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WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

INTERTEX, Inc. v. Shant Moughalian, Contess, Inc.

Case No. D2017-0480

1. The Parties

Complainant is INTERTEX, Inc. of Azusa, California, United States of America ("United States"), represented by Ourfalian & Ourfalian, United States.

Respondent is Shant Moughalian, Contess, Inc. of San Dimas, California, United States.

2. The Domain Names and Registrar

The disputed domain names <bluedri.com>, <grizzlytarps.com> and <soleaire.com> (the "Domain Names") are registered with Wild West Domains, LLC (the "Registrar").

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on March 8, 2017. On March 8, 2017, the Center transmitted by email to the Registrar a request for registrar verification in connection with the Domain Names. On March 8, 2017, the Registrar transmitted by email to the Center its verification response confirming that Respondent is listed as the registrant and providing the contact details.

The Center verified that the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the "Policy" or "UDRP"), the Rules for Uniform Domain Name Dispute Resolution Policy (the "Rules"), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the "Supplemental Rules").

In accordance with the Rules, paragraphs 2 and 4, the Center formally notified Respondent of the Complaint, and the proceedings commenced on March 15, 2017. In accordance with the Rules, paragraph 5, the due date for Response was April 4, 2017. Respondent did not submit any response. Accordingly, the Center notified Respondent's default on April 5, 2017.

The Center appointed Christopher S. Gibson as the sole panelist in this matter on April 18, 2017. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.

4. Factual Background

Complainant is a California business that manufactures and sells various branded retail and wholesale products internationally.

Complainant is the owner of the United States registered trademark, GRIZZLY TARPS, Reg. No. 4143505, in connection with goods in International Class 22 for tarpaulin covers. Complainant first used the GRIZZLY TARPS trademark in commerce at least as early as January 21, 2011, and the mark was registered on May 15, 2012. The GRIZZLY TARPS mark is used in connection with a line of tarpaulin covers manufactured by Complainant and sold on various online marketplaces and business websites.

Complainant is the owner of the United States registered trademark, BLUEDRI, Reg. No. 5020140, in connection with goods in International Classes 7 and 11. Complainant first used the BLUEDRI mark in commerce at least as early as September 1, 2013, and the mark was registered on August 16, 2016. The BLUEDRI mark is used in connection with a line of air movers, restorative drying equipment, air ventilation units and dehumidifiers for use in the inflatable goods industry, water damage industry, pet and animal industry, restoration industry, janitorial industry and horticulture industry manufactured by Complainant and sold on various online marketplaces and business websites.

Complainant is the owner of the registered trademark, SOLEAIRE, Reg. No. 5025008, in connection with goods in International Class 7. Complainant first used the SOLEAIRE mark in commerce at least as early as December 20, 2013, and the mark was registered on August 23, 2016. The SOLEAIRE mark is used in connection with a line of air movers and drying machines for use in the inflatable goods industry, pet and animal industries and restoration industry manufactured by Complainant and sold on various online marketplaces and business websites.

The Domain Name <grizzlytarps.com> was registered on August 10, 2010; the Domain Name <bluedri.com> was registered on July 18, 2012; and the Domain Name <soleaire.com> was registered on July 25, 2012.

5. Parties' Contentions

A. Complainant

(i) Identical or Confusingly Similar

Complainant has provided evidence that it owns United States registered trademarks for the marks GRIZZLY TARPS, BLUEDRI and SOLEAIRE. Complainant states that the Domain Name <grizzlytarps.com> is identical to its GRIZZLY TARPS mark, in that it is comprised of the identical words "Grizzly Tarps"; the Domain Name <bluedri.com> is identical to the BLUEDRI mark, in that it is comprised of the identical fanciful term "Bluedri"; and the Domain Name <soleaire.com> is identical to the SOLEAIRE mark, in that it is comprised of the identical fanciful term "Soleaire".

Complainant contends that it has satisfied the first element of the Policy because the Domain Names are identical and/or confusingly similar to trademarks in which Complainant has rights.

(ii) Rights or Legitimate Interests

Complainant submits that Respondent has no rights or legitimate interests in respect of the Domain Names because he was not given authority to use them or Complainant's trademarks. Complainant explains that Complainant hired Respondent to conduct marketing for the company in 2004 and employed him through 2015. During his employment, Respondent was instructed to register various domain names on behalf of Complainant, including the Domain Names in this case, for the purpose of offering Complainant's products for sale on online websites. Complainant states that it did not give Respondent authority to register or use the Domain Names under his personal name, at any point in time.

Complainant states that Respondent's employment was terminated in 2015. Unbeknownst to Complainant, the <grizzlytarps.com> Domain Name registration was updated on August 10, 2015, as evidenced by a WhoIs database search. Further, unbeknownst to Complainant, Respondent either initially named himself as registrant of the Domain Names or transferred ownership of them to himself at a later time, without Complainant's authorization. Respondent has no license or rights to Complainant's trademarks.

After Respondent's termination, numerous attempts were made to relinquish ownership and control of the various domain names from Respondent, including the Domain Names in this case, with no success. Pursuant to WhoIs database lookups dated February 8, 2017 and February 21, 2017, the Domain Names were registered by private registration through Domains By Proxy, a website offering domain name registration privacy services. Complainant filed claims with Domains By Proxy and in response, Domains By Proxy provided Respondent's name and contact information as the registrant of the Domain Names.

The Domain Names are not being used for any legitimate purpose, but rather to prevent Complainant from reflecting its trademarks with the corresponding Domain Names and to divert traffic seeking Complainant's products to non-operational websites.

Complainant contends that Respondent cannot demonstrate any of the following circumstances, enumerated in paragraph 4(c) of the Policy, for the reasons set forth below:

a. There is no evidence of Respondent's use of, or demonstrable preparations to use, the Domain Names in connection with a bona fide offering of goods or services before notice of the dispute. At the time the Domain Names were registered, Respondent worked for Complainant. The Domain Names were registered on behalf of Complainant. Respondent was never given the authority to use the Domain Names in his personal capacity, nor in any capacity other than for furtherance of the business interests of Complainant. In addition, Respondent was never given the authority to operate or control the Domain Names at the exclusion of Complainant and its employees and agents. Unbeknownst to Complainant, Respondent registered the Domain Names under his personal name at some point in time. Further, there is no evidence that the Domain Names are being used in connection with an offering of goods. The Domain Names direct users to a non-operational website. Complainant urges that Respondent's sole purpose for registering and using the Domain Names is to prevent Complainant from reflecting its trademarks in corresponding Domain Names and to divert traffic seeking Complainant's products away from websites that offer Complainant's products for sale.

b. Respondent has not been commonly known by the Domain Names. Respondent has fraudulently taken control and ownership of the Domain Names.

c. Respondent is not making a legitimate noncommercial or fair use of the Domain Names, without intent for commercial gain misleadingly to divert consumers or to tarnish Complainant's trademarks. Respondent and his company, Contess, Inc., are competitors to Complainant. Respondent's possession and control of the Domain Names is preventing Complainant, the rightful owner of the Domain Names, from using them to conduct business in connection with its registered trademarks. Further, patrons visiting the websites linked to the Domain Names may be misled to believe that Complainant's goods in connection with its trademarks are discontinued, as the websites are non-operational.

As such, Complainant submits that it has satisfied Policy in showing that Respondent has no rights or legitimate interests in the Domain Names.

(iii) Registered and Used in Bad Faith

Complainant contends that Respondent registered the Domain Names to prevent Complainant from reflecting its trademarks in corresponding domain names. The Domain Names are non­operational and are not being used for any legitimate purpose. Respondent has engaged in a pattern of such conduct since the time his employment was terminated by registering various domain names, which are identical to registered trademarks owned by Complainant. Respondent has retained registration of the Domain Names "primarily for the purpose of disrupting the business of a competitor".

Moreover, Complainant states that Respondent has engaged in a number of other unlawful and unfair business practices relating to Complainant, including but not limited to trademark and copyright infringement, unfair competition, and false, deceptive and misleading advertising. Complainant has submitted a copy of the cease-and-desist letter dated August 13, 2015, which describes some of Respondent's previous bad faith conduct.

Unbeknownst to Complainant, Respondent initially registered the Domain Names in his name or subsequently transferred ownership of the Domain Names from Complainant to himself. Complainant did not give Respondent authority to transfer ownership of the registrations or to register the Domain Names on behalf of any individual or entity, other than Complainant. In addition, Respondent does not have a license or any rights to use the trademarks. Respondent knowingly refuses to relinquish ownership and control of the Domain Names to Complainant, being fully aware of Complainant's intellectual property rights in them. This conduct constitutes bad faith by Respondent.

In view of the above, Complainant submits that it has satisfied the third element of the Policy, showing that Respondent registered and is using the Domain Names in bad faith.

B. Respondent

Respondent did not reply to Complainant's contentions.

6. Discussion and Findings

To succeed in its Complaint, Complainant must demonstrate that the three elements enumerated in paragraph 4(a) of the Policy have been satisfied. These elements are that:

(i) the Domain Names registered by Respondent are identical or confusingly similar to a trademark or service mark in which Complainant has rights;

(ii) Respondent has no rights to or legitimate interests in respect of the Domain Names; and

(iii) Respondent has registered and is using the Domain Names in bad faith.

A. Identical or Confusingly Similar

The Panel must determine whether the Domain Names are identical or confusingly similar to trademarks in which Complainant has rights. Complainant has submitted evidence of ownership of the registered trademarks, GRIZZLY TARPS, BLUEDRI and SOLEAIRE. The Domain Names <grizzlytarps.com>, <bluedri.com> and <soleaire.com> are identical to Complainant's respective trademarks, omitting only the ".com" generic Top-Level Domain ("gTLD").

Accordingly, Complainant has satisfied the first element of the Policy.

B. Rights or Legitimate Interests

Complainant has made out a prima facie case that Respondent lacks rights or legitimate interests in the Domain Names. Complainant hired Respondent in 2004 to conduct marketing, and employed him until 2015. During this time, Respondent was instructed to register the Domain Names (and certain other domain names) on behalf of Complainant. However, Respondent was not given authority to register or use the Domain Names in his personal capacity. Unbeknownst to Complainant, Respondent either registered the Domain Names under his personal name or later changed the registrations into his own personal name at some point in time.

Respondent has not been commonly known by the Domain Names, nor has Respondent made a legitimate noncommercial or fair use of the Domain Names. Moreover, Complainant has demonstrated there is no evidence of Respondent's use of, or demonstrable preparations to use, the Domain Names in connection with a bona fide offering of goods or services. Instead, it appears that Respondent and his company, Contess, Inc. are competitors to Complainant and that the Domain Names are linked to non-operational sites. Thus, they are not being used for a legitimate purpose, but instead used to prevent Complainant from reflecting its trademarks in corresponding domain names and to divert users seeking Complainant's products away from Complainant's websites to non-operational sites.

Respondent has failed to respond to the allegations and evidence presented by Complainant with regard to Respondent's lack of rights or legitimate interests in the Domain Names. Accordingly, the Panel finds that Complainant has satisfied the second element of the Policy.

C. Registered and Used in Bad Faith

The third element of paragraph 4(a) of the Policy requires that Complainant demonstrate that Respondent registered and is using the Domain Names in bad faith. In this case it appears that each of the Domain Names has an initial registration date predating Complainant's dates for first use or registration of each of Complainant's relevant trademarks:

- the Domain Name <grizzlytarps.com> was registered on August 10, 2010; on September 20, 2010, Complainant applied for the GRIZZLY TARPS trademark, which was subsequently registered on May 15, 2012;

- the Domain Name <bluedri.com> was registered on July 18, 2012; Complainant first used the BLUEDRI mark in commerce as early as September 1, 2013 and the mark was registered on August 16, 2016;

- the Domain Name <soleaire.com> was registered on July 25, 2012; Complainant first used the SOLEAIRE mark in commerce as early as December 20, 2013 and the mark registered on August 23, 2016.

These circumstances raise the question of whether the Domain Names were registered in bad faith, when they were each initially registered prior to the existence of Complainant's trademarks. Complainant has alleged that Respondent, as an employee hired to conduct marketing (including registration of domain names) for Complainant at the time the Domain Names were each registered, was not authorized to register the Domain Names – or later change their registrations – into Respondent's own name.

Pertinent to this case, WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition ("WIPO Overview 2.0"), paragraph 3.1 states that, generally speaking, although a trademark can satisfy the Policy's first element irrespective of its date, when a domain name is registered by a respondent before the complainant's relied-upon trademark right is shown to have been first established (whether on a registered or unregistered basis), the registration of the domain name would not have been in bad faith because the registrant could not have contemplated the complainant's then non-existent right. However, in the instant case, where Respondent was employed by Complainant to handle Complainant's marketing and to register domain names for Complainant corresponding to its brands, the evidence suggests that Respondent was closely aware of Complainant's plans for naming, branding and obtaining trademarks for its products. Respondent thus was in position to contemplate Complainant's plans for future product brand names and related trademarks.

These special circumstances are anticipated by the commentary in WIPO Overview 2.0. In particular, paragraph 3.1 states that "[i]n certain situations, when the respondent is clearly aware of the complainant, and it is clear that the aim of the registration was to take advantage of the confusion between the domain name and any potential complainant rights, bad faith can be found". Here, the Panel observes that, based on the evidence, Respondent was aware of Complainant and was also likely aware of Complainant's plans for naming, branding and obtaining trademarks for its products. Respondent violated his duty as an employee of Complainant when, without authorization, he registered the Domain Names in his own name – or later shifted the registrations into his own name – thereby taking advantage of Complainant's potential or existing rights. In either event, the registrations of the Domain Names were in bad faith.

Complainant has alleged that Complainant and Respondent are now competitors in the same business. From a review of the record above, it appears that Respondent's purpose for the Domain Names is to disrupt the business of a competitor and to prevent Complainant from reflecting its trademarks in the corresponding Domain Names and to divert users seeking Complainant's products away from Complainant's websites where the products are offered for sale to non-operational sites.

In conclusion, the Panel finds, on the balance of the probabilities, that Respondent registered and is using the Domain Names in bad faith. Accordingly, Complainant has satisfied the third element of the Policy.

7. Decision

For the foregoing reasons, in accordance with paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the Domain Names <bluedri.com>, <grizzlytarps.com>, and <soleaire.com> be transferred to Complainant.

Christopher S. Gibson
Sole Panelist
Date: May 9, 2017

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