WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Lumber Liquidators, Inc. v. Keith Krouldis, Direct Stores Online and

Rings Hardwood Flooring & Supplies, LLC

Case No. D2009-0861

1. The Parties

The Complainant is Lumber Liquidators, Inc. of Toano, Virginia, United States of America, represented by Troutman Sanders, LLP, United States.

The Respondents are Keith Krouldis, Direct Stores Online of Lockport, Illinois, United States and Rings Hardwood Flooring & Supplies, LLC of Woodridge, Illinois, United States, represented by Western IP Law, United States.

2. The Domain Name and Registrar

The disputed domain name <lumberliquidatorstore.com> (the “Domain Name”) is registered with FastDomain, Inc (“Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on June 29, 2009. On June 30, 2009, the Center transmitted by email to the Registrar a request for registrar verification in connection with the Domain Name. On July 8, 2009, the Registrar transmitted by email to the Center its verification response disclosing registrant and contact information for the Domain Name which differed from the named Respondent and contact information in the Complaint. The Center sent an email communication to the Complainant on July 10, 2009 providing the registrant and contact information disclosed by the Registrar, and inviting the Complainant to submit an amendment to the Complaint. The Complainant filed an amendment to the Complain on July 13, 2009. 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” 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 July 15, 2009. In accordance with the Rules, paragraph 5(a), the due date for Response was August 4, 2009. The Response was filed with the Center on August 7, 2009.

The Complainant subsequently submitted a Reply, and the Respondent filed a Reply Response.

The Center appointed W. Scott Blackmer as the sole panelist in this matter on August 25, 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.

4. Factual Background

The Complainant is a Delaware corporation headquartered in Virginia and listed on the New York Stock Exchange. According to the Complaint, the Complainant is the largest direct retailer of hardwood flooring in the United States of America. International sales also contribute to global revenues, which approach USD 250 million annually.

The Complainant operates 140 retail stores in 43 states, including six stores in Illinois, where the Respondents are located. The Complainant operates a website at “www.lumberliquidators.com.”

The Complainant claims use of the LUMBER LIQUIDATORS mark since 1995. It holds several registered trademarks for LUMBER LIQUIDATORS, either as a standard-character mark or as the prominent textual feature of a mark incorporating these words and a design. These include the following marks registered with the United States Patent and Trademark Office (“USPTO”):

The Domain Name was created on October 28, 2008. As of July 15, 2009, it was registered in the name of a website hosting service, BlueHost.com of Provo, Utah, United States. However, in response to an inquiry from the Center in connection with the current proceeding, the Registrar identified the registrant as Keith Krouldis of Direct Stores Online.

A Response was submitted in this proceeding only on behalf of Rings Hardwood Flooring & Supplies, LLC. The Response indicates that this Illinois limited liability company is the real party in interest in connection with the ownership and use of the Domain Name:

“The Respondent to this action, Rings Hardwood Flooring & Supplies, LLC is managed by Thomas Ringelsten. Mr. Ringelsten has been in the business of supplying lumber and hardwood flooring to consumers, laborers, material men, and distributors across the continental United States for more than twenty years. All of the other named Respondents to this action, including Keith Krouldis, are associated with and/or employed by the Respondent Rings Hardwood Flooring & Supplies, LLC.”

Accordingly, the term “Respondent” as used hereafter in this Decision refers to Rings Hardwood Flooring & Supplies, LLC.

It appears that the Complainant and the Respondent are direct competitors in selling hardwood flooring, in the State of Illinois and also nationally in the United States.

According to the Response, in 2007 and 2008 the Respondent, through its “agent” Mr. Krouldis, registered nine domain names for use in its business. These included, as well as the Domain Name, the similar domain names <flooringliquidatorstore.com>, <hardwoodflooringstoreonline.com>, <directstoresonline.com>, and <laminateflooringstoreonline.com>.

The Domain Name resolves to a website operated by the Respondent and headed “Lumber Liquidator,” with the slogan, “Lumber Liquidator Store is Your Online Flooring Superstore!” The website advertises hardwood and laminate flooring sold by the Respondent, as well as tile products and related supplies.

The Complainant's legal counsel sent two cease-and-desist letters to the registrant of the Domain Name in May 2009. In June 2009 a representative of Direct Stores Online advised the Complainant's attorney that the website had been deactivated. Later in June, the representative of Direct Stores Online reported that on advice of counsel the website had been reactivated, stating as well (according to the Complaint) that the Domain Name was worth “millions of dollars”. Since then, the following disclaimer has appeared on the Respondent's website associated with the Domain Name:

“Lumber Liquidators is a registered trademark and this website is not affiliated with the Lumber Liquidators organization in any manner. <LumberLiquidatorstore.com> is a privately owned website.”

5. Parties' Contentions

A. Complainant

The Complainant argues that the Domain Name is confusingly similar to the LUMBER LIQUIDATORS mark and that the Respondent has no rights or legitimate interests in the Domain Name.

The Complainant urges a finding of bad faith, asserting that the Respondent is a direct competitor of the Complainant and uses a confusingly similar Domain Name to mislead Internet users for commercial gain, infringing the Complainant's statutory trademark rights as well. The Complainant also contends that the Respondent demonstrated bad faith in attempting to sell the Domain Name to the Complainant for an amount far in excess of the Respondent's costs.

B. Respondent

The Respondent does not deny knowledge of the Complainant but claims that the Domain Name (which is not identical to the mark) was registered for its descriptive value. The Respondent furnishes a copy of its Online Marketing Plan in support of its plans to use the Domain Name, along with similar domain names, for online sales. The Respondent concludes that the Complainant's mark is weak and that the Respondent has a legitimate interest in the generic value of the three English words that comprise the Domain Name:

“The Complainant's mark is descriptive, and not enforceable in the Internet context. Complainant's mark is subject to extensive third-party use.”

6. Discussion and Findings

Paragraph 4(a) of the Policy provides that in order to divest the Respondent of a disputed domain name, the Complainant must demonstrate each of the following:

(i) the Domain Name 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 in respect of the Domain Name; and

(iii) the Domain Name has been registered and is being used in bad faith.

Under paragraph 15(a) of the Rules,

“A Panel shall decide a complaint on the basis of the statements and documents submitted and in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable.”

A. Late Response and Supplemental Filings

The Respondent states that it experienced difficulty in transmitting documents to its legal counsel in another state. The Panel finds that the delay of three business days in transmitting the Response to the Center did not significantly impede the proceedings or prejudice the Complainant. Accordingly, the Panel accepts the Response as filed.

The Complainant submitted a Reply arguing that the late-filed Response should not be accepted and responding to new information about the real party in interest. The Respondent challenged these arguments in a Reply Response.

The Policy is designed to provide an expeditious and economical administrative remedy in appropriate domain name disputes. There is no provision for discovery or hearings as there is in many judicial proceedings and in formal arbitration. Consequently, the time periods allowed for pleading and decision are short, and there are strict page limits for the pleadings. Neither the Rules nor the Supplemental Rules make provision for supplemental filings, except at the request of the panel (see Rules, paragraph 12). Paragraph 10 of the Rules enjoins the panel to conduct the proceeding “with due expedition”. Therefore, UDRP panels are typically reluctant to countenance delay through additional rounds of pleading and normally accept supplemental filings only to consider material new evidence or provide a fair opportunity to respond to new arguments.

The Panel accepts the supplemental filings to the extent that they address the late filing of the Response and the interests and intentions of the Respondent Rings Hardwood Flooring & Supplies, LLC, which was not previously identified as the beneficial owner of the Domain Name or real party in interest with respect to the disposition of the Domain Name.

B. Identical or Confusingly Similar

The Complainant indisputably holds registered trademarks comprising or incorporating the words LUMBER LIQUIDATORS. The Domain Name incorporates the LUMBER LIQUIDATORS mark in its entirety and adds only the generic word “store”. This does not avoid confusing similarity, especially since the Complainant operates many retail stores.

The Panel concludes that the Domain Name is confusingly similar to the LUMBER LIQUIDATORS mark for purposes of this element of the Complaint.

C. Rights or Legitimate Interests

The Policy's non-exhaustive list of grounds for asserting rights or legitimate interests in a Domain Name includes the following (paragraph 4(c)(i)), on which the Respondent relies:

“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”.

The Respondent is not known by a name corresponding to the Domain Name, but it clearly uses the Domain Name (as well as other domain names) in connection with its business of selling flooring products. This could not be considered a “legitimate” interest in the Domain Name, however, if it is established that the Domain Name was more likely than not selected in bad faith because of its trademark rather than generic value. See, e.g., Media General Communications, Inc. v. Rarenames, WebReg, WIPO Case No. D2006-0964 (and cases cited therein) (dictionary words may legitimately be used in a domain name for their generic value, but the claim to legitimacy is undermined in cases of famous marks or the respondent's actual knowledge of a mark).

This point is addressed more fully below.

D. Registered and Used in Bad Faith

The Policy provides a non-exhaustive list of instances of bad faith in the registration and use of a domain name, including two on which the Complainant implicitly relies:

(i) circumstances indicating that you 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 . . .

(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.

The Complainant's reliance on the first instance is not well supported on the available record. The Respondent developed and launched a website associated with the Domain Name (as well as with other domain names, as contemplated by its Online Marketing Plan), and it does not appear that the Respondent initiated discussions with the Complainant or initially raised the issue of the Domain Name's monetary value. On this evidence, it would be difficult to conclude that the Domain Name was registered “primarily for the purpose” of selling it to the Complainant.

In the Panel's view, the case turns instead on the allegation that the Respondent chose the Domain Name intentionally to mislead Internet users familiar with the Complainant's mark, using the Domain Name to attract consumers to the Respondent's website offering competing products in the same geographic markets.

Mr. Ringelsten's Declaration, attached to the Response, states that the Respondent “registered these domain names [including the disputed Domain Name] because they describe our products, not because we thought or knew anyone else had rights to them.”

The Respondent does not deny its awareness of the Complainant and its relative success in the same field in which the Respondent hoped to expand its sales. Therefore, it is hard to credit that the Respondent had “no knowledge” of the Complainant's trademark in its own name, and no intention of diverting Internet users interested in the better-known Complainant's products. The Complainant is a much larger and publicly traded company that operates several stores in Illinois, where the Respondent is also based, and it is undisputed that the Complainant is a major competitor of the Respondent.

The Online Marketing Plan attached to the Response details plans for an online presence by the Respondent as part of a collection of “Direct Sales Online” websites. In the section on “Competition”, the Plan expressly refers to the Complainant's website at “www.lumberliquidators.com” in listing competing online retailers. A stated “Objective” of the Plan is to “become the largest online flooring retailer within 3 years.” It is not surprising, then, that the Respondent's Online Marketing Plan mentions the Complainant's website and shows evidence of researching the Complainant as well as a handful of other competitors. The Panel notes that the Complainant's website includes a section on “Trademarks” on its “Terms and Conditions” page.

Paragraph 2 of the Policy, “Your Representations,” is incorporated by reference in the registration agreements of ICANN-approved registrars. It reads 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.”

This language does not imply a duty to conduct extensive due diligence before registering a domain name. But in the present case, where the Respondent registered and used a domain name incorporating the name of one of its principal competitors, the failure to determine whether that name was trademarked must be considered a convenient and willful blindness that amounts to bad faith for purposes of the Policy.

The Panel concludes, therefore, that the second and third elements of the Policy have been established.

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, <lumberliquidatorstore.com>, be transferred to the Complainant.

W. Scott Blackmer
Sole Panelist

Dated: September 8, 2009