In a recent decision under the Uniform Domain Name Dispute Resolution Policy (UDRP) before the World Intellectual Property Organization (WIPO), a Panel refused to order the transfer of a Domain Name because the Complainant failed to demonstrate that the Respondent registered the domain name in bad faith.

This decision serves as a reminder that having a trade mark does not necessarily mean that the rights holder will succeed in obtaining the transfer of a domain name, even if it is identical to such trade mark.  The UDRP requires complainants to prove, on the balance of probabilities, that the domain name in question was both registered and used in bad faith, and so cases where the respondent registered the domain name with the complainant’s consent (often involving ex-distributors) are usually doomed to fail.  Sometimes this can result in a rather unjust result for the complainant, which is why a number of country-code Top Level Domains have decided to adopt procedures only requiring registration or use in bad faith.

Background

The Complainant was Bialetti Industrie S.p.A. of Brescia, an Italian supplier of coffee-making equipment. The Respondent was Gary Valenti Inc. of Maspeth, New York, a former distributor of the Complainant on the American market. The Domain Name was registered in 1999 and previously resolved to a website mainly offering the Complainant’s products for sale.  It was now resolving to a website consisting of the phrase “For Bialetti Spare Parts Click Here”, which simply led to an email address.

UDRP procedure

To be successful in a complaint under the UDRP, a complainant must satisfy the following three requirements under paragraph 4(a):

(i) the domain name registered by the respondent is identical or confusingly similar to a 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 domain name; and

(iii) the domain name has been registered and is being used in bad faith.

First requirement

With regard to the first limb, the Complainant underlined that it owned many domain names containing the term “bialetti”, such as registered in 1998.  The Complainant also submitted that the Domain Name was confusingly similar to the Complainant’s trade mark, because it incorporated its trade mark its entirety with the mere addition of the geographical term “usa”, which only increased the likelihood of confusion.  Moreover, in order to explain the relationship between the parties, the Complainant stated that between 2000 and 2003 the Respondent was appointed as an agent of the Complainant to promote the conclusion of sale contracts of the Complainant’s products in the USA. The Respondent disagreed with the Complainant by asserting that the parties’ relationship was much longer than the Complainant described and that it dated back to the 1950’s, when the son of the Complainant’s founder became friends with the Respondent’s founder. According to the Respondent, this personal relationship meant that the parties never signed any formal agreements.

The Panel found that the Complainant had demonstrated evidence of trade mark and common law rights in the term BIALETTI and that the Domain Name consisted of the main part of the verbal element of the Complainant’s trade mark.  The Panel also noted that the addition of other terms, whether descriptive, geographical, or otherwise, would not prevent a finding of confusing similarity under the first element.  As a consequence, the Panel concluded that the Complainant had established that the Domain Name was identical or similar to a trade mark in which it had rights.  The Panel therefore considered that the Complainant has satisfied the first requirement under the UDRP.

Second requirement

As far as the second requirement under the UDRP was concerned regarding the Respondent’s rights or legitimate interests, the Complainant, who entered into the market in the 1930’s, pointed out that it was already well known at the date of registration of the Domain Name in 1999.  Furthermore, the Complainant admitted that the Respondent initially offered goods or services under the Domain Name legitimately because the Respondent was formerly an authorised distributor of the Complainant’s products in the USA.  However, according to the Complainant, the Respondent’s offering of goods or services was no longer “bona fide” as the Respondent sold, and still sells, products from other brands, thereby diverting the Complainant’s customers to other companies.  Moreover, the Complainant underlined that the Respondent had failed to comply with the requirement to accurately disclose the registrant’s relationship with the trade mark owner because the Respondent did not include a disclaimer on the website associated with the Domain Name.  The Respondent rebutted these statements by asserting that it had introduced the Complainant’s products to the American market and that it had represented the Complainant for over 50 years.  The Respondent therefore claimed that it had legitimately used the term “bialetti” for decades.  Furthermore, the Respondent submitted that it had decided to continue using the Domain Name after the Complainant contacted it in 2008 inquiring about it because the Complainant had still not paid off its debts.  The Respondent also added that such a complex business dispute between the parties was not capable of resolution via the UDRP.  The Panel found that, in light of its considerations regarding the third limb, it was not obliged to make a finding concerning the second requirement under the UDRP.

Third requirement

Turning to the third requirement, decisive in this case, the Complainant asserted that it was clear that the Respondent was well aware of the Complainant’s trade mark at the time of registration of the Domain Name.  According to the Complainant, the Respondent used the Domain Name to sell products bearing different trade marks to attract visitors and therefore benefit from the value of the Complainant’s trade mark.  In addition, the Complainant argued that the use of the Complainant’s trade mark plus the geographical term “usa” could confuse consumers into thinking that the Respondent’s website was operated by or affiliated to the Complainant.  The Complainant also stated that the Respondent’s offer to sell the Domain Name for a price exceeding its out-of-pocket expenses proved that the Respondent had engaged in bad faith conduct for the purposes of commercial gain.  In its defence, the Respondent submitted that in the correspondence preceding the filing of the complaint the Complainant had admitted that the Respondent did not register the Domain Name in bad faith and so this doomed the Complainant’s case due to the conjunctive requirement of registration and use in bad faith under the third UDRP element.

• The Panel noted that the Respondent had produced a number of documents which evidenced the length and closeness of the relationship between the parties.  In contrast, the Panel found it surprising that the Complainant had confidently stated, without presenting any evidence, that the Respondent was not authorised to register the Domain Name.
• As far as the Respondent’s alleged promotion of third party products was concerned, the Panel found that the Complainant had failed to provide evidence showing that pasta making machines competed directly with the Complainant’s coffee making products.
• Furthermore, the Panel also considered the Complainant’s second argument relating to the lack of a disclaimer on the website associated with the Domain Name.  Based on the example presented by the Complainant of a disclaimer in tiny font contained on a website of one of its authorised retailers, the Panel found that the Complainant might afford a relatively wide degree of latitude towards its authorised distributors in terms of the nature of their use of the “Bialetti” brand.
• Moreover, the Panel noted that the screen captures of the websites associated with the Domain Name submitted by the Complainant were either undated or incorrectly dated by the Complainant.  As a consequence, the Panel considered that it was impossible to know the Respondent’s state of mind at the time when the screen captures submitted were taken.
• The Panel also added that the Respondent’s offer to sell the Domain Name upon receipt of the Complainant’s cease and desist letter was of no relevance to the Respondent’s state of mind when registering the Domain Name some 20 years previously.
• Finally, the Panel noted that in previous correspondence the Complainant had admitted that the Respondent had acted in good faith when registering the Domain Name, and had then made no attempt to retreat from that position in the Complaint.

Accordingly, the Panel found that the Respondent had not registered the Domain Name in bad faith and so the Complaint was denied.

The decision is available here.

This post is selected from our Anchovy News publication: Anchovy® is our comprehensive and centralised online brand protection service for global domain name strategy, including new gTLDs together with portfolio management and global enforcement using a unique and exclusive online platform developed in-house.

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