NZ Manufacturing, Inc. v Eric Snell (FA1604001670641)
Complainant: NZ Manufacturing, Inc
Respondent: Eric Snell
NZ Manufacturing is a very interesting case that reveals the tension between global trademark laws and domain name policies and, specifically, what disputes come within the ambit of the UDRP.
In general, the only disputes over which UDRP panellists have jurisdiction are abusive domain name registrations or cybersquatting. This is because, in effect, the UDRP says so and because the UDRP was created to resolve disputes only where one party says that the domain name registered was identical or confusingly similar to the complaining party’s trademark, the party registering the domain name has no right or legitimate interest in the domain name and that the domain name was registered and used in bad faith.
In particular, a straight out commercial dispute or a dispute about the validity of a trademark is not covered and hence does not come within the jurisdiction of the UDRP.
The NZ Manufacturing case is a good example of a dispute that was really a trademark dispute and hence outside the jurisdiction of the UDRP. Let us look at this in more detail.
The Complainant alleged under the ICANN Policy that the Respondent had registered the domain name, <1stretchcordz.com> in bad faith. The case had all the usual findings of a simple domain name complaint – the domain name was confusingly similar to the Complainant’s trademark STRETCHCORDZ, the Complainant was well-known by this trademark, and, most importantly, the website provides links to the respondent’s unrelated products, competitive swimming gear, which made it look that this was an inappropriate registration and use of a domain name.
However, where NZ Manufacturing differs from a usual finding of bad faith is in the procession of events following the Complainant’s application. Upon being served by the Forum with the claim, the Respondent attempted to assert its rights in the domain name via two ways. Firstly, under the Policy, the defence was that the domain name consisted of generic terms and that it was one of many domain names the Respondent owned.
The Respondent’s second method to prove it had rights in the domain name was by filing a petition for the cancellation of the Complainant’s rights in the trademark. The argument would then be that as the Complainant was at risk of not having a trademark, its claim under the UDRP could not succeed.
However, that very fact created the problem. If the dispute could be resolved only by first deciding the validity of the trademark, the real dispute was the validity of the trademark and that was outside the jurisdiction of the UDRP. The panellist simply could not adjudicate on that matter because she did not have the jurisdiction to deal with a trademark dispute. As the panellist said, “... the existence of rights and/or legitimate interests turns on resolution of a legitimate trademark dispute.” In reaching that conclusion, the panellist relied on the consistent decisions in Abbott Labs. v. Patel, FA 740337 (Forum Aug. 15, 2006) (holding that assertions of trademark infringement are “entirely misplaced and totally inappropriate for resolution” in a domain name dispute proceeding because the UDRP Policy applies only to abusive cybersquatting and nothing else); and Stevenson Indus., Inc. v. CPAP-PRO Online, FA 105778 (Forum Apr. 25, 2002) (“If the existence of [rights or legitimate interests] turns on resolution of a legitimate trademark dispute, then Respondent must prevail, because such disputes are beyond the scope of this proceeding.”).
That view was also consistent with the 1999 Final Report of the WIPO Internet Domain Name Process to the effect that the UDRP was “not applicable to disputes between parties with competing rights acting in good faith.”
The case was therefore dismissed under the UDRP procedure until the trademark ownership issue was determined between the two parties.
The issue of whether a dispute is essentially a trademark dispute, or for that matter a broader commercial dispute, on the one hand, or whether, on the other hand, the dispute is a genuine domain name dispute where trademark issues arise only peripherally, is sometimes hard to resolve. All cases depend on their own unique facts. But it is important to appreciate that this is a real issue that can lead to a claim collapsing for want of jurisdiction before it is resolved. It is therefore a strong defence to a UDRP claim and practitioners should be alert to its potential.
 30 April 1999 Final Report of the WIPO Internet Domain Name Process (http://www.wipo.int/amc/en/processes/process1/report/index.html