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WIPO Arbitration and Mediation Center

 

ADMINISTRATIVE PANEL DECISION

Velcro Industries B.V. and Velcro USA Inc. v. Qingdao Kunwei Velcro Co., Ltd.

Case No. D2006-0023

 

1. The Parties

The Complainants are Velcro Industries B.V. (“VIBV”), Curacao, Netherland Antilles, and Velcro USA Inc. (“VUSA”), Manchester, New Hampshire, United States of America, represented by Foley Hoag, LLP, United States of America.

The Respondent is Qingdao Kunwei Velcro Co., Ltd., Shandong, China.

 

2. The Domain Name and Registrar

The disputed domain name <cn-velcro.com> is registered with WebNIC.cc.

 

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on January 10, 2006. On January 12, 2006, the Center transmitted by email to WebNIC.cc a request for registrar verification in connection with the domain name at issue. On January 13, 2006, WebNIC.cc transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details for the administrative, billing, and technical contact. In response to a notification by the Center that the Complaint was administratively deficient, the Complainant filed an amendment to the Complaint on January 18, 2006. The Center verified that the Complaint, together with the amendment to the Complaint, satisfied the formal requirements of the 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”).

In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on January 19, 2006. In accordance with the Rules, paragraph 5(a), the due date for Response was February 8, 2006. The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on February 9, 2006.

The Center appointed Peter G. Nitter as the sole panelist in this matter on February 20, 2006. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.

 

4. Factual Background

Complainant VIBV is a technologically-driven, global organization offering a large number of different hook and loop products and fastening systems. Complainant VUSA is a subsidiary of Complainant VIBV.

Complainant VIBV is the owner of the trademark VELCRO throughout the world. Complainant VUSA is the exclusive licensee of the VELCRO trademark in the USA.

Complainant VIBV is the owner of, inter alia, twenty United States trademark registrations for marks that comprise the word VELCRO for goods that comprise or contain hook-and-loop fastener material, components thereof, and products incorporating such fasteners. These registrations date from 1958.

Complainant VIBV is also the owner of 13 Chinese trademark registrations for marks that comprise the word VELCRO.

Complainants claim common law trademark rights in the mark VELCRO, as a result of their use of the mark in commerce since at least 1958, to identify the source or origin of their goods and services and as their trade name.

Complainant VUSA is the registered holder of hundreds of Internet domain names that include the word VELCRO.

Complainants offer their products, all under the VELCRO brand name, to the general public and industrial and commercial customers, through the Internet, retail stores, and a network of independent distributors and representatives throughout the world.

 

5. Parties’ Contentions

A. Complainant

Complainants have invested significant time, money, and effort developing and promoting the VELCRO mark and the business associated with that mark. Since at least 1958, Complainants and their affiliated companies have continuously used VELCRO in connection with the goods they offer, on the labels of their products sold in retail stores throughout the world, on product packaging, as part of their company names, on their corporate letterheads, at their web sites and on their promotional materials.

As a result of Complainants’ substantial investments and high quality standards, the VELCRO mark is extremely well-known in the industry and is recognized throughout the world as signifying the high quality of Complainants’ products.

VELCRO is expressly recognized as a trademark in various dictionaries around the world.

The VELCRO mark has been advertised and promoted by Complainants and their predecessors for over 47 years.

Complainants diligently monitor use of the VELCRO mark and actively enforce their rights to prevent infringement or other damage to the mark.

Complainant’s mark VELCRO is arbitrary and fanciful, and is entitled to the highest level of protection.

Respondent’s domain <cn-velcro.com> is confusingly similar to Complainant VIBV’s registered trademark VELCRO, despite the addition of the prefix “cn-”.

Complainants refer to Tamglass Ltd. Oy v. Shenyang Tai Mei Steel Glass Fixture Ltd, WIPO Case No. D2005-0200, where <cntamglass.com> was considered confusingly similar to Complainant’s trademark TAMGLASS. In this case the prefix “cn” was considered to refer to China, and the dominant element of the domain name at issue was considered to be “tamglass”.

Respondent has no legitimate rights in the domain name. Complainants have exclusive rights to the use of VELCRO in an Internet domain by virtue of the fact that Complainants have registered the trademark and the domain name VELCRO in various combinations.

Respondent is neither an agent nor a licensee of Complainants, and therefore has no right to the use of the VELCRO mark in its domain.

Respondent registered the domain name at issue approximately 46 years after the mark VELCRO was first registered and used in commerce in the United States.

Respondent’s registration of the domain name prevents valid use of the domain by the Complainants, and therefore wastefully restrains the legitimate and proper use of the domain name and unlawfully tarnishes Complainants’ marks.

Customers in China are likely to expect the domain to be in use by Complainants, particularly because Respondent’s domain uses the prefix “cn-” before the word “VELCRO” and “cn” stands for “China”.

Because the domain name at issue is confusingly similar to Complainants’ mark and Respondent is not authorized to use the mark, the burden shifts to Respondent to establish some right or legitimate interest.

Respondent cannot show that, before any notice of the dispute, it used the domain name in connection with a bona fide offering of goods or services. Respondent does appear to use the domain as part of its business; such use is not in connection with a bona fide offering. The offering of goods and services in association with an infringing trademark use does not constitute a “bona fide” offering within the meaning of the Policy paragraph 4(c)( i).

Respondent is not commonly known by “cn-velcro.com”. The WHOIS information indicates that Respondent does business as “Qingdao Kunwai Velcro Co., Ltd.”. Use of that business name is itself a violation of Complainant VIBV’s trademark rights, although Respondent has ceased using that business name on its web site at Complainants’ insistence.

Respondent cannot demonstrate legitimate rights in the domain because Respondent is not making a legitimate, non-commercial use of the domain.

Respondent registered and is using the domain name in bad faith.

Complainant VIBV’s registered and common law trademark VELCRO entitles Complainants to the exclusive use of VELCRO as a domain.

The domain name at issue is identical or confusingly similar to the aforementioned trademarks in which Complainants have exclusive rights. Respondent’s addition of the ordinary term “cn-“ to Complainants’ registered trademark does not differentiate Respondent’s domain from Complainants’ trademarks.

Respondent was aware of Complainants and the nature of Complainants’ business when Respondent registered the <cn-velcro.com> domain in 2004, especially insofar as Respondent is active in the same industry as Complainants.

Complainants and their affiliates are worldwide industry leaders in the hook and loop fastener business and have been using the VELCRO mark for almost fifty years. Complainants had extensive worldwide sales of countless products bearing their mark well before Respondent registered the domain name.

Until recently, the text of Respondent’s website only added to the confusion. Respondent displayed its name as “Qingdao Kunwei Velcro Co., Ltd.” And, in the description of its business on its website, Respondent described itself as “a high quality Velcro fastener tape manufacturer and exporter”. Respondent has recently removed these references to “Velcro” from its website, after Complainants’ insistence. Respondent has nonetheless refused to transfer the domain name <cn-velcro.com>.

Complainants sent several letters through their Chinese counsel, and had repeatedly done efforts to negotiate for almost one year, when Respondent finally made it abundantly clear in August 2005, that it will not cease and desist from using the infringing domain name.

Even if Respondent did not have actual knowledge of Complainants’ trademark and the association between the term VELCRO and Complainants, Respondent certainly had constructive knowledge. Respondent therefore had legal, if not actual, notice of the Complainants’ mark prior to registering the domain name.

Complainants refer to the fact that Respondent, when registering the domain name, agreed to warrant that the registration and use of the domain name, to the best of Respondent’s knowledge, did not directly or indirectly infringe intellectual property rights of another party.

A simple trademark search would have revealed Complainants’ marks and Respondent’s bad faith registration may therefore be inferred from Respondent’s representation in the registration agreement.

Even assuming that Respondent did not have actual knowledge of Complainants’ mark, Respondent’s constructive knowledge is sufficient evidence of bad faith registration.

The arbitrary and fanciful qualities of Complainants’ VELCRO mark strongly suggest that Respondent did not independently arrive at the conclusion that <cn-velcro.com> would form a strong foundation for a domain, because the domain is not an obvious choice of name, apart form its obvious association with Complainant’s long-established and famous business.

Respondent has registered and used the domain name in bad faith because it has hindered Complainants’ customers from contacting Complainants. Respondent acquired the domain name at issue either with willful disregard for Complainants’ rights, or with a deliberate plan to divert customers of Complainants who expect Complainants to own the domain name for their trademark. Any dissatisfaction with Respondent’s website or its services will reflect upon and irreparably damage Complainants’ valuable and hard-earned reputation and goodwill associated with its VELCRO mark.

On or about October 11, 2005, after Complainants informed Respondent that this UDRP proceeding would be commenced, Respondent orally agreed to allow the domain name at issue to lapse, allowing Complainants to rightfully secure the domain after the registration expired on October 20, 2005. However, Respondent reneged on its agreement, renewing the domain for one year.

B. Respondent

The Respondent did not reply to Complainants’contentions.

 

6. Discussion and Findings

A. Identical or Confusingly Similar

The domain name at issue, <cn-velcro.com>, was registered by Respondent in October 2004.

Complainant VIBV is the owner of the trademark VELCRO in several countries throughout the world. The earliest United States trademark registrations date from 1958. Complainant VIBV is also the owner of a number of Chinese trademark registrations for marks that comprise the word VELCRO.

Complainants also have common law trademark rights in the VELCRO mark as a result of its use of the mark in commerce since 1958.

The prefix “cn” refers to China. The adding of a geographical term as “cn” as a prefix does not prevent a finding of confusing similarity. In fact the addition of such a term is apt to suggest that Complainants’ goods and services are provided in that particular location.

The dominant element of the domain name at issue is “Velcro”. This element is identical to Complainants’ trademark VELCRO.

The Panel finds that the domain name at issue is confusingly similar to Complainants’ trademark VELCRO.

B. Rights or Legitimate Interests

The Panel has considered Complainants’ allegation that Respondent does not have any rights or legitimate interests in respect of the domain name at issue. Since Respondent is in default, these allegations have not been contested.

Because it is generally difficult for a complainant to prove the fact that a respondent does not have any rights or legitimate interests in the domain name at issue, while respondent at the same time is given ample opportunity to demonstrate any such rights or legitimate interests pursuant to paragraph 4(c) of the Policy, previous decisions under the UDRP have found it sufficient for complainant to make a prima facie showing of its assertion.

The Panel finds that the circumstances mentioned and evidenced by Complainants is sufficient to establish a prima facie showing that Respondent has no rights or legitimate interests in the domain name at issue.

As Respondent has not demonstrated any of the three circumstances that constitute rights to or legitimate interests in the disputed domain name pursuant to paragraph 4(a) (ii) of the Policy, the Panel concludes, based on the record, that Respondent does not have any rights or legitimate interests in respect of the domain name at issue.

C. Registered and Used in Bad Faith

The Panel has considered Complainants’ assertions and evidence with regard to the Respondent’s registration and use of the domain names in bad faith. By not submitting a response, Respondent has failed to invoke any circumstances that could demonstrate that it did not register and use the domain names at issue in bad faith.

The Policy paragraph 4(b) sets forth four nonexclusive illustrations of situations that may be deemed to reflect “bad faith” registration and use of a domain name. The Panel finds that one of these has been established, i.e. attempting to attract, for commercial gain, Internet users to the Respondent’s website by creating a likelihood of confusion with the Complainants’ mark to the source, sponsorship or affiliation of the website.

Complainants have demonstrated that their longstanding, extensive and worldwide use of the VELCRO mark, which consists of a fanciful word, has placed this mark in the category of trademarks with a high degree of acquired distinctiveness. As a result of its fame, the mark enjoys a wide scope of protection. The Panel therefore finds it likely that Respondent was aware of the existence of Complainants and their trademark rights at the time the domain name was registered.

The domain name is used by Respondent to forward to a website which promotes Respondent’s products, including fasteners. This shows that Respondent and Complainants, at least to some extent, are active in the same industry. The same also appears from Respondent’s description of itself as a “fastener tape manufacturer and exporter”. These facts indicate that Respondent knows that Internet users recognize Complainants’ VELCRO mark as identifying Complainants’ products.

The public that is familiar with Complainants’ trademark – which is the public most likely to search for the website – will expect to find under the domain name <cn-velcro.com> a website belonging to Complainants or their Chinese subsidiary or other company with a relation to Complainants. The fact that Respondent is using the domain name for its own website will, therefore, misleadingly divert customers to Respondent’s website. See Tamglass Ltd. Oy v. Shenyang Tai Mei Steel Glass Fixture Ltd, WIPO Case No. D2005-0200. This further proves that Respondent has intentionally used the goodwill of Complainants’ trademark to create traffic to its website operating under the domain name at issue.

The Panel therefore concludes that there is sufficient evidence that Respondent’s registration and use of the domain name <cn-velcro.com> is in bad faith.

 

7. Decision

For all the foregoing reasons, in accordance with paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the domain name <cn-velcro.com> be transferred to Complainants.

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Peter G. Nitter
Sole Panelist

Date: March 6, 2006