DECISION

Sonic USA, Inc. v. Remi Bukin

Claim Number: FA0407000304535

PARTIES

Complainant is Sonic USA, Inc. (“Complainant”), represented by David A. Hoffman, of Silverman Santucci, LLP, 500 W. Cypress Creek Rd., Suite 500, Ft. Lauderdale, FL 33309.  Respondent is Remi Bukin (“Respondent”), 24 Amherst Drive, Kitchener, Ontario N2P1C9.

REGISTRAR AND DISPUTED DOMAIN NAME

The domain name at issue is <sonicusa.com>, registered with Register.com.

PANEL

The undersigned certifies that he or she has acted independently and impartially and to the best of his or her knowledge has no known conflict in serving as Panelist in this proceeding.

R. Glenn Ayers served as Panelist.

PROCEDURAL HISTORY

Complainant submitted a Complaint to the National Arbitration Forum (the “Forum”) electronically on July 26, 2004; the Forum received a hard copy of the Complaint on July 29, 2004.

On July 27, 2004, Register.com confirmed by e-mail to the Forum that the domain name <sonicusa.com> is registered with Register.com and that the Respondent is the current registrant of the name.  Register.com has verified that Respondent is bound by the Register.com registration agreement and has thereby agreed to resolve domain-name disputes brought by third parties in accordance with ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”).

On August 2, 2004, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of August 23, 2004 by which Respondent could file a Response to the Complaint, was transmitted to Respondent via e-mail, post and fax, to all entities and persons listed on Respondent’s registration as technical, administrative and billing contacts, and to postmaster@sonicusa.com by e-mail.

A timely Response was received and determined to be complete on August 20, 2004.

On September 1, 2004, pursuant to Complainant’s request to have the dispute decided by a single-member Panel, the Forum appointed R. Glen Ayers as Panelist.

RELIEF SOUGHT

Complainant requests that the domain name be transferred from Respondent to Complainant.

PARTIES’ CONTENTIONS

A.            Complainant

Complainant contends that it holds a registered trademark, “SONIC USA.”  This registered mark, says Complainant, has been in continuous use in interstate commerce since 1991.  The registered mark is assigned to Complainant. 

Complainant also claims to hold the registered mark “SONIC.”  Finally, Complainant has registered the domain name <sonicusaboats.com>.  These marks and the domain name are used to identify power boats. 

Complainant asserts that Respondent registered the domain name <sonicusa.com> on December 30, 2000.  Complainant had registered its domain name, <sonicusaboats.com> a year earlier.  Complainant asserts that its trademarks are used on products throughout the United States and Canada.

Complainant asserts that “Respondent began soliciting the sale of the domain name WWW.SONICUSA.COM to the general public, including specific solicitations directed to Complainant on various occasions.”  Complainant states that it sent a cease and desist letter on February 26, 2003, and then contacted Respondent in an attempt to resolve the problem.  Respondent offered to sell the domain name several times, for as much as $22,000.00.  Respondent allegedly asserted that $22,000 represented “out-of-pocket expenses.” 

Complainant states that the domain name and the marks are identical.  Complainant also asserts that Respondent cannot show any legitimate rights or interest in the domain name.  Particularly, Claimant asserts that Respondent has made no offering of goods or services in connection with the domain name.  Complainant also notes that Respondent has no interest in or rights to the name SONIC. 

Complainant asserts bad faith, arguing first that the registration of the domain name, which is identical to an existing mark, is alone some evidence of bad faith.  The Complainant asserts that the registration of the name is “blatant cypersquatting” and that Respondent has offered to sell the domain name for varying amounts.  The last offer for sale was in the amount of $22,000.00.  Complainant disputes that the amount of $22,000.00 bears no reasonable relationship to any out-of-pocket costs.

B.            Respondent

Respondent, in a very short response, denies that it ever listed or offered the domain name for sale.  Respondent denies that Exhibit J is a printout of its website offering the domain names for sale.  Respondent denies allegations of cybersquatting.  Respondent denies that there are any Canadian trademark violations.  Respondent asserts that he “was harassed, threatened, and slandered by the complainant.” 

Respondent seems to argue that he registered the domain name “legally” in order to reserve the domain name “for future use of Sonic United Sales Associates to be operated in Canada.” 

FINDINGS

The Panelist finds first that Complainant holds a valid mark.  That mark is identical to the domain name registered by Respondent.  In the alternative, Respondent’s domain name is confusingly similar to Complainant’s mark. 

Complainant has demonstrated that Respondent has no rights in the mark.  Respondent admits, as best as can be determined from his Response, that he has not made any bona fide offering for the sale of goods or services under the domain name.  Respondent has not indicated that he claims any right to or interest in the name “Sonic” or the name “Sonic USA.” 

As to bad faith, the Panelist finds that the evidence provided by Complainant is overwhelming.  Respondent did offer to sell the domain name to Complainant for a sum that bears no reasonable relationship to out-of-pocket cost. 

DISCUSSION

Paragraph 15(a) of the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”) instructs this Panel to “decide a complaint on the basis of the statements and documents submitted in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable.”

Paragraph 4(a) of the Policy requires that the Complainant must prove each of the following three elements to obtain an order that a domain name should be cancelled or transferred:

(1) the domain name registered by the Respondent is identical or confusingly similar to a trademark or service mark in which the Complainant has rights;

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

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

Identical and/or Confusingly Similar

The domain name and mark are identical or confusingly similar.  The SONIC USA trademark was registered with the United States Patent and Trademark office on August 31, 1993 in connection with power boats.  Though the registrant of the mark is listed as American Industries, Inc., Complainant claims to be the assignee of all rights in the SONIC USA mark.  See Janus Int’l Holding Co. v. Rademacher, D2002-0201 (WIPO Mar. 5, 2002) (finding that the registration of a mark is prima facie evidence of validity, which creates a rebuttable presumption that the mark is inherently distinctive.  Respondent has the burden of refuting this assumption); see also Am. Online, Inc. v. Thomas P. Culver Enters., D2001-0564 (WIPO June 18, 2001) (finding that successful trademark registration with the United States Patent and Trademark Office creates a presumption of rights in a mark); see also Men’s Wearhouse, Inc. v. Wick, FA 117861 (Nat. Arb. Forum Sept. 16, 2002) (“Under U.S. trademark law, registered marks hold a presumption that they are inherently distinctive and have acquired secondary meaning.”).

According to Complainant, the domain name <sonicusa.com> is phonetically identical to Complainant’s SONIC USA mark, which satisfies the requirements of paragraph 4(a)(i) of the Policy.  See Hewlett-Packard Co. v. Cupcake City, FA 93562 (Nat. Arb. Forum Apr. 7, 2000) (finding that a domain name which is phonetically identical to Complainant’s mark satisfies ¶ 4(a)(i) of the Policy); see also Pfizer Inc. v. Phizer's Antiques & Phizer, D2002-0410 (WIPO July 3, 2002) (finding the <phizer.com> domain name phonetically equivalent and confusingly similar to the PFIZER mark).

Moreover, the disputed domain name has incorporated Complainant’s SONIC USA mark in its entirety and has merely added the generic top-level domain “.com” to the mark, which has consistently been held immaterial in comparing domain names with marks under paragraph 4(a)(i) of the Policy.  See Rollerblade, Inc. v. McCrady, D2000-0429 (WIPO June 25, 2000) (finding that the top level of the domain name such as “.net” or “.com” does not affect the domain name for the purpose of determining whether it is identical or confusingly similar); see also Busy Body, Inc. v. Fitness Outlet Inc., D2000-0127 (WIPO Apr. 22, 2000) (finding that the addition of a top-level domain is without legal significance).

Rights or Legitimate Interests

Complainant charges and Respondent admits that Respondent is not using the disputed domain name in connection with a bona fide offering of goods or services pursuant to Policy ¶ 4(c)(i) nor a legitimate noncommercial or fair use pursuant to Policy ¶ 4(c)(iii) because “Respondent has merely appropriated the domain name simply for the purpose of reselling the domain to the highest bidder.”  Complainant has provided evidence in the form of an e-mail dated February 1, 2003, which appears to have been sent by Respondent, purporting to offer Complainant the disputed domain name registration for sale in the amount of $5000.  Indeed, there is precedent to support a finding that, if a domain name is registered with the intent to merely sell the domain name registration to the owner of a trademark or service mark, it may be concluded that the domain name registrant lacks rights and legitimate interests in the domain name.  See Am. Nat’l Red Cross v. Domains, FA 143684 (Nat. Arb. Forum Mar. 4, 2003) (“Respondent’s lack of rights and legitimate interests in the domain name is further evidenced by Respondent’s attempt to sell its domain name registration to Complainant, the rightful holder of the RED CROSS mark.”); see also Kinko’s Inc. v. eToll, Inc., FA 94447 (Nat. Arb. Forum May 27, 2000) (finding that Respondent has no rights or legitimate interests in the domain name where it appeared that the domain name was registered for ultimate use by Complainant); see also Am. Int’l Group, Inc. v. Dobson, FA 146568 (Nat. Arb. Forum Apr. 8, 2003) (finding evidence that Respondent lacked rights or legitimate interests in the disputed domain name after it sent several correspondences offering to sell its rights in the domain name in exchange for 1,500 shares of Complainant’s stock to Complainant).

Respondent has passively held the domain name for a little less than four years and has failed to provide the Panelist with any demonstrable preparations to use the domain name in connection with this mysterious company referred to as Sonic United Sales Associates.  Therefore, the Panel may find that Respondent has failed to establish its rights or legitimate interests in the disputed domain name pursuant to Policy ¶ 4(a)(ii).  See Do The Hustle, LLC v. Tropic Web, D2000-0624 (WIPO Aug. 21, 2000) (finding that when Respondent declares its intent to develop a website, “[Policy ¶] 4(c)(i) requires Respondent to show 1) ‘demonstrable’ evidence of such preparations to use the domain name, and 2) that such preparations were undertaken ‘before any notice to [Respondent] of the dispute’”); see also AT&T Corp. v. Domains by Brian Evans, D2000-0790 (WIPO Sept. 27, 2000) (finding no rights or legitimate interests where Respondent did not provide any documentation on the existence of its alleged company that might show what the company’s business was, or how the company’s years of existence, if it ever existed, might mesh with Complainant’s trademark claims); see also Household Int’l, Inc. v. Cyntom Enter., FA 95784 (Nat. Arb. Forum Nov. 7, 2000) (holding that Respondent’s “vague and unsupported assertion of ‘plans to sell household goods, supplies and appliances over the Internet’” was insufficient to be considered proof of a legitimate business plan).

Registration and Use in Bad Faith

Complainant contends that as a result of its registration of the SONIC USA trademark with the United States Patent and Trademark Office, Respondent was on constructive notice of Complainant’s rights in the mark.  Consistent with prior decisions under the Policy, bad faith registration and use of a domain name may by imputed to a domain name registrant when it registers a domain name in spite of its knowledge of a third party’s rights in a mark.  See Entrepreneur Media, Inc. v. Smith, 279 F.3d 1135, 1148 (9th Cir. 2002) ("Where an alleged infringer chooses a mark he knows to be similar to another, one can infer an intent to confuse."); see also Samsonite Corp. v. Colony Holding, FA 94313 (Nat. Arb. Forum Apr. 17, 2000) (finding that evidence of bad faith includes actual or constructive knowledge of a commonly known mark at the time of registration); see also Digi Int’l v. DDI Sys., FA 124506 (Nat. Arb. Forum Oct. 24, 2002) (“[T]here is a legal presumption of bad faith, when Respondent reasonably should have been aware of Complainant’s trademarks, actually or constructively.”).

Furthermore, Complainant charges that Respondent registered and used the disputed domain name in bad faith pursuant to Policy ¶ 4(b)(i) by acquiring the domain name registration primarily to sell it to Complainant for valuable consideration in excess of its documented out-of-pocket expenses.  Complainant asserts that, during a telephone conversation with Respondent that took place on July 7, 2003, Respondent stated that it would be “willing to sell the domain name to the Complainant for a fee of approximately $22,000.00 USD, claiming this amount as ‘out-of-pocket expenses.’”  In a confirmation letter dated July 9, 2003, counsel for Complainant sent a letter to Respondent requesting “detailed accounting” of its expenses relating to the disputed domain name.  See Complaint, Exhibit N.  There is no evidence in the record that provides such an accounting.  Therefore, the Panelist finds that Respondent registered and used the disputed domain name in bad faith pursuant to Policy ¶ 4(a)(i) because Respondent attempted to sell the domain name registration to Complainant for valuable consideration in excess of Respondent’s expenses, which it has failed to properly document for the Panel.  See Dynojet Research, Inc. v. Norman, AF-0316 (eResolution Sept. 26, 2000) (finding that Respondent demonstrated bad faith when it requested monetary compensation beyond out-of-pocket costs in exchange for the registered domain name); see also Grundfos A/S v. Lokale, D2000-1347 (WIPO Nov. 27, 2000) (finding that a failure to use the domain name in any context other than to offer it for sale to Complainant amounts to a use of the domain name in bad faith); see also Am. Online, Inc. v. Prijic, FA 112639 (Nat. Arb. Forum June 27, 2002) (“[I]n determining whether Respondent has sought consideration in excess of its out-of-pocket costs, the Policy makes clear that only costs related to the domain name are to be considered, and not those related to the creation or maintenance of the connected website.”); see also Matmut v. Tweed, D2000-1183 (WIPO Nov. 27, 2000) (finding bad faith under Policy paragraph 4(b)(i) where Respondent stated in communication with Complainant, “if you are interested in buying this domain name, we would be ready to sell it for $10,000”).

Respondent registered and is using the disputed domain name in bad faith pursuant to Policy ¶ 4(a)(iii) by passively holding the domain name without demonstrating any preparations to use the domain name.  See DCI S.A. v. Link Commercial Corp., D2000-1232 (WIPO Dec. 7, 2000) (concluding that Respondent’s passive holding of the domain name satisfies the requirement of ¶ 4(a)(iii) of the Policy); see also Clerical Med. Inv. Group Ltd. v. Clericalmedical.com, D2000-1228 (WIPO Nov. 28, 2000) (finding that merely holding an infringing domain name without active use can constitute use in bad faith); see also Caravan Club v. Mrgsale, FA 95314 (Nat. Arb. Forum Aug. 30, 2000) (finding that Respondent made no use of the domain name or website that connects with the domain name, and that passive holding of a domain name permits an inference of registration and use in bad faith); see also Telstra Corp. v. Nuclear Marshmallows, D2000-0003 (WIPO Feb. 18, 2000) (“[I]t is possible, in certain circumstances, for inactivity by the Respondent to amount to the domain name being used in bad faith.”).

DECISION

Having established all three elements required under the ICANN Policy, the Panel concludes that relief shall be GRANTED.

Accordingly, it is Ordered that the <sonicusa.com> domain name be TRANSFERRED from Respondent to Complainant.

R. GLEN AYERS

Dated:  September 10, 2004

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