WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Cash Converters Pty Ltd. v. Casheez Pty Ltd
Case No. DAU2011-0029
1. The Parties
The Complainant is Cash Converters Pty Ltd. of Perth, Australia represented by Wrays, Australia.
The Respondent is Casheez Pty Ltd of Manly, Queensland, Australia represented by Cullens, Australia.
2. The Domain Names and Registrar
The disputed domain names <casheez.com.au> and <casheze.com.au> are registered with Netregistry Pty Ltd.
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on September 21, 2011. On September 21, 2011, the Center transmitted by email to Netregistry Pty Ltd a request for registrar verification in connection with the disputed domain names. On September 23, 2011, Netregistry Pty Ltd transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details. On September 28, 2011, the Center transmitted to the Complainant a notification of Complaint deficiency. On September 29, 2011, the Complainant filed with the Center an amended Complaint.
The Center verified that the Complaint and the amended Complaint satisfied the formal requirements of the .au Dispute Resolution Policy (the “Policy”), the Rules for .au Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for .au 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 September 30, 2011. In accordance with the Rules, paragraph 5(a), the due date for Response was October 20, 2011. On October 13, 2011, the Respondent requested an extension of time in which to file the Response. After obtaining comments from the Complainant on the Respondent’s request, the Center notified the Respondent on October 14, 2011, that the Center had resolved to deny the extension sought but, in recognition of the fact that it took 24 hours for the Center to reply, the due date for filing the Response was extended to October 21, 2011. The Response was filed with the Center on October 21, 2011.
The Center appointed The Hon Neil Brown QC, Andrew F. Christie and John Swinson as the Panelists in this matter on November 16, 2011. The Panel finds that it was properly constituted. The Panel has submitted the Statements 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 wholly owned subsidiary of Cash Converters International Limited. It was founded in 1984 when the first “Cash Converters” store opened in Perth, Western Australia. Its line of business is the sale of second-hand goods and micro-finance. In 1988 the Complainant began franchising the business and in 1990 it expanded into other Australian states. It currently has over 140 “Cash Converters” outlets in Australia, a presence in 21 countries worldwide, and approximately 500 franchised outlets worldwide. In the last five years the combined turnover of all “Cash Converters” stores in Australia was in excess of AUD 300 million per year. The Complainant owns several Australian trademark registrations for the trademark CASH CONVERTERS, the earliest of which date from the early 1990s. On September 13, 2005, the Complainant applied for registration in Australia of the trademark CASHIES in relation to wholesaling and retailing services, pawn-brokerage and computer programming services. This application was granted on December 21, 2005. The Complainant began using the CASHIES trademark “in a formal branding context” in February 2010.
On September 26, 1997, the Complainant granted a “Cash Converters” franchise business to Runaway Cove (Aust) Pty Ltd, which contained a restraint clause 17.1(2) providing that “The Franchisee and the Covenantor and each of them will not, without the prior written consent of the Franchisor […] for the periods and within the areas hereinafter specified be directly or indirectly (whether as director […] or in any other capacity whatsoever) engaged, concerned or interested in any firm, corporation, trust or business which is engaged in or concerned in or interested in, in any way, a business which buys and sells second-hand goods.” By a Deed of Assignment executed on December 17, 2003, this franchise business was transferred by Runaway Cove (Aust) Pty Ltd to Insignia Holdings Pty Ltd. Ms. M. Webber, the director and company secretary of the Respondent, was the sole director and the company secretary of Insignia Holdings Pty Ltd and, together with Mr. G. Webber, was a covenantor under the Deed of Assignment. On April 1, 2009, Cash Converters (Stores) Pty Ltd purchased this franchise business from Insignia Holdings Pty Ltd, and the franchise agreement between the Complainant and Insignia Holdings Pty Ltd was accordingly terminated on April 27, 2009.
The Respondent was incorporated on July 27, 2009, under the name Sweet Pty Ltd, with Ms. M. Webber as its director and its secretary. The company’s name was changed to Your Cash Mart Pty Ltd on September 7, 2009, and then to its current name, Casheez Pty Ltd, on September 23, 2009. The disputed domain names were registered on September 23, 2009. They resolve to a website at which the Respondent operates a business purchasing and selling second-hand goods, and providing financial services including personal loans and pawn brokerage.
On December 10, 2009, the Respondent filed an application for Australian trademark registration of the trademark CASH EEZ (stylized), which was accepted on March 16, 2010. On June 22, 2010, the Complainant filed a notice of opposition to the registration of this trademark. As of the date of filing of the Complaint, this opposition has not been resolved.
On December 24, 2009, the Complainant sent a cease and desist letter to the Respondent (and to Mr. G. Webber) in relation to the restraint clause 17.1(2) of the franchise agreement between the Complainant and Insignia Holdings Pty Ltd. On January 29, 2010, the Respondent (and Mr. G. Webber) replied denying all allegations in the cease and desist letter.
5. Parties’ Contentions
The Complainant contends that whilst it has been known as “Cash Converters” since it was founded in 1984, its Internet users, brokers, employees and franchisees developed the colloquial name “Cashies”, and that as a result of the popularity of this term the Complainant registered the CASHIES trademark on September 13, 2005. It then made a decision to adopt formal use of the CASHIES mark in February 2010, because it accepted that it was commonly used by consumers and that the “Cashies” name was a simple brand for consumers to verbalise and remember in connection with the Complainant’s services. The Complainant contends that the “Cashies” name is largely used phonetically, rather than in written form, and that the disputed domain names are phonetically and aurally identical or substantially identical to the CASHIES trademark. To the extent that the Respondent’s CASH EEZ trademark suggests that the disputed domain names should be pronounced with a slight pause between “cash” and “eez” or “eze” the Complainant contends that this subtle phonetic distinction does not render them sufficiently dissimilar because: (i) only phonetic similarity, rather than phonetic duplication, is required; (ii) the disputed domain names themselves do not have a space between “cash” and “eez” or “eze”; and (iii) that difference is vastly outweighed by the phonetic similarities exiting between the names. Further, Internet users who have imperfect knowledge or recollection of the CASHIES trademark or the “Cashies” name may accidentally use the disputed domain names’ spelling when searching for the Complainant based upon pronunciation.
The Complainant contends the Respondent has no rights or legitimate interests in respect of the disputed domain names as its use of, or demonstrable preparations to use, the disputed domain names is not in connection with a bona fide offering of goods or services because: (i) the Respondent’s sole director and company secretary, Ms. M. Webber, has breached a franchise agreement by offering for sale second-hand goods which are advertised on websites to which the disputed domain names resolve; (ii) the franchise agreement states that Ms. Webber cannot, for two years following the expiration, termination or assignment of the franchise agreement, engage in a business that buys and sells second-hand goods, and the franchise agreement was terminated on April 27, 2009, at which time Ms. Webber (and Mr. G. Webber) were covenantors under the Deed of Assignment; (iii) there is no substantial difference, other than the corporate shield afforded by the Corporations Act, between the actions of the Respondent and Ms. Webber; (iv) Ms. Webber breached the restraint clause of the franchise agreement because the Respondent has engaged in the business of buying and selling second-hand goods within 24 months of the franchise agreement’s termination, and Ms. Webber was and continues to be involved with the Respondent through her role as the Respondent’s director and company secretary; (v) the Respondent is intentionally selling goods under the disputed domain names in a manner which misappropriates the Complainant’s goodwill and reputation; (vi) the Respondent has been and remains fully aware of the Complainant’s rights and reputation in the CASHIES trademark and “Cashies” name through its director, Ms. Webber, who was a director of Insignia Holdings Pty Ltd, a former franchisee of the Complainant; (vi) the Respondent is not commonly known by the disputed domain names; (vii) the Respondent is not making a legitimate noncommercial or fair use of the disputed domain names as it intends to divert Internet users from the Complainant to the Respondent by using the disputed domain names for commercial purposes; (viii) the Complainant did not license or otherwise permit or authorize the Respondent’s use of the CASHIES trademark or “Cashies” name; and (ix) rights or legitimate interests in respect of the disputed domain names are not established merely by a domain name registrar’s determination that the Respondent satisfied the relevant eligibility criteria for the disputed domain names at the time of registration.
The Complainant contends the Respondent has registered and subsequently used the disputed domain names in bad faith because: (i) through its director, Ms. Webber, it registered them for the purposes of offering goods in contravention of the franchise agreement, thereby disrupting the business of the Complainant; (ii) it has attempted to attract, for commercial gain, Internet users to its website by creating a likelihood of confusion with the CASHIES trademark and “Cashies” name as to the source, sponsorship, affiliation or endorsement of the Respondent’s services; (iii) the Complainant had rights in, and was using, the CASHIES trademark and “Cashies” name at the time the Respondent registered the disputed domain names and the Respondent, through its director, Ms. Webber, knew of the Complainant’s rights; (iii) the disputed domain names are likely to confuse consumers as to whether the Complainant is the source of, has sponsored or endorsed, or is affiliated with, the website to which the disputed domain names resolve; (iv) the Respondent offers goods and services under the disputed domain names that are identical to those offered by the Complainant, namely the sale of new and used goods and micro-lending; and (v) the registration, by an ex-employee of the Complainant’s licensee, of a domain name which is confusingly similar to the Complainant’s trademark for the purpose of competing with the Complainant is bad faith.
The Respondent contends the disputed domain names are not confusingly similar to the Complainant’s CASHIES trademark because: (i) the word element “cash” of CASHIES trademark is a descriptive word used generically in the Complainant and the Respondent’s industry, including by their competitors; (ii) the word “cashies” is part of the Australian vernacular and refers to “cash in hand”, and is descriptive and suggestive of the services offered, thereby giving it a low level of inherent distinctiveness; (iii) if the Complainant’s CASHIES trademark is capable of co-existing with other CASHIES and KASHIES trademarks and names owned by other traders in the industry then it should be capable of co-existing with the Respondent’s distinct CASH EEZ and CASH EZE marks and names without risk of confusion; (iv) the Complainant has not provided sufficient evidence of its use of CASHIES as a trademark to distinguish its services, or to establish a reputation as exclusively identifying and distinguishing the Complainant’s services from the services of others in the industry; (v) the Complainant has failed to provide evidence that the use of CASHIES is largely aural/phonetic; (vi) the Respondent uses its CASH EEZ trademark in a predominantly visual way as the use of the double ‘ee’ and ‘z’ in “Casheez” and ‘eze’ in “Casheze” create a strong visual impression that is distinct from the more common suffix ‘-ies’, and the letter ‘Z’ is a key distinguishing feature used consistently and prominently in the Respondent’s CASH EEZ branding; (vii) the Complainant has implicitly acknowledged the significant visual differences by concentrating primarily on the purported phonetic and aural similarities between CASHEEZ/CASHEZE and CASHIES; (viii) the Internet is predominantly a visual medium that compels a consumer to pay regard to the spelling of a domain name and, as such, consumers are less likely to confuse a domain name with a particular trademark where there are significant visual differences; (ix) CASH EZE suggests easy access to cash/goods whereas CASHIES is known in the Australian vernacular as a reference to “cash in hand” and is thereby conceptually distinct; (x) there have not been any instances of confusion in the two years the CASH EEZ business has been trading and the Complainant has not shown any instances of confusion; (xi) CASH EEZ and CASH EZE are pronounced differently to CASHIES as there is a pause between the word CASH and EEZ/EZE, and there is a long vowel sound as in the word “easy” which is also involved in the Respondent’s branding which emphasizes “easy” in slogans and advertisements for, and descriptions of, its services, as opposed to the word CASHIES which is pronounced as a single word and does not include the sound similar to the word “easy”; and (xii) the word “cash” is highly apt to be applied to a business whose services include the pawning of goods and provision of loans, and consumers are likely to place less weight on it as part of a domain name and will distinguish it from other domain names or trademarks by reference to its appearance as a whole.
The Respondent contends it has rights or legitimate interests in the disputed domain names because: (i) it is the authorized user of the trademark CASH EEZ and the Complainant cannot claim to be the owner as it does not have prior use or prior registration of a mark which is identical or at least substantially identical to CASH EEZ; (ii) in 2009, well before the Complaint was filed, the Respondent had commenced use of the disputed domain names in connection with its business of a bona fide offering of services such as pawn-broking, micro-financing, and trading in second-hand used goods; (iii) CASH EEZ has established a reputation among customers, competitors, suppliers and property developers in the industry, and goodwill, as the trading name, brand name, trademark and distinctive identifier in the domain names of the Respondent, who is the authorized user of the CASH EEZ trademark; (iv) the Respondent is commonly known by the name CASH EEZ and CASH EZE and the website to which the disputed domain names resolve has acquired a reputation as the website of the CASH EEZ business; and (v) the Respondent believes it is not in breach of the franchise agreement restraint clause because its business is more than two kilometers away, and in a different city, from the Complainant’s business, and it is for the courts to decide whether a restraint clause in an agreement is reasonable, and thus enforceable, or is void.
The Respondent contends that it has registered and is using the disputed domain names in good faith because: (i) it has provided a statutory declaration outlining how it came to select the name CASH EEZ (and CASH EZE) for its business and the overall branding associated with that name, which distinguishes it from the Complainant’s business; (ii) the Respondent’s registration of the disputed domain names has not prevented the Complainant from reflecting “CASHIES” in a domain name, which it has done by registering <cashies.com.au> but which it fails to use; (iii) the Respondent has provided statutory declarations from customers and others in the industry who have not been confused by the disputed domain names, whilst the Complainant has not provided any evidence of confusion; (iv) the Respondent did not register the disputed domain names to sell, rent or otherwise transfer them to another person for profit, but rather to use them in the conduct of its bona fide CASH EEZ business; and (v) the Respondent’s intentions have been to distinguish its CASH EEZ business and branding from that of the Complainant’s business so that it would be seen as an attractive and compelling alternative and competitor to the Complainant.
The Respondent contends the Complainant has brought the Complaint in bad faith and that this constitutes an abuse of the proceeding. The Complainant has sought the transfer of the disputed domain names which would: (i) prevent the Respondent from reflecting its trademark CASH EEZ (and CASH EZE) in a domain name; (ii) disrupt the Respondent’s business; (iii) cause damage to the Respondent’s reputation and business; (iv) cause confusion amongst customers and in the industry; and (v) enable the Complainant to misleadingly divert CASH EEZ customers to its “Cash Converters” website which would comprise a bad faith use of the disputed domain names.
6. Discussion and Findings
A. Identical or Confusingly Similar
Given the Panel’s findings on the issue of whether or not the Respondent has rights or legitimate interests in the disputed domain names, discussed below, the Panel does not find it necessary to reach a conclusion on the issue of whether or not either of the disputed domain names is confusingly similar to the Complainant’s trademark CASHIES.
B. Rights or Legitimate Interests
The Respondent has been operating a business of purchasing and selling second-hand goods, and providing financial services including personal loans and pawn brokerage, under the company name Casheez Pty Ltd, and using the disputed domain names, since some time in late 2009 (being no earlier than September 27, 2009). It follows that, pursuant to paragraph 4(c)(i) of the Policy, these facts will demonstrate that the Respondent has rights or legitimate interests in the disputed domain names if this offering of goods and services was bona fide and occurred before any notice to the Respondent of this dispute.
The issue of whether or not the Respondent’s offering of goods and services in connection with the disputed domain names was bona fide is the subject of strong dispute between the Complainant and the Respondent. In essence, the Complainant contends that the Respondent’s offering of goods and services was not bona fide because it occurred in breach of the restraint clause in the franchise agreement to which the Respondent’s director and company secretary was a convenantor. The Respondent denies this contention, on the grounds that the restraint clause has not been breached and, in any event, is not valid and enforceable. To resolve this issue the onus is clearly on the Complainant and the standard of proof is on the balance of probabilities. That is so because the Complainant has to prove that the Respondent has no rights or legitimate interest in the disputed domain names.
The evidentiary record in this case currently before the Panel does not permit the Panel to resolve the issue of whether or not the restraint clause has been breached. Furthermore, the procedure provided by the Policy does not, in this Panel’s opinion, empower the Panel to determine the issue of whether or not the restraint clause is valid and enforceable. As a consequence, this Panel is not able to reach a finding that the Respondent’s use of the disputed domain names in connection with its offering of goods and services was not bona fide.
Accordingly, the Panel concludes that the Complainant has failed to discharge its burden of showing, on the balance of probabilities, that the Respondent has no rights or legitimate interests in the disputed domain names.
C. Registered or Subsequently Used in Bad Faith
Given the Panel’s findings on the issue of whether or not the Respondent has rights or legitimate interests in the disputed domain names, discussed above, the Panel does not find it necessary to reach a conclusion on the issue of whether or not either of the disputed domain names has been registered or is being used in bad faith.
D. Attempted Reverse Domain Name Hijacking
The reasons that make the Panel unable to resolve the issue of whether or not the Respondent’s use of the disputed domain names in connection with its offering of goods and services was bona fide also make the Panel unable to resolve the issue of whether or not the Complaint has been brought in bad faith. Accordingly, the Panel makes no finding on the issue of attempted reverse domain name hijacking.
For all the foregoing reasons, the Complaint is denied.
Andrew F. Christie
The Hon Neil Brown QC
Date: November 30, 2011