Recent Case Notes & Commentary

What's in a name? Or: Choose Your Trademark Carefully

Coachella Music Festival, LLC v. John Mercado

FORUM Claim Number: FA1904001840140

27th May 2019

In this case, the famous music festival Coachella tried to seize the domain name <> from John Mercado who said that he chose the name because it was a derivative of his childhood nickname Chelle. He intended to use the name for a shop selling women’s clothes.

Coachella had two trademarks, COACHELLA and CHELLA. Its first claim was that the domain name was confusingly similar to COACHELLA, because of the CHELLA in COACHELLA. But the very experienced panelist rejected this argument because you could hardly say that the dominant portion of the COACHELLA mark was CHELLA. How then do panels decide what is the dominant feature of a trademark? The burden of demonstrating this kind of overlap is placed on the Complainant and operates as a standing requirement to initiate the claim. As with all standing requirements, there are rules of thumb, but their interpretation can be fuzzy. There is no bright line you can follow, due to the judgemental exercise that panellists must undergo to find the dominant feature.

Having lost on its first argument, Coachella then put a second argument, which had more chance of success. This argument was that the domain name was confusingly similar to the other trademark, CHELLA. It was right, because all that Mercado had done was add the generic word ”shop” to CHELLA, and that process almost always leads to a finding of confusing similarity, as it did in this case. So the panel awarded Round 1 to Coachella. It had shown that <> was confusingly similar to CHELLA.

What’s In a Name?

Mercado then put up some valiant arguments on the second element to show why he had a right or legitimate interest in the domain name. His first argument was that he was commonly known as Chella. The trouble was that he could not produce any evidence to that effect and the argument failed. However, the panel noted that had it actually been his name, it would have been easier finding that he had a legitimate interest. This may serve as a nice reminder that in the world of domain name disputes, we all still have a right to the use of our own name. This is especially useful if we have chosen our parents wisely, like Mr. A R Mani. His parents gave him two given names which started with A and R respectively, so he registered <>, because it was his name. He won and kept the domain name, much to the annoyance of Georgio Armani. However if you look at today, you will find it is a Georgio Armani website. So Mr A R Marni must have done quite well out of it after all![1]

But back to Mr Mercado. He tried again and argued that he was still entitled to keep the domain name because he planned to use it for an online store selling women’s clothes. That argument also failed for the same reason: he could not produce any evidence showing that this was his intention or that he had done anything about it. So the panellist held that Mercado did not have a right or legitimate interest in the domain name and awarded Round 2 to Coachella.

By this time, things were looking grim for Mr. Mercado, but as often happens in contested cases, he was saved on the third element by the heavy burden on complainants that they have to prove not only that the registrant uses the domain name in bad faith, but that the registrant was also motivated by bad faith when it registered the domain name. This case shows that it can be hard for a complainant to prove this element. Unfortunately for Coachella, which has won several domain name cases, there were a few factors that led to its defeat on bad faith and its overall defeat in the case.

First, its argument that it was so famous that Mercado must have been targeting it, fell flat because, although it could prove Coachella was famous, which it is and which it proved, it had to prove Coachella’s trademark CHELLA was famous, because that was the only trademark with which the domain name had been found to be confusingly similar. Now you can see why Coachella was so keen to get the finding that the domain name was confusingly similar to COACHELLA rather than CHELLA, because it had all this evidence lined up to show how famous the COACHELLA trademark was, but and no evidence that CHELLA was famous, because it was not. So, no luck there for Coachella.

The second strand of Coachella’s defeat on bad faith was that you could not assume Mr. Mercado had to be fixed with knowledge of the CHELLA marks, as we know that Chella is also a personal name and a town in Spain. Accordingly, the panel found that “it is plausible that the disputed domain name was registered in good faith by Respondent, without any knowledge of or intention to target Complainant’s marks.” The mere fact of these generic usages makes it plausible that the disputed domain name was registered in good faith, as it may connote either of those meanings, as distinct from using it to poach the goodwill of the music festival brand opportunistically. So, no bad faith there, either.

Thirdly, it was found that Mercado had not breached any of the specific grounds of bad faith registration or use listed in paragraph 4(b) of the Policy. All in all, there was no bad faith and the decision therefore went to Mercado.

Perhaps if Coachella had waited until the domain name was unambiguously being used for opportunist gain based on a confusing similarity between the domain name and the trademarked name, if it ever was, it may have been a different story.