FC: WIPO arbiter dubs MP3.com CEO a -- domain name squatter

[Declan McCullagh <declan () well com>]

Of note:

Michael Robertson ... the Chief Executive Officer of MP3.com, Inc. ... In 
October 1997, Mr. Robertson registered the domain name talk-city.com. At or 
about the same time, Mr. Robertson registered the domain names 
meta-crawler.com, meta-crawler.net, win-zip.com and four-11.com.... Mr. 
Robertson registered these names to misdirect Internet traffic to his 
company's MP3.com website... Mr. Robertson registered and used the domain 
name for purposes of attracting Internet users to his company's MP3.com 
website...



http://arbiter.wipo.int/domains/decisions/html/d2000-0009.htm

   WIPO Arbitration and Mediation Center
   ADMINISTRATIVE PANEL DECISION

   Talk City, Inc. v. Michael Robertson
   Case Number D2000-0009

   The Domain Name

   This dispute concerns the domain name talk-city.com. The registrar for
       this domain name is Network Solutions, Inc.

   The Parties

   The Complainant is Talk City, Inc., 307 Orchard City Drive, Suite 350,
       Campbell, CA 95008 ("Talk City"). Talk City operates the virtual
       community located at talkcity.com and owns a United States
       trademark registration for TALK CITY for the following computer
       services: "providing on-line facilities for real-time interaction
       with other computer users concerning topics of general interest;
       and providing an on-line bulletin board in the fields of consumer
       education and business topics." According to NSI's WHOIS database,
       Talk City also owns, among others, the domain names talkcity.org,
       talk-city.net, talk-city.org, images-talkcity.com,
       images-talkcity.net, images-talkcity.org. Talk City does not own
       the domain name talkcity.net; that domain name is registered to
       Domains EO.
       The respondent is Michael Robertson, P.O. Box 910091, San Diego,
       CA 92191. According to the Complaint, Mr. Robertson is the Chief
       Executive Officer of MP3.com, Inc. The MP3.com website states that
       it is "the premier Music Service Provider (MSP) allowing consumers
       to instantly discover, purchase, listen to, store and organize
       their music collection from anywhere, at any time, using any
       Internet device."

   Factual Allegations from the Complaint

   In its complaint, Talk City asserts that it has used the TALK CITY
       trademark since April 1996 and has developed substantial fame in
       that mark.
       In October 1997, Mr. Robertson registered the domain name
       talk-city.com. At or about the same time, Mr. Robertson registered
       the domain names meta-crawler.com, meta-crawler.net, win-zip.com
       and four-11.com. Talk City asserts that each of these domain names
       contains a well-known trademark of an Internet company, and that
       Mr. Robertson registered these names to misdirect Internet traffic
       to his company's MP3.com website. The complaint further claims
       that Mr. Robertson has not used the talk-city.com domain name in
       connection with a bona fide offering of goods or services and is
       not making any legitimate noncommercial or fair use of the domain
       name.
       Attached to the complaint are two letters Talk City's counsel sent
       to Mr. Robertson objecting to his registration of the
       talk-city.com domain name. Although no written response appears in
       the record, Mr. Robertson apparently replied (through counsel)
       that he would not transfer the domain name to Talk City absent a
       payment by Talk City.

   Procedural History

   After determining that Talk City's complaint met the relevant
       procedural requirements, the WIPO Arbitration and Mediation Center
       (the "Center") commenced this proceeding on January 26, 2000. The
       Center transmitted the complaint to Mr. Robertson and his counsel
       at Cooley Godward LLP by mail, facsimile and e-mail, and informed
       them that a response was due by February 14, 2000. When Mr.
       Robertson failed to respond by the deadline, the Center issued a
       Notification of Default on February 15, 2000. On February 16,
       2000, the Center appointed David H. Bernstein of Debevoise &
       Plimpton as the Panelist in this matter.
       In response to the appointment of the Panel, Respondent (through
       an in-house lawyer at MP3.com, Inc.) sent an e-mail to the Center
       the evening of February 16, 2000. The e-mail stated that, since
       receipt of the complaint, Respondent had attempted to resolve this
       dispute amicably by offering to transfer the domain name to Talk
       City, but that Talk City refused to settle the dispute unless Mr.
       Robertson would agree to reimburse Talk City for its fees and
       costs. In light of these facts, Respondent asserted,
       the proceeding should be terminated under Rule 15(e) of the Rules
       for Uniform Domain Name Dispute Resolution Policy (the "Rules")
       because Talk City brought the proceeding in bad faith simply to
       harass Mr. Robertson. The e-mail concluded by reiterating that Mr.
       Robertson was "ready, willing and able to transfer the Domain Name
       in question directly to Talk City." The following day, in response
       to Respondent's February 16 e-mail, Talk City stated that it took
       "strong exception" to the "mischaracterization[s]" in Respondent's
       e-mail.
       On February 28, 2000, Respondent (this time through his outside
       counsel, Cooley Godward LLP), submitted a "Request for Termination
       of Proceedings and to Set Aside Default." The Request stated that
       Respondent had taken steps to transfer the domain name
       "talkcity.net" [sic] to Talk City, and therefore that this
       proceeding should be terminated pursuant to Rule 17(b) because it
       now is unnecessary to continue the proceeding. In the alternative,
       Respondent asked that the default be set aside on the ground that
       his failure to respond was "inadvertent" because "there was some
       confusion as to the appropriate time and format for which to
       respond."

   Decision

   For the reasons stated below, the domain name talk-city.com should be
       transferred to Talk City.

   a. Respondent's Late Submissions.

   Before reaching the merits, the Panel must decide whether to consider
       Respondent's February 16, 2000 e-mail and February 28, 2000
       Request, both of which were sent after the deadline for response,
       and what weight to accord them. Under the Rules, this
       determination is solely within the discretion of the Panel. Rule
       10(a), (d). See also WIPO Notification of Complaint and
       Commencement of Administrative Proceeding ("Notification of
       Commencement") ¶ 6 ("The Administrative Panel will not be required
       to consider a late-filed Response, but will have the discretion to
       decide whether to do so.").
       i. The February 16 e-mail.

   Because the February 16 e-mail was sent just two days after the
       deadline and on the same day that the Panel was appointed, and
       because it was received before the Panel began any substantive
       review of this matter, it is appropriate to consider the e-mail.
       In fairness, and to avoid any prejudice, the Panel also has
       considered Talk City's February 17 response.
       After considering Respondent's February 16 e-mail, the Panel has
       concluded that it will not accord any weight to the facts alleged
       in it. That is because Respondent's e-mail did not contain any
       certification that the information contained in the e-mail was,
       "to the best of Respondent's knowledge complete and accurate."
       Rule 5(b)(viii). Without the benefit of this certification, it is
       not appropriate to accept the factual assertions contained in the
       e-mail. Although the Panel is granted discretion to consider late
       responses, it is not granted similar discretion to waive the Rule
       5(b)(viii) certification requirement. Moreover, given that we
       still are in the early stages of the ICANN uniform dispute
       resolution process, it is arguably even more important than usual
       to insist on strict compliance with the Rules. Inconsistent
       approaches to the Rules will only cause a loss in confidence in
       the Uniform Domain Name Dispute Resolution Policy (the "Policy")
       and the Rules promulgated by ICANN.

   ii. The February 28 Request.

   The February 28 Request poses a different issue. This submission was
       not sent until two weeks after Respondent's deadline for a
       response, and on the eve of the deadline for the Panel's decision
       (March 1, 2000). See Rule 15(b) (absent extraordinary
       circumstances, Panel decisions are due within two weeks of the
       Panel's appointment). For this reason alone, the Panel would be
       justified in disregarding this submission.
       Moreover, Respondent has shown no entitlement to the requested
       relief. Respondent's claim that he "inadvertent[ly]" failed to
       respond to the complaint rings hollow given that Mr. Robertson
       clearly received notice and consulted with his counsel prior to
       the February 14 deadline. Indeed, his counsel's February 16 e-mail
       states that, since receipt of the complaint, Respondent had
       pursued settlement negotiations with Talk City, including on
       February 8, which shows that Respondent received and began to act
       on the complaint prior to the deadline. Furthermore, by the time
       of the February 16 e-mail, Respondent knew he was in default, yet
       submitted no request for the default to be lifted, either in that
       e-mail or shortly thereafter. To set aside the default at this
       time, absent extraordinary, compelling reasons, would be unfair to
       Talk City, which expects a decision by March 1, and could
       undermine potential claimants' expectation that resort to the
       Policy can lead to an expedited resolution of domain name disputes
       pursuant to the Rules.
       Similarly without merit is Respondent's assertion that he did not
       respond to the complaint in a timely fashion because "[t]here was
       some confusion as to the appropriate time and format for which to
       respond." The Center's Notification of Commencement, sent both to
       Respondent and his counsel, clearly stated:

   Deadlines
       . Within 20 calendar days from the day you receive this
       notification you must submit to the Complainant and to us a
       Response according to the requirements that are described in the
       Rules, Paragraph 5 and the Supplemental Rules. The last day for
       sending your Response to the Complainant and to us is February 14,
       2000.

   Notification of Commencement ¶ 5. The Rules, to which Respondent was
   referred in the Notification of Commencement, are similarly clear. See
   Rule 5(a) ("Within twenty (20) days of the date of commencement of the
   administrative proceeding the Respondent shall submit a response to
   the Provider."). Moreover, both Mr. Robertson (CEO of a prominent
   Internet company) and his outside counsel, Cooley Godward LLP (a well
   known law firm) are sophisticated parties. For all these reasons,
   there is no basis to lift the default in this matter.

   b. Respondent's Arguments that the Proceeding Should be Terminated.

   In the February 16, 2000 e-mail, Respondent argues that the proceeding
       should be terminated under Rule 15(e) because Talk City brought
       the proceeding in bad faith simply to harass Mr. Robertson. The
       Panel rejects this argument. First, as noted above, no weight is
       accorded to the factual assertions in the e-mail, and thus there
       are no facts before the Panel that would justify termination.
       Second, even if the factual statements in Respondent's e-mail were
       accepted, they would not provide any basis for a finding of bad
       faith. That Mr. Robertson previously offered to transfer the
       domain name to Talk City in return for "some nominal
       consideration," and now offers to transfer it without receiving
       any consideration, is not sufficient evidence to show that Talk
       City has pursued this matter in bad faith or with an intent to
       harass. To the contrary, having been unable to resolve the dispute
       with Mr. Robertson directly, it was fully appropriate for Talk
       City to have invoked the Policy. Accordingly, the Panel finds that
       Talk City has not abused the administrative proceeding process,
       and declines to terminate this proceeding under Rule 15(e).
       There similarly is no basis for terminating the proceeding under
       Rule 17(e), as Respondent requested in his February 28 submission.
       Not only has the Panel decided to disregard that submission, but
       also, Respondent's reference in that submission to transfer of the
       domain name "talkcity.net", which is not even the subject of this
       proceeding, is irrelevant. Furthermore, even if Respondent were to
       try to transfer the domain name talk-city.com to Talk City, it
       would be unable to do so unilaterally during the pendency of this
       proceeding. See Policy ¶ 8(a) (a registrant may not transfer a
       domain name during a pending administrative proceeding unless the
       transferee agrees in writing to be bound by the arbitrator's
       decision).

   c. Respondent's Offer and Attempt to Transfer the Domain Name.

   A more difficult issue is presented by the statement in the February
       16, 2000 e-mail that Mr. Robertson now is "ready, willing and able
       to transfer the Domain Name in question directly to Talk City,"
       and by the claim in the February 28 submission that Respondent has
       begun the process of transferring the domain name at issue in this
       case (which was improperly identified as "talkcity.net") to Talk
       City. In light of this offer, the Panel initially was tempted to
       rule that the domain name should be transferred and that it is
       unnecessary to reach the merits of the dispute. On reflection,
       though, that would not be an appropriate resolution.
       The Rules expressly provide that the proceeding may be terminated
       if the parties "agree on a settlement." Rule 17(a). Although Mr.
       Robertson has now offered all of the relief that Talk City seeks
       in this proceeding, Talk City has not "agreed" to accept that
       offer. Given that Mr. Robertson did not make this offer until
       after the filing of the complaint, Talk City is entitled to a
       decision on the merits. This conclusion is consistent with the
       Rules' mandate that, in the event of default, the Panel "shall
       decide the dispute based upon the complaint," absent exceptional
       circumstances. Rule 5(e) (emphasis added); see also Rule 14(a).

   d. Respondent's Failure to Answer.

   Given Respondent's failure to submit a substantive answer in a timely
       fashion, the Panel accepts as true all of the allegations of the
       complaint. The Rules expressly provide that the Panel "shall draw
       such inferences" from the Respondent's failure to comply with the
       rules "as it considers appropriate." Rule 14(b). Moreover, when a
       respondent defaults, the Rules direct the Panel to "proceed to a
       decision on the complaint." Rule 14(a); see also Rule 5(e).
       Furthermore, the Panel is charged with rendering its decision "on
       the basis of the statements and documents submitted." Rule 15(a).
       Even were the February 16, 2000 e-mail treated as an answer, it
       would not affect this decision. That is because, in addition to
       the absence of the required certification, Respondent's e-mail
       made no attempt to respond directly to the allegations of the
       complaint. Nor has Mr. Robertson articulated any legitimate reason
       for his registration of this domain name or countered the charge
       that he registered the domain name in bad faith.
       e. Evidence of Bad Faith Registration and Use.
       In its complaint, Talk City argues that bad faith can be found for
       three independent reasons: (a) Mr. Robertson refused to transfer
       the domain name talk-city.com to Talk City absent a payment by
       Talk City in excess of the expense Mr. Robertson incurred in
       registering the domain name; (b) Mr. Robertson registered and used
       the domain name for purposes of attracting Internet users to his
       company's MP3.com website; or (c) Mr. Robertson's registration of
       the domain name has created a likelihood of confusion as to the
       source, sponsorship, affiliation or endorsement of the MPS.com
       website.
       Talk City has properly alleged, and Respondent has not contested,
       that Mr. Robertson registered and used the domain name in order to
       attract Internet uses to the MP3.com website, and that MP3.com,
       Inc. derives significant advertising revenues based on the amount
       of Internet traffic directed to its site. This showing is
       sufficient to satisfy the requirement that, to justify transfer, a
       complainant must show that the domain name was registered and used
       in bad faith. Policy ¶ 4(a)(iii). See also Policy ¶ 4(b) (listing
       non-exhaustive examples of evidence of bad faith use and
       registration). In light of this finding, the Panel need not
       consider Talk City's alternate bases for a showing of bad faith.

   Conclusions

   The Panel finds that Mr. Robertson owns a domain name (talk-city.com)
       identical or confusingly similar to Talk City's trademark (TALK
       CITY), has no rights or legitimate interests in respect of the
       domain name, and registered and used the domain name in bad faith.
       These three factors entitle Talk City to an order transferring the
       domain name from Mr. Robertson to Talk City. Policy ¶ 4(a).
       Accordingly, pursuant to Paragraph 4(i) of the Policy, the Panel
       orders that the registration of the domain name talk-city.com be
       transferred to Talk City, Inc.

                             David H. Bernstein

                             Presiding Panelist

                          Dated: February 29, 2000

                             New York, New York

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