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 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 ot