Worst of 2010: UltimateGuitar.com Taken In WIPO Based On “Common Law” Trademark Of A Hyphenated Domain

In a case which was decided about a month ago, but just brought to my attention by a reader today, a one person WIPO panel took the domain name, UltimateGuitar.com away from Domain Capital which financed it on behalf of an undisclosed owner and gave it to the owner of Ultimate-Guitar.com, based on a “common law” trademark.

This decision has  made it onto my worst of 2010 list.

Here are the facts.

Complainant’s owns the domain ultimate-guitar.com which was created on October 13, 1999.

The disputed domain name,  ultimateguitar.com was created on August 5, 1999.

So the domain name taken was registered earlier than the domain through which the Complainant “established” his rights.

The Complainant that owned the domain ULTIMATE-GUITAR.COM since 1999  did not file for a trademark until November 2009 citing a first use date of 1998, even prior the registration of the domain.

Domain Capital lent on the domain in January 2007, some 2 1/2 years before the trademarks were filed and took title to the domain as they typically do to secure their loan.

Here is what the sole panelist found:

“”Complainant is the owner of six United States Trademark registrations for or including the words “ultimate” and “guitar” in combination…The six trademarks were registered between September 2009 and April 2010.

“”Respondent financed the purchase of the disputed domain name <ultimateguitar.com> by an undisclosed purchaser and registered the disputed domain name in its own name on January 9, 2007 as security for the funds advanced for the purchase of the disputed domain name.””

“”Respondent’s position is that Complainant is not entitled to rely on its registered trademark rights which were acquired more than two and a half years after Respondent registered the disputed domain name”

“While the UDRP makes no specific reference to the date on which the owner of the trademark or service mark acquired rights the Panel is of the view that in the absence of extenuating circumstances registered trademark rights should not be treated as regressive rights.””

“”The UDRP recognizes that a Complainant may successfully assert common law or unregistered trademark rights…. In order to establish common law rights a complainant must show that the mark has become a distinctive identifier associated with the complainant or its goods or services. Relevant evidence of such “secondary meaning” includes length and amount of sales under the mark, the nature and extent of advertising, consumer surveys and media recognition.””

“Complainant has operated its <ultimate-guitar.com> website for over ten years. Complainant’s website provides online music and musician related goods and services, including but not limited to tools for guitar players such as tablature and in structural videos worldwide. Complainant has for many years and continues to make use of its trademarks to identify the services found on Complainant’s <ultimate-guitar.com> website. Complainant’s website currently has over 1.5 million Internet users who are registered users of the website. Complainant’s <ultimate-guitar.com> website receives over 15 million unique visitors per month. Complainant’s <ultimate-guitar.com> website consistently maintains a Top-25 download ranking on iTunes App Store. The number of visitors per month and the iTunes App Store figures are independently generated data.””

“”Complainant registered its trademarks ULTIMATE GUITAR,ULTIMATE-GUITAR.COM and ULTIMATEGUITAR.COM Design on the Principal Register in the United States Patent and Trademarks Office on the basis of evidence of acquired distinctiveness filed in the trademarks office in 2009 to satisfy the requirements of Section (F) of the U.S. trademark law. Each of the three trademark applications were advertised for opposition but no third party opposed any of the applications which proceeded to registration.””

“Complainant’s U.S. Registrations on the Principal Register for ULTIMATE- UITAR.COM show a claimed first use date of October 9, 1998 which supports Complainant’s statement that its domain name <ultimate-guitar.com> has been in use for over a decade. The same Registration shows a claimed first use in commerce date October 9, 1998 for services in International Class 041 and a first use in commerce date of March 29, 2004 for services in International Class 035.””

“”A review of the webpages from the website <ultimate-guitar.com> from the years 2000 to 2008 appearing on the Internet Archive Wayback Machine support Complainants statements that the website has been in use for ten years and the number of registered users of the website and visitors to the website as measured by industry standards support a conclusion that the words “ultimate” and “guitar” in combination or separated by a “hyphen” “”

“”The Panel finds that Complainant had established common law rights in the words “ultimate “and “guitar” in combination or separated by a “hyphen” and/or in combination with “.com” in association with the services described in preceding paragraph by the end of 2006.””

So to recap the domain name with hyphen wasn’t registered until 1999, yet the panel says they have a common law right dating back to 1998 and although their was no trademark filed on the domain until 2 1/2 years after Domain Capital acquired it they took the domain away.

Scary stuff.

Moreover the Domain Capital did not make any offers to sell the domain to the Complainant, yet the panel cited 2 other cases where Domain Capital lost to negate this factor:

“”While Complainant has not received any direct offer of sale regarding the disputed domain name from Respondent, it is worth noting that Respondent has been involved in several other domain dispute cases before the WIPO Arbitration and Mediation Center as a Respondent….Both cases were decided in favor of the Complainant.””

Panelist are always quick to question domain holders intention, in this case why Domain Capital would not disclose who the beneficial owner of the domain was:

“””Respondent is the listed registrant of record of the disputed domain name, and has declined to disclose the name or identity of an alleged underlying purchase and use of the disputed domain name citing confidentiality. Respondent and the purchaser of the disputed domain name appear to have cooperated to hide the identity of the purchaser of the disputed domain name from Complainant. The proceedings under the UDRP are summary with no opportunity to discover documents or persons and discover and test the evidence presented by the opposing party. In this Panel’s view, hiding the identity of a person or entity having a legal interest in the disputed domain name (and which the Response suggests may in fact be the one making use of it) frustrates the procedure and interferes the development of the issues.””

But panelist never question the “trademark Holders intention or in this case why did the owner of the hyphenated domain, being so well know  and so valuable wait a full 10 years before filing a trademark?

I mean sometime between 1999 and 2009 the “trademark holder” must have realized they had a valuable asset and if so they should have protected it.

To me this looks like not a case of using trademark laws to protect your asset but to steal another asset.

Scary

Scary.

Comments

  1. says

    “To me this looks like not a case of using trademark laws to protect your asset but to steal another asset.
    Scary”

    I agree with you, yes it is very scary!
    It is horrible decision!

    How can we protect our digital assets?

    Domain Capital must appeal in real court!
    I am %100 sure, they are going to win.

  2. says

    When some newbies read about this-the fear of lawsuits if they register a domain-they will stay away from the domain industry.

    Good for us and bad for the people who are ignorance of the domain industry.

  3. Tim says

    That’s a truly disgusting and scary decision.

    Domain Capital should take them to court on this one.

    Just another reason to skip UDRP and go to court, or better yet take WIPO to court for their actions.

    At some point we need to start a fund to take WIPO and the NAF to court and crush them.

    These antics would never hold up in a court of law. This is truly absurd.

  4. says

    thugs get away with thuggery because they can.
    this was not arbitration. the decider(a bush era term)
    decided this because he could put money in his pocket.
    as long as he can retain complete anonymity this will continue
    to happen.

  5. John Berryhill says

    I agree, Howard. Ross Carson tends to be among the relatively reasonable ones.

    Why this was left up to a single member panel in the first place is a puzzler.

  6. RL says

    Domain Capital needs to improve its collateral financing business model to deal with the issue of “cybeflying” that means in this case becoming the owner of a domain name and to carry the dispute resolution on behalf of some undisclosed party, instead of making it clear to that party that it needs to take part in UDRP disputes.

    It appears that anyone could register the domain name “UltimateGuitar.com” if it was available today for a new registration without concern for the trademark issues.

  7. Steve M says

    Another wrong decision by a panelist who clearly should know better.

    DC’d win if they went to court; even the theory of laches should alone be sufficient to stop this illegal domain grab.

    If DC didn’t file a court action and the domain was therefore lost, wonder whether the domain owner’s still responsible for the loan to them?

    If so, double ouch.

  8. JDK says

    This case reminds me of one of the first UDRP cases with a dissenting opinion — Chernow Communications, Inc. v. Kimball, No. D2000-0119 (WIPO May 18, 2000) (ccom.com 2-1*).

    In that case, David Sorkin dissented from the majority decision arguing “The domain name “ccom.com,” is plainly not identical to Complainant’s trademark for long distance telephone services, “C-COM,” and under the circumstances presented in this proceeding I would not find it confusingly similar to Complainant’s trademark… A domain name that incorporates an unhyphenated variant of a hyphenated trademark is not identical to the trademark…”

    http://www.wipo.int/amc/en/domains/decisions/html/2000/d2000-0119.html

    Kimball threatened to take the case to federal court. Chernow blinked and decided to settle rather than risk a costly court battle. Kimball still owns the domain name today. :)

  9. says

    I am still confused on how this UDRP policies are put into effect while making a determination on who is right or wrong. It seems these panelists are flipping coins and pulling shit out of their asses and costing a lot of people time and money.

    Not only does the respondent have to pay for a lawyer to defend the domain in UDRP. But if an unfair decision is pulled (like this UltimateGuitar decision), that same respondent has to spend MORE money on lawyers to bring it to a physical court of law. Just to enforce “actual” laws and not bullshit policies which are pulled out of each panelists asses.

    Isn’t ICANN ~ WIPO ~ UDRP there to help manage ~ clear away infringing trademark violators rather then letting these thug like companies get away with theft?

    And for each annual domain registration fee, a small portion goes towards ICANN to help them operate and further allow such theft?

    I think they’re (people and panelists behind UDRP and NAF) on a verge of a major class action law suit if they don’t clean up their acts and more people lose their domain through unrighteous panelist decisions.

  10. says

    Maybe I am missing something, but to me it sounds like a good decision, for the sole reason that the first use of the “ultimate guitar” trademark (according to the trademark application) was prior to when the ultimate-guitar.com domain was first used/registered. There are really no other issues to consider. I don’t necessarily agree the domain laws are correct, but that is how most domain cases are decided.

  11. MHB says

    Eric

    You realize that they didn’t file for the trademark until 2009 saying they started using the trademark in 1998.

    How are you suppose to know about a trademark that is not filed?

  12. says

    How convenient they claim to started commerce in 1998 just “one” year ahead of the domain in question…Have a business license to back it up?

    Cause I remember I started doing business with the name “ebay” back in 84, pretty much when I came out of my mothers womb…

  13. says

    All that matters for domain name decisions is if the trademark was approved. Assuming the trademark that was filed is not being disputed in court, WIPO just goes by whatever the trademark says. The owner of Ultimateguitar.com would need to sue in a real court to invalidate the trademark if it really was not in use in 1998. I assume ultimate-guitar.com had to “prove” in their trademark application they were using it in 1998 so it is hard to dispute that, even though they may have stretched the truth in their application.

    The main point is that WIPO is not the forum for trademark disputes. If there is a filed and approved trademark, WIPO goes by that. The first use date is the most critical part of the trademark when it comes to domain cases.

  14. MHB says

    Eric

    “” I assume ultimate-guitar.com had to “prove” in their trademark application they were using it in 1998″

    No they just had to state they were doing so no “proof” is required at the trademark office upon application.

    The whole point of the trademark system is to put others on notice of the existence of a mark. So if you register a domain that already has a federally registered mark the panel is going to say, sorry but you should have checked and take your domain, and here they are saying yes you looked and there was no mark but we are going to take it anyway.

  15. says

    “The owner of Ultimateguitar.com would need to sue in a real court to invalidate the trademark if it really was not in use in 1998.”

    And I hope they do. Decisions like this can’t be let to stand unchallenged.

  16. says

    MHB – From what I understand, WIPO goes by whatever an approved trademark application says on it, and if the trademark is not really valid than that has to be argued somewhere other than the WIPO forum.

    ultimateguitar.com may have a good case in a court of law, if they can prove they used the domain before ultimate-guitar.com used their trademark, but I assume they could not prove that to WIPO. I think the only way they could have easily disputed this would be to have opposed the trademark application when it was filed, and blocked it from being approved.

    I don’t necessarily agree with the rules/laws for all of this, and as an owner of 9000 domains I have had a bunch taken away in trademark disputes (I never went to court or hired a lawyer though), but I think the real issue is that the WIPO decision making rules need to be updated, improved, and the guidelines made more clean.

  17. MHB says

    Eric

    You can call me Mike

    I will argue about this one all day every day, because I think he decision sucks.

    Why don’t they ever question the “trademark holder” as to why they waited 10 years to file for a trademark after first use, but still question domainers every motive and move?

    Wait to you see tomorrow post on a case decided by the federal court of Appeals and then tell me UDRP and WIPO panels are using the same law.

  18. Aggro says

    Eric is correct.

    Ultimate-guitar.com, whether by hook or crook, have a registered TM – this is a statement of FACT.
    Notice was given…which went unchallenged..

    It is not fot the UDRP/WIPO panel to determine the motive for late registration.

    If it had been Elequa – as we have seen on increasing occasions when he won disputes in similar circumstances – it would be different. He doesn’t f about taking chances when he knows the chances of facing a UDRP are high…
    He makes sure to register a TM himself in a different class from the complainant !!

  19. MHB says

    Aggro

    The trademark was not filed when the domain was acquired.

    How can you be responsible for knowing about a unregistered trademark?

    “It is not fot the UDRP/WIPO panel to determine the motive for late registration”

    Why not?

    Its for the panel to determine the domain owners motivation for the registration, why is only the domain name owners motives always in question?

  20. says

    Again, I give firsthand experience in losing a ruling on an injunction for a live production company I ran successfully in the 1990′s, establishing a nationwide event, promoted through various advertising mediums for several years.

    Then, an upstart company bribed one of my past winners after her year was up, to become the “new winner” of their “model contest,” and then this company stole the EXACT NAME OF MY COMPANY. However, due to three other competitors in this lucrative field, we were locked into two other lawsuits for damages, sabotage (really) and interference. We missed this usurper for several months.

    When we found out about the company stealing our name, six months had passed. We sued them to stop them from using our trademark (and our past “winner” who seemed to be enjoying the continuing fame), and the judge said this in her decision:

    “The Complainant (me) WAITED too long to file the motion (six months), and the Respondent has already scheduled events using the Complainant’s TM. Because of this delay, the Respondent will suffer untold damages, along with the participants who have signed up for Respondent’s events. For these reasons, the Complainant’s motion for an Injunction is DENIED.” This in the face of a TM filing by my company 3 years earlier.

    So… what’s fair in U.S. Courts? In UDRP filings? What is “justice”.

    It’s whatever some piece of sh*t makes it out to be, and trust me, there’s lots of pieces of sh*t out there controlling YOUR life and your business. Ever see someone in a high position who doesn’t deserve their position? 70% of those people who control the world fall into that category.

    My question is, why didn’t this reasoning factor in on the Ultimate-Guitar.com case? You wait too long to protect your TM, too bad.

    Just hold on. Hope DC fights this one.

    Good story, Em-bee

  21. says

    Stephen – That is the Doctrine of Laches defense (waiting too long to sue, kind of like a statute of limitations), but 6 months seems way to short for that sort of defense. I am not a lwyer though.

  22. says

    I’m surprised no one has commented about this particular part:

    “Complainant registered its trademarks ULTIMATE GUITAR,ULTIMATE-GUITAR.COM and ULTIMATEGUITAR.COM Design on the Principal Register in the United States Patent and Trademarks Office on the basis of evidence of acquired distinctiveness filed in the trademarks office in 2009 to satisfy the requirements of Section (F) of the U.S. trademark law.”

    So the complainant applied for and was granted a trademark on UltimateGuitar.com (yes, it’s a live TM), which is a domain they DIDN’T OWN! THAT is a travesty and shows that even the trademark system itself needs a serious overhaul, let alone the UDRP process. This could happen to any of us.

    What a horrible decision and precedent to set.

  23. says

    @Eric,

    Yeah brother, it freaked out me, my associates, investors, and team. That wasn’t the only thing that cursed that production, and I never want to actually think of it again, but so many issues pop up in the news that reminds me of how screwed someone can be when they don’t “pay the piper” (bribe the judge, court system, etc)

    When you consider how many innocent people have been jailed and executed (now that DNA can prove this), it’s really sad. That’s why I’m against the death penalty, unless the wronged person’s family member gets to do it after 100% guilt has been established. The state has no right to take a citizen’s life. Period. Why? Cuz the people in charge are numbskulls. I dare anyone to say otherwise.

  24. says

    A three member Panel may have helped, but there are reasons why that was not possible in this case, which are a matter of privilege. The bigger issue for the Panelist was the non-disclosed owner of the domain name. Quester absolutely put in no evidence of common law trademark rights. None. The Panelist fudged by citing their first use in commerce date as proof that their marks had acquired secondary meaning. First use in commerce date is not evidence of the nature or magnitude of use necessary to establish trademark rights. I completely agree that Domain Capital acted in complete good faith in providing financing for the domain, and should have won, had the decision been about Domain Capital. The decision was not about Domain Capital, however. The Panelist had to justify his decision against Domain Capital, because they were the listed registrant, but what was really going on was that the Panelist felt that the non-disclosed party was the true registrant, and was hiding behind Domain Capital as a shield.

  25. MHB says

    Brett

    Thanks for commenting

    The burden is on the complainant.

    The domain holder theoretical can stand mute or not even file and answer, so why does the actual domain holder have to come forward?

    The complainant either has a case or he does not

  26. says

    So true, but as in so many cases, this was more, to me, about the Panelist’s gut feeling that the “real” registrant was hiding than anything else. He did not seem to mind that the Complainant had been advertising itself on its Web site as ULTIMATEGUITAR.COM for years even though they didn’t own that domain name! Talk about reverse domain name hijacking. As with what happens in so many of these cases, the Panelists decide what they are going to rule and draft the decision to support the result. Unfortunately, with this panelist, he was really bothered by the fact that the responsible party in his mind was not named or defending itself, so in my view he bent the rules. It’s an unprincipled decision because they failed to establish trademark rights, Domain Capital has a legitimate right to finance domain name purchases, and financing domain name transactions is not a bad faith practice.

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