WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Yangzhou Okay Auto Accessories Co. Ltd. v. Mr. Ran Zheng, ZQ Pty Ltd.
Case No. DAU2017-0039
1. The Parties
The Complainant is Yangzhou Okay Auto Accessories Co. Ltd. of Yangzhou City, China, represented by SoCal IP Law Group LLP, United States of America ("United States").
The Respondent is Mr. Ran Zheng, ZQ Pty Ltd. of Acacia Ridge, Australia, represented by Lake Law, Australia.
2. The Domain Name and Registrar
The disputed domain name <zqracing.com.au> is registered with Melbourne IT Ltd.
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on December 28, 2017. On January 2, 2018, the Center transmitted by email to Melbourne IT Ltd a request for registrar verification in connection with the disputed domain name. On January 4, 2018, Melbourne IT Ltd 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 .au Dispute Resolution Policy (the "Policy"), the Rules for .au Dispute Resolution Policy (the "Rules"), and the WIPO Supplemental Rules for .au 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 January 18, 2018. In accordance with the Rules, paragraph 5(a), the due date for Response was February 7, 2018. The Response was filed with the Center on February 6, 2018.
The Center appointed Alistair Payne as the sole panelist in this matter on February 15, 2018. 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 has since 2001 manufactured and sold gaming chairs under the AKRACING trade mark in Europe, the Americas and Asia including in Australia. The Complainant asserts that it owns various trade mark registrations that incorporate its AKRACING mark and in particular Australian logo mark 1692227 registered on December 12, 2015. The Complainant promotes its products from its website at the domain name <akracing.com>.
The Respondent manufactures and sells gaming chairs under the ZQRACING trade mark in Australia. It owns an Australian trade mark registration for the trade mark ZQ that was filed on November 26, 2015. It subsequently filed a trade mark application for a logo mark that features its ZQRACING mark on September 13, 2016, which has subsequently been opposed by a New Zealand entity, ZQ Merino Fibre. It promotes its products from a website at the disputed domain name.
The disputed domain name was registered on July 5, 2016.
5. Parties' Contentions
The Complainant submits that it owns registered trade mark rights as set out above and that it also owns common law rights in its AKRACING name and trade marks based on the considerable period of time that the Complainant has used its mark in Australia. It says that the disputed domain name is confusingly similar to its AKRACING trade mark on the basis that its mark predates the disputed domain name and is essentially identical to it based on overall impression and similarity in sound, appearance and commercial impression and the wholesale incorporation of a textual feature of the Complainant's mark. It further submits that the letters "ZQ" at the beginning of the domain name are an inconsequential feature and merely a slight variation on the Complainant's mark and says that when the disputed domain name integrates the Complainant's trade mark in its entirety as a dominant element then the additional of a non-dominant element does not serve to distinguish the disputed domain name from the Complainant's mark.
The Complainant says that it has found no evidence that the Respondent has any rights to the disputed domain name whatsoever. It alleges that the Respondent has stolen the AKRACING brand years after the adoption, worldwide use, and registration by the Complainant and only so as to rely upon the goodwill built-up by the Complainant in selling counterfeit products using the disputed domain name. It says that the Respondent's business name and trade name is ZQ Pty Ltd, which bears no relation to AKRACING and that the Respondent applied for the disputed domain name in 2016, some 16 years after the Complainant started using its mark and over a year after the Complainant registered the AKRACING trade mark.
The Complainant submits that the Respondent's website, marketing, slogans, trade dress and products are confusingly similar to its own and that the Respondent's use of the disputed domain name is in bad faith and solely for commercial gain exists so as to misleadingly divert consumers. It notes that the Respondent is not an authorised dealer, distributor or licensee of the Complainant and has been given no other permission from the Complainant to use the Complainant's trade mark. It says further that the Respondent cannot assert that it is commonly known by the term "ZQRACING" or that is has made demonstrable preparations to use, or is using such term in connection with a bona fide offering of goods and services. The Complainant asserts that the Respondent is advertising and selling at the disputed domain name chairs for commercial gain that are confusingly similar in name and appearance to the Complainant's products, which clearly demonstrates that the Respondent has no bona fide or legitimate noncommercial or fair use.
The Complainant says that it first became aware of the Respondent's infringement in late October of 2017. While attending one of the events that the Complainant sponsors, called PAX Australia, the Complainant noticed a booth advertising chairs and a logo that it says looked strikingly similar to its own. It discovered that the booth was operated by the Respondent and upon further research the Complainant discovered the infringing and disputed website with the domain name <zqracing.com.au>. The Complainant also says that it discovered that a past employee of AKRacing, Ji Dongya, who worked for AKRacing from 2005-2010, has worked for a factory in China manufacturing ZQRacing's infringing chairs.
The Complainant asserts that the Respondent has intentionally attempted to steal from its former employer and attract for commercial gain Internet users to the Respondent's website by creating a likelihood of confusion with the Complainant's mark as to the source, sponsorship, affiliation, and endorsement of the Complainant's website. The Complainant asserts that the Respondent purposefully selected a domain name that was confusingly similar to the one that the Complainant has been using coupled with a website containing confusing similar if not identical content for the purpose of trading-off the Complainant's extensive goodwill and world-renowned reputation and to divert Internet users to its website. The Complainant says that the Respondent is using the disputed domain name, which is identical or confusingly similar to the Complainant's AKRACING mark, to operate a website that markets and sells products, namely high retail value gaming chairs that are identical in appearance to the Complainant's products and it says that such competing use constitutes disruption and is evidence of bad faith registration and use pursuant to sections 4(b)(iii) and section 4(b)(iv) of the Policy.
Further, the Complainant says that the Respondent registered the disputed domain name with actual or constructive knowledge of the Complainant's rights in the AKRACING mark because it became a world re-renowned brand and has been in use since 2001, and due to the fact that the former president of the Complainant now works for the Respondent. Moreover, the Panel should infer that the Respondent registered the disputed domain name with actual knowledge of the Complainant's rights in the mark due to the obvious connection between the content advertised on the Respondent's website and that this amounts to evidence of bad faith registration and use under section 4(a)(iii) of the Policy.
The Respondent submits that the Complainant has not demonstrated that it owns the AKRACING business name, company name or registered trade marks and neither has it shown that it is the beneficial owner of this intellectual property. Neither, submits the Respondent, has the Complainant established any right to the disputed domain name or ZQRACING.
The Respondent notes that the Complainant has included in the record the Respondent's Australian trade mark application for ZQRACING filed on September 13, 2016 and notes that it also owns an Australian trade mark registration for ZQ as set out above. It says that it sells racing chairs specifically designed for (computer) gaming under its ZQRACING mark and that it has developed substantial goodwill and reputation in Australia from its marketing efforts and engagement with the gamer community and that its racing chairs are sold in Australia and New Zealand by EB Games who claim to operate 450 stores in Australia and 40 in New Zealand.
It says further that there are a number of operators in this market apart from the Complainant, including DX Racer and Omega Racing amongst others. It says that the term "racing chair" is derived from the shape of the chair which mimics seats traditionally designed to be used in racing cars and notes that a search on Alibaba.com reveals 6,862 racing chair products from different manufacturers.
The Respondent denies that the disputed domain name is confusingly similar to the trade mark or business name or domain name that the Complainant asserts that it owns. In essence it says that the term "racing" is descriptive and an adjective used to describe the respective parties' chair products and in any event the word "racing" is in common use across a range of websites of which it notes, "www.skyracing.com.au", "www.xracing.com.au", "www.tisracing.com.au and "www.jracing.com.au" and that the Complainant does not have exclusive rights to it. It also says that the term or mark ZQ is not inconsequential as suggested by the Complainant and that it has not made a mere variation of the Complainant's mark as the Complainant implies by adding "ZQ" in front of "AK Racing".
As far as rights or legitimate interests are concerned the Respondent says that the disputed domain name consists of the Respondent's name appended to its product descriptor which falls within the criteria for ownership of a domain name in the ".com.au" domain space. In addition the Respondent says it has made an Australian trade mark application for ZQRACING and owns an Australian business name for ZQRACING registered on August 25, 2016, and the corporate name "ZQ Pty Ltd".
The Respondent asserts that it registered the disputed domain name in good faith based on its corporate and business name and has been using it since around October 2016 to sell its racing chair products. It denies that the disputed domain name has disrupted the Complainant's business in any way and notes the Complainant's own evidence that it only "first became aware of Respondent's infringement in late October 2017". It says that the Complainant has provided no evidence of confusion and although referring to the Respondent's products as counterfeit, the Complaint features a photograph of the Respondent's products with the Respondent's logo and trade mark on them and therefore there is no evidence to substantiate this allegation. The Respondent states that in any event the respective products are not identical and there are differences in both design and manufacture.
The Respondent claims that the Complainant has acted in bad faith by bringing this Complaint in an attempt to deprive the Respondent of the right to use the disputed domain name. It says that the Complainant has failed to file any evidence that would give rise to a legitimate claim that it has rights to the disputed domain name even though the Complainant had professional representation in filing the Complaint.
6. Discussion and Findings
A. Identical or Confusingly Similar
The Complainant asserts that it owns Australian registered trade mark 169227 which assertion has been challenged by the Respondent. The Complainant has not provided proof of its ownership of this trade mark or any other registration by way of evidence, only a list of marks. Exceptionally, in the circumstances, the Panel checked the IP Australia database and it appears that the registrant of this mark is Yangzhou OKAY Seat Co., Ltd and not the Complainant, although possibly a related company. Neither has the Complainant provided detailed evidence of sales, distribution and advertising information such as is typically required by panels to support its claim to ownership of common law rights in Australia. Further, the Respondent also asserts that the Complainant does not own the domain name <akracing.com.au>. The Respondent further notes that the Complainant asserts it owns <ak-racing.com.au>. Upon checking the relevant WhoIs records for <ak-racing.com.au>, it appears that it is owned by Ausjap Autoconsultants Pty. Limited. The Panel notes that the Complainant has not submitted that it owns an Australian business name registration as the basis of its claim under this head.
In any event, even on a best-case scenario view that the Complainant's corporate group owns Australian registered trade mark 169227, or any of the international trade mark registrations listed for AKRACING, the Panel is of the view that the disputed domain name is not identical or confusingly similar to the Complainant's mark. On a side-by-side comparison basis, the similarity between the marks is the ordinary English word "racing" which appears not only to be in common use as a descriptive term for racing style chairs based on the evidence submitted by the Respondent, but not surprisingly and again based on the Respondent's evidence is in common use amongst domain name registrants. The more distinctive element of the Complainant's mark is the "AK" element that precedes the word racing. However, this element is not incorporated into the disputed domain name and bears no similarity to the "ZQ" element that precedes the word "racing" in the disputed domain name, apart from the fact that it is also a two letter element. As a result, the Panel finds that the disputed domain name is neither identical nor confusingly similar to the AKRACING mark and the Complaint fails under this element of the Policy.
B. Rights or Legitimate Interests
Although the Panel is not in these circumstances required to consider this element of the Policy, even if it had found that Complaint succeeded under the first element, it notes that it does not consider that the Complainant has met the onus on it under the second element to demonstrate that the Respondent has no rights or legitimate interests in the disputed domain name.
The Respondent appears to be operating a bona fide business selling "racing chairs" under its own mark both through an established retail and distribution network in Australia and New Zealand and through a website at the disputed domain name. The disputed domain name reflects the Respondent's trading name, corporate name and pending trade mark application. Although it is apparent that the Respondent's products and business competes with the Complainant's products and business in Australia, there is no evidence on the record of consumer confusion, the Respondent uses its own logo and name on its website and products and in spite of any alleged similarities in the logo, website get-up, or product design (on which the Panel makes no observation), the fact that the Complainant did not by its own admission, become aware of this direct competition by the Respondent and its products until approximately one year after the Respondent had commenced its business is telling. Had the Respondent been actively diverting the Complainant's Internet based customers then it seems most likely that the Complainant would have become aware of the competing website, products and business at a much earlier point in time.
On this basis the Panel finds that the Respondent is carrying on its own business under its own mark both through a distribution network and from the website at the disputed domain name, and the Complainant has not met the burden upon it under this element of the Policy to demonstrate that the Respondent has no rights or legitimate interests in the disputed domain name. It follows that the Complaint also fails under this element of the Policy. It appears to the Panel that the nub of this case really concerns the departure of a past president of the Complainant to the Respondent's employ and the subsequent development of a competing product and website, however, any dispute concerning these matters goes well beyond the scope of the Policy and is a matter for the courts.
The Respondent has requested a finding of reverse domain name hijacking. On balance the Panel is not minded to make a finding of reverse domain name hijacking in this case, on the basis that, even though the Complainant was represented by professional advisors and should really have known better, the Panel is not satisfied that the Complainant proceeded with the Complaint in the knowledge that there was no possibility of succeeding.
For all the foregoing reasons, the Complaint is denied.
Date: February 25, 2018