Sights on Service, Inc. v. The Secret Shopper Company

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Sights on Service Inc. v. The Secret Shopper Company

Case No. D2003-0415

1. The Parties

The Complainant is Sights on Service, Inc. ("SOS"), of Minnesota,

United States of America, represented by Cooley Godward LLP, of United States

of America ("USA").

The Respondent is The Secret Shopper Company, of Georgia, United States of

America, represented by Powell, Goldstein Frazer & Murphy LLP, of United

States of America.

2. The Domain Name and Registrar

The disputed domain name <secretshoppercompany.com> (the "Domain

Name").

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

3. Procedural History

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

SOS’s Complaint by email on May 29, 2003, and in hard copy on June 4, 2003.

On May 29, 2003, the Center transmitted by email to the Registrar a request

for registrar verification in connection with the Domain Name at issue. On June

4, 2003, the Registrar transmitted an email to the Center containing its verification

response confirming that (1) the Domain Name was registered through it; (2)

Respondent is the current registrant of the Domain Name; (3) the Organization

and Administrative Contact for the Domain Name is as stated above; (4) the Uniform

Domain Name Dispute Resolution Policy applies to the Domain Name; and (5) the

Domain Name is active. After notices of Complaint Deficiency, the final Amendment

to the Complaint was received by email on June 20, 2003 and in hard

copy on June 23, 2003. 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 June

23, 2003. The Center received the Response by email on July 13, 2003, and in

hard copy on July 16, 2003.

The Center appointed Michael A. Albert as the sole panelist in this matter

on July 28, 2003. 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

SOS’s Complaint alleges that its SECRET SHOPPER mark is a distinctive, federally-registered

trademark that is famous in the mystery shopping industry. Mystery shopping

refers to the commonplace practice among certain retailers of goods or services

of sending someone to the retailer’s locations, on an anonymous or undercover

basis, to make purchases like an ordinary customer, in order to monitor or evaluate

the service, employee performance, or other aspects of the shopping experience.

SOS alleges that it has invested a significant percentage of its revenue in

advertising and promotion. SOS’s federal registration in the United States for

its SECRET SHOPPER trademark predates the registration of the Domain Name at

issue here.

SOS, which conducts business on the Internet at www.secretshopper.com, alleges

instances of actual confusion as a result of Respondent’s use of the Domain

Name and attaches several misdirected emails as evidence of confusion in Exhibit

E to the Complaint.

The Respondent alleges that the mark SECRET SHOPPER is generic within the mystery

shopping industry and that as a result of the generic nature of the mark Complainant

cannot satisfy its burdens as required under the Policy. Respondent attaches

a voluminous set of materials in support of its assertion that SECRET SHOPPER

is a generic mark.

5. Parties’ Contentions

A. Complainant

SOS asserts as follows:

• The registered SECRET SHOPPER mark is well known and famous in the mystery

shopping industry.

• The disputed Domain Name <secretshoppercompany.com> is identical to

the trademark SECRET SHOPPER and confusingly similar to SOS’s website "www.secretshopper.com".

• Complainant has made substantial commercial use of the SECRET SHOPPER mark

prior to Respondent’s registration of the Domain Name.

• Respondent is not a licensee and therefore has no legitimate interest in

the Domain Name or in the SECRET SHOPPER mark.

• Respondent registered and is using the Domain Name in bad faith.

• Respondent’s use of the Domain Name has resulted in actual confusion.

B. Respondent

Respondent The Secret Shopper Company asserts as follows:

• The mark SECRET SHOPPER is a descriptive and generic term, in both the general

lexicon and in the mystery shopping industry, used to refer to a person hired

by a retailer to anonymously monitor the retailer’s employees.

• The mark SECRET SHOPPER was originally used in the mystery shopping industry

several years before it was registered by Complainant.

• There can be no confusing similarity with the Domain Name <secretshoppercompany.com>

as the mark SECRET SHOPPER is generic and therefore not source identifying.

• Respondent has legitimate rights in the Domain Name as it legitimately operates

under the name "The Secret Shopper Company."

• Respondent has not registered or used the Domain Name in bad faith.

C. Jurisdictional Basis

As stated, the Registrar verified that the Policy applies to the Domain Name.

In accordance with the Policy, the Rules, and the Supplemental Rules, the Panel

has jurisdiction to decide this dispute.

6. Discussion and Findings

Paragraph 4(a) of the Policy provides that Complainant must prove, with respect

to the Domain Name, each of the following:

(i) The Domain Name is identical or confusingly similar to a trademark 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. Domain Name Identical to Trademark

Complainant owns a federal registration for the mark SECRET SHOPPER. The Domain

Name in dispute is <secretshoppercompany.com>. There is no dispute that

the Domain Name is identical to the asserted mark with the addition of the word

"company" at the end. It is well established in U.S. trademark law

that the addition or deletion of the corporate designation "company"

does not alter or eliminate the likelihood of confusion between two confusingly

similar trade names or marks. Cf. General Electric Co. v. Forddirect.com,

Inc., WIPO Case No. D2000-0394 (June 22, 2000)

(addition of generic term "direct" does not alter the confusing similarity

of domain name to mark). Accordingly, Respondent’s addition of the term "company"

does not distinguish the Domain Name from Complainant’s mark.

While it could be argued that, if the mark were deemed generic (an issue discussed

further below), Complainant could not own any trademark rights in it, the Panel

need not reach or resolve that issue in the context of establishing this first

element of Paragraph 4(a), as it is more relevant to the second, and perhaps

third, elements. For present purposes, Complainant’s ownership of a federal

registration suffices to give it standing to proceed with this dispute.

B. Respondent’s Rights In the Domain Name

Next, Complainant must show that Respondent lacks any rights or legitimate

interest in the Domain Name.

Respondent has put forth evidence that it is a legitimate business which has

operated under the name "The Secret Shopper Company" for several years.

(Response at Paragraph 52). Respondent has also shown that it is using the Domain

Name in connection with a bona fide offering of goods or services and is doing

so without intent to misleadingly divert consumers or to tarnish the trademark

at issue.

Complainant’s position is that Respondent’s use of this business name is improper

because it infringes Complainant’s trademark rights, and that Complainant has

not granted Respondent a license. While the Panel accepts the Complainant’s

representation that the Respondent does not have a license to the SECRET SHOPPER

mark, this fact alone is not dispositive of whether Respondent’s use of the

mark in its business has been legitimate. Respondent contends that the mark

is not strong enough to render a use by others in a similar industry ipso facto

unfair and illegitimate. Respondent further contends that the mark is generic

and thus unable to function as a trademark at all, but rather freely available

for others to use.

The Panel finds that Respondent’s use of the mark in its business was legitimate.

The mark, if not generic, is at least sufficiently descriptive and weak so as

to undermine Complainant’s contention that Respondent’s use of it as part of

a business name is ipso facto improper.

The Complainant has demonstrated that it has an incontestable federal registration

in the mark SECRET SHOPPER for business consulting services, namely evaluation

of customer service. See Exhibit D to Complaint. However, not every trademark

registration precludes the possibility of another party’s making legitimate

use, in a particular business, of the trademark. Moreover, an incontestable

registered trademark will be deemed abandoned if it becomes generic. 15 U.S.C.

§ 1064(3), 1065(4) [1].

Under the trademark law of the United States, a federal registration is generally

entitled to a strong presumption that the term is not generic. See 2

J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition (4th

ed.), § 12:12 [2]. In light of that presumption,

as well as the inherently limited scope of evidentiary presentations under the

Policy, it is not the place of this Panel to make a binding determination as

to genericness. Indeed, the genericness argument was raised for the first time

in a Response to which Complainant has had no opportunity to respond. Because

a full-scale adversary presentation of evidence relating to this issue may be

required prior to a determination by a court of competent jurisdiction as to

whether the presumption of trademark validity has been overcome, nothing herein

should be deemed a full or final adjudication of that issue.

i. Parties’ Assertions

Complainant alleges that the mark SECRET SHOPPER is an indicator of source

in the mystery shopping industry while the term "mystery shopper"

is used as a generic term. In support of this Complainant offered:

1) its 1991 federal registration of the mark (Exhibit D to the Complaint);

2) the absence of other live U.S. trademark registrations or applications using

the term "secret shopper" (though the Panel notes three dead intent-to-use

applications);

3) Complainant’s twelve years using the registered mark;

4) Complainant’s investments in advertising and promotion; and

5) Complainant’s use of the domain name <secretshopper.com>.

Respondent counters with the assertion that the mark SECRET SHOPPER is a generic

term and offers in support:

1) evidence of generic use of "secret shopper" by someone other than

the Complainant dating as early as 1983 (Exhibit A to the Response);

2) examples from third party commercial websites which use "mystery shopper"

and "secret shopper" in a generic, interchangeable manner (Exhibit

D to the Response);

3) examples from third party media websites which use "mystery shopper"

and "secret shopper" in a generic, interchangeable manner (Exhibit

E to the Response);

4) the first 150 results from a Google search of "secret shopper"

(out of an asserted several thousand) the majority of which use the term "secret

shopper" as a generic term to describe undercover shopping and customer

service evaluation (Exhibits F and G to the Response); and

5) a list of third party mystery shopping websites at domain names using the

term "secret shopper" (Exhibits F and H to the Response) including:

<secretshopper.net> and <secretshopnet.com>,

<secretshoppers.com>,

<secret-shoppers.com>,

<onestopsecretshopper.com>,

<secretshopperrewards.com>, and

<secret-shopper-jobs.974.us>.

ii. Findings Regarding Legitimacy of Respondent’s Use of Mark.

While it is ultimately the Complainant’s burden to prove each of the three

elements of Paragraph 4(a), its holding of an incontestable federal registration

for the mark entitles it to a presumption that the mark is valid and not generic.

This presumption shifts the burden of proof of genericness onto Respondent.

McCarthy, § 12:29.

Respondent has submitted a voluminous annex of exhibits in support of a finding

of genericness – approximately 200 pages of materials which demonstrate considerable

use of "secret shopper" as synonymous with "mystery shopper."

Respondent’s annex includes cited uses such as:

- "Mystery Shoppers are known as Secret Shoppers, Service Evaluators,

Consumer Researchers, Customer Service Researchers, or Market Research / Evaluators."

(from "www.justshop.org", website of the National Center for Professional

Mystery Shoppers and Merchandisers)

- A Business Week article from 1983 noting the existence of "secret shoppers"

used to patrol Pathmark stores. Retailing May Have Overdosed On Coupons,

Business Week, June 13, 1983, at 149.

- Dozens of printouts of other third-party commercial websites which refer

to "secret shopper programs" or "being a secret shopper"

(e.g. "www.a-closer-look.com", "www.ucountonus.com",

"www.pedge.com", "www.majesticimpressions.com/shopper.htm",

etc.).

- Numerous media articles which use "secret shopper" as a generic

term to describe undercover shopping services.

- Hundreds of search engine results which use "secret shopper" as

a generic term to describe undercover shopping services.

The Panel need not, and does not, resolve the question of whether the mark

is generic. The Panel finds, however, that Respondent’s evidence creates a legitimate

question as to whether the term "secret shopper" is associated in

the minds of the public with the type of service provided by undercover customer

service evaluators, rather than with any one such service provider. At the very

least, the mark does not appear strong enough to warrant a conclusion that Respondent’s

seemingly bona-fide use of it over the past several years in connection with

a business in the "mystery shopping" field should be deemed illegitimate.

Accordingly, pursuant to Paragraphs 4(c)(ii) and (iii) of the Policy the Panel

finds that the Complainant has failed to prove that Respondent has no legitimate

rights in the Domain Name.

C. Registration and Use In Bad Faith

Finally, Complainant bears the burden of proving that the Domain Name was registered

and used in bad faith. Paragraph 4(b) of the Policy sets out four non-exclusive

factors that should be considered when determining registration and use in bad-faith:

(i) registration primarily for the purpose of selling the Domain Name,

(ii) registration in order to prevent the trademark owner from using the Domain

Name,

(iii) registration primarily for the purpose of disrupting a competitor’s business,

and

(iv) registration for intentional creation of likelihood of confusion.

Here, the Panel finds that the Complainant has shown none of the above categories

of bad faith, nor has it demonstrated any other facts which would support a

finding of registration and use in bad faith. Although Complainant does offer

some evidence of actual confusion by way of misrouted emails, these are insufficient

to conclude that Respondent has been operating its business under the Domain

Name in bad faith.

Additionally, the existence of a federal registration of a mark is insufficient

to show constructive notice of the mark if that mark is generic or even weakly

descriptive. See Ciphergen Biosystems v. David Sabatini, WIPO

Case No. D2002-0600 (September 12, 2002) (descriptive mark not

entitled to presumption of notice). As there is no evidence in the record that

Respondent had actual notice of Complainant’s mark, the Panel cannot find that

Respondent knew of, or should have known of, Complainant’s mark. Nor, even if

Respondent had (or should have had) such knowledge, has its usage of the Domain

Name been shown to rise to the level of bad faith, as might have been the case

if there were more persuasive evidence of the strength or fame of Complainant’s

alleged mark.

In sum, Complainant has failed to meet its burden of proving bad faith registration

and use.

7. Decision

In light of the above findings, the Panel decides that Complainant has failed

to meet the second and third elements of Paragraph 4(a) of the Policy. Complainant

has not shown that Respondent lacks legitimate rights in the Domain Name or

that Respondent registered and used the Domain Name in bad faith. Accordingly,

the Panel decides that the Domain Name <secretshoppercompany.com> shall

remain with the Respondent.

Michael A. Albert

Sole Panelist

Dated: August 23, 2003

Footnotes:

1. A generic mark is a description of a product

or service that cannot be used to indicate origin. McCarthy, §12:1. For

example the word SOAP cannot be used as a trademark to designate that the cleaning

product comes from a particular manufacturer, nor can the term CARPET CLEANERS

be used as a service mark to indicate the source or origin of carpet cleaning

services. Generic marks describe what a service is, not who is

providing the service.

2. McCarthy is a leading and frequently-cited

treatise on trademark practice.