Generic Top Level Domain Name (gTLD) Decisions

P. O. Box 50191
Minneapolis, Minnesota 55405 USA

Hydraroll Limited,
Complainant

vs.

Morgan Corporation ,
Respondent

DOMAIN NAME DISPUTE
ADMINISTRATIVE PANEL DECISION
NAF File Number: # 0002000094108

The above entitled matter came on for an administrative hearing on April 7, 2000, by a three member panel consisting of Louis E. Condon, R. Glenn Ayers and Jack Marden, each of whom certifies that he has no conflict of interest in this case. After due consideration of the written submitted record and full discussion by the panel, the

following unanimous decision is rendered:

PROCEDURAL BACKGROUND

Domain Name HYDRAROLL.COM

Domain RegistrantMorgan Corporation Date : Oct. 25, 1999

Domain Name RegistrarNetwork Solutions, Inc.

By registering its domain name with Network Solutions, Inc., the Respondent agreed to resolve any dispute pursuant to the ICANN Uniform Domain Name Dispute Resolution Policy. The Complaint was filed with the National Arbitration Forum on February 21, 2000. After confirming administrative compliance, NAF notified the Respondent, the registrar, and ICANN that the proceeding had commenced. The Respondent duly filed its Response, to which the Complainant filed a Response. Thereafter, the matter was referred to this panel for a decision.

The Complainant, Hydraroll Limited, is a United Kingdom company which registered the trademark name "Hydraroll" on May 2, 1989, with the United States Patent and Trademark Office. By an agreement dated April 23, 1993, the Complainant appointed the Respondent, Morgan Corporation, as its exclusive distributor for Hydraroll products in the United States of America, the Caribbean Islands, Puerto Rico, Canada and Mexico, for a period of five years. This agreement replaced and substituted new terms and conditions for two earlier five year agreements, the first of which was dated on March 1, 1983.

Relations between the parties deteriorated at some time after the execution of this new agreement. By a letter dated July 19, 1999, Complainant advised the Respondent that "it is our wish that Morgan Corporation should no longer represent us for the sales of Hydraroll products in North America", thus giving the twelve month contractual notice of termination. The letter went on to set forth some of the Complainant’s observations and dissatisfaction, and then stated:

"Notwithstanding any or all of the above, we wish to draw your attention to the fact that you are currently in several breaches of our agreement dated 23 April 1993. Should you not remedy all or any of these breaches within the next ninety days (on or before 18 October, 1999), it would be our intention to terminate the agreement forthwith."

Thereafter, the letter set forth four alleged breaches with specific reference to the applicable sections of the contract. Prominent among these were the improper storage and handling of Hydraroll products and inadequate staffing. The letter also pointed out that the Respondent’s sales literature did not give due prominence to the fact that the trade mark was Hydraroll’s property.

Apparently, as indicated in a letter from the Complainant dated 29 September, 1999, the parties were attempting to work out the alleged breaches. A meeting had been proposed between the parties for October 18, 1999, but later rescheduled to October 26^th.

By a letter of 28 October, 1999, the Complainant complained of a lack of interest by the Respondent’s senior managers as evidenced by their failure to attend the meeting.

Complainant’s letter went on to state:

"As a result of this persisting breach, I hereby advise you that our agreement dated 23 April, 1993 is terminated with immediate effect. I draw your attention to Clause 12.3 of that agreement which clearly states that you may no longer hold yourselves out to be our distributor. I also draw your attention to Clause 8.3.2. As our agreement is now terminated you must cease to use our Trade Marks, and must therefore obliterate or remove the Hydraroll name ...... from all leaflets and other advertising materials."

Respondent maintains, as evidenced by the Complainant’s September 29, 1999 letter, that it was working to cure the alleged breaches. Further, that at the time the domain name was registered (October 25, 1999) there was a clear intent by Morgan Corporation to cure all breaches of the agreement, and the agreement was in full force and effect.

The Respondent acknowledges that the meeting of October 26, 1999, was for the stated purpose of Complainant inspecting Morgan’s efforts to cure the alleged breaches. Respondent states that " the domain name was registered prior to the meeting to establish at the meeting Morgan’s dedication to the agreement between the parties." Respondent acknowledges that the Complainant terminated the agreement by its letter dated October 28, 1999, based on Respondent’s inability to service the customers. Litigation between the parties was commenced by Respondent on November 3, 1999, less than ten (10) days after the registration of the domain name. The suit alleges that the Complainant wrongfully terminated the contract.

FINDINGS OF FACT

After due consideration of the documents submitted and full discussion by the panel, the following facts are found:

(1) The Complainant is the owner of the trade mark "Hydraroll", which was registered in the U.S. on May 2, 1989. At the time of the registration, Respondent was the authorized U.S. distributor of the Complainant’s trademark goods.

(2) The Respondent registered the domain name "Hydraroll.com" on October 25, 1999.

(3) The parties entered into an agreement on April 23, 1993, which provided inter alia:

(Paragraph numbers are those used in the contract)

2.2 "The Distributor will diligently and faithfully act as the Company’s distributor in the Territory and will use its best endeavours to promote both the sale of the products and also the reputation of the Company and will not do or permit anything that may hinder or harm either the sale of the Products or the Company’s trade".

3.2 "During the period of this agreement the Distributor will not without the previous written consent of the Company:

3.2.1 manufacture or advertise the products outside the Territory or establish or operate any base outside the Territory for the distribution of the Products to any person.

7.1 "The Distributor will to the reasonable satisfaction of the Company maintain a suitable place or places of business within the Territory to provide adequate facilities for users of the Products and so comply with its obligations hereunder".

7.3 "The Distributor will to the reasonable satisfaction of the Company employ an adequate force of qualified salesmen and engineers to comply with its obligations hereunder".

8.3 "The Company grants permission to the Distributor to use the Company’s trade mark ("the Trade Mark") for the purposes of advertising the Products and the fact that the Distributor is the Company’s exclusive distributor for the Products in the Territory. This permission is given on the following conditions:

8.3.1 the rights granted are personal to the Distributor.

8.3.2 the permission will only subsist during the continuance of this Agreement.

8.3.3 whenever the Distributor uses the Trade Mark due prominence must be given to the fact that the Trade Mark is the property of the Company.

If the Company is not satisfied that the above conditions are being complied with it may forthwith by written notice to the Distributor revoke the permission and require the Distributor to cease using the Trade Mark and obliterate or remove the Trade Mark from any advertising material or other place where it may be found ( except from advertising material or products supplied by the Company under the terms of this Agreement)"

9.4 "The Distributor will inform the Company of any infringement of any of the patents or trade marks relating to the Products ( particulars of which have been notified to the Distributor) immediately the Distributor receives knowledge of the same."

12.1 " This Agreement may at any time be terminated by either party serving on the other written notice of termination on the ground that the party on whom the notice is served has failed to perform or observe any of its duties under this Agreement within ninety days after written notice requiring such performance or observance."

12.3 " As from the date of termination the Distributor will forthwith thereafter cease to hold itself out as a Distributor for the Company and the sale of the Products".

14.2 " The Termination of this Agreement in any way whatsoever will be withoutprejudice to the rights and duties of either party accrued prior to termination. The Clauses in this Agreement which are expressed or designed to have effect after termination will continue to be enforceable notwithstanding termination."

14.4 "Failure by either party to enforce at any time any of the provisions of this Agreement will not be construed as a waiver of its rights. Any waiver of a breach of any provisions will not affect either party’s rights in the event of additional breach".

(4) Complainant has now severed its relationship with Respondent, although there is pending litigation.

CONCLUSION

It is the unanimous opinion of this panel that the Complainant’s trade mark and the Respondent’s domain name are identical. Further, based on contract principals and the ICANN Policy and Rules, the Complainant is entitled to the domain name and, therefore, the name should be transferred to the Complainant.

The continued use by Respondent would both (i) violate the now terminated contract and, (ii) would violate the ICANN Policy at Paragraph 4(a):

"1) ......the domain name registered by the Respondent is identical or confusingly similar to a trademark or service mark in which the Complainant has rights, and, ... the Respondent has no legitimate interests in respect of the domain name......"

The evidence also suggests, but not conclusively, that the third element of Policy Paragraph 4(a) is also present: "(3) the domain name has been registered and used in bad faith."

DECISION

For the foregoing reasons, the domain name "Hydraroll.com" should be transferred to the Complainant.

For the Panel

Chair

Louis E. Condon

Charleston, SC

April 14, 2000