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Nextag, Inc. v. Michael Huang [2005] GENDND 487 (13 June 2005)

World Intellectual Property Organization

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Lilly ICOS LLC v. East Coast Webs, Sean Lowery

Case No. D2004-1101

1. The Parties

The Complainant is Lilly ICOS LLC, Indianapolis, Indiana, United States of America, represented by Baker & Daniels, United States of America.

The Respondent is East Coast Webs, Sean Lowery, Columbia, Maryland, United States of America.

2. The Domain Name and Registrar

The disputed domain name <cialis-buy.com> (the “Domain Name”) is registered with GKG.Net, Inc. (formerly GK Group LLC).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on December 29, 2004. On December 29, 2004, the Center transmitted by email to GKG.Net, Inc. (formerly GK Group LLC) a request for registrar verification in connection with the domain name at issue. On December 30, 2004, GKG.Net, Inc. (formerly GK Group 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 January 6, 2005. In accordance with the Rules, paragraph 5(a), the due date for Response was January 26, 2005. The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on February 9, 2005.

The Center appointed Michael A. Albert as the sole panelist in this matter on February 23, 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

Complainant owns a United States trademark registration for the CIALIS mark dating back to its application of June 17, 1999, from which registration issued on June 10, 2003. It now owns some eighty-seven registrations and has other pending applications in 117 countries.

Complainant also has an Internet presence, primarily through the website accessed by the domain name <cialis.com>, that it uses to advertise and provide information regarding its pharmaceutical product. The <cialis.com> domain name was registered on August 10, 1999.

Complainant has been selling pharmaceutical products under the CIALIS mark since at least as early as January 2003, in numerous countries worldwide. Its release of the product identified by the mark was accompanied by extensive media attention. Additionally, Complainant spent in excess of $240 million dollars in 2003 alone to market and sell its CIALIS brand product, and sales of the CIALIS brand product totaled more than $27 million.

Respondent registered the Domain Name on August 21, 2003. Complainant’s rights in the CIALIS trademark accordingly predate Respondent’s registration date.

5. Parties’ Contentions

A. Complainant

Complainant contends that its CIALIS mark is strong, distinctive, and protected; that Respondent has registered a confusingly similar domain name; that Respondent has no rights or legitimate interests in the Domain Name; and that Respondent engaged in bad faith registration and use because it uses the Domain Name to draw Internet traffic to a web site that redirects users to a number of pharmaceutical e-commerce sites some of which purport to sell genuine CIALIS brand products and others of which sell or purport to sell competing products.

B. Respondent

The Respondent did not reply to the Complainant’s contentions. Accordingly, the Respondent is in default. Given Respondent’s default, the Panel can infer that Complainant’s allegations are true where appropriate to do so. Talk City Inc. v. Michael Robertson, WIPO Case No. D2000-0009 (February 29, 2000). Nonetheless, Complainant retains the burden of proving the three requisite elements of Paragraph 4(a).

6. Discussion and Findings

Accordingly, the Panel now proceeds to consider this matter on the merits in light of the Complaint, uncontested as no response was filed, the Policy, the Rules, and other applicable authority.

Paragraph 4(a) of the Policy provides that Complainant must prove, with respect to each Domain Name, each of the following:

(i) The Domain Name in issue is confusingly similar to Complainant’s trademark at issue here; and

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

(iii) The Domain Name was registered and is being used in bad faith.

A. Identical or Confusingly Similar

CIALIS is a strong trademark, both by virtue of its inherent distinctiveness as a coined term having no known meaning (other than to designate the source or origin of Complainant’s product), and by virtue of the large volume of public attention directed to the product and the hundreds of millions of dollars in advertising expenditures and millions of dollars of revenue the product has generated.

The addition of a descriptive word to Complainant’s CIALIS trademark does not undermine a finding of confusing similarity. See Lilly ICOS LLC v. Tudor Burden, Burden Marketing, WIPO Case No. D2004-0794 (December 20, 2004) (finding that the respondent’s addition of the words “apcalis” or “viagra” to the disputed domain names <cialisapcalis.com> and <cialis-viagra.info> did not eliminate the confusing similarity); Lilly ICOS LLC v. Dan Eccles, WIPO Case No. D2004-0750 (November 8, 2004) (finding that the addition of the words “drug”, “online”, “buying” and “guide” to Complainant’s registered CIALIS trademark did not eliminate the confusing similarity between the CIALIS mark and the <cialis-drug-online-buying-guide.com> domain name because the additional words did not distinguish the owner of the disputed name from Complainant); Lilly ICOS LLC v. Anwarul Alam/”- -”, WIPO Case No. D2004-0793 (November 26, 2004) (finding that the addition of the descriptive word “city” to the disputed domain name <cialiscity.com> did not eliminate the confusing similarity).

Here, Respondent’s addition of the descriptive word “buy” to Complainant’s CIALIS brand pharmaceutical product suggests that Respondent’s web site is a source from which a consumer might purchase Complainant’s CIALIS brand pharmaceutical product. The addition of “buy” does not in any way distinguish Respondent from Complainant, and indeed suggests an affiliation, using Complainant’s trademark to promote Respondent’s business.

Further, when a domain name incorporates a distinctive mark in its entirety, that has in many instances been found to create sufficient similarity between the mark and the domain name to render the domain name confusingly similar. See, e.g., EAuto v. Triple S. Auto Parts, WIPO Case No. D2000-0047 (March 24, 2000). In the case at hand, the Domain Name is confusingly similar to the CIALIS mark because it incorporates the mark in its entirety, adding only a generic term that does not undermine but rather reinforces the connection.

In short, Respondent’s Domain Name is confusingly similar to Complainant’s CIALIS trademark.

B. Rights or Legitimate Interests

Complainant has made a prima facie showing, which Respondent (who did not respond) has not rebutted, that Respondent lacks any rights or legitimate interests in the Domain Name.

Respondent uses the Domain Name, and thus the CIALIS mark, to direct Internet users to a website on which products described as Complainant’s CIALIS brand pharmaceutical product are advertised for sale. The web site also provides links to the websites of multiple online pharmacies (e.g. European Pharmacy, RX-Mex and Generic Drugs Pharmacy) from which either CIALIS brand pharmaceutical products or competing products are sold.

The evidence suggests that Respondent obtains referral fees or other revenue from these links, indicating that its usage is for a commercial purpose. See Lilly ICOS LLC v. Dan Eccles, WIPO Case No. D2004-0750 (November 8, 2004) (determining that the respondent used the disputed domain name for commercial purposes because the respondent’s website provided links to online pharmacies that sold Complainant’s CIALIS brand pharmaceutical product). Indeed, two of the online pharmacies to which Respondent’s “www.cialis-buy.com” website links describe an affiliate program– a program in which an online pharmacy makes commission payments to a website owner who links an Internet consumer to the online pharmacy and a sale is generated. Respondent’s provision of links to the above-named online pharmacies suggests that Respondent may be a member of the respective affiliate programs of the online pharmacies and may receive payments for redirecting traffic to those online pharmacies. Accordingly, Respondent appears to be using the Domain Name for commercial gain.

When the holder of a domain name that is confusingly similar to an established mark uses the domain name to divert Internet users to its own competing website for commercial gain, such use is neither a bona fide offering of goods or services, nor a legitimate noncommercial or fair use under Paragraphs 4(c)(i) and (iii) of the Policy. See G. D. Searle & Co. v. James Mahoney, Case Number FA 112559 (National Arbitration Forum, June 12, 2002) (finding the respondent’s use of the disputed domain name to solicit pharmaceutical orders without a license or authorization from the complainant does not constitute a bona fide offering of goods or services under Policy Paragraph 4(c)(i)); see also G.D. Searle & Co. v. Fred Pelham, Case Number FA 117911 (National Arbitration Forum, September 19, 2002) (finding that because the respondent was using the infringing domain name to sell prescription drugs, it could be inferred that the respondent was opportunistically using complainant’s mark in order to attract Internet users to its website).

Complainant has not authorized Respondent to use its CIALIS mark in the Domain Name. Respondent not only makes such use, but further uses the mark, and Complainant’s logo, on Respondent’s web site, which suggests an effort to confuse consumers as to the source, sponsorship, affiliation or endorsement of the pharmaceutical products advertised for sale on Respondent’s website.

While mere resale of genuine branded products might give rise to a legitimate debate over whether the use of the mark was “nominative” and therefore a fair use under U.S. trademark law, any such contention is undermined by Respondent’s sale of products directly competing with Complainant’s through the same web site. See Pfizer Inc. v. The Magic Islands, WIPO Case No. D2003-0870 (December 31, 2003) (finding that the respondent’s use of a domain name confusingly similar to the complainant’s trademark to attract customers, who were then offered the choice of the complainant’s product and a competing “generic” product at a lower price, deprived the respondent’s offering of services of the “bona fide” character required to satisfy Article 4(c)(i) of the Policy). This principle may have particular weight in the pharmaceutical context, where risks to the public may be enhanced by the lack of regulatory safeguards assuring the safety or efficacy of the purported “generic” version of Complainant’s CIALIS brand product, thus further undermining any argument (had Respondent made such an argument, which it did not) that it was making a bona fide offering of goods. See Lilly ICOS LLC v. Dan Eccles, WIPO Case No. D2004-0750 (November 8, 2004).

Additionally, Complainant contends that it has U.S. patent rights in the CIALIS brand pharmaceutical product, which would make the sale of any “generic” version of Complainant’s pharmaceutical product in the U.S. unlawful for the duration of such rights. This panel need not resolve any patent issues to conclude that Respondent lacks rights or legitimate interests in the Domain Name for the reasons set forth above.

C. Registered and Used in Bad Faith

Respondent almost certainly had actual notice, and in any event had constructive notice as a matter of law, of Complainant’s trademark prior to registering the Domain Name.

Marks that have a “high degree of inherent or acquired distinctiveness” are entitled to a greater scope of protection than others. See Digital City Inc. v. Smalldomain, WIPO Case No. D2000-1283 (November 6, 2000). The volume of business transacted under or in connection with Complainant’s mark, as well as the worldwide use, registration, and volume of associated advertising, appears to place the mark in the category of trademarks with a “high degree of … acquired distinctiveness.” As a result, the mark enjoys a wide scope of protection. It can fairly be inferred that Respondent was aware of the existence of the Complainant and of its trademark rights as of the time it registered the Domain Name. Indeed, it is inconceivable that Respondent’s choice of Domain Name was not motivated by such knowledge, and a deliberate use of Complainant’s mark.

The federal registration of the mark prior to Respondent’s registration of the Domain Name provides further support for this conclusion. Under Section 22 of the United States Trademark Act, “[r]egistration of a mark on the principal register . . . shall be constructive notice of the registrant’s claim of ownership thereof.” See e.g., Barney’s Inc. v. BNY Bulletin Board, WIPO Case No. D2000-0059 (April 2, 2000).

Policy Paragraph 4(b)(iv) provides that registration of a domain name in order to utilize another’s well-known trademark by attracting Internet users to a website for commercial gain constitutes a form of bad faith. See Am. Online, Inc. v. Tencent Comm. Corp., FA 93668 (National Arbitration Forum, March 21, 2000). As discussed above, Respondent is using Complainant’s CIALIS trademark in the Domain Name to attract Internet consumers to Respondent’s website, and then link them to online pharmacies where the consumers can purchase products described as Complainant’s CIALIS brand product or competing products.

Accordingly, Complainant has shown that Respondent has registered and used the Domain Name 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, <cialis-buy.com>, be transferred to the Complainant.

Michael A. Albert
Sole Panelist

Dated: March 16, 2005