WIPO Arbitration and Mediation Center

The Complainant is:

Chanel, Inc.
9 West 57^th Street
New York, New York 10019 USA

Represented by:

Lawrence Silvestro
Chanel, Inc.
9 West 57^th Street
New York, New York 10019 USA

And

Barbara A. Solomon, Esquire
Fross Zelnick Lehrman & Zissu, P.C.
866 United Nations Plaza
6^th Floor
New York, New York 10017 USA

The Respondent is:

Estco Technology Group and
Estco Enterprises, Ltd.
5101 River Road, Suite 1009
Bethesda, Maryland, USA

Respondent is represented by:

Valerie Brennan, Esq.
Hogan & Hartson L.L.P.
8300 Greensboro Drive, Suite 1100
McLean, Virginia 22102, USA

The domain names in dispute are: "chanelstore.com" and "chanelfashion.com". The Registrar is Network Solutions Incorporated (NSI) of 505 Huntmar Park Drive, Herndon, Virginia 20170-5139 USA.

This dispute is to be resolved in accordance with the Uniform Policy for Domain Name Dispute Resolution (the Policy) and Rules (the Rules) approved by the Internet Corporation for Assigned Names and Numbers (ICANN) on October 24, 1999, and in accordance with the World Intellectual Property Organization Arbitration and Mediation Center’s Supplemental Rules for Uniform Domain Name Dispute Resolution (the Center, the Supplemental Rules).

The Complaint was filed on May 10, 2000. On May 15, 2000, the Center requested that the Registrar NSI check and report back on the registrant for the domain names "chanelstore.com" and "chanelfashion.com". On May 16, 2000, NSI reported to the Center that the registrant for the disputed domain names was the Respondent, Estco Technology Group.

On May 17, 2000, the Center forwarded a copy of the Complaint to Respondent by registered mail and by e-mail and this Proceeding officially began. After being accorded a time extension by the Center with the agreement of the Complainant, Respondent’s Response was received by the Center on July 5, 2000.

On July 7, 2000, Complainant filed a request to file a sur-Response to Respondent’s Response and on July 12, 2000, the Respondent filed an objection to Complainant’s request to file a sur-Response.

After receiving a Statement of Acceptance and Declaration of Independence from each Panel member, the Center proceeded to appoint the Panel on August 22, 2000.

On September 12, 2000, this Panel denied Complainant’s request to submit a sur-Response as this Panel did not need any further information from the Parties to reach its Decision.

This Panel finds the Center has adhered to the Policy and the Rules in administering this Case.

This Decision originally was due by September 5, 2000, but, owing to a file lost during shipment, the Panel extended the due date to September 15, 2000.

Complainant, Chanel, Inc., is a famous manufacturer, importer and seller of luxury products throughout the world. Complainant provides its goods in name brand Chanel stores as well as in department store boutiques. Respondent is the developer of a project that seeks to offer a database of information on the retail fashion industry that would be found on the Internet at "DesignerGlobe.com". However, under this project, the web site "DesignerGlobe.com" also would be connected with the disputed domain name web sites "chanelstore.com" and "chanelfashion.com" and many others. Complainant is contesting Respondent’s right to register these domain names and to use them for its project.

Complainant’s Contentions:

- Complainant is a recognized leader in the fashion industry.

- Complainant has built the value of the "Chanel" trademark through extensive marketing and promotional activities over a seventy (70) year period in the United States. Chanel’s products include women’s and men’s fragrances, cosmetics and skincare products, women’s clothing and accessories, jewelry, watches, handbags and other leather goods. Chanel also provides retail store services under the "Chanel" mark.

- In 1999, Complainant’s sales totaled hundreds of millions of dollars worldwide.

- Complainant advertises its products and the "Chanel" brand on television, radio and in numerous famous magazines such as "Elle", "Harper’s Bazaar" and "Vogue".

- Chanel sells and distributes its products through many channels of trade, including its own Chanel retail stores, exclusive retail boutiques, and exclusive department stores. Currently, there are in excess of 2,500 outlets in the U.S. selling Chanel products.

- By the time Respondent registered the disputed domain names on May 12, 1999, and December 12, 1999, the "Chanel" trademark had been in continuous use in the United States and worldwide for over seventy (70) years. Chanel owns over seventeen (17) registrations for the "Chanel" trademark in the United States (Complaint, Exhibit C). In addition, the "Chanel" trademark is registered in over one hundred (100) countries.

- The fame and recognition of the "Chanel" trademark have been noted by a recent "Women’s Wear Daily" survey (Complaint Exhibit D), that ranked "Chanel" among the top one hundred (100) most famous brands in the U.S. The fame of the "Chanel" trademark is also evidenced by the numerous references to "Chanel" in artwork, songs, movies, television shows, books, and other media.

- U.S. courts have already held the "Chanel" trademark to be well known and distinctive. (Chanel, Inc. v. Smith, 178 U.S.P.Q. 630, 631 (N.D.Cal. 1973)).

- Respondent’s disputed domain names are identical to Complainant’s trademark and the public will be confused.

- Complainant’s trademark is so well known that there can be no legitimate use of it by Respondent.

- Respondent’s bad faith is shown by its having registered in excess of one hundred (100) domain names, many of which consist of a famous mark followed by a generic designation. These include BURBERRYFASHION.COM and DOLCEGABBANAFASHION.COM. It can thus be inferred that Respondent intends to sell the names for profit.

- Respondent registered the disputed domain names in bad faith because they were well aware of Complainant’s trademark at the time of registration.

Respondent’s Contentions

- Respondent’s business plan for using the disputed domain names calls for the creation of an internet directory for authorized designer fashion retailers. It will serve as an information portal, offering fashion commentary, reviews of designer lines, introductions of new designers, etc.

- The site would be structured so as never to imply that the designer-specific "fashion" or "store" address is the designer’s site.

- All of the addresses end in "FASHION". Incorporation of designer marks into domain names for use in this manner constitutes fair use.

- Respondent intentionally chose a variant of the mark that would not be confused with Complainant and that would not be needed by Complainant.

- Incorporation of the designers’ marks into the "FASHION" and "STORE" domain names serves an important purpose: it allows users to bypass the search engine available at the main site "DesignerGlobe.com" to access directly information regarding their favorite designer’s products.

- Respondent has a very real need and legitimate business plan for the disputed domain names. Although Respondent has not yet launched its site, for over a year it has been making preparations, including seeking financing.

- Respondent plans to stay in close contact with retail establishments. Respondent will thus be in a good position to bring gray market and counterfeit goods to the attention of Complainant and other participating designers.

- Respondent’s business plan supports registration and use of a multitude of domain names.

- Respondent is more than willing to incorporate disclaimers into "DesignerGlobe.com" if the parties determine that such disclaimers would be useful.

- No one looking for Complainant’s site is going to search at "chanelstore.com" or "chanelfashion.com" when Complainant has a web site at "Chanel.com".

In order for Complainant to prevail and have the disputed domain names transferred to itself, Complainant must prove the following (the Policy, para 4(a)(i-iii):

- the domain name is identical or confusingly similar to a trademark or service mark in which the Complainant has rights; and

- the Respondent has no rights or legitimate interests in respect of the domain name; and

- the domain name was registered and is being used in bad faith.

This issue need not detain us long. Complainant has provided (Complaint, Exhibit C) exemplary copies of some of its registrations of the "Chanel" trademark on the Principal Register in the United States, notably Registration no. 195,360 of February 24,1925, and a renewal dated December 13, 1997.

In the Panel’s view, Respondent’s disputed domain names "chanelstore.com" and "chanelfashion.com" are confusingly similar to Complainant’s famous trademark "Chanel." The addition of the generic terms "store" and "fashion" are not sufficient to avoid confusion (WIPO Case No. D2000-0047, L.L.C. v. Triple EAuto Parts d/b/a Kung Fu Yea Enters, Inc.).

It is true that Respondent has made an elaborate business plan for using the two disputed domain names. According to Respondent’s plan, the disputed domain names will be interconnected with Respondents’ fashion information portal at "DesignerGlobe.com", and internet navigators will be able to consult a database devoted to "Chanel" and to many other fashion houses. This elaborate business plan, although not yet enacted, might qualify as an "interest" under the ICANN Policy if the business plan involved a bona fide use of the "Chanel" trademark. But Respondent has no "rights" in the trademark in the disputed domain names because Respondent does not contend it has a license or any other legal claim to use Complainant’s trademark.

Moreover, the Panel finds that, in order for Respondent’s Internet business to be "legitimate" under the Policy, it must make non-infringing use of Complainant’s world famous trademark. Respondent claims this is so, and that it is making "fair use" of Complainant’s trademarks (the Policy 4(ciii). The Panel disagrees.

Respondent plans to offer a wealth of information at its web site on "Chanel’s" products, retail outlets and so forth. While it might be fair use for Respondent to mention Chanel in giving out information in the public domain, the Panel disagrees that it is fair use for Respondent to use Complainant’s famous trademark in order to attract the public to the web site. Fair use allows Respondent to use Complainant’s trademark when providing information on Complainant and the rest of the fashion industry to clients seeking this information. Thus, Respondent’s database at "DesignerGlobe.com" can talk about "Chanel" stores and "Chanel" products. In contrast, it would not be fair use for Respondent to use Complainant’s trademark outside a shop or office to entice customers in to use its database. The same logic applies in cyberspace: Respondent may not use Complainant’s famous fashion trademark as a domain name to entice Internet users to its database. This is not fair use but instead infringing use.

The Panel finds Respondent has failed to show fair use of Complainant’s world famous trademark, and that Respondent has no legitimate rights or interests in the disputed domain names.

The Panel finds the Respondent is in bad faith because, as proscribed by the Policy at 4(b)(iv), the Respondent is deliberately using Complainant’s famous trademarks with the aim of misleading the public and siphoning off the "Chanel" trademark’s accumulated good will for profit as fashion businesses pay Respondent for the privilege of being registered on Respondent’s database. Also, if Respondent were allowed to use Complainant’s famous trademark for its web sites as proposed, Respondent likely would derive increased advertising revenues based on confusion with Complainant’s trademark.

The Panel believes that internet mechanics make it inevitable that many persons looking for the owners and originators of "Chanel" fashion products would end up at Respondent’s web sites, i.e., the disputed domain names in this Case, "chanelstore.com" and "chanelfashion.com". In this context, the Panel specifically rejects Respondent’s contention that "No one looking for Complainant’s website is going to search "chanelstore.com" and "chanelfashion.com"."

The Panel is aware that in a similar case another Panel did not find bad faith (WIPO Case D2000-0395, Ermenegildo Zegna Corporation v. Estco Enterprises Ltd.). However, the Panel agrees with the dissent in that Case, which in fact involved the same Respondent with the same business plan as in this Case.

Pursuant to ICANN Policy para 4(i) and Rule 15, the Panel orders that the disputed domain names "chanelstore.com" and "chanelfashion.com" be turned over to Complainant, Chanel, Inc. These domain names are confusingly similar to Complainant’s famous trademark, "Chanel"; Respondent, Estco Technology Group and Estco Enterprises, Ltd., has no legitimate right or interest in the domain names; and Respondent has registered and is using the domain names in bad faith.

Dennis A. Foster
Presiding Panelist

Mark V. B. Partridge David Bernstein
Panelists

Dated: September 18,2000