A one member UDRP panel has found that Clearwater Systems, Inc. of Akron, Ohio, represented by Walker & Jocke, is guilty of Reverse Domain Name Hijacking (RDNH) on the domain name clearwatersystems.net

The decision is unusually because the domain holder, Glenn Johnson of Clearwater, Florida, / Clear Water Systems of Remington, Inc. of Remington, Indiana (“CWSRI”), didn’t even ask the panel for a finding of RDNH, Richard G. Lyon the sole panelist made a finding of RNDH on his own initiative

Here are the relevant facts and findings:

The Complainant provides commercial and residential drinking water products and services such as water softeners, water filters, bottled water delivery, purification chemicals and services, and deionizers. According to the Complainant’s website at “www.clearwatersystems.com” it sells through distributors in Ohio, Michigan, and Florida. The Complainant holds several trademarks for CLEARWATER SYSTEMS that are duly registered on the principal register of the United States Patent & Trademark Office (“USPTO”). The earliest of these was registered in January 1990.

The Respondent (named in the amended Complaint) Glenn Johnson is an individual who operates a web design service under “Buzzazz”. He registered the disputed domain name in August 2012.

The Respondent CWSRI is an independent water treatment company operating since 1996 in northwestern Indiana. CWSRI engaged Buzzazz to register the disputed domain name and create and maintain its business website at the disputed domain name.

The disputed domain name resolves to a website entitled “Clear Water Systems ‘Your Water Specialists’,” subheaded “Residential/Commercial | Water Softeners | Water Systems | Remington, IN[diana]”. This is an active website promoting CWSRI’s sale of water softeners and bottled water delivery; tabs include Home, About Us, Water Softeners, Bottled Water, Specials, Contact Us. On the home page is a link reading “Call to Request a Free Quote”. The copyright notice on the home page at this website reads “Copyright © 2014 Clear Water Systems. All Rights Reserved. Website Design & Internet Services by Buzzazz.com”.

The Respondent asserts that it is commonly known as “Clear Water Systems” and has been conducting and marketing its business under that name in Indiana. The Respondent avers that it chose its domain name to reflect its business name and it was not registered for the purpose of selling, renting or otherwise transferring the domain name to anyone else or with any malicious intent to harm the Complainant.

The Respondent further asserts that the Respondent and the Complainant are not competitors, sell different type of equipment, operate in different geographical markets, and no customer has ever contacted the Respondent thinking it was the Complainant.

The Policy was enacted to provide a trademark owner a less expensive and more expedient alternative to litigation in a discrete and cabined class of cases: to combat abusive domain name registration and use. In the fourteen-plus years since adoption the Policy has proven successful in no small part because of this limited application. During that time panels have developed a substantial body of UDRP precedent through careful application of the Policy to various factual circumstances, addressing within the four corners of the Policy developments in the domain name industry and coming to grips with language of the Policy that might yield different interpretations. While disagreements remain and new issues continue to arise, several once-divisive questions of interpretation have been resolved to the point of becoming principles generally accepted by UDRP panels.

The Panel quotes the operative provisions of the Complainant’s pleadings under these two Policy elements to emphasize that the Complaint depends upon a provision of US trademark law known as constructive notice. Under that provision in a US infringement action the Respondent would be presumed to be aware of the Complainant’s marks by virtue of their being registered with the USPTO.

This administrative proceeding is not a US infringement action. Policy precedent differs in material aspects from US law in respect to constructive notice: “Panels have mostly declined to introduce the US concept of constructive (deemed) notice per se into the UDRP.” WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition (“WIPO Overview 2.0”), paragraph 3.4. The limited exceptions to this now well-established principle are few, almost always requiring at a minimum either “indicia of cybersquatting” or a respondent that is a domain name aggregator. The record in this case contains no evidence of either such circumstance.

The language of paragraph 4 of the Policy provides a second and more substantial difference between US trademark litigation and Policy proceedings.

Infringement is a strict liability tort in which intention is of little moment. Under the Policy a complainant must prove that the respondent registered and used the disputed domain name in bad faith.

Apart from instances of willful blindness, that ordinarily requires that the complainant prove both that the respondent had actual knowledge of the complainant and its mark and selected it to take advantage of its value for commercial purposes (targeting). Knowledge and targeting may be proven inferentially, but will not be presumed merely from a complainant’s ownership of a similar or identical registered mark.

Nothing in the record of this case supports a finding of either actual knowledge or targeting.

As pleaded in the Complaint and is apparent from an examination by an Internet user, the website at the disputed domain name displays a business selling bottled water and filtration systems in Remington, Indiana by a company named Clear Water Systems. Unless the Complainant can demonstrate that this company’s entire use of its corporate name and the disputed domain name was intended to trade off the goodwill of the Complainant’s mark, the Respondent CWSRI falls within both of these safe harbors. Similarly, absent intentional targeting of the Complainant, the Respondent has a legitimate interest in reflecting its corporate name in its domain name and web address.

The Complainant does not allege and there is no evidence that its mark is famous or that the Respondent “must have known” of it. Its CLEARWATER SYSTEMS marks are not especially distinctive but rather to some extent descriptive of the Complainant’s – and CWSRI’s – goods and services. The Complainant does not allege and there is no evidence that prior to the Respondent’s selection of the disputed domain name the parties had any prior dealings, disputes, or other matter that would demonstrate or from which the Panel might infer that the Respondent or CWSRI was aware of the Complainant or its marks or targeted them. Nor does the content of the website at the disputed domain name furnish a basis for such an inference. CWSRI’s website does not imitate the Complainant’s and the Complainant is not mentioned.

The Respondent CWSRI’s services appear to be local to its Indiana location, and at the site the Respondent promotes an active business, not one (such as a farm of hyperlinks) dependent upon the disputed domain name. The Complainant does not allege and there is no evidence that the parties compete with each other for customers; each party appears to operate a business that is confined to particular geographic areas that do not overlap. Neither Mr. Johnson nor CWSRI, to the Panel’s knowledge and inquiry, has been a party to any other UDRP proceeding. To summarize in the language of the WIPO Overview 2.0, paragraph 3.4, the record contains no indicia of cybersquatting.

Without a showing of actual knowledge it is at least equally likely that the Respondent selected the disputed domain name to reflect its corporate name than to poach off the Complainant’s marks and has used the domain name solely to market its business. The Complainant has failed to prove that the Respondent lacks a right or legitimate interest in the disputed domain name or that he registered or used the disputed domain name in bad faith.

As the Policy’s requirements are conjunctive, the Panel need not make a finding under the first element of the Policy.
D. Abuse of the Administrative Proceeding

The Panel on his own initiative, see Timbermate Products Pty Ltd v. Domains by Proxy, LLC / Barry Gork, WIPO Case No. D2013-1603, considers whether the Complainant has “us[ed] the Policy in bad faith to attempt to deprive a registered domain-name holder of a domain name.” Rules, paragraph 1. “If after considering the submissions the Panel finds that the complaint was brought in bad faith, for example in an attempt at Reverse Domain Name Hijacking or was brought primarily to harass the domain-name holder, the Panel shall declare in its decision that the complaint was brought in bad faith and constitutes an abuse of the administrative proceeding.” Id. paragraph 15.

If the face of the Complaint demonstrates a settled reason why relief should be denied a panel may find Reverse Domain Name Hijacking (RDNH). E.g., Tarheel Take-Out, LLC v. Versimedia, Inc., WIPO Case No. D2012-1668, and cases cited in section 7, second and third paragraphs. A complainant or as here its representative must certify “that the assertions in this Complaint are warranted under these Rules and under applicable law, as it now exists or as it may be extended by a good-faith and reasonable argument.” Rules, paragraph 3(b)(xiv); see amended Complaint, paragraph 22. “Applicable law” in the Rule means the law to be applied in this proceeding, i.e., Policy precedent. By relying solely upon the US doctrine of constructive notice the Complainant has ignored a settled Policy rule of decision. The Complainant advances no factual or legal reason why in this proceeding the Panel should depart from or modify this Policy precedent. The entire content of the Complaint is that the Complainant has a trademark, the Respondent does not, and therefore the Complainant is entitled to the disputed domain name. Paragraph 4(a) of the Policy requires more than that, as the Complainant should have known.

The foregoing applies all the more to the Complainant’s representative. In the Panel’s view, the Complainant’s counsel should have been aware of or informed herself of the fundamental differences between Policy proceedings and US trademark litigation before filing this case. E.g., IUNO Advokatpartnerselskab v. Angela Croom, WIPO Case No. D2011-0806 (“a represented complainant… should be taken to have known and understood the Policy and should be taken to have known and desired the natural and probable consequences of its actions”).

In these circumstances the Panel finds that the filing of the Complaint constitutes an abuse of this administrative proceeding.
E. Other UDRP Decisions Involving the Complainant

The Panel has read the recent transfer decisions in Clearwater Systems, Inc. v. Clear Water Systems / Charles Maddox, WIPO Case No. D2014-0877 (“Maddox”), and Clearwater Systems, Inc. v. Clear Water Systems, Bill Terrones, WIPO Case No. D2014-0879 (“Torrones”), both involving the same Complainant as in this case. While this Panel does not have access to the pleadings and records in those recent cases, the factual circumstances and the Complainant’s contentions appear to be similar.

Unlike in the present case, in both of the above cases the Respondent defaulted. However, as noted above, this Panel would have reached the same result had there been no Response. That fact however appeared to matter to the panel in the circumstances of Maddox and Torrones, where the panel stated “Respondent has failed to file a formal Response, which can suggest, in appropriate circumstances, that Respondent lacks rights or legitimate interests in the disputed domain name,” and “Complainant has alleged, and Respondent has not rebutted, that Respondent is intentionally using the disputed domain name to attract Internet users to its website for commercial gain by creating a likelihood of confusion with Complainant’s CLEARWATER SYSTEMS mark as to the source, sponsorship, affiliation, or endorsement of the website.” (Citations omitted). This Panel’s approach reflects the Consensus View in the WIPO Overview 2.0, paragraph 4.6. While in civil litigation, a failure to deny results in an admission of a matter pleaded in a complaint, the Policy precedent instead provides as follows:

“Does failure of a respondent to respond to the complaint (respondent default) automatically result in the complainant being granted the requested remedy?

Consensus View: A respondent’s default does not automatically result in a decision in favor of the complainant. Subject to the principles described in paragraph 2.1 above with regard to the second UDRP element, the complainant must establish each of the three elements required by paragraph 4(a) of the UDRP.”

It is perhaps unusual to find a denial of the complaint in a default case. Here, the Panel on its own initiative even finds the Complainant committed an abuse of process (WIPO Overview 2.0, paragraph 4.17). Without further reference to the Maddox and Torrones decisions, the Panel at any rate finds that the record in this proceeding lacks any proof of bad faith or lack of a legitimate interest in the disputed domain name.

For the foregoing reasons, the Complaint is denied and the Panel finds an abuse of this administrative proceeding.