National Arbitration Forum

DECISION

Official Pillowtex LLC v. Smadar Zangi

Claim Number: FA0411000366168

PARTIES

Complainant is Official Pillowtex LLC ("Complainant"), represented by Kathryn E. Smith, of Wood, Herron & Evans, LLP, 2700 Carew Tower, 441 Vine Street, Cincinnati, OH 45202. Respondent is Smadar Zangi ("Respondent"), represented by Michael R. Abejuela, of Dozier Internet Law, P.C., 301 Concourse Blvd., West Shore III, Suite 300, Glen Allen, VA 23059.

REGISTRAR AND DISPUTED DOMAIN NAME

The domain name at issue is <royalvelvet.com>, registered with Ausregistry.com.

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.

Darryl C. Wilson as Panelist.

PROCEDURAL HISTORY

Complainant submitted a Complaint to the National Arbitration Forum electronically on November 17, 2004; the National Arbitration Forum received a hard copy of the Complaint on November 22, 2004.

On November 17, 2004, Ausregistry.com confirmed by e‑mail to the National Arbitration Forum that the domain Dame <royalvelvet.com> is registered with Ausregistry.com and that the Respondent is the current registrant of the name.  Ausregistry.com has verified that Respondent is bound by the Ausregistry.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 November 23, 2004, a Notification of Complaint and Commencement of Administrative Proceeding (the "Commencement Notification"), setting a deadline of December 13, 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@royalvelvet.com by e-mail.

A timely Response was received and determined to be complete on December 13, 2004.

An Additional Submission was sent by the Complainant pursuant to Supplemental Rule 7(a) and was timely received on December 17, 2004.

On December 23, 2004, pursuant to Complainant's request to have the dispute decided by a single-member Panel, the National Arbitration Forum appointed Darryl C. Wilson as Panelist.

RELIEF SOUGHT

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

PARTIES' CONTENTIONS

A.            Complainant

Complainant makes the following assertions:

1.            Complainant owns trademark rights in the name “Royal Velvet” and that its company is widely known and recognized as the source of goods under the ROYAL VELVET brand and marks, and that the ROYAL VELVET marks are closely and universally associated with Complainant.

2.            Respondent's domain name is identical or confusingly similar to Complainant's ROYAL VELVET trademark.

3.            Respondent has no known rights or legitimate interests in the <royalvelvet.com> domain name.

4.            Respondent's registration of the <royalvelvet.com> domain name should be considered as having been registered and being used in bad faith.

B.            Respondent

Respondent makes the following assertions:

1.            Despite the fact that the domain name at issue is identical or confusingly similar to trademarks in which Complainant has rights, that its adoption of the domain name <royalvelvet.com> is not an infringement of the Complainant's rights under United States Federal Trademark Law, or any relevant laws of unfair competition.

2.            That this forum is improper for determining whether any of Complainant's trademark or unfair competition rights have been violated.

3.            Respondent has rights and legitimate interests in respect to the domain name <royalvelvet.com> based on Respondent's intent to create a forum for sewing enthusiasts to exchange ideas and discuss topics dealing with sewing and based on Respondent's efforts at developing a website in accordance with those desires.

4.            Respondent is not using the <royalvelvet.com> domain name in a commercial manner in an attempt to divert users to her website and that the website is intended for fair use with no commercial gain as it does not presently or have future plans to allow any advertising on the site.

5.            Complainant has failed to show Respondent registered the domain name in bad faith and is using the domain name in bad faith.

C.        Additional Submissions

Additional submissions were received from the Complainant that reiterated the Complainant's assertions noted above.

FINDINGS

Complainant, Official Pillowtex LLC, owns the trademark rights to the mark ROYAL VELVET, having registered the same in the United States (U.S.) and with authorities in various countries around the world.  Its use and registration in the U.S. traces back as early as May 8, 1956, when it received its first U.S. federal trademark registration (U.S. Reg. No. 626, 627 premised on first use on 7/1/54).  The mark has been used continuously since that time for towels and other textile products and additional U.S. federal registrations have been secured and are presently in effect for the mark and variations thereon. 

Complainant previously owned the <royalvelvet.com> domain name having purchased the same along with other intangible property and received an assignment of the domain name on November 3, 2003.  Complainant allowed the domain name to lapse allegedly inadvertently as a result of business transactions that overshadowed the renewal date of the domain name.

Respondent, Smadar Zangi, is an individual living in Sunrise, Florida, who states that she discovered that the <royalvelvet.com> domain name was available and registered the same through the proper channels with the correct contact information.  Respondent is purportedly a sewing devotee who had no particular reason for selecting the words “royal” and “velvet.”  Respondent placed various items on the website indicating different types of velvet material available on line but also stating the website "is a non-commercial site for people who like fabrics.  Please no solicitation."  Pursuant to the Respondent's exhibits, these statements are on materials the Respondent plans on adding to the website as well, although there are plans to allow the Respondent to be contacted and allow the parties to communicate and exchange with each other.

Respondent began developing her website shortly after registering the domain name on April 10, 2004.  The website is still in development but the Respondent claims to have begun its development and preparation for use of the website prior to this time and far in advance of its receipt of the Complaint in this dispute.  The Respondent states that the lag in her website completion is principally attributable to issues involving her pregnancy and the ultimate birth of her child.

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

Respondent concedes that the domain name at issue is identical or confusingly similar to trademarks in which the Complainant has rights.  Complainant has several U.S. trademark registrations (e.g., Reg. Nos. 2435979, 2395380, 2325800, 626627), as well as other registrations worldwide, in addition to more than 50 years of continuous use of the mark ROYAL VELVET.  Respondent has not contested any of these factual claims.  While the Forum does not make legal determinations regarding infringement or unfair competition, the recognition of properly established trademark rights is an important aspect of these proceedings.  See Am. Online, Inc. v. Thomas P. Culver Enters., D2001-0564 (WIPO June 18, 2001) (finding that successful trademark registration with the United States Patent and Trademark Office creates a presumption of rights in a mark).

The domain name in dispute <royalvelvet.com> is identical to Complainant's ROYAL VELVET mark pursuant to Policy ¶ 2(a)(i) since it incorporates the mark in its entirety.  Respondent also admits to posting various textile swatches on the website.  These materials are similar to those offered in goods sold under Complainant's ROYAL VELVET mark; thus visitors to Respondent's website would likely be confused as to the source of information and products on the website.

The Panel finds that Complainant has established Policy ¶ 4(a)(i)

Rights or Legitimate Interests

Complainant argues that Respondent lacks rights and legitimate interests in the disputed domain name because Respondent is not authorized to use Complainant's ROYAL VELVET mark.  Complainant previously owned the domain name in dispute but inadvertently allowed a lapse in renewal.  See Am. Anti-Vivisection Soc'y v. "Infa dot Net" Web Serv., FA 95685 (Nat. Arb. Forum Nov. 6, 2000) (finding the Complainant's prior registration of the same domain name is a factor in considering Respondent's rights or legitimate interest in the domain name).  The inadvertent loss of a domain name and the subsequent registration by another has been found to be insufficient to evidence rights or legitimate interests in the name in question.  See Edmonds.com, Inc. v. Ult. Search, Inc., D2001-1319 (WIPO Feb. 1, 2002) (finding that Respondent could not rely on equitable doctrines under the Policy to defend its registration of the disputed domain name after the registration was inadvertently permitted to lapse by Complainant, noting that "Respondent was aware of the Complainant's well-known business and its mark and intended to exploit the mark.").  In this instance Complainant's prior ownership and inadvertent lapse weighs against the legitimacy of Respondent's interests.

Although the Respondent contests the mark in question's status as famous or well-known outside its field of use, the Respondent is clearly making use of the mark in the same field of textiles and as such knew or should have known that its use of the domain name in question would interfere with Complainant's established rights.  Further, Respondent indicated that it went through the proper channels in securing the mark and provided correct contact information.  In going through these proper channels, it seems highly unlikely that they would not have included even a cursory search into the background of the mark in question and thus yielded information indicating Complainant's existing trademark registrations as well as its prior domain name registration. 

Respondent overstates the fact that it provided correct contact information since nothing in the WHOIS information suggests the public identifies Smadar Zangi with the disputed domain name.  Nor does the Respondent anywhere indicate that it has ever been associated with the name “Royal Velvet” prior to her domain name registration.  It is uncontroverted that Complainant's association with the mark is well known due to its trademark registrations and use.  Thus Respondent is unable to show that it has legitimate interests or rights in the mark pursuant to Policy ¶ 4(c)(ii).  See Charles Jourdan Holding AG v. AAIM, D2000-0403 (WIPO June 27, 2000) (finding no rights or legitimate interests where:  (1) Respondent is not a licensee of Complainant; (2) Complainant's prior rights in the domain name precede Respondent's registration; (3) Respondent is not commonly known by the domain name in question).  Each of these facts is present in this case.

Thus the Panel finds that the Complainant has established that Respondent lacks any rights or legitimate interest in the domain name <royalvelvet.com>.

Therefore, the Panel finds that Complainant has established its burden set forth under the Policy ¶ 4(a)(ii).

Registration and Use in Bad Faith

Respondent claims that there is no registration and use in bad faith because it is not using the website for commercial purposes but instead is making a fair use of the website and the attendant domain name.  The facts do not support this claim because the Respondent is not currently, nor has it ever been known by the name “Royal Velvet,” nor did the Respondent in the past, or even currently have any existing business of any type associated with the name.  While it is true that a registree who registers a domain name for legitimate purposes or has a reasonable belief at the time that registration is legitimate will not have bad faith imputed to it, the facts do not support that such a reasonable belief could have formed.  There are numerous decisions finding bad faith where the domain name in dispute is obviously connected with Complainant's well-known marks, thus creating a likelihood of confusion, albeit these decisions generally involve commercial gain for the respondent.  See Perot Sys. Corp. v. Perot.net, FA 95312 (Nat. Arb. Forum Aug. 29, 2000); see also Am. Online, Inc. v. Fu, D2000-1374 (WIPO Dec. 11, 2000).  The Panel does not find that Respondent may avoid the impact of those decisions by simple disclaimers, stating that the site is non-commercial, as well as by either purposely, or inadvertently, delaying completion of the website and forestalling any determination on whether any advertisement or commercial exchange has in fact taken place.  In its present state, Respondent's website uses conflicting language regarding textile swatches available online and disclaimers at the end of the present and proposed information pages.  Respondent's website uses Complainant's well-known mark in relation to goods similar to those of the Complainant for a speculative venture that did not exist prior to registration of the disputed name.  See Disney Enters., Inc. v. Noel, FA 198805 (Nat. Arb. Forum Nov. 11, 2003) ("Respondent registered a domain name confusingly similar to Complainant's mark to divert Internet users to a competitor's website.  It is a reasonable inference that Respondent's purpose of registration and use was to either disrupt or create confusion for Complainant's business in bad faith pursuant to Policy ¶¶ 4(b)(iii) and (iv).").  A similar inference is reasonable in light of the totality of circumstances here.

Respondent's registration and use of the disputed domain name shortly after Complainant's registration lapsed also supports a finding of bad faith.  See R-H-Interactive Jobfinance v. Mooburi Servs., FA 137041 (Nat. Arb. Forum Jan. 16, 2003) (finding that Respondent's registration and use of the <jobfinance.com> domain name "immediately after Complainant failed to timely renew the domain name registration was evidence of bad faith").  Here, Respondent registered the domain name shortly after its registration lapsed as well.  The Respondent correctly points out that merely registering a lapsed domain name is not equivalent to bad faith.  See SEVCOR Int'l, Inc. v. Innovation Int'l, FA 96567 (Nat. Arb. Forum Mar. 29, 2001) ("The act of registering a lapsed domain name in and of itself does not necessarily evidence bad faith.").  Normally those who sleep on their rights do so at their own peril, but the law generally incorporates various safeguards to avoid undue forfeitures and unjust enrichments.  While the duty to police is properly placed on the property rights holder, a loss of rights occurs only when the adverse party has overcome certain buffers.  Where as here, (1) little if any investigation was done into the history of the domain name; (2) very little time passed between lapse and the new registration; and (3) the Respondent presents goods or services on its website that are directly related, identical or confusingly similar to Complainant's goods or services, the characterization of Respondent's behavior weighs against mere business savvy and instead reflects bad faith.

Hence, the Panel finds the elements of Policy ¶ 4(a)(iii) have been satisfied.

DECISION

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

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

Darryl C. Wilson, Arbitrator

Dated:  January 6, 2005

---

WorldLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback
URL: http://www.worldlii.org/int/other/GENDND/2005/129.html