WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Gymworld Inc. and Magformers UK Limited v. Vanbelle Jo, Vanbelle Law
Case No. DEU2017-0001
1. The Parties
The Complainants are Gymworld Inc. of Seul, Republic of Korea and Magformers UK Limited of Cheshire, United Kingdom of Great Britain and Northern Ireland ("United Kingdom"), represented by Billiet & Co Lawyers, Belgium.
The Respondent is Vanbelle Jo, Vanbelle Law of Brussels, Belgium, internally represented.
2. The Domain Name, Registry and Registrar
The disputed domain name is <magformers.eu>. The Registry of the disputed domain name is the European Registry for Internet Domains ("EURid" or the "Registry"). The Registrar of the disputed domain name is EuroDNS S.A.
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on June 28, 2017. On June 28, 2017, the Center transmitted by email to the Registry a request for registrar verification in connection with the disputed domain name. On June 29, 2017, the Registry transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details.
The Center verified that the Complaint satisfied the formal requirements of the .eu Alternative Dispute Resolution Rules (the "ADR Rules") and the World Intellectual Property Organization Supplemental Rules for .eu Alternative Dispute Resolution Rules (the "Supplemental Rules").
In accordance with the ADR Rules, Paragraph B(2), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on July 4, 2017. In accordance with the ADR Rules, Paragraph B(3)(a), the due date for Response was August 16, 2017. The Response was filed with the Center on July 26, 2017. In response to a notification by the Center that the Response was administratively deficient, the Respondent filed an amended Response on July 27, 2017.
The Center verified that the Response together with the amended Response satisfied the formal requirements of the ADR Rules and the Supplemental Rules.
The Center appointed Luca Barbero as the sole panelist in this matter on August 2, 2017. 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 ADR Rules, Paragraph B(5).
On August 8, 2017, the Complainants sent an email communication to the Center requesting to submit Further Statements.
In accordance with Paragraphs B(7) and B(8) of the ADR Rules, the Panel deemed appropriate to allow the Complainants to submit a Further Statement in response to the submission of the Respondent within seven calendar days, i.e., until August 18, 2017.
The Panel granted the Respondent additional seven calendar days after reception of the Complainants' Further Statement to submit any comments. The Panel reserved the right to assess the relevance of the additional arguments submitted when examining all the documents and statements.
The Complainants submitted a Further Statement on August 18, 2017. The Respondent submitted a Further Statement on August 25, 2017.
The due date for Decision was extended to September 15, 2017.
Hereinafter, Gymworld Inc. will be referred to as "the first Complainant" while "Magformers UK Limited" as "the second Complainant".
4. Factual Background
The first Complainant is a company incorporated under the law of the Republic of Korea and holds one hundred percent of the shares of the company Magformers LLC, located in the United States of America ("United States"), and seventy five percent of the shares of the second Complainant.
The company Magformers LLC is the owner of the United States trademark registration No. 4361063 for MAGFORMERS, filed on November 6, 2012 and registered on July 2, 2013, for magnetic toys, toy construction sets and toys in International class 28.
The first Complainant is the owner of the European Union trademark No. 1198801 for MAGFORMERS, registered on January 24, 2014 for magnetic toys, toy construction sets and toys in class 28.
The first Complainant is also the owner of the domain name <magformersworld.com>, which was registered on January 19, 2011 and is used for its worldwide business operations, and of the domain name <magformers.co.uk>, which was registered on May 5, 2010, and is used for its operation in the United Kingdom.
The Complainants' MAGFORMERS product is a 3D educational magnetic toy.
The first Complainant has been operating worldwide through a distributor network. In pursuing its business operations in the European Union, the first Complainant collaborated with a company named Smart Industries NV (hereinafter, "Smart"), which registered the disputed domain name on May 5, 2010, along with the domain names <magformers.nl> and <magformers.be>, in its own name.
After the termination of the collaboration with Smart, on November 4, 2016, the first Complainant requested to Smart, through its representative, the transfer of the disputed domain name and of the domain names <magformers.nl> and <magformers.be>. The first Complainant states that Smart refused to transfer the three domain names free of charge.
The Respondent is a Belgian law firm and appears to have been listed as registrant of the disputed domain name as of February 22, 2017.
The Respondent claims to hold the disputed domain name on behalf of its client Magforce Invest SA (hereinafter, "Magforce"), a company incorporated under Belgian law in May 2014.
The Respondent alleges that Magforce purchased the disputed domain name, together with two additional domain names, <magformers.be> and <magformers.nl>, from Smart for a purchase price of EUR 24,000, as agreed through an agreement on December 22, 2016, confirmed in a letter of the Respondent of January 9, 2017, and a more elaborate agreement of February 25, 2017.
In March 2017, some correspondence was exchanged between the Complainants' representative and the Respondent, in which the Respondent stated that the disputed domain name was held in the name of its client Magforce and that this client would have been able to sell the disputed domain name, along with the additional domain names <magformers.be> and <magformers.nl>, for an amount of EUR 30,000.
The disputed domain name <magformers.eu> was created on May 5, 2010 and the Respondent registered the disputed domain name on February 22, 2017. The disputed domain name is currently not pointed to an active website.
5. Parties' Contentions
A. Complainant
The Complainants contend that the disputed domain name is identical or at least confusingly similar to the European Union trademark MAGFORMERS and the brand name Magformers.
The Complainants state that the Respondent has no rights or legitimate interests in the disputed domain name, as the Respondent is by no means associated with the MAGFORMERS trademarks, there is no evidence that can possibly demonstrate that the Respondent is commonly known by the disputed domain name and no indication that the disputed domain name corresponds to the Respondent's name and/or trademarks, if any.
The Complainants also assert that the first Complainant and Magformers LLC are the only entities with a vested legitimate interest in the disputed domain name, that the first Complainant is not associated with the Respondent in any way, not being a licensee or distributor of the first Complainant or authorized to use the disputed domain name. The Complainants further point out that the Respondent must have had knowledge of the first Complainant's rights in the well-known trademark MAGFORMERS when it bought the disputed domain name.
The Complainants claim that, since the termination of the distribution relationship with Smart, the disputed domain name has been used in bad faith and subsequently transferred to the Respondent, which, again, is using it in bad faith. The Complainants further state that the disputed domain name is clearly not held by the Respondent in connection with a bona fide offering of products, since the disputed domain name is not being used by the Respondent at all.
The Complainants also highlight that the price of EUR 30,000, requested by the Respondent for the transfer of the disputed domain name to the Complainants, exceeds the costs directly related to the acquisition of the disputed domain name and the two additional domain names, <magformers.be> and <magformers.nl>. In addition, the Complainants claim that the Respondent, being a law firm regulated by the Brussels Bar, is not allowed to acquire any commercial gain from holding the disputed domain name, since further to Article 437 of the Belgian Judicial Code, the profession of lawyer is incompatible with engaging in trade or industry.
The Complainants further allege that the Respondent, by acquiring the disputed domain name, distorts competition in the sense that it intentionally tries to limit the business operations of the first Complainant in the European Union, as potential clients attempting to access the inactive website at the disputed domain name may have the impression that the first Complainant is no longer operating business in the European Union.
Therefore, the Complainants conclude that the transfer and holding of the disputed domain name by the Respondent have been executed in bad faith, and request that the disputed domain name be revoked from the Respondent and transferred to the second Complainant.
B. Respondent
The Respondent claims that the Complaint addressed against it is not admissible because the Respondent is not the legal owner and final user of the disputed domain name, which would be the Belgian company Magforce, as also disclosed to the Complainants' representative in the correspondence exchanged before the filing of the Complaint. The Respondent also claims that the position of law firms as third-party holders and formal registrants of immaterial assets is a common and widespread practice, at least at the Belgian Bar Association.
Anyway, the Respondent states the following as regards the merits of the case:
- The company Magforce is a Belgian holding and investment company, regrouping shares, management and investment interests on a group level, concerning participations and assets that are beneficial to its subsidiaries. One of such subsidiaries, responsible for international sales in certain territories, is the Belgian company Magforce BE. Another subsidiary, existing since 1953, is the French company Magforce International. Both companies sell similar products but not within the same scope of clients, territories or activities. The Magforce group is active in the field of production and sale of infrastructure, housing, transportation, clothing, equipment and similar products and services both for civil and military use. The group has provided products in case of international military but mostly human conflicts or emergencies due to natural disasters, earthquakes and epidemics;
- MAGFORCE is, amongst others initially already registered by Magforce International, registered as a European Union trademark in classes 6, 8, 9, 18 and 25;
- The Complainants cannot successfully demonstrate that there exists a certain notoriety of the products commercialized by the Complainants or any risk of confusion within the general public between the products or activities sold by the Complainants and the Magforce group, since the Complainants are active in the business of sale of toys and games while the Magforce group is active in another field;
- In 2016, the Magforce group started planning an educational project, as the group received more demand in the field of operations to help with training and technical assistance to the staff, ground handling troops in relation to the delivery, use, maintenance and preservation of its products. Therefore, since for French speaking users, "former" means "to educate", the name "Magfor-mers" or "Mag-formers" was "seen as more than useful";
- In order to preserve its interests within the process of developments of such new activity also through web-based solutions, the group wanted to register available domain names that would refer directly to the products and would have been accessible via dedicated webpages. The search of such relevant domain names resulted in several domain names that looked interesting, of which three were held by Smart, including the disputed domain name. Magforce and Smart reached an agreement after negotiation and the Respondent was appointed by Magforce and Smart to register the change of ownership of the domain names in order to temporarily complete the purchase transaction and, when fully paid out, transfer the domain names to the Magforce group;
- The purchase of the disputed domain name, along with the domain names <magformers.nl> and <magformers.be> was completed for the amount of EUR 24,000, and an agreement was signed by Magforce and Smart in January 2017. A first foreseen payment was already made and the remaining part must be paid by the end of 2017 at the latest;
- The operation was completed by Magforce in view of the legitimate use of the disputed domain name and the domain names <magformers.nl> and <magformers.be> for the commercialization of its products, with neither detriment nor knowledge of the Complainants' business;
- The acquisition of the disputed domain name and the domain names <magformers.nl> and <magformers.be> represents an understandable practice for the Magforce group in view of a planned future use when all the other parameters and aspects will be ready. The acquisition of domain names is usually one of the first commercial steps to take in order to preserve and protect such assets that easily move and change, and there is no need, under any legal text, to launch a webpage "under construction" in order to justify the rightful detention and protection of a domain name;
- The actual connection between the disputed domain name and its holder is the evident literal composition of the two words "mag-force" and "mag-formers". Magforce and its products are known on the relevant market since 1953. Its name, combined with the word "formers" and with its literal meaning sufficiently prove the use and utility of these domain names for the Magforce group within the foreseen new scope of activities;
- In view of the above, the purchase of the disputed domain name and its use by the group Magforce is consistent with a pattern of bona fide activities, based on the strict connection between the name of the holder and the products that are intended to be sponsored through the disputed domain name;
- Magforce, the actual holder of the disputed domain name, has no responsibility within or knowledge about any previous use or not of the disputed domain name by its previous owner Smart, as it has been established that, as from the moment of its purchase, Magforce held the disputed domain name in good faith, for a legitimate intended use, in accordance with bona fide commercial practices;
- Magforce registered the disputed domain name in good faith and without knowledge of the Complainants' trademark, which is moreover registered in a totally different area of business that can in no way compete with the one of the Magforce group;
- The Complainants' claim that the notoriety of its mark would imply a presumption of knowledge by Magforce has to be rejected since: i) the parties operate in diametrically opposite markets, with no reason or possibility for Magforce to be aware of the existence of the brand MAGFORMERS within such area of business; and ii) the first Complainant's trademark did not acquire distinctiveness in the European Union Intellectual Property Office ("EUIPO") Registry, meaning that the brand is not deemed to be known by the general public in Europe;
- The remuneration of EUR 30,000 proposed as a starting price of eventual negotiations with the Complainants' representative must be considered as appropriate with the normal expectation of a business operator not to incur into losses, since the disputed domain name and the two additional domain names mentioned above were purchased at the price of EUR 24,000 and the small margin (EUR 6,000) must be reappraised by taking into account the efforts and costs for the purchase and defense of the domain names and the fair expectation of their use in the future plans of the company, that would have been irremediably frustrated by its transfer;
- Since the Magforce group is active in a totally different field of activity than the Complainants, no distortion of competition could possibly occur. Specifically, the activity of the Complainants was undertaken in Europe, as well as in all other markets, through the use of different web pages, trademarks and sales points, while the disputed domain name was never used by the Complainants, with the consequence that its absence could not lead to any negative impression towards its clients. In addition, the first Complainant's trademark is not well-known out of its specific market and therefore the registration by Magforce of a homonymous domain name shows no intent to jeopardize or illicitly obtain advantages from the trademark.
C. Complainants' Further Statement
The Complainants state that, by registering the disputed domain name in its own name and providing its own contact data, without disclosing the identity of the alleged real holder, the Respondent has breached Section 5 of EURid's Domain Name Registration Policy, which establishes that a registrant is under an obligation to keep the provided information complete and accurate at all times throughout the term of registration and the information must be that of the registrant and not that of the proxy or representative of a person or entity that does not meet the General Eligibility Criteria.
The Complainants allege that the educational project supposedly developed by Magforce does not qualify as preparations to use the disputed domain name in connection with a bona fide offer of products or services, since the information presented is not independently verifiable, as no evidence has been submitted by the Respondent.
The Complainants point out that the Respondent is not the owner of the European Union trademark MAGFORCE of which the Respondent enclosed the trademark details as annex to the Response, since such trademark is owned by a Chinese individual which has no apparent relationship with Magforce.
The Complainants deny the Respondent's statement that the Complainants' trademark is not known to the general public in Europe since the records of the first Complainant's European Union trademark registration show that the trademark has not acquired distinctiveness. In this respect, the Complainants assert that the Respondent appears to misinterpret the meaning of "acquired distinctiveness", which shall be applied only to signs that do not have a distinctive character.
The Complainants also claim that there are two links between Magforce and Smart – the former holder of the disputed domain name as well as of the domain names <magformers.nl> and <magformers.be>. The first link is a person operating as managing director of Compagnie Financiere Des Palais D'outre-Ponts ("COFIPAL") – a company linked to Magforce – who also acts as managing director of Smart. The second link is another person, who is a director and person responsible for the daily management of Smart and, in the past, was the administrator of COFIPAL.
The Complainants contend that, given the fact that the same individuals were and are involved in Smart and Magforce, it is impossible for Magforce and the Respondent to claim that they did not have knowledge of the first Complainant's business. The Complainants also highlight that the purchase agreement between Smart and Magforce was concluded after the sending of its notice of default to Smart in connection with the disputed domain name and the domain names <magformers.nl> and <magformers.be>.
The Complainants further point out the following inconsistencies and inaccuracies in the argumentation of the Respondent:
- The purchase agreement that the Respondent is referring to appears to have been concluded on February 25, 2017 and not in January 2017 as stated in the Response. The first invoice arising out of this purchase agreement was issued on December 27, 2016, about two months before the agreement was actually concluded. The documents submitted by the Respondent in this respect do not have independently verifiable dates (fixed dates as per article 1328 of the Belgian Civil Code);
- The Respondent provides no evidence of its appointment by Smart and Magforce to register the change of ownership of the domain names in order to temporarily complete the purchase transaction and, when fully paid out, transfer the ownership of the domain names to Magforce;
- Apart from the fact that Magforce is not the owner of the registered trademark No. 1323047 for MAGFORCE, the trademark covers only goods in class 25, not also classes 6, 8, 9 and 18 as claimed by the Respondent.
D. Respondent's Further Statement
The Respondent states that its contractual relationship with Magforce has been duly proven through the power of attorney submitted as annex 1 to the Response.
The Respondent also asserts that the registration of the disputed domain name was made in respect of the Terms and Conditions for .be [sic] domain name registrations, as the disputed domain name was not registered with the aim at shielding the identity of its real holder, as it would be demonstrated by the fact that Respondent immediately disclosed its position and transmitted to the Complainants' representative the details of the domain holder Magforce, in order to correctly direct any eventual legal action.
With reference to the Complainants' assertions as to the alleged intended use of the disputed domain name by Magforce, the Respondent states that the project Magformers was far from being incorporated in the business plan of the company, and that the fact that the document provided as annex 6 to the Response to demonstrate such intended use finds no correspondence in the external communication strategy of the company is connected to the very nature of the document itself as a "first look" file conceived to be for mere internal use.
The Respondent also states that the Complainants' alleged links between Smart and Magforce are not an indication of bad faith in the transfer of the disputed domain name since: i) one of the people indicated by the Complainants ceased its charge as administrator of COFIPAL in July 2012, four years before the notice of default directed to Smart was issued; ii) with respect to the second person's presence in the administration of Smart and COFIPAL, it is normal practice that natural and moral persons would be part of different boards of administrators, especially in sectors such as the one of military wares that is restricted to a very specialized and small number of operators; iii) sharing part of the board of administration - and especially through another corporate structure (COFIPAL) that is specifically predisposed to this intent - does not implicate the share of contents or the spread knowledge of the operations undertaken between all the companies; iv) every administrator has obligations of non-disclosure and good faith towards the company on whose board it is part of, with the result that the link between the administration of the two entities does not preclude contractual relations in good faith; v) the two companies Magforce and Smart remain fully separate entities with no legal connection between each other and with different shareholders and control.
The Respondent further states that the agreement between Magforce and Smart was concluded through multiple steps, that took place in different dates, which is just a consequence of the fact that the agreement was reached in a long lapse of time, and there is no surprise that its partial payment and its contractual formalization were not set in the same date.
The Respondent also alleges that the fact that the full payment of the remaining amount (ninety percent) of the price set for the joint acquisition of the disputed domain name together with the domain names <magformers.be> and <magformers.nl> is delayed to the end of 2017, is an additional proof of the "extended delay originally foreseen by the parties to conclude the agreement and to finally make use of the disputed domain name."
6. Discussion and Findings
According to article 22(1)(a) of the Commission Regulation (EC) No. 874/2004 (hereinafter, the "Regulation"), an ADR procedure may be initiated by any party where the registration is speculative or abusive within the meaning of Article 21. Article 21(1) of the Regulation, provides that a registered domain name shall be subject to revocation where it is identical or confusingly similar to a name in respect of which a right is recognized or established by national and/or Community law and where it:
(a) has been registered by its holder without rights or legitimate interests in the name; or
(b) has been registered or is being used in bad faith.
Article 22(11) of the Regulation states that "the ADR panel shall decide that the domain name shall be revoked, if it finds that the registration is speculative or abusive as defined in Article 21. The domain name shall be transferred to the complainant if the complainant applies for this domain name and satisfies the general eligibility criteria set out in Article 4(2)(b) of Regulation (EC) No 733/2002."
This provision is reflected in paragraph B(11)(b) of the ADR Rules, stating that the sole remedies available pursuant to an ADR proceeding where the respondent is the domain name holder in respect of which domain name the complaint was initiated shall be limited to revocation or to the transfer of the domain name to the complainant provided that it satisfies the eligibility criteria established for the registration of .eu domain names.
A. Preliminary procedural issues: multiple complainants and identification of proper Respondent
The first preliminary procedural issue is whether the Panel may accept the Complaint filed by two different Complainants.
Neither the Regulation nor the ADR Rules expressly contemplate the possibility of an ADR complaint filed jointly by multiple complainants. However, in several prior domain name disputes decided pursuant to the Uniform Domain Name Dispute Resolution Policy ("UDRP")1, a single complaint filed by more than one complainant against a single respondent may be accepted if "(i) the complainants have a specific common grievance against the respondent, or the respondent has engaged in common conduct that has affected the complainants in a similar fashion, and (ii) it would be equitable and procedurally efficient to permit the consolidation" (section 4.11.1 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Third Edition ("WIPO Overview 3.0")).
The Panel finds that said conditions are satisfied in the present proceeding because:
i) The Complainants belong to the same group of companies;
ii) The first Complainant is based outside the European Union and the European Free Trade Association ("EFTA") region but it is the owner of an European Union registered trademark relevant to the present dispute;
iii) The second Complainant, of which the first Complainant is a majority shareholder, holds rights in a company name relevant to the present dispute and is based in a Member-State of the European Union, thus satisfying the eligibility requirements provided for the transfer of the disputed domain name;
iv) The Complainants have a common interest in the disputed domain name;
v) It would be equitable and procedurally efficient to permit the consolidation.
The second procedural issue is the identification of the proper Respondent, as the Complainants directed the Complaint against the registrant of the disputed domain name as referred to in the public WhoIs records published on the EURid website. However, the Respondent claims that the Complaint should be found inadmissible since the actual holder of the disputed domain name is another entity, the identity of which was disclosed by the Respondent to the Complainants in their pre-Complaint correspondence.
According to Paragraph B(1)(b)(5) of the ADR Rules, the complaint filed shall provide "the name of the Respondent and, in case of an ADR Proceeding against a Domain Name Holder provide all information (including any postal and e-mail addresses and telephone and fax numbers) known to the Complainant on how to contact the Respondent or any representative of the Respondent, including contact information based on pre-Complaint dealings, in sufficient detail to allow the Provider to send the Complaint to the Respondent as described in Paragraph A2(a)".
The Panel notes that the Complainants satisfied the above requirements by mentioning the registrant's contact information in the section of the Complaint dedicated to the Respondent. Moreover, according to the documents on records, all the pre-Complaint correspondence was exchanged by the Complainants only with the registrant of the disputed domain name and, although it indicated to have acquired the disputed domain name on behalf of its client Magforce, it failed to disclose the related full contact details. Furthermore, the Respondent duly received notice of the ADR proceeding in accordance with the provisions of the ADR Rules and, when filing the Response, provided only its contact details and not those of Magforce.
The Panel also notes that, as stated in Paragraph A(1) of the ADR Rules, the Respondent means the holder of a .eu domain name registration.
Furthermore, according to Section 15(2) of the .eu Domain Name Registration terms and conditions ("Terms and Conditions") established for the registration of domain names under the .eu country-code Top-Level Domain ("ccTLD"), "The Registrant must participate in ADR Procedures if a third party (a 'Complainant'), in compliance with the Dispute Resolution Rules, asserts to an ADR Provider and initiates a complaint against the Registrant on the basis of speculative or abusive registration, as referred to in Articles 21 and 22(1)(a) of the Public Policy Rules".
In view of the above, the Panel finds that Vanbelle Jo, Vanbelle Law is a proper Respondent in this case. However, the Panel will consider also its client Magforce in the assessment of the second and third substantive requirements provided by the Regulation and the ADR Rules.
B. Identical or Confusingly Similar to a name in respect of which a right or rights are recognized or established by national law of a Member State and/or Community law
Article 10(1) of the Regulation contains a list of rights which may fulfill the definition of "name in respect of which a right is recognized or established" provided in Article 21(1) of the Regulation. Said list includes, inter alia: "registered national and community trademarks, geographical indications or designations of origin, and, in as far as they are protected under national law in the Member-State where they are held: unregistered trademarks, trade names, business identifiers, company names, family names, and distinctive titles of protected literary and artistic works."
Paragraph B(11)(d)(1)(i) of the ADR Rules determines that the Panel shall issue a decision granting the remedies requested in the event that the Complainant proves "The domain name is identical or confusingly similar to a name in respect of which a right is recognized by the national law of a Member State and/or Community law".
In the case at hand, the first Complainant provided evidence of ownership of a European Union Trademark Registration for MAGFORMERS, No. 1198801, registered on January 24, 2014, for goods in class 28. The Panel notes that the trademark is indicated as "figurative" as it is constituted of the wording "magformers" in bold characters. However, the core of the mark clearly consists of the denominative element MAGFORMERS.
Several prior panels have ruled that a figurative trademark can be a relevant right, if the words contained therein can be clearly separated and distinguished from the other elements.
As established in several prior cases, in the assessment of identity or confusing similarity, the .eu ccTLD suffix has to be disregarded, being a mere technical requirement for registration.
The Panel notes that the first Complainant's trademark MAGFORMERS is entirely reproduced in the disputed domain name, with the mere addition of the .eu ccTLD suffix which, as stated above, is not relevant for the purposes of this assessment.
Therefore, the disputed domain name is clearly identical or confusingly similar to a trademark in which the first Complainant has established rights.
The Panel also notes that the disputed domain name is confusingly similar with the company name of the second Complainant, since the latter encompasses the term "Magformers" with the addition of the geographical indicator "uk" (clearly referring to the country in which the second Complainant is based, i.e., United Kingdom) and the abbreviation of the legal company form "Ltd", which are not distinguishing features.
Therefore, the Panel finds that the Complainants have proven that the disputed domain name is confusingly similar to a name in respect of which they have rights, according to the first requirement of Article 21(1) of the Regulation and Paragraph B(11)(d)(1)(i) of the ADR Rules.
C. Rights or Legitimate Interests
According to Article 21(2) of the Regulation and Paragraph B(11)(e) of the ADR Rules, 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 a respondent's rights or legitimate interests in a domain name:
(a) prior to any notice of the dispute, the respondent has used the domain name or a name corresponding to it in connection with the offering of goods or services or has made demonstrable preparations to do so;
(b) the respondent, being an undertaking, organization or natural person, has been commonly known by the domain name, even in the absence of a right recognized or established by national and/or Community law;
(c) the respondent is making a legitimate and non-commercial or fair use of the domain name, without intent to mislead consumers or harm the reputation of a name in which a right is recognised or established by national and/or Community law.
A complainant is required to make a prima facie case that the respondent lacks rights or legitimate interests and, once such prima facie case is made, the burden of production shifts to the respondent to submit appropriate allegations or evidence demonstrating rights or legitimate interests in the disputed domain name. If the respondent fails to come forward with such relevant evidence, the complainant is deemed to have satisfied the second element.
In the present case, the Panel finds that the Complainants have made out a prima facie case and that the Respondent has failed to provide convincing elements to establish rights or legitimate interests in the disputed domain name.
It is clear that the Complainants have no relation with the Respondent and its client Magforce, and have not authorized them to use the trademark MAGFORMERS or the disputed domain name.
In addition, there is no indication before the Panel that the Respondent and Magforce might be commonly known by the disputed domain name. The Panel also notes that the Respondent submitted, as annex to the Response, a printout of a trademark database search for the European Union Trademark Registration No. No. 1323047 for MAGFORCE, which the Panel notes is registered by a third party. The Respondent has not however provided any explanation as to the possible existing relationship between the Respondent and the trademark owner.
In addition, the Panel finds that the evidence submitted by the Respondent to substantiate its statements about Magforce's intended use of the disputed domain name – which is not used so far – for a project involving educational and training activities under the name "Magformers", namely a four-page working document entitled "Magformers project - First look", without any date and apparently originating from Magforce BE (Belgique) – thus a distinct company from Magforce –, is not independently verifiable. Therefore, the Panel is not in the position to determine its authenticity and whether the asserted project was actually conceived by Magforce before having received any notice of the present dispute.
In view of the above, the Panel finds on balance that it has not been demonstrated that the Respondent and/or its client Magforce have used, or made preparations to use, the disputed domain name in connection with the offering of goods or services prior to any notice of the dispute.
Furthermore, based on the elements on records, the Panel finds that the Respondent is not making a legitimate and non-commercial or fair use of the disputed domain name, without intent to mislead consumers or harm the reputation of the Complainants' distinctive signs.
In light of the foregoing, the Panel finds that the Complainants have proven that the Respondent has no rights or legitimate interests in the disputed domain name according to the second requirement of Article 21 (1) of the Regulation and Paragraph B(11)(d)(1)(ii) of the ADR Rules.
D. Registered or Used in Bad Faith
According to Article 21(1)(b) of the Regulation, a complainant is required to demonstrate that a domain name has been registered or used in bad faith.
Article 21(3) of the Regulation and Paragraph B(11)(f) of the ADR Rules provide a non-exhaustive list of circumstances which, if found by the Panel to be present, may be evidence of the registration or use of a domain name in bad faith:
(1) circumstances indicating that the domain name was registered or acquired primarily for the purpose of selling, renting, or otherwise transferring the domain name to the holder of a name in respect of which a right is recognized or established by national and/or Community law, or to a public body; or
(2) the domain name has been registered in order to prevent the holder of such a name in respect of which a right is recognized or established by national and/or Community law, or a public body, from reflecting this name in a corresponding domain name, provided that:
(i) the Respondent has engaged in a pattern of such conduct; or
(ii) the domain name has not been used in a relevant way for at least two years from the date of registration; or
(iii) there are circumstances where, at the time the ADR Proceeding was initiated, the Respondent has declared its intention to use the domain name, in respect of which a right is recognized or established by national and/or Community law or which corresponds to the name of a public body, in a relevant way but failed to do so within six months of the day on which the ADR Proceeding was initiated;
(3) the domain name was registered primarily for the purpose of disrupting the professional activities of a competitor; or
(4) the domain name was intentionally used to attract Internet users, for commercial gain to the Respondent's website or other on-line location, by creating a likelihood of confusion with a name on which a right is recognized or established, by national and/or Community law, or it is a name of a public body, such likelihood arising as to the source, sponsorship, affiliation or endorsement of the website or location or of a product or service on the website or location of the Respondent; or
(5) the domain name is a personal name for which no demonstrable link exists between the Respondent and the domain name registered.
The Panel finds that the Respondent acquired the disputed domain name from the previous holder Smart in bad faith and continues to hold it in bad faith.
The Complainants stated that the disputed domain name was initially registered by Smart when it was a distributor of the MAGFORMERS products in Belgium, and that the disputed domain name was kept by said company even after the termination of their distribution agreement.
On November 4, 2016, the Complainants' representative formally requested the transfer of the disputed domain name from Smart, which did not comply with such request. It could thus be inferred that, should the Complainants have brought the Complaint against Smart, they would have been successful.
Shortly after said date, however, the disputed domain name was transferred to the Respondent. Indeed, according to the Complainants' verifications with EURid as highlighted in annex 12 to the Complaint, it appears that the Respondent became the registrant of the disputed domain name as of February 22, 2017, and the documents provided by the Respondent demonstrate that negotiations between Smart and the Respondent's client Magforce were already ongoing in December 2016.
As mentioned above, the Respondent stated that it was indicated as holder of the disputed domain name pursuant to the instructions received from, and on behalf of, its client Magforce, which purchased the disputed domain name from Smart, along with the domain names <magformers.be> and <magformers.nl>, in December 2016.
The Panel finds that it is unlikely that the Respondent was not aware of the dispute concerning the disputed domain name since Smart, in light of its representations and warranties as seller, would have had to disclose such circumstance. In addition, the Respondent has not denied its knowledge of the dispute, but only stated that the holding of the disputed domain name in bad faith by the previous holder does not impact on the bad or good faith of the current domain name holder.
In view of the above and based on the documents submitted by the Respondent, the Panel concludes that the Respondent was likely aware of the Complainants' rights on the trademark MAGFORMERS and of the dispute related to the disputed domain name, and cooperated in the transfer of the disputed domain name from the prior owner in order to avoid that Smart would have to transfer it to the Complainants.
Moreover, from the document submitted as Annex 1 to the Response, it appears that Magforce and Smart have agreed to transfer the disputed domain name to the Respondent in order to shield the identity of the real domain name holder.
It is also relevant to note that in the communications and agreements between Smart and Magforce, it is stated that the effects of the transfer of ownership would be retroactive as of January 2016. The Panel finds that there is no plausible reason for adopting such solution, except for indeed shielding the identity of Smart by simulating a fictitious transfer predating the sending of the formal warning from the Complainant to Smart. The existing links highlighted by the Complainant between the two companies Smart and Magforce, i.e., people who had been working for both companies, reinforce said conclusion.
Moreover, the urgency to conclude the transaction that would allegedly justify the mandate given from Smart and Magforce to the Respondent to take care of the transfer of ownership of the disputed domain name appears to contradict the Respondent's allegation in its Further Statement about the "extended delay originally foreseen by the parties to conclude the agreement and to finally make use of the disputed domain name".
Furthermore, notwithstanding the claimed urgency of concluding the transfer of ownership of the disputed domain name, the Panel notes the disputed domain name has not yet been used by the Respondent's client Magforce.
In addition, upon receipt of the first communication from the Complainants' representative requesting the transfer of the disputed domain name, the Respondent presented to the Complainants, on behalf of its client, a request of EUR 30,000 for transferring the disputed domain name, and the two additional domain names that it had registered, to the Complainants. The Panel finds that the Respondent's request, which exceeds by EUR 6,000 the price at which the disputed domain name was allegedly purchased (EUR 24,000, of which though only EUR 2,400 were apparently paid), is well over the out-of-pocket costs and shows the Respondent's and its client's speculative intent.
In view of the above, the Panel finds that the disputed domain name was registered and is being held in bad faith and thus, the Complainants have also met the requirement of Article 21(1) of the Regulation and Paragraph B(11)(d)(1)(ii) of the ADR Rules.
7. Decision
For the foregoing reasons, in accordance with Paragraph B(11) of the ADR Rules, the Panel orders that the disputed domain name <magformers.eu> be transferred to the second Complainant Magformers UK Limited2.
Luca Barbero
Sole Panelist
Date: September 15, 2017
1 Given the similarities between the ADR Rules and the UDRP the Panel will refer to UDRP jurisprudence, where instructive.
2 This decision shall be implemented by the Registry within thirty (30) days after the notification of the decision to the Parties, unless the Respondent initiates court proceedings in a mutual jurisdiction.