BEDS.COM: ‘Wilful Blindness’ Only Applies to Distinctive Marks
You may recall that I have from time to time focused on what it takes to demonstrate acquired distinctiveness or a “secondary meaning” in an otherwise descriptive or generic term. This issue has again arisen in this case because the Complainant alleged common law trademark rights in BEDS.COM due to an “extensive period” of use. [Read commentary].
We hope you will enjoy this edition of the Digest (vol. 3.44), as we review these noteworthy recent decisions, with expert commentary. (We invite guest commenters to contact us):
‣ BEDS.COM: ‘Wilful Blindness’ Only Applies to Distinctive Marks (beds .com *with commentary)
‣ Is “Discount” Knife Confusingly Similar to the Complainant’s Marks? (discountknife .net *with commentary)
‣ Messy Pleadings, Disclaimed Words, and a Business Dispute Beyond the Scope of the Policy (usaquickprint .com *with commentary)
‣ A Strange Denial? (doncastercable .com *with commentary)
‣ Case Unripe for Resolution Under the Policy (insperityglobalservices .com *with commentary)
BEDS.COM: ‘Wilful Blindness’ Only Applies to Distinctive Marks
Panelist: Ms. Eugene I. Low (Chair), Mr. Jeffrey J. Neuman, and Mr. Douglas M. Isenberg
Brief Facts: The Complainant is a smart bed and wellness technology company. It has used the <BEDS .COM> mark and the disputed Domain Name since 2000 up till 2018 for promoting SLEEP NUMBER brand mattresses (and its predecessor SLEEP COMFORT) with estimated millions of customer visits. Later, in 2018, the disputed Domain Name was redirected to another Domain Name <sleepnumber .com>. The Complainant claims common law rights in the BEDS .com mark by way of the Complainant’s operation of the disputed Domain Name in the past two decades, which resulted in consumers visiting the domain name and associating it with SLEEP NUMBER, which is a registered famous mark owed by the Complainant. The Respondent is the principal officer of Silver Scope Media Ltd., a web design and search marketing company and he purchased the disputed Domain Name at SEDO marketplace.
The Complainant alleges that the Respondent (or its agent) either stole the disputed Domain Name from the Complainant by cyberattack or bought it from the person who did it. In the latter case, the Complainant alleged that the Respondent either knew or was wilfully blind to the theft. The Complainant further alleges that the Respondent generates click-through ad revenues through the disputed Domain Name and attempted to sell the disputed Domain Name through auctions. The Respondent contends that the Complainant has no common law rights in the mark, but rather the Complainant’s application to register the BEDS .COM mark filed in 2000 was refused and abandoned by the Complainant. Further, the Complainant fails to present sufficient evidence to establish acquired distinctiveness in the highly descriptive mark.
Held: The Panel notes that the disputed Domain Name comprises solely a descriptive term which is not inherently distinctive. In such a case, there was a greater onus on the Complainant to present evidence of the acquired distinctiveness or secondary meaning. However, there is scant evidence of the use of the BEDS. COM mark produced by the Complainant. The Panel is not satisfied that such scant evidence of use is sufficient to establish the requisite common law rights in the BEDS .COM mark under this element. Moreover, there is no evidence in support of the Complainant’s allegation related to theft. Conversely, the Respondent has provided evidence of his negotiation history and purchase of the disputed Domain Name from SEDO. The Respondent’s evidence on the history of the negotiations, combined with the fact that the disputed Domain Name is inherently descriptive, suggest that the purchase was conducted at arms-length and the Panel finds no reason to find otherwise. The Panel is of the view that the Complainant has failed to establish a prima facie case that the Respondent has no rights or legitimate interests in the disputed Domain Name.
Finally, the Respondent has provided credible evidence showing that it is a bona fide purchaser of the disputed Domain Name and in the absence of any evidence to the contrary, the Panel is satisfied that the Complainant has failed to establish that the disputed Domain Name has been registered and is being used in bad faith. The Panel also disagrees with the Complainant’s argument that the Respondent should have known about the Complainant’s use of the disputed Domain Name, as this is not a case in which the Respondent should be held to such a “wilful blindness” standard. “Wilful blindness” is generally only found in UDRP cases where marks are so distinctive that the use of the mark can only be associated with the Complainant. Here, the disputed Domain Name does not contain such a distinctive mark (both in terms of inherent distinctiveness and acquired distinctiveness), and therefore, based on the current evidence the Panel finds that the Respondent did not register the disputed Domain Name in bad faith.
RDNH: This Panel makes a finding of RDNH against the Complainant. Not only did the Complainant fail to establish any of the three elements, but it is clear that the Complainant made a speculative case at best by first alleging theft of the disputed Domain Name by the Respondent without supporting evidence pointing to the role of the Respondent in the alleged theft, and then after seeing Respondent’s response, essentially changing its arguments to say while the Respondent might not have stolen the disputed Domain Name, the Respondent should have known about the theft because of the low price, etc. The fact that the Complainant only cited court cases but not UDRP cases to support its “willful blindness” theory is telling – UDRP proceedings are clearly not the appropriate forum.
Complaint Denied (RDNH)
Complainants’ Counsel: Ben L. Wagner of Troutman Pepper Hamilton Sanders LLP, California, USA
Respondents’ Counsel: John Berryhill, Pennsylvania, USA
Case Comment by ICA General Counsel, Zak Muscovitch:
You may recall that I have from time to time focused on what it takes to demonstrate acquired distinctiveness or a “secondary meaning” in an otherwise descriptive or generic term. This issue has again arisen in this case because the Complainant alleged common law trademark rights in BEDS.COM due to an “extensive period” of use. This use however, was in association with beds, meaning that the Complainant would have an uphill battle to demonstrate that an otherwise descriptive term had become associated in the minds of consumers, with the Complainant. As I wrote previously in Volume 3.9 in connection with the MultiTracks case:
“As stated by Lord Russel in Canadian Shredded Wheat Co. v. Kellogg: “The onus on the person who attempts to establish this secondary meaning is a heavy one. Where the words are purely descriptive and in common use it is even more difficult to conceive a case in which they could acquire a secondary meaning”. And as stated in Registrar of Trade Marks v. Hardie & Co. Ltd.,  S.C.R. 483, the burden of proof for acquired distinctiveness “increases in direct ratio to the degree in which a word or words, is in common use as a descript[or] of an article of trade or laudatory thereof”. Put another way by UDRP Panelist Tony Willoughby in UK Betting PLC v. Pam Oldfield, WIPO Case No. D2005-0637 <UKBet.com> (August 31, 2005): “Descriptive names are capable of acquiring distinctiveness (e.g. BRITISH AIRWAYS and BRITISH PETROLEUM), but the more descriptive the name, the more by way of evidence that a court will require to establish reputation and goodwill”.
Here, the Panel determined that the evidence of acquired distinctiveness was wholly insufficient. This is hardly surprising considering the immense burden on a party trying to prove secondary meaning in a term like BEDS.COM. Although it is often thought to be nearly impossible to convert such a term into a distinctive mark, we have seen that it is sometimes possible, as in the Booking.com case which we also discussed in Volume 3.9.
Is “Discount” Knife Confusingly Similar to the Complainant’s Marks?
Panelist: Mr. Ho-Hyun Nahm, Esq.
Brief Facts: The Complainant, founded in 1994, is a designer and manufacturer of precision cutlery. The Complainant has rights in the DIRAC, DIRAC DELTA, MARFIONE CUSTOM KNIVES, and MICROTECH marks through its registration with the USPTO (between 2016 and 2019). The disputed Domain Name was registered on April 10, 2022. The Complainant argues that the disputed Domain Name is confusingly similar to the Complainant’s marks because the element “discount” is confusingly similar to the Complainant’s DIRAC and DIRAC DELTA marks in that it consists of the identical two first letters of Complainant’s marks and, therefore, has a similar appearance, sound, and pronunciation, and “descriptive of business in general because the Complainant sells goods.” Likewise, the element “knife” is confusingly similar to the Complainant’s MARFIONE CUSTOM KNIVES mark because it transforms a plural reference to the singular and relates to the Complainant’s products. The Complainant further alleges that the Respondent uses the disputed Domain Name to mimic the Complainant’s legitimate webpage displaying the Complainant’s trademarks and offering counterfeit products for commercial gain, and thus it is inconceivable that the Respondent registered and is using the disputed Domain Name without knowledge of the Complainant and its trademarks. The Respondent did not file a response.
Held: The Panel notes that the disputed Domain Name is comprised of purely descriptive or generic terms “discount” and “knife,” which are not generally considered in determining confusing similarity. Therefore, the Panel does not agree with the Complainant as to its confusing similarity arguments. The Panel finds that the Complainant failed to satisfy the requirement per Policy ¶ 4(a)(i).
As the Panel concludes that the Complainant has not satisfied Policy ¶ 4(a)(i), the Panel declines to analyze the other two elements of the Policy. See Balon Corporation and Valve Innovations, LLC v. Zhang Shao Bing, FA 2002820 (Forum Aug. 16, 2022) (finding that as the Panel concludes that the Complainant has not satisfied Policy ¶ 4(a)(i), the Panel declines to analyze the other two elements of the Policy.); see also Wasatch Shutter Design v. Duane Howell / The Blindman, FA 1731056 (Forum June 23, 2017) (deciding not to inquire into the respondent’s rights or legitimate interests or its registration and use in bad faith where the Complainant could not satisfy the requirements of Policy ¶ 4(a)(i)).
Complainants’ Counsel: Tasneem A. Dharamsi of Parker Poe Adams & Bernstein LLP, North Carolina, USA
Respondents’ Counsel: No Response
Case Comment by ICA General Counsel, Zak Muscovitch: It is genuinely hard to conceive how under the most liberal interpretation of the UDRP, that the disputed Domain Name could be considered confusingly similar to the Complainant’s marks. The Panel clearly recognized this in easily dismissing the Complaint despite it not being defended. Notably, this was not the only case that usually failed on the first part of the three-part UDRP test this week. Also issued on November 1, 2023, was another case in which the same counsel represented the same Complainant. In this other case, the Panel bluntly stated that the disputed domain name was simply not similar:
“Identical and/or Confusingly Similar
Complainant alleges that the disputed domain name <nattyoutdoorstore.com> is confusingly similar to its registered marks ANTHONY L MARFIONE and OUTBREAK. It is not.”
But in this latter case, Panelist Sorkin found RDNH whereas in the instant case, the other Panelist did not consider it. Panelist Sorkin inter alia stated in finding RDNH, “Complainant also states that “Respondent’s name of record ‘Wachira Chaina / Natty?s Store’ does not resemble the Domain Name, which tends to indicate Respondent has not been commonly known by the Domain Name and thus does not have any rights or legitimate interests in the Domain Name.” The Panel does in fact see some resemblance between both Respondent’s name “Wachira Chaina / Natty?s Store” and the title of its website, “Natty’s Store,” on the one hand, and the disputed domain name <nattyoutdoorstore .com> on the other; and is baffled by Complainant’s professed inability to do so. The Complaint includes these and other allegations that are unsupported by and in some instances contrary to the evidence, and in the Panel’s view Complainant knew or should have known that it did not have a colorable claim under the Policy. The Panel finds that the Complaint was brought in bad faith and constitutes an abuse of the administrative proceeding.
Messy Pleadings, Disclaimed Words, and a Business Dispute Beyond the Scope of the Policy
Panelist: Mr Steven M. Levy
Brief Facts: The Complainant is an offset and digital printing company, which is using the trade name USA Quickprint since 1985 and claims rights in the trademark USA QUICKPRINT. The design mark has been registered with USPTO since May 20, 1986, however, it disclaims the right to use “USA QuickPrint”. The disputed Domain Name was registered in 2001, and the Complainant claims that the Domain Name was created for a franchisee. Once the franchise location ceased to exist, the corporate company USA QUICKPRINT had trouble obtaining the domain. The company (along with the trademark/name) was sold in 2015 and a number of attempts to obtain the domain were made over the years since. Recently USA Quickprint proposed a sale of the domain that was equal to the estimated value generated by GoDaddy of USD $1800.00, which is still way beyond the company’s budget. The holder of the domain is unresponsive and keeps holding onto what the Complainant believes is already its owned domain.
The Respondent contends that at the time of purchasing the disputed Domain Name in 2001 there was “no trade name restriction”. J&J Fink owners and operators of USA Quickprint in Massillon Ohio and Carnation Mall Canton, Ohio were non-partners of USA Quickprint, Inc. and the Respondent claims he had never dealt with anyone other than John Fink Jr. and Judith Fink of J & J Fink dba usa quickprint. The Respondent further contends that he was doing IT work for them but they were not interested in the Domain Name and that the business was up for sale because of John’s health. The Respondent contends that sfter John’s passing in 2002, Judith along with her web design company decided to rent the Domain Name from to the Respondent in May 2002 until the business sold. After a year, when the New Owner “A & S Quickprint” dba usa quickprint non-partners purchased from J & J Fink, the Respondent claims he continued renting with an option to purchase. Once that company closed the Respondent says that he put the domain up for sale and that he has never tried to use the domain for malice nor tried to sell to competitors.
Held: The requirement of proving the existence of relevant trademark rights has been described as a “threshold” test, beyond which a complaint may not proceed if it is unmet. However, where an asserted registration consists of a design mark and the relevant words have been disclaimed apart from the mark as a whole, this requires the Complainant to provide additional evidence that the words have acquired secondary meaning and, thus, status as a trademark as required by Policy ¶ 4(a)(i). Unfortunately, the Complaint is very sparse and the documents submitted make no reference to the types of evidence that would typically support the existence of common law trademark rights in the claimed USA QUICKPRINT mark. In light of the above, the Panel concludes, by a preponderance of the evidence presented, that the Complainant has not met the threshold requirement of proving trademark rights under Policy ¶ 4(a)(i).
Even if the Complainant had demonstrated its ownership of trademark rights, the Panel has concluded that this dispute is not one that is suitable for resolution through the Policy. Both the Complaint and Response in this matter are very sparse with very little in the way of facts or legal argument, they leave many open questions and the Panel is left to try and intuit the overall situation and each party’s position. From these poorly prepared submissions and very limited facts, the Panel is unable to determine whether the Respondent has any rights or legitimate interests in the disputed Domain Name and whether it was registered and used in bad faith. Further, there seems to be an open question of whether the Respondent acted at the behest of one of the Complainant’s franchisees and, if so, under what terms and whether this creates a business relationship between the parties. This simply cannot be divined in the present forum. This does not appear to be a clear-cut case of cybersquatting or targeting of the Complainant’s claimed mark.
The above-mentioned fact and legal issues should be dealt with in a forum where the parties would, ideally, be represented by counsel and would benefit from the availability of more robust evidentiary tools. As such, the Panel finds it to be more likely than not that the present dispute is outside the scope of the Policy and that the status quo of the disputed Domain Name should be maintained until the parties can have their fate adjudicated through an appropriate process.
Complainants’ Counsel: Internally Represented
Respondents’ Counsel: Self-represented
Case Comment by ICA General Counsel, Zak Muscovitch:
It is apparent that the material facts are somewhat convoluted and difficult to discern based upon the limited information available to the Panel from both the Complaint and the Response. It is up to the respective parties to put their best foot forward in a manner comparable to the evidence required on a motion for summary judgment and to present their respective cases in a readily comprehensible manner, particularly due to the expedited nature of UDRP proceedings. Panels are not obliged, and should generally not try, to ‘get to the bottom’ of an incomplete or convoluted case particularly one with contested facts, via procedural orders requesting additional information and documents. Rather, cases as presented by the respective parties should generally stand or fall on their own given the limited nature of UDRP proceedings which is intended for clear-cut cases of cybersquatting rather than to resolve complex or business disputes. Panelist Levy did the right thing here by dismissing the Complaint in favor of a more appropriate forum for resolution of what appears to be primarily a business dispute.
A Strange Denial?
Panelist: Ms. Carrie Shang
Brief Facts: The Complainant has not explicitly identified any right related to its ownership and/or possession of any trademark related to the disputed Domain Name. Inferred from the complaint and its attached annex, the Complainant is the owner of the registered trademark “Doncaster Cables” in the United Kingdom (trademark UK00002409449 Doncaster Cables). However, it is unclear from the Complaint itself whether such trademark rights were acquired in other jurisdictions. The Complainant alleges that the disputed Domain Name is substantially similar to its registered trademark, “Doncaster Cables,” and the use of it is causing confusion among consumers, diluting the distinctive qualities of its brand, and infringing upon its intellectual property rights. The Respondent did not file a response.
Held: It is unclear from the complaint that the Complainant has the substantial right to the trademark “Doncaster Cables”. Even though the Complainant has attached an annex showing its UK trademark registration, the Complainant has not carefully presented its trademark right in the Complaint. It is thus unlikely that from the prima facie evidence that the Complainant has standing but for information provided in the annex. The Panel therefore could not conclude that the disputed Domain Name is confusingly similar to a trademark in which the Complainant has rights within the meaning of the Policy. The Complainant further has not provided any evidence showing that the Respondent has no legitimate interests in the disputed Domain Name. Even though the Complainant claimed that such use of his trademark is “unauthorized”, it is unclear from the prima facie case, why the Panel should be persuaded so. On the basis of preponderance of evidence, and in the absence of any evidence to the contrary or any administratively compliant response being put forward by the Respondent, the Panel finds that the Complainant has not established that the Respondent does not have rights or legitimate interests in the disputed Domain Name.
Finally, the Complainant has not demonstrated why the use of the disputed Domain Name misleads potential consumers of its products, nor that the alleged unauthorized use of its trademark has the potential to damage its reputation and cause significant financial harm to its business. Therefore, the Panel determines that the Complainant has not provided prima facie evidence undisputed by the Respondent that the disputed Domain Name was registered and is being used in bad faith. Overall, the preparation of the written complaint shows the Complainant’s lack of sufficient understanding of the burden of proof, presentation of facts, arguments and evidence necessary in order to satisfy paragraph 4(a)(i)-(iii) of the Policy, and therefore this decision is made out of fully considering merits of the case. Nonetheless, it is essential to recognize that UDRP proceedings serve as a neutral, efficient, and effective mechanism for rights holders to safeguard their interests against potential infringements by domain name registrants. These proceedings are not intended to obstruct rights holders’ access to competent legal representation aimed at achieving a just outcome.
In light of these considerations and in order to preserve the Complainant’s option to refile the complaint in the future, the current complaint is rejected without prejudice.
Complainants’ Counsel: Internally Represented
Respondents’ Counsel: No Response
Case Comment by ICA General Counsel, Zak Muscovitch: I must admit that I am somewhat confused by this case. The Complainant is listed as “EDDIE Whiteley (Amnack LTD (T/A) Doncaster Cables)” and the UK trademark for DONCASTER CABLES is registered to Amnack Limited, so aside from an unexplained inclusion of “Eddie Whiteley” which could possibly have been ignored or cleared up, the Domain Name does appear to exactly correspond to the registered trademark.
When comparing the disputed singular (DoncasterCable) domain name with the plural (Doncaster CableS) domain name (the latter apparently owned by the Complainant), there appears to be some kind of passing off:
Particularly in the absence of a response, it is dificult to understand why the Complainant did not succeed here, unless perhaps this is a case of alleged trademark infringment by a simiarly named competitor using a simillarly looking website for similar products. I invite readers to share their views on this with my by email: Zak@InternetCommerce.org and let me know if I can share them in the next Digest issue or keep the views private.
Case Unripe for Resolution Under the Policy
Panelist: Mr. Richard Hill
Brief Facts: The Complainant is a leading provider of human resources and business solutions designed to help improve business performance, including employee insurance-related services. The Complainant asserts rights in the INSPERITY mark through its registration in the United States in 2012. The disputed Domain Name was registered in 2023. The Respondent registered a US Employer Tax Identification Number in 2020, and a Pakistani Registration Number in 2015, both referring to “Insperity Global Services”. The Complainant alleges that the disputed Domain Name was initially used for a website that attempted to deceive consumers into thinking that the Respondent or Respondent’s business was affiliated with, or authorized by the Complainant; subsequently, the disputed Domain Name resolved to a web page stating: “This page is undergoing maintenance and will be back soon”.
The Complainant further alleges Respondent’s bad faith is also evidenced by the fact that the Respondent has configured the disputed Domain Name to send and receive email communications and used a privacy service. The Respondent had actual knowledge of the Complainant’s rights in the INSPERITY mark. The Respondent failed to submit a formal Response in this proceeding, however, in an informal communication, he states: “I really need to solve this trademark issue because my company is not affiliated or connected with Insperity. Inc and my company is registered in Pakistan and USA as well. I have a TAX ID in both countries for Insperity Global Services.”
Held: The Complainant alleges that the disputed Domain Name may be used for fraudulent purposes, but it provides no evidence of actual use to support this allegation. Unsupported allegations are insufficient to establish rights under the Policy. The Panel conducted limited factual research, consulting both the Complainant’s and the Respondent’s websites and publicly available databases. The Panel found that contrary to what the Complainant alleges – the initial resolving website did not purport to offer services that compete with those of the Complainant and the website was also not confusingly similar to the Complainant’s website. From publicly available databases, the Panel has determined that “555” indicated by the Respondent is not a valid area code. Thus, it appears unlikely that the initial resolving website was offering real business services.
The WHOIS information for the disputed Domain Name identifies the registrant as “Atif Javed / Insperity Global Services”. The Respondent provides evidence of tax registrations for a business known as “Insperity Global Services”. This can indicate that the Respondent is commonly known by the disputed Domain Name. However, it appears unlikely that the initial resolving website was offering real business services; Respondent stated that its website would be live on October 26, 2023, but such is not the case; the Respondent has not provided evidence of actually offering real business services; the Complainant’s trademark rights precede the Respondent’s tax registrations; and – contrary to what the Respondent states – it did use a fake telephone number on the original resolving website (but perhaps that is because that original website was derived from a template).
Considering all the above elements, the Panel finds, on the balance of the evidence, that it is not clear whether the Respondent really is commonly known by the disputed Domain Name. In terms of the Final Report of the WIPO Internet Domain Name Process dated 30 April 1999, the Panel finds that the facts before it are not sufficient to determine whether the instant dispute falls within the scope of the Policy. The Panel could suspend the proceedings until the Respondent implements a live website, which website could provide sufficient evidence to determine whether the Respondent does have rights or legitimate interests and whether the disputed Domain Name was registered and used in bad faith. However, that may result in a significant delay in disposing of the instant case, and that would not be consistent with the basic purpose of the Policy – which, as set forth in the Final Report, is to be quick and efficient.
Thus the Panel declines to suspend the proceedings and it will dispose of the case by dismissing the Complaint, without prejudice. This will allow the Complainant to resubmit a complaint if – once the Respondent implements a live website (or fails to implement one within a reasonable time) – it can provide evidence of bad faith registration and use.
Complainants’ Counsel: Caitlin Costello of Pirkey Barber PLLC, Virginia, USA
Respondents’ Counsel: Self-represented
Case Comment by ICA General Counsel, Zak Muscovitch: Panelist Hill took an interesting approach here. The current facts were apparently just not compelling enough to reach a determination of the case and rather than make an educated guess or go with a gut feeling, the Panelist prudently decided to dismiss the Complaint without prejudice so that the Complainant could refile if the case became clearer. This approach was preferable to suspending the proceeding as explained by the Panelist.