Recent Case Notes & Commentary

OKI Data Rides Again

Eight years later, it is still riding high. Indeed, two recent decisions show that it is still one of the leading cases and that it has considerable practical application.


Oki Data reflects the practical situation that arises in domain name disputes where the Respondent has acquired the domain name first and, when the dispute arises, claims that its use of the name is legitimate.


The essential question in Oki Data was whether an offering of goods or services by a reseller may be regarded as bona fide for the purposes of paragraph 4(c) (i) of the Uniform Domain Name Dispute Resolution Policy (“the UDRP”). Paragraph 4(c) (i) of the policy provides that a Complainant who is endeavouring to obtain the transfer of a domain name must prove that the Respondent, the registrant of the domain name, does not have a right or legitimate interest in the domain name. However, the registrant of the domain name may show that he has such a right or interest by proving he was using the domain name for a bona fide offering of goods or services before he was notified of the dispute.


A seller of goods would usually be able to show that he was making a bona fide offering of the goods being sold because the seller would own the goods, perhaps even as the manufacturer, or be expressly authorised by the owner to sell them and probably to use the trademark embodied in the domain name to sell them.


But could a “reseller” of goods also say that he was using the domain name to sell goods of a particular brand and that this also was a bona fide activity giving him a right or legitimate interest in the domain name? A reseller means in this context a person not necessarily effecting the first sale of the goods, but rather a second or subsequent sale, say as an agent or a former agent or an online retailer and one who might not even be connected with the trademark owner . That situation often arises in the case of automobile spare parts, or automobiles themselves, where a firm obtains genuine (but sometimes non-genuine) parts and sells them by using the brand name, which is a trademark, much to the annoyance of some trademark owners who might want to control the price, distribution and service of their products.


If a reseller could succeed in its claim that such a transaction was bona fide, it will have shown that it has a right or legitimate interest in the domain name and thus in one blow defeat the Complainant’s case.


Oki Data basically said, yes, a reseller may do so, subject to some very strict conditions. The respondent, ASD Inc., was a company that was an authorised Oki Data dealer and sold Oki Data products. Indeed, Oki Data listed it on it own website as an authorised dealer. But it took exception to ASD Inc. using the domain name and said this was a done without its permission and even that the registration and use of the domain name was in bad faith. But it was the point of whether ASD Inc had a right or legitimate interest in the domain name that is our main concern. Oki Data said that ASD Inc. did not have any right or legitimate interest in the domain name because it had no license or trademark rights to use the domain name. ASD Inc. replied that it did have such a right or legitimate interest that came from its authorisation to sell and repair Oki Data equipment and from the fact that it did not deal in the equipment of Oki Data’s competitors.


The Panel ruled first that the issue was whether Respondent’s offering of goods and services “may be characterised as “bona fide.” ”To be bona fide, the panel continued, the registrant of a domain name had to satisfy four “requirements”. These were:

  1. “Respondent must actually be offering the goods or services at issue…”, for example, Oki Data equipment.

  2. “Respondent must use the site to sell only the trademarked goods; otherwise, it could be using the trademark to bait Internet users and then switch them to other goods (emphasis added)”.

  3. “The site must accurately disclose the registrant’s relationship with the trademark owner; it may not, for example, falsely suggest that it is the trademark owner, or that the website is the official site, if, in fact, it is only one of many sales agents.”

  4. "The Respondent must not try to corner the market in all domain names, thus depriving the trademark owner of reflecting its own mark in a domain name.”


The Panel concluded that the Respondent had met those requirements. “In this case,” it said, “Respondent’s conduct meets all these factors. Respondent is an authorised seller and repair centre, is using the okidataparts.com site to promote only OKIDATA goods and services, and prominently discloses that it is merely a repair centre, not Oki Data itself. It has not registered numerous oki data-related domain names, and has not improperly communicated with Oki Data customers.”


Since then, the Oki Data decision has been applied and followed in several cases and the author has cited it, for example, in Control Techniques Limited v. Lektronix Ltd. (WIPO Case No. D2006-1052).


Recent decisions show that the Oki Data ruling is alive and well, that in appropriate cases it provides a valuable tool for registrants of domain names who want to defeat the trademark owner’s claim and they show that practitioners would be wise to use these decisions when the issue arises in UDRP cases, as it often does. Naturally, care must be taken by all concerned to ensure that the facts of individual cases are carefully weighed before any decisions are reached.


In the first of these recent decisions, ITT Manufacturing Enterprises, Inc., ITT Corporation v. Douglas Nicoll, Differential Pressure Instruments, Inc., (WIPO Case No. D2008-0936), decided on November 7, 2008, Oki Data was accepted as “the prevailing view” on this question. In the ITT Case case, to show their right or legitimate interest in the domain name, the Respondents relied on paragraph 4(c) (i) of the Policy and argued that they had used the disputed domain names in connection with a bona fide offering of goods and services, i.e., the sale of surplus products that the trademark owner had previously sold to the United States Government and which bore its trademark, together with related “testing, repair, and warranty services”. There was no evidence of “a distribution or authorized reseller agreement between the Complainants and the Respondents (which might be expected to include trademark licensing provisions). Thus, the Respondents could best be characterized as unauthorized resellers.”


Most of the Oki Data conditions were present in that case, but a question mark remained over whether the respondent domain name registrant was using the domain name to sell only the goods of the trademark owner or other goods as well. If it was the former, Oki Data would apply and the respondent would have established a right or legitimate interest in the domain name. If the latter, the registrant would have failed.


However, the respondent domain name registrant was successful also on this point. The Respondent’s website carried a link to other products, but the panel found that the Complainant had not made out that they were competing products. Nor had it been shown that there was a risk of “bait and switch” enticement because of the limited reference on the website to other products. This minor addition through the link to other products accordingly did not “change the character of the Respondents’ website as one concerned overwhelmingly with (the trademark products)…” to one that was really promoting competing products.


Thus the case was one where all of the Oki Data conditions were present and the decision was applicable, thus giving rise to a bona fide offering of goods and services and a right or legitimate interest in the disputed domain name.


One might say, therefore, that the ITT Case was the classic case of the application of the Oki Data principles; the case came within Oki Data, the Respondent used it to show a right or legitimate interest in the domain name and the Complainant failed.


The second decision is Daimler AG v. William Wood (WIPO Case No. D2008-1712), decided on February 25, 2009. But in that case, the Respondent failed to show that all the Oki Data principles had been complied with. Accordingly, it could not make out a right or legitimate interest in the domain name and the Complainant succeeded.


In the Daimler Case, some Mercedes Benz aficionados registered the domain name and used it for a web site that was part discussion forum and part sales outlet, initially for Mercedes Benz parts.


The WIPO panel found as factual matters that the Respondent’s website contained statements indicating that both of those activities were being undertaken. Thus, the website said:

“Since we began in February 1999 our foremost priority has been providing a free exchange of technical information and ideas regarding Mercedes-Benz vehicles. We also provide informative Do-It-Yourself articles complete with detailed pictures, descriptions, part’s, and instructions.”


But it also said:

“Need Mercedes parts? Check out FastLane and AllPartsExpress. We’ve got Mercedes parts AND lots of other parts available in our on-line catalogs. MercedesShop is supported by the parts we sell.”


In addition to this commercial element, the website also carried links that enabled brands of parts other than Mercedes to be purchased, tyres for other brands as well as Mercedes Benz and some other products like insurance.


The website also carried a purported but indistinct disclaimer in the following terms:

“MercedesShop recognizes that ‘Mercedes’, ‘Mercedes-Benz’, the three pointed star and various model numbers are registered trademarks of Daimler AG. These terms are used for identification purposes only. MercedesShop is not affiliated in any way with Daimler AG.”


The Panel came to consider whether the Complainant had made out the second of the three elements that it had to establish, namely whether the Respondent domain name holder had a right or legitimate interest in the domain name. In particular, the Panel had to decide whether, as had been claimed by the Respondent, the domain name had been used in connection with a bona fide offering of goods and services.


The Respondent of course was not authorised by Mercedes Benz to use its trademark in the domain name. It was selling Mercedes Benz parts in a commercial operation and as such was a reseller in the sense that it was reselling parts that Mercedes Benz or its authorised manufacturer had originally sold. Was this reselling activity bona fide?


The Oki Data decision had said in effect that it was, or could be bona fide, provided that four conditions or requirements were met. To recapitulate, the four conditions were:

  1. “Respondent must actually be offering the goods or services at issue…”, for example, Mercedes Benz parts.

  2. "Respondent must use the site to sell only the trademarked goods; otherwise, it could be using the trademark to bait Internet users and then switch them to other goods (emphasis added)”.

  3. “The site must accurately disclose the registrant’s relationship with the trademark owner; it may not, for example, falsely suggest that it is the trademark owner, or that the website is the official site, if, in fact, it is only one of many sales agents.”

  4. "The Respondent must not try to corner the market in all domain names, thus depriving the trademark owner of reflecting its own mark in a domain name.”


The Panel then came to apply the Oki Data principles to the facts of the case and said that there was:

“no doubt that the Respondent is selling non-MERCEDES parts on its website. It is offering parts for other brands of automobile, other brands of automobiles as well as Mercedes, tyres sold by TireRack.com, and insurance sold by ING Insurance. Accordingly, it cannot be said that it is using the site “to sell only the trademark goods”. It has therefore not satisfied the second requirement.”


The Panel then contributed to the developing chain of authority on this question by adding that this conclusion was

“… consistent with other UDRP decisions on analogous facts, such as Control Techniques Limited v. Lektronix Ltd., WIPO Case No. D2006-1052. In that case the panel had said: “Applying the Oki Data principles and this important qualification on those principles, to the facts of the present case, it is clear that the Respondent cannot rely on it to show a bona fide offering of goods and services, or, consequently, a right or legitimate interest in the domain name. That is so because the websites to which the domain names and resolve, promote the repair of and spare parts for, Control Techniques products, but they also promote them for other and rival brands.”


Likewise, the website in the Mercedes Case was promoting goods other than Mercedes Benz parts and had not satisfied the second Oki Data condition.


The panel in the Mercedes Benz Case went on and considered some further issues that had been raised in the case and which deserve comment.


'Sophisticated' buyers

The first was that the:

“Oki Data case related to domain name use by an authorized sales or service agent. The Respondent argues that the website hosted at the disputed domain name is of a different type, manifesting a ‘brand culture’ with sophisticated users. The Respondent refers to the extensive use of the Respondent’s discussion forum, and states that “Respondent’s site is a leading independent source of information about the Complainant’s product”. It states that the Complainant is trying “to shoehorn this situation into a ‘reseller UDRP’ case, [which] demonstrates the unfitness of the Policy to factually complex and disputed situations”".


In other words, it was being argued that although the Oki Data case might exclude some resellers from showing that they had a right or legitimate interest arising from the process of reselling because they sold goods in addition to the trademarked goods, the reseller might still be able to have the benefit of the Oki Data principle if his customers were ‘sophisticated’ people who knew what brand they were dealing with and were loyal followers of it.


The Panel did not accept that argument and stuck to the pure Oki Data proposition and its strict requirements, observing that the abuse at which the requirement struck

“… occurs equally with sophisticated purchasers who, initially intending to buy a MERCEDES branded or approved product, might change their minds at the point of sale if offered a generic alternative. Accordingly, the Respondent cannot rely on the alleged sophistication of its customers to justify offering for sale non-MERCEDES products.”


Nor did the element of the discussion forum that was present on the site save the day for the domain name registrant;

“… the fact that a website has a substantial legitimate element, either in the form of sales of trademark products or a widely used discussion forum, does not mitigate the wrong of misappropriation of goodwill through potential bait-and-switch selling.”


'Aftermarket' Parts

Secondly, what about ‘aftermarket’ parts where although they were parts for the major brand covered by the website, in this case Mercedes Benz, they were made by manufacturers other than Mercedes Benz? Could they not continue to be sold under the banner of the domain name, including the Mercedes Benz trademark and thus justify the continued use of the domain name?

Aftermarket parts had in fact been considered in Volvo Trademark Holding AB v. Peter Lambe WIPO Case No. D2001-1292 and Toyota Motor Sales, U.S.A., Inc. v. Pick Pro Parts Inc (WIPO Case No. D2005-0562).


The Panel did not strictly decide this issue, but it certainly gave no blanket exemption because of the sale of aftermarket parts. After all, on the facts of the present case, “… the Respondent (was) not simply offering aftermarket parts for MERCEDES cars, but also parts for many other brands of automobile, identified by their brand names.”


'Special Circumstances'

Thirdly, the Panel considered whether special circumstances might still give rise to a right or legitimate interest in a domain name when the registrant was reselling and in particular reselling the products of the trademark owner’s competitors, but still enable the reseller to rely on the Oki Data principle.

Several special circumstances were relied on, including a refashioning of some of the earlier notions advanced by the Respondent along the lines that its website was “a popular and heavily used site (that had generated)… testimonials that confirm the reputation of the website as a source of information…” and the length of time that it had operated.


However, the Panel said, there was really no good faith that had been shown here by the Respondent. Indeed, the history of the Respondent and his associates had shown “an increasingly commercial use of the disputed domain name” up to and including the sale of brands of automobiles themselves other than Mercedes Benz. Indeed the history showed that “… the legitimate elements of the website (such as the forum, and the sale of MERCEDES parts, and perhaps afterparts for MERCEDES automobiles) cannot redeem the flagrant use of the MERCEDES trademark to sell parts for a wide range of competing automobiles and the other commercial activities that have no connection with Mercedes Benz. The Respondent has chosen to use a successful website for an illegitimate purpose. He has chosen to increase the website traffic and his sales and revenue, by offering parts for a wide range of automobile brands, as well as other products. In doing so, he has forfeited any rights or legitimate interest in the disputed domain name that may once have existed (as recognised in the Prior Decision) and may have continued to exist if the website had remained confined to spare parts for MERCEDES automobiles.”


Whether special circumstances can be shown in other cases will depend, of course, on the facts of any such cases.

The conclusion of the Mercedes Benz Case was thus that the second of the Oki Data principles had not been shown and that consequently the Oki Data principle itself could not be relied on to show a right or legitimate interest in the domain name.


As the Complainant had thus established that the registrant had no right or legitimate interest in the domain name element and also the two other elements, the identicality of the domain name to, or its confusing similarity with, the trademark and bad faith in the registration and use of the domain name, the Complainant had made out its case on all three issues and the domain name was transferred to Daimler, the owner of Mercedes Benz.


Conclusion

Finally, it should be noted that another question arose in ITT Manufacturing Enterprises, Inc., ITT Corporation v. Douglas Nicoll, Differential Pressure Instruments, Inc. That question was whether the Oki Data principle should apply only in the case of an authorised reseller such as an agent of distributor, which was in fact the case in Oki Data itself, where the Respondent was an authorised reseller for the Oki Data company. On that question, the Panel found that the issues were similar;

"whether or not there is a contractual relationship between the parties. Therefore, the Panel follows the precedents of Volvo Trademark Holding AB v. Auto Shivuk and Dr. Ing. h.c. F. Porsche AG v. Del Fabbro Laurent, finding that the Oki Data criteria are appropriate here to assess the rights or legitimate interests of the unauthorised reseller for purposes of this element of the Policy.”


The recent cases therefore show that Oki Data continues to have a practical application in domain name dispute arbitration.