Davidoff & Cie SA v Dario Muriel d/b/a Comercio Personal SL

iii. Whether Respondent is making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.

Respondent contends that it used the site for a bona-fide offering of goods for sale pursuant to paragraph 4(c)(i) and/or made a fair use of the site pursuant to paragraph 4(c)(iii). Respondent notes that it is a buyer and seller of tobacco goods and has used the site to further this purpose. Complainant alleges Respondent has no rights to the Davidoff name because no authorization was given by Complainant to Respondent to use such name, and because Respondent is using the Davidoff name to attract Internet users to Respondent’s site for its own commercial gain. Complainant contends, in its supplemental submission, that Respondent sells many other goods besides Davidoff products. Respondent acknowledges the same through its exhibits.

Respondent argues that it is permissible to use the name of a manufacturer in connection with the sale of such manufacturer’s goods, citing Koninklijke Philips Electronics N.V. v. Cun Siang Wang, D2000-1778 (WIPO Mar. 15, 2001) and The Kittinger Co. Inc. v. Kittinger Collector, AF-0107 (eResolution May 8, 2000), among others, in support of its position. In each of those cases, the panel found that usage of Complainant’s name was acceptable where Complainant’s goods were being sold. Both Koninklijke and Kittinger, however, can be distinguished from Respondent’s position. There was no evidence in either of the aforementioned cases that Respondent in those cases sold competing brands. In fact, the Koninklijke panel specifically noted that no such evidence was present. Here, the evidence shows that Respondent advertised and sold products other than those produced by Complainant, and it appears that such other tobacco products are competitive brands. Moreover, as Complainant notes, the sale and marketing of Davidoff products represents only a small portion of Respondent’s overall business. Complainant also submitted evidence, in its supplemental materials, that Respondent was not part of Complainant’s official distribution network.

The present case is more akin to National Collegiate Athletic Ass’n v. Halpern, D2000-0700 (WIPO Dec. 10, 2000) than to Koninklijke or Kittinger, In Halpern, Respondent used the mark of the NCAA to advertise and sell not only tickets to NCAA events, but to other events, not affiliated with the NCAA, as well. The panel found that domain names used to sell Complainant’s goods without Complainant’s authority as well as others’ goods is not a bona-fide use. See also Chip Merch., Inc. v. Blue Star Elec., D2000-0474 (WIPO Aug. 21, 2000) (finding that the disputed domain names were confusingly similar to Complainant’s mark and that Respondent’s use of the domain names to sell competing goods was illegitimate and not a bona fide offering of goods). Here, the facts lead to an inference that Respondent used Complainant’s name to attract Internet users to Respondent’s site for commercial gain even while the majority of Respondent’s products were not those of Complainant. Such an inference has not been rebutted by Respondent. Moreover, a disclaimer of interest between Complainant and Respondent is significantly absent from Respondent’s site. The lack of any such disclaimer, or link to an official site of Complainant itself, increases the likelihood that Internet users will suffer confusion of identification between Respondent and Complainant. This increases the likelihood that Internet users will be diverted for Respondent’s gain. Again, cases cited by Respondent can be distinguished on this ground. Koninklijke for example noted, in finding for Respondent, that such a disclaimer was prominent. Therefore, for the foregoing reasons, the Panel concludes that Respondent did not have legitimate rights to use the Davidoff name for its site.

Registration and Use in Bad Faith

The Panel may consider a number of factors in reaching a determination on the question of bad faith including, but not limited to, those factors enunciated by paragraph 4(b) of the ICANN Policy. Such factors include:

i) Whether there are circumstances indicating that Respondent has registered or has acquired the domain name primarily for the purpose of selling, renting or otherwise transferring the domain name registration to the Complainant who is the owner of the trademark or service mark or to a competitor of that Complainant, for valuable consideration in excess of Respondent’s documented out of pocket costs directly related to the domain name; or

ii) Whether Respondent has registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that Respondent has engaged in a pattern of such conduct; or

iii) Whether Respondent has registered the domain name primarily for the purpose of disrupting the business of a competitor; or

iv) Whether by using the domain name, Respondent has intentionally attempted to attract, for commercial gain, Internet users to Respondent’s web site or other on line location, by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship, affiliation, or endorsement of Respondent’s web site or location or of a product or service on Respondent’s web site or location.

Complainant argues that, after it contacted Respondent regarding what it viewed as a violation of its mark, Respondent replied by offering to amicably resolve the matter. Complainant contends that such an action constitutes bad faith. The Panel cannot agree. The evidence submitted by Complainant in support of such an argument is not persuasive and fails to carry Complainant’s burden of proof on the issue. Complainant has submitted no evidence suggesting that Respondent attempted to sell the domain for profit over its out of pocket expenses. The evidence indicates that the purpose of registering the domain name was to sell cigars.

Although bad faith is not established under section (i), the evidence does support a finding of bad faith pursuant to section (iv). It is indisputable that Respondent intentionally attempted to attract Internet users to its site for commercial gain. By using the Davidoff name as part of the domain name, and by the way in which the site was set up, Respondent did create a likelihood of confusion with the Complainant’s mark as to the source and sponsorship and endorsement of the site. Moreover, because Respondent sold products that were not produced by Complainant, and because Respondent has never been known or recognized by the Davidoff name, the inescapable conclusion is that Respondent attempted to trade on Davidoff’s internationally famous name and goodwill to sell other products even while Davidoff products constituted a fraction of Respondent’s overall business. Such actions amount to bad faith on the part of Respondent. See Fossil Inc. v. NAS, FA 92525 (Nat. Arb. Forum Feb. 23, 2000) (finding that Respondent acted in bad faith by registering the domain name <fossilwatch.com> and using it to sell various watch brands); see also Busy Body, Inc. v. Fitness Outlet, Inc., D2000-0127 WIPO Apr. 22, 2000) (finding bad faith where Respondent attempted to attract customers to its website, <efitnesswholesale.com>, and created confusion by offering similar products for sale as Complainant).

DECISION

For the foregoing reasons, The Panel hereby finds that the domain name used by the Respondent is confusingly similar to the mark in which the Complainant has rights; that Respondent has no rights or legitimate interests in respect to the domain name; and that the domain name was registered and used in bad faith. Accordingly, the relief sought by Complainant shall be GRANTED and the domain name <davidoffshop.com> shall be TRANSFERRED to Complainant.

William H. Andrews, Presiding Panelist

Dated: January 28, 2003

Anne M. Wallace, Member Panelist

Dated: January 28, 2003

DISSENT OF G. Gervaise Davis III, Esq.:

I respectfully dissent from the thoughtful decision of the majority. I do so primarily because I am concerned that once again an ICANN Panel is unintentionally permitting a Complainant to use the UDRP to resolve a factual dispute that belongs in a trial court, not merely to stop an abusive domain name use. I also believe that the precedents cited by Complainant, and accepted by the majority, do not support the decision and conclusions reached by the majority.

In my judgment, this is not really a trademark-domain name dispute, but a barely disguised effort to stop a discount seller, by Complainant’s own indirect admission. Complainant says of Respondent’s website “the Respondent offered DAVIDOFF tobacco products for “super low prices, sharing the low taxes in Spain with the consumers.” Even Complainant admits that Respondent was in fact selling Davidoff tobacco products from the website through the use of the domain name, which belies any argument that the domain was being used to mislead or misdirect consumers. The exhibits from Respondent’s website, attached to the Complaint, clearly identify which products were Davidoff items, and which came from other tobacco producers. No one could be confused if they spent under two minutes looking at the content of the web site. Furthermore, there is no argument presented by Complainant of what has come to be known as “Initial Interest Confusion.”

In my judgment, there is nothing misleading about the website. However, if one were to feel that this was an issue, the extent to which the use of the domain name might have been confusing consumers is a factual issue which cannot be determined from the sparse evidence presented by Complainant. Complainant also admits that there are numerous other websites using the Davidoff name and mark for the sale of tobacco products, which it has apparently not made any effort to stop. If assumptions were to made about the facts, as the majority and Complainant have done here, one might also assume the reason no objections were made to the other sites is because they were not discounters. We, of course, do not know for sure since we have no evidence on many of the relevant issues. That is why it is inappropriate for us to rule on this dispute as an “abusive registration.”

UDRP arbitration panels handling domain name disputes have no procedures for taking evidence on conflicting issues or for ascertaining the relative truth or falsity of the evidence before them, unlike a trial court. They also have no way of evaluating the true purposes for the litigation, but must rely on ten short pages of facts and law cited, with some exhibits that are often incomplete or potentially misleading without accompanying testimony to explain them. Often, as in this case, there is an unanswered Supplemental filing by the Complainant, which the Respondent could have responded to, by request to the Panel, but did not. This case is a perfect illustration of why an intentionally created, simplified summary arbitration proceeding is a poor forum for a case involving disputed factual and legal issues that go far beyond an alleged “abusive domain name registration.”

As I understand the UDRP and its documented history, the UDRP proceedings are intended only for clear cases of abusive registration and misuse of a domain name that was adopted to take improper advantage of the trademark owner’s rights. See, the discussion of the WIPO Staff Report on the UDRP in my dissent in J. Crew v. Crew.com, D2000-0054 (WIPO Apr. 20, 2000) which dissent has received considerable favorable comment in legal journals, and subsequently been used by many WIPO and Forum decisions as the basis for refusing to transfer a domain name where there were disputed factual issues. Most of the true abusive registration cases involve someone who registers a name in the hopes of extorting money from the trademark owner, or to harass them, or to injure their business. There is admittedly no such evidence here of such activities – only the sale of tobacco products from the website, acquired from various producers including those of Davidoff.

The whole idea of a summary proceeding under UDRP was to provide a simple and quick proceeding for cases that were clear on their face, designed to avoid the cost of court litigation. For this reason, the Rules provide that the entire burden of proof is on the Complainant. Most of the cases under the UDRP correctly reflect this, and properly deny relief where there is any question of the facts. The majority, here, I believe, has permitted the Complainant to prevail based on questionable factual and legal assumptions and mere inferences. I believe this is improper, and demonstrates, once again, why factual and legal disputes should not be resolved by UDRP proceedings. To do so, improperly denies the Respondent rights to defend genuinely contested facts and interpretations of facts, and does not permit a full examination of the true purposes of the litigation, regardless of the merits either way.

It should be clear that I do not disagree with the usual application of the general concepts of the UDRP, and I agree that there are some elements of a trademark dispute here. The Complainant has demonstrated at least a minimal case of potentially confusing similarity between its “Davidoff” family of marks for tobacco products and the disputed domain name <davidoffshop.com> registered by Respondent. While I think the Respondent raised some genuine issues of fact about the generic nature of the domain name, I assume for purposes of this Dissent that the first leg of the three requirements of a UDRP case has been met by Complainant.

Where I first differ with the majority is in their finding that the Respondent had no legitimate right or interest in the use of the domain name that incorporates and uses the Davidoff surname/mark. The majority concludes this, based on the premise that Respondent “was not part of Complainant’s official distribution network,” and that Respondent also sold tobacco products of other companies to the extent that “Davidoff products represent only a small portion of Respondent’s overall business.” Whether these facts are true is an evidentiary question that is not answered in the pleadings submitted, but is merely a surmise by the Complainant accepted by the majority. In fact, even Complainant admits in its pleadings that under Spanish law, because Respondent has a tobacco sales license, it has the legal right to sell tobacco products of Complainant and those of any other producer. This admission directly conflicts with Complainant’s argument that Respondent was not authorized to sell Davidoff tobacco products.

By accepting these questionable assumptions and assertions, the majority seems to be accepting the unique legal premise argued by Complainant (who presented virtually no authority for the proposition) that the principle of “fair use” does not permit a reseller to use a product trademark for reselling and advertising unless at least a majority of the sales made under the mark are those of the trademark owner. This introduces a quantitative test for fair use that would make it impossible for a reseller to determine if its use of a trademark was legal, until the sales results for each business period were known. Such a test is, to me, unworkable and unreasonable commercially. Moreover, it is simply not the law of fair use.

It is also belied by the fact that in the automobile industry, for example, businesses routinely advertise that they are “Jones Pontiac-Acura Automobiles of Seaside,” when they sell both Pontiac cars from General Motors and Acura cars from a Japanese competitor. To create the quantitative rule espoused by Complainant would require that the Jones car dealership count up the cars sold each year in order to determine which trademark it could use, and even then one might question whether it was the number of cars of each brand sold, or the dollar value sold that determined whether the test was met. I could provide other examples, but think the point is made that this proposed and unsupported test that the majority and the Complainant have used is unworkable. The question should be “are the consumers confused by the use of the mark?” and “does the reseller actually sell the products sourced from the trademark owner?” On that basis, the Respondent would clearly prevail here.

Finally, on the third required leg of proof, of bad faith registration, I am also concerned that the majority has again accepted the very same false suppositions and assertions of the Complainant, discussed above, as to the law and the facts, neither of which have been proven conclusively by the Complainant. The bad faith finding is, therefore, based on a false and incorrect proposition of law, and neither of the cases used to support this view support the proposition for which it is cited.

The majority decision concludes that Respondent both registered and used the domain name in bad faith since Respondent sold products of Davidoff and other producers from the website and that therefore it was an “inescapable conclusion … that Respondent attempted to trade on Davidoff’s internationally famous name and goodwill.” If Complainant’s quantitative “fair use” test is not the law, then the majority decision is also wrong on this aspect as well. I feel that to simply accept Complainant’s assertion that it “must be bad faith” if you do not limit your sales entirely to items from the trademark owner is to shift the burden of proof from the Complainant to the Respondent, and then to deny him an opportunity to explain why selling other items does not harm the trademark owner. It would be an entirely different thing if Respondent only sold competitive goods, but that is not the case here.

Finally, the Busy Body, Inc. v. Fitness Outlet, Inc., case cited by Complainant and used by the majority to support the third leg of necessary law does not find bad faith because the domain name owner sold other goods in addition to those of the trademark owner. In fact, it merely found, in a default case where the Respondent did not even present evidence nor appear,

that the domain name “efitnesswarehouse.com” is confusingly similar to the service mark “FITNESS WAREHOUSE”. The Panel notes that Respondent has registered and attempted to use the disputed domain name in the same line of services as that which Complainant provides, and that this makes it likely that consumers would be confused as between these two sources.

This is a far cry from holding that selling more than one producer’s goods is an improper use of a trademark. I think no one would disagree with this conclusion by the Busy Body panel, since it is totally consistent with the existing law of trademark confusion and has absolutely nothing to do with any “fair use” test.

Furthermore, the principal case relied on by Complainant, Fossil, Inc. v. NAS, FA 92525 (Nat. Arb. Forum Feb. 23, 2000), is similarly NOT supportive of its proposition, even though there are many ICANN decisions that cite it for this proposition. The authors of such decisions have perhaps not read the actual decision they rely upon. That decision, almost in its entirety, states as follows:

On September 13, 1999, Respondent NAS registered with Network Solutions for the domain name www.fossilwatch.com, which is the subject of the instant Complaint. The site represented by this domain name engages in the sale of various brands of watches. Fossil watches are not authorized to be sold through this site. [Emphasis added by Dissenter.]

The undersigned concludes that Respondent’s domain name is confusingly similar to the Fossil Marks to which Complainant has rights. It would appear that the domain name is merely a combination of Complainant’s mark, “Fossil,” and the principal or primary goods represented by that mark, the word “watch” and .com. The record before the undersigned does not reflect any rights or legitimate interest in the domain name by Respondent. The combination as registered by Respondent herein reflects a wrongful attempt by the Respondent to attract, for commercial gain, internet users to its web site suggesting affiliation specifically with Fossil watches. Respondent is deemed to have exercised bad faith in registering and using the domain name.

There is nothing in this decision to suggest that “Fossil Watches” were in fact sold from the site in question, and there is virtually no discussion of the concept urged by Complainant to the effect that selling other producers products, as well as those of the trademark owner, makes it an “unfair use” to use the trademark. To the contrary, the decision merely states that the domain name owner used the exact trademark of the Complainant to sell “various brands of watches.” Whether the site even sold any watches from the Fossil Watch producer cannot be determined from the decision, and a fair reading would suggest that it did not sell them at all. Therefore, the conclusion reached by the panel there is certainly not surprising, nor would this dissenter disagree with the result of that case.

For the foregoing reasons, I believe that this Panel should not engage in the suppositions or assumptions urged by the Complainant, and I would deny the requested transfer of the domain name. It could well be that in the case of a formal trial, Complainant could establish that there was sufficient confusion to justify a claim of infringement, but on the slim and inconclusive evidence here, I believe we should exercise our right to deny the relief and ask that it be determined by a court of law. I see no evidence of the type of abusive conduct contemplated by the framers of the UDRP rules. I therefore respectfully dissent from the decision as filed.

G. Gervaise Davis III, Esq.

Dissenting Panelist

January 30, 2003

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