Edge Systems LLC v. Rafael Aguila / Edge Systems UG
Claim Number: FA1709001749820
Complainant is Edge Systems LLC (the “Complainant”), represented by Ali Razai of Knobbe Martens Olson & Bear LLP, California, USA. Respondent is Rafael Aguila / Edge Systems UG (the “Respondent”), Germany.
REGISTRAR AND DISPUTED DOMAIN NAME
The domain name at issue is <hydrafacial-md.com>, registered with Hetzner Online GmbH (the “Disputed Domain Name”).
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.
Kendall C. Reed as Panelist.
Complainant submitted a Complaint to the Forum electronically on September 19, 2017; the Forum received payment on September 19, 2017.
On September 21, 2017, Hetzner Online GmbH confirmed by e-mail to the Forum that the <hydrafacial-md.com> domain name is registered with Hetzner Online GmbH and that Respondent is the current registrant of the name. Hetzner Online GmbH has verified that Respondent is bound by the Hetzner Online GmbH registration agreement and has thereby agreed to resolve domain disputes brought by third parties in accordance with ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”).
On September 21, 2017, the Forum served the Complaint and all Annexes, including a Written Notice of the Complaint, setting a deadline of October 11, 2017 by which Respondent could file a Response to the Complaint, via e-mail to all entities and persons listed on Respondent’s registration as technical, administrative, and billing contacts, and to firstname.lastname@example.org. Also on September 21, 2017, the Written Notice of the Complaint, notifying Respondent of the e-mail addresses served and the deadline for a Response, was transmitted to Respondent via post and fax, to all entities and persons listed on Respondent’s registration as technical, administrative and billing contacts.
A timely Response was received and determined to be complete on October 11, 2017.
On October 16, 2017, a timely Additional Submission was received from Complainant.
On October 12, 2017, pursuant to Complainant's request to have the dispute decided by a single-member Panel, the Forum appointed Kendall C. Reed as Panelist.
Having reviewed the communications records, the Administrative Panel (the "Panel") finds that the Forum has discharged its responsibility under Paragraph 2(a) of the Rules for Uniform Domain Name Dispute Resolution Policy (the "Rules") "to employ reasonably available means calculated to achieve actual notice to Respondent" through submission of Electronic and Written Notices, as defined in Rule 1 and Rule 2.
Complainant requests that the domain name be transferred from Respondent to Complainant.
Complainant designs and sells skin health devices, including spa and skin treatment products and hydra dermabrasion systems. In connection with this business, Complainant holds a number of United States and international trademark registrations for the HYDRAFACIAL MD and related trademarks, including United States Patent and Trademark Office (“USPTO”) Reg. No. 3,341,027, registered Nov. 20, 2007 (the “Complainant’s Mark”), which establishes its rights under Policy paragraph 4(a).
Complainant has used Complainant’s Mark in commerce since 2005, and in connection therewith has had gross international sales of approximately
Respondent’s <hydrafacial-md.com> (registered Nov. 23, 2014) is identical to the HYDRAFACIAL MD mark because it merely adds a hyphen between the terms of the mark, and appends the “.com” generic top-level domain (“gTLD”) suffix.
Respondent has no rights or legitimate interests in or to <hydrafacial-md.com>. The WHOIS of record indicates that Respondent is not commonly known by <hydrafacial-md.com>. Further, Respondent uses the associated website to pass itself off as Complainant and caused actual consumer confusion through attempted sale of real or counterfeit products. This use represents no bona fide offering of goods or services or any legitimate noncommercial or fair use.
Respondent registered and used <hydrafacial-md.com> in bad faith. Respondent’s passing off behavior and counterfeit use imputes bad faith under both Policy ¶¶ 4(b)(iii) and (iv). Further, Respondent had actual and constructive knowledge of Complainant and Complainant’s rights in the HYDRAFACIAL MD mark under Policy ¶ 4(a)(iii).
Respondent’s domain name (the Disputed Domain Name) is a combination of dictionary words: “hydra” and “facial,” and he is using these words in their ordinary descriptive sense to describe his products on his website. He is entitled to use such words in a domain name; under the Policy, the first to register such a domain name has paramount rights, absent bad faith and a lack of legitimate interest. He has not acted in bad faith and he does have legitimate interests.
Complainant’s mark is descriptive. Under trademark law, such a trademark would not be honored, and this Panel should not allow Complainant to use such a trademark to overturn Respondent’s paramount rights under the Policy.
Respondent has rights and legitimate interests in <hydrafacial-md.com>. Respondent is using the descriptive terms of the domain name for a website that sells goods in accordance with the descriptive nature of the words. This represents a bona fide offering under Policy ¶ 4(c)(i).
Respondent did not register or use <hydrafacial-md.com> in bad faith. Respondent denies bad faith intent entirely. Generic terms in a domain name cannot lead to bad faith. In this regard it should be noted that Respondent has placed the following disclaimer on its website, on the footer of the domain:
“Caution: This website contains information on products which is targeted to a wide range of audiences and could contain product details or information otherwise not accessible or valid in your country. Please be aware that we do not take any responsibility for accessing such information which may not comply with any legal process, regulation, registration or usage in the country of your origin. This website is not intended for U.S. customers, visitors, or audiences”.
C. Complainant’s Additional Submission
All of Respondent’s arguments based upon the assertion that Complainant’s Marks consist of descriptive terms are incorrect. Complainant’s Marks, and numerous other trademark registrations around the world for the same or similar marks, would not have been issued if Complainant’s Mark consisted of generic terms. Further, assuming arguendo that Complainant’s Mark consist of generic terms, Complainant has established secondary meaning through use in commerce since 2005 and sales, including international sales, of approximately $170,000,000; Respondent has not rebutted this. Further still, Respondent’s argument with respect to Complainant’s Mark being generic is hollow and disingenuous. This is clear from Respondent’s inclusion of the element “-md” within the Disputed Domain Name. This element has nothing to do with the alleged descriptive nature of Complainant’s Mark and everything to do with Respondent’s precise copying of Complainant’s Mark.
Finally, Respondent’s protestations of innocence in his arguments against a finding of bad faith is belied by his pattern of behavior with respect to Complainant. Respondent has been masquerading as Complainant and selling knockoff products for many years, which conclusion is the finding of the US District Court for the Southern District of Florida (order dated May 9, 2016), affirmed on appeal by the US Court of Appeals for the Federal Circuit; the District Court said in reference to Respondent’s conduct with respect to Complainant, inter alia: “Bootleg. Clone. Copycat. Imitation. Knock-off. Palm-Off. However, one labels a peddled product that conspicuously capitalizes on another’s intellectual property rights, this case presents the quintessential example.”
Complainant owns the United States trademark registration number 3,341,027, registered Nov. 20, 2007, for the trademark HYDRAFACIAL MD. Further, Complainant owns numerous other trademark registrations in foreign countries for the same and similar marks.
Complainant has had significant gross product sales under Complainant’s Mark since 2005.
Respondent registered the domain name <hydrafacial-md.com> (the Disputed Domain Name) on or about November 23, 2014. The name of the registrant of this domain name is Rafael Aguila.
The Disputed Domain Name (<hydrafacial-md.com>) directs to a website on which Respondent offers products for sale which compete commercially with products sold by Complainant.
Respondent is subject to an order by the United States District Court for the Southern District of Florida, dated May 9, 2016, which granted Complainant’s Motion for Summary Judgment. This case involved allegations of trademark and patent infringement.
Paragraph 15(a) of 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 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 Respondent is identical or confusingly similar to a trademark or service mark in which Complainant has rights; and
(2) 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.
To establish the first element of the Policy, Policy paragraph 4(a)(i), Complainant must first demonstrate the existence of a trademark in which it has rights, and then it must demonstrate that the Disputed Domain Name is identical or confusingly similar to the trademark.
Rights in a trademark can be established by way of a trademark registration by a national trademark agency, including the US Patent and Trademark Office. See Liberty Global Logistics, LLC v. damilola emmanuel / tovary services limited, FA 1738536 (Forum Aug. 4, 2017) (stating, “Registration of a mark with the USPTO sufficiently establishes the required rights in the mark for purposes of the Policy.”). See also eBay Inc. v. eBay Motors, FA1705001731822 (Forum, June 26, 2017). See also T-Mobile USA, Inc. dba MetroPCS v. Ryan G Foo / PPA Media Services, FA 1627542 (Forum, Aug. 9, 2015) (finding that Complainant had rights in the METROPCS mark through its registration with the USPTO).
Here, Complainant has satisfied this requirement by demonstrating its ownership of US trademark registration number. 3,341,027 for the mark HYDRAFACIAL MD.
The issue of identicality or similarity between the Disputed Domain Name and Complainant’s Mark is determined at the level of the Disputed Domain Name and Complainant’s Mark and by way of a simple comparison between the two. Whereas, as a general statement, this comparison can become challenging when generic terms within a disputed domain name are added to all or part of a complainant’s trademark, and thereby arguably (or not) creating a meaningful distinction between the two, this is not true when a disputed domain name incorporates the entirety of a complaint’s trademark without addition. In such a situation, an argument with respect whether the terms making up Complainant’s Mark are generic is relevant, if at all, only to second or third elements of the Policy (Policy paragraphs 4(a)(ii) or 4(b)(iii)), but not to the first element of the Policy (Policy paragraph 4(a)). See Precious Puppies of Florida, Inc. v. kc, FA 1028247 (Forum Aug. 10, 2007) (examining Respondent’s generic terms arguments only under Policy ¶ 4(a)(ii) and Policy ¶ 4(a)(iii) and not under Policy ¶ 4(a)(i)); see also Vitello v. Castello, FA 159460 (Forum July 1, 2003) (finding that Respondent’s disputed domain name was identical to complainant’s mark under Policy ¶ 4(a)(i), but later determining the issue of whether the disputed domain name was comprised of generic terms under Policy ¶¶ 4(a)(ii) and 4(a)(iii)).
Arguments to the effect that the trademark laws of whatever nation control in this action under the Policy is off-point. See Abbott Labs. v. Patel, FA 740337 (Forum Aug. 15, 2006) (holding that assertions of trademark infringement are “entirely misplaced and totally inappropriate for resolution” in a domain name dispute proceeding because the UDRP Policy applies only to abusive cybersquatting and nothing else).
Here, the disputed domain name is <hydrafacial-md.com> and Complainant’s Mark is HYDRAFACIAL MD. the Panel has no difficulty finding that the Disputed Domain Name is identical to Complainant’s Mark.
The addition of a hyphen and the gTLD “.com” within the Disputed Domain Name do not create a meaningful distinction. It is true that these elements are not found within Complainant’s Mark, but such additions are routinely found by Panels to be irrelevant. See Blizzard Entertainment, Inc. v. XINXIU ZENG / haimin liang, FA 1736365 (Forum July 19, 2017) (finding that the addition of punctuation—specifically, a hyphen—did not sufficiently distinguish the disputed domain name from complainant’s registered mark); see also Marquette Golf Club v. Al Perkins, FA 1738263 (Forum July 27, 2017) (“When a respondent’s domain name incorporates a mark in its entirety and merely adds a generic top-level domain (gTLD), “.com”, then the Panel may find that the disputed domain name is identical to Complainant’s mark.”).
This Panel agrees and so finds.
As such, Complainant has established the first element of the Policy.
Under the second element of the Policy, Policy paragraph 4(a)(ii), Complainant must first make a prima facie case that Respondent does not have rights or legitimate interests in respect of the Disputed Domain Name, and then the burden shifts to Respondent to establish that his conduct falls within the parameters Policy paragraph 4(c). See Hanna-Barbera Prods., Inc. v. Entm’t Commentaries, FA 741828 (Forum Aug. 18, 2006) (holding that Complainant must first make a prima facie case that Respondent lacks rights and legitimate interests in the disputed domain name under UDRP ¶ 4(a)(ii) before the burden shifts to Respondent to show that it does have rights or legitimate interests in a domain name); see also AOL LLC v. Gerberg, FA 780200 (Forum Sept. 25, 2006) (“Complainant must first make a prima facie showing that Respondent does not have rights or legitimate interest in the subject domain names, which burden is light. If Complainant satisfies its burden, then the burden shifts to Respondent to show that it does have rights or legitimate interests in the subject domain names.”).
Here, Complainant has carried its required burden. Complainant has demonstrated that Respondent has not been commonly known by the Disputed Domain Name; the WHOIS information identifies respondent as “Rafael Aguila.” Complainant has not authorized or licensed respondent to use Complainant’s Mark, or any of Complainant’s trademarks, for any purpose. Respondent is not making a legitimate noncommercial or fair use of the Disputed Domain Name; Respondent is using the Disputed Domain Name to sell products, which activities are not noncommercial. Further, Complainant provides sufficient support for the assertion that Respondent is not using the Disputed Domain Name in connection with a bona fide offering of goods or services.
In reply, Respondent argues that it is engaging in legitimate sales activities under the Disputed Domain Name, and in doing so it is merely using generic terms in their generic sense; therefore, it has rights and legitimate interests in respect of the Disputed Domain Name.
Whereas lawful marketing and sales of products and/or services using generic terms is “legitimate” and “bona fide” in a vernacular sense, panels have routinely held that where a disputed domain name has been registered and is used in bad faith under the third element of the Policy, Policy paragraph 4(a)(iii), such a use cannot support a finding of rights or legitimate interests under the second element of the Policy. See Watts Water Technologies Inc. v. wo ci fa men zhi zao (kun shan) you xian gong si, FA 1740269 (Forum Aug. 11, 2017) (“Respondent has used the domain name to resolve to a website that mimics the color scheme associated with Complainant’s WATTS brand and displays counterfeit versions of Complainant’s products for purchase in an attempt to pass itself off as Complainant… [therefore], the Panel finds that Respondent has no rights or legitimate interests in the disputed domain name.”).
Many panels analyze this issue as part of their discussion of the second element of the Policy, but this Panel believes this issue is best addressed under the third element of the Policy, as is noted below.
The Panel finds that Respondent’s registration and use of the Disputed Domain Name was in bad faith under the third element of the Policy, and as such the Panel finds that Respondent does not have rights or legitimate interests in respect of the Disputed Domain Name.
As such, Complainant has established the second element of Policy.
The policy sets out four nonexclusive conditions which, if found, support a finding that Respondent’s conduct has been in bad faith. Policy paragraph 4(b). In particular policy paragraph4(b)(iv) reads:
“(iv) by using the [disputed] domain name, you [Respondent] have intentionally attempted to attract, for commercial gain, Internet users to your website or other on-line location, by creating a likelihood of confusion with Complainant’s mark as the source, sponsorship, affiliation, or endorsement of your website or location or of a product or service on your website or location.”
Here, Respondent has attempted to attract, for commercial gain, Internet users to his website. Otherwise, there would be no purpose for his website.
As a consequence, a likelihood of confusion results with Complainant’s Mark as to source, sponsorship, affiliation, or endorsement of his website. This follows from the identical nature of the disputed domain name to Complainant’s Mark and the completive nature of the parties’ respective products.
The critical issue here is Respondent’s intent. Were Respondent’s actions innocent under the Policy as Respondent argues and states in his declaration? Did Respondent merely use generic terms in their generic sense without any intention to benefit from the identicality between the Disputed Domain Name and Complainant’s Mark? Or rather, did Respondent intentionally attempt to benefit by this identicality? The Panel finds that the latter is the case, and this is so for two reasons.
First, Respondent is the subject of an order by the United States District Court for the Southern District of Florida dated May 9, 2016. This order grants Plaintiff’s (Complainant here) motion for summary judgement against the defendant (Respondent here). The court found that Respondent had passed itself off as Complainant and sold Respondent’s products as those of Complainant’s. The court stated, among other things, that Respondent’s conduct presented as a “quintessential” case of intellectual property infringement. It is to be noted that this order is not controlling here, and Respondent argues convincingly that said case did not involve Complainant’s Mark as defined here; however, said order can nevertheless be a lens through which Respondent’s conduct, and more importantly Respondent’s intentions, can be viewed. Through this lens, this Panel finds that Respondent’s intention here was to intentionally benefit from the identicality between the Disputed Domain Name and Complainant’s Mark for purposes of the Policy.
Second, Respondent’s argument that it has been innocently using descriptive terms within the Disputed Domain Name and thereby make functional descriptive reference to Respondent’s products is unpersuasive. This is because of the addition of the element “-md” to the element “hydrafacial” within the Disputed Domain Name. To whatever extent the element “hydrafacial” might be descriptive, that does not extend to the element “-md.” This latter element is out of place with respect to a functional description of Respondent’s products, but it is necessary for a complete copying of Complainant’s Mark. The inclusion of this element, “-md,” could only have been the result of an intentional copying of Complainant’s Mark.
The Panel is unclear about the import of Respondent’s argument with respect to the noted disclaimer placed on Respondent’s website. It could be that Respondent seeks to argue that because of this disclaimer, and presumably that he does not or would not sell product within the United States, there can be no competition between the parties for purposes of Policy paragraph 4(b)(iv). If this is the case, this argument is unpersuasive. The parties compete internationally, not merely within the United States. Or, it could be that Respondent seeks to argue that because the Panel is seated in the United States, it does not have authority to decide an action involving Respondent’s conduct occurring outside of the United States, thereby leaving no conduct on Respondent’s part that the Panel can reach. This argument too is unpersuasive. The Panel’s jurisdiction is based upon the Policy and on Respondent’s contract
with the involved domain name registrar, and it is not limited to the territory of any nation.
As such, Complainant has established the third element of the policy.
Having established all three elements required under the ICANN Policy, the Panel concludes that relief shall be GRANTED.
Accordingly, it is Ordered that the <hydrafacial-md.com> domain name be TRANSFERRED from Respondent to Complainant.
Kendall C. Reed, Panelist
Dated: October 23, 2017
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