Posted by Sequel on March 14, 2012
Topic: blogs, ICANN, Trademark
Domain Name Panel Rejects Arguments of Alleged Distributor

How does a brand owner successfully recover infringing domain names from someone claiming to be a former distributor?

Instead of getting bogged down arguing about the particular terms of a distribution contract (or lack thereof), focus on the singular elements that are basic to a domain name dispute, namely “bad faith” registration and use of the domains. A test is developing to measure the merits of a distributor’s rationale for owning a brand’s domain names.  Stick to it to avoid losing.

All too often the opposite happens – the trademark owner and the arbitration panel – get sidetracked by a  distribution argument that is outside the expertise and authority of an ICANN arbitration panel.  Doubting its ability and authority in such matters, many arbitration panels have refused to transfer disputed domains preferring to leave such questions to a civil court.

There are a few decisions, however, that show how to keep the focus on the issues properly within the authority of an ICANN arbitration panel.  Sequel recently secured such a decision for its client, Trek Bicycle, against an independent Mexican retailer who tried to assume the identity of a former Trek distributor to justify ownership of nine domains in the .mx space.

Instead of being detoured by the alleged defense, an arbitration panel at the World Intellectual Property Organization (WIPO) kept to the basics and tested the elements of “bad faith”in a slightly different way to account for the registrant’s arguments.  The panel observed that, irrespective of its claims to be a former distributor, the registrant’s arguments failed because it could not show compliance with the following four indicia:

(1) Did the alleged distributor actually offer products and services via the domain name in dispute? (No.)

(2) Did the website offers only those products covered under the brand owner’s brand(s)? (No)

(3) Did the website conspicuously reveal the relationship between the alleged distributor and brand owner? (No) and

(4) Did the alleged distributor attempt to monopolize the market using disputed domain names, thus preventing the brand owner from using its brand in a domain name? (Yes)

The registrant’s non-use of the domain names (the associated websites were blank at the time of the dispute) did not amount to a good-faith offer of products or services.  The registrant’s choice and quantity of registrations across the “.mx” spectrum demonstrated its attempt to monopolize the market.  For these reasons, and others, it became clear that the registrations had been obtained in bad faith and also, incidentally, highlighted the fact that a legitimate distribution relationship did not exist in the first place.  Because Trek had established its rightful claim, the panel ordered the transfer of all nine domain names.

You can read the full opinion, in Spanish, at WIPO’s website.

To learn more about domain name disputes, or for help securing names improperly using your mark, contact Sequel at sequeltechlaw.com/contact/.

 

 

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