WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Instrumentarium Corporation v Rautelin Oy
Case No. D2000-1537
1. The Parties
Instrumentarium Corporation, a Finnish public company of P. O. Box 100, FIN-00031. Instumentarium, represented by Ms Ritva Sotamaa, General Counsel, of the companyís address.
Rautelin Oy, a Finnish company, of Varastokatu 12 B, 00580 Helsinki, represented by Antti Meriläinen, attorney-at-law, of the same address as the company.
2. The Domain Names and Registrar
There are two domain names at issue, namely <instru.net> and <instru.org>. The Registrar in each case is Network Solutions Inc., of 505 Huntmar Drive, Herndon, VA 20170, USA.
3. Procedural History
The Complaint was received by the WIPO Arbitration and Mediation Center on November 8, 2000. A timely response was submitted to and received by the WIPO Arbitration and Mediation Center on December 8, 2000. George R. F. Souter was appointed sole panelist on January 4, 2001.
4. Factual Background
The complainant is an old, established Finnish company, trading in the field of medical technology in the segments of anesthesia and critical care, medical instruments and supplies, and in optical retail in Finland (in which it claims to be the market leader nationally), and a significant retailer in nearby markets.
It is, inter alia, the proprietor of Finnish trade mark registration No. 65221, for the trade mark INSTRU in block Latin capitals, in respect of all goods in classes 10, 11, 21 and 25, and all services in class 40. This registration dates from 1976, based on an application filed in 1972.
The Complainant operates two web sites, <instru.com> and <instru.fi>, at which the companyís products and services are itemised.
The Complainant, with the intention of introducing a new DNS hierarchy for its internal network, with external connections, applied to register the domain names <instru.net> and <instru.org>, and discovered that these domain names were already registered by the respondent.
The Complainant wrote to the respondent, on July 17, 2000 apparently requesting the respondent to transfer the two domain names at issue to it, for incurred registration costs. A copy of this letter was not submitted in evidence. The respondent replied on August 3 (for details of this letter see the next paragraph). It appears from a letter from counsel for the respondent to counsel for the complainant, dated, August 31, 2000, which was submitted in evidence, that the compensation discussed during a telephone conversation on August 8, 2000, was US$35 per domain name.
In its letter to the Complainant of August 3, 2000, mentioned in the previous paragraph, the respondent stated (as per the authorised translation into English from the original Finnish):
"Rautelin Oy supplies domain name services, registering domain names as revolving assets and selling them on to customers.
Domain name registration activities.
In the case of these activities, Rautelin Oyís business idea is to develop a domain name register, and to register and sell domain names. The companyís aim is to make domain names more readily accessible to customers and to offer a fast and economical marketplace for the acquisition of domain names.
Rautelin Oy registered several domain names in spring and summer 1999 and began its activities proper in the autumn of the same year.
Rautelin does not violate the rights of companies, associations and individual people to their own names, or the registered or otherwise protected trade mark of any company. It is also important to note that the domain name register does not involve the use of registered names in order to advertise or market similar goods or services. As a line of business, keeping and maintaining a domain name register does not differ from publishing a telephone directory or keeping an address register and selling addresss services.
Rautelin Oy thus keeps a domain name register and offers domain name registration services. By concentrating the registration activities, using its acquired registration knowhow and optimising the registration costs, Rautelin Oy is able to provide companies, associations and individuals with reasonably priced domain names which can be used immediately.
Respecting the Instru trade mark
Rautelin has never used, is not currently using, and will never use the INSTRU trade mark registered by Instrumentarium Oyj to advertise any goods or marketing services, or for any other purposes. The domain names Instru.net and Instru.org will not be sold to any company operating in Finland or to any individual that does not have the right to use the trade mark.. Rautelin Oy is familiar with the current Finnish and international trade mark legislation."
On August 31, 2000, counsel for the respondent wrote to counsel for the Complainant that US$35 does not cover the cost of transfer of a domain name.
5. Partiesí contentions
The Complainant contends that the respondent, as the current registered owner of the domain names in dispute, is the appropriate counterparty in this complaint.
The Complainant alleges that the domain names at issue are "clearly identical with the trade name "INSTRU" which Instrumentarium has registered", and, further, that customers have reasonable expectations that the domain names <instru.net> and <instru.org> will take them to the complainantís web sites, especially when the complainantís web sites can be accessed, inter alia, through its various domain names which include "instru", such as <instru.com> and <instru.fi>.
The Complainant further alleges that the respondent has no legitimate interests in the domain names at issue, and that the respondent has registered and is using the domain names in bad faith.
The Complainant contends that the circumstances indicate that "the domain names were registered primarily for the purpose of selling the domain names to the owner of the respective trade mark and/or business name". The complainant further contends that the respondent disturbs the business of the legitimate owner of the mark by preventing the owner of the trade mark from reflecting the mark in corresponding domain names.
The Complainant draws the attention of the Panel to the respondentís site <domainkauppa.com>, a visit to which, in the complainantís view "proves that the respondent seems to be engaged in a pattern of registering domain names".
The Complainant asks for the relief of transfer of the domain names at issue to itself.
The Respondent claims that the domain names at issue had been sold, in September 2000, to an Israeli company, and that because it is "not respondent any more the complaint should be cancelled".
The Respondent claims that it "registered domain names, <instru.org> and <instru.net> because a Finnish company, Instrumentarium Oyj (the complainant in this case) have left these names free. Instrumentarium Oyj has registered domain names <instru.fi> and <instru.com> and because they did not registered at the same time at the same time domain names at root "ORG" and "NET" all the audience was in the opinion, that Instrumentarium Oyj need not domain names at root "ORG" and "NET".
The Respondent, further claims that the complainant would not, under the ICANN rules, be entitled to be the proprietor of a <.org> domain name.
The Respondent alleges that "the word "instru" is an abbreviation of the word "instruments". So the word "instru" is like a common word, used world-wide. In the world there are machines, musical instruments etc. So there is millions of companies who is able to use "INSTRU" as a domain name."
The Respondent acknowledges that the complainant is the owner of registered trade mark rights to INSTRU, in classes 10, 11, 21, 25 and 40, but argues that this means that the complainant has "not registered" "in the area, for example of machines and machine tools or hand tools and hand-operated implements or electrical apparatus and instruments. In the practise of registration it could be possible to anybody in Finland to registrate the word "Instru" in the Category 7, or 8 or 9."
The Respondent observes that it is important to notice that it registered the domain names at issue on May 25, 1999, "before the ICANN Board adopted a set of Rules for Uniform Domain Name Dispute Resolution Policy on October 24, 1999."
The Respondent denies that the domain names at issue were registered or are being used in bad faith. The respondent contends:
"The domain names <instru.net> and <instru.org> have been on the grounds cited above free to sell any company in the world in the business branch of instruments, machine instruments, musical instruments etc. Rautelin Oy has registered these domain names, because Instrumentarium Oyj have left them free and because there is millions of companies who could be interested to buy such a domain names in the internet world.
Rautelin Oy have never had intention to sell or otherwise transfer the domain name registrations to the complainant for valuable consideration in excess of the domain name registrantís out-of-pocket costs directly related to the domain name.
The Complainant does not intend in his complaint that Rautelin Oy has contacted the Complainant to offer domain names. The Complainant offered itself to Rautelin Oy as much as 35 (thirtyfive) USD per domain name as a compensation to transfer names to Complainant.
After that Rautelin Oy informed the Complainant that 35 USD is not a out-of-pocket costs. Annex no 3 a copy of answer to General Counsel Sotamaa."
6. Discussion and Findings
As a preliminary matter, the Registrar in the case confirmed to the WIPO Arbitration and Mediation Center on November 20, 2000 that the respondent was the current registrant of the domain names at issue, and that "Network Solutionsí 5.0 Service Agreement is in effect". The Panel, accordingly decides that it will entertain the complaint.
Paragraph 4(a) of the Uniform Domain Name Dispute Resolution Policy lists three tests which a complainant must satisfy in order to succeed:
(i) the domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and
(ii) the respondent has no rights or legitimate interests in respect of the domain name; and
(iii) the domain name has been registered in bad faith and is being used in bad faith.
In connection with the test under paragraph 4(a)(i), the Panel finds in favour of the complainant, by virtue of its registered trade mark rights to "INSTRU", and the fact that the domain names at issue are identical to the trade mark. As the Panel observed in Case D2000-1314, Skattedirektoratet v Eivind Nag, the suffix which indicates the gTLD should be disregarded in this connection.
In connection with the test under paragraph 4(a)(ii), paragraph 4(c) of the Uniform Domain Name Dispute Resolution Policy sets out guidance to respondents as to how they can demonstrate rights to and legitimate interests in a domain name, in the following circumstances:
(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 and 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.
In the Panelís opinion, none of these circumstances apply in the present case.
The Respondent, by its own admission, is in the business of operating a "domain name register", for onward sale of domain names listed in the "register".
The Panel rejects the Respondentís argument that this is analogous to publishing a telephone directory, or keeping an address register and selling address services. In these activities, the property in the telephone numbers and addresses remain those of their owners, whereas, in a "domain name register", the domain names listed are for sale to third parties.
The question of sale of domain names was considered by the Panel in Case D2000-0638, Manchester Airport PLC v Club Club Ltd. In that case, the Panel decided that "selling a domain name is not per se prohibited by the ICANN Policy (nor is it illegal or even, in a capitalist system, ethically reprehensible), Selling of domain names is prohibited by the ICANN Policy only if the other elements of the ICANN Policy are also violated, namely trademark infringement and lack of legitimate interest".
In its Report of the WIPO Internet Domain Name Process, 1999, WIPO, accurately in the Panelís view, defined the essential legal problem associated with domain name registrations:
"Domain names are the human-friendly form of Internet addresses. While designed to serve the function of enabling users to locate computers in an easy manner, domain names have acquired a further significance as business identifiers and, as such, have come into conflict with the system of identifiers that existed before the arrival of the Internet, and that are protected by intellectual property rights."
The Panel accepts that the operation of a "domain name register", for onward sale of listed domain names, can be a legitimate business activity. The Panel, however, takes the view that, to give rise to legitimate interests, the operator of such a "domain name register" must take into account the possibility of prior intellectual property rights, ((as dealt with in paragraph 2 of the Uniform Domain Name Dispute resolution Policy)), so that the domain names which he registers for onward sale should, so far as is reasonable, be free from conflict with prior intellectual property rights. In the event that a domain name registered for onward sale proves to be in conflict with a prior intellectual property right, transfer of the domain name to the owner of the prior intellectual property right, at the request of the owner of the prior intellectual property right, substantially at the cost of registering the domain name, would, in the Panelís opinion, demonstrate the legitimacy of such business activity.
Paragraph 2 of the Uniform Domain Name Dispute Resolution Policy states:
"By applying to register a domain name Ö.you hereby represent and warrant to us that Ö to your knowledge, the registration of the domain name will not infringe upon or otherwise violate the rights of any party Ö..It is your responsibility to determine whether your domain name registration infringes or violates someone elseís rights.."
In the present case, the respondent operates a web site, <domainkauppa.com>, for the purpose of its "domain name register". "Kauppa" is a uniquely Finnish word, meaning "shop". In the Panelís opinion, it is improbable that many non-Finnish speakers would find their way to this web site if seeking domain names. The Panel, therefore, draws the conclusion that this web site is primarily designed for Finnish customers.
Although there is an English language message on the web site, to the effect that: "We have a large pool of domain names available for purchase. If you have further questions, donít hesitate to contact us by e-mail.", the Finnish language text guides visitors to the listing of domain names for sale. The Panel has reviewed the listing of over 600 domain names for sale, and finds that it contains many names which would be immediately recognisable to anyone with any knowledge of the Finnish economy as the names of well known Finnish companies, and well known trade marks in Finland. The sale prices quoted range from 1000 Finnish Marks (= circa US$150 ) to 300,000 Finnish Marks (=circa US$45,000 ).
There is no evidence that any attempt at reconciling domain names with prior intellectual property rights has been made.
The Panel takes the view in the light of the considerations in the two preceding paragraphs that this is incompatible with the respondentís claim, in its letter of August 3, 2000, quoted above, that it provides clients with "reasonably priced pre-registered domain names which can be used immediately".
In this case, the respondent turned down an offer by the complainant, with clearly established trade mark rights, and two domain name registrations identical to the established trade mark rights, to acquire the domain names at issue for a sum consonant with the costs of registering the domain names.
The Panel is compelled to the view that the respondentís practice cannot be regarded as giving rise to legitimate interests in domain names on the "register", and, consequently, finds for the complainant under paragraph 4(a)(ii).
In connection with paragraph 4(a)(iii), paragraph 4(b) of the Uniform Domain Name Dispute Resolution Policy sets out circumstances in which both registration and use in bad faith can be proved, as follows:
(i) circumstances indicating that you have registered Ö.the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to that domain name, or]
(ii) you have registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, providing that you have engaged in a pattern of such conduct.
The question of the operation of a domain name "register", in the context of registration and use in bad faith, has been considered previously.
In Case D2000-0054, J. Crew International, Inc. v. crew,com, the Panel held:
"Respondent admits it is involved in a pattern of conduct involving the speculative registration of domain names for profitÖ.This pattern of conduct prevents others from making bona fide use of desirable domain names that may correspond to their trade marks.
Therefore, a majority of the Panel finds that Respondent has registered and used the domain name Ö. in bad faith and that the requirement of the Policy paragraph 4(a) (iii) is satisfied."
In that case, the respondent stated that it "would not be interested in a nominal sum", for transfer to the owner of the trade mark rights.
The Panel in this case finds that, the respondent, engaged in a pattern of conduct involving the speculative registration of domain names for profit, having refused to transfer the domain names at issue to the complainant, and, thus, preventing the complainant "from making use of desirable domain names that may correspond to their trade marks", at a nominal sum, as in case D2000-0054, have both registered and used the domain names at issue in bad faith.
The Panel notes the statement by the respondent to the effect that "because a Finnish company, Instrumentarium Oyj (the complainant in this case) have left these names free. Instrumentarium Oyj has registered domain names <instru.fi> and <instru.com> and because they did not register at the same time domain names at root "ORG" and "NET" all the audience was in the opinion, that Instrumentarium Oyj need not domain names at root "ORG" and "NET"." (the rendering in bold is by the Panel)
Although the English used is difficult to interpret here, it appears to the Panel that the respondent may have been aware of, and considered, the complainantís prior trade mark rights, and prior <instru.com> and <instru.fi> registrations before registering the domain names at issue. If this interpretation is correct, then the respondent could not, in the Panelís view, have failed to anticipate that the complainant would be likely to be a "primary buyer" of the domain names at issue.
The Panel accepts the argument advanced by the respondent that a third party might be able to obtain registered trade mark rights to INSTRU in Finland for goods and services dissimilar to those protected by the complainant under the mark. A domain name, however, is capable of use extending across all products and services, unless prevented by (inevitably expensive) legal action by the owner of a conflicting prior intellectual property right. Although the respondent states, in its letter of August 3, 2000, that it would not sell the domain names at issue to a third party "that does not have the right to use the trade mark", the Panel doubts whether such control could be effectively exercised, and notes that the respondent has sold the domain names at issue to an Israeli company, and has provided no evidence that the Israeli company has rights in the trade mark which would not conflict with those of the complainant. The Panel notes that the domain names in issue do not appear to be currently in use.
The Panel decides that the complainant has proved each of the three tests of paragraph 4(a) of the Uniform Domain Name Dispute Resolution Policy, and, accordingly, requires that the domain names <instru.net> and <instru.org> be transferred to the complainant.
George R. F. Souter
Dated: January 17, 2001