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Designer Skin LLC v. S & L Vitamins, Inc., et al.
Unauthorized internet reseller of plaintiff’s products is not guilty of trademark infringement, and does not cause actionable initial interest confusion, by using plaintiff’s trademarks in meta tags of website at which plaintiff’s and its competitors’ products are sold, and in...

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Magnum Piering, Inc. v. The Mudjackers, et al.

Case No. D2000-1525 (WIPO, November 14, 2000)

In this domain name dispute brought under the Uniform Domain Name Dispute Resolution Policy ("UDRP"), the Panel determined that Respondents' registration of fourteen domain names containing Complainant's "Magnum" trademark ran afoul of the UDRP.  The Panel reached this result notwithstanding Respondents' contention that they had a legitimate interest in these domain names by virtue of a Dealership Agreement they entered into with Complainant, in which Respondents obtained a license to use certain of Complainant's patented processes.  The Panel accordingly directed the transfer of the domain names in dispute to Complainant.  In reaching this result, the Panel ruled that it could, and did, consider offers made by Respondents and their lawyers to lease the domains to Complainant for $2,500 per year per domain, made during settlement negotiations, as evidence of Respondents' bad faith in registering those domain names.

Complainant Magnum Piering Inc. is engaged in the business of providing shoring and stabilizing services for building foundations, as well as concrete paving and slabs, commonly known as "piering" services.  Complainant and its predecessor-in-interest have used the federally registered and incontestable trademark "Magnum," as well as the common law trademark "Magnum Piering," to promote these business activities.

Respondents, operating as The Mudjackers, also offer piering services and products.  In April, 1999, Respondents entered into a Dealership Agreement with Complainant, in which Respondents obtained a license to use certain of Complainant's patented processes.

Shortly after this agreement was signed, Respondents registered seven of the domain names at issue.  Each of these domain names incorporated in its entirety Complainant's "Magnum" trademark.  In or about April 2000, after Complainant objected to Respondents' registration of these domains, Respondents registered an additional five domain names.  Like the other domain names in dispute, these domains also incorporated Complainant's "Magnum" mark in its entirety.  After the parties were unable to resolve their dispute, Complainant gave Respondents notice that it was terminating the parties' Dealership Agreement.  Respondents thereafter registered two additional domains, each of which, again, incorporated the "Magnum" mark in its entirety. 

Each of the fourteen domains Respondents registered pointed to Respondents' web site, or sites which mirrored its content.  According to Complainant, none of these sites mentioned Complainant or used its trademark, and thus did not offer for sale Complainant's products.

In an effort to settle the parties' dispute, Respondents offered to transfer the domains at issue in exchange for an ownership interest in Complainant's firm.  When that offer was rejected, Respondents offered to lease each of the disputed domains to Complainant for $2,500 per domain per year. 

Complainant rejected this offer too, and commenced this UDRP proceeding.  Finding Complainant entitled to relief under the Policy, the Panel directed Respondents to transfer the domain names in dispute to Complainant.

To be entitled to relief under the UDRP, a Complainant must show that the domain name at issue is identical or confusingly similar to Complainant's mark, that the Respondents have no rights or legitimate interest in the domain name, and that Respondents registered and is using the domain name in bad faith.

The Panel found that each of the domains at issue -- which included magnum,, and numerous variations thereof, incorporating hyphens and "inc." -- were confusingly similar to Complainant's "Magnum" mark, which they incorporated in their entirety.

As numerous prior panels have held, when a domain name wholly incorporates a complainant's registered mark, that is sufficient to establish identity or confusing similarity for purposes of the Policy.    Here, there is no dispute as to Complainant's ownership of the distinctive, federally-registered trademark MAGNUM.  The addition in the domain names of the terms "PIER," "PIERS," or PIERING," and, in two cases, the generic term "INC," does not change the confusing similarity.

*          *          *

Under the Policy, the question of identity and confusing similarity is evaluated based solely on a comparison between a complainant's word mark and the alphanumeric string constituting the domain name at issue.

The Panel further found that Respondents had no legitimate interest in the domains.  Here, the parties told conflicting stories.  Complainant,  pointing to the terms of the Dealership Agreement, claimed that it never authorized Respondents to registered the domains at issue.  Among other things, the Agreement provided that the "Magnum" mark was owned by Complainant, and contained Respondents commitment both not to claim any right therein, and to make no use of the Magnum mark except to distribute designated advertising materials.

Respondents replied that they were impliedly granted rights to use the domains at issue in discussions the parties had over the operation of a web site to promote their joint activities, and that they had registered the domains to both promote these joint activities and to prevent others from registering them.

The Panel rejected Respondents' contentions.  Relying principally on the fact that Respondents had registered fourteen domain names containing Complainant's mark, the Panel found that Respondents had no legitimate interest in the domain names in dispute.  Said the Panel:

The mere fact that Respondents registered fourteen variations on Complainant's name is telling; a single distributor is extremely unlikely to have a legitimate interest in precluding others from using numerous variants on a mark.

Finally, the Panel found that Respondents had acted in bad faith.  Here, the Panel relied on the fact that Respondents had registered fourteen domains, which evidenced an intent "to occupy the field of rational domain names for Complainant's business," the fact that Respondents registered two additional domain names after Complainant give notice of termination of the parties' Dealership Agreement, as well as the settlement offers Respondents made, discussed above.  Respondents' "offer [  ] to turn the domain names to Complainant for sums exceeding the reasonable cost of registration and maintenance [of these domains]  . . .  is classic cybersquatting."

The Panel rejected Respondents' claims that, pursuant to U.S. Fed. Rule Evid. 408, the Panel could not consider offers made in an effort to settle the parties' dispute as evidence of bad faith.  While noting Panels had come to conflicting decisions on this point, the Panel held that the better view was to permit the consideration of such offers as evidence of bad faith.  Said the Panel:

The Panel is of the opinion that the Policy's goal of preventing cybersquatting would not be furthered by excluding evidence of a registrant's offer to sell or otherwise transfer the domain name for consideration in excess of out-of-pocket costs, even if the offer is made after the registrant is on notice of the dispute. Cybersquatters often wait until a trademark owner comes calling; they should not be able to avoid the Policy by being the second to speak.  It is true that canny complainants might attempt to entice innocent registrants into making offers they would not otherwise have made.  However, an offer to sell is of no moment if a registrant has a right or legitimate interest in the domain name at issue and so this scenario is not threatening to legitimate registrants.  Nor does an offer to sell automatically mandate a finding of bad faith; the Panel is still obligated to review the entire record to determine if bad faith exists.  But the history leading up to the adoption of the Policy suggests that an offer to sell, absent a legitimate interest and absent contrasting evidence of good faith, is so likely to be evidence of bad faith registration and use that its exclusion is likely to result in injustice.  By contrast, Rule 408 covers an enormous range of situations, and reflects a policy judgment that on average, an offer to compromise is not reliable evidence of responsibility or intent.  Moreover, parties in federal court litigations have other tools - including discovery and cross-examination - to help bring the true facts to the surface, thus making submission of settlement offers less important; UDRP Panels, in contrast, can rely only on a truncated paper record, and this Panel agrees with those that have held that Rule 408 should not operate to further limit the information available to Panels.

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