Complainants are Velcro Industries B.V., Curacao, Netherland Antilles and Velcro USA Inc, Manchester, New Hampshire, United States of America, represented by Foley Hoag, LLP, United States of America.

Respondent is Qingdao Kunwei Knitting Co., Ltd., Qingdao, Shandong, China.

2. The Domain Name and Registrar

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

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on February 12, 2007, by e-mail and on February 16, 2007 in hardcopy. On February 15, 2007, the Center transmitted by email to WebNIC.cc a request for registrar verification in connection with the domain name at issue. On February 15 and 23, 2007, WebNIC.cc transmitted by email to the Center its verification response confirming that 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, Complainant filed an amendment to the Complaint on February 26, 2007. 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 Respondent of the Complaint, and the proceedings commenced on March 2, 2007. In accordance with the Rules, paragraph 5(a), the due date for Response was March 22, 2007. Respondent did not submit any response. Accordingly, the Center notified Respondent’s default on March 28, 2007.

The Center appointed Manoel J. Pereira dos Santos as the sole panelist in this matter on April 12, 2007. 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

The trademark upon which the Complaint is based is VELCRO. According to the documentary evidence and contentions submitted, Complainant Velcro Industries B.V. owns a large number of trademark registrations for the VELCRO trademark around the world, including twenty U.S. Trademark Registrations which date back to 1958 and 12 China Trademark Registrations in Roman letters or Chinese characters. Reference is made to Annexes 4 and 5 of the Complaint. Complainant Velcro USA Inc. is the exclusive licensee of the VELCRO trademark in the United States of America.

According to the documentary evidence and contentions submitted, Complainant Velcro USA Inc. owns a number of domain names registrations that incorporate the word VELCRO, including <velcro.com>, registered with Network Solutions and created on November 2, 1994. Reference is made to Annexes 6 and 7 of the Complaint. An independent survey was conducted by the Panel and the Panel has found that the <velcro.com> domain name resolves to a website that contains information on VELCRO hook and loop products and fastening systems. Reference is also made to Annex 8 of the Complaint.

According to the documentary evidence and contentions submitted, VELCRO is expressly recognized as a trademark in various dictionaries around the world, including those published in China. Reference is made to Annex 9 of the Complainant. The Panel accepts Complainants’ contentions that VELCRO trademark is a famous trademark worldwide and has been extensively advertised and promoted, and notes that a previous WIPO panel has recognized that the VELCRO trademark enjoys a wide scope of protection. Velcro Industries B.V. and Velcro USA Inc. v. Qingdao Kunwei Velcro Co., Ltd., WIPO Case No. D2006-0023.

According to the documentary evidence, Respondent registered the domain name <china-velcro.com> with WebNIC.cc on October 22, 2006. On November 21, 2006 Complainants’ Chinese representative sent a cease and desist letter to Respondent requiring the transfer of the disputed domain name. Reference is made to Annex 11 of the Complaint. Complainants state that Complainants’ Chinese representative discussed the matter with Respondent in a December 2006 telephone conversation and that Respondent has refused to cease and desist from using the infringing domain name.

5. Parties’ Contentions

A. Complainants

Complainants contend that the domain name <china-velcro.com> is confusingly similar to Complainant Velcro Industries B.V.’s trademark VELCRO because (i) VELCRO is a renowned trademark in the industry and is recognized throughout the world in connection with Complainants’ products, and (ii) the addition of the prefix “china-” does not affect a finding of similarity as decided in previous WIPO UDRP decisions.

Complainants further argue that Respondent lacks rights in the disputed domain name because (i) Respondent is neither an agent nor a licensee of Complainants and, therefore, has no right to use the VELCRO trademark, which has been in use since at least 1958, (ii) as a result, the burden shifts to Respondent to establish some right or legitimate interest in the disputed domain name, (iii) Respondent cannot show that it used the domain name in connection with a bona fide offering of goods or services or that it is making a legitimate, non-commercial use of the disputed domain name, and (iv) Respondent is not commonly known by the domain name <china-velcro.com>.

Complainants contend that Respondent registered and is using the disputed domain name in bad faith because (i) Respondent was aware of Complainants and the nature of their business when Respondent registered the <china-velcro.com> domain name in October 2006 since the domain name <cn-velcro.com> also registered by Respondent was the subject of a UDRP case and was transferred to Complainants pursuant to a WIPO UDRP decision handed down in March 2006 (Velcro Industries B.V. and Velcro USA Inc. v. Qingdao Kunwei Velcro Co., Ltd., supra), (ii) Respondent previously referred to itself as “Qingdao Kunwei Velcro Co., Ltd.” and changed its name to Qingdao Kunwei Knitting Co., Ltd. in light of the <cn-velcro.com> dispute, (iii) even if Respondent did not have actual knowledge of Complainants’ trademark, Respondent certainly had constructive knowledge under U.S. trademark law, (iv) the arbitrary and fanciful qualities of Complainants’ VELCRO mark strongly suggest that the Respondent did not arrive at the conclusion that <china-velcro.com> would form a strong foundation for a domain name for an online business.

Complainants further argue that the evidence establishes that Respondent has, deliberately or with willful disregard, included Complainants’ trademark in its domain name to divert customers and attract business, and that Respondent’s illicit use of the disputed domain name creates the erroneous impression of endorsement by, or affiliation with, Complainants. Finally, Complainants state that, during a December 15, 2006 telephone call between Complainants’ Chinese representative and Respondent, Respondent’s representative agreed to transfer the <china-velcro.com> domain name “only if Complainant would remit to Respondent the sum of 100,000 USD”.

B. Respondent

Respondent did not reply to Complainant’s contentions.

6. Discussion and Findings

The consensus view is that the respondent’s default does not automatically result in a decision in favor of the complainant and that the complainant must establish each of the three elements required by paragraph 4(a) of the UDRP (WIPO Overview of WIPO Panel Views on Selected UDRP Questions, para. 2.2). However, paragraph 14(b) of the Rules provides that, in the absence of exceptional circumstances, a panel shall draw such inferences as it considers appropriate from a failure of a party to comply with a provision or requirement of the Rules.

This Panel finds that there are no exceptional circumstances for the failure of the Respondent to submit a Response. As a result, the Panel infers that the Respondent does not deny the facts asserted and contentions made by Complainants from these facts. Reuters Limited v. Global Net 2000, Inc., WIPO Case No. D2000-0441; LCIA (London Court of International Arbitration) v. Wellsbuck Corporation, WIPO Case No. D2005-0084; Ross-Simons, Inc. v. Domain.Contac, WIPO Case No. D2003-0994. Therefore, asserted facts that are not unreasonable will be taken as true and the Respondent will be subject to the inferences that flow naturally from the information provided by the Complainants. Reuters Limited v. Global Net 2000, Inc., (supra); RX America, LLC v. Matthew Smith, WIPO Case No. D2005-0540.

The Panel will now review each of the three cumulative elements set forth in Paragraph 4(a) of the Policy to determine whether Complainant has complied with such requirements.

A. Identical or Confusingly Similar

This Panel concurs with the opinion of several prior WIPO UDRP panels which have held that, when a domain name wholly incorporates a complainant’s registered mark, that is sufficient to establish confusing similarity for purposes of the Policy. See, e.g., Oki Data Americas, Inc. v. ASD, Inc., WIPO Case No. D2001-0903; Magnum Piering, Inc. v. The Mudjackers and Garwood S. Wilson, Sr., WIPO Case No. D2000-1525; Eauto, L.L.C. v. Triple S. Auto Parts d/b/a Kung Fu Yea Enterprises, Inc., WIPO Case No. D2000-0047; Bayerische Motoren Werke AG v. bmwcar.com, WIPO Case No. D2002-0615. That is particularly true when the registered trademark is entitled to a high level of protection due to its fame and notoriety, as is the case of the VELCRO trademark.

Furthermore, the addition of a geographical location to a domain name reinforces the risk of confusion. See Casio Keisanki Kabushiki Kaisha dba Casio Computer Co., Ltd. V. Taizhou Kaixuan Entertainment Co., Ltd, WIPO Case No. D2005-0870: “[a]ny one looking at the composition ‘chinacasio’ is likely to come to the conclusion that the word ‘China’ describes the geographical source of origin of CASIO’s products or services and that the Complainant is operating or doing business with the trademark”. See also Velcro Industries B.V. and Velcro USA Inc. v. Qingdao Kunwei Velcro Co., Ltd., supra.The domain name <china-velcro.com> suggests that Complainants’ products are provided in that particular location.

Therefore, the Panel finds that the requirement of paragraph 4(a)(i) of the Policy is met.

B. Rights or Legitimate Interests

The Panel accepts Complainants’ basic contentions that (i) Respondent has no right to use the VELCRO trademark which has been in use since at least 1958, and (ii) Respondent has not shown that it used the disputed domain name in connection with a bona fide offering of goods or services or that it is making a legitimate, non-commercial use of the disputed domain name.

The Panel concurs with the opinion cited by Complainants to the effect that “[t]he offering of goods and services in association with an infringing trademark use does not constitute a ‘bona fide’ offering of goods and services within the meaning of Policy paragraph 4(c)(i)”. Cable News Network LP, LLP v. Ahmed Latif, Case No. 100709 (Nat. Arb. Forum December 31, 2001). In fact, using a famous trademark in connection with any offering of goods or services, whether or not competitive, without the prior consent of the trademark owner or licensee is a clear indication of bad faith as further discussed below.

Finally, the Panel finds that the Complainants have satisfied their burden of providing sufficient evidence to show that Respondent lacks rights to or legitimate interests in the disputed domain name. It has been established by previous WIPO UDRP decisions that, “while the overall burden of proof rests with the complainant, the burden of proof shifts to the respondent where the complainant establishes a prima facie case showing lack of rights and legitimate interests of the respondent to the disputed domain name”. Caixa D´Estalvis I Pensions de Barcelona v. Young N., WIPO Case No. D2006-0406; Croatia Airlines dd v. Modern Empires Internet Ltd., WIPO Case No. D2003-0455.

The Respondent has failed to provide the Panel with any of the types of evidence set forth in paragraph 4(c) of the Policy from which the Panel might conclude that Respondent has any rights or legitimate interests in the disputed domain name. Berlitz Investment Corp. v. Stefan Tinculescu, WIPO Case No. D2003-0465.

In light of the foregoing, the Panel finds that the requirement of paragraph 4(a)(ii) of the Policy is met.

C. Registered and Used in Bad Faith

The Panel notes that the circumstances surrounding this case were mostly considered in the previous UDRP dispute involving the same parties and related to the domain name <cn-velcro.com>. See Velcro Industries B.V. and Velcro USA Inc. v. Qingdao Kunwei Velcro Co., Ltd., (supra). As a result, the same conclusions would apply here. In fact, it is obvious that Respondent was aware of Complainants and the nature of their business when Respondent registered the <china-velcro.com> domain name, and Respondent certainly chose that combination to form a domain name in order to intentionally create traffic to the website to which the disputed domain name resolves.

The fact that Respondent registered the disputed domain name after the former dispute was resolved is an evidence of bad faith. Therefore, the Panel finds that Respondent clearly registered the domain name in bad faith.

Even if Respondent were not the same respondent in the previous dispute, the particulars of this case do not favor Respondent. The domain name <china-velcro.com> resolves to a website which promotes Respondent’s products, including which fasteners. Respondent describes itself as a “fastener tape manufacturer” and, therefore, Respondent’s use of the VELCRO trademark, generally associated with fastening systems, creates the impression of endorsement by, of affiliation with, Complainants. In short, Respondent’s bad faith is demonstrated by its use of the <china-velcro.com> domain name in order to free-ride on Complainants’ reputation and customer goodwill.

In conclusion, the facts of this case show that the disputed domain name was registered, was used and is still being used in bad faith. Therefore, the Panel finds that the requirement of paragraph 4(a)(iii) of the Policy is met.

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 <china-velcro.com> be transferred to Complainants.

Manoel J. Pereira dos Santos
Sole Panelist

Dated: April 26, 2007