WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

J&J Snack Foods Corp. v. Frozen Brothers BV

Case No. DNL2020-0054

1. The Parties

The Complainant is J&J Snack Foods Corp., United States of America (“USA”), represented by Arnold & Siedsma B.V., the Netherlands.

The Respondent is Frozen Brothers BV, the Netherlands, represented by Dohmen Advocaten, the Netherlands.

2. The Domain Name and Registrar

The disputed domain name <slushpuppie.nl> (the “Domain Name”) is registered with SIDN through GoDaddy.com.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on November 20, 2020. On November 20, 2020, the Center transmitted by email to SIDN a request for registrar verification in connection with the Domain Name. On November 23, 2021, SIDN transmitted by email to the Center its verification response disclosing registrant and contact information for the Domain Name which differed from the named Respondent and contact information in the Complaint. The Center sent an email communication to the Complainant on December 2, 2020, providing the registrant and contact information disclosed by SIDN, and inviting the Complainant to submit an amendment to the Complaint. The Complainant filed an amended Complaint on December 2 and 4, 2020. The Center verified that the Complaint together with the Amended Complaint satisfied the formal requirements of the Dispute Resolution Regulations for .nl Domain Names (the “Regulations”).

In accordance with the Regulations, articles 5.1 and 16.4, the Center formally notified the Respondent of the Complaint, and the proceedings commenced on December 9, 2020. In accordance with the Regulations, article 7.1, the due date for Response was December 29, 2020. The Response was filed with the Center on December 29, 2020.

On January 6, 2021, SIDN commenced the mediation process. On March 11, 2021, SIDN confirmed to the parties and the Center that the dispute had not been solved in the mediation process.

The Center appointed Wolter Wefers Bettink as the panelist in this matter on March 19, 2021. The Panel finds that it was properly constituted. The Panelist has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required to ensure compliance with the Regulations, article 9.2.

4. Factual Background

The Complainant provides goods in the area of frozen beverages and frozen confections, and related goods and services. The Complainant is the owner of the following trademark registrations (the “Trade Marks”):

- Benelux device mark registration No. 0387001 for SLUSH PUPPIE and Device, registered on September 1, 1983, and duly renewed;
- Benelux device mark registration No. 0334993 for SLUSH PUPPIE and Device, registered on January 1, 1976, and duly renewed;
- European Union device mark registration No. 000476200 for SLUSH PUPPIE and Device, registered on March 14, 2005;
- European Union word mark registration No. 17092446 for SLUSH PUPPIE, registered on February 9, 2018.

SIDN informed the Center that the Domain Name was first registered on February 15, 2002. A few days prior to the initial filing of the Complaint, the Domain Name resolved to a website displaying the Trade Marks and copyrighted images for identical goods and services as those sold by the Complainant under the Trade Marks (the “Website”). By the time the Panel checked the Website on April 5, 2021, it displayed the messages “Page not found” and “It looks like nothing was found at this location”.

5. Parties’ Contentions

A. Complainant

According to the Complainant, the Domain Name is identical or confusingly similar to the Trade Marks, as it incorporates SLUSH PUPPIE in its entirety and differs from the Trade Marks only in that it adds the country code Top-Level Domain (“ccTLD”) “.nl” and removes the space between the terms “slush” and “puppie”. The Complainant submits that the addition of the ccTLD is irrelevant under the confusing similarity test, since it is a technical registration requirement, while the removal of space between the terms “slush” and “puppie” fails to create a distinct domain name that avoids confusing similarity.

The Complainant contends that the Respondent has no right or legitimate interest in the Domain Name. The Complainant states that from about 1999 through 2019, the Complainant (including through its predecessors in interest to the SLUSH PUPPIE business) has licensed certain rights to the Trade Marks through its wholly-owned and authorized subsidiary, The ICEE Company, to Slush Puppie Limited, a United Kingdom company (“SPUK”). The Complainant adds that, within that period, SPUK purportedly granted rights to the Respondent or an entity affiliated with the Respondent, Slush Puppie Benelux BV, to conduct business and use the Trade Marks in connection with non-alcoholic beverages and, in particular, frozen beverages and frozen confections in this jurisdiction (the “Business”). According to the Complainant, the licence to SPUK was terminated on June 25, 2019, and the termination was confirmed by a letter of December 17, 2019, from the Complainant’s authorized subsidiary, The ICEE Company, to Slush Puppie Benelux BV. The Complainant states that in March 2019, SPUK initiated a legal case before the courts of Ohio, USA, against the Complainant for alleged breach of a distribution and license agreement dating back to 2000. The Complainant points out that in that case, the Respondent has now withdrawn all claims based on the agreement from 2000, which it has acknowledged to have been forged. The Complainant purports that, since the trademark license agreement with SPUK has been terminated, this also affects any license SPUK may have provided to the Respondent, who therefore has no right or legitimate interest in the Trade Marks.

According to the Complainant, the Domain Name is being used in bad faith because it is apparent that the Respondent was well aware of the Complainant and its authorized subsidiary The ICEE Company, their business, and the Trade Marks when registering the Domain Name. The Complainant submits that, upon termination of the license to SPUK on June 25, 2019, the Respondent had no right or legitimate interest in use of the Domain Name. Furthermore, the Complainant contends, the Respondent did not have a right to use the Trade Marks in the Benelux or Sweden, as SPUK did not have authority to grant any sublicense. The Complainant also states that the continued display of the Trade Marks and copyrighted images concerning identical goods and services on the Website, and the Respondent falsely holding itself out as an authorized distributor of the Complainant’s products under the Trade Marks, clearly demonstrates bad faith use of the Domain Name. The Complainant also points out that, even if the website’s content were removed, the Respondent’s mere possession of the Domain Name prevents or makes it difficult for the Complainant to register its trademark as a Domain Name in this jurisdiction, and constitutes bad faith use of the Domain Name.

B. Respondent

According to the Respondent, there are good grounds to claim revocation or invalidity of the Trade Marks at the Benelux Office of Intellectual Property (“BOIP”) and the European Union Intellectual Property Office (“EUIPO”) due to non-use. However, the Respondent submits, by starting the present proceedings the Complainant deprives the Respondent of the opportunity to obtain a decision on such a claim and the Respondent therefore requests the suspension of these proceedings for two months in order to allow the Respondent to file a substantiated claim with BOIP / EUIPO, and to postpone the WIPO ruling until BOIP / EUIPO has taken an irrevocable decision.

The Respondent contends that, if the Complainant’s statement that SPUK was not allowed to grant sublicenses is correct, the use of the Trade Marks in the European Union by other companies than SPUK was probably not legal and therefore would be insufficient to demonstrate trademark use for the Benelux and the rest of the European Union. According to the Respondent, in 1983 – during the period in which the oldest of the Trade Marks, registered in the Benelux in 1975, would have been subject to expiration due to non-use – the trademark holder re-registered the SLUSH PUPPIE mark with device in the Benelux in order to circumvent the obligation to use. The Respondent submits that according to settled case law, such a new filing in order to circumvent the obligation to use a trademark within five years is a filing in bad faith and can therefore be canceled.

The Respondent also purports that the word mark SLUSH PUPPIE has become a “generic name” due to the act or omission of the trademark owner, and is therefore subject to an invalidity action. In this connection the Respondent points out that the Complainant has not interfered with or taken action against the mentioning of SLUSH PUPPIE in a “generic manner” on the Internet, in particular on a webpage of Wikipedia and a webpage under <drimble.nl>, a provider of business information. With respect to the SLUSH PUPPIE device marks on which the Complainant relies, the Respondent contends that established case law shows that words that are no longer eligible for trademark protection cannot be protected by adding an image.

According to the Respondent, it has its own right or legitimate interest in the Domain Name, since before having any notice of the dispute, the Respondent made demonstrable preparations to use the Domain Name in connection with a bona fide offering of goods or services, while it is commonly known by the Domain Name. The Respondent submits that it obtained a sub-license from SPUK and that the Complainant received royalties from SPUK from 2000 onwards, also on sales by the Respondent and its legal predecessors, and that the Complainant knew about this. In addition, the Respondent submits that it has a legitimate interest in the Domain Name, since it sends and receives a lot of emails (including confidential information) via – the Panelist understands an email address connected to – the Domain Name, from customers, suppliers, tax authorities, etc., which the Respondent could no longer receive without access to the Domain Name. The Respondent also points out that the termination by the Complainant of the licence to SPUK is still the subject of the court case in the USA, and which has not been decided yet. The Respondent furthermore purports that the Domain Name is subject to acquiring limitation (“verkrijgende verjaring”) under Dutch law, due to more than ten years of uninterrupted possession of the Domain Name in good faith, to which the periods of the previous holders of the Domain Name may be added, so that the Respondent and its predecessor would have lawfully and automatically become owner of the Domain Name in 2012.

According to the Respondent, the Domain Name was not registered in bad faith, since in 2002 its predecessor believed it had a legally valid sub-license through SPUK. With respect to bad faith use, the Respondent contends that the Respondent and its predecessors believed – because of the sublicense – that they could use the Trade Marks and (from 2002) the Domain Name, and this good faith has not changed by the receipt of a letter in 2019 in which is stated that the main license has been validly terminated and that there was never a legally valid sub-license. Furthermore, the Respondent submits, if an unlawful situation existed in relation to the use of Trade Marks and the Domain Name, the right to end this unlawful situation has lapsed after twenty years in accordance with Dutch law and the Complainant no longer has the right to end this situation.

6. Discussion and Findings

A. Request for suspension of proceedings

The first issue to be decided is whether these proceedings should be suspended to enable the Respondent to file an invalidity claim at BOIP and EUIPO against the Trade Marks. This is not the case. As set out in Article 21 of the Regulations, participation in the present proceedings does not prevent either party from submitting the dispute to an independent court of competent jurisdiction. It may be assumed that this rule covers all issues relating to the dispute, such as an action to challenge the validity of the Trade Marks. Therefore, the current proceedings are no impediment to the Respondent filing the purported cancellation and invalidity claims, which would be assessed independent of the present proceedings; there is no reason to suspend the proceedings for that purpose. The alleged invalidity of the Trade Marks may, however, be taken into account in these proceedings when deciding whether the Complainant has met the criteria for the requested change of registrant, set out in Article 2 of the Regulations.

B. Identical or Confusingly Similar

The Respondent has challenged the Complainant’s rights in the Trade Marks, submitting that such rights are subject to cancellation due to non-use and to an invalidity action because SLUSH PUPPIE would in effect have become a generic term. As a rule, if a complainant owns a registered trademark it prima facie satisfies the threshold requirement under the Regulations of having trademark rights (see WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Third Edition (“WIPO Overview 3.0”), section 1.1).¹ In the absence of a decision of a court or trademark authority canceling or invalidating the Trade Marks, the Panel accepts the evidence of the registration of the Trade Marks in the name of the Complainant as sufficient evidence of the Complainant’s trademark rights.

The Respondent has not denied that the Domain Name is confusingly similar to the Trade Marks. For completeness’ sake, the Panel notes that the Domain Name incorporates the mark SLUSH PUPPIE, of which the Trade Marks consist, in its entirety (see WIPO Overview 3.0, section 1.7), while the ccTLD “.nl” is typically disregarded under the confusing similarity test, since it is a technical registration requirement (see WIPO Overview 3.0, section 1.11).

Therefore, the Panel finds that the Domain Name is confusingly similar to the Trade Marks in which the Complainant has rights.

C. Rights or Legitimate Interests

Under article 3.1 of the Regulations, the Complainant has to make out a prima facie case that the Respondent does not have a right to or legitimate interest in the Domain Name, upon which the burden of production on this element shifts to the Respondent to come forward with relevant evidence demonstrating a right to or legitimate interest in the Domain Name (WIPO Overview 3.0, section 2.1). In this connection, the Complainant states that if and to the extent that the Respondent bases its right to use the Trade Marks in the Domain Name on a sub-license from SPUK, the Complainant’s licensee for Europe, that sub-license was invalid as SPUK did not have the right to grant sub-licenses in the Benelux, while the license to SPUK has been terminated by letter of May 25, 2019, and as a consequence, the Panel understands, any sub-license (whether or not legally granted) has also been terminated.

The Respondent has put forward in its defense that before having any notice of the dispute, it made demonstrable preparations to continue to use the Domain Name in connection with a bona fide offering of goods or services. The Panel understands that the Respondent bases the bona fide character of its offerings on the sub-license it contends to have received from SPUK and on acquiescence of the Complainant in the Respondent’s use of the Trade Marks, including the Domain Name, in connection with the sale of its products in the Benelux between 2002 (or 2000, when it started paying royalties) and 2019. On the face of it, this submission is not without merit. The Complainant acknowledges that SPUK has been its licensee for at least a part of Europe since about 1999. In addition, it is uncontested that the Respondent and its predecessors have used the Domain Name since 2002, without any challenge from the Complainant, and that during that period they have sold the Complainant’s products under the Trade Marks through the website to which the Domain Name resolved.

However, a respondent claiming a right or legitimate interest in a domain name based on a prior agreement or relationship between the parties or based on past good-faith use (thus demonstrating merely a past right or legitimate interest) does not necessarily have rights or legitimate interests in the domain name, at the time a decision is rendered (WIPO Overview 3.0, Section 2.11). If such an agreement or relationship is terminated, the right or legitimate interest may also terminate, depending on the terms of the agreement or relationship.

This raises a number of questions, in particular whether SPUK has validly given a sub-license to the Respondent and, if so, whether and how the termination of the license to SPUK by the Complainant affects that sub-license. It appears that the answer to the latter question may depend on the outcome of the court case in the USA between the Complainant and SPUK, as the court’s decision on the termination and scope of the license agreement with SPUK may also affect the purported sub-license from SPUK to the Respondent and the Respondent’s right to and legitimate interest in the Domain Name under the present proceedings. As a business and legal dispute about contractual relations, the present case in the Panel’s opinion is not appropriate for a proceeding under the Regulations, which are designed to address circumstances of abusive cyber-squatting; rather, the case is more appropriately handled in court (see e.g. Summit Industries, Inc. v. Jardine Performance Exhaust Inc., WIPO Case No. D2001-1001 and K & K Promotions Inc. v. Route 44 Leathers, WIPO Case No. D2011-0088).

The Panel concludes that, in view of all of the above circumstances, the Complainant has failed to establish the second element of the Regulations.

D. Registered or Used in Bad Faith

As the Complainant has not succeeded on the above second element under the Regulations, the Panel need not discuss the third element, registration or use in bad faith.

7. Decision

For all the foregoing reasons, the Complaint is denied.

Wefers Bettink, Wolter
Panelist
Date: April 6, 2021

¹ In view of the fact that the Regulations are to an extent based on the Uniform Domain Name Dispute Resolution Policy (“UDRP”), it is well established that both cases decided under the Regulations and cases decided under the UDRP, and therefore WIPO Overview 3.0, are relevant to this proceeding (see, e.g., Aktiebolaget Electrolux v. Beuk Horeca B.V., WIPO Case No. DNL2008-0050).