WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
U.S. Franchise Systems, Inc. v. Telmex Management Services
Case No. D2002-0099
1. The Parties
The Complainant in this administrative proceeding is U.S. Franchise Systems, Inc. which is incorporated in the State of Delaware, United States of America, with its principal place of business in Atlanta, Georgia.
The Respondent in this administrative proceeding is Telmex Management Services, an entity based in the British Virgin Islands.
2. The Domain Names and Registrar
The disputed domain names are , and .
The Registrar of the domain names is Intercosmos Media Group, Inc. of New Orleans, Louisiana, United States of America.
3. Procedural History
This is a mandatory administrative proceeding submitted for decision in accordance with the Uniform Domain Name Dispute Resolution Policy, adopted by the Internet Corporation for Assigned Names and Numbers (ICANN) on August 26, 1999, (the "Policy"), the Rules for Uniform Domain Name Dispute Resolution Policy, approved by ICANN on October 24, 1999, (the "Rules") and the World Intellectual Property Organization ("WIPO") Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the "Supplemental Rules").
By registering the subject domain name with the Registrar, the Respondent agreed to the resolution of disputes pursuant to the Policy and Rules.
The Complainant filed its Complaint with the WIPO Arbitration and Mediation Center (the "Center") on January 30, 2002, by email and on February 1, 2002, by hardcopy. On February 7, 2002, having verified that the Complaint satisfied the formal requirements of the Policy and the Rules, the Center formally commenced this proceeding. Respondent filed a Formal Response with the Center on February 12, 2002, by email and fax. On February 18, 2002, the Center issued a Response Deficiency Notification. On February 21, 2002, the Center acknowledged receipt of a Supplemental Filing entitled "Supplement Evidence and Filing". The Parties delivered additional comments.
The Administrative Panel consisting of single member was appointed on March 22, 2002, by the Center.
An examination of this material confirms that all technical requirements for the prosecution of this proceeding were met.
The Administrative Panel has accepted and considered all material filed by both Parties.
4. Factual Background
The following information is derived from the Complainant�s material.
The Complainant operates hotels.
The Complaint is based on the Service Marks HAWTHORN SUITES, HAWTHORN HOTEL & SUITES and HAWTHORN owned and used by the Complainant to identify hotel, hotel management, restaurant, bar, reservation, and franchise services since October 7, 1985. A summary of the registered marks and pending applications follows:
HAWTHORN SUITES - U.S. Reg. No. 1,401,695
Current Registered Owner: U.S. Franchise Systems, Inc
Date of First Use: October 7, 1985
Registration Date: July 15, 1986
Services: Hotel services, namely providing lodging and restaurant services in hotels.
HAWTHORN SUITES & Design - U.S. Reg. No. 1,531,365
Current Registered Owner: U.S. Franchise Systems, Inc.
Date of First Use: November 2, 1986
Registration Date: March 21, 1989
Services: Hotel, restaurant and bar services; and hotel management and reservation services.
HAWTHORN HOTEL & SUITES � U.S. Reg. No. 2,406,795
Current Registered Owner: U.S. Franchise Systems, Inc.
Date of First Use: September 25, 1997
Registration Date: November 21, 2000
Services: Hotel and motel franchises and franchise services, namely establishing, operating and maintaining and offering technical assistance in establishing operating and maintaining hotels and motels.
HAWTHORN HOTELS & SUITES & Design - U.S. Serial No. 76/244,310
Date of First Use: February 26, 2001
Application Date: April 20, 2001 (Pending)
Services: Hotel and motel services.
HAWTHORN SUITES & Design � U.S. Serial No. 76/244,751
Current Registered Owner: U.S. Franchise Systems, Inc.
Date of First Use: March 13, 2001
Filing Date: April 20, 2001 (Pending; application has been published for opposition)
Services: Hotel and motel services.
HAWTHORN & Design � U.S. Serial No. 76/244,411
Date of First Use: March 13, 2001
Filing Date: April 20, 2001 (Pending)
Services: Hotel and motel services.
HAWTHORN SUITES � U.K. Reg. No. 2,219,155
Current Registered Owner � U.S. Franchise Systems, Inc.
Registration Date: November 24, 2000
Services: Business consulting services relating to franchising; business advisory services; business advisory services relating to franchising; hotel and motel franchising services, namely establishing, operating and maintaining and offering technical assistance in establishing, operating and maintaining hotels and motels.
Professional Consultation Services relating to franchising; providing temporary accommodation for others.
HAWTHORN SUITES � Canadian Reg. No. TMA 473572
Current Registered Owner: U.S. Franchise Systems, Inc.
Filed: March 13, 1987
Registered: March 25, 1997
Services: Operation of a business providing hotel, food and cocktail services.
ADDITIONAL TRADEMARKS
HAWTHORN SUITES & Design � Mexican Reg. No. 426084
HAWTHORN SUITES & Design � Egyptian Reg. No. 112389
The Complainant also owns the domain names (registered May 19, 1999), (registered December 10, 1995), (registered May 19, 1999) and (registered May 19, 1999).
The Complainant has used the service mark HAWTHORN SUITES to identify its hotel and motel franchise services internationally since 1985. It also uses and promotes the marks HAWTHORN and HAWTHORN HOTEL & SUITES to identify its hotel and motel services internationally.
The Complainant currently operates 127 hotels worldwide under the HAWTHORN SUITES mark, including in the United States (all states), Canada, and Israel. Annual advertising expenditures to promote the marks are approximately two million dollars per year. The Complainant advertises the marks in conjunction with hotel and motel franchises in virtually every communication medium, including television and radio commercials, print advertising and the Internet.
The Complainant and its predecessor has promoted the HAWTHORN and HAWTHORN SUITES marks online for over six (6) years. The domain name was has provided online booking of Hawthorn Suites hotels services to the Complainant�s numerous customers for approximately five (5) years.
As a result of the promotion of its marks, the Complainant provides lodging services to nearly one million guests per year. The Complainant has established considerable goodwill in its marks. They and the domain name are well-recognized by the consuming public and internationally famous.
The subject domain names and , are redirected to a pornographic website . When users click over photographs on this site, pornographic images of women's genitalia and adult-themed poses are revealed. Similarly, the subject domain name , resolves to the web-site . The redirected websites which the Respondent has associated with the subject domain names do not include any legitimate use of the terms "HAWTHORN" or "HAWTHORN SUITES."
The Complainant has provided no authorization and has no affiliation with the Respondent permitting the use of the Complainant�s trademarks. The Respondent also does not appear to have been known by the terms "Hawthorn" or "Hawthorn Suites".
The subject domain names were registered by the Respondent on November 22, 2000.
In January 11, 2002, the Complainant�s legal representatives wrote to the Respondent asserting the Complainant�s interests and demanding that the Respondent cease and desist. There was no response.
The following information is derived from the Response.
The Respondent acquires domain names for actual and potential customers.
The Respondent reserves all of its rights to the use the subject domain names
and has not attempted to pass them off as the Complainant.
The Respondent is based in the British Virgin Islands and operates largely within Europe. Its client is based in Luxembourg and intends opening the "Hawthorn Suites
Hotel " subject to final planning approval.
The client asked the Respondent to purchase the subject domain names in preparation for the commencement of its hotel activities.
The subject domain names are not yet in use by the Respondent�s client and as with all of the domains that the Respondent develops they point to a random website in its portfolio until such time as they have been developed fully.
The Parties made additional comments.
The Complainant notes that the subject domain names are listed for sale on the internet, to which the Respondent replied stating:
"For the avoidance of doubt ALL domains purchased by [the Respondent] are automatically listed on all of DIRECTNIC associated domains services, by DIRECTNIC.
The domains are not for sale."
The Complainant further replied asserting that the Respondent has persisted in a pattern of registering domain names containing the names of well known hotel chains and listing them for auction. Examples include: ; ; ; ; .
In response, the Respondent states that it "�purchase[s], develop[s] and create[s] in excess of 35,000 domain/websites on behalf of its [sic] 11,500 + clients".
5. Parties� Contentions
A. Complainant
The Complainant relies on its registration and use of marks containing the word "hawthorn". It says that the subject domain names clearly are confusingly similar to the marks HAWTHORN SUITES, HAWTHORN HOTEL & SUITES and HAWTHORN in appearance, sound and commercial impression. In particular, the subject domain names and are distinguished from the Complainant's HAWTHORN SUITES mark only by the generic addition of "hotel" or "hotels," services the Complainant specifically provides.
The Complainant notes and relies on the decisions in Fairmont Hotel Management L.P. v. Puts, WIPO Case No. D2001-0431 ("The added words "hotel" and "resorts", respectively, do not serve to make the inclusion of the Complainants trademark in the domain names non-confusing. Rather, given that the added words describe the business services for which the Complainant's trademark is registered and used by the Complainant, the additions merely compound the confusion created by the incorporation of the Complainant's trademark.") and Mandarin Oriental Services B.V. v. Control Alt. Delete, WIPO Case No. D2000-1671 (Finding that the addition of "hotel" confuses the Complainant's area of activity and ".com" is merely generic).
The Complainant notes that "�the only difference between the domain name registered by the Respondent and Complainant�s HAWTHORN SUITES service mark is the addition of the word �the.� Mere inclusion of the antecedent �the� does not eliminate confusion where the disputed domain name includes the Complainant's entire mark." Previous decisions are relied to support this proposition.
Also referring to other domain name dispute decisions, the Complainant asserts that the Respondent�s course of conduct registering domain names using the marks of others, shows a lack of legitimate interest in the subject domain names and is bad faith.
In addition, the Complainant says that the Respondent is not authorized by the Complainant to use the Complainant�s marks and states that the fact that the subject domain names resolve to pornographic websites shows a lack of "legitimate use" of the words "HAWTHORN" and "HAWTHORN SUITES".
The Complainant refers to a significant number of domain name dispute decisions to support the proposition that "�using domain names to link to sexually-explicit, pornographic and/or adult websites for attracting users for commercial gain by creating a likelihood of confusion as to sponsorship or affiliation with the mark holder does so in bad faith."
The Complainant also notes that the Respondent has posted the subject domain names for auction.
B. Respondent
The Respondent says that it is in the legitimate business of registering and selling domain names to clients and states that: "The client asked the Respondent to purchase the subject domain names in preparation for the commencement of its hotel activities."
The Respondent does not address directly the Complainant�s assertion that the subject domain names resolve to pornographic websites or the allegation of a pattern of conduct by the Respondent, but it asserts that its domain names point to "random" websites pending use and that the Respondent acquires a great many domain names for a large number of clients.
The Respondent says that the subject domain names are not for sale.
6. Discussion and Findings
Paragraph 4 (a) of the Policy requires the Complainant to prove that:
(i) the domain name is identical or confusingly similar to a service mark in which the Complainant has rights;
(ii) the Respondent has no legitimate interest in respect of the domain name;
(iii) the domain name has been registered and is being used in bad faith.
Paragraph 4 (b) provides for the implication of evidence of bad faith in a number of circumstances:
(i) circumstances that indicate that the Respondent has registered or has acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the Complainant who is the owner of the trademark or service mark or to a competitor of the Complainant, for valuable consideration in excess of the Respondent�s documented out-of-pocket costs directly related to the domain name;
(ii) registration of 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;
(iii) registration of the domain name primarily for the purpose of disrupting the business of a competitor;
(iv) by using the domain name, intentionally attempting to attract, for commercial gain, Internet users to the Respondent�s web site 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 web site or location or of a product or service on it or a location.
These are illustrative and do not represent the only circumstances from which may arise evidence of bad faith.
The Complainant refers to a number of previous domain name dispute decisions. While these are neither controlling nor binding on this Administrative Panel, often reference to them is of assistance.
The resolution of this dispute takes place in the context of a consideration of the requirements of paragraph 4 (a) of the Policy.
A. Identical or Confusingly Similar
It is clear that the Complainant has rights to the word "hawthorn" and its use in the context of the hospitality industry. All of the subject domain names use that word and all link it to the hospitality industry. This is not surprising because the Respondent says that the names were acquired for a client that intended to open a facility in that industry.
As noted by previous administrative panels, the addition of the word "the" creates little distinction and the use of words such as "hotel" leads to confusion when the mark of a complainant in the hotel business is in issue.
The Respondent does not contest the Complainant�s rights to its marks or its assertion that the subject domain names are confusingly similar.
The Administrative Panel is satisfied that the Complainant has met the requirements of paragraph 4 (a) (i).
B. Respondent�s Legitimate Interest
The Respondent contends that it carries on a legitimate business of supplying domain names to customers and for that purpose it acquires many domain names that are stored pending use.
The issue in this case is whether the Respondent has a "�legitimate interest in respect of the [subject] domain names". Relevant to that inquiry is the purpose for which the Respondent acquired the subject domain names. Informing that inquiry is the course of conduct of the Respondent and the use it made of the subject domain names.
The subject domain names were registered by the Respondent in November 2000. It says that a client which wanted to open an hotel asked the Respondent to purchase the subject domain names. It is unclear whether this was a request by the client to purchase the subject domain names from the Respondent or whether it was to purchase them from someone else on behalf of the client. In any event, they remain registered to the Respondent.
It is noteworthy that the explanation which the Respondent advanced in this proceeding was not asserted in response to the Complainant�s lawyers� cease and desist letter.
Insofar as the client sought to acquire the subject domain names for use in the context of a new hotel, the objective apparently was in collision with the Complainant�s rights. It is not a foundation for a legitimate interest in the subject domain names.
The Respondent offers no real explanation why the subject domain names resolve to pornographic websites and makes no answer to the Complainant�s reference to its course of conduct registering domain names using the names of well known hotel chains.
The registration and acquisition of many domain names for the purpose of resale may be a legitimate business, but in undertaking that enterprise the Respondent cannot ignore the rights of others. The focus of legitimacy in a domain name dispute is on the domain names in issue. A Respondent must have a legitimate interest in those names, irrespective of the legitimacy of its overall operations.
The Complainant suggests that the Respondent�s use of the subject domain names is not legitimate. Although the nature of the use may support a conclusion that a respondent does not have a legitimate interest, it is the interest that is under review, not the use per se.
The Administrative Panel is satisfied that the Complainant has met the requirements of paragraph 4 (a) (ii).
C. Bad Faith
The conclusions that a Respondent does not have a legitimate interest in a domain name that is confusingly similar to a Complainant�s mark does not establish bad faith, but the facts that lead to those conclusion may be relevant to a consider of the bad faith issue.
Indicia of bad faith in this case include: the registration of domain names for a prospective hotel business that incorporate the marks of another hotel operation; directing the subject domain names to pornographic websites; posting the subject domain names for auction; a course of conduct that includes acquiring and registering domain names that incorporate the marks of others; ignoring the Complainant�s cease and desist demand with no explanation.
In many cases, the posting of a domain name for sale is telling evidence of bad faith, but in this case there is no suggestion that the Respondent intended to attempt to sell the subject domain names to the Complainant and the Administrative Panel accepts the Respondent�s assertion that the subject domain names are not for sale. The information provided by the Respondent suggests that they have been sold.
The registration of domain names that incorporate the mark of another raises suspicion. The Respondent has done nothing to expel that concern in this case. If it were to have followed its apparent practice of registering domain names incorporating the marks of hotel chains, an inference of bad faith registration would be appropriate. Its business is the acquisition and sale of domain names. Collecting domain names that incorporate the marks of others for sale to potential competitors is bad faith.
If it acquired the subject domain names at the behest of a customer which planned to use them and the Complainant�s marks to enter the Complainant�s business, also would be bad faith.
The subject domain names apparently have been parked, but they continue to mislead and to attract users to pornographic websites. The Respondent�s explanation for this is not compelling.
In any event, the use merely continues the purpose of the registration. It having been in bad faith, the use is similarly tainted.
The Administrative Panel is satisfied that the Complainant has met the requirements of paragraph 4 (a) (iii).
7. Decision
Based on the information provided to it and on its findings of fact the Administrative Panel concludes that the Complainant has established its case.
The Complainant asks that the subject domain names be transferred to it. The Administrative Panel so orders.
Edward C. Chiasson, Q.C.
Sole Panelist
Dated: April 5, 2002
Full & Egal Universal Law Academy