CanadaDrugs.com Partnership carrying on
business as CanadaDrugs.com v ASM Bioventure
Claim Number: FA0509000568743
PARTIES
Complainant is CanadaDrugs.com
Partnership carrying on business as CanadaDrugs.com (“Complainant”),
24 Terracon Place, Winnipeg, MB, R2J 4G7, Canada. Respondent is ASM
Bioventure (“Respondent”), represented by Karen F. MacDonald, of Smart & Biggar,
2200-650 West Georgia Street, Box 11560, Vancouver, BC, V6B 4N8, Canada.
REGISTRAR AND DISPUTED DOMAIN NAME
The domain name at issue is <canadadrugsonline.com>,
registered with Network Solutions, Inc.
PANEL
The undersigned certify that they have acted independently and
impartially and to the best of their knowledge have no known conflicts in
serving as Panelists in this proceeding.
Steven L. Schwartz, Chair
Anne M. Wallace
Mark V. B. Partridge
PROCEDURAL HISTORY
Complainant submitted a Complaint to the National Arbitration Forum
electronically on September 28, 2005; the National Arbitration Forum received a
hard copy of the Complaint on September 30, 2005.
On September 30, 2005, Network Solutions, Inc. confirmed by e-mail to
the National Arbitration Forum that the <canadadrugsonline.com>
domain name is registered with Network Solutions, Inc. and that the Respondent
is the current registrant of the name.
Network Solutions, Inc. has verified that Respondent is bound by the Network
Solutions, Inc. registration agreement and has thereby agreed to resolve
domain-name disputes brought by third parties in accordance with ICANN’s
Uniform Domain Name Dispute Resolution Policy (the “Policy”).
On October 4, 2005, a Notification of Complaint and Commencement of
Administrative Proceeding (the “Commencement Notification”), setting a deadline
of October 24, 2005 by which Respondent could file a Response to the Complaint,
was transmitted to Respondent via e-mail, post and fax, to all entities and
persons listed on Respondent’s registration as technical, administrative and
billing contacts, and to postmaster@canadadrugsonline.com by e-mail.
A timely Response was received and determined to be complete on October
24, 2005. Additional Submissions were
provided by Complainant on November 2, 2005 and by Respondent on November 5,
2005. The Panel exercises its discretion
and admits them for consideration.
On November 2, 2005, pursuant to Complainant’s
request to have the dispute decided by a three-member Panel, the National
Arbitration Forum appointed Steven L. Schwartz, Chair, Anne M.
Wallace and Mark V. B. Partridge as Panelists.
RELIEF SOUGHT
Complainant requests that the domain name be transferred from
Respondent to Complainant.
PARTIES’ CONTENTIONS
A. Complainant makes the
following contentions:
Background of the Claim
1. The
Complainant operates as an international prescription service pharmacy from a
website <canadadrugs.com>. The
Complainant has offered its pharmacy services over the Internet since April of
2001. The Complainant operates under
the registered business name “CanadaDrugs.com”; such business name having been
registered by the Complainant’s managing partner, Canada Drugs Ltd. on February
27, 2003.
2. The Complainant asserts established rights to the Canada Drugs Marks as evidenced by the registration of such marks with the CIPO and by continuous use of the marks in commerce since 2001. Kristjan Thorkelson, C.E.O. and owner of the Complainant’s managing partner, applied for trademark registration of the Canada Drugs Marks on March 23, 2001 and received registration of the marks with the CIPO as of May 20, 2003. Immediately thereafter on May 21, 2003 Mr. Thorkelson licensed the use of the Canada Drugs Marks to the Complainant.
3. The
Complainant develops its customers through active marketing and advertising of
the website located at <canadadrugs.com>. Since 2001, the Complainant has spent over $5,000,000 marketing
its services through various means, including advertisements in various
newspapers and magazines, journals, television commercials, radio, mailings as
well as building internet traffic to its website. Given the nature of the Complainant’s business, its website is
integral to the advancement of its business in the industry.
4.
The
Complainant states that it is an industry leader, currently operating from
within a state of the art 24,000 square foot pharmacy with over 250 employees
including 15 pharmacists.
5.
The
Complainant has an established clientele of over 150,000 patients, offers over
2,700 brand name prescription products, generic prescription products and over
the counter products, and fills approximately 2,500 prescriptions a day.
6. The
Complainant maintains the highest standards in the conduct of its
business. The Complainant has been a
fully licensed pharmacy under the Manitoba Pharmaceutical Association since
April 2001, is a member of the Better Business Bureau On-line and has received
certification and approval by both the Manitoba International Pharmacists
Association (MIPA) and the Canadian International Pharmacy Association (CIPA). In addition, the Complainant was the first
pharmacy accredited to meet the rigorous standards of the Vermont based
Internet and Mail-order Pharmacy Accreditation Commission (IMPAC). IMPAC accreditation includes ninety-one
elements that center on quality assurance, pharmacy management, confidentiality,
consumer satisfaction, health information technology, website content, shipping
and handling and customer call centre functions.
7. The Respondent is claimed to be a competitor of the
Complainant and has operated a directly competing international prescription
service pharmacy business from a website located at <candrug.com>. To the best of the Complainant’s knowledge,
the Respondent has operated its <candrug.com> business since approximately
November of 2002. The Complainant has
no dispute with the Respondent for operating a competing business from the
website <candrug.com> as the “candrug” name is sufficiently distinct from
the Complainant’s trademarks and business name so as to not cause confusion in
the mind of the public. However, the
Complainant states that it has recently discovered that the Respondent has set
up a directly competing international prescription service pharmacy business
from a website located at <canadadrugsonline.com>. To the best of the Complainant’s knowledge, the
Respondent began to operate this <canadadrugsonline.com> website
on September 25, 2004.
8. The
Complainant submits that the <canadadrugsonline.com> domain name is identical and confusingly
similar to the Complainant’s CANADA DRUGS and CANADADRUGS.COM trademarks (the
“Canada Drugs Marks”) pursuant to paragraph 4(a)(i) of the Policy.
9. The Respondent’s <canadadrugsonline.com>
domain name is claimed to be confusingly similar to the Complainant’s
Canada Drugs Marks because the Respondent’s domain name incorporates the
Complainant’s marks in their entirety and only deviates with the addition of
the generic or descriptive word “online.”
The mere addition of a generic or descriptive term does not negate the
confusing similarity of the Respondent’s domain name pursuant to Policy ¶
4(a)(i). The Complainant,
therefore, submits that ICANN Policy ¶ 4(a)(i) has been satisfied and that the
domain name registered by the Respondent is identical or confusingly similar to
the Complainant’s Canada Drugs Marks and business name.
10. The
Complainant submits that the Respondent has no rights or legitimate interest in
the <canadadrugsonline.com> domain name pursuant to paragraph 4(a)(ii) of
the Policy. Paragraph 4(c) of the Policy allows the
respondent three methods to demonstrate a right or legitimate interest in a
disputed domain name:
(i)
before any notice to you of the dispute, your use of, or demonstrable
preparations to use, the domain name or a name corresponding to the domain in
connection with a bona fide offering of goods or services; or
(ii)
you (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 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.
Complainant contends that there is no evidence that the Respondent’s
use of the <canadadrugsonline.com> domain name meets the elements of any of the methods provided for in
paragraph 4(c) of the Policy.
11. Through
its use of the <canadadrugsonline.com> domain name, the Respondent is attempting to attract and divert on-line
consumers to a competing website. The
Respondent’s use of the <canadadrugsonline.com> domain name to sell directly competing
services is illegitimate and is not a bona fide offer of
services pursuant to paragraph 4(c)(i) of the Policy.
12. The
Complainant has not authorized the Respondent to use its Canada Drugs Marks or
its business name for any purpose.
Prior to September 2004, the Respondent had never been known by or
operated a business under the Canada Drugs Marks or the <canadadrugsonline.com>
domain name.
13. The
Complainant submits that the Respondent’s use of the Complainant’s Canada Drugs
Marks in connection with identical or similar services to that of the
Complainant directly violates the trademark rights now residing with the
Complainant – rights which began accruing to the Complainant years prior to the
September 25, 2004 date when the Respondent began to operate an international
prescription services business from the <canadadrugsonline.com> domain
name. As such, the Complainant submits
that the Respondent is not commonly known by the disputed domain name pursuant
to paragraph 4(c)(ii) of the Policy.
14. As
the Respondent is using the domain name for commercial purposes, it is claimed
that it is clear that the Respondent is not making a legitimate non-commercial
or fair use of the domain name <canadadrugsonline.com> pursuant to paragraph 4(c)(iii) of the
Policy.
Registration and Use in Bad Faith
15. The Complainant submits that the Respondent registered and is using the <canadadrugsonline.com> domain name in bad faith in violation of paragraph 4(a)(iii) of the Policy.
16. Paragraph 4(b) of the Policy sets forth four non-exclusive criteria for the Complainant to show bad faith in registration and use of domain names:
(i)
circumstances
indicating that the Respondent 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 to a competitor of that complainant, for valuable consideration in excess of
documented out-of-pocket costs directly related to the domain name;
(ii)
the Respondent
has registered the domain name in order to prevent the Complainant from
reflecting the mark in a corresponding domain name, provided that the
Respondent has engaged in a pattern of such conduct;
(iii)
the Respondent
has registered the domain name primarily for the purpose of disrupting the
business of the Complainant; and
(iv)
by using the
domain name, the Respondent has intentionally attempted to attract for
commercial gain, internet users to its website by creating a likelihood of
confusions with the Complainant’s mark as to the source, sponsorship,
affiliation or endorsements of the Respondent’s website.
17. The Complainant submits that the Respondent registered the domain name <canadadrugsonline.com> primarily for the purpose of disrupting the business of the Complainant, a competitor of the Respondent. The Respondent established the <canadadrugsonline.com> website on or about September 25, 2004, years after the Complainant had been using the Canada Drugs Marks in the marketplace and years after the Respondent set up its own business from the website <www.candrug.com>. Since the Respondent is in the international prescription service industry and a direct competitor of the Complainant, the Respondent knew or should have known of the Complainant’s business under its established and registered trademarks. There is no reason for the Respondent to have registered and to have set up its business from the domain name <canadadrugsonline.com> in September of 2004, but to disrupt the business of the Complainant and to misleading divert internet traffic from the Complainant to the Respondent’s website. The Complainant submits that the Respondent has merely registered and used the <canadadrugsonline.com> domain name in bad faith for the purpose of capitalizing on the Complainant’s famous Canada Drugs Marks and to divert customers away from the Complainant’s website. This is evidence of bad faith registration as pursuant to paragraph 4(b)(iii) of the Policy.
18. The Complainant further submits that the Respondent is using the <canadadrugsonline.com> domain name to attract internet users to its website by creating confusion with the Complainant’s mark as to source, sponsorship, affiliation or endorsement of the Respondent’s website.
19. The website <canadadrugsonline.com> has been registered and is being used by the Respondent and is identical to the Complainant’s Canada Drugs Marks except for the addition of the words “online.” Internet users are attracted to the Respondent’s website because they mistakenly believe that the website located at <canadadrugsonline.com> is sponsored by, related or affiliated with the Complainant. The Respondent registered and used the domain name in question to profit from the Complainant’s mark by attracting users to its competing website. This is evidence of bad faith pursuant to paragraph 4(b)(iv) of the Policy.
20.. Complainant states that it has been confronted with evidence of actual confusion in the market place due to the operation of the Respondent’s <canadadrugsonline.com> domain name. On September 15, 2005, a customer service representative at the Complainant’s business received a telephone call from a customer wherein the customer advised that they had mistakenly placed an online order with <canadadrugsonline.com>, believing that the Respondent was affiliated with CanadaDrugs.com. This is not the first call that the Complainant has received regarding such confusion.
The Complainant submits, therefore, that paragraph 4(a)(iii) of the Policy has been satisfied and that the Respondent has registered and used the domain name <canadadrugsonline.com> in bad faith.
B. Respondent makes the following
contentions:
Background of the Response
3. This is also a case about misapplication, either purposefully or negligently, of the Policy in an attempt to retroactively presume notice of a third party’s “rights” by way of a Canadian registration which issued 1 year after the registration of the Corresponding Domain. Complainant attempts to rewrite the Policy by making the operative date to determine whether or not a domain name registration was registered in bad faith the date that a respondent launches its website rather than the date the domain name was registered.
4. The Respondent, Candrug Health
Solutions Inc. (“Candrug”) was incorporated on May 17, 2002. It conducts an international retail pharmacy
business. Candrug currently occupies
over 15,000 sq. ft. of operational space, and employs over 80 people. Since the start of its business, Candrug has
established a clientele of over 40,000 patients, many
of whom are U.S. citizens. Candrug offers in excess
of 2500 medical products to its clients and processes
close to 1,000 prescriptions per day.
Candrug maintains the highest quality standards in the conduct of its
pharmacy operation. Candrug is licensed
by the Canadian International Pharmacy Association, is certified by Pharmacy
Checker, and is a member of the International Pharmacy Association of British
Columbia.
5. Candrug’s retail pharmacy was set up in
February 2002, with operational premises 15 minutes from the Canada/USA border,
in order to facilitate the international scope of Candrug’s business through
its mail order business, which was launched in May 2002. In anticipation of the scope of Candrug’s
international retail pharmacy, the following three domain names were registered
for Candrug in May 2002:
(a) <candrug.com> (registered: May 16, 2002);
(b) <medisave.ca> (registered: May 05, 2002); and
(c) <canadadrugsonline.com> (registered: May 16, 2002).
6. At the outset of Candrug’s retail
pharmacy operation, it was believed that Candrug’s target audience would not be
Internet savvy. At the time, it was
felt that the best source of generating business from seniors would be by
targeting their physicians for referrals.
Candrug therefore deferred launch of these web sites due to cost.
7. Candrug started its business by
targeting medical clinics adjacent to the U.S. border for proximity of
patients. Presentations were made at
several Washington based medical clinics to earn the trust of physicians to
refer to Candrug’s reliable trustworthy retail pharmacy business under the
Candrug name. Patients would have the
option of either driving to the pharmacy for personal pick up or faxing their
orders for mail order.
8.
At or about the
end of 2002, Candrug formed a joint venture with East West Consulting (“EWC),
whereby EWC would be responsible for all business development activities
associated with the trade-name and trade-mark CanDrug. As part of the joint venture with EWC, Candrug
and EWC launched the <candrug.com> web site, using the trade-name and
trade-mark CANDRUG.COM (the “CanDrug Business”). EWC was paid a commission on all business associated with the
Candrug Business.
9. EWC
handled all inbound call center functions in Washington. Candrug was responsible for the pharmacy
aspect and fulfillment of orders, and did not itself have a functioning call
center at that time.
10. At the time of launch, the purpose of the
candrug.com web site was intended as more of an informational resource for
clients who were referred by their respective doctors from WMGA clinics. It was not intended for online
advertising.
11. The CanDrug Business experienced steady
growth until a tremendous increase in business during the summer of 2003. Since that time, the CanDrug Business has
been steady.
12. While the CanDrug Business is a
significant part of Candrug’s profits, Candrug’s ability
to develop new strategies with respect to the
CanDrug Business is significantly hampered by the exclusive arrangement with
EWC, whereby Candrug does not have the flexibility, pricing, or profitability
(due to commission payout) to roll out competitive strategies. Further, the sustainability of the CanDrugs
Business has been limited due in part to the actions of the Complainant who
has, since in or about April 27, 2003, used the domain name
<candrugs.com> as a link to the <canadadrugs.com> domain name,
thereby diverting legitimate Candrug customers to the Complainant’s web site.
13. Therefore, in early 2003, Candrug entered
into an agreement with Sydel Agency (“SA”) for a business using the trade-name
and trade-mark MEDISAVE, and the previously registered domain name
<medisave.ca> (the “MediSave Business”).
By the end of summer, 2003, Candrug dissolved the exclusive arrangement
and took control of the MediSave Business and worked on developing aggressive
online marketing strategies. Concurrently, Candrug had to work on developing an
in-house call center.
14. Candrug worked on many online strategies
with respect to the MediSave Business, including Search Engine optimization,
which is expected to produce results within 6 to 12 months. However, Candrug
was not successful in generating strong results from this brand, as the
MediSave Business was significantly hampered by the “.ca” aspect which limited
U.S. customer receptivity along with optimization strategies which did not work
well with the “.ca” extension.
15. By the summer of 2004, Candrug determined
that it needed to come up with a new strategy to grow its business, as the
CanDrug Business was hampered by the exclusive arrangement, and the MediSave
Business was severely compromised by the “.ca” extension. As the domain name medisave.com was in use
by an insurance company who wanted substantial compensation to sell the domain
name, Candrug decided that it would be more effective to use its existing
domain name <canadadrugsonline.com>, previously registered in May 2002.
16. Further,
since 2002, the marketplace had changed significantly: competitors were far
more savvy, pricing was becoming very competitive and Candrug realized that the
Internet was a very powerful medium to generate business. It was essential to have a well-optimized
web site (with “.com” to target U.S. clientele), low pricing, aggressive
marketing, and good customer service, with a well-trained call center. As a result, Candrug chose its already
registered domain name, the Corresponding Domain, to launch a new web site,
wherein the Respondent’s Common Law Design Mark and the trade-name
Canada Drugs Online would be used (the “Canada Drugs Online Business”).
17. In preparing to launch the Canada Drugs
Online Business, Candrug set up a call centre, and consulted with search engine
optimization experts as part of the strategy. Candrug launched the Canada Drugs
Online Business, through the <canadadrugsonline.com> web site, in September of 2004 with competitive pricing, a
well optimized web site, and an aggressive marketing plan.
18. The
Corresponding Domain was transferred to ASM, as one of
four shareholders of Candrug, on April 20, 2005, as a part of an internal
shareholder’s agreement and corporate restructuring. ASM holds the Corresponding Domain for the benefit of Candrug,
and it has been Candrug at all times who has operated the <canadadrugsonline.com> web site.
19. Since the launch of the Canada Drugs
Online Business, Candrug has spent over CDN$120,000 on GoogleTM
advertisement services and over US$120,000 for other online “pay-per-click”
advertising. Candrug has also spent over CDN$80,000 on other marketing aspects,
including search engine optimization strategies.
20. In products sold through the Canada Drugs
Online Business, Candrug is highly competitive in its pricing among other
competitors in the marketplace.
Comparative pricing for the top eleven prescription drugs sold in the
USA in 2004, shows that drugs sold through <canadadrugsonline.com> are the most competitively priced in 21 out of
the 26 doses/quantities listed (81%).
On the other hand, the Complainant at a rate of 50%, has the highest
prices listed 13 out of the 26 listings. As consumers are extremely price
sensitive and are constantly price shopping, they are led to purchase from
companies that offer them the best rates and service.
21. Many customers are drawn to the Canada
Drugs Online Business as a result of the highly competitive pricing, leading edge customer service and fast delivery times
relative to others in the marketplace.
Customers of the Canada Drugs Online Business have indicated high
satisfaction with the services offered in association with the Canada Drugs
Online Business.
22. The competitive pricing offered by
Candrug through its Canada Drugs Online Business, in combination with leading
edge service and fast shipping, are the reasons why Candrug is growing so
rapidly and many competitors are losing customers to Candrug.
23. At the time of registering the Corresponding Domain, the Respondent was not aware of any trademark registrations in the U.S. or Canada owned by Complainant, notably because there were none. At the time of the launch of the Canada Drugs Online Business, Candrug was not aware that any party, including the Complainant had any, or claimed any, trade-name or trade-mark rights to the Unenforceable Elements CANADA DRUGS and/or CANADADRUGS.COM, or that Kristjan Thorkelson had registered these generic words and terms in Canada. Candrug was at the time aware of the Complainant as a competitor in the market place, but Candrug was also aware of hundreds of other competitor web sites in the marketplace using all sorts of variations of the generic and descriptive terms “Canada”, “Canadian”, “drugs”, “pharmacy”, etc. in trade-names, trade-marks and domain names. The possibility of trade-mark conflict was not even considered to be paramount, as Candrug knew that the whole online pharmacy marketplace was crowded with these descriptive (non-unique) trade-names and domain names. Further, Respondent was not and still is not aware of any trademark registration rights in the United States in the name of Complainant. There is one mark in the name of Kris Thorkelson which may be published soon (U.S. Serial No. 78406520), but all the elements except the “Stylized CD in an oval” design element have been disclaimed.
24. The words “Canada” and “Drugs”, including
CANADA DRUGS are descriptive
of drugs, and the sale of drugs, originating from Canada, and are commonly used
in the online pharmacy marketplace.
There are a large number of other retail pharmacy entities who operate
through domain names, and in association with trade-marks and trade-names,
which incorporate the words “Canada” and “Drugs”, including CANADA DRUGS, or derivatives thereof.
25. The Complainant has applied for the trademarks CANADA DRUGS and CANADADRUGS.COM with the United States Patent and Trademark Office (“USPTO”), for use in association with “retail drugstore and pharmacy services; on-line retail drugstore and pharmacy services.” The USPTO has issued a final refusal against both applications on the basis that the marks are primarily geographically descriptive of the origin of the Complainant’s services. Respondent agrees with the USPTO examiner. Complainant’s geographically descriptive terms lack trademark significance.
26. The Complainant has applied for a design trademark
incorporating the term CANADADRUGS.COM with the USPTO, and has
disclaimed CANADADRUGS.COM apart from the trademark as a
whole. With respect to Canadian
Trade-mark Registration No. TMA581,915 for CANADA DRUGS, the Complainant has
disclaimed both “Canada” and “Drugs” apart from the trade-mark as a whole.
27.
Candrug first became aware of the
Complainant’s purported trademark rights in the generic words and terms CANADA DRUGS and/or CANADADRUGS.COM upon receipt of
a letter dated June 2, 2005, from legal counsel for the Complainant. By letter dated June 10, 2005, legal counsel
for Candrug denied that the Complainant owned any rights in and to the generic
words and terms CANADA DRUGS and/or
CANADADRUGS.COM, or that use of the domain name <canadadrugsonline.com>, or the trade-mark and trade
name Canada Drugs Online, would cause any confusion in the marketplace.
28. Paragraph 4(a) of the Policy requires the
Complainant to prove cumulatively each of the following three elements so as to
obtain an order for a domain name to be cancelled or transferred:
(a)
the
domain name registered by Respondent is identical or confusingly similar to a
trademark or service mark in which the Complainant has rights;
(b)
Respondent
has no rights or legitimate interest in respect of the domain name; and
(c)
the
domain name has been registered and is being used in bad faith.
29. In order to establish that the domain name registered by the
Respondent is identical or confusingly similar to the Complainant’s trademark
or service mark, the Complainant must first establish that it has rights to a
trademark or service mark. Where
serious questions arise as to whether the Complainant has any proprietary rights
in the alleged marks, the Panel must reject the Complainant’s claim, as the
ultimate decision as to whether the Complainant does or does not have
proprietary rights is better left to a court or trademark office tribunal.
Respondent contends that the Complainant has no rights in and to the generic
words and terms CANADA DRUGS and CANADADRUGS.COM
(the “Purported
Canada Drugs Trademarks”). A term is generic when its principal significance to the public
is to indicate that product or the service itself, rather than its source. A generic term is not entitled to exclusive
protection.
30. Where a Respondent can show that the
alleged trademarks are used by a number of other entities in the market place,
such evidence is persuasive of the generic and descriptive nature of the
marks. Further, in determining whether
marks are generic or descriptive, the Panel can consider conclusions made by
Trademark Examiners in respect of those issues. The words and
terms “Canada Drugs” are geographically descriptive of the services offered by
the Complainant, describing to the public that the Complainant offers the sale
of pharmaceutical drugs from Canada.
Further, the addition of the term “.com” does not render such terms
distinctive, but rather is generic and descriptive of such services being
offered online. Further, such words,
alone and in combination, and derivatives thereof, are commonly used by others
in the online pharmacy marketplace, reflecting the generic use of such terms to
describe the services offered by the Complainant.
31. The USPTO has issued a final office action refusing to
register the Purported Canada Drugs Trademarks in the United States, on the
basis that such marks are geographically descriptive of the Complainant’s
services. The Respondent submits that
this is a persuasive indication that the Purported Canada Drugs Trademarks are
generic and descriptive, as is the fact that the Complainant has disclaimed
“Canada” and “Drugs” in respect of Canadian Trade-mark Registration No.
TMA581,915, and has disclaimed CANADADRUGS.COM
from its U.S. design
application. The Respondent
submits that this is conclusive evidence that Complainant lacks rights in the
United States to the terms CANADA DRUGS and CANADADRUGS.COM.
To be refused registration on the
Principal Register under §2(e)(1) of the Trademark Act, 15 U.S.C. §1052(e)(1),
a mark must be merely descriptive or deceptively misdescriptive of the goods or
services to which it relates. A mark is considered merely descriptive if it
describes an ingredient, quality, characteristic, function, feature, purpose or
use of the specified goods or services. The only remaining element of any known
mark in the U.S. claimed to be owned by Complainant upon which Complainant
could stake a claim, namely the “Stylized CD in an oval” design, does not
resemble in the slightest the Corresponding Domain.
32. All three
of the trademark applications filed in the United States remain applications,
and all were filed after the registration of the Corresponding Domain. It is well established that mere
applications do not give rise to trademark rights.
34. Where
words or terms are descriptive, they are inherently
non-distinctive, and cannot be protected unless the purported trademark owner
establishes that the terms have taken on secondary meaning, such that the
public would identify those terms with the source of the product or service
rather than the product or service itself.
In disputes under the Policy, the Complainant has the burden of
establishing secondary meaning where descriptive terms
are used, wherein the panel should consider such factors as advertising
expenditures, consumer surveys linking the mark to a source, unsolicited media
coverage, sales success and length and exclusivity of the mark’s use. Evidence that a Complainant has published
its trademark or trade name does not, standing alone, prove a connection
between the source and the mark. The
burden of establishing secondary meaning is high, because of the disinclination
of the courts to take words of ordinary meaning out of common usage.
35. As
the words and terms CANADA DRUGS and CANADADRUGS.COM are descriptive and the elements “Canada” and “Drugs” are individually generic, the Complainant must therefore show that the words
and term CANADA DRUGS and CANADADRUGS.COM have acquired secondary meaning as referring to the
services offered by the Complainant.
36. The Complainant has not shown extensive
use of the Purported Canada Drugs Trademarks, such that the words and term
CANADA DRUGS could be said to have acquired secondary meaning
in Canada.
The Complainant has made statements, without supporting
documentary evidence, that it has offered its pharmacy services over the
Internet since April 2001 and has conducted extensive advertising. The Complainant has shown no evidence that
the public links the words and terms CANADA DRUGS to the
Complainant, and certainly not prior to the Respondent’s registration of the
Corresponding Domain. Further, the
Complainant has only alleged use for a relatively short period of time, and has
not shown that such use was exclusive; to the contrary, the Respondent’s
evidence shows that such use was not exclusive.
37. While the Complainant does own two
Canadian Trade-mark Registrations, and such registrations are presumed valid,
there is no presumption under Canadian trade-mark law that such marks have
acquired secondary meaning by virtue of their registration in Canada. As in the U.S., such registrations can be
declared invalid, and are of no force and effect, in the event that it is shown
that such marks are descriptive and generic, and therefore not distinctive of
the Complainant.
38. Respondent submits that the Complainant’s
Canadian Trade-mark Registrations are likely invalid for lack of
distinctiveness, on the basis of improper licensing. In Canada, a mark that is owned by one party and used by another
without proper licensing provisions, is not use attributed to the owner,
thereby resulting in a loss of distinctiveness which renders such registrations
subject to expungement. The Complainant
has used the Purported Canada Drugs Trademarks in association with its business
from April 2001 to May 2003, without license from Mr. Thorkelson, the alleged
owner of the marks, thereby effectively destroying any possible trade-mark
rights. Further, the license from May
2003 is not between the owner of the registered marks and the Complainant, but
between a numbered company and the Complainant.
39. The Respondent submits that it has
presented sufficient evidence to raise serious doubts about the validity of the
Complainant’s alleged marks. Therefore,
the Panel is required to reject the Complainant’s claim. The ultimate decision as to whether the
Complainant does or does not have proprietary rights is better left to a court
or trademark office tribunal.
40. The domain name <canadadrugsonline.com> is not identical to either of the
Purported Canada Drugs Trademarks. The
issue is therefore whether the domain name is confusingly similar with the
Complainant’s alleged marks.
41. Under Canadian trade-mark law, a weak, non-inherently
distinctive trade-mark, such as a descriptive or generic mark, will not be
granted a broad scope of protection and comparatively small differences between
marks will be sufficient to avert confusion. Where two marks contain a common
element that is also contained in a number of other marks in use in the same
market, such a common occurrence in the market tends to cause purchasers to pay
more attention to other features of the respective marks, and to distinguish
them by those other features.
42.
As
the Purported Canada Drugs Trademarks are inherently weak, such marks,
including the Canadian Trade-mark registrations, should be granted a narrow
scope of protection, if valid (which is denied), with small differences between
marks being sufficient to avoid any possibility of confusion.
Here, the Respondent submits that the addition of “online”
to the generic terms CANADA DRUGS is sufficient, such that the domain name <canadadrugsonline.com>
is not
confusingly similar with the Purported Canada Drugs Trademarks.
Response to Claim of Lack of Legitimate Rights or Interests
43. Under paragraph 4(c) of the Policy, the
Respondent can show its rights to and legitimate interest in the domain name,
where one of the following circumstances is present:
(1)
whether,
before any notice to the Respondent of the dispute, Respondent’s use of, or demonstrable preparations to use, the
domain name or a name corresponding to the domain name is in connection with a
bona fide offering of goods or services;
(2)
whether
Respondent (as an individual, business, or other organization) has been
commonly known by the domain name, even if Respondent has not acquired
trademark or service mark rights; or
(3)
whether
Respondent is 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.
44. The Respondent submits that it meets the
first two of these criteria, and that not only has the Complainant failed to
meet the burden of establishing no legitimate interests, but the evidence filed
by the Respondent has proven its legitimate interests.
45. The Respondent operates a bona fide business, offering online pharmacy services, using the Corresponding Domain and the Respondent’s Common Law Design Mark, and has done so, well in advance of any notice of the Complainant’s purported trademark rights. The Respondent has been commonly known under the domain name <canadadrugsonline.com> and the trade-name Canada Drugs Online. The Respondent has not tried to trade-off on any alleged reputation or goodwill associated with the Complainant’s generic and disclaimed names CANADA DRUGS and CANADADRUGS.COM, or to confuse customers of the Complainant in an attempt to divert such customers to the Respondent.
46. Where the domain name in dispute incorporates a term or terms used generically by others, such use is legitimate. A Respondent has the right to use the common English words which are generic for or merely describe its goods and services in order to refer to its goods and services. The first to register a domain name containing a generic or descriptive mark should prevail, absent bad faith and a lack of legitimate interests.
47. Given that the words and terms CANADA DRUGS are used generically by others, and are descriptive of the Canadian pharmacy services offered by the Complainant, the Respondent and others, the Respondent’s use is legitimate. The Respondent has the right to use both “Canada” and “Drugs” in association with its services, and, as the first to register the domain name in question, the Respondent should prevail. Respondent has rights to the Respondent’s Common Law Design Mark which contains the textual elements CANADA DRUGS ONLINE.
48. Paragraph 4(b) of the Policy outlines
situations where bad faith will be found.
The Respondent submits that there is no evidence of bad faith, and that
the Complainant has not shown any evidence in support of any of
the circumstances outlined in paragraph 4(b) of the Policy.
49. The Complainant’s claim of bad faith registration and use
rests on the claim that the Respondent has intentionally attempted to attract,
for commercial gain, Internet users to its site by creating a likelihood of
confusion with the Complainant’s mark.
However, the mere presence of a likelihood of confusion or dilution is
not sufficient to find bad faith under the Policy.
50. There can be no bad faith in the use of a descriptive and
utterly non-distinctive term relating to the services offered by the
Respondent. Where it is shown that
words and terms are generic in respect of the services offered, such evidence
supports a finding that the Respondent uses the domain name in an attempt to
attract Internet users by using common words and terms for their services, not
for creating confusion with the Complainant’s mark.
51. There has been no evidence of bad faith in the Respondent selecting