WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Mark C. Spicher v. Frogi Design, s.r.o. / The Artwork Factory, s.r.o.

Case No. D2015-0606

1. The Parties

The Complainant is Mark C. Spicher of Carlisle, Pennsylvania, United States of America, represented by The Keller Law Firm, LLC and Tucker Arensberg, P.C., United States of America.

The Respondent is Frogi Design, s.r.o. of Brno, Czech Republic / The Artwork Factory, s.r.o, of the Czech Republic, represented by Dreitler True LLC, United States of America.

2. The Domain Name and Registrar

The disputed domain name <the-artwork-factory.com> is registered with Ascio Technologies Inc. (the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on April 7, 2015. On April 7, 2015, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain name. On April 8, 2015, 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.

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 proceedings commenced on April 14, 2015. In accordance with the Rules, paragraph 5(a), the due date for Response was May 4, 2015. The Response was filed with the Center on May 1, 2015.

The Center appointed Andrew D. S. Lothian as the sole panelist in this matter on May 20, 2015. 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

The Complainant is a private individual and is the sole proprietor of a business registered under the name “The Artwork Factory” with the Commonwealth of Pennsylvania’s Bureau of Corporations and Charitable Organizations on November 21, 2011. The Complainant notes that it began designing, manufacturing, distributing and selling framed artwork in 1992 and began to rebrand under “The Artwork Factory” in 2011, using the mark THE ARTWORK FACTORY for the first time in commerce on August 10, 2011. Since that date, the Complainant says that it has offered framed art products worldwide through a variety of well-known physical and Internet retailers such as “www.amazon.com”. The Complainant registered the domain name <theartworkfactory.com> for use with its business on March 9, 2011 and claims to have used this domain name with an associated website offering framed artwork and related products for sale since at least November 11, 2011.

It should also be noted that, in paragraph 18 of the Complaint, the Complainant states that it has sold and shipped products under THE ARTWORK FACTORY mark to customers throughout the world, including Europe, since 2001. Given the terms of the contradictory submissions outlined above, which are found in paragraphs 4 and 17 of the Complaint, together with the lack of any evidence supporting the latter statement or any further elaboration in the Complaint, the Panel assumes that the reference to 2001 in paragraph 18 is a typographical error for 2011.

The Complainant claims common law rights in the mark THE ARTWORK FACTORY and says that these rights were established on August 10, 2011 when the Complainant claims that it began to sell its products in international commerce on the Internet. The Complainant is also the owner of five registered trademarks for THE ARTWORK FACTORY in the Commonwealth of Pennsylvania, each of which was filed on March 25, 2015 and which cover use classes 16, 19, 27, 40 and 42 and claim use as early as January 31, 2012 for two marks, April 25, 2013 for one mark and September 30, 2013 for two marks. On October 4, 2014 and March 23, 2015 respectively, the Complainant filed two applications with the United States of America (“US”) Patent and Trademark Office to register the word mark THE ARTWORK FACTORY in respect of the same use classes. The application process in respect of such marks is still pending.

On January 6, 2014, a representative of the Respondent contacted the Complainant by email in which the former introduced himself as “the owner of the other Artwork Factory in Europe” and stated that the Respondent had received an email by mistake from a customer of the Complainant. The email from the said customer was also quoted and its terms indicate that she had intended to ask the Complainant about the availability of further stock.

According to the Registrar verification email, the disputed domain name was created on August 28, 2013. There is a discrepancy between this date and the date of creation recorded by the corresponding whoIs, which is May 31, 2013. Both the WhoIs and Registrar-confirmed expiration dates are the same, namely May 31, 2018, which may indicate that the May 31, 2013 registry creation date is authoritative. However, nothing appears to turn on the discrepancy as far as the present dispute is concerned.

The registrant of the disputed domain name is Frogi Design, s.r.o., a marketing and advertising firm based in the Czech Republic which registered the disputed domain name on behalf of its client, The Artwork Factory, s.r.o. (hereinafter “Respondent”), also of the Czech Republic. The Respondent states that it is the beneficial owner of title to the disputed domain name and this is also acknowledged by a statutory representative of Frogi Design, s.r.o. in a declaration of April 17, 2015. In terms of such declaration, it is stated that Frogi Design, s.r.o. claims no rights to the disputed domain name and has never used it other than to build and manage the website for the Respondent’s business. The said statutory representative also adds that he has personal knowledge of the Respondent’s principal operating a business under the name “The Artwork Factory” in the Czech Republic since as early as May 2009.

The Respondent claims to have superior rights in the mark THE ARTWORK FACTORY to those of the Complainant. The Respondent’s principal says that he began in business as a sole trader producing and selling artwork under the name THE ARTWORK FACTORY in May 2009, ultimately incorporating the business in 2013. The Respondent is the proprietor of a national trademark registration no. 341227/513293 in the Czech Republic for THE ARTWORK FACTORY in classes 16, 41 and 42 filed on May 2, 2014 and issued on October 8, 2014, albeit that the Complainant misstates this as October 8, 2011. The Respondent obtained international registered trademark no. 1236538 for THE ARTWORK FACTORY on October 24, 2014, designating the US under the Madrid Protocol and the outcome of such designation is still under consideration by the US Patent and Trademark Office having been approved for publication on April 10, 2015.

The Parties are also in dispute as to whether one of their mutual distributors was confused as to their respective identities such that it is alleged to have disclosed the Complainant’s confidential sales and customer data to the Respondent. The Complainant asserts that the said disclosure took place and the Respondent denies this. On April 21, 2015 the said distributor’s general counsel stated in an email to the Respondent’s counsel that it was unable to substantiate the Complainant’s allegation.

5. Parties’ Contentions

A. Complainant

The Complainant contends that the disputed domain name is confusingly similar to a trademark in which the Complainant owns rights; that the Respondent has no rights or legitimate interests in the disputed domain name; and that the disputed domain name was registered and is being used in bad faith.

The Complainant notes that the disputed domain name is entirely incorporated into its THE ARTWORK FACTORY mark and adds that the addition of hyphens is not of significance. The Complainant indicates that this is sufficient to establish confusing similarity under the Policy and notes that the test is typically “low threshold” in nature. The Complainant submits that registration of a trademark is not necessary for a complainant to obtain relief pursuant to the Policy as such relief may be granted on the basis of a complainant’s common law rights. The Complainant also asserts that actual confusion has been caused by the use of the disputed domain name by the Respondent based upon the Complainant’s customer’s email received by the Respondent and the alleged distributor confusion.

The Complainant states that the Respondent cannot claim to have acquired a right or legitimate interest solely because it has been operating a well-visited website under the disputed domain name for a period of time in that the traffic is likely to be been diverted from the Complainant’s long established domain name. The Complainant asserts that the Respondent has not obtained a legitimate interest in the disputed domain name by obtaining a trademark registration, noting that the overall circumstances should demonstrate that the registration was obtained in good faith for the purpose of making bona fide use of the mark in the jurisdiction where it is registered. The Complainant submits that the Respondent’s trademark was obtained after the Respondent was aware of the Complainant’s prior use of the mark and after the Respondent had learned of confusion caused by its use of the mark.

The Complainant states that the Respondent is not known by the disputed domain name but rather by The Artwork Factory s.r.o or “The Artwork Factory”. The Complainant submits that it cannot be a coincidence that the Respondent has adopted the disputed domain name in connection with the sale of products that compete directly with those of the Complainant. The Complainant asserts that the Respondent cannot now claim rights and legitimate interests in the disputed domain name after selecting it with the purpose of capitalizing on the Complainant’s fame and trading goodwill.

The Complainant submits that the Respondent’s registration and use of the disputed domain name was in bad faith because the Respondent’s purpose was to confuse or deceive visitors by causing actual confusion with the Complainant and its products. The Complainant submits that the Respondent cannot credibly deny knowledge of the Complainant and its use of its THE ARTWORK FACTORY mark prior to the Respondent’s registration of the disputed domain name. The Complainant notes that its use of the mark predates that of the Respondent by two years and that a simple search by the Respondent would have revealed this. The Complainant submits that the Respondent’s use of hyphens in the disputed domain name strongly suggests that the Respondent knew that <theartworkfactory.com> had already been registered by the Complainant and that the Respondent therefore registered the next closest thing. The Complainant adds that the Respondent’s trademark seeks protection of the unhyphenated variant.

The Complainant notes that bad faith can be inferred to exist where a registrant fails to comply with the representations and warranties made pursuant to paragraph 2 of the Policy and indicates that the Respondent has not complied with such representations and warranties in the present case. The Complainant states that even if the Respondent did not know of the Complainant when it registered the disputed domain name it became aware of confusion in January 2014 and its continued use of the disputed domain name must be deemed to be retroactive bad faith.

B. Respondent

The Respondent requests the Panel to deny the remedies requested by the Complainant.

The Respondent notes with reference to its principal’s declaration that it began in business in the Czech Republic in May 2009 and provides dated catalogues from 2009 to date showing the Respondent offering to sell artwork under the mark THE ARTWORK FACTORY. The Respondent also provides copies of receipts for artwork bearing the mark dating from 2009 to date along with declarations from the Respondent’s customers indicating that they purchased artwork from the Respondent operating under such mark in the years 2009 to date.

The Respondent argues that the Complainant has failed to make out a prima facie case under the Policy and suggests that the Complainant has made numerous false representations about the facts of the matter. The Respondent notes that the Complainant did not mention that it did not file for its Pennsylvania trademarks until March 2015 and did not advise the Panel that such marks do not provide the Complainant with any substantive rights even in the State of Pennsylvania. The Respondent notes that such registrations have been found not to be entitled to any evidentiary consideration in a previous case under the Policy, namely South Fork Hardware, Inc., DBA TireChain.com v. Vulcan Sales, Inc., DBA Vulcan Tire Sales, WIPO Case No. D2013-0199. The Respondent notes that the Complainant claims to have made worldwide use of the term “The Artwork Factory” since 2001 but points out that it swore the date of first use in commerce in connection with framed art pictures for the purpose of its US trademark application was January 31, 2012.

The Respondent denies that there has been confusion between the Parties’ use of their domain names and suggests that the incident referred to by the Complainant is of no significance. The Respondent denies any knowledge of the Complainant until January 6, 2014 when its principal received the email referred to in the factual background section above. The Respondent notes that its priority filing date in the US in respect of its international trademark registration is May 2, 2014 which it notes predates the filing date of the Complainant’s US trademark application, namely October 4, 2014. The Complainant adds that it also filed a corresponding Community Trademark application on May 2, 2014.

The Respondent states that the disputed domain name has been used to promote its business since 2013 without knowledge of the Complainant’s claimed rights or domain name. The Respondent submits that it did not register the disputed domain name to disrupt the Complainant’s business but accuses the Complainant of causing such disruption to the Respondent. The Respondent narrates the terms of various correspondence which has gone between the Parties, states that the Complainant has filed a lawsuit against the Respondent in the Middle District of Pennsylvania and has taken active steps to interfere with the Respondent’s business relationship with one of its customers.

The Respondent asserts that it has at all times used the disputed domain name in connection with a bona fide offering of goods and has provided cogent and corroborated reasons for its adoption of the disputed domain name, noting that the Policy does not aim to adjudicate between genuine conflicting interests.

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 name is 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 name; and

(iii) the disputed domain name has been registered and is being used in bad faith.

A. Preliminary issue: Effect of Court Proceedings

The Complainant notes that it filed an action against the Respondent on April 2, 2015 in the United States District Court for the Middle District of Pennsylvania alleging claims for federal and state trademark infringement, unfair competition, cybersquatting and intentional interference with business relationships. The Respondent notes its awareness of the action but states that it has not yet been served upon it.

Paragraph 4(k) of the Policy provides:

“Availability of Court Proceedings.

The mandatory administrative proceeding requirements set forth in Paragraph 4 shall not prevent either you or the complainant from submitting the dispute to a court of competent jurisdiction for independent resolution before such mandatory administrative proceeding is commenced or after such proceeding is concluded. If an Administrative Panel decides that your domain name registration should be canceled or transferred, we will wait ten (10) business days (as observed in the location of our principal office) after we are informed by the applicable Provider of the Administrative Panel's decision before implementing that decision. We will then implement the decision unless we have received from you during that ten (10) business day period official documentation (such as a copy of a complaint, file-stamped by the clerk of the court) that you have commenced a lawsuit against the complainant in a jurisdiction to which the complainant has submitted under Paragraph 3(b)(xiii) of the Rules of Procedure. (In general, that jurisdiction is either the location of our principal office or of your address as shown in our Whois database. See Paragraphs 1 and 3(b)(xiii) of the Rules of Procedure for details). If we receive such documentation within the ten (10) business day period, we will not implement the Administrative Panel’s decision, and we will take no further action, until we receive (i) evidence satisfactory to us of a resolution between the parties; (ii) evidence satisfactory to us that your lawsuit has been dismissed or withdrawn; or (iii) a copy of an order from such court dismissing your lawsuit or ordering that you do not have the right to continue to use your domain name.”

Paragraph 18 of the Rules provides:

“Effect of Court Proceedings

(a) In 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.

(b) In the event that a Party initiates any legal proceedings during the pendency of an administrative proceeding in respect of a domain-name dispute that is the subject of the complaint, it shall promptly notify the Panel and the Provider. See Paragraph 8 above.”

Paragraph 18(a) of the Rules thus provides that an administrative proceeding may be terminated or suspended in consequence of legal proceedings whether initiated prior to or during an administrative proceeding. Alternatively, the Panel may proceed to a decision, according to the exercise of its discretion. As this Panel noted in Hedera AB v. Support Desk, Captive Media, WIPO Case No. D2013-2102, the question of how such discretion should be exercised has been considered in detail in a number of cases under the Policy, most notably by the panelists in DNA (Housemarks) Limited v. Tucows.com Co, WIPO Case No. D2009-0367 and Navista S.A. v. Virtual Point Inc. dba CrossPath, It Manager, WIPO Case No. D2012-1157.

The Panel notes that neither party has requested suspension or termination of the administrative proceeding in light of the court proceedings initiated by the Complainant. As this Panel noted in Hedera, supra, it is supportive of the notion that the Policy generally obliges a panel to make a decision on a complaint and accordingly it will proceed to a Decision. The Panel need not concern itself with what may be done with the Decision after the Panel is functus officio and notes that it does not address its Decision to the attention of any other forum.

B. Preliminary Issue: Respondent Identity

The Panel notes that the Complainant seeks a remedy against both the registrant and the Respondent in the present case. That appears to the Panel to be the correct approach given that in the event of the Complainant’s success a clear direction requires to be given to the Registrar regarding the transfer or cancellation of the disputed domain name and that such direction must make reference to the current registrant notwithstanding the existence of a third party claiming an alleged beneficial interest in the disputed domain name.

That said, the Panel has been presented with declarations made under penalty of perjury by both the registrant and the Respondent indicating that the nominal respondent is the registrant, who is merely the Respondent’s web developer, and that the true respondent and beneficial owner of the disputed domain name is the Respondent. The Panel has no reason to doubt the terms of these declarations and can identify no prejudice to the Complainant from a decision to treat the Respondent, who has filed the Response in this case, as the true Respondent. The Panel will proceed accordingly and references to the Respondent in this Decision should therefore be treated as referring to The Artwork Factory, s.r.o.

C. Identical or Confusingly Similar

The inquiry under the first element is in two parts. The first issue is whether the Complainant has UDRP-relevant rights in a trademark and the second is whether any such trademark is identical or confusingly similar to the disputed domain name. Failure on either of the two issues would result in a failure to meet the requirements of paragraph 4(a)(i) of the Policy and ultimately in failure of the Complaint.

In the present case, the Panel is faced with a bundle of rights claimed by the Complainant in the mark THE ARTWORK FACTORY. The Panel must consider first, the Complainant’s Pennsylvania State registered trademarks; secondly, the Complainant’s US federal trademark applications; and thirdly, the Complainant’s claim to common law trademark rights.

With regard to the Complainant’s Pennsylvania State registered trademarks, the Panel agrees with the Respondent’s submissions that in general panels under the Policy have been reluctant to accord US state registered marks any evidentiary consideration on the basis that such registrations are issued with no examination, and do not give rise to the same presumptions of validity and ownership as does a federal US trademark registration. See, for example, the general discussion regarding such marks contained in paragraph 1.1 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition (“WIPO Overview 2.0”) and South Fork Hardware, Inc., DBA TireChain.com v. Vulcan Sales, Inc., DBA Vulcan Tire Sales, WIPO Case No. D2013-0199 regarding Pennsylvania State registered trademarks in particular. The Panel is not a US lawyer and does not have a detailed knowledge of the differences between US state and federal registered trademarks. Nevertheless, the Panel is satisfied from its analysis of cases under the Policy that where panels featuring US lawyers consider this issue they typically do not find UDRP-relevant rights in state registered trademarks for the reasons set out above and accordingly the Panel will take the same approach in the present case.

With regard to the Complainant’s federal trademark applications which have not yet proceeded to grant, the Panel noted recently in Konga Online Shopping Limited v. Rocket Internet GmbH, Arnt Jeschke, WIPO Case No. DSC2014-0001, with reference to Fashiontv.com GmbH v. Mr. Chris Olic, WIPO Case No. D2005-0994 and the more recent cases of Tiger Media, Inc. v. Leconte Pierre, WIPO Case No. D2011-0670 and Jetgo Australia Holdings Pty Limited v. Name Administration Inc. (BVI), WIPO Case No. D2013-1339 that the preponderant view of panels under the Policy on this topic, shared by the present Panel, is that until a trademark application proceeds to grant, it does not constitute a trademark in which a complainant has rights for the purposes of the Policy. Indeed, the Complainant appears to accept this in the Complaint itself, given that it describes its trademark applications along with the caveat “Nevertheless, registration of a trademark is not necessary for a complainant to obtain relief pursuant to the Policy, and relief can be granted pursuant to the Policy on the basis of a complainant’s common law rights.”

Turning then to the Complainant’s claim of common law rights, the Panel notes that paragraph 1.7 of the WIPO Overview 2.0 addresses the question of what needs to be shown for the complainant to successfully assert unregistered or common law trademark rights and provides the following consensus view:

The complainant must show that the name has become a distinctive identifier associated with the complainant or its goods or services. Relevant evidence of such “secondary meaning” includes length and amount of sales under the trademark, the nature and extent of advertising, consumer surveys and media recognition. The fact that the secondary meaning may only exist in a small geographical area does not limit the complainant’s rights in a common law trademark. For a number of reasons, including the nature of the Internet, the availability of trademark-like protection under passing-off laws, and considerations of parity, unregistered rights can arise for the purposes of the UDRP even when the complainant is based in a civil law jurisdiction. However, a conclusory allegation of common law or unregistered rights (even if undisputed) would not normally suffice; specific assertions of relevant use of the claimed mark supported by evidence as appropriate would be required. Some panels have also noted that in cases involving claimed common law or unregistered trademarks that are comprised of descriptive or dictionary words, and therefore not inherently distinctive, there may be a greater onus on the complainant to present compelling evidence of secondary meaning or distinctiveness. Some panels have noted that the more obvious the viability of a complainant’s claim to common law or unregistered trademark rights, the less onus there tends to be on that complainant to present the panel with extensive supporting evidence. However, unless such status is objectively clear, panels will be unlikely to take bald claims of trademark fame for granted.

In the present case, much as in Konga Online Shopping Limited, supra, the Panel has been presented with a series of conclusory allegations from the Complainant as to its alleged common law rights. In Konga,the only relevant material produced by the complainant in support of its assertions was its Certificate of Incorporation together with its trademark applications and the present case is very similar in that the Complainant has merely produced the US state trademarks and applications for US federal trademarks outlined above together with the Business Entity Filing History reflecting its registration of “The Artwork Factory” as a trade name in 2011. While the Complainant makes a range of assertions of relevant use of the mark, for example the alleged use in association with well-known physical and Internet retailers, this has not been supported by any appropriate evidence.

In these circumstances, the Panel finds that there is no evidence on the present record of the kind contemplated by paragraph 1.7 of the WIPO Overview 2.0 which might demonstrate to the Panel’s satisfaction that “The Artwork Factory” has become a distinctive identifier associated with the Complainant and/or has acquired a “secondary meaning”. Given the number of assertions of relevant use made in the Complaint it must have been in the Complainant’s reasonable contemplation that at least some measure of supportive evidence would be required. In these circumstances, the Panel was not prepared to give the Complainant “a second bite at the apple” by way of a Panel Order requesting that it supplement its case. In the opinion of the Panel, this would not be in line with the spirit of expediency and efficiency suggested in the Policy (see the reasoning regarding the soliciting of further evidence by the panel in Konga and the cases cited therein).

For completeness, the Panel notes that a very similar bundle of rights to that in the present case was put forward relatively recently in the case of Missouri Lottery Commission v. SED Domain Services / Common Law, WIPO Case No. D2014-0118. In that case, the complainant sought to rely upon a Missouri State registration, a pending US federal application, a US federal composite mark and common law trademark rights. The panel appears to have given no weight to the various rights cited, with the notable exception of the claimed common law rights which it found to have been demonstrated due to “longstanding and very substantial use and promotion” of the mark concerned, including cumulative sales to the value of USD 15 billion over a period in excess of 27 years, annual sales in excess of USD 1 billion and advertising expenditure exceeding USD 12 million. The Panel in the present case has taken a similar approach regarding the Complainant’s state trademark registrations and applications for federal marks but, as noted above, is unable to make a similar finding in respect of the Complainant’s alleged common law mark due to the lack of evidence of the extent of its alleged promotion and use.

It follows that the Complaint fails for want of a demonstration of rights in a trademark as required by paragraph 4(a)(i) of the Policy. The Panel notes in passing that had it required to go on to consider in detail the question of rights or legitimate interests or registration and use in bad faith it is of the opinion that the Complaint would have failed on those grounds also. The substantive evidence put forward by the Respondent in the form of invoices and catalogues indicates to the Panel that on the balance of probabilities the Respondent’s predecessor, prior to the Respondent’s incorporation in 2013, was trading under the name “The Artwork Factory” from no later than 2009, before the Complainant appears to have adopted the name in 2011. Accordingly, the Panel would likely have found that the Respondent had rights and legitimate interests in the disputed domain name on the basis of prior use of a name corresponding thereto, in terms of paragraph 4(c)(i) of the Policy, and that due to the fact that the Respondent’s trading under such name (albeit not the creation date of the disputed domain name itself) predated that of the Complainant, the disputed domain name could not be considered to have been registered and used in bad faith.

D. 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 will result in failure of the complaint in its entirety. Accordingly, in light of the Panel’s finding under the preceding head, it is unnecessary for the Panel to address the issue of the Respondent’s rights or legitimate interests in the disputed domain name in detail.

E. Registered and Used in Bad Faith

As noted above, in light of the Panel’s finding in terms of paragraph 4(a)(i) of the Policy, it is unnecessary for the Panel to address the issue of registration and use in bad faith in detail in the present case.

7. Decision

For the foregoing reasons, the Complaint is denied.

Andrew D. S. Lothian
Sole Panelist
Date: June 3, 2015