Split Panel Beats Up Domainer Over “Vagalume”


In the recent domain name dispute decision of Vaga-lume Midia Ltda v. Kevo Ouz d/b/a Online Marketing Realty FA1287151 (Nat. Arb. Forum, December 7, 2009) a three member Panel was faced with a dispute over the domain www.vagalume.com. Complainant runs a Brazilian based web site about music, since 2002, located at www.vagalume.com.br and www.vaga-lume.com.br. Respondent is a domain name entrepreneur who admits to registering domains of common or descriptive words. The disputed domain was purchased by Respondent in December 2007.

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.

The Panel provided a split decision, with only two of the Panelists providing the majority opinion. In addressing the first prong the Panel explained that Complainant provided a Brazil  trademark registration certificate for VAGALUME and design. The Panel concluded that the there was letter-by-letter coincidence of the disputed domain and the mark.

The Panel next addressed the second element, whether the Respondent has any rights or legitimate interests in the domain. The Respondent argued that the term vagalume means firefly in Portugese. The Panel however noted that Complainant’s use of the mark is not descriptive and instead was arbitrary. Respondent claimed he registered the domain due to its high traffic, but the Panel noted he failed to provide any evidence of this traffic being a result of common nature use of the term. Instead the Panel noted that results of an Alexa.com search showed that over 91% of the visitors to the disputed domain originated from Brazil. Next the Panel addressed the actual control and use of the domain, and this is where the Panel began to chastize Respondent:

As also shown by Complainant, after having received service of the present complaint, Respondent manually modified the parameters governing the generation of ads appearing on the website at the disputed domain name, from ads almost related to music to generic ads. This shows that Respondent always could and did control the contents of his website (“pay-per-click” links), which deprives of any credibility Respondent’s contention that he did not did not select the links, and that they were auto-generated by Yahoo and Parked.com. Respondent’s manual change of the ads parameters, following his having received service of the complaint, was hidden until Complainant revealed it in its additional submission. This shows that when Respondent registered the disputed domain name he was targeting Complainant’s mark to extract income from pay-per-click links precisely aimed at Complainant’s audience and traffic. Only after having been served with the complaint, did Respondent use his ability to manually control the contents of his website at the disputed domain name, and posted texts explaining that VAGALUME means “firefly”, in an obvious attempt to justify – ex post facto – his having chosen the disputed domain name. All this does not reveal a use of the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services, pursuant to Policy ¶ 4.c.i., or a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers, pursuant to Policy ¶ 4.c.iii.

The Panel then moved to the final element, bad faith. The Panel explained that bad faith requires knowledge or awareness of the mark. This knowledge or awareness is a responsibility for those who own large portfolios of domains. This willful blindness concern was addressed by Respondent who claimed that he conducted a search for the trademark on the USPTO site prior to purchase. Additionally, the Respondent claimed that a U.S. resident should not be obliged to search the records of all foreign trademark offices. The Panel disagreed with this view, noting that since the domain was a Portugese word, a search in Brazil would have been necessary. The Panel went on to explain:

Additionally, the Panel notes that Respondent’s remarks that he had no knowledge of the Complainant or its trademark prior to the instant dispute are contradicted by the uncontroverted circumstantial evidence discussed above.  Respondent’s prevarication regarding his prior knowledge of the Complainant and its common law trademark, as well other apparently disingenuous statements made in his pleadings, is additional independent and sufficient grounds for finding bad faith registration and use.

The Panel does not stop the bleeding there, as they then discuss the three prior UDRP cases which Respondent lost on default. As a result the Panel stated:

While Respondent observes that in all such cases he was in default, the Panel cannot but speculate that an experienced domainer like Respondent may have considered that its case was indefensible. In any event, there is no evidence that Respondent has challenged any of these decisions before a court, as it was his right under the UDRP. Respondent cavalierly considers such cases to be a “few UDRP losses”. The Panel believes that those cases demonstrate that Respondent had engaged “in a pattern of such conduct” when he registered the disputed domain name in order to prevent Complainant from reflecting the VAGALUME mark in a “.com” domain name, which is a circumstance of bad faith registration pursuant to Policy § 4.b.ii.

The reasons for ruling against Respondent did not stop there, though. The Panel criticized Respondent for changing the parameters of the pay per click links on his web site after receiving notice of the dispute. The Panel found that this showed Respondent had control of the web site all along and that since this is an experienced domainer “it is unlikely if not absurd to find that he was unaware of exactly how the parking page worked and that he could manipulate it.”

Ultimately, the Panel found that all three elements were satisfied and ordered the domain be TRANSFERRED.

DefendMyDomain Commentary: There is a very long and well thought Dissent opinion. The Panelist takes a careful approach at noting that there are issues on both sides, but that the Complainant just did not provide evidence sufficient for a finding that satisfied all the elements. The dissenting Panelist instead challenged that the decision should not be based on supposition and conjecture. Take the time to read this dissent to get an understanding of just how different Panelists can view a specific case.  We believe the Domainers are going to have a real problem with this decision, but the current UDRP system remains.

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