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Hilton Group Plc v. EFT [2005] GENDND 1598 (27 September 2005)

World Intellectual Property Organization

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Hilton Group Plc v. EFT

Case No. D2005-0682

1. The Parties

The Complainant is Hilton Group Plc, Watford, Hertfordshire, United Kingdom of Great Britain and Northern Ireland, represented by Willoughby & Partners, London, United Kingdom of Great Britain and Northern Ireland.

The Respondent is EFT, St Helier, Jersey, United Kingdom of Great Britain and Northern Ireland.

2. The Domain Name and Registrar

The disputed domain name <conradphuket.com> is registered with Tucows Inc.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on June 28, 2005. On June 28, 2005, the Center transmitted by email to Tucows a request for registrar verification in connection with the domain name at issue. On June 28, 2005, Tucows 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 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 July 28, 2005. In accordance with the Rules, paragraph 5(a), the due date for Response was August 18, 2005. The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on August 18, 2005.

The Center appointed Adam Samuel as the sole panelist in this matter on August 25, 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 September 1, 2005, the Panel issued a Procedural Order seeking further information and submissions concerning the Complainant’s rights in the trademark with which it is alleged the domain name is confusingly similar.

4. Factual Background

The Complainant is a United Kingdom company which owns hotels. It founded Conrad Hotels in 1982 as part of a joint venture with Hilton Hotels Corporation in the United States. This venture is run through Conrad Hospitality LLC, a corporation 50% owned by the Complainant. Conrad Hospitality LLC operates a network of 18 luxury hotels. It also owns trademark registrations featuring the word “Conrad”. It promotes its business using the word “Conrad” in front of the location of the relevant hotel. An example of this is that it plans to open in 2006 the Conrad Phuket Resort & Spa in Phuket, Thailand. The Complainant contributes significant sums of money to the marketing of the CONRAD hotels in a number of ways. It also uses the name, Conrad, quite openly in its own promotional material. At the bottom of the front page of its website, “www.hilton.co.uk”, the Complainant provides a link in capitals to a website marketing the CONRAD hotels, as the first item in a series of such links to what it describes as “the Hilton family of fine hotels”.

The Respondent is based apparently in Jersey. The domain name appears to be under construction, but then contains links to websites offering hotel booking services in the Phuket area.

On March 2, 2005, solicitors for the Complainant e-mailed the Respondent seeking the transfer of the domain name. This was followed up on March 16, 2005. It has received no reply. There was some subsequent contact with a Jersey law firm which indicated that it had received the letter since it was sent to the firm’s address.

In Société des Hôtels Méridien v. EFT, WIPO Case No. D2004-0995, the Respondent registered the domain names <lemeridienjakarta.com>, <lemeridienkhaolak.com> and <lemeridienpacific.com> and was ordered to transfer them to the complainant in that case. In each case, the websites led users to online stores offering hotel bookings.

On September 9, 2005, the President of Conrad Hospitality LLC wrote to the Center:

“I confirm that Hilton Group plc has invested considerable sums of money in the advertising, promotion and development of the CONRAD brand.

Hilton Group plc has the right to use the CONRAD trademarks in relation to the Conrad Hotels business although no written licence agreement exists between Hilton Group plc and Conrad Hospitality LLC in relation to such use.

To the extent that it is appropriate, I confirm that Conrad Hospitality LLC consents to Hilton Group plc acting as Complainant in the above WIPO domain name Complaint on the basis that, if successful, the domain name be transferred to the Conrad Hospitality LLC company.”

5. Parties’ Contentions

A. Complainant

It founded Conrad Hotels in 1982. It owns the domain names <hilton.com>, <hilton.co.uk> and others which contain links to the Complainants’ hotel businesses operated under the Hilton brands including Conrad Hotels. Its company, Conrad Hospitality LLC, which is a joint venture business, owns trademarks in the name CONRAD. The Complainant invests substantially in promoting the CONRAD brand across the world. Through its extensive use of the ‘Conrad’ name, the Complainant enjoys a substantial reputation and goodwill in the name, giving rise to proprietary common law unregistered rights to the trademark. The Complainant is in practice licensed to use the trademark.

Conrad Hospitality LLC promotes its hotels by referring to them as CONRAD followed by the location of the hotel.

The domain name incorporates the trademark CONRAD along with the addition of the place name Phuket in Thailand. The Respondent has no rights to the trademark, CONRAD.

It directs traffic to a portal website which has no connection with the Complainant. This then contains links to a number of websites offering hotel accommodation booking services.

The Respondent’s motive is to attract users seeking the Complainant’s CONRAD Phuket hotel business and then make money from linking users to other websites. The Respondent knew that a significant proportion of users would be attracted to the website on the basis of ‘initial interest confusion’. This is evidence of bad faith.

The use of the domain name to host portal websites is inherently deceptive and designed to exploit the Complainant’s and its subsidiary company’s goodwill in the CONRAD trademark.

In a previous case, the Respondent had been involved in similar behaviour which resulted in the domain name in dispute in that case being transferred to the complainant in that case.

B. Respondent

The Respondent did not reply to the Complainant’s contentions.

6. Discussion and Findings

Under the Policy, the Complainant must prove that

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

(ii) the Respondent has no rights or legitimate interests in respect of the domain name; and

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

A. Identical or Confusingly Similar

The first issue is whether the domain name is similar to a trademark or service mark in which the Complainant has rights. The Complainant is not the owner of any trademark with respect to the word “Conrad”. Its partly-owned subsidiary is the proprietor of the trademarks. However, the Policy only requires the Complainant to have rights in the trademark or service mark.

In Grupo Televisa, S.A., Televisa, S.A. de C.V., Estrategia Televisa, S.A. de C.V., Videoserpel, Ltd. v. Party Night Inc., a/k/a Peter Carrington, WIPO Case No. D2003-0796, the Panel found in favour of the Complainant. It said as follows:

“Paragraph 4(a)(i) of the Policy requires, as one element to be proved, that the domain name be identical or confusingly similar to a trademark or service mark in which Complainant has rights. These words do not require that Complainant be the owner of the mark and would include, for example, a licensee of the mark. It has been accepted in several decisions that a company related as subsidiary or parent to the registered holder of a mark may be considered to have rights in the mark. See, for example, Miele, Inc. v. Absolute Air Cleaners and Purifiers, WIPO Case No. D2000-0756 where Complainant’s grandparent corporation had a long established United States trademark registration for the mark for vacuum cleaners. The decision reads in part:

“The Panel finds that Complainant, through its affiliation with its grandparent corporation which owns the trade-mark registration, has rights in and duties concerning the mark MIELE”.

The Policy does not require that Complainant have exclusive rights in the trade-mark or service mark - see Smart Design LLC v. Carolyn Hughes, WIPO Case No. D2000-0993 in which the Panel stated:

“It is also abundantly clear from the evidence filed by Respondent that there are literally dozens of other entities trading under and by reference to precisely the same name.”

and concluded:

“In this Panel’s view the test under paragraph 4(a)(i) of the Policy, which makes no mention of “exclusive rights” is or ought to be a relatively easy test for a Complainant to satisfy, its purpose simply being to ensure that Complainant has a bona fide basis for making the Complaint in the first place”.

Televisa, S.A. de C.V. and Estrategia Televisa, S.A. de C.V. each have the necessary interest, that is rights in the service marks in question, to file this Complaint. However, the Complaint is stated to be filed by the international group of companies headed by Grupo Televisa, S.A. and including the other companies registrants of the service marks in question, which are said to be wholly owned subsidiaries of Grupo Televisa, S.A. Although no documentary evidence was produced with regard to the parent subsidiary relationship, the Panel accepts this statement which is certified in the Complaint to be accurate.

The Panel concludes that Grupo Televisa, S.A. has rights in the service marks in question which are registered by its wholly owned subsidiaries.”

However, in an earlier decision, NBA Properties, Inc. v. Adirondack Software Corporation, WIPO Case No. D2000-1211, the Panel said:

“The record fails to make clear what rights in the trademark Complainant claims to have. The rights of a licensee are contract rights with respect to, not in, the licensed marks. So it is also in the case of a licensing and merchandising agent.

There may well be circumstances in which the contract rights possessed by an exclusive licensee vest in him substantially all the powers of an owner of the licensed property. However, such circumstances have not been shown to exist here.

The Policy is believed by the Panel to envision a transfer of a disputed domain name to a complainant/trademark owner as a route to unification of control over the uses of the domain name and the trademark. However, Complainant’s request for an order transferring the disputed name to Complainant in this case would place ownership of the domain name in an entity other than the trademark owner without consent from the trademark owner.”

It has to be said that this case represents the minority position in UDRP panel decisions.

In this case, one can easily imply consent from the trademark owner to the Complainant to own the domain name. The letter from Conrad Hospitality LLC of September 9, 2005, makes it clear that permission has been given to the Complainant to use the trademark in the past and that the domain name will be transferred ultimately to registered trademark owner.

The issue here is whether the Complainant has shown that at the time of filing the Complaint that it had rights in the trademark“CONRAD. The majority view is that the awkward expression “rights in a trademark” should be construed broadly to cover licensees of a trademark. Here, there is no practical risk of control of the domain name and ownership of the trademark ending up in separate hands.

The next problem is whether there is a license. No such document exists in writing. Under English law, a trademark license has to be in writing: section 28(2) Trade Mark Act 1994. In reality, though, the Complainant has been operating under an oral licence for a significant length of time. It has expended money in support of the Conrad business on promoting its hotels. It certainly has rights in connection with the trademark in the sense that it would appear to have an absolute defence to a claim by Conrad Hospitality LLC for trademark infringement in the form of an equitable estoppel or waiver. Conrad Hospitality has known of the Complainant’s extensive use of the trademark and the Complainant’s considerable expenditure in reliance on its acquiescence. This equitable waiver or estoppel would operate to provide to the Complainant the protection described above under all the relevant legal systems here, those of England, Jersey and California.

The case law under the Policy has always interpreted the terms “rights in the trademark” not to be the same as the right to sue for trademark infringement. If one accepts the extension of the term to include contractual rights to use the trademark, this must also include the right to defend a trademark action for infringement on the basis of equitable waiver or estoppel.

Another way of looking at this is that in its letter of September 9, 2005, Conrad Hospitality LLC granted a written licence to the Complainant to use the trademark. It appeared to ratify or confirm the contractual rights that had previously existed even though they were not committed to writing in a form necessary to entitle an exclusive licensee to sue for trademark infringement. Again, once it is accepted that a purely contractual right in connection with the trademark suffices, regardless of whether this gives any right to bring a trademark action, the lack of formality for the latter purpose becomes irrelevant.

For all the above reasons, although not without hesitation, the Panel concludes that the Complainant does have rights in the trademark, CONRAD. It would, of course, have been far more straightforward and more satisfactory if Conrad Hospitality LLC had brought this Complaint. Nevertheless, in the Panel’s judgement, the Complainant’s rights in connection with the trademark suffice for the purposes of this part of the Complaint.

The domain name is confusingly similar to the trademark in question. The name, Conrad is a not uncommon first name although not in the English language. However, it does not have any meaning except as a first or surname. From this, one can deduce that use of “Conrad” in a domain name would be “confusingly similar” to a trademark of that name.

The addition of the word ‘Phuket’ appears to make no difference. In Société des Hôtels Méridien v. EFT, WIPO Case No. D2004-0995, the panel found in favour of the complainant on the question of whether the addition of a place name after a trademark prevents the domain name from being confusingly similar to the mark. It commented simply:

“According to the previous WIPO case law, the mere addition, within the contested domain names, of the geographical designations KHAOLAK / JAKARTA / PACIFIC does not cast aside the likelihood of confusion between the prior trademark Le MERIDIEN and the disputed domain names.

In Red Bull GmbH v. Chai Larbthanasub, WIPO Case No. D2003-0709, it has been held that ‘the mere addition of a descriptive term to an identical trademark has been repeatedly held by previous panels as not sufficient to avoid confusion between domain name and the trademark. This is especially true considering that, in the present case, the descriptive term is a geographical term (i.e. Thai for Thailand) and the trademark RED BULL is renowned worldwide.’

In Volvo Trademark Holding AB v. SC-RAD Inc., WIPO Case No. D2003-0601, it has been decided that ‘it has previously been held in very many others proceedings before WIPO Panelists that a domain name created by appending a geographical term to another’s trademark or service mark does not change the domain name from being confusingly similar to the trademark’.

In Harrods Limited v. John Griffin, WIPO Case No. D2002-0641, that ‘the geographic designation “usa” adds nothing distinctive, and the emphasis remains on the name HARRODS to attract the attention of Internet users.’”

In Red Bull GmbH v. Chai Larbthanasub, WIPO Case No. D2003-0709, the panel went into more detail:

“The domain name <thairedbull.com> integrates the trademark RED BULL in its entirety with a description of geographical nature, that is “thai” as a prefix. The panel here agrees with Complainant’s allegation that consumers world wide will likely think that “thairedbull” is a variation of Complainant’s trademarks. The mere addition of a descriptive term to an identical trademark, has been repeatedly held by previous panels as not sufficient to avoid confusion between the domain name and the trademark. This is especially true considering that, in the present case, the descriptive term is a geographical term (i.e. Thai for Thailand) and the trademark RED BULL is renowned worldwide. It is then more than likely, that consumers will be led to think about <thairedbull.com> as Complainant’s domain name for Thai users/clients (see e.g. Red Bull Gmbh v. Tony Marinelli, WIPO Case No. D2001-0522 relating to the domain names <redbullwesterncanada.com>, <redbullcanada.org> and <redbullcanada.net>, where the Panel finding was that ‘the combination of a trademark with a geographical name is common practice for many domain names and does not exclude confusing similarity’; Inter-IKEA v. Polanski, WIPO Case No. D2000-1614 relating to the domain name <ikeausa.com>; Wal-Mart stores Inc v. Walmarket Canada, WIPO Case No. D2000-0150 relating to the domain name <walmartcanada.com>; and Viacom International Inc. v. Emperor Sedusa, WIPO Case No. D2001-1438 related to the domain name <mtvasia.net> where the Panel found that: ‘The domain name <mtvasia.net> is identical to the Complainant’s trademark MTV with the addition of the geographical term ‘asia’.’ The first and inherently distinctive portion of the domain name <mtvasia.net> is identical to Complainant’s trademark MTV. The Respondent has associated the geographical ‘asia’ with the word MTV to create a domain name which is confusingly similar with Complainant’s trademark MTV.’

In view of all the above, the Panel finds that the disputed domain name is confusingly similar to the Complainant’s trademark RED BULL.”

The addition of a place name after a trademark is, if anything, more likely to confuse a user than the use of the place name before the mark.

For all these reasons, the Panel concludes on balance that the domain name is identical or confusingly similar to a trademark or service mark in which the Complainant has rights.

B. Rights or Legitimate Interests

The Respondent is not called ‘Conrad’ and does not appear to trade under that name. There is no evidence that the owner of the trademark in question has authorized it to use the trademark. The Respondent has never asserted any rights or legitimate interests in the name. For these reasons, the Panel concludes that the Respondent has no rights or legitimate interests in respect of the domain name.

C. Registered and Used in Bad Faith

It is difficult to identify any good faith reason why the Respondent should have registered the domain name. Its only objective seems to have been to divert business away from Conrad Hospitality LLC and to profit from attracting Conrad’s customers to its website for the purposes of earning money through click-throughs to other websites.

The Respondent has previously bought domain names using hotel groups and adding locations to them: Société des Hôtels Méridien v. EFT, WIPO Case No. D2004-0995. The panel on that occasion concluded that this had been done in bad faith. This all suggests that the Respondent’s motives in adding a location to a hotel group name is to divert traffic from Conrad Hospitality LLC to itself in the way indicated in the previous paragraph.

Indeed, the Panel agrees with the decision in Société des Hôtels Méridien v. EFT, WIPO Case No. D2004-0995 where the panel said:

“It is also difficult to imagine that the Respondent could have lacked knowledge of the Complainant’s trademark when registering the contested domain names. It is unlikely that the Respondent would have randomly registered the disputed domain names <lemeridienkhaolak.com> and <lemeridienjakarta.com> comprising geographical indications where precisely the Complainant holds hotels, and redirected them towards websites merely displaying links notably proposing discount hotel bookings, without being aware that it refers to the famous hotel chain Le Méridien.

By using the disputed domain names, the Respondent has intentionally attempted to attract, for commercial gain, Internet users to its website, by creating a likelihood of confusion with the Complainant’s marks as to the source, sponsorship, affiliation or endorsement of its website.

The fact that the disputed domain names are registered on the same pattern as the ones belonging to the Complainant constitutes in itself bad faith registration and use, as it demonstrates that the Respondent has tried to benefit unfairly from the reputation of the Complainant’s trademark by creating a likelihood of confusion with the Complainant’s marks as to the source, sponsorship, affiliation or endorsement of its website.

The Respondent’s domain names (or at least one of them) point to websites which seem to be created for the sole purpose of displaying a mere collection of advertisement banners and links to other websites and online stores, notably in the field of hotel industry.

It follows from the above that the disputed domain names have been registered and used in bad faith.”

While Conrad is not as distinctive a name as Meridien, it is difficult to imagine how the Respondent could have registered the domain name without thinking of the CONRAD trademark.

For all these reasons, the Panel concludes that the domain name has been registered and is being used in bad faith.

7. Decision

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 <conradphuket.com> be transferred to the Complainant.

Adam Samuel
Sole Panelist

Dated: September 27, 2005