DECISION

 

Sagmel, Inc. v. Kortest Co Ltd.

Claim Number: FA0106000097359

 

PARTIES

Complainant is Sagmel, Inc., Libertyville, IL, USA (“Complainant”) represented by Richard M. Assmus, of Mayer, Brown & Platt.  Respondent is Kortest Co. Ltd., Kiev, KI, Ukraine (“Respondent”).

 

REGISTRAR AND DISPUTED DOMAIN NAME

The domain name at issue is "sagmel.com" registered with AWRegistry.

 

PANEL

The undersigned certifies that he has acted independently and impartially and to the best of his knowledge, has no known conflict in serving as Panelist in this proceeding.

 

Judge Ralph Yachnin as Panelist.

 

PROCEDURAL HISTORY

Complainant submitted a Complaint to the National Arbitration Forum (the “Forum”) electronically on June 5, 2001; the Forum received a hard copy of the Complaint on June 6, 2001.

 

On June 5, 2001, AWRegistry confirmed by e-mail to the Forum that the domain name "sagmel.com" is registered with AWRegistry and that Respondent is the current registrant of the name.  AWRegistry has verified that Respondent is bound by the AWRegistry registration agreement and has thereby agreed to resolve domain-name disputes brought by third parties in accordance with ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”).

 

On June 6, 2001, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of June 26, 2001 by which Respondent could file a Response to the Complaint, was transmitted to Respondent via e-mail, post and fax, to all entities and persons listed on Respondent’s registration as technical, administrative and billing contacts, and to postmaster@sagmel.com by e-mail.

 

Having received no Response from Respondent, using the same contact details and methods as were used for the Commencement Notification, the Forum transmitted to the parties a Notification of Respondent Default.

 

On June 28, 2001, pursuant to Complainant’s request to have the dispute decided by a single-member Panel, the Forum appointed Judge Ralph Yachnin as Panelist.

 

Having reviewed the communications records, the Administrative Panel (the “Panel”) finds that the Forum has discharged its responsibility under Paragraph 2(a) of the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”) “to employ reasonably available means calculated to achieve actual notice to Respondent.”  Therefore, the Panel may issue its Decision based on the documents submitted and in accordance with the ICANN Policy, ICANN Rules, the Forum’s Supplemental Rules and any rules and principles of law that the Panel deems applicable, without the benefit of any Response from Respondent.

 

RELIEF SOUGHT

Complainant requests that the domain name be transferred from the Respondent to the Complainant.

 

PARTIES’ CONTENTIONS

A. Complainant

Complainant makes the following contentions, as taken verbatim from the Complaint:

 

“This is a case of bad faith and retribution.  Respondent Kortest Co. Ltd. registered the corporate name and trademark of Complainant Sagmel, Inc. after Kortest Co. Ltd. had been terminated as a distributor of Sagmel’s pharmaceutical products.  This is precisely the type of abusive use of the domain name system the UDRP was designed to prevent, and its application to the following facts compels the transfer of the domain name <sagmel.com> to Complainant Sagmel, Inc.

 

“In addition, in accordance with the Policy, Paragraph 4(a), the Respondent is required to submit to a mandatory administrative proceeding because:

 

a.         The domain name <sagmel.com> is confusingly similar to a trademark in which Complainant Sagmel has rights, namely SAGMEL; and

b.                  The Respondent has no rights or legitimate interests in respect of the domain name, and in fact registered and is holding the domain name as ransom for the money owed a former business partner; and

c.                   The Respondent registered and is using the domain name in bad faith to unlawfully profit from the domain name’s registration, as evidenced by an offer to sell the domain name to the trademark owner Sagmel.”

 

B. Respondent

Respondent has not filed any response.

 

FINDINGS

Complainant has registered the SAGMEL mark in a number of European countries, including the Ukraine, Russia, Belarus, Moldova, Kazakhstan, Lithuania, Estonia and Latvia.  Complainant has filed a U.S. federal trademark application for SAGMEL, application Serial No. 76/227,582.

 

Complainant is a distributor of pharmaceutical products in Eastern Europe, and contracted with Respondent in March 1997 to distribute Sagmel products in the Ukraine.  At no time during this contractual relationship was Respondent given permission to use the name Sagmel in any other way than as a distributor of Sagmel products.

 

In late 1999, a dispute arose between Complainant and Respondent regarding Respondent’s payments to Complainant under the distributorship agreement. Complainant brought suit against Respondent in the Ukraine, and won a favorable decision on November 28, 2000.  The decision froze the Respondent’s assets and ordered Respondent to pay Complainant the amount due under the parties’ contract, which totaled approximately $33,000 with interest.

During the Ukrainian court proceedings, and unbeknownst to Complainant, Respondent took the step of registering Complainant’s corporate name and trademark as a domain name.  Although not under the Panel’s purview, Respondent also registered <sagmel.com.ua>. 

 

In February 2001, Complainant sought to register the disputed domain name, “sagmel.com”, and discovered that it had been registered by Respondent.  An employee of Complainant in Complainant’s office in the Ukraine contacted Respondent, and was informed by Respondent’s representative that the domain name could be purchased for the amount due Complainant under the Ukrainian court order.  Since then, Respondent has offered the domain name for sale in a notice on the Respondent’s other website and the <sagmel.com> website for approximately three times the amount Respondent owes Complainant under the Ukrainian court order.

 

Respondent has never made any use of the domain name “sagmel.com”, except to post a “for sale” sign on the attached Website.

 

DISCUSSION

Paragraph 15(a) of the Rules instructs this Panel to “decide a complaint on the basis of the statements and documents submitted in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable.”

 

In view of Respondent's failure to submit a response, the Panel shall decide this administrative proceeding on the basis of the Complainant's undisputed representations pursuant to paragraphs 5(e), 14(a) and 15(a) of the Rules.

 

Paragraph 4(a) of the Policy requires that the Complainant must prove each of the following three elements to obtain an order that a domain name should be cancelled or transferred:

 

(1) the domain name registered by the Respondent is identical or confusingly similar to a trademark or service mark in which the Complainant has rights;

(2) the Respondent has no rights or legitimate interests in respect of the domain name; and

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

 

Identical and/or Confusingly Similar

Complainant has been offering pharmaceutical products in the Ukraine since 1996 and has established substantial goodwill in the mark SAGMEL in the Ukraine and elsewhere.  In addition to its foreign registrations in the Ukraine, Russia, Belarus, Moldova, Kazakhstan, Lithuania, Estonia and Latvia, Complainant has filed a U.S. federal trademark application for SAGMEL, application Serial No. 76/227,582.

 

Under Policy ¶ 4(a)(i), the domain name in question must be identical or confusingly similar to Complainant’s mark.  The domain name “sagmel.com” incorporates Complainant’s entire SAGMEL mark.  See Nike, Inc. v. Coleman, D2000-1120 (WIPO Nov. 6, 2000) (finding that the domain name <nike.net> is identical to the Complainant’s famous NIKE mark).  Under these circumstances, the confusing similarity standard of ¶ 4(a)(i) is met.

 

For these reasons, the Panel concludes that the burden set forth in Policy ¶ 4(a)(i) has been satisfied by Complainant.

 

Rights or Legitimate Interests

The Policy provides that certain circumstances, as set forth in Paragraph 4(c), shall demonstrate a domain name holder’s rights or legitimate interests to the domain name. Respondent cannot demonstrate any of those circumstances identified in Policy ¶ 4(c).

 

Respondent has never made any use of the domain name “sagmel.com”, except for posting a “for sale” sign.  As such, under Policy ¶¶ 4(c)(i), (iii), Respondent cannot show commercial or non-commercial use of the domain name.  Chanel, Inc. v. Heyward, D2000-1802 (Feb. 23, 2001) (finding no rights or legitimate interests where “Respondent registered the domain name and did nothing with it”).

 

In addition, Respondent is not known by the domain name, as Respondent has never made use of the domain name.  Policy ¶ 4(c)(ii).  Furthermore, Respondent never used the name “Sagmel” in its corporate name during its time as a distributor of Sagmel.

 

For these reasons, the Panel concludes that the burden set forth in Policy ¶ 4(a)(ii) has been satisfied by Complainant.

 

Registration and Use in Bad Faith

A “for sale” notice was posted on Respondent’s website <kortest.com.ua> and on “sagmel.com.”  In addition, Respondent’s representative verbally offered the domain name for sale to Complainant for an excessive amount.  Respondent has not used the domain name to conduct any legitimate business, but offered the domain name to the public and to Complainant at a price that clearly exceeds Respondent’s out-of-pocket costs related to the domain name.  Policy ¶ 4(b)(i).  This is evidence of bad faith registration and use.  John C. Nordt Co., Inc. v. Jewelry Exch., FA 96789 (Nat. Arb. Forum Apr. 11, 2001) (finding that Respondent exhibited bad faith when Respondent, a competitor of Complainant, attempted to sell a domain name, which was identical to Complainant’s MOTHER’S RING mark, to the Complainant for a profit).

 

Furthermore, under Policy ¶ 4(b)(iii), Respondent’s registration was made to disrupt the business of its former supplier and competitor; in fact, the registration was made after Complainant was forced to file suit in the Ukraine to recover monies owed by Respondent to Complainant under their terminated distributorship agreement. This is also evidence of bad faith registration and use.  Surface Protection Indus., Inc. v. The Webposters, D2000-1613 (WIPO Feb. 5, 2001) (finding that given the competitive relationship between Complainant and Respondent, Respondent likely registered the contested domain name with the intent to disrupt Complainant's business and create user confusion).

 

Using a domain name as a bargaining chip in a payment dispute constitutes bad faith under the Policy.  Other panels have consistently transferred domain names from distributors back to their rightful owners when situations such as the one between Respondent and Complainant arise.  See generally Hydraroll Ltd. v. Morgan Corp., FA 94108 (Nat. Arb. Forum Apr. 14, 2000) (transferring domain name to manufacturer after terminated distributor registered domain name incorporating manufacturer’s corporate name); Magnum Piering, Inc. v. The Mudjackers, WIPO D2000-1525 (Jan. 29, 2001) (transferring domain name to complainant where dealer of complainant’s services registered domain name incorporating complainant’s corporate name); Mariah Boats, Inc. v. Shoreline Marina, LLC, FA 94392 (Nat. Arb. Forum May 5, 2000) (transferring domain name to manufacturer where dealer registered domain name incorporating manufacturer’s corporate name); Labrada Bodybuilding Nutrition, Inc. v. Garrett, FA 94293 (Apr. 27, 2000) (transferring domain name to manufacturer where dealer registered domain name incorporating manufacturer’s corporate name).  This Panel finds no reason to depart from such precedent.

 

For these reasons, the Panel concludes that the burden set forth in Policy ¶ 4(a)(iii) has been satisfied by Complainant.

 

DECISION

Having established all three elements required by the ICANN Policy Rule 4(a), it is the decision of the Panel that the requested relief be granted. 

 

Accordingly, for all of the foregoing reasons, it is ordered that the domain name, "sagmel.com" be transferred from the Respondent to the Complainant.

 

 

Hon. Ralph Yachnin, Panelist

Justice, Supreme Court, NY (Ret.)

 

Dated: July 3, 2001