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Exel Oyj v. KH Trading, Inc. [2004] GENDND 1141 (9 August 2004)

1. The Parties

The Complainant is Exel Oyj, Mäntyharju, Finland, represented by Jukka Kivitie, Finland.

The Respondent is KH Trading, Inc., Boynton Beach, Florida, United States of America. The Respondent is not represented in this proceeding.

2. The Domain Names and Registrar

The disputed domain name <nordicwalker.net> is registered with Network Solutions, LLC. The disputed domain name <nordicwalker.org> is registered with Go Daddy Software, Inc.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on June 11, 2004.

On June 11, 2004, the Center transmitted by email to Network Solutions, LLC. a request for registrar verification in connection with the domain names <nordicwalker.org> and <nordicwalker.net>. On June 15, 2004, Network Solutions, LLC. transmitted by email to the Center its verification response confirming that with respect to <nordicwalker.net>, the Respondent is listed as the registrant and providing the contact details for the administrative, billing and technical contact. No confirmation was received with regard to the domain name <nordicwalker.org>.

On June 18, 2004, the Center transmitted by email to Go Daddy Software, Inc. a request for registrar verification in connection with the domain name <nordicwalker.org>. On June 18, 2004, Go Daddy Software, Inc. transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details for the administrative, billing and technical contact.

In response to the notification by the Center that the Complaint was administratively deficient - since Network Solutions, LLC. was not the registrar of the domain name <nordicwalker.org> but Go Daddy Software, Inc. the Complainant filed an amendment to the Complaint on June 22, 2004, by e-mail and on June 24, 2004, in hardcopy. The Center verified that the Complaint together with the amendment to the Complaint now satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the "Policy"), the Rules for Uniform Domain Name Dispute Resolution Policy (the "Rules"), and the WIPO Supplemental Rules for Uniform 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 June 28, 2004. The Panel is satisfied that the Complaint was sent to the Respondent as prescribed in paragraph 4(a) of the Rules. In accordance with the Rules, paragraph 5(a), the due date for Response was July 18, 2004. Since the Respondent did not file a Response to the Complaint, on July 20, 2004, the Center formally issued a Default Notification to the Respondent.

The Center appointed Madeleine De Cock Buning as the sole panelist in this matter on July 28, 2004. 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 relies on the following trademark registrations, evidence of which is provided in annexes 5a – f to the Complaint (the "Mark(s)"):

- NORDIC WALKER (figurative), registered under 197274 in Norway on April 30, 1999, in class 28;

- NORDICWALKER (figurative), a Community Trademark registered under 987206 on March 17, 2000, in class 28;

- NORDIC WALKER (figurative), registered under 4519537 in Japan on November 2, 2001, in class 28;

- NORDIC WALKER (figurative), registered under 556119 in Canada on January 8, 2002, in class 28;

- NORDICWALKER (figurative), a Community Trademark registered under 2269413 on August 27, 2002, in class 25; and

- NORDIC WALKER (figurative), registered under 1073394 in Taiwan on December 1, 2003, in class 28.

Moreover, the Complainant has invoked a number of trademark applications pending in various countries, evidence of which is provided in annexes 5g – m to the Complaint.

The domain names <nordicwalker.net> as well as <nordicwalker.org> (the Domain names) were registered in the name of the Respondent on September 24, 1999, and May 6, 2003, respectively. The Panel observes that <nordicwalker.org> is automatically linked to <nordicwalker.net>, which directs to an active website where nordicwalker walking poles are advertised. The website moreover features the logo of the Complainant, Exel Oyj, which serves as a hyperlink to the Complainant’s website <exel.net>. Visitors to the website are requested to contact the Respondent for product information. However, when clicking on the button "order", the text "ordering is temporarily closed" appears.

5. Parties’ Contentions

A. Complainant

Identical / confusingly similar domain name

The Complainant invokes its trademarks as listed above in paragraph 4 to contend that the Domain names are identical to the Marks.

Absence of right / legitimate interest

The Complainant asserts that the Respondent lacks any legal right to the Domain names, since the Respondent does not hold any trademark rights to either "nordicwalker" or "nordic walker", nor do the Domain names relate to the Respondent’s business name.

Furthermore, the Complainant points out that by virtue of the Purchase and Retail Agreement (the "Agreement"), signed on May 30, 2000, the Respondent had become Complaint’s retailer in the United States of America. The Complainant relies on Article 4 of the Agreement to assert that the Respondent thereby recognized the exclusive right to any symbols that the Complainant at the time of conclusion of the contract had adopted or would consequently adopt within the United States of America. Moreover, according to the Complainant, in signing the Agreement, the Respondent undertook to assign to the Complainant all registrations referencing "nordic walker" in Respondent’s name. The Agreement ended in 2003, when the Complainant signed a distribution agreement with a second party.

Registration and use in bad faith

The Complainant contends that by virtue of the Agreement, the Complainant endorsed past and future domain name registrations with respect to the Marks in the name of the Respondent. However, these registrations were subject to two conditions: the subsequent assignment thereof to the Complainant as well as the limitation of this right to the duration of the Agreement. Therefore, according to the Complainant still, failure to assign the Domain names upon the termination of the Agreement retroactively deprived the registration of its bona fide character. Moreover, the Respondent is thus preventing the Complainant from using its Marks as a domain name.

Furthermore, the Respondent has offered the transfer of the Domain names together with product (advertising) materials to the Complainant for the amount of EUR 92,000, which largely exceeds the sum of the registration costs and value of the product materials. The Complainant also invokes email correspondence evidencing the Respondent’s threat to transfer the Domain names to an unnamed third party willing to pay the required amount.

The Domain names are currently still connected to an active website with information about "nordicwalking" products as well as featuring the Exel logo and a link to the Complainant’s website. The Complainant therefore alleges that this use of the Domain names creates the incorrect impression that the Respondent is either the exclusive distributor or a subsidiary of the Complainant or that the Complainant approves of the use made of the Domain names. This is further compounded by the absence of a disclaimer to this effect.

In addition, the website described above features the Respondent’s contact details. This leads the Complainant to claim that the Respondent is using the Domain names for the sole purpose of attempting to attract Internet users to the Registrant’s website for financial gain by creating a likelihood of confusion with the Marks.

B. Respondent

The Respondent did not submit a Response to the Complainant’s contentions before the Response due date of July 18, 2004.

6. Discussion and Findings

The Respondent was given notice of this proceeding in accordance with the Rules. The Center discharged its responsibility under paragraph 2 (a) of the Rules to employ reasonably available means calculated to achieve actual notice to Respondent of the Complaint.

However, as previously indicated, the Respondent failed to file a reply to the Complaint. The Panel finds that the Respondent has been given a fair opportunity to present its case.

Pursuant to paragraph 15 (a) of the Rules, the Panel shall decide on the Complaint on the basis of the statements and documents submitted and in accordance with the Policy, the Rules and any rules and principles of law it deems applicable. Moreover, in accordance with paragraph 14(b) of the Rules, the Panel may draw such inferences as it considers appropriate from the Respondent’s failure to reply to the Complainant’s assertions and evidence. In those circumstances, the Panel’s decision may be based upon the Complainant’s assertions and evidence.

The Respondent’s default however does not automatically result in a decision in favor of the Complainant. The Complainant must still prove the elements required by paragraph 4 (a) of the Policy, which stipulates that in order to succeed in this proceeding and obtain the transfer of the Domain names, the Complainant must prove that each of the following elements are satisfied:

i. The Domain names are identical or confusingly similar to a trademark or service mark in which the Complainant has rights (see below, section 6 A);

ii. The Respondent has no rights to or legitimate interest in the Domain names (see below, section 6 B); and

iii. The Domain names have been registered and are used in bad faith (see below, section 6 C).

A. Identical or Confusingly Similar

As stated above, paragraph 4 (a) of the Policy requires that the disputed domain names are "identical or confusingly similar" to the Marks.

The disputed domain names are <nordicwalker.net> and <nordicwalker.org>.

The "nordicwalker" trademarks the Complainant relies on are listed above under section 4. The Complainant has provided sufficient evidence of its rights in the Marks, registered in a wide variety of countries and well known in hiking circles. The Panel notes that the Marks concerned predominantly consist of the word element "nordicwalker". Therefore, the Panel finds the Domain names <nordicwalker.org> and <nordicwalker.net> to be confusingly similar to the Marks. Accordingly, the Panel is satisfied that the Complainant has met the first requirement of paragraph 4 (a) of the Policy.

B. Rights or Legitimate Interests

While the overall burden of proof is on the Complainant, the element of possible rights or legitimate interest of the Respondent in the Domain names involves the Complainant establishing matters which normally are within the knowledge of the Respondent. It involves for the Complainant the often impossible task of proving a negative. This should, as correctly stated in Julian Barnes v. Old Barn Studios, WIPO Case No. D2001-0121, be approached as follows: the Complainant makes its assertion and puts forward the evidence it can muster in support (e.g. it has rights to the name, the Respondent has no rights to the name of which it is aware). Unless the allegation is manifestly misconceived, the Respondent has to demonstrate its rights to or legitimate interests in the Domain name under paragraph 4 (c) of the Policy.

According to paragraph 4 (c) of the Policy, the following circumstances, if proved, demonstrate the Respondent’s rights or legitimate interest in the Domain names:

(i) the Respondent used or demonstrably prepared to use the Domain names or corresponding names in connection with a bona fide offering of goods or services prior to notice of the dispute;

(ii) the Respondent (as an individual, business or other organization) has been commonly known by the Domain name, even if it has not acquired trademark rights; or

(iii) The Respondent is making a legitimate non-commercial or fair use of the Domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the Complainant’s trademarks.

There is no apparent legitimate justification for the Respondent’s registration and use of the Domain names which are confusingly similar to the Marks. As indicated above, the Complainant has stated what it could to establish the absence of any rights or legitimate interests in the Domain names on the part of the Respondent. In these circumstances, where the Complainant had made a prima facie case, it was up to the Respondent to negate those assertions by providing evidence to the contrary. In the absence of a Response, the Panel in deciding on this point, therefore relies on the Complainant’s assertions to this effect.

However, for the sake of completeness, the Panel notes the following. As will be elaborated on below, under the heading "Registered and Used in Bad Faith", in the absence of evidence to the contrary, the Panel finds that at least in the period prior to the commencement of the present dispute, the Respondent was not bona fide in offering goods on its website, thus precluding reference to paragraph 4 (c) i of the Policy as any offering of goods on the website ceased to be a bona fide offering once the distribution agreement had terminated. Since the Respondent made commercial usage of the website connected to the Domain name, reference to paragraph 4 (c) iii of the Policy is also precluded.

C. Registered and Used in Bad Faith

Paragraph 4 (a) iii requires the Complainant to prove that the Respondent registered and has used the Domain names in bad faith. Paragraph 4 (b) of the Policy non-exhaustively lists circumstances which, if found by the Panel to be present, constitute evidence that the Respondent has registered and used the Domain names in bad faith:

(i) Circumstances indicating that the Respondent has registered or has acquired the Domain names primarily for the purpose of selling, renting, or otherwise transferring the registration of the Domain names to the Complainant who is the owner of the trademark or service mark or to a competitor of the Complainant, for valuable consideration in excess of its documented out-of-pocket costs directly related to the Domain names; or

(ii) The Respondent has registered the Domain names in order to prevent the owner of the trademark or service mark from reflecting the Marks in a corresponding domain name, provided that the Respondent has engaged in a pattern of such conduct; or

(iii) The Respondent has registered the Domain Names primarily for the purpose of disrupting the business of a competitor; or

(iv) By using the Domain names, the Respondent has intentionally attempted to attract, for commercial gain, Internet users to its website or other on-line location, by creating a likelihood of confusion with the Complainant’s Marks as to the source, sponsorship, affiliation or endorsement of its website or location or of a product or service on its website or location.

In support of its claim that the Respondent has registered the Domain names in bad faith, the Complainant relies on UVA Solar GmbH & Co K.G. v. Mads Kragh, WIPO Case No. D2001-0373 where the Panel was asked to decide on inter alia the following question: if authority to register a domain name was given subject to certain terms and conditions, did the subsequent breach of such conditions render what would otherwise have been a bona fide registration negative? After careful deliberation of the circumstances at hand, the Panel in that case answered the question in the affirmative.

In this particular case, the Panel finds that even if the initial registration was condoned by the Complainant, it was done so subject to two conditions, namely the registration was limited to the duration of the Respondent’s status as Complainant’s retailer, and required the subsequent transfer of the Domain names to the Complainant.

The Panel notes that the Respondent’s capacity as the Complainant’s retailer had come to an end. Thus in the absence of a transfer of the Domain names to the Complainant, the Respondent has failed to fulfill the first condition. The Respondent’s non-fulfillment of the contractual term in relation to the return of the Domain names may in the absence of a Response, be taken as a basis for concluding that the registration lacks good faith. The fact that one of the Domain names was registered before the distribution agreement between the Complainant and the Respondent is not relevant since the Respondent agreed to terms in the Agreement that foresaw the transfer of the Domain names at the end of the Agreement.

The Respondent, in failing to submit a Response, also failed to provide any information as to any circumstances that may justify retaining ownership of the name.

In support of its claim that the Respondent has used the Domain names in bad faith, the Complainant relies inter alia on paragraph 4 (b) (i) of the Policy. The Complainant has submitted e-mail correspondence between itself and the Respondent in support of its allegation that the Respondent offered the transfer of the Domain names for the amount of EUR92,000. The Panel considers that the Complainant has sufficiently demonstrated that the offering of the Domain names, albeit as part of a package, for the sum of EUR92,000 is manifestly in excess of the out-of-pocket costs usually paid for the registration of domain names. The Panel therefore finds the Respondent to have used the Domain names in bad faith as stipulated under paragraph 4 (b) (i) of the Policy.

Moreover, with its status as the Complainant’s retailer terminated, the Respondent lacks a legitimate purpose to retain (usage of) the Domain names. By having an active website connect to the Domain names, the Respondent has intentionally attempted to attract, for commercial gain, Internet users to its website which features the Complainant’s logo and Marks. The Respondent has thus created a likelihood of confusion as to the source of its website. Coupled with the request that potential customers of the Complainant’s products direct their inquiries to the Respondent, thereby creating the impression of endorsement by Complainant of such usage of the Domain names, the Respondent has violated article 4 (b) iv of the Policy.

Accordingly, the Panel finds that the Complainant has established that the Respondent registered and is using the Domain names in bad faith pursuant to paragraphs 4 (b) i and iv of the Policy.

7. Decision

For all the foregoing reasons, in accordance with Paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the domain names <nordicwalker.net> and <nordicwalker.org> be transferred to the Complainant.

Madeleine De Cock Buning
Sole Panelist

Dated: August 9, 2004