WIPO

 

WIPO Arbitration and Mediation Center

 

ADMINISTRATIVE PANEL DECISION

United Consumers Club, Inc. v. Texas International Property Associates

Case No. D2007-0987

 

1. The Parties

Complainant is United Consumers Club, Inc., Merrillville, Indiana, United States of America, represented by DLA Piper US LLP, United States of America.

Respondent is Texas International Property Associates, Dallas, Texas, United States of America, represented by Shrull Altman LLP, United States of America.

 

2. The Domain Name and Registrar

The disputed domain name <directbuymembers.com> is registered with Compana LLC.

 

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on July 6, 2007. On July 9, 2007, the Center transmitted by email to Compana LLC a request for registrar verification in connection with the domain name at issue. On July 18, 2007, Compana LLC transmitted by email to the Center its verification response confirming that Respondent is listed as the registrant and providing the contact details. The Center verified that the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy”), 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(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on July 23, 2007. In accordance with the Rules, paragraph 5(a), the due date for Response was August 12, 2007. The Response was filed with the Center on August 12, 2007.

The Center appointed Bradley A. Slutsky as the sole panelist in this matter on August 29, 2007. 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

Complainant provides members-only buying club services under the name DIRECTBUY, and has a trademark for DIRECTBUY registered with the United States Patent and Trademark Office (“USPTO”). Complainant’s trademark is registered pursuant to 15 U.S.C. 1052(f). Complainant’s Certificate of Registration recites a date of first use in commerce of April 2002. Complainant submitted the sworn Declaration of Scott M. Powell to the USPTO in order to overcome the examiner’s refusal to register the mark on the grounds that it was merely descriptive. After receiving the Powell Declaration the examiner approved the mark for publication on February 23, 2004. Complainant’s mark was subsequently opposed, but the opposition was terminated in December 2005 and the mark became registered on the Principal Register on January 24, 2006.

Respondent registered the disputed domain name <directbuymembers.com> on January 17, 2005 - after Complainant’s trademark had been approved by the USPTO but before Complainant’s trademark became registered on the Principal Register. Respondent’s “www.directbuymembers.com” website contains paid links which generate revenue for Respondent when users click the links on the page. These links send users to websites that, in some cases, compete with Complainant.

 

5. Parties’ Contentions

A. Complainant

Complainant asserts that is has been using the DIRECTBUY mark since 2002 and that it has a federal registration for the mark DIRECTBUY. Complainant asserts that through extensive use and promotion, its mark has become distinctive and was distinctive prior to Respondent’s registration of the disputed domain name. Complainant asserts that the disputed domain name differs from Complainant’s domain name only by the addition of the term “members” at the end as well as the “.com”. Complainant asserts that Respondent has no rights or legitimate interests in the disputed domain name as Respondent is using the disputed domain name to lead users to third party websites. Complainant asserts that this use is in bad faith as it generates revenue for Respondent based on confusion with Complainant’s trademark. Complainant also asserts that Respondent has engaged in a pattern of registering well known trademarks of others in order to collect click-through fees.

B. Respondent

Respondent asserts that when it registered the disputed domain name Complainant’s mark had twice been rejected by the USPTO. Respondent asserts that because Complainant’s mark is registered pursuant to 15 U.S.C. 1052(f), the presumption of the mark’s validity only begins on the date of registration and thus Complainant had no enforceable rights in the trademark prior to January 24, 2006. Respondent asserts that the disputed domain name is not identical or confusing similarly to Complainant’s mark because the disputed domain name adds the word “members”, and there are several other trademarks registered that combine the words “direct” and “buy” with other words. Respondent asserts that <directbuymembers.com> is a generic term, and that Respondent has a legitimate interest in offering targeted advertising searches in cooperation with Google and Yahoo! and receiving advertising revenue therefrom. Respondent asserts that the content on his website is determined by what terms third parties bid on with Google and Yahoo! and that Respondent thus has no control over the content. Respondent asserts that it is not acting in bad faith, but rather is in the business of providing locator services and is not attempting to pass itself off as Complainant or any related company. Respondent further asserts that its use of the disputed domain name is a fair use.

C. Complainant’s Reply

Complainant filed a Reply to Respondent’s Response and in the Reply requested that the Panel accept the additional filing. The Reply asserts that it clarifies and addresses a number of incorrect or misleading statements in Respondent’s Response. Complainant asserts that it had used the DIRECTBUY mark for over two years at the time Respondent registered the disputed domain name, and that it had trademark rights arising out of such use. Complainant’s Reply also attached the Declaration of Scott M. Powell (the same Declaration submitted to the USPTO in 2004) which details some of the advertising Complainant conducted, including the first infomercials that Complainant ran - which ran in Respondent’s home town of Dallas, Texas in April of 2002. According to the Declaration, by 2004 Complainant’s infomercials were airing in markets with in excess of 56.3 million television households. Complainant also points out that Respondent has made similar arguments in many other UDRP disputes, and has been unsuccessful doing so at least sixteen (16) times. Complainant also asserts that Respondent is using the term <directbuymembers.com> as a designation of source because Respondent’s website contains the notice “ 2007 directbuymembers.com. All Rights Reserved. Contact Us”. Complainant also asserts that the picture that Respondent has placed on its website resembles Complainant’s own advertisements.

D. Respondent’s Sur-Reply

Respondent objects to Complainant’s Reply but asks that the Panel accept Respondent’s Sur-Reply if it accepts Complainant’s Reply. In its Sur-Reply Respondent asserts that it registered the disputed domain name before Complainant had rights in its trademark. Respondent asserts that Complainant’s Declaration does not prove that Complainant’s advertising was successful in associating the DIRECTBUY mark with Complainant. Respondent further asserts that in ten (10) of the cases cited by Complainant, Respondent consented to the transfer of the domain name at issue, and thus there was no finding of abusive domain name registration. Respondent asserts that it is the registrant of “thousands of domain names, which consist of electronically registered generic words”, and that in this context the number of domain name cases it has lost should be viewed as small. Respondent also asserts that if the notice at the bottom of its web page is a source designation, then this matter is about two competing claims to the same mark and is not appropriate for resolution in a UDRP proceeding. Respondent reiterates that its use is not in bad faith but rather consists of a “legitimate and bona fide business use in registering generic and descriptive terms for targeted advertising services”.

 

6. Discussion and Findings

As an initial matter, the Panel accepts both parties’ supplemental filings. Paragraph Rule 12 of the Rules states that “[i]n addition to the complaint and the response, the Panel may request, in its sole discretion, further statements or documents from either of the Parties.” Although Complainant’s Reply and Respondent’s Sur-Reply were submitted before any request by the Panel for such documents, the Panel finds both documents helpful and is not inclined to interpret paragraph 12 of the Rules to require the rejection of helpful papers merely because they precede a request for them. The Panel believes it is empowered by paragraph 10 of the Rules to accept such submissions and does accept them.

Turning to the merits, paragraph 15 of the Rules directs that panelists in domain name disputes “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 [they] deem[] applicable.”

Under paragraph 4(a) of the Policy, Complainant must prove the following:

(i) Respondent’s domain name is identical or confusingly similar to a trademark or service mark in which Complainant has rights; and

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

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

A. Identical or Confusingly Similar

In demonstrating that the domain name at issue is “identical or confusingly similar to a trademark or service mark in which the complainant has rights”, “[t]he Policy does not require that the Complainant should have rights in a registered trademark or service mark. It is sufficient that the Complainant should satisfy the Administrative Panel that she has rights in common law trademark or sufficient rights to ground an action for passing off.” Julia Fiona Roberts v. Russell Boyd, WIPO Case No. D2000-0210 (May 29, 2000). Here, Complainant has a registered trademark for DIRECTBUY (although the 2(f) trademark registration post-dates the domain registration) and, as set forth in the extensive and uncontradicted Declaration of Scott M. Powell, Complainant has established common law trademark rights in the term DIRECTBUY which, even though more relevant under the second and third elements of the Policy, the Panel notes were established by the date Respondent registered its domain name. Thus, the requirement of “a trademark or service mark in which the complainant has rights” is satisfied.

As to the requirement of confusing similarity, Respondent’s domain name is identical to Complainant’s trademark but for the addition of the word members at the end and the addition of the .com top level domain. As Complainant notes, the word members implies an association with DIRECTBUY. Thus, in this case the addition of this word adds to the confusing similarity. In addition, “[n]umerous [UDRP] Panel decisions have established that the addition of words or letters to a mark used in a domain name does not alter the fact that the domain name is confusingly similar to the mark, 3 J. Thomas McCarthy, McCarthy on Trademarks & Unfair Competition 23:50 (4th ed. 1998).” See General Electric Company v. CPIC NET and Hussain Syed, WIPO Case No. D2001-0087 (May 2, 2001).

The addition of the .com top level domain also does nothing to dispel the confusing similarity between Respondent’s domain name and Complainant’s trademark. “UDRP case law … has established that top level domains must be disregarded when considering a domain name’s identity or confusing similarity to a trademark”. Unigestion Holding S.A. v. ITCG s.c. W. Drewniak, M. Olczykowski, WIPO Case No. DCH2005-0013 (July 18, 2005).

Accordingly, the Panel finds that the disputed domain name is confusingly similar to a trademark or service mark in which Complainant has rights, and that Rule 4(a)(i) is satisfied.

B. Rights or Legitimate Interests

Complainant also must demonstrate that Respondent has “no rights or legitimate interests in respect of the domain name”. Paragraph Rule 4(a)(ii) of the Policy. “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 [Respondent’s] rights or legitimate interests to the domain name for purposes of Paragraph 4(a)(ii):”

(i) before any notice to [Respondent] of the dispute, [Respondent’s] use of, or demonstrable preparations to use, the domain name[s] or a name corresponding to the domain name[s] in connection with a bona fide offering of goods or services; or

(ii) [Respondent] (as an individual, business, or other organization) ha[s] been commonly known by the domain name[s], even if [Respondent has] acquired no trademark or service mark rights; or

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

Policy, paragraph 4(c)

Respondent seeks to take advantage of each of these defenses. Respondent asserts that its use of the domain name for commercial advertising services is a bona fide offering of goods or services and/or a fair use, and cites cases involving terms such as “lip service”, “grocery outlet”, and “teen’s mart”. Unlike those cases, however, here the domain name itself suggests an affiliation with a commercial service, and the name of that commercial service had been advertised heavily at the time Respondent registered its domain name and subsequently became registered on the Principal Register. Moreover, Complainant’s trademark was first advertised in Respondent’s home town, nearly three years before Respondent registered its domain name. Accordingly, the Panel finds that Respondent’s use of the domain name is not bona fide or fair within the meaning of paragraph 4 of the Policy See, e.g., American Automobile Association Inc. v. Texas International Property Associates, WIPO Case No. D2007-0592 (August 13, 2007) (“By Respondent’s own admission, it uses the disputed domain name to collect revenues by providing links to advertisers who seek to sell, among other things, products (i.e., maps) similar to those offered by the Complainant. There have been many prior panels operating pursuant to the Policy that have declared this sort of disputed domain name use to fall short of the requirements of both paragraphs 4(c)(i) and 4(c)(iii).”); Asbury Automotive Group, Inc. v. Texas International Property Associates, Claim Number: FA. 0704000958542 (May 29, 2007) (“Complainant has offered undisputed evidence that Respondent is using the <cogginacura.com> domain name to operate a website featuring links to competing car dealerships as well as to dating, entertainment, education, and financial services. The Panel infers from such use that Respondent is collecting referral fees for each Internet user misdirected to Respondent’s website. The Panel thus finds that Respondent has failed to use the <cogginacura.com> domain name in connection with a bona fide offering of goods or services under Policy paragraph 4(c)(i) or a legitimate noncommercial or fair use pursuant to Policy paragraph 4(c)(iii).”).

In its Reply, Complainant notes that Respondent’s website states “ 2007 directbuymembers.com. All Rights Reserved. Contact Us”. Complainant thus asserts that “Respondent has presented its copyright notice in such a way as to suggest to consumers that the name of its organization is DIRECTBUYMEMBERS.com.” In its Sur-Reply, Respondent notes that “by Complainant’s own argument, Respondent is known as <directbuymembers.com>’ thus falling under the safe harbor for legitimate use. UDRP (4)(c)(iii).” Given that Respondent does not actually argue that it is commonly known as <directbuymembers.com> (but rather focuses on “Complainant’s own argument” allegedly to this effect), and given the nature of Respondent’s copyright notice and the fact that there is no evidence that Respondent is, in fact, commonly known as directbuymembers.com (whether or not it sought to be known as such), the Panel concludes that the “commonly known” defense of Policy paragraph 4(c)(ii) also is not satisfied.

Accordingly, the Panel finds that Respondent has no rights or legitimate interests in respect of the domain name, and that paragraph 4(a)(ii) of the Policy is satisfied.

C. Registered and Used in Bad Faith

Complainant also must establish that the “domain name has been registered and is being used in bad faith”. Policy, 4.a.iii. As set forth in the Policy:

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 [Respondent has] registered or [Respondent has] 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 [Respondent’s] documented out-of-pocket costs directly related to the domain name; or

(ii) [Respondent has] 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 [Respondent has] engaged in a pattern of such conduct; or

(iii) [Respondent has] registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(iv) by using the domain name, [Respondent has] intentionally attempted to attract, for commercial gain, Internet users to [Respondent’s] website 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 [Respondent’s] web site or location or of a product or service on [Respondent’s] website or location.

Policy, paragraph 4(b)

Respondent Texas International Property Associates has been taken to task for its business practices in many UDRP decisions. Its practices consistently have been found to constitute bad faith. See, e.g., American Airlines, Inc. v. Texas International Property Associates; Claim Number: FA0702000914854 (April 10, 2007); American Automobile Association Inc. v. Texas International Property Associates, WIPO Case No. D2007-0592 (August 13, 2007); Asbury Automotive Group, Inc. v. Texas International Property Associates, Claim Number: FA0704000958542 (May 29, 2007); Associated Bank Corp. v. Texas International Property Associates, WIPO Case No. D2007-0334 (June 28, 2007); Barry D. Sears, Ph.D. v. Texas International Property Associates, WIPO Case No. D2007-0284 (May 4, 2007); The Benevolink Corporation v. Texas International Property Associates, WIPO Case No. D2007-0404 (May 8, 2007); Bond & Co. Jewelers, Inc. v. Texas International Property Associates, Claim Number: FA0703000937650 (April 30, 2007); Constellation Wines U.S., Inc. v. Texas International Property Associates, Claim Number: FA0703000948436 (May 16, 2007); David Hall Rare Coins v. Texas International Property Associates, Claim Number: FA0702000915206 (April 9, 2007); Fifth Third Bancorp v. Texas International Property Associates, WIPO Case No. D2007-0537 (June 29, 2007); Ganz v. Texas International Property Associates, Claim Number: FA0705000991778 (July 19, 2007); Hospira, Inc. v. Texas International Property Associates, Claim Number: FA0704000959934 (June 4, 2007); JELD-WEN, inc. v. Texas International Property Associates, Claim Number: FA0701000882053 (April 2, 2007); Jerry Damson, Inc. v. Texas International Property Associates, Claim Number: FA0702000916991 (April 10, 2007); Mary’s Futons, Inc. v. Texas International Property Associates - NA NA, Claim Number: FA0706001012059 (August 13, 2007); Redcats USA, L.P. v. Texas International Property Associates, Claim Number: FA0704000960604 (June 11, 2007); RMC of Illinois Inc. v. Texas International Property Associates, Claim Number: FA0706000998091 (August 14, 2007); Rockstar Games v. Texas International Property Associates, WIPO Case No. D2007-0501 (June 8, 2007); Skyhawke Technologies, LLC v. Texas International Property Associates, Claim Number: FA0705000977213 (June 21, 2007); Sports Holdings Inc. v. “Texas International Property Associates”/ “Sports Holdings Inc.”, WIPO Case No. D2007-0430 (June 18, 2007); SurePayroll, Inc. v. Texas International Property Associates, WIPO Case No. D2007-0464 (June 9, 2007); Vitalife, Inc. dba Tabak’s Health Products v. Texas International Property Associates, WIPO Case No. D2007-0507 (August 8, 2007); Vitalife, Inc. dba Tabak’s Health Products v. Texas International Property Associates, WIPO Case No. D2007-0507 (August 1, 2007); ZRT Laboratory, LLC v. Texas International Property Associates, Claim Number: FA0701000907499 (March 27, 2007). In addition to these cases, there have been many other UDRP cases brought against Respondent in which Respondent has consented to transfer its disputed domain names and the Panels have declined to make specific findings concerning bad faith. This Panel has been able to find only two UDRP cases in which Respondent prevailed. In Wigwam Mills, Inc. v. Texas International Property Associates, Claim Number: FA0701000903891 (March 20, 2007), the Panel found that the domain name <wigwammills.com> was not substantially similar to the trademark WIGWAM, which was held by Wigwam Mills, Inc. In Z Gallerie, Inc. v. Texas International Property Associates, Claim Number: FA0702000917209 (April 5, 2007), the Panel found that the domain name <zeegallerie.com> was not substantially similar to the trademark Z GALLERIE, which was held by Z Gallerie, Inc.

This Panel agrees with the many UDRP decisions cited above that Respondent’s use of the trademark of another for paid links or “click through” advertising revenue constitutes bad faith.

Accordingly, the Panel finds that Respondent’s domain name has been registered and is being used in bad faith pursuant to paragraphs 4(b)(ii), (iii), and (iv) of the Policy, and that paragraph 4(a)(iii)of the Policy is satisfied.

 

7. Decision

For all the foregoing reasons, in accordance with paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the domain name <directbuymembers.com> be transferred to Complainant.


Bradley A. Slutsky
Sole Panelist

Dated: October 5, 2007