DECISION

Candela Corporation v. Orion

Claim Number: FA0201000104191

PARTIES

Complainant is Candela Corporation, Boston, MA (“Complainant”) represented by Heather E. Balmat, of Testa, Hurwitz & Thibeault, LLP.  Respondent is Orion, Bologna, ITALY (“Respondent”) represented by Faffaella Pelosio.

REGISTRAR AND DISPUTED DOMAIN NAME 

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

PANEL

The undersigned certifies that he has acted independently and impartially and to the best of his knowledge, has no known conflict in serving as Panelist in this proceeding.

G. Gervaise Davis, III as sole Panelist.

PROCEDURAL HISTORY

Complainant submitted a Complaint to the National Arbitration Forum (“the Forum”) electronically on January 31, 2002; the Forum received a hard copy of the Complaint on February 4, 2002.

On February 5, 2002, Network Solutions, Inc. confirmed by e-mail to the Forum that the domain name <candelalaser.com> is registered with Network Solutions, Inc. and that the 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 February 7, 2002, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of February 27, 2002 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@candelalaser.com by e-mail.

A timely response was received and determined to be complete on February 25, 2002.

On March 6, 2002, pursuant to Complainant’s request to have the dispute decided by a single-member Panel, the Forum appointed G. Gervaise Davis III, as sole Panelist.

RELIEF SOUGHT

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

PARTIES’ CONTENTIONS

A. Complainant

FACTUAL BACKGROUND

            Complainant is the owner of U.S. Registration No. 1,649,891 for the mark CANDELA for use in connection with Scientific lasers and capacitive charging power supplies thereof, in Class 9; and Medical lasers and capacitive charging power supplies and parts thereof, in Class 10.  Complainant started using its mark in 1971 and has used the mark continuously since then in connection with the goods and services described above.

Additionally, Complainant owns trademark registrations for the Mark in many foreign jurisdictions, including the European Community (Reg. No. 210,302 – Class 10), France (Reg. No. 1,457068 – Classes 9 and 10), Italy (Reg. No. 542,038 – Classes 9 and 10), Japan (Reg. No. 2,220,279 – Class 9, Reg. No. 2,251,914 – Class 10, and Reg. No. 2,419,318 – Class 11), Spain (Reg. No. 1,284,406 – Class 10). 

Stern Laser was an authorized Distributor of the Complainant’s products in the Italian market, until the Complainant terminated the relationship in 1994.  Complainant’s current distributor is Michele Bonelli, a former employee of Stern Laser.  On August 30, 1999, the Domain Name was registered in the name of Orion, with Max Gritti of Stern Laser listed as the Administrative Contact.  At that time, the business relationship between Stern Laser and Candela had been terminated for more than five years. 

Complainant first learned that Respondent had registered the Domain Name at the American Academy of Dermatology convention in March 2000.  At the convention, Max Gritti told Michele Bonelli and Complainant’s Vice President of European Operations that he had registered the www.candelalaser.com Domain Name and that it would cost Complainant a large sum to acquire it. 

On June 26, 2001, Complainant’s employee Cyndi Blais (“Blais”) contacted Max Gritti regarding possible transfer of the Domain Name.  In her email, Blais noted that although Respondent had registered the Domain Name on August 30, 1999, he had not yet used the site.  Ms. Blais indicated that if Respondent did not intend to do anything with the site, she would be interested in purchasing it on behalf of Complainant.

In an email response, Max Gritti claimed that he intended to use the Domain Name for marketing an Italian fireplace lighter.  He went on to say that Respondent intended to launch the site for this purpose by the end of the summer, so if Complainant wanted him to consider selling it instead, it needed to make an offer right away. 

On June 29, 2001 Complainant inquired as to what Max Gritti considered a reasonable offer.  In his response, Max Gritti did not state a specific sum, but strongly implied that it would only consider an offer “related to the annual revenue” of the Complainant.  (At the time, Complainant’s annual revenues were in the range of tens of millions of dollars.)  On November 19, 2001, Complainant’s authorized distributor Michele Bonelli contacted Max Gritti with an offer to buy the domain name for $7,000.  Respondent rejected Complainant’s offer but countered with an offer to sell the Domain Name for $57,000.  Bonelli rejected this offer.

On November 26, 2001, Bonelli called Max Gritti in an attempt to negotiate the purchase of the domain name from Respondent.  In this conversation, Max Gritti indicated that he would give Complainant the Domain Name in exchange for a SMOOTHBEAM laser manufactured and sold by Complainant (market value $49,900). 

Complainant has reviewed the web site at the disputed Domain Name, and Respondent has not yet put the site into use.  Furthermore, Complainant contends that Respondent does not manufacture or sell the fireplace lighters it claimed it was going to sell on the web site, and it has not yet used the Respondent’s Domain Name as a trademark for any commercial purpose.  Thus, it appears that Respondent’s claim that he intended to use the site to sell fireplace lighters was merely a pretense intended to aid him in extracting a high purchase price from Complainant.  The conversations between Michele Bonelli and Respondent in which Respondent demanded either $57,000 or a SMOOTHBEAM laser valued at $49,900 not only further undermine Respondent’s claim that he was going to use the Domain Name to market a fireplace lighter, but also clearly demonstrate that Respondent registered the Domain Name either to keep it out of the hands of the Complainant or to force the Complainant to pay a large sum of money for a Domain Name in which Respondent has no legitimate interest.  Both scenarios constitute bad faith.

COMPLAINANTS GROUNDS FOR COMPLAINT

A. The Domain Name is Identical or Confusingly

                        Similar to the Complainant’s Trademark.  Paragraph 4(a)(i)

Under Paragraph 4(a)(i) of the Policy, the Domain Name must be identical or confusingly similar to Complainant’s Mark.  In this case, the first portion of the Domain Name is identical to Complainant’s CANDELA mark, which has been in continuous use since at least as early as 1971 and is the subject of a U.S. registration and 7 foreign registrations.  Before a corporate name change in 1995 shortened its name to Candela Corporation, Complainant operated under the name Candela Laser Corporation; Complainant continues to be commonly identified in the industry as Candela Laser.  Complainant clearly has common law rights in the mark “Candela Laser,” which is identical to the Domain Name, and the Domain Name therefore also meets the criterion of being identical to Complainant’s Mark.

B.         Respondent Has No Rights or Legitimate Interests in Respect

            Of the Domain Name.  Paragraph 4(a)(ii).                                        

As required under Paragraph 4(a)(ii) of the Policy, the Respondent has no rights or legitimate interests in respect of the Domain Name.  Paragraphs 4(c)(i)-(iii) set out three factors by which Respondent could make a showing of legitimacy:

(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; or

(ii) [Respondent]…has been commonly known by the domain name, even if [Respondent] ha[s] acquired no trademark or service mark rights; or

(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.

As demonstrated below, not one of these factors is met with respect to the Domain Name in dispute.

1. Respondent has not used the Domain Name, before the dispute, in connection with the bona fide offering of goods or service.  Paragraph 4(c)(i).                                                                          

As of the date of filing of this Complaint, the Respondent had not put the domain name into operation, although he has owned it for over two years.  Furthermore, despite its claim that it planned to begin selling an Italian fireplace lighter through the site, Respondent has not done so, nor has it proffered any evidence of preparations to do so.  Therefore, Respondent cannot make a showing of legitimate right or interest under Paragraph 4(c)(i) of the Policy.

           

            2.         Respondent has not become known by the domain name. 

            Paragraph 4(c)(ii).       

           

            Respondent has not yet put the Domain Name into operation, and therefore could            not have become commonly known by the domain name.  Nor is the domain      name in any way similar to Respondent’s business or individual name. Thus,           Respondent cannot make a showing of legitimate right or interest under Paragraph     4(c)(ii) of the Policy.

3.      Respondent is not making noncommercial or fair use of

                        the Domain Name.                

                                               

            Again, Respondent has not put the Domain Name into operation, despite having

            owned the domain name since August 1999.  Furthermore, to the best of    Complainant’s knowledge, Respondent has not expressed any intention to use the     Domain Name for any legitimate noncommercial or fair use, nor has he made any             preparations to do so.

C,        Respondent Has Registered the Domain Name in Bad Faith.  Paragraph     4(a)(iii).                                                                                   

Under Paragraph 4(a)(iii) of the Policy, one of the elements that must be demonstrated is that the Respondent has registered the domain name in bad faith. Among the circumstances constituting bad faith set out in Paragraph 4(b) of the Policy, are the following:

(i)         circumstances indicating that [Respondent] has registered or [has] 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…for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name; or …

(iii)       [Respondent] ha[s] registered the domain name primarily for the purpose of disrupting the business of a competitor…

Respondent’s actions clearly constitute bad faith under subsection (i).  Respondent bragged to Complainant’s distributor that he had registered the <candelalaser.com> domain name and that it would “cost” Complainant to get it back.  Later, Respondent stated it might be willing to sell it for a price “relating to [Complainant’s] yearly revenue.”  Later still, Respondent said he would sell the Domain Name for $57,000, and when this was rejected, Respondent said he would give Complainant the Domain Name in exchange for one of Complainant’s lasers [with a retail value of $49,000].  All of the foregoing indicates that Respondent’s primary interest in registering the Domain Name was to force Complainant to pay an exorbitant sum of money for a Domain Name to which Respondent had no right.

Respondent has no legitimate interest or right in the domain name <candelalaser.com> and has registered and is holding the Domain Name in bad faith for the purposes of extorting money from the Complainant, preventing the Complainant from reflecting its mark in the Domain Name and/or disrupting the business of the Complainant.  As long as the Respondent owns the Domain Name, the possibility exists that Respondent will use it to lure Complainant’s medical and cosmetic laser customers to a site about its competitor’s lasers.  The use of the Complainant’s Mark in the Domain Name for these purposes is a violation of trademark law and is exactly the type of conduct the Policy was designed to prevent. 

In accordance with Paragraph 4(i) of the Policy, and for the reasons set forth above, Complainant requests that the Administrative Panel appointed in this administrative proceeding issue a decision that the domain name <candelalaser.com> be transferred to Complainant.  Rule 3(b)(x).

B. Respondent

FACTUAL BACKGROUND

The Registrant of the Domain Name <candelalaser.com> is ORION S.r.l, an Italian limited liability company that planned in 1999 to produce and launch on the market a new product, a fireplace lighter.

Mr. Max Gritti is shareholder and Director of Orion S.r.l. The Domain Name was             registered in August 1999 as part of the business plan to create a commercial web site for         the fireplace lighter. 

The <candelalaser.com> denomination was chosen by Orion S.r.l. after consultation with an advertising agency in charge of developing the corporate identity for the new product (the fireplace lighter) to be launched: “candela” meaning “candle” in Italian, a term commonly used for referring to fire.  The term “laser” was chosen to be used in conjunction with the term “candela” as it implies, in its common sense, a new and efficient technology.

Orion s.r.l. claims that they could legitimately register this particular domain name because of the descriptive and common use of the term and because the activity planned were not in competition with the products and services provided by Complainant. 

Orion S.r.l. contacted an Italian company, Pubblica comunicazione s.n.c., to estimate the costs of marketing of the fireplace lighter. In December 2000, Orion received from Pubblica comunicazione s.n.c. an estimate of the costs.

In June 2001, Ms. Blais emailed Mr. Gritti writing: “I have noticed that you obtained         candelalaser.com on August 30, 1999” and “I would like to discuss your reserved domain          name.”   Ms. Blais tried to convince Gritti to make a price proposal.  Mr. Gritti never         made an explicit request for any amount. When Mr. Gritti considered selling the Domain    Name, Ms. Blais acted as if Mr. Gritti had to convince Candela Corporation to purchase         the Domain Name - “we will do our best to see if we can accommodate it.”

Respondent believes that Gritti was pressured by Candela in order to induce him to make a proposal to Complainant in connection with the sale of the Domain Name.  Respondent denies making any proposal.  Further, the Respondent claims that the production and launch of the fireplace lighter was delayed due to financial and timing constraints.

Respondent also stressed that the complaint was made against Gritti, based on the assumption that he acted on behalf of Sternlaser when registering the Domain Name. Respondent asserts that Complainant never proved the involvement of Sternlaser S.p.a.

Respondent denies that Sternlaser S.p.a. has any right to the Domain Name.  Respondent further claims that Complainant must have known that Gritti was representing Orion S.r.l. when answering Ms. Blais e-mails.

Mr. Gritti’s e-mail address (mgritti@sternlaser.com) is the only one he owns and it is also used for other businesses and personal purposes, as it is common practice for many entrepreneurs and in general for users of e-mail addresses.

Respondent believes that because the Complainant addressed the complaint to Mr. Gritti and Sternlaser S.p.a. instead of addressing it to Orion S.r.l., that Sternlaser S.r.l. was involved without providing evidence of such involvement.  Respondent also asserts that this shows bad faith on the part of the Complainant in the construction of this case.

Respondent acknowledges that Mr. Gritti is a shareholder of Sternlaser s.p.a.., which distributes laser machines for cosmetic and medical use, produced by an American company which is a competitor of Complainant. Respondent claims that the burden of proof for the Complainant may not be met by submitting declarations recounting conversations between Gritti and Bonelli. 

Respondent claims (in contrast to the Complainant) that when Mr. Gritti met Mr. Bonelli at the Dermatology Convention held in Washington in March 2000, it was Mr. Bonelli who told Mr. Gritti that the Complainant was aware of the registration of the Domain Name <candelalaser.com>.  Mr. Gritti felt this statement was a menace to his business plan for Orion S.r.l.’s new product (whose marketing was based on the Domain Name).

Mr Gritti reacted exclaiming “It is going to cost you to get it.”  This was merely meant to say that if Candela Corporation was thinking of taking the Domain Name, it would have cost a price which would dissuade Bonelli from attempting to obtain the Domain Name. 

It is acknowledged by Respondent that Bonelli called Gritti after Ms. Blais sent emails to Gritti.  But Mr. Bonelli did not offer directly $7,000 nor did he say that he was doing so on behalf of Candela Corporation.  He asked Mr. Gritti if his Domain Name “could be worth around $7,000.”  Mr. Gritti answered that he did not consider that fair, and that he was already in touch with Candela Corporation through Ms. Blais. 

Mr. Gritti also denies that he considered or expressed the intention to exchange his Domain Name for a laser machine produced by Candela Corporation, as alleged by Complainant.  Mr. Gritti denies offering to sell the Domain Name or that he proposed any specific amount of money.

            GROUNDS FOR DISMISSAL OF COMPLAINT

            A.        The Domain Name is not identical nor confusingly similar to the trademark in       which the Complainant has rights. [ICANN Rule 3(b)(ix)(1); ICANN Policy ¶ 4(a)(i)].

Complainant’s trademark is “Candela”. Respondent Domain Name is <candelalaser.com>.  The term “candela” is the Italian word for “candle”, a very common term used for many other registered and pending marks and in conjunction with a large variety of different applications and products. The object of the Complaint is a descriptive, non-source identifying domain name.  Apart from the basic principle of freedom of expression, Complainant failed to prove the identity or relevant similarity to his trademark.

Orion S.r.l. chose and registered the Domain Name and has a legitimate right to use it as registrant because Orion S.r.l. considered the term “candela” for the new product he intended to launch, a fireplace lighter, because of its immediate reference to fire.  Furthermore, the term “laser,” in conjunction with “candela,” was considered for its immediate reference to a modern technology which implies, in its common sense, an efficient and well functioning technology. [The Panel does not understand how these two words “in its common sense” implies what the Respondent suggests.  Lasers are not “candles” and the two appear to bear no relationship to each other.]

          B.         Respondent has full rights and legitimate interests in respect of the Domain name [ICANN Rule 3(b)(ix)(2); ICANN Policy ¶ 4(a)(ii)].

          Candela Corporation never advised Gritti that it doubted his good faith in registering the Domain Name and Complainant (allegedly) never considered sending a cease-and-desist letter nor any other communication to Mr. Gritti. 

         

          Respondent Orion S.r.l. believes it has proven preparation to use the Domain Name in connection with a bona fide offering of new goods, completely different and not likely to be confused with Complainant’s goods and services.  [Respondent does not explain how confusion is unlikely when using the identical marks.]  This is a legitimate and fair use of the Domain Name, without intent to misleadingly divert consumers or to tarnish the trademark of Complainant.

         

          Respondent also refutes Complainant’s assertion “Furthermore, to the best of Complainant’s knowledge, Respondent has not expressed any intention to use the Domain Name for any noncommercial or fair use.”  Complainant knew that the Registrant was Orion S.r.l. and that Mr. Gritti acted on behalf of Orion S.r.l.    Complaint’s statements in the Complaint seem to Respondent, clear evidence of bad faith.

          Complainant seeks to involve Sternlaser S.p.a. in the complaint, but the only link between Orion S.r.l. as the Registrant and Sternlaser S.r.l. is Mr. Gritti, who is incidentally a shareholder of both companies.  Orion S.r.l. planned a different activity and business compared to the goods and activities of Complainant, and Respondent feels that Mr. Gritti has the freedom of conducting business for different companies without giving rise to confusion.  Complainant apparently considers it fair to make the Complaint arguing that the actual registrant is Sternlaser S.p.a.      

         

          An admission of this claim would constitute prejudice not only for Mr. Gritti and Orion S.r.l. but also for Sternlaser S.r.l., because it represents one of the competitors of the Complainant.  The attempt made by Complainant to get Sternlaser S.p.a. involved in the Complaint is without consequence, because the activity planned for the Domain Name is not one that is in competition with the one comprised in the trademark “Candela” registered by Complainant.

            C.        The Domain Name should not be considered as having been registered and being used in bad faith. [ICANN Rule 3(b)(ix)(3); ICANN Policy ¶ 4(a)(iii)].

            Complainant has failed to prove the third element required by ICANN Policy.

There are no circumstances indicating that Respondent has registered or has acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the Complainant or to a competitor of that Complainant. 

  

All evidence submitted by the Complainant proves that Mr. Gritti was induced by Complainant to consider the sale of the Domain Name.  The statement of Mr. Bonelli, apart from all considerations above, is not evidence of Mr. Gritti’s primary purpose to sell the Domain Name to Complainant or a competitor nor that it was registered primarily for the purpose of disrupting the business of a competitor.  Mr. Gritti’s purpose of using the domain name to launch a new product was explained, shown, and admitted by Complainant itself and proved by Respondent .

DISCUSSION AND FINDINGS

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; and

(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.

Before beginning analysis of each of the above stated elements, the Panel feels it is appropriate to comment upon the evidentiary submissions of the Parties to this action.  The Respondent rests a great deal on the alleged failures of proof offered by the Complainant.  While it is completely appropriate to demand that a Complainant make a showing substantiating its case, it is also required that a Respondent make its claims supportable and its case credible.  In the instant arbitration the Respondent has utterly failed to support its somewhat far fetched assertions with any convincing evidence.  

Identical and/or Confusingly Similar

While Complainant has put forth evidence that it may have a common law trademark in CANDELALASER, the Panel need not make such a determination because the Panel finds that the Domain Name is confusingly similar to the CANDELA trademark, which is the subject of U.S. Registration No. 1,549,891.   It would be difficult to discern a more logical scenario for a domain name to be confusingly similar to a trademark than to take a registered trademark and add the name of the trademarked goods or services.  The Complainant's registration is for the following goods: scientific lasers and capacitive charging power supplies thereof, in Class 9; and medical lasers and capacitive charging power supplies and parts thereof, in Class 10.  Respondent’s domain name merely adds the generic term for Complainant’s product to Complainant’s mark.  See Parfums Christian Dior v. 1 Netpower, Inc., D2000-0022 (WIPO Mar. 3, 2000) (finding that four domain names that added the descriptive words “fashion” or “cosmetics” after the trademark were confusingly similar to the trademark); 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 confusingly similarity).

The Complainant has proven this element to support transfer of the domain name.

Rights or Legitimate Interests

 

The Panel finds that Respondent has no rights or legitimate interests in the domain because Respondent knew of Complainant’s mark prior to registering the domain name. In addition, the Respondent has not put forth any credible evidence of a legitimate purpose for use of the name.  Respondent knew of Complainant’s mark prior to registering the domain name and has a substantial relationship with a direct competitor of Complainant.

Respondent contends it chose the Domain Name to market a fireplace lighter.  Respondent had the opportunity to put forth credible evidence of its purported business and submitted so little, that the Panel is not convinced that the fireplace lighter business was not merely a sham.  No matter how desperately the Respondent argues that Orion, Stern Laser and Max Gritti are separate parties, they are inextricably intertwined.  Respondent could have easily provided evidence proving the separateness these three parties and lack of control of these organizations by Gritti, but did not do so. 

Stern Laser was a former distributor of Complainant’s goods and is a current distributor of a direct competitor of the Complainants’.  Max Gritti is the administrative contact for the domain name, his listed email address is at sternlaser.com and it is admitted by Respondent that he is a shareholder in both Orion (the putative owner of the domain name) and Stern Laser.  The Complainant has proven this element to support transfer of the domain name.

Registration and Use in Bad Faith

The Panel finds that Respondent registered the domain name in bad faith because he knew of Complainant’s marks before registering the domain name, was directly related to a competitor of Complainant, and has articulated no legitimate reason for such registration.  See Samsonite Corp. v. Colony Holding, FA 94313 (Nat. Arb. Forum Apr. 17, 2000) (evidence of bad faith includes actual or constructive knowledge of commonly known mark at the time of registration).  The argument advanced by the Respondent, that Stern Laser was not proved to be a real party in interest is unpersuasive.  Respondent has acknowledged that Mr. Gritti is a shareholder in both Stern Laser and Orion, who is listed as the registrant.  The Respondent provided no evidence or argument for the proposition that Gritti was not a controlling principal in either organization.  The fact that Mr. Gritti was both a former employee of the Complainant, and now works for a direct competitor of the Complainant is telling.  The Complainant has proved this element to support transfer of the domain name.

Based on the evidence set forth above the Panel finds that the Respondent has used the Domain Name in bad faith because the Respondent attempted to sell Complainant the domain name for consideration in excess of out-of-pocket costs and has made no demonstrable legitimate use of the Domain Name. 

DECISION

For the foregoing reasons, the panel orders that the domain name be transferred from Respondent to Complainant.

_

G. Gervaise Davis, III, Panelist
Dated: April 1, 2002

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