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WIPO Arbitration and Mediation Center

Complainants are Advantica Restaurant Group, Inc. a United States corporation, of Spartanburg, South Carolina (USA), and its subsidiary Carrows Restaurants, Inc., a corporation located in Irvine, California USA (Complainants), represented by Mary Jane Saunders of Venable, Baetjer, Howard & Civiletti of Washington, DC USA.

Respondent is Ben's New Company, San Diego, California USA (Respondent).

The domain names at issue are <carrows.net> and <carrows.org>. They are referred to as the Domain Names. The registrar is Tucows.com, Inc.

A. The Center. The WIPO Arbitration and Mediation Center (the Center) received the complaint on January 11, 2001 (electronic version) and January 15, 2001 (hard copy). The Center verified that the complaint satisfied the formal requirement of the ICANN Uniform Domain Name Dispute Resolution Policy (the Policy), the Rules for Uniform Domain Name Dispute Resolution Policy (the Rules), and the Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the Supplemental Rules). Complainant made the required payment to the Center.

On January 18, 2001, the Center transmitted, via email to the Registrar, a request for registrar verification in connection with this case. On January 30, 2001, the Registrar transmitted via email to the Center its Verification Response, confirming that the Respondent is the registrant, that the contact for administrative, technical, and billing matters is Antonio Ben Espinosa. As noted below, Espinosa controls Respondent.

Having verified that the complaint satisfied the formal requirements of the Policy and the Rules, on February 1, 2001, the Center transmitted to the Respondent its Notification of Complaint and Commencement of the Administrative Proceeding, via post/courier and e-mail.

No reply having been received, on February 21, 2001, the Center notified Respondent of its default.

The formal date of the commencement of this administrative proceeding is February 1, 2001.

On March 19, 2001, in view of the Complainants' designation of a single panelist (but without prejudice to any election to be made by the Respondent) the Center invited Richard G. Lyon to serve as a panelist. Having received Mr. Lyon's Statement of Acceptance and Declaration of Impartiality and Independence, the Center transmitted to the parties a Notification of Appointment of Administrative Panel and Projected Decision Date of March 19, 2001. The Sole Panelist finds that the Administrative Panel was properly constituted and appointed in accordance with the Rules and Supplemental Rules and that the Panel has jurisdiction by virtue of Section 4(a) of the Policy.

This is the second proceeding before the Center involving Respondent's use of the Domain Names. WIPO Case No. D2000-0888, also instituted by the Complainants, was terminated following Respondent's second court action against Complainants, described in part B.

B. Litigation. Respondent has twice initiated litigation over the Domain Names. In February 2000 Respondent filed a declaratory judgment action in the United States District Court for the Central District of California, seeking a declaration that its use of the Domain Names did not infringe Complainants' registered marks. Complainants answered this complaint and counterclaimed for trademark infringement, trademark dilution, and "cyberpiracy." This action (the First Action) was dismissed following a written settlement agreement, dated April 3, 2000, that included in pertinent part (i) Respondent's transfer of the Domain Names to Complainant and (ii) Respondent's undertaking "not to register any other Internet domain name that incorporates the phrase Carrows, or any similar word."

As stated in the following section of this decision, apparently the transfer was never completed. At any rate, Respondent commenced a second lawsuit, in the United States District Court for the Southern District of California (the Second Action), again seeking a declaration of no trademark infringement by virtue of the Domain Names and also seeking a declaration that Complainants' marks were invalid. The court granted Complainants' motion to dismiss the Second Action. The non-infringement claim was dismissed on the merits, and the invalidity claims for lack of subject matter jurisdiction. The court's opinion bears significantly on the Panel's findings in this proceeding.

The Administrative Panel shall issue its Decision based on the Complaint, the evidence presented by Complaint, the Policy, the Rules, and Supplemental Rules.

As Respondents have not submitted a response or other materials, the factual discussion comes from the Complaint and its attachments, one of which is a letter from Respondent to Complainants' counsel, and also from the court's opinion dismissing the Second Action.

Complainants own and operate over 140 restaurants under the Carrows name in seven Western states. They have used the Carrows name for restaurant services since 1970. They own many registered United States service marks for restaurant services (Class 42) (the Marks) that include the word Carrows. They own and use in their restaurant business the domain names <carrows.com> and <carrows-dine.com>.

Complainant has not licensed Respondents to use its marks or its name. There is no evidence that the word carrows relates in any way to Respondent or its business.

According to the Registrar, Respondent registered the Domain Names on June 6, 2000. This is two months after the settlement agreement that led to dismissal of the First Action. There is no evidence of any use of the Domain Names as web sites. In a letter to Respondent's counsel, dated July 12, 2000, Respondent, through Espinosa, acknowledges ownership of the Domain Names, asserting that he acquired them pursuant to an agreement with a third party. Respondent apparently then commenced the Second Action.

Complainants assert that (a) the Domain Names are identical to its Marks; (b) Respondent's use of the Domain Names is likely to cause confusion as to ownership or affiliation of the Domain Names, and dilute Complainant's Marks; and (c) that Respondent's registration or use of the Domain Names was done in bad faith.

Respondent has not answered the Complaint or otherwise submitted evidence.

Paragraph 15(a) of the Rules instructs the Administrative Panel as to the principles the Administrative Panel is to use in determining the dispute:

"A Panel shall decide a complaint on the basis of the statements and documents submitted in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable."

Paragraph 4(a) of the Policy directs that the Complainant must prove each of

the following:

(1) that the Domain Name registered by the Respondent is identical or confusingly similar to the trademark in which the Complainant has a right;

(2) that the Respondent has no legitimate interests in respect to the Domain Name; and

(3) that the Domain Name has been registered and used in bad faith.

A Respondent's failure to respond to a complaint does not automatically result in a default judgment for Complainant. Complainant must still establish the elements described above, and the Panel will make findings in accordance with the evidence and base its decision upon those findings.

Identity. The Domain Name is identical to Complainants' Marks and trade names and is likely to cause confusion among Complainant's users.

Legitimate Interest. Nothing in the record suggests any legitimate interest of Respondent in the Domain Name. There is no suggestion that it is used by Respondent to identify it or its business. Complainants have not licensed Respondent to use their Marks.

Bad Faith. Complainants have shown several instances of bad faith. The Domain Names were registered well after Complainants' restaurant business became well known. Registration and use appears to be an intentional violation of the settlement agreement. In its opinion dismissing the Second Action, the court noted that Respondent had commenced similar declaratory judgment actions against other well known companies, based upon its similar registration of domain names that mirrored the names of those companies [1]. While none of the court's factual findings is technically collateral estoppel against Respondent, the Panel gives considerable weight to a court's findings made in contested litigation (in this instance one commenced by the party as to which those facts are adverse). The court and the parties in the Second Action had available to them far more effective fact-finding machinery than is afforded in a proceeding under the Rules, and this Sole Panelist accordingly defers to the court's findings.

Any of the facts identified in the preceding paragraph supports a finding of registration and use in bad faith.

For the foregoing reasons, the Administrative Panel orders that the registration of the Domain Names be transferred to the Complainant.

Richard G. Lyon
Sole Panelist

Dated: March 30, 2001

Footnotes:

1. The case captions are illustrative: Mary Kay Toys & Carburetors v. Mary Kay Cosmetics and Alabama Power Toy Products v. Alabama Power Company. Espinosa controlled the plaintiffs in both cases. The court also noted that Espinosa had asserted similar charges as counterclaims against Wells Fargo & Co. in a case involving the domain name www.wells-fargo.com.