National Arbitration Forum

 

DECISION

 

Shoe Mart Factory Outlet, Inc. v. DomainHouse.com, Inc. c/o Domain Administrator

Claim Number: FA0504000462916

 

PARTIES

Complainant is Shoe Mart Factory Outlet, Inc. (“Complainant”), represented by Gene S. Winter, of St. Onge Steward Johnston and Reens LLC, 986 Bedford Street, Stamford, CT 06905.  Respondent is DomainHouse.com, Inc. c/o Domain Administrator (“Respondent”), represented by Wilson Martinez, 2501 Colorado Blvd., Suite H, Los Angeles, CA 90041

 

REGISTRAR AND DISPUTED DOMAIN NAME 

The domain name at issue is <shoemart.com>, registered with Enom, Inc.

 

PANEL

The undersigned certify that they have acted independently and impartially and to the best of their knowledge have no known conflict in serving as Panelist in this proceeding.

 

G. Gervaise Davis III, Houston Putnam Lowry, Chartered Arbitrator, and David S. Safran as Panelists.

 

PROCEDURAL HISTORY

Complainant submitted a Complaint to the National Arbitration Forum electronically on April 13, 2005; the National Arbitration Forum received a hard copy of the Complaint on April 15, 2005.

 

On April 13, 2005, Enom, Inc. confirmed by e-mail to the National Arbitration Forum that the domain name <shoemart.com> is registered with Enom, Inc. and that the Respondent is the current registrant of the name.  Enom, Inc. has verified that Respondent is bound by the Enom, Inc. registration agreement and has thereby agreed to resolve domain-name disputes brought by third parties in accordance with ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”).

 

On April 25, 2005, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of May 16, 2005 by which Respondent could file a Response to the Complaint, was transmitted to Respondent via e-mail, post and fax, to all entities and persons listed on Respondent’s registration as technical, administrative and billing contacts, and to postmaster@shoemart.com by e-mail.

 

A timely Response was received and determined to be complete on May 16, 2005.

 

A timely Reply from Complainant was received on May 20, 2005. 

 

A Sur-reply was received from Respondent on May 25, 2005.  While this was not submitted in a timely manner, it was accepted as a late submission by the Panel and considered by the Panel.

 

On May 24, 2005, pursuant to Respondent’s request to have the dispute decided by a three-member Panel, the National Arbitration Forum appointed Houston Putnam Lowry, Chartered Arbitrator, as Chair, G. Gervaise Davis III and David S. Safran as Panelists.

 

RELIEF SOUGHT

Complainant requests that the domain name be transferred from Respondent to Complainant.

 

PARTIES’ CONTENTIONS

A. Complainant’s Allegations

A.        THE FACTUAL BACKGROUND

 

Complainant is in the business of providing retail store services and online retail store services featuring footwear; footwear care products, namely, shoe polish, shoe brushes, shoehorns and shoe trees; clothing, namely, jackets, gloves and belts; and leather goods, namely, leather cases for pens, keys, business cards, credit cards and knives (“Shoemart Goods and Services”) under its SHOEMART trade name and trademark.

 

Complaint has used the SHOEMART trademark for nearly fifty years.  Shoemart has continuously advertised its business and services since at least 1956.  As a result of exclusive, continuous and extensive use by Complainant, the SHOEMART trademark is alleged to have acquired significant goodwill, and over the years has came to represent quality and excellence in the full range of Shoemart Goods and Services.

 

Complainant is the owner of a domain name registration for the <theshoemart.com> domain name.  Complainant uses its SHOEMART website at the <theshoemart.com> domain to provide on-line retail store services featuring footwear; footwear care products, namely, shoe polish, shoe brushes, shoehorns and shoe trees; clothing, namely, jackets, gloves and belts; and leather goods, namely, leather cases for pens, keys, business cards, credit cards and knives.

 

Respondent, DomainHouse.com, Inc. (“DomainHouse”), is the registrant of the <shoemart.com> domain name. 

 

On or about November 30, 2004, Complainant, through its attorneys, wrote to the domain name registrant, DomainHouse, to inquire about the possible purchase of the <shoemart.com> domain name, and was told the price was $250,000.

 

DomainHouse has a website at its <shoemart.com> domain name.  The DomainHouse website has the following banner at the top of its website:

 

Complainant claims that because of this logo, the website is intended to convey that DomainHouse is providing a footwear-related website. There is also, however, a temporary posting of information on the web page relating to relief efforts connected with the December 26, 2004, tsunami disaster in the Indian Ocean.  This is clearly unrelated to the intended actual use of the website, that is, to hold the domain name for sale to the rightful owner of the mark.

 

B.     LEGAL GROUNDS

 

1.         The <shoemart.com> Domain Name Is Identical to Complainant’s SHOEMART Mark

 

It is alleged that Complainant’s common-law rights in the mark SHOEMART require that the <shoemart.com> domain name be transferred to Shoemart. The Policy protects misuse of unregistered as well as registered trademarks. See Archer-Daniels-Midland Co. v. Bodine, D2002-0482 (WIPO July 16, 2002); see also Sydney Mkts. Ltd. v. Rakis, D2001-0932 (WIPO Oct. 8, 2001) ("A Complainant may rely on an unregistered word, phrase or string of characters, provided that the unregistered mark is and performs the function of a 'trademark.'"). A trademark distinguishes the goods and services of one party in trade from those of another. Id. Furthermore, under United States law trademark rights accrue from usage, not registration. See Ga. Gulf Corp. v. Ross Group, D2000-0218 (WIPO June 14, 2000) ("There is no requirement, at least under U.S. law, for a mark to be registered before rights attach. Rather, under U.S. trademark law, rights attach upon use of the mark in commerce."). Complainant has been using the SHOEMART mark since 1956; thus, Complainant claims the mark possesses acquired distinctiveness based on its long-term use.

 

The <shoemart.com> domain name is identical to the SHOEMART mark pursuant to the Policy paragraph 4(a)(i).  Numerous courts and prior panels have recognized that the incorporation of a trademark in its entirety is sufficient to establish that a domain name is identical or confusingly similar to the complainant’s mark. See Paccar Inc. v. Telescan Techs., L.L.C., 115 F. Supp. 772 (E.D. Mich. 2000) (finding that <peterbuilttrucks.com>, <kenworthtrucks.com> and similar domain names are not appreciably different from the PETERBUILT and KENWORTH trademarks); Quixtar Invs. Inc. v. Hoffman, D2000-0253 (WIPO May 29, 2000) (finding that QUIXTAR and <quixtarmortgage.com> are legally identical). 

 

Here, DomainHouse has adopted, in its entirety, the SHOEMART mark in the <shoemart.com> domain name.  Generally, a user of a mark "may not avoid likely confusion by appropriating another's entire mark and adding descriptive or non-distinctive matter to it." McCarthy on Trademarks & Unfair Competition § 23:50 (4th ed. 1998). The addition of the phrase ".com" is non-distinctive because it is required for registration of such a domain name.   Therefore, the <shoemart.com> domain name is confusingly similar to the SHOEMART mark, pursuant to Policy paragraph 4(a)(i).

 

2.         Respondent Has No Rights or Legitimate Interests in Respect of the Domain Name that Is the Subject of the Complaint

 

Respondent has no rights or legitimate interests in the <shoemart.com> domain name pursuant to Policy paragraph 4(a)(ii).  Respondent has no relationship with or permission from Complainants to use the SHOEMART mark.  There are three elements under Policy paragraph 4(c) that, if satisfied, lead to the conclusion that Respondent has rights or a legitimate interest in the domain name: (1) Prior to notice of the dispute, Respondent had used or prepared 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 (2) Respondent has been commonly known by the domain name, even if it had not acquired  trademark or service mark rights; or (3) 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 repair mark at issue.  See Document Techs., Inc. v. Int’l Elec. Communications, Inc., D2000-0270 (WIPO June 6, 2000). 

 

Here, none of the three elements is satisfied.  Respondent has not incorporated under the name SHOEMART.  Respondent has no fictitious business name registration for SHOEMART or <shoemart.com>.  Having searched appropriate databases, Complainants have found no evidence that Respondent has ever used the trade name SHOEMART.COM or been known as <shoemart.com>.   Respondent is not commonly known by the Domain Name and is using the domain name solely to force Complainant to buy the name at an exorbitant price. This is not a bona fide or fair use of the domain name. Policy para. 4(c)(i), (iii).

 

It was only after the offer from Complainant that Respondent placed solicitations for donations to relief efforts, bearing no relationship to the domain name, on the website.

 

In a previous panel decision involving the same Respondent, the panels have found DomainHouse to have no rights or legitimate interests in other domains involved in the proceedings in which DomainHouse was named as a respondent.  For example, in Apple Computer, Inc. v. DomainHouse.com, Inc., D2000-0341 (WIPO July 5, 2000), Respondent represented that regarding the <quicktime.com> domain name, it had “prepared to use the domain name to establish a website devoted to presenting information about parenting for non-commercial purposes.”  DomainHouse attempted to show that the domain name at issue, <quicktime.com>, referred to the idea of “quality time” between parents and children.  DomainHouse further argued that it failed to develop its non-commercial web site because of the cease-and-desist letter it had received from the Complainant, the trademark owner. The panel rejected DomainHouse’s argument:

 

[T]he Panel does not find Respondent’s evidence or explanation persuasive. Respondent, on his own behalf, has made clear that it is in the business of developing, warehousing and selling domain names. It has gone to some lengths to justify this practice. The development of a noncommercial website devoted to parenting and childcare is sufficiently remote from the ordinary object and purpose of Respondent’s activities to demand more concrete evidence of its intention.

 

Apple Computer, Inc. v. DomainHouse.com, Inc., D2000-0341 (WIPO July 5, 2000).  Although in the instant case, Respondent has made a half-hearted attempt to create a noncommercial website devoted to the Tsunami relief efforts, these postings are clearly only an attempt to thwart the process of this panel in the transfer of the domain name to its rightful owner.

 

In yet another case involving DomainHouse as Respondent, the panel found DomainHouse had no rights or legitimate interests in the domain names <cgfns.com> and <cgfns.net>. See Comm’n on Graduates of Foreign Nursing Sch. v. Free Speech Alliance, FA 109364 (Nat. Arb. Forum June 12, 2002). The panel found:

 

Respondent registered the disputed domain names with knowledge of Complainant’s mark and rights therein, and with the intent to sell the domain names for profit.  Such intentions demonstrate Respondent’s lack of rights and interests in the domain names.  See Hewlett-Packard Co. v. High Performance Networks, Inc., FA 95083 (Nat. Arb. Forum July 31, 2000) (finding no rights or legitimate interests where the Respondent registered the domain name with the intention of selling it); see also Cruzeiro Licenciamentos Ltda v. Sallen, D2000-0715 (WIPO Sept. 6, 2000) (finding that rights or legitimate interests do not exist when one holds a domain name primarily for the purpose of marketing it to the owner of a corresponding trademark).

 

Complainant argues that since the disputed domain names were registered nearly three years ago, with no actual use having been made, Respondent’s passive holding of the names demonstrates its lack of rights or interests therein.  See Bloomberg L.P. v. Sandhu, FA 96261 (Nat. Arb. Forum Feb. 12, 2001) (finding that no rights or legitimate interest can be found when Respondent fails to use disputed domain names in any way); see also J. Paul Getty Trust v. Domain 4 Sale & Co., FA 95262 (Nat. Arb. Forum Sept. 7, 2000) (finding rights or legitimate interests do not exist when one has made no use of the websites that are located at the domain names at issue, other than to sell the domain names for profit); see also Comm’n on Graduates of Foreign Nursing Sch. v. Free Speech Alliance, FA 109364 (Nat. Arb. Forum June 12, 2002).

 

In the instant case, Respondent conducts business under the name “DomainHouse.com, Inc.” indicating that Respondent is not commonly known by the <shoemart.com> domain name under Policy ¶ 4(c)(ii).   See Tercent Inc. V. Lee Yi, FA 139720 (Nat. Arb. Forum Feb. 10, 2003) (stating “nothing in Respondent’s WHOIS information implies that Respondent is ‘commonly known by’ the disputed domain name” as one factor in determining that Policy ¶ 4(c)(ii) does not apply); see also Gallup Inc. v. Amish Country Store, FA 96209 (Nat. Arb. Forum Jan. 23, 2001) (finding that Respondent does not have rights in a domain name when Respondent is not known by the mark). 

 

When Complainant inquired about purchasing the <shoemart.com> domain name, Respondent stated that Complainant’s offer was “way below the asking price of $250,000.” Respondent’s offer to sell the domain name registration indicates that Respondent lacks rights or legitimate interests in the domain name under Policy ¶¶ 4(c)(i) and (iii).   See J. Paul Getty Trust v. Domain 4 Sale & Co., FA 95262 (Nat. Arb. Forum Sept. 7, 2000) (finding rights or legitimate interests do not exist when one has made no use of the websites that are located at the domain names at issue, other than to sell the domain name registrations for profit); see also Wal-Mart Stores, Inc. v. Stork, D2000-0628 (WIPO Aug. 11, 2000) (finding Respondent’s conduct purporting to sell the domain name registration suggests it has no legitimate use). 

 

Complainant argues that other panels have ruled similarly in other cases, holding that Respondent’s lack of purpose or development of the domain name suggests that Respondent lacks rights or legitimate interests in the domain name under Policy ¶ 4(a)(ii).  See Do The Hustle, LLC v. Tropic Web D2000-0624 (WIPO Aug. 21, 2000) (finding that when Respondent declares its intent to develop a website, “[Policy ¶] 4(c)(i) requires Respondent to show 1) ‘demonstrable’ evidence of such preparations to use the domain name, and 2) that such preparations were undertaken ‘before any notice to [Respondent] of the dispute’”); see also Vestel Elektronik Sanayi ve Ticaret AS v. Kahveci, D2000-1244 (WIPO Nov. 11, 2000) (finding that “merely registering the domain name is not sufficient to establish rights or legitimate interests for purposes of paragraph 4(a)(ii) of the Policy”); see also Computer Doctor Franchise Sys., Inc. v. Computer Doctor, FA 95396 (Nat. Arb. Forum Sept. 8, 2000) (finding that Respondent’s website, which is blank but for links to other websites, is not a legitimate use of the domain names); see also Ritz-Carlton Hotel v. Club Car Executive, D2000-0611 (WIPO Sept. 18, 2000) (finding that prior to any notice of the dispute, the Respondent had not used the domain names in connection with any type of bona fide offering of goods and services).

 

It is argued that in the instant case, DomainHouse has acted in exactly the same way, registering the domain name with the intent to sell it for profit. In addition, the domain name was registered more than five years ago and was transferred to DomainHouse more than a year ago. DomainHouse failed to use the domain name in any way until approached by Complainant. Respondent’s current use of the site does not represent a legitimate noncommercial use of the domain name. Thus DomainHouse has no rights or legitimate interests in the <shoemart.com> domain name.

 

3.   Respondent Has Registered and Used the Domain Name in Bad Faith

 

Complainant claims Respondent registered and is using the domain name in bad faith in violation of Policy paragraph 4(a)(iii).  In Apple Computer, Inc. v. DomainHouse.com, Inc., D2000-0341 (WIPO July 5, 2000), the panel found DomainHouse had acted in bad faith:

 

The Policy indicates that certain circumstances may, "in particular but without limitation", be evidence of bad faith (Policy, para. 4(b)). Among these circumstances are that the domain name has been registered or acquired by a respondent "primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of [Respondent’s] documented out-of-pocket costs directly related to the domain name" (id., para. 4(b)(i)).

 

Respondent observes that offering for sale and selling domain names is an inherently legitimate commercial activity. The leading domain name registrars offer or plan to offer their services to assist domain name registrants to advertise and sell names they have previously registered. Respondent is in the business of developing and selling domain names. Respondent claims to have developed combinations of generic or common descriptive terms, or misspellings of such terms, that will appeal to purchasers of domain names.

 

There is nothing inherently wrongful in the offer or sale of domain names, without more, such as to justify a finding of bad faith under the Policy. However, the fact that domain name registrants may legitimately and in good faith sell domain names does not imply a right in such registrants to sell domain names that are identical or confusingly similar to trademarks or service marks of others without their consent.

 

[O]ffers to sell to the public at large domain names that are identical or confusingly similar to marks of others may constitute bad faith within the meaning of paragraph 4(a)(iii) of the Policy (citation omitted). This is based on the nonexhaustive character of the express list of bad faith factors in paragraph 4(b) of the Policy, and the lack of a justification for awarding financial gain to persons for the mere act of registration of the marks of others.

 

In the present case, Respondent’s business is the development and sale of domain names. Its acknowledged purpose for registering names is to sell them. In light of this evident purpose, the Panel determines that Respondent registered the disputed domain name with the intention to offer it for sale to the public for valuable consideration in excess of its out-of-pocket costs. The Panel determines that Respondent has acted in bad faith within the meaning of paragraph 4(a)(iii) of the Policy.

 

Apple Computer, Inc. v. DomainHouse.com, Inc., D2000-0341 (WIPO July 5, 2000)

 

Likewise, in Comm’n on Graduates of Foreign Nursing Sch. v. Free Speech Alliance, FA 109364 (Nat. Arb. Forum June 12, 2002), the panel found DomainHouse had acted in bad faith:

 

Respondent’s posted offer to sell the disputed domain names evidences bad faith registration and use pursuant to Policy ¶ 4(b)(i).  See Am. Anti-Vivisection Soc’y v. “Infa dot Net” Web Serv., FA 95685 (Nat. Arb. Forum Nov. 6, 2000) (finding that “general offers to sell the domain name, even if no certain price is demanded, are evidence of bad faith”); see also Booz-Allen & Hamilton Inc. v. Servability Ltd, D2001-0243 (WIPO Apr. 5, 2001) (finding bad faith where Respondent, a domain name dealer, rejected Complainant’s nominal offer of the domain in lieu of greater consideration).[1]

 

In this case, DomainHouse still acquires domain names for the express purpose of holding them for sale. Respondent has acquired the <shoemart.com> domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to Complainant, who is the owner of the trademark, for valuable consideration in excess of Respondent’s documented out-of-pocket costs directly related to the domain name.

 

Thus Respondent has clearly acted in bad faith in registering and now using the <shoemart.com> domain name and purporting to construct a noncommercial web site upon receiving notice of Complainant’s legitimate interest in the web site domain name. Respondent’s use of Complainants’ entire mark, SHOEMART, in the domain name makes it impossible to infer a legitimate use of the domain name by Respondent. 

 

Here, Respondent never even made a pretext of using the domain name to carry on its own independent business under the mark until after it received notice of Complainant’s legitimate interest in the domain name.  Immediately after the offer to purchase the domain name, Respondent attempted to “repackage” its web site as a source of information about donations to tsunami relief efforts.   Respondent's current use of the <shoemart.com> domain name only underscores its bad faith.

 

 

B. Respondent’s Assertions

 

A.  The Factual Background.

 

Respondent is in the business of providing a domain name exchange for the registration of domain names, the identification of users on a global computer network, website development, namely, designing and implementing websites for others, and hosting the web sites of others on a computer server for a global computer network.

 

It also identifies domain names comprised of generic or descriptive terms, registers those domain names, develops these domains as businesses and from time to time sells a few of these generic domains to interested parties.

 

Respondent is operating a website at <domainhouse.com> and is offering a wide variety of Internet services related to domain names, such as email packs, website creator, traffic vista, web monitoring, ssl certificates, url forwarding and many more all related to the function of domain names on the Internet.  DomainHouse.Com, Inc. holds a federally registered trademark for this type of service.

 

On March 7, 1999, <shoemart.com> was registered, and the fees were paid through March 7, 2012.  The domain was used in commerce to promote registration of domain names with the two domain Registrars, namely, Register.Com and Bulkregister.com. Mr. Martinez earns a commission for every domain registered at these Registrars during this period. At the time the domain name was registered by Wilson Martinez, CEO of DomainHouse.Com, Inc., he had no knowledge of the existence of Complainant nor any of its trademark rights.

 

On February 25, 2000, DomainHouse.Com was incorporated, and acquired <shoemart.com>. Respondent began using <shoemart.com> to promote its domain name registration and hosting services, which it has continued to do up until the present.

 

On March 31, 2000, Respondent filed a fictitious business name statement with the County Clerk of Los Angeles, for Shoemart.com and DomainHouse.Com, Incorporated along with two other business names that Respondent uses.  This filing has been renewed and published this year. The allegation of Complainant that Respondent has no fictitious business name registration for <shoemart.com> is false.

 

In April 2000, Respondent hired a graphic designer from Gotlogos.com to design a logo and a slogan for the domain name that is currently in use.

 

On March 29, 2001, Respondent then entered into a collocation contract with Epoch Internet which is currently Vital Stream.Com, Inc., one of the world’s best streaming media service, to co-locate its dedicated server for <shoemart.com>. The contract has been renewed through June 11, 2005.

 

<shoemart.com> has been assigned its own static IP address. A static IP is an Internet protocol address that does not change. This is required when secure socket layer technology is applied to the website and digital certificates installed for e-commerce capabilities. Respondent provides its clients with a password to login at <https://www.shoemart.com:8443>; once logged in they will be able to see the features of the hosting server.  These help Respondent’s clients experience in reality how the server works from the backend with features like backup capability, file transfer protocols, file system management, creation of unlimited email addresses and how to set up emails as auto-responders, pop or re-directing emails, domain name server management and many more. 

 

Shoemart.com’s front end website simply directs potential clients to <domainhouse.com> via a contact email. Respondent’s clients upon request are given a password to log in at https<shoemart.com:8443> to demo the hosting server features before they purchase the service.

 

On November 18, 2004, a person by the name of Anne Marie Provino sent us an email inquiring and offering a transfer amount for the domain name.  She concealed her true identity and her intentions in inquiring and offering a price for the domain. The email address she used was provino@optonline.net with the name Peter Provino.  The email has a letterhead logo of Pro International, Inc. with an address in Beaver Landing, Harrison, NY. It also shows her position as the Vice President of this company.  There is no way for Respondent to know, based on the information provided that this person is one of the attorneys for Complainant.  Respondent only learned of her real identity as an attorney for Complainant when Respondent received the Complaint.

 

The legal argument of Complainant stated below is false and deceptive.

 

“Immediately after the offer to purchase the domain name, Respondent attempted to “repackage” its website as a source of information about donations to Tsunami relief efforts.”

 

This information was posted simply because the tragedy happened on December 26, 2004.  It was the worst human disaster in recent history; it was a sincere gesture by Respondent to help the victims and is not in any way connected to Complainant’s anonymous email. These charitable links were posted not only on <shoemart.com> but also on two other domains that Respondent is using.

 

On April 21, 2005, Respondent filed a trademark application for <shoemart.com> under class 042 with Serial Number 78,613,711 based on its continuous use in commerce for six years.

 

B.  Legal Grounds

 

1.  The <shoemart.com> domain name is not identical or confusingly similar to a trademark or service mark in which Complainant has rights.

 

Respondent argues that a common law mark is established only when a complainant’s mark becomes distinctive and acquires secondary meaning. Complainant alleges that it has used the SHOEMART mark since 1956 and therefore the mark possesses acquired distinctiveness based on its long-term use.

 

Descriptive marks (or more properly, "merely descriptive marks") are devices, which merely describe the services or goods on which the mark is used. If a device is merely descriptive, it is not a mark at all, since it does not serve to identify the source of the goods or services. No trademark rights are granted to protect merely descriptive marks.

 

As in this case Complainant has been using the words “shoe mart” in its descriptive meaning; a shoe store. Respondent claims the USPTO has recently denied Complainant’s application for a trademark.

 

However, it is possible for descriptive marks to "become distinctive" by achieving secondary meaning. Secondary meaning indicates that although the mark is on its face descriptive of the goods or services, consumers recognize the mark as having a source indicating function. Once it can be shown that a descriptive term or phrase has achieved this "second meaning" (the first meaning being the generally understood meaning of the term or phrase), a protectable trademark is developed.

 

Secondary meaning can be achieved through long-term use, or large amounts of advertising and publicity. The acquisition of secondary meaning is often proven through the use of consumer surveys that show that consumers recognize the mark as a brand.

 

Examples of marks, which might be considered descriptive but have clearly developed secondary meaning include:

 

            SHARP for televisions;

DIGITAL for computers;

WINDOWS for windowing software;

 

Because the mark claimed by the Complainant is based in common law, it does not enjoy the presumption of validity, inherent distinctiveness, or constructive notice presumption. It is the burden of Complainant to prove with a preponderance of evidence that the mark has acquired distinctiveness or secondary meaning before rights under common law may become enforceable. 

 

Complainant has submitted no evidence to establish either fame or strong secondary meaning in its mark such that consumers are likely to associate SHOE MART only with Complainant.

 

There is no proffered evidence that the words have acquired secondary meaning nor evidence of Complainant’s exclusive rights to the words “shoe mart.” Complainant’s long term use of the words “shoe mart” did not produce a protectable common law right because the words did not acquire a secondary meaning associated only with Complainant. Complainant advertised and used the words in its descriptive or generic meaning; a shoe store. See Cyberimprints.com, Inc. v. Alberga, FA 100608 (Nat. Arb. Forum Dec. 11, 2001) (finding that Complainant failed to prove trademark rights at common law because it did not prove the CYBERIMPRINTS.COM mark was used to identify the source or sponsorship of goods or services or that there was strong customer identification of the mark as indicating the source of such goods or services).

 

Trademark rights under common law also have a geographical limitation.  Complainant submitted evidence of advertisements on local newspapers and receipts for plastic bags and flyers, within the years 1996, 1998 and 1999.  Assuming that this may give rise to a protectable right, it can only be enforced within the geographical location where Complainant operate but not against a shoe store in California or in any other state outside of its County or State.

 

Furthermore, the phrase “shoe mart” is comprised entirely of generic terms to which Complainant cannot maintain exclusive rights. See SOCCERPLEX, INC. v. NBA Inc., FA 94361 (Nat. Arb. Forum May 25, 2000) (finding that Complainant failed to show that it should be granted exclusive use of the domain name <soccerzone.com>, as it contains two generic terms and is not exclusively associated with its business); see also Successful Money Mgmt. Seminars, Inc. v. Direct Mail Express, FA 96457 (Nat. Arb. Forum Mar. 7, 2001) (finding that “seminar” and “success” are generic terms to which Complainant cannot maintain exclusive rights); see also Lucky Money, Inc. v. ilovesschool.com, FA 96383 (Nat. Arb. Forum Mar. 9, 2001) (finding Complainant cannot claim exclusive common law rights to an expression – Lucky Money – comprised of generic terms).

 

Respondent claims it registered <shoemart.com> because it is a common combination of generic words that has widespread use and is used extensively by third parties. It is a combination of two generic words “shoe,” which means a durable covering for the human foot, made of leather or similar material with a rigid sole and heel, usually extending no higher than the anklet, and the word “mart,” which simply means a store or market.

 

A search in Goggle for the words “shoe mart” shows over 755,000 third party web pages mostly unrelated to Complainant, demonstrating that Complainant does not have exclusive rights to the words.  A search in the business section of Smart Pages, an online directory of businesses showed over 41 businesses with addresses and telephone numbers that incorporate the words “shoe mart” as part of their business or corporate name.

 

A search in Big Book super pages by Verizon showed ninety-two companies using the words “shoe mart” in their company name. These are evidence that Complainant does not have exclusive use of the phrase “shoe mart.” 

 

Complainant applied for a Federal trademark for the phrase THESHOEMART.COM on June 4, 2004 under Serial No. 78,430,117 and SHOEMART SINCE 1956 filed on February 26, 2004 under Serial No. 78,374,534; both were refused registration by the USPTO on March 6, 2005 and March 7, 2005.  This shows that the mark as used by Complainant is not registrable as a trademark.

 

Furthermore, Complainant filed this Complaint against Respondent, but will do nothing in a timely manner to protect its alleged exclusive interest in its company name.  Complainant should know that other parties with bad faith intentions can register their company name or their variations as a domain name, but as of May 12, 2005, a name availability search at <networksolutions.com> shows that the <shoemartsince1956.com>, <shoemartfactoryoutletinc.com>, <shoemartfactory.com> and <shoemartoutlet.com> domain names are all available for registration by third parties. 

 

Respondent argues that Complainant simply wants to plunder a valuable dot com domain owned by Respondent, while all the domains that more accurately reflect Complainant’s company name are left available for registration by third parties.

 

2.  Respondent has rights or legitimate interests in respect of the <shoemart.com> domain name.

 

(i.)        Before any notice to Respondent of the dispute, Respondent has used the domain for the promotion of its domain name registration and hosting services.

 

(ii.)       Respondent has also been commonly known by the domain name as a business in the county of Los Angeles, California. Respondent has acquired trademark rights through its continuous use in commerce for six years. A federal trademark application by the Respondent is pending under Serial No. 78,613,711.

 

(iii.)            Respondent has also made a legitimate noncommercial posting on its domain name for charitable purposes.

 

(iv.)             Where, as here, a disputed domain incorporates a mere combination of common words, Respondent, ipso facto, has a legitimate interest in the <shoemart.com> domain name.  See Target Brands, Inc. v. Eastwind Group, FA 267475 (Nat. Arb. Forum July 9, 2004) (involving the domain name <target.org>).  In this case, the complainant there had a trademark for the TARGET mark, which is arguably far more well-known than Complainant’s alleged mark here.  Finding for the respondent, the panel held that the “[r]espondent has rights to and legitimate interests in a domain name that consists of a generic or common term.”  The panel explained that “where a domain name is generic, the first person to register it in good faith is entitled to the domain name and this is considered a legitimate interest.” Id., citing Target Software Solution GmbH v. NetVirtue, Inc., D2002-0277 (WIPO Aug. 19, 2002); see also CRS Tech. Corp. v. CondeNet, FA 93547 (Nat. Arb. Forum Mar. 28, 2000); see also Coming Attractions v. ComingAttractions.com, FA 94341 (Nat. Arb. Forum May 11, 2000); see also Energy Source Inc. v. Your Energy Source, FA. 96364 (Nat. Arb. Forum Feb. 19, 2001) (finding that the respondent has rights and legitimate interests in the <yourenergysource.com> domain name where “[r]espondent has persuasively shown that the domain name is comprised of generic and/or common words, and, in any event, is not exclusively associated with Complainant’s business”); see also Ultrafem, Inc. v. Royal, FA 97682 (Nat. Arb. Forum Aug. 2, 2001)(Respondent “has a legitimate interest in the domain name. The <instead.com> domain name is generic, and is a commonly used word.”).  As noted, the common word “hood” appears on over 3.8 million third party web pages wholly unrelated to Complainant, so it is clear that Complainant does not have exclusive rights to the word.

 

3.         The <shoemart.com> domain name has been registered and used in good faith.

 

(i)     Respondent did not register or acquire the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to Complainant who claims to be the owner of the trademark or service mark.

 

Respondent registered the domain name because it is a common descriptive combination of words.  Respondent, in the declaration of its President, states it had no knowledge of any trademark rights of Complainant or its existence as a business at the time the domain name was registered.

 

Respondent did not seek to sell the domain name to Complainant; rather, Complainant solicited the offer to sell using an anonymous agent. These facts do not indicate any bad faith on the part of Respondent.

 

The Panel in Container Research Corp. v. Markovic, FA 328163 (National Arbitration Forum Nov. 2, 2004) found that the complainant could not prod the respondent into offering a transfer price and then invoke Policy ¶ 4(b)(i) to show the respondent’s bad faith registration and use. The Panel denied the complaint.

 

 

(ii.)       Respondent did not register the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name.  Complainant has been using <theshoemart.com> as its website. As of May 12, 2005, the date of Respondent’s latest search conducted by Respondent with Networksolutions.com, Complainant’s corporate name, slogan and their variations in domain names are still available for registration by third parties. See Exhibit M.

 

(iii.)      Respondent did not register the domain name primarily for the purpose of disrupting the business of a competitor; or

 

(v.)               Respondent did not attempt to attract, for commercial gain, Internet users to Respondent’s web site or other on-line location, by creating a likelihood of confusion with Complainant’s mark as to the source, sponsorship, affiliation, or endorsement of Respondent’s web site or location or of a product or service on Respondent’s web site or location.

 

 

C.                 Additional Submission by Complainant

 

I.          INTRODUCTION

 

Complainant’s Additional Submission reiterates that it disputes the factual and legal assertions in the Response filed by Respondent in this matter, on the basis that: 

 

·        Complainant’s SHOEMART trademark has acquired distinctiveness and secondary meaning, and contrary to Respondent’s assertions, the U.S. Trademark Office has acknowledged and accepted the claim of Acquired Distinctiveness.

·        Respondent has registered a domain name that is identical to Complainant’s protected trademark.

·        Respondent offers no bona fide services or any meaningful content whatsoever on the disputed domain.  Respondent’s alleged use consists of nothing more than making the control panel settings available for viewing.  Such use renders meaningless the requirement for bona fide use because all websites by definition have administrative settings regardless of whether they have content.

·        Despite the fact that it makes no discernable use of the domain, Respondent demanded a payment of $250,000 for transfer of the domain name.

·        Respondent has engaged in a pattern of bad faith domain registration as evidenced by two prior findings of bad faith in similar cases.

 

Thus, Complainant is entitled to transfer of the disputed domain name.

 

II.        THE DISPUTED DOMAIN NAME IS IDENTICAL OR CONFUSINGLY SIMILAR TO COMPLAINANT’S PROTECTED TRADEMARK

 

Long use of a mark is relevant in determining whether a mark has acquired distinctiveness.  See In re Uncle Sam Chem. Co., Inc., 229 USPQ 233 (TTAB 1986) (accepting a §2(f) claim of acquired distinctiveness of SPRAYZON for "cleaning preparations and degreasers for industrial and institutional use").

 

Complainant has more than met the burden for establishing that the SHOEMART trademark has acquired distinctiveness under the Trademark Act.  Complainant has provided retail store services under the SHOEMART trademark for nearly fifty (50) years.  Complainant has provided evidence of use consisting of receipts, invoices, business documents, and advertisements dating back to 1960.  Complainant’s use of the mark in connection with the retail store services is uncontested by Respondent.

Moreover, the U.S. Trademark Office has accepted Complainant’s claim of Acquired Distinctiveness in two separate trademark applications for the THESHOEMART.COM and SHOEMART SINCE 1956 trademarks.  In each case, the Trademark Office initially refused registration on the grounds that the proposed mark was descriptive of the identified services.  Contrary to Respondent’s assertions, the Trademark Office withdrew the refusal to register in each case in light of Complainant’s demonstration of acquired distinctiveness. 

 

The disputed domain name, <shoemart.com>, is identical to Complainant’s SHOEMART trademark. Complainant has protected trademark rights in the SHOEMART name, and the U.S. Trademark Office has acknowledged that right.  Respondent does not contest the similarity of the terms. 

 

III.       RESPONDENT HAS NO LEGITIMATE INTEREST IN THE DISPUTED DOMAIN NAME BECAUSE IT DOES NOT USE THE DOMAIN NAME IN CONNECTION WITH A BONA FIDE OFFERING OF GOODS OR SERVICES AND IS NOT COMMONLY KNOWN BY THE DOMAIN NAME

 

Respondent’s bad faith in registering the disputed domain name is evident because it fails to use the domain name with a bona fide offering of goods or services and is not commonly known by the disputed domain name.

 

Respondent alleges in its Response that it uses the domain name for the promotion of its domain name registration services and further that it is commonly known by the domain name.  However, Respondent offers no credible support for these assertions.

 

As of the date of the filing of this Complaint, Respondent offered no services through the domain <shoemart.com>.  Respondent states that it offers a log-in page for clients to “experience in reality how the server works from the back end.”  However, nothing in the records establishes that the services are offered in connection with the <shoemart.com> website. 

 

Moreover, even if the evidence put forward by Respondent is accurate, it does not demonstrate use of the domain name in connection with bona fide services.  Nothing on the website, <shoemart.com>, references any services whatsoever.

 

Furthermore, Respondent is not commonly known by the domain name in question.  Respondent has provided no evidence to indicate that it is commonly known by either “shoemart.com” or “shoemart” in commerce.  Evidence of use such as advertisements, business forms, or any other documentation normally used in the course of business is absent from the record.

 

Respondent cites as evidence that it is commonly known by the domain name, its fictitious business name and federal trademark application shoe for SHOEMART.COM.  A fictitious business name does not require proof of use and therefore does not establish that Respondent is commonly known by the domain name.  Moreover, the “Fictitious Business Name Statement” states on its face “the filing of this statement does not itself authorize the use in this state of a fictitious business name in violation of the rights of another under federal, state, or common law.”

 

Respondent is commonly known by the name “DomainHouse.com” – one of the names on its Fictitious Business Name Statement.  See Tercent Inc. v. Lee Yi, FA 139720 (Nat. Arb. Forum Feb. 10, 2003) (stating “nothing in Respondent’s WHOIS information implies that Respondent is ‘commonly known by’ the disputed domain name” as one factor in determining that Policy ¶ 4(c)(ii) does not apply).  The other names in the statement are <officestuff.com> and <medicalshoppe.com>.  Both these domains are used in the same manner as <shoemart.com>.

 

Finally, Respondent’s federal trademark application was filed on April 21, 2005, after this Complaint was initiated, and is a thinly veiled attempt to create a trademark right in the domain name where none exists.  A review of Respondent’s trademark application demonstrates that their specimen of use consists of a logo on a blank page and provides no reference to any actual services provided.  To show service mark usage, the specimens must show use of the mark in a manner that would be perceived by potential purchasers as identifying the applicant's services and indicating their source.  In re Universal Oil Prods. Co., 476 F.2d 653, 177 USPQ 456 (C.C.P.A. 1973).

 

Complainant says Respondent’s pattern in these matters is clear.  It registers domain names and maintains them without use in connection with any goods or services and without any meaningful content presumably in seeking to sell the domain name at a later time.  However, without some evidence of bona fide use or evidence that it is commonly known by the domain name, Respondent cannot demonstrate that it has a legitimate interest in the domain name when challenged by a trademark holder.

 

Respondent has failed to use the domain in connection with any bona fide offering of goods and services and is not commonly known by the <shoemart.com> domain name– therefore it has no legitimate right to the disputed domain name.

 

IV.       RESPONDENT HAS REGISTERED THE DISPUTED DOMAIN FOR THE PURPOSE OF SELLING IT AND HAS OTHERWISE ENGAGED IN A PATTERN OF BAD FAITH CONDUCT IN REGISTERING DOMAIN NAMES.

 

Complainant reiterates that Respondent is in the business of speculating in domain names.  Respondent states that it registers domain names and “from time to time” sells the names of interested parties. 

 

Offers to sell domain names that are identical or confusingly similar to the marks of others to the public at large constitute bad faith under section 4(a)(iii) of the UDRP.  See Apple Computer, Inc. v. DomainHouse.com, Inc., D2000-0341 (WIPO July 5, 2000).  Moreover, an offer for sale of an otherwise unused domain name can constitute use for the purposes of paragraph 4(a)(iii) of the Policy.  See Espirito Santo Fin. Group, S.A. v. Colman, D2001-1214 (WIPO Jan. 22, 2002); see also J. Paul Getty Trust v. Domain 4 Sale & Co., FA 95262 (Nat. Arb. Forum Sept. 7, 2000) (finding rights or legitimate interests do not exist when one has made no use of the websites that are located at the domain names at issue, other than to sell the domain name registrations for profit); see also Wal-Mart Stores, Inc. v. Stork, D2000-0628 (WIPO Aug. 11, 2000) (finding Respondent’s conduct purporting to sell the domain name registration suggests it has no legitimate use).  This is particularly so in the case where the price sought is exorbitant in proportion to out of pocket expenses.  See Gortsew Ltd. v. Cavanaugh, D2004-1214 (WIPO Aug. 25, 2004) (A fee of $10,000 raised an inference of bad faith); see also Booz-Allen & Hamilton Inc. v. Servability Ltd, D2001-0243 (WIPO Apr. 5, 2001) (finding bad faith where Respondent, a domain name dealer, rejected Complainant’s nominal offer of the domain in lieu of greater consideration).

 

When Complainant inquired about purchasing the <shoemart.com> domain name, Respondent stated that Complainant’s offer was “way below the asking price of $250,000.”  An asking price of $250,000 for a domain name that is not being used clearly raises an inference of bad faith, especially given Respondent’s pattern of bad faith registrations.

 

In summary, Complainant argues it has established that it is the owner of the protected SHOEMART trademark, whose acquired distinctiveness has been recognized by the U.S. Trademark Office.  Respondent has not used the disputed domain name, <shoemart.com>, for any legitimate purpose and has offered to sell it for a price far in excess of its out-of pocket expenses.  Given Respondent’s history of bad faith registrations, it is clear that Complainant is entitled to transfer of the disputed domain name.

 

D.                Additional Submission by Respondent

 

Respondent’s Sur-Reply disputes the factual and legal assertions in the Additional Submission filed by Complainant in this matter, by a series of assertions that are largely repetitions of its initial Response, to wit:

 

I. THE DOMAIN NAME IS NOT IDENTICAL OR CONFUSINGLY SIMILAR TO COMPLAINANT'S PROTECTED TRADEMARK.

 

Complainant's bare assertion that SHOEMART has acquired distinctiveness and secondary meaning is false and illusory. There is no explanation whatsoever by Complainant as to the secondary meaning of SHOEMART based on its usage and there is also no proof of exclusive use by Complainant. To the contrary, the Respondent has offered evidence that the term “shoe mart” is being used by multiple third parties in their websites or as part of their company names.

 

Complainant's application for trademark "in their own words" has been refused registration for being descriptive, so the assumption by Complainant that the USPTO has "acknowledged or accepted the claim of acquired distinctiveness” and that therefore they have presumptive enforceable federal trademark rights is false. Such reconsideration by the USPTO is simply a part of the trademark application process and subject to review and opposition by parties that may be adversely affected by the registration of this descriptive term. Respondent will vigorously oppose Complainant's application if it ever reaches the publication stage. Complainant is trying to assert a claim of a registered trademark holder in this Reply versus their claim of common law rights in the Complaint. Complainant simply does not have a federally registered trademark at this point in time, and does not enjoy a legal presumption of inherent distinctiveness.

 

There is a complete absence of proof of exclusive use or secondary meaning in the record of this case. Furthermore, the alleged evidence of long use submitted is mostly scribbled, handwritten third party invoices from suppliers, which are not authenticated, by those third parties who "presumably" have issued these handwritten Shoe Mart invoices. This type of hearsay evidence is highly susceptible of being fabricated; its probative value is suspect as to proof of long use of the name “shoe mart.” Complainant has not offered evidence of incorporation papers since 1956 nor a business name statement supporting their 1956 use claim. Complainant makes bare, self-serving statements through a declaration of its counsel that SHOEMART has acquired distinctiveness and secondary meaning, where there is no independent corroborating evidence to support it.

 

Complainant has also not been forthcoming with its statements in the Complaint, when it decided not to disclose that its application has been refused for being descriptive. It is only when brought to light in our Response that this Complainant admitted that its federal trademark application was refused for being descriptive.

 

Based on the facts and legal arguments above mentioned, Complainant has no protectable rights under the Policy. No further analysis of the other elements of the Policy is necessary where Complainant has failed to prove that it has protectable trademark rights under the Policy.

 

II. RESPONDENT HAS LEGITIMATE INTEREST IN THE DOMAIN NAME, BECAUSE IT IS USING THE DOMAIN NAME IN CONNECTION WITH A BONA FIDE OFFERING OF SERVICES AND IS COMMONLY  KNOWN BY THE DOMAIN NAME.

 

Contrary to the false allegations of Complainant, Respondent has had a fictitious business name statement since March 31, 2000. It was filed and published for three consecutive weeks in a newspaper of general circulation in the County of Los Angeles; it enjoys a legal presumption of validity. It provides legal notice to the public that <shoemart.com> is also known as DomainHouse.Com.

 

Respondent repeats that it has used the <shoemart.com> domain name to advertise and promote DornainHouse.Com, Inc. which is a provider of new domain name registrations, hosting, ssl certificates, dedicated server hosting, website creator, traffic vista, web monitoring, etc. These are bona fide offering of services. The claim of Complainant that these are not bona fide offering of services is absurd.

 

Respondent again argues that it has continuously used the domain as a gateway to its dedicated hosting services. Complainant characterized this as mere "settings." Complainant is again misleading and wrong on this issue. While all websites have settings, not all websites are hosted on a dedicated server, not all websites have control panels that can modify traffic usage and data and control disk space usage, not all websites have traffic monitoring management and not all websites have assigned static IP addressees and many more. All of these services are being utilized by <shoemart.com> and is not just mere generic administrative settings for domain names.

 

Respondent filed a trademark application on April 21, 2005, before Respondent received notice of the Complaint on April 25, 2005. It is not a "veiled attempt to create a trademark right." This Complainant is trying to explain that our logo has no reference to actual services provided. Again this Complainant is looking for "shoes" as the only goods or services you can offer for this domain. Complainant has deliberately ignored the fact that <shoemart.com> can be used and is being used to promote the offering of domain name registration and hosting services at Domainhouse.Com.

 

Respondent, as a federal trademark applicant, has used the domain name <shoemart.com> continuously for five years in the domain name registration and hosting business. It has acquired distinctiveness in its exclusive use in the domain name registration and hosting industry. It is for this reason that Respondent believes it has a protectable right and a legitimate interest in <shoemart.com> and is entitled to keep the domain name.

 

III.       RESPONDENT HAS NOT REGISTERED OR USED THE DOMAIN NAME IN BAD FAITH.

 

Respondent was neither aware nor had knowledge of the existence of Complainant or its alleged trademark rights when the domain name was registered on March 7, 1999.  Respondent chose to register this domain name because it was descriptive of a service that could be offered under the domain name.

 

There was no demand made by Respondent to Complainant for the sale of the domain to Complainant. Complainant, without a good faith intention to purchase, solicited Respondent to sell the domain name. Complainant went to the extent of prodding for a reply when Respondent did not return its solicitous email. Respondent, after being prodded for a reply, expressed what it believed to be its valuation of the domain name. Immediately thereafter, Anne Marie Provino, a lawyer pretending to be a businessperson, sent an email to Mr. Gene Winter, counsel for Complainant. This clearly shows that the only purpose for this solicitation was to use it as evidence of bad faith under the Policy.

 

The Panel in Container Research Corp. v. Markovic, FA 328163 (Nat. Arb. Forum Nov. 2, 2004), that this kind of practice mitigates the Policy. It found that the complainant could not prod the respondent into offering a transfer price and then invoke Policy ¶ 4(b)(i) to show the respondent's bad faith registration and use.

 

It is also well established that the sale of generic domain names constitutes a bona fide offering of goods and services where the respondent is unaware of a party's rights in a mark. See BND Ent. v. RN WebReg, FA 280502 (Nat. Arb. Forum July 28, 2004); see also Micron Tech., Inc. v. Null Int'l Research Ctr., D2001-0608 (WIPO June 20, 200l).

 

In CRS Tech. Corp. vs. CondeNet Inc., FA 93547 (Nat. Arb. Forum Mar. 28, 2000), the Panel found that a person or entity may legitimately register and use many domain names that are different from its corporate or trade names. Thus, while the registration of a domain name that mimics one's corporate or trade name may provide proof of legitimacy under Policy ¶ 4(c)(ii), the inverse is not also true: the absence of a corporate or trade name from which a domain name was derived does not render the registration and use illegitimate.

 

This is not a case where Respondent selected a domain name of a famous or distinctive mark that it should have known it is not entitled to use, nor is this a case where the words “shoe mart,” although based on a word from everyday discourse, has developed such a strong fame or distinctiveness that consumers would inevitably believe that a website located at the <shoemart.com> domain name is affiliated only with Complainant, To the contrary, Respondent has provided evidence of widespread use of “shoe mart” by third parties in their websites or part of their company name or trade name, while Complainant offered no evidence of exclusive use.

 

Complainant's allegation that Respondent "registers domain names and maintains them without use" is false. It is asserted by Respondent that under Respondent's business plan, it waits for the right time when its market had been properly evaluated and financing has been prepared before it launches an online business.

 

For example, Registrant asserts <medicalshoppe.com> is one of these domains that is being organized as an independent online business. Respondent registered this domain name on June 14, 1999. This domain name however was referenced by Complainant in its reply as a domain without use, which is again an allegation that is completely false.

 

On March 2, 2004, MedicalShoppe.Com, Inc. was incorporated in California, it applied for federal trademark registration for its mark on Feb. 12, 2005, was issued a license by the Bureau of Home Furnishings and Thermal Insulation, State Board of Equalization and the City of Los Angeles. It also has pending application for License with Bureau of Food and Drug with the State of California for Medical Device Retailers license. With all of these licenses, Complainant has referenced this domain name in their Reply as a "domain name without use."

 

The claim of this Complainant in this case is totally without merit. It relies solely on its devious presumption that it should be awarded the domain, simply because Respondent lost two prior cases. Complainant's legal arguments and factual characterization is false, misleading and deceptive.

 

IV.       COMPLAINANT SHOULD BE FOUND TO HAVE ENGAGED IN DOMAIN NAME HIJACKING.

 

Respondent has enjoyed quiet possession of the domain name from March 7, 1999 up until April 25, 2005, when Respondent received notice of the Complaint. This Complainant knew for six years that Respondent owns the domain name and is legitimately using the domain.

 

Respondent argues that what is really happening here is that Complainant is feeling discontented with its <theshoemart.com> domain name as its website, so Complainant decided that it wants a better domain name which it knows is descriptive and very valuable. Complainant then chose to apply for a federal trademark registration with a motive to hijack Respondent’s domain name. The application was refused registration by the USPTO because it is descriptive. Complainant then proceeded to create a deceptive scheme of inquiring and offering a paltry sum of money that they clearly knew would be rejected, so it can offer proof of bad faith, simply because the domain has been offered for sale.  In addition it found Respondent had lost two prior cases, which provided Complainant an incentive to file this Complaint.

 

So even though Complainant clearly knew or should have known that it cannot prove any of the elements of the Policy, it then proceeded with this spurious Complaint at the expense of Respondent. Complainant is convinced that even though it has no evidence of its rights in the mark and was in fact refused by the USPTO, it could use the Forum to plunder a valuable descriptive domain name from its rightful owner.

 

This action of Complainant is a grave abuse of the Policy and of the Forum and should be sanctioned. Respondent requests a finding of domain name hijacking against Complainant.

 

 

FINDINGS

The Panel makes the following findings:

 

(1)                the mark in which Complainant claims exclusive rights has not been registered nor has Complainant established that it has acquired a secondary meaning sufficient to constitute a common law trademark under existing law, even though the domain name in suit is identical and confusingly similar to the trade name used by Complainant;

(2)                the Panel finds it unnecessary, under these circumstances, to determine if Respondent has any rights or legitimate interests in respect of the domain name; and

(3)                similarly, the Panel makes no findings as to whether the domain name was properly registered and is being used in good or bad faith.

 

 

DISCUSSION

Paragraph 15(a) of the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules” or the “UDRP”) instructs this Panel to “decide a complaint on the basis of the statements and documents submitted in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable.”

 

Paragraph 4(a) of the Policy requires that the Complainant must prove each of the following three elements to obtain an order that a domain name should be cancelled or transferred:

 

(1)                the domain name registered by the Respondent is identical or confusingly similar to a trademark or service mark in which the Complainant has rights;

(2)                the Respondent has no rights or legitimate interests in respect of the domain name; and

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

 

General Comments on Underlying Basis of this Decision

 

With respect to our dissenting brother, the Panel Majority has a different understanding of the purpose of the UDRP and the rules under which we are to decide domain name cases.  It is on that basis that we decide this case in favor of Respondent, in spite of the fact that we agree that many of the arguments of Respondent appear contrived.  We are constrained by these rules to conclude that Complainant has not established that it owns a mark protectible under the UDRP, for the reasons expressed below.

 

As the Panel Majority understands the history of the UDRP, it was developed and adopted to provide a summary proceeding for the prompt recovery of domain names that had been registered “abusively” or “in bad faith” in the sense that they were obviously registered to extort money from holders of registered trademarks or owners of well established common law trademarks.  See ICANN Staff Report on Implementation Documents for the Uniform Dispute Resolution Policy, available at http://www.icann.org/udrp/staff-report-29sept99.htm (discussing the approach used in developing the UDRP). 

 

Early in the outset of the Internet, there were a series of egregious cases where an unscrupulous party registered a domain name and then attempted to force the owner of a famous trademark to pay extortionate sums of money to use it.  See, e.g., Thomas R. Lee, In Rem Jurisdiction In Cyberspace, 75 Wash. L. Rev. 97, (2000) (discussing the activities of Dennis Toeppen and others engaging in this activity).

 

In these cases, the owner of the mark had to engage in expensive trademark infringement litigation in order to recover the domain. This was time consuming and deemed unfair and undesirable, so the UDRP rules and regulations were developed and adopted to provide a summary proceeding for cases that were clear instances of abusive registration.  “One of the main purposes of the UDRP is to provide a quick, cheap, and easy means to adjudicate domain name disputes between trademark holders and bad faith registrants of domain names.” See discussion available at http://cyber.law.harvard.edu/udrp/process.html.

 

Under these rules, if three elements can be proven in simple pleadings and declarations, the domain name can be cancelled or transferred to the trademark owner without the necessity of a formal trial.  It is also clear that if the Complainant does not prove the three elements, it cannot prevail and the domain name cannot be taken away from the registrant. These are the rules set forth at the outset of this Discussion, and we are required to apply these three standards to the facts of this case.

 

Because of this history, the sine qua non of a complainant prevailing in a UDRP case is that the complainant establish conclusively that the complaint is based upon ownership of either a registered trademark or a mark which would be recognized by a court as a common law trademark.  As the parties correctly argue the law here, although they view the facts differently, a mark which is either generic or descriptive cannot be registered and cannot become a protected common law trademark unless it is conclusively shown to have become distinctive in the sense that it has achieved a secondary meaning such that consumers identify those common terms exclusively with the goods or services of the owner of the mark.  An excellent example of this situation is cited by Respondent.  The WINDOWS mark was sought to be registered by Microsoft early in its use, and Microsoft had to place this mark on the Supplemental Registry until five years had passed so it could establish conclusively that it had acquired a secondary meaning beyond its common, generic meaning. At that point, and only at that point, was it granted protection as a registered mark.

 

One of the difficulties that this system presents to UDRP panels is that, since we are not a trial court with parties and witnesses physically before us, all we can do is read the briefs and declarations and other evidence presented, and make a determination on that basis.  Here, on reviewing the evidence, it appears to the Panel Majority that Complainant, while using the trade name ShoeMart in its business for more than 50 years, has not established, and we believe could not, that its name has become so distinctive as to have acquired a secondary meaning in the minds of the public, and thereby to become a protectible common law trademark because there is ample evidence that use of the term “shoe mart” is currently not exclusive to Complainant and has not been exclusive to Complainant in the past.  That being the case, Complainant has no protectible interest in the term “shoe mart” under the UDRP, regardless of whether it proved the second and third elements here.

 

For the sake of completeness, it should be noted that the Panel Majority also disagrees philosophically with our dissenting brother on what he deems to be the key issue here -- whether it is illegal to register domain names for the purpose of selling them later, as he seems to suggest is the case.  We think it is well established by UDRP decisions that the registration of common descriptive or generic terms and holding them for the purpose of sale is perfectly legal.  What is prohibited is only the registration of protectible common law marks or registered marks for sale to the owners.  In fact, even the cases cited by Complainant acknowledge that there is nothing inherently wrong with registering domain names for the purpose of selling them so long as the names registered are not trademarks. See, e.g., Apple Computer, Inc. v. DomainHouse.com, Inc., D2000-0341 (WIPO July 5, 2000) (“There is nothing inherently wrongful in the offer or sale of domain names, without more, such as to justify a finding of bad faith under the Policy. However, the fact that domain name registrants may legitimately and in good faith sell domain names does not imply a right in such registrants to sell domain names that are identical or confusingly similar to trademarks or service marks of others without their consent.”).  Further support for the proposition that there in nothing wrong with the registering of domain names for the purpose of resale can be found in numerous panel decisions. In Allocation Network GmbH v. Gregory, D2000-0016 (WIPO Mar. 24, 2000), the respondent had registered over 400 domain names, all of which contained or were composed of common words or short phrases from the English language or misspellings of such words. The panel found the respondent's explanation that he selected many of the domain names offered for sale at random was prima facie acceptable and it found that the respondent had a legitimate interest in the domain, which could have been refuted if the complainant had established that the domain was chosen with the intent to profit from or otherwise abuse the complainant's trademark rights.

 

Thus, the majority have chosen not to depart from the general proposition that  “even though the trademark and the name are all but identical… the first person or entity to register the domain name should prevail in circumstances such as these where the domain name is a generic word.”   CRS Tech. Corp. v. CondeNet, Inc., FA 93547 (Nat. Arb. Forum Mar. 28, 2000).

 

Identical and/or Confusingly Similar

 

The simple fact is that Complainant’s claimed protectible mark is generic and descriptive and Complainant has not established that these two descriptive words in combination have obtained any secondary meaning in the marketplace. The Panel has taken considerable care to set out the facts and the arguments of the parties to demonstrate this fact.  See Rollerblade, Inc. v. CBNO, D2000-0427 (WIPO Aug. 24, 2000) (finding that "genericness, if established, will defeat a claim of trademark rights, even in a mark which is the subject of an incontestable registration"); SportSoft Golf, Inc. v. Sites to Behold Ltd., FA 94976 (Nat. Arb. Forum July 27, 2000) (finding that the disputed domain name, golfsociety.com, is neither identical to nor confusingly similar to complainant’s trademark because the trademark links together two generic words – golf and society). 

 

Thus, Complainant has failed to establish rights in the SHOEMART mark pursuant to Policy ¶ 4(a)(i), and cannot prevail here, even if it shows evidence of lack of interest in the domain name and/or bad faith, since it has no protectible interest under the UDRP.  See Successful Money Mgmt. Seminars, Inc. v. Direct Mail Express, FA 96457 (Nat. Arb. Forum Mar. 7, 2001) (“seminar” and “success” are generic terms to which the complainant cannot maintain exclusive rights); see also SOCCERPLEX, INC. v. NBA Inc., FA 94361 (Nat. Arb. Forum May 25, 2000) (finding that the complainant failed to show that it should be granted exclusive use of the domain name <soccerzone.com>, as it contains two generic terms and is not exclusively associated with its business).

 

It is particularly significant that, because it holds no registered mark on these words,  Complainant has failed adequately to show that its descriptive mark has acquired secondary meaning, and therefore has not established that it has any common law trademark rights.  Thus, the Panel is required to find that Complainant lacks standing to file this current Complaint pursuant to Policy ¶ 4(a)(i).  See Weatherford Int’l, Inc. v. Wells, FA 153626 (Nat. Arb. Forum May 19, 2003) (“Although Complainant asserts common law rights in the WELLSERV mark, it failed to submit any evidence indicating extensive use or that its claimed mark has achieved secondary source identity.”); see also, Lowestfare.com LLA v. US Tours & Travel, Inc., AF-0284 (eResolution Sept. 9, 2000) (finding that marks classified as descriptive cannot be protected unless secondary meaning is proven and to establish secondary meaning the complainant must show that the public identifies the source of the product rather than the product itself); see also, Cyberimprints.com, Inc. v. Alberga, FA 100608 (Nat. Arb. Forum Dec. 11, 2001) (finding that the complainant failed to prove trademark rights at common law because it did not prove the CYBERIMPRINTS.COM mark was used to identify the source or sponsorship of goods or services or that there was strong customer identification of the mark as indicating the source of such goods or services).

 

 

Rights or Legitimate Interests

 

As noted at the outset of this Discussion, the Panel feels that no discussion of this point is appropriate or necessary because Complainant has failed to establish a protectible mark under the UDRP.  The Panel Majority notes  however, that it agrees with our dissenting brother that there are some disturbing facts here which might have tipped the case in favor of Complainant on this point, if it had been able to establish ownership of a protectible mark.

 

Registration and Use in Bad Faith

 

The same is the case with respect to this point, although the Panel notes that Complainant did not provide evidence to rebut Respondent’s assertion that, at the time it registered the subject domain name, it was unaware of Complainant’s use of the mark.  This would normally defeat the case of Complainant even if it had a protectible interest in the mark.  Policy ¶ 4(b).

 

 

DECISION

Complainant, having failed to establish or prove the critical first element of ownership of a protectible mark, as required under the ICANN Policy, the Panel concludes by a majority vote that relief shall be DENIED.

 

 

 

 

G. Gervaise Davis III, Panelist
Dated: June 10, 2005

 

 

 

 

 

David S. Safran, Panelist
Dated: June 10, 2005

 

 

DISSENT:

 

With all due respect to my brother Panelists, I must dissent.  As an overall matter, I believe the UDRP was designed to regulate a scarce resource (domain names) rather than to provide a mechanism to protect registered trademarks. 

 

There is no doubt Respondent is in the business of being a reseller of domain names that consist of common English words.  The fundamental question before the Panel is whether or not such a business should be allowed under the UDRP.  The secondary question is whether the trademark in question has acquired a secondary meaning (no pun intended).

 

As with any claim under the UDRP, three elements must be proven:

 

1.                  The domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights.

 

Please note this does not require Complainant to have registered rights.  This does not require the Complainant to have exclusive rights.  It merely requires Complainant to have some rights.  There are three general categories of trademarks:

 

1.         Fanciful (a word that is new and unique, such as Kleenex®).

 

2.         Misapplied (a word that has a meaning is applied in a new way, such as scotch tape®-which has no relation to the alcoholic beverage).

 

3.         Descriptive (but not to the level of generic, which gets no protection).

 

The trademarks are given protection in a descending manner.  A descriptive trademark is generally less protected than a misapplied trademark (and a misapplied trademark is given less protection than a fanciful trademark).  SHOEMART is in the third category, although reasonable minds differ.

 

There is no doubt that Complainant did not register SHOEMART with the United States Patent and Trademark Office.

 

I would find Complainant established common law rights in the SHOEMART mark through aggressive promotion and continuous use of the mark in commerce for nearly fifty years.  See SeekAm. Networks Inc. v. Masood, D2000-0131 (WIPO Apr. 13, 2000) (finding that the Rules do not require that the complainant’s trademark or service mark be registered by a government authority or agency for such rights to exist); see also Tuxedos By Rose v. Nunez, FA 95248 (Nat. Arb. Forum Aug. 17, 2000) (finding common law rights in a mark where its use was continuous and ongoing, and secondary meaning was established); see also Nat’l Ass’n of Prof’l Baseball Leagues v. Zuccarini, D2002-1011 (WIPO Jan. 21, 2003) (finding that the complainant had provided evidence that it had valuable goodwill in the <minorleaguebaseball.com> domain name, establishing common law rights in the MINOR LEAGUE BASEBALL mark).

 

I would also find Respondent’s <shoemart.com> domain name is identical to Complainant’s SHOEMART mark because the addition of the generic top-level domain is not enough to distinguish Respondent’s domain name from Complainant’s mark pursuant to Policy ¶ 4(a)(i).  See Kioti Tractor Div. v. O’Bryan Implement Sales, FA 210302 (Nat. Arb. Forum Dec. 29, 2003) (“Respondent's domain name, <kioti.com>, is identical to Complainant's KIOTI mark because adding a top-level domain name is irrelevant for purposes of Policy ¶ 4(a)(i).”); see also Busy Body, Inc. v. Fitness Outlet Inc., D2000-0127 (WIPO Apr. 22, 2000) (“[T]he addition of the generic top-level domain (gTLD) name ‘.com’ is . . . without legal significance since use of a gTLD is required of domain name registrants.”).

 

 

2.                  Respondent has no rights or legitimate interests in respect of the domain name.

This can be proven a number of ways, such as:

 

(i)         before any notice to Respondent of the dispute, 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.

Respondent failed to meet this test.  No goods or services were offered on the web site.  Simply claiming to have put a “dummy” back end web hosting panel behind a password does not constitute an offering of goods and services (especially since the content of the web site had nothing to do with web hosting).  Simply entering into a web hosting contract (even if it has a static IP address) does not constitute demonstrable preparations to make bona fide offering of goods or services.  Reselling domain names does not constitute a bona fide offering of goods or services.  To allow such an absurd construction would eviscerate the UDRP because every respondent could demonstrate rights.

 

While Respondent had 2,241 days from the date this domain name was registered until the Complaint was filed to establish some rights, it simply failed to do so.

 

(ii)                Respondent (as an individual, business, or other organization) have been commonly known by the domain name, even if Respondent has acquired no trademark or service mark rights.

While Respondent filed a trade name certificate in Los Angles Country, that does not mean Respondent is commonly known by that name.  Filing an application with the United States Patent and Trademark Office (which I would find was done before Respondent knew of this UDRP complaint) does not give Respondent any rights.  It is only after a registration is allowed that an applicant acquires rights from the filing.

 

(iii)       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.

 

Respondent did not make this claim.

 

I would find Respondent is using the <shoemart.com> domain name, which is identical to Complainant’s SHOEMART mark, in conjunction with its domain name resale operation, and that the domain name registration is offered for sale.  While Respondent claims it is in the business of a domain name exchange, for the registration of domain names, for identification of users on a global computer network; website development, namely, designing and implementing websites for others and hosting the web sites of others on a computer server for a global computer network, none of that is obvious from its web site.  In fact, you cannot tell what business Respondent is in from its web site.  I would find such use is not a use in connection with a bona fide offering of goods or services pursuant to Policy ¶ 4(c)(i) or a legitimate noncommercial or fair use pursuant to Policy ¶ 4(c)(iii).  I would conclude Respondent has not established rights or legitimate interests in the disputed domain name pursuant to Policy ¶ 4(a)(ii).  See J. Paul Getty Trust v. Domain 4 Sale & Co., FA 95262 (Nat. Arb. Forum Sept. 7, 2000) (finding rights or legitimate interests do not exist when one has made no use of the websites that are located at the domain names at issue, other than to sell the domain names for profit); see also Hewlett-Packard Co. v. High Performance Networks, Inc., FA 95083 (Nat. Arb. Forum July 31, 2000) (finding no rights or legitimate interests where the respondent registered the domain name with the intention of selling its rights).

 

Despite the neat trick of filing a fictitious trade name certificate in Los Angles County, I would find Respondent is neither commonly known by the disputed domain name nor authorized to register domain names featuring Complainant’s SHOEMART mark.  I would conclude that Respondent has not established rights or legitimate interests in the <shoemart.com> domain name pursuant to Policy ¶ 4(c)(ii).  See Compagnie de Saint Gobain v. Com-Union Corp., D2000-0020 (WIPO Mar. 14, 2000) (finding no rights or legitimate interests where the respondent was not commonly known by the mark and never applied for a license or permission from the complainant to use the trademarked name); see also RMO, Inc. v. Burbridge, FA 96949 (Nat. Arb. Forum May 16, 2001) (interpreting Policy ¶ 4(c)(ii) “to require a showing that one has been commonly known by the domain name prior to registration of the domain name to prevail”).

 

 

3.         Respondent’s domain name has been registered and is being used in bad faith.

Bad faith must be determined from the totality of circumstances.  There are a number of ways to prove bad faith, as described in the rules:

 

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

Being in the business of reselling domain names seems to fit pretty clearly into this category.

 

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

Being in the business of reselling domain names seems to fit pretty clearly into this category.  While this Panel would not claim Respondent did this to specifically block Complainant, Respondent did this to block someone in Complainant’s position.  In fact, Respondent’s entire business model assumes the existence of someone in Complainant’s position.

 

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

Not applicable in this case.

 

(iv)        by using the domain name, Respondent 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.

 

Respondent is entitled to sell its domain name.  Making an offer to sell the domain name is not evidence of bad faith.  The evidence of the bad faith was offering to sell it for $250,000.  I would find Respondent registered the <shoemart.com> domain name primarily for the purpose of selling it for an amount in excess of its out-of-pocket expenses to Complainant or a competitor, which constitutes bad faith registration and use pursuant to Policy ¶ 4(b)(i).  See World Wrestling Fed’n Entmt., Inc. v. Bosman, D99-0001 (WIPO Jan. 14, 2000) (finding that the respondent used the domain name in bad faith because he offered to sell the domain name for valuable consideration in excess of any out-of-pocket costs); see also Dynojet Research, Inc. v. Norman, AF-0316 (eResolution Sept. 26, 2000) (finding that the respondent demonstrated bad faith when he requested monetary compensation beyond out-of-pocket costs in exchange for the registered domain name).

 

I would also find Respondent has engaged in a pattern of preventative domain name registration through its prior conduct of registering domain names that are identical to third party marks.  See Apple Computer v. DomainHouse.com, Inc., D2000-0341 (WIPO July 5, 2000) (involving the complainant’s QUICKTIME mark and Respondent’s <quicktime.net domain name); see also Comm’n on Graduates of Foreign Nursing Sch. v. Free Speech Alliance, FA 109364 (Nat. Arb. Forum June 12, 2002) (involving the complainant’s CGFNS mark and Respondent’s (under the name of Wilson Martinez, Respondent’s president) <cgfns.com> and <cgfns.net> domain names).  Respondent registered and used the disputed domain name in bad faith pursuant to Policy ¶ 4(b)(ii).  See Gamesville.com, Inc. v. Zuccarini, FA 95294 (Nat. Arb. Forum Aug. 30, 2000) (finding that the respondent engaged in a pattern of conduct of registering domain names to prevent the owner of the trademark from reflecting the mark in a corresponding domain name, which is evidence of registration and use in bad faith); see also Encyclopaedia Britannica Inc. v. Shedon.com, D2000-0753 (Sept. 6, 2000) (finding bad faith where the respondent engaged in the practice of registering domain names containing the trademarks of others).

 

 

 

 

Houston Putnam Lowry, Chartered Arbitrator and Chair, Panelist
Dated: June 10, 2005

 

 

 

 

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[1] Also in the Comm’n on Graduates of Foreign Nursing Sch. case, the panel found bad faith in the fact that DomainHouse had provided false information to the domain name registrar when it switched the registration from Advent Home Health to Free Speech Alliance.