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September 20, 2016 / Nate Harris

KGP Telecom can’t prove bad faith with KGP.COM

Summary of  KGP Telecommunications, Inc. v. KGP International Ltd.

(NAF Case No. FA1607001685573)

Filed: July 27, 2016; Decided: September 7, 2016 (Panelists: Douglas M. Isenberg; Reinhard Schanda; Hon. Karl V. Fink (Ret.))

Disputed domain name: <kgp.com>

screen-shot-2016-09-17-at-8-44-42-pm
kgp.com

The Parties

According to Complainant KPG Telecommunications, Inc., it was founded in 1973 and has become a “leading provider” of supply chain solutions and other services for the communications industry.  It has over 2,000 employees in 15 locations in the United States.  It owns a U.S. trademark registration for the mark KGP for distributorship-related services; the registration claims a first use date going back to 1985, and was registered on January 19, 2010.

Respondent registered the disputed domain the following day, January 20, 2010.  The “registrant name” identified Michael Gleissner, the well-known owner of many three-letter domain names. Since at least September 2013, the domain has resolved to a landing page [Screenshot above] promising a “new project is coming to you.” Complainant asserts that several hundred of Mr. Gleissner’s domains resolve to the same landing page.

In June 2016, Complainant contacted Respondent to inquire about purchasing the domain.  The Respondent indicated that it would not engage without a “serious offer in the 6 figures.”

On July 15, 2016, the WHOIS record for the domain was changed to list “KGP International Ltd.” as the registrant name; other details were unchanged.   The present Complaint was filed on July 27, 2016, and on August 8, 2016, before filing its response, Respondent filed a trademark application for the mark KGP.COM in connection with various entertainment-related services.  [Some extra-decision research: the same day, companies called KGM International Ltd. and KGN International Ltd., both having the same address as the Respondent, also applied to register the marks KGM.COM and KGN.COM, respectively, all for identical services.]

Complainant filed a reply to the Response that reiterated the points made in the Complaint.  It also pointed out that Respondent’s post-Complaint trademark filing was made for the purposes of the proceeding, and cited media reports that Mr. Gleissner has sold over 14,500 domain names.

The Respondent then filed a surreply taking issue with the “14,500” domains” story, noting the “dubious nature of the allegation,” and pointing out that it made no effort to sell the domain for almost 6 years before being approached by the Complainant.  The Respondent also argued that the Complaint is barred by laches.

Laches

The Panel declines to invoke laches, quoting WIPO Overview 2.0 for the observation that “[P]anels have recognized that the doctrine or defense of laches as such does not generally apply under the UDRP.”  [Note: The Panel doesn’t quote the Overview’s observation that  “a small number of panels have also begun to acknowledge the possible applicability, in appropriate and limited circumstances, of a defense of laches under the UDRP where the facts so warrant.”]

Supplemental Filings

The Panel notes the parties’ right to make their additional filings, but also notes that the Panel may disregard them.  It finds the additional submissions here to be “largely repetitive of their previous arguments”; accordingly, it “does not find them helpful, and . . . gives them little attention.”

Identical or Confusingly Similar – Yes

The Panel finds that Complainant’s trademark registration establish rights in and to its KGP trademark.  The second-level portion of the disputed domain <kgp.com> is therefore identical to Complainant’s mark.

Rights or Legitimate Interests – N/A

“[F]or the reasons set forth above and below” with respect to bad faith, the Panel finds it unnecessary to make a finding regarding Respondent’s rights or legitimate interests in the disputed domain.

Registered and Used in Bad Faith – No

The Respondent claimed to be unaware of Complainant or its trademark when registering the domain name, and Complainant adduced no direct evidence to the contrary.  The Panel notes that “panels in similar situations also involving three character domain names have found that a respondent did not register or use the domain name in bad faith.”

The Panel quotes the decision in General Nutrition Investment Company v. John Gates / The Web Group, WIPO Case. No. D2014-0982, in which a Panel declined to transfer another three-letter domain:

Complainant is of course not the only entity in the world entitled to use those three letters in connection with an offering of goods or services, on the contrary, it is more than likely that many entities around the world could be entitled to use a three-letter abbreviation such as TMG. It is entirely feasible for the Respondent to make a bona fide offering under the disputed domain name <tmg.com>. The Complainant has not given any evidence of to what extent the TMG mark is known, and has not presented any evidence to support his assertion that the Respondent knew of the mark when registering the Domain Name.

Noting that it, too, is not in a position to “second guess” the Respondent’s assertions,  the Panel find that the Respondent has shown “contemplated good faith use” of the domain name, and has not taken active steps to conceal its true identity nor provided false contact details.

Furthermore, because the Respondent is “passively holding” the domain, the Panel concludes that confusion is unlikely, particularly where it is unclear whether Complainant’s mark is well-known outside the United States.

Finally, while the Respondent may have indicated a willingness to sell the domain for a high price, “the purchase and sale of domain names for six or even seven figures is often a legitimate practice that does not in and of itself violate the UDRP.”

Decision
The complaint is denied.

Commentary

As the Panel in the General Nutrition Investment Company decision points out, there are probably a lot of companies out there using every possible three letter combination.  So the takeaway here is that, as the disputed domain name gets shorter, a Complainant may have a harder time showing that the Respondent knew of Complainant’s mark when registering and using the domain.

I agree it would be hard to show specific bad faith registration here, and maybe the decision should have been limited to that ground.  The Panel here suggests that there is no evidence of bad faith use of the domain, which I think is arguable.  First, the fact that the Respondent apparently owns several hundred domain names that all lead to the same landing page seems like an obvious attempt to defend a lot of domain names against UDRP complaints; it’s certainly hard to believe that this is evidence of “contemplated good faith use,” as the Panel finds.  Check out kgn.com and kgm.com— look familiar?

The idea that something fishy is going on here is supported by the recent “registrant name” change and the post-complaint trademark filing, particularly in the context of the same things happening in parallel for the <kgn.com> and <kgp.com> domains (and there may be others).  Those seem like classic examples of a respondent having “taken active steps to conceal its true identity,” though the Panel concludes the opposite. I’d be curious to know if there are actually registered entities in the U.K. called KGP International Ltd., KGM International Ltd., and KGN International Ltd., all having the same address.  Call me skeptical.

It’s also interesting that Panel considers the domain to be a “passive holding,” which the WIPO Overview 2.0 defines as, among other things, a domain not associated with an actively-used website.  What about the landing page?  Whether it is legitimately associated with a nascent business or is a smokescreen for UDRP purposes, it’s still an active website.

As I said, I think this complaint fails on bad faith registration alone, so I’m not sure why the Panel suggests, in the face of such funny business, that the Respondent appears to be using the domain in good faith.

Gerald Levine has written about why he thinks the Panel in this case declined to decide the “rights or legitimate interests” prong; definitely a great read.

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