WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

TerraCycle, Inc. v. Natasha Nowakowski

Case No. D2011-1569

1. The Parties

Complainant is TerraCycle, Inc. of Trenton, New Jersey, United States of America (“U.S.”) represented by Davis & Gilbert LLP, U.S.

Respondent is Natasha Nowakowski of Stevenson, Washington, U.S., self-represented.

2. The Domain Name and Registrar

The disputed domain name <outsmartwaste.com> (the “Domain Name”) is registered with GoDaddy.com, Inc.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on September 16, 2011. On September 19, 2011, the Center transmitted by email to GoDaddy.com, Inc. a request for registrar verification in connection with the Domain Name. On September 19, 2011, GoDaddy.com, Inc. transmitted by email to the Center its verification response disclosing registrant and contact information for the Domain Name which differed from the named Respondent in the Complaint. The Center sent an email communication to Complainant on September 20, 2011, providing the registrant information disclosed by the Registrar, and inviting Complainant to submit an amendment to the Complaint. Complainant filed an amended Complaint on September 21, 2011.

The Center verified that the Complaint together with the amended 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 Respondent of the Complaint, and the proceedings commenced on September 23, 2011. In accordance with the Rules, paragraph 5(a), the due date for Response was October 13, 2011. The Response was filed with the Center on October 13, 2011.

The Center appointed Harrie R. Samaras as the sole panelist in this matter on October 17, 2011. 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.

On Thursday, October 27, 2011 the Center received an affidavit (and accompanying exhibits) of A. Zakes who identifies himself as the Chief Legal Officer of Complainant. In his affidavit, Mr. Zakes states that he is making “this affidavit as a supplemental filing in the matter of case number (CT) D2011-1569 to correct inaccuracies noted in the Response submitted by respondent Natasha Nowakowski.” According to communications the Center had received from Complainant’s counsel, this “supplemental filing” was to have been received by the Center on Monday, October 24, 2011. On Friday, October 28, 2011 Respondent filed an email response to Complainant’s filing.

4. Factual Background

Complainant owns and operates TerraCycle, Inc., which specializes in eliminating waste by recycling previously non-recyclable or hard-to-recycle waste and converting collected waste into a wide variety of products and materials. Complainant has filed an application to register the mark OUTSMART WASTE (“the Mark” or “the OUTSMART WASTE Mark”) with the U.S. Patent and Trademark Office, claiming a date of first use in 2007.

Complainant offers a variety of goods for sale through the TerraCycle website including handbags, laptop cases and messenger bags made out of recycled materials. Goods on the TerraCycle website are presented alongside each other in bordered, hyperlinked boxes, which consumers can click on to be directed to detailed product information and instructions on how to order. Although Complainant sells many of its products through its major retail partners, Complainant utilizes the TerraCycle website as a source of sales revenue from sales to consumers.

The Domain Name was registered on July 17, 2010.

On June 28, 2011, counsel for Complainant sent a cease and desist letter to Respondent. The letter demanded, among other things, that Respondent immediately and permanently cease its use of the Domain Name and all other alleged unauthorized uses of the OUTSMART WASTE Mark, and that Respondent transfer the Domain Name to Complainant. Respondent replied to Counsel for Complainant in an e-mail dated July 1, 2011, stating, among other things, that “based on the minimal information you have provided to us there is no basis for us to cease and desist the use of our company’s name, OutsmartWaste.com. Finally, there is no basis by which we would be required to transfer our company’s domain name.”

5. Parties’ Contentions

A. Complainant

Complainant has used the OUTSMART WASTE Mark continuously in interstate and international commerce for at least four years in connection with its recycling services and recycled products. It owns the substantial degree of goodwill associated with the OUTSMART WASTE Mark, and has earned a valuable reputation within the recycling services and recycled products industry and among consumers throughout the world. By virtue of its prior and continuous use, Complainant has the exclusive and enforceable right to use the OUTSMART WASTE Mark in connection with recycling, including sales of recycled products.

At least through August 30, 2011, Respondent used the home page of the website corresponding to the Domain Name (the “Website”) to display an online store selling recycled products to consumers. Almost identical in appearance to the TerraCycle Website’s online store, the Website’s products - including handbags and messenger bags made out of recycled materials - appeared alongside each other with each product in a bordered, hyperlinked box, which consumers could click on to be directed to detailed product information and instructions on how to order.

The Domain Name is identical to and confusingly similar to the Mark, which Complainant has used for four years to uniquely brand its recycling services and recycled products. The results of a Google search on the words “outsmart” coupled with “waste” would clearly lead any consumer to conclude that Respondent is affiliated with or licensed by TerraCycle since the leading search results direct the searcher to Complainant’s TerraCycle Website, and Respondent’s site and its products are listed in the search results immediately following the results for TerraCycle. The search results and the identical appearance of the Website demonstrate that Respondent is creating deliberate confusion as to the Website as a source of recycled goods and to Respondent’s non-existent connection with TerraCycle.

Through Complainant’s four years of consistent and continuous advertising, marketing and extensive use, the Mark has come to be associated distinctly and exclusively with Complainant’s products and services. Complainant’s use is and for many years has been on its home page in immediate conjunction with its TerraCycle® and Infinity Symbol® branding. Consumers identify the OUTSMART WASTE Mark specifically with Complainant’s products and services. As evidenced by Complainant’s rapidly growing business and by its application to the U.S. Patent and Trademark Office for a trademark registration, Complainant intends to similarly continue using the Mark in the future. Complainant has significant and protectable rights in this unregistered trademark.

There is no indication that Respondent has ever been legitimately and commonly known by or associated with Complainant’s Mark. Complainant has not authorized Respondent to use its Mark and has no affiliation with Respondent. As such, Respondent possesses no rights whatsoever in the Mark. Moreover, Complainant’s common law rights in the Mark give Complainant exclusive rights to use “Outsmart Waste” in connection with recycled goods and recycling services in the U.S. and throughout other parts of the world, as well as the right to stop third parties from using the term “Outsmart Waste” in any confusingly similar way. Thus, Respondent’s use of the Domain Name to link to the Website clearly infringes Complainant’s OUTSMART WASTE Mark. Accordingly, Respondent’s use of the infringing Domain Name does not give Respondent any bona fide, rightful or legitimate interest in the Domain Name under the Policy.

Respondent is not using the Domain Name to make a bona fide offering of goods or services because Respondent is merely free riding on the goodwill and reputation established by Complainant by misleading consumers with a copycat website. Respondent presently uses the Mark in the Domain Name and on the Website to misleadingly direct Internet users to an online store identical to Respondent’s online store on the TerraCycle Website. Thus, Respondent’s Website serves to divert and drive visitor traffic from Complainant’s TerraCycle Website. Both Complainant and Internet users are harmed through Respondent’s misleading practices, which free ride on Complainant’s trademark and reputation.

Respondent cannot claim to be using the Domain Name for legitimate fair use or noncommercial purposes. Respondent is using bad faith business practices to take advantage of this hard earned, and well deserved, public trust. Further, Respondent in no way is using the Domain Name to make a legitimate reference to Complainant or its well-known business. Indeed, nowhere does Respondent’s Website currently make any direct reference to Complainant or its business conducted using the Mark.

The Domain Name was registered on July 17, 2010 and, as stated on Respondent’s Facebook page, Respondent founded the Website in 2010. Thus, Respondent’s use of the OUTSMART WASTE Mark does not predate 2010. Complainant is one of the world’s fastest-growing green companies and has developed its successful business under the Mark since 2007. Given Complainant’s earlier and well-publicized use of the Mark since 2007, as evidenced by its annual expenditure on marketing and publicity, Respondent was quite likely aware of Complainant at the time it registered the Domain Name. Respondent’s registration of the Domain Name, therefore, smacks of bad faith.

Without a doubt, Respondent used the Domain Name to attract customers looking for the TerraCycle Website by creating a copycat website to profit from selling products similar to Complainant’s products and using the goodwill and reputation of the OUTSMART WASTE Mark, which Complainant established and earned.

B. Respondent

Respondent developed the name after a discussion with her husband where she was describing how there were a growing number of clothing brands dedicated to using recycled and upcycled waste as a source of fabric. She then made a reference to these brands as “outsmarting waste,” a commonly used English term. It was only after the name was chosen that Respondent checked to see if there was any company with that name. Respondent did not find any. Respondent found that TerraCycle used the term “Outsmart Waste” under its trademark TerraCycle® and its logo. Respondent was not aware at the time she registered for the Domain Name and established her website that TerraCycle considered the term a “mark.” She checked to see if the term “Outsmart Waste” was a registered trademark, as one could see by the ® after the TerraCycle name that TerraCycle was a trademark. There was no trademark filed for it. Respondent had never heard of it before and at the time she registered the Domain Name, there was no such domain name.

TerraCycle has failed to prove that “Outsmart Waste” was a trademark or service mark when Respondent registered the Domain Name. Also, the names are not identical or confusingly similar. TerraCycle did not file for a trademark registration for the OUTSMART WASTE Mark until June 17, 2011; nearly a year after Respondent registered the Domain Name and opened her website. The term “outsmart” and “waste” are common English descriptive terms. TerraCycle alleges that the term “outsmart waste” is a trademark and not simply a customary English term because after “four years of advertising, marketing and extensive use, the Outsmart Waste Trademark has come to be associated distinctly and exclusively with TerraCycle’s products and services.” TerraCycle’s own website and offering of goods refutes its own statements. TerraCycle’s own website fails to use its own alleged mark when offering recycled products.

OUTSMART WASTE and the Domain Name <outsmartwaste.com> are not identical or confusingly similar.

Rather than buying from TerraCycle, TerraCycle diverts you to a third party’s website. For example, if you click “buy” on the Drink Pouch Messenger Bag product page you are diverted to DwellSmart’s website. DwellSmart is a licensed retailer of TerraCycle. Nowhere on this page, where one actually buys the product, is the OUTSMART WASTE Mark referenced, including under TerraCycle’s name, under TerraCycle logo or on any other of the numerous TerraCycle Products offered by this retailer on this website page, despite referencing specifically the name TerraCycle. Contrary to its contention and as evidenced by its own website, TerraCycle itself is not using its alleged OUTSMART WASTE Mark continuously in connection with its sale of recycled products.

A search on the Way Back Machine disproves that Complainant has been using the Mark consistently and continuously. Respondent did a search for snapshots of TerraCycle’s home page in August 2009. As can be seen on the snapshot, “OUTSMART WASTE” is not found anywhere on TerracCycle’s home page.

TerraCycle’s trademark filing activities further discredit their claim to have used the OUTSMART WASTE Mark for four years. TerraCycle first applied for a trademark for the word “TerraCycle” in 2008 to be used for food services. TerraCycle did not file any such application for the OUTSMART WASTE Mark despite its contention they are used in unison. Then in March 2008, TerraCycle sought a trademark for the word TerraCycle, to be used for shopping bags, pencils, folders and binders made of recycled plastic, recycled materials and packaging. Again, Terracycle did not seek to register the OUTSMART WASTE Mark although it contends by this time the Company was using the terms in unison. Again in March 2008, TerraCycle sought a trademark of an Infinity Symbol but abandoned it in December 29, 2008. However, on April 6, 2009, TerraCycle filed for a trademark of its Infinity symbol coupled with “Terracycle.” Again, TerraCycle did not file the same for the OUTSMART WASTE Mark. Finally on August 24, 2009, TerraCycle sought to trademark its slogan, “Eliminating the idea of waste.” Again, TerraCycle did not file the same for the OUTSMART WASTE Mark. Respondent finds this odd as TerraCycle contends that the slogan to which it is dedicated is “OutSmartWaste”. Yet, less than two years ago, during the time it alleges it was using the OUTSMART WASTE Mark distinctly and extensively with the name TerraCycle, TerraCycle filed a trademark for an entirely different slogan. Respondent assumes “Eliminating the idea of waste” was their original slogan - they still have it as part of their “About Us” bio.

When a Google search is conducted for “outsmartwaste.com” a reference to TerraCycle’s OUTSMART WASTE Mark appears only once, in the seventh listing, and then not again on the first five. Also, TerraCycle has provided no evidence that after years of marketing “[c]onsumers identify the OUTSMART WASTE Mark specifically with TerraCycle’s product.” Contrary to this, Respondent collected information on all of her orders through Shopify (“a shopping platform service I purchase which tracks referring sites on all of my visitors who make purchases”). Based on the referring site analysis provided by Shopify, 52% of Respondent’s customers were family and friends who came directly to her site via word of mouth, 26% came from Google Product Search, Google’s product search engine, which promotes the products she sells, 17% came from a general Google search using specific product names, keywords, or “outsmartwaste.com”, and 4% were untrackable, meaning no referral site was provided in the analysis. No one has asked Respondent whether she is affiliated or connected with TerraCycle since she began her website.

In response to TerraCycle’s allegation that consumers identify the Mark with TerraCycle’s products, Respondent conducted a survey to see whom if anyone had ever heard of “Outsmart Waste.” Out of over 30 people surveyed, not one had ever heard of “Outsmart Waste.”

TerraCycle contends that Respondent has no legitimate business interest in the Domain Name. Immediately after obtaining the Domain Name, Respondent hired a professional website developer to customize a Shopify template. She also hired someone to develop her brand. Respondent spent thousands of dollars developing her website, creating her brand, and operating her business. OutSmartWaste.com is recognized independently from any such affiliation. She has been interviewed by GreenMarketing.tv, and listed and given the seal of approval by The Green Maven, a “green” search engine. Furthermore, when searching OutSmarWaste.com on Google, only one reference in the first five pages identifies TerraCycle.

TerraCycle argues that Respondent’s offer of goods is not bona fide because Respondent was attempting to “misleadingly direct Internet users” to her website from TerraCycle’s and such users were harmed by such misuse. As noted, TerraCycle itself does not use the OUTSMART WASTE Mark in its actual sale of goods so Respondent is not certain how customers could be confused or diverted to her website by the use of OutsmartWaste.com.

The only case to which TerraCycle cites is Chanel, Inc. v. Estco Technology Group, WIPO Case No. D2000-0413. Unlike that case, TerraCycle has not proven that the OUTSMART WASTE Mark is a “world famous trademark”. Further, unlike the Chanel case, TerraCycle had not filed for a trademark prior to Respondent’s registration of the Domain Name.

Respondent was aware that TerraCycle used the term “Outsmart Waste” under its name but was not aware that it was a trademark or service mark and she was not attempting to divert customers from TerraCycle. Respondent claims she was simply trying to sell third party products. She did not register or use the Domain Name in bad faith. Respondent claims that she did not copy Complainant’s website or format. Rather, she hired a professional web designer to give her site a unique look and feel and to develop her “brand.”

Aside from viewing the home page once prior to registering the Domain Name, Respondent claims she never actually saw the TerraCycle website where any of the products are offered until after TerraCycle’s attorney sent her the letter demanding she turn over the Domain Name (and not in detail until she began drafting this response). As evidenced by Respondent’s actual use of the website, she did not register the Domain Name for the purpose of simply selling it to TerraCycle or one of its competitors. She registered it for a business purpose and has used it for a legitimate business purpose through August 30, 2011, based on the use of common English terms. As evidenced by TerraCycle’s registration of the domain name <outsmartwaste.net> on February 2, 2011, Respondent did not register the Domain Name to prevent TerraCycle from reflecting the Mark in a corresponding domain name. There are at least 10 other “outsmartwaste” based domain names available for use by TerraCycle.

6. Discussion and Findings

Paragraph 4(a) of the Policy requires that Complainant prove each of the following three elements to obtain an order that a domain name should be cancelled or transferred:

(i) the Domain Name registered by Respondent 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) the Domain Name has been registered and is being used in bad faith.

A. Supplemental Submissions

The first issue that needs to be decided is the status of Complainant’s and Respondent’s unsolicited (by this Panel) supplementary filings. In general, the UDRP makes no provisions for unsolicited filings by either party. The Center informed both parties of this. While there are occasions when a Panel may request additional filings, the Panel did not do so here.

With respect to unsolicited filings, this Panel is of the view expressed in Gordon Sumner, p/k/a Sting v. Michael Urvan, WIPO Case No. D2000-0596, that unsolicited submissions will be considered only in exceptional circumstances, and only when the party filing the unsolicited submission explains the exceptional circumstances and why the material could not have been submitted with the Complaint.

Complainant has made no showing of exceptional circumstances and has not explained why the materials in its unsolicited submission, which relate to its alleged common law rights, could not have been submitted earlier. Consequently, the Panel will not consider Complainant’s affidavit, nor Respondent’s response. It seems to the Panel that if a Complainant bears the burden of proving, among other things, that it has rights in the mark it claims Respondent is using without authorization then a Complainant would want to set forth in its Complaint all the evidence it has to establish those rights.

B. Identical or Confusingly Similar

There is no question that the Domain Name <outsmartwaste.com> (absent the generic domain suffix) is identical to Complainant’s OUTSMART WASTE Mark, the term in which Complainant claims common law rights. The threshold issue is whether Complainant has demonstrated the existence of those rights.

Question 1.7 of the “WIPO Overview of WIPO Panel Views on Selected UDRP Questions”, addresses this exact issue, i.e., what needs to be shown for the complainant to successfully assert common-law or unregistered trademark rights? The answer provided reads as follows: “Consensus view: The complainant must show that the name has become a distinctive identifier associated with the complainant or its goods and services. Relevant evidence of such ‘secondary meaning’ includes length and amount of sales under the mark, the nature and extent of advertising, consumer surveys and media recognition. The fact that the secondary meaning may only exist in a small geographic area does not limit complainant’s rights in a common law trademark. Unregistered rights can arise even when the complainant is based in a civil law jurisdiction.”

While Complainant may have a thriving waste elimination business under the TERRACYCLE Mark, Complainant has failed to provide any evidence to support its allegations of common law trademark rights in the OUTSMART WASTE Mark.

Complainant makes a host of allegations regarding its use of the OUTSMART WASTE Mark that stand wholly unsubstantiated on this record. For example, Complainant asserts that it “has used the Outsmart Waste mark continuously in interstate and international commerce for at least four years in connection with its recycling services and recycled products”, citing to snapshots of pages from its website all dated “9/13/2011”, a mere three days before Complainant filed its Complaint in this proceeding. A printed first page of Complainant’s website shows the OUTSMART WASTE Mark in juxtaposition to the TERRACYCLE Mark but, again, the date of that page is “9/13/2011.” There is no evidence of four years of use, let alone four years of continuous use.

Complainant also makes the bald statement: “Through Complainant’s four years of consistent and continuous advertising, marketing and extensive use, the Outsmart Waste Trademark has come to be associated distinctly and exclusively with Complainant’s products and services. Complainant’s use is and for many years has been on its home page in immediate conjunction with its TerraCycle® and Infinity Symbol® branding.” In addition to providing no evidence of use for even a year, let alone four years, Complainant has not provided the Panel with any evidence of its advertising and marketing efforts relating to the OUTSMART WASTE Mark in conjunction with its products and service. Similarly, in trying to make a case that Respondent was likely aware of Complainant and its rights in the OUTSMART WASTE Mark when she registered the Domain Name, Complainant points to its “earlier and well-publicized use of the Mark since 2007, as evidenced by its annual expenditure on marketing and publicity.” Again, the record is devoid of any evidence of such expenditures.

The Complaint contains nothing by way of documentary exhibits and/or sworn testimony (e.g., affidavit or declaration) to support Complainant’s specific allegations or its general claim to common law rights in respect of the OUTSMART WASTE Mark. Thus, Complainant has failed to prove a crucial element of its case. Mancini’s Sleepworld v. LAKSH INTERNET SOLUTIONS PRIVATE LIMITED, WIPO Case No. D2008-1036; Infodev Electronic Designers International, Inc. v. Infodev, WIPO Case No. D2002-0565. In these circumstances, it is not necessary for the Panel to make any findings in relation to elements (ii) and (iii) of paragraph 4(a) of the Policy.

7. Decision

For all the foregoing reasons, the Complaint is denied.

Harrie R. Samaras
Sole Panelist
Dated: October 31, 2011