Vertical Axis Holds on to ParkRoyal.com after complainant is denied in UDRP

In a 3 panelist ruling Vertical Axis holds on to ParkRoyal.com but there is no finding of Reverse Domain Name Hijacking.

1. The Parties

1.1 The Complainants are Grupo Costamex, S.A. de C.V. (“Costamex”) of Mexico City, Mexico and Operación y Supervisión de Hoteles, S.A. de C.V. (“Opyssa”) of Cancun, Mexico, represented internally.

1.2 The Respondent is Vertical Axis Inc. of Barbados, represented by ESQwire.com PC, United States of America.

Factual Background

4.1 The Complainants are part of the same group of companies and conduct business in the tourism sector. One of the Complainants, Costamex, is the parent company in this group. The Complainants’ business began in Mexico in 1984.

4.2 The Complainants’ revenues in 2010 were USD 222 million and they have 30 sales offices around the world. Their customer base comes from a large number of countries but is primarily from the North American continent.

4.3 The Complainants’ business first used the “Park Royal” brand in relation to its hotels in 1989. “Park Royal” hotels have subsequently been opened in various places in Mexico and Puerto Rico. The Complainants’ group of companies has been part of the RCI affiliation program since 1999, which has resulted in its Park Royal hotels being promoted among the RCI’s 3.7 million members around the world.

4.4 The Complainants also promote their business from a website operating from the url “www.royal-holiday.com”.

4.5 One of the Complainants, Costamex, is the owner of various trade marks that comprise of or incorporate the term “Park Royal” in one form or another in Mexico, the United States and Puerto Rico. Those marks include:

(i) Mexican registered trade mark no. 669695 for the word mark PARKROYAL in class 42 with a filing date of May 6, 1998. This is the earliest registered trade mark relied upon.

(ii) United States registered trade mark no. 3146797 for the word mark PARK ROYAL in class 39.

4.6 The Respondent is a well-known dealer and speculator in domain names. A company with the name Vertical Axis Inc. was incorporated in the British Virgin Islands, Overseas Territory of the United Kingdom of Great Britain and Northern Ireland in January 2002, but this would appear to be the predecessor in business to the Respondent, which is incorporated in Barbados with company no. 24264. Although it is registered in Barbados and two of its directors give addresses in Barbados, its third director, Mr. Ham, has an address in Vancouver, Canada. It would appear that Mr. Ham has some association with Reinvent.com, a business responsible for the Hitfarm pay-per-click (“PPC”) advertising platform. A webpage appearing on the Reinvent.com website in April 2012 asserts that:

“By 2007, through the vision and drive of our CEO, [Mr.] Ham we were recognized as undisputed leaders in the domaining industry”

4.7 The Respondent has been involved in a large number of disputes under the UDRP. It has lost at least 25 cases under the UDRP. However, it has also been successful in an even larger number of cases.

4.8 The history of the registration and use of the Domain Name until late 2008 would appear to be as follows:

(i) The Domain Name was first registered on June 10, 1997.

(ii) As at May 10, 2000 the Domain Name was used to display a webpage that contained the text “Welcome to the CES Marketing Group Website – We specialize in the development and marketing of valuable Domain Names”.

(iii) As at March 22, 2003 the Domain Name was registered in the name of CES Marketing Group Inc., with contact details in Vancouver, Canada.

(iv) As at July 27, 2004 the Domain Name was being used in connection with a PPC webpage that displayed hotel-related PPC links only. That hotel-related use appears to have continued until at least February 2005.

(v) As at March 27, 2006 the Domain Name was registered in the name of DomainWorks Inc, with contact details in Vancouver, Canada. Although the telephone number and physical address provided was different from that used by CES Marketing Group, only the last two digits of the telephone number were different.

(vi) As at February 7, 2008, the Domain Name was registered in the name of the “WhoIs Identity Shield”. Clearly, this was the name of a “privacy” shield or service. Once again the contact details for the Domain Name provided an address in Vancouver, Canada.

4.9 On November 13, 2008 UDRP proceedings (Hotel Plaza Limited, Parkroyal Hospitality Management Pte Ltd. (PHM) v. DomainWorks Inc./PARKROYAL.COM c/o Whois IDentity Shield/Vertical Axis, Inc., WIPO Case No. D2008-1760) were commenced by Hotel Plaza Limited and Parkroyal Hospitality Management Pte Ltd. in relation to the Domain Name. Hotel Plaza Limited and Parkroyal Hospitality Management Pte Ltd are unrelated to the Complainants. Although at that time the Domain Name remained registered in the name of “WhoIs Identity Shield”, the then registrar of the Domain Name disclosed to the Center that the Respondent was the entity behind the privacy shield that actually controlled the Domain Name.

4.10 The Respondent took an active part in those initial proceedings, being represented by the same law firm that represents it in the current proceedings. The three person panel in the initial proceedings rejected the complaint. In so doing, it would appear that the panel relied upon what was being displayed on a PPC webpage operating from the Domain Name at about that time. In particular, the panel stated as follows:

“The majority of the current content on the site at the disputed domain name relates to camping and park activities, primarily confined to the United States.“

4.11 Thereafter the Domain Name was registered in the name of various “privacy” shields, although there appears to be no dispute that in reality at all times the Respondent controlled the Domain Name. Indeed, for a short period in 2011 the Respondent was openly recorded as the registrant of the Domain Name in the publically available WhoIs database.

4.12 There also appears to be no dispute that the Domain Name continued to be used to display a PPC page, although the exact form of the links displayed on that webpage from November 2008 and March 2012 is unclear. From March 2012 the webpage appearing from the Domain Name, contained a large number of different links under 12 different category headings. One of those headings was “Travel”, but the other links included, “Insurance”, “Education”, “Business” and “Entertainment”.

5. Parties’ Contentions

A. Complainants

5.1 In their Complaint, the Complainants refer to, and rely upon, the various PARK ROYAL registered trade marks described in the Factual Background section of this decision.

5.2 They refer to the history of the registration of the Domain Name, from which the Complainants conclude and assert that the Domain Name was acquired by the Respondent in February 2008.

5.3 The Complainants contend that the Domain Name is identical to the PARK ROYAL mark.

5.4 The Complainants assert that none of the examples of rights or legitimate interests set out in paragraph 4(c) of the Policy apply so far as the Domain Name is concerned. They anticipate an argument of the Respondent that it has a legitimate interest in the Domain Name based upon the fact that Park Royal is the name of an area in London, and contend that (a) Park Royal is an “area so insignificant in size and importance that the geographical meaning of its name is obscure and remote to the vast majority of Internet users worldwide”; and (b) the Domain Name has never been used by the Respondent in connection with this geographical meaning.

5.5 So far as actual use is concerned, the Complainants complain that the PPC links appearing on the webpage operating from the Domain Name include a number of links related to travel and that:

“By following these links, the Internet user can quickly gain access to hotels and services competing with those offered by the Complainant[s]”

5.6 The Complainants also assert that the Domain Name is parked with Hitfarm, a business associated with one of the Respondent’s directors, with the aim of monetising traffic reaching the PPC page because of the Domain Name’s incorporation of the Complainants’ trade mark. Such use, it is claimed, provides no right or legitimate interest.

5.7 So far as the bad faith registration is concerned, the Complainants contend, referring to paragraph 3.7 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition (the “WIPO Overview 2.0”), that the transfer of the Domain Name to the Respondent in February 2008 was a fresh registration for the purposes of the Policy.

5.8 The Complainants assert that, by that date, the trade mark had “been in continuous use in commerce in Mexico for over 18 years” and that the Complainants had registered trade marks in Mexico, the United States and Puerto Rico, and, therefore, that “the Respondent ought to have known” about the Complainants’ mark. Further, the Complainants claim that “a quick search on Google.COM would have revealed” that “Park Royal” was the brand name of the Complainants’ hotel chain, although no evidence of such search results as of the date of registration is offered in this respect.

5.9 Further, the Complainants contend that, in registering the Domain Name, the Respondent was in breach of the representation and warranty provided to the registrar of the Domain Name by means of paragraph 2 of the Policy. The Complainants maintain (citing a number of UDRP cases including, Grundfos A/S v. Texas International Property Associates, WIPO Case No. D2007-1448) that professional domainers such as the Respondent bear a heavier burden to fulfil and discharge their Policy commitments in this respect.

5.10 So far as the bad faith use is concerned, the Complainants refer once again to the travel-related PPC links appearing on the webpage operating from the Domain Name and the fact that if the term “Discount Travel” is clicked upon, various hotel related sponsored links appear, including one which makes direct reference to one of the Complainants’ hotels in Cancun and which links to a business that offers an online booking system for both that hotel and other competing hotels in that area. Such use is said to be use in bad faith.

5.11 Reference is also made to the fact that the webpage operating from the Domain Name at one point displayed only hotel-related PPC links and that “the current configuration of the website has been in place since 2012 at least”.

5.12 Further, in support of the allegations of bad faith the Complainants rely upon the fact that the Respondent has been (a) found “guilty of cybersquatting on numerous occasions”; (b) has offered the Domain Name for sale for the “exorbitant figure” of USD 1,080,000; and (c) that the Respondent has a history of concealing its identity behind a privacy shield.

5.13 The Complainants also put forward various additional arguments in supplemental submissions covering both the issue of recusal of various panelists and the substance of the dispute. The issue of recusal is dealt with in detail later on in this decision. Further, for reasons that are also explained later on in this decision, it is not necessary to set out the Complainants’ further arguments as to the substance of the dispute.

B. Respondent

5.14 The Respondent claims that it has a legitimate interest in the Domain Name because the term “Park Royal” is said to be a well-known geographical area in London. It claims to have acquired the Domain Name as part of a large portfolio of descriptive term domain names it purchased from CES Marketing in late 2007 without knowledge of the Complainants or the Complainants’ business.

5.15 The Respondent contends that in a case where there is registration “of geographic common word domain”, it is for the complainant to show that the registration was to profit from the complaint’s mark and that this is not been shown in this case.

5.16 The Respondent also complains about the fact that the Complainants waited 6 years in bringing this Complaint.

5.17 In support of these contentions the Respondent provides a declaration from its director of finance of Ms. Wilfred-Boyce. In that declaration Ms. Wilfred-Boyce confirms that the date of purchase of the Domain Name was December 12, 2007 and that this was part of a purchase of a large domain portfolio without knowledge of the Complainants. The statement goes on to make a number of general statements in relation to the Respondent’s business, but virtually none of them address or evidence the specific circumstances surrounding the registration of the Domain Name or the other domain names acquired at that time. For example, the declaration records that the Respondent owns a large number of geographic term domain names and also a large number of domain names that incorporate the terms “Park” or “Royal”. Many of these are listed. However, it is not suggested that the Domain Name was one of a number of domain names of this sort purchased from CES Marketing in December 2007. Further, there is no evidence that the Respondent actually focused on the existence of the Domain Name as part of the purchase or that the Respondent did any particular due diligence at that time with respect to the Domain Name specifically.

5.18 Ms. Wilfred-Boyce accepts that the Domain Name has been hosted with Hitfarm and has been used for pay-per-click advertising. However, she contends that the links themselves are auto-generated by Google and that these are “constantly changing based on solely Google’s algorithm, keyword advertising inventory and user search behaviour”.

5.19 Turning to the requirements of the Policy, the Respondent contends so far as the requirement of trade marks is concerned, that “it cannot be argued that Respondent targeted Complainant or that Complainant has exclusive rights to” what it describes as a “common English word combination that is subject to tremendous third party use”.

5.20 So far as rights or legitimate interests are concerned, the Respondent contends that it has such an interest because “it registered the [Domain Name] because it is the name of an area in London”.

5.21 On the issue of bad faith, it once again asserts that the Complainants have failed to prove that the Complainants’ mark was the reason the Domain Name was registered. Further, it maintains that there can be no constructive knowledge given that the Complainants are based in Mexico and that knowledge of a foreign trade mark is not to be imputed under the UDRP.

5.22 The Respondent denies it has engaged in a bad faith pattern of registering domain names. Although it does not deny that it has lost UDRP proceedings on numerous occasions, it points to 37 decisions in its favour, which are said to support the proposition that the Respondent’s practices have been held to be legitimate and proper. In any event, it contends that each case must be decided on its merits.

5.23 The Respondent denies that the offer to sell the Domain Name was in bad faith given that an offer to sell a domain name for a significant profit is not of itself improper.

5.24 So far as the more recent PPC links are concerned, it contends that the Complainants have “concocted” a search that leads to themselves and their competitors. In particular, the Complainants are said to have “created the search either by inserting the terms into the search box or by clicking on a link for ‘travel’”. It also contends that the creation of “generic links are not evidence of bad faith”.

5.25 The Respondent also claims that the fact that the Complainants waited 15 years from the date of original registration of the Domain Name and 6 years after the Respondent’s purchase of the Domain Name means that the doctrine of “laches” applies.

5.26 Finally, the Respondent seeks a finding of reverse domain name hijacking on the grounds that at the time the Complaint was filed the Complainants knew that they could not prove bad faith registration.

5.27 The Respondent has also put forward various additional arguments in supplemental submission covering both the issue of recusal of various panelists and the substance of the dispute. Once again it is not necessary to address these in this part of the Panel’s decision.

G. Reverse domain name hijacking

6.43 As has been described, the Panel in this case proceeded on the assumption that the Respondent did not to any significant degree turn its mind to the issue of third party rights at the time of registration of the Domain Name. Further, the Respondent admits to seeking financial gain by burying its head in the sand as to the content displayed on a website operated from the Domain Name and attempting to shift all responsibility to Google.

6.44 So far as the UDRP is concerned, this is an approach that carries with it significant risk. Although the Panel agrees with the Respondent’s contention that each UDRP case should be decided on its own facts and merits, if the Respondent’s modus operandi in previous UDRP cases was similar, it is perhaps unsurprising that the Respondent’s record of success in those proceedings has been so mixed.

6.45 Admittedly, the Respondent’s assertions as to reverse domain name hijacking focus primarily on the issue of registration in bad faith, and it is precisely on this issue that the Complainants’ Complaint has foundered. Nevertheless, it does not follow that the Complainants knew or should have known at the time that they filed the Complaint that they could not prove that element. In the circumstances, it would be inappropriate for the Panel to reach a finding of reverse domain name hijacking.