WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Grendene USA, Inc. v. Patricia Brady
Case No. D2015-0178
1. The Parties
The Complainant is Grendene USA, Inc. of Orlando, Florida, United States of America (“USA” or “US”), represented by Kupferstein Manuel & Quinto, LLP, USA.
The Respondent is Patricia Brady of Encinitas, California, USA, represented by Knobbe, Martens, Olson & Bear, LLP, USA.
2. The Domain Name and Registrar
The disputed domain name <ipanemaus.com> (the “Domain Name”) is registered with Network Solutions, LLC (the “Registrar”).
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on February 3, 2015. On February 4, 2015, the Center transmitted by email to the Registrar a request for registrar verification in connection with the Domain Name. On February 5, 2015, the Registrar transmitted by email to the Center its verification response confirming the Respondent 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 the Respondent of the Complaint, and the proceeding commenced on February 10, 2015. In accordance with the Rules, paragraph 5(a), the due date for Response was March 2, 2015. The Response was filed with the Center on March 2, 2015.
The Center appointed W. Scott Blackmer, Jonathan Agmon and David H. Bernstein as panelists in this matter on March 30, 2015. 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, formerly known as Grendha Shoes Corporation, is a business corporation established in January 1987 under the laws of the state of Delaware, USA, with its principal place of business in the state of Florida, USA. The Complaint identifies the Complainant as a wholly owned subsidiary of Grendene, S.A., a company established in Brazil. Grendene, S.A. has been in business since 1971, manufacturing fashion sandals and other footwear sold in more than 90 countries.
The website of Grendene, S.A., found at “www.grendene.com.br”, shows the Complainant as the US distributor of footwear manufactured by Grendene, S.A. and branded with its IPANEMA trademark. In September 2007, the Complainant registered the domain name <ipanemausa.com>, under its former name, Grendha Shoes Corporation. According to the Complaint, the Complainant has been selling its parent company’s IPANEMA-branded sandals in the US since 2010, through over 3,500 retail outlets such as specialty fashion shops, vacation resorts, fitness centers, and casinos, as well as online. The Complainant’s website at “www.ipanemausa.com” (“the Complainant’s website”) is headed “Ipanema”, and displays only products sold under the IPANEMA brand, although the website refers to the Complainant as the US distributor of the IPANEMA, GRENDHA, RIDER, and MELISSA brands. The Complainant claims 2014 revenues of USD 11 million.
The Respondent is an individual residing in Encinitas, California, USA. According to the Response and the Declaration of James W. Brady dated September 19, 2014, attached to the Response and originally filed in the US trademark litigation described below (“Mr. Brady’s Declaration”), the Respondent’s parents, Mr. Brady and Patricia M. Brady, have operated a family business since 1985 designing, manufacturing, and selling bikinis and other beachwear throughout the US and using the mark IPANEMA. The Respondent joined this business in 2013. For convenience, the Respondent’s parents are referred to in this Decision as the “senior Bradys”, while the Respondent and the senior Bradys are referred to collectively as “the Bradys”. For some time, the senior Bradys’ swimwear business was operated as a company, Made in Brazil, Inc., which was incorporated in the state of California, USA, in 1986.
The Response and attachments indicate that the senior Bradys attended major swimwear and beachwear trade shows to display their products, and the Response attaches photos that appeared in the US national magazine Sports Illustrated in 1989 and 2014 showing models wearing the Bradys’ IPANEMA swimsuits, along with other evidence of media stories featuring the Bradys’ IPANEMA swimwear. According to the Response, the Bradys invested more than USD 2 million in advertising and marketing IPANEMA swimwear and beachwear since 1985 and earned “millions of dollars” in revenues from selling beachwear and swimwear since 2000.
The parties dispute the extent to which the Bradys continued to sell IPANEMA-branded swimwear in recent years. The Complaint asserts that the Bradys abandoned their swimwear business in 2006. The Response acknowledges that the Bradys sold much of their inventory in 2006 to a third party, Mercury Beach Maid, which then advertised and sold the IPANEMA-branded swimwear until 2009.
However, Mr. Bradys’ Declaration states that the Bradys retained hundreds of swimsuits and made sales of IPANEMA-branded swimsuits in every year except 2013, when the Respondent was brought into the business and the Bradys “reinvigorated the line with new designs.” The senior Bradys advertised their IPANEMA-branded swimwear on a website at “www.ipanemaswimwear.com” from 2009 (the year that Mercury Beach Maid stopped selling the line) to 2013, when the Respondent joined the family business. Mr. Brady’s Declaration acknowledges that they sold primarily to retailers and distributors and did not rely on online sales until 2014. The Bradys released new swimsuit designs at the Miami Swim Show in July 2014 and subsequently participated in 2014 trade shows in Las Vegas, Orlando, and Huntington Beach, California. The Response attaches screenshots of website and social media pages dated in February 2015, demonstrating that the Bradys currently advertise and sell IPANEMA-branded swimwear and beachwear online. Mr. Brady’s Declaration indicates that “hangtags” are typically attached to the clothing, with the mark IPANEMA and in some cases other words. Mr. Bradys’ Declaration states that the Bradys expended more than USD 100,000 on advertising IPANEMA swimwear from January to September 2014.
The Complainant’s IPANEMA Mark
Ipanema Shoe Corp., an apparently unrelated company established under the law of the state of New York, USA, obtained a US trademark registration on September 13, 1983 (Registration Number 1251204) for the mark IPANEMA used in connection with women’s shoes, including sandals. That trademark registration was deemed abandoned in January 1990, as the registrant’s parent company failed to file an affidavit of continuing use. Ipanema Shoe Corp. then applied in November 1992 to register the IPANEMA mark again, stating that it continued to sell footwear under that brand. The US Patent and Trademark Office (“USPTO”) denied the application on the ground of a likelihood of confusion with the IPANEMA trademark for which the Bradys’ company, Made in Brazil, Inc., applied in 1991, as discussed further below.
Ipanema Shoe Corp. filed a lawsuit to invalidate the Made in Brazil, Inc. trademark registration. The parties negotiated a settlement (“the 1995 Settlement Agreement”), which provided that Ipanema Shoe Corp. would dismiss its invalidation suit and refrain from selling “swimwear” and “activewear” (excluding footwear), while Made in Brazil, Inc. would consent to Ipanema Shoe Corp. using the IPANEMA mark on footwear and would refrain from selling IPANEMA-branded footwear itself. Consequently, the USPTO issued US Trademark Registration Number 1908543 on August 1, 1995 to Ipanema Shoe Corp. for the trademark IPANEMA used in connection with footwear.
That trademark registration was assigned successively to three other parties before it was acquired by the Complainant (under the name Grendha Shoes Corporation) in October 2007, within a few weeks of the Complainant registering the domain name <ipanemausa.com>. The registration was subsequently assigned to the Complainant’s Brazilian parent company in 2008, and finally back to the Complainant, under its current name, in January 2015. Thus, the Complainant is currently the owner of the US registered IPANEMA trademark for footwear.
The Respondent’s IPANEMA Marks
The senior Bradys’ company, Made In Brazil, Inc., applied in September 1991 to register IPANEMA as a trademark for “swimwear”, claiming first use in commerce in September 1990. Made in Brazil, Inc. obtained US Trademark Registration Number 1778404 on June 22, 1993. The registration was assigned in April 1998 to the senior Bradys individually. The senior Bradys filed trademark infringement actions in 2009 and 2010 against several manufacturers and retailers to protect the IPANEMA mark, reportedly resulting in agreements by each of those parties to cease using the mark.
Made in Brazil, Inc. also obtained US trademark registration for IPANEMA WEAR (Registration Number 1630915, registered January 8, 1991), which was assigned to the senior Bradys in May 1998 and then cancelled effective November 2002, as the senior Bradys replaced that mark with the IPANEMA mark. The senior Bradys later obtained US trademark registration for THE GIRL FROM IPANEMA in their own names (Registration Number 2842768, registered May 18, 2004).
The Parties’ Trademark Dispute
It is undisputed that counsel for the Complainant’s Brazilian parent company, Grendene, S.A., engaged in email and telephone communications with Mr. Brady in 2004 concerning the Brazilian company’s interest in selling its IPANEMA-branded sandals in the US. The parties characterize those communications differently, but in any event, they did not lead to an agreement concerning a business partnership (the Complainant’s version) or the licensing of the Respondent’s IPANEMA mark (the Respondent’s version).
Discussions between Mr. Brady and the Complainant recommenced in December 2008, after the Complainant had acquired the US registered IPANEMA trademark for footwear. Again, the discussions did not lead to an agreement. The Complainant began selling its parent company’s IPANEMA-branded footwear in the US in 2010.
On March 12, 2012, the senior Bradys filed a federal trademark infringement action against the Complainant, as discussed further below. That lawsuit remains pending at the time of this Decision.
The Domain Name
The Respondent registered the Domain Name on March 18, 2014. According to the Deposition of Patricia Brady dated November 14, 2014 (the “Respondent’s Deposition), which was made in connection with the trademark litigation and attached to the Response in this proceeding, the Respondent registered the Domain Name for use in the family business that would now deal in beach apparel in addition to swimwear. It has been used for that purpose from that time to the present, with the Bradys adding new content and online ordering capabilities as well as redirecting traffic from the senior Bradys’ old website at “www.ipanemaswimwear.com”.
5. Parties’ Contentions
The Complainant argues that the Domain Name is confusingly similar to its registered IPANEMA trademark, given that “USA” is a generic geographic abbreviation and the Complainant uses a nearly identical string for its own website, “www.ipanemausa.com”.
The Complainant contends that the Respondent has no rights or legitimate interests in the Domain Name, because it contains more than the Respondent’s mark and the additional material, “USA”, is designed to target the Complainant.
The Complainant infers that the Respondent registered and used the Domain Name in bad faith, in an effort to harm the Complainant’s business and “create confusion to aid their infringement lawsuit” against the Complainant, which depends in part on establishing a likelihood of confusion between the parties’ marks.
The Respondent contends that the Complainant’s IPANEMA trademark registration is invalid and that the Complainant should be estopped from arguing in this proceeding that there is a likelihood of confusion with the Domain Name.
The Respondent asserts rights and legitimate interests in the Domain Name because the Bradys (including the Respondent) use the senior Bradys’ registered IPANEMA mark in their family business. The Respondent contends that appending the letters “USA” to this mark is appropriate because the business is chiefly focused on the market for swimwear and beachwear in the USA and combines design features from the USA and Brazil.
Denying bad faith in the registration and use of the Domain Name, the Respondent argues that it legitimately selected the Domain Name because it reflects the broader scope of the Respondent’s business in the USA beginning in 2014, offering beach apparel in addition to swimwear, for which the Bradys’ former domain name, <ipanemaswimwear.com>, was inadequate. The Respondent denies selecting the Domain Name to target the Complainant’s IPANEMA mark and observes that the Respondent’s business already used “IPANEMA USA” on some of the hangtags attached to its products in 2014.
The Respondent asks the Panel to enter a finding of Reverse Domain Name Hijacking against the Complainant.
6. Discussion and Findings
Paragraph 4(a) of the Policy provides that in order to divest a respondent of a disputed domain name, a complainant must demonstrate each of the following:
(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.
Under paragraph 15(a) of the Rules, “A Panel shall decide a complaint on the basis of the statements and documents submitted and in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable.”
A. Pending Litigation
The parties have been engaged in US trademark litigation since 2012, James W. Brady and Patricia M. Brady v. Grendene USA, Inc., Civ. No. 12CV0604 WQHKSC (United States District Court for the Southern District of California, complaint filed March 9, 2012). In their judicial complaint, the senior Bradys request relief in the form of cancellation of the Complainant’s US trademark registration for IPANEMA (on grounds of abandonment) and an injunction against the Complainant’s use of the IPANEMA mark in connection with the sale of beach sandals in the US. The Respondent argues, therefore, that the Panel should exercise its discretion to terminate the present UDRP proceeding.
The Rules (paragraph 18(a)) provide that, “[i]n the event of any legal proceedings initiated prior to or during an administrative proceeding in respect of a domain-name dispute that is the subject of the complaint, the Panel shall have the discretion to decide whether to suspend or terminate the administrative proceeding, or to proceed to a decision.”
As noted in WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition (“WIPO Overview 2.0”), paragraph 4.14, “a panel may determine (as happens in rare instances) that a UDRP dispute cannot be evaluated separately from such ongoing court proceeding, and may terminate or suspend the UDRP case on that basis, normally (in the case of termination) without prejudice to the filing of a future UDRP complaint pending resolution or discontinuation of such court proceeding.”
The Panel does not consider this to be a “rare instance” in which the UDRP dispute cannot be evaluated separately. The judicial complaint does not expressly concern the Domain Name or contest its ownership. Cancellation of registered trademarks is a relatively infrequent judicial remedy, for which the party seeking cancellation has the burden of persuasion, and the Complainant may have legitimate common law trademark claims in addition to the registration. The litigation may be resolved by settlement or by a judicial ruling that sustains the Complainant’s right to use the mark, with or without conditions. The parties have been engaged in this litigation for more than three years. The ultimate resolution may or may not affect the parties’ rights to use corresponding domain names. Thus, the Panel finds no compelling reason to exercise its discretion to avoid reaching a decision on the UDRP complaint on the current facts.
B. Identical or Confusingly Similar
The Complainant holds a US trademark registration for IPANEMA. The Domain Name contains an identical string and adds the letters “US”, a common abbreviation for the United States of America. Such a generic addition does not avoid confusion for purposes of this element of the Complaint, especially as the Complainant sells its parent company’s IPANEMA-branded footwear in the US and adds “USA” to the IPANEMA mark to form its own domain name.
The Respondent argues that the Complainant should be estopped from claiming that the Domain Name is confusingly similar to the Complainant’s IPANEMA mark, because in the trademark litigation between the parties the Complainant has asserted that its use of an IPANEMA mark for different kinds of products, in different commercial channels, does not infringe the senior Bradys’ trademark.
The Respondent’s argument is not apposite, as the “likelihood of confusion” for purposes of establishing an infringement claim under trademark law differs from the standard for establishing “confusing similarity” for the first element of a UDRP complaint. The likelihood of confusion may be relevant in discussing the other elements of the complaint, but UDRP panels customarily treat the first element of the UDRP complaint as merely a threshold standing requirement, based on a straightforward visual or aural comparison with the domain name in question. See WIPO Overview 2.0, paragraph 1.2. The Panel finds that this test is satisfied in the present case and concludes that the first element of the Complaint has been established.
C. Rights or Legitimate Interests
Paragraph 4(c) of the Policy gives non-exclusive examples of instances in which the Respondent may establish rights or legitimate interests in the Domain Name, by demonstrating any of the following:
(i) before any notice to it of the dispute, the Respondent’s 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) that the Respondent has been commonly known by the Domain Name, even if it has acquired no trademark 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.
The Respondent asserts that the senior Bradys used an IPANEMA mark in their swimwear business beginning in the mid-1980s (actually, the application for US trademark registration claims first commercial use in 1990) and obtained trademark registration in 1993. While the Respondent is not herself an owner of the trademark, it is undisputed that the Respondent, the senior Bradys’ daughter, has been involved in the “reinvigorated” family business since 2013 and therefore has an interest in the mark. The Respondent’s Deposition affirms that the Respondent registered the Domain Name for that business in 2014.
The Complainant argues that the Bradys’ business was dormant from 2006 to 2014. However, Mr. Brady’s Declaration states that some sales occurred in every year but 2013. In any event, there is evidence in the record that the Bradys were making substantial preparations to offer Ipanema-branded swimwear and beachwear when the Respondent registered the Domain Name in March 2014. Their new line of swimwear was launched at trade shows beginning in July 2014, and they have been selling the apparel directly online since about that time, via the website associated with the Domain Name and several social media sites.
Such facts would normally suffice to establish “rights or legitimate interests” in a domain name consisting solely of the senior Bradys’ IPANEMA trademark, or adding to that mark relevant generic words or abbreviations. However, if the additional elements of the string were more likely than not designed to engender confusion and target another’s trademark, the Panel questions whether that must be considered a use of the Domain Name in connection with a bona fide offering of goods or services for purposes of the second element of the Complaint. Panels have declined to find that respondents had rights or legitimate interests in a domain name for Policy purposes, for example, in cases where the overall circumstances demonstrated that the respondent applied for or obtained a trademark, trade name, or company name to take unfair advantage of an existing mark or circumvent the application of the UDRP. See WIPO Overview 2.0, paragraph 2.7. As the panel concluded in an early and much-cited UDRP decision, Madonna Ciccone, p/k/a Madonna v. Dan Parisi and “Madonna.com”, WIPO Case No. D2000-0847: “use which intentionally trades on the fame of another cannot constitute a ‘bona fide’ offering of goods or services. . . . [T]o conclude otherwise would mean that a Respondent could rely on intentional infringement to demonstrate a legitimate interest, an interpretation which is obviously contrary to the intent of the Policy.”
The question of whether the Respondent, more likely than not, selected the Domain Name to engender confusion with the Complainant’s IPANEMA mark involves many of the same facts and inferences addressed below in the discussion of the third element of the Complaint, bad faith. To avoid repetition, that possibility will be addressed in the following section of the Decision.
D. Registered and Used in Bad Faith
The Policy’s non-exhaustive list of circumstances that shall be considered evidence of bad faith registration and use (paragraph 4(b)) includes the following:
(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 Complainant in this instance also asserts another reason for finding bad faith, charging that the Respondent registered and used the Domain Name to “manufacture confusion” in support of the senior Bradys’ contention, in the ongoing trademark litigation, that allowing the Complainant to continue to use its own IPANEMA mark is likely to create confusion in overlapping geographic and product markets.
Unquestionably, as discussed above in connection with the second element of the Complaint, the Bradys have used their registered IPANEMA trademark to brand goods sold in commerce. The question is why they changed from their long-time domain name, <ipanemaswimwear.com> to the Domain Name <ipanemaus.com>, almost identical to the Complainant’s website domain name of <ipanemausa.com>, while the parties were in the midst of trademark litigation. The Panel accepts that <ipanemaswimwear.com> was no longer fully descriptive of the Bradys’ new business, including other kinds of beach apparel. But it was a very strange choice for the owners of a newly re-launched business, trying to establish itself, to emulate so closely the domain name used by a perceived rival that the Bradys were suing.
There is no question that Mr. Brady, at least, was aware when the Domain Name was registered in March 2014 that the Complainant had long used the nearly identical string <ipanemausa.com> for its website. The parties’ trademark litigation had been in progress for two years by that time and was well into the discovery phase. Mr. Brady acknowledged in his Deposition in the judicial proceeding that he had frequently viewed the Complainant’s website. The Respondent testified in her Deposition that she knew only that the domain name <ipanemausa.com> was “taken” when she registered the Domain Name for the family business, but she also promptly notified Mr. Brady of the new Domain Name, and he allowed it to be used, with the arrangement that visitors to the Bradys’ long-established website using the domain name <ipanemaswimwear.com> would be redirected to the website associated with the Domain Name.
There are other indicia that the Bradys encouraged rather than avoided confusion with the Complainant while the litigation proceeded. The Bradys used the handle “Ipanema USA” (not “Ipanema US” or “Made in Brazil”) on Instagram, posting a photo of a woman in a bikini in the spring of 2014 with the caption “ipanemaus Ipanema USA # theorginal matching bikinis and shoes since the 70s”. This can only be viewed as intentionally misleading. Not only is “ipanemausa” used for the Complainant’s domain name and social media handle (e.g., on Facebook), but it is the Complainant, not the Respondent, that sells shoes, and the Complainant’s parent company, not the Bradys, has been doing so since the 1970s. (In fact, in their 1995 Settlement Agreement with Ipanema Shoe Corp., the Bradys agreed not to sell IPANEMA-branded footwear.) According to their trademark application, the Bradys did not begin using the IPANEMA brand until 1990, although the Response dates such use to “the mid-1980s” – not the 1970s.
In addition, when the Bradys started exhibiting their new product line at trade shows in the summer of 2014, they used as the backdrop for their booth an image of the patterned sidewalk at Ipanema Beach in Rio de Janeiro, an image virtually identical to the Complainant’s registered design trademark based on that sidewalk pattern. The Complainant used that trademarked design for the cover of its “2014 Collection” catalog, which was in circulation while the Respondent exhibited in the summer of 2014.
Whether the Bradys encouraged confusion with the Complainant to attract customers familiar with the Complainant’s well-known and long-established IPANEMA brand, or to bolster their claims of a likelihood of confusion in the ongoing trademark litigation (as the Complainant suggests), neither can be viewed as a good faith reason for registering and using the Domain Name.
The Panel concludes that the Respondent cannot rely on a legitimate interest in the senior Bradys’ IPANEMA mark to justify adding to that string, in the Domain Name, letters that appear designed to engender rather than avoid confusion with the Complainant. The Complainant’s domain name, based on an identical IPANEMA mark, differs from the Domain Name by only one letter, “USA” rather than “US”, both commonly signifying the same country. The Bradys have used the Complainant’s domain name string and social media handle on their own social media sites and the Complainant’s trademarked design on their own trade show booths. It stretches credulity to consider these uses coincidental.
The Panel concludes, therefore, that the second and third elements of the Complaint have both been established on this record.
E. Reverse Domain Name Hijacking
The Respondent has requested a finding of Reverse Domain Name Hijacking. Paragraph 15(e) of the UDRP Rules provides that, if “after considering the submissions the panel finds that the complaint was brought in bad faith, for example in an attempt at Reverse Domain Name Hijacking or was brought primarily to harass the domain-name holder, the panel shall declare in its decision that the complaint was brought in bad faith and constitutes an abuse of the administrative proceeding”. Reverse Domain Name Hijacking is defined under the UDRP Rules as “using the UDRP in bad faith to attempt to deprive a registered domain-name holder of a domain name”.
The Complainant in this proceeding prevailed on all three elements of the Policy. The Panel does not find evidence of bad faith or abuse of process, nor does there appear to be a pattern of harassment (although the parties have certainly displayed a marked animus toward each other, both in this proceeding and in the current trademark litigation). Consequently, the Panel declines to enter a finding of Reverse Domain Name Hijacking against the Complainant.
For the foregoing reasons, in accordance with paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the Domain Name <ipanemaus.com> be transferred to the Complainant.
W. Scott Blackmer
David H. Bernstein
Date: May 8, 2015