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WIPO Arbitration and Mediation Center

Complainant is Rolex Watch U.S.A., Inc. ("Complainant" or "Rolex"), a New York corporation with its principal place of business located at 665 Fifth Avenue, New York, New York 10022 USA, represented by Morgan & Finnegan, LLP.

Respondent is Spider Webs Ltd. ("Respondent" or "Spider Webs"), a general partnership comprised of Steve Thumann, Pierce Thumann, and Fred Thumann (as trustee) located at 2200 Lauder Road, Houston, Texas 77039 USA, represented by Bernard Lilse Mathews, III.

The domain names at issue are <relojesrolex.com> and <erolexwatches.com> (the "Domain Names"). The registrar is Network Solutions, Inc. (the "Registrar") located at 505 Huntmar Park Drive, Herndon, Virginia, 20170 USA.

3. Procedural History

On March 21, 2001, the WIPO Arbitration and Mediation Center (the "Center") received a copy of the Complaint via email. On March 22, 2001, the Center received the hardcopy of the Complaint. On March 23, 2001, the Center sent an Acknowledgment of Receipt of Complaint to Complainant. The Complainant paid the required fee.

On March 28, 2001 after the Center sent a Request for Verification to the Registrar requesting verification of registration data, the Registrar confirmed, inter alia, that it is the registrar of the Domain Names and that the Domain Names are registered in the Respondent's name.

On March 29, 2001, the Center notified Complainant of deficiencies in the Complaint. On April 2, 2001, the Center received a First Amended Complaint from Complainant via email. On April 4, 2001, the Center received the First Amended Complaint in hardcopy.

The Center verified that the First Amended Complaint satisfies the formal requirements of the ICANN Uniform Domain Name Dispute Resolution Policy (the "Policy"), the Rules for Uniform Domain Name Dispute Resolution Policy (the "Rules"), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the "Supplemental Rules"). The Panel agrees with these conclusions.

On April 6, 2001, the Center sent a Notification of the First Amended Complaint and Commencement of Administrative Proceeding to the Respondent together with copies of the Complaint with Amendment, with a copy to the Complainant. This notification was sent by the methods required under paragraph 2(a) of the Rules.

On April 25, 2001, the Center received the Response of Respondent via email. On April 30, 2001, the Center received the Response of Respondent in hardcopy.

On May 7, 2001, the Center received a request from Complainant to file a Reply. The Center deferred the decision regarding acceptance of the Reply until the Panel had been selected.

On May 22, 2001 after the Center received a completed and signed Statement of Acceptance and Declaration of Impartiality and Independence from each of the panelists, the Center notified the parties of the appointment of a three-member panel consisting of Richard W. Page (the "Presiding Panelist"), David H. Bernstein and Paul M. DeCicco (collectively the "Panel").

The Panel has considered the Complainant’s request to file a Reply and unanimously decided not to consider the Reply. Supplemental filings are inappropriate except in the rarest of circumstances, such as discovery of new evidence not reasonably available to the submitting party at the time of its initial submission, or arguments by the Respondent that the Complainant could not reasonably have anticipated. See Goldline International, Inc. v. Gold Line, Case No. D2000-1151 (WIPO Jan. 4, 2001). Because no new facts or authorities were presented beyond those contained in the First Amended Complaint and Response, the Panel has denied the request to file a Reply.

Rolex is the exclusive distributor of Rolex watches in the United States. Rolex is responsible for marketing and selling Rolex watches, watch bracelets, and related products in the United States, and for maintaining control over the quality of ROLEX products and services in this country. Rolex is the owner of United States Trademark Registration No. 101,819, issued January 15, 1915, for the trademark ROLEX covering watches, clocks, parts of watches and clocks, and their cases and United States Trademark Registration No. 1,753,843, issued February 23, 1993, for the trademark ROLEX covering jewelry. Said registrations are in full force and effect and have become incontestable pursuant to 15 U.S.C. § 1065.

Rolex has used the ROLEX trademark for many years in connection with Rolex watches and jewelry. Rolex has developed an outstanding reputation in the ROLEX trademark, which identifies high quality products originating with Rolex. By virtue of Rolex’s longstanding use of the ROLEX mark, substantial expenditures on advertising and promotions, and the high quality of Rolex products, the ROLEX trademark is now famous and has been famous for decades.

The Domain Names <relojesrolex.com> and <erolexwatches.com> were registered with the Registrar on July 21, 1999 and November 11, 1999, respectively. Upon discovering the existence of the <relojesrolex.com> Domain Name, Rolex sent a letter to the Respondent on November 1, 1999, demanding that it cease and desist all infringing uses of the ROLEX trademark, and consent to the deletion or transfer of the Domain Names to Rolex.

Respondent did not respond to the November 1, 1999 letter. Instead, shortly thereafter, it registered another domain name incorporating the ROLEX trademark, <erolexwatches.com>, on November 11, 1999. On March 24, 2000, Complainant sent a second letter to Respondent, again demanding that it cease and desist all infringing uses of the ROLEX trademark, and consent to the deletion or transfer of the two Domain Names. Complainant did not receive any response to the March 24, 2000 letter from the Respondent.

The Complainant sent additional letters to the Respondent on November 17, 2000 and February 6, 2001. As with the prior correspondence, there was no response to these letters.

There is no indication in the record of any offers by either party to sell or buy the Domain Names.

(i) Complainant contends that it has registrations of the trademark ROLEX, that its trademark registrations are valid and subsisting, and that they serve as prima facie evidence of its ownership and the validity of the ROLEX mark. 15 U.S.C. § 1115. Complainant further alleges that its registrations are incontestable and conclusive evidence of its exclusive right to use the mark in connection with the stated goods. 15 U.S.C. §§ 1065 and 115(b).

(ii) Complainant argues that the Domain Names are confusingly similar to the ROLEX mark, pursuant to Paragraph 4(a)(i) of the Policy, because they wholly incorporate the trademark ROLEX with the addition of generic terms.

(iii) Complainant contends that Respondent has no rights or legitimate interests in the Domain Names, pursuant to Paragraph 4(a)(ii), and that Respondent has failed to demonstrate any of the three circumstances that constitute rights to or legitimate interests in the Domain Names.

Respondent cannot demonstrate rights or legitimate interest in the Domain Names under Paragraph 4(c)(i) because it has not made use, or demonstrable preparations to use, the Domain Names in connection with the bona fide offering of goods or services. Both of the Domain Names currently resolve to a website at spintopic.com, which purports to be a site for consumer commentary. Most of the links to pages within the website, though, are inactive, or resolve to empty and/or abandoned webpages devoid of content. Spintopic is thus a Potemkin Village, a sham website likely designed with the sole purpose of attempting to satisfy the "legitimate interest" defense provisions of Paragraph 4(c)(iii) of the Policy. Not a single one of the listings on the Spintopic website are remotely related to the ROLEX mark or to watches.

Respondent cannot demonstrate rights or legitimate interests in the Domain Names under Paragraph 4(c)(ii) because it is known as Spider Webs, Ltd., and is not commonly known under either of the Domain Names. Respondent has no connection or affiliation with Complainant, and has not received any license or consent, express or implied, to use the ROLEX mark in a domain name or in any other manner. Spider Webs is not an authorized dealer of ROLEX products or services and does not have any related watch business.

Respondent cannot demonstrate rights or legitimate interests in the Domain Names under Paragraph 4(c)(iii) because it is not making a legitimate noncommercial or fair use of the Domain Names without the intent to (a) derive commercial gain, (b) misleadingly divert consumers, or (c) tarnish the trademark at issue. Respondent has deliberately registered domain names containing the ROLEX trademark and the word "watch" or its Spanish equivalent to attract the attention of internet users searching for ROLEX watches. Spider Webs is using the Domain Names to misleadingly divert consumers and tarnish the ROLEX trademark.

(iv) Complainant contends that Respondent registered and is using the Domain Names in bad faith in violation of Paragraph 4(a)(iii).

Complainant argues that the Respondent registered the Domain Names primarily for the purpose of selling, renting, or otherwise transferring the registrations to the Complainant or one of its competitors for valuable consideration in excess of the registrant’s out-of-pocket costs. In support of this allegation, Complainant cites the testimony of Steve Thumann in E. & J. Gallo Winery v. Spider Webs, Ltd., 129 F.Supp. 2d 1033 (S.D. Tex. 2001). Thumann indicated that the Respondent was in the business of acquiring domain names containing famous trademarks or company names for the purpose of selling the names. Further evidence of Respondent’s intent may be discerned by the large number of domain names that it has registered. Complainant attached a list showing some of the more than 2,471 domain names currently registered by the Respondent. Among the domain names are trademarked terms, in addition to ROLEX, such as <bridgestonetires.com>, <kmartautomotive.com>, and <oreocookies.com>. Also, Respondent was previously found to have registered the domain name <davidtaylorcadillac. com> in bad faith in NAF Proceeding No. FA0010000095832.

The actions of the Respondent after it was notified of the Complainant’s claims provide further evidence of Respondent’s bad faith. The Respondent did not contact the Complainant or otherwise respond to four letters from the Complainant. In addition, it registered one of the subject Domain Names, <erolexwatches.com>, after receipt of the initial cease and desist letter from the Complainant. Further, on November 11 and 12, 1999, shortly after the Respondent received the first cease and desist letter dated November 1, 1999 from Complainant’s counsel, Tod M. Melgar of the law firm Morgan & Finnegan, the Respondent registered the domain names <todmmelgaresq.com> and <morganandfinnegan.com>.

In addition, Respondent has allegedly registered the Domain Names to prevent the Complainant from reflecting the mark in a corresponding domain name and has admittedly engaged in a pattern of such conduct. See Gallo, 129 F.Supp. 2d at 1046. Pursuant to Paragraph 4(b)(ii), such actions further demonstrate that the Respondent has registered and used the Domain Names in bad faith.

(i) Respondent does not dispute that the Complainant has registrations of the trademark ROLEX.

(ii) Respondent asserts that the Domain Names are not identical or confusingly similar to the trademark because a reasonable person would not assume the Domain Names are actually being used or sponsored by Complainant. Typing in the disputed names in an internet browser will take the interested party to a website known as <spintopic.com>, which is clearly not a product of Rolex. Respondent asserts that relief is not warranted by the fact that a domain name merely incorporates certain trademarks along with other language unless a typical consumer would be misled. Anyone capable of navigating his or her way to a website on the internet can read what is on the site and make a determination as to whether it is a manufacturer’s site created to promote certain products, or a site devoted to useful consumer information. If any doubt exists, the reading of the disclaimer at the Spintopic site would eliminate the doubt completely.

(iii) Respondent asserts that it has rights to or legitimate interests in the Domain Names because it is conducting a legitimate, consumer advocacy enterprise of benefit to the general public, and has never demonstrated any ill will or engaged in unfair competition with Complainant. Respondent argues that any use or intended use of the Domain Names that does not compete with or disparage the business interests of Complainant is legitimate. Citing Bally Total Fitness Holding Corp. v. Faber, 29 F. Supp. 2d 1161 (C.D. Cal. 1998), the Respondent argues that a party is entitled to use a website to comment on issues of public policy and what it considers to be key consumer issues.

Respondent says it is engaged in consumer advocacy and operates an internet website known as <spintopic.com>. Keying in the Domain Names, along with numerous other addresses that have been registered by Respondent, will direct an individual’s browser to <spintopic.com>. Spintopic provides a variety of information to consumers on numerous products and the companies that manufacture them and free forums for exchange of information on consumer topics. Respondent has linked the Spintopic site to other sites of interest to consumers. A visitor to the site can find tips on buying and pricing automobiles, reach Better Business Bureaus, or read the latest updates from the Federal Consumer Protection Agency. Thriving on visitors or "hits," the Spintopic site tries to attract the largest volume of visitors by registering a wide variety of names and resolving them to the Spintopic site.

Respondent also argues that even perfunctory preparations for the use of a website have been sufficient to establish legitimate use (citing Maureen A. Healy v. Andreas Kuhlen, Case No. D2000-0698; Shirmax Retail Ltd. v. CES Marketing Group, Inc., AF-0104; Lumena s-ka zo.o. v. Express Ventures Ltd., FA00030000094375 and Royal Bank of Canada v. Xross, AF-0133). Respondent argues that there is more than an inkling of non-commercial use in this dispute because it is actively operating a consumer-oriented web site.

Respondent notes that it does not derive any financial benefit from activity at the Spintopic site and has made no effort to divert customers from the Complainant. A clear disclaimer appears on the home page that there is no relationship between the site and any corporate entity other than the host.

(iv) Respondent denies that it registered or used the Domain Names in bad faith. Paragraph 4(b) suggests four types of evidence of bad faith registration, none of which apply:

Respondent claims that there is no showing of bad faith based on Paragraph 4(b)(i) because it did not offer or intend to sell the Domain Names to the Complainant or to others.

Respondent argues that Paragraph 4(b)(ii) does not apply because the registration of the Domain Names does not prevent the Complainant from reflecting the mark in a corresponding domain name. It also has not engaged in a pattern of registering domain names to prevent the trademark owner from reflecting the mark in a corresponding domain name.

Respondent and Complainant are not business competitors and thus, there is no evidence of bad faith based on Paragraph 4(b)(iii).

There is no evidence of bad faith based on Paragraph 4(b)(iv) because Respondent is making a fair, non-commercial use of the Domain Names.

Paragraph 15(a) of the Rules instructs the Panel as to the principles the Panel is to use in determining the dispute: "A Panel shall 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."

Because both the Complainant and Respondent are domiciled in the United States and United States courts have recent experience with similar disputes, to the extent that it would assist the Panel in determining whether the Complainant has met its burden as established by Paragraph 4(a) of the Policy, the Panel shall look to rules and principles of law set out in decisions of the courts of the United States. Tribeca Film Center, Inc. v. Lorenzo Brusasco-Mackenzie, WIPO Case No. D2000-1772 (April 10, 2001), n. 3.

Paragraph 4(a) directs that the Complainant must prove each of the following:

(i) that the domain name registered by the Respondent is identical or confusingly similar to a trademark or service mark in which the Complainant has rights; and,

(ii) that the Respondent has no legitimate interests in respect of the domain name; and,

(iii) that the domain name has been registered and is being used in bad faith.

Complainant has registrations for the trademark ROLEX. Respondent concedes the validity of the ROLEX mark. Respondent claims, however, that the domain names are not confusingly similar to that mark.

As numerous courts and prior ICANN panels have recognized, the incorporation of a trademark in its entirety is sufficient to establish that a domain name is identical or confusingly similar to the complainant’s registered mark. See Paccar Inc. v. Telescan Technologies, L.L.C., 115 F. Supp. 772 (E.D. Mich. 2000) (finding that <peterbuilttrucks.com>, <kenworthtrucks.com> and similar domain names are not appreciably different from the trademarks PETERBUILT and KENWORTH); Quixtar Investments Inc. v. Dennis Hoffman, WIPO Case No. D2000-0253 (May 29, 2000) (finding that QUIXTAR and <quixtarmortgage.com> are legally identical). The addition of other terms in the domain names does not affect a finding that the domain name is identical or confusingly similar to the complainant’s registered trademark.

Contrary to the Respondent’s contention, the owner of the registered trademark does not have to show "likelihood of confusion", as that term is used in trademark infringement jurisprudence, to establish that a domain name incorporating a trademark in its entirety is identical or confusingly similar for purposes of this first factor. Under Paragraph 4(a)(i), the question of identity and confusing similarity is evaluated solely based on a comparison between the complainant’s trademark and the alphanumeric string constituting the domain name at issue. See Magnum Piering, Inc. v. The Mudjackers and Garwood S. Wilson, Sr., Case No. WIPO D2000-1525 (January 29, 2001). It thus is irrelevant, for purposes of evaluating the first factor, whether consumers would avoid confusion by reviewing the content of Respondent’s website.

The Domain Names incorporate the famous ROLEX trademark in its entirety. The addition of the words "watch" and "relojes" (the Spanish word for wristwatches), generic terms that refer to the goods in connection with which the ROLEX trademark is used, and "e", an oft-used prefix to designate electronic-based communication and services, does nothing to change the fact that the Domain Names incorporate the ROLEX mark. Therefore, the Panel finds that the Domain Names are identical or confusingly similar to the ROLEX mark.

Paragraph 4(c) provides three nonexclusive circumstances that can demonstrate that the Respondent has rights to or legitimate interests in the Domain Names:

(i) before any notice to you [Respondent] of the dispute, your use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or

(ii) you [Respondent] (as an individual, business, or other organization) have been commonly known by the domain name, even if you have acquired no trademark or service mark rights; or

(iii) you [Respondent] are making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.

Paragraph 4(a)(ii) requires the Complainant to prove that the Respondent has no rights to or legitimate interests in the Domain Names. Once a Complainant establishes a prima facie showing that none of the three circumstances establishing legitimate interests or rights apply, the burden of production on this factor shifts to the Respondent to rebut the showing. The burden of proof, however, remains with Complainant to prove each of the three elements of Paragraph 4(a). See Document Technologies, Inc. v. International Electronic Communications, Inc., WIPO Case No. D2000-0270 (June 6, 2000).

The Complainant has sustained its burden of proving that the Respondent lacks rights to or legitimate interests in the Domain Names. Although Respondent asserts that the Domain Names are being used to encourage consumer commentary on Rolex and the Rolex brand, Respondent has failed to come forward with concrete evidence of use of, or demonstrable preparations to use, the Domain Names in connection with a bona fide offering of such services. See World Wrestling Federation Entertainment, Inc. v. Ringside Collectibles, WIPO Case No. D2000-1306 (January 24, 2001). Rather, the Panel finds that the spintopic.com site is a pretext, designed solely to avoid a finding of cybersquatting by inventing a purported fair use. Cf. National Hockey League v. Daniel Krusz, WIPO Case No. D2001-0234 (April 4, 2001). The site makes no mention of Rolex watches or of any watches. There has been no execution of any purported business plan or demonstrable preparations to supply consumer information about Rolex watches. Thus, the Respondent’s assertion that the site is intended for consumer information about these products is not persuasive.

For similar reasons, the Panel finds that Respondent is not making a legitimate noncommercial or fair use of the Domain Names. Respondent’s emphasis on the fact that it does not use the Domain Names for commercial gain only establishes that its use of the Domain Names is noncommercial, but does not establish legitimate or fair use. Respondent’s contention that it has shown legitimate or fair use because its website serves as a "consumer advocacy enterprise of benefit to the general public" is undermined by the pretextual nature of the Spintopic website and the absence of any information on the site related to Rolex watches or watches in general. Furthermore, the diversion of internet users to the website by the use of the Domain Names does not constitute fair use if the Respondent is not using the website to which the Domain Names resolve to provide commentary on Rolex watches. Cf. Chanel, Inc. v. Estco Technology Group, WIPO Case No. D2000-0413 (September 18, 2000) (use of famous trademark in order to attract the public to the Respondent’s web site is not fair use). Accepting the Respondent’s claim that its website is legitimate use would mean that cybersquatters could rightfully acquire domain names that incorporate famous trademarks by simply arranging for the domain names to resolve to generic and largely empty websites with no information or opportunities for commentary on the products known by the trademarks. As a policy matter, the Panel declines to accept such a practice.

Paragraph 4(b) sets forth four nonexclusive criteria for the Complainant to show bad faith registration and use of domain names:

(i) circumstances indicating that you have registered or you have acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name; or

(ii) you have registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that you have engaged in a pattern of such conduct; or

(iii) you have registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(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.

As noted above, the Policy expressly provides that the criteria are not exclusive. Weighing the totality of the evidence, the Panel is persuaded that Respondent registered and is using the Domain Names in bad faith, in violation of Paragraph 4(a)(iii).

First, the Panel finds that the Respondent acquired the Domain Names primarily for the purpose of selling the registrations, which is an element of bad faith under Paragraph 4(b)(i). Although the Respondent did not make an offer to sell the Domain Names to the Complainant, a fair inference can be drawn that the Respondent acquired the Domain Names as part of its broader "domain name speculation" plan – a plan which was described by Steve Thumann, a principal of Spider Webs, in E. & J. Gallo Winery v. Spider Webs, Ltd., 129 F.Supp. 2d 1033 (S.D. Tex. 2001). Thumann testified that the Respondent registered a domain name incorporating a well known trademark (ERNEST AND JULIO GALLO) with the intention of holding it as "real estate" and that the Respondent was in the business of acquiring domain names incorporating famous trademarks or company names for the purpose of selling them to the trademark owners at a profit. Gallo, 129 F.Supp. 2d at 1046. Significantly, the Respondent registered the first Rolex domain name at around the same time that it registered the Gallo domain name (July 21, 1999 and August 26, 1999, respectively), thus making it a fair inference that the Rolex domain name was registered as part of the same "real estate" scheme.

The Respondent’s intent to register the Domain Names for the purpose of selling them to the Complainant also can be inferred from its past practice of cybersquatting, from the evidence demonstrating that the Spintopic website is a pretext, and from Respondent’s bad faith registration of the second Rolex Domain Name immediately after it received notice about the first Domain Name.

The evidence also is sufficient to establish the necessary elements of bad faith under Paragraph 4(b)(ii). Consistent with the "real estate" scheme described in the Gallo case, the Respondent appears to have registered the Domain Names to prevent the Complainant from registering these addresses and has engaged in a pattern of registering domain names reflecting famous trademarks for a similar purpose.

Respondent argues strenuously that the court’s findings in Gallo are incorrect, and thus should be disregarded by the Panel. We reject that assertion. Given the transcribed record in UDRP proceedings, it is fully appropriate for the Panel to defer to relevant factual findings made by a court that has had the benefit of a more developed record.

The Panel concludes: (a) that the Domain Names <erolexwatches.com> and <relojesrolex.com> are confusingly similar to Complainant’s registered trademark ROLEX; (b) that Respondent has no rights or legitimate interest in the Domain Names; and (c) that Respondent registered and used the Domain Names in bad faith. Therefore, pursuant to Paragraph 4(i) of the Policy and Paragraph 15 of the Rules, the Panel orders that the Domain Names be transferred to Complainant.

Richard W. Page
Presiding Panelist

Paul M. DeCicco
Panelist

David H. Bernstein
Panelist

Dated: July 2, 2001