Candy Direct, Inc. v. itsalldirect2u.com
Claim Number: FA0507000514784
PARTIES
Complainant
is Candy Direct, Inc. (“Complainant”),
represented by Stephen L. Anderson, of Anderson & Associates,
27349 Jefferson Avenue, Suite 211, Temecula, CA 92590. Respondent is itsalldirect2u.com (“Respondent”), represented by Thomas J. Drake, 305 14th Avenue
North, Nashville, TN 37203.
REGISTRAR AND DISPUTED DOMAIN NAME
The
domain name at issue is <candydirect2u.com>,
registered with Wild West Domains, Inc.
PANEL
The
undersigned certifies that he or she has acted independently and impartially
and to the best of his or her knowledge has no known conflict in serving as
Panelist in this proceeding.
Jonas
Gulliksson as Panelist.
PROCEDURAL HISTORY
Complainant
submitted a Complaint to the National Arbitration Forum electronically on July
11, 2005; the National Arbitration Forum received a hard copy of the Complaint
on July 12, 2005.
On
July 12, 2005, Wild West Domains, Inc. confirmed by e-mail to the National
Arbitration Forum that the domain name <candydirect2u.com>
is registered with Wild West Domains, Inc. and that the Respondent is the
current registrant of the name. Wild
West Domains, Inc. has verified that Respondent is bound by the Wild West
Domains, 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
July 13, 2005, a Notification of Complaint and Commencement of Administrative
Proceeding (the “Commencement Notification”), setting a deadline of August 2,
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@candydirect2u.com by e-mail.
A
timely Response was received and determined to be complete on August 2, 2005.
On
August 5, 2005 Additional Submission was received from the Complainant. As the
submission was received in a timely manner according to the Forum’s
Supplemental Rule 7, the Panelist has considered the Additional Submissions.
On August 9, 2005, pursuant to Complainant’s request to
have the dispute decided by a single-member
Panel, the National Arbitration Forum
appointed Jonas Gulliksson as Panelist.
RELIEF SOUGHT
Complainant
requests that the domain name be transferred from Respondent to Complainant.
PARTIES’ CONTENTIONS
A. Complainant
The
Complainant has stated the following in its Complaint.
Since
at least as early as May 22, 1997, Complainant CANDY DIRECT, INC. and its
founder, predecessor and chief executive, Stephen Traino, have used the trade
name and service mark CANDY DIRECT and the associated domain name candydirect.com in connection with the
retail and online sale of candy, confections, gift baskets and gifts.
Complainant is the owner of the trade name, common law trademark, and service
mark CANDY DIRECT and several closely related domain names which it and its
predecessor have continuously used in connection with the CANDY DIRECT mark in
connection with the manufacture, distribution and sale of candy, confections
and hand-made gifts. Complainant’s CANDY DIRECT trademark has been promoted and
used notoriously in connection with several websites on the Internet, and is
the owner of numerous domain names including:
May 22, 1997 CANDYDIRECT.COM
August 04, 1997 CANDYDIRECT.NET
November 28, 1999 CHOCOLATEDIRECT.COM
October 24, 2001 CANDYDIRECT.INFO
April 24, 2002 CANDY2U.COM
Collectively
attached as Exhibit “A”
hereto are the WHOIS records pertaining to the Complainant’s registration of
such domain names.
Attached
as Exhibits “B-1” and “B-2” are printouts of the
Complainant’s home page of its extensive, branded online candy and gift store
located at <candydirect.com>, respectively dated September 8, 1999 and
June 24, 2005. At all times relevant
herein, Complainant has also used its CANDY DIRECT mark on several other
Internet websites which include: <buycandyonline.com>, <candy.org>,
<crazyaboutcandy.com>, <candycity.com>, <candyvillage.com>,
<candyemporium.com>, <candyinc.com>, <candystore.com>,
<candysuperstore.com>, <chocolateland.com>, and
<sandiegocandy.com> among several others.
On July 7,
1997, Complainant’s predecessor, Stephen Traino registered CANDY DIRECT as a
duly registered fictitious business name with the San Diego Recorder/County Clerk through July 07, 2002. On April 23,
2001, Mr. Traino again registered CANDY DIRECT as a fictitious business name with the San Diego Recorder/County Clerk
through April 23, 2006. On April 10, 2003, Complainant registered its business
name with the San Diego Recorder/County Clerk through April 10, 2008. Collectively
attached as Exhibit “C”
hereto are current relevant San Diego County fictitious business name records
pertaining thereto.
On December 19, 2002, Mr.
Traino founded the Complainant CANDY DIRECT,
INC. Attached as Exhibit “D” is the
current record of the California Secretary of State’s corporation records
database showing Complainant CANDY DIRECT INC.’s current status as a valid
California corporation.
Beginning
at least as early as May, 1997, Complainant and its predecessor have publicly
used and have advertised the CANDY DIRECT trade name, service mark and domain
name at the candydirect.com website and on numerous offline publications.
Complainant’s CANDY DIRECT branded products and services have been prominently
featured in books, news reports and variety features in such publications as
The Boston Globe, Time Magazine, Parents Magazine, Computer
World, Yahoo Internet Life Magazine,
Candy Buyer Magazine, Candy Freak,
Confectioner Magazine, Distribution Channels Magazine, Vogue Magazine, and USA Today.
During
the past eight years, Complainant’s name as well as its founder’s name and the
CANDY DIRECT mark have been the subject of several feature stories and have
received favorable mention, including on Food Network’s “Unwrapped” television
show, “The View” nationally syndicated television show, TechTV television show,
Martha Stewart’s television show, and were referenced in a number of widely
distributed radio show interviews.
Complainant’s
founder has attended numerous trade shows as a representative of CANDY DIRECT
and has specifically promoted the Candy Direct brand at the National
Confectioner Association annual Candy Expo representing Candy Direct to all
major candy manufacturers (during each of the years 1999, 2004 and 2005).
Complainant’s “Candy Direct” is well-known among consumers and is
well-recognized by most people within the candy industry.
During
the past eight years, Complainant and its founder have spent over one million
dollars ($1,000,000) advertising and promoting Complainant’s candydirect.com
website and CANDY DIRECT trade name and marks.
All advertising promoted “Candy Direct” and was directly or indirectly
linked to <candydirect.com>. Such advertising included banner ads placed
on third party websites, pay per click keyword advertisements, directory
inclusions, link exchanges, and the like.
At all times relevant to this proceeding Complainant’s candydirect.com
website has been listed in numerous directories (including Yahoo and DMOZ) and
for several years, Complainant has paid to advertise its goods and services on
the Google Search engine and on other pay-per-click search engines, such as
<Yahoo.com> and <Overture.com>.
Candy
Direct, Inc. receives on average nearly three million (3,000,000) unique visitors
to the candydirect.com web site and 30 million page views each year. At all times relevant herein, Complainant’s
<candydirect.com> website has been ranked within the top 45,000 websites
as rated by the Alexa Web Search system.
Considering Candy Direct is an e-commerce site this ranking is quite
high when taking into account that it is also competing for traffic from free
content sites and well over ten million other active web sites on the Internet.
As
a result of the Complainant’s efforts, the CANDY DIRECT mark has achieved
secondary meaning, and the Complainant has become the best-known
non-manufacturer distributor of candy and gifts on the Internet,
worldwide. Records of the independent
web traffic service known as Alexa (a subsidiary of Amazon.com), which are
annexed hereto as Exhibit “E”
(concerning the webtraffic for candydirect.com for the period of May 2002
through June 24, 2005). Also
collectively attached within Exhibit “E” and hyperlinked immediately below are
current records from the Alexa traffic ranking system which conclusively show
that Complainant’s <candydirect.com> website is ranked as the #3 most
popular website in the world, for the category “confectionary” and is ranked #1
in the world under the category for candy.
See http://www.alexa.com/browse?&CategoryID=27966;
see also http://www.alexa.com/browse?&CategoryID=358990.
Complainant’s
CANDY DIRECT mark and website have become famous and as a result enjoy a
tremendous amount of success, goodwill and secondary meaning in its trademark
and domain name among the public.
Indeed, Candy Direct Inc.’s revenues in the year 2004 alone, exceeded
two million dollars ($2,000,000). Upon information and belief, the Respondent
registered the subject domain name <candydirect2u.com> in bad
faith, and for the purpose of usurping the Complainant’s goodwill in its Candy
Direct mark.
On
or about December 18, 2002, without Complainant’s knowledge or authorization,
Respondent registered the subject domain name in dispute <candydirect2u.com>. See Exhibit “F” attached
hereto, namely the WHOIS records pertaining to Respondent’s registration of
candydirect2u.com.
Respondent has never been known by
the subject domain name.
Upon
information and belief, at such time Respondent was specifically aware of
Complainant’s prior use of its related trade names, trademarks and domain
names, including CANDY DIRECT, CANDYDIRECT.COM (May 22, 1997); CANDYDIRECT.NET
(August 04, 1997) and CANDY2U.Com (April 24, 2002). Evidently, however, Respondent registered the subject domain name
in bad faith and with the intent to improperly take advantage of Complainant’s
trademark rights and goodwill in such name.
Since
registering the subject domain name, the Respondent has never directly used the
website to host any content or for any legitimate purpose. To the contrary,
such Uniform Resource Locator has at all times been used only to forward/
redirect to Respondent’s Internet website at <itsalldirect2u.com>.
Respondent’s
<itsalldirect2u.com> website is used to promote and sell a variety of
goods, particularly including candy and gifts.
A printout of a portion of Respondent’s home page at
<itsalldirect2u.com> is attached hereto as Exhibit “G.”
Respondent
has recently begun a pay-per-click keyword advertising campaign for the term
CANDY DIRECT that is obviously directly intended to divert Complainant’s
customers and prospective customers seeking to find the Complainant and its
branded goods and services. Attached
hereto as Exhibit “H” is
a copy of recent search results from the Google Internet search engine which
shows paid sponsored links by Respondent for the term CANDY DIRECT.
Notably,
directly below the Complainant’s name, Respondent boldly attempts to misdirect
Complainant’s customers and prospective customers by inviting such
persons: “Before you buy from them – Check Out Our Low Prices On All Your Favorite
Candies.” Attached as Exhibit “H” hereto is a two-page
printout of the Google Search engine results for the term CANDY DIRECT showing
the unfair competition on the part of Respondent as well as the competitive
paid-for, and directory listings by the Complainant and Respondent herein.
LEGAL ARGUMENTS
This
Complaint is based on the following factual and legal grounds:
[a.] <candydirect2u.com>
is Confusingly Similar to Complainant's Trademark
Complainant’s common
law rights in its trade name and in the CANDY DIRECT mark as used since May
1997 are sufficient under the UDRP to grant a transfer of the subject domain
name registration. See eGalaxy Multimedia Inc. v. T1, FA101823 Nat. Arb.
Forum Dec. 23, 2001) (recognizing protection for common law marks); see also McCarthy on Trademarks and Unfair
Competition,
§ 25:74.2 (4th ed. 2002) (The
ICANN dispute resolution policy is “broad in scope” in that “the reference to a
trademark or service mark ‘in which the complainant has rights’ means that
ownership of a registered mark is not required – unregistered or common law
trademark or service mark rights will suffice” to support a domain name
Complaint under the Policy);
see also Georgia Gulf Corporation v. The Ross Group Case, D2000-0218 (WIPO June
14, 2000) ("Rather, under U.S. trademark law, rights attach upon use of
the mark in commerce.");
see also LIN Television Corporation v. Home In USA and Home In USA, Inc., D2000-0257 (WIPO June
2, 2000) ("The Panel concludes that the Complainant has trademark rights in
the terms WAVY, WAVY TV, and WAVY TV 10. The lack of a federal registration
does not prevent the Complainant from establishing common law trademark rights
in these terms.").
Indeed, such common law
rights have often been found
as
sufficient to satisfy the requirement that the Complainant has trademark rights
in the mark identical thereto.
See 20th Century Fox Film Corporation v. Leonard Rogan, FA 102952 (Nat. Arb.
Forum Sept. 15, 2002). Such common law right in the Mark warrants the exclusive
right to use the mark reflected in the domain at issue. American
Online, Inc. v. Tencent Communications Corp., FA 92668 (Nat. Arb. Forum Mar. 21, 2000).
Here,
the subject domain is identical in sight sound and connotation to Complainant’s
name and mark except for the ".com" generic top-level domain, and two
additional characters: “2” and “U” which are commonly used online shorthand for
of “to” and “you”. For purposes of comparison, the ".com" portion of
such URL does not serve to distinguish the Domain name from the Complainant's
trademark. Nor do minor variations in the domain name such as “e” or “’i” added
to a complainant’s prior used name or mark.
See, e.g., Robbie Williams v.
Howard Taylor, D2002-0588 (WIPO Aug. 8, 2002) ("It is
immediately obvious that the Domain Name is identical to the Complainant’s
ROBBIE WILLIAMS mark, save for the .info generic top level domain which does
not serve to distinguish the Domain Name from the Complainant’s trade mark."); see also Pierce Brosnan v. Network Operations Center,
D2003-0519 (WIPO Aug. 27, 2003).
Consequently,
Respondent’s registration and use of <candydirect2u.com> creates a
likelihood of confusion with Complainant’s name and mark as well as its prior
domain name registrations, including <candydirect.com> and <candy2u.com>
as used in connection with its CANDY DIRECT mark. At very least such
registration and use creates a likelihood of confusion with respect to the Complainant’s trade names, mark and
domain names, that there is some connection between the Respondent’s
website and goods offered thereon and/or that consumers seeking the Complainant
will mistakenly be led or otherwise unfairly misdirected to Respondent’s
website.
[b.] Respondent has no rights or legitimate
interests in the Domain Name
[i] Respondent’s use of <candydirect2u.com>
is not in connection with any bona fide offerings.
Respondent is a competitor of the Complainant sufficient to satisfy
Policy ¶ 4(b)(iii). There is no relationship between the Complainant and the
Respondent, which would entitle the Respondent to use the Complainant’s mark.
To the contrary, Respondent has used Complainant’s mark to attract traffic to its <candydirect2u.com>
URL which redirects such traffic to Respondent’s <itsalldirect2u.com>
website which has no connection with Complainant and is simply taking advantage
of the Complainant’s reputation and goodwill in the mark by offering and selling a number of various services
competitive to those offered by the Complainant, hence not constituting a bona
fide offering of goods or services. See
Pierce
Brosnan,
D2003-0519;
see also Peter Frampton v.
Frampton Enterprises, Inc., D2002-0141 (WIPO Apr. 17, 2002).
Where a competitor uses
a colorable simulation of the complainant’s trademark to misleadingly divert
consumers to its own website, such use is not a fair use, and can only
demonstrate Respondent’s bad faith. See Madonna Ciccone, p/k/a Madonna v. Dan Parisi and
"Madonna.com", D2000-0847 (WIPO Oct. 16, 2000)(“[T]he evidence
demonstrates a deliberate intent to trade on the good will of complainant.
Where no plausible explanation has been provided for adopting a domain name
that corresponds to the name of a famous entertainer, other Panels have found a
violation of the Policy."); See,
e.g., eGalaxy Multimedia Inc., FA101823 (transferring domain
name to complainant where respondent’s intent was to divert traffic away from
complainant, even where complainant had not secured trademark registration at
the time of respondent’s domain registration).
Inasmuch as
Respondent's use of Complainant's mark infringes Complainant's exclusive
trademark rights, and is used in the same field of goods and services as
previously and widely used by the Complainant, Respondent cannot have any
rights or legitimate interests in the subject domain name and cannot be using
the name in connection with a bona fide offering of goods or services.
Moreover in light of
Complainant’s longstanding and extensive use of its CANDY DIRECT mark and
names, since May 1997, which had become well-known and widely recognized in the
industry and on the Internet, by the time that the Respondent registered the
subject domain name points only to bad faith.
Given these facts,
there is no reasonable possibility that respondent’s infringing domain name was
selected by chance. See, e.g., Dr. Karl Albrecht v. Eric
Natale FA
95465 (NAF Sept. 16, 2000); see also Six
Continent Hotels, Inc. v. Patrick Ory, D2003-0098 (WIPO March 26, 2003) (using the Domain Name which incorporates the Complainant’s HOLIDAY INN
mark, to re-sell services in the exact same field of endeavor as the
Complainant, i.e. hotel services, is intentionally seeking to exploit user
confusion by diverting Internet users away from the Complainant's Web site to
the Respondent’s Web site. Intentionally trading on the fame of a mark cannot
constitute bona fide offering of goods or services.
[ii] Respondent has never
been known by the domain name and has no legitimate rights therein.
Although heretofore
unknown to Complainant, Respondent <itsalldirecttoyou.com>, an unknown
form of entity, has apparently never been known, commonly or otherwise, by the
contested domain name or any name corresponding to or including the
Complainant's trademark. As such, under
the circumstances herein, Respondent registered such name in bad faith. See
Broadcom Corp. v. Intellifone Corp., FA 96356 (Nat. Arb. Forum Feb. 5, 2001) (finding no
rights or legitimate interests because Respondent is not commonly known by the
disputed domain name or using the domain name in connection with a legitimate
or fair use).
Respondent
has no legitimate rights in such name; has apparently registered and used the
domain name to misdirect and mislead consumers and has prevented Complainant
from use of such domain name which fully incorporates its trade name and
trademark. As such and as supported by the attached Exhibits, Respondent’s
registration and use of the domain name can only be in bad faith in violation
of the Policy.
[iii] Respondent is not
making a legitimate noncommercial or fair use of the domain name
As described above,
Respondent is actively using Complainant's trademark and name to redirect
traffic to another website which is used promote its competitive and
unauthorized business of selling candy and gifts, and is therefore providing commercial
products and services in the same field as the Complainant. Accordingly, Respondent is not making a
legitimate noncommercial or fair use of the domain name, and further has no
rights or legitimate interest in the Domain Name, either by any of the
illustrations under Paragraph 4(b) or 4(c) of the Policy or on any other
basis.
Indeed, as classic
evidence of Respondent’s bad faith in violation of Policy ¶ 4(b)(iv), the
Respondent has used the domain name in an intentional attempt to attract,
for commercial gain, Internet users to its 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.
[c.] Respondent
has registered the Domain Name in bad faith
Paragraph 4(b) of
"Uniform Domain Name Dispute Resolution Policy" sets out
non-exclusive criteria which shall be evidence of the registration and use of a
domain name in bad faith, including:
- Respondent has
registered the domain name primarily for the purpose of disrupting the business
of a competitor; or
- by using the domain
name, the Respondent has intentionally attempted to attract, for commercial
gain, Internet users to its website or other online location, by creating a
likelihood of confusion with the Complainant’s mark as to the source,
sponsorship, affiliation, or endorsement of its website or location or of a
product or service on its website or location.
[i] Respondent has registered the domain
name primarily for the purpose of disrupting the business of a competitor.
Respondent is a competitor of the Complainant
sufficient to satisfy Policy ¶ 4(b)(iii). Respondent’s registration and use of
such domain name has disrupted and diverted Complainant’s business. Moreover, in light of Respondent’s
advertisement of the subject domain name on the Google Search engine: “Before you buy
from them – Check Out Our Low Prices On All Your Favorite Candies”
it can hardly be
disputed that the Respondent’s actions were deliberate and in bad faith.
[ii] Respondent has intentionally
attempted to attract, for commercial gain, Internet users to Respondent’s web
site by creating a likelihood of confusion with the Complainant’s mark as to
the source, sponsorship, affiliation, or endorsement of Respondent’s web site
"The
mere fact of diversion, regardless of the content of Respondent’s website, is
evidence of bad faith use of a domain name. Prior UDRP panels have found that
this sort of activity using a domain name comprised of a well-known trademark
to attract users to the registrant’s website constitutes bad faith use of the
domain name.” See Robbie Williams, D2002-0588; see also Big Dog Holding Inc. v
Frank Day, FA 93554 (Nat. Arb. Forum March 9, 2000).
Respondent’s
bad faith intent to divert Internet users from Complainant, is further
demonstrated by Respondent’s aggressive pay-per-click marketing, which
acknowledges Complainant’s prior and contemporaneous use of the CANDY DIRECT
mark, and invites Complainant’s customers and prospective customers via
pay-per-click advertising on the Google Search engine, that “Before you buy
from them” (Complainant) to “Check Out Our Low Prices On All Your Favorite
Candies.” (See Exhibit “H”).
Respondent
obviously intends to mislead the public and to divert online traffic from
Complainant to its website by creating a likelihood of confusion with the
Complainant's mark as to the source, sponsorship, affiliation, or endorsement
of Respondent's web site. Accordingly, Respondent has registered the Domain
Name in bad faith in violation of Policy ¶ 4(b)(iv).
Respondent,
on the other hand, has no legitimate rights in such name; has falsely used the
URL to mislead consumers and has intentionally diverted traffic from and
otherwise prevented Complainant from obtaining such domain name. As is
illustrated above, and by the annexures hereto, Respondent’s registration and
use of the subject domain name can only be in bad faith in violation of the
Policy.
REMEDY SOUGHT
The Complainant
requests that the Panel issue a decision that the domain name registration be
transferred to Complainant.
B.
Respondent
The
respondent does not accept that the complainant has a right to the domain name
CandyDirect2u.com.
The complainant has a long list of information about <candydirect.com> or
<candydirect.net>, but admits that CANDY DIRECT, INC., was not registered
with the California Secretary of State until the day after the respondent claimed
the domain name in dispute. The paragraphs concerning the actions of the
complainant are misleading in that the complainant does not state an eight-year
history of using <candy2u.com>. The complaint tries to join in all of the
prior actions of the affiliated entities and corporation, when the complainant
had only registered the domain name <candy2u.com> in April 2002, not May
22, 1997.
The
complainant further alleges a million dollar investment in
<candydirect.com> web site, however, this is again misleading because the
“candy2u.com” domain name was only 8 months old when the respondent registered
a vaguely similar name, <candydirect2u.com>.
The
respondent has not acted in bad faith. The allegation of the complaint is that
the
respondent
registered <candydirect2u.com> on December 18, 2002, without the
Complainant’s knowledge or authorization. The California Secretary of State did
not have on its register of corporations an entity known as “Candy Direct,
Inc.,” as is admitted by the complainant in its paragraph 4, which states
specifically, “ On December 19, 2002, Mr. Traino founded the Complainant CANDY
DIRECT, INC.” It seems that “candydirect2u.com” precede the complainant
entirely. It is denied that the respondent was aware of and ignored the domain
name which the complainant took over after the respondent registered its domain
name.
The
respondent has not in the last 18 months, offered, contracted to, nor
transferred the domain name and did not register the domain name prior to the
existence of the complainant in order to sell the domain name either to the
complainant or any other entity.
The
respondent has not, and it has not been shown that the respondent has tried to
prevent the complainant from reflecting <candydirect.com>,
<candydirect.net>, <chocolatedirect.com>, <candydirect.info>,
or <candy2u.com>, or any other term, trademark or service mark from being
used, and the complainant does not provide evidence that the respondent has.
The
respondent did not register the domain name to disrupt the business of a
competitor, since the complainant and the respondent are only in similar
businesses. The complainant has many competitors in more direct relation than
the respondent.
There
is no proof and there can be no proof that the respondent intentionally or
inadvertently attempted to attract Internet users to its web site over the
complainants. The terms used by both complainant and respondent are so generic
that there is no likelihood of confusion. The complainant states that the only
trademark it owns is “Candy Direct.” This is not a unique enough term to be
afforded the right to exclude any and all other variations of these to general
terms. In one search using <yahoo.com>, there were 4,600,000 hits using
the terms “candy direct” (see attached Exhibit “1"). The terms
“candy direct” on Yahoo do not call up the respondent’s website until #23 (see
attached Exhibit “2")
The
respondent maintains a wholesale business with candy as one product, and has
claim to registration of <candydirect2u.com>, <toysdirect2u.com>,
<silverdirect2u.com>, <perfumedirect2u.com>,
<noveltydirect2u.com>, and <tobaccodirect2u.com>. (See attached
“WHOIS”, collective Exhibit “3”)
The
Complainant has not provided sufficient evidence to show that the secondary
meaning of “candy direct” establishes trademark rights in terms of this forum.
“Although a trademark registration is certainly strong evidence that
complainant has right in a mark and may even constitute a presumption of same,
it is certainly not conclusive of this important requirement of UDRP
4(a)(i).” eGalaxy Multimedia Inc. v.
RDCTO Limited, FA 100705 (Nat. Arb. Forum Oct. 22, 2001) (“Many, if not
most or even all, states in the United States issue registrations without any
significant examination.”). No member of the purchasing public could possibly
associate either “candy” or “direct, ” or even “candydirect” with products or
services of any one person or entity. Id.; CRS Tech. Corp. v. Condo Net, Inc., FA 93547 (Nat.
Arb. Forum Mar. 28, 2000); Successful Money Management Seminars, Inc., v.
Direct Mail Express, FA 96457 (Nat. Arb. Forum Mar 7, 2001); Pet
Warehouse v Pets.com, Inc., D2000-0105 (WIPO Apr. 13, 2000); Tough
Traveler, Ltd. v. Kelty Pack, Inc., D2000-0783 (WIPO September 28, 2000); Sweeps
Vacuum & Repair Center, Inc., v. Nett Corp., D2001-0031 (WIPO Apr.13,
2001); Lumena S-KA 20.0 v. Express Ventures, Ltd., FA 94375 (Nat. Arb.
Forum Apr. 3, 2000).
The
respondent has legitimate rights in the domain name. As previously stated, the
respondent registered the domain name prior to the existence of the
complainant, Candy Direct, Inc. The respondent used the domain name in
furtherance of its wholesale business. The complainant did not contact the
respondent at all concerning a dispute about the domain name for 18 months
after the complainant was organized. There is no deliberate intent to trade on
the complainant’s name, which is not as unique as “Madonna.” See Madonna Ciccone, p/k/a Madonna v. Dan
Parisi and “Madonna.com” D2000-0847
(WIPO Oct. 16, 2000).
The
complaint contains broad, sweeping conclusions that are not supported by
evidence. There is no evidence (because there is no intent) that the respondent
intended to, or set out to, divert traffic from the complainant’s domain site.
In this case the respondent comes forward to refute the allegations of the
complainant, who does not have the notoriety and more than half century
standing of Holiday Inn. See Six
Continent Hotels, Inc., D2003-0098.
In
conclusion, the respondent would submit that the complainant has not shown and
proved any of the elements required which would entitle the complainant to
obtain the domain name from the respondent. The respondent used the
“candydirect2u.com” domain name in its overall wholesale business beginning in
December of 2002, at least 18 months prior to any knowledge of any dispute
about the domain name. There can be no allegation by the complainant that the
complainant advised the respondent of any dispute. The respondent’s first
knowledge of dispute was this filing.
The
respondent has been known by the domain name and has been operating under the
domain name as part of its overall wholesale business.
C.
Additional Submissions
Complainant
has submitted the following Additional Submission.
In light of the factual misstatements contained in
Respondent's response, Complainant hereby submits
this additional submission in order to clarify and correct same. Due to
Respondent's mischaracterization of relevant dates and matters related to this
dispute, Complainant's hereby reiterates the
timeline of facts relevant to its long-standing use of the trade name and
service mark CANDY DIRECT, and further highlights the
evidence submitted concerning Respondent's bad faith registration and use of the <candydirect2u.com>
domain name, as follows.
[a] TIMELINE
OF RELEVANT FACTS;
•
May 22,1997: Complainant's
founder, predecessor and chief executive, Stephen Traino,
began using the trade name and service mark
CANDY DIRECT and the associated domain name candydirect.com in
connection with the retail and online sale of candy, confections, gift baskets and gifts.
•
July 07, 1997:
Complainant's predecessor, Stephen Traino, registered CANDY DIRECT as a fictitious business name with the San Diego
Recorder/County Clerk.
•
August 04, 1997: Complainant's
predecessor, Stephen Traino, registered and began using the domain name <candydirect.net> to promote his candy
company known as CANDY DIRECT.
•
November 28, 1999:
Complainant's predecessor, Stephen Traino, registered and began using the domain name <chocolatedirect.com> to promote
CANDY DIRECT.
•
April 23,2001:
Complainant's predecessor, Stephen Traino, again registered CANDY DIRECT as a
fictitious business name with the San Diego Recorder/County Clerk
•
October 24, 2001:
Complainant's predecessor, Stephen Traino, registered and began using the domain name <candydirect.info> to promote
CANDY DIRECT.
•
April 24, 2002:
Complainant's predecessor, Stephen Traino, registered and began using the
domain name <candy2u.com> to promote CANDY DIRECT.
•
December 18, 2002: Respondent,
without Complainant's knowledge or authorization,
registered the subject domain name in dispute
<candydirect2u.com>.
•
December 19, 2002:
Complainant's predecessor, Stephen Traino, founded the Complainant CANDY
DIRECT, INC. as a California corporation.
•
May 22, 1997- through July
6, 2005: Complainant and its predecessor spent in excess of one million dollars
($1,000,000.00) advertising its CANDY DIRECT trademark, received on average
nearly three million unique visitors to its <candydirect.com> website and
were regularly featured at industry trade shows,
and in numerous books, newspapers and television shows.
[b] ACTS AND
CONDUCT OF RESPONDENT THAT AMOUNT TO BAD FAITH.
(i) Beyond
merely registering the domain at issue herein, Respondent has engaged in affirmative acts that amount to bad faith herein.
1) RESPONDENT HAS
ENGAGED IN A PAID ADVERTISING CAMPAIGN THAT BOLDLY
ATTEMPTS TO DIVERT CUSTOMERS SPECIFICALLY SEARCHING FOR COMPLAINANT, CANDY DIRECT IN VIOLATION OF THE POLICY
As was alleged in the
Complaint, Respondent, in bad faith, knowingly
engaged unfair competition directed particularly at the Complainant and its
CANDY DIRECT trademark when it attempted to misdirect Complainant's customers
and prospective customers by inviting such persons: "Before
you buy from them - Check Out Our Low Prices On All Your Favorite Candies" via a pay-per-click keyword Google advertising campaign
for the term CANDY DIRECT, which appeared immediately
below Complainant's "top spot" sponsored advertisement on the Google search engine network (See
Exhibit "H"; Paragraph 21 of the affidavit of Stephen Traino attached to the Complaint and paragraph
2 of the second affidavit of Stephen Traino
attached hereto).
Notably, in its Response
filed herein on August 2, 2005, Respondent omitted any mention of this important allegation in an obvious attempt to
"sweep" such fact "under the rug." However, due to
Respondent's failure to specifically deny such clearly shown allegations of bad
faith and unfair competition in its response
brief, the Panel can simply accept such facts as uncontroverted and
conclusively proven herein. See AltaVista Company v. Astavista.com,
FA 095251 (Nat. Arb. Forum August 17,
2000); see also AltaVista Company v. Jean-Daniel Gamache, FA 095249
(Nat. Arb. Forum August 17, 2000); see
also The Chicago Tribune Company v. Jose P. Varkey, D2000-0133 (WIPO May 9, 2000); see also The
Coca-Cola Company v. Individual D2001-0940 (WIPO Sept. 10, 2001); Banque
Saudi Fransi v. ABCIB,
D2003-0656 (Nat. Arb. Forum Oct. 14, 2003); AtitoviIIage.com Inc. v.
Enthusiast World, Inc., D2003-0738 (WIPO November 29, 2003).
The UDRP Rules thus provide
that Respondent is required to specifically respond to each and every substantive, well-plead factual allegation of
Complainant's Complaint and make a certification regarding same. Federal Rule of Civil Procedure Rule 8(d) provides
that, "Averments in a pleading to which a responsive pleading is required, other than those as to the amount
of damages, are admitted when not denied in the responsive
pleading. Averments in a pleading to which no responsive pleading is required
or permitted shall be taken as denied or
avoided." While the Federal Rules do not govern here, guidance may be
drawn therefrom. ... Because Respondent has consciously chosen not to respond
to each of these factual allegations in accordance with the Rules, each and
every one of those well-plead, factual allegations shall be deemed admitted for purposes of this proceeding.
In sum, by failing to deny
the allegation that it purposefully attempted to divert internet users to its
competitive website in violation of Policy ¶ 4(b)(iv), Respondent has in
effect, conceded its own bad faith herein.
2) RESPONDENT
WAS SPECIFICALLY AWARE OF COMPLAINANT AND ITS
PREDECESSOR'S PRIOR USE OF THE CANDY
DIRECT TRADEMARK,
TRADE NAME AND DOMAIN NAMES
INCLUDING CANDY DIRECT,
CANDYDIRECT.COM (May 22,1997);
CANDYDIRECT.NET (August 04,1997)
AND CANDY2U.Com (April 24,2002) AT
THE TIME IT REGISTERED THE
DOMAIN NAME IN DISPUTE
CANDYD1RECT2U.COM (December 02, 2002)
Evidently, Respondent
registered the subject domain name in bad faith and with the intent to
improperly take advantage of Complainant's trademark rights and goodwill in
such name. Again, by failing to deny these essential allegations contained at
page 4 of the Complaint, such uncontroverted facts should be deemed as
conclusively proven herein. Further, in light of the additional evidence as described and shown in the Complaint and in this
additional submission, bad faith can be easily inferred
herein.
3) IN
AN ATTEMPT TO DENY ITS BAD FAITH, RESPONDENT HAS MISLED
THE PANEL ABOUT THE NATURE OF ITS
BUSINESS
In its Response, Respondent
disingenuously attempts to mislead this Panel concerning the nature of its
operations, and its bad faith intent to trade on the fame of the Complainant's mark. As such, Respondent protests (too
much) that: "Respondent maintains a wholesale
company with candy as one product, and has claim to registration of
<candydirect2u.com>, <toysdirect2u.com>,
<silverdirect2u.com>, <perfumedirect2u.com>,
<noveltydirect2u.com>, and <tobaccodirect2u.com>.”
Notwithstanding such
protestations, a review of the source code, meta name and metatags related to
Respondent's <itsalldirect2u.com> website belies its position. To the
contrary, as is shown by Exhibit "J" attached hereto,
(namely the source code for the Respondent's <itsalldirect2u.com> website which the domain name <candy2u.com> at
issue herein is redirected to,) such website is not a wholesale business with candy as only one product, but
rather, <itsalldirect2u.com> is specifically designed only to attract
Internet users searching for either CANDY generally, or more likely, the
Complainant. That is to say, that all metatags and meta name references
included on the <itsalldirect2u.com>
relate strictly to candy, (including numerous famous trademarks such as
Hershey's candy, M&M Candy, Willy Wonka candy, Lifesavers candy, Starburst
candy, etc.), yet not even one reference
therein pertains to perfume, tobacco, silver, novelties, nor any other product
good or service.
The source code for Respondent's itsalldirect2u.com
website attached hereto as Exhibit "J" begins: "<meta
NAME="descriptkm" CONTENT="Welcome to the world's largest online
candy store. We give wholesale prices to everyone, not just big businesses.
Feel free to browse our site and take advantage of our large selection
and discounted prices."> <meta
NAME="keywords" CONTENT="Candy, candy bar, rock candy, candy
stand, cotton candy, hard candy,
candy company, candy store, chocolate candy, mars candy, big rock candy,
m&m candy, bulk candy, candy
land, hershey candy, candy apple, candy stores, sugar free candy, wholesale
candy, lifesavers candy, candy co,
candy wholesale, candy hearts, candy shop, candy list, m & m candy, wonka candy,
candy barr, candy cruncher, retro
candy, strange candy, old fashioned candy, wedding candy, sugar candy, penny
candy, candy vending, candy
companies, pictures of candy, candy cotton, lifesaver candy, life savers candy,
nostalgic candy, hot candy, candy
supplies, candy pictures, old time candy, m and m candy, quality candy, brachs candy, candy online, peppermint candy, starburst
candy, mexican candy, candy heart, fannie may, willy wonka candy, candy expo,
m&m's candy, brach's candy, fannie mae, buckeye candy, candy dispenser,
sponge candy, candy cigarettes, California candy, baby ruth candy, sour candy,
candy Christmas, vintage candy, candy sales, buy candy, the candy man, peeps candy, candy gift, mars candy company,
rare candy, candy distributors, candy shops, candy gifts, snickers candy bar,
harry potter candy, boston candy, hershey's candy, old candy, milky way
candy, skittles candy, candy dark, candy raver, smarties candy, candy kids,
online candy,"> No other meta tags
or meta names are included therein.
Moreover, as shown by
Exhibit "G" on file herein, at the top of Respondent's home page of
<itsalldirect2u.com>, where Respondent has forwarded
<candydirect2u.com>, it is prominently
stated: "Welcome to the world's largest online candy store."
As such, not only is the
credibility of the Respondent strained by its false protestations that it is a
general wholesaler and is not a "direct competitor" of the Complaint,
but also, the respondent's own website description, meta-names, meta-tags and
other internal references convey the knowing and bad faith intent by Respondent
to disrupt the Complainant's business, in violation of Policy ¶ 4(b)(iii) as well as its intent to divert Internet users
to its website in violation of Policy ¶
4(b)(iv).
As additional evidence of the Respondent's bad
faith, as shown by Exhibit "B-l" on file, namely, the printout of the Complainant's <candydirect.com>
website dated September 8, 1999, as well as page 3 of Exhibit "A"
namely the WHOIS record for Complainant's CANDYDIRECT.NET website, at least as
early as 1999, and indeed years before the Respondent registered any of its
domain names, (including <candydirect2u.com> and
<itsalldirect2u.com> Complainant
had used the slogan "World's Largest Candy Store Online" as
well as meta names and meta tags
extremely similar, to those that Respondent "coincidentally" adopted
years later.
In light of the Complainant's evidence, Respondent's
position readily appears as transparent.
[c.] RESPONDENT'S OWN EVIDENCE SHOWS
THAT COMPLAINANT'S "CANDY DIRECT" MARK HAS ACHIEVED SIGNIFICANT
PUBLIC RECOGNITION, GOODWILL AND
SECONDARY MEANING.
Respondent states in its
Response that Complainant's mark, CANDY DIRECT is "not a unique enough
term to be afforded the right to exclude any and all variations of these general terms." This statement is supported
only by blatant mischaracterizations of the facts related to the issues at hand
and ignorance of the evidentiary materials submitted by the parties herein. For example, Respondent's own Exhibits
"1" and "2" contradict the Respondent's own position and demonstrate Complainant's secondary meaning
of the terms CANDY DIRECT as well established.
For
example, Respondent claims that a search it conducted on the Yahoo search
network for the phrase "candy direct" yielded 4,600,000 hits is
evidence that Complainant's mark is not unique.
However, upon examining
Respondent's Exhibits "1" and "2" submitted herein, it
becomes clear that the Yahoo search was not actually
made for the phrase "candy direct" as alleged, but instead, sought
webpage "hits" which contained either the term CANDY or the term
DIRECT, but not the composite phrase at issue herein,
namely "candy direct". That is to say that the Yahoo search performed
by Respondent, did not seek to find webpages on the Internet which contain the
composite phrase "candy direct" in quotes, but, instead, sought any
Internet webpage which contained either the term CANDY or DIRECT.
(See Exhibit "K" hereto.)
On the other hand, as is
shown by Exhibit "L" hereto, when one uses the Yahoo search engine to conduct a search for the composite phrase
"candy direct" (in quotes), there are only l/100lh of the number of results, namely 46,000 "hits"
of websites containing the phrase "candy direct."
In any event, no matter
which search method is employed on the Yahoo search network, it is important to
note that in addition to its "top spot" sponsored listings which
appear first in the results of either such search for CANDY DIRECT (Exhibit 1)
or "candy direct" (Exhibit "L"), Complainant appears in seven of the top ten listings on Respondent's
Exhibit "1" and eight of the top ten listings as shown by the search results for the phrase
"candy direct" which are attached as Exhibit "L" hereto.
Inasmuch as Complainant
has achieved listings among at least seven of the top ten spots for unpaid search listings appearing in Yahoo, resulting from
searches for either CANDY DIRECT or "candy
direct," such evidence suggests strong secondary meaning in the CANDY
DIRECT mark as owned by Complainant and as previously
alleged at pages 3 and 4 of the Complaint herein.
Indeed, Complainant's fame,
goodwill and acquired distinctiveness of its CANDY DIRECT trade name, domain
name and mark has only been obtained by the Complainant as the result of
Complainant's and its founder/predecessor's long-standing use of same since
1997, and its extensive advertising
both online and off.
Respondent's allegations
fail to adequately rebut Complainant's contentions as noted above. To the contrary, based on the facts alleged in the
Complaint, as well as the those contained in the second
affidavit of Stephen Traino attached hereto, Respondent's prior knowledge of
Complainant's exclusive rights in its CANDY DIRECT
trademark, trade name, and websites; and its intentional use of a domain name, slogan (world's largest online candy
store), meta tags, meta page descriptions and its
paid-for advertising campaign on Google make it eminently clear that Respondent
has engaged in bad faith herein in an attempt to divert
Complainant's customers and to usurp its goodwill.
For such reasons,
Complainant again respectfully requests that this Panel order that the domain name <candydirect2u.com> be
transferred to the Complainant.
FINDINGS & DISCUSSION
Paragraph 15(a) of the Rules for Uniform Domain Name
Dispute Resolution Policy (the “Rules”) 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.
Identical and/or Confusingly Similar
Complainant has used
the term CANDY DIRECT as a business identifier for many years and the Panel is
satisfied that Complainant has rights in that business identifier. Under the
Policy, however, Complainant must have rights in a mark (trademark or service
mark). Complainant has no registration of the words CANDY DIRECT as a mark.
According to the Policy
¶ 4(a)(i), common law rights are sufficient and a complainant thus need not
hold a registered trademark to establish rights in a mark. The ICANN dispute
resolution policy is thus broad in scope in that the reference to a trademark
or service mark in which the complainant has rights means that ownership of a
registered mark is not required and unregistered or common law trademark or
service mark rights will suffice to support a domain name Complaint under the
Policy. See British Broad. Corp. v. Renteria, D2000-0050 (WIPO Mar.
23, 2000).
Respondent contends
that the CANDY DIRECT mark is
merely composed of the descriptive word “candy” and the common term “direct”
and that Complainant’s mark cannot be afforded common law protection since it
has not acquired a secondary meaning. See Coupons Inc. v. Motherboards.com, FA 192249 (Nat. Arb.
Forum Nov. 4, 2003); see
also Advanced Relational Tech., Inc. v. Domain Deluxe, D2003-0567 (WIPO Oct.
13, 2003). To establish common law rights in a mark requires that Complainant
shows that its mark has acquired secondary meaning. In other words, Complainant
must establish that the public associates the asserted mark with its goods and
services.
Relevant evidence of
secondary meaning includes length and amount of sales under the mark, the
nature and extent of advertising, consumer surveys and media recognition. See Amsec Enterprises, L.C. v. Sharon McCall, D2001-0083
(WIPO April 3, 2001). Complainant states that the <candydirect.com>
website receives on average nearly three million unique visitors each year,
that the website is ranked within the top 45.000 websites as rated by the Alexa
Web Search system and that Candy Direct Inc.’s revenues in the year 2004
exceeded two million dollars. Complainant further claims that the mark has been
used since May 1997 and that Complainant and its founder have spent over one
million dollars advertising and promoting Complainant’s candydirect.com website
and the CANDY DIRECT trade name and marks. This has according to Complainant
resulted in Complainant becoming the best-known non-manufacturer distributor of
candy and gifts on the Internet. To support this, Complainant has adduced as
evidence records of the independent web traffic service Alexa regarding the web
traffic for <candydirect.com> for the period of May 2002 through June 24,
2005.
Numerous decisions have
determined that the relevant point in time when Complainant must establish
rights in its mark is before Respondent’s registration of the domain name. See Transpark LLC v. Network Adm’r, FA 135602 (Nat. Arb.
Forum Jan. 21, 2003); see
also DJR Holdings, LLC v. Paul Gordon a/k/a IQ Mgmt. Corp., FA 141813 (Nat. Arb. Forum Mar. 4, 2003). Even if the Panel
accepted Complainant’s contention that it has common law rights in the
CANDYDIRECT mark as true, such rights must be established prior to Respondent’s
registration of the disputed domain name, that is to say before December 18,
2002.
Based
on the record presented, the Panel finds that the evidence of secondary meaning is
inadequate and that the Complainant has failed to prove enforceable
rights in the mark CANDY DIRECT.
Because the Panel has
determined that Complainant has not satisfied this requirement of the Policy ¶
4(a)(i), there is no need to determine whether Respondent has rights or
legitimate interests in the domain name or whether Respondent registered or
used the domain name in bad faith. See
Pet Warehouse v. Pets.com, Inc., D2000-0105 (WIPO April 13, 2000).
DECISION
Having
established all three elements required under the ICANN Policy, the Panel
concludes that relief shall be DENIED.
Jonas Gulliksson, Panelist
Dated: August 22, 2005
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