WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Velcro BVBA v. Monali Mohanty, Velcroelectricals
Case No. D2018-0635
1. The Parties
The Complainant is Velcro BVBA of Deinze, Belgium, represented by Sujata Chaudhri IP Attorneys, India.
The Respondent is Monali Mohanty, Velcroelectricals of Bhubaneswar, India, represented by Kapil Wadhwa, India.
2. The Domain Name and Registrar
The disputed domain name <velcroelectrical.com> (the “Domain Name”) is registered with PDR Ltd. d/b/a PublicDomainRegistry.com (the “Registrar”).
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on March 22, 2018. On March 22, 2018, the Center transmitted by email to the Registrar a request for registrar verification in connection with the Domain Name. On March 23, 2018, 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 and 4, the Center formally notified the Respondent of the Complaint, and the proceedings commenced on March 29, 2018. In accordance with the Rules, paragraph 5, the due date for Response was April 18, 2018. On April 17, 2018, the Respondent sent an email communication asking for at least 90 days to change its company name. On April 18, 2018, the Center granted the Respondent a four-day extension of the Response due date and confirmed the Response due date was April 23, 2018.
On April 21, 2018, the Center received an email communication from the Respondent. On April 24, 2018, the Center forwarded the Respondent’s email communication to the Complainant. On April 26, 2018, the Complainant requested a suspension of the proceeding. On the same day, the proceeding was accordingly suspended by the Center to enable the Parties to discuss settlement. On May 24, 2018, the Complainant requested that the Center reinstitute the proceeding. On May 25, 2018, the Center reinstituted the proceeding and notified the Parties that it would proceed to panel appointment.
The Center appointed W. Scott Blackmer as the sole panelist in this matter on May 31, 2018. 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.
Following the grant of further extensions of time at the request of the Respondent (and with the result that the Respondent was able to obtain the assistance of legal counsel), the Response was submitted on June 15, 2018.
4. Factual Background
The Complainant is a private limited liability company organized under the laws of the Netherlands and headquartered in Deinze, Belgium. The Complainant manufactures and sells VELCRO-branded “hook and loop” fasteners, with approximately 2500 employees and a presence in more than 40 countries, including India. The Complainant was founded by the inventor of VELCRO, Swiss electrical engineer George de Mestral, who invented and perfected techniques beginning in the 1940s for temporarily mating a fabric strip with tiny hooks to a fabric strip with small loops. He gave his invention a portmanteau name based on the French words “velour”(velvet) and “crochet”(hook). The Complainant’s predecessor, a Swiss corporation named VELCRO S.A., obtained the first patent in 1955 and the first trademark registration for VELCRO in 1956. The Complainant now has more than 1000 patents and 35,000 VELCRO-branded fastening products used in a wide variety of industries and applications, including the electrical industry, generating hundreds of millions of US dollars in revenues annually.
The record shows that VELCRO products are advertised globally online and in social media, in retail stores, and in print and broadcast media, and that the Complainant has received awards for the VELCRO brand (including the 2013 REBRAND 100 Global Award, the 2015 Gold Pro Award, and the 2016 Mom’s Choice Award), as well as frequent international and online media coverage. The record includes VELCRO advertising that appeared in Indian newspapers with national circulation before 2000, as well as evidence of the Complainant’s annual sales in India through 2011, the year that the Respondent established its website.
The Complainant operates its principal website at “www.velcro.com”, a domain name it first registered in 1994. The Complainant holds a number of other VELCRO domain names, including <velcro.co.in> (registered in 2009) and <velcro.in> (registered in 2013). It does not appear that these Indian domain names have been used for active websites.
The Complainant holds more than 200 trademark registrations for VELCRO (collectively, the “VELCRO trademark”), including the following:
United States of America
May 13, 1958
(Device formed of stylized letters)
April 30, 1958
December 12, 2002
According to the Response, the Respondent Ms. Mohanty is a director and shareholder of Velcro Electrical Manufacturers Pvt Ltd, a registered Indian private limited company established in 2006 in the Indian state of Odisha to perform electrical, construction, manufacturing, and technical services. The Respondent is also a director of two later established “Velcro” companies, Velcro Steel Pvt Ltd and Velcro International Pvt Ltd. The Response attaches substantial evidence demonstrating the Respondent’s growing business since 2006 under the name “Velcro Electrical Manufacturers”, as well as archived screenshots showing its use of the Domain Name for a website associated with that business starting in 2011. The Respondent’s website advertised the Respondent’s electrical engineering and construction services in projects such as electrical installations at industrial plants and construction projects for commercial and residential developments in Odisha state.
When the Complainant became aware of the Respondent’s website, counsel for the Complainant sent a cease-and-desist letter on December 11, 2017. The parties’ counsel exchanged emails without resolving the dispute. On January 2, 1018, the Respondent filed Application No. 3717000 to register a design trademark in India featuring the “Velcro” name. The Complainant filed a notice of opposition against that trademark application and also filed a complaint with the Indian Registrar of Companies, seeking cancellation of the most recent corporate name, Velcro International Private Limited. These proceedings appear to be pending at the time of this Decision.
The Respondent took down its website after entering into settlement discussions with the Complainant in late April 2018, and the Domain Name does not resolve to an active website at the time of this Decision. The Respondent continues to advertise its services through third-party business portals.
5. Parties’ Contentions
The Complainant contends that the Domain Name is confusingly similar to its registered VELCRO trademark, which the Respondent uses for its company names and Domain Name without permission and without other rights or legitimate interests.
The Complainant argues that the Respondent must have been aware of the Complainant’s trademark and sought to exploit it by misdirecting Internet users for commercial gain.
The Respondent argues that the Complainant has no trademark rights relevant to the Respondent’s service offerings and, indeed, claims that the Complainant’s VELCRO trademark has become a generic term incapable of distinguishing the Complainant’s products. The Respondent also argues that the Domain Name is not confusingly similar to the VELCRO trademark because the addition of the word “electrical” is distinguishing.
The Respondent claims a legitimate interest in using a Domain Name corresponding to its company name, which it says was suggested by a marketing consultant for its “dictionary meaning” of “joining or fitting together”. The Respondent also claims a “noncommercial” fair use of the Domain Name because the Respondent’s website is freely available to the public.
The Respondent denies prior awareness of the Complainant and its trademark and observes that its services are entirely different from the Complainant’s products. The Respondent denies any intent to exploit or target the Complainant’s mark.
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. Identical or Confusingly Similar
The Respondent challenges the Complainant’s trademark interests with respect to the goods and services furnished by the Respondent. However, paragraph 4(a)(i) requires only that the Complainant have rights to a trademark or service mark, regardless of the jurisdiction and the classes of covered goods or services. Those facts may be relevant for the other elements of the Complaint, but not for this preliminary requirement.
More fundamentally, the Respondent argues that “the complainant’s trademark has internationally become a generic trademark. That a Generic mark is incapable of distinguishing the complainant’s goods and thus the complainant cannot seek protection or registration qua the same”.
The phenomenon to which the Respondent alludes is sometimes termed “genericide”, where a well-known trademark enters into common usage as the descriptive name of a generic class of goods or services. Trademark offices or courts have declined protection for trademarks such as ASPIRIN, SELLOTAPE, and THERMOS in some countries when they determined that the marks had lost their character as brand names distinguishing a trademark holder’s product. One reason for this result can be the lack of a suitable generic substitute term, as with ESCALATOR, originally trademarked in 1900, an invention for which no one ever popularized a short, descriptive term. As the Indian Intellectual Property Appellate Board observed in B.V. IIango Himachalapathy vs. M/S Rank Xerox Ltd., Order No. 229/2012 (September 21, 2012), a trademark owner may avoid this consequence by vigilantly monitoring against infringement and encouraging the use of generic alternative terms.
This has been the Complainant’s policy, successfully reclaiming confusingly similar Indian domain names, for example, in Velcro Industries B.V. v. Velcro Technologies, INDRP 858/2017 (March 3, 2017, <velcrotechnologies.in>) and Velcro Industries B.V. v. Zhao Ke, INDRP 602/2014 (August 10, 2014, <velcro.in>), as well as in at least twenty UDRP proceedings involving respondents in China, Korea, Kenya, Mexico, and Costa Rica, according to the Center’s online database of UDRP cases.
The Complainant has also actively promoted the use of substitute generic terms, such as “hook and loop” fasteners, for functionally similar products not manufactured by the Complainant. The Complainant’s website at “www.velcro.com” includes an informative and accessible “ABOUT VELCRO® BRAND” page discussing the Complainant’s trademarks and policies. The website also presents a “DON’T SAY VELCRO”page with two celebrated music videos (which it also broadcasts on YouTube) featuring singing “lawyers”, deleted expletives, and an imaginative array of substitute terms suggested by viewers but ultimately rejected by the Complainant in favor of its decades-old favorite, “hook and loop”.
In short, the Complainant is clearly taking aggressive measures to protect its brand against genericide. It remains to be seen whether that campaign will prevail over time or whether the Complainant will become a victim of its own success. But there is certainly insufficient evidence in this UDRP proceeding to conclude that the VELCRO trademark has lost its capability to distinguish VELCRO products in the marketplace. The Complainant diligently maintains hundreds of trademark registrations, with hundreds of millions of US dollars in annual sales, and the Panel cannot find that the Complainant now lacks trademark rights based on the Respondent’s bald assertion that the mark has become generic.
After disposing of the challenge to the Complainant’s trademark rights, the next issue is confusing similarity.
As in most cases, the generic Top-level Domain name (“gTLD”) “.com” is not a distinguishing feature in this instance. See WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Third Edition (“WIPO Overview 3.0”), section 1.11. The second-level Domain Name incorporates the Complainant’s registered VELCRO trademark in its entirety and adds the dictionary word “electrical”. The addition of a generic or descriptive term to a distinctive mark does not normally avoid confusing similarity, although it may be relevant in considering the second and third elements of the Complaint. See WIPO Overview 3.0, section 1.8. The Respondent argues that the word is sufficiently distinctive in this case to avoid confusion, but the Panel is not persuaded, especially given the wide variety of applications of the Complainant’s VELCRO products. The Complainant’s website, for example, advertises “industrial strength” fasteners, as well as ties for wires and cords and “bulky cables”.
The first element of a UDRP complaint “functions primarily as a standing requirement” and entails “a reasoned but relatively straightforward comparison between the complainant’s trademark and the disputed domain name”. See WIPO Overview 3.0, section 1.7. The Panel concludes under this test that the Domain Name is confusingly similar to the Complainant’s registered VELCRO trademark for purposes of the first element of the Policy.
The Panel concludes that the Complainant has established the first element of the Complaint.
B. 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.
Since a respondent in a UDRP proceeding is in the best position to assert rights or legitimate interests in a disputed domain name, it is well established that after a complainant makes a prima facie case, the burden of production on this element shifts to the respondent to come forward with relevant evidence of its rights or legitimate interests in the domain name. See WIPO Overview 3.0, section 2.1.
Here, the Complainant has established a prima facie case by demonstrating confusing similarity and denying that the Respondent had permission to use a well-known, coined trademark as a domain name, thus shifting the burden to the Respondent.
The Respondent claims a noncommercial fair use of the Domain Name because the associated website was “free to the public” and did not carry third-party advertising. This misconstrues the Policy, paragraph 4(c)(iii), as the content formerly published on the Respondent’s website was commercial in nature, advertising the Respondent’s services. That paragraph is more commonly used to defend the use of trademarks in domain names associated, for example, with noncommercial criticism sites or fan sites. See WIPO Overview 3.0, sections 2.6, 2.7.
More to the point, the Respondent claims a legitimate interest in using the Domain Name because it corresponds to the Respondent’s company name, a name which it has used in an electrical construction business for years before the current dispute arose. As noted above, the Complainant has challenged the Respondent’s most recent establishment of another company with the name “Velcro”, and the Complainant has also objected to the Respondent’s recent application for an Indian device trademark featuring the name “Velcro”. Those disputes are not yet resolved. The parties do not compete in the same sectors and might conceivably use “Velcro” company names and marks for different classes of goods and services, although there still could be potential issues of fair trading and confusion. (The Panel notes that the India Trademarks Act, 1999, section 9(2) includes the general principle of avoiding public deception and confusion.) In any event, only one of the parties can have the Domain Name, and the question under the second element of the Policy is essentially whether the Respondent, even though it does not itself hold a registered trademark, nevertheless has legitimate interests in the Domain Name.
The Respondent was legally established as a company named Velcro Electrical Manufacturers Pvt Ltd in 2006 and had been doing business under that name for about five years when it registered the Domain Name. It used the Domain Name subsequently to advertise that business. These would ordinarily constitute legitimate interests under the Policy, paragraph 4(c)(i) and (ii). But if the company name itself was modeled on the Complainant’s trademark, without permission, the corresponding Domain Name could not be considered a legitimate, fair use in connection with a “bona fide” commercial offering. It appears from the record that the Respondent had no other reason to use the Complainant’s coined brand name than to refer, metaphorically, to the qualities of the Complainant’s products, and the Domain Name falsely implies, at least initially, an association with the Complainant. This cannot be considered a legitimate or “fair” use of the trademark of another party. See WIPO Overview 3.0, sections 2.4, 2.5. In this respect, the analysis of legitimacy and bad faith rely on many of the same facts, and the Respondent’s motivations in selecting the Domain Name are considered further below in connection with the third element of the Complaint, bad faith.
C. Registered and Used in Bad Faith
The Policy, paragraph 4(b), furnishes a non-exhaustive list of circumstances that “shall be evidence of the registration and use of a domain name in bad faith”, including the following (in which “you” refers to the registrant of the domain name):
(iv) by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your website or other online location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your website or location or of a product or service on your website or location.
The Respondent asserts that its company name, to which the Domain Name corresponds, was selected for its “dictionary meaning of joining or fitting together … and has nothing to do with the complainant company or its services. Velcro in India is not known as a brand or a trademark. The respondent was not even aware that there existed any company in India or elsewhere by the name of Velcro.”
It is undisputed in this proceeding that the name “VELCRO” is a coined term created from two French words by the Complainant’s founder, and that it is not otherwise a “dictionary word” in English, Hindi, or Oriya (Odia), an official language in the Respondent’s state of Odisha. The Panel notes that when dictionaries include the term “Velcro” at all, they tend to identify it correctly as a “trademark” or “brand name” for a fastening tape or fabric. See, e.g., the “Velcro” entries at “www.dictionary.cambridge.org” (citing the Cambridge Academic Content Dictionary and the Cambridge Advanced Learner’s Dictionary and Thesaurus); “www.thefreedictionary.com” (citing the American Heritage Dictionary of the English Language 2016; the Collins English Dictionary 2014; Random House Kemerman Webster’s College Dictionary 2010); “www.dictionary.com”; “www.merriam-webster.com”.
Thus, citing the “dictionary” meaning of “Velcro” does not support the Respondent’s argument. Rather, it reinforces the plausible inference that the Respondent or its advisor was likely aware that VELCRO was indeed a brand name referring to a product that “joined” things together. The Response offers no evidence to support the contention that “Velcro in India is not known as a brand or a trademark.” The Panel notes that the Indian arbitrators in the recent INDRP proceedings cited above, Velcro Industries B.V. v. Velcro Technologies and Velcro Industries B.V. v. Zhao Ke, referred to the Complainant’s VELCRO marks as “well-known” and “exclusively associated with the Complainant”. Using another party’s brand name for the Respondent’s company name was a perilous choice. Using it for a domain name was even riskier, especially when the name was already in use by the trademark owner for both the “.com” gTLD and the “.co” domain name in the “.in” Indian country code domain. The Complainant’s home page associated with <velcro.com> clearly displays the trademark registration symbol (as well as the tag line, “There is only one.”). The “dictionary” entries and the fact that these international and Indian domain names were not available should have given the Respondent and its advisors pause, even without checking for Indian trademarks.
The Respondent cites UDRP decisions such as Euronext N.V. v. Huang tian wei, WIPO Case No. D2018-0348 for the proposition that an unrelated business in a distant country can plausibly protest ignorance of a foreign trademark and therefore deny bad faith. But the facts are quite different here. The Complainant does business in India and has had VELCRO trademarks registered in India for 60 years. Indian domain name arbitrators have recently held that the mark is well-known and exclusively associated with the Complainant. The Respondent admits naming its company for the “dictionary” meaning of the Complainant’s coined term – which dictionaries identify as a trademark.
It is true that the Respondent is in a different line of business from the Complainant, and the Panel accepts that the Respondent meant to use the brand name only in a metaphorical sense. And it is true that once a visitor reached the Respondent’s website, the visitor would ascertain fairly quickly, even without a disclaimer, that the site had nothing to do with VELCRO fasteners. Nevertheless, it seems clear that the Respondent selected and used the company name and accompanying Domain Name because “Velcro” was well-known and the Respondent was not. In short, the Respondent was exploiting the reputation of another, for commercial gain, and that amounts to an abuse of trademark as contemplated by the Policy. The Complainant has a right as a trademark owner to protect its trademark from infringing use that could have, over time, precisely the effect that the Respondent now claims: a loss of distinctiveness that undermines its value and may ultimately deprive the holder of the mark entirely. The trademark owner can legitimately seek to control when and how the mark is used, and by whom. Using the trademark of another for a domain name, therefore, must be reckoned bad faith for Policy purposes, as the UDRP was designed to correct trademark abuses in the domain name system.
The Panel concludes on these facts that the Respondent has no rights or legitimate interests in the Domain Name and that it registered and used the Domain Name in bad faith, within the meaning of the Policy. Thus, the Complainant prevails on the second and third elements of the Complaint.
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, <velcroelectrical.com>, be transferred to the Complainant.
W. Scott Blackmer
Date: June 22, 2018