WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

UTVG Europe Holding B.V. v. Vitali S

Case No. D2014-1345

1. The Parties

The Complainant is UTVG Europe Holding B.V. of Cruquius, Netherlands, represented by Arnold + Siedsma, Netherlands.

The Respondent is Vitali S of Virginia, United States of America (“USA”), represented by LeClairRyan, USA.

2. The Domain Names and Registrar

The disputed domain names <premiumvape.com>, <premiumvapes.com> and <vapemaster.com> are registered with GoDaddy.com, LLC (the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on August 8, 2014. On August 8, 2014, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain names. On August 8, 2014, 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. In response to a notification by the Center that the Complaint was administratively deficient, the Complainant filed an amended Complaint on August 15, 2014.

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 the Respondent of the Complaint, and the proceedings commenced on August 18, 2014. In accordance with the Rules, paragraph 5(a), the due date for Response was September 7, 2014. The Response was filed with the Center on September 5, 2014.

The Center appointed Andrew D. S. Lothian, Alfred Meijboom and David H. Bernstein as panelists in this matter on September 25, 2014. The Panel finds that it was properly constituted. Each member of 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, UTVG Europe Holding B.V. (“UTVG Holding”) was incorporated in Amsterdam, Netherlands on February 15, 2012 and is the holding company of UTVG Europe B.V. (“UTVG Europe”), a company incorporated in Amsterdam, Netherlands on February 17, 2012 which wholesales e-cigarettes and related accessories. Mr. Raymund Story is a director of both of these companies. The Complainant says that its corporate group also includes a company named UTVG Inc., located in Alpharetta, Georgia, USA. The initials “UTVG” stand for “United Tobacco Vapor Group”.

The Complainant is the owner of two registered Community Trademarks, namely no. 011222239 (stylized word “Premium v a p e s”), for goods and services in international classes 9 and 34, filed September 27, 2012, registered May 30, 2014 and no. 011222271 (stylized word “Vape Master V” with a design of a shield with a capital “V” emblazoned thereon inserted between the two words), for goods and services in international classes 9 and 34, filed September 27, 2012 and registered February 27, 2013.

The Complainant is also the owner of USA registered trademark no. 4469089 stylized word “Vape Master V” with the same shield design as that noted above, for goods and services in international class 34, filed January 30, 2013 and registered January 21, 2014. This mark contains a disclaimer of the exclusive right to the word “Vape” other than in the mark as shown.

The Complainant is the owner of various trademark applications in Australia, Canada and the USA, including USA trademark application serial no. 85836735 for the stylized word mark “Premium v a p e s”, the stylization of which is identical to Community Trademark no. 011222239. The Panel has noted that this USA trademark application is subject to office action dated May 16, 2013 in which the Examining Attorney states that the word “premium” is laudatory and descriptive of the applicant’s goods and that the word “vapes” is likewise descriptive of the applicant’s goods. On June 11, 2013, the Complainant agreed to disclaim any rights in the word “premium” in this application.1

The Respondent’s name is Vitali Servutas. The Respondent has been in the e-cigarette business since 2008 and operates a company named PremiumEstore LLC located in Virginia, USA. Although the Complainant did not elaborate further on this fact, the Respondent has persuasively demonstrated that Messrs. Servutas and Story are or were in business together, having met at a trade fair in about 2011. The Respondent and Mr. Story founded a Georgia, USA corporation named United Tobacco Vapor Group, Inc. (“UTVGI”) on January 13, 2012. Mr. Story is listed as the CEO of UTVGI while the Respondent is listed as its Secretary.

The Respondent appears to have solely procured the design of the stylized word “Premium”, as found in the Complainant’s Community Trademark no. 011222239. This same stylized word appears in a logo, featuring the addition of capitalized words “ELECTRONIC CIGARETTE” which the Respondent says it obtained from a graphic designer in 2009. The Respondent’s company PremiumEstore LLC applied for a corresponding USA trademark under serial no. 77842281, filed on October 6, 2009. This trademark application was abandoned on July 14, 2010.

An abbreviated form of the Respondent’s personal name, “Vitali S”, appears on the WhoIs record for the disputed domain names. The creation dates of the disputed domain names are as follows:

<premiumvape.com> was created on July 3, 2011;

<premiumvapes.com> was created on April 4, 2012; and

<vapemaster.com> was created on October 15, 2009.

Neither party states whether the Respondent created the disputed domain names itself or whether they were acquired by the Respondent from an earlier registrant. In the absence of evidence to the contrary, the Panel assumes that the domain names were created by the Respondent. The creation date for all three domain names precedes the earliest priority date of Complainant’s various trademark applications and registrations, the earliest of which is September 27, 2012.

During the gestation of their venture, the Respondent and Mr. Story communicated regularly by electronic means and some of the logs of their conversations have been retained by the Respondent. In an Internet chat conversation between the Respondent and Mr. Story dated May 15, 2012, Mr. Story (on Complainant’s behalf) stated “just FYI we will put premium Vapes in the UTVG when we apply so that you have control”… “I will make sure its [sic] in the UTVG corporation where only YOU have control”.

It appears that the Respondent and Mr. Story had a disagreement about their business venture in about July 2014. A screenshot from June 25, 2014 (Annex 15 of the Complaint) shows that <vapemaster.com> was then being used for a website, featuring the Complainant’s figurative Community Trademark no. 011222271, which offered “Vape Master” branded electronic cigars and pipes for sale. A screenshot from June 28, 2013 (Annex 16 of the Complaint) shows that <premiumvapes.com> was being used for a website, featuring the Complainant’s figurative Community Trademark no. 011222239, which offered “Premium Vapes” branded electronic cigarettes for sale. The Complainant says that, after it objected to the turnover from such sites allegedly being allocated to the Respondent’s company PremiumEstore LLC, the Respondent redirected the disputed domain names <premiumvape.com> and <premiumvapes.com> to the Respondent’s own site at “www.premiumecigarette.com”. Screenshots provided (Annex 18 of the Complaint) show that “403 Forbidden” errors were returned by the server for that site although, at the date of this Decision, the site is active and offers electronic cigarettes for sale branded with the Complainant’s figurative Community Trademark no. 011222239. The said site is operated by PremiumEstore LLC. As at the date of this Decision, the disputed domain name <vapemaster.com> redirects to a website at “www.vape-master.com” which offers “Vape Master” branded electronic cigars and pipes for sale and is a site operated by the Complainant.

5. Parties’ Contentions

A. Complainant

The Complainant contends that the disputed domain names are identical or nearly identical to trademarks in which it owns rights; that the Respondent has no rights or legitimate interests in the disputed domain names; and that the disputed domain names were registered and are being used in bad faith.

Curiously, the Complaint tells a truncated version of the facts. It does not elaborate on the fact that the parties had a prior relationship, that the Respondent played a role in the development of these names, or that the Complainant made certain representations to the Respondent about his rights to “control” the Premium Vapes name.

Relying on the more limited version of the facts set forth in the Complaint, the Complainant contends that the Respondent never received any rights to register and/or use the disputed domain names in its own name and for its own purpose, namely for the benefit of PremiumEstore LLC. The Complainant states that the Respondent is not known by the names “Premium Vape(s)” or “Vape Master”, is not making a legitimate noncommercial use of the disputed domain names, and is not using the disputed domain names in connection with the bona fide offering of goods. The Complainant adds that the redirection of the <premiumvape.com> and <premiumvapes.com> to the Respondent’s website constitutes use to misleadingly divert consumers. With regard to <vapemaster.com>, the Complainant asserts that the use of this disputed domain name in the name of the Respondent is unlawful to the Complainant and submits that it fears that the disputed domain name will be redirected to another domain name of the Respondent for its own commercial benefit.

The Complainant submits that the Respondent was aware of the Complainant’s products and trademarks prior to making the redirections of <premiumvape.com> and <premiumvapes.com> for the benefit of the Respondent’s own business and therefore uses the disputed domain names in bad faith. The Complainant also claims that the use of the disputed domain names disrupts the Complainant’s business, which it states is a competitor of the Respondent’s business.

The Complainant submits that the Respondent’s use of the disputed domain names has created a likelihood of confusion with the Complainant’s mark and cites three examples of customers of PremiumEstore LLC apparently being confused into thinking they were dealing with the Complainant’s corporate group. The Complainant notes that the website “www.premiumecigarette.com” to which <premiumvape.com> and <premiumvapes.com> redirected was taken down while the Respondent and Mr. Story corresponded but produces a screen print (Annex 21 of the Complaint) showing that the Respondent then published its telephone number and email address alongside a message inviting orders from the public.

B. Respondent

The Respondent contends that the Complainant bears but has not satisfied the burden of proof. The Respondent submits that the Respondent is the senior user of the “Premium” element in the Complainant’s mark and of the Complainant’s marks as a whole. The Respondent states that the VAPE MASTER mark and associated products were developed and designed by the Respondent individually and that the Respondent has a basis to claim ownership of the Complainant’s corresponding mark. The Respondent states that he did not assign these marks to the Complainant and adds that, after the business relationship broke down, the Respondent retained ownership thereof.

The Respondent asserts that the disputed domain names are used in connection with a bona fide offering of goods, namely electronic tobacco products, and adds that such use does not require the consent of the Complainant. The Respondent adds that, as a senior user of the marks contained in the disputed domain names, the Respondent has a legitimate interest therein. The Respondent submits that the Complainant was aware of the Respondent’s promotional activities and by extension that the Respondent had a legitimate basis to engage in such activities.

The Respondent states that it acquired the disputed domain names to assist in marketing the Complainant’s products and adds that it has been engaged in such activity since 2011, prior to the incorporation and claimed trademark rights of the Complainant. The Respondent asserts that there is no evidence that the Respondent acquired the disputed domain names to sell them to any person or that the Respondent has engaged in a pattern of preventing the Complainant from reflecting its marks in domain names. The Respondent argues that the Complainant was aware of the Respondent’s activities and permitted these to be continued in the hope that the Complainant would profit thereby.

The Respondent states that it has not sold or leased the disputed domain names to any party and argues that it is not a competitor of the Complainant, asserting that its activity was at the direction of the Complainant and with the Complainant’s knowledge. The Respondent adds that its use of websites was anticipated by the Complainant to create a financial gain for the Complainant and that the Respondent’s activities by their nature cannot be deemed to create consumer confusion.

6. Discussion and Findings

To succeed, the Complainant must demonstrate that all of the elements listed in paragraph 4(a) of the Policy have been satisfied:

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

(ii) the Respondent has no rights or legitimate interests in respect of the disputed domain names; and

(iii) the disputed domain names have been registered and are being used in bad faith.

A. Identical or Confusingly Similar

There are two parts to the inquiry under the first element of the Policy. The Complainant must first demonstrate that it has rights in one or more trademarks and secondly that each disputed domain name is identical or confusingly similar to the corresponding mark. For the purposes of this element of the Policy, it is not necessary for the registration date of the trademarks relied upon by the Complainant to pre-date the creation date of the corresponding disputed domain names (see paragraph 1.4 of the WIPO Overview 2.0).

The Panel notes that both of the trademarks relied upon by the Complainant are figurative in nature. Paragraph 1.11 of the WIPO Overview 2.0 addresses this topic by posing the question: “Are disclaimed or design elements of a trademark considered in assessing identity or confusing similarity?” The consensus view is stated as follows:

“[…] as figurative, stylized or design elements in a trademark are generally incapable of representation in a domain name, such elements are typically disregarded for the purpose of assessing identity or confusing similarity, with such assessment generally being between the alpha-numeric components of the domain name, and the dominant textual components of the relevant mark. However, design elements in a trademark may be relevant to the decision in certain circumstances - such as where, for example, they form an especially prominent or distinctive part of the trademark overall. Some panels have found it to be a matter of impression in the circumstances of each case. Where the entire textual component of a complainant’s relevant trademark has been disclaimed, or the only protectable component of such mark is comprised of design elements which generally cannot be represented in the alpha-numeric string of a domain name, then (absent a showing of acquired distinctiveness through use of the relevant mark) the complainant may lack any relevant rights under the UDRP on the basis of such mark, rendering moot any assessment of the disputed domain name’s identity or confusing similarity with it.”

In the present case, the Panel considers that the only protectable component of the Complainant’s PREMIUM VAPES mark is likely to be the stylized representation itself. The Panel is fortified in this view by the USPTO office action, which asserts that “premium” and “vapes” are generic or merely descriptive:

“The word ‘premium’ is laudatory and descriptive of the applicant’s goods. The word ‘premium’ is defined as ‘having or reflecting superior quality or value.’ … Applicant’s mark immediately identifies a superior quality of the electrical cigarettes, cigars and pipes. Specifically, the word ‘premium’ refers to the superior quality of inhaling the applicant’s electrical cigarettes, cigars and pipes as well as electronic smoking simulators.

Additionally, the word ‘vapes’ is also descriptive of the applicant’s goods. The word ‘vape’ is defined as ‘to inhale the vapor produced by a non-combustible cigarette.’ ... Applicant’s goods are electrical cigarettes, cigars, and pipes as well as electronic smoking simulators, which allows a user to inhale vapors infused with nicotine through a ‘non-combustible’ means. See attached internet evidence showing that others recognize the term ‘vape(s)’ to describe inhaling vapor infused with nicotine through electronic cigarettes.”

USPTO Office Action, May 16, 2013, in Application Serial No. 85/836,735 (“Premium Vapes”). The “internet evidence” attached to the Office Action included a “Word Spy” dictionary reference, a website guide on the use of e-cigarettes, and an article on e-cigarettes from The Economist, all of which used “vape” as a common term describing the use of e-cigarettes in which nicotine-infused liquid is turned into vapor which is inhaled by the user. This conclusion is further reinforced by the fact that the Complainant has disclaimed PREMIUM in that application and also has disclaimed VAPES in its registration for VAPE MASTER V. That is because “premium” is a common laudatory term that it thus appears that, at least according to the USPTO, PREMIUM VAPES is not a protectable trademark, and the Complainant has essentially conceded that point with its disclaimers.

The Panel acknowledges that the Complainant holds a registered Community Trademark for a figurative mark containing a stylized representation of the words “Premium v a p e s”. This mark is duly registered and accordingly benefits from a presumption of validity and compliance with the legal requirements for its registration. However, caution must be exercised where comparing a domain name, which can only consist of alphanumeric elements, with a mark which may have secured registration due to the addition of figurative elements to an otherwise non-distinctive word mark, the addition of which is sometimes termed a ‘figurative figleaf’2 . The test of identity or confusing similarity should not be based on a non-distinctive element where the only protectable component of the mark is comprised of design elements (see paragraph 1.11 of the WIPO Overview 2.0).

With regard to the Complainant’s VAPE MASTER V mark, the Panel considers that, although the word “vape”, standing alone, is likely generic or merely descriptive for e-cigarettes, and indeed has been disclaimed in the Complainant’s corresponding USA registered trademark, its combination with the word “Master” and the letter “V” leads to a composite which may be protectable. To the extent the Complainant has rights in the VAPE MASTER V trademark, the Panel finds that the <vapemaster.com> domain name is confusingly similar to that trademark.

Accordingly, had it been necessary to make a finding, the Panel would most probably have found that, with respect to the domain names <premiumvape.com> and <premiumvapes.com>, the Complainant fails under this element of the Policy. With respect to the domain name <vapemaster.com>, the Panel would most probably have found the Complainant did have rights in respect of the VAPE MASTER V mark and that the domain name is confusingly similar to that trademark given that both whitespace in the trademark and the generic Top-Level Domain (“gTLD”) “.com” in the disputed domain name may be disregarded for the purposes of comparison as is customary in cases under the Policy. However, in light of the Panel’s finding in respect of registration and use in bad faith, the Panel does not require to express a concluded view on this topic.

B. Rights or Legitimate Interests

The requirements of paragraph 4(a) of the Policy are conjunctive. A consequence of this is that failure on the part of a complainant to demonstrate one element of the Policy, including that the disputed domain name has been registered and is being used in bad faith, will result in failure of the complaint in its entirety. Accordingly, in light of the Panel’s finding under the next head, it is unnecessary for the Panel to address the issue of the Respondent’s rights or legitimate interests in the disputed domain name.

C. Registered and Used in Bad Faith

Paragraph 4(b) of the Policy provides four, non-exclusive, circumstances that, if found by the Panel to be present, shall be evidence of the registration and use of a domain name in bad faith:

“(i) circumstances indicating that you have registered or you have acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name; or

(ii) you have registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that you have engaged in a pattern of such conduct; or

(iii) you have registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(iv) by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your web site or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your web site or location or of a product or service on your web site or location”.

The present dispute is of a multi-faceted nature, resulting as it does from the establishment of the business venture between Mr. Story and the Respondent in about 2011 and its ultimate breakdown in July 2014. There are many relevant questions of detail which the Parties have left open. Did the Respondent register all or some of the disputed domain names itself, or did it acquire all or some of them from a previous registrant? At what date and at what point in the development of the Parties’ business relationship were any such registrations or acquisitions effected? Were either or both of the brands contained in the Complainant’s trademarks developed or originated in whole or in part by the Respondent and if so was such work conducted exclusively for the Respondent’s benefit or for the benefit of the Complainant’s group? Did the Respondent unreservedly or conditionally agree to assign any such designs and brand names to the Complainant’s corporate group in a “combination of assets” or did the Respondent merely agree to permit UTVGI to use these? What is the meaning or effect of the assurance apparently given by Mr. Story to the Respondent in the Internet chat conversation of May 15, 2012? Does the breakdown in the Parties’ business relationship entitle the Respondent to withhold the disputed domain names from the Complainant’s group of companies?

The Panel poses these questions to illustrate the fact that what has been placed before it is a complex and in many ways opaque commercial dispute involving alleged breach of fiduciary duty and apparently competing intellectual property rights rather than a case of abusive cybersquatting. It is the latter type of case that the Policy is intended to address, not the former. It is not designed to adjudicate all disputes of any kind that relate in any way to domain names. The Panel need only quote the words of one of their number from the relatively early case under the Policy, The Thread.com, LLC v. Jeffrey S. Poploff, WIPO Case No. D2000-1470, which remain equally valid today, namely “[t]o attempt to shoehorn what is essentially a business dispute between former partners into a proceeding to adjudicate cybersquatting is, at its core, misguided, if not a misuse of the Policy.”

As with the circumstances in The Thread.com, LLC v. Jeffrey S. Poploff, supra, the Complainant’s case of bad faith registration and use in the present case arises from the Respondent’s alleged breach of fiduciary duty rather than its having engaged in cybersquatting on the basis of any of the various species of bad faith as they are typically known to the Policy. The fact that there are some features of the Respondent’s alleged conduct here which may appear superficially similar to the Policy’s concepts of bad faith, such as the pointing of the disputed domain names <premiumvapes.com> and <premiumvape.com> to a website operated by the Respondent’s company PremiumEstore LLC in a manner which is said to cause confusion, does not alter this conclusion.

Further, and based on the limited facts made available to the Panel, there are substantial questions as to the Complainant’s assertion that the Respondent registered the domain names in bad faith. At least two of the domain names appear to have been registered by the Respondent prior to the development of the Complainant’s trademark rights, and all three appear to have been registered with the consent and knowledge of the Complainant at a time when the parties were working together. These facts undermine the Complainant’s assertion that the Respondent registered the domain names in bad faith in 2009, 2011 and 2012.

In all of these circumstances, the Panel finds that the Complainant has failed to prove that the disputed domain names were registered and have been used in bad faith within the meaning of the Policy. In making that finding, the Panel takes no position on the merits of the wider dispute that evidently exists between the Parties. It should in no way be considered as preventing either of the Parties from seeking to pursue this matter through the courts should they choose to do so. Nor does the Panel address this Decision to any particular forum that may ultimately be seized of the matter. Finally, the Panel notes that this Decision neither condones or endorses the actions of the Respondent in its use of the disputed domain names, nor should it be construed as a finding that the Respondent has not acted in bad faith in a wider context than that which the Panel may consider within the framework of the Policy.

7. Decision

For the foregoing reasons, the Complaint is denied.

Andrew D. S. Lothian
Presiding Panelist

Alfred Meijboom
Panelist

David H. Bernstein
Panelist

Date: October 9, 2014


1 Neither party notified the Panel of the disclaimers in the US trademark registration and application, perhaps because both parties have an interest in the protectibility of trademarks containing the term “vapes”. The public, however, has an interest in ensuring that generic and merely descriptive marks are not given trademark rights that make them the exclusive domain of any individual parties. The Panel has thus considered the disclaimers and the US Patent & Trademark Office (“USPTO”) office actions, which are in any event a matter of public record. It long has been accepted that UDRP panels may rely on publicly-available trademark office documents in UDRP proceedings. See WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition (“WIPO Overview 2.0”) at paragraph 4.5 (“A panel may undertake limited factual research into matters of public record if it deems this necessary to reach the right decision. This may include . . . discretionary referencing of trademark online databases.”) (citing cases).

2 See, for example, the remarks of Arnold J. in Starbucks (UK) Ltd v British Sky Broadcasting Group Plc & Others [2012] EWHC 1842 (Ch) at paragraph 117.