DECISION

Ian Schrager Hotels, L.L.C. and Beach Hotel Associates Limited v. Jay Taylor

Claim Number: FA0307000173369

PARTIES

Complainants are Ian Schrager Hotels, L.L.C. and Beach Hotel Associates Limited, New York, NY (“Complainant”) represented by Ariana G. Voigt of McDermott, Will & Emery. Respondent is Jay Taylor, Fort Lauderdale, FL (“Respondent”).

REGISTRAR AND DISPUTED DOMAIN NAMES

The domain names at issue are <paramounthotelnewyork.com>, <paramounthotelnyc.com> and <delanohotelsouthbeach.com> registered with Intercosmos Media Group, Inc. d/b/a Directnic.com.

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.

Jeffrey M. Samuels, as Panelist.

PROCEDURAL HISTORY

Complainants submitted a Complaint to the National Arbitration Forum (the “Forum”) electronically on July 25, 2003; the Forum received a hard copy of the Complaint on July 28, 2003.

On July 28, 2003, Intercosmos Media Group, Inc. d/b/a Directnic.com confirmed by e-mail to the Forum that the domain names <paramounthotelnewyork.com>, <paramounthotelnyc.com> and <delanohotelsouthbeach.com> are registered with Intercosmos Media Group, Inc. d/b/a Directnic.com and that Respondent is the current registrant of the name. Intercosmos Media Group, Inc. d/b/a Directnic.com has verified that Respondent is bound by the Intercosmos Media Group, Inc. d/b/a Directnic.com 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 August 7, 2003, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of August 27, 2003 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@paramounthotelnewyork.com, postmaster@paramounthotelnyc.com and postmaster@delanohotelsouthbeach.com by e-mail.

A timely Response was received and determined to be complete on August 27, 2003.

Complainants submitted a timely and complete Additional Submission on September 2, 2003.

On September 9, 2003, an Additional Submission was timely received from Respondent and determined to be complete.

On September 11, 2003, pursuant to Complainants’ request to have the dispute decided by a single-member Panel, the Forum appointed Jeffrey M. Samuels as Panelist.

RELIEF SOUGHT

Complainants request that the domain names be transferred from Respondent to Complainant.

PARTIES’ CONTENTIONS

A. Complainants

Complainant Ian Schrager Hotels, LLC ("ISH") is an internationally known, premier hotel company.  ISH, through various affiliated entities, owns several world-famous hotels, including the Paramount in New York City and the Delano in Miami Beach.  The Paramount opened in 1990, and Complainants have used the mark PARAMOUNT in connection with hotel and restaurant services since at least the hotel's opening.  The Delano Hotel opened in 1995.  The mark DELANO, owned by Complainant Beach Hotel Associates Limited Partnership, of which ISH is the managing member, is the subject of U.S. Trademark Registration No. 2,115,849.  The registration certificate indicates that the mark was first used in commerce in connection with hotel services in June 1995.

According to Complainants, Respondent is using the disputed domain names in connection with hotel reservation websites.

Complainants contend that each of the domain names fully incorporates and is confusingly similar to Complainants' marks, insofar as each name consists entirely of either Complainants' DELANO or PARAMOUNT mark along with generic terms. 

Complainants further argue that Respondent has no rights or legitimate interests in the domain names.  According to Complainants, despite Respondent's contention to the contrary, Complainants have not consented to Respondent's use of the domain names in dispute.  Finally, Complainants maintain that Respondent is not commonly known by any of the domain names and is not making a legitimate noncommercial or fair use of the names.

With respect to the issue of "bad faith" registration and use, Complainants insist, inter alia, that Respondent has engaged in a "pattern of conduct" in order "to prevent the owner of the trademark[s] from reflecting the mark in corresponding domain name[s]” in violation of paragraph 4(b)(ii) of the Policy; that Respondent's registration of the domain names has disrupted the legitimate business of ISH and its ability to conduct its own hotel reservation services with registered and authorized travel agencies in violation of paragraph 4(b)(iii) of the Policy; and that Respondent has "intentionally attempted to attract, for commercial gain, internet users to [its] web site . . . by creating a likelihood of confusion with the Complainants' mark[s] as to source, sponsorship, affiliation, or endorsement of [its] web site" in violation of paragraph 4(b)(iv) of the Policy.

B. Respondent

Respondent asserts that it used the disputed domain names as an Iatan-authorized travel agent on behalf of Complainants, among others, and that ISH has compensated Respondent for its hotel reservation services through the payment of commission checks. According to Respondent, its agents simply take a customer's credit card and other information and forward that information to the reservation clerk at the Paramount and Delano hotels.

Respondent emphasizes that a consumer assessing any of the disputed sites sees several lines of text that read, "This site is operated by Net411.com and owned by a travel agent, 10735712."  The site located at the <delanohotelssouthbeach.com> domain name also contains a link to the Ian Schrager Official site.  Moreover, according to Respondent, when its customers call Respondent's agents, the agents never represent themselves as anything but Respondent's agents for <hotel411.com> and the disputed sites do not contain images from Complainants' sites.  Respondent further maintains that 70% of its customers that access the disputed domain names do so only after first searching for "hotels in New York."  Respondent also notes that a search for "Paramount Hotel" in "Google" on August 26, 2003, revealed the existence of other "Paramount" Hotels having no connection with Complainants.

Respondent argues that it has rights and legitimate interests in the domain names in issue in that Complainants consented to Respondent's use of the domain names until late 2002, and in view of the fact that Respondent spent nearly one year and thousands of dollars creating the disputed sites.  Respondent further maintains that it is commonly known by the domain names and that it is making a legitimate commercial and fair use of the names.

On the issue of "bad faith" registration and use, Respondent asserts that its registration of the disputed domain names has provided additional positive exposure for Complainants' hotels.  Respondent concedes that it has "intentionally attempted to attract, for commercial gain," internet users to its websites by creating a network of city-specific hotel directories.

C. Additional Submissions

In their Additional Submission, Complainants note that Respondent does not argue that the domain names are not confusingly similar to Complainants' marks and contend that evidence that about one-third of Respondent's customers arrive at its websites after searching the terms "Paramount" and "Delano" demonstrates actual confusion.

Complainants further maintain that Respondent's travel agent status offering reservation services for Complainants' hotels does not give Respondent the right to use Complainants' marks in a domain name.  They also insist, contrary to Respondent's assertion, that they have never authorized or consented to Respondent's use of the disputed domain names and never authorized Respondent to register the domain names.  The Additional Submission includes a declaration of James Schultenover, the chief marketing officer of ISH, to the effect that ISH does not have any specific contractual relationship with Respondent, that Respondent was not, and has never been, authorized to register and maintain the domain names in dispute, and that Respondent was not, and has never been, authorized to offer reservation services for ISH under the domain names.

With respect to the "bad faith" issue, Complainants argue that Respondent's assertion that it has "intentionally attempted to attract, for commercial gain, internet users to Respondents websites by creating a network of city specific hotel directories" is "exactly the type of behavior prohibited by the Lanham Act."  Moreover, Complainants contend that each of the disputed sites provides links to information and reservation services for hotels in competition with Complainants.  They further allege that Respondent may be found in violation of the applicable Policy even if he assisted in providing additional exposure to Complainants' hotels and even if Complainants benefited from the services offered at the disputed sites.  Finally, Complainants maintain that Respondent's use of such phrases as "this site brought to you by the hotel people at Hotel411.com" or "this site operated by Net411.com" does not prevent a finding of bad faith, since such statements do not avoid initial interest confusion.

In his Additional Submission, Respondent argues that the disputed sites cannot cause confusion because they are clearly marked, that he and his employees have always acted in good faith, that he registered the domain names in dispute before Complainants had any websites, and that, as a result, he, not Complainants, is known by the domain names.

FINDINGS

Upon review of all the evidence, the Panel finds that the disputed domain names are confusingly similar to marks in which Complainants have rights; that Respondent has no rights or legitimate interests in respect of the domain names; and that Respondent registered and used the domain names in bad faith.

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

Complainants have established their trademark rights in the PARAMOUNT and DELANO marks through registration in the U.S. Patent and Trademark Office of the DELANO mark and through substantial use of both marks.  While the evidence suggests some third-party use of the PARAMOUNT mark outside of New York City, it is uncontroverted that Complainants have used such mark in connection with hotel services in New York City since 1990.  It thus appears that the PARAMOUNT mark enjoys secondary meaning in the New York City metropolitan area and that, as a result, Complainants possess common law rights in the mark.

The disputed domain names clearly are confusingly similar to Complainants’ marks.  The addition of the generic term “hotel” does not distinguish the domain names from the marks, given its generic, and, thus, non-distinctive, nature.  See Marriott Int’l v. Café au lait, FA93670, Nat. Arb. Forum (Mar. 13, 2000) (finding that the Respondent’s domain name Marriott-hotel.com is confusingly similar to Complainant’s MARRIOTT mark).  Further, the addition of the non-distinctive geographic terms “newyork,” “nyc,” and “southbeach” do not avoid a finding of confusing similarity.

Rights or Legitimate Interests

There is no demonstrable evidence to support Respondent’s assertion that he is commonly known by the disputed domain names and, as a result, such assertion must be rejected.  See, e.g., Red Bull GmbH v. Gutch, D2000-0766 (WIPO Sept. 21, 2000) (panel transferred name to complainant because, although respondent claimed he was known by the nickname "Red Bull," he provided no demonstrable evidence of the nickname's use); Canadian Imperial Bank of Commerce v. D3M Virtual Reality Inc., AF-0336 (eRes. Sept. 23, 2000) (finding no rights or legitimate interests where no such right or interest was immediately apparent to panel and respondent did not come forward to suggest any right or interest he may have possessed).

While Respondent argues that he is making a legitimate commercial and fair use of the disputed domain names, the applicable Policy makes clear that only noncommercial use gives rise to rights or legitimate interests.

Respondent’s principal argument with respect to the issue of rights or legitimate interests appears to be that Complainants “consented” to his registration of the domain names, presumably through payment of commissions, and that Complainants have benefited from Respondent’s activities through increased exposure and revenue as a result of Respondent’s hotel reservation services.  However, prior panels have held, in similar situations, that such acts constitute “classic trademark infringement, even if the ultimate result … is that some revenue flows to the owner of the marks.”  See, e.g., Gorstew Ltd. v. Caribbean Tours & Cruises FA 94927 (Nat. Arb. Forum July 28, 2000) (finding no rights or legitimate interests where respondent, a travel agent, registered several domain names incorporating the SANDALS mark in order to make a commission by taking internet reservations for SANDALS properties); DeLuxe Corp. v. Dallas Internet, FA 105216 (Nat. Arb. Forum Apr. 10, 2002) (finding respondent had no rights or legitimate interests where it used the domain name deluxeform.com to redirect users to complainant's deluxeforms.com domain name and to receive a commission from complainant through its affiliate program); Ritz-Carlton Hotel Co., LLC v. Jtravel FA 105960 (Nat. Arb. Forum Apr. 30, 2002) (finding no rights or legitimate interests in use of domain name ritzcarltonhotels.com to promote travel and tour business).  This Panel concurs with this position.

Moreover, the sworn declaration of ISH's chief marketing officer establishes that Respondent was not, and has never been, authorized to offer reservation services for ISH under the domain names.

Registration and Use in Bad Faith

The issue of "bad faith" registration and use need not detain the Panel given Respondent's admission that he has "intentionally attempted to attract, for commercial gain, internet users to Respondent's web sites, by creating a network of city specific hotel directories …as to reserve rooms for ISH in turn for a 10 to 15% commission paid by ISH."   Such action constitutes evidence of the requisite bad faith under paragraph 4(b)(iv) of the Policy.  The fact that Respondent's websites include such phrases as "this site brought to you by the hotel people at Hotel411.com" or "this site operated by Net411.com" does not avoid a finding of bad faith, given the initial interest confusion generated through use of the disputed domain names.  See Thomas & Betts Int'l, Inc. v. Power Cabling Corp., AF-0274 (eRes. Oct. 23, 2000) ("initial interest confusion occurs when information may attract users who are looking for a different web site, organization or product.  While those users may rapidly realize that the site is different from the one they were originally looking for, it is possible that some users may simply remain at the site and never reach the initially sought after site"); Paxton Herald v. Truth Squad, FA 114766 (Nat. Arb. Forum Aug. 21, 2002) (disclaimer on website irrelevant because of initial interest confusion); New York Times v. New York Internet Serv. D2000-0172 (WIPO Dec. 5, 2000) (panel transferred domain name to trademark owner even though respondent, who used domain name for criticism, had disclaimers and redirected users to complainant's website); E & J Gallo Winery v. Spider Webs Ltd., [2002] USCA5 122; 286 F.3d 270 (5th Cir. 2002) (use of disclaimer on ernestandjuliogallo.com website did not cure defendant's bad faith intent to profit).

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 <paramounthotelnewyork.com>, <paramounthotelnyc.com> and <delanohotelsouthbeach.com> domain names be TRANSFERRED from Respondent to Complainant.

Jeffrey M. Samuels, Panelist
Dated: September 25, 2003

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