Randan Corporation v. Rapazzini Winery

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Randan Corp. v. Rapazzini Winery

Case No. D2003-0353

1. The Parties

The Complainant is Randan Corp., a corporation existing under the laws of California,

with a place of business at Gilroy, California, United States of America. Complainant

is represented by Daniel R. Richardson of Richardson Intellectual Property Law,

P.C.

The Respondent is Rapazzini Winery, an entity with a place of business at Gilroy,

California, United States of America. Respondent is represented by Michael K. Bosworth

of Burns, Doane, Swecker & Mathis, LLP.

2. The Domain Names and Registrar

The domain names at issue are <garligarni.com> and <garlicgarni.com>.

The domain names are registered with Network Solutions, Inc. ("NSI").

3. Procedural History

The Complainant initiated this proceeding by filing a Complaint by email with

the World Intellectual Property Organization Arbitration and Mediation Center

(the "Center") on May 7, 2003. On May 9, 2003,

the Center received a hard copy of the Complaint. The Center verified that the

Complaint satisfied the formal requirements of the ICANN Uniform Domain Name

Dispute Resolution Policy (the "Rules") and the Supplemental Rules

for Uniform Domain Name Dispute Resolution Policy.

On May 8, 2003, the Center sent an email to NSI requesting a registrant verification

in connection with this case. On May 12, 2003, NSI sent an email to

the Center confirming that the Respondent is the registrant of the domain names.

On May 12, 2003, the Center formally commenced this proceeding. On May 31, 2003,

Respondent submitted its timely Response to the Complaint. On June 11, 2003,

after clearing for any potential conflicts, the Center appointed David H. Bernstein

as the Sole Panelist in this matter.

On June 16, 2003, the Panel issued Procedural Order No. 1, which

stated, in relevant part:

"Respondent asserts that Complainant consented to Respondent’s registration

of the <garligarni.com> and <garlicgarni.com> domain names (the

‘domain names’). Response, § III(C)(II); Declaration of Alex Larson (‘Larson

Decl.’), ¶ 5. If true, this fact is potentially dispositive because the Policy

requires that Complainant prove both bad faith registration and bad

faith use. E-duction, Inc. v. Zuccarini, WIPO Case

No. D2000-1369 (February 5, 2001); The Thread.com LLC. v. Poploff,

WIPO Case No. D2000-1470 (January 5, 2001).

If Complainant in fact consented to Respondent’s registration of the domain

names, Complainant cannot satisfy one of the prerequisites for transfer under

the Policy.

"Whether it is true remains to be determined. Because this is a new issue

raised for the first time in the Response, this fact was obviously not addressed

in the Complaint. Under the circumstances, the Panel determines that it is appropriate

to grant the Complainant an opportunity to address this issue. Investissement

Marius Saradar S.A.L. v. John Naffah, WIPO

Case No. D2000-0853 (November 22, 2000). Because Rule 5 contemplates

that a respondent will have the right to respond to a complaint, and because

Rule 10(b) directs the Panel to treat the parties with equality, the Panel concludes

that it is appropriate to give Respondent a right to respond to the Complainant’s

supplemental submission, if any. Pacific Fence & Wire Co v. Pacific Fence,

WIPO Case No. D2001-0237 (June 11, 2001).

"A related assertion in the Response is that Complainant granted Respondent

written permission to use Complainant’s trademark and logo in Internet advertising.

Larson Decl. ¶ 5. Respondent did not, however, attach a copy of that written

consent to its Response. The specific terms of this consent, if it exists, may

well have bearing on the disputed issues in this proceeding.

"Accordingly, the Panel issues the following request for supplemental

submissions:

• On or before June 18, 2003, Respondent shall submit a copy

of the written consent referenced in paragraph 5 of the Larson Declaration.

• On or before June 27, 2003, Complainant may submit a supplemental

submission addressing the factual assertion that Complainant consented to Respondent’s

registration of the domain names and the legal effect of any such facts.

• On or before July 7, 2003, Respondent may submit a supplemental

submission responding to the Complainant’s supplemental submission.

"Each party shall limit its supplemental submission to the specific request

and shall deliver its submission to the Center via email no later than 11 p.m.,

Greenwich Mean Time, on the due date, with a copy by email to the other party.

Exhibits, if any, not available in electronic form shall either be scanned and

sent with the email or shall be contemporaneously faxed to the Center and the

other party with hard copies to follow by overnight courier."

On June 18, 2003, Respondent submitted a statement declaring that the alleged

written consent referenced in ¶ 5 of the Larson Declaration had been destroyed

by water damage to Respondent’s office. On June 27, 2003, Complainant

submitted a statement denying that it ever consented to Respondent’s use of

the mark for purposes other than retail promotion. Complainant’s response included

declarations by Tom Reed and Caryl Simpson, both vice presidents of

Complainant. Respondent thereafter elected not to file any additional supplemental

submission.

4. Factual Background

Complainant, located in the self-styled "Garlic Capital of the World"

(see "www.gilroy.org"), produces and distributes garlic-based

products under its federally-registered "GARLIC FESTIVAL" trademark.

Complainant sells its products through wholesale distributors, operates a local

retail store, and offers its products online for purchase at "www.garlicfestival.com."

In 1985, Complainant began using the mark "GARLI GARNI" on its garlic

food seasoning labels. Since then, the Complainant has made continuous use of

the mark in commerce. Complainant registered "GARLI GARNI" as a trademark

with the state of California on July 12, 2001; it does not appear

to have applied for any similar registration at the federal level.

Respondent owns and operates a winery and tasting room, also in Gilroy. In

the tasting room, Respondent sells Complainant’s Garli Garni product line as

well as other garlic-based seasoning products. Respondent has sold the Garli

Garni products for years, purchasing the product both directly from Complainant

and indirectly. Currently, Complainant has terminated local distribution of

the Garli Garni product line to Respondent’s Gilroy stores but continues to

supply Respondent’s Garlic Shoppe stores in Monterey, CA and Bloomington, MN.

In addition, Respondent sells Complainant’s Garli Garni products on its

primary website, "www.garlicshoppe.com." In 1999, Respondent

registered and began use of the domain names in conjunction with its primary

website.

5. Parties’ Contentions

Complainant asserts that the <garligarni.com> domain name is identical

to its mark, "GARLI GARNI" Although it does not claim to have

trademark rights in the name "Garlic Garni," Complainant argues

that the <garlicgarni.com> domain name is confusingly similar to its GARLI

GARNI mark.

Complainant also claims that Respondent has no rights or legitimate interest

in the domain names because Respondent knew of Complainant’s use of the mark

for years preceding Respondent’s registration of the domain names. Complainant

argues that Respondent has used the domain names for the sole purpose of diverting

actual and potential customers to Respondent’s website for commercial gain.

Complainant further alleges that Respondent registered and used the domain

names in bad faith. According to Complainant, Respondent’s unauthorized use

of the Complainant’s "Garlic Festival" mark on its web page creates

a false commercial impression in the mind of the potential customer that they

have found Complainant’s site. This creates a likelihood of confusion with the

Complainant’s mark as to the source, sponsorship, affiliation, or endorsement

of the Respondent’s website.

Finally, in its supplemental submission, Complainant denies Respondent’s assertion

that, shortly after the domain names were registered, Respondent offered to

transfer the domain names at no cost to the Complainant. To the contrary, Complainant

avers that it never was offered transfer and that it never consented to the

registration of the domain names by Respondent.

In its defense, Respondent argues that, although the <garligarni.com>

domain name is identical to Complainant’s mark, the <garlicgarni.com>

domain name is not. Rather, Respondent states, that domain name is a combination

of the generic words "garlic" and "garni" (French for garnish)

and, therefore, is merely descriptive of garlic garnishes.

Respondent also asserts that it has rights or a legitimate interest in the

domain names because Respondent is using the domain names to sell and promote

genuine Garlic Festival products. Under the principle of exhaustion of rights,

Respondent claims that it is permitted to make use of the domain names to advertise

the brand name and manufacturer of products that the Respondent sells at retail.

Respondent claims that it does not divert Complainant’s customers because Respondent

sells bona fide Garlic Festival products produced by Complainant.

Finally, Respondent denies that it has registered and used the domain names

in bad faith. As noted above, Respondent alleges that, shortly after it registered

the domain names, it offered the domain names to Complainant at no cost, but

that Complainant refused Respondent’s good faith offer. Contrary to Complainant’s

assertions, Respondent claims that Complainant expressly consented to Respondent’s

use of the domain names to sell Garli Garni products. Further, Respondent asserts

that it did not register the domain names primarily for the purpose of selling,

renting, or transferring them to Complainant or a competitor, but rather for

the sole purpose of promoting its retail sale of Complainant’s Garli Garni products.

6. Discussion and Findings

In order to succeed in its claim, Complainant must demonstrate that all of

the following elements in Paragraph 4(a) of the Policy have been satisfied:

1. The domain names are identical or confusingly similar to a trademark or

service mark in which the Complainant has rights;

2. Respondent has no rights or legitimate interests with respect to the domain

names; and

3. The domain names have been registered and used in bad faith.

The Complainant must carry its burden of proof by a preponderance of evidence.

Bootie Brewing Co. v. Ward, WIPO Case No. D2003-0185

(May 28, 2003).

A. The Domain Names are Identical or Confusingly Similar to Complainant’s Trademark

Respondent does not contest Complainant’s ownership of the trademark GARLI GARNI[1].

Nor does it contest that <garligarni.com> is identical to the Complainant’s

trademark. Thus, the only question for resolution is whether the <garlicgarni.com>

domain name is confusingly similar to Complainant’s mark.

Respondent challenges this similarity on the ground that <garlicgarni.com>

is a combination of two generic words - garlic and garni - and therefore that

the domain name is descriptive of garlic garnishes. That argument misses the

point. The descriptiveness of the domain name, if any, may be relevant to the

question of whether Respondent is making a fair use or otherwise has a legitimate

interest in the name. It is not, however, germane to the question of whether

the domain name and the trademark share sufficient similarity as to satisfy

this threshold question. See generally Wal-Mart Stores, Inc. v. MacLeod,

WIPO Case No. D2000-0662 (September 19, 2000);

cf. Schouten Industries B.V. v. Canadian Soylife Health Co., NAF Claim

No. FA0303000149188 (July 19, 2003).

When analyzed under the proper standard, it is clear that <garlicgarni.com>

is so close to the GARLI GARNI trademark as to easily satisfy this first element.

The only relevant difference between the mark and the domain name is the addition

of a single letter. That letter, Respondent concedes, is one that consumers

are likely to mistype if they mistakenly think the product is called "Garlic

Garni" rather than "Garli Garni." Under well-settled principles,

such efforts to capture Internet users who may mistype the domain name are more

than sufficient to prove confusing similarity. Cf. Shields v. Zuccarini,

254 F.3d 476 (3d Cir. 2001) (<joescartoons.com>,

<joecarton.com>, <joescartons.com>, <joescartoon.com>, and

<cartoonjoe.com> are all confusingly similar to <joecartoon.com>);

Compaq Info. Tech. Group, L.P. v. Jones, NAF File No. 99091 (October 4, 2001),

(<compaqq.com> is confusingly similar to "Compaq" trademark);

Oxygen Media, LLC v. Primary Source, WIPO

Case No. D2000-0362 (June 19, 2000), (<oxygen.com>, with

a zero rather than the letter "o," is confusingly similar to "Oxygen"

trademark).

Accordingly, Complainant easily sustains its burden of proof on this first

factor.

B. Respondent Does Not Have a Legitimate Interest in the Domain Names

Although a closer question, Complainant also has satisfied the second element

of the Policy.

Respondent forcefully argues that it has a legitimate interest in these domain

names because it is using them to sell Complainant’s own GARLI GARNI product.

It thus seeks to take advantage of the safe harbor provided by paragraph 4(c)(i)

of the Policy, which provides that a use is legitimate if, prior to commencement

of the dispute, Respondent used the domain names in connection with a bona

fide offering of goods or services.

In this case, it is undisputed that Respondent was and remains an authorized

distributor of Complainant’s goods. There remains, however, a question as to

whether Respondent’s offerings can be characterized as bona fide. That

issue has been explored by numerous prior panels, which have articulated a series

of requirements in order for a reseller’s use to be deemed legitimate. See generally

Oki Data Americas, Inc. v. ASD, Inc., WIPO

Case No. D2001-0903 (November 6, 2001). Those include, at the

minimum, the following:

• Respondent must actually be offering the goods or services at issue.

E.g., World Wrestling Federation Entertainment, Inc. v. Ringside Collectibles,

WIPO Case No. D2000-1306 (January 24, 2001).

• Respondent must use the site to sell only the trademarked goods; otherwise,

it could be using the trademark to bait Internet users and then switch them

to other goods. Nikon, Inc. v. Technilab, WIPO

Case No. D2000-1774 (February 26, 2001), (use of Nikon-related

domain names to sell Nikon and competitive cameras not a legitimate use); Kanao

v. J.W. Roberts Co., CPR Case No. 0109 (July 25, 2001) (bait

and switch is not legitimate).

• The site must accurately disclose the registrant’s relationship with

the trademark owner; it may not falsely suggest that it is the trademark owner,

or that the website is the official site, if, in fact, it is only one of many

sales agents. See, e.g., Houghton Mifflin Co. v. Weatherman, Inc., WIPO

Case No. D2001-0344 (June 14, 2001), (no bona fide offering

where website’s use of Complainant’s logo, and lack of any disclaimer, suggested

that website was the official Curious George website).

• The Respondent must not try to corner the market in all domain names,

thus depriving the trademark owner of reflecting its own mark in a domain name.

Magnum Piering, Inc. v. Mudjackers, WIPO

Case No. D2000-1525 (January 29, 2001), ("a single distributor

is extremely unlikely to have a legitimate interest in precluding others from

using numerous variants on a mark").

Based on the screen shots Respondent itself has submitted, the Panel finds

Respondent’s use cannot be deemed bona fide. That is because Respondent

has not used the domain names to sell only Complainant’s trademarked goods;

rather, Respondent has used the domain names to offer an array of competitive

products for sale. There can be no justification for using the Complainant’s

trademark as a domain name to lure users to the site, and then offer those consumers

products that directly compete with the GARLI GARNI products. Nikon, Inc.,

supra.

An even closer question is presented by the domain name <garlicgarni.com>.

If consumers came to this site to find generic garlic garnishes, the offering

for sale of numerous competitive products could well be legitimate, and the

use of that descriptive domain name could be determined fair. See Commerce

LLC v. Hatcher, NAF File No. FA0203000105749 (April 9, 2002).

Once again, though Respondent’s own submission is determinative. In paragraph

5 of Respondent’s Larson Declaration, Mr. Larson explains that he secured

this domain name because "so many of our customers refer to [Complainant]’s

products as "Garlic Garni." Thus, in registering and using the <garlicgarni.com>

domain name, Respondent’s intent was not to register a generic term for garlic

garnish products, but rather, to specifically capture those consumers who erroneously

refer to Complainant’s GARLI GARNI products as GARLIC GARNI. In light of this

testimony, Respondent’s use of <garlicgarni.com> cannot be considered

fair or legitimate.

C. Respondent Has Registered and Used the Domain Names in Bad Faith

As noted in the Panel’s Procedural Order No. 1, to sustain its burden of proof

with respect to the final element, Complainant must show that Respondent registered

and used the domain names in bad faith. The Panel concludes that

Complainant has met that burden.

Respondent concedes that it registered the domain names in 1999, knowing that

Complainant produced and sold garlic-based products under the mark GARLI GARNI,

without prior consultation of the Complainant. Respondent appears to recognize

that such registration, if done without consent, would have been problematic

when it states that, shortly after procuring these registration, it specifically

asked Complainant for consent and offered to transfer the domain names to Complainant.

Larson Decl. ¶ 5.

In light of Respondent ‘s own testimony, it is clear that, at the time of registration,

Respondent lacked permission. A hotly disputed issue, though, is whether Complainant

subsequently endorsed Respondent’s ownership of these domain names. Respondent,

through Mr. Larson, says it offered to transfer the names at no cost, but

that Complainant declined and in fact consented to Respondent’s use; Complainant,

in contrast, vehemently insists that it never was offered transfer of the domain

names, never consented to Respondent’s use of the domain names, and, in fact,

did not know of Respondent’s ownership of these domain names until years later.

Dueling declarations of this type pose a unique problem in proceedings under

the Policy given the lack of discovery, cross-examination and live testimony

at which credibility determinations can be made. Tribeca Film Center, Inc.

v. Lorenzo Brusasco-Mackenzie, WIPO Case

No. D2000-1772 (April 10, 2001). The Panel must nevertheless do

the best it can to resolve the disputed facts on the paper record. Bootie Brewing

Co., supra. If, because of these inherent limitations, the Panel gets it

wrong, the parties still are free to pursue their dispute in court, where all

of the procedural protections missing from the proceedings under the Policy

are available. Policy ¶ 4(k).

In this case, the evidence tends to support Complainant’s version of the events

– that is, that Complainant was never asked and never consented to Respondent’s

registration of these domain names. First, though Mr. Larson claims that

his conversation with Tom Reed and Carol Simpson was witnessed by Jon and

Zondra Rapazzini, Mr. and Mrs. Rapazzini’s declarations

are too conclusory to be of any evidentiary value. Rather than provide factual

support for Mr. Larson’s assertions, they simply state: "The events

as Alex Larson has sworn on his Declaration dated May 27, 2003, are

true and accurate." That statement is demonstrably over broad, as some

of the statements in Mr. Larson’s declaration reflect his own actions,

and thus it is highly dubious that Mr. and Mrs. Rapazzini have sufficient

personal knowledge to affirm that every statement in his declaration is true.

Moreover, Mr. and Mrs. Rapazzini offer no basis for even their

conclusory statement – they do not, for example, state that they witnessed the

discussion between Messrs. Larson and Reed and Ms. Simpson,

nor do they recount their recollection of what was said. Accordingly, the Panel

disregards the Rapazzini declarations.

In contrast, Complainant has submitted detailed, credible declarations. Not

only do Mr. Reed and Ms. Simpson recount the specific events and deny

having consented to the registration, but they also provide persuasive reasons

why they never would have consented had they been asked. Mr. Reed, for

example, explains that, because of his background in advertising, he is sensitive

to the need to protect trademarks, and thus would not have allowed one retailer

to own a domain name incorporating his company’s trademark. Moreover, Mr. Reed

recounts how he first learned of Respondent’s registration through a consumer

comment – a fact that further undermines any suggestion that he had earlier

knowledge of Respondent’s registration and use of the domain names. Finally,

both Mr. Reed and Ms. Simpson specifically state that they never had

any contact with Mr. and Mrs. Rapazzini.

The Panel thus finds, on this record, that Complainant’s version of the events

leading to this dispute are more credible than Respondent’s. With that as the

factual predicate, a finding of bad faith flows naturally. Respondent’s conduct

is on all fours with Policy paragraph 4(b)(iv), which provides that a Complainant

can prove bad faith by showing that Respondent "intentionally attempted

to attract, for commercial gain, Internet uses to [its] website . . . by creating

a likelihood of confusion with the complainant’s mark as to the source, sponsorship,

affiliation or endorsement of [its] website." In light of the evidence,

that appears to have been Respondent’s intent from the start.

7. Decision

Complainant has met its burden of proof under Paragraph 4 of the Policy. The

domain name <garligarni.com> is identical, and the domain name <garlicgarni.com>

is confusingly similar, to Complainant’s GARLI GARNI trademark, Respondent lacks

a legitimate interest in those domain names, and Respondent has registered and

used the domain names in bad faith. Accordingly, the Panel concludes that the

domain names at issue should be transferred to the Complainant.

David H. Bernstein

Sole Panelist

Dated: July 28, 2003

1. The Panel notes that Complainant relies,

in part, on a California state registration to establish its trademark rights.

Unlike a federal trademark registration, a state registration may not deserve

a presumption of validity. That is because, unlike the thorough examination

process at the U.S. Patent and Trademark Office, applications for state trademark

registrations are subject to only minimal, if any, review. In this case, though,

Complainant also has alleged continuous use of the mark since 1985, which is

more than sufficient to establish common law trademark rights.