WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

F. Hoffmann-La Roche AG v. Alexandr Grog

Case No. D2013-0995

1. The Parties

The Complainant is F. Hoffmann-La Roche AG of Basel, Switzerland, represented internally.

The Respondent is Alexandr Grog of Ukraine.

2. The Domain Name and Registrar

The disputed domain name <diet-xenical.com> is registered with Melbourne IT Ltd.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on June 4, 2013. On June 4, 2013, the Center transmitted by email to Melbourne IT Ltd a request for registrar verification in connection with the disputed domain name. On June 13, 2013, 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

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 13, 2013. In accordance with the Rules, paragraph 5(a), the due date for Response was July 3, 2013. The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on July 10, 2013.

The Center appointed Henry H. Perritt, Jr. as the sole panelist in this matter on September 13, 2013. 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 well-known international pharmaceutical company. The Complainant owns the trademark XENICAL, registered in a number of states. The Complainant submitted International Registration numbers 612908 and 699154 showing a priority date of August 5, 1993.

The disputed domain name resolves to a website that advertises Generic Xenical for sale. The logo on the site is "T+T Pharmacy," characterized as "Your reliable supplier of generic medications." The two products offered on the site are "Generic Xenical (Orlistat)" and "Orlistat (Tetrahydrolipstatin) capsule." Except for one reference to "Generic Xenical," the site consistently refers to the product as "Orlistat."

5. Parties’ Contentions

A. Complainant

The Complainant alleges:

That it owns the protected trademark XENICAL. Complaint 10 at § A.

That the disputed domain name is confusingly similar to the protected mark. Id.

That the Respondent has no rights or legitimate interests in the disputed domain name because the Complainant did not consent to the use of XENICAL in the domain name, because the disputed domain name "clearly alludes to the Complainant," and because "Respondent's only reason in registering and using the contested domain name is to benefit from the reputation of the trademark XENICAL and illegitimately trade on its fame for commercial gain and profit." Id. § B.

That the disputed domain name was registered and is being used in bad faith, because the Respondent is intentionally misleading consumers and confusing them so as to attract them to other websites making them believe that the websites behind those links are associated or recommended by Complainant." Id. § C.

The Complainant requests that the Panel issue a decision that the contested domain name be transferred to the Complainant. Complaint 11.

B. Respondent

The Respondent did not reply to the Complainant’s contentions.

6. Discussion and Findings

As more fully explained below, the Panel finds (a) that the Complainant owns the trademark XENICAL; (b) that the disputed domain name is not confusingly similar to the trademark because the Respondent’s website clearly states that it is offering generic alternatives to the trademarked product; (c) that the Respondent has legitimate reasons to use the trademark under the doctrine of “nominative fair use; ” and (d) that the Respondent’s use of the disputed domain name to sell its own generic drugs does not constitute bad faith.”

The nominative fair use privilege implicates not only the legitimacy of the Respondent’s use but also the confusingly similar inquiry. In Toyota Motor Sales, U.S.A., Inc. v. Tabari, 610 F.3d 1171 (9th Cir. 2010), the court of appeals vacated the district court's injunction against use of the trademark Lexus. It extensively discussed the nominative fair use privilege, finding it likely applicable. "But nothing about the Tabaris' domains would give rise to such confusion; the Tabaris did not run their business at lexus.com, and their domain names did not contain words like “authorized” or “official.” See pp. 1178–79 supra. Reasonable consumers would arrive at the Tabaris' site agnostic as to what they would find. Once there, they would immediately see the disclaimer and would promptly be disabused of any notion that the Tabaris' website is sponsored by Toyota. Because there was no risk of confusion as to sponsorship or endorsement, the Tabaris' use of the Lexus mark was fair." 610 F.3d at 1182. In Toyota Motor Sales, U.S.A., Inc. v. Tabari, 610 F.3d 1171 (9th Cir. 2010) the court held that when the nominative fair use defense is at issue, the plaintiff bears the burden of proof to establish a likelihood of confusion. 610 F.3d at 1183.

"On remand, Toyota must bear the burden of establishing that the Tabaris' use of the Lexus mark was not nominative fair use. A finding of nominative fair use is a finding that the plaintiff has failed to show a likelihood of confusion as to sponsorship or endorsement. And, as the Supreme Court has unambiguously instructed, the Lanham Act always places the burden of proving likelihood of confusion on the party charging infringement. In this case, that party is Toyota. All the Tabaris need to do is to leave the factfinder unpersuaded." 610 F.3d at 1183 (internal quotations and citations omitted).

A. Identical or Confusingly Similar

The disputed domain name is identical to the Complainant’s trademark except for the prefix “diet-“. It is well established, as the Complainant argues, that a mere prefix does not make a domain name distinct.

Whether use of the mark is likely to lead to consumer confusion is a different question. The Respondent’s website does not suggest that it is marketing its products under the authority of the Complainant. Indeed the Respondent’s website prominently displays a different trade name, "T+T Pharmacy" and also explicitly characterizes the sponsor of the website as a seller of generic drugs.

A reasonable consumer with basic knowledge of the fact that suppliers of proprietary drugs rarely market generic equivalents of those drugs would not conclude that the website is sponsored or approved by the Complainant.

The Complainant alleges that the disputed domain name "is confusingly similar to the trademark of the Complainant," Complaint 10, at § A. The Complainant does not, however, allege any additional facts to support the conclusion that ordinary consumers would be likely to interpret the Respondent's website as offering proprietary XENICAL when it explicitly states that it supplies generic drugs, or why they would believe that "T+T Pharmacy" is sponsored or authorized by the Complainant.

Annex 5 of the Complainant's submission shows webpages from Respondent dated 04.06.2013, each of which bears the running header, "Xenical - Buy Xenical Treatment Online for Obesity." Respondent webpages retrieved by the Panel on September 26, 2013 showed no such header. The “About us,” “Frequently Asked Questions,” and “Contact us” pages of the Respondent's website make no reference to the Complainant and make no suggestions that the Respondent's products are authorized by the Complainant. They indicate that the Respondent is distinct.

In Toyota Motor Sales, the accused website had been modified by the time of trial to reduce the likelihood of confusion. Similarly, in this case, it appears that the Respondent’s website has been modified since the screen shot presented by the Complainant was taken. The Toyota Motor Sales court observed that forced relinquishment of a domain name is no less extraordinary a remedy than an injunction, and that "The important principle to bear in mind on remand is that a trademark injunction should be tailored to prevent ongoing violations, not punish past conduct. Speakers do not lose the right to engage in permissible speech simply because they may have infringed a trademark in the past." 610 F.3d at 1182.

Likewise, in this case, the Respondent’s website, reflecting its use of the disputed domain name, appears to have changed since the Complainant gathered materials in support of its complaint. Following the sound guidance of the Toyota Motor Sales court, the Panel elects to consider current rather than past use of the disputed domain name.

Courts in the United States have considered what proof of the likelihood of consumer confusion is necessary when an alleged trademark infringer uses a mark to sell generic equivalents of a trademarked product.

Merck & Co., Inc. v. Mediplan Health Consulting, Inc., 425 F. Supp.2d 402 (S.D.N.Y. 2006) involved a claim by the owner of the trademark Zocor that advertisements for the generic alternative to Zocor infringed its trademark. All of the defendants used the mark in connection with the sale of their generic products. 425 F. Supp.2d at 408. In addition, they made arrangements to have their web pages displayed when Zocor was used as a search term in popular search engines. 425 F. Supp.2d at 408. The court denied a motion to dismiss the complaint, finding that it could not conclude at that stage of the proceeding that "that the ZOCOR mark, adjacent to or in close proximity to the word “generic” on defendants' websites, cannot give rise to consumer confusion as to the origin or sponsorship of the product." 425 F. Supp.2d at 414. It did, however, dismiss claims involving use of the mark in search engine results. 425 F. Supp.2d at 416. The case reinforces the proposition articulated in Toyota Motor Sales that the trademark owner has the burden of proving likelihood of confusion.

Other U.S. courts have considered the likelihood of confusion when an alleged infringer claims nominative fair use. In Tiffany (NJ) Inc. v. eBay Inc., 600 F.3d 93 (2d Cir. 2010), the United States Court of Appeals held that use of the trademark "Tiffany" on the defendant's websites did not constitute infringement because:

“The doctrine of nominative fair use allows a defendant to use a plaintiff’s trademark to identify the plaintiff’s goods so long as there is no likelihood of confusion about the source of the defendant’s product or the mark-holder’s sponsorship or affiliation. . . . To fall within the protection: First, the product or service in question must be one not readily identifiable without use of the trademark; second, only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and third, the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder. “600 F.3d at 102 (internal quotations and citations omitted).

B. Rights or Legitimate Interests

In a number of domain-name-dispute cases, the panels found that individuals or entities who had registered domain names similar to those in which a pharmaceutical company owned a trademark must be transferred or cancelled. See, e.g. F. Hoffmann-La Roche AG v. Private Whois buyvaliumg.com, WIPO Case No. D2012-0422; Hoffmann-La Roche Inc. v. ML, Matt Leavsi / WhoisGuard, WIPO Case No. D2012-0587; Sanofi-aventis v. Evangelos Sopikiotis, WIPO Case No. D2008-1459. In most of these cases, the Respondent offered to sell the brand-name drug without a license or prescription. In the cases this Panel has reviewed, the decisionmaker(s) did not consider the nominative-fair-use privilege. Indeed, a September 27, 2013 search of WIPO panel decisions found no documents using both the term "nominative fair use" and the term "generic drug."

Earlier panel decisions have, however, accepted the nominative fair use defense as a doctrine. In Nelnet Business Solutions, Inc. d/b/a FACTS Management Co. v. Andrew Goldberger, WIPO Case No. D2013-0764, a case not involving the sale of generic drugs, the panel restated the elements of nominative fair use:

"Under the three-pronged test for nominative fair use, Respondent would need to show that (1) the Complainant’s tuition-related products are not identifiable without the use of the mark; (2) only so much of the mark was used as was reasonably necessary to identify the product; and (3) Respondent did nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder."

Id., sec. B(6). It found that the Respondent in the case before it had not satisfied the elements.

In this case, the Panel finds that the Respondent has satisfied the three elements of the nominative fair use doctrine.

It is difficult to market generic drugs effectively without use of the brand name under which the proprietary product is known. This means that the Respondent’s has a legitimate need to use of the Complainant’s trademark as a baseline to explain the nature of its products.

C. Registered and Used in Bad Faith

This is not a case in which the Respondent is cybersquatting—obtaining a domain name in order to extort a higher-than-market price for a domain name containing the Complainant’s trademark. Nor is it a case in which the Respondent is using the disputed domain name to pass off its products as those of the Complainant. It is not a case in which the Respondent represents that its activities have been authorized by the Complainant.

The content of the Respondent’s website supports the inference that Respondent is merely trying to sell generic drugs under its own trade name.

The Respondent’s failure to respond to the complaint is unhelpful, but a default in a UDRP proceeding does not, without more, indicate bad faith.

7. Decision

The failure of the Respondent to respond to the Complaint obligates the Panel to accept the Complainant’s factual allegations. In order to grant the requested relief, however, the Panel must find that the Complaint makes out a prima-facie case of a violation of the Rules for Uniform Domain Name Dispute Resolution Policy (the Rules) as approved by ICANN on October 30, 2009, and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the Supplemental Rules) in effect as of December 14, 2009.

The Complainant has not made out a prima facie case.

For all the foregoing reasons, the Complaint is denied.

Henry H. Perritt, Jr.
Sole Panelist
Date: September 27, 2013