WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

San Diego Hydroponics & Organics v. Innovative Growing Solutions, Inc.

Case No. D2009-1545

1. The Parties

The Complainant is San Diego Hydroponics & Organics of San Diego, California, United States of America, represented by Procopio Cory Hargreaves & Savitch, LLP, United States of America.

The Respondent is Innovative Growing Solutions, Inc. of San Diego, California, United States of America, represented by The Law Office of Paul Michael DeCicco, United States of America.

2. The Domain Names and Registrar

The disputed domain names <sandiegohydro.com> and <sdhydro.com> are registered with Wild West Domains, Inc.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on November 17, 2009. On November 18, 2009, the Center transmitted by email to Wild West Domains, Inc. a request for registrar verification in connection with the disputed domain names. On November 25, 2009 Wild West Domains, Inc. transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details. The Center verified that the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy” or “UDRP”), the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the “Supplemental Rules”).

In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceedings commenced November 30, 2009. In accordance with the Rules, paragraph 5(a), the due date for Response December 20, 2009. The Response was filed with the Center December 18, 2009.

The Center appointed William R. Towns, R. Mark Halligan and Diane Cabell as panelists in this matter on February 17, 2010. 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.

4. Factual Background

The Complainant and the Respondent both operate retail businesses in San Diego, California featuring hydroponics growing products. The Complainant owns a United States trademark registration for SAN DIEGO HYDROPONICS & ORGANICS issued by the United States Patent and Trademark Office (USPTO) on January 6, 2009. The Complainant applied to the USPTO for registration of its mark on February 27, 2008. The Complainant also maintains a commercial website for its business associated with the domain name <sdhydroponics.com>.

The Respondent registered the disputed domain names <sdhydro.com> and <sandiegohydro.com> on August 9, 2004 and September 19, 2004, respectively. Each of the disputed domain names resolves to a parking website providing advertising links to various third-party sites. The Respondent maintains a commercial website for its business associated with the domain name <igshydro.com>. Neither of the disputed domain names resolves nor otherwise is linked to the Respondent's website.

5. Parties' Contentions

A. Complainant

The Complainant asserts ownership of the registered trademark SAN DIEGO HYDROPONICS & ORGANICS. The Complainant notes that the USPTO registration certificate contains a recitation of first use and first use in commerce dates of June 6, 2000, and June 20, 2000, respectively.

The Complainant contends that the disputed domain names are confusingly similar to its mark, and further asserts that the Respondent is making an infringing use of the domain names under the anti-cybersquatting provisions of the Lanham Act. The Complainant maintains that the Respondent registered the disputed domain names to redirect Internet visitors away from the Complainant's business, and that the use of the disputed domain names with the Respondent's website would create consumer confusion and suggest an affiliation with the Complainant.

According to the Complainant, the Respondent has no rights or legitimate interests in the disputed domain names, which the Complainant contends were registered and are being used by the Respondent in bad faith. The Complainant maintains that the Respondent has never been commonly known by the disputed domain names, and that the Respondent has made no legitimate commercial or fair use of the domain names, asserting that the Respondent is using the domain names solely to obtain unfair commercial gain by misleading and diverting potential consumers of the Complainant and tarnishing the Complainant's mark.

B. Respondent

The Respondent indicates it launched its San Diego, California based hydroponics business in December 2003, and that the disputed domain names were registered in mid-2004 for use in conjunction with the Respondent's Internet presence. According to the Respondent, the disputed domain names were obvious choices for a San Diego based hydroponics business and were registered solely for their short descriptive value.

The Respondent maintains that, at the time of the registration of the disputed domain names, the Respondent was only “marginally aware” of the Complainant and had no reason to believe that the Complainant or anyone else might have or claim trademark rights relative to either of the disputed domain names. The Respondent maintains that it registered the disputed domain names before the Complainant had established trademark rights, and that the Complainant has submitted no evidence to the contrary.

The Respondent asserts that while it registered the disputed domain names with the intent that they immediately be used with the Respondent's website, this has not yet been done. According to the Respondent, the domain names are now being held for use in conjunction with the Respondent's expansion of its business to include hydroponic farming. The Respondent further asserts that it did not become aware of the use of the disputed domain names with two parking pages until recently, that the domain name registrar is solely responsible for this arbitrary use, and the Respondent has received no direct or indirect benefit from the registrar's placeholder pages.

The Respondent contends that the Complainant has failed to meet its burden of proof with respect to any of the three elements of the Policy. According to the Respondent, the disputed domain names are not confusingly similar to the Complainant's mark when compared in terms of sight and sound, but are dissimilar. Further, the Respondent maintains that the general impression given by the disputed domain names, which the Respondent asserts is primarily descriptive, is dissimilar from the general impression conveyed by the Complainant's mark, assuming that the Complainant's mark in fact serves as an indicator of source.

According to the Respondent, the Complainant has failed to make a prima facie showing that the Respondent lacks rights or legitimate interests in the disputed domain name. The Respondent maintains that it has rights or legitimate interests in the disputed domain name because the domain names were registered based on their descriptiveness for use with the Respondent's website, and because the Complainant had no common law rights in its mark when the disputed domain names were registered and has submitted no proof of secondary meaning. The Respondent maintains that the disputed domain names are merely descriptive of hydroponics businesses in San Diego, and that the Respondent was the first of such businesses to register the domain names in question for that purpose.

The Respondent asserts that the Complainant's lack of trademark rights at the time the Respondent registered the disputed domain names is fatal to the Complainant's bad faith assertions. The Respondent maintains that the Complainant's contention that the disputed domain names were registered to take advantage of potential confusion with the Complainant's mark, or to generally disrupt the Complainant's business, are untrue and unproven. According to the Respondent, the Complainant has presented no evidence of registration and use of the disputed domain names in bad faith pursuant to paragraph 4(b) of the Policy.

The Respondent requests that the Panel find and declare that the Complaint was filed in bad faith pursuant to paragraph 15(e) of the Policy. According to the Respondent, the Complainant, represented by trademark counsel, must have known that the instant Complaint could not succeed on the merits, but filed it anyway, purely to harass and vex the Respondent.

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 Final 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 the 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

A majority of the Panel finds for purposes of paragraph 4(a)(i) of the Policy that the disputed domain names <sandiegohydro.com> and <sdhydro.com> are confusingly similar to the Complainant's SAN DIEGO HYDROPONICS & ORGANICS mark, in which the Complainant has established rights arising from its registration on the USPTO Principal Registrar pursuant to Section 2(f) of the Trademark Act. Section 2(f) provides that “proof of substantially exclusive and continuous use” of a designation “as a mark by the applicant in commerce for the five years before the date on which the claim of distinctiveness is made” may be accepted as prima facie evidence that the mark has acquired distinctiveness” as used with the applicant's goods or services.¹

Regarding the question of identity, the inquiry under the first element of the Policy is largely framed in terms of whether the mark and domain name, when directly compared, are identical or confusingly similar. See Wal-Mart Stores, Inc. v. Richard MacLeod d/b/a For Sale, WIPO Case No. D2000-0662. This may involve comparison based on sight, sound, and general or commercial impression.

While neither of the disputed domain names incorporates the Complainant's mark in its entirety, “San Diego” arguably is the dominant portion of the Complainant's mark², and in this context it is evident that “sd” is intended as an abbreviation for “San Diego”. In addition, the term “hydro” is used on both parties' websites as a shortened version of the word “hydroponics”, something that might be expected in an Internet context. The Complainant promotes itself on its Internet site as “San Diego Hydro” and “SD Hydro”, while the Respondent promotes itself on its Internet site as “IGShydro.com”. ³

In view of the foregoing, the Panel majority concludes that the disputed domain names are confusingly similar to the Complainant's for purposes of the first element of the Policy, and that the Complainant accordingly has satisfied the requirements of paragraph 4(a)(i) of the Policy.⁴

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 of proof to the respondent to come forward with evidence of rights or legitimate interests in a 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. It is undisputed that the Complainant has not authorized the Respondent to use the Complainant's mark, and there is no indication that the Respondent has been commonly known by either of the disputed domain names. Nevertheless, the record reflects that the Respondent, a competitor of the Complainant in the San Diego area, has registered two domain names that are confusingly similar to the Complainant's mark. As noted earlier, the disputed domain names resolve to pay-per-click parking sites.

Pursuant to paragraph 4(c) of the Policy, the Respondent may establish rights to or legitimate interests in the disputed domain names 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.

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. Thus, 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.

As noted above, the Respondent maintains that the disputed domain names were registered solely for use in conjunction with its San Diego based hydroponics business, and that the Respondent was not aware at the time that the Complainant or anyone else claimed trademark rights in connection with the domain names. This explanation is supported by the sworn declaration of the Respondent's president. However, the Respondent has not denied knowing of the Complainant at the time the disputed domain names were registered. And the Respondent clearly has never used either of the disputed domain names in conjunction with its business in the 5½ years since it registered the domain names. Instead, the Respondent has used or permitted the disputed domain names to be used with pay-per-click parking sites. Such use arguably does not qualify as use of a domain name in connection with a bona fide offering of goods or services within the meaning of paragraph 4(c)(i) of the Policy. See Trade Me Limited v. Vertical Axis Inc., WIPO Case No. D2009-0093.

Because, as discussed below, the Panel finds that the Complainant has failed to meet its burden of proof respecting bad faith registration and use under paragraph 4(a)(iii) of the Policy, a determination whether the Respondent has established rights or legitimate interests in the disputed domain names is not strictly necessary to the Panel's decision in this case.

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 respondent's 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 is using the domain name to intentionally attempt to attract, for commercial gain, Internet users to its website or other online 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 the 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. Nevertheless, it is paramount that panels decide cases based on the very limited scope of the Policy. Match.com, LP v. Bill Zag and NWLAWS.ORG, WIPO Case No. D2004-0230. The Policy provides a remedy only in cases where a complainant proves that the domain name “has been registered and is being used in bad faith”.

The Panel, after considering the totality of the circumstances in the record, does not find the evidence on balance sufficient to demonstrate that the Respondent registered the disputed domain names with the aim of profiting from and exploiting the Complainant's rights or prospective rights in its SAN DIEGO HYDROPONICS & ORGANICS mark. While the Complainant has established registration rights in its mark sufficient to invoke the Policy, the mark nonetheless consists of the geographically descriptive term “San Diego” combined with the words “Hydroponics & Organics”, essentially a generic descriptor of the Complainant's business. The Complainant's mark is not inherently distinctive in relation to the Complainant's goods and services.

As noted above, the USPTO did not conclude that the Complainant's mark was entitled to registration as an inherently distinctive indicator of source, but instead granted registration only under Section 2(f) of the Trademark Act based on acquired distinctiveness. The Panel notes that the registration of the Complainant's mark under Section 2(f) indicates only that the mark had acquired distinctiveness in the public mind as an indicator of source by the time of the USPTO's registration of the mark in January 2009; it does not involve a determination that the Complainant's mark, at the time of the Respondent's registration of the disputed domain names, had acquired secondary meaning sufficient for the public to recognize it as a symbol distinguishing the Complainant's goods and services from those of others.

Evidence looked to by U.S. courts as relevant in determining secondary meaning includes evidence as to (1) the length and continuity of a mark's use, (2) sales, advertising, and promotional activities, (3) expenditures relating to promotion and marketing, (4) unsolicited media coverage, and (5) sales or admission figures. See First Brands Corp. v. Fred Meyer, Inc., 809 F.2d 1378, 1383 (9th Cir.1987). The Complainant has submitted no such evidence this administrated proceeding. While the Panel has taken into consideration evidence of use publicly available in the USPTO database in connection with the Complainant's trademark application,⁵ this evidence does not demonstrate that the Complainant' mark had acquired secondary meaning at the time of the Respondent's registration of the disputed domain names.

As a general rule, and excluding certain situations not present in this case,⁶ when a domain name is registered before any trademark rights are established, the registration of the domain name is not in bad faith since the registrant could not have contemplated the complainant's non-existent rights. See, e.g., General Growth Properties, Inc., Provo Mall L.L.C. v. Steven Rasmussen/Provo Towne Centre Online, WIPO Case No. D2003-0845. The primary rule in relation to domain name registrations is “first come, first served”, to which the Policy provides a narrow exception. See Macmillan Publishers Limited, Macmillan Magazines Limited and HM Publishers Holdings Limited v. Telepathy, Inc, WIPO Case No. D2002-0658. The Policy was not intended to permit a party who elects to register or use a common or descriptive term as a trademark to bar others from using the common term in a domain name, unless it is clear that the use involved is seeking to capitalize on the goodwill created by the trademark owner. See Match.com, LP v. Bill Zag and NWLAWS.ORG, supra; National Trust for Historic Preservation v. Barry Preston, supra.

In the final analysis, the ultimate burden of proof with respect to all three elements of paragraph 4(a) of the Policy remains with the Complainant. The Respondent has offered a plausible good faith explanation, supported by a sworn declaration, and the record in this proceeding does not clearly evince that the Respondent's aim in registering the disputed domain names was to profit from and exploit the Complainant's actual or prospective trademark rights. Nor do the circumstances in the record on balance otherwise establish bad faith under paragraph 4(b) of the Policy. For all of the foregoing reasons, the Panel concludes that the Complainant has failed to satisfy its burden of showing bad faith registration and use name under paragraph 4(a)(iii) of the Policy.

E. Reverse Domain Name Hijacking

Paragraph 1 of the Rules defines reverse domain name hijacking as “using the Policy in bad faith to attempt to deprive a registered domain name holder of a domain name”. To prevail on such a claim, a respondent must show that the complainant knew of the respondent's unassailable rights or legitimate interests in the disputed domain name or the clear lack of bad faith registration and use, and nevertheless brought the complaint in bad faith. Sydney Opera House Trust v. Trilynx Pty. Ltd., WIPO Case No. D2000-1224 and Goldline International, Inc. v. Gold Line, WIPO Case No. D2000-1151. While the Panel has determined based on the facts and circumstances before it that the Complainant has failed to meet its burden of proof with respect to the third element of the Policy, the Panel is not persuaded from the totality of the record that the Complainant acted in bad faith in invoking the Policy in this case.

7. Decision

For all the foregoing reasons, the Complaint is denied.

Dated: March 3, 2010