January 29, 2014 was a dark day for domain owners which saw the public company NCI Building Systems, Inc. file a UDRP against the generic 15 year old domain name STEELBUILDINGS.COM.
The company which boasts a market cap of over $1.4 billion dollars attempted to argue that the domain name (which was registered many years before the group acquired Heritage Building Systems d.b.a Steelbuilding.com) was registered in bad faith by its proprietor Bradshaw Consulting Inc.
The background to the circumstances surrounding this case can be read at http://domainnamewire.com/2014/02/20/steelbuildings-com-an-example-of-whats-wrong-with-udrp/ , which revealed that the true owner of the domain name was a small business owner (John K Morgan) who registered the domain name for the purpose of promoting his company Atlantic Building Systems.
A copy of NCIs’s complaint is available here (pdf), the gist of which suggested that they had superior rights to the descriptive term Steel Building(s) by means of their registered trademark.
NCI provided three trademark printouts from the United States Patent and Trademark office with filing dates of July 28, 2005 (Reg No. 3612444), July 3, 2001 (Reg No. 3474327) and June 3, 2001 (Reg No. 3947466) respectively, none of which it should be noted predated the registration of the domain name.
Although it is true under paragraph 4 (a) (i) of the policy does not make any specific reference to the date in which the Complainant acquired rights in its mark but simply requires that they have rights at the time of filing its Complaint, we did not leave this section uncontested; for the purpose of presenting a full and complete response, it is key that Respondents contest the existence of such a trademark wherever possible. In doing so we were able to identify that all marks proffered by NCI were registered under Section 2 (F) of the Lanham Act which was an important finding as it suggested that their trademark applications were initially refused pursuant to a USPTO office action on grounds that the trademarks were merely descriptive of the goods and services which they referenced. Consequentially we argued that the trademark certificates presented would not in itself be sufficient in satisfying their burden under the first element; namely, demonstrating rights in a trademark.
The UDRP provides no presumption of distinctiveness for generic terms; Complainant’s need to be aware that although they may have been granted a trademark by the trademark office, when it comes to litigation, they may still need to provide additional evidence of use of said trademark in commerce. NCI’s website handout dated January 27, 2014 would not be sufficient in this case…No, what the UDRP requires is evidence of length and amount of sales under the trademark, the nature and extent of advertising, consumer surveys and media recognition etc.
In addition to this NCI had a very difficult time asserting that the term “Steel Buildings” was uniquely adopted in relation to its business, especially in light of the evidence we presented which suggested that the term was descriptive in nature and the term was widely used within the industry. Much evidence in the form of Annexes was presented to the panel on this point but the strongest evidence we found came from NCI themselves. You see NCI had used the term descriptively on their own site when making reference to the services that they offered, a fatal mistake on their part.
Clearly the descriptive nature of the term “Steel Building” is what made it so desirable to NCI in the first place, with such benefits that come with the possession of a descriptive trade name comes disadvantages, that is, its lack of distinctiveness and its applicability to any business of a like kind.
We argued that if NCI was to have bestowed upon it the protection that is usually afforded to fanciful, arbitrary or suggestive marks this would open up the floodgates for frivolous filings by trademark owners; there would be no limits as to what domain names NCI could recover, and subsequently every entity that incorporated the “STEEL BUILDING” mark in a domain name would become a potential victim.
On the matter of rights and legitimate interests, NCI’s complaint was one of supposition and speculation and it is quite concerning that their legal counsel would seek to file a UDRP complaint when it is clear that they were uncertain about fundamental facts such as the underlining Registrant and his background.
Although they referred to Bradshaw Consulting, Inc as the Respondent, they were fully aware that the website promoted the company Atlantic Building Systems, which is very much in existence.
Through substantial evidence accumulated, we were able to provide proof that the true owner of steelbuilding.com was in fact Mr John Morgan the owner of Atlantic Building Systems which is actively engaged in the steel building industry.
Although in NCI’s “request for withdrawal” they insist that this was information not within their knowledge at the time of filing, we do not believe that they should be excused from their error. NCI knew that this was a possibility as would any reasonable person who on first impression acknowledged a web consultancy provider operating an industrial themed website and this was clear from their complaint.
Rather than analysing the factual circumstances surrounding the registration of the domain name, NCI’s complaint was essentially made up of what they did not know and could be summarized as follows:
– NCI has no information to present to the panel that would indicate Respondent has [or has not] engaged in use of “steelbuildings.com” in connection with a bona fide offering of services.
– NCI does not believe that the underlying owner, Atlantic Building Systems exists…because it has no reason to believe otherwise.
– And lastly, NCI is not familiar with Respondent’s business activities… and therefore believes its own company would utilize the domain name better
It was important to mention to the Panel that In the 15 years that our client Mr Morgan had held the domain name, he had never attempted to sell, transfer or even communicate with NCI in regards to the domain name or anyone else for that matter. Since the domain name was first registered, the domain name had always been used for the purpose intended and continues to be used for that purpose; namely, as an indicator of his company’s goods and services.
Irrespective of everything else that NCI failed to do, we could not ignore that they had not provided one string of evidence to demonstrate that Mr Morgan targeted and acted in bad faith.
We further argued that this case constituted a frivolous filing and a malicious attempt to defame Mr Morgan as a cyber squatter and bully him out of a domain name that he has legitimately held for a significant period of time. We encouraged the Panel to reflect on incidents where Respondents have relinquished legitimately owned domain names under the pressure imposed by Complainants who seek to bully them out of their domain names or who fail to respond to complaints due to being overwhelmed or discouraged by these administrative proceedings or the costs of hiring legal counsel.
It should also be noted that this was not a typical case against an unsuspecting individual who registered a domain name, but an attack on a small local business. NCI brought this case forward with no regard for the consequences of its actions or the potential damage it would cause to Mr Morgan’s reputation and in turn livelihood.
It is a shame that this case did not go all the way, upon receiving the complaint, it did not take long until NCI retracted their statements and requested the formal withdrawal of their complaint.
Although we will never know exactly which way the three member Panel would have decided, sometimes victories are won off the battle field, as in this case.
This case really was a clash between David and Goliath, and we all know how that story ended…