WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Western Holdings, LLC v. JPC Enterprise, LLC d/b/a Cutting Edge Fitness and d/b/a Strivectin SD Sales & Distribution
Case No. D2004-0426
1. The Parties
The Complainant is Western Holdings, LLC, of Casper, Wyoming, United States of America, represented by Gilbert/Rothman, PLC., United States of America.
The Respondent is JPC Enterprise, LLC d/b/a Cutting Edge Fitness and d/b/a Strivectin SD Sales & Distribution, Wisconsin, United States of America, represented by Law Office of Jonathan Bender, P.C., United States of America.
2. The Domain Names and Registrar
The disputed domain names are <trivestin.biz>, <trivestin.info> and <trivestin.org> are registered with R&K Global Business Services, Inc. d/b/a 000Domains.com.
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on June 10, 2004. On June 11, 2004, the Center transmitted by email to R&K Global Business Services, Inc. d/b/a 000Domains.com a request for registrar verification in connection with the domain names at issue. R&K Global Business Services, Inc. d/b/a 000Domains.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, billing, 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 June 16, 2004. In accordance with the Rules, paragraph 5(a), the due date for Response was July 6, 2004. The Response was filed with the Center on July 7, 2004.
The Center appointed Mark Partridge as the sole panelist in this matter on July 15, 2004. 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 licenses its trademarks to an affiliated entity, Basic Research LLC (“Basic Research”) for the development and manufacturing of cosmetics, nutritional supplements and dietary supplements. Another related entity, Klein-Becker USA, LLC (“Klein-Becker”) sells the products developed by Basic Research.
One of the brands developed by Basic Research and sold by Klein-Becker is TRIVESTIN dietary supplements. These products are available to consumers through retail stores and websites pursuant to agreements between the resellers and Basic Research and Klein-Becker. The TRIVESTIN products have been the subject of substantial advertising and sales.
On April 3, 2003, Complainant filed an application for federal registration of the mark TRIVESTIN. The application was later amended to claim first use on June 20, 2003. The application was approved for publication on July 7, 2004, but has not yet matured to registration.
Until about October 28, 2003, Respondent was an approved distributor of Complainant’s products. It was given an oral agreement to use Complainant’s trademarks.
Respondent registered the domain names on July 2, 2003.
On or about October 28, 2003, Respondent was terminated as an authorized distributor of Complainant’s products.
The domain names redirect Internet users to a website at “www.bodyworx.com”, which is operated by a company affiliated with Respondent. That website sells products in competition with Complainant.
The parties are involved in a related law suit in the United States District Court for the Western District of Texas, entitled Basic Research LLC v. William Stanley and Bodyworx.com, Inc. The Second Amended Complaint in that suit alleges unfair competition under Section 43(a) of the Lanham Act, violation of the Anticybersquatting Consumer Protection Act, Copyright infringement and Breach of Contract. The marks at issue in the complaint include STRIVECTIN, but do not specifically include TRIVESTIN.
5. Parties’ Contentions
Complainant contends that it has trademark rights in the name TRIVESTIN and that the domain names are identical or confusingly similar to that mark; that Respondent does not have a legitimate right or interest in the domain names because it was not given permission to register the domain names and is no longer an authorized distributor of Complainant’s products; and that the domain names were registered and used in bad faith to disrupt the business of Complainant.
Respondent does not dispute that the domain names are identical in material part to Complainant’s TRIVESTIN mark. Respondent contends that it registered the domain names with Complainant’s knowledge and permission and asks the Panel “to suspend or terminate stay [sic] any decision in this administrative proceeding.”
6. Discussion and Findings
A. Concurrent Civil Proceedings
Paragraph 18 of the Rules states: “In the event of any legal proceedings initiated prior to or during an administrative proceeding in respect of a domain name dispute . . . the Panel shall have the discretion to decide whether to suspend or terminate the administrative proceeding, or to proceed to a decision.”
Other panels confronted with the question of proceeding in the face of a related court proceeding have frequently exercised the discretion provided under Paragraph 18 to issue a decision, recognizing that doing so does not prevent either party, if dissatisfied with the result, from continuing to seek relief in court. See Weber-Stephen Products Co. v. Armitage Hardware, WIPO Case No. D2000-0187; Cognigen Networks, Inc. v. Pharmaceutical Outcomes Research a/k/a Cognigen Corporation, WIPO Case No. D2001-1094; AB SKF and SKF Beaings India Limited v. Vikas Pagaria, WIPO Case No. D2001-0867; and Fadesa Inmobiliaria, S.A. v. Flemming Madsen, WIPO Case No. D2001-0570.
For similar reasons, the Panel has decided to exercise the discretion granted to the Panel under Paragraph 18 to proceed to decision under the Policy. The Panel finds that the record is sufficiently developed to reach a conclusion under the Policy and does not believe that the decision reached will interfere with either parties’ claims in court.
B. Identical or Confusingly Similar
Complainant must show that the domain names are identical or confusingly similar to a mark in which the Complainant has rights. It is not disputed that the domain names are identical in material part to a mark used by Complainant. Although Complainant’s mark is not registered, the mark appears to be inherently distinctive and subject to use in commerce sufficient to create common law trademark rights. The Panel finds that the first element of Complainant’s claim is satisfied.
C. Rights or Legitimate Interests
Complainant must show that Respondent lacks any right or legitimate interest in the domain names. Although Respondent was an authorized distributor of Complainant’s products, that relationship ended in October 23, 2003, and Respondent no longer sells Complainant’s products at its website. Accordingly, The Panel finds that Respondent does not have any rights or legitimate interests in the domain names at the time of the Complaint.
D. Registered and Used in Bad Faith
The key issue presented by this proceeding is whether the domain names were registered in bad faith. 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 . . .
To take but one example, in email correspondence . . . I mention to [Complainant’s] regional manager Cody Aagard that I noticed [Complainant’s] appeared to have a new product “Trivestin.” Mr. Aagard replied by telling me to pass on his suggestion that [a company executive] “start looking for domain names.” Based on prior conversations and dealings with Mr. Aagard, no doubt existed that that [sic] he was advising [our executive] to register names incorporating the mark “Trivestin.””
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.
The permission admittedly granted to Respondent clearly bears on the allegation of bad faith registration. When addressing similar circumstances, the panel in Urbani Tartufi s.n.c. v. Rosario’s Epicureo Ltd., WIPO Case No. D2003-0081, stated:
“Registration of the disputed Domain Name was done with the evident consent of Complainant at a time when Complainant and Respondent were in a business relationship. Complainant says, for instance, “Lately and after several years of good business relationship...” (then describes recent problems). No evidence has been produced that could satisfy Paragraphs 4(b)(i), (ii) or (iii) of the Policy to the effect that Respondent registered the Domain Name to sell for a profit, or had intended to block Complainant from reflecting its mark in a Domain Name (and had engaged in a pattern of doing so), or had the primary intention of disrupting Complainant’s business. In the terms of Paragraph 4(b)(iv), which is governed by Paragraph 4(a)(iii), there has to be both registration of the Domain Name in bad faith and use in bad faith, and whilst Complainant may now want to make complaints about the recent use of the website, for reasons stated previously there is no evidence its registration was made in bad faith. Complainant has failed to prove that the Domain Name was registered and used in bad faith within the meaning of Paragraph 4(a)(iii) of the Policy.”
Similarly, in Celebrity Signatures International, Inc. v. Hera’s Incorporated Iris Linder, WIPO Case No. D2002-0936, the Panel explained the difficulty of finding a violation of the Policy when there is no specific prohibition on a dealer’s registration of domain names incorporating the mark of the products it is allowed to sell:
“A variety of cases under the Policy deal with use of marks as domain names for sites operated by dealers. In some instances, the Panel has found a violation of the Policy. For example, this Panel found a violation of the Policy in Herbalife International of America, Inc. v. myherbalife.com, WIPO Case No. D2002-0101 (April 13, 2002). In that case, 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.”
That case is distinguishable from the circumstances here. The evidence shows that when Respondent registered the domain names 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.
Complainant is correct in noting that a distributor’s use of a manufacturer’s mark as a domain name may constitute an infringement of trademark rights. However, such use may be permissible if there is license or consent. Here, Respondent was not prohibited by contract from using the Complainant’s mark as her domain names, and in fact it appears that Complainant’s representatives encouraged such use on at least two occasions. . . .
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.”
The importance of clear contractual language was emphasized in Oki Data Americas, Inc. v. ASD, Inc., WIPO Case No. D2001-0903:
“It is important to keep in mind that the Policy was designed to prevent the extortionate behavior commonly known as cybersquatting. It cannot be used to litigate all disputes involving domain names. The Thread.com, LLC v. Poploff, WIPO Case No. D2000-1470 (January 5, 2001). If trademark owners wish to prevent the use of their marks by authorized sales and repair agents in domain names, they should negotiate such protections through appropriate contractual language or, when permitted under the relevant law, seek recovery in classic trademark infringement or dilution litigations.”
The Panel finds those principles applicable here. In the face of Complainant’s admission that Respondent was permitted to use Complainant’s marks and in the absence of any clear evidence indicating an express provision in the oral agreement prohibiting Respondent from registering and using the permitted marks as domain names, the Panel concludes that Complainant has failed to meet its burden of proving that the domain names were registered in bad faith. Under the circumstances presented, it does not appear that Respondent registered the domain names with the requisite bad faith required under the Policy. Although Respondent’s continued use after termination of the parties’ relationship might be viewed as bad faith use, the Policy also requires proof of bad faith conduct at the time of registration. It appears here that Respondent registered the domain names for the purpose of promoting the sale of Complainant’s products, an activity which it may have reasonably concluded was within the scope of the permission granted to it by Complainant, as it claims. Complainant has presented no evidence that contradicts that conclusion nor has the Panel found any further evidence of Respondent’s current conduct that could cast doubts on that conclusion. The decision in this proceeding is not intended to have any effect on the deliberations in the concurrent United States District Court proceeding.
For all the foregoing reasons, the Complaint is denied.
Mark V.B. Partridge
Dated: August 5, 2004