In markets where fake and counterfeit products can be widespread, companies often look to the UDRP to attempt to assert their trademark rights. It is not uncommon to see individual companies bring multiple cases against different Respondents in a short period of time.
Juul, a global market-leader in the e-cigarette and vaporiser industry, has recently brought three complaints to the UDRP, to curb what it alleges as the unauthorised sale and counterfeiting of its own products. Superficially, the three cases appear to be quite similar, involving the disputed domain names <juulbulgaria.com>, <buyjuul.com> and <juulistanbul>. However, Juul had mixed results, with its first complaint a success, the second going up in smoke and, after regaining some more puff, success with the third.
In both cases, the Complainant had no issues succeeding under the first element of the policy. However, under the second and third the Complainant had drastically different fortunes, and upon examining them closely, we can see how the UDRP deals with some of the intricacies of trademark law. After doing that, we will return to the third and most recent decision.
Case 1.
JUUL Labs, Inc. v. Valentin Houseman / juulbulgaria
Claim Number: FA1906001848751
In this case, the complaint was undefended by the Respondent. Nevertheless, all three elements of the UDRP still had to be proved. The Complainant argued that the domain name was being used to “divert Internet users to the Respondent’s scam website which sells counterfeit or unauthorised versions of Complainant’s products.” With evidence submitted in the form of screenshots, and no response from the Respondent, the evidence before the panel demonstrated a clear case of cybersquatting. The panel had no issue finding in favour of the Complainant in the remaining two elements of the Policy.
However, it is worth noting that Complainants must always prove bad faith use and registration of a disputed domain name to be successful. While proving bad faith use is relatively straightforward in such cases, bad faith registration can sometimes be a little more complex. In this instance, given the trademark’s notoriety and the fact the domain name contained a geographic term (indicating a possible location in which the Respondents counterfeit products were sold), the panel concluded that on balance, the Respondent must have known about the trademark at the time of registering, with an intent to use it in bad faith.
All in all, this was a pretty clear case of cybersquatting, and the disputed domain name was transferred.
Case 2.
JUUL Labs, Inc. v. Jake Ades / Internet Development Company
Claim Number: FA1906001846643
However, the second of these three cases that JUUL brought under the UDRP wasn’t quite as straightforward, and a 2 out of 3 majority of the three-person panel ultimately found for the Respondent.
This case centred on the domain name <buyjuul.com> and is particularly interesting because it involves the resale of a trademark owner’s product. The Respondent was not an authorised distributor of the Complainant’s products, but rather purchased the legitimate products from a distributor, and resold them online. The Complainant argued that because the Respondent was not licensed or permitted to use the trademark, it did not have a right or legitimate interest in the domain name. However, the panel noted the following:
“The products it sells are not unauthorized as they are legitimate products made and sold by Complainant itself. Nothing in the UDRP or U.S. law requires Respondent or any other to be “authorized” by the Trademark Owner to resell legitimate goods bearing that Trademark Owner’s mark.
The “first sale” or “exhaustion” doctrine is well-established in trademark law. Once a trademark owner releases its goods into the marketplace, it relinquishes control over their distribution, and resale, even if “not authorized,” it does not constitute trademark infringement and is permissible under law.”
Ultimately, a majority of the panel found in favour of the Respondent on the second and third elements of the policy, because despite not owning or being authorised to use the Complainant’s trademark, the resale of legitimate products is a bona fide offering of goods and services under both the UDRP and relevant trademark laws. Given there were no other factors indicating a bad faith nature of the business, such as evidence of counterfeiting, the second and third elements were found in favour of the Respondent.
Notice here, also, that this decision, so far as the majority was concerned, is another useful illustration of the principle known as Oki Data and the famous decision was cited by the panel. Accordingly, the facts also gave rise to a right or legitimate interest in the domain name because, as the majority said:
“A respondent’s use of a Complainant’s trademark in a disputed domain name in the resale of a complainant’s products constitutes a bona fide offering of goods or services in accord with Policy ¶ 4(c)(i) where the respondent actually offers the goods or services at issue, the respondent uses the site to sell only the legitimate trademarked goods, the site accurately discloses the registrant’s relationship with the trademark owner, and the respondent does not try to corner the market in all domain names. Inter-Tel, Inc. v. Marcus, FA 727697 (Forum July 27, 2006) (respondent’s use of the disputed domain name in the resale of complainant’s products constitutes a bona fide offering of goods or services in accord with Policy ¶ 4(c)(i) where the respondent actually offered the goods or services at issue, the respondent used the site to sell only the trademarked goods, the site accurately disclosed the registrant’s relationship with the trademark owner, and the respondent did not try to corner the market in all domain names, (which would have thus deprived the trademark owner of reflecting its own mark in a domain name)). OkiData Americas, Inc. v. ASD, Inc., WIPO Case No. D2001-0903; Experian Information Solutions, Inc. v. Credit Research, Inc., WIPO Case No. D2002-0095; Project Mgt. Institute v. CMN.com, WIPO Case No. D2013-2035; WIPO Overview 2.0, ¶2.4, ¶2.3, New Kids On The Block v. News American Publg., Inc., 971 F.2d 302 (1992); Toyota Motor Sales, U.S.A., Inc. v. Tabani, 610 F.3d 1171 (2010); General Motors, LLC v. Flashcraft, WIPO Case No. D2011-2117. Respondent argues that it purchases the products offered for sale on the site to which disputed domain name resolves from a legitimate, authorized distributor of Complainant and identifies same as Midwest Distribution.”
The Respondent’s website also contained a disclaimer which highlighted that it was not associated with the Complainant, which, for the majority of the panel, added weight to the legitimate nature of the Respondent’s business.
However, the disclaimer seemed to be the focus for a dissent from the remaining panellist, who took issue with the disclaimer and made some trenchant criticism of its size and location. His conclusion was that the disclaimer was so weak that it really did not tell the consumer that the Respondent was not associated with the Complainant. Moreover, he said, the Respondent seemed to have made every attempt to copy the Complainant’s website and give prominence to its trademark.
What do these two cases, with differing results, tell us?
By comparing the two cases we can see both how the UDRP can be effective in clear cases of fraudulent activity, but also protects legitimate business activities - or at least tries to.
Case 3.
JUUL Labs, Inc. v. Temp name Temp Last Name / Temp Organization
Claim Number: FA1907001851254
Now to the third and final case in this study concerning the domain name <juulistanbul.com>. This was fairly straightforward, with the not very original tactic of “istanbul” being attached to the JUUL trademark, enabling the panellist[1] to say quickly on well established principles that the domain name was confusingly similar to the trademark. By setting up a website to which the offending domain name resolved, the Respondent was diverting traffic that might have been looking for the official JUUL website to a scam site which sold counterfeit or at least unauthorised Juul products. As well, the Respondent had set up some forms on its site to tempt users to part with their personal information. Clearly, the Respondent could not show a right or legitimate interest in the domain name with that sort of behaviour.
The last gasp on the bad faith issue was that the Respondent had set up its website to mimic the Complainant’s official website, complete with pictures of the products for sale to suggest they were official and authorised, which of course they were not. The Complainant’s attorneys did a good job of illustrating with screenshots to just what the official and counterfeit websites looked like; it was a classic case showing by means of a couple of screenshots just what the Respondent was up to.
So, all three decisions are consistent. In the second case, the Respondent won because there was no evidence of the Juul products that were for sale being unauthorised or counterfeit and, indeed, there was evidence that they had been acquired from an authorised distributor. In the third case, the Complainant won because there was evidence that the goods were unauthorised and may have been counterfeit, not to mention the brazen way the Respondent had tried to pass its website off as the Complainant’s website.
The other message from these decisions: evidence wins the day.
[1] The Hon Neil Brown QC