DECISION

New Creative Enterprises, Inc. v. Toland Enterprises

Claim Number:  FA0403000243478

PARTIES

Complainant is New Creative Enterprises, Inc. (“Complainant”) represented by Kathryn E. Smith, of Wood, Herron & Evans, LLP, 2700 Carew Tower, 441 Vine Street, Cincinnati, OH 45202.  Respondent is Toland Enterprises (“Respondent”), 1750 South Lane, Mandeville, LA 70741.

REGISTRAR AND DISPUTED DOMAIN NAME

The domain name at issue is <nceflags.com>, registered with Network Solutions, 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.

Honorable Paul A. Dorf  (Ret.) as Panelist.

PROCEDURAL HISTORY

Complainant submitted a Complaint to the National Arbitration Forum (the "Forum") electronically on March 1, 2004; the Forum received a hard copy of the Complaint on March 4, 2004.

On March 5, 2004, Network Solutions, Inc. confirmed by e-mail to the Forum that the domain name <nceflags.com> is registered with Network Solutions, Inc. and that Respondent is the current registrant of the name. Network Solutions, Inc. has verified that Respondent is bound by the Network Solutions, 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 March 8, 2004, a Notification of Complaint and Commencement of Administrative Proceeding (the "Commencement Notification"), setting a deadline of March 29, 2004 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@nceflags.com by e-mail.

Having received no Response from Respondent, using the same contact details and methods as were used for the Commencement Notification, the Forum transmitted to the parties a Notification of Respondent Default.

On April 8, 2004, pursuant to Complainant's request to have the dispute decided by a single-member Panel, the Forum appointed Honorable Paul A. Dorf (Ret.) as Panelist.

Having reviewed the communications records, the Administrative Panel (the "Panel") finds that the Forum has discharged its responsibility under Paragraph 2(a) of the Rules for Uniform Domain Name Dispute Resolution Policy (the "Rules") "to employ reasonably available means calculated to achieve actual notice to Respondent."  Therefore, the Panel may issue its decision based on the documents submitted and in accordance with the ICANN Policy, ICANN Rules, the Forum's Supplemental Rules and any rules and principles of law that the Panel deems applicable, without the benefit of any Response from Respondent.

RELIEF SOUGHT

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

PARTIES' CONTENTIONS

A.  Complainant makes the following assertions:

1. Respondent’s <nceflags.com> domain name is confusingly similar to Complainant’s <NCE> mark.

2. Respondent does not have any rights or legitimate interests in the <nceflags.com> domain name.

3. Respondent registered and used the <nceflags.com> domain name in bad faith.

B.  Respondent failed to submit a Response in this proceeding.

FINDINGS

Complainant, New Creative Enterprises (NCE), is a leading designer, manufacturer, importer, and distributor of decorative accessories for both indoor and outdoor use. Complainant’s products include decorative flags, giftware and accessories for the home and babies and youth, wind chimes, painted garden giftware, birdhouses and lawn ornaments. Complainant’s products are consistently among the top selling general, seasonal, and outdoor décor gift items. Complainant sells its products in retail stores nationwide.

Complainant’s NCE mark is well known in both the United States and Canada. Complainant first used its NCE mark in the United States as early as 1975 in connection with its goods and services. Specifically, Complainant has been continuously using its mark in connection with decorative, cloth flags for the home and garden since 1989, and has become known as a quality source of flags for the home and garden and other décor items. Complainant intends to use and is currently using, advertising, offering for sale, and selling in interstate commerce, decorative flags under the NCE mark, as well as other home and garden decorative items. Flag sales account for approximately 40% of Complainant’s overall business.

Complainant has invested substantial time, effort, and money into developing the reputation of the NCE mark and the goodwill associated with the mark. NCE is now well known and is recognized as the source for goods marketed under the NCE mark.

Complainant filed applications for registration of the NCE and NCEGIFTS.com marks with the United States Patent and Trademark Office on December 13, 1999 and October 30, 2001 respectivly. Complainant’s marks were successfully registered with the United States Patent and Trademark Office for the NCE and NCEGIFTS.COM marks on October 8, 2002 (Reg. No. 2,632,374) and January 22, 2002 respectivly (Reg. No. 2,531,815).

Complainant’s main website is located at the domain name <ncegifts.com>, where consumers have access to Complainant’s products.

Respondent registered the <nceflags.com> domain name on September 8, 1999. Respondent is using the domain name to divert Internet users to its website, which offers home and garden décor items including decorative flags similar to those offered by Complainant. Respondent is also in the business of home and garden décor products and decorative flags for home and garden use.

DISCUSSION

Paragraph 15(a) of 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."

In view of Respondent's failure to submit a Response, the Panel shall decide this administrative proceeding on the basis of Complainant's undisputed representations pursuant to paragraphs 5(e), 14(a) and 15(a) of the Rules and draw such inferences it considers appropriate pursuant to paragraph 14(b) of the Rules.

Paragraph 4(a) of the Policy requires that 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 Respondent is identical or confusingly similar to a trademark or service mark in which Complainant has rights; and

(2) 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

Although Complainant holds registrations for the NCE marks with the United States Patent and Trademark Office, Complainant filed the applications for the registrations of its marks after Respondent registered the domain name. However, registration of a mark with a governmental authority is unnecessary for Complainant to establish rights in a mark under the Policy. See 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 Great Plains Metromall, LLC v. Creach, FA 97044 (Nat. Arb. Forum May 18, 2001) (finding that the Uniform Domain Name Dispute Resolution Policy does not require “that a trademark be registered by a governmental authority for such rights to exist.”).

Complainant has established common law rights in the NCE mark through its long-term, continued use of the mark in connection with its goods and services since 1975. See Keppel TatLee Bank v. Taylor, D2001-0168 (WIPO Mar. 28, 2001) (“[O]n account of long and substantial use of the said name [<keppelbank.com>] in connection with its banking business, it has acquired rights under the common law.”); see also BroadcastAmerica.com, Inc. v. Quo, DTV2000-0001 (WIPO Oct. 4, 2000) (finding that Complainant has common law rights in BROADCASTAMERICA.COM, given extensive use of that mark to identify Complainant as the source of broadcast services over the Internet, and evidence that there is wide recognition with the BROADCASTAMERICA.COM mark among Internet users as to the source of broadcast services); 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).

Respondent’s domain name is confusingly similar to Complainant’s mark because the domain name incorporates Complainant’s NCE mark in its entirety and only deviates by the addition of the generic word “flags,” a word that describes the majority of Complainant’s business. Combining a Complainant’s mark in its entirety with a general term that describes the type of business in which Complainant is engaged, where Respondent is in the same line of business, does not remove the domain name from the realm of confusingly similar. See Slep-Tone Entm't Corp. v. Sounds Choice Disc Jockeys, Inc., FA 93636 (Nat. Arb. Forum Mar. 13, 2000) (stating, “likelihood of confusion is further increased by the fact that the Respondent and [Complainant] operate within the same industry.”); see also Vivid Video, Inc. v. Tennaro, FA 126646 (Nat. Arb. Forum Nov. 14, 2002) (finding that any distinctiveness resulting from Respondent’s addition of a generic word to Complainant’s mark in a domain name is less significant because Respondent and Complainant operate in the same industry); see also Brown & Bigelow, Inc. v. Rodela, FA 96466 (Nat. Arb. Forum Mar. 5, 2001) (finding that the <hoylecasino.net> domain name is confusingly similar to Complainant’s HOYLE mark, and that the addition of “casino,” a generic word describing the type of business in which Complainant is engaged, does not take the disputed domain name out of the realm of confusing similarity); see also Caterpillar Inc. v. Quin, D2000-0314 (WIPO June 12, 2000) (finding that the disputed domain names <caterpillarparts.com> and <caterpillarspares.com> were confusingly similar to the registered trademarks CATERPILLAR and CATERPILLER DESIGN because “the idea suggested by the disputed domain names and the trademarks was that the goods and services offered in association with the domain name are manufactured by or sold by the Complainant or one of the Complainant’s approved distributors. The disputed trademarks contain one distinct component, the word Caterpillar.”).

The Panel finds that ¶ 4(a)(i) has been satisfied.

Rights or Legitimate Interests

Complainant urges that Respondent has no rights or legitimate interests in the domain name. Based on Respondent’s failure to respond to the Complaint, it is assumed that Respondent lacks rights and legitimate interests in the disputed domain name. Once Complainant establishes a prima facie case, the burden shifts to Respondent to show that it does have rights or legitimate interests pursuant to Policy ¶ 4(a)(ii). See Clerical Med. Inv. Group Ltd. v. Clericalmedical.com, D2000-1228 (WIPO Nov. 28, 2000) (finding that under certain circumstances the mere assertion by Complainant that Respondent has no rights or legitimate interests is sufficient to shift the burden of proof to Respondent to demonstrate that such rights or legitimate interests exist); see also Do The Hustle, LLC v. Tropic Web, D2000-0624 (WIPO Aug. 21, 2000) (finding that once Complainant asserts that Respondent has no rights or legitimate interests with respect to the domain, the burden shifts to Respondent to provide credible evidence that substantiates its claim of rights and legitimate interests in the domain name).

Furthermore, because Respondent has not submitted a Response, the Panel can accept all reasonable allegations and inferences in the Complaint as true. See Do the Hustle, LLC v. Tropic Web, D2000-0624 (WIPO Aug. 21, 2000) (“Failure of a respondent to come forward to [contest complainant’s allegations] is tantamount to admitting the truth of complainant’s assertion in this regard.”); see also Vertical Solutions Mgmt., Inc. v. webnet-marketing, inc., FA 95095 (Nat. Arb. Forum July 31, 2000) (holding that Respondent’s failure to respond allows all reasonable inferences of fact in the allegations of the Complaint to be deemed true).

Respondent is using the domain name to benefit from Complainant’s goodwill and to intercept Internet traffic intended for Complainant. The use of a domain name, confusingly similar to Complainant’s mark, to redirect Internet users interested in Complainant’s services to a directly competing website that offers home and garden gifts and decorative flags for home and garden use, similar to Complainant’s services is not a use in connection with a bona fide offering of goods or services pursuant to Policy ¶ 4(c)(i), nor a legitimate noncommercial or fair use pursuant to Policy ¶ 4 (c)(iii). See Clear Channel Communications, Inc. v. Beaty Enters., FA 135008 (Nat. Arb. Forum Jan. 2, 2003) (finding that Respondent, as a competitor of Complainant, had no rights or legitimate interests in a domain name that utilized Complainant’s mark for its competing website); see also Chip Merch., Inc. v. Blue Star Elec., D2000-0474 (WIPO Aug. 21, 2000) (finding that the disputed domain names were confusingly similar to Complainant’s mark and that Respondent’s use of the domain names to sell competing goods was illegitimate and not a bona fide offering of goods).

Moreover, Respondent has offered no proof and there is no evidence in the record suggesting that Respondent is commonly known by the NCE mark. Thus, Respondent has not established rights or legitimate interests in the disputed domain name pursuant to Policy ¶ 4(c)(ii). See 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); see also Compagnie de Saint Gobain v. Com-Union Corp., D2000-0020 (WIPO Mar. 14, 2000) (finding no rights or legitimate interests where Respondent was not commonly known by the mark and never applied for a license or permission from Complainant to use the trademarked name). 

The Panel finds that ¶ 4(a)(ii) has been satisfied.

Registration and Use in Bad Faith

Respondent registered the domain name for its own commercial gain. Respondent’s domain name diverts Internet users, who intend to search under Complainant’s mark, to a website sponsored by Respondent that directly competes with Complainant’s business. At its website, Respondent sells similar products as Complainant, through the use of a domain name confusingly similar to Complainant’s mark. This practice of diversion for commercial gain evidences bad faith registration and use of a domain name pursuant to the Policy ¶ 4(b)(iv). See G.D. Searle & Co. v. Celebrex Drugstore, FA 123933 (Nat. Arb. Forum Nov. 21, 2002) (finding that Respondent registered and used the domain name in bad faith pursuant to Policy ¶ 4(b)(iv) because Respondent was using the confusingly similar domain name to attract Internet users to its commercial website); see also Computerized Sec. Sys., Inc. v. Hu, FA 157321 (Nat. Arb. Forum June 23, 2003) (finding that Respondent’s use of the <saflock.com> domain name to offer goods competing with Complainant’s illustrates Respondent’s bad faith registration and use of the domain name, evidence of bad faith registration and use pursuant to Policy 4(b)(iv)); see also Busy Body, Inc. v. Fitness Outlet, Inc., D2000-0127 WIPO Apr. 22, 2000) (finding bad faith where Respondent attempted to attract customers to its website, <efitnesswholesale.com>, and created confusion by offering similar products for sale as Complainant); see also Luck's Music Library v. Stellar Artist Mgmt., FA 95650 (Nat. Arb. Forum Oct. 30, 2000) (finding that Respondent had engaged in bad faith use and registration by linking the domain name to a website that offers services similar to Complainant’s services, intentionally attempting to attract, for commercial gain, Internet users to its website by creating a likelihood of confusion with Complainant’s marks).

Respondent registered the domain name for the primary purpose of disrupting Complainant’s business by diverting Internet traffic intended for Complainant to Respondent’s website, which offers directly competing home and garden décor items, including decorative flags. Registration of a domain name for the primary purpose pf disrupting the business of a competitor is evidence of bad faith registration and use pursuant to Policy ¶ 4(b)(iii). See Surface Protection Indus., Inc. v. Webposters, D2000-1613 (WIPO Feb. 5, 2001) (finding that, given the competitive relationship between Complainant and Respondent, Respondent likely registered the contested domain name with the intent to disrupt Complainant's business and create user confusion); see also Lubbock Radio Paging v. Venture Tele-Messaging, FA 96102 (Nat. Arb. Forum Dec. 23, 2000) (concluding that domain names were registered and used in bad faith where Respondent and Complainant were in the same line of business in the same market area); see also S. Exposure v. S. Exposure, Inc., FA 94864 (Nat. Arb. Forum July 18, 2000) (finding Respondent acted in bad faith by attracting Internet users to a website that competes with Complainant’s business); see also EthnicGrocer.com, Inc. v. Latingrocer.com, FA 94384 (Nat. Arb. Forum July 7, 2000) (finding bad faith where Respondent’s sites pass users through to Respondent’s competing business); see also Puckett, Individually v. Miller, D2000-0297 (WIPO June 12, 2000) (finding that Respondent has diverted business from Complainant to a competitor’s website in violation of Policy 4(b)(iii)).

The Panel finds that ¶ 4(a)(iii) has been satisfied.

DECISION

Having established all three elements required under the ICANN Policy, the Panel concludes that relief shall be GRANTED.

Accordingly, it is Ordered that the <nceflags.com> domain name be TRANSFERRED from Respondent to Complainant.

                       

Honorable Paul A. Dorf (Ret.), Panelist

Dated:  April 19, 2004

---

WorldLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback
URL: http://www.worldlii.org/int/other/GENDND/2004/449.html