Skin Fairy takes #domains away from Aussie cosmetic studio

A battle between two Aussie cosmetic companies ended up with the domains SkinFairy.com.au and TheSkinFairy.com.au being transferred to the Complainant.

According to the Respondent, the Complainant was an employee of the company when they created the Skin Fairy products and thus obligated to abandon any intellectual property rights. The Complainant, however, disputes that, stating that they created the brand and registered the mark outside of their employment to the Respondent.

An interesting twist to the story appears to be that auDA, the Australian entity ruling on .AU domains, sided with the Respondent on the second of two rulings. In general, auDA regulations are rather strict regarding the eligibility for domain registrations ending in .AU.

The sole WIPO panelist, however, pointed out that the decision by auDA was focusing on a technicality of eligibility but did not address the issue of rights to the Skin Fairy mark. In the UDRP, the Respondent indicated their intention to seek the cancellation of the Complainant’s mark.

Unfortunately for the Respondent, Australian Dr. Katina Elfis of Skin Evolution, the documentation for these claims was lacking; the panelist ordered the domains to be transferred to the Complainant, Carmen McNamara (the “Complainant Individual”), The Skin Fairy Pty Ltd t/as Skin Fairy, Skin Fairy Group Pty Ltd.

WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Carmen McNamara, The Skin Fairy Pty Ltd t/as Skin Fairy, Skin Fairy Group Pty Ltd v. Katine Elfis, James Buchanan, Skin Evolution, About Face Cosmetic Studio Pty Ltd.
Case No. DAU2021-0001

1. The Parties

The Complainant is Carmen McNamara (the “Complainant Individual”), The Skin Fairy Pty Ltd t/as Skin Fairy, Skin Fairy Group Pty Ltd (together, the “Complainant Companies”), Australia, internally-represented.

The Respondent is About Face Cosmetic Studio Pty Ltd., Australia, represented by Pragma Lawyers, Australia.

2. The Domain Names and Registrar

The disputed domain names <skinfairy.com.au> and <theskinfairy.com.au> (the “Disputed Domain Names”) are registered with Domain Directors Pty Ltd.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on January 7, 2021. On January 7, 2021, the Center transmitted by email to Domain Directors Pty Ltd. a request for registrar verification in connection with the Disputed Domain Names. On January 14, 2021, Domain Directors Pty Ltd. transmitted by email to the Center its verification response disclosing registrant and contact information for the Disputed Domain Names which differed from the named Respondent and contact information in the Complaint. The Center sent an email communication to the Complainant on January 15, 2021, providing the registrant and contact information disclosed by the Registrar, and notifying the Complainant that the Complaint was administratively deficient. The Complainant filed an amended Complaint on January 18, 2021. In response to a notification that the amended Complaint was administratively deficient, the Complainant filed an amendment to the Complaint on January 21, 2021.

The Center verified that the Complaint, together with the amended Complaint and amendment to the amended Complaint, satisfied the formal requirements of the .au Dispute Resolution Policy (the “Policy”), the Rules for .au Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for .au Domain Name Dispute Resolution Policy (the “Supplemental Rules”).

In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on January 22, 2021. In accordance with the Rules, paragraph 5(a), the due date for Response was February 11, 2021. The Response was filed with the Center on February 8, 2021.

The Center appointed John Swinson as the sole panelist in this matter on February 17, 2021. 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.

On February 26, 2021, the Panel issued Administrative Procedural Order No. 1 (the “Procedural Order”) relating to two decisions of .au Domain Administration Limited (“auDA”) in respect of a complaint filed by the Complainant regarding one of the Disputed Domain Names. On March 1, 2021, the Complainant responded to this Procedural Order providing copies of auDA’s decisions.

4. Factual Background

Carmen McNamara (the Complainant Individual) is the owner of The Skin Fairy Pty Ltd and Skin Fairy Group Pty Ltd (the Complainant Companies) which are companies incorporated in Australia (collectively, the “Complainant”). The Complaint operates a business that offers skin treatment services and products.

The Complainant is the owner of Australian registered trade mark number 1703392 for THE SKIN FAIRY, registered on July 7, 2015 (the “Trade Mark”). According to the Trade Marks Office database, this trade mark registration was assigned on August 20, 2019 from Carmen Anuriw to The Skin Fairy Pty Ltd. The Complainant is the owner of three domain names which incorporate the Trade Mark (or part of the Trade Mark), being <theskinfairyclinic.com.au>, <theskinfairy.net.au>, and <skinfairyclinic.com.au>

The Respondent is About Face Cosmetic Studio Pty Ltd, a company incorporated in Australia. The Disputed Domain Names were both registered on June 18, 2015. The Respondent operates a skin treatment business.

According to the Complainant, the Complainant Individual was previously employed by the Respondent. According to the Response, the Complainant Individual was previously employed by Skin Evolution Pty Ltd. It appears Skin Evolution Pty Ltd and the Respondent are related entities but the nature of this relationship is unclear. According to a treatment menu provided by the Respondent, “Skin Evolution” is the advanced skin rejuvenation and beauty therapy arm of “About Face Cosmetic Studio”, the Respondent’s cosmetic medicine centre.

5. Parties’ Contentions

A. Complainant

The Complainant makes the following submissions.

Identical or Confusingly Similar

The Trade Mark has been owned and used by the Complainant in relation to its business since 2015, after the Complainant ceased to be employed by the Respondent. The Trade Mark is synonymous with the Complainant and the goodwill it has built in its business. The names of the Complainant Companies incorporate the Trade Mark either wholly or substantially and The Skin Fairy Pty Ltd, one of the Complainant Companies, trades as “Skin Fairy”. The Complainant also owns and operates various domain names and social media pages which incorporate the Trade Mark or “Skin Fairy’”

The Disputed Domain Names are confusingly similar to the Trade Mark.

Rights or Legitimate Interests

No website appears at either of the Disputed Domain Names. Accordingly, the Respondent is not making use of the Disputed Domain Names. The Respondent owns the Disputed Domain Names to either restrict the Complainant by ensuring that the Complainant cannot obtain or use the Disputed Domain Names or to eventually use and knowingly infringe the Trade Mark, to misleadingly divert customers or tarnish the Trade Mark.

The Complainant previously filed a complaint with auDA in relation to the Disputed Domain Name <skinfairy.com.au>. The Complainant was successful at first instance but this decision was successfully appealed by the Respondent based on a treatment menu provided by the Respondent which referenced a treatment named “The Skin Fairy facial”. The Complainant was unaware of this treatment and on December 7, 2020 obtained online and physical treatment menus from the Respondent’s business which do not include “The Skin Fairy facial”.

Registered or Used in Bad Faith

The Respondent is not making any use of the Disputed Domain Names. The Respondent’s ownership of the Disputed Domain Names is preventing the Complainant from reflecting the Trade Mark in a corresponding domain name. Currently, the Complainant uses <skinfairyclinic.com.au> as its primary domain name. The Complainant’s intention is to use the Disputed Domain Name <skinfairy.com.au> as its primary domain name.

The Disputed Domain Names were registered and are being used in bad faith to either restrict the Complainant or tarnish the Complainant’s Trade Mark and reputation. Given the Complainant and Respondent are competitors in the same market, the Disputed Domain Names may cause confusion for the Complainant’s customers and mislead customers into thinking that there is an association between the Complainant and Respondent. The Complainant contacted the Respondent on several occasions to request that the Respondent transfer the Disputed Domain Names to the Complainant. The Respondent did not respond.

Further Submission

In response to the Procedural Order, the Complainant provided copies of the two auDA decisions relating to the Disputed Domain Name <skinfairy.com.au>. In the initial decision, auDA investigated the Complainant’s complaint and determined that the registration of the Disputed Domain Name <skinfairy.com.au> was in breach of auDA policy. In the second decision, auDA overruled the initial decision based on submissions from the Respondent. auDA concluded, for reasons that are not totally clear, that the Respondent met the eligibility criteria prescribed in the auDA Published Policies for the Disputed Domain Name <skinfairy.com.au>.

B. Respondent

The Respondent makes the following submissions.

Identical or Confusingly Similar

The Respondent denies that the Complainant has any rights in the Disputed Domain Names or any similar name, trade mark or service mark.

The Respondent does not admit that the Complainant has rights in respect of the Trade Mark. The Respondent was using the name “Skin Fairy” as a trade mark prior to any use by the Complainant. The Respondent is considering whether to seek to have the Trade Mark expunged from the Australian trade mark register.

Rights or Legitimate Interests

The Respondent has developed products and services associated with the name “Skin Fairy” since at least February 2015, including a “Skin Fairy Facial”.

As a result of the development of these products and services, the Respondent registered the Disputed Domain Names on June 18, 2015. The Respondent possessed and continues to possess the right to remain the holder of the Disputed Domain Names.

The products and services associated with the “Skin Fairy” name were created at the time the Complainant Individual was an employee of Skin Evolution Pty Ltd. Even if the Complainant Individual was involved in the creation of the “Skin Fairy” name, she was an employee of the Respondent and accordingly, all intellectual property created by the Complainant Individual at that time vested in the Respondent, both at common law and under the terms of the Complainant Individual’s employment contract. The business, goodwill and intellectual property (including rights in “Skin Fairy”) were transferred to the Respondent in or around May 30, 2014.

The Complainant Companies were registered on July 13, 2015 and November 9, 2017 respectively. This is after the Complainant Individual’s employment with the Respondent ceased. Registration of a corporation provides no rights in respect of the name of that corporation.

The Respondent was successful in auDA proceedings initiated by the Complainant in respect of the Disputed Domain Name <skinfairy.com.au>. The Respondent established that it had a legitimate interest in the Dispute Domain Name <skinfairy.com.au> to the satisfaction of auDA.

Registered or Used in Bad Faith

The Respondent denies that the Disputed Domain Names were registered or are being used in bad faith. The Disputed Domain Names relate to the Respondent’s products and services.

Reverse Domain Name Hijacking

auDA has already made a decision in favour of the Respondent in proceedings initiated by the Complainant in respect to the Disputed Domain Name <skinfairy.com.au>. The Complaint is an attempt by the Complainant to re-litigate an already decided issue and constitutes Reverse Domain Name Hijacking.

6. Discussion and Findings

To succeed, the Complainant must demonstrate that all of the elements enumerated in paragraph 4(a) of the Policy have been satisfied, namely:

(i) the Disputed Domain Names are identical or confusingly similar to a name, trade mark 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 Names; and

(iii) the Disputed Domain Names have been registered or have subsequently been used in bad faith.
A. Identical or Confusingly Similar

Paragraph 4(a)(i) of the Policy provides that the Complainant must establish that the Disputed Domain Names are identical or confusingly similar to a name, trade mark or service mark in which the Complainant has rights.

The Respondent contends that the Complainant has no rights in the Trade Mark. The Complainant provided evidence demonstrating that it has registered the Trade Mark in Australia and that it has used the Trade Mark in connection with its business. The Panel’s remit does not extend to assessing whether a trade mark registration is valid. No opposition was filed in respect of the registration of the Trade Mark, and no action has been brought to cancel the registration of this Trade Mark. Where a complainant holds an Australian Trade Mark registration, this prima facie satisfies the threshold requirement of paragraph 4(a)(i) of the Policy of having sufficient standing for the purposes of filing an auDRP case.

The Panel therefore accepts that the Complaint has rights in the Trade Mark.

Generally, the test for identity or confusing similarity involves a comparison of the domain name and the trade mark to assess whether the trade mark is recognisable within the domain name (see section 1.2 of the auDA Overview of Panel Views on Selected auDRP Questions First Edition (“auDA auDRP Overview 1.0”)).

The Disputed Domain Name <theskinfairy.com.au> incorporates the entirety of the Trade Mark. The Disputed Domain Name <skinfairy.com.au> incorporates a substantial part of the Trade Mark, only omitting the word “the”. Accordingly, the Panel considers the Disputed Domain Name <theskinfairy.com.au> to be confusingly similar to the Trade Mark and the Disputed Domain Name <skinfairy.com.au> to be identical to the Trade Mark.

The Trade Mark was registered after Disputed Domain Names were registered. This is not relevant to the Panel’s decision under this element. The relevant time by which the Complainant must establish its rights is at the time of the filing of the Complaint (see section 1.4 of the auDA auDRP Overview 1.0).

The Complainant is successful on the first element of the Policy.

B. Rights or Legitimate Interests

Paragraph 4(a)(ii) of the Policy provides that the Complainant must establish that the Respondent has no rights or legitimate interests in respect of the Disputed Domain Names. The Complainant is required to make out a prima facie case showing that the Respondent lacks rights or legitimate interests.

The Complainant Individual admits that she was an employee of the Respondent, or a related entity of the Respondent, in 2015. According to the Respondent, this coincided with the Respondent’s development of the products and services associated with the name “Skin Fairy” and that if the Complainant Individual was involved in their development, any relevant intellectual property created by the Complainant Individual vested in the Respondent at common law and by virtue of the Complainant Individual’s employment contract. However, the Respondent did not provide a copy of the Complainant Individual’s employment contract and there is no tangible evidence regarding who developed the name “Skin Fairy” or the context of the development and first use of that name.

The Respondent provided no information or evidence as to when the Complainant Individual was employed by the Respondent.

In short, the Respondent contends that the “Skin Fairy” name was created when the Complainant Individual was employed by the Respondent and was created in the course of employment, so that then all intellectual property rights vest in the Respondent under the employment contract (which was not provided) and at common law (which depends on the scope of employment, of which no details were provided). In light of the fact that the Complainant owns a trade mark registration that has been on the register and uncontested for six years, without tangible evidence to the contrary to prove the Respondent’s assertions, the Panel must give more weight to the trade mark registration than the Respondent’s unsupported assertions.

The Complainant and the Respondent referenced two decisions made by auDA relating to the Respondent’s registration of the Disputed Domain Name <skinfairy.com.au>. The Respondent contends that the second of these decisions (which overruled the earlier decision) upheld the Respondent’s rights or legitimate interests in the Disputed Domain Name <skinfairy.com.au>. Copies of the decisions were provided by the Complainant in response to the Procedural Order.

The Panel has reviewed the auDA decisions and in the Panel’s view, they do not support the Respondent’s contention that it has rights or legitimate interests in the Disputed Domain Name <skinfairy.com.au>. In the second of these decisions, auDA concluded that the Respondent had met the eligibility criteria prescribed in the auDA Published Policies for the Disputed Domain Name <skinfairy.com.au>. This is a different question to whether the Respondent has rights or legitimate interests in the Disputed Domain Names under paragraph 4(a) of the Policy.

The Respondent contends that it registered the Disputed Domain Names in connection with products and services it developed in 2015 which were associated with the name “Skin Fairy”. The Respondent provided an undated copy of one of its treatment menus which included a treatment named “The Skin Fairy facial”. According to the Complainant, the Respondent is not currently making any use of the name “Skin Fairy”. The Complainant provided copies of the Respondent’s current online and physical treatment menus, neither of which contain any reference to the term “Skin Fairy”.

In the absence of any relevant evidence, the circumstances in which the name “Skin Fairy” was developed are unclear. The Complainant has presented a prima facie case that the “Skin Fairy” name and brand were conceived and developed by the Complainant after the Complainant Individual had left the Respondent’s employment. The Respondent contended that the “Skin Fairy” name was developed when the Complainant Individual was employed by the Respondent and any associated intellectual property rights vested in the Respondent. However, the Respondent failed to provide any evidence in support of this contention. Accordingly, in the Panel’s view, the prima facie case established by the Complainant has not been successfully rebutted.

Further, the Panel is required to assess whether the Respondent has rights or legitimate interests in the Disputed Domain Name at the time of the filing of the Complaint (see e.g., Signature Nail Systems, LLC v. Diamond Nails Supplies Pty Ltd as Trustee for the DT Pham & PTT Nguyen Family Trust, WIPO Case No. DAU2020-0010).

The Respondent did not explain why the Respondent’s current treatment menus (provided to the Panel by the Complainant) do not contain any reference to “The Skin Fairy facial” or the “Skin Fairy”. The treatment menu provided by the Respondent (which does refer to “Skin Fairy”) is undated. The Respondent did not provide any other evidence that it is currently using or previously used the name “Skin Fairy” in connection with its business. Neither of the Disputed Domain Names resolve to active websites.

In light of the above, the Panel considers that the Complainant has made out a prima facie case that the Respondent lacks rights or legitimate interests in the Disputed Domain Names and the Respondent has failed to rebut this.

The Complainant is successful on the second element of the Policy.

The Panel notes that its conclusion on this point may have been different had the Respondent presented evidence that it was responsible for developing the “Skin Fairy” name or that the Complainant Individual developed the name in the course of her employment with the Respondent and that any associated intellectual property rights did in fact vest in the Respondent. The issues surrounding the development of the “Skin Fairy” name and brand and the ownership of any associated intellectual property may be more appropriately addressed by a court of competent jurisdiction, which may have more fulsome evidence before it.

C. Registered or Subsequently Used in Bad Faith

Paragraph 4(a)(iii) of the Policy provides that the Complainant must establish that the Respondent registered or used the Disputed Domain Names in bad faith.
Registered in bad faith

As outlined above, the circumstances in which the “Skin Fairy” name and brand were developed are unclear. The Disputed Domain Names were both registered on June 18, 2015, just prior to the registration of the Trade Mark on July 7, 2015. The Respondent contends that it registered the Disputed Domain Names in connection with products and services associated with the name “Skin Fairy” which it began developing in February 2015. Alternatively, it is possible that the Respondent registered the Disputed Domain Names in anticipation of the Complainant’s nascent rights in the Trade Mark. However, the Complainant did not present any evidence that the Respondent registered the Disputed Domain Names to target the Complainant.

The Panel is not obliged to reach a conclusion on this point given its conclusion below in relation to use in bath faith. If the Panel was required to rule on this point, it would find that the Complainant has not established that the Respondent registered the Disputed Domain Names in bad faith.

Used in bad faith

There is no evidence that the Respondent has made any use of the Disputed Domain Names since they were registered. The Disputed Domain Names do not currently resolve to active websites.

In addition, the only evidence that the Respondent has presented of its use of the name “Skin Fairy” was an undated treatment menu. The Respondent did not address evidence presented by the Complainant that the Respondent’s current treatment menus do not contain any reference to “Skin Fairy”.

Based on the factors outlined above, the Panel is satisfied that the Respondent is likely holding the Disputed Domain Names to prevent the Complainant from reflecting its Trade Mark in a corresponding domain name. This constitutes bad faith use. Unlike the position under the UDRP, the Complainant is not required to establish that the Respondent had engaged in a pattern of such conduct.

In addition, the Respondent and the Complainant both operate similar businesses in the skin treatment industry. It is therefore difficult to see how any future use of the Disputed Domain Names by the Respondent in connection with its business would not represent an intentional attempt to attract, for commercial gain, Internet users to the Disputed Domain Names by creating a likelihood of confusion with the Complainant’s Trade Mark. Any such use would be in bad faith.

The Complainant is successful on the third element of the Policy.

D. Reverse Domain Name Hijacking

The Respondent has asked the Panel to make a finding of Reverse Domain Name Hijacking (“RDNH”). The Complainant was successful and the Panel does not make a finding of RDNH.

7. Decision

For all the foregoing reasons, in accordance with Paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the domain names <skinfairy.com.au> and <theskinfairy.com.au> be transferred to the Complainant.

John Swinson
Sole Panelist
Date: March 17, 2021

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