National Arbitration Forum

 

DECISION

 

Morgans Hotel Group Co., Morgans Group LLC, and Beach Hotel Associates LLC v. Damir Kruzicevic

Claim Number: FA0711001106477

 

PARTIES

 

Complainant is Morgans Hotel Group Co., Morgans Group LLC, and Beach Hotel Associates LLC (“Complainant”), represented by Adele R. Frankel, of McDermott Will & Emery, 227 West Monroe Street; Suite 4400, Chicago, IL 60606.  Respondent is Damir Kruzicevic (“Respondent”), represented by Ari Goldberger, of ESQwire.com Law Firm, 35 Cameo Drive, Cherry Hill, NJ 08003.

 

 

REGISTRAR AND DISPUTED DOMAIN NAME 

 

The domain name at issue is <delanohotel.com>, registered with Fabulous.com Pty Ltd.

 

PANEL

 

The undersigned certify that they have acted independently and impartially and to the best of their knowledge have no known conflicts in serving as Panelists in this proceeding.

 

Diane Cabell, Hon. Carolyn Marks Johnson (Ret.) and Hon. Bruce E. Meyerson (Ret.) as Panelists.

 

PROCEDURAL HISTORY

 

Complainant submitted a Complaint to the National Arbitration Forum electronically on November 6, 2007; the National Arbitration Forum received a hard copy of the Complaint on November 7, 2007.

 

On November 6, 2007, Fabulous.com Pty Ltd. confirmed by e-mail to the National Arbitration Forum that the <delanohotel.com> domain name is registered with Fabulous.com Pty Ltd. and that the Respondent is the current registrant of the name.  Fabulous.com Pty Ltd. has verified that Respondent is bound by the Fabulous.com Pty Ltd. registration agreement and has thereby agreed to resolve domain-name disputes brought by third parties in accordance with ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”).

 

On November 20, 2007, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of December 10, 2007 by which Respondent could file a Response to the Complaint, was transmitted to Respondent via e-mail, post and fax, to all entities and persons listed on Respondent’s registration as technical, administrative and billing contacts, and to postmaster@<delanohotel.com> by e-mail.

 

A timely Response was received and determined to be complete on December 31, 2007.

 

A timely Additional Submission was received from Complainant on January 7, 2008, and a timely Additional Submission was received from Respondent on January 15, 2008.

 

On January 9, 2008, pursuant to Complainant’s request to have the dispute decided by a three-member Panel, the National Arbitration Forum appointed Diane Cabell, the Hon. Carolyn Marks Johnson (Ret.) and the Hon. Bruce E. Meyerson (Ret.) as Panelists.

 

RELIEF SOUGHT

 

Complainant requests that the domain name be transferred from Respondent to Complainant.

 

PARTIES’ CONTENTIONS

 

A.     Complainant

 

Morgans Hotel Group Co. and its related entities (collectively Complainant”) are an international family of luxury hotel companies.  In particular, DELANO is the name of Complainant’s urban resort hotel in South Beach, Miami.  Complainant has based its Complaint upon several federal trademark registrations containing the DELANO mark, including DELANO (Reg. No. 2,115,849) and BLUE DOOR AT DELANO (Reg. No. 2,852,379), the registered CTM for the DELANO (Reg. No. 865287) service mark, the U.K. registered trademark for the DELANO (Reg. No. 2168813), and the common law DELANO trademark.  Complainant has used the DELANO name in connection with its Miami, Florida hotel since at least 1995.  Complainant asserts that DELANO is one of its strongest brands and its plans to open a new DELANO resort in Las Vegas, and other DELANO projects are in the planning stages.  Further, customers can book hotel rooms for the Delano Hotel in Miami through Complainant’s website at www.delano-hotel.com. 

 

Complainant states that the domain name incorporates and is confusingly similar to the Complainant’s marks and Complainant’s own domain name.   Complainant alleges that Respondent’s domain name creates a likelihood of confusion with the Complainant’s marks as to the source, sponsorship, affiliation, or endorsement of Respondent’s web site. 

 

Complainant alleges that it has not consented to Respondent’s use of the domain name and that in response to inquiries by Complainant’s counsel, Respondent has indicated that he might be willing to sell the disputed Domain Name in a letter dated July 25, 2004:  “We have reviewed your ‘generous’ offer of $500 for the above domain, and unfortunately must relate that it is not sufficient to motivate our client to transfer the domain to you or your client.”  

 

Complainant alleges that Respondent is not commonly known by the domain name, either as a business, individual, or other organization.  According to Complainant, Respondent has been using its domain name to deceive consumers by redirecting Complainant’s consumers and potential consumers to a commercial web site offering hotel reservations, which is not affiliated with Complainant.  In addition, Respondent is further leading consumers to believe that such a site is somehow affiliated with, or otherwise sponsored or approved by Complainant by using “DELANO HOTEL” as a meta-tag, which redirects consumers who are conducting web searches for Complainant’s DELANO hotel to Respondent’s website.  Thus, according to Complainant, Respondent has registered the domain name at issue to intentionally attract, for commercial gain, Internet users to its web site, by creating a likelihood of confusion with Complainant’s marks as to the source, sponsorship, affiliation and endorsement of Respondent’s web site. 

 

Complainant states that Respondent has a prior history of registering domain names encompassing well-known company names, including <victoriasecret.com>, <ouimagazine.com>, <michaelholigan.com>, <absolutseries.com>, <laquintainns.com> and <aatravel.com >.  All of these companies owning marks identical or confusingly similar to the domain names registered by Respondent filed actions against Respondent. In each case, Respondent was found to have registered the domain name in bad faith and ordered to transfer the domain name back to the company with the legitimate interest in the name. 

 

B.     Respondent

 

Respondent states that he registered the domain name to promote hotels in the city of Delano, California as part of his network “of over 1,300 [city]-hotel.com domain names which Respondent operates through his Cheaprooms.com hotel reservation service.”   Respondent states that he has registered 1,300 domain names which incorporate the names of major cities around the world.

 

Respondent states that his domain name is a geographically descriptive domain name and thus he is entitled to register and use it in good faith.    Respondent points out that Complainant holds a trademark for DELANO, and not DELANO HOTEL.  Thus, Respondent contends that the domain name is not identical to Complainant’s mark.

 

Respondent states that his reply to the offer to purchase the domain name is not evidence that Respondent registered the domain name for the purpose of selling it.  Respondent rejected another offer to sell the domain name (which he believes was an offer made on behalf of Complainant) by stating the domain name “isn’t for sale.” 

 

Respondent denies that he is misleading Internet users to believe the site is affiliated with Complainant as the site “makes clear” that the users can search for hotels in the city of Delano, California.

 

Respondent acknowledges that he previously had been unsuccessful in past UDRP cases.  He admits he was wrong in some of those cases, not understanding at the time the intricacies of trademark law and its relationship to UDRP proceedings.

 

C.     Additional Submissions Submitted by the Parties

 

In its Additional Submission Complainant states that even though it has not registered a trademark for DELANO HOTEL, the addition of the word HOTEL to its mark does not materially alter the mark to lessen the likelihood of confusion between the domain name and its mark.  Complainant disputes Respondent’s argument that the domain name is merely a geographic descriptive term because Complainant’s use of the DELANO mark is “suggestive or fanciful and geographically descriptive.” 

 

Complainant points out that as of the 2006 census, the population of Delano, California was 49,359.  Thus, Complainant argues that Internet users who type <delanohotel.com> are more likely seeking Complainant’s hotel, than a hotel in Delano, California.  Complainant disputes Respondent’s assertion that he registered the domain name to promote hotels in Delano, California because the domain name resolves to Respondent’s hotel reservation service.

 

In his Additional Submission, Respondent disputes the contention that he registered the domain name for the purpose of selling it to Complainant.  Respondent also denies he had knowledge of Complainant’s hotel when he registered the domain name.  Respondent also denies that he should have had constructive knowledge of Complainant’s trademarks as he is a resident of Croatia.

 

Respondent also states that the domain name is not confusingly similar to Complainant’s marks because DELANO HOTEL does not refer exclusively to Complainant’s location but to any generic hotel in Delano, California.

 

FINDINGS

 

Morgans Hotel Group Co. and its related entities (collectively Complainant”) hold several federal trademark registrations containing the DELANO mark, including DELANO (Reg. No. 2,115,849) and BLUE DOOR AT DELANO (Reg. No. 2,852,379), the registered CTM for the DELANO (Reg. No. 865287) service mark, and the U.K. registered trademark for the DELANO (Reg. No. 2168813).  Complainant has used the DELANO name in connection with its Miami, Florida hotel since at least 1995.   Respondent operates the Cheaprooms.com hotel reservation service that offers Internet users access to hotel reservations in 1300 cites, of which Delano, California, an agricultural community between Los Angeles and San Francisco, is one.

 

DISCUSSION

 

Paragraph 15(a) of the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”) instructs this Panel to “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.”

 

Paragraph 4(a) of the Policy requires that the Complainant must prove each of the following three elements to obtain an order that a domain name should be cancelled or transferred:

 

(1)   the domain name registered by the Respondent is identical or confusingly similar to a trademark or service mark in which the Complainant has rights;

(2)   the Respondent has no rights or legitimate interests in respect of the domain name; and

(3)   the domain name has been registered and is being used in bad faith.

 

Identical and/or Confusingly Similar

 

Complainant contends that it has established rights in the DELANO mark through registration with the United States Patent and Trademark Office (“USPTO”) (Reg. No.  2,115,849 issued November 25, 1997) and over 55 years of use, which established and developed substantial goodwill in the DELANO mark.  The Panel finds that Complainant’s registration of the DELANO mark with the USPTO establishes its rights in the mark for the purposes of satisfying Policy ¶ 4(a)(i).  See Vivendi Universal Games v. XBNetVentures Inc., FA 198803 (Nat. Arb. Forum Nov. 11, 2003) (“Complainant's federal trademark registrations establish Complainant's rights in the BLIZZARD mark.”); see also Men’s Wearhouse, Inc. v. Wick, FA 117861 (Nat. Arb. Forum Sept. 16, 2002) (“Under U.S. trademark law, registered marks hold a presumption that they are inherently distinctive [or] have acquired secondary meaning.”).

 

The Panel further finds that Respondent’s <delanohotel.com> domain name is confusingly similar to Complainant’s mark.  Respondent’s disputed domain name includes Complainant’s DELANO mark in its entirety, adding the generic term “hotel,” which relates to Complainant’s business, and a generic top-level domain (“gTLD”) of “.com.”  The additions of a generic term and a gTLD are irrelevant in determining whether a domain name is confusingly similar to an established mark under Policy ¶ 4(a)(i).  See Brown & Bigelow, Inc. v. Rodela, FA 96466 (Nat. Arb. Forum Mar. 5, 2001) (finding that the <hoylecasino.net> domain name is confusingly similar to the complainant’s HOYLE mark, and that the addition of “casino,” a generic word describing the type of business in which the complainant is engaged, does not take the disputed domain name out of the realm of confusing similarity); see also Trip Network Inc. v. Alviera, FA 914943 (Nat. Arb. Forum Mar. 27, 2007) (concluding that the addition of a gTLD, whether it be “.com,” “.net,” “.biz,” or “.org,” is irrelevant to a Policy ¶ 4(a)(i) analysis).

 

Contrary to Respondent’s assertion, UDRP decisions have found that in appropriate cases geographic names can fall within the scope of Policy ¶ 4(a)(i).  In support of his position, Respondent cites the decision in Sorel Corp. v. Domaine Sales Ltd., FA 96674 (Nat. Arb. Forum Mar. 28, 2001), a case in which the trademark SOREL also referred to a town in Canada.   In that case the Panel found the domain name <sorel.com> to be confusingly similar to complainant’s mark SOREL but rejected the complaint concluding that the complainant could not claim an exclusive right to use the name SOREL as it was a geographic term and not exclusively associated with Complainant’s business.   The decision has been described as “questionable.”  See Robert A. Badgley, Domain Name Disputes, 6-22 (2002).

 

However, the majority view is that geographical terms can be protected under the UDRP if the complainant has shown that it has rights in the geographic term and that the term is being used as a registered (or common law) trademark.  See, e.g., Skipton Building Society v. Coleman, D2000-1217 (WIPO Dec. 1, 2001); Sydney Opera House Trust v. Trilynx, D2000-1224 (WIPO Oct. 31, 2000).  Thus, the geographic nature of the domain name does not insulate it from challenge in a proper case such as this.

 

Rights or Legitimate Interests

 

Because the Complainant has made a prima facie case in support of its allegations, the burden shifts to Respondent to show that it does have rights or legitimate interests pursuant to Policy ¶ 4(a)(ii).  See Do The Hustle, LLC v. Tropic Web, D2000-0624 (WIPO Aug. 21, 2000) (holding that, where the complainant has asserted that the respondent has no rights or legitimate interests with respect to the domain name, it is incumbent on the respondent to come forward with concrete evidence rebutting this assertion because this information is “uniquely within the knowledge and control of the respondent”). 

 

A majority of the Panel rejects Respondent’s contention that it has registered the domain name to promote hotels in the city of Delano, California.  The domain does not resolve to a site merely listing and limited to hotels in Delano, but to Respondent’s Cheaprooms.com hotel reservation service.  Complainant points out that an inspection of the site on one occasion displayed a listing of only three hotels available in Delano.  Respondent’s Cheaprooms.com hotel reservation service allows Internet users to locate hotels in hundreds of other locations, including the Miami, Florida area, the location of Complainant’s property.    

 

Thus, because hotels in Delano are an insignificant aspect of Respondent’s Cheaprooms.com hotel reservation service, the Panel draws the conclusion that Respondent’s use of the Complainant’s mark results in diverting Internet users looking for Complainant’s hotel, not to hotels in Delano, California, but ultimately to other hotels accessed through Respondent’s site, which potentially compete with the Delano Hotel owned by Complainant.  Under these circumstances a majority of the Panel find that Respondent’s activities do no constitute a bona fide offering of goods and services within the meaning of Policy ¶ 4(c)(i).  See WHM L.L.C. v. Northpoint, Inc., D2005-1134 (WIPO Jan. 27, 2006)(use of complainant’s mark to direct Internet users to a web portal to obtain information about competing hotels was not a bona fide offering of goods and services under Policy ¶ 4(c)(i)).

 

Registration and Use in Bad Faith

 

Complainant has demonstrated that Respondent has engaged in a pattern of registering domain names that incorporate third-party marks as shown in at least five previous UDRP decisions against Respondent.    E.g., Oly Holigan, L.P. v. Damir Kruzicevic, FA 97353 (Nat. Arb. Forum July 9, 2001); Victoria’s Secret v. Damir Kruzicevic, FA 96537 (Nat. Arb. Forum Mar. 7, 2001).   This pattern of conduct constitutes bad faith pursuant to Policy ¶ 4(b) (ii).  See Armstrong Holdings, Inc. v. JAZ Assocs., FA 95234 (Nat. Arb. Forum Aug. 17, 2000) (finding that the respondent violated Policy ¶ 4(b)(ii) by registering multiple domain names that infringe upon others’ famous and registered trademarks); see also National Abortion Fed’n v. Dom 4 Sale, Inc., FA 170643 (Nat. Arb. Forum Sept. 9, 2003) (finding bad faith pursuant to Policy ¶ 4(b)(ii) because the domain name prevented the complainant from reflecting its mark in a domain name and the respondent had several adverse decisions against it in previous UDRP proceedings, which established a pattern of cybersquatting).   

 

Respondent states that his prior UDRP disputes are irrelevant because the “only time other cases are relevant is . . . where a domain name is registered to prevent the owner of a trademark from reflecting the mark in a corresponding domain name provided the owner has ‘engaged in a pattern of such conduct.’”   Although the Panel recognizes that each case must be considered on its merits, a majority of the Panel finds that Respondent’s conduct, on five occasions, of registering domain names found to violate the rights of various complaining parties, constitutes a “pattern” within the meaning of Policy ¶ 4(b)(ii).  E.g., Effems v. Weitner, D2000-1433 (WIPO Dec. 22, 2000)(three is a “pattern”).

 

Finally, as stated above, given the paucity of hotels in the small town of Delano, California, a majority of the Panel accepts Complainant’s contention that Respondent has registered the disputed domain name not to advertise hotels in Delano, California but to misdirect Internet users searching for Complainant’s mark to Respondent’s website.  The Panel’s review of the record confirms Complainant’s contention that Respondent’s website which allows Internet users to access hotels in Miami, Florida, operates in competition with the services offered by Complainant.  The majority finds that such use constitutes a disruption of Complainant’s business and is therefore evidence of bad faith registration and use pursuant to Policy ¶ 4(b)(iii).  See S. Exposure v. S. Exposure, Inc., FA 94864 (Nat. Arb. Forum July 18, 2000) (finding the respondent acted in bad faith by attracting Internet users to a website that competes with the complainant’s business).

 

DECISION

 

Having established all three elements required under the ICANN Policy, a majority of the Panel concludes that relief shall be GRANTED.

 

Accordingly, it is Ordered that the <delanohotel.com> domain name be TRANSFERRED from Respondent to Complainant.

 

 

 

Hon. Bruce E. Meyerson (Ret.)

and the Hon. Carolyn Marks Johnson (Ret.), Panelists

 

DISSENTING OPINION

 

            This panelist does not subscribe to the majority's interpretation of the term "bona fide offering of goods and services."  I view the panel's role under 4(c)(i) as limited to a simple determination of whether the Respondent operates an active commercial enterprise or whether the enterprise is spurious, such as when a website has been hastily mounted to give a false impression that services are being offered. 

 

Respondent has registered a large number of domains that reflect geographic hotel designations.  This ownership is supported by a search of Whois records and a view of the relevant websites.  I am persuaded that Respondent operates a bona fide concern and is therefore entitled to a defense under Section 4(c)(i).  Whether his use of domains in this manner is an infringement of the trademark rights of the Complainant is, in my opinion, a question of trademark law more properly put before a court.

 

 

                                                            Diane Cabell, Panelist


Dated: January 30, 2008

 

 

 

 

 

 

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