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WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Balglow Finance S.A., Fortuna Comércio e Franquias Ltda. v. Name Administration Inc. (BVI)

Case No. D2008-1216

1. The Parties

The Complainants are Balglow Finance S.A. of Montevideo, Uruguay, and Fortuna Comércio e Franquias Ltda. of São Paulo, Brazil, represented by Barros e Souza Advogados, Brazil.

The Respondent is Name Administration Inc. (BVI) of Grand Cayman, Cayman Islands B.W.I., Overseas Territory of the United Kingdom of Great Britain and Northern Ireland, represented by John Berryhill Ph.d., Esq., United States of America.

2. The Domain Name and Registrar

The disputed domain name <chillibeans.com> is registered with Domain Name Sales Corp.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on August 8, 2008. On August 12, 2008, the Center transmitted by email to Domain Name Sales Corp. a request for registrar verification in connection with the disputed domain name. On August 17, 2008, Domain Name Sales Corp. 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”), 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 August 18, 2008. In accordance with the Rules, paragraph 5(a), the due date for Response September 7, 2008. The Response was filed with the Center on September 8, 2008.

The Center appointed William R. Towns, M. Scott Donahey and Sir Ian Barker as panelists in this matter on October 1, 2008. The Panel finds that it was properly constituted. Each member of 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.

The Complainant on September 14, 2008, submitted to the Center a further statement entitled “Reply to Response”, in which the Complainant, inter alia, objected to the Panel’s consideration of the Response as untimely submitted. The Panel issued a Procedural Order on October 10, 2008, in which the Panel determined that the Response should be allowed. The Panel further accepted the Complainant’s Reply to Response, to the extent that it contained additional unsolicited arguments regarding the Response, and afforded the Respondent until October 17, 2008, to submit a Sur-Reply. The Respondent’s Sur-Reply was submitted to the Center on October 17, 2008.

4. Factual Background

The Complainant Balglow Finance S.A. (“Balglow”), of Uruguay, is the owner of trademark registrations for CHILLI BEANS for eyewear, watches, and related goods in Brazil, the European Union, and the United States of America. The mark is best known in connection with sunglasses sold exclusively in retail stores or kiosks operated by the Complainant Fortuna Comércio e Franquias Ltda. (“Fortuna”), a Brazilian company, under the CHILLI BEANS name. Fortuna also maintains an official CHILLI BEANS website at “www.chillibeans.com.br”.1 Beginning with a single kiosk in Brazil opened in the latter part of 2000, there are now more than 200 CHILLI BEANS retail outlets in Brazil, 6 retail outlets in Portugal, and one store in the United States, located in Los Angeles, California. The first of the Portugal stores was opened in 2005, and the Los Angeles location was opened in 2006.

At the time of the filing of the Complaint, the Complainant Balglow owned two Community trademark registrations for CHILLI BEANS issued by OHIM on February 3, 2003, and July 15, 2003,2 and two Brazilian registrations for CHILLI BEANS issued by the Brazilian trademark office on March 11, 2008. All four of these registrations resulted from trademark applications filed between September 2000 and April 2002.3 In addition, the United States Patent and Trademark Office (USPTO) issued a registration for CHILLI BEANS on April 17, 2007, the application for which was filed in May 2002, originally on an intent-to-use basis. According to the USPTO database, the registrant was a Brazilian company, C Vinte E Cinco Comercio Ltda., which later assigned the registration to the Complainant Balglow. This assignment was recorded by the USPTO on September 4, 2008, about three weeks after the filing of the Complaint in this case.4

Insofar as the record reflects, each of the Complainants’ trademark registrations is for a design mark consisting of the drawing of a pepper and the stylized words “Chilli Beans” in a shaded oval. The founder of the Complainants’ business, Caito Maia, indicated in a magazine article published in 2008 that he adopted the mark because he is a fan of Mexican food and chilli beans, the English language name for a popular spiced bean food dish. The record further reflects that “chilli” is an alternative spelling for “chili”.

The Respondent, based in the British Virgin Islands and the Cayman Islands, is in the business of registering domain names for use with paid search advertising. The Respondent describes itself on its website as an online media network that operates thousands of “generic” domain names that is, according to the Respondent, “terms that have descriptive meaning to many people,” for which there are advertisers who want to buy targeted traffic.

The Respondent registered the disputed domain name on September 7, 2004. The disputed domain name resolves to a landing page at “www.chillibeans.com” (“ChilliBeans.com website”), which contains links purportedly relevant to the disputed domain name. At present, the landing page of the Respondent’s ChilliBeans.com website contains links organized under the categories of “most relevant link”, “other relevant links”, “related links”, and “food/drink categories”. These links consist primarily of words and phrases such as “chili”, “food”, “food and wine”, “cooking”, “fruit”, “vegetables”, “nutrients, “grocery stores”, “healthy recipes”, and “catering supply”. Internet visitors clicking on any of these links are directed to secondary web pages that contain paid advertising links (“sponsored results”) and “related links”. The following links (or tabs) are placed immediately below the prominent ChilliBeans.com logo at the top of the Respondent’s website: “Home”, “Chili Bean”, “Canning Jars”, “Grocery Online” and “Country Mail Boxes”. These links are included not only on the landing page but also on the secondary web pages where paid advertising links are displayed.

The Respondent has made several changes to the ChilliBeans.com landing page since the filing of the Complainant. No longer displayed on the landing page are a number of links of questionable relevance to the domain name that previously were included under the category “popular links”. In addition, a link for “glasses” that previously was displayed immediately below the ChilliBeans.com logo has been removed. Prior to this change, Internet visitors clicking on the “glasses” link were directed to a secondary web page with advertising links to websites selling eyeglasses and sunglasses, and “related links” for eyewear, including eyeglasses and sunglasses, and contact lens. The “glasses” link was removed by the Respondent after it was pointed out in the Complaint. The Complaint also presents traffic data for the ChilliBeans.com website from a search conducted on the Alexa website on August 25, 2008, reflecting that seventy-five percent (75%) of ChilliBeans.com website users come from Brazil.

5. Parties’ Contentions

A. Complainants

The Complainants contend that the disputed domain name <chillibeans.com> is identical and confusingly similar to the CHILLI BEANS mark. According to the Complainants, CHILLI BEANS is a well-known brand of sunglasses and related goods that have been sold internationally for more than ten (10) years. The Complainants argue that trademark registrations for CHILLI BEANS were obtained prior to the Respondent’s registration of the disputed domain name, and that pending applications to register the mark in Brazil and the United States were of record as far back as four (4) years before the domain name registration. The Complainants also point out that the domain name <chillibeans.com.br> was created in June 2000, and is used in connection with the Complainants’ official website.

The Complainants assert that the Respondent has no rights or legitimate interests in respect of the disputed domain name because the Respondent has never been commonly known by the domain name or acquired any trademark of service mark rights in the domain name. In addition, according to the Complainants, the Respondent is not making a legitimate noncommercial or fair use of the disputed domain name, nor is the Complainant using the domain name in connection with a bona fide offering of goods or services.

To the contrary, the Complainants contend that the Respondent has used the disputed domain name to divert Internet users to a website that includes pay-per-click advertising for third party websites offering goods competing with those offered by the Complainants. Specifically, the Complainants refer to the “glasses” tab or link on the landing page of the Respondent’s website, which directs Internet visitors to a secondary web page containing sponsored links and related links to websites offering sunglasses and related products of the Complainants’ competitors.

While the Complainants acknowledge that “chilli beans” has a common or descriptive meaning as a food dish, they contend that links on the Respondent’s website to paid advertising for sunglasses, eyeglasses and related products are relevant only to the CHILLI BEANS mark. In further support of this position, the Complainants rely on a search conducted on August 25, 2008, using the Alexa traffic ranking tool, which reflects that seventy-five percent (75%) of the disputed domain name’s traffic derives from users based in Brazil. In addition, the Complainants place reliance on the results of a Google search conducted on August 4, 2008, reflecting that <chillibeans.com.br>, which resolves to the Complainants’ website, is the most popular search result for the search term “chilli beans”.

The Complainants contend that the Respondent registered and is using the domain name in bad faith. The Complainants observe that the Respondent regularly registers expired or otherwise available domain names for use with pay-per-click landing pages. According to the Complainants, while the Respondent alleges that it only targets “generic” domain names, the Respondent makes no effort to discharge its obligation under paragraph 2 of the Policy to avoid registering domain names that infringe third-party trademarks, but instead chooses to remain willfully blind regarding whether a domain name is identical or confusingly similar to another’s trademark.

The Complainants urge that the Respondent’s knowledge of the CHILLI BEANS mark should be inferred from such “willful blindness”, particularly in circumstances where the disputed domain name has been used in its trademark sense on the Respondent’s website to generate advertising revenues. According to the Complainants, a simple search of either the USPTO or OHIM trademark databases prior to the registration of the disputed domain name would have informed the Respondent of the Complainants’ rights in the CHILLI BEANS mark.

The Complainants argue that the Respondent’s failure to undertake reasonable measures to ensure that the registration of the disputed domain name did not violate the Complainants’ rights in the CHILLI BEANS mark, coupled with the Respondent’s use of the disputed domain name to generate advertising revenue from pay-per-click links related to the Complainant’s trademark, establishes registration and use in bad faith within the meaning of the Policy. The Complainants reject as untenable the Respondent’s claim that it had no intention to exploit or profit from the Respondent’s CHILLI BEANS mark, and dispute that the placement of paid advertising links for sunglasses is the unintended consequence of the term “glasses” being susceptible to use with advertisements relating to both “beverage glasses” and “eyeglasses”.

The Complainants further assert that the Respondent’s removal of the “glasses” link from its website after the filing of the Complainant is not sufficient to negate the bad faith of the Respondent, and the Complainants have included in their “Reply to Response” a screen shot of the Respondent’s website that Complainants contend shows that the Respondent continues to profit from paid advertising links related to the Complainant’s trademark.

B. Respondent

The Respondent maintains that it registered the disputed domain name prior to any use by the Complainants of the CHILLI BEANS mark, for use in connection with food products. The Respondent submits that prior to notice of a dispute the Respondent was using the domain name in connection with the ChilliBeans.com website, to provide automated advertising links to goods and services relating to food and beverages consistent with the “primary” meaning of the term “chilli beans”.

The Respondent proffers evidence that various preparations of spiced red or black beans are commonly known to English speakers as “chilli beans”. According to the Respondent, this association between the term “chilli beans” and food products also is reinforced by the drawing of a pepper in the Complainants’ figurative mark, and by the Complainants’ public acknowledgment that the business’ founder had this food dish in mind when the CHILLI BEANS mark was adopted.

The Respondent acknowledges that the Complainants have filed “a prodigious number of trademark applications”, but asserts that pending applications do not establish rights in the mark for purposes of the Policy. The Respondent concedes in its supplemental statement, however, that the Complainants had obtained at least two Community trademark registrations for CHILLI BEANS predating the Respondent’s registration of the disputed domain name on September 7, 2004.

Nonetheless, the Respondent maintains that it has every right to use the disputed domain name in connection with food products. The Respondent argues that the Complainants’ reliance on screenshots of the Respondent’s website depicting a “glasses” link on the landing page and the presence of paid advertising links on a secondary web page targeting sunglasses and related products is misplaced. The Respondent states that the “glasses” term “apparently crept into an automated relevance-matching system for a web page that is clearly targeted toward food products”, and urges that the mere incidence of a “glasses” link is hardly representative of the overall impression presented by the Respondent’s website. The Respondent further asserts that “glasses” has two meanings as a beverage vessel, bean or chilli home canning supplies, or as a worn optical device.

In support of the contention that the website is targeted toward food products, the Respondent urges the Panel to consult the Internet Archive (www.archive.org). Although the Respondent notes (without explanation) that archived pages from the Respondent’s website are not available on the Internet Archive, the Respondent asserts that an available PHP input string “cat=food/drink” from October 11, 2004, and an “exit page” code “url=exitpage.FoodDrink.php” from December 6, 2004, demonstrate that search results for which the Respondent’s website were targeted include the categories of food and drink.

The Respondent also is dismissive of the Complainants’ assertion that the ChilliBeans.com website continues to target pay-per-click advertising related to the CHILLI BEANS mark. The Respondent is adamant that the post-Complaint screenshot relied on by the Complainant in its “Reply to Response” could only have been arrived at through the use of the search function provided on the Respondent’s website, and that the Complainant’s use of this screenshot is thus misleading and deceptive.

The Respondent asserts that there is no evidence of bad faith in the record before the Panel. The Respondent maintains that its overall use of domain names in connection with food and recipes is well documented, pointing to the Respondent’s registration of the trademark QUICKFARES.COM in connection with advertising and directory services promoting the services of others engaged in providing food and beverages, as well as the registration of more than fifty (50) domain names relating either to chili or to beans.

The Respondent denies being aware of the Complainants’ rights in the CHILLI BEANS mark when it registered the disputed domain name in September 2004, claiming that the Respondent made no use of the mark before September 2006. Further, assuming arguendo that the Respondent had such knowledge, the Respondent posits that this would not render illegitimate its use of the disputed domain name with food products. Such use, according to the Respondent, documents and demonstrates its intent to use the domain name consistent with its commonly understood or “primary” meaning. According to the Respondent, the “recent and brief” appearance of a single “glasses” link among an overwhelming number of links relating to food and recipes has no probative value regarding the Respondent’s intent in registering and using the disputed domain name. The Respondent asserts that the advertising retrieval software used for keyword advertising is incapable of differentiating between the two meanings of “glasses”, and that the Respondent’s removal of the “glasses” link in view of the “heretofore unappreciated ambiguity of the meaning of that word” does not change the manifest intent of the Respondent respecting the registration and use of the domain name, in the overall context of the facts and circumstances present in the record.

6. Discussion and Findings

A. Scope of the Policy

The Policy is addressed to resolving disputes concerning allegations of abusive domain name registration and use. Milwaukee Electric Tool Corporation v. Bay Verte Machinery, Inc. d/b/a The Power Tool Store, WIPO Case No. D2002-0774. Accordingly, the jurisdiction of this Panel is limited to providing a remedy in cases of “the abusive registration of domain names”, also known as “cybersquatting”. Weber-Stephen Products Co. v. Armitage Hardware, WIPO Case No. D2000-0187. See Report of the WIPO Internet Domain Name Process, paragraphs 169 and 170.

Paragraph 15(a) of the Rules provides that the Panel shall decide a complaint on the basis of statements and documents submitted and in accordance with the Policy, the Rules and any other rules or principles of law that the Panel deems applicable.

Paragraph 4(a) of the Policy requires that the Complainant prove each of the following three elements to obtain a decision that a domain name should be either cancelled or transferred:

(i) 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) The respondent has no rights or legitimate interests with respect to the domain name; and

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

Cancellation or transfer of the domain name is the sole remedy provided to the Complainant under the Policy, as set forth in paragraph 4(i).

Paragraph 4(b) of the Policy sets forth four situations under which the registration and use of a domain name is deemed to be in bad faith, but does not limit a finding of bad faith to only these situations.

Paragraph 4(c) of the Policy in turn identifies three means through which a respondent may establish rights or legitimate interests in a domain name. Although the complainant bears the ultimate burden of establishing all three elements of paragraph 4(a) of the Policy, panels have recognized that this could result in the often impossible task of proving a negative, requiring information that is primarily if not exclusively within the knowledge of the respondent. Thus, the consensus view is that paragraph 4(c) shifts the burden to the respondent to come forward with evidence of a right or legitimate interest in the domain name, once the complainant has made a prima facie showing. See, e.g., Document Technologies, Inc. v. International Electronic Communications Inc., WIPO Case No. D2000-0270.

B. Identical or Confusingly Similar

The Panel finds that the disputed domain name <chillibeans.com> is identical or confusingly similar to the Complainants CHILLI BEANS mark, in which the Complainants have demonstrated rights in for purposes of paragraph 4(a)(i) of the Policy. The critical inquiry under the first element of the Policy is whether the mark and domain name, when directly compared, are identical or confusingly similar. Wal-Mart Stores, Inc. v. Richard MacLeod d/b/a For Sale, WIPO Case No. D2000-0662. See also Magnum Piering, Inc. v. The Mudjackers and Garwood S. Wilson Sr., WIPO Case No. D2000-1525. That is the case here. The Panel finds that the inclusion of design elements in the Complainants’ mark does not dispel confusing similarity, particularly given that the word portion of the mark and domain name are identical.

Accordingly, the Panel finds that the Complainant has satisfied the requirements of paragraph 4(a)(i) of the Policy.

C. Rights or Legitimate Interests

As noted above, once the Complainant makes a prima facie showing under paragraph 4(a)(ii) of the Policy, paragraph 4(c) shifts the burden to the Respondent to come forward with evidence of rights or legitimate interests in the disputed domain name. The Panel is persuaded from the record of this case that a prima facie showing under paragraph 4(a)(ii) has been made. The disputed domain name is identical or confusingly similar to the Complainants’ mark. The Complainants had secured Community trademark registrations for the CHILLI BEANS mark more than a year before the Respondent registered the disputed domain name in September 2004, and there is evidence in the record of the Complainants’ use of the mark in Brazil as early as the year 2000 in connection with sunglasses and other related products. There is no indication in the record that the Respondent explored the possibility of third-party trademarks before registering the disputed domain name. Further, there is evidence of pay-per-click advertising links on the Respondent’s website related to a trademark, which the Respondent made no effort to remove until after the filing of the Complaint.

Pursuant to paragraph 4(c) of the Policy, the Respondent may establish rights to or legitimate interests in the disputed domain name by demonstrating any of the following:

(i) before any notice to it of the dispute, the respondent’s 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) the respondent has been commonly known by the domain name, even if it has acquired no trademark or service mark rights; or

(iii) the respondent is 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.

The Respondent submits that prior to notice of a dispute the Respondent was using the domain name in connection with the ChilliBeans.com website to provide automated advertising links to goods and services relating to food and beverages, consistent with the “primary” meaning of the term “chilli beans”. As the Panel appreciates it, the Respondent’s position is that the domain name therefore is being used in connection with a bona fide offering of goods or services within the meaning of paragraph 4(c)(i) of the Policy.

A number of panels have concluded that a respondent may have a right to register and use a domain name to attract Internet traffic based on the appeal of a commonly used descriptive phrase, even where the domain name is confusingly similar to the registered mark of a complainant. See National Trust for Historic Preservation v. Barry Preston, WIPO Case No. D2005-0424; Private Media Group, Inc., Cinecraft Ltd. v. DHL Virtual Networks Inc., WIPO Case No. D2004-0843; T. Rowe Price Associates, Inc. v. J A Rich, WIPO Case No. D2001-1044; Sweeps Vacuum & Repair Center, Inc. v. Nett Corp., WIPO Case No. D2001-0031; EAuto, L.L.C. v. Triple S. Auto Parts d/b/a Kung Fu Yea Enterprises, Inc., WIPO Case No. D2000-0047. Where a respondent registers a domain name consisting of “dictionary” terms because the respondent has a good faith belief that the domain name’s value derives from its generic or descriptive qualities, the use of the domain name consistent with such good faith belief may establish a legitimate interest. See Mobile Communication Service Inc. v. WebReg, RN, WIPO Case No. D2005-1304. But the domain name must have been registered because of, and any use consistent with, its attraction as a dictionary word or descriptive term, and not because of any value corresponding to a trademark. Media General Communications, Inc. v. Rarenames, WebReg, WIPO Case No. D2006-0964. See also Asian World of Martial Arts Inc. v. Texas International Property Associates, WIPO Case No. D2007-1415; HSBC Finance Corporation v. Clear Blue Sky Inc. and Domain Manager, WIPO Case No. D2007-0062.

The Panel notes that paragraph 2 of the Policy implicitly requires some good faith effort to avoid registering and using domain names corresponding to trademarks in violation of the Policy.5 See Media General Communications, Inc. v. Rarenames, WebReg, supra. In this case, the Respondent has not indicated that it explored the possibility of third-party rights in any way before registering and using the disputed domain name. Although the Respondent does not so acknowledge, it is evident from the record that even a cursory search of the OHIM trademark database prior to the Respondent’s registration of the disputed domain name would have disclosed the existence of two Community trademark registrations for CHILLI BEANS. And a cursory search of the USPTO trademark database would have disclosed the existence of a pending application to register the CHILLI BEANS mark. See, e.g., HSBC Finance Corporation, supra.

The Respondent’s position appears to be that – without regard to any knowledge of the Complainant’s rights in the CHILLI BEANS mark – it enjoys an absolute right to operate a pay-per-click landing page keyed to the commonly understood or “primary” meaning of “chilli beans”. If that is the Respondent’s position, it is at variance with Panel decisions holding that those who register domain names in large numbers for targeted advertising, often using automated programs and processes, cannot simply turn a blind eye to the possibility that the names they are registering will infringe or violate third-party trademark rights. See, e.g., Grundfos A/S v. Texas International Property Associates, WIPO Case No. D2007-1448; mVisible Technologies Inc. v. Navigation Catalyst Systems, Inc., WIPO Case No. D2007-1141; Mobile Communication Service Inc., supra.

These Panel decisions are firmly grounded in an appreciation that paragraph 2 of the Policy requires registrants to make reasonable efforts to ensure they are not infringing upon third-party rights. See, e.g., Terroni Inc. v. Gioacchino Zerbo, WIPO Case No. D2008-0666. Moreover, as has been recognized in both Asian World of Martial Arts Inc., supra, and mVisible Technologies Inc., supra, many domain names have both dictionary word meanings and trademark-related meanings. The disputed domain name at issue here falls into this category. Bringing to bear the force of these Panel decisions in the context of this case, where the Respondent has not indicated that it explored the possibility of third-party rights before registering the disputed domain name, the Panel concludes that to establish rights or legitimate interests in the domain name the Respondent must come forward with credible evidence that the disputed domain name was registered because of its attraction as a generic or descriptive term, and not because of its value corresponding to a trademark, and credible evidence that there has been no use of the domain name inconsistent therewith. See Media General Communications, Inc. v. Rarenames, WebReg, supra.

Simply stated, to demonstrate rights or legitimate interests under paragraph 4(c) of the Policy, it is not sufficient for the Respondent merely to show that the domain name has a commonly understood or descriptive meaning, while turning a blind eye to the use of the domain name with a pay-per-click landing page containing links to ads that relate at least in part to a trademark (as opposed to merely the generic or descriptive meaning of the domain name). See Champagne Lanson v. Development Services/MailPlanet.com, Inc., WIPO Case No. D2006-0006. While the Panel acknowledges that the Respondent has used the disputed domain name to target paid advertising keyed to the domain name’s generic or descriptive meaning, the domain name also has been used to attract paid advertising that appears in part related to the CHILLI BEANS trademark (as opposed to any merely generic or descriptive meaning). In the Panel’s opinion, it is immaterial that this may be the result of the Respondent’s use of an automated relevance-matching system and advertising retrieval software that even the Respondent acknowledges is incapable of distinguishing between the generic or descriptive meaning and any trademark-related meaning. Ultimately, the Respondent is responsible for the content on its website. See, e.g., Grundfos A/S, supra; Grisoft, s.r.o. v. Original Web Ventures Inc., WIPO Case No. D2006-1381.

While the Respondent attempts to argue based on scant information that a PHP scripting program resident on the Respondent’s server ensured that only links related to food and beverages would be generated, the Panel finds this argument unpersuasive. In the first place, the limited information available on the Internet Archive to which the Panel’s attention has been directed involves a period of no more than five (5) months immediately following the registration of the disputed domain name. Further, the Respondent does not actually claim that the PHP scripting program operates to exclude links unrelated to food and beverages; rather, the Response indicates only that the search results for which the web page was targeted “included the categories of food and drink” (emphasis added).

In point of fact, the Panel considers that the Respondent’s automated advertising retrieval system is designed to generate pay-per-click advertising based on Internet traffic to the website and searches conducted by Internet users while visiting the website. This is a system inherently likely to result in the display of sponsored links in the field of commercial activity of a company whose mark corresponds to the domain name, including links to that company’s competitors. See Grisoft, s.r.o., supra. In any event, on the basis of the record before it, the Panel cannot avoid a conclusion that the Respondent has received advertising revenues as a result of links on its website related to a trademark.

Moreover, this Panel cannot ignore the implications of publicly available traffic rankings generated by Alexa – and unchallenged by the Respondent – reflecting that in August 2008 some seventy-five percent (75%) of the traffic to the Respondent’s website originated in Brazil. This is significant given that the CHILLI BEANS mark has been used in Brazil since as early as 2000 and is more widely known there than in other areas of the world. While the Panel has no effective means of discovering traffic data at earlier dates, this certainly cautions against the Panel blindly accepting the Respondent’s contention that the sheer numerical preponderance of links keyed to the generic or descriptive meaning of the domain name renders the presence of paid advertisements related to a trademark insignificant or inconsequential, at least insofar as it concerns the pay-per-click revenue generated as a result of these links. Such information is peculiarly within the knowledge of the Respondent, but the Respondent has chosen not to voluntarily provide such information to the Panel for purposes of its deliberations in this case.

The Panel also has no ready means of determining the length of time that such revenue-generating links may have been present on the Respondent’s website, as an historical record of the Respondent’s website is not available on the Internet Archive. Once again, such information is peculiarly within the knowledge of the Respondent, which the Respondent has not voluntarily disclosed in this proceeding. The Panel further observes that upon visiting the Internet Archive at the Respondent’s urging, it was confronted with indications that the Respondent has possibly employed robot.txt, thus preventing the public generally, and this Panel, from reviewing the history of the use of the disputed domain name.6 See The iFranchise Group v. Jay Bean / MDNH, Inc. / Moniker Privacy Services [23658], WIPO Case No. D2007-1438. In light of this, the Panel is not prepared to accept the Respondent’s unsupported allegations that the presence of paid advertising links on its website related to a trademark is merely a transitory and recent event.

In view of all of the foregoing circumstances, and in particular the presence of paid advertising on the Respondent’s website prior to the filing of the Complaint related at least in part to a trademark, the Panel does not believe that the Respondent has met its burden of production under paragraph 4(c) of the Policy. Accordingly, the Panel concludes that the Complainant has satisfied the requirements of paragraph 4(a)(ii) of the Policy.

D. Registered and Used in Bad Faith

Paragraph 4(b) of the Policy states that any of the following circumstances, in particular but without limitation, shall be considered evidence of the registration and use of a domain name in bad faith:

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

(ii) circumstances indicating that the respondent 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 the respondent has engaged in a pattern of such conduct; or

(iii) circumstances indicating that the respondent registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(iv) circumstances indicating that the respondent intentionally is using the domain name in an attempt to attract, for commercial gain, Internet users to its website 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 the respondent’s website or location or of a product or service on its website or location.

The examples of bad faith registration and use set forth in paragraph 4(b) of the Policy are not meant to be exhaustive of all circumstances from which such bad faith may be found. See Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No. D2000-0003. The overriding objective of the Policy is to curb the abusive registration of domain names in circumstances where the registrant is seeking to profit from and exploit the trademark of another. Match.com, LP v. Bill Zag and NWLAWS.ORG, WIPO Case No. D2004-0230.

The particular facts and circumstances of this case require the Panel to traverse largely uncharted waters in resolving issues of bad faith registration and use under the third element of the Policy. The record establishes beyond question that the Complainant had secured rights in the CHILLI BEANS mark as a result of Community trademark registrations prior to the Respondent’s registration of the disputed domain name in September 2004. The Respondent claims not to have been aware of the Complainants’ rights in the mark, but there is no indication in the record that the Respondent explored the possibility of third-party rights in any way before registering the disputed domain name, notwithstanding the implicit requirement of paragraph 2 of the Policy.

The disputed domain name, although identical or confusingly similar to the Complainants’ CHILLI BEANS mark, has a commonly understood or descriptive meaning that is different from the trademark meaning derived from the Complainants’ arbitrary use of the mark with sunglasses and related products. The Respondent registered the domain name in order to use it to target paid advertising, purportedly based solely on the domain name’s generic or descriptive meaning, but nevertheless with the full knowledge that it intended to populate its landing page with paid advertising generated by an automated relevance-matching system and advertising retrieval software seemingly incapable of distinguishing between different meanings attached to the domain name. And clearly, as the record reflects, the domain name by the time of its registration by the Respondent had acquired a separate value related to a trademark in addition to its commonly understood or descriptive meaning, even if the Complainants’ mark did not at that time enjoy widespread recognition outside of Brazil.

At some point in time, as a result of the Respondent’s adoption of a business model that relies on the automated processes and programs described above to generate revenues from paid advertising, the Respondent’s website became populated with pay-per-click links related at least in part to a trademark. These advertising links were removed by the Respondent only after the Complaint had been filed. The point at which these advertising links first appeared on the Respondent’s website cannot be reliably determined from the record before this Panel, since the Respondent has not been forthcoming on this point and there is no history of the Respondent’s use of the domain name available on the Internet Archive, possibly due to the Respondent’s own actions. In any event, and as noted earlier, the Panel is not prepared to accept the Respondent’s unsubstantiated claim that this was a transitory and recent event, given evidence of substantial traffic to the Respondent’s website originating from Brazil, and evidence of the Complainants’ use of the CHILLI BEANS mark in Brazil as far back as the year 2000. The Respondent’s argument that the mark was not used until 2006 focuses exclusively on use in the United States, a focus that conveniently ignores the Complainants’ use of the mark for a significant period of time preceding the Respondent’s registration of the disputed domain name.

In the final analysis, the determination of bad faith under the Policy inevitably focuses on the registrant’s intent in adopting the domain name, as the Respondent in this case correctly observes. It has been conventional wisdom in cases decided under the Policy that a complainant must proffer some evidence, whether direct or circumstantial, indicating that the respondent had the complainant’s mark in mind when registering the disputed domain name. See The Skin Store, Inc. v eSkinStore.com, WIPO Case No. D2004-0661. The Panel further notes that paragraph 2 of the Policy has not been read as routinely requiring registrants to conduct trademark searches. See, e.g., Starwood Hotels and Resorts Worldwide, Inc., Sheraton LLC and Sheraton International Inc. v. Jake Porter, WIPO Case No. D2007-1254.

There are circumstances, however, where an unwavering adherence to conventional wisdom may unduly and unnecessarily frustrate the fundamental purposes of the Policy. This is clearly the teaching of Panel decisions holding that that those who register domain names in large numbers for targeted advertising through the use of automated programs and processes cannot be willfully blind to the possibility that the names they are registering will infringe or violate third-party trademark rights. See, e.g., Grundfos A/S; mVisible Technologies Inc.; and, Mobile Communication Service Inc. v. WebReg, RN, supra.

Indeed, the application of conventional wisdom to what once might have been considered an unconventional use of a domain name, but which today has become increasingly commonplace, would in effect render paragraph 2 of the Policy a nullity in such cases. As noted by the Panel in Mobile Communication Service Inc. v. WebReg, RN, supra, where a respondent registers large swaths of domain names through the use of automated programs that snap up domain names as they become available, with no attention whatsoever to whether they may be identical or confusingly similar to trademarks, such practices may support a finding that the respondent is engaged in a pattern of conduct that deprives trademark owners of the ability to register domain names reflecting their marks.

Under such circumstances, a claim of “no actual knowledge” may not obviate a respondent’s “willful blindness” to the existence of such third-party rights. Rather, those who register domain names in large numbers for targeted advertising through automated programs and processes must make reasonable good faith efforts to avoid registering and using domain names that are identical or confusingly similar to marks held by others. See, e.g., Grundfos A/S, supra. In this Panel’s view, whether such good faith efforts have been undertaken by a respondent in any give case is best determined from the pertinent facts and circumstances reflected in the record of that case, bearing in mind that the burden of proof respecting all three elements of the Policy always rests with the complainant.

It is the Respondent’s position in this case that the use of the disputed domain name with food and beverages conclusively demonstrates the Respondent’s good faith intent to use the domain name in relation to its commonly understood or “primary” meaning. According to the Respondent, the “recent and brief” appearance of a “glasses” link among an overwhelming number of links relating to food and recipes has no probative value regarding the Respondent’s intent in registering and using the disputed domain name, even though this link generated pay-per-click advertising revenue based on its relation to a trademark. Nor, according to the Respondent, would it be appropriate for the Panel to draw an adverse inference from the Respondent’s failure to remove this link until it was brought to light in the Complaint, even though the failure to do so is inconsistent with the Respondent’s claim that it intended to use the domain name only in relation to its generic or descriptive meaning.

The Panel respectfully must disagree with the Respondent’s conclusion that no finding of bad faith registration and use can be made based on the overall facts and circumstances in the record. For reasons already discussed, the Panel is not prepared to conclude based on the record in this case that the presence on the Respondent’s website of paid advertising links related at least in part to a trademark was merely a transitory and recent event. Further, for reasons already discussed, the Panel does not accept the proposition that the sheer numerical preponderance of other links seemingly keyed to the generic or descriptive meaning of the domain name renders the presence of these paid advertisements related to a trademark insignificant or inconsequential.

In the Panel’s estimation, the Respondent’s intent in registering the domain name is made manifest by the facts and circumstances in the record. The record reflects that the Respondent registered the disputed domain name without exploring the possibility of third-party rights, even though the Complainants had already established rights in the CHILLI BEANS mark and were in fact using the mark. Although the Respondent professes to have been interested only in using the domain name only in relation to its generic or descriptive meaning, the Respondent targeted paid advertising using an automated relevance-matching system and advertising retrieval software known to the Respondent to be incapable of distinguishing between dictionary meaning and trademark meaning. This system generated pay-per-click advertising links related at least in part to a trademark, at which point the Respondent either turned a blind eye to this use of the domain name or else was unwilling to forego the advertising revenue generated thereby until this use was placed in issue by the Complainant.

The Panel is persuaded from the totality of the facts and circumstances in this case that the disputed domain name has been registered and used by the Respondent in bad faith, a determination underscored by the Respondent’s willingness to turn a blind eye both to the Complainants’ right in the CHILLI BEANS mark and to the generation of revenue from advertising links related in part to a trademark. The Respondent’s business model, entailing registration of large swaths of domain names through the use of automated programs with no apparent attention paid in any particular case to whether the domain name being registered may be identical or confusingly similar to another’s trademark, also is consistent with a pattern of conduct that deprives trademark owners of the ability to register domain names reflecting their marks. See Mobile Communication Service Inc. v. WebReg, RN, supra.

Accordingly, the Panel finds that the Complainant has satisfied the requirements of paragraph 4(a)(iii) of the Policy.

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, <chillibeans.com> be transferred to the Complainants.


William R. Towns
Presiding Panelist


M. Scott Donahey
Panelist


Sir Ian Barker
Panelist

Dated: November 10, 2008


1 According to the Complaint, Fortuna is the former owner of the CHILLI BEANS trademarks, and is now licensed by Balglow to use the marks. In addition, it appears that some of the CHILLI BEANS stores are operated as franchises.

2 The corresponding Community trademark applications were filed with OHIM on September 14, 2001, and April 4, 2002. One of these registrations appears to be the subject of a pending cancellation proceeding, according to the OHIM database.

3 The Complainants have filed 12 trademark applications for CHILLI BEANS in Brazil, the majority of these filings occurring in 2000 and 2001. The Complainants report that the Brazilian trademark office has approved a number of these filings for registration, but at the time the Complaint was filed registration certificates had been issued by the Brazilian trademark office for only two of the applications.

4 The registration reflects the first use of the mark in commerce (in the United States) in June 2006, a date that appears to coincide with the opening of the CHILLI BEANS store in Los Angeles.

5 Paragraph 2 of the Policy, “Your Representations”, is incorporated by reference in the registration agreements of ICANN-approved registrars, and provides as follows:

By applying to register a domain name, or by asking us to maintain or renew a domain name registration, you hereby represent and warrant to us that (b) to your knowledge, the registration of the domain name will not infringe upon or otherwise violate the rights of any third party; (c) you are not registering the domain name for an unlawful purpose; and (d) you will not knowingly use the domain name in violation of any applicable laws or regulations. It is your responsibility to determine whether your domain name registration infringes or violates someone else’s rights. (emphasis added).

6 There are in fact indications of the use of robot.txt in the page from the “www.archive.org” website submitted by the Respondent to support its argument regarding the PHP scripting program discussed above.

 

: https://www.internet-law.ru/intlaw/udrp/2008/d2008-1216.html

 

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