WIPO Arbitration and Mediation Center

EXPERT DECISION

Société des Produits Nestlé S.A. v. Shen Chaoyong¹

Case No. DCH2014-0013

1. The Parties

The Claimant is Société des Produits Nestlé S.A. of Vevey, Switzerland, represented by Studio Barbero, Italy.

The Respondent is Shen Chaoyong of Basel, Switzerland.

2. Domain Name

The dispute concerns the following domain name <nestleskinhealth.ch> (the "Domain Name").

The Registry for the Domain Name is SWITCH, Switzerland.

3. Procedural History

The Request was filed in English with the WIPO Arbitration and Mediation Center (the "Center") on June 5, 2014. On June 6, 2014, the Center transmitted by email to SWITCH, the ".ch" and ".li" registry, a request for verification in connection with the Domain Name. On June 10, 2014, SWITCH transmitted by email to the Center its verification response confirming that the Respondent is listed as the holder of the Domain Name and providing the relevant contact details, and informing the Center that the language of the Registration agreement for the Domain Name was German. Accordingly, the Claimant was requested to provide at least one of the following options: 1) satisfactory evidence of an agreement between the Claimant and the Respondent to the effect that the proceedings should be in English; 2) submit the Request translated into German; 3) submit a request for English to be the language of the proceedings. On June 16, 2014 the Claimant submitted a request that English be the language of the proceedings, to which the Respondent did not reply.

The Center verified that the Request satisfied the formal requirements of the Rules of procedure for dispute resolution proceedings for ".ch" and ".li" domain names (the "Rules of Procedure"), adopted by SWITCH, on March 1, 2004.

In accordance with the Rules of Procedure, paragraph 14, the Center formally notified the Respondent of the Request in English and in German, and the Dispute resolution proceedings commenced on July 1, 2014. In accordance with the Rules of Procedure, paragraph 15(a), the due date for Response was July 21, 2014.

On July 14, 2014, an informal communication was received from the International School of Basel stating that they "received a request for a Dispute resolution regarding a domain name that has been contested by Nestlé S.A.", but that the individual, Shen Chaoyong, was not known to them and that the address indicated by the Respondent for the Domain Name was wrong. On this basis, it appears that the International School of Basel has nothing to do with these proceedings (as mentioned in footnote 1).

The Respondent has neither filed a Response nor expressed his readiness to participate in a Conciliation in accordance with paragraph 15(d) of the Rules of Procedure.

On July 22, 2014 the Center notified the Claimant accordingly, who on July 22, 2014 made an application for the continuation of the Dispute resolution proceedings in accordance with paragraph 19 of the Rules of procedure and paid the required fees.

On July 31, 2014 the Center appointed Jacques de Werra as Expert in this case. The Expert finds that it was properly appointed. In accordance with Rules of Procedure, paragraph 4, the above Expert has declared his independence of the parties.

4. Factual Background

The Claimant belongs to a group of companies which is the world's largest food consumer products company in terms of sales. The group has over 283,000 employees and markets its products in over 200 countries. The group has extended its activities to include the field of specialized, medical skin treatments through the creation of a dedicated company which is Nestlé Skin Health S.A. This was announced in a press conference which took place in Paris on February 11, 2014 and which was widely reported in the media globally.

The Claimant is the owner of several international trademarks for "Nestlé" covering various goods and services and various countries ("the Trademark"). It is also the owner of two word and design Swiss trademarks for "NestléHealthScience" covering various goods and services and which were registered on October 8, 2010².

The Domain Name was registered on February 12, 2014. It does not resolve to an active website.

The Respondent has also registered various other domain names which include and associate the terms "Nestlé" and "Skin", and - for most of them - "health" (i.e. <nestleskinhealth.com>, <nestleskin.com>, <nestleskinhealth.co.uk>, <nestleskinhealth.cn> and <nestleskinhealth.com.cn>) on February 12, 2014 (the "Other Domain Names").

The Claimant and the Respondent had contacts (i.e. exchange of emails in English) before the initiation of the current proceedings in the course of which the Respondent made various offers to sell the Domain Name along with the Other Domain Names to the Claimant for a price ranging from USD 5800 to USD 3000-.

5. Parties' Contentions

A. Claimant

The Claimant makes the argument that the Domain Name is confusingly similar to the Trademark in which Claimant has rights and that the addition of the descriptive terms "skin" and "health" do not serve to distinguish the Domain Name from the Trademark, but that this rather increases the confusing similarity as these words refer to the recent creation of the wholly-owned Nestlé subsidiary company Nestlé Skin Health S.A., which was widely publicized by preeminent news sources one day before the registration of the Domain Name by the Respondent.

The Claimant further indicates that it has not been provided by the Respondent with any evidence of use of, or demonstrable preparations to use, the Domain Name in connection with a bona fide offering of goods or services before or after any notice of the present dispute. The Claimant claims that the Respondent has simply passively held the Domain Name since its registration and showed that its primary intent is to gain profits from its sale to the legitimate owner of the Trademark and prevent the Claimant from reflecting the company name Nestlé Skin Health SA, inter alia, in a ".ch" domain name. The registration of a domain name without legitimate interest but to impair a third party is considered an act against the principle of fairness and integrity which is prohibited under Swiss unfair competition law.

In addition, given that the Claimant's Trademark is well-known and in light of the massive media campaign which surrounded the creation of the company Nestlé Skin Health S.A. which took place on the day before the Respondent's registration of the Domain Name, it is inconceivable that the Respondent was unaware of the existence either of the Trademark or the company name Nestlé Skin Health S.A. to which the Domain Name is confusingly similar. For this reason, the Respondent registered the Domain Name in bad faith. In addition, the fact that the Respondent requested an important amount of money (i.e. USD 5800 that it subsequently reduced to USD 3000) for the transfer of the Domain Name (along with the Other Domain Names) to the Claimant, whereby these amounts are to be considered well in excess of the out-of-pocket costs directly related to those domain names, is a further evidence of the Respondent's bad faith.

B. Respondent

The Respondent did not reply to the Claimant's contentions.

6. Discussion and Findings

A. Language of the proceedings

While the language of the registration agreement is German, the Claimant has requested for the proceedings to be conducted in English, particularly because the Parties exchanged several emails in English before the commencement of the proceedings in which the Respondent offered for sale the Domain Name along with the Other Domain Names to the Complainant.

Paragraph 7(a) of the Rules of Procedure provides that the proceedings shall be conducted in the language of the Registration agreement, without prejudice to the authority of the Dispute resolution service provider, a Conciliator or an Expert, exceptionally to determine otherwise on application by one or both parties or at their own discretion in view of the circumstances of the Dispute resolution proceedings.

In this case, in view of the previous communications between the Parties which took place in English, the Expert notes that the Respondent is able to communicate in English. The Expert also notes that the Respondent has not participated in the proceedings and has not made the claim that the language of the proceedings should be German. On this basis, the Expert decides that the language of the proceeding shall be English. See PLB International Inc. v. Bürobedarf Lack AG / Pet Partner GmbH, Peter Wyser, WIPO Case No. DCH2013-0027.

B. Decision on the merits

According to the Rules of Procedure, paragraph 24 (c), "the Expert shall grant the request if the registration or use of the domain name constitutes a clear infringement of a right in a distinctive sign which the Claimant owns under the laws of Switzerland or Liechtenstein."

The Rules of Procedure, paragraph 24 (d) specify that "a clear infringement of an intellectual property right exists when:

- both the existence and the infringement of the claimed Right in a distinctive sign clearly result from the wording of the law or from an acknowledged interpretation of the law and from the presented facts and are proven by the evidence submitted; and

- the respondent has not conclusively pleaded and proven any relevant grounds for defence; and

- the infringement of the right justifies the transfer or deletion of the domain name, depending on the remedy requested in the request".

B.1. The Claimant has a right in a distinctive sign

The Claimant has established its ownership of trademarks in Switzerland and throughout the world, covering the name "Nestlé" which is a well established and distinctive trademark identifying the products manufactured and marketed by the group to which the Claimant belongs, it being noted that the Trademark (i.e. the term "Nestlé") was held to constitute a famous trademark in Switzerland by the Swiss Supreme Court (ATF 130 III 748).

B.2. The registration or use of the domain name constitutes a clear infringement of the Claimant's right

Pursuant to Art. 15 paragraph 1 of the Swiss Trademark Act (the "TMA"), "[t]he proprietor of a famous trade mark may prohibit others from using his trade mark for any type of goods or services if such use threatens the distinctiveness of the trade mark or exploits or damages its reputation"³. The extended protection granted under Art. 15 TMA does not require to identify the specific goods or services for which the trademark is used (contrary to the standard conditions of trademark protection under Art. 3 and 13 TMA). It however requires that the use of the trademark "threatens the distinctiveness of the trade mark or exploits or damages its reputation".

In this case, Art. 15 TMA could be applicable because the Trademark is a famous trademark within the meaning of this provision (ATF 130 III 748). The next issue is whether the registration of the Domain Name by the Respondent constitutes a use of the trademark which "threatens the distinctiveness of the trade mark or exploits or damages its reputation" (pursuant to Art. 15 paragraph 1 TMA). It is uncertain whether this is the case given that the Domain Name is not actively used by the Respondent. The Expert notes by comparison that, according to Swiss case law, the mere registration of a domain name does not constitute an infringing use of a trademark under Art. 13 TMA (see decision of the Swiss Supreme Court in the "riesen.ch" case, 4C.31/2004, sic! 2005, 200). Under these circumstances, it is uncertain whether the registration of the Domain Name would by itself constitute "a clear infringement" of the trademark rights of the Claimant under paragraph 24 (c) of the Rules of Procedure. There is however no need to decide on this issue because the registration of the Domain Name by the Respondent conflicts in any case with the principles of Swiss unfair competition law (as reflected in the Swiss Act against Unfair Competition Law, "SUCA").

According to Swiss case law, the registration of a domain name which is made without legitimate interest for the mere purpose of blocking the market for a third party is unfair within the meaning of Art. 2 SUCA. See the decision of the Swiss Supreme Court ATF 126 III 239, 247; see also Sven Beichler, mySwissChocolate AG v. chocri GmbH, WIPO Case No. DCH2012-0032.

The Expert notes in this respect that the Domain Name was registered one day after the establishment of the company Nestlé Skin Health SA was publicly announced. This already constitutes a circumstance which indicates that the Respondent was targeting the Claimant's (new) business activities. The absence of any legitimate interest of the Respondent to use the Domain Name is confirmed by the fact that the Domain Name has remained inactive since its registration and that the Respondent has offered it (along with the Other Domain Names) for sale to the Claimant for prices which largely exceed the costs of registration of such domain names.

Against this background, the Expert considers that the Respondent, by registering the Domain Name, has tried to take undue advantage of the Claimant's famous Trademark and to block the market for the Claimant. This constitutes an unfair behaviour which is prohibited by Swiss unfair competition law (Art. 2 SUCA). See also Vattenfall AB v. Roger Lundmark, WIPO Case No. DCH2009-0021 (which refers by analogy to the "gmail" case decided by the Swiss Supreme Court, sic ! 2008, p. 732, in which the Court held that the registration of a trademark which is not made for the purpose of using it but rather for the purpose of obtaining a financial advantage from the prior user of the trademark conflicts with the principle of good faith and is unfair under Art. 2 SUCA).

7. Expert Decision

For the above reasons, in accordance with paragraph 24 of the Rules of Procedure, the Expert orders that the Domain Name <nestleskinhealth.ch> be transferred to the Claimant.

Jacques de Werra
Expert
Dated: August 12, 2014

¹ The Panel notes the communication of July 14, 2014 and decides therefore to remove (as explained in the decision below) the name "The International School of the Basel Region AG" from the identification of the parties in these proceedings.

² The Expert notes that most trademark exhibits filed by the Claimant relate to international trademarks covering countries outside of Switzerland (given that Switzerland is the country where the national basis registration was made) and that some exhibits do not show that certain international trademarks would still be valid as of today. This however does not affect the legal analysis and the outcome of the case given that, as will be developed under Section 6 below, the Expert finds that the registration of the Domain Name constitutes a violation of Swiss unfair competition law.

³ Based on the unofficial English version of the TMA (which is provided for information purposes only by the Swiss Confederation, see http://www.admin.ch/opc/en/classified-compilation/19920213/index.html).