Generic Top Level Domain Name (gTLD) Decisions

P. O. Box 50191
Minneapolis, Minnesota 55405 USA

Hearst Communications, Inc. and
Hearst Magazines Property, Inc.,

Complainants

vs.

David Spencer d/b/a Spencer
Associates, and Mail.com, Inc.,

Respondents

DOMAIN NAME DISPUTE
ADMINISTRATIVE PANEL DECISION
Forum File Number FA # FA0093763

The above entitled matter came on for an administrative hearing on April 4, 2000, by a three member panel consisting of Louis E. Condon, Clark W. Lackert and Milton L. Mueller. After due consideration of the written submitted record and full discussion by the panel, the following decision was made with two judges concurring and a dissenting opinion by the third.

PROCEDURAL BACKGROUND

Domain Name ESQUIRE.COM

Domain RegistrantSpencer Associates Date: Dec 21, 1994

Domain Name RegistrarNetwork Solutions, Inc.

By registering its domain name with Network Solutions, the Respondent agreed to resolve any dispute pursuant to the ICANN Uniform Domain Name Dispute Resolution Policy. The Complainant and Response were duly filed in accordance with the rules and regulations of ICANN and the National Arbitration Forum. After confirming administrative compliance, the Forum notified Network Solutions, (the registrar), ICANN, and the Complainant that the administrative proceeding had commenced in compliance with Rule 4(d). Subsequently, both parties timely filed additional responses. After the deadline, both sides filed additional materials in support of their positions, which was forwarded to the panel.

The Complainants, Hearst Communications, Inc. and its affiliated entity Hearst Magazines Property, Inc. ( herein after "Hearst), is the world’s largest publisher of monthly magazines, including "Esquire" which has been published since 1933. In addition to publishing "Esquire" magazine in the United States, Hearst licenses the publication of international editions in many other countries including Europe and Asia. Hearst is the owner of several United States Trademark Registrations for ESQUIRE as well as a number of other registrations which include the Esquire trademark. The Esquire trademarks were first used in 1922. Hearst advertises, markets and sells its brands, including Esquire, throughout the world and on the internet, including at its website esquiremag.com. Complainant asks that the domain name be transferred to Hearst.

While the Respondent David Spencer d/b/a Spencer Associates registered the domain name originally, Mail.com, Inc. claims to be the true party in interest in this proceeding in that it now owns the rights to the domain name esquire.com as hereinafter explained. Mail.com, Inc. agreed to be bound by the decision of the arbitration panel. Spencer Associates is a web page development company which has registered a number of domain names that have been/or are presently being offered for sale at its internet site. The site clearly states that its list includes valuable names which are a precious resource and will not be sold for an insignificant price, indicating that $500.00 would be embarrassingly low. The domain name esquire.com is listed on Spencer’s Domains for Sale web page as "sold".

Mail.com is a leading global provider of internet messaging services to businesses, internet service providers (ISP’s), web sites and individual consumers. Mail.com began offering e-mail services in 1996 under the name iName.com and in January 1999 changed its corporate name to Mail.com, Inc. Mail.com is publicly owned and traded on the NASDAQ stock exchange under the symbol "MAIL". On the consumer level, Mail.com offers a wide variety of its own personalized e-mail services through its site at www.mail.com. These personalized e-mail services use vanity e-mail addresses such as accountant.com, dr.com, doctor.com, engineer.com, teacher.com, priest.com, and lawyer.com. It is in connection with these services that Mail.com intends to use the "vanity" domain name esquire.com which is the subject of this proceeding.

On or about August 18, 1997, Mail.com, through a successor in interest GlobeComm, Inc. executed a purchase agreement with David Spencer d/b/a Spencer Associates to acquire the domain name esquire.com. Since the domain name esquire.com had been put "on hold" by the registrar at the time, the parties have been unable to consummate the sale and NSI still lists Spencer as the owner. The Complainant takes the position that Mail.com’s interest and arguments are irrelevant to this dispute claiming that the ICANN Policy is plainly addressed to the bad faith of the registrant at the time of registration.

The mere selling of domain names is not prohibited by the existing ICANN Policy and Rules. In order to justify transferring the domain name, Paragraph 4(a) of the Policy provides that the Complainant must prove the following:

1. that the domain name registered by the respondent is identical or confusingly similar to a trademark or service mark in which the Complainant has rights; and

2. that the Respondent has no rights or legitimate interests in respect of the domain name; and

3. that the domain name has been registered and is being used in bad faith.

DISCUSSION

The majority of the panel agrees to a finding of identity or confusing similarity between Complainant’s trademark and the Respondent’s domain name. The dissenter also disagrees as to the other two elements. These differences relate primarily to which respondent is the real party in interest; the strength of the trademark; Spencer’s rights in engaging in the sale of domain names; and, whether Mail.com’s intended use, which may be legitimate and fair, cures any bad faith which might have applied to Spencer.

FINDINGS OF FACT

Based on consideration of the documents submitted and an extensive discussion, the following facts are found:

1. The Complainant is the owner of several Esquire Trademarks which have been in use since 1922.

2. The Complainant has a website with the domain name esquiremag.com.

3. On or abut December 21, 1994, Spencer Associates registered the domain name esquire.com with Network Solutions, Inc. Subsequently, Complainants initiated NSI’s dispute resolution policy which resulted in the domain name being placed "on hold", which status it was in at the time of the hearing.

4. On or about August 18, 1997, while the domain name was "on hold", Mail.com through a successor in interest executed an agreement to purchase the domain name "esquire.com" from the Respondent.

5. In addition to the subject domain name, Spencer has registered a number of generic names as well as many others which are identical or confusingly similar to the registered trademarks of other entities (i.e. acurasource.com, buicksource.com, chryslersource.com, dodgesource.com, gmcsource.com, lincolnsource.com, mazdasource.co, mercurysource.com, nissansource.com, pontiacsource.com, and porschesource.com). Spencer’s complete list of names was not provided to the panel. Spencer neither has nor had any legitimate connection with any of these trademarks. Rather, Spencer established an internet business called "Domain Names for Sale!" which listed these and other registered domain names for sale at prices considerably above the cost of acquiring them.

CONCLUSIONS

While the ICANN Policy may not have been in effect when Spencer registered his domain names, he was simply ahead of his time and was fully aware of the nature of his acts. Since the Complainant’s action put the name "on hold" it was not necessary for Hearst to take any action until the ICANN Policy came into existence and the name was going to be released. It is the opinion of the majority of the panel that Spencer’s actions constitute the very thing the Policies are designed to prevent. It was and is his intent to take advantage of the benefit of these established trademarks. Contrary to the Respondent’s claim, the majority does not agree that esquire is a generic term or that the Complainant’s trademark is so weak it should not be protected.

In placing the domain name on the Internet for sale Spencer is making a commercial use in that it is offering it for sale to the Complainant as well as its competitors and everyone else in the entire world. By rejecting out of hand bids of $500.00, Respondent is clearly seeking much more than the cost of registering the domain name.

Mail.com does not claim to be nor is it entitled to the protection of a bona fide purchaser for value without notice. Accordingly, its rights are subject to whatever defects Spencer’s claim may face. The majority agrees with the Complainant that the ICANN Policy requires consideration of this matter as of the time of registration - was there bad

faith at that moment. To hold that an alleged change of heart or a subsequent permissible use could over-ride the Respondent’s bad faith act would totally negate the ICANN Policy and Rules. Therefore, while Mail.com’s intended use might be legitimate, it has no bearing on this decision. However, Mail.com is bound by the decision.

DECISION

Accordingly, it is the decision of a majority of the panel that the Complainant has met its burden of proof in establishing that the domain name is confusingly similar to its trademark, Spencer has no legitimate interest in the domain name, and that Spencer acted in bad faith for commercial purposes. Therefore, the domain name esquire.com should be transferred to Hearst.

The panel members all certify that none of them have a conflict of interest in this matter. A separate dissenting opinion is being filed.

For the Majority:

Judge Louis E. Condon, Chair

April 13, 2000 Judge Clark W. Lackert concurs.

Charleston, SC

Judge Milton L. Mueller dissents.

Dissenting Opinion

Hearst communications, Inc. and Hearst Magazines Property, Inc. vs. David Spencer.

I am unable to concur with the decision for the complainant. My points of disagreement center on the issue of bad faith and on the status of Mail.com’s proposed use of the disputed domain name, which I regard as legitimate.

For the domain name "esquire.com" to qualify as "confusingly similar", we would have to believe that anyone who uses the domain name esquire.com would be confused with the owners of Esquire Magazine. This is plainly not true, as the proposed use of the domain name by Mail.com would not create any confusion with the magazine. While recognizing that Esquire Magazine is well-known, the word "esquire" by itself is too generic and widely used to be exclusively associated with the magazine. The term has common meaning as a descriptor for lawyers, or more broadly for gentlemen. The unadorned term "esquire" is also a registered trademark for well-known shoe care products and for a variety of other products and services. The character string "esquire" appears in over 280 domain names in the .com space. It follows inexorably, then, that the domain name "esquire.com" can be used legitimately as a domain name by a large number of people and in a variety of ways, without infringing the rights of the complainant.

It is clear that Spencer was engaged in the business of selling domain names. It is also clear that the name "esquire.com" would be of great value to Esquire Magazine, as well as many other possible users. To win this case, complainant must show that the domain name was registered and used in "bad faith." The policy specifies that the following can be considered evidence of bad faith:

Criteria #2 and #3 can be eliminated immediately. Spencer is not using the name and is not an agent of any competing publication interest — indeed, Esquire Magazine has flourished on the web without the disputed name. The only relevant issue, therefore, is #1 — whether Spencer originally registered the name with the intent to sell it to Esquire Magazine.

Unfortunately, the facts before this panel do not resolve that question. One could take either view. Joshua Quittner’s famous Wired Magazine article "Billions Registered," in which a journalist boasted of registering mcdonalds.com and noted that hundreds of other corporate names were available in the com space, appeared in June 1994. Spencer registered the name in December 1994. One could assume that Spencer read the article and decided to try to cash in. On the other hand, any evidence that the original registrant contacted Hearst or ever attempted to sell the domain name to Hearst is conspicuously absent from the complaint. This is particularly noteworthy because Spencer registered the name at a time when the legal status of trademark-domain name conflicts was not at all clear. The Federal Dilution Act had not been passed, and key cases such as Intermatic and Panavision had not been decided. In early 1995, Spencer could have reasonably assumed that he had a legitimate right to sell the name to Hearst, and thus would have had no reason to conceal his intent. This panelist would have been willing to find for the complainant had any credible evidence of contact and negotiation in the 1995-96 time frame been produced. Absent any such evidence, I cannot conclude that there was bad faith in the original registration.

Complainant’s only attempt to deal with this issue is notable for its lack of logic. Complainant asserts that "Spencer’s sole purpose in registering the domain name esquire.com is to sell it to Hearst or its competitors for valuable consideration. This is apparent since the domain name esquire.com is already listed on Spencer’s domains for sale web page as Sold." Apparently, counsel for complainant overlooked the fact that if the domain name was sold to a party that was not Hearst nor one of its competitors, it would seem to indicate that Spencer’s "sole purpose" was not what they asserted it to be. Indeed, it seems obvious that Spencer’s "sole purpose" was to make money on the name and not necessarily to extort Hearst. Objectively, the sale of the domain name to another party with a legitimate proposed use is a strong factor undermining Hearst’s claim of bad faith. A true cybersquatter is not someone who trades on the value of the name in a general marketplace for names. A cybersquatter is one who exploits or disrupts the brand equity of a trademark owner.

There is growing precedent within US law and within the UDRP that resale of domain names per se is not evidence of actionable bad faith. (See Avery Dennison Corp. v. Jerry Sumpton, D.C. Case No. CV-97-00407-JSL, Appeal No. 98-55810; General Machine Products Co., Inc v. Prime Domains NAF 0001000092531 re: craftwork.com, and Allocation Network GbmH v Steve Gregory, WIPO Case D2000-0016 re: allocation.com.)

Which leads to the issue of Mail.com’s status in this proceeding. Respondents offered proof that Spencer sold the domain name to a party with a legitimate, non-infringing interest in the name. Mail.com provided evidence from 1997 — three years before this dispute — of plans to use the domain name as a vanity email address. Complainant Hearst offered no evidence or argumentation to challenge the intent or validity of this transaction. The Avery Dennison v. Sumpton precedent is directly applicable to this case, as the ruling specifically upholds the right of a domain name registrant to resell use of a domain name as a vanity address even when the character string of the second level domain name corresponds to someone’s trademark.

I emphatically dissent from the majority opinion’s statement that Mail.com’s rights "are subject to whatever defects Spencer’s claim may face." I find their contention that a subsequent permissible use cannot be considered as an important factor in this case to be insupportable. The majority panelists have decided — without any direct evidence — that Spencer’s sole original intent was to sell the name to Esquire Magazine. When faced with the clear fact that Spencer sold the name to someone else, they say that this sale is invalid because of Spencer’s imputed original intent. The argument is entirely circular, and has no validity.

The UDRP is intended to prevent trademark owners from being extorted by cybersquatters, but it is also intended to protect legitimate registrations from being threatened by overreaching trademark owners. A correct application of the spirit and letter of the UDRP gives each of these concerns equal weight. The majority opinion fails to balance these concerns. Absent any evidence that the original registrant was trading specifically on the value of the Esquire Magazine mark, I cannot conclude that the name was registered in bad faith.

Judge Milton L. Mueller