WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Crunch IP Holdings, LLC v. Paydues Inc.

Case No. D2012-1033

1. The Parties

Complainant is Crunch IP Holdings, LLC, of New York, New York, United States of America (“United States”), represented by Leason Ellis, United States.

Respondent is Paydues Inc. of Santa Fe, New Mexico, United States.

2. The Domain Name and Registrar

The disputed domain name <crunchfranchise.net> is registered with GoDaddy.com, LLC.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on May 15, 2012. On May 16, 2012, the Center transmitted by email to GoDaddy.com, LLC a request for registrar verification in connection with the disputed domain name. On May 16, 2012, GoDaddy.com, LLC transmitted by email to the Center its verification response confirming that Respondent is listed as the registrant and providing the contact details.

The Center verified that the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy” 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 May 23, 2012. In accordance with the Rules, paragraph 5(a), the due date for Response was June 12, 2012. Respondent did not submit any response. Accordingly, the Center notified Respondent’s default on June 13, 2012.

The Center appointed Gary J. Nelson as the sole panelist in this matter on June 20, 2012. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.

4. Factual Background

Complainant is the owner of at least one United States trademark registration for CRUNCH by itself, and at least one United States trademark registration for a mark combining CRUNCH with a design element. Specifically, Complainant owns at least the following trademark registrations in the United States:

The disputed domain name appears to have been registered on July 7, 2011. The operational website at <crunchfranchise.net> purports to offer information on how to secure a “crunch franchise.” The website appears to feature trademarks owned by Complainant.

5. Parties’ Contentions

A. Complainant

Complainant is the holding company for all intellectual property rights to the CRUNCH trademarks on behalf of Crunch Holdings, LLC and its operating companies. Complainant owns, operates and franchises health clubs and fitness centers internationally under the CRUNCH mark.

In addition to its registered rights, Complainant uses the mark CRUNCH as a trade name and has acquired common law rights in the mark CRUNCH for fitness related services.

Since at least 1988, Complainant, or its predecessor in interest, has used the CRUNCH mark in commerce in association with its gymnasiums and fitness centers and related goods and services.

Complainant has operated a website using the domain name crunch.com since at least 1999 to promote the CRUNCH FITNESS business.

Complainant has been operating a website using the domain name <crunchfranchise.com> since at least 2010 to provide information about its franchising opportunities.

Respondent’s website displays text and information purportedly relating to obtaining a gym franchise associated with Complainant. The site contains a form soliciting contact information from website visitors. Respondent is using the disputed domain name to solicit information from Internet users, and to promote its own businesses.

Complainant has no relationship with Respondent, contractual or otherwise, that would in any way entitle Respondent to use the CRUNCH trademark.

Respondent is a serial cybersquatter who targets potential franchisers. Respondent operates various websites containing famous marks. Respondent purports to offer a “Franchise Toolkit” that it promotes through these franchise websites. This solicitation represents the diversion of traffic for Respondent’s own purposes.

Respondent is taking well known marks and using them to advertise and sell his own products and services.

The disputed domain name is confusingly similar to Complainant’s CRUNCH trademark.

Respondent has no rights or legitimate interest in the disputed domain name.

Respondent registered and is using the disputed domain name in bad faith.

B. Respondent

Respondent did not reply to the Complainant’s contentions.

6. Discussion and Findings

Paragraph 15(a) of the Rules instructs the Panel to “decide a complaint on the basis of the statements and documents submitted in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable.”

In view of Respondent’s failure to submit a formal Response, the Panel shall decide this administrative proceeding on the basis of Complainant’s undisputed representations pursuant to paragraphs 5(e), 14(a) and 15(a) of the Rules and shall draw such inferences it considers appropriate pursuant to paragraph 14(b) of the Rules.

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

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

(ii) Respondent has no rights or legitimate interests in 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

Complainant has established that it owns prior rights in the CRUNCH mark and the disputed domain name is confusingly similar to Complainant’s CRUNCH mark.

Complainant owns at least two CRUNCH trademark registrations in the United States. One of these registrations is for United States trademark registration no. 1,942,852. The registration date for this trademark (i.e., December 19, 1995) precedes the date upon which the disputed domain name was registered (i.e., July 7, 2011).

Accordingly, Complainant has established rights in its CRUNCH mark pursuant to Policy, paragraph 4(a)(i). See Janus International Holding Co. v. Scott Rademacher, WIPO Case No. D2002-0201 (finding that the registration of a mark is prima facie evidence of validity, which creates a rebuttable presumption that the mark is inherently distinctive. The respondent has the burden of refuting this assumption).

The disputed domain name, <crunchfranchise.net>, is confusingly similar to Complainant’s CRUNCH trademark because the disputed domain name incorporates the entirety of Complainant’s CRUNCH trademark and merely adds a generic descriptive term (i.e., “franchise”) and the top-level “.net” domain suffix. Neither the addition of a purely descriptive/generic term to a well-known mark nor the addition of a generic top-level domain suffix is sufficient to create a distinct domain name capable of overcoming a proper claim of confusing similarity. See Arthur Guinness Son & Co. (Dublin) Limited v. Tim Healy/BOSTH, WIPO Case No. D2001-0026 (finding confusing similarity where the domain name contains the identical mark of the complainant combined with a generic word or term); see also, Sony Kabushiki Kaisha (also trading as Sony Corporation) v. Inja, Kil, WIPO Case No. D2000-1409 (finding that “[n]either the addition of an ordinary descriptive word […] nor the suffix “.com” detract from the overall impression of the dominant part of the name in each case, namely the trademark SONY” and thus Policy, paragraph 4(a)(i) is satisfied).

The addition of the word “franchise” directly in back of Complainant's CRUNCH mark is insufficient to avoid a finding of confusing similarity.

The Panel therefore finds that Complainant has proven the requirement of Policy, paragraph 4(a)(i).

B. Rights or Legitimate Interests

The Panel finds that Respondent has no rights or legitimate interests in the disputed domain name.

Respondent has failed to file a formal Response, which can suggest, in appropriate circumstances, that Respondent lacks rights or legitimate interests in the disputed domain name. See Pavillion Agency, Inc., Cliff Greenhouse and Keith Greenhouse v. Greenhouse Agency Ltd., and Glenn Greenhouse., WIPO Case No. D2000-1221 (finding that the respondent’s failure to respond in a UDRP proceeding can be construed, in appropriate circumstances, as an admission that it has no rights or legitimate interests in a domain name).

By not filing a formal Response, Respondent has not provided any evidence that it is commonly known by the disputed domain name, or that it is commonly known by any name consisting of, or incorporating the words “crunch,” “franchise” or any combination of these words. In Charles Jourdan Holding AG v. AAIM, WIPO Case No. D2000-0403, the panel held that a lack of rights or legitimate interests could be found where (1) the respondent is not a licensee of the complainant; (2) the complainant’s rights in its related trademarks precede the respondent’s registration of the domain name; and (3) the respondent is not commonly known by the domain name in question. The Panel notes that by not submitting a formal Response, Respondent also failed to provide any evidence that it is a licensee of Complainant or that its registration of the disputed domain name predates the establishment of Complainant’s rights in its CRUNCH mark.

Complainant has provided unrebutted evidence showing that Respondent is operating a website at <crunchfranchise.net> featuring services that purport to offer relevant information on how to become a franchise of Complainant’s businesses. Respondent’s decision to add a common descriptive word (i.e., “franchise”) to a well known trademark for the purposes of attracting Internet users to Respondent’s own website does not instill Respondent with legitimate rights in the composite name or mark. See CHANEL, INC. v. ESTCO TECHNOLOGY GROUP, WIPO Case No. D2000-0413 (finding that use of a famous trademark to attract the public to a website is not a fair or legitimate use of the domain name, and ordering the transfer of <chanelstore.com> and <chanelfashion.com> to complainant).

Moreover, the corresponding website operating in association with the <crunchfranchise.net> disputed domain name is using Complainant’s CRUNCH mark to promote the services offered by Respondent. Infringement of another’s trademark or service mark can never create rights or legitimate interests in a corresponding domain name.

The Panel therefore finds that Complainant has proven the requirement of Policy, paragraph 4(a)(ii).

C. Registered and Used in Bad Faith

The Panel finds that Respondent registered and is using the disputed domain name in bad faith.

The Panel finds that Respondent likely chose the disputed domain name with full knowledge of Complainant’s rights in the CRUNCH trademark. Supporting this conclusion is the fact Respondent is directly targeting Complainant on its website as part of the services it offers. Also, Respondent’s awareness of Complainant’s CRUNCH trademark may be inferred because the mark was registered with the United States Patent and Trademark Office prior to Respondent’s registration of the disputed domain name and since the CRUNCH trademark is well-known. See Trip.com, Inc. v. Daniel Deamone, WIPO Case No. D2001-1066 (finding bad faith where the respondent had actual and constructive notice of the complainant’s trademarks registered in the United States); see also Kraft Foods (Norway) v. Fredrik Wide and Japp Fredrik Wide, WIPO Case No. D2000-0911 (“the fact that Respondent chose [sic] to register a well-known mark to which he has no connections or rights indicates that he was in bad faith when registering the domain name [at issue]”).

Moreover, Complainant has alleged, and Respondent has not rebutted, that Complainant operates its CRUNCH branded fitness centers and health clubs as franchises, and that franchisee opportunities are promoted on Complainant’s website at “www.crunchfranchise.com.

The Panel also finds that Respondent’s use of the <crunchfranchise.net> disputed domain name is an attempt by Respondent to intentionally attract, for commercial gain, Internet users to Respondent’s web site by creating a likelihood of confusion with Complainant’s CRUNCH mark as to the source, sponsorship, affiliation, or endorsement of Respondent’s website. This ongoing activity is a direct violation of paragraph 4b(iv) of the Policy, and is evidence of bad faith registration and use.

Finally, Respondent’s registration of numerous domain names containing trademarks owned by others is evidence of a pattern and history of exploiting the trademarks of others without any rational justification. This activity by Respondent is evidence of bad faith evidence and use. See La Quinta Worldwide, L.L.C. v. Paydues, Inc., WIPO Case No. D2012-0016 (finding bad faith registration and use when the evidence clearly established Respondent had engaged in a pattern and history of registering domain names that included the trademarks of others for the purpose of diverting Internet users to Respondent’s own websites).

The Panel therefore finds that Complainant has proven the requirement of Policy, paragraph 4(a)(iii).

7. Decision

For 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, <crunchfranchise.net>, be transferred to Complainant.

Gary J. Nelson
Sole Panelist
Dated: June 22, 2012