World Intellectual Property Organization

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Enable Holdings, Inc. v. Domain Discreet/Fashion Interaction, Ofer Kahana,

Case No. D2010-1175

1. The Parties

The Complainant is Enable Holdings, Inc. of Itasca, Illinois, United States of America, represented by Fredrikson & Byron, United States of America.

The Respondent is Domain Discreet/ Fashion Interaction, Ofer Kahana of Los Angeles, California, United States, represented by McDermott Will & Emery LLP, United States of America.

2. The Domain Name and Registrar

The disputed domain name <redtagclothing.com> (the “Domain Name”) is registered with Register.com.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on July 16, 2010. On July 16, 2010, the Center transmitted by email to Register.com a request for registrar verification in connection with the Domain Name. On July 28, 2010, Register.com 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 July 29, 2010 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 July 30, 2010. 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(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on August 4, 2010, with a due date for the Response set at August 24, 2010.

The Panel observes that an issue has arisen in this case as to whether or not the Respondent was entitled to an extension of the deadline for submitting its Response. The file shows that the Complainant communicated with a legal representative of the Respondent at least as early as August 10, 2010. The file also discloses an email from the Respondent’s representative dated August 23, 2010, and a reply from the Complainant’s representative dated August 24, 2010. The parties had exchanged settlement offers. However, the Complainant’s email of August 24, 2010, which rejected a “co-existence” offer made by the Respondent and proposed a counteroffer that had to be accepted before the end of the day, expressly refused to agree to the Respondent’s request for a 30-day extension of the time for submitting the Response. Next, on that same date, Respondent substituted lawyers and the counsel of record now representing the Respondent in this case requested a 20-day extension of time for submitting the Response. In a communication dated August 26, 2010, the Center referenced the communications between the parties and inquired whether the Complainant wished to request suspension of the proceedings in order to explore a possible settlement between the parties. The Complainant replied on August 27, 2010 to indicate that it would not be requesting a suspension of the proceedings. In addition, the Complainant objected that the Respondent had already had ample time to submit its Response and that the Respondent had switched its authorized representative on the very day when the Response was due – August 24, 2010. The Complainant contended that it did not believe the instant case was one of the “exceptional cases” under Rule 5(d) for which the Center should grant Respondent’s request for an extension of time to submit a Response. On August 30, 2010 the Center wrote to the parties indicating that, “taking into account the Respondent’s stated reason for that request, and considering the comments of the Complainant, the Center will grant an extension of time until Wednesday, September 1, 2010.” The Response was filed on September 1, 2010.

On September 3, 2010, the Complainant lodged an objection that “the Center made only a bare summary of its reasoning for making the decision to grant an extension to Respondent.” The Complainant thus requested that (i) all email correspondence between the parties be made part of the record and be provided to the Panel, (ii) the Panel review the merits of the Center's determination to grant Respondent an eight-day extension of time to file its Response, and (iii) if necessary, the Complainant be permitted to provide an reply to the arguments advanced by Respondent in its Response.

The Center appointed Christopher S. Gibson as the sole panelist in this matter on September 27, 2010. 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.

The first issue for the Panel to decide is whether it may, as requested by the Complainant, review the Center’s decision to grant an extension to the Respondent for filing the Response. In this respect, Rule 5(d) provides that, at the request of a Respondent, “the Provider may, in exceptional cases, extend the period of time for the filing of the response.” Nothing in the Rules would appear to permit the Panel to review a Provider’s decision in this regard. Instead, Rules 10(a), (b) and (c), concerning general powers of the Panel, provide respectively that the “Panel shall conduct the administrative proceeding in such manner as it considers appropriate in accordance with the Policy and these Rules; ”that “[i]n all cases, the Panel shall ensure that the Parties are treated with equality and that each Party is given a fair opportunity to present its case; ”and that the Panel may “at the request of a Party or on its own motion, extend, in exceptional cases, a period of time fixed by these Rules or by the Panel.” None of these general powers of the Panel specifically authorize it to review the merits of a Provider’s decision to extend the period of time for filing the Response.

In this case, the Panel may well have denied the Respondent’s request for an extension given the ample time the Respondent had had to prepare its Response, the Complainant’s timely objections, and the lack of circumstances to make it an “exceptional case.” The Panel supports the approach in Mobile Communication Service Inc. v. WebReg, RN, WIPO Case No. D2005-1304, where the panel noted that an “exceptional” case, by its very nature, must be the exception, not the rule, and refused to consider a response where the respondent failed to provide good cause for filing 9-days late. In the instant case, however, the Center, as the Provider under Rule 5(d), decided to grant an extension as requested at the “11th hour” by the Respondent through its substituted counsel. The Panel will not second guess this decision, but will review the entire file in this case including the correspondence between the parties, as requested by the Complainant. The Panel does not consider it useful or necessary to request further statements or documents from the parties under Rule 12.

4. Factual Background

The Complainant is the owner of the REDTAG.COM trademark, which the Complainant has used in commerce in connection with online retail services offering a variety of consumer goods and merchandise, including clothing and accessories such as belts and handbags.

The Complainant’s REDTAG.COM mark is the subject of a federal registration in the United States (U.S. Reg. No. 2535096), which was filed on September 29, 2000 and registered on the Supplemental Register on January 29, 2002. Complainant has re-filed to register the REDTAG.COM mark on the Principal Register (U.S. App. Serial No. 85021645) on the basis of actual use in commerce from November 1998. An opposition is now pending in these re-filing proceedings.

The Complainant provides its online retail services under its REDTAG.COM mark through its website at <redtag.com>.

The Respondent’s Domain Name was registered on March 28, 2001.

The Respondent has used the Domain Name in connection with an e-commerce website selling clothing goods.

5. Parties’ Contentions

A. Complainant

(1) The Domain Name is identical or confusingly similar to a trademark or service mark in which the Complainant has rights.

In addition to asserting its trademark rights through use over an 11 year period, the Complainant maintains that the Respondent’s <redtagclothing.com> Domain Name wholly incorporates the Complainant’s REDTAG.COM trademark and is therefore nearly identical to and confusingly similar to Complainant’s mark in its appearance, pronunciation, and meaning. The Complainant argues that it is well-established that the incorporation of a mark in full within a disputed domain name may be sufficient to establish confusing similarity between the mark and the domain name. The Domain Name differs from Complainant’s REDTAG.COM mark only by the addition of the term “clothing.” Respondent uses the Domain Name for a website from which it sells clothing goods. Because Respondent sells clothing, the additional term “clothing” in the Domain Name is merely a descriptive or generic term and does not distinguish the Domain Name from Complainant’s trademark. Instead, because the descriptive term refers to some of the same goods that the Complainant sells under its own mark, such term in the Domain Name serves to increase or exacerbate the confusing similarity.

(2) The Respondent has no rights or legitimate interests in respect of the Domain Name.

The Complainant asserts that to the best of its knowledge and belief, Respondent has no rights or legitimate interests in the Domain Name. Complainant has used its REDTAG.COM mark continuously in commerce in the United States since at least as early as November 10, 1998, with an active website as early as June 1998. Respondent began using the Domain Name four years later in 2002. The Respondent is thus the junior user by at least four years. The Complainant also contends that the Respondent knew or should have known of Complainant’s trademark registration for the REDTAG.COM mark, because the application was filed on September 29, 2000 and registered on January 29, 2002. Additionally, to the best of Complainant’s knowledge and belief, Respondent is not making a legitimate non-commercial or fair use of the Domain Name because the Respondent is using it for an e-commerce website from which the Respondent sells clothing.

(3) The Domain Name was registered and is being used in bad faith.

The Complainant asserts that the Respondent has registered and used the Domain Name in bad faith of the type described in Paragraph 4.b.(iv) of the Policy because the Respondent has created an e-commerce website for selling clothing goods, which is linked to the Domain Name which wholly incorporates the Complainant’s REDTAG.COM mark. The Respondent is thus intentionally attempting to attract, for commercial gain, Internet users to Respondent’s website, by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship, affiliation, or endorsement of the Respondent’s website.

logo

The Complainant alleges that the Respondent’s bad faith is demonstrated by the Respondent’s recent use of a logo that is nearly identical to the Complainant’s proprietary logo, and which the Respondent has created in a deliberate attempt to create confusion in the online marketplace and to draw potential customers away from the Complainant’s website for the Respondent’s commercial gain. When the Complainant began using its REDTAG.COM trademark in 1998, it combined the REDTAG.COM term with a design logo in which an angular image of a red tag provided a background. In August of 2008, however, the Complainant redesigned its REDTAG.COM logo to accompany a redesign of its website. In the new logo, the red tag graphic element is no longer the background. Instead, the red tag graphic element is looped around the “D” of the word “RED” and displays the word “TAG” in white lettering against the red tag as follows:

logo

The Complainant asserts that at around the same time, the Respondent developed a new logo in direct and deliberate imitation of the Complainant’s new logo. The Complainant has submitted evidence of an archived webpage for the Respondent’s website, dating from an Internet Archive record of June 21, 2008, to show that the Respondent’s old logo is quite different from the new logo currently used by the Respondent, which incorporates the Domain Name as follows:

The Complainant asserts that the similarities between the Respondent’s current logo and the Complainant’s logo are striking. Like the Complainant, the Respondent emphasizes the “red tag” term in all capitals and places the other terms of its Domain Name in smaller and lower case font. Like the Complainant, the Respondent has a red tag looped around the “D” in red and the term “tag” in white lettering against the red tag. The only elemental difference between the Respondent’s current logo and the Complainant’s logo is the term “clothing,” which the Respondent puts in white lower case lettering within the red tag.

The Complainant argues that the manifest similarities between the two logos, in combination with the evidence of changes made by the Respondent in its old logo near the time when the Complainant made changes, constitutes evidence to support the inference that the Respondent was fully aware of the Complainant and its trademark and domain name when the Respondent registered the Domain Name and created its logos for its e-commerce website. According to the Complainant, this evidence allows the further inference that, despite knowing of the Complainant’s prior rights, the Respondent deliberately created a new logo in August 2008 or thereafter in direct imitation of the Complainant’s logo and in a purposeful effort to create confusion and to draw Internet customers away from the Complainant’s website for the Respondent’s commercial gain.

Finally, the Complainant argues that the Respondent’s bad faith is also demonstrated by the fact that the Complainant sent a cease and desist letter to the Respondent in May 2010, but the Respondent made no reply. The Complainant states that the Respondent’s non-responsiveness allows the inference that the Respondent is fully aware of the Complainant and the Complainant’s prior rights, but intends to continue in the current course of action in spite of those senior rights because Respondent wants to profit from the confusing similarity it has created with the Complainant’s trademark. This behavior constitutes bad faith use of the Domain Name.

B. Respondent

(1) At the time of registration of the Domain Name, the Complainant had no protectable trademark rights in REDTAG.COM.

The Respondent contends that when it registered the Domain Name in March 2001, the Complainant had no protectable trademark rights in REDTAG.COM because the term was generic and descriptive and had not acquired distinctiveness. The Complainant’s REDTAG.COM mark was registered on the Supplemental Register in January 2002, after the Respondent had already registered the Domain Name.

The Respondent asserts that the term “red tag” refers to a tag or other marker colored red and used to categorize something for special purposes, such as merchandise items that are on sale. Online retailers frequently use the term “red tag” to indicate their special sale events.

The Respondent refers to records from the Complainant’s application to register REDTAG.COM as a trademark. The Respondent observes that the United States Patent and Trademark Office (USPTO) initially refused registration of the mark on the Principal Register because the mark appeared to be descriptive and generic. The Respondent indicates that the Complainant’s amendment of its application to the Supplemental Register, and subsequent issuance of the Supplemental Registration for the mark REDTAG.COM, all occurred after March 28, 2001 when the Respondent registered the Domain Name. The Respondent argues that registration of the REDTAG.COM mark on the Supplemental Register is itself evidence that the Complainant’s mark had not acquired the required distinctiveness at the time of application, and that the Complainant has the burden to prove this acquired distinctiveness.

The Respondent maintains that at the time it registered the Domain Name, at least three other e-commerce retail websites had been using the term “red tag,” including <redtagsales. com>, <redtagsale. com> and <redtagcomputer. com>. Because there were multiple users of the term “red tag,” the Respondent argues that there can be no presumption of acquired distinctiveness under U.S. trademark law. In particular, 15 U.S.C. §1052(f) provides that a party can establish a presumption of acquired distinctiveness by showing it has been using the mark “substantially exclusively and continuously for a five-year period before the date on which the claim of distinctiveness is made. The Respondent contends, however, that at no point has the Complainant been an exclusive user of the term “red tag” and refers to other websites using this term as part of their name. Moreover, the Respondent refers to various Internet Archive records in order to claim that the Complainant’s use of its REDTAG.COM mark has not been continuous.

(2) The Respondent has rights and a legitimate interest in the Domain Name.

The Respondent also claims that its use of the Domain Name from 2002 in connection with a bona fide e-commerce website selling clothing demonstrates the Respondent’s rights and legitimate interests in the Domain Name.

(3) The Domain Name has not been registered and used in bad faith.

The Respondent denies that it was aware of the Complainant’s trademark registration for REDTAG.COM at the time when the Respondent registered the Domain Name. In addition, the Respondent contends that, unlike the Principal Register, because REDTAG.COM is registered on the Supplemental Register, there is no legal or factual basis for the Complainant’s contention that the Respondent had constructive notice of Complainant’s mark.

Finally, with respect to bad faith, the Respondent emphasizes that bad faith must occur at the time of the Domain Name’s registration and then continue during the use of the Domain Name. In the case, however, the Respondent emphasizes that it registered the Domain Name before the Complainant’s REDTAG.COM mark was registered on the Supplemental Register, and that it had no actual or constructive knowledge of the Complainant’s use of or application for the REDTAG.COM mark.

In addition, the Respondent denies that it deliberately imitated the Complainant’s logo, explaining that its new logo was designed by an independent graphic designer working on a commission basis for the Respondent. The Respondent claims it had no actual or constructive knowledge of the Complainant’s logo, and that upon becoming aware of the similarities, the Respondent started the process of redesigning a new logo. The Respondent also claims laches in that the Complainant has delayed pursuing its claim in this case, waiting more than 9 years after the Respondent registered the Domain Name, and 8 years after the Respondent began using the Domain Name for an e-commerce website to sell clothing.

6. Discussion and Findings

The burden for Complainant under paragraph 4(a) of the Policy is to prove:

(i) that the Domain Name registered by Respondent is identical or confusingly similar to a trademark or service mark in which Complainant has rights; and

(ii) that Respondent has no rights or legitimate interests in respect of the Domain Name; and

(iii) that the Domain Name has been registered and is being used in bad faith.

A. Identical or Confusingly Similar

There are two requirements that a complainant must establish under paragraph 4(a)(i): that it has rights in a trade or service mark, and that the domain name is identical or confusingly similar to the mark.

The Respondent has disputed whether the Complainant has trademark rights in REDTAG.COM based on the registration on the Supplemental Register and the term’s alleged generic nature and lack of distinctiveness. The Respondent has argued that the REDTAG.COM mark was not distinctive at the time of registration by the Complainant, and has further argued that the Complainant’s 11 years of use of the mark does not give rise to any trademark rights because the Complainant’s use has not been “substantially exclusive” and “continuous” as required under US trademark law.

The Panel agrees that registration on the Supplemental Register implies that an applicant could not demonstrate that the claimed term was distinctive at the time of application (see Thomas McCarthy, McCarthy on Trademarks, 4th ed. May 2007, §19: 37). However, the Complainant has asserted that it has used the REDTAG.COM trademark in commerce continuously and with substantial exclusivity since at least as early as November 11, 1998, which totals a period of more than 11 years. Complainant has provided evidence of use attached to the Complaint. Such a long period of use in commerce could constitute prima facie evidence under U.S law that the REDTAG.COM mark has acquired distinctiveness. Moreover, the Complainant has indicated that in recognition of this prima facie evidence of acquired distinctiveness, the Complainant’s recent application to re-file the REDTAG.COM mark on the Principal Register successfully completed its evaluation before the USPTO, with the USPTO approving the application for publication on August 4, 2010. If the USPTO did not agree that Complainant's mark had acquired distinctiveness, it would not have approved the application for publication. The Panel is aware, however, that an opposition has been lodged in those USPTO proceedings.

For purposes of the Policy, the Panel finds that the Complainant has satisfied the threshold for demonstrating that it has rights in a trademark at the time it filed this case. As the consensus position in WIPO’s Overview of Panel Views on Selected UDRP Questions makes clear, the UDRP makes no specific reference to the date on which the owner of a trademark must have acquired its rights. Thus, what was unprotectable under trademark law at one point in time might be considered subject to trademark protection at a later time, and therefore give rise to rights in a mark that are recognizable under the Policy. However, the timing of the acquisition of any trademark rights can be relevant to the assessment of bad faith pursuant to Paragraph 4(a)(iii), which is considered below. Here, the panel will not ignore the Complainant’s long use of its REDTAG.COM mark, in which the words “red” and “tag” are joined together into one word and the mark has been used by the Complainant for a significant period of time on its popular ecommerce website. With the threshold met for purposes of the UDRP, the Panel finds that any disputed questions concerning the Complainant’s trademark rights are better left to the currently pending procedures before the USPTO.

The next question is whether the REDTAG.COM mark is identical or confusingly similar to the Domain Name <redtagclothing.com>. Accepting that the suffix ".com" can be disregarded for the purpose of this comparison, it is clear that this is not a case where the marks are identical. However the Domain Name wholly incorporates the Complainant’s mark and is similar in appearance and meaning. The Domain Name differs from the Complainant’s REDTAG.COM mark only by the addition of the term “clothing.” Because the Respondent sells clothing, the additional term “clothing” in the Domain Name is merely descriptive and does not distinguish the Domain Name from the Complainant’s mark. Instead, because this descriptive term refers to some of the same goods that the Complainant sells under its own mark, such term in the Domain Name serves potentially to increase the confusing similarity. See Bridgestone Corporation v. Horoshiy, Inc., WIPO Case No. D2004-0795 (the disputed domain name <brigestonegolf.com> wholly incorporated the complainant’s BRIDGESTONE mark and the Panel found that “not only is the additional term ‘golf’ descriptive or generic, thereby not serving to avoid confusion, the conjunction of complainant’s trademark with this non-distinctive term actually serves to increase the likelihood of confusion, since complainant actually uses the subject mark in connection with golf, and has done so for quite some time”). The Panel therefore finds that the Domain Name is confusingly similar to the Complainant’s REDTAG.COM mark.

The Complainant has thus satisfied the requirements of paragraph 4(a)(i) of the Policy.

B. Rights or Legitimate Interests

The Complainant asserts that the Respondent has no rights or legitimate interest in the Domain Name, as required under paragraph 4(a)(ii) of the Policy. The Complainant makes a number of specific arguments concerning this point on “information and belief,” as indicated in section 5.A (2) above. The Respondent counters that its use of the Domain Name from 2002 in connection with a bona fide e-commerce website selling clothing demonstrates the Respondent’s rights and legitimate interests in the Domain Name

The Panel is persuaded that the Respondent does have rights or a legitimate interest in the Domain Name, which have been acquired through its 8 years of use of the Domain Name in connection with its e-commerce website. The Panel, however, notes concern (discussed below) that for a certain period dating from 2008, the Respondent’s use of its Domain Name in connection with a website promoting a logo that appears to deliberately imitate the Complainant’s proprietary logo undercuts and weakens the Respondent’s acquisition of rights or a legitimate interest in the Domain Name through bona fide use.

C. Registered and Used in Bad Faith

The Complainant has put forward credible evidence that given the timing of the Respondent’s recent use of a logo encompassing the Domain Name that is nearly identical to Complainant’s proprietary logo encompassing its trademark, the Respondent has engaged in a deliberate attempt to create confusion in the online marketplace and to draw potential customers away from the Complainant’s website for the Respondent’s commercial gain. The Respondent has denied that it did so intentionally. However, on balance the Panel considers that the Complainant’s evidence is quite persuasive and points toward the Respondent having used the Domain Name in bad faith for at least a limited period during the 8 years in which it was linked to the Respondent’s e-commerce website. See Lexar Media, Inc. v. Michael Huang, WIPO Case No. D2004-1039 (the respondent has intentionally attempted to attract, and indeed has attracted for commercial gain, Internet users to his website, where he offers products that are directly related to the complainant).

Despite these concerns, however, the Complainant has not established that at the time the Respondent registered the Domain Name, it did so in bad faith. There is insufficient evidence that the Respondent was aware of the Complainant’s REDTAG.COM mark when it registered the Domain Name on March 28, 2001. Moreover, the Complainant’s mark had not yet been registered on the USPTO’s Supplemental Register (registration date of January 29, 2002), which would nonetheless have been insufficient to establish any presumption as to the validity of a mark or to put the Respondent on constructive notice. Previous panels have held that “[i]t is the consistent view of administrative panels interpreting the Policy…that a respondent’s registration of a domain name prior to a complainant’s acquisition of trademark rights does not constitute bad faith because the respondent cannot be attempting to take unfair advantage of rights which do not exist.” Foundation Source Philanthropic Services, Inc. v. Arlene B Gibson/Foundations That Make a Difference/Domain Discreet, WIPO Case No. D2007-0875; see also WIPO’s Overview of WIPO Panel Views on Selected UDRP Questions, paragraphs 1.4 & 3.1. Here, the Respondent registered the Domain Name before any time at which the Complainant could have conceivably acquired trademark rights.

Consequently, the Panel finds that it has not been proven that the Domain Name was registered and is being used in bad faith. The requirements of bad faith in paragraph 4(a)(iii) of the Policy have not been fulfilled.

7. Decision

For all the foregoing reasons, the Complaint is denied.

Christopher S. Gibson
Sole Panelist
Dated: October 28, 2010

 

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