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Beanhead, Inc., D/B/A Miracle Home Improvements v. Franzoso Contracting, Inc. [2005] GENDND 1329 (3 July 2005)

World Intellectual Property Organization

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Beanhead, Inc., D/B/A Miracle Home Improvements v. Franzoso Contracting, Inc.

Case No. D2005-0388

1. The Parties

The Complainant is Beanhead, Inc., D/B/A Miracle Home Improvements, Croton-on-Hudson, New York, United States of America, represented by Milde & Hoffberg, LLP, United States of America.

The Respondent is Franzoso Contracting, Inc., Croton Point Avenue, Croton-on-Hudson, New York, United States of America.

2. The Domain Name and Registrar

The disputed domain name <miraclehomeimprovements.com> is registered with Network Solutions, LLC.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on April 13, 2005. On April 14, 2005, the Center transmitted by email to Network Solutions, LLC a request for registrar verification in connection with the domain name at issue. On April 15, 2005, Network Solutions, LLC transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details for the administrative, billing, and technical contact. The Center verified that the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy”), the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the “Supplemental Rules”).

In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on April 19, 2005. In accordance with the Rules, paragraph 5(a), the due date for Response was May 9, 2005. On May 14, 2005, the Respondent submitted by email a request for an extension of time for the filing of its Response. By an email dated May 17, 2005, the Center acknowledged receipt of the Respondent’s request and indicated that the Administrative Panel would decide in its sole discretion whether to consider a late Response (if filed). The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on May 17, 2005.

The Center appointed Angela Fox as the sole panelist in this matter on May 26, 2005. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.

On June 9, 2005, the Panel issued Procedural Order No. 1 requiring the Complainant to provide further information and materials in support of the Complaint, and indicating that the Panel had a discretion to take into account a late-filed response if the Respondent chose to submit one. On June 17, 2005, the Complainant filed a response to Procedural Order No. 1. No response from the Respondent was received.

4. Factual Background

The Complainant is a home improvement contractor licensed to do business in Westchester County, New York. It is based in the small town of Croton-on-Hudson. The Complainant’s co-owners, Robert and Mary Sniffen, began doing business under the trading name “Miracle Home Improvements” in November 1999. They applied for a Certificate of Assumed Name for this trading name pursuant to New York law in the counties of Westchester, Putnam and Dutchess in December 1999.

The Complainant registered the domain names <miraclehomeimprovement.com>, <miraclehomeimprovement.net> and <miraclehomeimprovement.org> on November 11, 1999. The Complainant says that it did not register <miraclehomeimprovements.com> because it had been improperly advised that a domain name could not exceed 25 characters.

The Complainant claims to have spent considerable sums in promoting and advertising its home improvement contracting business under the name Miracle Home Improvements. In support of this, it provided a table showing the Complainant’s promotional expenses related to this name, as well as the Complainant’s gross sales, year by year, from 2000 to 2004. The Complainant describes this table as confidential and asked that it not be disclosed to the Respondent. Later, in response to Procedural Order No. 1, the Complainant provided further, more specific information and materials concerning the manner in which it had promoted itself which it did not identify as confidential.

On the material identified as confidential, under paragraph 10 of the Rules the Panel has a general power to conduct the administrative proceeding in such a manner as it considers appropriate in accordance with the Policy and Rules, which would seem to envisage a power to treat certain information provided by a party as confidential in certain circumstances. However, paragraph 10 of the Rules must be applied with paragraph 11 of the Rules in mind, under which the Panel shall ensure that the parties are treated with equality and that each party is given a fair opportunity to present its case. In the Panel’s view, withholding relevant evidence from a respondent is fundamentally problematic under paragraph 11 of the Rules, because it deprives the respondent of the opportunity fully to address the case against him, and thus places the parties on an unequal footing. The Panel is unable, therefore, to regard the table provided by the Complainant as confidential. There may be some exceptional circumstances which justify confidentiality for certain information or materials, but such circumstances are likely in the Panel’s view to be rare, and no such circumstances have been put forward here.

The Respondent is also a home improvement contractor, who appears to do business under the names Franzoso Contracting Home Design Center and The Franzoso Factor. It is also based in Croton-on-Hudson, New York. On September 15, 2000, the Respondent registered the domain name <miraclehomeimprovements.com>. The disputed domain name links to a website at “www.franzoso.com,” advertising the Respondent’s business under the Franzoso names. The print-outs from this website which were annexed to the Complaint show no reference to Miracle Home Improvements. There is no evidence of any trade by the Respondent at any time under the name Miracle Home Improvements, apart from its re-direction of Internet visitors to the Franzoso site.

On November 27, 2000, the Complainant received an email from Ms. Derevlany of Yorktown Electronic Publishing, which hosts the Complainant’s own website, reading, “Hi, Mary—did you know that Franzoso owns ‘miraclehomeimprovements.com?’ [sic] Obviously, this is a malicious attempt to divert traffic from your website. I asked my husband, and there may be legal remedies. Perhaps you should speak with an attorney.” Following this, the Complainant’s attorney wrote in December 2000 to the Respondent and to the Assistant Attorney General of the State of New York, complaining that the Respondent’s registration and use of the disputed domain name amounted to unlawfully doing business under the name Miracle Home Improvements, and demanding that the Respondent cease and desist from that use.

The Respondent did not reply, and it was only after several months that the Office of the Assistant Attorney General invited the Complainant to complete and file a complaint form, which the Complainant promptly did. This was accompanied by a complaint from a customer, who indicated that she had been attempting to find a website for the Complainant, having seen their advertisement on the front page of the Yellow Pages telephone directory for Croton-on-Hudson, and had been diverted to the Respondent’s website after typing in the Complainant’s name as a URL.

About five months later, the Office of the Assistant Attorney General wrote to the Respondent, and the Respondent replied on September 5, 2001, indicating that it had obtained a Certificate of Incorporation for Miracle Home Improvements Inc., which would not have been granted if there had been a conflict with any other legitimate company with the exclusive right to use that name. The Respondent’s incorporation of Miracle Home Improvements Inc. took place on August 17, 2001. In October 2001, the Office of the Assistant Attorney General suggested that the Complainant contact the Better Business Bureau or consult an attorney.

It is unclear what if anything happened between October 2001 and June 2003. However, in June 2003, one of the Complainant’s customers, wrote to the Complainant indicating that she had attempted to find the Complainant’s Internet website by typing in “miraclehomeimprovements.com” and had been taken instead to the Respondent’s site. This customer assumed that the Complainant had gone out of business or sold its business to the Respondent, and that her contract had been transferred to the Respondent.

Over the next two years, the Complainant appears to have set some enquiries afoot. Another apparent customer emailed the Complainant on March 16, 2005, about a request for a quote from the Respondent that she had just made, in which she “asked why my search for Miracle Home Improvements kept bringing me back to them [the Respondent] on the Internet. I asked if Miracle was a part of them and the woman who called me answered, yes. I said that Miracle’s sign on a job at Fox Meadow had prompted the call. She said they did several jobs on Fox Meadow. Anyway…There was a whole exchange between us…And I asked again if Miracle was a part of Franzoso. She said Yes, they owned the name Miracle and had been in business for many years…That there was someone else—a small outfit—’up the road’ operating as ‘Miracle’… She said that ‘Mark’ had explained it in his response to my email…But I never received an email reply. … I’ll let you know if an email arrives, but I doubt they’ll put this in writing.”

On March 23, 2005, the Complainant’s attorney, telephoned the Respondent and identified himself as an old customer of Miracle Home Improvements, and said that he had gone onto their website and got the Respondent’s name. According to a transcript prepared by the Complainant’s attorney, the telephonist answered, “Right, we own the name.” In answer to the question “which name?” she replied, “We own the name to the rights [sic] to Miracle Home Improvements. There’s a company that calls themselves Miracle…They use the name Miracle but they’re actually something else, but we own the rights to Miracle…We own the name but they for some reason are using the name.”

This Complaint was filed on April 13, 2005.

5. Supplemental Information and Materials Filed by Complainant

By Panel Order No. 1 dated June 9, 2005, the Panel ordered the Complainant to provide information and materials proving the Complainant’s business activities under the trading name Miracle Home Improvements prior to September 15, 2000, and proving that the Respondent had knowledge of the Complainant’s business activities under that trading name prior to September 15, 2000.

In reply, the Complainant provided inter alia copies of an advertisement and a sample of a direct mail letter which it used in November 1999 to announce the launch of Miracle Home Improvements; documents relating to its ordering of job site, vehicle and other signs which bore the name Miracle Home Improvements in November 1999, January and July 2000; an invoice from April 2000, relating to local newspaper advertisements in Croton-on-Hudson and an advertising proof showing the name Miracle Home Improvements; the front cover of the Croton-on-Hudson Yellow Pages telephone directory which was published in spring 2000, and which carried a half-page advertisement for the Complainant; and samples of written estimates and contracts sent to potential customers of the Complainant from November 1999, and which all bore the name Miracle Home Improvements.

The Complainant also disclosed that its co-owners had both worked as independent contractors for the Respondent prior to November 1999, when they set up on their own. The parting was acrimonious and in December 1999, the Complainant’s co-owners sued the Respondent for monies owed to them for services previously provided, and for reimbursement in respect of a substantial hospital bill incurred by one of the Complainant’s co-owners as a result of a work-related injury sustained while acting as an independent contractor for the Respondent.

6. Parties’ Contentions

A. Complainant

The Complainant contends that it owns common law rights in the service mark Miracle Home Improvements acquired through use as a trading name since November 1999, and that the disputed domain name is identical or confusingly similar to that service mark.

The Complainant further contends that the Respondent has no rights or legitimate interests in the domain name, because it has never conducted any business under the name Miracle Home Improvements apart from using the disputed domain name to divert home improvement contracting business away from the Complainant and to the Respondent. The Respondent only registered the company name Miracle Home Improvements, Inc. in August 2001, after having been notified of the dispute by both the Complainant and the Office of the Assistant Attorney General of the State of New York. The Complainant asserts that Miracle Home Improvements, Inc. has never offered any services or conducted any home improvement contracting business under its own name.

Finally, the Complainant alleges that the disputed domain name was registered and is being used in bad faith, in order to attract, for commercial gain, Internet users to the Respondent’s website, thereby creating a likelihood of confusion with the Complainant’s service mark as to the source, sponsorship, affiliation or endorsement of the Respondent’s website or of the services offered on it. On the question of confusion, the Complainant points out that the official search made before a proposed corporation name is registered is only of other New York registered corporation names, so that the mere registration of a company name by the Respondent is no proof that confusion would not, and has not, ensued as a result of the use of the disputed domain name. The Complainant also relies on the instances of confusion set out in the Complaint. When the web address “wwww.miraclehomeimprovements.com” is entered into a web browser, the Respondent’s name and not that of the Complainant appears on the screen, but the Complainant nevertheless contends that there is still recognizable initial interest confusion which is capable of diverting custom and undermining the Complainant’s goodwill.

The Complainant asserts that the Respondent had actual knowledge of the Complainant’s activities under the name Miracle Home Improvements prior to registration of the disputed domain name, as a result of the parties’ previous business relationship and the legal dispute that erupted between them in December 1999. The Complainant contends that the Respondent has committed acts of willful trademark infringement and unfair competition, and intentionally misappropriated the Complainant’s service mark in bad faith.

The Complainant asks that the disputed domain name be transferred to the Complainant, and for a legal opinion stating that the Respondent may not register any other domain name or names which include the word “miracle” such as <miraclehomeimprovements.org>, <miraclehomeimprovements.net>, <miraclehomeimprovements.biz>, <miraclehome.com>, <miracleimprovements.com>, etc.

B. Respondent

The Respondent did not reply to the Complaint and is in default. No exceptional circumstances explaining the default have been put forward. Therefore, in accordance with Paragraphs 14(a) and (b) of the Rules, the Panel will decide the Complaint and shall draw such inferences as it considers appropriate from the Respondent’s default.

7. Discussion and Findings

Under Paragraph 4(a) of the Policy, a complainant can only succeed in an administrative proceeding under the Policy if the Panel finds that:

(i) the domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights;

(ii) the respondent has no rights or legitimate interests in the domain name;

(iii) the domain name has been registered and is being used in bad faith.

All three elements must be present before a complainant can succeed in an administrative proceeding under the Policy.

A. Identical or Confusingly Similar to a Trademark or Service Mark in Which the Complainant Has Rights

It is well-established that even where registered trademark rights do not exist, a complainant may succeed in an administrative proceeding under the Policy if it owns sufficient goodwill in a mark or name in a given area that the use of the same or a similar mark or name by another would constitute a misrepresentation capable of damaging the Complainant’s goodwill (see inter alia Imperial College v. Christophe Dessimoz, WIPO Case D2004-0322 and Julian Barnes v. Old Barn Studios Limited WIPO Case D2001-0121).

Taking the Complainant’s response to Procedural Order No. 1 into account, the Panel is satisfied that the Complainant owns such common law rights in the trading name and service mark Miracle Home Improvements in the area of Croton-on-Hudson, and that it owned such rights prior to registration of the disputed domain name on September 15, 2000.

In its response to Procedural Order No. 1, the Complainant provided evidence that from November 1999, it was consistently and regularly putting itself forward to customers and potential customers in the Croton-on-Hudson area, through newspaper and other directory advertisements and direct mailings, as Miracle Home Improvements. At least one of the Complainant’s advertisements, namely the one appearing on the front cover of the spring 2000 local Yellow Pages telephone directory, was very prominent and made through the medium of a publication distributed to practically every home or business in the area. The examples of contracts and estimates supplied by the Complainant is evidence that the Complainant’s efforts were generating enquiries and business prior to registration of the disputed domain name, and continued to do so.

There is also evidence that shortly after September 15, 2000, at least, customers were seeking out Miracle Home Improvements on the Internet (the consumer complaint from March 2001 is particularly relevant because of its proximity to the domain name registration date) and being confused by their misdirection to a competitor’s site under a different name. All these factors point to a likely awareness of the Complainant’s trading name on the part of homeowners in the market for home improvements in the Croton-on-Hudson area as of September 15, 2000, and to the ownership of goodwill in the trading name and service mark Miracle Home Improvements there as of September 15, 2000.

The Panel finds that the Complainant does own common law rights in the service mark and trading name Miracle Home Improvements, and that the disputed domain name is identical to that trading name and service mark, differing only in the addition of the non-distinctive domain name suffix .com.

B. Rights or Legitimate Interests

The Respondent has not contested the facts as presented by the Complainant, nor the Complainant’s assertion that the Respondent has no rights or legitimate interests in the domain name.

If the Respondent had considered itself to have such a right or legitimate interest, one would have expected it to have put that case forward by way of response to the Complainant’s cease and desist letter, or to the Office of the Attorney General of New York, or in this administrative proceeding. The Respondent’s only comment, however, made in its response to the Office of the Assistant Attorney General, was that it had, following notice of the dispute, managed to register the corporate name Miracle Home Improvements Inc. and that it followed that no one else had an exclusive right to use that name. This act post-dated both registration of the domain name and notice of the dispute, however, and the Respondent’s response to the Assistant Attorney General amounts purely to an assertion that no one else had a right in the name. It is not the same as asserting that the Respondent did have one.

It is apparent from the evidence that, prior to and following notice to it of the dispute, the Respondent used the disputed domain name to re-direct Internet visitors to the Respondent’s own website for its business, which also offered home improvement services in the Croton-on-Hudson area. Such intentional re-direction to a competitor’s site is not use in connection with a bona fide offering of goods or services. It is, in fact, the opposite of a bona fide use.

The Respondent’s after-the-fact registration of the company name Miracle Home Improvements Inc. does not amount to evidence that the Respondent was commonly known by the domain name. Although the Respondent’s staff apparently claimed that the Respondent owned the rights to the name Miracle Home Improvements in 2 separate telephone calls reported by the Complainant, this was in response to direct questioning by the callers, and the Respondent’s staff did not say that the Respondent was Miracle Home Improvements (although one ambiguously referred to “Miracle” as “a part of them”). No reference to Miracle Home Improvements appears in the website extracts from the Respondent’s site which were annexed to the Complaint. All the evidence is that the Respondent traded, and was known as, Franzoso, and not as Miracle Home Improvements.

The Panel deems that the Complainant has established an arguable case on this point and that the burden of proof has thus shifted to the Respondent to show that there is a possible right or legitimate interest which justifies his registration. The Respondent has not discharged this burden. The Panel finds that the Respondent has no rights or legitimate interests in the Domain Name.

C. Registered and Used in Bad Faith

Under Paragraph 4(b)(iii) and (iv) of the Policy, “the following circumstances, in particular but without limitation, if found by the Panel to be present, shall be evidence of the registration and use of a domain name in bad faith…:

(iii) you have registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(iv) by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your website 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 website or location or of a product or service on your website or location.”

It is highly improbable that the Respondent was not aware of the Complainant and its use of the name Miracle Home Improvements prior to September 15, 2000.

Both parties were active in the same commercial field at the same time, in the same relatively small community. The longer-established Respondent was likely to have been keeping an eye on the local competition, and particularly on new competitors who might present a commercial threat. The Complainant was a new entrant in the field, and it was owned by former independent contractors for the Respondent, with whom the Respondent was in a legal dispute. The Complainant may have had commercial knowledge about the Respondent which would have sharpened its ability to compete effectively, as well as the motive to seek to undermine the Respondent’s commercial base. The Respondent is likely to have been only too keenly aware of the Complainant’s activities from November 1999, and does not seek to deny it.

The Respondent proceeded to register the Complainant’s name as a domain name and to use it to divert to the Respondent’s own site Internet visitors who were seeking the site of the Complainant. The Respondent had every reason to want to disrupt the Complainant’s fledgling business in this way and has offered no alternative explanation for its acts. It is plain that, by using the domain name in this way, the Respondent intentionally attempted to attract, for its own commercial gain, Internet users to its own website by creating a likelihood of confusion with the Complainant’s name as to the source, sponsorship, affiliation, or endorsement of its website or of a product or service on its website. That such use did in fact lead to confusion is evident from the experiences of the customers referred to in the Complaint.

The Panel finds that the disputed domain name was registered, and has been used, in bad faith.

8. Decision

The Complainant has asked that the disputed domain name be transferred to it, and for a legal opinion stating that the Respondent may not register any other domain name or names which include the word “miracle.”

Under Paragraph 4(i) of the Policy, however, the only remedies available to a complainant pursuant to any proceeding before an Administrative Panel shall be limited to requiring the cancellation of a domain name or the transfer of a domain name registration to a complainant.

For all the foregoing reasons, in accordance with Paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the domain name <miraclehomeimprovements.com> be transferred to the Complainant.

Angela Fox
Sole Panelist

Dated: July 3, 2005