Colmer USA, Inc.; Creative Nail Design, Inc. v. Creative Nails

WIPO Arbitration

and Mediation Center

ADMINISTRATIVE

PANEL DECISION

Creative Nail Design, Inc. and Colomer USA, Inc. v. Creative Nails, c/o E Designers Ltd.

Case No. D2006-0873

1. The Parties

The Complainants are Creative Nail Design, Inc., Vista, California, United States of America, and Colomer USA, Inc., Jacksonville, Florida, United States of America, represented by Sarah Grosse, United States of America.

The Respondent is Creative Nails, c/o E Designers Ltd., London, United Kingdom

of Great Britain and Northern Ireland.

2. The Domain Names and Registrar

The disputed domain names <creative-nails.com> and <creativenails.com>

are registered with Go Daddy Software.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on July 10, 2006. On July 11, 2006, the Center transmitted by email to Go Daddy Software a request for registrar verification in connection with the domain names at issue. On July 12, 2006, Go Daddy Software 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 July 14, 2006. In accordance with the Rules, paragraph 5(a), the due date for Response was August 3, 2006. The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on August 4, 2006.

The Center appointed Christopher J. Pibus as the sole

panelist in this matter on August 16, 2006. 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 Complainants have been operating a business providing goods and services to nail care professionals, including artificial nails, manicures, pedicure applications, hand and foot beautification, and spa applications since 1979. The business was founded in California, where Complainants built and continue to operate a substantial research and development facility. The Complainants’ nail care products are distributed and sold all over the world. The Complainants also provide training services to nail care professionals via its Creative Nail Academy and Master Technician programs. The reputation of the Complainants’ products and services has been enhanced through endorsement and use by celebrities at events, such as the Academy Awards, Emmys, Grammies and Sundance Film Festival. Promotional features for the Complainants’ products and services have appeared in magazines such as In Style, Cosmopolitan, Family Circle, Glamour, Redbook, Oprah, Shape and Modern Bride.

The Complainants own a European Union Trademark Registration for the C CREATIVE NAIL DESIGN mark, under Registration Number 001473990. The Complainants also own sixty (60) trademarks worldwide for:

CREATIVE NAIL DESIGN

CREATIVE NAIL ACADEMY

CREATIVE NAIL DESIGN and Design (Lady)

CREATIVE NAIL DESIGN SYSTEMS

CREATIVE NAIL DESIGN SYSTEMS AND C (stylized)

C CREATIVE NAIL ACADEMY & Device

C CREATIVE NAIL DESIGN PERFORMANCE FORMS

C CREATIVE NAIL DESIGN RADICAL SOLARANIL LIQUID

C CREATIVE NAIL DESIGN RADICAL SOLARNAIL (stylized)

The Complainants registered the domain names <creativenaildesign.com> on November 6, 1996 and <creativenail.com> on June 25, 1997. The Complainants’ domain names have been used in commerce since 1996 and 1997 in connection with nail care products and services.

In Ireland, the Complainants have used their CREATIVE NAIL DESIGN trademarks in connection with artificial and natural nail care products since as early as 1999, and on the internet since 1996. The Complainants have a sub-distributor in Ireland trading under the name Creative Nail Academy.

The Respondent registered its <creativenails.com> domain name on August 6, 2001 and its <creative-nails.com> domain name on July 26, 2002. At the date of the Complaint, the Respondent was operating a website providing links to competitors’ products and websites.

The Complainants filed a Plenary Summons and General

Endorsement of Claim (“the Irish Claim”) in the High Court of Ireland

against the Respondent on July 22, 2003. The litigation involves claims for

trademark infringement and passing off arising out of the Respondent’s

operation of websites under the domain names in dispute in this Complaint. Difficulties

were encountered in effecting service of the Irish Claim, and substituted service

was permitted against one of the principals of the Respondent. The Irish Claim

remains pending and unresolved, although Complainants have offered to settle

the case simply for the transfer of the domain names.

5. Parties’ Contentions

A. Complainant

(a) Identical or Confusingly Similar

The domain names <creativenails.com> and <creative-nails.com> are virtually identical to the Complainants’ mark C CREATIVE NAIL DESIGN, differing only by the addition of the letter “s” and the addition of a hyphen between the words “creative” and “nails”. The addition of the letter “s” and hyphen do not serve to distinguish the domain names from the Complainants’ mark in any meaningful way.

(b) Rights or Legitimate Interests

The Respondent has no rights or legitimate interest in respect of the domain names <creativenails.com> and <creative-nails.com>. The Complainants own a European Union trademark registration for the mark C CREATIVE NAIL DESIGN and sixty (60) other trademarks worldwide containing variations of the words CREATIVE NAIL (“the Creative Nail Trademarks”). The Complainants’ rights in the Creative Nail Trademarks and the domain names <creativenail.com> and <creativenaildesign.com> predate the Respondent’s corresponding domain names <creativenails.com> and <creative-nails.com> by many years. The Respondent does not own any trademark or intellectual property rights in the Creative Nail Trademarks. The Complainants have never authorized, licensed, or permitted the Respondent to use their trademarks. The Complainants further contend that the Respondent is engaging in typosquatting, relying on mistakes made by internet users to direct internet traffic intended for the Complainants’ website to the Respondent’s site.

(c) Registered and Used in Bad Faith

The Respondent’s domain names were registered and are being used in bad faith based on the following factors: (i) disrupting the business of a competitor by diverting traffic through confusion; (ii) diverting traffic through confusion for monetary gain by offering links to other competing nail care and beauty product sites; (iii) knowledge of the Complainants’ long and continuous use of the Creative Nail Trademarks at the time of registration and that the Respondent had no right, title or interest, whatsoever, in the mark or domain names; (iv) the diverting of traffic through confusion for monetary gain by intentional copying of the Complainants’ look of its website and products; and (v) typosquatting.

B. Respondent

The Respondent did not reply to the Complainant’s

contentions.

6. Discussion and Findings

Co-Pending Litigation

There is a pending proceeding before the High Court in Ireland filed under Record No. 2003/8682P against the Respondent. This litigation involves several claims, by the including trademark infringement, passing off, damages and accounting of profits. The litigation also seeks the transfer of the ownership of the domain names <creativenails.com> and <creative-nails.com>.

Paragraph 18 of the Rules for Uniform Domain Name Dispute Resolution Policy provides as follows:

“18. Effect of Court Proceedings

(a) In the event of any legal proceedings initiated prior to or during an administrative proceeding in respect of domain name dispute that is the subject of complaint, the Panel shall have the discretion to decide whether to suspend or terminate the administrative proceeding, or to proceed to a decision.”

It is relatively common for domain name disputes to involve co-pending court

proceedings, and relatively rare for panels to suspend or terminate the administrative

proceedings in the absence of compelling circumstances. In the present case,

the evidence strongly suggests that the Respondent has attempted to delay the

process of resolution, by ignoring repeated cease-and-desist letters, and by

evading service. The Panel is also mindful of the fact that actual confusion

has been occurring as a result of the Respondent’s activities, thereby

increasing the need for effective and timely remedies. Finally, it is noted

that the parties retain their ability to continue to seek relief through the

Courts, if dissatisfied with the Panel’s decision. (see Western Holdings,

LLC v. JPC Enterprises, LLC d/b/a Cutting Edge Fitness and d/b/a Strivectin

SD Sales & Distribution, WIPO Case

No. D2004-0426; Weber-Stephen Products Co. v. Armitage Hardware, WIPO

Case No. D2000-0187; Cognigen Netowrks, Inc. v. Pharmaceutical Outcomes

Research a/k/a Cognigen Corporation, WIPO

Case No. D2001-1094; AB SKF and SKF Beaings India Limited v. Vikas Pagaria,

WIPO Case No. D2001-0867; and Fadesa

Inmobiliaria, S.A. v. Flemming Madsen, WIPO

Case No. D2001-0570).

In the circumstances, the Panel exercises its discretion under Paragraph 18 of the Rules to proceed to a decision.

Analysis

According to paragraph 4(a) of the Policy, in order to succeed, the Complainants must establish each of the following elements:

(i) The Domain Names are identical or confusingly similar to a trademark or service mark in which the Complainants have rights;

(ii) The Respondent has no rights or legitimate interest in respect of the Domain Names; and

(iii) The Domain Names have been registered and are being used in bad faith.

A. Identical or Confusingly Similar

The first issue in this matter is whether the domain names <creativenails.com> and <creative-nails.com> are confusingly similar to the Complainants’ trademarks. There are two elements that must be satisfied: (a) the Complainant has rights in the particular mark; and (b) the domain names in question are identical or confusingly similar to that mark.

The first element is readily established and independently verified by reference

to the applicable Trademarks Register. In this case, presentation of a certified

copy of European Union Trademark Registration No. 001473990 satisfies the threshold

requirement of having rights in the mark C CREATIVE NAIL DESIGN (Imperial

College of Science, Technology and Medicine v. Zahid Khan (for Imperial College

Management School Alumni Association- ICMSAA), WIPO

Case No. 2000-1079). The Panel also recognizes that the Complainant owns

sixty (60) other trademark registrations worldwide that contain variations of

the words CREATIVE NAIL, thereby creating a family of CREATIVE NAIL trademark

registrations.

The domain names <creativenails.com> and <creative-nails.com> differ

from the Complainants’ trademarks in minor ways: (i) the addition of the

letter “s” to the word NAIL in the domain name <creativenails.com>;

(ii) the further addition of a hyphen in between the words CREATIVE and NAILS

in the domain name <creative-nails.com>; and (iii) the deletion of the

descriptive word “design”. The addition of a letter or hyphen does

not distinguish the domain name from the mark in any meaningful way. Domain

names that add a single letter or a hyphen have been considered to be confusingly

similar by prior panels. (See France Telecom SA v. France Telecom Users Group,

WIPO Case No. D2002-0144 and Advanced

Comfort, Inc. v. Frank Grillo, WIPO Case

No. 2002-0762). None of these minor changes do anything to reduce the likelihood

of confusion.

This conclusion is borne out by the Complainants’ evidence of actual consumer confusion (Annex 20 Complaint). A significant number of consumers complained that they believed the domain names <creativenails.com> and <creative-nails.com> belonged to the Complainants, and understood that they would be able to purchase Complainants’ products through the corresponding websites. In fact, as the consumer discovered to their dismay, the Respondent’s websites do not provide access to legitimate CREATIVE NAIL products. This is compelling evidence that the disputed domain names are in fact confusing with Complainants’ trademarks.

The Panel therefore finds that the Complainants have satisfied the first requirement of paragraph 4(a)(i) of the Policy.

B. Rights or Legitimate Interests

The Respondent is not affiliated with the Complainants, nor has it received

permission from the Complainants to use the trademark Creative Nail Trademarks

or any variations. It cannot be said that the Respondent is using the domain

names in connection with a bona fide offering of goods or services. In fact,

the Respondent is operating a deliberately deceptive website, obtaining access

fees from users under false pretences. It is inconceivable that this sort of

conduct could be construed as evidencing a legitimate interest in the trademarks

in question. (See Microsoft Corporation v Microsof.com aka Tarek Ahmed,

WIPO Case No. D2000-0548 and Amazon.com

Inc. v. Victor Korotkov, WIPO Case No.

D2002-0516).

The Panel concludes that the Complainants have satisfied the second requirement under paragraph 4(b) of the policy.

C. Registered and Used in Bad Faith

The Panel is prepared to find, on the basis of the evidence, that there is a pattern of egregious conduct by the Respondent, which was designed to deceive users, through the choice of confusing domain names and the structure and design of the corresponding website. Complainants’ proof of bad faith is compelling. It is clear that the Respondent has chosen to register confusingly similar domain names to divert internet traffic away from the Complainants’ website for monetary gain. The Respondents’ website leads internet users to pay a fee of $20.00,which will “permit” the user to purchase Complainants’ nail care products and services. However, once the mis-directed internet users pay the fee, the users discover that they cannot purchase any of the Complainants’ products, but rather will be diverted to links to products and services of competitors. Convincing evidence of actual confusion from deceived consumers was put forward. A typical complaint reads “I paid the $20 to go to your website to purchase product. I am unable to do so. What am I doing wrong?” The Panel believes that the damage to customer relations caused by this sort of scheme is extremely serious, and justifies all appropriate remedies.

It is also important to note that the Respondent has designed its website with

both visual content and html codes that are similar to the Complainants’

website, thereby increasing the likelihood of confusion. For example, the Respondent’s

website uses a stylized “CN” in brush-stroke letters which is confusingly

similar to the stylized “C” of the Complainants’ C CREATIVE

NAIL DESIGN trademark. The non-visual portions of the website, namely the html

codes such as “creative nails, creative, creative nail design, Creative

Nail Products, Creative Nail Professionals”, contribute to further confusion,

again wholly consistent with the purpose of diverting traffic and disrupting

the business of the Complainants for monetary gain. The Panel finds that this

sort of conduct to be particularly insidious. The Respondent is not merely diverting

traffic based on its confusing domain names, and its deceptively configured

websites, but it is also generating revenue for which no actual services or

products are provided. This type of conduct is clearly considered to be bad

faith under the Policy (see Amazon.com Inc. v. MCL International Ltd., WIPO

Case No. D2000-1678 and American Institute of Floral Designers v. Palm

Coast Floral, Inc., WIPO Case No. D2000-0335).

Accordingly, the Panel is prepared to find that the Complainants have satisfied

the third element, under paragraph 4(c) of the Policy.

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 names, <creativenails.com> and <creative-nails.com> be transferred to the Complainants.

Christopher J. Pibus

Sole Panelist

Dated: August 22, 2006