to have been aware of the Complainant at any relevant time and there is also a lack of evidence of use of the disputed domain name in connection with sewing machines or in any other way likely to have created confusion on the part of the Complainant's customers. There is no obvious reason why the Respondent ought to have included a disclaimer on its website, as the Complainant has claimed.
The Complainant's claim that the Respondent acquired the disputed domain name from a "dubious" source does not help the Complainant's case. If the Complainant wanted to put forward such a claim, it ought to have backed it up with evidence demonstrating (a) the exact nature of the allegedly "dubious" conduct of the previous registrant and (b) exactly how the Respondent is allegedly implicated in such conduct. Here, the Complainant has provided no such evidence and its assertions are thus no more than speculation or an effort to suggest some unspecified impropriety. The Policy and Rules demand evidence, not unsupported implication. In fact the Respondent has confirmed that it simply acquired the disputed domain name by auction following its expiry and that it never dealt with the previous registrant.
The Panel also rejects the Complainant's claim that the Respondent and/or its brokers somehow sought to conceal the Respondent's identity. The brokers simply stated that they were acting for the current owner of the disputed domain name and that owner is the Respondent, which is named as the registrant in the WhoIs.
The fact that the Respondent owns many domain names is, of itself, irrelevant, as is the fact, if true, that the Respondent's "only interest" is in selling domain names. Trafficking in domain names is, of itself, entirely legitimate if the Respondent has rights or legitimate interests in the domain names and/or is not trafficking in the domain names in bad faith.
The Respondent has established that it is genuinely located in the Cayman Islands and that it is not based "offshore" in the sense of an illicit manoeuvre to evade trade mark owners.
The Panel therefore concludes the Complainant has failed to establish the third element of paragraph 4(a) of the Policy.
The Respondent argues that the Complainant has been guilty of RDNH.
Paragraph 15(e) of the Rules provides that, if "after considering the submissions 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". RDNH is defined under the Rules as "using the UDRP in bad faith to attempt to deprive a registered domain-name holder of a domain name".
The Panel considers that the Complainant has been guilty of RDNH for the following reasons:
1. The Complainant has failed by a large margin. In the Panel's opinion, the Complainant knew or at least should have known that it could not prove one of the essential UDRP elements. For example, it is a well-settled Policy precedent that some proof of targeting (i.e., using the disputed domain name to take advantage of the Complainant's marks in whatever manner) is required to establish bad faith. As explained above, there was no such evidence in this case. Furthermore, the Complainant relied heavily on the mere fact that the Respondent trafficked in domain names, whereas it is again well-established under the Policy that such activity of itself may well be entirely legitimate, depending on the circumstances.
2. The Complaint lacks candour. In particular:
a. The Complainant relies on a "proposed sale price of US$ 29,000" and exhibits various broker communications in August 2016 putting forward this price. But its submissions are misleading because it nowhere provides details of the sales enquiries on behalf of (though not in the name of) the Complainant which prompted such offers or even mentions that the Respondent's offers were solicited. Nor does the Complainant refer to its earlier offers in 2010 or 2015. The Panel would add that the Respondent's account of the relevant purchase enquiry history is also somewhat incomplete.
b. The Complainant's description of the Respondent's business structure is highly inaccurate. The Complainant is represented by counsel, who ought to know better and who is under an obligation imposed by paragraph 3(b)(xiii) of the Rules to undertake at least minimal due diligence before filing a complaint. The Panel sees no excuse for not recognising Frank Schilling and his businesses, which have been involved in many previous UDRP cases or, if not familiar with them, doing a basic Internet search.
3. In the Panel's view, this is a classic "Plan B" case, i.e., using the Policy after failing in the marketplace to acquire the disputed domain name. This stratagem has been described in several earlier UDRP cases as "a highly improper purpose" and it has contributed to findings of RDNH. See, e.g., Patricks Universal Export Pty Ltd. v. David Greenblatt, WIPO Case No. D2016-0653 (holding "Plan B" approach as a basis for a finding of RDNH) and Nova Holdings Limited, Nova International Limited, and G.R. Events Limited v. Manheim Equities, Inc. and Product Reports, Inc., WIPO Case No. D2015-0202 (use of UDRP proceeding to increase bargaining leverage in sale negotiations called "a highly improper purpose").
4. Many of the above points were specifically drawn to the Complainant's attention in the Respondent's pre-action letter, mentioned in section 4 above. This should have given the Complainant serious pause for thought but it ploughed on regardless.
For the foregoing reasons, the Complaint is denied and the Panel finds that the Complainant has been guilty of RDNH.
David H. Bernstein
Richard G. Lyon
Date: November 7, 2016
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