WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Toland International Ltd. v. Mr. Philip Horvath d/b/a PH Technologies, LLC

Case No. D2015-1891

1. The Parties

The Complainant is Toland International Ltd. of Hong Kong, China, represented by Dykema Gossett PLLC, United States of America ("United States").

The Respondent is Mr. Philip Horvath d/b/a PH Technologies, LLC of New Carlisle, IN, United States / Hendersonville, TN, United States, represented by R. Tracy Crump, United States.

2. The Domain Names and Registrar

The disputed domain names <tolandflag.com>, <tolandflags.com> and <tolandgardenflags.com> are registered with 1&1 Internet AG (the "Registrar").

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on October 22, 2015. On October 23, 2015, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain names. On October 27, 2015, the Registrar transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details. Further to the Center's communication, the Complainant submitted its amendment to the Complaint on November 9, 2015.

The Center verified that the Complaint together with the amendment to the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the "Policy" or "UDRP"), 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 and 4, the Center formally notified the Respondent of the Complaint, and the proceedings commenced on November 11, 2015. In accordance with the Rules, paragraph 5, the due date for Response was December 1, 2015. On November 30, 2015, the Respondent requested a four days extension to file its Response. The Response was filed with the Center on December 5, 2015.

The Center appointed Warwick A. Rothnie as the sole panelist in this matter on December 16, 2015. 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

The Complainant is a wholesale home garden store that offers for sale decorative art flags, garden d├ęcor products and associated items. It appears from the Complaint that the Complainant, or an associated or predecessor business, has been operating since 1976. It says it has authorised representatives in 34 states of the United States. According to the Complaint, the TOLAND trademark has been in use since 1996. The trademark TOLAND itself was registered in the United States as Trademark No. 3,429,440 in 2008. It has been registered in a number of International Classes relevant to trade in flags and associated items: International Classes 6, 9, 11, 20, 21, 24 and 27.

The first and second disputed domain names were first registered on April 2, 1999; the third disputed domain name was first registered on April 6, 2006.

It appears that each of the disputed domain names was initially registered by a Mr. Perch. According to the Respondent, Mr. Perch operated a business selling the Complainant's products at retail including selling the Complainant's products through websites associated with the disputed domain names from the date those disputed domain names were registered.

The Respondent purchased the websites and domain name registrations from Mr. Perch in late 2007. It then carried on and expanded the business previously operated through the websites by Mr. Perch. According to the Respondent, Mr. Perch died shortly after the sale.

Mr. Perch and then subsequently the Respondent purchased the TOLAND products from an entity known as Toland Home Garden (Toland HG). For several years after the Respondent acquired the disputed domain names from Mr. Perch, the relationship seems to have flourished with Toland HG according the Respondent the status of "high priority" dealer. Amongst the terms on which Toland HG agreed to supply the Respondent was a condition that it only sell TOLAND brand flags from the websites which the disputed domain names resolved to.

In 2010 or 2011, however, Toland HG changed its marketing strategy and commenced to sell TOLAND products directly to retail customers through the website <madaboutgardening.com>. Relations soured after that and on April 3, 2012, Toland HG, apparently then known as Marketing Resource Group Inc. ("MRG"), had its lawyers send a letter of demand to the Respondent alleging its use of the disputed domain names infringed trademark rights.1

The outcome of that letter of demand is not clear from the record. The Respondent continued using the disputed domain names. It offered for sale from the websites some of the Complainant's products, but also products sourced from other suppliers whom the Complainant describes as its competitors.

A further letter of demand was sent on behalf of the Complainant in October 2014. That elicited an undertaking from the Respondent to cease use of the disputed domain names. The Respondent subsequently resumed using the disputed domain names, however, leading to a further letter of demand. The Respondent once again undertook to cease all use of the disputed domain names. There was also some discussion of transfer of the disputed domain names to the Complainant. The Complainant's offer of USD100, however, was deemed insufficient by the Respondent.

5. Discussion and Findings

Paragraph 4(a) of the Policy provides that in order to divest the Respondent of the disputed domain names, the Complainant must demonstrate each of the following:

(i) the disputed domain names are 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 disputed domain names; and

(iii) the disputed domain names have been registered and are being used in bad faith.

Paragraph 15(a) of the Rules directs the Panel to decide the complaint on the basis of the statements and documents submitted and in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable.

A. Identical or Confusingly Similar

The first element that the Complainant must establish is that the disputed domain names are identical with, or confusingly similar to, the Complainant's trademark rights.

There are two parts to this inquiry: the Complainant must demonstrate that it has rights in a trademark and, if so, the disputed domain names must be shown to be identical or confusingly similar to the trademark.

The Complainant has proven ownership of the United States registered Trademark No. 3,429,440 for TOLAND. It is also not in dispute between the parties that the Complainant has been using the trademark TOLAND in the United States from a date before the Respondent became the registered holder of the disputed domain names. Nor for that matter is it in dispute that the Complainant was using the trademark in the United States before Mr. Perch registered the first two disputed domain names in 1999.

On the question of identity or confusing similarity, what is required is simply a comparison and assessment of the disputed domain name itself to the Complainant's proved trademarks: see for example, Disney Enterprises, Inc. v. John Zuccarini, Cupcake City and Cupcake Patrol, WIPO Case No. D2001-0489; IKB Deutsche Industriebank AG v. Bob Larkin, WIPO Case No. D2002-0420. This is different to the question under trademark law which can require an assessment of the nature of the goods or services protected and those for which any impugned use is involved, geographical location or timing. Such matters, if relevant, may fall for consideration under the other elements of the Policy.

In undertaking that comparison, it is permissible in the present circumstances to disregard the ".com" component of the disputed domain names as a functional aspect of the domain name system: Telstra Corporation Limited v. Ozurls, WIPO Case No. D2001-0046; Ticketmaster Corporation v. DiscoverNet, Inc., WIPO Case No. D2001-0252.

Apart from the ".com" extension, each of the disputed domain names consists of TOLAND and the plain English word "flag" or "flags" and, in the case of the third disputed domain name, "garden". The Complainant's products are garden flags so these additional words are simply descriptive of its products. The word "TOLAND" is not in itself descriptive of "flags" and has significance in relation to such products as the identifier of the Complainant as the products' trade source.

Accordingly, the Panel finds that the Complainant has established that the disputed domain names are confusingly similar to the Complainant's trademarks and the requirement under the first limb of the Policy is satisfied.

B. Registered and Used in Bad Faith

In the circumstances of this case, the Panel considers the third requirement under the Policy next.

Under the third requirement of the Policy, the Complainant must establish that the disputed domain names have been both registered and used in bad faith by the Respondent: see, e.g., Burn World-Wide, Ltd. d/b/a BGT Partners v. Banta Global Turnkey Ltd, WIPO Case No. D2010-0470.

Generally speaking, a finding that a domain name has been registered and is being used in bad faith requires an inference to be drawn that the respondent in question has registered and is using the disputed domain name to take advantage of its significance as a trademark owned by (usually) the complainant.

The record in this case also shows that the Respondent was using the disputed domain names in connection with websites which did offer the Complainant's products for sale. It is also clear that, at least from the time Toland HG (or MRG) changed its marketing strategy to enter the retail market, the Respondent was selling both the Complainant's products and those of competing suppliers through the websites associated with the disputed domain names.

It is well established that conduct of this kind does not usually qualify as good faith use under the Policy.

That is particularly so in the present case where Toland HG made it clear in the correspondence outlining the terms on which it would do business with the Respondent that the Respondent could use the disputed domain names only to offer for sale genuine TOLAND brand products. See for example the email from Mr. Solly to the Respondent dated January 24, 2008.

The bad faith nature of the use the Respondent has been making of the disputed domain names is compounded by the events in October and November 2014. As noted above, the Complainant arranged for a letter of demand to be sent to the Respondent in October 2014. On November 10, 2014, the Respondent's patent attorney replied offering the Respondent's undertakings to cease all use of the disputed domain names. It appears that the websites did become inactive for a period following this. However, the Respondent resumed his activities of selling both the Complainant's products and competing products via the disputed domain names. The Respondent has not explained why it resiled from the undertakings given in November 2014. The Respondent offered the undertakings again in response to the correspondence in June 2015. It also claimed it had never been using the disputed domain names in email addresses although the websites he operated did display email addresses based on the disputed domain names.

Accordingly, the Panel finds that the Respondent has been using the disputed domain names in bad faith under the Policy.

The Complainant must however also show that the Respondent registered the disputed domain names in bad faith.

In the present case, it is clear that the Respondent obtained the disputed domain names with knowledge of the Complainant's trademark as the Respondent acquired Mr. Perch's websites and the disputed domain names precisely to carry on business selling the Complainant's products.

That is not sufficient in the present case to constitute registration in bad faith, however. That is because, as the Respondent claims, the disputed domain names had been registered and used by Mr. Perch with the knowledge and consent of Toland HG from April 1999 (in the case of the first two disputed domain names). Moreover, the Complainant (or at least Toland HG claiming to be the owner of the rights to TOLAND in the United States) was perfectly happy for the Respondent to acquire Mr. Perch's interests in the disputed domain names and continue that business for a number of years.

The Panel notes that some decisions under the Policy have been prepared to find that a domain name was registered in bad faith where the right to use the domain name has been terminated and the registrant has refused to transfer the domain name. The Panel finds more persuasive, however, the reasoning of those Panels who have held that the requirement of registration in bad faith looks to the intention or motivation of the Respondent at the time of registration of the disputed domain names. See e.g. Greyson International, Inc. v. William Loncar, WIPO Case No. D2003-0805; SPECS Surface Nano Analysis GmbH v. Rickmer Kose / Domain Name Administrator, PrivacyProtect.org, WIPO Case No. D2010-1173; and The Proprietors of Strata Plan No. 36, A Turks and Caicos Corporation v. Gift2Gift Corp., WIPO Case No. D2010-2180.

In the present case, it seems clear that the Respondent acquired the registrations of the disputed domain names to carry on a business of selling the Complainant's products; a business which had then been operating for some eight years. At the least, it appears that the Respondent had a strong expectation that he would be permitted by Toland HG to continue Mr. Perch's use, an expectation that was borne out in very short order. Further, on the record in this case, it appears that relationship continued harmoniously for a number of years. The Respondent's subsequent use of the disputed domain names in bad faith does not appear to be such as to colour his motives at the time he acquired the registrations and convert those registrations into bad faith actions.

The Respondent has also refused to transfer the disputed domain names to the Complainant on the grounds that the sum offered, while in excess of registration costs, does not sufficiently compensate the Respondent for its investment of time and money in promoting the disputed domain names. For similar reasons, however, that action does not convert the Respondent's motives in registering the disputed domain names retrospectively into registrations in bad faith.

Accordingly, the Panel finds that the Complainant has failed to establish that the disputed domain names were registered in bad faith. Therefore, the Complainant has failed to establish the third requirement under the Policy.

C. Rights and legitimate interests

The failure to establish that the disputed domain names were registered in bad faith means that the Complaint cannot succeed. Therefore, no good purpose would be achieved by considering whether or not the Complainant has established that the Respondent had no rights or legitimate interests under the Policy.

6. Decision

For the foregoing reasons, the Complaint is denied.

Warwick A. Rothnie
Sole Panelist
Date: December 28, 2015


1 It is not entirely clear from the record what the relationship between Toland HG, MRG and the Complainant is. The Respondent describes Toland HG as the Complainant's authorised affiliate. In its 2012 letter of demand, MRG claimed it was the owner of (amongst other things) US Trademark No. 3,429,440. The Complainant has not sought to challenge these claims or to correct the record.