WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Seoul Laser Dieboard System Co., Ltd. v. SDS USA, Inc.

Case No. D2008-0306

1. The Parties

Complainant is Seoul Laser Dieboard System Co., Ltd., of United States of America, represented by Procopio Cory Hargreaves & Savitch, LLP, United States of America.

Respondent is SDS USA Inc., of United States of America, represented by The Rando Law Firm P.C., United States of America.

2. The Domain Name and Registrar

The disputed domain name <easybender.com> is registered with GoDaddy.com, Inc.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on February 28, 2008. On March 3, 2008, the Center transmitted by email to GoDaddy.com, Inc. a request for registrar verification in connection with the domain name at issue. On March 3, 2008, GoDaddy.com, Inc. transmitted by email to the Center its verification response confirming that Respondent is listed as the registrant and providing the contact details. 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 Respondent of the Complaint, and the proceedings commenced on March 11, 2008. In accordance with the Rules, paragraph 5(a), the due date for Response was April 7, 2008. The Response was filed with the Center on April 7, 2008.

The Center appointed Mark Partridge as the sole panelist in this matter on April 22, 2008. 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, Seoul Laser Dieboard System Co., Ltd, has used the trademark EASYBENDER in connection with computerized bending machine for industrial applications for about twelve or fifteen years.

Respondent, SDS USA Inc., was a U.S. service representative operating under agreement as a distributor of Complainant.

On February 13, 1998, while Respondent was affiliated with Complainant as a distributor, Respondent registered Internet domain name for “www.easybender.com”.

On May 2, 2006, Complainant filed a trademark application in Class 007 with the U.S. Patent and Trademark Office for the registration of the mark EASYBENDER (U.S. Trademark Application Serial No. 78/874,634). The trademark application has since been allowed, published, and is being readied for registration.¹

On February 8, 2007, in accordance with an agreement between Complainant and Respondent, Respondent assigned all its rights to the mark EASYBENDER and has since abandoned its own application for the same mark (U.S. Trademark Application Serial No. 78/684,054).

As of mid-January 2008, Complainant terminated its relationship with Respondent for non-performance of its responsibilities and obligations. On January 29, 2008, Complainant sent to Respondent a letter alleging trademark and patent infringement, as well as breach of contract. In the letter, Complainant requested Respondent to transfer ownership rights to the disputed domain name. The letter was sent via Federal Express and signed for by a representative of Respondent.

On February 12, 2008, Respondent renewed the registration for the disputed domain name.

5. Parties’ Contentions

A. Complainant

Complainant contends that Respondent’s use of the disputed domain name will create a likelihood of public confusion, will cause damage to the value of Complainant’s trademarks, reputation, and business, and will deceive and confuse the public.

Complainant further contends that Respondent assigned all of its rights in EASYBENDER to Complainant in 2007, and improperly renewed the disputed domain name in 2008 in bad faith after its relationship with Complainant was terminated.²

B. Respondent

Respondent asserts a wide range of contentions against Complainant, including many issues outside the scope of this proceeding. The principal contentions relevant to this proceeding are (1) that Complainant lacks prior rights in the mark; (2) that Respondent has a legitimate interest in the name; and (3) that Respondent registered and used the domain name in good faith.

6. Discussion and Findings

A. Identical or Confusingly Similar

The disputed domain name is identical to a mark in which Complainant claims rights.

The real question here is whether Complainant has rights in the mark. Complainant claims it came up with the name over fifteen years ago and that Respondent used the name as a representative of Complainant. Complainant also claims that Respondent assigned all of its rights in the mark to Complainant in 2007.

Respondent claims that it was the first user of the mark and that Complainant’s claim of use is fraudulent.

Respondent has provided evidence indicating that it used the mark pursuant to a distribution contact with Complainant (See Annex R-1). Under these circumstances, Respondent may have been operating as a licensee of Complainant. If so, Respondent’s use would have inured to the benefit of Complainant and would be considered use by Complainant for the purpose of establishing trademark rights.

The issue was resolved with more certainty when Respondent assigned all of its rights to Complainant in 2007. Complainant has provided a trademark assignment from Respondent to Complainant dated February 8, 2007. As a result of this assignment, Complainant obtained all rights of Respondent in the mark EASYBENDER.

Either way – by use as a licensor or by assignment - we conclude that Complainant has rights in that mark superior to Respondent.

B. Rights or Legitimate Interests

Respondent contends that it has a legitimate interest in the disputed domain name because it was the first legitimate user of the mark in the commerce. As noted above, the record shows however that Respondent was the U.S. distributor of Complainant’s products as early as 1996 and that all rights in EASYBENDER were transferred from Respondent to Complainant in 2007. The record also shows that Complainant terminated its relationship with Respondent, including any right Respondent may have had to use the disputed domain name, in 2008. Accordingly, we conclude that Complainant has met its burden of showing that Respondent has no right or legitimate interest in the name.³

C. Registered and Used in Bad Faith

The central issue is whether Complainant has established that the domain name was registered and used in bad faith.

The record indicates that Respondent has used use the domain name in bad faith, by continuing to use it as a redirect to its own website after receiving notice that its right to use the disputed domain name was terminated.

It is not so clear that Complainant has met its burden of proving that the domain name was registered in bad faith. Complainant argues that the domain name should be transferred because it was renewed in bad faith.

Other Panels have considered the question of whether bad faith renewal satisfies the bad faith registration requirement. In Substance Abuse Management, Inc. v. Screen Actors Modesl [sic] International, Inc., SAMI, WIPO Case No. D2001-0782, the Panel stated:

“The issue of whether renewal of a registration made in bad faith can convert a name originally registered in good faith to a name registered in bad faith was addressed head-on in Weatherall Green & Smith v. Everymedia.com, WIPO Case No. D2000-1528. The Panel in that case, like the Panel here, found no evidence that the original registration was obtained in bad faith. The Panel did find that the registration was renewed in bad faith and that at the time of the renewal the domain name was being used in bad faith. However, even with this evidence, the Panel did not find a violation of the UDRP, concluding “a registration of a domain name that at inception did not breach Rule 4(a)(iii) but is found later to be used in bad faith does not fall foul of Rule 4(a)(iii).” The Panel also relied on the Report of the WIPO Internet Domain Name Process (April 30, 1999) which states that the Report was not intended to extend the definition of abusive registration “to include domain names originally registered in good faith.” See also Teradyne, Inc. v. 4tel Technology, WIPO Case No. D2000-0026. Clearly, the authors of the Report could have extended its analysis of the UDRP to cover registrations obtained in bad faith either at the time of the original registration or at the time of renewal. It chose not to do so. Similarly, the Policy could have been drafted to address both bad faith registration and bad faith renewal. It does not, referring only to a registration having been obtained in bad faith. Thus, there is no support for Complainant’s position.

[…]

Because Complainant has not presented any evidence to suggest that when the domain name was originally registered it was done so in bad faith, and because there is no indication in the UDRP that a renewal constitutes a new registration, Complainant has not satisfied its burden of showing bad faith registration. If a domain name was registered in good faith, it cannot, by changed circumstances, the passage of years, or intervening events, later be deemed to have been registered in bad faith. Accord, Telaxis Communications Corp. v. William E. Minkle, WIPO Case No. D2000-0005. Absent proof of bad faith registration, the Complainant has not satisfied the requirements of the UDRP. Weatherall Green & Smith v. Everymedia.com, WIPO Case No. D2000-1528.”

We concur with the analysis and conclude that Respondent’s bad faith renewal did not satisfy the requirements of the UDRP with respect to bad faith registration.

This leads to the question of whether the initial registration of the disputed domain name was made in bad faith. As already noted, Respondent was a distributor of Complainant’s products and used the domain name for many years without objection.

This Panel has previously considered similar situations involving a former distributor. This Panel found a violation of the Policy in Herbalife International of America, Inc. v. myherbalife.com, WIPO Case No. D2002-0101. There the respondent’s use was contrary to the Complainant’s published guidelines for independent distributors. The decision states:

“Respondent lacks any rights or legitimate interest in the Domain Name. It is not authorized or licensed to use Complainant’s mark as a domain name. In fact, Complainant’s Internet Guidelines for independent distributors prohibit such use. […] I also find that Respondent registered and used the Domain Name in bad faith. Registration of the Domain Name was contrary to Respondent’s obligations as an independent distributor of Complainant’s products. […] Bad faith registration is shown here by the registration of a domain name in contravention of an undisputed agreement between the parties.”

A different result arises if the domain name registration occurs with the consent or acquiescence of the trademark owner. Celebrity Signatures International, Inc. v. Hera’s Incorporated Iris Linder, WIPO Case No. D2002-0936 states:

The principal issue in this case is whether Respondent registered and used the domain name in good faith. The record shows that Respondent operated a website selling Complainant’s products using Complainant’s mark as a domain name. It appears that Complainant was aware of the use for about a year before objecting. Even before and after the objection, Complainant’s representatives appear to have encouraged that use before informing Respondent that they were referring customers to her site and that the web page looked great.

[…]

The evidence shows that when Respondent registered the domain name and began initial use, there was no contractual prohibition on Respondent’s conduct. When Respondent inquired about distributor requirements, she was told no form or agreement was required. That fact has not been contradicted by Complainant. Thus, there is no violation of a contract or published guidelines to support a finding of bad faith here.

[…]

Applying those principles here, I recognize without deciding the issue the possibility that Respondent’s current use after objection might be an infringement of Complainant’s rights and that Respondent may no longer be justified in believing its use is permitted after receiving Complainant’s objections. Nevertheless, that possibility involves a dispute that is beyond the scope of this proceeding. Here, the Policy requires proof of bad faith registration and use. Based on the record presented, I find at the time of registration that Complainant had no distribution agreement or policy in place to prevent Respondent from registering and using the domain name. Further, Complainant’s representatives appear to have known of Respondent’s conduct and encouraged her in her use. She intended to use the domain name for a website selling Complainant’s products, she was encouraged to do so by Complainant’s representatives, she did so for over a year without objection. These facts have not been rebutted by Complainant. It does not appear that she did so with the intent to be a cybersquatter or to unfairly trade on Complainant’s good will. To a significant degree, Complainant’s own actions created the circumstances in which Respondent could reasonably concluded that her conduct was permitted. Thus, I conclude within the circumstances of this record that Complainant has not met its burden of proving that Respondent registered the domain name in bad faith.”

Similarly, the complaint was denied in Western Holdings, LLC v. JPC Enterprise, LLC d/b/a Cutting Edge Fitness and d/b/a Strivectin SD Sales & Distribution, WIPO Case No. D2004-0427, where there was evidence of consent by the Complainant:

“Complainant acknowledges that Respondent was an authorized distributor of Complainant’s products when the domain names were registered and that there was “an oral agreement pursuant to which [Respondent] was granted the right to use certain of Complainant’s trademarks in connection with the advertising and sale of products.” Complainant claims, however, that agreement did not include permission to register the domain names.

In contrast, Respondent submits the Second Declaration of Pat Corrao, its owner, stating:

“[Complainant’s] pattern and practice is to advise its distributors to register all domain names incorporating terms similar to [Complainant’s] products . . .

[Complainant] specifically suggested that [Respondent] register any domain names the [Respondent] wished that incorporate terms similar to [Complainant’s] products . . .”

The factual record is not clear regarding the scope of permission given to Respondent. What is apparent on the record submitted, however, is that Respondent, at a minimum, had oral permission to use Complainant’s marks in advertising and that there was no express restriction informing Respondent that the permission granted did not include registration and use of the marks by Respondent as domain names.”

In summary, the registration addressed in the Herbalife case was deemed to be a bad faith because it was contrary to the trademark owner’s written guidelines. In contrast, the registration at issue in Signature International and Western Holdings was not found to be in bad faith because the statements or conduct of the complainants demonstrated that the respondents’ conduct was allowed.

In this case, there is no evidence of an agreement between the parties prohibiting Respondent to register the domain name. And there is no evidence that Complainant objected to the registration at the time or for many years thereafter. When dealing with an affiliate, we do not mean to suggest that a specific prohibition is a necessary condition for finding bad faith. To the contrary, registration without authorization or consent may be sufficient to show bad faith under appropriate circumstances. One normally is not permitted to use another’s trademark as a domain name in the absence of permission, implied or explicit. Curiously here, however, there is no allegation by Complainant that the domain name was originally registered in bad faith or that the registration lacked Complainant’s authorization or consent. Instead, the allegation of bad faith relies solely on bad faith renewal of the domain name. As already shown above, that basis is insufficient under the UDRP.

Complainant’s silence with respect to the 1998 registration of the domain name is puzzling. Complainant does not confirm or deny knowledge of the domain name registration, but acknowledges that Respondent “was affiliated with Complainant” at that time as “a U.S. service representative for Complainant” and “used the domain name for promoting and selling easybender [sic] products.” In addition, it appears that Complainant waited for ten years and did not voice any objection to the domain name until after the affiliation ended. These facts weigh in favor of Respondent. Complainant fails to present any facts or argument to the contrary with respect to the initial registration and it fails to explain why it waited ten years to object. The lack of objection for ten years while the Respondent was admittedly “affiliated with the Complainant” seems consistent with the conclusion that the initial domain name registration was made in good faith and implies acquiescence that is not otherwise rebutted by Complainant. In any event, Complainant bears the burden of proof regarding bad faith registration. By failing to address the question of bad faith registration, and by relying solely on an argument centered on bad faith renewal, we find that Complainant has failed to meet that burden.

Much is made in Respondent’s submission of the contention that Complainant has acted in bad faith in its dealings with Respondent. The Response alleges a list of bad acts against Complainant, including “fraudulent misrepresentation, breach of fiduciary duties, breach of contract, breach of the covenant of good faith and fair dealing, tortious interference and fraudulent misrepresentation through conspiracy [. . .] with respect to patents”. We of course take no position on such matters, noting only that they are beyond the scope of this proceeding and that we do not see how they are relevant to this domain name dispute. We also recognize without deciding the issue the possibility that Respondent’s current use after objection might be an infringement of Complainant’s rights or a breach of the assignment of rights between the parties, and that Respondent may no longer be justified in believing its use is permitted after ending its relationship with Complainant and receiving Complainant’s objections. Nevertheless, that possibility involves a dispute that is beyond the scope of this proceeding.

7. Decision

For all the foregoing reasons, in accordance with paragraphs 4(i) of the Policy and 15 of the Rules, the claim is denied.

Mark Partridge
Sole Panelist

Dated: May 28, 2008

¹ As the mark was not the subject of a valid registration at the time the dispute arose, we do not rely on the application as a basis for establishing rights. Inside, we find that Complainant has common law rights by virtue of long use and an assignment of rights from Respondent.

² For reasons more fully explored below, it is significant that Complainant's objection focuses on renewal of the domain name in 2008 and does not challenge the original registration in 1998.

³ Significantly, Respondent does not deny that Complainant terminated Respondent’s role as a distributor in January 2007. Rather, Respondent argues that Complainant is not entitled to the domain name because Respondent owns rights in the mark. That position is flatly contradicted by the assignment of rights from Respondent to Complainant in 2007.