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Karl’s Sales and Services Company, LLC v. LaPorte Holdings, Inc. [2005] GENDND 17 (28 January 2005)

World Intellectual Property Organization

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Karl’s Sales and Services Company, LLC v. LaPorte Holdings, Inc.

Case No. D2004-0929

1. The Parties

The Complainant is Karl’s Sales and Services Company, LLC of Fairfield, New Jersey, United States of America, represented by Skadden, Arps, Slate, Meagher & Flom, LLP of New York, New York, United States of America.

The Respondent is LaPorte Holdings, Inc. of Los Angeles, California, United States of America.

2. The Domain Name and Registrar

The disputed domain name <karlsappliances.com> (the “Domain Name”) is registered with NameKing.com, Inc.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on November 5, 2004, by e-mail and on November 8, 2004, by hardcopy. On November 8, 2004, the Center transmitted by e-mail to NameKing.com a request for registrar verification in connection with the domain name at issue. On December 10, 2004, Nameking.com transmitted by e-mail to the Center its verification response confirming that 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 Respondent of the Complaint, and the proceedings commenced on December 13, 2004. In accordance with the Rules, paragraph 5(a), the due date for filing a response was January 2, 2005. Respondent did not submit any response. Accordingly, the Center notified Respondent of its default on January 4, 2005.

The Center appointed Robert A. Badgley as the Sole Panelist in this matter on January 24, 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.

4. Factual Background

The following information derives from allegations in the Complaint (sometimes supported by annexed documents), which are unrefuted by Respondent. Since 1941, Complainant has been engaged in the sale of kitchen appliances and the provision of attendant services. Complainant operates out of six New Jersey stores and serves the states of New Jersey, New York, and Connecticut. Since 1948, Complainant has provided goods and services under the marks KARL’S APPLIANCES and KARL’S SALES AND SERVICE.

Complainant’s Internet presence is its website located at “www.karlsappliance.com”, a domain name Complainant registered in November 1997. The Panel visited Complainant’s website, and viewed an archived version of this website going back to 1998 (via the “Wayback Machine” located at “www.archive.org”). The purpose for the Panel’s visit was to satisfy itself that Complainant had, as alleged, been using its alleged mark KARL’S APPLIANCES in connection with the goods and services described in the Complaint.

Respondent has been the named registrant of the Domain Name <karlsappliances.com> since October 2004. Prior to that, the named registrant of the Domain Name was Horoshiy, Inc., who was the registrant as of July 29, 2004. For some period of time prior to that date, the Domain Name was registered in the name of Henry Chan, who had initially registered the Domain Name on or about December 29, 2002.

There have been numerous prior cases under the Policy in which Henry Chan was respondent, and he has been found in bad faith under the Policy on numerous occasions. The same holds true for Horoshiy, Inc., and, as a more recent wave of cases illustrates, the same holds true for the current Respondent, LaPorte Holdings. The link between Henry Chan, Horoshiy, Inc., and LaPorte Holdings has been established in previous decisions under the Policy. See Krome Studios Pty, Ltd v. LaPorte Holdings, Inc., WIPO Case No. D2004-0707 (December 12, 2004); Pearson Education, Inc. v. Horoshiy, Inc., WIPO Case No. D2004-0942 (January 9, 2005).

The Domain Name resolves to a website which contains advertisements and links to various third-party websites unaffiliated with and not sponsored by Complainant. The site also provides links to sites featuring products sold by merchants in direct competition with Complainant.

Complainant asserts, and Respondent does not deny, that Respondent is not authorized by Complainants to use the KARL’S APPLIANCES mark or name in any manner by Complainants.

5. Parties’ Contentions

A. Complainant

Complainant claims to have acquired common law rights in the mark KARL’S APPLIANCES through use in commerce going back to 1948. No documentary evidence is submitted in support of this assertion, despite the fact that Complainant is represented by well-reputed counsel.

Complainant alleges that Respondent’s Domain Name is identical or confusingly similar to Complainant’s mark, that Respondent lacks any rights or legitimate interests in respect of the Domain Name, and that the Domain Name has been registered and is being used in bad faith. With respect to bad faith, Complainant alleges essentially (without specifically designating the bad faith factors of Policy, paragraph 4(b)) that Respondent is in violation of Policy, paragraphs 4(b)(ii) and 4(b)(iv).

Complainant seeks transfer of the Domain Name.

B. Respondent

As noted above, Respondent did not respond to the Complaint.

6. Discussion and Findings

Paragraph 4(a) of the Policy lists the three elements which Complainant must satisfy in order to succeed:

(i) the Domain Name is identical or confusingly similar to a trademark or service mark in which Complainant has rights; and

(ii) 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

This is a fairly straightforward case of cybersquatting. Complainant is, however, playing with fire when it invokes common law trademark rights and presents absolutely no documentary evidence to prove up such rights. Fortunately for Complainant, there is ample precedent allowing panelists to conduct some small measure of independent Internet research. See, e.g., Creative NetVentures, Inc. v. Webheads, WIPO Case No. D2000-1655 (March 9, 2000) (“[i]t is well accepted that the Panel is entitled to consider publicly available facts, such as those revealed in a visit to Respondent’s Website”). This was done here, and it was rather an easy task to confirm that Complainant has, in fact, been using the mark KARL’S APPLIANCES in commerce since at least 1998 (well before the Domain Name was registered). It should be reiterated, though, that this Complaint could have been denied for want of evidence on a simple point.

The Domain Name is essentially identical -- save the missing apostrophe -- to Complainant’s mark. Policy paragraph 4(a)(i) is satisfied.

B. Rights or Legitimate Interests

Pursuant to paragraph 4(c) of the Policy, Respondent may establish its rights or legitimate interests in the domain name, among other circumstances, by showing any of the following elements:

(i) before any notice to you [Respondent] of the dispute, your 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) you [Respondent] (as an individual, business, or other organization) have been commonly known by the Domain Name, even if you have acquired no trademark or service mark rights; or

(iii) you [Respondent] are 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 Complainant properly argues, Respondent’s use of the Domain Name to misdirect Internet traffic to a site with advertisements and commercial links is not a bona fide use under the Policy. See Pearson Education, Inc. v. Horoshiy, Inc., WIPO Case No. D2004-0942 (January 9, 2005); Yahoo! Inc., GeoCities, HotJobs.com, Ltd., and Launch Media, Inc. v. Henry Chan, NAF Case No. 162050 (July 13, 2003).

This defaulting Respondent has not advanced any basis for claiming a right or legitimate interest in respect of the Domain Name, and none is apparent. The Panel rules that Respondent lacks any “rights or legitimate interests” in respect of the Domain Name for purposes of Policy, paragraph 4(a)(ii).

C. Registered and Used in Bad Faith

Paragraph 4(b) of the Policy provides that the following circumstances, “in particular but without limitation”, are evidence of the registration and use of the Domain Name in “bad faith”:

(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 Complainant who is the owner of the trademark or service mark or to a competitor of that Complainant, for valuable consideration in excess of its documented out-of-pocket costs directly related to the Domain Name; or

(ii) that Respondent has registered the Domain Name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that Respondent has engaged in a pattern of such conduct; or

(iii) that Respondent has registered the Domain Name primarily for the purpose of disrupting the business of a competitor; or

(iv) that by using the Domain Name, Respondent has intentionally attempted to attract, for commercial gain, Internet users to Respondent’s website or other on-line location, by creating a likelihood of confusion with Complainant’s mark as to the source, sponsorship, affiliation, or endorsement of Respondent’s website or location or of a product or service on Respondent’s website or location.

Respondent’s conduct runs afoul of Policy paragraph 4(b)(iv). The Panel finds it more likely than not that Respondent, who (using its current name or a previous alias) has a long history (documented in part by annexes to the Complaint) of targeting trademarks for exploitation as revenue-generating domain names, had Complainant’s mark in mind when registering the Domain Name at issue here. Moreover, the Panel finds it more likely than not that Respondent derives revenue from the commercial links found at the website to which the Domain Name resolves. The consumer deception is aggravated here by the fact that Respondent’s website lists various appliance categories overlapping those sold by Complainant, and provides hyperlinks to sites where such appliances (often competitor products) are offered for sale.

Under these circumstances, the Panel finds that Respondent has “intentionally attempted to attract, for commercial gain, Internet users to Respondent’s website or other on-line location, by creating a likelihood of confusion with Complainant’s mark as to the source, sponsorship, affiliation, or endorsement of Respondent’s website or location or of a product or service on Respondent’s website or location”. Thus, Respondent has committed “bad faith” within the meaning of Policy, paragraph 4(b)(iv).

Respondent’s conduct also, and independently, violates Policy, paragraph 4(b)(ii), as Respondent’s preclusive registration of a Domain Name very similar to Complainant’s mark is just one of innumerable instances of such conduct by Respondent and/or its predecessors and aliases, Horoshiy, Inc. and Henry Chan. See Pearson Education, Inc. v. Horoshiy, Inc., WIPO Case No. D2004-0942 (January 9, 2005); Krome Studios Pty, Ltd v. LaPorte Holdings, Inc., WIPO Case No. D2004-0707 (December 12, 2004).

In sum, the Panel concludes that Respondent’s registration and use of the Domain Name constitutes “bad faith” within the meaning of Policy, paragraph 4(a)(iii).

7. Decision

For all the foregoing reasons, in accordance with paragraph 4(i) of the Policy and paragraph 15 of the Rules, the Panel orders that the Domain Name <karlsappliances.com> be transferred to the Complainant, Karl’s Sales and Services Company, LLC.

Robert A. Badgley
Sole Panelist

Dated: January 28, 2005