Rolex Watch U.S.A., Inc. v. Spider Webs, Ltd.

WIPO

Arbitration and Mediation Center

ADMINISTRATIVE

PANEL DECISION

Rolex Watch U.S.A., Inc. v. Spider Webs, Ltd.

Case

No. D2001-0398

1. The Parties

Complainant is Rolex Watch

U.S.A., Inc. ("Complainant" or "Rolex"), a New York corporation

with its principal place of business located at 665 Fifth Avenue, New York, New

York 10022 USA, represented by Morgan & Finnegan, LLP.

Respondent is

Spider Webs Ltd. ("Respondent" or "Spider Webs"), a general

partnership comprised of Steve Thumann, Pierce Thumann, and Fred Thumann (as trustee)

located at 2200 Lauder Road, Houston, Texas 77039 USA, represented by Bernard

Lilse Mathews, III.

2. The Domain Names and Registrar

The domain names at issue are <relojesrolex.com> and <erolexwatches.com>

(the "Domain Names"). The registrar is Network Solutions, Inc. (the

"Registrar") located at 505 Huntmar Park Drive, Herndon, Virginia, 20170

USA.

3. Procedural History

On March 21, 2001,

the WIPO Arbitration and Mediation Center (the "Center") received a

copy of the Complaint via email. On March 22, 2001, the Center received the hardcopy

of the Complaint. On March 23, 2001, the Center sent an Acknowledgment of Receipt

of Complaint to Complainant. The Complainant paid the required fee.

On March

28, 2001 after the Center sent a Request for Verification to the Registrar requesting

verification of registration data, the Registrar confirmed, inter alia,

that it is the registrar of the Domain Names and that the Domain Names are registered

in the Respondent's name.

On March 29, 2001, the Center notified Complainant of deficiencies in the Complaint.

On April 2, 2001, the Center received a First Amended Complaint from Complainant

via email. On April 4, 2001, the Center received the First Amended Complaint

in hardcopy.

The Center verified that

the First Amended Complaint satisfies the formal requirements of the ICANN 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"). The Panel agrees with these conclusions.

On

April 6, 2001, the Center sent a Notification of the First Amended Complaint and

Commencement of Administrative Proceeding to the Respondent together with copies

of the Complaint with Amendment, with a copy to the Complainant. This notification

was sent by the methods required under paragraph 2(a) of the Rules.

On April 25, 2001, the Center received the Response of Respondent via email.

On April 30, 2001, the Center received the Response of Respondent in hardcopy.

On

May 7, 2001, the Center received a request from Complainant to file a Reply. The

Center deferred the decision regarding acceptance of the Reply until the Panel

had been selected.

On May 22, 2001 after the Center received a completed

and signed Statement of Acceptance and Declaration of Impartiality and Independence

from each of the panelists, the Center notified the parties of the appointment

of a three-member panel consisting of Richard W. Page (the "Presiding Panelist"),

David H. Bernstein and Paul M. DeCicco (collectively the "Panel").

The Panel has considered the Complainant’s request to file a Reply and unanimously

decided not to consider the Reply. Supplemental filings are inappropriate except

in the rarest of circumstances, such as discovery of new evidence not reasonably

available to the submitting party at the time of its initial submission, or

arguments by the Respondent that the Complainant could not reasonably have anticipated.

See Goldline International, Inc. v. Gold Line, Case

No. D2000-1151 (WIPO Jan. 4, 2001). Because no new facts or authorities

were presented beyond those contained in the First Amended Complaint and Response,

the Panel has denied the request to file a Reply.

4. Factual Background

Rolex

is the exclusive distributor of Rolex watches in the United States. Rolex is responsible

for marketing and selling Rolex watches, watch bracelets, and related products

in the United States, and for maintaining control over the quality of ROLEX products

and services in this country. Rolex is the owner of United States Trademark Registration

No. 101,819, issued January 15, 1915, for the trademark ROLEX covering watches,

clocks, parts of watches and clocks, and their cases and United States Trademark

Registration No. 1,753,843, issued February 23, 1993, for the trademark ROLEX

covering jewelry. Said registrations are in full force and effect and have become

incontestable pursuant to 15 U.S.C. § 1065.

Rolex has used the ROLEX trademark

for many years in connection with Rolex watches and jewelry. Rolex has developed

an outstanding reputation in the ROLEX trademark, which identifies high quality

products originating with Rolex. By virtue of Rolex’s longstanding use of the

ROLEX mark, substantial expenditures on advertising and promotions, and the high

quality of Rolex products, the ROLEX trademark is now famous and has been famous

for decades.

The Domain Names <relojesrolex.com> and <erolexwatches.com>

were registered with the Registrar on July 21, 1999 and November 11, 1999, respectively.

Upon discovering the existence of the <relojesrolex.com> Domain Name, Rolex

sent a letter to the Respondent on November 1, 1999, demanding that it cease and

desist all infringing uses of the ROLEX trademark, and consent to the deletion

or transfer of the Domain Names to Rolex.

Respondent did not respond to

the November 1, 1999 letter. Instead, shortly thereafter, it registered another

domain name incorporating the ROLEX trademark, <erolexwatches.com>, on November

11, 1999. On March 24, 2000, Complainant sent a second letter to Respondent, again

demanding that it cease and desist all infringing uses of the ROLEX trademark,

and consent to the deletion or transfer of the two Domain Names. Complainant did

not receive any response to the March 24, 2000 letter from the Respondent.

The Complainant sent additional letters to the Respondent on November 17, 2000

and February 6, 2001. As with the prior correspondence, there was no response

to these letters.

There

is no indication in the record of any offers by either party to sell or buy the

Domain Names.

5. Parties’ Contentions

A. Complainant’s

contentions

(i) Complainant contends that it has registrations

of the trademark ROLEX, that its trademark registrations are valid and subsisting,

and that they serve as prima facie evidence of its ownership and the validity

of the ROLEX mark. 15 U.S.C. § 1115. Complainant further alleges that its registrations

are incontestable and conclusive evidence of its exclusive right to use the mark

in connection with the stated goods. 15 U.S.C. §§ 1065 and 115(b).

(ii)

Complainant argues that the Domain Names are confusingly similar to the ROLEX

mark, pursuant to Paragraph 4(a)(i) of the Policy, because they wholly incorporate

the trademark ROLEX with the addition of generic terms.

(iii) Complainant

contends that Respondent has no rights or legitimate interests in the Domain Names,

pursuant to Paragraph 4(a)(ii), and that Respondent has failed to demonstrate

any of the three circumstances that constitute rights to or legitimate interests

in the Domain Names.

Respondent cannot demonstrate rights or legitimate

interest in the Domain Names under Paragraph 4(c)(i) because it has not made use,

or demonstrable preparations to use, the Domain Names in connection with the bona

fide offering of goods or services. Both of the Domain Names currently resolve

to a website at spintopic.com, which purports to be a site for consumer commentary.

Most of the links to pages within the website, though, are inactive, or resolve

to empty and/or abandoned webpages devoid of content. Spintopic is thus a Potemkin

Village, a sham website likely designed with the sole purpose of attempting to

satisfy the "legitimate interest" defense provisions of Paragraph 4(c)(iii)

of the Policy. Not a single one of the listings on the Spintopic website are remotely

related to the ROLEX mark or to watches.

Respondent cannot demonstrate rights

or legitimate interests in the Domain Names under Paragraph 4(c)(ii) because it

is known as Spider Webs, Ltd., and is not commonly known under either of the Domain

Names. Respondent has no connection or affiliation with Complainant, and has not

received any license or consent, express or implied, to use the ROLEX mark in

a domain name or in any other manner. Spider Webs is not an authorized dealer

of ROLEX products or services and does not have any related watch business.

Respondent

cannot demonstrate rights or legitimate interests in the Domain Names under Paragraph

4(c)(iii) because it is not making a legitimate noncommercial or fair use of the

Domain Names without the intent to (a) derive commercial gain, (b) misleadingly

divert consumers, or (c) tarnish the trademark at issue. Respondent has deliberately

registered domain names containing the ROLEX trademark and the word "watch"

or its Spanish equivalent to attract the attention of internet users searching

for ROLEX watches. Spider Webs is using the Domain Names to misleadingly divert

consumers and tarnish the ROLEX trademark.

(iv) Complainant contends that

Respondent registered and is using the Domain Names in bad faith in violation

of Paragraph 4(a)(iii).

Complainant argues that the Respondent registered

the Domain Names primarily for the purpose of selling, renting, or otherwise transferring

the registrations to the Complainant or one of its competitors for valuable consideration

in excess of the registrant’s out-of-pocket costs. In support of this allegation,

Complainant cites the testimony of Steve Thumann in E. & J. Gallo Winery

v. Spider Webs, Ltd., 129 F.Supp. 2d 1033 (S.D. Tex. 2001). Thumann indicated

that the Respondent was in the business of acquiring domain names containing famous

trademarks or company names for the purpose of selling the names. Further evidence

of Respondent’s intent may be discerned by the large number of domain names that

it has registered. Complainant attached a list showing some of the more than 2,471

domain names currently registered by the Respondent. Among the domain names are

trademarked terms, in addition to ROLEX, such as <bridgestonetires.com>,

<kmartautomotive.com>, and <oreocookies.com>. Also, Respondent was

previously found to have registered the domain name <davidtaylorcadillac. com>

in bad faith in NAF Proceeding No. FA0010000095832.

The actions of the Respondent after it was notified of the Complainant’s claims

provide further evidence of Respondent’s bad faith. The Respondent did not contact

the Complainant or otherwise respond to four letters from the Complainant. In

addition, it registered one of the subject Domain Names, <erolexwatches.com>,

after receipt of the initial cease and desist letter from the Complainant. Further,

on November 11 and 12, 1999, shortly after the Respondent received the first

cease and desist letter dated November 1, 1999 from Complainant’s counsel, Tod

M. Melgar of the law firm Morgan & Finnegan, the Respondent registered the

domain names <todmmelgaresq.com> and <morganandfinnegan.com>.

In addition, Respondent has allegedly

registered the Domain Names to prevent the Complainant from reflecting the mark

in a corresponding domain name and has admittedly engaged in a pattern of such

conduct. See Gallo, 129 F.Supp. 2d at 1046. Pursuant to Paragraph 4(b)(ii),

such actions further demonstrate that the Respondent has registered and used the

Domain Names in bad faith.

B. Respondent’s contentions

(i) Respondent does not dispute that the Complainant has registrations of the

trademark ROLEX.

(ii) Respondent asserts that the Domain Names are not identical

or confusingly similar to the trademark because a reasonable person would not

assume the Domain Names are actually being used or sponsored by Complainant. Typing

in the disputed names in an internet browser will take the interested party to

a website known as <spintopic.com>, which is clearly not a product of Rolex.

Respondent asserts that relief is not warranted by the fact that a domain name

merely incorporates certain trademarks along with other language unless a typical

consumer would be misled. Anyone capable of navigating his or her way to a website

on the internet can read what is on the site and make a determination as to whether

it is a manufacturer’s site created to promote certain products, or a site devoted

to useful consumer information. If any doubt exists, the reading of the disclaimer

at the Spintopic site would eliminate the doubt completely.

(iii) Respondent

asserts that it has rights to or legitimate interests in the Domain Names because

it is conducting a legitimate, consumer advocacy enterprise of benefit to the

general public, and has never demonstrated any ill will or engaged in unfair competition

with Complainant. Respondent argues that any use or intended use of the Domain

Names that does not compete with or disparage the business interests of Complainant

is legitimate. Citing Bally Total Fitness Holding Corp. v. Faber, 29 F.

Supp. 2d 1161 (C.D. Cal. 1998), the Respondent argues that a party is entitled

to use a website to comment on issues of public policy and what it considers to

be key consumer issues.

Respondent says it is engaged in consumer advocacy

and operates an internet website known as <spintopic.com>. Keying in the

Domain Names, along with numerous other addresses that have been registered by

Respondent, will direct an individual’s browser to <spintopic.com>. Spintopic

provides a variety of information to consumers on numerous products and the companies

that manufacture them and free forums for exchange of information on consumer

topics. Respondent has linked the Spintopic site to other sites of interest to

consumers. A visitor to the site can find tips on buying and pricing automobiles,

reach Better Business Bureaus, or read the latest updates from the Federal Consumer

Protection Agency. Thriving on visitors or "hits," the Spintopic site

tries to attract the largest volume of visitors by registering a wide variety

of names and resolving them to the Spintopic site.

Respondent also argues that even perfunctory preparations for the use of a

website have been sufficient to establish legitimate use (citing Maureen

A. Healy v. Andreas Kuhlen, Case

No. D2000-0698; Shirmax Retail Ltd. v. CES Marketing Group,

Inc., AF-0104; Lumena s-ka zo.o. v. Express Ventures Ltd.,

FA00030000094375 and Royal Bank of Canada v. Xross, AF-0133).

Respondent argues that there is more than an inkling of non-commercial use in

this dispute because it is actively operating a consumer-oriented web site.

Respondent

notes that it does not derive any financial benefit from activity at the Spintopic

site and has made no effort to divert customers from the Complainant. A clear

disclaimer appears on the home page that there is no relationship between the

site and any corporate entity other than the host.

(iv) Respondent denies

that it registered or used the Domain Names in bad faith. Paragraph 4(b) suggests

four types of evidence of bad faith registration, none of which apply:

Respondent

claims that there is no showing of bad faith based on Paragraph 4(b)(i) because

it did not offer or intend to sell the Domain Names to the Complainant or to others.

Respondent

argues that Paragraph 4(b)(ii) does not apply because the registration of the

Domain Names does not prevent the Complainant from reflecting the mark in a corresponding

domain name. It also has not engaged in a pattern of registering domain names

to prevent the trademark owner from reflecting the mark in a corresponding domain

name.

Respondent and Complainant are not business competitors and thus,

there is no evidence of bad faith based on Paragraph 4(b)(iii).

There is

no evidence of bad faith based on Paragraph 4(b)(iv) because Respondent is making

a fair, non-commercial use of the Domain Names.

6. Discussion

and Findings

Paragraph 15(a) of the Rules instructs the Panel as to

the principles the Panel is to use in determining the dispute: "A Panel shall

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."

Because both the Complainant and Respondent are domiciled in the United States

and United States courts have recent experience with similar disputes, to the

extent that it would assist the Panel in determining whether the Complainant

has met its burden as established by Paragraph 4(a) of the Policy, the Panel

shall look to rules and principles of law set out in decisions of the courts

of the United States. Tribeca Film Center, Inc. v. Lorenzo Brusasco-Mackenzie,

WIPO Case No. D2000-1772 (April 10, 2001),

n. 3.

Paragraph 4(a) directs

that the Complainant must prove each of the following:

(i) that the domain

name registered by the Respondent is identical or confusingly similar to a trademark

or service mark in which the Complainant has rights; and,

(ii) that the

Respondent has no legitimate interests in respect of the domain name; and,

(iii)

that the domain name has been registered and is being used in bad faith.

A.

The Domain Names are Confusingly Similar to Complainant’s Trademark

Complainant

has registrations for the trademark ROLEX. Respondent concedes the validity of

the ROLEX mark. Respondent claims, however, that the domain names are not confusingly

similar to that mark.

As numerous courts and prior ICANN panels have recognized, the incorporation

of a trademark in its entirety is sufficient to establish that a domain name

is identical or confusingly similar to the complainant’s registered mark. See

Paccar Inc. v. Telescan Technologies, L.L.C., 115 F. Supp. 772 (E.D. Mich.

2000) (finding that <peterbuilttrucks.com>, <kenworthtrucks.com>

and similar domain names are not appreciably different from the trademarks PETERBUILT

and KENWORTH); Quixtar Investments Inc. v. Dennis Hoffman, WIPO

Case No. D2000-0253 (May 29, 2000) (finding that QUIXTAR and <quixtarmortgage.com>

are legally identical). The addition of other terms in the domain names

does not affect a finding that the domain name is identical or confusingly similar

to the complainant’s registered trademark.

Contrary to the Respondent’s contention, the owner of the registered trademark

does not have to show "likelihood of confusion", as that term is used

in trademark infringement jurisprudence, to establish that a domain name incorporating

a trademark in its entirety is identical or confusingly similar for purposes

of this first factor. Under Paragraph 4(a)(i), the question of identity and

confusing similarity is evaluated solely based on a comparison between the complainant’s

trademark and the alphanumeric string constituting the domain name at issue.

See Magnum Piering, Inc. v. The Mudjackers and Garwood S. Wilson, Sr., Case

No. WIPO D2000-1525 (January 29, 2001). It thus is irrelevant, for purposes

of evaluating the first factor, whether consumers would avoid confusion by reviewing

the content of Respondent’s website.

The Domain Names

incorporate the famous ROLEX trademark in its entirety. The addition of the words

"watch" and "relojes" (the Spanish word for wristwatches),

generic terms that refer to the goods in connection with which the ROLEX trademark

is used, and "e", an oft-used prefix to designate electronic-based communication

and services, does nothing to change the fact that the Domain Names incorporate

the ROLEX mark. Therefore, the Panel finds that the Domain Names are identical

or confusingly similar to the ROLEX mark.

B. Respondent has no

Rights to or Legitimate Interests in the Domain Names

Paragraph 4(c)

provides three nonexclusive circumstances that can demonstrate that the Respondent

has rights to or legitimate interests in the Domain Names:

(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.

Paragraph 4(a)(ii) requires the Complainant to prove that the Respondent has

no rights to or legitimate interests in the Domain Names. Once a Complainant

establishes a prima facie showing that none of the three circumstances establishing

legitimate interests or rights apply, the burden of production on this factor

shifts to the Respondent to rebut the showing. The burden of proof, however,

remains with Complainant to prove each of the three elements of Paragraph 4(a).

See Document Technologies, Inc. v. International Electronic Communications,

Inc., WIPO Case No. D2000-0270 (June

6, 2000).

The Complainant has sustained its burden of proving that the Respondent lacks

rights to or legitimate interests in the Domain Names. Although Respondent asserts

that the Domain Names are being used to encourage consumer commentary on Rolex

and the Rolex brand, Respondent has failed to come forward with concrete evidence

of use of, or demonstrable preparations to use, the Domain Names in connection

with a bona fide offering of such services. See World Wrestling Federation

Entertainment, Inc. v. Ringside Collectibles, WIPO

Case No. D2000-1306 (January 24, 2001). Rather, the Panel

finds that the spintopic.com site is a pretext, designed solely to avoid a finding

of cybersquatting by inventing a purported fair use. Cf. National Hockey

League v. Daniel Krusz, WIPO Case No. D2001-0234

(April 4, 2001). The site makes no mention of Rolex watches or of any watches.

There has been no execution of any purported business plan or demonstrable preparations

to supply consumer information about Rolex watches. Thus, the Respondent’s assertion

that the site is intended for consumer information about these products is not

persuasive.

For similar reasons, the Panel finds that Respondent is not making a legitimate

noncommercial or fair use of the Domain Names. Respondent’s emphasis on the

fact that it does not use the Domain Names for commercial gain only establishes

that its use of the Domain Names is noncommercial, but does not establish legitimate

or fair use. Respondent’s contention that it has shown legitimate or

fair use because its website serves as a "consumer advocacy enterprise

of benefit to the general public" is undermined by the pretextual nature

of the Spintopic website and the absence of any information on the site related

to Rolex watches or watches in general. Furthermore, the diversion of internet

users to the website by the use of the Domain Names does not constitute fair

use if the Respondent is not using the website to which the Domain Names resolve

to provide commentary on Rolex watches. Cf. Chanel, Inc. v. Estco Technology

Group, WIPO Case No. D2000-0413 (September

18, 2000) (use of famous trademark in order to attract the public to the Respondent’s

web site is not fair use). Accepting the Respondent’s claim that its website

is legitimate use would mean that cybersquatters could rightfully acquire domain

names that incorporate famous trademarks by simply arranging for the domain

names to resolve to generic and largely empty websites with no information or

opportunities for commentary on the products known by the trademarks. As a policy

matter, the Panel declines to accept such a practice.

C. Respondent Registered and Used the

Domain Names in Bad Faith

Paragraph 4(b) sets forth four nonexclusive

criteria for the Complainant to show bad faith registration and use of domain

names:

(i) circumstances indicating that you have registered or

you have acquired the domain name primarily for the purpose of selling, renting,

or otherwise transferring the domain name registration to the complainant who

is the owner of the trademark or service mark or to a competitor of that complainant,

for valuable consideration in excess of your documented out-of-pocket costs directly

related to the domain name; or

(ii)

you have 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 you have engaged in a pattern of such conduct; or

(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 web site 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 web site or location or of a product.

As

noted above, the Policy expressly provides that the criteria are not exclusive.

Weighing the totality of the evidence, the Panel is persuaded that Respondent

registered and is using the Domain Names in bad faith, in violation of Paragraph

4(a)(iii).

First, the Panel finds that the Respondent acquired the Domain

Names primarily for the purpose of selling the registrations, which is an element

of bad faith under Paragraph 4(b)(i). Although the Respondent did not make an

offer to sell the Domain Names to the Complainant, a fair inference can be drawn

that the Respondent acquired the Domain Names as part of its broader "domain

name speculation" plan – a plan which was described by Steve Thumann, a principal

of Spider Webs, in E. & J. Gallo Winery v. Spider Webs, Ltd., 129 F.Supp.

2d 1033 (S.D. Tex. 2001). Thumann testified that the Respondent registered a domain

name incorporating a well known trademark (ERNEST AND JULIO GALLO) with the intention

of holding it as "real estate" and that the Respondent was in the business

of acquiring domain names incorporating famous trademarks or company names for

the purpose of selling them to the trademark owners at a profit. Gallo,

129 F.Supp. 2d at 1046. Significantly, the Respondent registered the first Rolex

domain name at around the same time that it registered the Gallo domain name (July

21, 1999 and August 26, 1999, respectively), thus making it a fair inference that

the Rolex domain name was registered as part of the same "real estate"

scheme.

The Respondent’s intent to register the Domain Names for the purpose

of selling them to the Complainant also can be inferred from its past practice

of cybersquatting, from the evidence demonstrating that the Spintopic website

is a pretext, and from Respondent’s bad faith registration of the second Rolex

Domain Name immediately after it received notice about the first Domain Name.

The

evidence also is sufficient to establish the necessary elements of bad faith under

Paragraph 4(b)(ii). Consistent with the "real estate" scheme described

in the Gallo case, the Respondent appears to have registered the Domain

Names to prevent the Complainant from registering these addresses and has engaged

in a pattern of registering domain names reflecting famous trademarks for a similar

purpose.

Respondent argues strenuously that the court’s findings in Gallo

are incorrect, and thus should be disregarded by the Panel. We reject that assertion.

Given the transcribed record in UDRP proceedings, it is fully appropriate for

the Panel to defer to relevant factual findings made by a court that has had the

benefit of a more developed record.

7. Decision

The

Panel concludes: (a) that the Domain Names <erolexwatches.com> and <relojesrolex.com>

are confusingly similar to Complainant’s registered trademark ROLEX; (b) that

Respondent has no rights or legitimate interest in the Domain Names; and (c) that

Respondent registered and used the Domain Names in bad faith. Therefore, pursuant

to Paragraph 4(i) of the Policy and Paragraph 15 of the Rules, the Panel orders

that the Domain Names be transferred to Complainant.

Richard

W. Page

Presiding Panelist

Paul M. DeCicco

Panelist

David

H. Bernstein

Panelist

Dated: July 2, 2001

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