SundaeSwap Labs, Inc. v Cerci

WIPO Case No. D2022-1049

ARBITRATION

AND

MEDIATION CENTER

ADMINISTRATIVE PANEL DECISION

SundaeSwap Labs, Inc. v. Cerci

Case No. D2022-1049

1. The Parties

The Complainant is SundaeSwap Labs, Inc., United States of America (“United States”), represented by

Much Shelist PC, United States.

The Respondent is Cerci, United States.

2. The Domain Name and Registrar

The disputed domain name <sundaeswap.help> (the “Domain Name”) is registered with Hostinger, UAB (the

“Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on March 25, 2022.

On March 28, 2022, the Center transmitted by email to the Registrar a request for registrar verification in connection with the Domain Name. On March 29, 2022, the Registrar transmitted by email to the Center its verification response disclosing registrant and contact information for the Domain Name which differed from the named Respondent and contact information in the Complaint. The Center sent an email communication to the Complainant on March 29, 2022, providing the registrant and contact information disclosed by the Registrar and inviting the Complainant to submit an amendment to the Complaint. The Complainant filed an amendment to the Complaint on March 30, 2022.

The Center verified that the Complaint together with the amendment to the Complaint satisfied the formal

requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy” or “UDRP”), the Rules for
Uniform Domain Name Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for

Uniform Domain Name Dispute Resolution Policy (the “Supplemental Rules”).

In accordance with the Rules, paragraphs 2 and 4, the Center formally notified the Respondent of the
Complaint, and the proceedings commenced on March 31, 2022. In accordance with the Rules,

paragraph 5, the due date for Response was April 20, 2022. The Respondent did not submit any response.

Accordingly, the Center notified the Respondent’s default on April 21, 2022.

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The Center appointed W. Scott Blackmer as the sole panelist in this matter on April 29, 2022. The Panel
finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and
Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the

Rules, paragraph 7.

4. Factual Background

The Complainant is a business corporation established in May 2021 under the laws of the State of Wyoming,

United States and headquartered in Greenbrae, California, United States. The Complainant’s incorporators

announced a DEX (a decentralized exchange) for cryptocurrency trading and related transactions in April

2021, registering the domain name <sundaeswap.finance> on April 4, 2021, setting up a Twitter account and

tweeting on April 12, 2021, that “SundaeSwap is going live very soon!” A subreddit and Discord server were

both established in April and soon had several hundred followers. The Complainant also posted some 40

articles on cryptocurrency on the Medium social media site beginning in May 2021. Screenshots archived by

the Internet Archive’s Wayback Machine show that the website associated with the domain name

<sundaeswap.finance> (the “Complainant’s website”) displayed information about the Cardano blockchain

platform and the Complainant’s “roadmap” before January 20, 2022. According to the Complainant, this was

when the Complainant’s DEX trading application went live on the website and trading and related services

commenced.

Since April 2021, the Complainant’s website and social media have displayed the Complainant’s

unregistered SUNDAESWAP mark. This is a combination mark featuring the textual element

SUNDAESWAP and a design representing an ice cream sundae. The Complainant has three pending

applications before the United States Patent and Trademark Office (“USPTO”) for registration of

SUNDAESWAP as a standard character trademark, Numbers 90878057, 90878036, and 90878068, all filed on August 11, 2021, with amended statements alleging first use in commerce on January 21, 2022. The Complainant claims that this mark has been viewed by more than two million visitors to its website since it was launched in April 2021. According to the Complainant, tens of thousands of Medium readers have

“clapped” (approved) the Complainant’s posts, and the Complaint attaches evidence that it has 287,000

followers on Twitter, 108,000 members on its Discord server, 33,000 members on its subreddit, and a featuring the Complainant in The Motley Fool, Forbes, Newsweek, Business Insider, and Coindesk.

According to the WhoIs database, the Domain Name was created on January 30, 2022. The Registrar

reports that it is registered to the Respondent “Cerci”, listing no organization, in Amherst, Massachusetts,

United States. The contact email address listed in the registration includes the name Harvey Cerci, but there is no further information about such a person, and the Respondent did not reply to communications from the Complainant or from the Center.

The Complaint states that “[f]or a time” the Respondent used the Domain Name “to publish a website

providing information about the Complainant’s cryptocurrency services in a way that imitated the

Complainant, including by using the Complainant’s distinctive logo and copyrighted material. Copies of this

use are no longer available, because as of the filing of this Complaint, the Respondent is passively holding

the disputed domain name without publishing any active site there”.

The Complaint does not attach a screenshot of the Respondent’s former website, and the Panel notes that

the Internet Archive’s Wayback Machine does not include any screen captures associated with the Domain

Name. At the time of this Decision, the Domain Name does not resolve to an active website.

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5. Parties’ Contentions

A. Complainant

The Complainant asserts that its unregistered SUNDAESWAP mark has obtained “rapid recognition” on the

Internet and social media, acquiring distinctiveness as a common law service mark and therefore satisfying the first element of the Policy:

“The SUNDAESWAP brand became enormously popular in a relatively short period (hundreds of

thousands of enthusiasts in less than a year’s time). This is precisely the type of ‘relatively rapid

recognition’ that other UDRP panels have found to support trademark rights, even in the absence of

a trademark registration. For example, in Andrey Ternovskiy dba Chatroulette v. Envient

(‘Chatroulette’), WIPO Case No. D2018-2240, the panel found that although the complainant did not

have any trademark registrations at the time the disputed domain name in that case was registered,
it had rights in its CHATROULETTE mark. The panel noted how the Chatroulette platform had
quickly became popular - it had gained thousands of daily visitors within a year of its launch. In the

very same way, the facts of this case establish that the Complainant has trademark rights in

SUNDAESWAP, and it had those rights when the disputed domain name was registered.”

The Complainant argues that the Domain Name is identical to its arbitrary and distinctive SUNDAESWAP mark. The Complainant argues further that the Respondent has no relationship to the Complainant and no evident rights or legitimate interests in the Domain Name, as the WhoIs record does not disclose a corresponding name and there is no relevant use of the Domain Name to date.

The Complainant urges a finding of bad faith based on the registration and passive holding of a Domain

Name identical to an arbitrary and rapidly popular mark, indicating the Respondent’s familiarity with the mark,

and the lack of any conceivable legitimate purpose, citing the leading decision in Telstra Corp. Ltd. v.

Nuclear Marshmallows (“Telstra”), WIPO Case No. D2000-0003.

“Stated differently, SUNDAESWAP is so closely linked and associated with the Complainant that the

Respondent’s use of this mark, or any minor variation of it, strongly implies bad faith – where a domain name

is ‘so obviously connected with such a well-known name and products . . . its very use by someone with no

connection with the products suggests opportunistic bad faith” (quoting Parfums Christian Dior v. Javier

Garcia Quintas, WIPO Case No. D2000-0226).

The Complainant contends, moreover, that the Respondent’s former website demonstrated a knowledge of

the Complainant’s mark and an intent to exploit it, including a reproduction of the mark and copyrighted

material from the Complainant’s website.

B. Respondent

The Respondent did not reply to the Complainant’s contentions.

6. Discussion and Findings

Paragraph 4(a) of the Policy provides that in order to divest a respondent of a domain name, a complainant must demonstrate each of the following:

(i) the domain name is identical or confusingly similar to a trademark or service mark in which the

complainant has rights; and

(ii) the respondent has no rights or legitimate interests in respect of the domain name; and

(iii) the domain name has been registered and is being used in bad faith.

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Under paragraph 15(a) of the Rules, “[a] Panel shall decide a complaint on the basis of the statements and

documents submitted and in accordance with the Policy, these Rules and any rules and principles of law that

it deems applicable”.

A. Identical or Confusingly Similar

The first element of a UDRP complaint “functions primarily as a standing requirement” and entails

“a straightforward comparison between the complainant’s trademark and the domain name”. See WIPO

Overview of WIPO Panel Views on Selected UDRP Questions, Third Edition (“WIPO Overview 3.0”), section

1.7. Where standing is based on an unregistered mark, the complainant must adduce evidence that the

mark has acquired distinctiveness, or secondary meaning, “to become a distinctive identifier which

consumers associate with the complainant’s goods and/or services” (id. section 1.3)

Here, the Complainant announced a new business, with a distinctive and arbitrary name and combination mark, in April 2021. This was accompanied by an intense and sustained marketing campaign, largely on the

Internet and social media, leading up to the commercial launch of the Complainant’s cybercurrency platform

trading in January 2022, with over two million viewers. This is a relatively short period to establish acquired distinctiveness for an unregistered mark, and the record lacks sales and advertising figures. But the record documents hundreds of thousands of pre-launch views, as significant public recognition in national media,

resulting in rapid take-up of the new service. This is the kind of circumstance described in Chatroulette and

similar cases where the mark associated with a popular new online business is capable of building a large

reputation quickly. See WIPO Overview 3.0, section 1.3: “Particularly with regard to brands acquiring

relatively rapid recognition due to a significant Internet presence, panels have also been considering factors

such as the type and scope of market activities and the nature of the complainant’s goods and/or services.”

The Panel finds sufficient evidence in this proceeding to conclude that the Complainant’s unregistered

SUNDAESWAP word mark and the combined mark in which the textual element SUNDAESWAP is a dominant feature have both acquired distinctiveness. The Domain Name incorporates the SUNDAESWAP

mark in its entirety. As usual, the Top-Level Domain “.help” is disregarded as a standard registration

requirement. See id. section 1.11.2.

The Panel concludes, therefore, that the Complainant has established the first element of the Complaint.

B. Rights or Legitimate Interests

Paragraph 4(c) of the Policy gives non-exclusive examples of instances in which a respondent may establish rights or legitimate interests in a domain name, by demonstrating any of the following:

(i) before any notice to it of the dispute, the respondent’s use of, or demonstrable preparations to use, the

domain name or a name corresponding to the domain name in connection with a bona fide offering of goods

or services; or

(ii) that the respondent has been commonly known by the domain name, even if it has acquired no

trademark or service mark rights; or

(iii) the respondent is making a legitimate noncommercial or fair use of the domain name, without intent for
commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.

Because a respondent in a UDRP proceeding is in the best position to assert rights or legitimate interests in a domain name, it is well established that after a complainant makes a prima facie case, the burden of production on this element shifts to the respondent to come forward with relevant evidence of its rights or legitimate interests in the domain name. See WIPO Overview 3.0, section 2.1.

The Complainant has established trademark rights (rapidly well-known in its sector), a lack of permissive

use, the Respondent’s apparent lack of a corresponding name, a brief use of the Domain Name for an

imitative website, and the subsequent passive holding of the Domain Name. None of this suggests rights or

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legitimate interests in the Domain Name, and the Respondent has not come forward with arguments or
evidence of such. The Panel finds, therefore, that the Respondent has not met the burden of establishing
rights or legitimate interests and concludes that the Complainant prevails on the second element of the

Complaint.

C. Registered and Used in Bad Faith

The Policy, paragraph 4(b), furnishes a list of circumstances that “shall be evidence of the registration and

use of a domain name in bad faith”, including the following (in which “you” refers to the registrant of the

domain name):

“(iv) by using the domain name, you have intentionally attempted to attract, for commercial gain,

Internet users to your web site or other on-line location, by creating a likelihood of confusion with

the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your web site

or location or of a product or service on your web site or location.”

The list is expressly non-exclusive, and UDRP panels have long embraced the “passive holding” doctrine

that bad faith can be found in registering and then holding a domain name pending possible resale or use for
illicit purposes, even when there is no associated website, in circumstances where no legitimate use can be

foreseen. See WIPO Overview 3.0, section 3.3 and Telstra, supra.

The Complainant announced a new business, with a distinctive and arbitrary name and combination mark, in

April 2021. The Complainant’s website and social media sites quickly attracted hundreds of thousands of

enthusiastic viewers interested in cybercurrency trading. The Complainant launched a DEX platform on its website on January 20, 2022. It evidently began trading operations on January 21, 2022, the date claimed

as “first use in commerce” in the Complainant’s three pending applications to register SUNDAESWAP as a

word mark. The Respondent registered the Domain Name just nine days later, using a string identical to the

Complainant’s SUNDAESWAP mark. The timing and the choice of the Domain Name are not likely to be

merely coincidental. The Complainant had already filed its applications for a word mark, and there was a

great deal of publicity surrounding the launch of its DEX platform. Thus, even if there was not an enormous

sales volume associated with the Complainant’s common law mark by the time the Respondent registered

the Domain Name, the evidence points to the Respondent’s registration in anticipation of attacking a

successful mark. See WIPO Overview 3.0, section 3.8.2 on the effect of publicity on “anticipatory mark-

targeting” bad faith.

Moreover, the Respondent’s reported initial efforts to publish a website imitating the Complainant’s website,

replete with copied text and logo, strongly suggest an attempt to capitalize on the Complainant’s reputation for commercial gain. It is difficult to conceive of a defensible reason for the Respondent’s conduct, and the

Respondent has not come forward to offer one. The Panel finds on this record that the Respondent more likely than not registered and used the Domain Name in bad faith, both actively at first and then in the sense of passive holding.

The Panel concludes that the Complainant has established the third element of the Complaint, bad faith.

7. Decision

For the foregoing reasons, in accordance with paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the Domain Name, <sundaeswap.help>, be transferred to the Complainant.

/W. Scott Blackmer/

W. Scott Blackmer

Sole Panelist
Date: May 13, 2022