WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Childrens Outlet Ltd v. Ian Davidson, Childrensalon Ltd

Case No. D2018-1816

1. The Parties

The Complainant is Childrens Outlet Ltd of Harlow, United Kingdom of Great Britain and Northern Ireland (“UK”), represented by Adlex Solicitors, UK.

The Respondent is Ian Davidson, Childrensalon Ltd¹ of Tunbridge Wells, UK.

2. The Domain Name and Registrar

The disputed domain name <childrensoutlet.com> (the “Disputed Domain Name”) is registered with Register.IT SPA (the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on August 9, 2018. On the same day, the Center transmitted by email to the Registrar a request for registrar verification in connection with the Disputed Domain Name. On August 14, 2018, the Registrar transmitted by email to the Center its verification response confirming that the 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” 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 August 16, 2018. In accordance with the Rules, paragraph 5, the due date for Response was September 5, 2018. The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on September 10, 2018.

The Center appointed Nick J. Gardner as the sole panelist in this matter on September 17, 2018. 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 UK company. Since 2014 the Complainant has retailed children’s clothing at discount prices initially via a shop in Epping, Essex, UK and subsequently also via its website at “www.childrensoutlet.co.uk”, all under the name “Childrens Outlet”. The Complainant’s evidence establishes that:

a) the Complainant has around 6,000 followers on Facebook;

b) its Facebook statistics show between December 2016 and June 2018 499,219 impressions and 11,486 link clicks;

c) the Complainant’s Pinterest profile page as at June 2018 has some 2,400 monthly views;

d) since January 2015 the Complainant has processed nearly 7,000 orders and almost 26,000 products through its website;

e) from January 2016 to May 2018, there have been 258,589 unique visitors to the Complainant’s website; and

f) the Complainant was a finalist for the Drapers Digital Awards 2018 for the category “Best Pure-play Etailer Under £50m Turnover” and was awarded the Gold Trusted Service Award 2018 by the independent customer feedback website, Feefo, for maintaining over 4.5 out of 5 star rating on customer feedback.

The Complainant owns UK registered trademark No 00003291619, registered May 25, 2018, for the logo trademark “Childrens Outlet”.

The Respondent is another UK company which also sells children’s clothes.

Correspondence between the parties shows that the Complainant and the Respondent knew each other and had previous business dealings prior to the events the subject of the Complaint.

The Respondent operates via a website at “www.childrensalon.com”. Prior to December 2017 the Respondent also operated via a website selling discounted items at “www.petitsalon.com”. In December 2017 it rebranded that part of its business to Childrensalon Outlet and started using a website at “www.childrenssalonoutlet.com”.

The Disputed Domain Name was acquired by the Respondent on October 17, 2016.

The day after the Disputed Domain Name was registered a director of the Complainant received a telephone call from a director of the Respondent enquiring if the Complainant would be willing to sell its <childrensoutlet.co.uk> domain name to the Respondent and also enquiring about another brand the Complainant owned. This proposal was not pursued but subsequently discussions ensued about a possible sale of the Complainant’s business to the Respondent. Ultimately however the Respondent decided not to pursue this possibility and the parties each carried on trading in their own right.

On November 21, 2016, the Complainant sent an email to the Respondent stating that, as the Complainant was already trading under the name reflected in the Disputed Domain Name it would be happy to purchase the Domain from the Respondent and reimburse what it had paid. The Complainant stated that it had previously been offered the Disputed Domain Name for USD 6,000 but had decided not to buy it as it was not necessary for its business model at that time. The Respondent replied the same day advising that it did not want to sell the Disputed Domain Name but that it had “no plans to compete directly with you on this domain name”.

On October 6, 2017, the Complainant again emailed the Respondent pointing out that the Disputed Domain Name had not been used and again offering to buy the Domain. The Respondent replied the same day advising that it wished to “keep the url a while longer”.

At some date prior to February 26, 2018, the Respondent redirected the Disputed Domain Name so as to link it to its website at “www.childrensalonoutlet.com”.

The Complainant’s solicitors sent a cease and desist communication by email to the Respondent on March 7, 2018. As well as complaining about the Disputed Domain Name the letter raised a number of other wider allegations about the Respondent’s alleged conduct. At some point thereafter, the Respondent removed the redirection associated with the Disputed Domain Name.

On March 20, 2018, the Respondent’s solicitors replied to the Complainant’s solicitors’ letter. Amongst other things, the letter indicated that the redirection associated with the Disputed Domain Name would be removed and henceforth would resolve to a blank page.

On April 4, 2018, the Complainant’s solicitors telephoned the solicitors for the Respondent advising that the actions taken by the Respondent were inadequate and stating, amongst other things, the Respondent had clearly set out to target the Complainant and that the Complainant required transfer of the Disputed Domain Name. The Respondent’s solicitors stated that they believed the Respondent would want to take a commercial view and may agree not to renew the Disputed Domain Name when it came up for renewal, and possibly undertake not to use the domain or transfer it to a third party. They said that they would take instructions on this and on whether the Respondent would be prepared to transfer the Disputed Domain Name to the Complainant.

On April 12, 2018, the Respondent’s solicitors advised the Complainant’s solicitors by telephone that the Respondent would agree to provide an undertaking that it would not use the Disputed Domain Name in future, or transfer it to a third party and not to renew the Disputed Domain Name when it expired. When asked why the Respondent was not prepared to transfer the Disputed Domain Name to the Complainant if it was prepared to provide these undertakings, the Respondent replied that the Disputed Domain Name had been registered as “brand protection” and that the Respondent wanted to retain the Disputed Domain Name as it allegedly thought that the Complainant might cease operating in the near future and sell the Disputed Domain Name onto a competitor.

On May 2, 2018, the Complainant’s solicitors emailed an offer by the Complainant to buy the Disputed Domain Name for the price originally paid for it by the Respondent, less the Complainant’s legal costs. The Respondent’s solicitors responded on May 4, 2018, advising that the Respondent was not prepared to sell the Disputed Domain Name that had been acquired “as part of a wider policy of acquiring descriptive domain names that incorporate the word “children” in order to protect its Childrensalon brand”.

5. Parties’ Contentions

A. Complainant

The Complainant contends that the Disputed Domain Name is identical to its Childrens Outlet trademark. It acknowledges that the term “childrens outlet” is to some extent descriptive but says that by virtue of its activities (see above) it has built up protectable goodwill in that term which suffices for the purposes of the Policy. It also relies upon its logo trademark.

The Complainant alleges that the Respondent has no rights or legitimate interests in respect of the Disputed Domain Name and is unable to rely on any of the circumstances set out in paragraphs 4(c)(i), (ii) or (iii) of the Policy.

The Complainant draws particular attention to an incident that occurred on national television in September 2016 on a daily breakfast TV show where a feature was directed at showing how children could be dressed like young members of the Royal family at a very modest cost. Two children were featured dressed in clothes which replicated at much lower costs outfits worn by young members of the British Royal family. The children misbehaved and the incident attracted some publicity including on websites associated with popular tabloid newspapers. The publicity included screen shots taken from the program in which the Complainant’s name, as supplier of one of the outfits, is prominently shown. The Complainant suggests that it was this incident which may have given the Respondent the idea of registering the Disputed Domain Name as this occurred shortly thereafter.

The Complainant states that the Respondent registered the Disputed Domain Name with the intention of using it in some manner that was unfair to the Complainant. It says that it was naïve not to recognise this when it first became aware of it and that it should have complained then. It says that the subsequent linking of the Disputed Domain Name by redirection to the Respondent’s website is clear evidence of use in bad faith. It also goes into considerable detail of changes that the Respondent has made to its website which it says mimic the Complainant’s website in various respects and being clear evidence of a broader plan to confuse consumers. It also exhibits screen shots of a “live chat” dialogue between a customer visiting the Respondent’s website and an operator at the site on February 23, 2018. The customer asks “Is this Children’s Outlet” and the operator replies “yes we are the sister company with Childresalon [sic]”. The Complainant again alleges this evidences a deliberate plan by the Respondent to confuse customers.

B. Respondent

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

6. Discussion and Findings

Procedural Matters

The Panel notes that no Response has been received from the Respondent. The Panel considers that to be a matter of some significance in this case and relevant with regard to the Panel’s reasoning (below). This is quite clearly a dispute between two bona fide and established UK companies. As appears from the factual summary (above) it has been preceded by solicitors acting for the Complainant sending a formal “cease and desist” letter to the Respondent. That letter prompted a reply from solicitors instructed by the Respondent which took issue with most of the various matters raised by the Complainant’s solicitors. Further communications then took place. When the Complaint was served by the Center it was served by email to various email addresses, including that of Mr. Davidson, and that of the director who had been corresponding with the Complainant, and that of the individual solicitor who had been acting on behalf of the Respondent. A hard copy of the Complaint was also delivered by courier to the Respondent’s business address and the courier’s records indicate it was accepted and signed for. In these circumstances the Panel concludes that the Complaint must have come to the Respondent’s attention and it is very likely the Respondent would have discussed it with its solicitors. The Panel considers that in all probability a considered decision was then made not to respond to the Complaint.

So far as the UDRP Rules are concerned given the Complaint and Written Notice were sent to the relevant addresses disclosed by the Registrar the Panel considers that this satisfies the requirement in paragraph 2(a) of the UDRP Rules to “employ reasonably available means calculated to achieve actual notice”. Accordingly, the Panel considers it is able to proceed to determine this Complaint. While the Respondent’s failure to file a Response does not automatically result in a decision in favor of the Complainant, the Panel may thereby draw appropriate inferences from the Respondent’s default (see, e.g., Verner Panton Design v. Fontana di Luce Corp, WIPO Case No. D2012-1909). In the present case this is of some significance, for reasons discussed further below.

Substantive Matters

To succeed, in accordance with paragraph 4(a) of the Policy, the Complainant must satisfy the Panel that:

(i) the Disputed 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 Disputed Domain Name; and

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

A. Identical or Confusingly Similar

The Panel finds that the Complainant has rights in the unregistered trademark Childrens Outlet for the purpose of this proceeding. The term is descriptive but it is possible through use to build up protectable goodwill in such a term. The Panel is satisfied that the Complainant’s use (see above) is sufficient to have done so. Further there is no evidence before the Panel of any third parties using the term “Children’s Outlet” as a trading name.

Overall the Panel is therefore satisfied that this evidence establishes the Complainant has unregistered or common law trademark rights in Childrens Outlet (the “Childrens Outlet trademark”) for the purpose of this proceeding, and for example in England and Wales this would be sufficient to establish an action for the tort of passing off under English law.

In addition the Complainant owns a registered trademark for a logo which prominently features the words “Childrens Outlet”. Although recently filed that too is sufficient to satisfy the requirements of the Policy in this regard.

The Panel considers the Disputed Domain Name to be identical to the Complainant’s Childrens Outlet trademark. The omission of the space between the two words is a technical requirement and makes no difference and it is also well established that the generic Top-Level Domain (“gTLD”), in this case “.com”, does not generally affect the Disputed Domain Name for the purpose of determining whether it is identical or confusingly similar. See, for example, Rollerblade, Inc. v. Chris McCrady, WIPO Case No. D2000-0429.

Accordingly the Panel finds that the Disputed Domain Name is identical to the Complainant’s trademark and hence the first condition of paragraph 4(a) of the Policy has been fulfilled.

B. Rights or Legitimate Interests

Paragraph 4(c) of the Policy provides a list of circumstances any of which is sufficient to demonstrate that a respondent has rights or legitimate interests in the Disputed Domain Name:

(i) before any notice to the respondent of the dispute, 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) the respondent has been commonly known by the domain name, even if the respondent has acquired no trade mark 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.

None of these apply in the present circumstances. The Complainant has not authorised, licensed, or permitted the Respondent to register or use the Disputed Domain Name or to use the Childrens Outlet trademark. The Complainant has prior rights in the Childrens Outlet trademark which precede the Respondent’s registration of the Disputed Domain Name. The Complainant has therefore established a prima facie case that the Respondent does not have rights or legitimate interests in the Disputed Domain Name and thereby the burden of production shifts to the Respondent to produce evidence demonstrating rights or legitimate interests in respect of the Disputed Domain Names (see, for example, Do The Hustle, LLC v. Tropic Web, WIPO Case No. D2000-0624; Croatia Airlines d.d. v. Modern Empire Internet Ltd., WIPO Case No. D2003-0455).

The Panel finds that the Respondent has failed to produce any evidence to establish its rights or legitimate interests in the Disputed Domain Name. Accordingly the Panel finds that the second condition of paragraph 4(a) of the Policy has been fulfilled.

C. Registered and Used in Bad Faith

The Complainant has to show both that the Disputed Domain Name was registered and used in bad faith. It is well established that these requirements are conjunctive and each must be shown. It is convenient to deal with use first.

There is no dispute that for a period the Respondent linked the Disputed Domain Name by redirection to its own website. It did so when it clearly was aware of the Complainant and its business and when it had decided not to pursue discussions to purchase the Complainant’s business. The Respondent’s solicitor in their letter provided no evidence or explanation to justify this but simply stated that redirection would cease as the Respondent did not want to “become embroiled in costly and time consuming proceedings”. It seems to the Panel that this redirection must have been intended to divert customers searching for the Complainant to the Respondent. As such that is within the Policy, paragraph 4(b)(iv), as evidence of the registration and use of a domain name in bad faith:

“by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your website or other online location, by creating a likelihood of confusion with the complainant's mark as to the source, sponsorship, affiliation, or endorsement of your website or location or of a product or service on your website or location”.

Further the “live chat” dialogue quoted above clearly shows one of the Respondent’s staff providing an answer that is wrong and misleading – it seems unlikely to be a mistake and is certainly not a “typo” which is what the Respondent’s solicitors said about it. This further supports the Complainant’s case.

The Panel is less persuaded by the Complainant’s reliance on changes to the Respondent’s website. Certainly changes were made, and these seem to introduce some features which bear some similarities to the Complainant’s website but whether they are as confusing or as compelling as the Complainant suggests, the Panel is less sure about. However in view of the preceding finding the Panel does not need to decide this issue.

Accordingly the Panel is satisfied that the Disputed Domain Name has been used in bad faith. A more difficult question is whether it was registered in bad faith. The Complainant suggests the registration may have been prompted by the publicity the live TV incident (see above) attracted and suggests it was part of some sort of scheme to take advantage of the Complainant. The Panel really cannot tell on the evidence if that was the case. What is clear is that immediately following the registration the Respondent approached the Complainant and initially enquired as to whether it would sell its domain name, <childrensoutlet.co.uk>. Those discussions turned into discussions about a possible purchase of the Complainant’s business. Strikingly at no time did the Complainant protest at the Respondent’s action in registering the Disputed Domain Name, although it now says it was “naïve” not to have done so. The Respondent’s solicitors in their letter offer no explanation at all for why the Disputed Domain Name was originally purchased. The Respondent itself has suggested in correspondence that it was part of a strategy of buying up domain names relevant to its business protectively, though no evidence of any other purchases has been provided.

The Panel finds all of this rather unsatisfactory. Clearly if the Respondent had a case as to innocent registration it could have advanced it by filing a response. It manifestly, for whatever reason, chose to acquire a domain name which it must have known corresponded to the name of another retailer which it knew and had had dealings with. Its precise motive and reasoning remains a mystery. In all the circumstances the Panel concludes that the Complainant has produced sufficient material to raise an inference that this was part of a plan to take advantage of the Complainant and that the original registration was therefore in bad faith. The subsequent use made of the Disputed Domain Name (see above) also supports such an inference. Given the Respondent has failed to file a response, and the Panel’s conclusion (see above) that this failure is the result of a considered decision on the Respondent’s part, the Panel concludes the Respondent has failed to rebut this inference. Accordingly the Complainant succeeds in showing the Disputed Domain Name was registered in bad faith.

As a result the Panel finds that the Disputed Domain Name has been registered and is being used in bad faith. Accordingly the third condition of paragraph 4(a) of the Policy has been fulfilled.

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 Disputed Domain Name <childrensoutlet.com> be transferred to the Complainant.

Nick Gardner
Sole Panelist
Date: October 1, 2018

¹ This of course conflates two legal entities, namely Mr. Davidson and the company Childrensalon Limited. Mr. Davidson is a director of that company and all the evidence indicates that the Disputed Domain Name was registered by him on behalf of the company. The Panel proceeds on the basis that the Respondent is Childrensalon Limited.