WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Yamaha Motor Corporation, USA v. Powers Motor Sports

Case No. D2007-0396

1. The Parties

The Complainant is Yamaha Motor Corporation, USA of Kennesaw, Georgia, United States of America, represented by Dinsmore & Shohl LLP, United States of America.

The Respondent is Powers Motor Sports, c/o Matt Isard of Fremont, Michigan, United States of America.

2. The Domain Name and Registrar

The disputed domain name <yamaha-motorcycleparts.com> is registered with Register.com.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on March 14, 2007. On March 16, 2007, the Center transmitted by email to Register.com a request for registrar verification in connection with the domain name at issue. On March 16, 2007, Register.com transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details for the administrative and technical contact. The Center verified that the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy”), the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the “Supplemental Rules”).

In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on March 26, 2007. In accordance with the Rules, paragraph 5(a), the due date for Response was April 15, 2007. The Response was filed with the Center on April 14, 2007.

The Center appointed Frederick M. Abbott as the sole panelist in this matter on April 20, 2007. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.

4. Factual Background

Complainant’s parent corporation, Yamaha Corporation, which has authorized Complainant, Yamaha Motor Corporation USA, to proceed in this matter (hereinafter collectively referred to as “Complainant”), is the holder of various registrations for the trademark YAMAHA on the Principal Register of the United States Patent and Trademark Office (“USPTO”), including registration nos. 688,208, dated November 17, 1959, in International Class (“IC”) 19, covering “motorcycles”, and registration no. 866,762, dated March 18, 1969, in ICs 12 & 16, covering “motorboats and parts thereof” and “outboard engines” (see also, USPTO registration nos. 1,150,112; 2,017,999; and 2,429,646) (Complaint, paragraph 12 & Annexes C-H). Complainant has submitted evidence that these registrations are valid and subsisting.

Complainant manufactures and distributes motorcycles and parts thereof in the United States and other countries. Complainant has registered the domain name and operates a commercial Internet website at “www.yamaha-motor.com”.

Complainant sells its motorcycles and parts in the United States through authorized dealers, including Respondent. Complainant and Respondent are parties to a “Yamaha Motor Corporation Sales and Service Agreement”, dated March 24, 2006 (“Dealer Agreement”). The Dealer Agreement appoints Respondent a nonexclusive authorized reseller, inter alia, of motorcycles and parts manufactured by Complainant. With respect to Complainant’s trademarks, the Dealer Agreement provides at paragraph 5.4, headed “Trademarks”:

“Yamaha agrees to permit Dealer to identify itself as an authorized dealer for the Products and use the trademarks of Yamaha applicable to the Products in connection with the dealer’s efforts to sell and promote the Products, provided, however, that such use shall be subject to the control of Yamaha and be in a manner consistent with a high quality image of the Products. Dealer shall not use the tradenames or trademarks of Yamaha as a part of its corporate name or in any manner inconsistent with the instructions of Yamaha. Dealer shall promptly notify Yamaha of any infringement or unauthorized use by any person of such patents, trademarks, tradenames, copyrights or designs. Dealer acknowledges that Yamaha has the sole right and interest in such patents, trademarks, tradenames, copyrights and designs. Dealer agrees to cease immediately all use of Yamaha trademarks, trade names and copyrights and any other proprietary rights on termination of this agreement.” (Complaint, Annex J)

Complainant transmitted to Respondent on July 14, 2006 its “2007 Internet Marketing Guide” which reads in relevant part:

“Domain names - Dealers with multi-brands must have a separate domain name for their Yamaha website. Domain names should conform as closely as possible to the dealer’s store name. Domain names which refer specifically or generally to Yamaha or any of its products or services are reserved for use by Yamaha, and may not be registered by a dealership for its exclusive use. Domain name examples: smithyamaha – OK; cypressyamaha – OK; yamahadiscounters.com – not OK. Dealers who may already have registered domain names inconsistent with this policy will be required to assign such domain names to Yamaha….” (Complaint, paragraph 12 & Annex N)

According to the Registrar’s Verification Report, Respondent is the registrant of the disputed domain name. According to a WHOIS database report transmitted by the Registrar, the record of registration for the disputed domain name was created on January 5, 2007. According to a WHOIS database report transmitted by Complainant, the record of registration was last updated on January 11, 2007 (Complaint, Annex A).

By e-mail of January 10, 2007, Complainant (through its counsel) transmitted to the predecessor owner of the disputed domain name, Kevin Kelleher, a cease and desist and transfer demand. Subsequently, Respondent requested authorization from Complainant to purchase the disputed domain name from the predecessor owner. By voicemail dated January 12, 2007, Complainant rejected that request and demanded transfer of the domain name to it.

By e-mail dated January 18, 2007, the predecessor owner advised Complainant:

“When you first sent me the original e-mail, I was in the process of finalizing the sale of the domain to an Authorized Yamaha Dealer: Power Motorsports Yamaha. That is why I wanted to chat with you. The Transfer of ownership had actually gone thru to Powers [sic] Motorsports Yamaha upon receipt of the 35K in funds which had been initialed [sic] before I received your e-mail.” (E-mail from Kevin Kelleher to Lisa McManus, dated January 18, 2007, Complaint, Annex L).

On January 18, 2007, Complainant and Respondent discussed this matter by telephone. Respondent expressed the view that it was authorized to use the disputed domain name because it is an authorized Yamaha dealer, and indicated that it would not transfer the disputed domain name to Complainant absent reimbursement of the $35,000 which it had paid to acquire the name. Complainant reiterated its position that Respondent was not authorized to register or use the disputed domain name.

By letter dated January 24, 2007, Complainant reiterated its cease and desist and transfer demand, setting a deadline of January 31, 2007 for Respondent to discontinue use of and to transfer the disputed domain name. (Complaint, Annexes M-N)

Respondent operates a commercial Internet website offering to sell motorcycles and parts, as well as other motorized equipment (e.g., all-terrain vehicles), at the address of the disputed domain name “www.yamaha-motorcycleparts.com”. The home web page identified by this Internet address is prominently captioned “YAMAHA” and, in less prominent lettering, refers to “YAMAHA Original OEM Parts”. The web page also refers in prominent terms to discounts on OEM Parts from other manufacturers, including Honda and Kawasaki. A fairly prominent advertisement on the same web page states “HONDA The 2007 Models Are Here”. There is also reference to “Top Selling Aftermarket” with specific reference to 30 other brand names. (Complaint, Annex I)

The Registration Agreement in effect between Respondent and Register.com subjects Respondent to dispute settlement under the Policy. The Policy requires that domain name registrants submit to a mandatory Administrative Proceeding conducted by an approved dispute resolution service provider, of which the Center is one, regarding allegations of abusive domain name registration and use.

5. Parties’ Contentions

A. Complainant

Complainant argues that it is the owner of trademark rights in the term “YAMAHA” and that the disputed domain name <yamaha-motorcycleparts.com> is confusingly similar to that trademark.

Complainant alleges that Respondent has no rights or legitimate interests in the disputed domain name because Complainant’s contract with Respondent expressly grants and acknowledges Complainant’s control over use of its trademark, and that Complainant expressly advised Respondent prior to Respondent’s registration of the disputed domain name that such type of domain name could not be registered or used by Respondent. Complainant further argues that prior panel decisions under the Policy have refused to allow similar use by resellers when such resellers are offering for sale the products of competitors on their web sites.

Complainant argues that Respondent registered and is using the disputed domain name in bad faith because (1) Respondent is violating the terms of the Dealer Agreement and 2007 Internet Marketing Guide; (2) Respondent has refused to transfer the disputed domain name to Complainant despite being advised that registration and use was not approved by Complainant; (3) Respondent has intentionally attempted to attract for financial gain Internet users to its web site by creating a likelihood of confusion with Complainant’s trademark as to the source, sponsorship, or affiliation of Complainant with its web site; (4) Respondent is acting in bad faith because the web site identified by the disputed domain name includes advertisement and sales information regarding products of Complainant’s competitors (which suggests that Complainant is affiliated with or endorses the products of its competitors); and (5) Respondent requested that Complainant pay $35,000 for transfer of the disputed domain name to Complainant.

Complainant requests that the Panel direct the Registrar to transfer the disputed domain name to it.

B. Respondent

Respondent has not disputed Complainant’s ownership of trademark rights in YAMAHA.

Respondent has not disputed that it is party to the Dealer Agreement with Complainant, nor has it disputed Complainant’s contention that Respondent received the 2007 Internet Marketing Guide.

Respondent has not disputed Complainant’s version of the facts regarding correspondence between the parties.

Respondent argues that it registered the disputed domain name as a positive act of good faith as a means to increase sales for itself and Complainant, and that “[a]s an authorized Yamaha dealer we retain the right to use the Yamaha name and Logo for advertising purposes if it is used in the best interest of both parties. This practice is being used by MANY other Yamaha dealers across the United States.” Respondent adds, “Yamaha does not sell their products directly online to consumers thru a privately owned shopping cart, so there is no conflict of competition here. (NO diverging sales from Yamaha, its web site or other privately owned Web properties) Only increasing Sales for Yamaha through its authorized dealers.”

Respondent argues that its web site makes clear that it is owned and operated by Powersedge.com, and does not have the “look & feel” of Complainant’s proprietary web site. Respondent states that it spends in excess of $25,000 per month to promote Complainant’s parts online as well is in print and on radio. Respondent states that it has increased Complainant’s monthly parts revenue in excess of $90,000, and that Respondent has projected sales of up to $200,000 per month by the third quarter of 2007 (all online parts sales).

Respondent argues that it operates its web site in a professional manner positively benefiting both itself and Complainant.

6. Discussion and Findings

The Policy is addressed to resolving disputes concerning allegations of abusive domain name registration and use. The Panel will confine itself to making determinations necessary to resolve this Administrative Proceeding.

It is essential to dispute resolution proceedings that fundamental due process requirements be met. Such requirements include that a respondent have notice of proceedings that may substantially affect its rights. The Policy and the Rules establish procedures intended to ensure that respondents are given adequate notice of proceedings commenced against them, and a reasonable opportunity to respond (see, e.g., Rules, paragraph 2(a)).

Respondent has filed a Response in this proceeding. The Panel is satisfied that Respondent was given adequate notice of these proceedings, and that each party has been given adequate opportunity to present its position.

Paragraph 4(a) of the Policy sets forth three elements that must be established by a complainant to merit a finding that a respondent has engaged in abusive domain name registration and use, and to obtain relief. These elements are that:

(i) respondent’s domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and

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

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

Each of the aforesaid three elements must be proved by a complainant to warrant relief.

A. Identical or Confusingly Similar

Complainant has provided substantial evidence of rights in the YAMAHA trademark based on use in commerce and registration at the USPTO.

Complainant contends that the disputed domain name <yamaha-motorcycleparts.com> is confusingly similar to its trademark because the trademark is combined with generic terms for products which Internet users would expect to be associated with its trademark.

Complainant’s evidence of rights in the YAMAHA trademark is sufficient to establish those rights. The visual impression, sound and meaning of the disputed domain name are sufficiently similar to Complainant’s trademark to give rise to a substantial likelihood that Internet users would associate the disputed domain name with Complainant and its trademarked products.

The Panel determines that Complainant is the holder of rights in the YAMAHA trademark and that the disputed domain name is confusingly similar to that trademark.

B. Rights or Legitimate Interests

The second element of a claim of abusive domain name registration and use is that the respondent has no rights or legitimate interests in respect of the domain name (Policy, paragraph 4(a)(ii)). The Policy enumerates several ways in which a respondent may demonstrate rights or legitimate interests:

“Any of the following circumstances, in particular but without limitation, if found by the Panel to be proved based on its evaluation of all evidence presented, shall demonstrate your rights or legitimate interests to the domain name for purposes of paragraph 4(a)(ii):

(i) before any notice to you of the dispute, your use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or

(ii) you (as an individual, business, or other organization) have been commonly known by the domain name, even if you have acquired no trademark or service mark rights; or

(iii) you are 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.” (Policy, paragraph 4(c))

Respondent has not argued that it made use of the disputed domain name in connection with a bona fide offer of goods or services prior to notice of a dispute with Complainant. The Panel notes that Complainant had objected to registration of the disputed domain name in the hands of a predecessor owner immediately prior to transfer of the disputed domain name to Respondent, and that Complainant immediately objected to the registration and use by Respondent. Moreover, to the extent that Respondent registered and used the disputed domain name in a manner contrary to the terms of its contract and instructions from Complainant, such use would not be considered bona fide in the particular circumstances of this proceeding (see discussion infra).

Respondent has not argued that it has been commonly known by the disputed domain name.

Respondent is in essence arguing that its use of Complainant’s trademark in the disputed domain name is a “fair use” permitted within the terms of paragraph 4(c)(iii) of the Policy. Respondent is contending that as an authorized reseller of Complainant’s products it is entitled to use Complainant’s trademark in the manner Respondent deems appropriate so long as it is doing so in a way which is mutually beneficial to Complainant and Respondent. It further argues that it is making use of the disputed domain name in a way which is consistent with usage by other authorized resellers of Complainant.

Determinations under the Policy with respect to the rights of authorized resellers are each made in the particular context of the relationship between the trademark holder and reseller, and the specific use of the trademark being made by the authorized reseller. See cases referenced in paragraph 2.3 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions.

This sole panelist has previously considered the scope of rights of authorized resellers under the Policy. In Milwaukee Electric Tool Corporation v. Bay Verte Machinery, Inc. d/b/a The Power Tool Store, WIPO Case No. D2002-0774, the respondent made use of the complainant’s trademark in a domain name, <milwaukeetool.com>, to direct Internet users to a website which offered the complainant’s power tools as well as the power tools of the complainant’s competitors. In that proceeding, this sole panelist accepted the respondent’s argument that such use of complainant’s trademark was a bona fide use prior to notice of a dispute (under paragraph 4(c)(i) of the Policy) because: (1) in the “brick and mortar” world, the complainant had generally permitted its authorized resellers to use its mark for the advertisement of its products along with the products of its competitors (and had provided reimbursement for such advertisement); (2) the complainant did not establish a policy with respect to use of its trademark in domain names until more than a year following the respondent’s registration and commencement of use of the domain name at issue in that case, and the complainant had not objected to respondent’s use until the end of that period and: (3) when the domain name dispute was initiated, the complainant continued to identify the respondent on its own website as an authorized reseller of its products. In that proceeding, this sole panelist expressly noted that it was reserving the question whether the respondent’s conduct would have been acceptable as a bona fide use prior to notice had the complainant contractually precluded the registration and use being made of the disputed domain name. This sole panelist said, inter alia:

“Had Complainant adopted and communicated its terms of sale and Internet policy prior to Respondent’s registration and use of the disputed domain name in the same manner, Respondent would have had notice of a dispute and might have been acting in an illegitimate manner. However, in the context in which Complainant typically allowed (and even compensated for) advertising and promotion of multiple product lines in the physical world, Respondent should not be charged with foreseeing that Complainant would object to a seemingly consistent practice in the virtual world.

Today, Respondent might be in breach of Complainant’s terms of sale and Internet policy. Today, Respondent might not be able to register and use Complainant’s mark in a domain name and make a bona fide offering of goods, because of an express breach of contract. The Panel is offering no opinion on those matters. Respondent’s assertion of legitimate interests in the domain name is based on conduct occurring before Complainant adopted its terms and policy. Respondent acted reasonably in deciding that Complainant did not object to its use of ‘MILWAUKEE’ in a domain name in connection with its authorized sale of products.

The Panel in this proceeding is not suggesting a general rule regarding relationships between trademark holders and authorized distributors. The Policy addresses abusive domain name registration and use. Here an authorized distributor of several years standing registered the trademark holder’s mark in a domain name in circumstances in which it had reason to conclude that the trademark holder would not object. Later, the trademark holder adopted a policy with respect to its authorized distributors that may have contractually precluded the registrant’s initial course of action, had it been adopted earlier. At that point, if the trademark holder considered that its distributor was acting improperly, it might have terminated the distribution relationship. If the distributor continues to buy and resell products in violation of the terms of a new legal relationship, the trademark holder might have some other legal recourse. None of these circumstances, however, makes out a case of abusive domain name registration and use.” WIPO Case No. D2002-0774.

The facts in the instant proceeding are distinctly distinguishable from those in the Milwaukee Electric Tool proceeding. In the instant proceeding, the Dealer Agreement between Complainant and Respondent expressly grants to Complainant the right to control Respondent’s use of Complainant’s trademark. Respondent accepted in the Dealer Agreement it entered into with Complainant that Respondent’s use of Complainant’s trademark:

“shall be subject to the control of Yamaha and be in a manner consistent with a high quality image of the Products. Dealer shall not use the tradenames or trademarks of Yamaha as a part of its corporate name or in any manner inconsistent with the instructions of Yamaha.”

Complainant exercised this control by communicating approximately six months prior to Respondent’s purchase and registration of the disputed domain name its Internet Marketing Guide that precluded the form of trademark use adopted by Respondent in the disputed domain name. Respondent does not have the factual basis for arguing that it registered and commenced using the disputed domain name without notice that Complainant objected to that registration and use.

This sole panelist is cautious to avoid performing the task of interpreting complex and/or ambiguous contracts in circumstances in which a court would be likely to consider external evidence regarding the context in which the contract was made, the validity of terms, and so forth. See, e.g., Other Half Entertainment v. Jason Fiore aka One Stor, WIPO Case No. D2005-1156. In the instant proceeding, the contract terms are not ambiguous and Respondent has not argued that it is not party to the contract with Complainant. Respondent’s argument for overcoming the express terms of the Dealer Agreement with Complainant is twofold: (1) it is acting in the mutual best interest of Complainant and Respondent, and (2) other authorized dealers of Complainant are similarly violating Complainant’s contract and instructions pursuant to it.

Parties are free, within certain limitations (such as limitations imposed by the doctrine of unconscionability), to determine the terms of their own contractual bargain, and one party may choose to contract for a performance which, as it may happen, is not in its own best interest. Absent demonstration by Respondent that the Dealer Agreement with Complainant was improperly formed (and is therefore invalid), or that its terms are unconscionable (and are therefore invalid or unenforceable), or that its terms are in some other way prohibited by law, Respondent is for present purposes bound by its terms. Respondent has offered no evidence that on its face would invalidate the Dealer Agreement or any of its terms.

Respondent has offered no evidence that Complainant’s other authorized dealers are consistently violating their dealer agreements with Complainant or Complainant’s Internet Marketing Guide. Although the Panel does not wish to foreclose the possibility that, in some circumstance not demonstrated here, the consistent failure of a party to enforce its dealership contracts might provide some form of defense to enforcement, Respondent cannot make out this defense with a mere allegation in the present circumstances. There is no evidence presented by Respondent as to the terms by which other resellers are bound, or regarding what attempts Complainant made or is making to control those resellers. Coupled with Respondent’s failure to provide any evidence regarding the conduct of other resellers, a defense to contract enforcement – even if theoretically possible under some circumstance not present here – is not established in the current case.

The Panel need not make a determination regarding the rights of resellers to register and use Complainant’s trademark in domain names for the offering and sale of Complainant’s products in the absence of a contractual relationship with Complainant. That circumstance is not present here. Respondent has undertaken to use Complainant’s trademark subject to Complainant’s control and has accepted the discipline imposed by its contract. Establishing an alternative claim by Respondent to “fair use” would require inter alia a demonstration that the restrictions imposed by the Dealer Agreement exceed those permissible under United States trademark law. Respondent has made no such offering or demonstration.

The Panel determines that Complainant has established that Respondent does not have rights or legitimate interests in the disputed domain name.

C. Registered and Used in Bad Faith

Paragraph 4(b) of the Policy provides that, “the following circumstances, in particular but without limitation, if found by the Panel to be present, shall be evidence of the registration and use of a domain name in bad faith: … (iv) by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your 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 your web site or location or of a product or service on your website or location.”

Respondent registered and is intentionally using the disputed domain name to attract Internet users to its web site for commercial gain by creating the likelihood of confusion for Internet users regarding whether Complainant has endorsed its web site. Complainant has expressly refused to endorse the use of its trademark in connection with identifying Respondent’s website, at least (but not exclusively) in so far as that web site advertises and promotes the products of Complainant’s competitors. Respondent registered and used the disputed domain name knowing of Complainant’s lack of endorsement, that is, on the basis of the terms of the Dealer Agreement, Internet Marketing Guide and correspondence from Complainant. Such registration and use by a Respondent is in bad faith within the meaning of paragraph 4(b)(iv) of the Policy.

However, the Panel does not accept that Respondent registered the disputed domain name with the intention of selling it to Complainant for an amount in excess of its out-of-pocket costs. The evidence strongly supports that Respondent intended to use the disputed domain name for the conduct of its own business, and did not intend to profit from resale to Complainant. The evidence suggests that Respondent demanded payment for the disputed domain name to avoid a financial loss as a consequence of its decision to purchase the disputed domain name without adequate regard for its contractual relationship with Complainant. There is no bad faith in Respondent’s seeking to avoid the financial hardship resulting from its decision in this particular case.

For the reasons discussed above, the Panel determines that Respondent registered and used the disputed domain name in bad faith.

7. Decision

For all the foregoing reasons, in accordance with paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the domain name <yamaha-motorcycleparts.com> be transferred to the Complainant.

Frederick M. Abbott
Sole Panelist

Dated: May 5, 2007