Obagi Medical Products, Inc. v. Obagi Skin Health Products Italy SRL [2000] GENDND 78 (20 March 2000)

The above-entitled matter came on for an administrative hearing on March 20, 2000 before the undersigned arbitrator on the Complaint of Obagi Medical Products, Inc., appearing by its counsel, Scott J. Major, Cleary & Komen, LLP, 600 Pennsylvania Ave., SE, Suite 200, Washington, DC 20003-4316, ("Complainant"), against Obagi Skin Health Products Italy SRL, Yahia Kouke, Via Borella, 181/P, 43020 Scurano (PARMA) Italy, ("Respondent"), who did not submit a response or otherwise appear personally or through counsel. Upon the written submitted record including only the Complaint, the following DECISION is rendered:

Date of Commencement of the Administrative Proceeding in Accordance with Rule 2(a) and

After reviewing the Complaint, and determining it to be in administrative compliance, the National Arbitration Forum ("Forum") forwarded the Complaint to the Respondent, on February 16, 2000 in compliance with Rule 2(a) and the administrative proceeding was commenced pursuant to Rule 4(c). In compliance with Rule 4(d), the Forum immediately notified Network Solutions that the administrative proceeding had commenced. The Complaint was then docketed and forwarded to the undersigned arbitrator for decision. Respondent did not submit a response to the Forum within twenty (20) days pursuant to Rule 5(a).

1. On February 22, 2000, Network Solutions confirmed that Respondent registered the domain name "obagi.com" under the registrant name Obagi Skin Health Products Italy SRL, Via Borella, 181/P, Scurano, PR 43020, Italy, with Marco Grulli as Administrative Contact. Network Solutions acknowledged the commencement of this administrative proceeding and that Respondent is bound by the Network Solutions Service Agreement Version 4.0. Accordingly, Respondent agreed to resolve any dispute regarding its domain name registration pursuant to ICANN's Rules for Uniform Domain Name Dispute Resolution Policy and the Uniform Domain Name Dispute Resolution Policy. Neither the Complainant nor Respondent contest the jurisdiction of the Forum or the undersigned arbitrator to resolve this controversy.

2. By virtue of the fact that there is no appearance of any kind by Respondent, all reasonable inferences of fact in the allegations of the Complainant will be taken to be true.

3. Complainant develops and markets skin health products in many countries of the world through distributors and a network of thousands of medical practitioners. Many of these products are sold with the trademark "OBAGI" or some name including that mark. Federal registration of the mark was originally applied for in the U.S.A. by Zein E. Obagi in 1992, and the registration with the U.S. Patent and Trademark Office issued on November 25, 1997 under Reg. No. 2,114,897. Complainant has an assignment of this mark and has applied for or obtained registrations in many other countries throughout the world.

4. Since 1989, Complainant and its predecessors in interest have been selling skin health products under the mark "OBAGI" and have spent at least $3,000,000 (US) in advertising products with the mark. Complainant claims that the mark is distinctive and is "famous" within the meaning of the trademark and antidilution laws.

5. Respondent, through a sub-distribution agreement from an authorized German distributor of Obagi products, has been selling these products in Italy since 1997 until terminated on February 10, 1999. The distributorship agreement did not confer any rights upon the German distributor in the mark "Obagi" or any other intellectual property. Accordingly, no such rights could have been conferred in the sub-distributorship agreement involving Respondent.

6. On January 26, 1998, prior to Respondent's termination as a sub-distributor, a California entity identified as Skin Care Specialties registered "obagi.com" with Network Solutions, Inc. without the prior knowledge or consent of Complainant or its predecessor in interest. A letter from counsel for Complainant to the registrant demanding abandonment or transfer of the domain name received no response. Respondent, while still a sub-distributor of Obagi products and without knowledge of Complainant or its predecessor in interest, obtained an assignment of the obagi.com domain from Skin Care Specialties in 1998.

7. Several demands by counsel for Complainant on Respondent that it abandon or transfer the obagi.com domain name were met with corresponding demands for large cash payments to Respondent. In a letter (Exhibit 16 to the Complaint) dated May 22, 1999, Respondent demanded a cash payment for transfer of the domain name in the amount of $300,000. Alternatively, Respondent proposed a cash payment of $200,000 with a guaranteed annual license fee of $30,000. It should be noted that, as of such date, Respondent had been a terminated sub-distributor for more than a month.

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CONCLUSIONS

The undersigned certifies that he has acted independently and has no known conflict of interest to serve as the Arbitrator in this proceeding. Having been duly selected, and being impartial, the undersigned makes the following findings and conclusions:

1. I find that the domain name at issue is identical or confusingly similar to a trademark or service mark in which the Complainant has rights.

2. The Respondent has no rights or legitimate interests in respect of the domain name.

3. That the domain name, obagi.com, is being conspicuously claimed and used by Respondent in bad faith.

DECISION

Based upon the above findings and conclusions, and pursuant to Rule 4(i) of the ICANN's Rules for Uniform Domain Name Dispute Resolution Policy and the National Arbitration Forum's Supplemental Rules to ICANN's Uniform Domain Resolution Policy, it is decided as follows:

THE UNDERSIGNED DIRECTS THAT THE DOMAIN NAME "OBAGI.COM," REGISTERED BY RESPONDENT OBAGI SKIN HEALTH PRODUCTS ITALY SRL, BE TRANSFERRED TO COMPLAINANT OBAGI MEDICAL PRODUCTS, INC.

Signed this 20th day of March 2000 by Judge James A. Carmody (Retired), arbitrator.

[1] Any references to "Rule" or "Rules" are to ICANN's Rules for Uniform Domain Name Dispute Resolution Policy and Uniform Domain Name Dispute Resolution Policy (the "Policy") as supplemented by the National Arbitration Forum's Supplemental Rules to ICANN's Uniform Domain Resolution Policy.

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