Storm Guard Franchise Systems, LLC v.just lost its bid to grab the domain name StormGuard.com which was just registered on February 6, 2014

The domain owner was represented by ESQwire.com

A majority of the three member panel of Willem J. H. Leppink, The Hon Neil Brown Q.C. found that the domain was generic and since the registrant was located in South Korea is was unlikely that they knew about the trademark of the Complainant.

However, panelist Nicholas Weston disagreed with the majority and filed a long dissenting opinion which we have included a summary of at the end.

Needless to say this demonstrates why domain holders should always ask for a three member panel as if this case was only decided by one panelist who turned out to have been Mr. Weston, the domain holder would have lost the domain.

Here are the highlights:

Complainant, Storm Guard Franchise Systems LLC, is a franchisor of roofing and exterior restoration franchises. Complainant has approximately 23 franchisees throughout the Eastern half of the United States of America. Complainant and all of its franchisees use the “Storm Guard” marks in association with their business.

Complainant operates its main website at stormguardrestoration.com” and stormguard.co”.

Complainant owns a United States trademark for the word “STORM GUARD” and for a black, white, yellow and red figurative word “Storm Guard” in the United States. (Hereinafter together referred to as the “Trademark”).

Complainant made an offer to purchase the Domain Name for $500 and then $5,000 but Respondent replied that the lowest Respondent would expect is USD 85,000.

“Complainant states that Respondent has no legitimate rights in respect of the Domain Name and is only seeking to sell the Domain Name for a profit far in excess of what Respondent originally paid for the Domain Name. Furthermore, Complainant states that Respondent does not offer any goods or services for sale and does not provide any information or other content at the Domain Name. Respondent is not known by the name “stormguard.com” or “Storm Guard”.

Respondent does not agree with Complainant and relies on the nature of his business and the descriptive or generic nature of the terms in the Domain name. As already noted, he says he is a reseller of domain names which consist of generic terms and that is perfectly legitimate under the Policy.

It is clear that Respondent has no rights in respect of the Domain Name.

The question is whether Respondent has a legitimate interest.

It is certainly true that it is permissible under the Policy to register generic terms and exploit them for their value as generic terms. However, it is not permissible to register a “generic” term as a domain name and exploit it for the value it has as a trademark where it is someone’s trademark. The registration and use must flow from the generic nature of the term, not the term’s significance as a trademark.

The Panel has established that a number of the advertising links on the website behind the Domain Name are inconsistent with a genuine use of the descriptive meaning of the words “storm” and “guard”, such as the links to “4CHAN”, “MEME” and “Albuquerque”.

The Panel finds that in this particular situation Respondent has done too little to show a legitimate interest when creating this landing page.

Therefore the Panel is satisfied that the second element of the Policy is met.

Registered and Used in Bad Faith

Under the third requirement of the Policy, Complainant must establish that the Domain Name has been both registered and used in bad faith by Respondent.

Although Respondent could have known about the Trademark and could have been aware of Complainant and its business when Respondent registered the Domain Name, Complainant has not provided convincing evidence supporting that fact.

Therefore, the Panel finds that there is no actual evidence that Respondent actually knew Complainant when Respondent registered the Domain Name.

The Panel also takes into consideration that the two elements of which the Trademark consist, i.e., “storm” and “guard” are not such an unusual combination.

The Panel could therefore not easily conclude that Respondent, who is located in the Republic of Korea, could have known about the brand under which Complainant sells its products when registering the Domain Name.

Furthermore, Respondent cannot be blamed that Complainant opened the dealings on acquiring the Domain Name. A

bove that, it was Complainant who tried to purchase the Domain Name several times for different amounts.

The fact that Respondent replied and informed Complainant that the Domain Name was for sale for a higher amount does certainly not prove registering a Domain Name with the intention of selling it to Complainant.

In these circumstances, the Panel majority finds that Complainant has not established the third requirement under the Policy.

Dissenting Opinion

I agree with the majority Panelists on all but one point: I respectfully disagree with the Panel majority’s ground on Registration and Use in Bad Faith.

At the time of registration, the onus was on Respondent to make the appropriate enquiries to ensure that the registration of the Domain Name does not infringe or violate the third party rights. The Response makes no mention of the appropriate enquiries having been made.

Paragraph 2 of the Policy clearly states: “It is your [the domain name holder’s] responsibility to determine whether your domain name registration infringes or violates someone else’s rights”. Respondent’s apparent lack of any good faith attempt to ascertain whether or not the Domain Name was infringing someone else’s trademark, bearing in mind there are numerous registrations of this mark in various jurisdictions, for example by conducting trademarks searches or search engine searches, supports a finding of bad faith

Further, in this Panelist’s view, it is in breach of the “Fabulous.com Domain Registration Agreement” for breach of the warranty (at paragraph 10.1): “You warrant that the registration or renewal of the Registered Name is made in good faith and that, to the best of your knowledge and belief, neither the registration nor renewal of the Registered Name nor the manner in which it is or shall be used, either directly or indirectly, infringes the intellectual property rights or other legal rights of any third party. A breach of this warranty shall constitute a material breach of this Registration Agreement.”

The absence of evidence from Respondent that it conducted search engine searches or any follow up trade marks registration searches, even in the country applicable to the registration agreement, before choosing a domain name to park PPC links on and divert traffic to its parking page means that there was no basis to signing up to that statement.

It also means, in this Panelist’s view, that Complainant has met its evidentiary burden that there is bad faith pursuant to paragraph 4(a)(iii) of the Policy.

The dissenting panelist finds that the Domain Name should be transferred to Complainant.”