Cactus Restaurants Ltd. v. Web Master
Claim Number: FA0604000671297
PARTIES
Complainant is Cactus Restaurants Ltd. (“Complainant”), represented by Franc Boltezar, of Smart & Biggar, 2200-650 West Georgia Street, Box 11560 Vancouver Centre, Vancouver, BC V6B 4N8, Canada. Respondent is Web Master (“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 <cactusclub.com>,
registered with Addrcreat.
PANEL
The undersigned certify that they have acted independently and
impartially and to the best of their knowledge have no known conflict in
serving as Panelists of this proceeding.
Hon. Sir Ian Barker, QC (Chair), Mr. Edward C. Chiassson, QC and Ms
Diane Cabell as Panelists.
PROCEDURAL HISTORY
The Complainant submitted a Complaint to the National Arbitration Forum
electronically on April 3, 2006; the National Arbitration Forum received a hard
copy of the Complaint on April 4, 2006.
On April 13, 2006, Addrcreat confirmed by e-mail to the National
Arbitration Forum that the <cactusclub.com>
domain name is registered with Addrcreat and that the Respondent is the current
registrant of the name. Addrcreat has
verified that Respondent is bound by the Addrcreat 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 April 13, 2006, a Notification of Complaint and Commencement of
Administrative Proceeding (the “Commencement Notification”), setting a deadline
of May 3, 2006 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@cactusclub.com by e-mail.
A timely Response was received and determined to be complete on May 2,
2006.
Additional Submissions were received in a timely fashion from the
Complainant on May 5, 2006 and from the Respondent on May 10, 2006.
On May 9, 2006, pursuant to Respondent’s request
to have the dispute decided by a three-member
Panel, the National Arbitration Forum
appointed Hon. Sir Ian Barker, QC (Chair), Mr. Edward C. Chiasson, QC and Ms
Diane Cabell as Panelists.
RELIEF SOUGHT
The Complainant requests that the domain name be transferred from the
Respondent to the Complainant.
PARTIES’ CONTENTIONS
A. Complainant
Complainant is a Canadian corporation which operates restaurants in
North America under the mark CACTUS CLUB.
It has provided restaurant services since 1988 and has sold and
distributed clothing and novelties to the public in association with the said
mark since 1994.
Complainant owns the following registered trademarks:
[i.] United
States Service Mark: CACTUS CLUB CAFE, Registration No. 2,844,143, Registered
05.25.2004, for use in association with "restaurants."
[ii.] Canadian Trademark: CACTUS CLUB, Registration No. TMA 370,951, Registered: 07.20.1990, for use in association with Services (1) "operation of a restaurant".
[iii.] Canadian Trademark: CACTUS CLUB CAFE, Registration No. TMA 492,067, Registered: 03.30.1998, for use in association with: Wares (1) Clothing distributed through restaurants operated by the applicant, namely T-shirts; … (4) Novelties distributed through restaurants operated by the applicant, namely mugs; (5) Clothing distributed through restaurants operated by the applicant, namely boxer shorts and caps…; and Services (1) Restaurant Services.
[iv.] Canadian Trademark: CACTUS CLUB CAFE & Design, Registration No. TMA 473,485, Registered: 03.25.1997, for use in association with clothing distributed through restaurants operated by the applicant, namely T-shirts…; novelties, namely … mugs, boxer shorts, caps…; and restaurant services.
Complainant asserts a common law mark in Canada and elsewhere prior to
registration of the disputed domain name in the name CACTUS CLUB CAFÉ GLOBAL
DINING LOUNGE and Design in association with restaurant services. It registered in 2001, the domain names
<cactusclubcafe.com> and <cactuscareers.com>.
The disputed domain name is identical to the Complainant’s CACTUS CLUB
mark and confusingly similar to its CACTUS CLUB CAFÉ marks.
Respondent has received no licence to use Complainant’s marks and does
not qualify under any of the provisions of ¶ 4(c) of the UDRP.
Respondent’s website, at the date of lodging the Complaint, was being used
to host a website with links to the following :
(a)
“Cactus Club
Restaurant”, “Cactus Club Locations”, “Cactus Club Menu” and “Vancouver
Restaurant”;
(b)
other
restaurants, such as Hard Rock Café, which are in competition with the
Complainant;
(c)
pornographic sites;
(d)
pop-up
advertising.
There is no contact information or place of business given with the
registration particulars of the disputed domain name. The Respondent has failed to respond to a “cease and desist”
letter from the Complainant’s solicitors dated February 1, 2006. The telephone number given in the
particulars is inoperative.
Bad faith by the Respondent can be inferred from the following:
(a)
incomplete,
false and/or non-updated registration information in breach of the Respondent’s
registration agreement;
(b)
a pattern of
behaviour demonstrated by successful recent UDRP cases against the Respondent
where it was ordered to transfer a well-known mark which it had registered as a
domain name, i.e. Wal-mark Stores Inc. v
Walmarts (WIPO Case D2005-0706, <walmarts.com>) and Viacom International Inc. & Anor v Web
Master (WIPO Case D2005-0321 <mtvbase.com>).
(c)
Respondent is
disrupting Complainant’s business and causing public confusion by implying an
association with Complainant’s business and marks. This conduct appears designed to attract internet users to
Respondent’s website, thus creating confusion as to the source, sponsorship or
affiliation or endorsement of the Respondent’s website. The link to pornography sites tarnishes
Complainant’s reputation and goodwill.
B. Respondent
CACTUS CLUB is a generic term used by entities in the restaurant
business other than the Complainant. An
advanced Google search for CACTUS CLUB (without the word Café) yielded 3.3
million third-party uses of the term.
At least 15 businesses in the USA, unaffiliated with Complainant,
operate under the name CACTUS.
Respondent registered the disputed domain name on July 2, 2004, when it
had been deleted due to expiration and had become generally available. This assertion was accompanied by a document
signed by one Kara Fox. This document
reads as follows:
DECLARATION
OF KARA FOX
KARA FOX declares the following to
be true and is proferred under penalty of law for making false statements:
I am the domain manager of Web
Master, the Respondent in these proceeding.
I submit this declaration in opposition to the Complaint brought by
Cactus Restaurants Ltd. The testimony
contained herein is based upon my own personal knowledge.
1.
We registered the
disputed domain cactusclub.com (“Disputed Domain”) when it expired and became
available for anyone to register. We
selected the Disputed Domain because it incorporates the common term “cactus
club.”
2.
We did not register the
Disputed Domain with the intent to sell it to Complainant, to disrupt
Complainant’s business, to prevent it from registering a domain name containing
its trademark, or to confuse users.
3.
We had never heard of
Complainant or its trademark when we registered the Disputed Domain.
4.
We have used the
Disputed Domain in connection with a pay-per-click advertising affiliate
program operated by DomainSponsor.com.
Domain Sponsor posts automated advertising links on the web site located
at the Disputed Domain. We had no
control over the type of ads appearing.
I DECLARE THE ABOVE TO BE TRUE UNDER PENALTY OF LAW.
[signed]
KARA FOX Date:
April 27, 2006
Respondent receives a share of the revenue generated by the
advertisement on the website of the disputed domain name. The auto-links are auto-generated by Domain
Sponsor and are not within Respondent’s control.
The Complaint should be denied because the disputed domain name had
been registered as long ago as July 2004.
Cases where there had been significant time elapsing between
registration and the filing of a Complaint were cited. In none of them was the delay of 21 months
as here.
Respondent does not dispute the first element of the Policy, i.e.
domain name identical to or confusingly similar to the Complainant’s mark.
Respondent has rights and a legitimate interest in the disputed domain
name for the following reasons:
(a) Complainant has no exclusive rights to
such a generic name which is used by unconnected businesses.
(b) Respondent uses the disputed domain name
with an affiliate programme that posts paid advertising links. UDRP cases were cited in support.
Respondent did not register and does not use the disputed domain name
in bad faith because:
(a) It
had no knowledge of Complainant’s mark as at the date of registration and bad
faith cannot be shown at date of registration.
(b) The
disputed domain name is comprised of common descriptive terms and, absent
direct proof of registration solely for the purpose of profiting from the
Complainant’s rights, there can be no finding of bad faith. See Ultrafem Inc. v Royal (Nat. Arb. Forum FA 97,682 Aug. 2, 2001).
(c) A
pay-per-click service does not establish bad faith but supports a legitimate
interest.
(d) Respondent
does not select the advertisements which are auto-generated under Respondent’s
agreement with Domain Sponsor.
Therefore, Respondent can have no intention specifically to confuse
consumers.
(e) The
disputed domain name was registered after it had expired. The deletion is a signal that the prior
registrant had abandoned any claim to it.
See Vernon Pools Ltd v Vertical
Axis Inc. D2003-0041 (WIPO
Mar. 12, 2003).
C. Complainant’s Additional
Submissions
The registration of a confusingly similar domain name which attracts
and confuses internet users is not a legitimate use.
Third-party control of the disputed domain name through an affiliate
programme is not a defence if the programme confuses internet users.
The existence of third-party users of CACTUS CLUB as a trademark
neither destroys Complainant’s rights nor disentitles the public from being
confused or misled. Nor does the
existence of third-party users of the mark assist the Respondent when it is not
one of those users who could set up a defence of legitimate right or interest.
Respondent does not deny knowledge of Complainant’s US trademark for
CACTUS CLUB CAFÉ secured before
registration of the disputed domain name, nor of its business and the
reputation of its mark.
The references in Respondent’s website to Complainant’s Vancouver
restaurant and its menu were removed after the “cease and desist” letter had
been sent, indicating that Respondent had control of the website.
The links on Respondent’s website did not lead to any third party
identified by Respondent as a user of the CACTUS CLUB mark but instead to
competitors, restaurant listings and pornography.
Negative inferences should be drawn from various aspects of
Respondent’s submissions and evidence, including, but not limited to:
(a)
Respondent’s
failure to address its prior pattern of domain name registrations, and its
failure to provide valid contact information to the Provider (except perhaps an
e-mail address);
(b)
Respondent’s
failure to address the clear and prominent reference to “Vancouver” on its
website, which is the location of the Complainant’s head office and highest
concentration of restaurants, and the subsequent removal of many of those
references after the sending of the “cease and desist” letter; and
(c)
the failure to
include an address for its deponent, Ms. Fox, nor identify the basis for her
knowledge, as well as the failure to address several points in issue through
Ms. Fox’s evidence, including, which “trademark_” [emphasis added] she was
referring to therein.
Each of Respondent’s cases, suggesting that it has a legitimate
interest are inapplicable and properly distinguished, given that, in this
case, inter alia, the domain name
is distinctive. Each of Respondent’s cases are distinguishable on at least
one of the following grounds:
(1)
Complainant had
no prior trademark registrations.
(2)
a lack of
confusing usage by the respondent; and/or
(3)
no prior pattern of wrongful registration (all
of the cited cases).
With respect to Respondent’s “affiliate program” submissions, no case
cited by Respondent, provides this allegation as a basis for a legitimate
interest when the domain name in question is a distinctive trademark, and
especially when, inter alia, it is
used in a manner likely to confuse consumers.
Further, Respondent omitted from its evidence any detail on how the
domain has been used and managed, except that it has a pay-per-click advertising
component. Nor did Respondent explain
how the website came clearly to allude to Complainant, but then lead people to
other restaurants, e.g., the Hard Rock CafeTM.
Respondent alleges that it had no prior knowledge of Complainant’s
“trademark”, but fails to address whether or not Respondent had knowledge of
another one of Complainant’s family of CACTUS CLUB Trademarks. In any event, since Complainant had
registered several members of its family of CACTUS CLUB Trademarks prior to the
Respondent’s registration of the disputed domain name, including obtaining
issuance of its US registration for CACTUS CLUB CAFÉ shortly before,
constructive knowledge is imputed to Respondent, and a bad faith registration
inferable on this basis alone.
Another independent basis for this Panel finding bad faith are the
actions of the Respondent subsequent to registration, namely use of the domain
name in a manner likely to mislead and confuse internet users.
Respondent’s cases relating to bad faith are inapplicable to the facts
currently before the Panel. For
example, in Future World Consultancy
(Pty) Limited v. Online Advice, D2003-0297 (WIPO July 18, 2003), the respondent was found to have
registered the disputed domain name, <futureworld.com>, without the
complainant in mind, but this conclusion was supportable by, inter alia, the descriptiveness of the
domain, the lack of a pre-existing trademark registration (and no filing for
such in the jurisdiction of the respondent), the lack of any implied reference
to the complainant on the respondent’s site, and the lack of any prior pattern
of wrongful conduct.
Respondent’s cases on delay are inapplicable given the fact that,
unlike in those cases, in this case, inter
alia: (1) the delay is less; (2)
there is no bona fide use by
Respondent; and (3) Respondent has likely caused confusion and/or diverted
internet traffic for commercial gain.
The extraordinary remedy of bar due to laches should not be entertained.
D. Respondent’s
Additional Submission
Complainant’s Additional Submission does not change the inevitable
conclusion that there is insufficient evidence of bad faith registration.
Because Complainant does not have exclusive use of the term CACTUS
CLUB, there is no basis to infer that Complainant was targeted by the registration. Hence no proof of bad faith.
FINDINGS
Complainant owns the business and the
trademarks set out above.
Other businesses exist which trade under the
words CACTUS CLUB.
Respondent operates the website described
above accessed through the disputed domain name. Respondent is paid for “click throughs” but the content of some
of the website is generated automatically by the firm with which Respondent
contracts.
Respondent has not denied and therefore the
Panel accepts as proved, the following:
(a)
Respondent has
not provided complete or accurate information to the Registrar of the disputed
domain name. The telephone number
provided is inactive and no response was received by Complainant to emails sent
to the nominated administration and technical contact.
(b)
Respondent made
no reply to Complainant’s “cease and desist” letter.
(c)
Respondent’s
website featured prominently Complainant’s Vancouver restaurant and its menu at
the time when the “cease and desist” letter was sent. Respondent removed the prominent references to the Vancouver
restaurant after it had received the letter.
(d)
The same
Respondent was involved in the two WIPO decisions in 2005 noted earlier where,
on both occasions, it had registered well-known trademarks (or a minor
variation) as a domain name.
The Panel views the statement of Kara Fox
submitted by Respondent, with some degree of skepticism for the following
reasons:
(a)
The deponent
gives no address which is usual in any affidavit, deposition or statutory
declaration.
(b)
The deponent
does not state the source of her alleged personal knowledge.
(c)
The deponent
declares the statement to be true “under penalty of law”. Yet this is a meaningless statement unless
the place where the statement was made is disclosed. Otherwise, anybody aggrieved by a false statement would not know
in which jurisdiction the penalty could be imposed.
(d)
There is no
witness to the statement. Declarations
under penalty of law in many jurisdictions around the world, as a test of
authenticity, frequently are required to be witnessed by some public
functionary such as a notary or court official.
The Panel does not find the Complaint
debarred by laches because it was filed some 21 months after the registration
of the disputed domain name. The Panel
does not accept that the equitable doctrine of laches has any part in the UDRP
process since it is not mentioned in the Policy. Even if this were not so, a delay of 21 months is not exceptional
in the Panel’s experience.
Nor is the Complaint debarred because an
earlier registration had lapsed.
Complainant did not deny that this had happened. The Panel notes the authorities cited by
Respondent in this regard, which can make the position of a respondent who registers
such a name stronger.
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.
The disputed domain name is identical to
Complainant’s Canadian trademark CACTUS CLUB and confusingly similar to its US
trademark CACTUS CLUB CAFÉ. Respondent
does not challenge this ground, which the Panel finds proved.
Because Complainant gave Respondent no rights
in respect of its trademarks, it is for Respondent to show that it comes within
one or other of the limbs in Para. 4(c) of the Policy.
The only enquiries relevant to this case
under Para. 4(c) are whether Respondent has a legitimate interest in the names,
and whether its use of an affiliate programme that posts paid advertising links
is a legitimate interest.
In the Panel’s view, Complainant’s marks are
sufficiently distinctive. The Panel
should not “second guess” the Patent Offices of Canada and the USA to say that
Cactus Club should not have been registered as a trademark. If the Respondent had been operating a
business under the CACTUS CLUB name, then it might have been able to show a
genuine commercial use. However, that
is not the case here.
The Panel finds that Respondent, by directing
internet users seeking Complainant’s restaurant services to its own website, is
acting for commercial gain in the form of click-through fees. In the Panel’s view, it does not constitute
a bona fide offering of goods or
services pursuant to Policy ¶ 4(c)(i), or a legitimate noncommercial or fair
use pursuant to ¶ 4(c)(iii). See Target Brands, Inc. v. Bealo Group S.A., FA
128684 (Nat. Arb. Forum Dec. 17, 2002) (finding that use of the
<targetstore.net> domain name to redirect internet users to a
pornographic website did not equate to a bona
fide offering of goods or services under Policy ¶ 4(c)(i), or a legitimate
noncommercial or fair use of a domain name under ¶ 4(c)(iii); see also Ameritrade Holdings Corp. v. Polanski, FA
102715 (Nat. Arb. Forum Jan. 11, 2002) (finding that the respondent’s use of
the disputed domain name to redirect internet users to a financial services
website, which competed with the Complainant, was not a bona fide offering of goods or services).
Respondent’s business model is similar to
that of a billboard owner. He makes
money by renting out space to companies that want to post their ads on it. If the billboard is located next to a busy
street, then the rental is higher. This
is the same revenue principle that
Respondent adopts when it buys up domain names and rents the domain
space out to third parties. Respondent
earns money based on how much traffic visits the site. It pays to register domains that will draw a
lot of traffic.
Accordingly, the Panel finds the second
element of the Policy Para. 4(a) proved.
It is clear that the Panel must find bad
faith both at the time of registration and in subsequent use.
A trademark can be registered in Country A in
respect of goods or services which, whilst well-known in Country A, are not
universally-known names like, say, Coca Cola.
When a domain name is registered in Country B some great distance away
and it is often not possible to infer bad faith registration. See VZ Vermögens Zentrum AG v Anything.com, D2000-0527 (WIPO Aug.
22, 2000).
A majority of the Panel feels able to infer
bad faith registration in this case for the following reasons:
(a)
the true
Respondent has not been revealed and inadequate or inoperative contact details
have been given. The Panel takes
judicial notice that the Cayman Islands Colony is a well-known place of
corporate registration for entities who do not live there.
(b)
Respondent’s
pattern of conduct in 2005 in cybersquatting, as shown in the two WIPO
decisions cited earlier, demonstrates that it is no stranger to the UDRP and to
using well-known trademarks.
(c)
One would have
expected a reply to the “cease and desist” letter. See ACCOR v.
Tigertail Partners, D2002-0625 (WIPO Aug. 29, 2002).
(d)
The deletion of
the reference to the Vancouver restaurant from the website all indicates that
Respondent knew about Complainant and its chain of restaurants.
One member of the
panel considers that only (b) above is applicable. However, all members of the Panel consider that bad faith
registration and use can be inferred.
Respondent claims
that it registered the disputed domain name without any consciousness of
infringement, therefore the requisite intent did not exist. However, Respondent has an established
business model by which it intends to use the domain for third party
content/generation services. It also
indicates knowledge that the content, thus generated, is based on traffic
records of users who searched for them.
Therefore, Respondent should be presumed to know that this practice has
a high probability of producing content related to the mark itself. Therefore, Policy ¶ 4(b)(iv) bad faith
intent existed at the time of registration.
If the disputed domain name were an obscure, little-used search term,
then traffic would be minimal and presumably less valuable a domain name to
register since it would attract fewer searchers.
If the mark were a
single word (cactus or club), the situation could be different since each is a
commonly-used word that may be a popular search term in itself. But the combination of the two is not so
common.
Examples of bad faith under Para. 4(b)(iv) of the Policy include:
“(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 reveals little of its methodology in the selection of domain
names to register, other than declaring that it had no awareness of any
trademarks. The Panel does not accept an argument that allows a
registrant to ignore potential conflicts simply by burying its head in the
sand. Respondent, in the Fox declaration, acknowledges that it
engages in a selective process by choosing "common terms."
However, common words form the basis of many established trademarks. Therefore, a simple declaration of
ignorance does not seem either persuasive or realistic for a business that
has already been subjected to at least two UDRP procedures.
Respondent's business model seems rather to encourage selection of
domains that reflect existing trademarks as it would clearly be more profitable
to select domains that correspond to known and active marks because more users
are likely to be searching for information about them. Respondent's
intent at registration is to use the domain to earn revenues that increase with
the proportion of traffic that visits the site. The Panel thinks it
likely that a known trademark will drive more traffic than an unknown common
word, and any part of Respondent's business model that is based on traffic
levels will likely select in favor of existing marks . Thus, it seems that the registration is
intentionally attempting to take advantage of a trademark’s goodwill by
creating a likelihood of confusion to users who are using the mark as a search
term.
As to bad faith use, it is no defence to say that Respondent has no
control of the auto-generated pop-ups of Domain Sponsor. The website clearly creates confusion for
internet viewers. They would not
expect, if seeking to view a website about the Complainant, to be referred to
either competitor restaurants or to pornographic sites.
A website owner cannot be reckless or indifferent as to what is placed
by another on his/her website. This has
been shown in other cases involving Domain.Sponsor such as Sanofi-Aventis et al. v. IN4 Web Services, D2005-0938 (WIPO Nov. 24, 2005) and Herbalife International Inc. v. Surinder
S.Farmaha, D2005-0765 (WIPO
Oct. 3, 2005), to name but two.
As was said by the Panelist in
Sanofi-Aventis:
“These cases indicate the extreme
caution with which any domain name registrant must approach such schemes. In the present case, the Respondent
routinely enters newly registered domain names into a “pay-per-click” scheme. On the available evidence, the Panel found
that the Respondent either passively condoned or was indifferent to the
material posted to its domains by another party. The very intention of that other party is to drive traffic
through the websites. It would appear
from the evidence that one strategy to do so may be to use a third party
trademark which is similar to the domain name.
the Panel believes that registrations made as part of such a scheme are
made and used in bad faith for the purposes of this Policy if it is held that
the domain name in point is confusingly similar to a mark in which a
third-party complainant has rights.”
Accordingly, in the Panel’s view, the third requirement of the Policy
is proved, both as to bad faith registration and use.
The Panel does not hold that there was any constructive notice of the
trademarks which were registered prior to registration of the disputed domain
name. Possibly, if it could be
established that Respondent was based in the United States or Canada,
constructive notice could be invoked by a failure to search the
readily-available trademark registers of those two countries.
DECISION
Having established all three elements required under the ICANN Policy,
the Panel concludes that relief shall be GRANTED.
Accordingly, it is Ordered that the <cactusclub.com>
domain name be TRANSFERRED from Respondent to Complainant.
Hon. Sir Ian
Barker, QC
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