winemonthclub.com

Wine of the Month Club, Inc. v. Kris Calef

Case No. D2003-0703

The Complainant is Wine of the Month Club, Inc., of Monrovia, California, United States of America, represented by Arnold & Porter, United States of America.

The Respondent is Kris Calef, Malt of the Earth, of Laguna Hills, California, United States of America; C&H Clubs USA Inc., Laguna Hills, California, United States of America, represented by Workman Nydegger & Seeley, United States of America.

The disputed domain name <winemonthclub.com> is registered with Go Daddy Software.

The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on September 5, 2003. On September 8, 2003, the Center transmitted by email to Go Daddy Software a request for registrar verification in connection with the domain name at issue. On September 10, 2003, Go Daddy Software 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 September 23, 2003. 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 September 26, 2003. In accordance with the Rules, paragraph 5(a), the due date for Response was October 16, 2003. The Response was filed with the Center on October 16, 2003.

The Center appointed Frederick M. Abbott, Jeffrey H. Kaufman and Mark V.B. Partridge as panelists in this matter on November 25, 2003. 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.

By email of December 9, 2003, the Center notified the parties that based on exceptional circumstances the due date for a decision by the Panel was extended until December 16, 2003.

Complainant has registered the term "WINE OF THE MONTH CLUB" as a word service mark on the Principal Register of the United States Patent and Trademark Office (USPTO), reg. no. 1500846, dated August 16, 1988, in International Class (IC) 42, covering "mail order services in distribution of wine", claiming date of first use and first use in commerce of March 1972. Exclusive use of the terms "wine" and "club" are disclaimed apart from the mark as shown. Complainant has filed an affidavit of incontestability of the mark pursuant to Section 15 of the Lanham Act.

Complainant is registrant of the domain name <wineofthemonthclub.com> and operates a commercial Internet website at URL "www.wineofthemonthclub.com".

Complainant has used the term "WINE OF THE MONTH CLUB" in commerce for approximately 30 years in connection with a membership-based mail (and Internet-based) service business largely (though not exclusively) concerned with the sale of wine. This website operates under a banner headed [small font] "The Original" [large font] "Wine of the Month Club®" [small font] "Since 1972".

According to the Registrar’s verification response, Respondent is the current registrant of the dispute domain name, <winemonthclub.com>. A Network Solutions WHOIS database search printout furnished by Complainant indicates that a record of registration of the <winemonthclub.com> name was created on October 30, 1998, with the registrant listed as "Malt of the Earth" of Laguna Hills, California, USA. The current record of registration shows the registrant as "Kris Calef", with company name listed as "Malt of the Earth", with the same address in Laguna Hills, California. (Complaint, Annexes A & B).

According to a Declaration by Respondent, a commercial Internet website at URL <www.winemonthclub.com> was established in December 1998, and has been in continuous operation since that date. This website operates under a banner headed "The International Wine of the Month Club" and states "’Since 1994’" [sic] in smaller font. There is no disclaimer of association with Complainant and/or its alleged mark on the website. (Response, Declaration of Kris Calef, dated October 16, 2003, Annex R ("Declaration of Calef") & Exhibit E)

Respondent registered the domain names <beermonthclub.com> and <cigarmonthclub.com> contemporaneously with the disputed domain name. Commercial websites associated with these two names have been in continuous operation since November-December 1998 (Response, Declaration of Calef & Exhibits C-D, F-G). Respondent has more recently registered the domain names <cheesemonthclub.com>, <chocolatemonthclub.com> and <flowermonthclub.com> and operates commercial Internet websites associated with these domain names (Declaration of Calef & Exhibit L).

Respondent asserts that he selected the disputed domain name because it describes the type of business in which he proposed to engage, and not to take advantage of the reputation of Complainant (Declaration of Calef, paras. 9 & 19). Respondent states:

"While I was aware of Complainant as a competitor, when I registered winemonthclub (along with the related domain names beermonthclub and cigarmonthclub), I had no knowledge of Complainant’s asserted rights. My selection of the domain name was based solely on the reasons outlined [relating to descriptive terms] above." (Id. at para. 18)

Complainant has submitted evidence of actual confusion among Internet users who have contacted Complainant by email or telephone in efforts to reach Respondent regarding purchase orders or membership. Eight such events were recorded over the period January through August 2003. (Declaration of Karen M. Mazone, Executive Secretary, Wine of the Month Club, Inc., dated September 2, 2003)

Respondent has submitted substantial evidence of the use by commercial enterprises on the Internet of the term "WINE OF THE MONTH CLUB" to describe their businesses. This evidence includes the first 260 results of a Yahoo! search that generated approximately 10,400 results, and the first 452 results of a comparable Google search. (Response, Annexes E & F). Although a number of these results show the term combined with a distinguishing identifier (e.g., Virginia Wine of the Month Club and Cooper’s Oak Wine of the Month Club), the term also frequently stands alone to describe a service or feature of the wine vending business (see, e.g., references associated with URLs "www.californiareds.com", "www.champagnewines.com" and "www.beyondgifts.com") ( id., Annex E).

Complainant first transmitted (through its counsel) a cease and desist and transfer demand to Respondent in April 2002. Respondent (through his counsel) sent a detailed reply to that initial demand denying any infringement of rights (largely on the basis of asserted genericness of the alleged trademark). A second cycle of demand and response followed, with Respondent’s final letter transmitted by telefax and mail on July 15, 2002. Respondent noted in his July 15, 2002 letter that Complainant’s failure to assert its alleged rights between his commencement of using the disputed domain name and April 2002 constituted "an inexcusable and unreasonable delay that would unfairly cause prejudice to our client, and would thus now preclude any action on your client’s part". (Exchange of correspondence between Arnold and Porter (for Complainant), and Workman Nydegger and Seeley (for Respondent), Response, Exhibits N-Q).

Complainant alleges rights in the word trademarks "WINE OF THE MONTH CLUB" and "WINE OF THE MONTH" based on long use in commerce and as evidenced by registration at the USPTO. Complainant further alleges that its trademarks have incontestable status. (See Factual Background, supra)

Complainant asserts that the disputed domain name is confusingly similar to its mark.

Complainant states that Respondent has no rights or legitimate interests in the disputed domain name because (a) he has not been authorized by Complainant to use it, (b) the mark is incontestable and (c) Respondent has not been commonly known by the disputed domain name.

Complainant argues that Respondent registered and used the disputed domain name in bad faith because he registered and has used the mark to intentionally divert Internet users to his website for commercial gain based on confusion as to source, affiliation or endorsement of his website. Complainant states that Respondent had actual and/or constructive notice of its mark at the time of registering the disputed domain name.

Complainant requests that the Panel direct the registrar to transfer the disputed domain name to it.

Respondent contends that Complainant has no rights in the "WINE OF THE MONTH" trademark or service mark because it has failed to carry its burden of proof of ownership. Respondent further contends that Complainant has no trademark rights in the term "WINE OF THE MONTH CLUB" because the term is generic. Respondent notes that the incontestable status of a trademark does not preclude challenge to validity based upon genericness.

Respondent contends that his business uses the term "WINE OF THE MONTH CLUB" in a generic sense.

Respondent argues that the disputed domain name is not in any case confusingly similar to the alleged trademark.

Respondent contends that he has rights and legitimate interests in the disputed domain name because he used it in connection with a bona fide offering of goods and services prior to notice of a dispute. Respondent invested a substantial amount of money between late 1998 and April 2002, building his business based on a good faith belief that he was making legitimate use of a generic term.

Respondent rejects the contention that he registered or used the disputed domain name in bad faith. He argues that he had no knowledge of Complainant’s alleged trademark, and the alleged mark is a generic term which he registered and is using in a generic sense. Therefore he did not act intentionally to cause Internet user confusion for commercial gain.

Respondent requests the Panel to reject Complainant’s request to transfer the disputed domain name to it.

The Policy is addressed to resolving disputes concerning allegations of abusive domain name registration and use. The Panel will confine itself to making determinations necessary to resolve this Administrative Proceeding.

It is essential to dispute resolution proceedings that fundamental due process requirements be met. Such requirements include that a respondent have notice of proceedings that may substantially affect its rights. The Policy and the Rules establish procedures intended to ensure that respondents are given adequate notice of proceedings commenced against them, and a reasonable opportunity to respond (see, e.g., Rules, paragraph 2(a)).

In this case, the Respondent has filed a timely Response. The Panel is satisfied that the Respondent had adequate notice of the proceedings.

Paragraph 4(a) of the Policy sets forth three elements that must be established by a complainant to merit a finding that a respondent has engaged in abusive domain name registration and use, and to obtain relief. These elements are that:

(i) respondent’s domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and

(ii) respondent has no rights or legitimate interests in respect of the domain name; and

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

Each of the aforesaid three elements must be proved by a complainant to warrant relief.

Complainant asserts rights in the word service mark "WINE OF THE MONTH CLUB" based on use in commerce in the United States since 1972, and as evidenced by registration of the asserted service mark at the USPTO. Complainant has submitted evidence that it has fulfilled the procedural requirements to establish incontestable status of the mark.

Respondent asserts that Complainant does not have service mark rights in the term "WINE OF THE MONTH CLUB" because the term is generic for a membership business in which vendors of wine products supply those products to their members (in Respondent’s words, a "membership-based monthly wine club").

As Respondent notes, incontestable status under the Lanham Act does not preclude a successful challenge to the validity of a trademark or service mark based on genericness (15 USC §1065(4), see Park N’ Fly v. Dollar Park and Fly, 469 U.S. 189, 196-97). The Supreme Court in Park N’ Fly v. Dollar Park and Fly, 469 U.S. 189, expressly distinguished terms that are "merely descriptive" from those that are generic, holding that a challenge to incontestability may not be mounted on the basis of mere descriptiveness (based on the text of the Lanham Act and its legislative history). Respondent has based its challenge on the alleged "generic" nature of the term "WINE OF THE MONTH CLUB" as opposed to alleging that the term is merely descriptive of Complainant’s services (and without secondary meaning).

Respondent has furnished a substantial body of evidence that the term "WINE OF THE MONTH CLUB" is used by many vendors of wine in a sense that is at least descriptive of their business. Whether the term stands among the public for a genus or type of service enterprise and cannot be the subject of service mark rights is a more difficult question. Complainant succeeded in registering "WINE OF THE MONTH CLUB" as a service mark in 1988, and appears to have enjoyed at least some distinctiveness from other wine vendors in its use of the term. Respondent must overcome the presumption of rights established by registration in order to establish genericness.

The Panel does not find it necessary to make a determination as to whether the term "WINE OF THE MONTH CLUB" is generic. If the term is a service mark, Complainant’s rights in it are very thin because the term is widely used by other enterprises to describe the type of service they provide. Given the conclusions reached below, the Panel need not determine the extent of Complainant's trademark rights or whether the disputed domain name is confusingly similar to the alleged mark.

The second element of a claim of abusive domain name registration is that the respondent has no rights or legitimate interests in respect of the domain name (Policy, paragraph 4(a)(ii)). The Policy enumerates several ways in which a respondent may demonstrate rights or legitimate interests:

"Any of the following circumstances, in particular but without limitation, if found by the Panel to be proved based on its evaluation of all evidence presented, shall demonstrate your rights or legitimate interests to the domain name for purposes of paragraph 4(a)(ii):

(i) before any notice to you 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 (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 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." (Policy, paragraph 4(c)).

Respondent claims that he has rights and legitimate interests in the disputed domain name because he used the name for a bona fide offer of goods and services prior to notice of a dispute. Although constructive notice established by federal registration of a service mark is a significant element in determining whether a respondent has notice of dispute under the Policy, registration is not the equivalent of notice of a dispute.

Respondent acknowledges awareness of Complainant and its business at the time of registering the disputed domain name, but claims good faith reliance on a belief that the term "WINE OF THE MONTH CLUB" generically described the type of business which he proposed to establish. Respondent bolsters this assertion by reference to a variety of other "OF THE MONTH CLUB" businesses that he contemporaneously and subsequently established. Respondent further notes that he operated his "WINE OF THE MONTH CLUB" business in full view of Complainant on the Internet for three and one half years prior to any formal notice from Complainant of a dispute concerning its alleged service mark.

However, Respondent's intent is not determinative if its use of the domain name infringes upon Complainant's mark. Even evidence of similar use by numerous third parties - if they are also infringing uses - does not legitimize Respondent's use. Thus, the extent of Complainant's trademark rights is a critical consideration in determining whether Respondent made a legitimate bona fide use of the domain name. Because the Complaint fails on the bad faith requirement, we do not determine this issue.

Complainant contends that Respondent registered and used the disputed domain name with the intention for commercial gain to attract Internet users to his website by creating confusion as to Complainant’s acting as the source of goods or services, or as to Complainant’s affiliation with or endorsement of his website.

Respondent is using the domain name <winemonthclub.com> in a manner that is entirely descriptive of his business, that is, a service supplying wine to members on a monthly basis. He has not on his website used distinctive features or get-up from Complainant’s website. He has added the term "International" to "Wine of the Month Club" on his home page, distinguishing his usage from that of Complainant (which uses "The Original WINE OF THE MONTH CLUB" as its home page identifier). Contemporaneously with initiating his "International Wine of the Month Club" website, Respondent used the "OF THE MONTH" phrase in connection with other websites offering different goods and services. As noted above, the fact that there are many businesses on the Internet using the term "WINE OF THE MONTH CLUB", with and without combination terms, does not insulate Respondent or other users of the term from a claim of trademark infringement if Complainant is indeed able to establish rights in the term. However, the widespread competing usage of the term "WINE OF THE MONTH CLUB" lends credence to Respondent’s assertion that he did not intend to take advantage of the goodwill or reputation of Complainant when registering and using the disputed domain name.

In light of the very thin, at best, character of Complainant’s asserted mark and other circumstances present here, the Panel does not consider that Complainant has carried its burden of proving that Respondent acted in bad faith in registering and using the disputed domain name. The Panel therefore declines to direct the registrar to transfer the disputed domain name.

The Panel’s determination does not purport to resolve issues that might be presented in a civil trademark infringement proceeding in which the question of Complainant’s rights in its asserted mark might be further examined, and a more complete record regarding Respondent’s conduct developed.

For all the foregoing reasons, the Complaint is denied.