WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

BTSA Biotecnologias Aplicadas, S.L. v. Gregg Freeman, Domain Capital and Macrosten Ltd.

Case No. D2018-1726

1. The Parties

The Complainant is BTSA Biotecnologias Aplicadas, S.L. of Madrid, Spain, represented by Whiteford, Taylor & Preston, LLP, United States of America (“United States”).

The Respondents are Gregg Freeman, Domain Capital of Englewood, New Jersey, United States and Macrosten Ltd of Nicosia, Cyprus, represented by WEBLEGAL, Italy.

2. The Domain Name and Registrar

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

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on July 31, 2018. On July 31, 2018, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain name. On July 31, 2018, 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. In reply to a request for clarification sent by the Center, the Complainant filed an amended Complaint on August 8, 2018.

The Center verified that the Complaint together with the amended 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 August 10, 2018. In accordance with the Rules, paragraph 5, the due date for Response was August 30, 2018. The Response was filed with the Center on August 30, 2018. The Complainant sent an email communication to the Center on September 6, 2018. The Respondent sent two email communications to the Center on September 6 and 7, 2018.

The Center appointed Warwick A. Rothnie as the sole panelist in this matter on September 13, 2018. 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.

On September 14, 2018, the Complainant filed a supplemental filing in reply to the Response. On September 20, 2018, the Respondents filed a supplemental filing in response to the Complainant’s supplemental filing.

4. Factual Background

The Complainant was established in 1994 in Spain. It produces and markets a range of chemical products including natural antioxidants, natural vitamin E and Omega 3 for food, cosmetics and personal care, nutraceuticals, pharmaceutical and animal nutrition. Its main product, marketed under the trademark “Tocobiol” is (according to the Complaint) a powerful antioxidant used in the food industry since 1995 and subsequently in the cosmetics industry.

The Complainant says it has customers in over 30 countries. In the Complaint, the Complainant makes a point that it has sales offices in Mexico. In May 2018, the Complainant established a subsidiary in the United States.

Since it began operations, the Complainant says it has marketed and sold its products by reference to a figurative mark which includes as the most prominent element the letters “btsa”. The Complaint includes evidence demonstrating use of that mark on brochures, corporate stationery and the like.

According to the Complaint, the Complainant spent about EUR 90,000 each year on marketing and promotion of the trademark until the last three years. In the last three years, the annual expenditure has been around EUR 300,000.

The Complainant established its website at <btsa-es.com> in mid-2004. The Complainant has provided evidence that, since November 2015, there have been 228,492 visitors to its website. Apparently, 85 per cent are “new visitors”, the remaining 15 per cent are returning visitors. The Complainant began “investing” in Google AdWords in 2016. Since then, for an expenditure of EUR 39,000, it has gained some 26 million impressions resulting in 137,568 clicks through to its site; the number of “clicks” increasing each year.

The figures from Google Analytics included in the Complaint appear to indicate that there were less than 1,000 visitors per month to the Complainant’s website in the first half of 2016. From July 2016 to late 2017, the number of visitors ranged between 6,000 – 10,000 per month. From late 2017, the number of visitors has increased to over 15,000 per month.

The Complainant has also spent some EUR10,000 on LinkedIn Ads since January 2017, resulting in over seven million impressions and almost 5,000 “clicks”.

The Complainant has attended numerous trade shows. Until 2010, this was as a visitor or attendee. From 2010 onwards, it has been an exhibitor.

The Complainant’s founder has secured registration of a version of the figurative mark as an International Registration of Trademark No. 1319111 BTSA BIOTECNOLOGÍAS APLICADAS for a range of relevant products in International Class 1. The registration was effected on May 26, 2016. On that date, the Complainant’s founder also filed to register the figurative trademark in the United States, Trademark No. 5,298,748 BTSA BIOTECNOLOGÍAS APLICADAS. That trademark was registered in the United States on October 3, 2017.

The disputed domain name was registered in July 2003. According to the Complaint, at least on December 10, 2004 it was registered to Macrosten Ltd (the “Second Respondent”), or that company’s principal, Michele Dinoia. Over time, the Second Respondent has also registered numerous other three letter and four letter domain names. It says that its business model is “to invest” in what it calls “premium” domain names, by which it appears to be referring to plain words and very short domain names such as two, three or four letter domain names. Neither the Response nor the Respondents’ supplemental filing expose how the Second Respondent identified and obtained these domain names.

In about October 2014, the registration of the disputed domain name (along with the registrations of numerous other “premium” domain names) was transferred to the first named Respondent, Gregg Freeman of Domain Capital. According to the Respondents, this is a sale and lease back arrangement whereby the First Respondent has provided substantial funding to the Second Respondent on the security of the “leased” domain names. In February 2017, there was some sort of renegotiation or extension of this arrangement.

At all times since its registration, the registrant has consistently offered it up for sale. For most of that time, the disputed domain name appears to have been inactive (apart, more recently, for a link to “inquire about this domain”). At some point after June, 2016 and before the filing of the Complaint, the disputed domain name has begun resolving to a website with pay-per-click (PPC) links to job or employment searches.

5. Discussion and Findings

Paragraph 4(a) of the Policy provides that in order to divest the Respondent of the disputed domain name, the Complainant must demonstrate each of the following:

(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 has been registered 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.

In the interests of ensuring that both parties are properly heard, the Panel admits both supplemental filings into the record in this proceeding.

A. Preliminary Issue: The Respondent’s identity

Paragraph 1 of the Rules defines the “respondent” for the purposes of a complaint under the Policy as:

“the holder of [the] domain-name registration against which [the] complaint is initiated.”

In the present case, that is the First Respondent. The Respondents contend, however, that the First Respondent’s registration is a mere formality to secure the moneys advanced by way of “lease back” to the Second Respondent (the disputed domain name is only one of a portfolio of domain names provided as security for the moneys lent.). The Respondents say that the disputed domain name and the use made of it at all times remains under the control and responsibility of the Second Respondent. The First Respondent will assert actual control only if the Second Respondent defaults on repayment under the sale and lease back arrangement.

The Respondents, however, present themselves as independent third parties dealing with each other at arm’s length. They appear to have a longstanding relationship going back to at least 2014, but it is a commercial relationship of borrower and financier. It is not a familial relationship nor are they members of the same corporate group.

The Respondents have also chosen not to disclose the terms of their relationship in full. So the precise arrangements between them are not clear. What is clear, however, is that the First Respondent has advanced what is apparently a very substantial sum to the Second Respondent on the strength, at least partly, of the security over the disputed domain name. The Panel recognises that the disputed domain name is one of only a portfolio of names which are subject to this arrangement. However, the Respondents rejected an offer of USD 15,000 for the disputed domain name as too low. In other evidence, the Respondents also claim that the “average value” of four letter domain names is USD 75,000.

Although the precise terms of the relationship have not been disclosed, the Panel would expect that someone advancing substantial sums on the strength of the security over the domain names would include covenants to protect the subsistence of the security. That is, the financier typically imposes obligations to preserve the value of the security and retains power to step in to preserve the subject matter of the security. The Panel also notes that there does in fact appear to have been a significant change in how the disputed domain name has been used around the time the Respondents engaged in a second sale and lease back arrangement in February 2018. As noted above, at some point after September 2017 (so far as can be ascertained from records maintained by the Wayback Machine) the disputed domain name began resolving to a website with PPC advertising links.

In these circumstances, the Panel does not consider it appropriate to classify the stated ownership arrangement as a mere formality like transfers between members of the same corporate group or family. The stated ownership arrangement was effected to generate commercial value for both parties from the disputed domain name as a domain name, rather than a mere administrative reorganization.

The Panel also notes that in Dean & Simmons, Sàrl and Heintz Van Landewyck S.à.r.l. v. Domain Capital / Moniker Privacy ServicesWIPO Case No. D2015-0080, a similar sale and lease back arrangement resulted in the present First Respondent being characterised as the correct respondent. That was in a context, however, where the alternative candidate was the privacy service the domain name had been registered in. Further, the Panel notes that the Intellectual Property Court of Rome, Italy in Decision No. 982/2018 published on January 15, 2018 ruled that the person formally entered in the WhoIs record as the registrant had standing to challenge an arbitral decision under Article 5 of the Policy on “Assignment and management of domain names in the ccTLD .it”. ordering the transfer of the domain name <smallbiz.it> to the owner of the trademark “Smallbiz”. The registrant, like the Respondents here, was operating a sale and lease back financing business of domain names.

Accordingly, the Panel finds that the First Respondent is properly the Respondent in these proceedings.

B. Identical or Confusingly Similar

The first element that the Complainant must establish is that the disputed domain name is identical with, or confusingly similar to, the Complainant’s trademark rights.

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 proven that its founder is the owner of the registered trademarks referred to in section 4 above. The founder registered the trademarks after they had been in use by her company, the Complainant, for many years and for use in the Complainant’s business. The Panel infers that the Complainant uses the trademark in effect under licence from its founder.

In addition, the Complainant contends and, having regard to the matters set out in section 4 above, the Panel accepts that the Complainant has rights in the trademark BTSA as an unregistered trademark: WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Third Edition (“WIPO Overview 3.0”), section 1.3.

The second stage of this inquiry simply requires a visual and aural comparison of the disputed domain name to the proven trademarks. In undertaking that comparison, it is permissible in the present circumstances to disregard the gTLD component as a functional aspect of the domain name system: WIPO Overview 3.0, section 1.7. Questions such as the scope of the trademark rights, the geographical location of the respective parties and other considerations that may be relevant to an assessment of infringement under trademark law are not relevant at this stage. Such matters, if relevant, may fall for consideration under the other elements of the Policy.

Disregarding the generic Top Level Domain (“gTLD”) “.com”, the disputed domain name consists of the letters “btsa” which constitute the dominant element of the Complainant’s registered trademark BTSA BIOTECNOLOGÍAS APLICADAS and in which the Complainant also has unregistered trademark rights. Accordingly, the Panel finds that the disputed domain name is confusingly similar to the Complainant’s trademark and the requirement under the first limb of the Policy is satisfied.

C. Rights or Legitimate Interests

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

Paragraph 4(c) of the Policy provides that the following circumstances can be situations in which the Respondent has rights or legitimate interests in a disputed domain name:

(i) before any notice to [the Respondent] of the dispute, [the Respondent’s] use of, or demonstrable preparations to use, the [disputed] domain name or a name corresponding to the [disputed] domain name in connection with a bona fide offering of goods or services; or

(ii) [the Respondent] (as an individual, business, or other organization) has been commonly known by the [disputed] domain name, even if [the Respondent] has acquired no trademark or service mark rights; or

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

These are illustrative only and are not an exhaustive listing of the situations in which a respondent can show rights or legitimate interests in a domain name.

The onus of proving this requirement, like each element, falls on the Complainant. UDRP panels have recognized the difficulties inherent in proving a negative, however, especially in circumstances where much of the relevant information is in, or likely to be in, the possession of the respondent. Accordingly, it is usually sufficient for a complainant to raise a prima facie case against the respondent under this head and an evidential burden will shift to the respondent to rebut that prima facie case. See e.g., WIPO Overview 3.0, section 2.1.

It is not in dispute between the parties that the Respondents are not authorised by the Complainant to use its trademark and they are not affiliated with the Complainant or its products in any way. Nor is the disputed domain name derived from either of the Respondents’ names. The Respondents also do not claim any non−commercial use of the disputed domain name. Instead, the Respondents point to a number of different factors to support their claim.

First, they point out that the Second Respondent registered the disputed domain name in 2003, many years before the Complainant’s founder registered the trademarks. There are two answers to this contention. It overlooks the fact that the Complainant has been using the trademark since 1994. Moreover, it overlooks the fact that the disputed domain name is registered in the First Respondent’s name.

Secondly, the Respondents point out that the disputed domain name is a four letter acronym. They contend it is, therefore, a “premium” domain name which has inherent value in and of itself because it is easy to type, easy to remember and capable of representing many different entities. The Respondents say that the Second Respondent has a business whereby it registers many such names because of their intrinsic value. The Respondents have provided evidence that the Second Respondent has in fact registered many such domain names. Furthermore, the Respondents point to a number of possible meanings or users of the acronym “btsa”.

Contrary to the Respondents’ assertion, mere registration of a dictionary word or acronym does not by itself automatically confer rights or legitimate interests. It may do so, but a range of factors require consideration. See e.g. WIPO Overview 3.0 section 2.10. In Media General Communications, Inc. v. Rarenames, WebReg, WIPO Case No. D2006-0964, concerning the domain name <wcmh.com>, the learned panelist provided a helpful summary of some of the relevant considerations:

- the respondent regularly engages in the business of registering and reselling domain names, and/or using them to display advertising links;

- the respondent makes good-faith efforts to avoid registering and using domain names that are identical or confusingly similar to marks held by others;

- the domain name in question is a “dictionary word” or a generic or descriptive phrase;

- the domain name is not identical or confusingly similar to a famous or distinctive trademark; and

- there is no evidence that the respondent had actual knowledge of the complainant’s mark.

As the Complainant points out, the acronym “btsa” is not a dictionary word and does not have any commonly accepted meaning. Moreover, the Respondents have not been using the disputed domain name in any way which reflects some common, descriptive or generic signification of the term “btsa”.

In the First Respondent’s favour, it does appear that the Respondents have engaged in a practice of registering many three and four letter combinations as domain names. Contrary to the Complainant’s contention, it cannot be said as a matter of assertion that the domain names have value only because they are third parties’ trademarks.

The Response does state unequivocally that the principal of the Second Respondent was unaware of the Complainant’s trademark when he, or the Second Respondent, registered the disputed domain name in 2003. The Response and the Respondents’ supplemental filing are silent as to the First Respondent’s knowledge or otherwise.

Furthermore, the Respondents have not disclosed any good faith steps they have taken at any stage to avoid registering and using domain names that are confusingly similar to trademarks held by others.

In these circumstances, the question of rights or legitimate interests will turn on questions of bad faith, which are best considered in section 5D below. As the panelist in Media General Communications, Inc. v. Rarenames, WebReg, supra, explained:

“[…] the determination of legitimacy in this case largely hinges on the question of bad faith, which is better addressed below in connection with the third element of the Policy. If the Respondent registered and used the Domain Name, and offered it for sale, in good faith, then we must conclude that the Respondent had a legitimate interest in the Domain Name as it does in hundreds of thousands of other domain names in its portfolio. On the other hand, if the Respondent failed to act in good faith, by registering and using a non-generic domain name that it should have realized was likely to correspond to a trademark, then the Respondent has no legitimate interest in this particular Domain Name.”

For completeness, the Panel notes that the circumstances of this proceeding are different to the circumstances in the Panel’s own earlier decision in Banca Monte Dei Paschi Di Siena S.p.A. v. Platform Specialty Products Corporation, WIPO Case No. D2018-1296. In the Panel’s earlier decision, the respondent was able to point to ownership of a genuine, longstanding business in the provision of specialty chemicals operating under a name from which the disputed, three letter acronym could readily be derived.

D. Registered and Used in Bad Faith

In the circumstances of this case, it is appropriate to consider next whether the Respondents have registered and used the disputed domain name 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. These are conjunctive requirements; both must be satisfied for a successful complaint: see e.g., Burn World-Wide, Ltd. d/b/a BGT Partners v. Banta Global Turnkey Ltd, WIPO Case No. D2010-0470.

Generally speaking, a finding that a domain name has been registered and is being used in bad faith requires an inference to be drawn that the respondent in question has registered and is using the disputed domain name to take advantage of its significance as a trademark owned by (usually) the complainant.

The Complainant relies on its longstanding and global use of its trademark dating back to 1994, as a result of which it says it is one of the world’s leading suppliers of natural antioxidants and the other products it supplies. It points out that the disputed domain name resolves to a website with PPC links unrelated to anything which might be described as “btsa” and, moreover, offering the disputed domain name for sale.

The Complainant also points out that both Respondents have been found repeatedly to have registered and used domain names in bad faith. The Complainant therefore rejects the Respondents’ claim that they have just registered the disputed domain name to take advantage of its intrinsic value as a four letter acronym.

The Respondents point out that there have been numerous domain name disputes where the cases against them have been rejected including at least one decision by an Italian court on appeal from an arbitral ruling ordering transfer.

The Panel is left with the clear impression that there have been more cases where the Respondents have individually been ordered to transfer improperly registered domain names. The Complainant points to some 75 decisions; the Respondents claim they have succeeded in some 20 cases. However, the domain names in question and the circumstances are quite different one from another. The Panel considers that each case must be considered on its own facts. The findings against the Respondents in other cases are not determinative in this case, but may provide a basis for treating claims made by the Respondents with caution.

On the record in this case, the Panel considers the question as to whether Respondents registered the disputed domain name with actual knowledge of the Complainant’s trademark is a difficult one: Dean & Simmons, Sàrl and Heintz Van Landewyck S.à.r.l. v. Domain Capital / Moniker Privacy ServicesWIPO Case No. D2015-0080.

As adverted to in section 5C above, however, panels have held that the obligations on registrants under paragraph 2 of the Policy mean that persons, particularly sophisticated registrants like the present Respondents, who have failed to search or screen domain names against available online databases can provide a foundation for abusive registration on the basis of willful blindness: WIPO Overview 3.0, section 3.2.3.

Here, no searches would have revealed any trademark registrations or pending applications as neither Complainant nor its founder had made any such applications when the First Respondent entered into the sale and lease back arrangement in October 2014.

When the First Respondent became the registrant of the disputed domain name, the Complainant’s website had been operational for some 10 years or so. As recorded above, there appears to have been a substantial expansion of the Complainant’s business activities in recent years. Nonetheless it seems highly likely that even a cursory “Google” search would have disclosed the Complainant’s operations and use of its trademark, especially having regard to how long the Complainant had been online by that date.

The failure of the First Respondent to disclose what due diligence, if any, it undertook is particularly significant in circumstances where it has apparently advanced very substantial sums of money on the strength of the security (at least partly) provided by the registration of the disputed domain name. In any event, consistently with the approach recorded in WIPO Overview 3.0 section 3.2.3, the Panel finds that the disputed domain name has been registered in bad faith.

As mentioned above in section 4, the disputed domain name has been used to resolve to a website with PPC links relating to job and employment searches. The PPC links do not appear to have any connection with something represented by the acronym “btsa”. In these circumstances, the disputed domain name is being used to attract internet users looking for the Complainant to what appears to be an unrelated website for commercial gain; taking such advantage is use in bad faith under the Policy.

The First Respondent as the holder of the disputed domain name presumptively has power to control its use, or preventing it being used in a way which would impair its value as a security.

Accordingly, the Panel finds that the disputed domain name has been registered and is being used in bad faith and, for that reason, it also follows that the (First) Respondent does not have rights or a legitimate interest in the disputed domain name.

E. Reverse Domain Name Hijacking

The Respondents claim a finding of reverse domain name hijacking against the Complainant. Given the conclusions reached above, this issue does not arise.

The Panel, however, does reject the Respondents’ argument that laches bars the Complaint. The Complainant says it discovered the use of the disputed domain name only recently in the course of setting up its subsidiary in the United States. There is nothing in the record to contradict this. Upon that discovery, an unsuccessful approach to acquire the disputed domain name was made. Then, the Complainant’s lawyers sent a cease and desist letter to the First Respondent in May 2018. Further correspondence between the parties ensured. There has been no delay nor detrimental reliance in the Complainant challenging the registration of the disputed domain name by the First Respondent.

6. Decision

For the foregoing reasons, in accordance with paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the disputed domain name, <btsa.com> be transferred to the Complainant.

Warwick A. Rothnie
Sole Panelist
Date: September 28, 2018