Almost exactly 5 years ago, a UDRP decision was made that had most domain investors saying WTF!
The domain name Vanity.com was lost in a UDRP. Mike wrote about it on Jun 20, 2012.
And now today Mike uncovered this from Hilco Streambank that the complainant in the case has filed Chapter 11 and that their assets will be auctioned off.
Chapter 11 Acquisition Opportunity Intellectual Property Assets
Vanity® and Vanity.com
Bid Deadline: July 19, 2017 at 5:00 PM ET
Hilco Streambank has been retained by Vanity Shop of Grand Forks, Inc. (“Vanity” or the “Company”) to market and sell its intellectual property assets. The assets include the Vanity® brand and related private label brands, trademarks, Vanity.com and other domain names, e-commerce code and customer data (the “Assets”). The Company is currently operating as a Chapter 11 debtor-in-possession in the United States Bankruptcy Court for the District of North Dakota (the “Bankruptcy Court”).
BACKGROUND
From its roots as a Midwestern dress shop in the 50s to its first juniors focused specialty store in Fargo, ND in 1969, Vanity has provided fashionable young women low-cost, high quality apparel and accessories for over 50 years. As of March 2017 Vanity operated 137 stores across 27 States. In addition, the Company operated its e-commerce store using the premium domain name – Vanity.com.
For over half a century, the Vanity name has resonated among young women looking for clothing and accessories that are both trend right and affordable. Although originally juniors focused, the Vanity customer trended toward fashion conscious women ranging from 20 – 35 years old. Vanity differentiated itself from its competitors by providing customers a broader selection of sizes throughout various product categories utilizing Vanity’s proprietary assortment of fits and styles.
FINANCIAL OVERVIEW
In FY 2016 the Company generated total revenue of $90 million, a decrease of $25 million from FY 2013 results. Although the Company opened its e-commerce channel in 2008, it was not until 2014 that it was able to create an e-commerce environment that was user friendly. The e-commerce channel generated revenues of over $4MM in FY2015 and $6.5MM in FY2016.
Vanity 4 Year Financial Overview
- FY2016 Total Revenue: $90MM
- FY2015 Total Revenue: $98.1MM
- FY2014 Total Revenue: $99.5MM
- FY2013 Total Revenue: $115MM
E-Commerce Platform
The company developed proprietary .net based website code to operate its e-commerce infrastructure with Microsoft’s Azure cloud. The combination of internal development and full utilization of the Azure software enabled the vanity.com e-commerce channel to be optimized with special feature such as an enhanced recommendation engine and advance search options, greatly improving shopper experience and performance of the website. The following back-end systems were utilized to create a fully functional e-commerce platform:
- Netsuite OMX-Inventory and Order Management System
- TrueShip-Packing, Shipping and Returns
- Amazon Web Services-E-Mail Marketing Services
Opportunity Highlights
- Premium Domain Name – Vanity.com generating a significant amount of organic traffic
- The www.vanity.com website generated approximately 4,266,955 total sessions and 2,080,847 unique visitors in calendar year 2016
- 1,087,312 sessions originated from organic search and 1,126,497 sessions were from direct type-in traffic
- National retail store footprint generating increased brand awareness among female consumers
- Flexibility to use the Vanity® brand among multiple product categories including denim. bottoms. knit tops, dresses, career clothing and accessories.
- Multiple market segmentation opportunities through owned brand concepts: Delve BluTM and Liv & Piper®
- Database of loyal customers, including over 1MM Vanity Rewards members
Potential Areas for Growth
Multiple channels of distribution exist for the Vanity® brand including:
- E-Commerce with a world-wide recognized brand and Domain Name
- Potential U.S & International Licensing in multiple categories
- Stores in key locations and outlets
- Potential retail house brand or wholesale apparel brand
AVAILABLE ASSETS
Trademarks and Trademark Applications including:
- Vanity®
- Vanity.com®
- Delve BluTM
- Liv & Piper®
- Style That Works®
- FASHIONLINK®
Domain Names
The Company owns 40 domain names which include the following:
- Vanity.com
- Vanity.net
- eVanity.com
- DelveBlu.com
- LivandPiper.com
- VanityStyle.com
- VanityShops.com
Customer Data
- Approximately 1.53MM unique Opt-in E-mail Addresses
- Over 1MM Vanity Rewards members E-mail Addresses linked to the Vanity Rewards Program
Social Media Profiles
- Facebook – Over 55,000 Page Likes
- Instagram – Over 7,000 Followers
- Twitter – 2,000 Followers
DILIGENCE & SALE PROCESS
Hilco Streambank is currently soliciting interest in the Assets from qualified buyers. Data Room: An online Data Room containing detailed diligence information has been opened. Access to the online Data Room will be provided to interested parties upon execution of a non-disclosure agreement. Bid Submission: Bidding instructions will be provided by Hilco Streambank in advance of the bid deadline. Bid Deadline: July 19, 2017 at 5:00 PM ET
Here were the pertinent facts from the UDRP
Here are the relevant facts and finding by the one member panel:
“Complainant owns numerous federal trademark registrations for the VANITY mark, issued by the United States Patent and Trademark Office (“USPTO”)
“Complainant and Respondent’s marks are virtually identical; Respondent has not been commonly known by the disputed domain name; Respondent is not making a bona fide offering of goods or services or a legitimate noncommercial or fair use of the disputed domain name; Respondent is using the disputed domain name to direct consumers to its own website offering information, blogs, chat groups, and social media links on beauty, fashion, health, and self topics”
“Respondent is targeting the same consumer group as Complainant with its website”
“It is inconceivable that Respondent was not aware of Complainant when it acquired the disputed domain name; Respondent’s disputed domain name is causing confusion among consumers as to whether or not Respondent’s site is affiliated with Complainant;
Respondent offered to sell the disputed domain name to Complainant for $1,000,000 after Complainant offered to purchase the domain name from Respondent”
“Respondent has attempted to attract Internet users to Respondent’s commercial website by creating a likelihood of confusion with Complainant’s marks.”
“Respondent recently filed a civil action against Complainant in the United States District Court, Northern District of California for a declaratory judgment of non-infringement with respect to Respondent’s registration and use of the Vanity.com domain name; Respondent’s filing of a civil complaint in District Court takes precedent over this proceeding; Respondent registered the disputed domain name in 1995, over seventeen years ago”
“Respondent owns active and valid federal trademark registrations issued by the USPTO for the VANITY.COM mark (e.g., Reg. No. 3,720,766 registered December 8, 2009
“Respondent’s Vanity.com domain name is composed of a common English word, such that bad faith could not possibly have persisted; Respondent requests the Panel dismiss the Complaint without prejudice.”
“In situations where concurrent court proceedings are pending, as is the situation with respect to the instant Complaint, some panels have chosen to proceed with the arbitration filing. ”
“This administrative proceeding under the Policy concerns only control of the Domain Name, not any of the other remedies at issue in the federal litigation. It is not binding on the court, and it does not preclude the prosecution of any claims, defenses, or counterclaims in the federal litigation”
“The Panel chooses to proceed to a decision.”
“Complainant asserts that it registered the VANITY mark with the USPTO (e.g., Reg. No. 1,780,669 registered July 6, 1993). Complainant submits a printout from the USPTO website , which indicates that the mark is registered and that Complainant is the owner of the registration.”
“Complainant also asserts that its VANITY mark is virtually identical to Respondent’s mark. ”
“Complainant argues that Respondent has never been commonly known by the disputed domain name. ”
“The Panel notes that the WHOIS information identifies the registrant of the vanity.com domain name as “Vanity.com, Inc.”
” The Panel also notes that there is no other evidence on record addressing this issue. Therefore, even though the Panel finds that the WHOIS information appears to indicate that Respondent is commonly known by the disputed domain name, the Panel concludes that Respondent is not commonly known by the <vanity.com> domain name under Policy ¶ 4(c)(ii). “
“Complainant also argues that Respondent is not making a bona fide offering of goods or services or a legitimate noncommercial or fair use of the <vanity.com> domain name. ”
“Complainant states that Respondent resolves the <vanity.com> domain name to a commercial website offering information, blogs, chat groups, and social media links on beauty, fashion, health, and self topics. Nonetheless, the Panel finds that Respondent is not engaging in a bona fide offering of goods or services under Policy ¶ 4(c)(i) or a legitimate noncommercial or fair use of the <vanity.com> domain name under Policy ¶ 4(c)(iii).”
“Complainant alleges that Respondent offered to sell the <vanity.com> domain name to Complainant for $1,000,000. ”
“Complainant states that it initially offered to purchase the <vanity.com> domain name for $4,500-$10,000 dollars, based upon an appraisal of the domain name’s worth provided by GoDaddy. ”
“Based upon the offer made by Respondent, the Panel finds that Respondent registered and uses the disputed domain name in bad faith pursuant to Policy ¶ 4(b)(i). “
“Complainant also alleges that Respondent’s disputed domain name is causing confusion among consumers as to whether or not Respondent’s site is affiliated with Complainant.”
“Complainant states that Respondent has attempted to attract Internet users to Respondent’s commercial website by creating a likelihood of confusion with Complainant’s marks. ”
“The Panel agrees with Complainant’s allegations and statements, the Panel finds that Respondent registered and uses the disputed domain name in bad faith according to Policy ¶ 4(b)(iv).”
“Complainant position is that it is inconceivable that Respondent was not aware of Complainant when it acquired the disputed domain name.”
” The Panel finds that Respondent had actual knowledge of Complainant’s rights in the VANITY mark when it registered the disputed domain name, the Panel concludes that Respondent registered the disputed domain name in bad faith under Policy ¶ 4(a)(iii).”
Having established all three elements required under the ICANN Policy, the Panel concludes that relief shall be GRANTED.
Accordingly, it is Ordered that the Vanity.com domain name be TRANSFERRED from Respondent to Complainant.”
