Paragraph 4(c)(i) of the Policy contains three conjunctive elements: “before any notice to you of the dispute”, “[you made] demonstrable preparations to use” and the proposed use of the domain name was “in connection with a bona fide offering of goods or services.” The term “demonstrable preparations” requires proof of measurable preparations. Prior activity that meets the requirements of a bona fide business is evidence that the respondent registered the domain name for legitimate purposes and not to take advantage complainant’s trademark, while post-notice activity has the hallmarks of opportunism which negates rights or legitimate interests. The Respondent in Honeywell International Inc. v. Celeris Controls, FA1010001351938 (Nat. Arb. Forum November 15, 2010) contended that it was a legitimate enterprise in that Complainant both purchased services from it and supplied goods to it. The record, however, disclosed a different story, that rogue engineers employed by Complainant started a side business and were offering services competitive with it.
Honeywell International is not a case of Respondent lacking knowledge of the CELERIS trademark. Its core contention is that it is in a business relationship with the Complainant. The term “before the dispute” has been construed as meaning a prior history. In Honeywell International “Respondent endeavours to rebut the prima facie case essentially by advancing an argument based on the establishment of its business and its registration and use of the domain names for that business.” In support of “demonstrable preparations” the Respondent pointed to the registration of disputed domain names and use of one of them as part of an email address. “ With respect to the use of the domain name as part of an email address, as the Complainant points out [and with which the Panel agrees], it was noted in Alienware Corp. v. Dann, FA 1290045 (Nat. Arb. Forum December 28,2009) that ‘If the use of the disputed domain name by itself as an email address for the Respondent amounted to bona fide use, UDRP would become easily avoidable’.” The Panel continues: “The same consideration applies to the mere registration of the domain names.”
The third element is proof of a bona fide offering of goods or services. The respondent has the burden of production. In accessing this element there is a subtle interplay with paragraph 4(b) of the Policy, and although as a formal matter the Panel must conclude each requirement separately, it is likely to be influenced by the totality of the record. “More importantly, it must be remembered that the most important ingredient of Policy ¶ 4(c)(i) is that the conduct relied on by the Respondent to establish its right or legitimate interest must be bona fide.” The question is not whether a respondent’s business is legal in the goods or services offered, but whether the respondent’s offering is in good faith.
The Respondent in Honeywell International could not demonstrate the third element and this was underscored by the formation of the Respondent’s company. “The conduct relied on by the Respondent in the present case, where in reality its essence is two of the Complainant’s employees setting up a rival business and using the name that the employer has given to its own products and trademark and without permission from the employer, cannot be bona fide.” In such a way does bad faith negate good faith.