WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Noxell Corporation v. Shaun Lewis
Case No. D2020-2854
1. The Parties
The Complainant is Noxell Corporation, United States of America (United States), represented by Studio Barbero, Italy.
The Respondent is Shaun Lewis, Russian Federation (Russia).
2. The Domain Name and Registrar
The disputed domain name <maxfactor.org> is registered with Belmontdomains.com LLC (the “Registrar”).
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on October 29, 2020. On October 29, 2020, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain name. On October 30, 2020, the Registrar transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details.
The Center verified that the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy” or “UDRP”), the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the “Supplemental Rules”).
In accordance with the Rules, paragraphs 2 and 4, the Center formally notified the Respondent of the Complaint, and the proceedings commenced on November 18, 2020. In accordance with the Rules, paragraph 5, the due date for Response was December 8, 2020. The Response was filed with the Center on December 8, 2020.
The Center appointed Warwick A. Rothnie as the sole panelist in this matter on December 29, 2020. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.
4. Factual Background
The origins of the “Max Factor” cosmetics label can be traced to the early 20th century when a Russian immigrant to the United States, Maksymilian Faktorowicz, commenced supplying cosmetics to film stars in the emerging Hollywood studios under the anglicized name, Max Factor.
In 1916, Mr. Factor commenced selling eye shadow and eyebrow pencils to the general public. The Complaint claims this was the first time such products were available outside the movie industry. Over time the products supplied to the public developed into a full range of cosmetics.
In 1951, the business, now operated through a company headed by Mr. Factor’s son, Max Factor Jr, extended its product range to include male cosmetics including shampoo, aftershave lotion, deodorant, and shaving foams.
In 1961, the company became a public company, listing on the New York Stock Exchange. The company launched the Halston line of fragrances in 1975 which the Complaint claims became the second-best selling line of designer fragrances behind Chanel No. 5. In 1986, the “Max Factor” business was sold to Revlon. In 1991, Revlon sold the “Max Factor” brand to Procter & Gamble for USD 1.5 billion. In 2015, Coty Inc. purchased a number of beauty brands from Procter & Gamble, including MAX FACTOR, for USD 12 billion. The Max Factor brand was then re-launched in the United States in either 2016 or 2018 – the Complaint states both dates.
The Respondent states his researches disclose the brand was withdrawn from the United States market between 2009 and 2016. In support of this claim, the Response includes an article published in The Telegraph (a media publication in the United Kingdom) dated June 5, 2009 headed “Max Factor to kiss America goodbye” which reported plans by Proctor & Gamble to phase out its “Max Factor” brand in the United States in favour of its more popular “Covergirl” range. The article states that Proctor & Gamble intended to continue selling “Max Factor” products “overseas” where its sales were strongest. The website at <maxfactor.com>, which the Complainant uses to market its products, includes a timeline which claims that “Max Factor” launched:
(a) its “False Lash Effect” mascara in 2009, which became its best-selling mascara;
(b) its “Colour Effect Boutique” range of nail polish, eye shadow and other cosmetics in 2010;
(c) its “Colour Effect Flipstick” double-ended lipsticks in April 2012; and
(d) its “Glossfinity” nail finishes in December 2012.
As shown in the timeline, each of these products is labelled with the “Max Factor” trademark.
The Complaint includes evidence of five registered trademarks owned by the Complainant. These include:
(a) European Union Trademark (EUTM) No. 00273730, MAX FACTOR, for a range of goods in International Classes 3 and 21, which was registered on October 6, 1998;
(b) EUTM No. 006160311, MAX FACTOR (fancy), for a range of goods in International Class 3, which was registered on July 24, 2008 and in which the word MAX is depicted in a line above FACTOR and in much larger type;
(c) EUTM No. 011657004, MAX FACTOR X, for a range of goods in International Classes 3, 8, 9, 18, and 21, which was registered on August 2, 2013;
(d) United States Registered Trademark No. 1,373,314, MAX FACTOR, for cosmetics in International Class 3, which was registered on December 3, 1985 and claims first use in commerce from September 1909;
(e) Russian Registered Trademark No. 363769, MAX FACTOR (fancy), for goods in International Class 3, which was registered on November 5, 2008 and in which the word MAX is depicted in a line above FACTOR and in much larger type.
The Respondent is apparently a United States citizen, now residing in Russia. According to the Response, he became an adult in 2000 and served six years in the military. The Respondent apparently holds a number of domain names.
In the spring of 2016, he was completing his Masters of Business Administration at the University of Washington.
On August 29, 2016, he became the registrant of the disputed domain name through bidding via a “drop catching” service. He says he registered the disputed domain name for a project he was planning relating to a financial investment strategy.
The Respondent parked the disputed domain name on the “Sedo.com” service. The disputed domain name resolves to a pay-per-click (“PPC”) parking page with links to buy cosmetics products. Some of these products are the Complainant’s products, but others are products which compete with the Complainant’s products.
The disputed domain name is also listed on the “Sedo.com” site as being for sale with a minimum bid listed as USD 4,999.
The Respondent says that shortly after he became the registrant of the disputed domain name, he received a telephone call from a Chinese investor offering to buy the disputed domain name for USD 12,000. He rejected this offer.
Later in 2018, the Respondent was approached by a representative of the Complainant offering to buy the disputed domain name for USD 100. He rejected this offer too. In further contacts, the Respondent explained that such a small amount was not worth discussing. Having told the Complainant’s representative about the “Chinese” offer, the Respondent indicated that USD 12,000 was an amount that would be worth discussing.
A cease and desist letter from the Complainant’s lawyers followed. The Respondent initially replied:
“I am in receipt of your email and letter. I intend to follow up with a formal response to you during the following week.”
Despite several requests, the Respondent did not respond further.
5. Discussion and Findings
Paragraph 4(a) of the Policy provides that in order to divest the Respondent of the disputed domain name, the Complainant must demonstrate each of the following:
(i) the disputed domain name is identical or confusingly similar to a trademark or service mark in which the Complainant has rights; and
(ii) the Respondent has no rights or legitimate interests in respect of the disputed domain name; and
(iii) the disputed domain name has been registered and is being used in bad faith.
Paragraph 15(a) of the Rules directs the Panel to decide the Complaint on the basis of the statements and documents submitted and in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable.
A. Identical or Confusingly Similar
The first element that the Complainant must establish is that the disputed domain name is identical with, or confusingly similar to, the Complainant’s trademark rights.
There are two parts to this inquiry: the Complainant must demonstrate that it has rights in a trademark at the date the Complaint was filed and, if so, the disputed domain name must be shown to be identical or confusingly similar to the trademark.
The Complainant has proven ownership of registered trademarks for MAX FACTOR as set out in section 4 above.
The second stage of this inquiry simply requires a visual and aural comparison of the disputed domain name to the proven trademarks.
In undertaking the comparison, it is permissible in the present circumstances to disregard the generic Top‑Level Domain (“gTLD”) component as a functional aspect of the domain name system. WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Third Edition (“WIPO Overview 3.0”), section 1.11.
The omission of the space between the words “max” and “factor” is trivial and, in any event, cannot be included in a domain name. Accordingly, it can also be disregarded. See e.g. Telstra Corporation Limited v OzurlsWIPO Case No. D2001-0046.
Disregarding the “.org” gTLD, therefore, the disputed domain name consists of the Complainant’s registered trademark alone.
The Respondent points out that registered trademarks are limited to particular goods or services and do not extend to financial services or investment services at all.
As the first requirement under the Policy is essentially a standing requirement, however, questions such as the scope of the trademark rights, the geographical location of the respective parties and other considerations that may be relevant to an assessment of infringement under trademark law are not relevant at this stage. Such matters, if relevant, may fall for consideration under the other elements of the Policy. e.g. WIPO Overview 3.0, section 1.7.
Accordingly, the Panel finds that the Complainant has established that the disputed domain name is identical with the Complainant’s trademarks and the requirement under the first limb of the Policy is satisfied.
B. Rights or Legitimate Interests
The second requirement the Complainant must prove is that the Respondent has no rights or legitimate interests in the disputed domain name.
Paragraph 4(c) of the Policy provides that the following circumstances can be situations in which the Respondent has rights or legitimate interests in a disputed domain name:
(i) before any notice to [the Respondent] of the dispute, [the Respondent’s] use of, or demonstrable preparations to use, the [disputed] domain name or a name corresponding to the [disputed] domain name in connection with a bona fide offering of goods or services; or
(ii) [the Respondent] (as an individual, business, or other organization) has been commonly known by the [disputed] domain name, even if [the Respondent] has acquired no trademark or service mark rights; or
(iii) [the Respondent] is making a legitimate noncommercial or fair use of the [disputed] domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.
These are illustrative only and are not an exhaustive listing of the situations in which a respondent can show rights or legitimate interests in a domain name.
The onus of proving this requirement, like each element, falls on the Complainant. Panels have recognized the difficulties inherent in proving a negative, however, especially in circumstances where much of the relevant information is in, or likely to be in, the possession of the respondent. Accordingly, it is usually sufficient for a complainant to raise a prima facie case against the respondent under this head and an evidential burden will shift to the respondent to rebut that prima facie case. The ultimate burden of proof, however, remains with the Complainant. See e.g., WIPO Overview 3.0, section 2.1.
The Complainant states that it has not authorised the Respondent to use the disputed domain name. Nor is the Respondent affiliated with it. The disputed domain name is plainly not derived from the Respondent’s name. Nor is there any suggestion of some other name by which the Respondent is commonly known from which the disputed domain name could be derived.
These matters, taken together, are sufficient to establish a prima facie case under the Policy that the Respondent has no rights or legitimate interests in the disputed domain name.
The Respondent says he was unaware of the Complainant’s trademark when he registered the disputed domain name. He points out he is a male and not in the Complainant’s target market. Referring to his claim that Max Factor products were unavailable in the United States between 2009 and 2016, he argues the trademark was a declining brand.
The Respondent says that during his MBA he became aware of an investment strategy known as “factor investing” which seeks to select stocks to invest in based on quantifiable firm factors. The Respondent says he began exploring on “ExpiredDomains.net” the availability of potential domain names for use in connection with implementation of that strategy. “ExpiredDomains.net” allowed him to search for domain names which matched his specified criteria. These criteria included limiting the search to Top-Level Domains, excluding numbers and dashes, using English words and limited to 10 characters or less in length. By this means, the Respondent was hoping to identify short, easy to remember and logical domain names.
According to the Respondent, the disputed domain name was one of the domain names identified by these criteria. It was a short and simple combination of two common words which would be easy to remember. It was also logical as one of the key components of “factor” investing is to identify the “maximum” or “max” factors that lead to above-market returns.
The Respondent has not yet launched the website he contemplated when searching for and registering the disputed domain name. The Respondent notes that, by March 2018 when he received the first approach from the Complainant’s representative, he had started in a new role.
Decisions under the Policy have firmly established that a claim to rights or legitimate interests in a domain name based on use of it in connection with the offer of goods or services should satisfy at least two main criteria. First, if the offer of goods or services is not already being made, the Respondent must provide evidence demonstrating or corroborating that plans for the launch of the claimed business are in train. See e.g.WIPO Overview 3.0, section 2.2. Secondly, the use or proposed use must be in good faith. It must not be an attempt to capitalise on, or take advantage of, the trademark significance of the element(s) of, or incorporated in, the disputed domain name.
In the present case, the Respondent has not provided any evidence at all to support his claimed plans. The claim to rights or legitimate interests based on that plan must therefore be rejected.
On the other hand, the disputed domain name resolves to a PPC parking page where goods which compete with the Complainant’s products are offered for sale. In addition, the disputed domain name itself is offered for sale for a minimum price of USD 4,999.
This conduct does not qualify as a good faith offering under the Policy.
The Respondent claims that the PPC links are automatically generated by Sedo and he had no knowledge that this would happen or control over what links are posted. He offers to remove these for the future if the Complaint is dismissed. The Respondent also points out that there has been very little traffic to the site (some 131 hits in the past year) and he has not actually received any payment from Sedo as, apart from anything else, he has not provided his financial details to it.
In the circumstances of this case, the Panel cannot accept these matters as exculpatory.
First, the Respondent chose to use the services provided by Sedo at <sedo.com>. He says he did so:
“to benefit from the useful analytics and also to alert me to the existence of backlinks and referrals. I did not, at any time, affirmatively turn on monetization for any of these domains, although it is now apparent that this was done automatically upon registering the domain on the site. ….”
Sedo does promote itself as providing “Free Domain Parking for everyone”. As Milton Friedman famously declared, however, there is no such thing as a free lunch. It is very difficult to accept the Respondent’s contention that he was unaware that the domains he parked with Sedo would be used for PPC advertising. For example, when landing on the homepage of “Sedo.com”, the user is met with:
The statement “Domain Parking: Earn money, and sell your domains more quickly” is very prominent and strikes the eye. Note also the first bullet point under “Your benefits”.
Further, to park a domain name with Sedo, the user agrees to Sedo’s Domain Parking Terms and Conditions.1 The current terms and conditions posted on January 2019 include terms that:
“3.1 Description of Service
“Domain Parking is an optional service for Users to “park” their undeveloped domain names in order to generate revenue and increase the chance of a sale. To use Domain Parking, the User must forward their Domain to a Nameserver specified by Sedo and enter the Domain in their Sedo account. As the registered owner of the Domain(s), the User is solely responsible for any content directly or indirectly displayed by directing the domain to Sedo’s Services.”
“3.3. User Obligations
“Users who utilize the Domain Parking Service are obligated and solely responsible for verifying that their use of the Domain Parking Service with their Domain(s) does not and will not violate the rights of any third parties, including, but not limited to, trademark rights, naming rights, and rights protected by unfair competition laws as well as any applicable laws. In addition, should User receive notice from a third party regarding their use of Sedo’s Domain Parking Service, the User is obligated to immediately cease their use of the Domain Parking Service for the respective Domain and contact Sedo and provide any relevant information related to such notice.”
“3.5. Advertising Keywords
“Users who use the Domain Parking Service may select an advertising keyword for each of their parked Domains that is related to the subject matter of the Domain and which may control which advertisements appear for the respective Domain. All keyword selections must comply with Keyword Selection Policy, which is hereby incorporated by reference and subject to revision from time to time. User agrees not to select advertising keywords likely to cause the display of content infringing the rights of any third party. Sedo and its advertising providers reserve the right to disable or alter advertising keywords at any time, without notice, and at their sole discretion to ensure relevancy for advertisers, non-infringement of any third-party right, or violation of Sedo’s Offensive Domain Policy.
“You acknowledge that the content on parked Domains is generated automatically. Sedo makes no warranties as to the appropriateness, validity and non-infringement of such content. Sedo makes no warranties that such content when displayed on your Domain will not violate any applicable laws. You have the ability to discontinue the Domain Parking Service for any Domain and as such may choose to do so at your sole discretion. The entire risk arising out of the use of the Domain Parking Service remains with You, and You will indemnify Sedo from any claims arising in relation to your use of the Domain Parking Service.” (Emphasis supplied)
Apart from anything else, clause 3.5 confirms that a user of the parking service has the power to specify what keywords are used. In addition, both clauses 3.3 and 3.5 make it clear that, as between Sedo and the user, the user assumes all responsibility for the content displayed on the “parked” webpage. The Respondent cannot be heard to deny that responsibility. Furthermore, panels have repeatedly held under the Policy that the domain name holder is responsible for the PPC links appearing with the domain name in the absence of demonstrated efforts to preclude misuse of third party trademark rights. See e.g.WIPO Overview 3.0, section 2.9.
Moreover, as noted above, the disputed domain name is listed on “Sedo.com” for sale and specifying a minimum bid of USD 4,999.
A person offering a domain name “for sale” on “Sedo.com” enters into a Domain Marketplace Agreement with Sedo, the current form of which has been effective from April 1, 2015. The preamble to clause 4 points out that Sedo offers registered users a domain trading platform through which domain holders “may list, market, auction, and sell Domains to buyers”.
Clause 4.2 identifies three listing options for offering domain names for sale – Buy Now, Make Offer, or Auction. It also provides that:
“Sellers may delete their Domain listings from the Domain Marketplace at any time without cost unless their Domain is subject to an Open Bid Thread or Auction, has been sold and is pending payment and/or transfer, and/or is subject to a brokerage agreement.”
Clause 4.2.1 provides that the Buy Now option is one where the domain holder specifies a fixed price at which the domain name will be sold without further negotiation. If the Buy Now option is not selected, the sales listing will be a “Make Offer” listing . Clause 4.2.1 further provides:
“If a Seller does not state a fixed sales price when listing a Domain in their Account for sale, the Domain listing will default to a “Make Offer” listing and will serve as an invitation for other Users to submit an offer and negotiate for the purchase and sale of the Domain that is the subject of the Domain listing.
“Sellers may submit a “Minimum Offer” preference for their Domain listing by submitting or updating the Domain listing in their Account to include a minimum price at which Seller is willing to consider offers. A Minimum Offer indication on your Domain listing serves as an invitation for other Users to submit an offer in excess of the stated amount to negotiate for the purchase and sale of the Domain that is the subject of the Domain listing.
“Please note, Buy Now and Make Offer Domain listings are automatically promoted on the Sedo Site and the websites of Sedo’s promotional partners based on the listing preferences of Sedo’s partners, which are subject to change from time to time without prior notice.”
It is noteworthy from these terms that the user must take action to specify the minimum amount.
Apart from anything else, therefore, listing the disputed domain name on “Sedo.com” for a minimum price of USD 4,999 required the Respondent (or someone acting with his authority) to specify that minimum bid amount.2 That is inconsistent with the Respondent’s claim that all this has happened without his knowledge or involvement.
The Panel notes further that, despite the Respondent’s claims and his offer not to continue the use of the disputed domain name on “Sedo.com” after this proceeding, the cease and desist letter sent by the Complainant’s lawyers to the Respondent on May 4, 2018 specifically drew attention to both the PPC parking page and the offer to sell the disputed domain name with a minimum bid listed as USD 4,999. So, the Respondent has continued in this conduct for more than two years after being put on notice by the Complainant through the cease and desist letter.
Accordingly, the Complainant has established a prima facie case that the Respondent does not have rights or legitimate interests in the disputed domain name and the Respondent has not rebutted that prima facie case. Therefore, the Panel finds the Complainant has established the second requirement under the Policy also.
C. Registered and Used in Bad Faith
Under the third requirement of the Policy, the Complainant must establish that the disputed domain name has been both registered and used in bad faith by the Respondent: see e.g. Burn World-Wide, Ltd. d/b/a BGT Partners v. Banta Global Turnkey LtdWIPO Case No. D2010-0470.
Generally speaking, a finding that a domain name has been registered and is being used in bad faith requires an inference to be drawn that the respondent in question has registered and is using the disputed domain name to take advantage of its significance as a trademark owned by (usually) the complainant.
Paragraph 4(b) identifies situations which my demonstrate that registration or use of a disputed domain name was not in bad faith under the Policy:
For the purposes of paragraph 4(a)(iii), the following circumstances, in particular but without limitation, if found by the Panel to be present, shall be evidence of the registration and use of [the disputed] domain name in bad faith:
(i) circumstances indicating that [the Respondent] has registered or [the Respondent has] acquired the [disputed] domain name primarily for the purpose of selling, renting, or otherwise transferring the [disputed] 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 [the Respondent’s] documented out-of-pocket costs directly related to the [disputed] domain name; or
(ii) [the Respondent has] registered the [disputed] 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; or
(iii) [the Respondent has] registered the [disputed] domain name primarily for the purpose of disrupting the business of a competitor; or
(iv) by using the [disputed] domain name, [the Respondent has] intentionally attempted 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 Respondent’s] website or location or of a product or service on [the Respondent’s] web site or location.
As noted above, the Respondent denies any knowledge of the Complainant’s trademark. He also contends that he adopted the term “max factor” as it is often used to describe the popular investing strategy he learned about during his MBA.
The Respondent does provide two articles to support his claim that the investment strategy is often described as “max factor” investing.
The first article is an article in the Autumn 2017 issue of State Street Global’s “Contribution” publication. The article is headed “Max Factor: Smart Beta Investing in [defined contribution pension schemes]”. Apart from the title of the article, the article itself does not use the expression “max factor”, referring instead to “factor investing” or “Smart Beta”, which is said to be changing the investing landscape. It is noteworthy that the article was published more than one year after the Respondent registered the disputed domain name.
The second article is a screenshot of a webpage of Collaborative Consulting, a financial advisory firm in New Zealand. The page is headed “We design and manage strategies that Give Your Portfolio The Edge” and continues with a heading “The Max Factors of Investment”. It then states:
“The rationale behind the factors is that from many years of academic research, it was discovered that by tilting portfolios with these factors, an above market return could be achieved. The success of the factor-tilting can also be replicated, over and over within a long period of time.”
Apart from the heading referred to and the page URL, the term “max factor” does not appear on the page. The page does not appear to be dated. However, it bears a copyright notice “Copyright Collaborative Consulting Ltd 2019. All Rights Reserved.”
The Panel can accept that one would aim to have an investment strategy which maximized the returns on investment and seek to identify factors which would assist achieving that strategy. However, the materials advanced by the Respondent do not lead to a conclusion that “max factors” was a widely used term in the financial services or investment industry when he registered the disputed domain name.
The Panel notes also that the Respondent registered the term “maxfactor”, the singular rather than the plural “maxfactors”.
While the Respondent has admitted to owning a number of domain names, there is no evidence that he is in fact a “domainer”. He did secure the domain name, however, through “drop catching”. That is a circumstance which is often found to put the registrant on inquiry about trademark rights. See e.g.Supermac’s (Holdings) Limited v. Domain Administrator, DomainMarket.com,
WIPO Case No. D2018-0540.
In addition, in the present case, the Respondent says he conducted a trademark search before registering the disputed domain name and identified that no-one had rights in the United States to “Max Factor” in respect of relevant financial and investment services. It would be surprising if such a search of the United States Trademarks Register did not disclose the existence of the Complainant’s trademark.
In these circumstances the failure of the Respondent’s claim that he adopted the disputed domain name as part of a plan to launch a financial services business under the name “Max Factor” for the reasons discussed in section 5B above becomes particularly significant. In light of that failure, the most compelling explanation for the adoption of the disputed domain name lies in its significance as the Complainant’s trademark. Accordingly, the Panel finds that on the record in this case the Respondent registered the disputed domain name in bad faith.
Further, for the reasons discussed in section 5B above, the way the Respondent has used the disputed domain name, or permitted it to be used, constitutes use in bad faith under the Policy.
The Complainant therefore has established all three requirements under the Policy.
7. Decision
For the foregoing reasons, in accordance with paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the disputed domain name, <maxfactor.org>, be transferred to the Complainant.
Warwick A. Rothnie
Sole Panelist
Date: January 12, 2021
1 https://sedo.com/us/about-us/policies/updated-domain-parking-terms-and-conditions-sedocom/
2 https://sedo-us1.custhelp.com/app/answers/detail/a_id/782.
