National Arbitration Forum

 

DECISION

 

Candy Direct, Inc. v. itsalldirect2u.com

Claim Number: FA0507000514784

 

PARTIES

Complainant is Candy Direct, Inc. (“Complainant”), represented by Stephen L. Anderson, of Anderson & Associates, 27349 Jefferson Avenue, Suite 211, Temecula, CA 92590.  Respondent is itsalldirect2u.com (“Respondent”), represented by Thomas J. Drake, 305 14th Avenue North, Nashville, TN 37203.

 

REGISTRAR AND DISPUTED DOMAIN NAME 

The domain name at issue is <candydirect2u.com>, registered with Wild West Domains, Inc.

 

PANEL

The undersigned certifies that he or she has acted independently and impartially and to the best of his or her knowledge has no known conflict in serving as Panelist in this proceeding.

 

Jonas Gulliksson as Panelist.

 

PROCEDURAL HISTORY

Complainant submitted a Complaint to the National Arbitration Forum electronically on July 11, 2005; the National Arbitration Forum received a hard copy of the Complaint on July 12, 2005.

 

On July 12, 2005, Wild West Domains, Inc. confirmed by e-mail to the National Arbitration Forum that the domain name <candydirect2u.com> is registered with Wild West Domains, Inc. and that the Respondent is the current registrant of the name.  Wild West Domains, Inc. has verified that Respondent is bound by the Wild West Domains, Inc. 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 July 13, 2005, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of August 2, 2005 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@candydirect2u.com by e-mail.

 

A timely Response was received and determined to be complete on August 2, 2005.

 

On August 5, 2005 Additional Submission was received from the Complainant. As the submission was received in a timely manner according to the Forum’s Supplemental Rule 7, the Panelist has considered the Additional Submissions.

 

On August 9, 2005, pursuant to Complainant’s request to have the dispute decided by a single-member Panel, the National Arbitration Forum appointed Jonas Gulliksson as Panelist.

 

RELIEF SOUGHT

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

 

PARTIES’ CONTENTIONS

A.     Complainant

 

The Complainant has stated the following in its Complaint.

 

FACTUAL SUMMARY

 

Since at least as early as May 22, 1997, Complainant CANDY DIRECT, INC. and its founder, predecessor and chief executive, Stephen Traino, have used the trade name and service mark CANDY DIRECT and the associated domain name candydirect.com in connection with the retail and online sale of candy, confections, gift baskets and gifts. Complainant is the owner of the trade name, common law trademark, and service mark CANDY DIRECT and several closely related domain names which it and its predecessor have continuously used in connection with the CANDY DIRECT mark in connection with the manufacture, distribution and sale of candy, confections and hand-made gifts. Complainant’s CANDY DIRECT trademark has been promoted and used notoriously in connection with several websites on the Internet, and is the owner of numerous domain names including:

 

May 22, 1997                        CANDYDIRECT.COM                        

                                    August 04, 1997            CANDYDIRECT.NET         

                                    November 28, 1999             CHOCOLATEDIRECT.COM

October 24, 2001             CANDYDIRECT.INFO

April 24, 2002             CANDY2U.COM

 

Collectively attached as Exhibit “A” hereto are the WHOIS records pertaining to the Complainant’s registration of such domain names.

 

Attached as Exhibits “B-1” and “B-2” are printouts of the Complainant’s home page of its extensive, branded online candy and gift store located at <candydirect.com>, respectively dated September 8, 1999 and June 24, 2005.  At all times relevant herein, Complainant has also used its CANDY DIRECT mark on several other Internet websites which include: <buycandyonline.com>, <candy.org>, <crazyaboutcandy.com>, <candycity.com>, <candyvillage.com>, <candyemporium.com>, <candyinc.com>, <candystore.com>, <candysuperstore.com>, <chocolateland.com>, and <sandiegocandy.com> among several others.

 

On July 7, 1997, Complainant’s predecessor, Stephen Traino registered CANDY DIRECT as a duly registered fictitious business name with the San Diego Recorder/County Clerk through July 07, 2002. On April 23, 2001, Mr. Traino again registered CANDY DIRECT as a fictitious business name with the San Diego Recorder/County Clerk through April 23, 2006. On April 10, 2003, Complainant registered its business name with the San Diego Recorder/County Clerk through April 10, 2008. Collectively attached as Exhibit “C” hereto are current relevant San Diego County fictitious business name records pertaining thereto.

 

On December 19, 2002, Mr. Traino founded the Complainant CANDY DIRECT,  INC. Attached as Exhibit “D” is the current record of the California Secretary of State’s corporation records database showing Complainant CANDY DIRECT INC.’s current status as a valid California corporation. 

 

Beginning at least as early as May, 1997, Complainant and its predecessor have publicly used and have advertised the CANDY DIRECT trade name, service mark and domain name at the candydirect.com website and on numerous offline publications. Complainant’s CANDY DIRECT branded products and services have been prominently featured in books, news reports and variety features in such publications as The Boston Globe, Time Magazine, Parents Magazine, Computer World, Yahoo Internet Life Magazine, Candy Buyer Magazine, Candy Freak, Confectioner Magazine, Distribution Channels Magazine, Vogue Magazine, and USA Today.

 

During the past eight years, Complainant’s name as well as its founder’s name and the CANDY DIRECT mark have been the subject of several feature stories and have received favorable mention, including on Food Network’s “Unwrapped” television show, “The View” nationally syndicated television show, TechTV television show, Martha Stewart’s television show, and were referenced in a number of widely distributed radio show interviews.

 

Complainant’s founder has attended numerous trade shows as a representative of CANDY DIRECT and has specifically promoted the Candy Direct brand at the National Confectioner Association annual Candy Expo representing Candy Direct to all major candy manufacturers (during each of the years 1999, 2004 and 2005). Complainant’s “Candy Direct” is well-known among consumers and is well-recognized by most people within the candy industry.

 

During the past eight years, Complainant and its founder have spent over one million dollars ($1,000,000) advertising and promoting Complainant’s candydirect.com website and CANDY DIRECT trade name and marks.  All advertising promoted “Candy Direct” and was directly or indirectly linked to <candydirect.com>. Such advertising included banner ads placed on third party websites, pay per click keyword advertisements, directory inclusions, link exchanges, and the like.  At all times relevant to this proceeding Complainant’s candydirect.com website has been listed in numerous directories (including Yahoo and DMOZ) and for several years, Complainant has paid to advertise its goods and services on the Google Search engine and on other pay-per-click search engines, such as <Yahoo.com> and <Overture.com>.

 

Candy Direct, Inc. receives on average nearly three million (3,000,000) unique visitors to the candydirect.com web site and 30 million page views each year.  At all times relevant herein, Complainant’s <candydirect.com> website has been ranked within the top 45,000 websites as rated by the Alexa Web Search system.  Considering Candy Direct is an e-commerce site this ranking is quite high when taking into account that it is also competing for traffic from free content sites and well over ten million other active web sites on the Internet.

 

As a result of the Complainant’s efforts, the CANDY DIRECT mark has achieved secondary meaning, and the Complainant has become the best-known non-manufacturer distributor of candy and gifts on the Internet, worldwide.  Records of the independent web traffic service known as Alexa (a subsidiary of Amazon.com), which are annexed hereto as Exhibit “E” (concerning the webtraffic for candydirect.com for the period of May 2002 through June 24, 2005).  Also collectively attached within Exhibit “E” and hyperlinked immediately below are current records from the Alexa traffic ranking system which conclusively show that Complainant’s <candydirect.com> website is ranked as the #3 most popular website in the world, for the category “confectionary” and is ranked #1 in the world under the category for candy.  See http://www.alexa.com/browse?&CategoryID=27966; see also http://www.alexa.com/browse?&CategoryID=358990.

 

Complainant’s CANDY DIRECT mark and website have become famous and as a result enjoy a tremendous amount of success, goodwill and secondary meaning in its trademark and domain name among the public.  Indeed, Candy Direct Inc.’s revenues in the year 2004 alone, exceeded two million dollars ($2,000,000). Upon information and belief, the Respondent registered the subject domain name <candydirect2u.com> in bad faith, and for the purpose of usurping the Complainant’s goodwill in its Candy Direct mark. 

 

            EVIDENCE OF RESPONDENT’S BAD FAITH

 

On or about December 18, 2002, without Complainant’s knowledge or authorization, Respondent registered the subject domain name in dispute <candydirect2u.com>.  See Exhibit “F” attached hereto, namely the WHOIS records pertaining to Respondent’s registration of candydirect2u.com.

 

            Respondent has never been known by the subject domain name.

 

Upon information and belief, at such time Respondent was specifically aware of Complainant’s prior use of its related trade names, trademarks and domain names, including CANDY DIRECT, CANDYDIRECT.COM (May 22, 1997); CANDYDIRECT.NET (August 04, 1997) and CANDY2U.Com (April 24, 2002).  Evidently, however, Respondent registered the subject domain name in bad faith and with the intent to improperly take advantage of Complainant’s trademark rights and goodwill in such name. 

 

Since registering the subject domain name, the Respondent has never directly used the website to host any content or for any legitimate purpose. To the contrary, such Uniform Resource Locator has at all times been used only to forward/ redirect to Respondent’s Internet website at <itsalldirect2u.com>.

 

Respondent’s <itsalldirect2u.com> website is used to promote and sell a variety of goods, particularly including candy and gifts.  A printout of a portion of Respondent’s home page at <itsalldirect2u.com> is attached hereto as Exhibit “G.

 

Respondent has recently begun a pay-per-click keyword advertising campaign for the term CANDY DIRECT that is obviously directly intended to divert Complainant’s customers and prospective customers seeking to find the Complainant and its branded goods and services.  Attached hereto as Exhibit “H” is a copy of recent search results from the Google Internet search engine which shows paid sponsored links by Respondent for the term CANDY DIRECT.

 

Notably, directly below the Complainant’s name, Respondent boldly attempts to misdirect Complainant’s customers and prospective customers by inviting such persons:  Before you buy from them – Check Out Our Low Prices On All Your Favorite Candies.”  Attached as Exhibit “H” hereto is a two-page printout of the Google Search engine results for the term CANDY DIRECT showing the unfair competition on the part of Respondent as well as the competitive paid-for, and directory listings by the Complainant and Respondent herein.

 

LEGAL ARGUMENTS

 

This Complaint is based on the following factual and legal grounds:

 

[a.]         <candydirect2u.com> is Confusingly Similar to Complainant's Trademark

 

Complainant’s common law rights in its trade name and in the CANDY DIRECT mark as used since May 1997 are sufficient under the UDRP to grant a transfer of the subject domain name registration.  See eGalaxy Multimedia Inc. v. T1, FA101823 Nat. Arb. Forum Dec. 23, 2001) (recognizing protection for common law marks); see also McCarthy on Trademarks and Unfair Competition, § 25:74.2 (4th ed. 2002) (The ICANN dispute resolution policy is “broad in scope” in that “the reference to a trademark or service mark ‘in which the complainant has rights’ means that ownership of a registered mark is not required – unregistered or common law trademark or service mark rights will suffice” to support a domain name Complaint under the Policy); see also Georgia Gulf Corporation v. The Ross Group Case, D2000-0218 (WIPO June 14, 2000) ("Rather, under U.S. trademark law, rights attach upon use of the mark in commerce."); see also LIN Television Corporation v. Home In USA and Home In USA, Inc., D2000-0257 (WIPO June 2, 2000) ("The Panel concludes that the Complainant has trademark rights in the terms WAVY, WAVY TV, and WAVY TV 10. The lack of a federal registration does not prevent the Complainant from establishing common law trademark rights in these terms.").

 

Indeed, such common law rights have often been found as sufficient to satisfy the requirement that the Complainant has trademark rights in the mark identical thereto. See 20th Century Fox Film Corporation v. Leonard Rogan, FA 102952 (Nat. Arb. Forum Sept. 15, 2002). Such common law right in the Mark warrants the exclusive right to use the mark reflected in the domain at issue.  American Online, Inc. v. Tencent Communications Corp., FA 92668 (Nat. Arb. Forum Mar. 21, 2000). 

 

Here, the subject domain is identical in sight sound and connotation to Complainant’s name and mark except for the ".com" generic top-level domain, and two additional characters: “2” and “U” which are commonly used online shorthand for of “to” and “you”. For purposes of comparison, the ".com" portion of such URL does not serve to distinguish the Domain name from the Complainant's trademark. Nor do minor variations in the domain name such as “e” or “’i” added to a complainant’s prior used name or mark.  See, e.g., Robbie Williams v. Howard Taylor, D2002-0588 (WIPO Aug. 8, 2002) ("It is immediately obvious that the Domain Name is identical to the Complainant’s ROBBIE WILLIAMS mark, save for the .info generic top level domain which does not serve to distinguish the Domain Name from the Complainant’s trade mark."); see also Pierce Brosnan v. Network Operations Center, D2003-0519 (WIPO Aug. 27, 2003).

 

Consequently, Respondent’s registration and use of <candydirect2u.com> creates a likelihood of confusion with Complainant’s name and mark as well as its prior domain name registrations, including <candydirect.com> and <candy2u.com> as used in connection with its CANDY DIRECT mark. At very least such registration and use creates a likelihood of confusion with respect to the Complainant’s trade names, mark and domain names, that there is some connection between the Respondent’s website and goods offered thereon and/or that consumers seeking the Complainant will mistakenly be led or otherwise unfairly misdirected to Respondent’s website.

 

            [b.]      Respondent has no rights or legitimate interests in the Domain Name

 

[i]         Respondent’s use of <candydirect2u.com> is not in connection with any bona fide offerings.

 

Respondent is a competitor of the Complainant sufficient to satisfy Policy ¶ 4(b)(iii). There is no relationship between the Complainant and the Respondent, which would entitle the Respondent to use the Complainant’s mark. To the contrary, Respondent has used Complainant’s mark to attract traffic to its <candydirect2u.com> URL which redirects such traffic to Respondent’s <itsalldirect2u.com> website which has no connection with Complainant and is simply taking advantage of the Complainant’s reputation and goodwill in the mark by offering and selling a number of various services competitive to those offered by the Complainant, hence not constituting a bona fide offering of goods or services. See Pierce Brosnan, D2003-0519; see also Peter Frampton v. Frampton Enterprises, Inc., D2002-0141 (WIPO Apr. 17, 2002).

 

Where a competitor uses a colorable simulation of the complainant’s trademark to misleadingly divert consumers to its own website, such use is not a fair use, and can only demonstrate Respondent’s bad faith.  See Madonna Ciccone, p/k/a Madonna v. Dan Parisi and "Madonna.com", D2000-0847 (WIPO Oct. 16, 2000)(“[T]he evidence demonstrates a deliberate intent to trade on the good will of complainant. Where no plausible explanation has been provided for adopting a domain name that corresponds to the name of a famous entertainer, other Panels have found a violation of the Policy."); See, e.g., eGalaxy Multimedia Inc., FA101823 (transferring domain name to complainant where respondent’s intent was to divert traffic away from complainant, even where complainant had not secured trademark registration at the time of respondent’s domain registration).

 

Inasmuch as Respondent's use of Complainant's mark infringes Complainant's exclusive trademark rights, and is used in the same field of goods and services as previously and widely used by the Complainant, Respondent cannot have any rights or legitimate interests in the subject domain name and cannot be using the name in connection with a bona fide offering of goods or services. 

 

Moreover in light of Complainant’s longstanding and extensive use of its CANDY DIRECT mark and names, since May 1997, which had become well-known and widely recognized in the industry and on the Internet, by the time that the Respondent registered the subject domain name points only to bad faith.

 

Given these facts, there is no reasonable possibility that respondent’s infringing domain name was selected by chance.  See, e.g., Dr. Karl Albrecht v. Eric Natale FA 95465 (NAF Sept. 16, 2000); see also Six Continent Hotels, Inc. v. Patrick Ory,  D2003-0098 (WIPO March 26, 2003) (using the Domain Name which incorporates the Complainant’s HOLIDAY INN mark, to re-sell services in the exact same field of endeavor as the Complainant, i.e. hotel services, is intentionally seeking to exploit user confusion by diverting Internet users away from the Complainant's Web site to the Respondent’s Web site. Intentionally trading on the fame of a mark cannot constitute bona fide offering of goods or services.

 

[ii]        Respondent has never been known by the domain name and has no legitimate rights therein.

 

Although heretofore unknown to Complainant, Respondent <itsalldirecttoyou.com>, an unknown form of entity, has apparently never been known, commonly or otherwise, by the contested domain name or any name corresponding to or including the Complainant's trademark.  As such, under the circumstances herein, Respondent registered such name in bad faith.  See Broadcom Corp. v. Intellifone Corp., FA 96356 (Nat. Arb. Forum Feb. 5, 2001) (finding no rights or legitimate interests because Respondent is not commonly known by the disputed domain name or using the domain name in connection with a legitimate or fair use).

 

Respondent has no legitimate rights in such name; has apparently registered and used the domain name to misdirect and mislead consumers and has prevented Complainant from use of such domain name which fully incorporates its trade name and trademark. As such and as supported by the attached Exhibits, Respondent’s registration and use of the domain name can only be in bad faith in violation of the Policy.

 

[iii]       Respondent is not making a legitimate noncommercial or fair use of the domain name

 

As described above, Respondent is actively using Complainant's trademark and name to redirect traffic to another website which is used promote its competitive and unauthorized business of selling candy and gifts, and is therefore providing commercial products and services in the same field as the Complainant.  Accordingly, Respondent is not making a legitimate noncommercial or fair use of the domain name, and further has no rights or legitimate interest in the Domain Name, either by any of the illustrations under Paragraph 4(b) or 4(c) of the Policy or on any other basis. 

 

Indeed, as classic evidence of Respondent’s bad faith in violation of Policy ¶ 4(b)(iv), the Respondent has used the domain name in an intentional attempt to attract, for commercial gain, Internet users to its 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 or service on your web site or location.

 

[c.]             Respondent has registered the Domain Name in bad faith

 

Paragraph 4(b) of "Uniform Domain Name Dispute Resolution Policy" sets out non-exclusive criteria which shall be evidence of the registration and use of a domain name in bad faith, including:

 

- Respondent has registered the domain name primarily for the purpose of disrupting the business of a competitor; or

           

- by using the domain name, the Respondent has intentionally attempted to attract, for commercial gain, Internet users to its website or other online location, by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship, affiliation, or endorsement of its website or location or of a product or service on its website or location.

 

[i]            Respondent has registered the domain name primarily for the purpose of disrupting the business of a competitor.

 

Respondent is a competitor of the Complainant sufficient to satisfy Policy ¶ 4(b)(iii). Respondent’s registration and use of such domain name has disrupted and diverted Complainant’s business.  Moreover, in light of Respondent’s advertisement of the subject domain name on the Google Search engine: “Before you buy from them – Check Out Our Low Prices On All Your Favorite Candies” it can hardly be disputed that the Respondent’s actions were deliberate and in bad faith.

 

[ii]            Respondent has intentionally attempted to attract, for commercial gain, Internet users to Respondent’s web site by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship, affiliation, or endorsement of Respondent’s web site

 

"The mere fact of diversion, regardless of the content of Respondent’s website, is evidence of bad faith use of a domain name. Prior UDRP panels have found that this sort of activity using a domain name comprised of a well-known trademark to attract users to the registrant’s website constitutes bad faith use of the domain name.”  See Robbie Williams, D2002-0588; see also Big Dog Holding Inc. v Frank Day, FA 93554 (Nat. Arb. Forum March 9, 2000). 

 

Respondent’s bad faith intent to divert Internet users from Complainant, is further demonstrated by Respondent’s aggressive pay-per-click marketing, which acknowledges Complainant’s prior and contemporaneous use of the CANDY DIRECT mark, and invites Complainant’s customers and prospective customers via pay-per-click advertising on the Google Search engine, that “Before you buy from them” (Complainant) to “Check Out Our Low Prices On All Your Favorite Candies.” (See Exhibit “H”). 

 

Respondent obviously intends to mislead the public and to divert online traffic from Complainant to its website by creating a likelihood of confusion with the Complainant's mark as to the source, sponsorship, affiliation, or endorsement of Respondent's web site. Accordingly, Respondent has registered the Domain Name in bad faith in violation of Policy ¶ 4(b)(iv).

 

Respondent, on the other hand, has no legitimate rights in such name; has falsely used the URL to mislead consumers and has intentionally diverted traffic from and otherwise prevented Complainant from obtaining such domain name. As is illustrated above, and by the annexures hereto, Respondent’s registration and use of the subject domain name can only be in bad faith in violation of the Policy. 

 

REMEDY SOUGHT

 

The Complainant requests that the Panel issue a decision that the domain name registration be transferred to Complainant.

 

B. Respondent

 

FACTUAL SUMMARY

 

The respondent does not accept that the complainant has a right to the domain name

CandyDirect2u.com. The complainant has a long list of information about <candydirect.com> or <candydirect.net>, but admits that CANDY DIRECT, INC., was not registered with the California Secretary of State until the day after the respondent claimed the domain name in dispute. The paragraphs concerning the actions of the complainant are misleading in that the complainant does not state an eight-year history of using <candy2u.com>. The complaint tries to join in all of the prior actions of the affiliated entities and corporation, when the complainant had only registered the domain name <candy2u.com> in April 2002, not May 22, 1997.

 

The complainant further alleges a million dollar investment in <candydirect.com> web site, however, this is again misleading because the “candy2u.com” domain name was only 8 months old when the respondent registered a vaguely similar name, <candydirect2u.com>.

 

The respondent has not acted in bad faith. The allegation of the complaint is that the

respondent registered <candydirect2u.com> on December 18, 2002, without the Complainant’s knowledge or authorization. The California Secretary of State did not have on its register of corporations an entity known as “Candy Direct, Inc.,” as is admitted by the complainant in its paragraph 4, which states specifically, “ On December 19, 2002, Mr. Traino founded the Complainant CANDY DIRECT, INC.” It seems that “candydirect2u.com” precede the complainant entirely. It is denied that the respondent was aware of and ignored the domain name which the complainant took over after the respondent registered its domain name.

 

The respondent has not in the last 18 months, offered, contracted to, nor transferred the domain name and did not register the domain name prior to the existence of the complainant in order to sell the domain name either to the complainant or any other entity.

 

The respondent has not, and it has not been shown that the respondent has tried to prevent the complainant from reflecting <candydirect.com>, <candydirect.net>, <chocolatedirect.com>, <candydirect.info>, or <candy2u.com>, or any other term, trademark or service mark from being used, and the complainant does not provide evidence that the respondent has.

 

The respondent did not register the domain name to disrupt the business of a competitor, since the complainant and the respondent are only in similar businesses. The complainant has many competitors in more direct relation than the respondent.

 

There is no proof and there can be no proof that the respondent intentionally or inadvertently attempted to attract Internet users to its web site over the complainants. The terms used by both complainant and respondent are so generic that there is no likelihood of confusion. The complainant states that the only trademark it owns is “Candy Direct.” This is not a unique enough term to be afforded the right to exclude any and all other variations of these to general terms. In one search using <yahoo.com>, there were 4,600,000 hits using the terms “candy direct” (see attached Exhibit “1"). The terms “candy direct” on Yahoo do not call up the respondent’s website until #23 (see attached Exhibit “2")

 

The respondent maintains a wholesale business with candy as one product, and has claim to registration of <candydirect2u.com>, <toysdirect2u.com>, <silverdirect2u.com>, <perfumedirect2u.com>, <noveltydirect2u.com>, and <tobaccodirect2u.com>. (See attached “WHOIS”, collective Exhibit “3”)

 

LEGAL ARGUMENT

 

The Complainant has not provided sufficient evidence to show that the secondary meaning of “candy direct” establishes trademark rights in terms of this forum. “Although a trademark registration is certainly strong evidence that complainant has right in a mark and may even constitute a presumption of same, it is certainly not conclusive of this important requirement of UDRP 4(a)(i).”  eGalaxy Multimedia Inc. v. RDCTO Limited, FA 100705 (Nat. Arb. Forum Oct. 22, 2001) (“Many, if not most or even all, states in the United States issue registrations without any significant examination.”). No member of the purchasing public could possibly associate either “candy” or “direct, ” or even “candydirect” with products or services of any one person or entity.  Id.; CRS Tech. Corp. v. Condo Net, Inc., FA 93547 (Nat. Arb. Forum Mar. 28, 2000); Successful Money Management Seminars, Inc., v. Direct Mail Express, FA 96457 (Nat. Arb. Forum Mar 7, 2001); Pet Warehouse v Pets.com, Inc., D2000-0105 (WIPO Apr. 13, 2000); Tough Traveler, Ltd. v. Kelty Pack, Inc., D2000-0783 (WIPO September 28, 2000); Sweeps Vacuum & Repair Center, Inc., v. Nett Corp., D2001-0031 (WIPO Apr.13, 2001); Lumena S-KA 20.0 v. Express Ventures, Ltd., FA 94375 (Nat. Arb. Forum Apr. 3, 2000).

 

The respondent has legitimate rights in the domain name. As previously stated, the respondent registered the domain name prior to the existence of the complainant, Candy Direct, Inc. The respondent used the domain name in furtherance of its wholesale business. The complainant did not contact the respondent at all concerning a dispute about the domain name for 18 months after the complainant was organized. There is no deliberate intent to trade on the complainant’s name, which is not as unique as “Madonna.”  See Madonna Ciccone, p/k/a Madonna v. Dan Parisi and “Madonna.com  D2000-0847 (WIPO Oct. 16, 2000).

 

The complaint contains broad, sweeping conclusions that are not supported by evidence. There is no evidence (because there is no intent) that the respondent intended to, or set out to, divert traffic from the complainant’s domain site. In this case the respondent comes forward to refute the allegations of the complainant, who does not have the notoriety and more than half century standing of Holiday Inn.  See Six Continent Hotels, Inc., D2003-0098.

 

In conclusion, the respondent would submit that the complainant has not shown and proved any of the elements required which would entitle the complainant to obtain the domain name from the respondent. The respondent used the “candydirect2u.com” domain name in its overall wholesale business beginning in December of 2002, at least 18 months prior to any knowledge of any dispute about the domain name. There can be no allegation by the complainant that the complainant advised the respondent of any dispute. The respondent’s first knowledge of dispute was this filing.

 

The respondent has been known by the domain name and has been operating under the domain name as part of its overall wholesale business.

 

C. Additional Submissions

 

Complainant has submitted the following Additional Submission.

 

In light of the factual misstatements contained in Respondent's response, Complainant hereby submits this additional submission in order to clarify and correct same. Due to Respondent's mischaracterization of relevant dates and matters related to this dispute, Complainant's hereby reiterates the timeline of facts relevant to its long-standing use of the trade name and service mark CANDY DIRECT, and further highlights the evidence submitted concerning Respondent's bad faith registration and use of the <candydirect2u.com> domain name, as follows.

[a]     TIMELINE OF RELEVANT FACTS;

                 May 22,1997: Complainant's founder, predecessor and chief executive, Stephen Traino,
began using the trade name and service mark CANDY DIRECT and the associated domain name candydirect.com in connection with the retail and online sale of candy, confections, gift baskets and gifts.

                 July 07, 1997: Complainant's predecessor, Stephen Traino, registered CANDY DIRECT as a fictitious business name with the San Diego Recorder/County Clerk.

                 August 04, 1997: Complainant's predecessor, Stephen Traino, registered and began using the domain name <candydirect.net> to promote his candy company known as CANDY DIRECT.

                 November 28, 1999: Complainant's predecessor, Stephen Traino, registered and began using the domain name <chocolatedirect.com> to promote CANDY DIRECT.

                 April 23,2001: Complainant's predecessor, Stephen Traino, again registered CANDY DIRECT as a fictitious business name with the San Diego Recorder/County Clerk

                 October 24, 2001: Complainant's predecessor, Stephen Traino, registered and began using the domain name <candydirect.info> to promote CANDY DIRECT.

                 April 24, 2002: Complainant's predecessor, Stephen Traino, registered and began using the domain name <candy2u.com> to promote CANDY DIRECT.

                 December 18, 2002: Respondent, without Complainant's knowledge or authorization,
registered the subject domain name in dispute <candydirect2u.com>.

                December 19, 2002: Complainant's predecessor, Stephen Traino, founded the Complainant CANDY DIRECT, INC. as a California corporation.

                May 22, 1997- through July 6, 2005: Complainant and its predecessor spent in excess of one million dollars ($1,000,000.00) advertising its CANDY DIRECT trademark, received on average nearly three million unique visitors to its <candydirect.com> website and were regularly featured at industry trade shows, and in numerous books, newspapers and television shows.

[b]     ACTS AND CONDUCT OF RESPONDENT THAT AMOUNT TO BAD FAITH.

(i)       Beyond merely registering the domain at issue herein, Respondent has engaged in affirmative acts that amount to bad faith herein.

1)   RESPONDENT HAS ENGAGED IN A PAID ADVERTISING CAMPAIGN THAT BOLDLY ATTEMPTS TO DIVERT CUSTOMERS SPECIFICALLY SEARCHING FOR COMPLAINANT, CANDY DIRECT IN VIOLATION OF THE POLICY

As was alleged in the Complaint, Respondent, in bad faith, knowingly engaged unfair competition directed particularly at the Complainant and its CANDY DIRECT trademark when it attempted to misdirect Complainant's customers and prospective customers by inviting such persons: "Before you buy from them - Check Out Our Low Prices On All Your Favorite Candies" via a pay-per-click keyword Google advertising campaign for the term CANDY DIRECT, which appeared immediately below Complainant's "top spot" sponsored advertisement on the Google search engine network (See Exhibit "H"; Paragraph 21 of the affidavit of Stephen Traino attached to the Complaint and paragraph 2 of the second affidavit of Stephen Traino attached hereto).

 

Notably, in its Response filed herein on August 2, 2005, Respondent omitted any mention of this important allegation in an obvious attempt to "sweep" such fact "under the rug." However, due to Respondent's failure to specifically deny such clearly shown allegations of bad faith and unfair competition in its response brief, the Panel can simply accept such facts as uncontroverted and conclusively proven herein. See AltaVista Company v. Astavista.com, FA 095251 (Nat. Arb. Forum August 17, 2000); see also AltaVista Company v. Jean-Daniel Gamache, FA 095249 (Nat. Arb. Forum August 17, 2000); see also The Chicago Tribune Company v. Jose P. Varkey, D2000-0133 (WIPO May 9, 2000); see also The Coca-Cola Company v. Individual D2001-0940 (WIPO Sept. 10, 2001); Banque Saudi Fransi v. ABCIB, D2003-0656 (Nat. Arb. Forum Oct. 14, 2003); AtitoviIIage.com Inc. v. Enthusiast World, Inc., D2003-0738 (WIPO November 29, 2003).

The UDRP Rules thus provide that Respondent is required to specifically respond to each and every substantive, well-plead factual allegation of Complainant's Complaint and make a certification regarding same. Federal Rule of Civil Procedure Rule 8(d) provides that, "Averments in a pleading to which a responsive pleading is required, other than those as to the amount of damages, are admitted when not denied in the responsive pleading. Averments in a pleading to which no responsive pleading is required or permitted shall be taken as denied or avoided." While the Federal Rules do not govern here, guidance may be drawn therefrom. ... Because Respondent has consciously chosen not to respond to each of these factual allegations in accordance with the Rules, each and every one of those well-plead, factual allegations shall be deemed admitted for purposes of this proceeding.

 

In sum, by failing to deny the allegation that it purposefully attempted to divert internet users to its competitive website in violation of Policy ¶ 4(b)(iv), Respondent has in effect, conceded its own bad faith herein.

                2)           RESPONDENT WAS SPECIFICALLY AWARE OF COMPLAINANT AND ITS
PREDECESSOR'S PRIOR USE OF THE CANDY DIRECT TRADEMARK,
TRADE NAME AND DOMAIN NAMES INCLUDING CANDY DIRECT,
CANDYDIRECT.COM (May 22,1997); CANDYDIRECT.NET (August 04,1997)
AND CANDY2U.Com (April 24,2002) AT THE TIME IT REGISTERED THE
DOMAIN NAME IN DISPUTE CANDYD1RECT2U.COM (December 02, 2002)

Evidently, Respondent registered the subject domain name in bad faith and with the intent to improperly take advantage of Complainant's trademark rights and goodwill in such name. Again, by failing to deny these essential allegations contained at page 4 of the Complaint, such uncontroverted facts should be deemed as conclusively proven herein. Further, in light of the additional evidence as described and shown in the Complaint and in this additional submission, bad faith can be easily inferred herein.

                3)           IN AN ATTEMPT TO DENY ITS BAD FAITH, RESPONDENT HAS MISLED
THE PANEL ABOUT THE NATURE OF ITS BUSINESS

In its Response, Respondent disingenuously attempts to mislead this Panel concerning the nature of its operations, and its bad faith intent to trade on the fame of the Complainant's mark. As such, Respondent protests (too much) that: "Respondent maintains a wholesale company with candy as one product, and has claim to registration of <candydirect2u.com>, <toysdirect2u.com>, <silverdirect2u.com>, <perfumedirect2u.com>, <noveltydirect2u.com>, and <tobaccodirect2u.com>.”

Notwithstanding such protestations, a review of the source code, meta name and metatags related to Respondent's <itsalldirect2u.com> website belies its position. To the contrary, as is shown by Exhibit "J" attached hereto, (namely the source code for the Respondent's <itsalldirect2u.com> website which the domain name <candy2u.com> at issue herein is redirected to,) such website is not a wholesale business with candy as only one product, but rather, <itsalldirect2u.com> is specifically designed only to attract Internet users searching for either CANDY generally, or more likely, the Complainant. That is to say, that all metatags and meta name references included on the <itsalldirect2u.com> relate strictly to candy, (including numerous famous trademarks such as Hershey's candy, M&M Candy, Willy Wonka candy, Lifesavers candy, Starburst candy, etc.), yet not even one reference therein pertains to perfume, tobacco, silver, novelties, nor any other product good or service.

The source code for Respondent's itsalldirect2u.com website attached hereto as Exhibit "J" begins: "<meta NAME="descriptkm" CONTENT="Welcome to the world's largest online candy store. We give wholesale prices to everyone, not just big businesses. Feel free to browse our site and take advantage of our large selection and discounted prices."> <meta NAME="keywords" CONTENT="Candy, candy bar, rock candy, candy stand, cotton candy, hard candy, candy company, candy store, chocolate candy, mars candy, big rock candy, m&m candy, bulk candy, candy land, hershey candy, candy apple, candy stores, sugar free candy, wholesale candy, lifesavers candy, candy co, candy wholesale, candy hearts, candy shop, candy list, m & m candy, wonka candy, candy barr, candy cruncher, retro candy, strange candy, old fashioned candy, wedding candy, sugar candy, penny candy, candy vending, candy companies, pictures of candy, candy cotton, lifesaver candy, life savers candy, nostalgic candy, hot candy, candy supplies, candy pictures, old time candy, m and m candy, quality candy, brachs candy, candy online, peppermint candy, starburst candy, mexican candy, candy heart, fannie may, willy wonka candy, candy expo, m&m's candy, brach's candy, fannie mae, buckeye candy, candy dispenser, sponge candy, candy cigarettes, California candy, baby ruth candy, sour candy, candy Christmas, vintage candy, candy sales, buy candy, the candy man, peeps candy, candy gift, mars candy company, rare candy, candy distributors, candy shops, candy gifts, snickers candy bar, harry potter candy, boston candy, hershey's candy, old candy, milky way candy, skittles candy, candy dark, candy raver, smarties candy, candy kids, online candy,"> No other meta tags or meta names are included therein.

 

Moreover, as shown by Exhibit "G" on file herein, at the top of Respondent's home page of <itsalldirect2u.com>, where Respondent has forwarded <candydirect2u.com>, it is prominently stated: "Welcome to the world's largest online candy store."

As such, not only is the credibility of the Respondent strained by its false protestations that it is a general wholesaler and is not a "direct competitor" of the Complaint, but also, the respondent's own website description, meta-names, meta-tags and other internal references convey the knowing and bad faith intent by Respondent to disrupt the Complainant's business, in violation of Policy ¶ 4(b)(iii) as well as its intent to divert Internet users to its website in violation of Policy ¶ 4(b)(iv).

As additional evidence of the Respondent's bad faith, as shown by Exhibit "B-l" on file, namely, the printout of the Complainant's <candydirect.com> website dated September 8, 1999, as well as page 3 of Exhibit "A" namely the WHOIS record for Complainant's CANDYDIRECT.NET website, at least as early as 1999, and indeed years before the Respondent registered any of its domain names, (including <candydirect2u.com> and <itsalldirect2u.com> Complainant had used the slogan "World's Largest Candy Store Online" as well as meta names and meta tags extremely similar, to those that Respondent "coincidentally" adopted years later.

In light of the Complainant's evidence, Respondent's position readily appears as transparent.

[c.]     RESPONDENT'S OWN EVIDENCE SHOWS THAT COMPLAINANT'S "CANDY DIRECT" MARK HAS ACHIEVED SIGNIFICANT PUBLIC RECOGNITION, GOODWILL AND SECONDARY MEANING.

Respondent states in its Response that Complainant's mark, CANDY DIRECT is "not a unique enough term to be afforded the right to exclude any and all variations of these general terms." This statement is supported only by blatant mischaracterizations of the facts related to the issues at hand and ignorance of the evidentiary materials submitted by the parties herein. For example, Respondent's own Exhibits "1" and "2" contradict the Respondent's own position and demonstrate Complainant's secondary meaning of the terms CANDY DIRECT as well established.

For example, Respondent claims that a search it conducted on the Yahoo search network for the phrase "candy direct" yielded 4,600,000 hits is evidence that Complainant's mark is not unique.

However, upon examining Respondent's Exhibits "1" and "2" submitted herein, it becomes clear that the Yahoo search was not actually made for the phrase "candy direct" as alleged, but instead, sought webpage "hits" which contained either the term CANDY or the term DIRECT, but not the composite phrase at issue herein, namely "candy direct". That is to say that the Yahoo search performed by Respondent, did not seek to find webpages on the Internet which contain the composite phrase "candy direct" in quotes, but, instead, sought any Internet webpage which contained either the term CANDY or DIRECT. (See Exhibit "K" hereto.)

On the other hand, as is shown by Exhibit "L" hereto, when one uses the Yahoo search engine to conduct a search for the composite phrase "candy direct" (in quotes), there are only l/100lh of the number of results, namely 46,000 "hits" of websites containing the phrase "candy direct."

In any event, no matter which search method is employed on the Yahoo search network, it is important to note that in addition to its "top spot" sponsored listings which appear first in the results of either such search for CANDY DIRECT (Exhibit 1) or "candy direct" (Exhibit "L"), Complainant appears in seven of the top ten listings on Respondent's Exhibit "1" and eight of the top ten listings as shown by the search results for the phrase "candy direct" which are attached as Exhibit "L" hereto.

Inasmuch as Complainant has achieved listings among at least seven of the top ten spots for unpaid search listings appearing in Yahoo, resulting from searches for either CANDY DIRECT or "candy direct," such evidence suggests strong secondary meaning in the CANDY DIRECT mark as owned by Complainant and as previously alleged at pages 3 and 4 of the Complaint herein.

Indeed, Complainant's fame, goodwill and acquired distinctiveness of its CANDY DIRECT trade name, domain name and mark has only been obtained by the Complainant as the result of Complainant's and its founder/predecessor's long-standing use of same since 1997, and its extensive advertising both online and off.

Respondent's allegations fail to adequately rebut Complainant's contentions as noted above. To the contrary, based on the facts alleged in the Complaint, as well as the those contained in the second affidavit of Stephen Traino attached hereto, Respondent's prior knowledge of Complainant's exclusive rights in its CANDY DIRECT trademark, trade name, and websites; and its intentional use of a domain name, slogan (world's largest online candy store), meta tags, meta page descriptions and its paid-for advertising campaign on Google make it eminently clear that Respondent has engaged in bad faith herein in an attempt to divert Complainant's customers and to usurp its goodwill.

For such reasons, Complainant again respectfully requests that this Panel order that the domain name <candydirect2u.com> be transferred to the Complainant.

 

FINDINGS & 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 has used the term CANDY DIRECT as a business identifier for many years and the Panel is satisfied that Complainant has rights in that business identifier. Under the Policy, however, Complainant must have rights in a mark (trademark or service mark). Complainant has no registration of the words CANDY DIRECT as a mark.

 

According to the Policy ¶ 4(a)(i), common law rights are sufficient and a complainant thus need not hold a registered trademark to establish rights in a mark. The ICANN dispute resolution policy is thus broad in scope in that the reference to a trademark or service mark in which the complainant has rights means that ownership of a registered mark is not required and unregistered or common law trademark or service mark rights will suffice to support a domain name Complaint under the Policy.  See British Broad. Corp. v. Renteria, D2000-0050 (WIPO Mar. 23, 2000).

 

Respondent contends that the CANDY DIRECT mark is merely composed of the descriptive word “candy” and the common term “direct” and that Complainant’s mark cannot be afforded common law protection since it has not acquired a secondary meaning.  See Coupons Inc. v. Motherboards.com, FA 192249 (Nat. Arb. Forum Nov. 4, 2003); see also Advanced Relational Tech., Inc. v. Domain Deluxe, D2003-0567 (WIPO Oct. 13, 2003). To establish common law rights in a mark requires that Complainant shows that its mark has acquired secondary meaning. In other words, Complainant must establish that the public associates the asserted mark with its goods and services.

 

Relevant evidence of secondary meaning includes length and amount of sales under the mark, the nature and extent of advertising, consumer surveys and media recognition. See Amsec Enterprises, L.C. v. Sharon McCall, D2001-0083 (WIPO April 3, 2001). Complainant states that the <candydirect.com> website receives on average nearly three million unique visitors each year, that the website is ranked within the top 45.000 websites as rated by the Alexa Web Search system and that Candy Direct Inc.’s revenues in the year 2004 exceeded two million dollars. Complainant further claims that the mark has been used since May 1997 and that Complainant and its founder have spent over one million dollars advertising and promoting Complainant’s candydirect.com website and the CANDY DIRECT trade name and marks. This has according to Complainant resulted in Complainant becoming the best-known non-manufacturer distributor of candy and gifts on the Internet. To support this, Complainant has adduced as evidence records of the independent web traffic service Alexa regarding the web traffic for <candydirect.com> for the period of May 2002 through June 24, 2005.

 

Numerous decisions have determined that the relevant point in time when Complainant must establish rights in its mark is before Respondent’s registration of the domain name. See Transpark LLC v. Network Adm’r, FA 135602 (Nat. Arb. Forum Jan. 21, 2003); see also DJR Holdings, LLC v. Paul Gordon a/k/a IQ Mgmt. Corp., FA 141813 (Nat. Arb. Forum Mar. 4, 2003). Even if the Panel accepted Complainant’s contention that it has common law rights in the CANDYDIRECT mark as true, such rights must be established prior to Respondent’s registration of the disputed domain name, that is to say before December 18, 2002.

 

Based on the record presented, the Panel finds that the evidence of secondary meaning is inadequate and that the Complainant has failed to prove enforceable rights in the mark CANDY DIRECT.

 

Because the Panel has determined that Complainant has not satisfied this requirement of the Policy ¶ 4(a)(i), there is no need to determine whether Respondent has rights or legitimate interests in the domain name or whether Respondent registered or used the domain name in bad faith. See Pet Warehouse v. Pets.com, Inc., D2000-0105 (WIPO April 13, 2000).

 

DECISION

Having established all three elements required under the ICANN Policy, the Panel concludes that relief shall be DENIED.

 

 

 

 

Jonas Gulliksson, Panelist
Dated: August 22, 2005

 

 

 

 

 

 

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