1. The Parties

The Complainants in this administrative proceeding are QVC, Inc., a corporation of the State of Delaware, USA with a principal place of business at Studio Park, West Chester, Pennsylvania, USA and it’s wholly owned subsidiary ER Marks, Inc., a corporation of the State of Delaware with a principal place of business of Wilmington, Delaware USA (“Complainants” or “QVC”).

Respondents are Island Wholesale and QVC Discount Stores c/o Richard Hyland of Babylon, New York USA (“Respondents” or “Island”).

2. The Domain Names and Registrar

The domain names at issue are <qvcdiscountstore.com> and <qbcdiscountstore.com> (the “Domain Names”). The registrar with which the domain names are registered is eNom, Inc. located in Washington USA (the “Registrar”).

3. Procedural History

On June 4, 2004, the WIPO Arbitration and Mediation Center (the “Center”) received a copy of the Complaint of Complainants via email. On June 7, 2004, the Center received hardcopy of the Complaint. On June 7, 2004, the Center sent an Acknowledgment of Receipt of Complaint to Complainants. The Complainants paid the required fee.

On June 7, 2004, after the Center sent a Request for Verification to the Registrar requesting verification of registration data, the Registrar confirmed, inter alia, that it is the registrar of the Domain Names and that the Domain Names are registered in the Respondent’s name.

On June 10, 2004, the Center requested clarification of the Domain Names and received such clarification from Complainants.

The Center verified that the Complaint satisfies the formal requirements 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”).

On June 10, 2004, the Center sent a Notification of Complaint and Commencement of Administrative Proceeding to the Respondent together with copies of the Complaint, with a copy to the Complainants. This notification was sent by the methods required under paragraph 2(a) of the Rules.

On July 1, 2004, the Center advised Respondents that they were in default for failing to file their Response. No Response has been received.

On July 9, 2004, after the Center received a completed and signed Statement of Acceptance and Declaration of Impartiality and Independence from Richard W. Page (the “Panel”), the Center notified the parties of the appointment of a single-arbitrator panel consisting of the Panel.

4. Factual Background

QVC began providing electronic retail services for in-home shopping in connection with its “QVC” trademark (the “Mark”) in 1986, and has continued to do so, without interruption, to the present date. QVC’s net revenue has increased from $858,000,000 (858 Million U.S. Dollars) in 1990, to a global business with net revenue in 2003, of $4,889,000,000 (4.889 Billion U.S. Dollars). It sells both by television shopping channels and by means of interactive Internet sites on the worldwide web. It also sells through various retail outlets and by catalog. It started as a business in the United States but now its presence spans the world through its foreign affiliates such as QVC UK, QVC Deutschland, QVC Japan and others.

The QVC Mark now reaches almost 85,000,000 homes in the United States alone. QVC reaches over 130 million homes worldwide. In 2003, QVC shipped millions of packages worldwide to achieve its over 4.899 billion net sales dollars. It ships products of all types with special emphasis on home, jewelry and apparel/accessory products. In addition to its own television studios, QVC has expanded to the Internet. It launched its web site in the fall of 1996. Harris Interactive, Inc., a leading Internet marketing research firm, ranked QVC’s on-line site (“www.qvc.com” or “www.iqvc.com”) as one of the top e-commerce sites in customer satisfaction in 1999. In early 2001, Forrester Research, Inc., another respected independent research firm, issued its general merchandise PowerRankings for e-commerce sites and “www.qvc.com” or “www.iqvc.com” was the top ranked site. Between 2001, and the present, on BizRate alone, over 650,000 internet customers rated QVC, and its internet site received outstanding ratings. BizRate awarded QVC its Circle of Excellence award for the 2003 Holiday Season.

QVC has spent significant effort and expense in protecting its intellectual property rights. QVC began obtaining United States service mark registrations for its QVC and QVC formative marks as early as 1987. Since 1999, QVC, Inc. assigned certain of its marks and registrations to its wholly owned subsidiary and Co-Complainant, ER Marks, Inc. These marks almost all pertain to in home shopping via television, telephone and/or the Internet. The QVC/QVC formative United States registrations and applications now owned by ER Marks and licensed exclusively to QVC, Inc. are contained in the Complaint and all contain “QVC” with numerous variations of this phrase. QVC has also protected its trademarks internationally, including the countries of Algeria, Argentina, Australia, Bahrain, Brazil, Canada, Chile, China, Egypt, European Union, Germany, Hungary, Indonesia, Israel, Japan, Kuwait, Lebanon, Malaysia, Mexico, Morocco, Norway, Oman, Qatar, Saudi Arabia, Singapore, South Korea, Spain, Switzerland, Taiwan, Tangier Zone, Tunisia, Turkey, Ukraine, United Arab Emirates, United Kingdom and Yemen.

In addition, QVC is the registrant of hundreds of QVC formative domain names. These include top level domains and country code domains. They include domain names that are critical to QVC’s national and international business, and even include names QVC has no intention of using but has obtained to protect its own reputation (i.e., adultqvc.com).

In September 2003, Respondent Richard Hyland dba Island Merchandise registered <qvcdiscountstore.com>. On October 13, 2003, Complainants sent Mr. Hyland a cease and desist letter requesting that he desist from further use of the infringing <qvcdiscount store.com> domain name because of its likely association with QVC and its Mark. At that time, the <qvcdiscountstore.com> domain name led to an active “online superstore” website for online shopping in direct competition with QVC. Mr. Hyland called Complainants’ counsel on October 30, 2003, and requested additional time to confer with an attorney and his request was granted. At that time, Mr. Hyland admitted his knowledge of the well known QVC online shopping network and he offered to sell his infringing domain name to QVC. Mr. Hyland then informed Complainants’ counsel, on November 7, 2003, that he would cease use of the infringing <qvcdiscountstore.com> domain name and transfer it to QVC which agreed to reimburse him for his registration expense. Mr. Hyland was given the necessary information to accomplish the transfer.

On December 16, 2003, Complainants sent another letter to Mr. Hyland noting that the domain name had not yet been transferred. Complainants learned that while <qvcdiscount store.com> was not active (and still had not been transferred), Mr. Hyland had begun using a new domain name, <qbcdiscountstore.com>. The <qbcdiscountstore.com> did and still does lead the user to an active website for on line shopping which directly competes with QVC. On February 11, 2004, Complainants’ counsel wrote Mr. Hyland concerning both of his infringing Domain Names. The letter informed Mr. Hyland that his conduct was infringing and demanded transfer of both Domain Names. Mr. Hyland’s only response came on April 4, 2004 when he offered to sell to QVC his “registered domain name” for the sum of $175,000.00.

5. Parties’ Contentions

A Complainant’s contentions

i. Complainants contend that they have numerous registrations of the QVC Mark, that their trademark registrations are valid and subsisting, and that they serve as prima facie evidence of their ownership and the validity of the Mark. 15 U.S.C. §

ii. Complainants argue that the Domain Names are confusingly similar to the QVC Mark, pursuant to Paragraph 4(a)(i) of the Policy, because they wholly incorporate “QVC” and add only the generic term “discount store” to the “QVC” letters. The addition of a generic term and .com to Complainants’ QVC Mark is legally insufficient to avoid a finding of confusing similarity. Complainants cite ER Marks Inc. and QVC Inc. v. VerCentre.com, WIPO Case No. D2003-0078; QVC, Inc. and ER Marks, Inc. v. Sticky Dicky, WIPO Case No. D2001-0774; Quixtar Investments, Inc. v. Dennis Hoffman, WIPO Case No. D2000-0253; and Telstra Corporation Limited v. Peter Lombardo et al., WIPO Case No. D2000-1511.

iii. Complainants contend that Respondents have no rights or legitimate interests in the Domain Names, pursuant to Paragraph 4(a)(ii), and that Respondents have failed to demonstrate any of the three circumstances that constitute rights to or legitimate interests in the Domain Names. Complainants further contend that Respondents have no license from Complainants, nor any affiliation with Complainants.

Complainants assert that Respondents cannot demonstrate rights or legitimate interest in the Domain Names under Paragraph 4(c)(i) because they have not made use, or demonstrable preparations to use, the Domain Names in connection with the bona fide offering of goods or services. Any services offered by Respondents cannot be bona fide because Respondents have used both offending Domain Names to lead users to online shopping sites which have no connection to Complainants.

Complainants assert that Respondents cannot demonstrate rights or legitimate interests in the Domain Names under Paragraph 4(c)(ii) because they are not commonly known by either of the Domain Names.

Complainants assert that Respondents cannot demonstrate rights or legitimate interests in the Domain Names under Paragraph 4(c)(iii) because they are not making a legitimate noncommercial or fair use of the Domain Names without the intent to (a) derive commercial gain, (b) misleadingly divert consumers, or (c) tarnish the trademark at issue.

iv. Complainants contend that Respondents registered and are using the Domain Names in bad faith in violation of Paragraph 4(a)(iii). This contention is based upon the allegations that Respondents did not register either <qvcdiscount store.com> or <qbcdiscountstore.com> until September 4, 2003, and October 25, 2003, respectively, over 17 years after QVC began registering and using its QVC Mark in connection with services for in-home shopping. Complaints alleged that the worldwide fame of QVC was well established before Respondents registered either of their Domain Names. Complainants further alleged bad faith based upon the registration of the <qbcdiscountstore.com> Domain Name until after Mr. Hyland received the October 13, 2003 cease and desist letter pertaining to the <qvcdiscountstore.com> Domain Name. Complainants allege that at about the same time Mr. Hyland admitted his knowledge of the well known QVC online shopping network and offered to sell his infringing <qbcdiscountstore.com> Domain Name.

B. Respondent’s contentions

i. Respondents do not dispute Complainants’ assertion that they have registrations of the QVC Mark.

ii. Respondents do not dispute Complainants’ assertion that the Domain Names are identical or confusingly similar to the Mark.

iii. Respondents do not dispute Complainants’ assertion that Respondents have no rights to or legitimate interests in the Domain Names.

iv. Respondents do not dispute Complainants’ assertion that Respondents registered or used the Domain Names in bad faith.

6. Discussion and Findings

Paragraph 15(a) of the Rules instructs the Panel as to the principles the 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.”

Because both the Complainants and Respondents are domiciled in the United States and United States courts have recent experience with similar disputes, to the extent that it would assist the Panel in determining whether the Complainant has met its burden as established by Paragraph 4(a) of the Policy, the Panel shall look to rules and principles of law set out in decisions of the courts of the United States. Tribeca Film Center, Inc. v. Brusasco-Mackenzie, WIPO Case No. D2000-1772.

A respondent is not obliged to participate in a domain name dispute proceeding, but if it were to fail to do so, asserted facts that are not unreasonable would be taken as true and the respondent would be subject to the inferences that flow naturally from the information provided by the complainant: Reuters Limited v. Global Net 2000, Inc., WIPO Case No. D2000-0441. See also Hewlett-Packard Company v. Full System, NAF Case No. FA 0094637; David G. Cook v. This Domain is For Sale, NAF Case No. FA0094957 and Gorstew Jamaica and Unique Vacations, Inc. v. Travel Concierge, NAF Case No. FA0094925.

Even though Respondents have failed to file a Response or to contest Complainants’ assertions, the Panel will review the evidence proffered by Complainants to verify that the essential elements of the claims are met.

Paragraph 4(a) of the Policy directs that the Complainants must prove each of the following:

i. that the domain name registered by the Respondents is identical or confusingly similar to a trademark or service mark in which the Complainants have rights; and,

ii. that the Respondents have no legitimate interests in respect of the Domain Names; and,

iii. that the Domain Names have been registered and are being used in bad faith.

Complainants contend that they have numerous registrations of the QVC Mark and that its trademark registrations are valid and subsisting and serve as prima facie evidence of its ownership and the validity of the Mark. 15 U.S.C. § 1115.

Panel decisions have held that registration of a mark is prima facie evidence of validity, which creates a rebuttable presumption that the mark is inherently distinctive. Respondents have the burden of refuting this assumption. See, e.g., EAuto, L.L.C. v. Triple S. Auto Parts d/b/a Kung Fu Yea Enterprises, Inc., WIPO Case No. D2000-0047. Respondents have not contested the assertions by Complainants that they have valid registrations of the Mark. Therefore, the Panel finds that Complainants, for purposes of this proceeding, have enforceable rights in the Mark.

Identity or Confusing Similarity

Complainants argue that the Domain Names are confusingly similar to the QVC Mark, pursuant to Paragraph 4(a)(i) of the Policy. The <qvcdiscountstore.com> Domain Name wholly incorporates the QVC Mark and only adds the generic term “discount store” to the “QVC” letters. The <qbcdiscountstore.com> Domain Name is merely an intentional misspelling or phonetic equivalent of “QVC.” The addition of a generic term, an intentional misspelling, phonetic equivalent or .com to Complainants’ QVC Mark is legally insufficient to avoid a finding of confusing similarity. See citations, supra.

Respondents have not contested the assertions by Complaints that the Domain Names are confusingly similar to the Mark. Therefore, the Panel finds that the Domain Names are confusingly similar to the QVC Mark pursuant to the Policy paragraph 4(a)(i).

Rights or Legitimate Interest

Complainants contend that Respondents have no rights or legitimate interest in the Domain Names pursuant to the Policy paragraph 4(a)(ii).

Paragraph 4(a)(ii) requires the Complainants to prove that the Respondents have no rights to or legitimate interests in the Domain Names. Once a complainant establishes a prima facie showing that none of the three circumstances establishing legitimate interests or rights apply, the burden of production on this factor shifts to the respondent to rebut the showing. The burden of proof, however, remains with complainant to prove each of the three elements of Paragraph 4(a). See Document Technologies, Inc. v. International Electronic Communications, Inc., WIPO Case No. D2000-0270 (June 6, 2000).

Respondents have no relationship with or permission from Complainants for the use of the QVC Mark.

The Policy paragraph 4(c) allows three nonexclusive methods for the Panel to conclude that Respondents have rights or a legitimate interest in the Domain Names:

i. before any notice to you [Respondent] of the dispute, your 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. you [Respondent] (as an individual, business, or other organization) have been commonly known by the domain name, even if you have acquired no trademark or service mark rights; or

iii. you [Respondent] are 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.

Complainants assert that Respondents have not made use, or demonstrable preparations to use, the Domain Names in connection with the bona fide offering of goods or services. Any services offered by Respondents cannot be bona fide because Respondents have used both offending Domain Names to lead users to online shopping sites which have no connection to Complainants. Complainants assert that Respondents cannot demonstrate rights or legitimate interests in the Domain Names under Paragraph 4(c)(ii) because they are not commonly known under either of the Domain Names. Complainants assert that Respondents cannot demonstrate rights or legitimate interests in the Domain Names under Paragraph 4(c)(iii) because they are seeking to derive commercial gain by misleadingly diverting consumers.

The Complainants have sustained their burden of proving that the Respondents lack rights to or legitimate interests in the Domain Names. Respondents have come forward with no evidence to rebut the assertions of Complainants. Therefore, the Panel finds that Respondents have no rights or legitimate interests in the Domain Names pursuant to the Policy paragraph 4(a)(ii).

Bad Faith

Complainants contend that Respondents registered and are using the Domain Names in bad faith in violation of the Policy paragraph 4(a)(iii).

The Policy paragraph 4(b) sets forth four nonexclusive criteria for Complainants to show bad faith registration and use of the Domain Names:

i. circumstances indicating that you have registered or you have 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 that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name; or

ii. you have 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 you have engaged in a pattern of such conduct; or

iii. you have registered the domain name primarily for the purpose of disrupting the business of a competitor; or

iv. by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your 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 your web site or location or of a product

Complainants’ contentions are based upon the allegations that Respondents did not register either <qvcdiscount store.com> or <qbcdiscountstore.com> until September 4, 2003, and October 25, 2003, respectively, over 17 years after QVC began registering and using its QVC Mark in connection with services for in-home shopping. Complainants alleged that the worldwide fame of QVC was well established before Respondents registered either of their Domain Names. Complainants further alleged bad faith based upon the registration of the <qbcdiscountstore.com> Domain Name only after Mr. Hyland received the October 13, 2003 cease and desist letter pertaining to <qvcdiscountstore.com>. Complainants allege that at about the same time Mr. Hyland admitted his knowledge of the well known QVC online shopping network and offered to sell his infringing <qvcdiscountstore.com>.

Complainants also assert that Respondents used the Domain Names in bad faith by seeking to divert users to Respondent’s own on-line shopping site. See Nokia Corporation v. Liquid SMS Limited, WIPO Case No. D2002-0292.

The Panel finds that the evidence of Complainants is sufficient to demonstrate that the Respondents have intentionally attempted to attract Internet users for commercial gain by creating a likelihood of confusion. This evidence is sufficient to establish the necessary elements of bad faith under the Policy paragraph 4(b)(iv).

The four criteria set forth in the Policy paragraph 4(b) are nonexclusive. Telstra Corporation Limited v. Nuclear Marshmellows, WIPO Case No. D2000-0003. In addition to these criteria, other factors alone or in combination can support a finding of bad faith. The actions of Respondents demonstrate a course of conduct of promising to transfer the Domain Names and then requesting significant amounts of money above the costs of registration. It is noted here that Respondents filed the <qbcdiscountstore.com> Domain Name after being advised that their <qvcdiscountstore.com> Domain Name was in violation of Complainants’ rights.

Another factor is the use of Complainants’ entire Mark in the Domain Names, thus making it difficult to infer a legitimate use of the Domain Names by Respondents. In Cellular One Group v. Paul Brien, WIPO Case No. D2000-0028 the complainant filed a WIPO complaint against the registrant of domain name <cellularonechina.com>. The WIPO panel agreed with complainant that the registrant unlawfully registered an identical or confusingly similar domain name in bad faith. Moreover, the Panel inferred bad faith use of <cellularonechina.com>, because the domain name included complainant’s entire trademark. In light of Cellular One’s trademark registrations and applications, “it is not possible to conceive of a plausible circumstance in which Respondent could legitimately use the domain name.” See Telstra Corp. Ltd. v. Nuclear Marshmallows, WIPO Case No. D2000-0003.

These factors taken together demonstrate the bad faith of Respondents independently of their violation of 4(b)(iv).

Based upon this evidence, the Panel finds that Complainants have shown sufficient facts to support a finding that the Domain Names were registered and used in bad faith pursuant to the Policy paragraph 4(a)(iii).

7. Decision

The Panel concludes (a) that the Domain Names <qvcdiscountstore.com> and <qbcdiscountstore.com> are confusingly similar to Complainants’ QVC Mark, (b) that Respondents have no rights or legitimate interest in the Domain Names and (c) that Respondents registered and used the Domain Names in bad faith. Therefore, pursuant to Paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the Domain Names be transferred to Complainants.

Richard W. Page
Sole Panelist

Dated: July 24, 2004