The Complainant is Rainbow Sandals, Inc. of San Clemente, California, United States of America (the “United States” or “US”), represented by the Law Offices of Morland C. Fischer, United States.

The Respondent is Malua Point Holdings Pty Limited, Anthony Brown of Pymble, New South Wales, Australia / Malua Point Holdings Pty Limited a/k/a Malua Point Merchants of Double Bay, New South Wales, Australia.

2. The Domain Name and Registrar

The disputed domain name <rainbowsandals.com.au> is registered with TPP Domains Pty Ltd. dba TPP Internet.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on May 14, 2013. On May 14, 2013, the Center transmitted by email to TPP Domains Pty Ltd. dba TPP Internet a request for registrar verification in connection with the disputed domain name. On May 16, 2013, TPP Domains Pty Ltd. dba TPP Internet 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 .au Dispute Resolution Policy (the “Policy” or “.auDRP”), the Rules for .au Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for .au 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 May 29, 2013. In accordance with the Rules, paragraph 5(a), the due date for Response was June 18, 2013. The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on June 19, 2013.

The Center appointed Alistair Payne as the sole panelist in this matter on June 26, 2013. 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, based in California, United States, has since 1974 produced flip flops under its RAINBOW or RAINBOW SANDALS marks, in particular for the surfing market. The Complainant owns various trade mark registrations including US trade mark 1264326 for the word mark RAINBOW dating from 1984. The Complainant’s business has subsequently expanded dramatically and by 2007 its turnover had reached USD 50 million per year. It now sells approximately two million products per year in numerous countries worldwide, including in Australia. The Complainant maintains a website at “www.rainbowsandals.com”.

The Respondent, who had applied to be the Complainant’s distributor in Australia, without the Complainant’s authority created the disputed domain name on September 20, 2010, the same day on which it also applied to register the Australian trade mark “Rainbow Sandals”. The Complainant subsequently prevailed upon the Respondent to assign the Australian trade mark application to it and this trade mark was subsequently granted as a combined word and logo mark being Australian trade mark 1383591. The Respondent did not advise the Complainant during negotiations for transfer of the Australian trade mark that it had registered the disputed domain name and it was not until the Complainant had appointed its new Australian distributor, that the distributor discovered the existence of the disputed domain name.

After the distributor discovered that the Respondent had registered <rainbowsandals.com.au>, it sent an e-mail offering to pay the Respondent’s registration fees and website costs so that the disputed domain name could be transferred to it. By email dated February 11, 2013, the Respondent demanded USD 60,000 in exchange for transferring the disputed domain name. The Respondent’s registration and continued possession of the disputed domain name has resulted in the Complainant’s new Australian distributor being unable to have a “.au” domain name incorporating the RAINBOW SANDALS trade mark.

5. Parties’ Contentions

A. Complainant

The Complainant submits that it owns registered trade mark rights in the RAINBOW and RAINBOW SANDALS trademarks as set out above and that the substantive elements of the disputed domain name are identical or confusingly similar to these marks.

It says that the Respondent was never authorised to use its mark or register the disputed domain name as the negotiations for the Respondent to act as its Australian distributor never came to fruition and in any event the Respondent confirmed that had no rights to the mark. The Complainant asserts that when it found out about the Respondent’s Australian trade mark application for a mark that was identical to its combined word and logo mark, it required the Respondent to assign the application to it and the Respondent agreed to do so and subsequently did so. It further says that the Respondent’s business name registration for “Rainbow Sandals Australia” was registered similarly in anticipation of its distributorship relationship with the Complainant and that as the Respondent has never acted as its distributor, the Respondent did not trade under and is not known by this name. In summary the Complainant says that it did not know of the Respondent’s registration of the disputed domain name and as it was never authorised by the Complainant and as the Respondent never became its distributor and is not commonly known by the disputed domain name and nor is it making a noncommercial or fair use of it, the Respondent has no rights or legitimate interests in the disputed domain name.

As far as bad faith is concerned the Complainant submits that the Respondent’s conduct in registering the disputed domain name without its knowledge and in circumstances where it was very well aware of the Complainant’s rights and in then demanding the sum of USD 60,000, an amount that is far beyond its out of pocket establishment costs, for the transfer of the disputed domain name, points to the Respondent’s conduct in bad faith under paragraph 4(b)(i) of the Policy. In addition the Complainant submits that the Respondent has prevented the Complainant from registering and using a domain name reflecting its RAINBOW SANDALS trade mark and trade name, which amounts to “blocking” conduct under paragraph 4(b)(ii) of the Policy. Further, it says that the Respondent’s registration is disrupting the Complainant’s Australian business under paragraph 4(b)(iii) of the Policy in that its current distributor cannot operate its distribution business from the domain name that most Australian would expect it to operate from. Finally, the Complainant says that the Respondent’s passive holding of the disputed domain name is additional evidence of its registration and use in bad faith.

B. Respondent

The Respondent did not respond to the Complainant’s contentions.

6. Discussion and Findings

A. Identical or Confusingly Similar

The Complainant has demonstrated that it owns registered trade mark rights in the United States and elsewhere in the RAINBOW mark as detailed above. Even without owning Australian rights this foreign trade mark registration would be adequate for the purposes of establishing the necessary trade mark rights under limb 1 of the Policy (see for example the panel decision in Marshmallow Skins, Inc. v. Piipiinoo Australia Pty Limited, WIPO Case No. DAU2013-0015).

However the Complainant in this case also demonstrated that it owns a registration in Australia. As detailed above, it owns a combined word and logo mark which comprises the word mark RAINBOW SANDALS and a pictorial rainbow device, together with the words in much smaller font “The original San Clemente, CA since 1974”. This mark is the Australian registration of the combined device mark that it uses internationally. Clearly the most prominent element of the combined mark are the words “rainbow sandals” and the next most distinctive element, the rainbow device, is evocative of its RAINBOW mark. The overall impression left by the mark is of a rainbow and reinforces the effect and meaning of the dominant textual element, being the mark RAINBOW SANDALS. The Panel considers that the RAINBOW element of the Complainant’s mark is quite distinctive in relation to sandals and in the Panel’s view it is therefore appropriate in the circumstances of this combined mark to find that this registration supports the claim that the Complainant owns trade mark rights in the RAINBOW SANDALS word mark in Australia for the purposes of the Policy. As noted in Limited Liability Company Infomedia v. c/o Office-Mail processing center / Whois privacy services, provided by DomainProtect LLC / 1) Eurofirm Ltd. 2) Ethno Share PO, Domain Manager, WIPO Case No. D2010-1239 (the “Ethno case”), each analysis of a combined mark for the purposes of finding trade mark rights under the Policy turns on its own facts and this case is distinguishable in that regard from the circumstances in the Ethno case.

The Panel finds that the substantive elements of the disputed domain name are confusingly similar to the Complainant’s RAINBOW word mark registration in the United States (the “sandals” element of the mark being a common word in the English language and therefore nondistinctive). In addition the Panel finds that the disputed domain name is confusingly similar to the Complainants combined word/device mark Australian registration of which the dominant element is the word mark RAINBOW SANDALS.

Accordingly, the Panel finds that the Complaint succeeds under the first element of the Policy.

B. Rights or Legitimate Interests

This is not a typical “distributorship” case of the kind referred to at paragraph 2.3 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition (“WIPO Overview 2.0”). The Respondent in this case was in negotiations to be appointed as the Complainant’s Australian distributor but according to the Complainant was never so appointed. It appears that the Respondent was not authorised to register the Complainant’s mark as a trade mark or as a domain name in Australia but took it upon itself to do so in any event.

Unfortunately for the Complainant it found out initially about the Respondent’s Australian trade mark application, but not about the disputed domain name. In the process of agreeing the assignment of the trade mark application to the Complainant, the Complainant confirmed in its email correspondence and the Respondent effectively admitted by consenting to the Complainant’s request for assignment that the Respondent had no right to register the mark as a trade mark without the Complainant’s permission. However it omitted to mention to the Complainant that it had also simultaneously registered the disputed domain name.

In these circumstances, considering the subsequent demands of the Respondent for payment far beyond its out of pocket costs as noted below and that the Respondent is not otherwise known by the disputed domain name, the Panel finds that the Complainant has made out a prima facie case that the Respondent has no rights or legitimate interests in the disputed domain name. As the Respondent has not rebutted this case or provided any contrary view of the facts, the Panel finds that the Complaint succeeds under the second limb of the Policy.

C. Registered or Subsequently Used in Bad Faith

Under the Policy the Complainant is required to demonstrate that the Respondent has either registered or used the disputed domain name in bad faith.

The Panel finds a range of factors to be indicative of bad faith in this case. Firstly, there is the Respondent’s conduct in registering the disputed domain name without the Complainant’s knowledge and in circumstances that it was in negotiations for a distributorship but had not concluded such an arrangement. Secondly, the Panel considers that the Respondent acted in bad faith in agreeing to assign the Australian trade mark application to the Complainant without telling the Complainant that it had also registered the disputed domain name. Thirdly, its demands in its email of February 11, 2013 in demanding the sum of USD 60,000, an amount that is far beyond its out of pocket establishment costs, in exchange for the transfer of the disputed domain name is indicative of bad faith.

The Panel infers in these circumstances that the Respondent registered the disputed domain name in order to prevent the Complainant from reflecting its mark in a corresponding domain name in the “.au” domain name space. Under paragraph 4(b)(ii) of the Policy this is evidence of the registration or use by the Respondent of the disputed domain name in bad faith. As a result the Panel finds that the Complaint succeeds under the third element 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 disputed domain name <rainbowsandals.com.au> be transferred to the Complainant provided the Registrar is satisfied that the Complainant fulfills the eligibility criteria set out in Schedule C of the Australian Domain Name Authority’s Domain Name Eligibility and Allocation Policy Rules for the Open 2LDs (2012-04) for ownership of the disputed domain name. Alternatively, the Panel orders that the disputed domain name <rainbowsandals.com.au> be cancelled.

Alistair Payne
Sole Panelist
Date: July 7, 2013