Tech International, Inc. d/b/a Health
Tech v. ClearChoiceofny
Claim Number: FA0412000379875
PARTIES
Complainant
is Tech International, Inc. d/b/a Health Tech (“Complainant”),
1095 Windward Ridge Parkway, Suite 150, Alpharetta, GA 30005. Respondent is ClearChoiceofny (“Respondent”), represented by Ari Goldberger, of ESQwire.com Law Firm, 35 Cameo Drive, Cherry Hill, NJ,
08003 USA.
REGISTRAR AND DISPUTED DOMAIN NAME
The
domain name at issue is <clearchoiceofny.com>,
registered with Network Solutions, Inc.
PANEL
The
undersigned certifies that they have acted independently and impartially and to
the best of their knowledge have no known conflict in serving as Panelists in
this proceeding.
Steven
L. Schwartz and Judge Irving H. Perluss (Ret.) as Panelists and Judge Karl V.
Fink (Ret.) as Chair.
PROCEDURAL HISTORY
Complainant
submitted a Complaint to the National Arbitration Forum electronically on December
13, 2004; the National Arbitration Forum received a hard copy of the Complaint
on December 14, 2004.
On
December 16, 2004, Network Solutions, Inc. confirmed by e-mail to the National
Arbitration Forum that the domain name <clearchoiceofny.com>
is registered with Network Solutions, Inc. and that the Respondent is the
current registrant of the name. Network
Solutions, Inc. has verified that Respondent is bound by the Network Solutions,
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
December 17, 2004, a Notification of Complaint and Commencement of
Administrative Proceeding (the “Commencement Notification”), setting a deadline
of January 6, 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@clearchoiceofny.com by e-mail.
A
timely Response was received and determined to be complete on January 18, 2005.
A
timely Additional Submission was received from Complainant January 24, 2005.
A
timely Response to the Additional Submission was received from Respondent on
January 31, 2005.
All
submissions were considered by the Panel.
On January 27, 2005, pursuant to Complainant’s request
to have the dispute decided by a three-member
Panel, the National Arbitration Forum
appointed Steven L. Schwartz and Judge Irving H. Perluss (Ret.) as
Panelists and Judge Karl V. Fink (Ret.) as Chair.
RELIEF SOUGHT
Complainant
requests that the domain name be transferred from Respondent to Complainant.
PARTIES’ CONTENTIONS
A.
Complainant
Complainant
is the sole owner of the CLEAR CHOICE trademark, United States Registration
Numbers 2,264,493 and 2,483,055, and Canadian Registration Number 548,063. The goods with which the CLEAR CHOICE mark
is used relate to nutritional and dietary supplements in the form of
carbohydrate shakes, herbal teas, herbal capsules and tablets, liquid additives
and beverages.
Complainant
is the exclusive distributor for a line of CLEAR CHOICE products that are sold
to online retailers and hundreds of stores in the United States and
Canada. In addition, Complainant markets
and sells its CLEAR CHOICE products directly to individuals throughout the
world. Complainant has been in business
since 1993 and has sold over one million CLEAR CHOICE products since that time.
Complainant
uses the CLEAR CHOICE trademark as an integral identifying mark in association
with its business, and the mark has acquired distinction and notoriety.
Complainant
selectively grants to qualified companies and individuals a limited license to
use the CLEAR CHOICE mark in association with the operation of Authorized
Dealer (hereinafter referred to as “Agent”) websites. Respondent was an Agent for Complainant and, as such, was granted
a limited license to use Complainant’s intellectual property on its websites
pursuant to an Internet Retailer Agreement (the “Agreement”) entered into on
February 27, 2003. The Agreement was breached on or before October 1, 2004 and
the Agreement was terminated by Complainant for cause and Respondent was
notified on November 2, 2004.
In
direct violation of their specific contractual obligations under the Agreement,
Respondent has appropriated for its own use the <clearchoiceofny.com> domain
name, which contains the identical trademark owned by Complainant.
Respondent
has not replied to Complainant’s demand letter dated October 12, 2004 or to the
Notice of Termination/Cease and Desist letter sent by Complainant’s attorney on
November 2, 2004.
The
registered <clearchoiceofny.com> domain name is identical or
confusingly similar to a trademark or service mark in which the Complainant has
rights. Respondent does not have rights
or legitimate interests with respect to the <clearchoiceofny.com>
domain name.
Respondent
has used, and is continuing to use, the domain name in connection with an
offering of Complainant’s goods. Such
use has been a restricted use subject to the terms of the Agreement. The Agreement merely granted to Respondent
the limited right to use the mark with the consent of Complainant and according
to the terms of the Agreement.
Since
the Agreement was terminated by Complainants for cause on November 2, 2004,
Respondent has not been using the domain name for a legitimate noncommercial
use and Respondent has not made fair use of the domain name.
Respondent’s
actions with respect to the continued use of the domain name after
Complainant’s Termination of the Agreement for cause evidence bad faith. Respondent has been promoting and selling
competing products using the domain name containing the CLEAR CHOICE mark,
thereby disrupting the business of Complainant. Respondent has persisted in using the trademarks of Complainant
for commercial gain, to misleadingly divert consumers, and to tarnish the
trademark at issue. In attempting to
attract, for commercial gain, customers by creating a likelihood of confusion with
Complainant's mark as to the source, sponsorship, affiliation, endorsement of
the websites, Respondent has acted in bad faith.
While
the ICANN Uniform Domain Name Dispute Resolution Policy states in the
conjunctive that the domain name "has been registered and is being used in
bad faith," the codified examples of bad faith are alternative and include
the following in Paragraph 4 (b) (iv):
"by
using the domain name, you have intentionally attempted to attract, for
commercial gain, Internet users to your 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."
Respondent's
intentions in continued use of the domain name, despite its original
motivations, are precisely so. Respondent has retained the domain name in order
to either sell the Complainant's products which Respondent has obtained without
payment, and/or to sell competing products.
B.
Respondent
This
is a case of Reverse Domain Name Hijacking and unfair trade practice. The Complaint should be denied because i)
Respondent has been commonly known as Clear Choice of New York, the name
incorporated in the domain name, prior to the registration date of any of
Complainant’s registered trademarks; ii) Complainant has at all times been
aware of, approved of and encouraged Respondent’s use of the disputed domain;
and iii) Respondent’s sale of Complainant’s products in connection with the
disputed domain irrefutably constitutes use of the
domain name in connection with a bona fide offering of goods or services before
any notice of this dispute. For the
same reason, it cannot be held that Respondent has engaged in bad faith
registration and use.
Respondent
is a New York corporation known as Clear Choice of New York, Inc. This corporation has been in existence since
December 18, 1998. Since as early as
1998, Complainant has had knowledge of, has approved of, and has actively
encouraged Respondent’s use of the corporate name Clear Choice of New York, as
well as Respondent’s web site located at the <clearchoiceofny.com>
domain name. The agreement with
Complainant and Respondent is in the name of Clear Choice of New York,
Complainant has emailed Respondent at its info@clearchoiceofny.com email
address, and billings to and payments received from Respondent have been in
Respondent’s corporate name.
Complainant even produced a brochure for Respondent, which promoted
Respondent’s <clearchoiceofny.com> website.
This
dispute has arisen because Complainant has recently dramatically raised the
prices it charges Respondent for its products by 35 percent, forcing Respondent
to seek alternative suppliers.
Respondent has several hundred thousand customers that know it as Clear
Choice of New York and know its website as <clearchoiceofny.com>
and Respondent has spent thousands of dollars promoting its website across the
Internet. Complainant’s goal is to
appropriate the fruit of Respondent’s hard work, capture its customers, and
steal its business by hijacking Respondent’s domain name.
Clear
Choice of NY is not Complainant’s intellectual property. It is Respondent’s corporate name, which
preceded and existed independently of the Sales Agreement. In fact, the Sales Agreement itself is
written in Respondent’s corporate name of Clear Choice of NY. Respondent formed its corporation and
registered the disputed domain before Complainant even registered its
trademarks.
Complainant
has long approved of Respondent’s sale of third party products on its website,
which compete with its own products. It
is disingenuous for Complainant to argue that Respondent is misleadingly
diverting consumers seeking Complainant’s website to its own site. The only users who would access the <clearchoiceofny.com>
domain name would be those users who are seeking Respondent, who is known as
Clearchoice of NY.
The
term “clear choice” is an extremely common descriptive term. Complainant does not have exclusive rights
to this term, a fact borne out by the more than 50 third party active and
pending U.S. trademarks which incorporate the term “clear choice.”
Tens of thousands of Respondent’s customers know the
domain name <clearchoiceofny.com> as
Respondent’s online location. Complainant cannot now be permitted to
essentially shut Respondent’s business down after having approved and consented
to its use of its corporate name and website for six years.
In early December 1998, Respondent advised
Complainant that he planned on calling his company Clear Choice of New York and
that he would operate a website at the <clearchoiceofny.com> domain
name. Complainant voiced no objection
to the corporate name or domain name.
Respondent is known as “Clear Choice of New York,”
which is wholly incorporated in the disputed domain (with New York abbreviated
as NY). At all times, Complainant has
had knowledge, has approved, and promoted Respondent’s Clear Choice of New York
business name and the <clearchoiceofny.com> domain name.
Although Complainant argues that Respondent breached
the Internet Sales Agreement by carrying products of competitors, Complainant
has been aware of and has not objected to Respondent’s sale of such products
carried on Respondent’s website throughout their business relationship.
Complainant
does not even own the <clearchoice.com> domain name -- the logical domain
name that users would type in seeking to find Complainant. If Complainant is not entitled to the domain
name that is identical to its registered trademark, it certainly should not be
entitled to a domain that clearly is different from that mark in a way that
clearly identifies a different party who conducts business under a corporate
name identical to the domain name.
The registration dates of each of
Complainant’s three trademark registrations post-date the 1998 registration
date of the disputed domain.
Accordingly, Complainant’s
alleged mark provides no enforceable rights under the Policy with respect to
the disputed domain. In the
event the Panel concludes that Complainant has enforceable trademark rights to
Clear Choice, it should find that the mark is not confusingly similar to the
disputed domain.
Respondent
has a legitimate interest to the disputed domain for several reasons. It is well established that the use of a
domain name in connection with a bona fide offering of goods or services
establishes Respondent’s legitimate interest pursuant to paragraph
4(c)(i). There can be no doubt that
Respondent has engaged in the bona fide offering of goods and services.
Respondent has sold drug-testing related products through its website since
1998, purchasing thousands of dollars worth of goods each month from
Complainant.
Respondent’s
selection of Clear Choice of New York as its corporate name and its
registration of <clearchoiceofny.com> was entirely in good faith,
with the full knowledge, approval and encouragement of Complainant. Complainant’s Internet Sales Agreement
denotes Respondent’s business name as Clear Choice of New York. Complainant cannot now take the position
that Respondent lacks a legitimate interest in the Disputed Domain, after
consenting to the use of this corporate name and website name for six years.
Respondent
has “been commonly known by the domain name,” thus
further establishing Respondent’s legitimate interest under paragraph 4(c)(ii)
of the Policy. The Internet Sales
Agreement was entered into in February 2003 – more than four years after
Respondent had incorporated as Clear Choice of New York and registered the <clearchoiceofny.com>
domain name.
The
first to register a domain name incorporating a common descriptive term subject
to substantial third party use has a legitimate interest in such domain name.
Complainant
must prove that the disputed domain was registered in bad faith. This is impossible to prove where, as here,
the Complainant consented to registration of the domain name at the time it was
registered. There is absolutely no
evidence that Complainant registered <clearchoiceofny.com> with
the intent to sell it to Complainant, to disrupt its business, to prevent it
from registering its trademark, or to confuse consumers.
Respondent submits that this is a case of Reverse Domain Name
Hijacking and, pursuant to Paragraph 15(e) of the Rules, this Panel should
declare in its decision that
the Complaint was brought in bad faith and constitutes an abuse of the
administrative proceeding. Where a
Complainant has condoned and encouraged the use of a domain name, the filing of
a complaint that contains allegations that Respondent lacks a legitimate
interest or engaged in bad faith constitutes reverse domain name hijacking.
Here
a finding of Reverse Domain Hijacking is particularly warranted because
Complainant has threatened to challenge Respondent’s domain name as a
strong-arm tactic in an attempt to force it to submit to Complainant’s
outrageous price increases. Through
this action, Complainant is attempting to appropriate those customers and steal
Respondent’s business that has been built over the past six years.
C.
Additional Submissions
Complainant
Unbeknownst to Complainant, after the parties signed their
authorized dealership agreement, the Respondent formed a corporation
integrating Complainant’s trademark, and registered the domain name in dispute
in this matter. Just a few months ago,
Complainant received actual knowledge that Respondent had actually incorporated
with Complainant’s trademark.
Prices under the dealership agreement generally remained unchanged
or actually decreased over the course of the six-year relationship of the
parties. Recently, when Respondent
objected to an 11.22% average percentage increase in prices, which was
specifically permitted under the dealership agreement, Respondent ordered a
great amount of product from Complainant just before the price increase. Respondent was on a net-30 term with
Complainant. At 30 days, Complainant
attempted to charge Respondent’s credit card, which was declined. Respondent unilaterally decided to split the
$20,949.90 owed Complainant into 12 monthly installments, and sent Complainant
a check for $1690.42, which was the first installment. When Complainant attempted to deposit the
check, it was returned because Respondent had placed a “stop-payment” order on
the check.
Thereafter, as Respondent depleted its inventory of various Clear
Choice products, it started selling detoxification products that directly
compete with Clear Choice. At this
time, the Respondent engaged in a “bait and switch” campaign, where visitors to
Respondent’s various websites would click on links with graphics of
Complainant’s products, but then be transported to an order page with a
competing product in the shopping cart.
Because the distribution agreement has been terminated for cause,
Respondent has no legitimate rights in a domain name containing the CLEAR
CHOICE mark. Additionally, Respondent’s
actions all combine to create a clear record of bad faith supporting
Complainant’s UDRP complaint.
Complainant started using the CLEAR CHOICE trademark (hereinafter,
the “Mark”), within the category of its registration, in 1993. Accordingly, the date of first use and the
date of first use in commerce as noticed in the registered trademark is October
1993. Complainant filed the Mark
application for the CLEAR CHOICE word mark on February 27, 1998, almost ten
months before Complainant and Respondent signed their first contract.
Complainant’s use of the Mark has also been extensive since
1993. The Mark is the only mark by
which Complainant markets its detoxification products, and since 1993,
Complainant has placed the Mark conspicuously on all product packaging, sales
and marketing materials, contracts and business cards. The Mark is well known in the industry, and
hundreds of thousands of consumers nationwide associate the Mark with
Complainant’s goods.
Significant secondary meaning for the term “Clear Choice” had
developed in the marketplace, between 1993 and the point at which Respondent
registered the disputed domain name.
At no time did Complainant authorize Respondent to register a
domain name containing Complainant’s trademark, nor did Complainant have prior
knowledge of Respondent creating a corporation with a name containing
Complainant’s trademark. The key dates
in the history of the relationship between the parties are as follows:
·
September
28, 1998: Complainant sent written
correspondence to Respondent thanking Respondent for its interest in working
with Complainant.
·
Fall
1998: Respondent approached Complainant
and asked for permission to sell a line of non-Health Tech detection kits on
Respondent’s website.
·
December
1, 1998: The parties entered an
“Authorized Dealership” agreement, which was a one-page fax, confirmed by
Respondent’s signature. The agreement
referenced both exclusivity and Complainant’s CLEAR CHOICE trademark, and it
only refers to Michael Fichera personally, with no reference to any
company. Notably, this agreement was
signed just three days before Respondent registered the disputed domain name, <clearchoiceofny.com>. Also, this agreement was signed 17 days
before Respondent incorporated in New York as “Clear Choice of New York, Inc.”
·
December
30, 1999: A second, more thorough agreement between the parties was signed.
Respondent was not referred to as a corporation, and there was no designation
on the agreement indicating a corporation (i.e. “Inc.,” “Incorporated,” etc.).
·
November
8, 2001: A third agreement was signed,
which was substantially similar to the December 30, 1999 agreement. There is no reference to Respondent as a corporation.
·
February
27, 2003: A fourth agreement was
signed, which was substantially similar to the previous two written
agreements. Complainant’s attorney
redrafted the header section of the agreement, and Complainant inadvertently
and mistakenly handwrote “NY” into the agreement. Despite this language in the agreement, Complainant had no direct
knowledge that Respondent had actually incorporated with Complainant’s
trademark.
This timeline is important because Respondent, in its Response,
focuses exclusively on the February 27, 2003 agreement without any reference
whatsoever to the prior written agreements, one of which precedes the
registration of the domain name and Respondent’s incorporation.
On July 27, 2004, Complainant gave Respondent notice of a product
price increase averaging 11%.
The Panel should also factor in all the other facts supporting
“bad faith.” Complainant never gave any
express permission to Respondent to register a domain name with Complainant’s
trademark; the authorized dealership agreement made it clear that the use of
Complainant’s mark was for the sole purpose of the agreement and for no other
purposes; Respondent has engaged in “bait and switch” tactics. Respondent ordered an unusually large amount
of product with the intent of not paying for it. Respondent’s website is currently confusing because it has
Complainant’s trademark in the domain name.
Perhaps the most important evidence of bad faith is that
Respondent, with clear knowledge of Complainant’s mark, is using a domain
containing Complainant’s mark to promote a business that is in direct
competition with Complainant.
Respondent
The
fact that Respondent is known by the domain name provides an “independent
right” to use the name.
None
of the cases cited by Complainant support a finding of bad faith under the set
of facts present here. Respondent is
entitled to retain the domain name.
Complainant
argues that it only learned that Respondent was incorporated a few months ago,
and that the checks were only viewed by the person responsible for handling
Complainant’s accounts receivable.
Whether Complainant’s president was aware of the corporate status is
irrelevant. His organization, by
admission, was aware of this fact.
The
December 1, 1998 agreement contains no limitation, whatsoever, regarding use of
the term “Clear Choice” within a dealer’s business name or domain name, so the
argument that Respondent registered the disputed domain in violation of that
agreement is false.
After
Complainant sent Respondent notification of price increase, Complainant
encouraged Respondent to buy up as much as it could at the old prices and
Complainant agreed to 120-day payment terms.
It was only after Complainant became aware that Respondent was seeking
other suppliers that it changed the terms to net-30, and Respondent countered
with an offer to pay in 12 monthly installments.
Respondent’s
argument is that Complainant had no registered trademark or common law
trademark at the time Respondent registered the disputed domain. Complainant has not proven it had
enforceable trademark rights prior to the issuance of its federally registered
mark. Accordingly, Complainant did not
have trademark rights at the time Respondent registered the disputed domain.
FINDINGS
For the reasons set forth below, the Panel
finds Complainant has not proven that the domain name should be transferred.
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.
For Complainant to prevail, it must prove
all three elements. Because of the
Panel’s ruling on the issue of Registration and Use in Bad Faith, the Panel
makes no ruling on this issue.
For Complainant to prevail, it must prove
all three elements. Because of the
Panel’s ruling on the issue of Registration and use in Bad Faith, the Panel
makes no ruling on this issue.
The
Panel finds that Respondent registered the domain name in good faith pursuant
to the distribution and licensing agreement it had with Complainant. Thus the Panel concludes that Respondent did
not register and use the <clearchoiceofny.com> domain name in bad
faith pursuant to Policy ¶ 4(a)(iii). See
Urbani Tartufi s.n.c. v. Urbani U.S.A., D2003-0090 (WIPO Apr. 7, 2003)
(finding that the disputed domain name was not registered in bad faith where
the original registration occurred in the context of a healthy distributor
relationship between the parties which was subsequently revoked by
Complainant); see also Mark Travel Corp. v. ATHS, FA 154644 (Nat. Arb.
Forum May 29, 2003) (stating that Policy ¶ 4(a)(iii) requires a showing of bad
faith use and registration, and that any subsequent termination of a
distributorship agreement would not allow a particular case to fall under the
UDRP in the future); see also Gorstew
Ltd., Jamaica & Unique Vacations v. Twinsburg Travel, FA 94944 (Nat.
Arb. Forum July 7, 2000) (finding no bad faith where Respondent used
<sandalsoutlet.com> and other domain names incorporating the SANDALS
mark, as an agent, in good faith, on behalf of Sandals Resorts).
Complainant has not proven this element.
DECISION
Complainant
having failed to prove all three elements required under the ICANN Policy, the
Panel concludes and orders that relief shall be DENIED.
Judge Karl V. Fink
(Ret.), Chair
February 17, 2005
Judge Irving H.
Perluss, (Ret.) & Steven L. Schwartz, Panelists
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