WIPO Domain Name Decision: D2007-1856

Shaw Industries Group Inc. and Columbia Insurance Company v. Rugs of the World Inc.

The Complainants are Shaw Industries Group Inc. (“Complainant Shaw”) of Dalton, Georgia, United States of America, and Columbia Insurance Company (“Complainant Columbia”) of Omaha, New England, United States of America, represented by Neal & McDevitt, United States of America.

The Respondent is Rugs of the World Inc., Tampa, Florida, United States of America.

The disputed domain name <shawrugsonline.com> is registered with GoDaddy.com, Inc.

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on December 13, 2007. On December 17, 2007, the Center transmitted by email to GoDaddy.com, Inc. a request for registrar verification in connection with the domain name at issue. On December 17, 2007, GoDaddy.com, Inc. transmitted by email to the Center its verification response. In response to a notification by the Center that the Complaint was administratively deficient, the Complainant filed an amendment to the Complaint on December 21, 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 the Respondent of the Complaint, and the proceedings commenced on December 24, 2007. In accordance with the Rules, paragraph 5(a), the due date for Response was January 13, 2008. The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on January 14, 2008.

The Center appointed William R. Towns, Timothy D. Casey and W. Scott Blackmer as panelists in this matter on February 6, 2008. 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.

The Complainants are the owners of numerous SHAW and SHAW-formative trademarks (collectively “the SHAW Marks”), which Complainant Shaw has used in connection with carpeting and flooring related goods and products for many years. Complainant Columbia is the owner of United States registrations for three of the SHAW Marks - SHAW (and Design), U.S. Reg. No. 1444248, issued on June 23, 1987; SHAW, U.S. Reg. No. 2291182, issued on November 9, 1999; and SHAW, U.S. Reg. No. 2877500, issued on August 24, 2004. The Complainants also have registered and use numerous other SHAW Marks for carpeting and flooring related goods and products, including the mark SHAW RUGS, U.S. Reg. No. 2682164, issued on February 11, 2003 (the “SHAW RUGS Mark”), which is registered to Complainant Shaw. (Complaint, Annex C). In addition, Complainant Shaw owns and has registered numerous domain names incorporating the SHAW Marks. (Complaint, Annex D).

The Respondent Rugs of the World Inc., is the owner of Rugs of the World, a Tampa, Florida based store advertising and selling various brands of rugs. Until approximately six (6) months ago, the Respondent was an authorized Shaw rug dealer; however, on or about August 20, 2007, the Complainant Shaw revoked the Respondent’s status as an approved Shaw dealer. The Complainant took this action based on the Respondent’s “continued use” of the disputed domain name <shawrugsonline.com>. (Complaint, Annex I). The record reflects the Respondent is using the disputed domain name to resolve to a website that, in addition to containing references to the SHAW Marks, features advertising and sponsored links to other websites, some selling Shaw products, others in competition with Shaw, and some apparently unrelated websites. (Complaint, Annex K). On September 28, 2007, the Complainants demanded that the Respondent transfer the disputed domain name to Complainant Shaw, failing which the Complainants indicated that a new UDRP Complaint would be filed based upon the change in circumstances. (Complaint, Annex J)

The Complaint filed herein reflects an earlier albeit unsuccessful attempt by Complainants to obtain the transfer of the disputed domain name, at a time when the domain name was not registered to the Respondent. See Shaw Industries Group, Inc. and Columbia Insurance Company v. DomainsByProxy, Inc. and Patti Casey, WIPO Case No. D2007-0555 (hereinafter “Shaw I”). When the original Complaint in Shaw I was filed with the Center, the registrar GoDaddy.com, Inc.’s (“GoDaddy.com”) WHOIS records identified the domain name registrant as DomainsByProxy, Inc. (“DBP”), a privacy protection service affiliated with GoDaddy.com. The Complaint in Shaw I subsequently was amended to name Patti Casey as an additional Respondent, after GoDaddy.com identified Ms. Casey as the domain name registrant in response to the Center’s request for registrar verification in connection with the disputed domain name.

The original Complaint in Shaw I was filed with the Center on April 12, 2007. According to the registrar’s WHOIS database, the disputed domain name initially was registered on August 11, 2006. Ms. Casey, who submitted the Response in Shaw I, indicated that she was an officer and employee of Rugs of the World, and acknowledged that she had registered the domain name. According to Ms. Casey, the Rugs of the World website as it then existed was informational only and did not have e-commerce capabilities, instead providing links to the authorized websites of vendors whose rugs were sold at the Rugs of the World showroom, one of which at that time was the Complainant Shaw. Ms. Casey represented that the disputed domain name, together with several domain names relating to other vendors whose products were sold by Rugs of the World, was intended to be linked to an updated Rug of the World website with e-commerce capabilities.

At the time of the submission of the Shaw I complaint, the disputed domain name directed Internet visitors to a website that appears to be the same website to which the domain name currently resolves – a website containing unauthorized references to SHAW marks and advertising and sponsored links to vendors of Shaw rugs and vendors of competing rugs, as well as to unrelated websites. See Shaw I, supra. Ms. Casey denied in her Response in Shaw I that she had made arrangements for the “pay for click” use of the domain name, and she represented that this unauthorized use of the domain name, for which she blamed GoDaddy.com, would be ended.

Setting to one side the acknowledged “improper use” of the disputed domain name, for which the Shaw I Panel accepted Ms. Casey’s disavowal of responsibility and her promise of remedial action, the Shaw I Panel concluded that “acceptable evidence” had been presented by Ms. Casey regarding demonstrable preparations, prior to any notice of the dispute, to use the domain name at issue in connection with a bona fide offering of goods or services – namely, “for direction of customers interested in Shaw rugs to the Rugs of the World online store where Shaw rugs [would be] sold.” See Shaw I, supra. On this basis, the Shaw I Panel found that Ms. Casey had established rights and legitimate interests in the disputed domain name for purposes of the Policy. The Shaw I Panel observed that the unexplained use of the disputed domain name for click through advertising revenue might support an inference of bad faith, but declined to draw an inference of bad faith registration and use based on the Panel’s acceptance of Ms. Casey’s denial of responsibility for such use and her promise to put a stop to such use.

The Shaw I decision is dated August 3, 2007. At some point following this decision the disputed domain name registration data was changed to reflect the current Respondent, although the WHOIS records submitted herein do not indicate the precise date upon which such change occurred. As noted, the Complainants notified the Respondent on August 20, 2007 that its status as an approved Shaw dealer had been revoked, but the Respondent has continued to use the disputed domain name as described above.

The Complainants contend that the disputed domain name is confusingly similar to their SHAW Marks, which the Complainants assert are distinctive and well known in the carpeting and flooring industry, both in the United States and internationally. The Complainants contend that the Respondent has deliberately infringed and diluted Complainants’ invaluable rights in the SHAW Marks through the unlawful registration of the disputed domain name.

According to the Complainants, changed circumstances since the Shaw I decision, consisting of the transfer of the disputed domain name to the Respondent and the revocation of the Respondent’s status as an authorized Shaw dealer, permit the Complainant to bring this proceeding. The Complainants disagree with the decision in Shaw I, contending that the Respondent has no rights or legitimate interest in the disputed domain name, and that the Respondent registered and is using the domain name in bad faith. The Complainants request transfer of the disputed domain name to Complainant Shaw.

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, 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

Cancellation or transfer are the sole remedies provided to a 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.

The Complainants have presented uncontested evidence of their rights resulting from registration and use in the United States of numerous SHAW and SHAW-formative trademarks, including the SHAW RUGS Mark. At a minimum, the Complainants’ marks are entitled to a presumption of validity by virtue of their registration with the United States Patent and Trademark Office. See EAuto, L.L.C. v. Triple S. Auto Parts d/b/a Kung Fu Yea Enterprises, Inc., WIPO Case No. D2000-0047.

Under paragraph 4(a)(i) of the Policy the question of identity or confusing similarity is evaluated based on a comparison of the complainant’s mark and the alphanumeric string constituting the domain name at issue. Magnum Piering, Inc. v. The Mudjackers and Garwood S. Wilson, Sr., WIPO Case No. D2000-1525. The disputed domain name <shawrugsonline.com> incorporates Complainant Shaw’s registered trademark SHAW RUGS in its entirety, and neither the inclusion of the descriptive word “online” nor the addition of the suffix “.com” to the Complainants’ trademark precludes a finding of confusing similarity. See Wal-Mart Stores, Inc. v. Richard MacLeod d/b/a For Sale, WIPO Case No. D2000-0662. See also Chicago Pneumatic Tool Company LLC v. Tool Gopher, WIPO Case No. D2007-0330; Chanel, Inc. v. Estco Technology Group, WIPO Case No. D2000-0041; Nikon Inc. and Nikon Corporation v. Photocom Korea, WIPO Case No. D2000-1330.

Accordingly, the Panel finds that the Complainant has satisfied the requirements of paragraph 4(a)(i) of the Policy.

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 to the Respondent to come forward with evidence of rights or legitimate interests in the disputed domain name. It is uncontroverted that the Respondent’s status as an authorized dealer of the Complainant Shaw was revoked in August 2007, shortly after the decision in Shaw I. It can scarcely be countenanced that the Respondent did not have notice of this dispute long before this occurrence, given the Complaint lodged with the Center in April 2007 respecting Ms. Casey’s registration and use of the disputed domain name, and in light of Ms. Casey’s purported status as an employee and officer of the Respondent. Yet the Respondent has continued to use the disputed domain name in precisely the manner that the Shaw I Panel noted would, if unexplained, support an inference of bad faith. In light of the changed circumstances reflected in the Complaint in this matter and the further inferences that might be drawn therefrom, an explanation is warranted.

Accordingly, the Panel is persuaded from the record of this case that a prima facie showing under paragraph 4(a)(ii) has been made. The circumstances as set forth and documented in the Complaint and its Annexes, including the transfer of the disputed domain name to the Respondent following the Shaw I decision, the revocation of the Respondent’s status as an authorized Shaw dealer, and the Respondent’s continued use of the domain name with a website apparently generating click through advertising revenue, are sufficiently evocative of cybersquatting to require the Respondent to come forward with evidence under paragraph 4(c) of the Policy demonstrating rights to or legitimate interests in the disputed domain name.

Pursuant to paragraph 4(c) of the Policy, the Respondent may establish rights to or legitimate interests in the disputed domain name by demonstrating any of the following:

(i) before any notice to her 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 she 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.

The Respondent has not submitted a formal response to the Complaint, and in the absence of any such submission this Panel may accept all reasonable inferences and allegations included in the Complaint as true. See Talk City, Inc. v. Michael Robertson, WIPO Case No. D2000-0009.¹ In any event, the Panel has carefully reviewed the record in this case, and finds nothing therein that would bring the Respondent’s registration and use of the disputed domain name within any of the safe harbors of paragraph 4(c) of the Policy.

The Respondent is using the disputed domain name in connection with a website consisting of little more than a collection of links to other websites, and serving no apparent purpose other than as a vehicle for generating advertising revenue. Using a domain name for third-party advertising may be legitimate in some circumstances. See, e.g., The Landmark Group v. DigiMedia.com, L.P., NAF No. 0285459. Where a respondent registers a domain name consisting of a “dictionary” word 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 its value as a trademark. Media General Communications, Inc. v. Rarenames, WebReg, WIPO Case No. D2006-0964; Weather Shield Mfg., Inc. v. Lori Phan, WIPO Case No. D2007-1247. The word “Shaw” is not a dictionary word, and the Respondent as a former authorized dealer of the Complainant Shaw obviously was aware of the Complainants’ mark. Under such circumstances, the Respondent’s use of the disputed domain name incorporating the Complainants’ mark to generate advertising revenue does not constitute use of the disputed 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 HSBC Finance Corporation v. Clear Blue Sky Inc. and Domain Manager, WIPO Case No. D2007-0062.

Nor does the Panel believe that the Respondent can claim rights or legitimate interests based on any demonstrable preparations by Ms. Casey to use the domain name in connection with a contemplated e-commerce website. The consensus view of WIPO Panelists is that the transfer of a domain name to a third party amounts to a new registration. See WIPO Overview of WIPO Panel Views on Selected UDRP Questions, § 3.7, and cases cited therein; HSBC Finance Corporation v. Clear Blue Sky Inc. and Domain Manager, supra. The Panel considers it appropriate to follow the consensus view of WIPO Panelists in this case, particularly in light of prior panel decisions such as Ideenhaus Kommunikationsagentur GmbH v. Ideenhaus GmbH, WIPO Case No. D2004-0016 (“Ideenhaus”) (transfer of domain name from Respondent’s managing director to Respondent constitutes new registration under the Policy).² Thus, the issue is whether the current Respondent has made demonstrable preparations to use the Domain Name in connection with a bona fide offering of goods or services. The Respondent has not come forward with evidence of such preparations.

While prior panel decisions have considered the transfer of a domain name as the focal point with reference to the issue of bad faith registration, thus precluding the current registrant from relying merely upon the good faith of the original registrant, the logic of these decisions applies in full force to the creation of rights or legitimate interests under the second Policy element as well. It follows from the foregoing that the Respondent cannot demonstrate rights or legitimate interests in the disputed domain name based solely on the acquisition of the domain name from an original good faith registrant (even one who ostensibly acted on the Respondent’s behalf) where the Respondent fails to establish continuity of use of the domain name consistent with that upon which the original registrant claimed rights or legitimate interests. The benefit of an original good faith registration cannot be perpetual and transferable, see HSBC Finance Corporation v. Clear Blue Sky Inc. and Domain Manager, supra, and there is no indication in the record that the Respondent has carried forward any demonstrable preparations to make a good faith use of the disputed domain name.³ Instead, the record reflects only the Respondent’s continued use of the domain name in a manner that the original registrant acknowledged would not be legitimate, disclaimed any responsibility for, and represented would be stopped.

Accordingly, the Panel concludes that the Complainant has satisfied the requirements of paragraph 4(a)(ii) of the Policy.

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 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 intentionally is using the domain name in an attempt to attract, for commercial gain, Internet users to its website 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 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 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.

As noted earlier, the consensus view of WIPO Panelists is that the transfer of a domain name to a third party amounts to a new registration, requiring the issue of bad faith registration to be determined at the time the current registrant took possession of the domain name. See HSBC Finance Corporation v. Clear Blue Sky Inc. and Domain Manager, supra. The Panel notes that paragraph 2 of the Policy implicitly requires some good faith effort to avoid registering and using domain names corresponding to trademarks in violation of the Policy.⁴ See Media General Communications, Inc. v. Rarenames, WebReg, WIPO Case No. D2006-0964.

Since acquiring the disputed domain name, the Respondent has used and persists in using the domain name with a website that contains unauthorized references to the Complainants’ SHAW Marks, and is replete with advertising and sponsored links to vendors of Shaw rugs, to vendors of competing rugs, and to other unrelated websites. This is the very use that the prior registrant acknowledged was unauthorized and should be stopped. The Panel further notes the absence of a reply by the Respondent to the Complaint. In the circumstances, the Panel infers that the Respondent acquired and has used the disputed domain name in such fashion in order to attract Internet users to its website for commercial gain, by creating a likelihood of confusion with Complainants’ trademarks as to the source, sponsorship, affiliation or endorsement of the Respondent’s website and the products or services offered there. See Columbia Insurance Co. and Benjamin Moore v. Whois Data Shield and St Kitts Registry, WIPO Case No. D2007-0741; Chicago Pneumatic Tool Company LLC v. Tool Gopher, WIPO Case No. D2007-0330.

As noted above, there is no indication in the record of any demonstrable preparations by the Respondent following its acquisition of the disputed domain name to use the domain name in connection with a bona fide offering of goods or services. Nor is there any good faith explanation why the Respondent has persisted in an unauthorized use of the domain name. The Panel is persuaded from the totality of circumstances that the Respondent could not have entertained a good faith belief at the time it acquired the disputed domain name that any plausible actual or contemplated active use of the domain name could be made that would not be illegitimate. See Telstra Corporation Limited v. Nuclear Marshmallows, supra. In view of all of the foregoing, the Panel concludes that the Respondent registered and is using the disputed domain name in bad faith.

Accordingly, the Panel finds that the Complainant has satisfied the requirements of paragraph 4(a)(iii) of the Policy.

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 <shawrugsonline.com> be transferred to the Complainant Shaw Industries Group Inc.

William R. Towns
Presiding Panelist

Timothy D. Casey
Panelist

W. Scott Blackmer
Panelist

Dated: February 20, 2008

¹ Some panels have held that a respondent’s lack of response can be construed as an admission that the respondent has no rights or legitimate interests in a disputed domain name. See, e.g., DoThe Hustle, LLC v. Tropic Web, WIPO Case No. D2000-0624. Other panel decisions note that adverse inferences may be drawn from a respondent’s failure to reply. See, e.g., Charles Jourdan Holding AG v. AAIM, WIPO Case No. D2000-0403.

² In reaching this conclusion, the Panel acknowledges that the Shaw I Panel characterized Rugs of the World as the “beneficial owner” of the domain name, based on the representations made by Ms. Casey. However, the Panel is not persuaded that a departure from the consensus view of WIPO Panelists would be appropriate in the circumstances of this case. To the contrary, several factors militate strongly against this Panel engrafting a “beneficial owner” exception onto the consensus view. The fundamental assumption of the Policy is that the formal respondent for case purposes is to be found in the applicable WHOIS database, an assumption that the creation of such an exception clearly would be at odds with. Further, there is no overriding reason to create such an exception in the circumstances of this case, given that the current Respondent did not come forward in Shaw I to claim “beneficial ownership” on its own behalf, and even now has not done so. The Panel sees no material distinction between this case and Ideenhaus, supra, in which it was held that the respondent’s acquisition of the disputed domain name through a transfer from the respondent’s managing director constituted a separate registration. For the foregoing reasons, the Panel also concludes that this case does not involve a ‘refiled complaint’. See, e.g., AB Svenska Spel v. Andrey Zacharov, WIPO Case No. D2003-0527 (“refiled complaint” is a complaint respecting a domain name that was the subject of a previous UDRP complaint involving the same complainant and respondent).

³ In view of Shaw I, the Respondent arguably had notice of this dispute at the time it acquired the domain name by registration (presumably, by transfer from Ms. Casey), and such notice would likely have precluded any persuasive assertion of rights or legitimate interests based on any claimed subsequent preparations to use the domain name. See Ideenhaus, supra. Of course, no such claim has been made by the Respondent here.

⁴ Paragraph 2 of the Policy, “Your Representations”, is incorporated by reference in the registration agreements of ICANN-approved registrars, and provides 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. (emphasis added).