Recent Case Notes & Commentary

Demonstrable Preparations - UDRP

The One Group LLC v. GOUVERNEUR INC. / Manon Goudreau, NAF Case Claim Number: FA1208001460010


This case deals with some interesting questions: what disputes are within the jurisdiction on the UDRP; what are demonstrable preparations; when is “notice of the dispute”?


Facts

The Complainant had a widely registered trademark, STK, for bar service and restaurants.


The Respondent had registered a series of domain names that, for present purposes, can be divided into two groups, the first being grilladesstk.com, steakhousestk.com, stkgrillades.com, stkrestaurantbar.com, stkresto.com, and stkrestobar.com.


Confusingly Similar

These domain names clearly incorporated the Complainant’s trademark and added only generic expressions like “grillades” which of course invoked restaurants and hospitality and enabled the 3 person panel to decide without any difficulty that the domain names were confusingly similar to the trademarks.


The second group was stk-otl.com and stkotl.com, where it can be seen that the Respondent had again taken the trademark and added in different places “otl”. The Complainant argued and the panel accepted, that these two domain names were also confusingly similar to the trademark because the expression “otl” could be read as meaning ‘”out to lunch”, “hotel”, “motel” , all of which invoked the notion of bar services and restaurants. After a good lunch, the Panel was thus able to go onto the other limbs of the Policy.


Rights and Legitimate Interests

Under Rights and Legitimate Interests the Panel first considered whether the Complainant had made out a prima facie case and decided that it had done so. The factors going to make up the prima facie case were regular reasons not unique to this case except perhaps for one. This factor was that “Respondent had notice of the dispute for years before registering the disputed domain names.”


The argument here was not elaborated on but it seems a fair point. In other words, as in the present case, there was a dispute between the parties on the intellectual property relating to their similar businesses and as the Respondent had registered the domain names despite the dispute, that was a prima facie factor, meaning that it suggested by itself and without considering any evidence there might be to the contrary, as things stood at that point it suggested there was no right or legitimate interest in the domain names.


The Panel then went on to see if the prima facie case had been rebutted.


The Respondent relied on ground (i) , namely that “;…(i) before any notice of the dispute, Respondent’s use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services;…”


Meaning of "Demonstrable Preparations"

The Respondent relied on two bases to show “demonstrable preparations”.


The first basis was that it had brought expungement proceeding against Complainant’s STK trademark in Canada, i.e. proceedings to expunge the registration in Canada of the STK trademark of the Complainant. This, it said was a demonstrable preparation to use the disputed domain names, presumably because it opted to take the expungement proceedings first to clear the decks and use , in Canada, domain names that did not have a corresponding trademark. The second basis was that the Respondent had itself also applied in Canada to register the same trademark and that act could also be demonstrable preparations.


Integral to the Respondent’s argument was its further argument that the relevant time , being the time it had notice of the dispute was the recent date August 27, 2012, the date on which the Complainant had been filed. The Respondent’s argument then seems to have been that its above two bases for demonstrable preparations had occurred before August 27, 2012.


But, no, said the Panel, that is not the only event that can fix the date of notice of the dispute, for another date on which the time of that notice can be fixed is the date on which the Respondent had notice of the Complainant’s trademark, citing Ideal Prods., LLC v. Manila Indus.,Inc., FA 819490 (Nat. Arb. Forum November 26, 2006) (“As of April 30, 2002 (the filing date of the application for U.S. registration of SANI-TRED), Respondent was on notice of Complainant’s trademark rights. Respondent cannot say that its preparation to use the domain name was without notice of the dispute, or that its use of the domain name was a bona fide offering of goods or services, given that notice”). This had to be the date on which the Complainant filed the expungement proceedings in Canada, namely October 3, 2011. That was so, apparently, because , if the Respondent could file for the expungement of the trademark on that date, it must have known by that date that there was a dispute. It is not said so in the decision but it can safely be said that a respondent in that position would know there was a dispute no later than that date, because it had just created it on that date.


The same argument was advanced with respect to the filing by the Respondent of its own application to register the trademark in Canada.


The argument seems to be that neither activity could be “demonstrable preparations” because they did not occur before October 3, 2011, the date of notice of the dispute ( for the reason given above) ; i.e., they did not precede the date on which the Respondent had notice of the dispute, which must have been before October 3, 2011.

In any event, they were not demonstrable preparations per se because neither of the proceedings taken by the Respondent were “demonstrable preparations to use the disputed domain names in connection with a bona fide offering of goods or services …” . This was because “to use a domain name it is not necessary to own a trademark or to expunge one from a third party.”


The Panel summarised: “Simply stating that the domain names are going to be used as a promotional site for a steakhouse, holding a trademark application, and initiating an expungement procedure is not evidence of Respondent’s rights or legitimate interest in them. Since their registration, Respondent has had enough time to prepare and use the website of the disputed domain names; notwithstanding, it has not use them or prove that it has been preparing them to be used.”


Relying on the above and some subsidiary points, the Panel thus concluded there was no right or legitimate interest in the domain names.


Bad Faith

This element was also held to have been satisfied, the most noteworthy point in that regard being that “ …Respondent knew about the existence of a previously registered trademark and instead of waiting until the Canadian proceeding was over, it decided to register the disputed domain names. On the other hand, Respondent could have simply changed the trademark STK since it was a recently created brand. Hence, it is possible to conclude that Respondent registered the disputed domain names primarily for the purpose of disrupting the business of a competitor pursuant to Policy ¶ 4(b) (iii).”


A Preliminary Issue? A suitable Case for the UDP?

This may seem an odd place to deal with a preliminary issue (and the Panel dealt with it at the beginning and not the end of the decision. We are putting it here as, when the readers have read all of the foregoing, they might be excused for asking whether this was really a dispute appropriate to be dealt with under the UDRP.


The Respondent argued that it was not and that, as it had started the proceedings referred to above, the UDRP case should be denied (not, apparently, that the Panel should not even proceed with the case) as “… this dispute is much more complex than a simple cybersquatter issue under the UDRP, and that this case should be decided outside of the UDRP. “


Who Determines the Jurisdiction of UDRP panels?

The Panel first of all noted that the Panel was entitled to determine its own jurisdiction on the facts and arguments put before it: (See Weber-Stephen Prod. Co. v. Armitage Hardware, D2000-0187 (WIPO May 11, 2000) (“Like any other tribunal, however, this Panel can determine whether it has jurisdiction only from the facts and arguments presented to it. In this case, Complainant did allege bad-faith use and registration of the domain name at issue. Had Complainant proved those allegations, there would be no proper question as to this Panel’s jurisdiction”).)


It then decided that the dispute came within the UDRP as there was a trademark owner and a series of domain names that included the Complainant’s trademark. The Panel also relied on the provision in the Policy that “Dispute proceedings arising from alleged abusive registrations of domain names (for example, cybersquatting) may be initiated by a holder of trademark rights” and held that the dispute came within that statement.


The UDRP case therefore proceeded, was disposed of in the manner described above and resulted in an order for transfer of the domain names.