The Complainant is Rainbow Play Systems, Inc. of Brookings, South Dakota, United States of America ("United States"), represented by Neal & McDevitt, United States.

The Respondent is Freeplay Pty. Ltd. of Dandenong, Victoria, Australia.

2. The Domain Name and Registrar

The disputed domain name <rainbowplay.com.au> is registered with Web Address Registration Pty Ltd (the "Registrar").

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on October 7, 2015. On October 8, 2015, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain name. On October 9, 2015, 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 .au Dispute Resolution Policy (the "Policy"), the Rules for .au Dispute Resolution Policy (the "Rules"), and the WIPO Supplemental Rules for .au Domain Name Dispute Resolution Policy (the "Supplemental Rules").

In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on October 20, 2015. In accordance with the Rules, paragraph 5(a), the due date for Response was November 9, 2015. The Center received a communication from the Respondent on October 27, 2015, the contents of which are elaborated in section 4 below. On October 27, 2015, the Center invited the Complainant to consider requesting a suspension of the proceedings to explore a possible settlement between the parties. On October 30, 2015, the Complainant transmitted by email to the Center its response stating that it does not wish to seek a suspension of the present action. The Respondent did not file a formal response.

The Center appointed Andrew F. Christie as the sole panelist in this matter on November 13, 2015. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.

4. Factual Background

The Complainant sells playground-related products in various countries around the world, including in Australia since 1996. It is the owner of numerous registrations for trademarks consisting of or including the word "rainbow", including Australian trademark registrations in class 28 for play structures for the word trademarks RAINBOW PLAY SYSTEMS INC and RAINBOW CUBBY SERIES (registered May 3, 1996 and December 3, 2014, respectively), and the word and image trademark RAINBOW (registered May 3, 1996).

The Respondent was, at one time, an authorized distributor for the Complainant in Australia. During that time, on May 7, 2012, the Respondent registered, with the permission of the Complainant, the disputed domain name <rainbowplay.com.au> for use with a website directed at Australian consumers of the Complainant's products. The Complainant terminated its distributorship agreement with the Respondent on November 10, 2013. Currently, the disputed domain name resolves to a blank web page.

Emails were exchanged between the Complainant and the Respondent between April 8, 2015, and August 7, 2015, regarding the disputed domain name and the requirement under the distribution agreement for its return to the Complainant upon termination of that agreement. On April 8, 2015, the Respondent stated: "The website is not owned by Freeplay Pty. Ltd. but a private individual and they would be willing to sell the domain name and transfer it to your desired company. We have instructed the owner to stop using the site for the purposes of marketing anything to do with Rainbow Play Systems products or associated products. As the website name is generic and can be applied to many industries there is a value outside of Cubby houses or Play Systems." On August 4, 2015, the Respondent stated: "The website is not being used for Rainbow Play Systems Inc products and it was purchased by a third party. It is as simple as that. It quite obviously can be applied to other products and industries and has a value at that level to the owner."

On October 27, 2015, the registrant contact for the disputed domain name transmitted by email to the Center a communication stating: "We were once a distributor of Rainbow Play Systems, in doing so we set up and paid for a website here in Australia called rainbowplay.com.au under a company called Freeplay Pty Ltd. In doing so we incurred costs involved with setting up the site and administrative costs involved with hosting the site etc. ... We are now no longer a distributor and have deactivated the website, however we do own the web address and site as acknowledged in the letter from WIPO. We have expressed to Rainbow Play Systems that we are happy to hand over the website and address as long as we are paid for what it costs us in administration and set up. The total cost of set up and administration would be $20,000 AUD, we do not think this is an unreasonable request to finalise our expenses on this project."

5. Parties' Contentions

A. Complainant

The Complainant contends that the disputed domain name is virtually identical and thus confusingly similar to the Complainant's family of RAINBOW trademarks because it incorporates one or more of those trademarks. The addition of a country code Top-Level Domain ("ccTLD") to another's trademark does not obviate a likelihood of confusion.

The Complainant contends that the Respondent has no rights or legitimate interests in the disputed domain name because: (i) the Complainant has used and has indisputably established enforceable trademark rights in and to its family of RAINBOW trademarks since long prior to the Respondent's registration of the disputed domain name on May 7, 2012; (ii) following the termination of the distribution agreement between the Complainant and Respondent, the Respondent refused to relinquish ownership of the disputed domain name, in direct violation of the terms set forth in the agreement, and instead offered to sell said registration to the Complainant for an amount far in excess of the cost to originally purchase the disputed domain name from the Registrar; (iii) apart from its now terminated distributorship agreement with the Respondent, the Complainant has never given the Respondent permission to register or maintain ownership of a domain name bearing one or more of the family of RAINBOW trademarks, nor to continue use of the disputed domain name and trademark; (iv) the Respondent's refusal to relinquish ownership, and continued control of the disputed domain name, is in direct violation of the Respondent's Registrar's Domain Name Policy, as the Respondent fails to meet the eligibility criteria; (v) there is a complete absence of any evidence to show that the Respondent is commonly known by the disputed domain name, or that the Respondent is making a non-commercial, fair use of it; and (vi) the Respondent is refusing to transfer registration solely to restrict the Complainant's ability to protect its famous name and forcing the Complainant to police said mark to insure no third-party entities obtain rights to same, and has therefore failed to make a bona fide offering of its services.

The Complainant contends that the disputed domain name was registered or is subsequently being used in bad faith because: (i) it is well-settled that "passive holding" or the holding hostage of a domain name registration may amount to bad faith registration and use, as required by paragraph 4(b) of the auDRP; (ii) in this instance the Respondent not only refused to transfer the disputed name to the Complainant, but then transferred it to a third party in further attempt to evade the covenant it made with the Complainant, and it is believed that this third party is a relative of the Respondent, which proves the Respondent's intentional evasion of its obligations and representations to the Complainant and is the embodiment of bad faith registration and use; (iii) the right to own and maintain the disputed domain name registration, as well as the RAINBOW trademarks in Australia, was governed by the terms of the distributorship agreement and said rights explicitly were extinguished upon termination of the agreement between the Parties; (iv) the Respondent is infringing the rights of the Complainant and lacks any and all rights to the disputed domain name; (v) following numerous demands by the Complainant for transfer of the disputed domain name, the Respondent unequivocally acted with "opportunistic bad faith" by intentionally attempting to attract, for commercial gain, Internet users to its website by creating a likelihood of confusion with the Complainant's well-established family of RAINBOW trademarks as to the source, sponsorship, affiliation, and/or endorsement of the Respondent's website or location of a product or service on its website or location; (vi) the Respondent has both sought payment from the Complainant for transfer of the disputed domain name and threatened to sell it to other interested parties, and is therefore attempting to obtain commercial gain for itself; (vii) the Respondent has no affiliation with the Complainant nor is it authorized, in any way, to use any of the Complainant's family of RAINBOW trademarks; and (viii) there are active and ongoing acts of trademark infringement, unfair competition, and trademark dilution, among others, by the Respondent in connection with the unauthorized use of the disputed domain name.

The Complainant also contends that the Respondent cannot meet the eligibility requirements for registration of a ".au" ccTLD domain name, which include the following: (i) a prohibition on domain monetization of an "entity name, personal name, or brand name in existence at the time the domain name was registered"; (ii) credibility criteria that demand that the domain name to be registered or renewed be an exact match, abbreviation, or acronym of the registrant's name or trademark or otherwise closely and substantially connected to the registration; and (iii) the policies explicitly prohibiting a domain name's registration "for the sole purpose of resale or transfer to another entity".

B. Respondent

The Center received a communication from the Respondent on October 27, 2015, the contents of which are elaborated in section 4 above. The Respondent did not submit a formal response.

6. Discussion and Findings

A. Identical or Confusingly Similar

When the ccTLD identifier ".au" and the second-level extension ".com" are ignored, the disputed domain name consists of the string "rainbowplay". This string comprises the first two elements of the Complainant's registered Australian trademark RAINBOW PLAY SYSTEMS INC. In the Panel's opinion, the first two elements of the Complainant's trademark are the more distinctive elements, because they appear at the beginning of the trademark and the remaining two elements – "systems" and "inc" – are highly descriptive. The Panel finds that the disputed domain name is confusingly similar to a trademark in which the Complainant has rights.

B. Rights or Legitimate Interests

The distribution agreement between the Complainant and the Respondent was terminated with effect from November 10, 2013. The distribution agreement states that, upon termination, the Respondent shall assign to the Complainant at the Respondent's expense "any domain name registrations that include any or all of" a trademark owned by the Complainant. As discussed in section 6A above, the disputed domain name includes a part of one of the Complainant's registered Australian trademarks. Thus, pursuant to the distribution agreement between the parties it appears that the Respondent has no rights or legitimate interests in the disputed domain name following termination of the distribution agreement.

In any event, the case record before the Panel does not disclose any ground on which it might be concluded that the Respondent has rights or legitimate interests in the disputed domain name. The disputed domain name currently resolves to a blank web page, and so it cannot be said that the Respondent is making either a bona fide use of the disputed domain name in connection with an offering of goods or services, or a legitimate non-commercial or fair use of the disputed domain name. Furthermore, there is no evidence that the Respondent is commonly known by the disputed domain name or has, for any other reason, rights or legitimate interests in the disputed domain name. For all the above reasons, the Panel finds that the Respondent has no rights or legitimate interests in the disputed domain name.

C. Registered or Subsequently Used in Bad Faith

Evidence provided by the Complainant shows that the Respondent has refused to comply with its apparent obligation under the distribution agreement to transfer the disputed domain name to the Complainant upon termination of the agreement. That evidence also shows that the Respondent informed the Complainant that the disputed domain name "was purchased by a third party". The case record does not make clear the identity of the third party to whom the Respondent allegedly sold the disputed domain name. The WhoIs record for the disputed domain name, which was last modified on October 9, 2015, identifies the Respondent as the registrant. It thus appears that the Respondent's claim to have sold the disputed domain name to a third party either is false or has not been given effect by changing the name of the registrant. A subsequent communication from the registrant contact for the disputed domain name to the Center stated (in part): "We were once a distributor of Rainbow Play Systems … We have expressed to Rainbow Play Systems that we are happy to hand over the website and address as long as we are paid for what it costs us in administration and set up. The total cost of set up and administration would be $20,000 AUD …". The contents of this communication suggest that the Respondent has not sold the disputed domain name to "a third party", but rather retains the disputed domain name and refuses to transfer it to the Complainant unless a sum in the vicinity of AUD 20,000 is paid by the Complainant.

The Panel considers that the Respondent's refusal to transfer the disputed domain name to the Complainant upon termination of the distribution agreement apparently in breach of the terms of that agreement, the Respondent's apparently false claim that it has transferred the disputed domain name to a third party, and the Respondent's subsequent indication that it would transfer the disputed domain name to the Complainant in return for a payment in the vicinity of AUD 20,000 taken together indicate that the Respondent is, in effect, holding the disputed domain name "hostage" and is seeking the payment of a "ransom" from the Complainant of a sum in excess of documented out-of-pocket expenses associated with the disputed domain name. For all these reasons, the Panel finds that the Respondent is using the disputed domain name in bad faith.

D. Eligibility Requirements

The Complainant has requested transfer of the disputed domain name "to the Complainant or a suitable Australian agent of the Complainant". The Complainant, as the owner of an Australian trademark registration that includes the disputed domain name's third level string, appears to satisfy the eligibility requirements for registration of the disputed domain name. Accordingly, the Panel will order transfer of the disputed domain name to the Complainant.

7. Decision

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

Andrew F. Christie
Sole Panelist
Date: November 27, 2015