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WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

California Exotic Novelties, LLC v. Technoweenie, Inc.

Case No. D2009-1320

1. The Parties

The Complainant is California Exotic Novelties, LLC, of California, United States of America, represented by Lipsitz Green Scime Cambria, LLP, United States of America.

The Respondent is Technoweenie, Inc., of Texas, United States of America.

2. The Domain Names and Registrar

The disputed domain names <cal-exotic.com>, <cal-exotics.com> and <california-exotics.com> (the "Domain Names") are registered with GoDaddy.com, Inc.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on October 6, 2009. On October 7, 2009, the Center transmitted by email to GoDaddy.com, Inc. a request for registrar verification in connection with the disputed domain names. On October 7, 2009, GoDaddy.com, Inc. transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details. The Center verified that the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the "Policy" or "UDRP"), 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 October 19, 2009. In accordance with the Rules, paragraph 5(a), the due date for Response was November 8, 2009. The Respondent did not submit any response. Accordingly, the Center notified the Respondent`s default on November 9, 2009.

The Center appointed Thomas D. Halket as the sole panelist in this matter on November 18, 2009. 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.

In response to a request by Respondent filed on November 17, 2009, the Panel granted Respondent until December 7, 2009 to submit any response which it may have. Respondent filed its Response on December 6, 2009. Subsequently the Panel requested Complainant respond by December 22, 2009, to certain of the allegations in the Response. Complainant made such filing on that date.

4. Factual Background

The Complainant has manufactured, distributed and sold (but not at retail) various adult-oriented novelties, including but not limited to vibrators, trinkets and adult-themed toys since 1994. Complainant is the owner of the trademarks CALIFORNIA EXOTIC NOVELTIES or CALEXOTICS which it has registered in a number of countries.

Respondent sells Complainant`s products at retail on the websites to which the Domain Names pertain. There is, however, some dispute as to whether Respondent sells any other manufacturer`s products on its sites. Respondent also uses on its sites some of marketing collateral supplied by Complainant for use by its distributors and others in the supply chain, but there is dispute as to whether such use is rightful. Respondent alleges that it purchases all of the Complainant products which it sells from an authorized distributed of Complainant; Complainant appears not to dispute this contention. Respondent contends it has been a reseller of Complainant`s products for about 10 years; this contention is not disputed by Complainant. Respondent appears to have used the Domain Names for at least 2-3 years.

Complainant`s attorneys sent Respondent a cease and desist letter on August 18, 2009. Respondent has not replied to this letter.

5. Parties` Contentions

A. Complainant

Complainant alleges:

(a) The Domain Names are identical and confusingly similar to a trademark or service mark in which the Complainant has rights;

(b) The Respondent has no rights or legitimate interests in respect of the Domain Names; and

(c) The Domain Names were registered and are being used by Respondent in bad faith.

B. Respondent

The Respondent denies Complainant`s contentions.

6. Discussion and Findings

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

"(i) that the domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and, (ii) that the respondent has no rights or legitimate interests in respect of the domain name; and, (iii) that the domain name has been registered and is being used in bad faith."

Paragraph 4(b) provides that for the purposes of Paragraph 4(a)(iii) the following circumstances, in particular but without limitation, if found by the Panel to be present, shall be evidence of the registration and use of a domain name in bad faith:

"(i) circumstances indicating that you [the Respondent] 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 or service on your web site or location."

A. Identical or Confusingly Similar

The Domain Names essentially incorporate Complainant`s registered trademarks. The minor differences cited by Respondent are not sufficient to rebut this conclusion. The Domain Names are thus identical or confusingly similar to a trademark or service mark in which the Complainant has rights.

B. Rights or Legitimate Interests

Complainant has not met its burden to establish that the Respondent has no rights or legitimate interests in respect of the Domain Names. Respondent claims that it is a legitimate retailer of Complainant`s products, and only Complainant`s products, and that therefore it has a legitimate interest in the Domain Names. Complainant simply has not either shown that Respondent sells other products or provided a persuasive argument that a retailer of a manufacture`s products can not in general (or more particularly, in the circumstances of the instant case) have a legitimate interest in using the Complainant`s mark as part of the name of the retailer`s website.

In particular, the Panel in its Panel Order No. 2, dated December 15, 2009, specifically requested that Complainant answer the following question:

"[Whether] the Respondent only sells Complainant`s products which it purchased either from Complainant or from an authorized distributor of Complainant."

The Panel finds that Complainant`s answer to this question simply does not provide any compelling basis for determining that Respondent has no legitimate interest in the Domain Names. Complainant`s answer to this question is:

"2. Whether Respondent Sells Actual CalExotics Products on its

Website is Immaterial to this Proceeding

CalExotics has no oversight over the subject web sites run by Technoweenie, nor can it verify that all of the products on said website are actual CalExotics products. The domain names utilized by Technoweenie trade off of Cal Exotics` name and trademark. Such use is deceptive, as a consumer is likely to be confused as to the website`s affiliation with CalExotics or lack thereof.

Indeed, assuming arguendo that Respondent only sells CalExotics` products on the subject websites, this would serve to only heighten the likelihood of consumer confusion. By analogy, if someone only sold Hewlett Packard computers on a website that used a domain name that incorporated all or part of the Hewlett Packard name (i.e. "HewlettPackard. com"), a consumer would reasonably believe that the retail website was somehow affiliated with or connected to the manufacturer of the Hewlett Packard computers sold on the website. The same holds true in this instance. A consumer will reasonably believe that he or she is buying a CALIFORNIA EXOTIC NOVELTIES brand product from a website that is owned by, affiliated or connected with Complainant, especially when the domain name uses or incorporates all or part of Complainant`s name and trademarks."

This Panel finds that response to be insufficient. First, despite being requested expressly to do so, Complainant fails to show any facts which would tend to show, let alone meet its burden of proof to establish, that Respondent`s contentions as to the nature of its business are wrong – namely that Respondent is not, as it contends, a retailer solely of Complainant`s products. The Panel therefore feels it has no alternative on the present record but to find that Respondent is in fact a retailer of solely Complainant`s products.

Second and accordingly, this Panel finds that Complainant then fails to provide a convincing argument that a retailer of a manufacturer`s products can have no legitimate interest in using part or all of the manufacturer`s trademarks as part of the retailer`s name or website name. Complainant cites no authority for this position<sup>1</sup> and, in any event, its argument (which is set forth above in the quote) is not (as presented here) to the Panel convincing. The Panel can conceive of many instances where a retailer (who is a seller of only one manufacturer`s products) may legitimately use the manufacturer`s mark. How, for example, would a consumer know which cars were for sale at a car dealer if the car dealer which sold one brand of car only did not use the manufacturer`s mark to identify its business? Typically such use is with the permission² of the automobile manufacturer. And it is true that Complainant argues that Respondent does not have its permission and that Complainant claims its use of the Domain Names infringes Complainant`s trademarks. But Respondent, on the other hand, essentially argues that it has implied permission to use the Domain Names arising (i) from its acting as a reseller for almost 10 years and its use of the Domain Names for at least 2-3 years and (ii) as an inevitable result of Complainant`s choice to market its products only at wholesale.

While Respondent`s contentions may to some extent be novel, the Panel can not entirely dismiss them. Perhaps more to the point, the Panel is unable to determine from the record before it whether this is a situation in which relief is appropriate under the Policy or whether the dispute is a supply chain disagreement or intellectual property infringement case, both of which must be resolved in the courts. Indeed, the two-sided nature of the situation is amply demonstrated by the following excerpt from the cease and desist letter sent by Complainant`s attorneys (emphasis added):

"It appears that Technoweenie sells adult novelty products produced by my client to retail consumers at its aforesaid websites. To the extent that you are selling CalExotics` products online, my client appreciates your business and in no way intends to discourage you from continuing to sell its products in the future. Rather, my client`s concern centers on the manner in which you are selling its products. Among other things, the operation of the above-mentioned websites infringes upon various trademarks owned by CalExotics."

The record in this proceeding is just not sufficient for this Panel to make a determination of whether or not Respondent has a legitimate interest in the Domain Names. As Complainant bears the burden of proof on this issue, the Panel must conclude that Complainant has failed to prove that Respondent lacks such an interest.

C. Registered and Used in Bad Faith

Nor has Complainant met its burden to establish that Respondent has been registered and is using the Domain Names in bad faith. Complainant`s contentions in this regard may be summarized as: (i) Complainant`s counsel recently sent a cease and desist letter to Respondent to which Respondent has not responded in any way; (ii) Respondent is using certain of Complainant`s marketing collateral; (iii) Complainant owns many domain names that utilize its trademarks and (iv) it is therefore "clear" that Respondent is using and has used the Domain Names for a commercial gain, at the expense of Complainant, by creating a likelihood of confusion among consumers.

Again in this Panel`s view, Complainant misses the mark. The first three points, under the circumstances here presented, do not establish the conclusion it makes in its fourth point. First there is no obligation per se for the Respondent to respond to a demand letter and its failure to do so is not probative here of Complainant`s point 4. Second, whether or not Complainant is right that Respondent is wrongly using its marketing collateral (and it is far from clear on the record here that Complainant has established that Respondent is doing so), such use, by itself or together with points 1 and 3, is also not probative of point 4. Thirdly, the fact that Complainant owns many domain names that utilize its trademarks is immaterial to the issue of assessing Respondent`s bad faith (as a reseller of Complainant`s products) in the circumstances of this dispute.

Finally, Complainant`s statement that Respondent`s actions are at Complainant`s expense seems to the Panel to be disingenuous. Since Complainant apparently does not sell at retail and Respondent is seemingly a retailer of Complainant`s products and those of no others, it would seem that Respondent`s activities may actually benefit Complainant. This conclusion is supported by the excerpt from the cease and desist letter quoted above. Thus, Complainant has not established its point 4, even assuming its point 4 accurately states an applicable test for registration and use in bad faith. Complainant may be right that Respondent does not have the right to use its trademark or collateral or that Complainant has a legal right to prevent Respondent from selling at retail Complainant`s products, but, because of the limited record here, this Policy proceeding is not the place or proceeding to prosecute those types of claims.

7. Decision

For all the foregoing reasons, the Complaint is denied.

Thomas D. Halket
Sole Panelist

Dated: December 28, 2009