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WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
R.T. Quaife Engineering, Ltd. and Autotech Sport Tuning Corporation d/b/a Quaife America v. Bill Luton
WIPO Case No. D2000-1201
1. The Parties
Complainants are R.T. Quaife Engineering, Ltd., a United Kingdom private limited company, with an address at Vestry Road, Otford, Sevenoaks, Kent, TN14 5EL United Kingdom ("Quaife U.K."), and Autotech Sport Tuning Corporation d/b/a Quaife America, a California corporation, with an address at 32240 E Paseo Adelanto, San Juan Capistrano, California 92675, U.S.A ("Quaife America") (collectively "Quaife").
Respondent is Bill Luton, owner of Bill’s Incorporated d/b/a Bill’s Isuzuperformance, with an address at 8400 Craighill Drive, St. Louis, Missouri 63132, U.S.A ("Luton").
2. Domain Name and Registrar
The domain name at issue is <quaifeusa.com>
The Registrar is Network Solutions, Inc. ("NSI").
3. Procedural History
The WIPO Arbitration and Mediation Center (the "Center") received Quaife’s complaint (the "Complaint") in hard copy on September 12, 2000, and, after deficiency notice was issued, via email on September 26, 2000. The Center verified that the Complaint satisfies the formal requirements of the ICANN Uniform Domain Name Dispute Resolution Policy (the "Policy"), the Rules for Uniform Domain Name Dispute Resolution Policy (the "Rules"), and the Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the "Supplemental Rules"). Quaife made the required payment to the Center. The formal date of the commencement of this administrative proceeding was September 28, 2000, and the due date for a Response was set at October 17, 2000.
On September 19, 2000, the Center transmitted via email to NSI a request for registrar verification in connection with this case. On September 24, 2000, NSI transmitted via email to the Center NSI’s Verification Response, confirming that the registrant of the quaifeusa.com domain name is Bill Luton, with administrative and billing contact information c/o EPC Online Domain Registrar, 12533 Missouri Bottom Rd., Hazelwood, Missouri 63042, and the domain name registration at issue is in "Active" status.
On October 17, 2000, the Respondent submitted its Response to the Complaint. On October 26, 2000, after clearing for potential conflicts, the Center appointed David H. Bernstein as the sole Panelist in this matter, and set November 14, 2000 as a due date for the decision. No further communications have been received from the parties.
4. Factual Background
According to the Complaint, Complainant Quaife U.K. is in the business of manufacturing and distributing a full range of high performance and racing components for automobiles and motorcycles. These products include differential gear systems ("differentials"), gearboxes, driveline gears, gear kits, and four-wheel drive systems. Complainant Quaife America is Quaife U.K.’s exclusive North American retail distributor for almost all of Quaife U.K.’s product line. Quaife America, with Quaife U.K.’s permission, has been doing business as "Quaife America" since September 1998, and has operated a website at the domain name quaifeamercia.com since October 1998.
Complainant Quaife U.K. owns a United States trademark registration for the mark QUAIFE (the "Mark"), Reg. No. 2,218,151, for automotive parts. The Quaife mark has been registered since January 9, 1999. Quaife America is the exclusive licensee of the unregistered trademark "Quaife America."
Quaife alleges the Mark enjoys a valuable reputation, and that Quaife America has accrued substantial good will for the licensed derivative mark "Quaife America" through its business and website use. Quaife alleges that the Respondent is not permitted to use the Mark and is using the Mark in the quaifeusa.com domain name to cause confusion and divert internet users from Quaife America’s quaifeamerica.com.
In its Response, Respondent states that he is an automotive parts distributor and has been an authorized seller of Quaife U.K. differentials since 1997. Respondent claims that he was authorized on May 11, 1999 to use the Mark to market the Quaife U.K. products he resells. On December 22, 1999, Respondent registered the domain name quaifeusa.com for the purpose of promoting his sales of Quaife U.K. differentials. Respondent contends his website was operational immediately and that there was no content at quaifeamerica.com until at least that spring.
There are a number of hotly contested issues in this case, but the parties agree on the basic facts, many of which are supported by undisputed documentary evidence. Those documents show that, for over a decade, Quaife America has been the exclusive distributor in the United States for various Quaife U.K. products. Quaife U.K. and Quaife America had agreed, though, that Quaife U.K. could develop and market new products with other distributors in the United States.
In November 1997, Luton worked with Quaife U.K. to develop and sell Quaife differentials for Isuzu automobiles. Luton thereafter purchased a quantity of Quaife differentials for resale to Isuzu owners. In a letter dated November 27, 1997, Quaife U.K. agreed to refer Isuzu differential customers to Luton for the first year of the parties’ relationship, and thereafter to "discuss" quantity orders with him. Over the next two years, Luton expanded his Quaife product line to include differentials for Saturn and Neon models. On September 6, 1998, Quaife U.K. wrote to Luton confirming his agency for Quaife Izusu Differentials and promised to continue referring customers for these parts to Luton.
Friction between Quaife U.K., Quaife America and Luton began almost immediately. In a letter dated April 9,1998, Quaife U.K. requested Luton to direct "all future correspondence, enquiries and samples [to] our U.S. office . . . Quaife America." Luton continue, however, to send samples to and correspond directly with Quaife U.K. In June 1998, Quaife U.K. was apparently forced to intercede after Quaife America represented that Luton’s differentials were not genuine Quaife U.K. parts. In July 1998, Luton accused Quaife U.K. of using a Mitsubishi sample he submitted in May of that year to instead develop a Mitsubishi differential for distribution by Quaife America.
During this time period, Luton developed a website for his automotive parts business, including the sale of Quaife differentials, at the domain name isuzuperformance.com. This domain name was registered in January 1998, and correspondence from that period shows that Quaife U.K. was aware that the Quaife trademark was being used to some extent on the isuzuperformance.com website.
In an email dated May 11, 1999, Quaife U.K. informed Luton that Quaife U.K. had added a link from its website to isuzuperformance.com. This email also stated that Quaife U.K. had registered the Quaife trademark in the U.S. Patent and Trademark Office and that "we duly grant Bills Performance Centre authorization to use the QUAIFE name to market the Quaife products." Shortly thereafter, in an email dated July 1, 1999, Luton asked permission from Quaife U.K. to sponsor a promotional racing competition using the Quaife trademark and logograph, and Quaife U.K. agreed.
On November 18, 1999, Quaife U.K. and Quaife America signed an exclusive North American distribution agreement for Quaife auto parts. This agreement contained an exception for certain parts sold by Luton and two other distributors, but gave Quaife America a right of first refusal for development of any new products. The agreement also codified Quaife U.K.’s approval of Quaife America’s use of the derivative trademark Quaife America. Quaife America registered the domain name quaifeamerica.com on November 24, 1999.
Quaife U.K. informed Luton, in an email dated November 29, 1999, that Quaife America would be Quaife U.K.’s exclusive North American distributor under the Quaife America name. Quaife U.K. instructed Luton to order all automotive parts through Quaife America, except for direct orders of Luton’s Saturn, Neon, and Isuzu differentials. Quaife U.K. also informed Luton that development of any new differentials would be "discussed and assessed" on an individual basis.
In response, Luton wrote to Quaife U.K. on December 1,1999 requesting permission to continue purchasing transmission parts directly from Quaife U.K. On December 2, 1999, Quaife U.K. refused Luton’s request and Luton responded by informing Quaife U.K. that he would no longer recommend or sell Quaife transmissions. Luton did not make any statement regarding his intent to continue purchasing differentials directly from Quaife U.K.
On December 22, 1999, Luton registered the domain name quaifeusa.com and essentially duplicated the Quaife portion of his Isuzuperformance.com site on the new site at quaifeusa.com.
Luton had been in discussions with Quaife U.K. since at least November 1999 regarding the development of a Ford differential. On December 17, 1999, Luton shipped a Ford sample to Quaife U.K. On January 5, 2000, Quaife U.K. informed Luton that the Ford differential had recently been ordered by Quaife America who would handle all sales of the product. This appears to have been the final break in the Quaife U.K. / Luton relationship.
Shortly thereafter, on February 1, 2000, Quaife U.K. sent Respondent a cease and desist email objecting to Respondent’s use of the domain name quaifeusa.com. Respondent replied by email on February 1, 2000 by denying that he infringed any of Quaife U.K.’s intellectual property rights and reminding Quaife U.K. that it had granted Respondent authorization to use the trademark in May 1999. Quaife U.K. responded by email on February 2, 2000 by revoking Respondent’s authorization to use the trademark. A second cease and desist letter was sent to Luton on March 7, 2000.
Thereafter, Luton engaged in tactics that can only be described as bad faith efforts to undermine the relationship between customers and Quaife U.K. and Quaife America. According to customer affidavits submitted by Complainant, which have not been disputed by Luton, Luton has provided incomplete and misleading information in response to customer inquiries. In May 2000, when Luton was asked about Quaife Acura Differentials – which had always been a Quaife product supplied by Quaife America – he informed the customer that Quaife USA "no longer produced" the Acura part. On May 25, 2000, Luton sent an email to customer Stan Marcewicz who had inquired about Quaife BMW Differentials (another product Luton had never sold and that was carried by Quaife America). Luton responded that the part was not available and that "[m]any differential applications have been discontinued recently." Luton later advised Marcewicz that any Quaife BMW Differentials offered by Quaife America were likely to be counterfeit. In a third incident, Luton responded to an email requesting warrantee assistance with Quaife products. In an email dated July 17, 2000, Luton informed that customer that the differential in question had been eliminated from the product line and that "it is policy that no technical or warranty assistance be extended to any products which have been categorized as obsolete."
5. Parties’ Contentions
Complainants allege that Respondent’s registration and use of the domain name quaifeusa.com violates their rights in the registered trademark Quaife, the common law trademark Quaife America, and the domain name quaifeamerica.com. Complainant asserts that quaifeusa.com is confusingly similar to and incorporates an unauthorized use of, the Quaife trademark. Complainants also allege that Respondent has no legitimate interest in the domain name quaifeusa.com and has exceeded his authorization to use the Quaife mark in marketing Quaife U.K. products.
Complainants further allege that Respondent registered and used the quaifeusa.com domain name in bad faith because: (i) Respondent registered the quaifeusa.com domain name after Quaife America began doing business as "Quaife America;" (ii) Respondent registered the quaifeusa.com domain name after Quaife America registered quaifeamerica.com; (iii) Respondent registered the domain as retaliation for Quaife U.K.’s designation of Quaife America as its official U.S. supplier; (iv) Respondent is attempting confuse the public and trade off the good will of Quaife America and the quaifeamerica.com website; (v) Respondent is purposefully disrupting the business of Quaife America by holding itself out as the exclusive U.S. supplier of Quaife U.K. products; (vi) Respondent is damaging Quaife U.K. by inappropriately representing himself as Quaife U.K.’s U.S. representatives; and (vii) Respondent is purposefully disrupting the business of Quaife U.K. by falsely portraying his products as the full extent of the Quaife U.K. product line.
In his defense, Respondent alleges that his registration and use of the domain name quaifeusa.com is (i) not confusingly similar to the Mark and (ii) is not confusingly similar to Quaife America’s "Quaife America" mark or the domain name quaifeamerica.com. Respondent does not dispute that he was aware of Quaife America’s prior use of "Quaife America" or registration of quaifeamerica.com, but alleges that his website was launched in January 2000, and the quaifeamerica.com website was not fully functioning until some time in spring 2000.
Respondent further alleges that he has permission from Quaife U.K. to use the Mark in relation to marketing Quaife U.K. products. In fact, Respondent claims that this permission amounts to an unrestricted "naked" license of the Mark to the Respondent, which invalidates Complainant’s trademark rights. Respondent also claims that he has filed a Petition for Cancellation of the Mark with the United States Patent and Trademark Office.
6. Discussion and Findings
Paragraph 4(a) of the Policy provides that, to justify transfer of a domain name, a Complainant must prove each of the following:
(i) that the domain name registered by the Respondent is identical or confusingly similar to a trademark or service mark in which the Complainant has rights;
(ii) that the Respondent has no rights or legitimate interests in respect of the domain name; and
(iii) that the Respondent has registered and has been using the domain name in bad faith.
A The Domain Name is Confusingly Similar to the Quaife Trademark
There is no serious question but that the domain name quaifeusa.com is confusingly similar to Complainants’ Quaife and Quaife America marks. In fact, the domain name incorporates in its entirety the Quaife mark, which is registered in the U.S. Patent and Trademark Office, and thus is entitled to a presumption of validity. See EAuto, L.L.C. v Triple S. Auto Parts, Case No. D2000-0047 (WIPO March 24, 2000). Respondent’s argument that the May 11, 1999 email constitutes a naked license that invalidates all of Complainant’s trademark rights is not only quite weak, but in any event is not the kind of allegation that properly should be resolved in these truncated proceedings. Furthermore, the addition of a geographical descriptor to a registered trademark to form a domain name is insufficient to prevent the composite domain name from being confusingly similar to Complainants’ Mark. See AT&T Corp. v. WorldClassMedia.com, Case No. D2000-0553 (WIPO July, 28, 2000). Finally, there can be no argument that the synonymous terms "America" and "USA" are not confusingly similar when used as suffixes to the same root term. Therefore, Complainants have satisfied the first prong of the domain name transfer analysis.
Respondent nevertheless asserts that quaifeusa.com is not "necessarily confusingly similar" to Complainant’s Quaife trademark. In response to this contention, the Panel cannot help but note that, when parties take indefensible positions, it necessarily harms their credibility. Parties would be better advised to admit facts or conclusions that are not genuinely in dispute and instead focus their arguments on the true areas of disagreement.
B The Respondent Does Not Have a Legitimate Interest in the Domain Name
This is the most difficult factor in this case. That is because Respondent remains an authorized reseller of a narrow part of Complainant’s product line. Respondent thus forcefully argues that it has a legitimate interest in the mark under paragraph 4(c)(1) of the Policy, which states that a Respondent can show a legitimate interest if it uses the domain name in connection with a bona fide offering of good or service prior to any notice of the dispute.
Although this Panel is cognizant of the cases finding that a reseller may have a legitimate interest for purposes of avoiding a finding of abusive cybersquatting under the Policy, see, e.g., Adaptive Molecular Technologies, Inc. v. Machines & More, Case No. D2000-0006 (WIPO Feb. 28, 2000), but see Motorola Inc. v. NewGate Internet, Inc., Case No. D2000-0079 (WIPO April 14, 2000) (right to resell or market a product does not create the right to use a mark more extensively than required to advertise and sell the product). Respondent is not entitled to take advantage of that line of cases for two reasons.
First, Luton was on notice of the "dispute" well before he registered and began to use the domain name in connection with his offering Quaife products. When the Policy refers to the "dispute," that cannot mean solely the filing of a Complaint under the Policy. Otherwise it would create a disincentive for complainants to contact cybersquatters in an effort to resolve a dispute short of initiating a formal proceeding. Rather, the reference to "dispute" must be read more broadly to include any disagreement between the parties concerning the domain name or trademark at issue, and here it is clear that Luton had such a dispute with Complainants when he registered the domain name in December 1999. Indeed, it is a fair reading of the facts in this case to conclude that Luton registered the domain name quaifeusa.com specifically in response to Quaife U.K.’s decision to grant an exclusive license to Quaife America, and as an act of vengence for Luton’s various disagreements with Quaife U.K. and Quaife America.
Second, even if Luton’s status as a reseller gave him some legitimate interest for purposes of the Policy, that interest does not extend to the domain name quaifeusa.com. That is because, unlike a name such as quaifedifferentials.com, which communicates that the website owner provides Quaife brand differentials, quaifeusa.com suggests a much broader affiliation with Quaife U.K.: it suggests that the quaifeusa.com site is the U.S. presence for Quaife, and the place where U.S. consumers can go to get all their questions about Quaife products answered. Thus, whatever rights Luton may have had do not extend to use of the deceptive domain name quaifeusa.com.
Nor can Luton take advantage of paragraphs 4(c)(ii)-(iii) of the Policy. It is undisputed that Luton’s automotive parts business had never been known under the "Quaife USA" name until after Luton learned that Quaife U.K. gave Quaife America an exclusive license for the United States for most Quaife parts. Indeed, when he registered the domain name, Luton already had – and still has - an established website at isuzuperformance.com featuring a full line of automotive services and products, including Quaife differentials. Similarly, Luton is not making fair use of the domain name without intent for commercial gain to misleadingly divert consumers or to tarnish the Quaife trademark. Not only is the quaifeusa.com site part of Luton’s commercial enterprises, but also, the undisputed documentary evidence shows that Luton has used customer confusion to mislead and divert customers who contacted him via the website and that these acts tarnished the Quaife trademark.
C The Respondent Registered and Used the Domain Name in Bad Faith
Complainants easily carry their burden of proving the third factor: that Respondent registered and used the domain name in bad faith. It is undisputed that Respondent chose the domain name quaifeusa.com with full knowledge of Quaife U.K.’s trademark rights in "Quaife" and Quaife America’s long standing use of "Quaife America." Moreover, as noted above, Respondent registered the domain name only after relations with the Complainants had soured and shortly after learning that Quaife America was chosen to be the exclusive North American distributor of Quaife products under the Quaife America name. These actions alone are sufficient to establish bad faith.
Additional evidence of Respondent’s bad faith is that he deceptively has used the domain name to hold himself out as Quaife U.K.’s representative in the United States. Respondent’s emails with Quaife customers, including his refusal to honor Quaife U.K. warrantees and his assertion that certain Quaife products were completely unavailable, show that he is using the domain name "primarily for the purpose of disrupting the business of a competitor." These actions thus constitute an independent basis for finding the requisite bad faith in this case.
For all of the foregoing reasons, the Panel decides that Complainants have met their burden of proof under paragraph four of the Policy: the domain name quaifeusa.com is confusingly similar to trademarks in which Complainants have rights, Respondent lacks a legitimate interest in that domain name, and Respondent has registered and used the domain name in bad faith. Accordingly, this Panel concludes that the domain name quaifeusa.com should be transferred to the Complainant Quaife U.K.
David H. Bernstein
Dated: November 14, 2000