WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Truworths Limited, Truworths Intellectual Property Limited and WSM Operations v. AVA Associates
Case No. D2001-0818
1. The Parties
1.1 The Complainants are Truworths limited, Truworths Intellectual Property Limited and WSM Operations.
1.2 The first Complainant is a public company duly incorporated through the laws of the Republic of South Africa with its principal place of business situated at SRG House, I Mostert Street, Cape Town, Republic of South Africa.
1.3 The second Complainant is an Isle of Man company with its principal place of business situated at Derby House, Athol Street, Douglas, Isle of Man.
1.4 The third Complainant is a Nevis Leeward Island company with its principal place of business situated at New Street, St. Peter Port, Guernsey Channel Island.
1.5 The three Complainants have their address for service as P.O. Box 600, Cape Town 8000, Republic of South Africa.
1.6 The Complainants are represented by Marilyn Krige of Adams & Adams Attorneys, P.O. Box 1104, Pretoria 0001, Republic of South Africa.
1.7 The Respondent is Ava Associates and the only information known to the Complainants regarding the Respondentís contact is an address Ė 219 W.81 Street, Suite 3D, New York, NY 10024, United States of America.
2. The Domain Name and Registrar
2.1 The domain name that is the subject of this Complainant is <truworths.com>. The Registrar of this domain name is Network Solutions Inc. (NSI).
3. Procedural History
3.1 A Complaint was submitted electronically to the World Intellectual Property Organization Arbitration and Mediation Center (the WIPO Center) on June 21, 2001. An acknowledgement of receipt by the WIPO Center was sent on June 22, 2001. A Request for Registrar Verification was sent to NSI on June 25, 2001, by the WIPO Center. The WIPO Center received a hard copy of the Complaint on June 26, 2001. The verification was received from NSI on June 26, 2001, which indicated the Domain Name is registered with them and the Respondent is the proper party.
3.2 The Respondent was notified about the Complaint and the Commencement of Administrative Proceedings on June 27, 2001.
3.3 On July 10, 2001, the courier containing the Notification of the Complaint from the Respondentís postal address was returned to the WIPO Center.
3.4 On July 19, 2001, a notification was made by the WIPO Center of the Respondent's default.
3.5 On July 31, 2001, the WIPO Center issued a Notification of Appointment of a Single Administrative Panel presided over by Mr. Justin Semuyaba.
4. Factual Background
4.1 The Complaint asserted and provided evidence in support of and the Administrative Panel finds established the following facts.
Complainantsí Activities, Trading name and Trademarks
4.2 The Complainants are the proprietors of 25 trademark registrations and 21 applications for TRUWORTHS in 24 countries, including South Africa, Argentina, Saudi Arabia, Brazil and the United Kingdom. The first of these marks was registered in 1945, in South Africa. A list of these registrations and applications were presented as Annex "C". True and correct certified copies of the South African trademarks were presented as Annexes "C1" to "C7".
4.3 The First Complainant is the proprietor of three trademarksí registrations for TRUWORTHS MAN and two trademark applications for TRUWORTHS ELEMENTS logo in South Africa. The Third Complainant is the applicant for TRUWORTHS L.T.D. logo in the United Arab Emirates. The particulars of these trademark registrations and applications are set out in a schedule presented as Annex "D".
4.4 In addition to its trademark registrations and applications, Complainants claim common law rights to the trademark TRUWORTHS. Complainants have used the TRUWORTHS trademark for over 80 years in South Africa and throughout the world. Truworths was founded in 1917, and operated in wholesale merchandise trading in exclusive ladies fashions imported from Europe and America. The first store was opened in Cape Town, South Africa and traded as Alliance Trading Company. In 1935, Alliance Trading Company changed its name to Truworths Fashion House and opened two additional stores. By 1935, Complainants sourced their own fabrics and used local manufacturers to produce fashion goods. Truworths then opened its own factories in 1944. Truworths went public in 1946, and was quoted on the Johannesburg Stock Exchange. By 1950, it had 40 stores in the chain and one additional factory opening.
4.5 Continuing with its expansion trend, the First Complainant now has 233 stores and is trading under the name Truworths in the Republic of South Africa. Furthermore, Complainants have expanded their international business by opening franchise stores in various countries. In all of the following countries Complainants operate stores trading under the name Truworths: United Arab Emiratesí Dubai, Bahrain, Botswana, Kenya, Mozambique, Swaziland, Zambia, Namibia and Lesotho.
4.6 Since the founding of Truworths, Complainantsí staff has traveled outside South Africa to the United States, Europe, United Kingdom and the Near and Far East to attend fashion shows, conventions, and seminars in the fashion industry. During the course of these trips, the TRUWORTHS trademark appears on business cards, letterhead and other documentation.
4.7 Truworths Limited is a wholly owned subsidiary of Truworths International Limited (S.A.). 54% of the shares in Truworths International Limited (S.A.) is owned by Wooltru Limited.
4.8 Truworths Intellectual Property Limited is wholly owned by Truworths Worldwide Limited (Guernsey) which is wholly owned by Truworths International Limited (S.A.). Wooltru Limited owns 54% in Truworths International Limited (S.A.)
4.9 Truworths International Limited (Guernsey) holds a share in WSM Operations Holding Company Limited. Truworths International Limited (Guernsey) is wholly owned by Truworths Worldwide Limited (Guernsey), a company wholly owned by Truworths International Limited (S.A.) and in which Wooltru Limited holds a 54% share. WSM Operations Company Limited is furthermore a subsidiary of Wooltru Limited, the ultimate Holding Company of the Group.
4.10 In 1996, the Respondent registered domain names based on the trademark and name identifiers of 100 of the top companies listed on the Johannesburg Stock Exchange. A listing of these trademarks and name identifiers is attached hereto as Annex "E". Amongst the domain names registered was that of the Complainantsí TRUWORTHS mark, which was registered on May 17, 1996, through Network Solutions Inc. (NSI) as <truworths.com>.
4.11 In June 1996, as Complainants continued to expand their international business into electronic commerce, Complainants became aware of the domain name in dispute and through counsel, sought to take action against the Respondent.
4.12 Originally, working under NSI Domain Name Dispute policy (rev.1, effective November 23, 1995), Complainants sent a letter of demand dated August 21, 1996, to the Registrar at NSI requesting the cancellation of the domain name registration. NSI responded in its letter of October 10, 1996, requesting certified copies of the trademark registrations and a copy of prior notice to the domain name registrant of the dispute as required by the Policy. Complainant provided the requested information in a letter of November 7, 1996, thereby completing Complainantsí requirements under the Domain Name Dispute policy. Copies of this correspondence were presented as Annexes "F", "G" and "H" respectively.
4.13 On January 7, 1997, NSI sent a letter to Respondent regarding the Complaint. By this time, a second revision of the NSI Domain Name Dispute Policy was in effect. In its letter, NSI outlined three options by which the Respondent could reply and stated the 30-day deadline for Response as allowed by the NSI Policy. The Respondent failed to reply. On February 21, 1997, NSI sent a letter to Respondent stating that due to its non-Response the domain name was placed on "hold" status until the dispute was resolved between the two parties. The UDRP replaced NSI's Dispute Policy and the domain name remains on "Hold" status. Copies of the letters from NSI were presented are as Annexes "I" and "J" respectively.
4.14 On March 20, 1997, Complainants sent a letter of demand to Respondent requesting that the domain name be relinquished to its group due to the prior right based on Complainantsí trademark rights in TRUWORTHS. A copy of this letter was presented as Annex "K" to this Complaint.
4.15 Respondent replied to Complainants' letter on April 3, 1997, refusing to acknowledge the rights of the Complainants and challenging Complainants to institute formal legal action. Furthermore, Respondent threatened to delay a resolution of this dispute by stating, "each letter we generate to answer off-base letters like yours involves our time. We will tack $500.00 per letter to our expenses on this account. We will notarise this letter today and it will be an exhibit for your clients to see that your letters are costing them money in more ways than one". The Respondent indicated, "if your client has an interest in one of our names, then make an offer. If not, then please cease with these pointless letters". (Emphasis added). A true and correct copy of the Respondentís letter was presented as Annex "L".
5. Relevant Provisions and the Uniform Policy
5.1 Paragraph 4(a) of the Uniform Policy sets out the three elements which must be present for a proceeding to be brought against the Respondent, and which the Complainant must prove to obtain a remedy. It provides as follows:
a. Applicable Disputes. You [the Respondent] are required to submit to a mandatory administrative proceeding in the event that a third party (a "Complainant") asserts to the applicable Provider, in compliance with the Rules of Procedure, that:
(i) your domain name is identical or confusingly similar to a trademark or service mark in which the Complainant has rights; and
(ii) you have no rights or legitimate interests in respect of the domain name; and
(iii) your domain name has been registered and is being used in bad faith.
In the administrative proceeding, the Complainant must prove that each of these three elements are present.
5.2 Paragraph 4(b) of the Uniform Policy identifies, in particular but without limitation, four circumstances which, if found by the Administrative Panel to be present, shall be evidence of the registration and use of a domain name in bad faith. The precise wording of this paragraph is as follows:
b. Evidence of Registration and Use in Bad Faith. For the purposes of Paragraph 4(a)(iii), the following circumstances, in particular but without limitation, if found by the Panel to be present, shall be evidence of the registration and use of a domain name in bad faith:
(i) circumstances indicating that you have registered or you have acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the Complainant who is the owner of the trademark or service mark or to a competitor of that Complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name; or
(ii) you have registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that you have engaged in a pattern of such conduct; or
(iii) you have registered the domain name primarily for the purpose of disrupting the business of a competitor; or
(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.
5.3 It is worthy of note that each of the four circumstances in paragraph 4(b), if found, is an instance of "registration and use of a domain name in bad faith", notwithstanding the fact that circumstances (i), (ii), and (iii) are concerned with the primary intention or purpose of the registration of the domain name, whilst circumstance (iv) is concerned with an act of use of the domain name.
5.4 Paragraph 4(c) of the Uniform Policy sets out circumstances, in particular but without limitation, which, if found by the Administrative Panel to be proved, demonstrate the Respondentís rights or legitimate interests to the domain name for the purposes of paragraph 4(a)(ii). The provisions of this paragraph are as follows:
c. How to Demonstrate Your Rights to and Legitimate Interests in the Domain Name in Responding to a Complaint. When you receive a Complaint, you should refer to Paragraph 5 of the Rules of Procedure in determining how your Response should be prepared. Any of the following circumstances, in particular but without limitation, if found by the Panel to be proved based on its evaluation of all evidence presented, shall demonstrate your rights or legitimate interests to the domain name for purposes of Paragraph 4(a)(ii):
(i) before any notice to you of the dispute, your 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) you (as an individual, business, or other organization) have been commonly known by the domain name, even if you have acquired no trademark or service mark rights; or
(iii) you are 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.
6. Parties' Contentions
6.1 The Complainant contends that each of the three elements specified in paragraph 4(a) of the Uniform Policy are applicable to this dispute. In relation to element (1) the Complainant contends that the relevant part of the domain name in issue is <truworths.com> and that is clearly identical or confusingly similar to the Complainantsí registered trademarks TRUWORTHS. The Complainant contends that the domain name <truworths.com> incorporates the whole of the Complainantsí intellectual property rights in the form of its registered trademarks, as well as its common law trademarks in those jurisdictions where registration of its rights has not yet been secured, but where the Complainants have been trading actively as Truworths.
6.2 In relation to element (ii) the Complainant contends that the Respondent has no rights or legitimate interest in <truworths.com>. The Complainant further contends that the domain name has not been used since its registration and the domain name has remained on "hold" since February 1997, pursuant to NSIís Domain Name Dispute Policy. That the domain name does not resolve to a website operated by the Respondent. The domain name has remained on "hold" and the Respondent has shown no interest in resolving this dispute over the past three years. And because the domain name has not been used, the Respondent has never been commonly known by that name and it has never acquired or applied for any trademark or service mark rights in respect of TRUWORTHS, nor has it generated any goodwill or reputation in respect to the name. It was further contended by Complainants that the very use of the name with the ".com" designation indicates that a domain name is of international commercial origination. Complainants site the case of Nandos International Limited v. M. Fareed Farukhi WIPO Case No. D2000-0225. The Complaint alleges the Respondent has made no such use or demonstrable preparation to use the domain name in dispute or any name corresponding to the international use with which TRUWORTHS is associated. The Complainant further alleges that the Respondent can provide no evidence whatsoever of any actual or contemplated good faith use of the domain name, and it is not possible to conceive of any plausible or contemplated active use of the domain name by the Respondent that would be illegitimate.
6.3 In relation to element (iii) the Complainant contends that evidence of bad faith registration and use is established by the following circumstances.
6.3.1 In early 1996, Respondent registered the shortened form of Johannesburg Stock Exchange designations and trademarks of over 100 companies listed on the Johannesburg Stock Exchange. (See annex "E"). Respondentís only intention in registering the domain name <truworths.com> and the other domain names was for the purpose of selling, renting or otherwise transferring the domain name registration to the legitimate trademark holder or to a competitor of the trademark holder for valuable consideration in excess of its out of pocket costs.
6.3.2 In the case of these other registrationsí letters of demand were addressed to the right holders and trademark holders offering to transfer the domain name for a consideration. It is submitted that the Respondent only registered the list of domain names (the JSE designation of the top companies on the Stock Exchange) at the time to obtain a financial benefit from the true right holders on transfer of the relevant domain name.
6.3.3 The domain name <truworths.com> was registered in order to prevent the Complainants from reflecting its trademark as its international domain name. Complainants refer to Annex "E", a list of domain names previously registered by the Respondent, demonstrating that the Respondent has previously engaged in a similar pattern of conduct.
6.3.4 Passive holding (circumstances of inaction) of a domain name by a Respondent can amount to the Respondent acting in bad faith. See Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No. D2000-0003. The evidence of this present case demonstrates that Respondentís passive holding of <truworths.com> amounts to the Respondent acting in bad faith.
6.3.5 Further evidence of Respondent's bad faith was the threat to force a resolution of this matter by stating that it will charge the Complainants $500.00 per correspondence in this matter.
6.3.6 Respondent registered these various trademarks as domain names in early 1996, when a highly publicized opinion of the South African Provincial Court failed to recognize the well-known aspect of the McDonald's trademark in McDonaldís Corp v. Joburgers Drive-inn Restaurant (Pty) Limited and Dax Prop CC (Case no. 1170095) (T) October 5, 1995, (unreported). In its decision, the Provincial Court refused to recognize the well-known status of McDonald's in the name of McDonaldís Corporation and awarded rights in the famous trademark to two local South African businesses. Complainants allege that Respondent saw such an opinion as a business opportunity and began registering famous trademarks from South African companies as domain names. When the Provincial Court opinion was reversed by the South African Appellate Division in late 1997, Respondent abandoned its efforts in regard to <truworths.com> which had been placed on "hold" status.
6.3.7 The Respondent registered the domain name <truworths.com> strategically for the purpose of disrupting the Internet business of the Complainants, thereby attempting to force the Complainants to negotiate a settlement unjustly favourable to the Respondent. Furthermore, Respondentís obvious knowledge that its domain name would disrupt Complainantsí business is convincing evidence that Respondent registered and is using the disputed domain name in bad faith in contravention of the Policy 4(b)(iii).
6.3.8 Respondent had knowledge of Complainantsí trademark rights. Respondent did not arbitrarily, or in good faith, register TRUWORTHS as a domain name. Rather, Respondent targeted valuable trademarks from a list of public companies in South Africa and registered them as its own.
6.3.9 Respondent had actual knowledge of the commercial value vested in TRUWORTHS and Respondent used that knowledge to take unfair advantage of Complainants by creating a likelihood of confusion with the Complainantsí mark as to a source, sponsorship, affiliation or endorsement of the website.
6.1 The Respondent did not file a Response to the Complaint.
7. Findings and Conclusions
7.1 The domain name in issue is <truworths.com>. The relevant part of this domain name is <truworths> The Administrative Panel finds that this part of the domain name is identical to the numerous trademark registrations of the word mark TRUWORTHS. The three Complainants are proprietors of 25 trademark registrations and 21 applications of TRUWORTHS in 24 countries evidenced in Annex C, (C1 to c7). The first Complainant is the proprietor of three trademark registrations for TRUWORTHS MAN and two trademark applications for TRUWORTHS, ELEMENTS logo in South Africa. The first Complainant is the applicant for TRUWORTHS LTD Logo in the United Arab Emirates. All these trademarks were set out in the schedule attached to the Complaint as Annex D. The Complainants have used the trademark TRUWORTHS for over 80 years in South Africa and throughout the world where fashion offices are operated under the name TRUWORTHS. The word is used extensively on business cards and on letterhead of the Complainant. See Administrative Panel Decision Telstra Corporation Limited v. Nuclear Marshmallows WIPO Case No. D2000-0003.
Respondentís Rights or Legitimate Interest in the Domain Name
7.2 The Respondent has not provided any evidence of circumstances of the type specified in paragraph 4(c) of the Uniform Policy or any other circumstances giving right to or legitimate interest in the domain name. Nor was there any evidence adduced that the Respondent has ever been known by the name Truworths. There has not been adduced any evidence that the Respondent has a license from the Complainants to use the domain name. The facts put forward plainly demonstrate that the Respondentís interest in the Domain Names was not in connection with a bona fide offering of goods or services, but rather to take advantage of the reputation of the Complainantsí Marks. The Administrative panel finds that the Respondent has no rights or legitimate interests in the domain name <truworths.com>.
Domain Name Registered and Used in Bad Faith
7.3 The Complainants provided evidence of facts, which are clearly relevant to the issue of whether the Respondent registered and is using the domain name in bad faith. The Respondentís challenge to Complainants regarding commencing legal action and the promise that they will tack on US$ 500.00 per correspondence as expenses for any subsequent settlement, combined with its request to Complainants to make an offer rises to bad faith. This is clear evidence that the Respondent registered the domain name in bad faith and with the primary purpose of selling or otherwise transferring it to the Complainants, the owner of trademark TRUWORTHS, for valuable consideration in excess of documented out of pocket costs directly related to the domain name. Refer to paragraph 4(b)(i) of the Uniform Policy.
7.4 The Complainantís trademark has a strong reputation and is widely known as evidenced by its substantial use in South Africa and other countries. The Respondent has not adduced any evidence whatsoever of any actual or contemplated use by it of the domain name. In the absence of such evidence to the contrary, knowledge of the Complainants mark can be imputed, especially when combined with the Respondent's active registration of domain names for over 100 of the most prominent South African companies. This acts to demonstrate Respondent's bad faith registration of the Domain Names.
7.5 Had there been no communications between the parties, the Respondent's bad faith could also have been found based on passive holding, see Telstra supra combined with the multiple registration of domain names based on third partiesí marks. The Panel in the Telstra case came to the conclusion, with which I respectfully agree, that "being used in bad faith" is not limited to positive action of using and invention is within the concept. That is to say it is possible in certain circumstances for inactivity by the Respondent to amount to a domain name being used in bad faith. Paragraph 4 (b)(i), (ii) and (iii) can be found in a signature involving a passive holding of a domain name registration with intent to disrupt the business of the competitor. With regard to the present case the Respondent has had the domain name for over three years. No action has been taken to remove the "hold" placed on the site, nor has any attempt been made to launch a web-site. This amounts to passive holding on part of the Respondent and bad faith use under Telstra.
In light of the particular circumstances the Administrative Panel concludes that the Respondentís passive holding of the domain name in this particular case satisfies the requirement of paragraph 4(a)(iii) that the domain name "is being used in bad faith" by the Respondent. The Administrative Panel finds that Respondent has registered the domain name <truworths.com> in order to prevent the Complainants from reflecting its trademark as its international domain name. Nandos International Limited v. M. Fareed Farukhi Ė WIPO Case No. D2000-0225 and Telstra Corporation Limited v. Nuclear Marshmallows WIPO Case No. D2000-0003 refers.
8.1 The Administrative Panel decides that the Complainant has proven each of the three elements in paragraph 4(a) of the Uniform Policy. Accordingly, the domain name <truworths.com> shall be transferred to the Complainant.
Dated: August 14, 2001