How much of the Complainant’s trade mark may a Respondent legitimately use in its domain name?
December 29, 2016
VKR Holding is a very interesting decision where the Respondent had incorporated the Complainant’s registered trade mark into its domain name and hence into its business website. In fact, as the Complainant’s trademark was VELUX and the Respondent’s domain name was <veluxwindowinstallers.com>, could the Respondent be allowed to use the domain name to sell the service of installing , not its own products, but the Complainant’s own products, its Velux windows? Well, yes. How come? Because the facts brought the case within the principles established and now widely accepted, known as the Oki Data principles.
The Oki Data case (Oki Data Americas, Inc. v. ASD, Inc., WIPO Case No. D2001-0903, <okidataparts.com>) in effect decided that a respondent/ registrant of a domain name had rights or a legitimate interest in a domain name where it was using another party’s trademark, even without consent, but where it was a distributor of that party’s goods or services. Normally, you would expect that taking someone else’s trademark and using it in a domain name for your own business would be quite illegitimate. But a genuine distributor, it was felt, is only using another party’s trademark because it could not describe its business of distributing the trademark owner’s goods without giving the name of the goods. Therefore, the distributor should be allowed to use the other party’s trademark in its domain name, which gives it both a right and a legitimate interest in the domain name, subject to some exceptions.
That right is tremendously important in many industries, particularly the selling of spare parts for motor vehicles. For example, if I am a distributor of Mercedes-Benz spare parts, should I be allowed to use the MERCEDES BENZ trademark in my domain name and hence on my website? Yes, but subject to some exceptions.
The VKR Holding case is a good illustration of how a panellist might decide whether a case comes within the Oki Data principles and hence give the respondent /registrant a good claim to the domain name and defeat the complainant/ trademark owner’s claim. In this case the reliance on Oki Data succeeded and the respondent won. We will now look at how that happened.
The VKR Holding case
The Complainant in VKR Holding was a Danish company, VKR Holding A/S, the owner of the VELUX Group, a worldwide manufacturer of roof windows and accessories. The Company was incorporated in 1941, has been selling in the UK since 1954 and owns 450 trade mark registrations worldwide, including in the US and including VELUX.
The Respondent is a UK company, Code 4 Designs, which operated a business via its website, at <veluxwindowinstallers.com> installing Velux windows. The Respondent registered the domain name on 1 July 2016.
The Respondent argued that its domain name was legitimate as its business was installing Velux windows, it was akin to being a distributor and that the Oki Data principles applied, in other words that it was entitled to use the VELUX trademark in its domain name and hence on its website.
The Panelist’s analysis
The Panelist first noted the consensus in UDRP panel decisions of similar kinds, that “a reseller or distributor can be making a bona fide offering of goods and services and thus have a legitimate interest in the domain name if its use meets certain requirements.” So the starting point was that this principle exists, provided the registrant of the domain name brought itself within the principles.
The Oki Data principles provide four criteria which must be satisfied in order for a Respondent to incorporate the Complainant’s trademark in its domain name legitimately. These are that the Respondent must:
Be actually offering the goods or services at issue;
Use the website to sell only the trademarked goods and not as an excuse to induce the internet user to buy competing goods;
Take steps to prevent confusion (in other words, making it clear to the viewer that it does/does not have a relationship with the trademark owner); and
Does not corner the market, consequently depriving the trademark owner of a chance to reflect its mark in a domain name.
Having set out those principles, the Panel then went on to see how the facts of the case measured up against the principles.
In applying the principles to the present case, the Panelist found that the Respondent was in fact:
Offering services directly related to the Complainant, i.e. installing Velux windows;
Using its website only to sell the installation of VELUX windows;
Displaying its own trade mark on its website(KIERCAM) and not the Complainant’s trademark; and
Not cornering the market or depriving the Complainant of another related domain name.
Thus, the Panelist determined that the Respondent has adequately proven that it is not suggesting it had an affiliation with the Complainant. This view is consistent with UDRP cases, as evidenced in Eli Lilly and Company and Novartis Tiergesundheit AG v. Manny Ghumman / Mr. NYOB / Jesse Padilla, WIPO Case No. D2016-1698, where the Panel stated that "[a]n overarching principle of the Oki Data approach is that a use of a domain name cannot be 'fair' if it suggests affiliation with the trademark owner."
Before the final determination that the Complainant’s case was denied, the Panelist noted that there were a few points that emerged from the facts that were in the Complainant’s favour. They are the sort of facts you should look for in your own case to help assess if the Oki Data defence will be upheld or not. For example, the Respondent appears to have previously sold competitor’s products as well as the VELUX products, copied the Complainant’s website and overstepped the boundaries of the Complainant’s "Certified Installer" scheme. However, these seem to have been rectified. If they had still existed, a respondent might have found it difficult to succeed under Oki Data. But in any event, as the Panelist pointed out, these arguments would be better suited in a to court proceedings with cross-examination and discovery, rather than via the UDRP policy.
The case shows that Oki Data is alive and well and can be used, when the facts justify it, to show that the registrant of a domain name has a right or legitimate interest in a domain name and hence may defeat a claim for the domain name. Note also, that it can be used not only where the registrant is an authorised distributor, but even where it is not authorised and that it may also be used in relationships that are akin to distributorships.
There are at least 2 other notes on the Oki Data principles and distributorships on Domain Times and this note should be read in conjunction with them to get the full picture:
 WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition ("WIPO Overview 2.0"), Section 2.3