WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Velcro Industries B. V. and Velcro USA Inc. v. allinhosting.com/Andres Chavez

Case No. D2008-0864

1. The Parties

The Complainants are Velcro Industries B. V. of Island area of Curaçao of the Netherlands Antilles and Velcro USA Inc. of Manchester, New Hampshire, United States of America, represented by Foley Hoag, LLP, United States of America.

The Respondent is allinhosting.com/Andres Chavez, Palmares, Alajuela, Costa Rica.

2. The Domain Name and Registrar

The disputed domain name, <velcroart.net> (the “Domain Name”), is registered with eNom (the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on June 4, 2008. On June 5, 2008, the Center transmitted by email to the Registrar a request for registrar verification in connection with the Domain Name. On the same day, the Registrar transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details.

In response to a notification by the Center that the Complaint was administratively deficient, the Complainant filed an amendment to the Complaint on June 16, 2008.

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 June 17, 2008. In accordance with the Rules, paragraph 5(a), the due date for Response was July 7, 2008. The Response was filed with the Center on July 6, 2008.

The Center appointed Tony Willoughby as the sole panelist in this matter on July 14, 2008. 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.

It is convenient at this stage to say something of the identity of the parties. First, as to the Complainants they are affiliates and there is no dispute that they are each proprietors of trade mark rights in respect of the name or mark, VELCRO, the name or mark under which each company trades. For the purposes of this decision, the Panel treats them as one. Secondly, as to the Respondent, while the Registrar’s Whois database records the registrant of the Domain Name as indicated in the heading to this decision, it is not in dispute that the true owners of the Domain Name are the users of the Domain Name, namely Marta Azparren Lucas and Raquel Samaniego Garcia of Madrid, Spain, who filed the Response to the Complaint. For the purposes of this decision, the Panel treats Marta Azparren Lucas and Raquel Samaniego Garcia as one with the Respondent and are together hereinafter referred to as the “Respondents”.

4. Factual Background

The Complainants and their affiliates are the proprietors of the well-known VELCRO brand of hook and loop fasteners. They are the proprietors of a large number of trade mark registrations comprising or including the name or mark VELCRO and covering a wide geographical area. The earliest registrations date as far back as 1958.

The Domain Name was registered on July 28, 2005.

The Domain Name is connected to a website devoted to what the Respondents describe as ‘net.art’. The Complainants accept that the website is an art studio. At the centre of the Respondent’s home page is a device mark, which comprises elements intended to represent a hook and loop fastener system and the words “velcro art”.

At some stage prior to January 22, 2008, the Respondents applied in Spain for registration of their logo as a service mark in class 41.

On January 22, 2008, lawyers acting on behalf of the Complainants wrote to the Respondents drawing the Respondents’ attention to the Complainants’ rights and seeking cessation of use of the name, ‘velcro art’, withdrawal of the service mark application and transfer of the Domain Name.

By an undated letter in reply the Respondents refused to accede to the Complainants’ requests.

5. Parties’ Contentions

A. Complainant

The Complainants point to their numerous trade mark registrations of or including the name or mark, VELCRO and contend that the Domain Name is both identical and confusingly similar to their trade mark.

The Complainants contend that the Respondents have no rights or legitimate interests in respect of the Domain Name, pointing out that their VELCRO trade mark is very well-known and that they have given the Respondents no permission to use it. They contend that none of the examples of rights or legitimate interests set out in paragraph 4(c) of the Policy is applicable.

Finally, the Complainants contend that the Domain Name was registered and is being used in bad faith. They reiterate the fame of their trade mark and assert that the Respondents had constructive knowledge of the VELCRO trade mark even if they did not have actual knowledge. However, they contend that the Respondents did have actual knowledge of their trade mark because the wording on the Respondents’ website makes explicit references to the Complainants’ product.

The Complainants contend that there is a high likelihood of confusion as a result of the Respondents’ adoption and use of the Domain Name. They also refer to the ‘Representations and Warranties’ provision in the agreement that the Respondents have with the Registrar in which the Respondents represent to the best of their knowledge and belief that neither the Domain Name nor their proposed use of it will infringe a third party’s rights. The argument appears to be that this provision ought to have alerted them to check the position and if they failed to do so, they have only themselves to blame.

The Complainants point out that if, as is likely, Internet users believe the Respondents’ website to be in some way sponsored or approved by the Complainants, any quality defect is likely to have an adverse effect on the substantial reputation and goodwill for high quality products that the Complainants have worked so hard to develop over the last 50 years.

The Complainants conclude by observing that the Respondents’ inability to demonstrate that they have rights or legitimate interests in respect of the Domain Name is indicative of their inability to demonstrate lack of bad faith.

B. Respondents

The Respondents state that they are defending the opposition filed in respect of their service mark application for their logo in relation to artistic activities.

The Respondents state that they are using the Domain Name for ‘net.art’ and contend that the suffix ‘art.net’ is sufficient to distance themselves and their not-for profit website from the Complainants and the Complainants’ commercial activities.

The Respondents assert that in Spain VELCRO is not as famous as a brand as it is in the United States of America. They contend that in Spain it is better known as a generic term to describe hook and loop fastener material. They point out that the generic term ‘hook and loop fastener’ is a bit of a mouthful, thereby rendering ‘velcro’ as a more user-friendly alternative. They state that there is a well-known Spanish band called “Niños Velcro”.

The Respondents state that their use of the word ‘velcro’ is “as a metaphor with the material ‘velcro’ for describing the meeting of both artists coming from a very different artistic and professional origin”, one of them being a fine arts graduate specializing in “plastic arts” and “the investigation of theatrical space and video art” and the other being a telecommunications engineer “with wide experience in the development of technological and educational projects”. They claim that their use of ‘velcro’ is a reference to the product and not the brand.

The Respondents state that their use of the name ‘velcroart’ dates back to 2005 and that they have appeared/exhibited under that name at festivals of digital and electronic art and international art fairs. They contend that their use of the term is fair and that they do not derive any benefit of any kind from any confusion. They state that they are at least as keen as the Complainants to avoid any perception that they are linked with the Complainants.

The Respondents deny that the Domain Name was registered and is being used in bad faith. They state that when they registered the Domain Name they were aware of ‘velcro’, the product, but were not aware that it was a brand name. They say that they first became aware that it was a brand name when the Complainants filed opposition to their service mark application for their logo.

The Respondents state that they do not feature in the first 500 pages of a Google search by reference to the ‘velcro’ name. They say that it is most unlikely that anyone could arrive at their site unless the visitor was already aware of their existence or had been referred via another ‘net.art’ site.

The Respondents state that confusion is most unlikely and that in any event they will not benefit from any confusion. They have now incorporated a disclaimer on the website to alert any visitors who may have been deceived by the Domain Name. They point out that they are not competitors of the Complainants and have not sought to disrupt the Complainants’ business in any way.

The Respondents claim that their name ‘velcroart’ is the name by which they are known and that if it were taken away from them it would effectively take away everything that they have built up over the last 3 years.

6. Discussion and Findings

A. General

According to paragraph 4(a) of the Policy, for this Complaint to succeed in relation to the Domain Name, the Complainants must prove that:

(i) The Domain Name is identical or confusingly similar to a trade mark or service mark in which the Complainants have rights; and

(ii) The Respondents have no rights or legitimate interests in respect of the Domain Name; and

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

For the reasons given in Section 3 above, the Panel treats the Complainants as one and treats the Respondents as being the two Spanish artists, who used the named Respondent, a service provider, as their agent for the purposes of the registration.

B. Identical or Confusingly Similar

The Complainants expressly claim that the term ‘velcroart’ is identical to their trade mark VELCRO. One only needs to look at the two terms to see that they are not identical, but in any event it is sufficient if they are confusingly similar.

In assessing confusing similarity it is not necessary to examine how the Domain Name is being used. For the purposes of this test, one simply compares the two names, name for mark. One may also ignore the generic domain suffix.

The Domain Name comprises the Complainants’ registered trade mark with the addition of the word, ‘art’. Is the additional word sufficient to obviate all risk of confusion?

The Complainants quote from the decision in Magnum Piering Inc. v. The Mudjackers and Garwood S. Wilson, Sr., WIPO Case No. D2000-1525 for the proposition that “When a domain name wholly incorporates a complainant’s registered mark, that is sufficient to establish identity or confusing similarity for the purposes of the Policy”. In the Panel’s view that overstates the case. The Panel doubts, for example, that the Complainants would regard a domain name such as <levelcrossing.com> as being confusingly similar to their trade mark and notwithstanding that their trade mark is wholly incorporated within the domain name. Nonetheless the Panel accepts that the proposition will usually hold good where the trade mark is recognizable in the domain name and where there is nothing else about the domain name to render confusion unlikely.

Here the Complainant’s trade mark is readily recognizable in the Domain Name and many commercial organizations are noted for their sponsorship of the arts. The Panel has no difficulty in accepting that a person familiar with the Complainants’ widely known trade mark will be likely to believe that the Domain Name is a name of or associated with the Complainants.

The Panel finds that the Domain Name is confusingly similar to a trade mark in which the Complainants have rights.

C. Rights or Legitimate Interests

In light of the Panel’s finding under the next heading (Registered and Used in Bad Faith) it is unnecessary for the Panel to address this issue.

D. Registered and Used in Bad Faith

To succeed under this heading the Complainants must prove that the Domain Name was both registered and is being used in bad faith.

What does this mean? If one goes back to the Final Report of the First WIPO Internet Domain Name Process (April 30, 1999), the Report which gave birth to the Policy, one finds at paragraphs 151 to 172 the recommendations as to the scope of the Policy. It was intended to be limited to ‘cybersquatting’, being “the deliberate, bad faith abusive registration of a domain name in violation of rights in trade marks and service marks.” In his evidence to Congress on July 28, 1999 Francis Gurry, then Assistant Director-General and Legal Counsel of WIPO stated:

“The WIPO Report found ample evidence that a significant problem exists as a result of the intersection of, on the one hand, the largely privately administered and globally accessible domain name system and, on the other hand, the publicly administered and territorially based intellectual property rights system. The most egregious manifestation of this problem is the exploitation in bad faith of the ease and simplicity of obtaining a domain name registration in order to register, as a domain name, the trademark of another person with a view to extracting a premium from the owner of the mark. Significantly, throughout the whole of the WIPO Process, not one voice defended this practice, which is known commonly as cybersquatting.”

While it is useful to review the history to understand the background to the Policy, it is the Policy itself, by reference to which the Panel has to come to his decision. In what form (if at all) did these views and recommendations materialize in the Policy? The answer is to be found in paragraph 4(b) of the Policy.

Paragraph 4(b) of the Policy contains a list (albeit a non-exhaustive list) of what shall constitute bad faith registration and use under the Policy. Four examples are given. The first is where the registrant registered the domain name in issue knowing it to comprise the complainant’s trade mark and with a view to selling it to the complainant or a competitor of the complainant at a profit (i.e. the vice referred to by Francis Gurry in his evidence to Congress). The second covers the situation where the registrant deliberately registered the domain name in issue to prevent the complainant from registering it. The third is where the registrant, a competitor of the complainant, registered the domain name in order to disrupt the complainant’s business. The fourth is where the registrant uses the domain name with the intention of deriving a commercial gain on the back of the complainant’s reputation and goodwill by misleading Internet users into believing that the registrant’s site is in some way associated with the complainant.

What all these examples have in common is that the vice at which each is directed involves an intention on the part of the registrant at time of registration of the domain name¹ to damage the complainant and/or exploit the complainant’s goodwill for commercial gain.

Ordinarily, therefore, for a complaint to succeed, the complainant must demonstrate to the satisfaction of the panel that at time of registration of the domain name the respondent’s intention was either to damage the complainant or its business or to derive a commercial gain on the back of the complainant’s goodwill. True, the list in paragraph 4(b) of the Policy is not an exhaustive list, but in the view of the Panel it would take an exceptional case to succeed where there was no malicious or exploitative intent directed at the complainant at time of registration of the domain name. On this point the Panel is fortified by the views expressed by those who promulgated the Policy, which are quoted above.

Here, the Respondents deny all knowledge of the Complainants at time of registration of the Domain Name. They say that they were aware of the term ‘velcro’, being a term used to describe a hook and loop fastener material, but they were not aware that it was a trade mark. They say that in Spain ‘velcro’ is better recognized as a generic term than as a trade mark. They refer to the existence of a Spanish band named the Velcro Kids (Niños Velcro). They say that they first became aware that it was a brand name when the Complainants filed opposition to their service mark application for their logo.

The Complainants have produced in evidence a phenomenal volume of evidence to support the proposition that VELCRO is not only registered internationally as a trade mark, but is perceived internationally as a trade mark. One exhibit comprises no less than 114 dictionary extracts in all of which the name is identified as a trade mark. However, that does not necessarily mean that it is universally regarded as a brand by everyone. Nor does it mean that those who know it to be a brand will always use it correctly.

Some trade marks will always be susceptible to generic use, whatever the efforts of the brand owner to counter this. Those trade marks will usually be the brand names of phenomenally successful products, possibly protected by a patent monopoly for their early life, and for which there is no convenient short form generic term. Hoover and vacuum cleaner spring to mind with the result that in the English language (at any rate in the United Kingdom) that trade mark is often used generically as a verb (i.e. to hoover). As soon as one sees a trade mark being used otherwise than a noun, one can see cause for concern.

The Respondents contend that VELCRO is in the same category. They say with some justification that the brand name is a much more convenient generic term in ordinary parlance than ‘hook and loop fastener’. Indeed, among the dictionary definitions exhibited by the Complainants, the Panel found some support for this proposition. The 1989 edition of The Oxford English Dictionary (Clarendon Press) allows of two spellings of Velcro (with and without a ‘v’ in upper case) and, as with many of the dictionaries, acknowledges the existence of the verb ‘to Velcro/velcro] and the adjective ‘Velcroed/velcroed’. The entry in the Collins Spanish-English/English-Spanish Dictionary, while accurate is somewhat less than informative and potentially confusing. “Velcro ®” is defined as “velcro ® m”. The registered trade mark symbol is clear, but the lower case ‘v’ in the definition and the absence of any proper description is not helpful. The American Heritage Dictionary of the English language relates the following use of the term, which is more a reference to the adhesive qualities of the product than anything else: “Many colleges and universities have adopted a Velcro approach to curriculum design: sticking additional requirements on a base of distribution requirements New York Times)”. The Afrikaans-English entry in the Major Dictionary (Pharos 1997) contains no reference to any trade mark. It simply reads “Velcro (ejen), Velcro, material fastener”.

The purpose of the above is not to seek to suggest that VELCRO is not a trade mark, for clearly it is a trade mark and a widely known trade mark at that. However, the evidence put before the Panel by the Complainants demonstrates that there is significant scope for perfectly innocent misuse of the trade mark as a generic term. It is with that in mind that the Panel has to assess whether the Respondents’ adoption of the Domain Name was motivated by a desire to cause damage to and/or exploit the goodwill of the Complainants or whether it was something quite different.

The Respondent’s explanation for their choice of name has been translated from the original Spanish by the Complainants² and reads as follows:

“Dear Sirs,

In reply to your letter of January 22, 2008 concerning your intention of opposing Trademark Appl. No. 2,795,247 VELCROART in class 41, we inform you that we have no intention of replacing, modifying or abandoning said trademark or domain name since, to the contrary of the statements made in your letter, it cannot cause any damage to your clients.

Velcroart is an artistic name or pseudonym to be used solely in artistic activities related to the Internet (what is known as net.art) and it would be used to appear in catalogues, participate in art fairs, festivals, etc. with no commercial intention nor for carrying on any other activity similar to that of your clients.

Regarding the domain registration, if you enter the website www.velcroart.net, you can see that the name “velcro” is only used in the statement or description of the artists as a metaphor to describe the synergy between the two components, who come from very different fields. We have simply used a word, for which there is no other generic name, that appears in both the Maria Moliner Dictionary and Wikipedia, for example, to describe a product, which explains the use thereof in many names, domain names, etc. In addition, you can also see that, if you enter the word “velcro” in any internet search engine (like Google), you do not access our page www.velcroart.net, or, at least, you will not have accessed it after a list of 600 websites, which is where our patience (and, presumably, that of any possible client of “Velcro®”) ended.

In short, the intention has been to use the name “velcro”, which everyone associates with a type of product (not with a famous trademark), as an artistic name that is not related to any commercial activity and, therefore, it would be unlikely to lead to confusion in the market, as, without any doubt, you know far better than we do, under either Spanish or Community legislation and case law.

We remain

Very truly yours,

Marta Azparren and Raquel Samaniego”

The Respondents invite a visit to their website and it does appear to be, as they claim and as the Complainants admit, a gallery of electronic art. They describe their co-operation in the following terms³ (as translated by the Complainants):

“Velcroart is an artistic group resulting from the union of two different materials.

One of them is composed of a fabric with entangled fibres

(Marta Azparren, a Fine Arts graduate, has been developing her artistic career since 1991 between the plastic arts, the investigation of theatrical space and video art)

Into which some minute ordered and aligned hooks are inserted

(Raquel Samaniego, a Telecommunications Engineer, with wide experience in the development of technological and educational projects)

The union of these two so different fibres created velcroart in 2005 with the intention of adhering art and technology. The two strips that form it, with really diverse subjects and training, are joined by, among other things, the search for simplicity as an imperative of form, or even ethics, and, primarily, the investigation of play as a form of communication or artistic expression or as a privileged tool to explore human and social relations.

Play and the net as resources that aspire to shorten the distances between the artist and society.”

The Complainants accept that it is just possible that the Respondents may not have appreciated that VELCRO was a trade mark when they registered the Domain Name, but argue that in that unlikely event the Panel should nonetheless hold that they had constructive knowledge on the basis of the existence of the Complainants’ trade marks. They accept that the constructive knowledge concept in this area is something normally restricted to cases where both parties are based in the United States of America, but they say that their European and Spanish registrations justify a similar approach here. They also refer to the ‘Representations and Warranties’ provision in the agreement that the Respondents have with the Registrar in which the Respondents represent to the best of their knowledge and belief that neither the Domain Name nor their proposed use of it will infringe a third party’s rights. The Complainants argue that this provision ought to have alerted the Respondents to check the position, they could very readily have checked either by way of a visit to the online trade mark registry databases or by way of a simple search engine enquiry and if they failed to do so, they have only themselves to blame.

The Panel is unwilling to go down the constructive knowledge route. Constructive knowledge is a concept appropriate in a number of different circumstances, but to use it to establish bad faith is a massive step in the context of the Policy. The Panel has sought to highlight above the fact that when the Policy was first promulgated it was intended to cover clear cases of cybersquatting, a reprehensible activity involving a dishonest or malicious intent targeted at a particular trade mark owner. This is confirmed by the examples of bad faith registration and use set out in paragraph 4(b) of the Policy. Constructive knowledge assumes ignorance in fact of the trade mark in question. The vice at which the Policy is directed requires actual knowledge.

The Complainants have cited a number of previous decisions, mainly involving parties based in the United States of America, where constructive knowledge of federal trade mark registrations is a familiar concept. The Panel has not been informed whether this concept is used in the courts of the United States of America to establish bad faith. Be that as it may, the Respondents are not in the United States of America. They are two Spanish artists. The Complainants have not put before the Panel any evidence that the constructive knowledge concept is applicable under Spanish/European trade mark law, still less that it may be used to establish bad faith. For this reason too, the Panel is not prepared to apply the concept in this case.

As to the Representations and Warranties clause in the registration agreement relating to the Domain Name, the Panel accepts that if the Respondents had read it, it would have been prudent of them to conduct a trade mark search of some kind. However, the reality is that for most registrants of domain names, their priority is to obtain the registration and they rarely read all the small print. Certainly it cannot be inferred that their failure to conduct a trade mark or other relevant search in the face of this provision in the registration agreement suffices as evidence of a bad faith intent targeted at the Complainants.

The Panel sees no reason to doubt the evidence of the Respondents that they selected the Domain Name to represent the coming together of two very different backgrounds in art to produce their version of ‘net.art’. In so doing they were clearly aware of the adhesive properties of the Complainants’ product, but the Panel accepts that it is perfectly possible that, as they have stated, they were not aware that the name they were using incorporated a trade mark. It is noteworthy that the Complainants’ product is most commonly found as an element of another product e.g. as a fastener on an item of clothing. One of the dictionary definitions, for example, describes Velcro thus:

“A trade mark used for a fastening tape consisting of a strip of nylon with a surface of minute hooks that fasten to a corresponding strip with a surface of uncut pile, used especially on cloth products, such as outerwear, luggage and athletic shoes.”

In such usages of the Complainants’ product it is not uncommon for the Complainants’ product to appear unbranded.

It is also noteworthy, as indicated above⁴, that the Complainants’ trade mark is peculiarly apt for descriptive use. Another example from The American Heritage Dictionary of the English language is taken from the Chicago Tribune: “In the early stages of a romance – the Velcro period – intimacy is rarely an issue.” These usages, as with the Respondents’ use of the Complainants’ trade mark, are no doubt unwelcome to the Complainants, but they cannot sensibly be said to indicate any malicious or exploitative design targeted at the Complainants. Whether or not they or any of them constitute trade mark infringement is an issue to be determined in another forum and not by way of an administrative proceeding under the Policy.

The Panel is not persuaded that the Domain Name was registered and is being used in bad faith.

7. Decision

For all the foregoing reasons, the Complaint is denied.

Tony Willoughby
Sole Panelist

Dated: July 28, 2008

¹ In fact, on its wording, the fourth example (paragraph 4(b)(iv) of the Policy) is not tied to an intention formed at time of registration, but the majority of panelists construe it that way. See for example Shirmax Retail Ltd./ Détaillants Shirmax v. CES Marketing Group Inc., eResolution Case No. AF-0104

² The Panel has corrected the translation by changing ‘Velcro’ to ‘velcro’, the latter being the form used by the Respondents in the original Spanish.

³ It is relevant to point out that on the webpage in question, to the left of the names of the two artists are pictures representing the fabrics/fibres described.

⁴ “Many colleges and universities have adopted a Velcro approach to curriculum design: sticking additional requirements on a base of distribution requirements (New York Times).