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Trade Pals Inc. c/o Tino Buntic v. Natour Global / Sam Natur [2005] GENDND 220 (24 March 2005)

World Intellectual Property Organization

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Trade Pals Inc. c/o Tino Buntic v. Natour Global / Sam Natur

Case No. D2005-0144

1. The Parties

The Complainant is Trade Pals Inc. c/o Tino Buntic, Mississauga, Ontario, of Canada.

The Respondent is Natour Global / Sam Natur, Mississauga, Ontario, of Canada.

2. The Domain Name and Registrar

The disputed domain name <tradepals.com> is registered with Tucows.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on February 8, 2005. On February 9, 2005, the Center transmitted by email to Tucows a request for registrar verification in connection with the domain name at issue. On February 9, 2005, Tucows 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 a notification by the Center that the Complaint was administratively deficient, the Complainant filed an amendment to the Complaint on February 17, 2005. The Center verified that the Complaint together with the amendment to the Complaint 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 February 17, 2005. In accordance with the Rules, paragraph 5(a), the due date for Response was March 9, 2005. The Response was filed with the Center on March 4, 2005.

The Center appointed Ross Carson as the sole panelist in this matter on March 10, 2005. 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 the owner and user of a common law trademark for TRADE PALS and graphic design based on use since August of 2004. Canadian Trademark Application Number 1246230 for the trademark TRADE PALS and graphic design was filed in the Canadian Trademarks office on February 7, 2005. Particulars of the Canadian Trademark Application are attached as Annex 6 to the Complaint. The trademark application was used and applied for in relation to business networking services, sales and exchange of sales leads to business professionals and sales people, operation of a website.

The Complainant engaged the Respondent on August 4, 2004 to register the domain name in dispute and launch a website with an “Under Construction” or “ Coming Soon” heading. The Respondent was also engaged to develop and design web pages for the website. See Engagement Letter and Summary of Services, Annex 2 to the Complaint.

The Respondent does not contest that the Complainant is the owner of the common law trademark or Canadian Trademark Application for TRADE PALS and graphic design.

5. Parties’ Contentions

A. Complainant

Identical or Confusingly Similar

Complainant contends that the domain name in dispute <tradepals.com> is confusing with the Complainant’s common law trademark for TRADE PALS and graphic design.

No Rights or Legitimate Interests

The Complainant submits that the Respondent registered the domain name in dispute in Respondent’s company’s name Natour Global without authorization from the Complainant. See Paragraph 5B of the Complaint.

The Complaint submits that the Respondent was never known as TRADE PALS and the trademark TRADE PALS has nothing to do with the Respondent’s business.

The Complainant submits that the Respondent never completed the website. The Complainant advised the Respondent that Complainant was terminating the contract. (Annex 2 to the Complaint). The Complainant also demanded that the domain name in dispute be transferred by the Respondent to the Complainant. (See Letter, Annex 7 to the Complainant). Further correspondence took place between the parties including a statement that the Complainant intended to commence legal proceedings before the civil court in Ontario for damages for breach of contract and an order of the court, ordering the transfer of the domain name in dispute to the Complainant. (Annex 10 to the Complaint).

Registered and Used in Bad Faith

The Complainant submits that the domain name in dispute <tradepals.com> was registered by the Respondent solely for the purpose of transferring the domain name to the Complainant in exchange for the balance due to the Respondent upon completion of the website. The Complainant alleges that the website has not been completed. The Complainant informed the Respondent by letter dated January 20, 2005 (Annex 11 to the Complaint) that retention of the domain name in dispute in the Respondent’s name amounted to conversion of Complainant’s property.

The Complainant submits that while an unpaid web designer can control the product of the web services to secure unpaid services, the web designer cannot secure an interest in the domain name itself. Map Supply Inc. V On-line Colour Graphics, FA 0012000096332. The Complainant submits that on the basis of the Map Supply decision, the Respondent has no legitimate interest in the domain name in dispute and is retaining the domain name in bad faith.

Other Legal Proceedings

The Complainant states that the Complainant is concurrently suing the Respondent for recovery of monetary damages in the Ontario Courts. The Complainant submits that rights in the domain name will not be brought up in the Ontario Courts if the UDRP decision is favorable to the Complainant.

B. Respondent

Identical or Confusingly Similar

Respondent does not contest that the domain name in dispute is identical or confusingly similar to the Complainant’s trademark TRADE PALS.

No Rights or Legitimate Interests

The Respondent replied that the Respondent was instructed to register the domain name in dispute and provide the services of development and preparation of a website pursuant to the contract attached as Annex 2 to the Complaint. The Respondent submits that the website which the Respondent had agreed to develop and prepare was completed and forwarded to the Complainant prior to receipt of the demand letter from the Complainant. The Respondent further submits that the Complainant refused to pay the outstanding balance of $2,250.00 CDN to the Respondent for Respondent’s website development and preparation services in breach of the agreement between the parties attached as Annex 2 to the Complaint. On January 15, 2005 the Respondent sent an e-mail to the Complainant stating that the Respondent would transfer the domain name in dispute to the Complainant when the website is complete and payment has been received for Respondent’s services in developing the website. (Annex 9 to the Response).

The Respondent further submits that the domain name in dispute <tradepals.com> was registered by the Respondent and is being held by the Respondent for the Complainant in good faith pending payment by the Complainant to Respondent of the balance of funds currently owed to the Respondent for development and preparation of the website.

Registered and Used in Bad Faith

The Respondent submits that the domain name in dispute was registered by the Respondent as per the instructions of the Complainant and in accordance with the terms of the contract. (Annex 2 to the Complaint). The Respondent submits that the contract attached as Annex 2 to the Complaint required the Respondent to register the domain name in dispute, obtain ASP Hosting and develop and prepare a website for the Complainant in exchange for a total payment of $3,425.00 CDN. (Annex 2 to the Complaint).

The Respondent further submits that the Respondent acted in good faith and performed every term of the contract. The Respondent submits that Respondent registered the domain name <tradepals.com>, obtained ASP Hosting with webcenter.ca and completed the <tradepals.com> website in good faith with the understanding that all the above would be transferred upon final payment. The Respondent further submits that the Complainant has failed to pay an outstanding balance of $2,250.00 CDN to the Respondent for Respondent’s web page design.

The Respondent further submits that the Respondent is not using the website for any purpose and has actually placed Temporarily Closed on the website as a means of satisfying the demands of the Complainant.

Other Legal Proceedings

The Respondent submits that the Complainant is concurrently suing the Respondent in the Ontario Courts for recovery of monetary damages for failure to complete the website. The Respondent states that the Respondent has documented proof that the website was completed (Annex 4 and Annex 12 to the Response) as per the terms of the contract. (Annex 2 to the Complaint). The Respondent states that it will be counter claiming for the outstanding balance owing to the Respondent for developing and designing the website and monetary damages for losses incurred in this case.

6. Discussion and Findings

The brief summations of the Parties contentions disclose a contractual dispute over damages relating to performance or alleged non-performance by the Complainant and Respondent relating to the terms of the Agreement between the Parties concerning the registration of the domain name in dispute and development and preparation of the website identified by the domain name <tradepals.com>.

The Respondent alleges a contractual right or lien right in the registration of the domain name in dispute until the Complainant has paid the outstanding amount which Respondent alleges is due on the contract. (Annex 2 to the Complaint).

The dispute between the parties as to entitlement to the domain name <tradepals.com> is dependent upon applying the law of the Province of Ontario relating to contracts and liens to the dispute between the parties. This is so especially since it is alleged that the registration of the domain name at issue formed part of the contractual terms agreed between the parties. The Courts of the Province of Ontario, whose procedures include subpoenas, discoveries, viva voce evidence, cross-examination and oral argument is the proper body to decide this dispute. Both Parties and the Registrar of the domain name are within the jurisdiction of the Ontario Courts.

The dispute is primarily contractual and dependent upon the laws of Ontario and therefore outside the scope of the Policy. See Adoptive Molecular Technologies, Inc. v Priscilla Woodward & Charles R.Thonton, WIPO Case No. D2000-0006.

The Complainant submitted that the Respondent has no rights or legitimate interest in respect of the domain name in dispute relying on the decision of the Panel in Map Supply Inc. V On-line Colour Graphics, FA00120009632, The Complainant states that the Panel in the Map Supply case found that while an unpaid web designer can take control of the work the designer created to secure unpaid amounts, that the unpaid web designer cannot control the domain name itself.

The decision in the Map Supply Case was considered by the Panel in Clinomics Biosciences, Inc. V Simplicity Software, Inc., WIPO Case No. D2001-0823, a case where the claims of the parties turn on whether or not there is a genuine dispute over Respondent’s contractual or legal right to retain the domain name as security for payment. The Panel in the Clinomics case distinguished the Map Supply case as one where there was no legitimate dispute over payment between the Complainant and Respondent. The Respondent who was the registrant of the domain name in dispute in the Map Supply case was not the web designer of the website identified by the domain name in dispute.

In the Clinomics case the Panel agreed with dicta in the Map Supply case where the Panel stated: “The Respondent’s argument does raise the interesting question whether an unpaid web designer once given control over a domain name by the client can retain it as a security for payment. In my view, this may be so. The law may recognize some sort of lien or charge against a domain name. To assert such a claim is to assert a legitimate interest. On that assumption this could be a dispute to be decided by traditional means - as it would fall outside the scope of this tribunal”.

The Panelist in the Clinomics case decided that there was a genuine dispute over Respondent’s contractual or legal right to retain the domain name in dispute as security for payment. The Panel found that to decide the issue would require further evidence and an evaluation of the commercial law of liens, holding that such a dispute was outside the scope of proceedings under the Policy and is properly decided by traditional means.

7. Decision

For all the foregoing reasons, I find that the issue of any possible rights of the Respondent to the domain name in dispute should not be bifurcated from the issue of damages and costs relating to the alleged breach of contract as the two issues are related. This is so especially since it is alleged that the registration of the domain name at issue formed part of the contractual terms agreed between the parties. I find that this dispute is primarily a commercial dispute outside the scope of the Policy. The Complaint is denied.

Ross Carson
Sole Panelist

Date: March 24, 2005