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WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Milwaukee Electric Tool Corporation v. Bay Verte Machinery, Inc.d/b/a The Power Tool Store
Case No. D2002-0774
1. The Parties
The Complainant is Milwaukee Electric Tool Corporation, a corporation organized in the State of Delaware, United States of America (USA), with place of business in Brookfield, Wisconsin, United States of America.
The Respondent is Bay Verte Machinery, Inc., doing business as (d/b/a) The Power Tool Store, with address in Green Bay, Wisconsin, United States of America.
2. The Domain Name and Registrar
The disputed domain name is <milwaukeetool.com>.
The registrar of the disputed domain name is IARegistry.com, with business address in Fort Mill, South Carolina, United States of America.
3. Procedural History
(a) The Complainant initiated the proceeding by the filing of a Complaint via e-mail received by the WIPO Arbitration and Mediation Center ("WIPO") on August 16, 2002, and via courier mail received by WIPO on August 19, 2002. Complainant paid the requisite filing fees. On August 19, 2002, WIPO transmitted a Request for Registrar Verification to the Registrar, IARegistry.com, with the Registrar’s Response received by WIPO on August 29, 2002.
(b) On September 3, 2002, WIPO transmitted notification of the Complaint and commencement of the proceeding to Respondent via e-mail and courier mail.
(c) On September 23, 2002, Respondent’s response was received via e-mail by WIPO, and on September 25, 2002, Respondent’s response was received in hardcopy by WIPO. Respondent also transmitted its response to Complainant.
(d) On September 25, 2002, Complainant transmitted via e-mail to WIPO (and copied to Respondent) a request for permission to file and for consideration of a Reply (attached to its request).
(e) On September 26, 2002, Respondent transmitted via e-mail to WIPO (and copied to Complainant) a request for permission to file Respondent’s Reply Brief (attached to its request).
(f) On October 4, 2002, WIPO invited the undersigned to serve as Panelist in this administrative proceeding, subject to receipt of an executed Statement of Acceptance and Declaration of Impartiality and Independence ("Statement and Declaration"). On October 7, 2002, the undersigned transmitted via telefax the executed Statement and Declaration to WIPO.
(g) On October 9, 2002, Complainant and Respondent were notified by WIPO of the appointment of the undersigned sole Panelist as the Administrative Panel (the "Panel") in this matter. WIPO notified the Panel that, absent exceptional circumstances, it would be required to forward its decision to WIPO by October 23, 2002. The Panel received a hard copy of the file in this matter by courier from WIPO.
(h) Following a request from the Panel based on exceptional circumstances, on October 24, 2002, WIPO notified the parties that the due date for the Panel’s decision in this matter was extended until October 28, 2002.
The Panel has not received any requests from Complainant or Respondent regarding further submissions, waivers or extensions of deadlines, and the Panel has not found it necessary to request any further information from the parties. The proceedings have been conducted in English.
4. Factual Background
Complainant is the holder of several registrations for the stylized word mark "MILWAUKEE" on the Principal Register at the United States Patent and Trademark Office (USPTO), including Reg. No. 917,618, dated August 3, 1971, in International Class 7, covering various power tools (e.g., "portable electric drills and attachments therefor") (Complainant, para. 11 & Annex C).
Complainant has used its "MILWAUKEE" mark in commerce in the United States continuously since the 1920s, in connection with the marketing and sale of power tools (id., para. 11).
Complainant maintains a commercial website at Internet address (URL) "www.mil-electric-tool.com." At that website, Complainant provides, inter alia, information regarding its product line. Also at that website, Complainant provides a "Where to Buy" web page at which users may "Find the authorized Distributor nearest you..." by entering the first two or three digits of their postal zip code. (Response, para. B & Annexes C-D). Entering the first three digits of Respondent’s zip code on this page returns a list of nineteen (19) authorized distributors. Respondent is listed second and, alongside Respondent’s name and telephone number, it is designated as one of those authorized distributors with "with an informational Web site." (Panel visit of October 25, 2002).
According to the Registrar’s (IARegistry.com’s) verification response to WIPO, dated August 29, 2002, "The Power Tool Store" is the listed registrant of the disputed domain name <milwaukeetool.com>. According to the Registrar, the record of registration for the disputed domain name was created on April 14, 2000. Respondent, Bay Verte Machinery, Inc., acknowledges that it is the holder of the registration of the disputed domain name (Response, para. B).
As of the commencement of this proceeding, Respondent used the disputed domain name to direct Internet users to its website at URL "www.thepowertoolstore.com." At that website, Respondent maintained a page on which were listed the names of thirty (30) tool producers, including Complainant (identified by its stylized "MILWAUKEE" mark). This page stated "Milwaukee is the only vendor whose tools are online...others will follow as soon as possible...check back often...sorry for the inconvenience." (Complaint, para. 11 & Annex E).
As late as January 2000, Complainant had provided partial reimbursement to Respondent for newsprint advertisement of "MILWAUKEE" power tool products on advertisement pages that included reference to twenty-five (25) different power tool producers (Respondent’s Reply, Annex E).
Complainant transmitted to its authorized dealers a written "Sales Policy" and "Distributor Policy – Internet" no earlier than December 2001 (Complainant, Annex D (texts of documents), and Complainant’s letters to Respondent of May 14 & July 9, 2002). Complainant alleges that Respondent was orally advised of its Internet Policy by telephone in July 2001 (Complainant’s letter to Respondent of July 9, 2002). The December 2001 Sales Policy states, inter alia, "Distributor further agrees not to register, attempt to register, or use Milwaukee’s name or trademarks as part of the Distributor’s business or corporate name or as part of the Distributor’s domain name and/or its Internet website name, without the prior written consent of Milwaukee." Complainant’s December 2001 Sales Policy (see above) also provides "Authorized distributors may only use Milwaukee’s trademarks and trade names for the purpose of advertising and promoting Milwaukee’s products, and shall not use it in a false, misleading, or objectionable manner."
By letters of May 14 and July 9, 2002, Complainant (via counsel) sent cease and desist and transfer demands to Respondent. Although counsel for the parties discussed this matter by telephone, and Respondent made a proposal that it incorporate a disclaimer of corporate affiliation on its website (with a link to Complainant’s website), the parties appear not to have resolved this matter to their mutual satisfaction.
The Registration Agreement in effect between Respondent and IARegistry.com subjects Respondent to IARegistry.com’s dispute settlement policy, the Uniform Domain Name Dispute Resolution Policy, as adopted by ICANN on August 26, 1999, and with implementing documents approved by ICANN on October 24, 1999. The Uniform Domain Name Dispute Resolution Policy (the "Policy") requires that domain name registrants submit to a mandatory administrative proceeding conducted by an approved dispute resolution service provider, of which WIPO is one, regarding allegations of abusive domain name registration and use (Policy, paragraph 4(a)).
5. Parties’ Contentions
Complainant asserts that it holds rights in the trademark "MILWAUKEE", as evidenced, inter alia, by its registration at the USPTO and its long and extensive use in commerce (see Factual Background, supra).
Complainant alleges that its "trademark has become well and favorably known among the relevant public, and has become famous."
Complainant argues that the disputed domain name is confusingly similar to its mark.
Complainant states that Respondent has no rights or legitimate interests in the disputed domain name. Complainant observes that Respondent is its authorized distributor, but was not authorized to use its mark as part of a domain name. Respondent is said to be one of many authorized dealers, and has agreed to the terms of Complainant’s written sales and Internet policies, which prohibit authorized dealers from using its mark as part of their domain names.
Complainant alleges that Respondent is "not doing business under the MILWAUKEE trademark", but is instead using the mark in the disputed domain name to link to its own website where it lists more than 30 brands it sells. It says "Respondent’s registration of the domain name improperly suggests a much closer affiliation between Milwaukee and Respondent than is actually the case." Complainant refers to several administrative panel decisions under the UDRP that it argues support its argument against distributor’s use of a mark in this manner.
Complainant asserts that Respondent registered and has used the disputed domain name in bad faith. It argues that its mark is famous and that Respondent was on constructive notice of the mark when it registered it. Complainant argues that Respondent is trading on its goodwill "to intentionally lure Milwaukee’s customers to Respondent’s website, where Respondent sells competing goods." Complainant states that Respondent is not using the marks of its other suppliers in domain names.
Complainant states that Respondent is "continuing to use the domain name in violation of its agreement to the contrary." It states that Respondent has refused to transfer the name. Complainant says that Respondent has disrupted its business, and confused its customers and potential customers "into believing that Respondent is more than just an authorized distributor of MILWAUKEE goods, all with no countervailing justification."
Complainant requests the Panel to direct the Registrar to transfer the disputed domain name to it.
Respondent accepts that Complainant has rights in the "MILWAUKEE" mark and that the disputed domain name is confusingly similar to the mark.
Respondent argues that Complainant has failed to prove that it has no rights or legitimate interests in the disputed domain name. Respondent asserts that for five years it has been (and continues to be) an authorized distributor and warranty service provided for Complainant’s products. It indicates that Complainant routinely permits its distributors to advertise its products alongside those of other producers in making sales to end users.
Respondent notes that even taking Complainant’s timeline in the light most favorable to Complainant, it did not adopt its Internet Policy until July 2001, "more than one year after the Respondent registered and began using the domain name at issue." Respondent did not register the disputed domain name in defiance of Complainant’s policy.
Respondent asserts that it registered the disputed domain name and used it in connection with a bona fide offering of goods or services prior to notice of a dispute. Respondent states that as an authorized distributor of Complainant’s products in a network of non-exclusive distributors, and prior to Complainant’s adoption of its Internet Policy, its sales were bona fide.
Respondent objects to Complainant’s argument that its registration of the disputed domain name is per se bad faith because the mark is well known. It states that because Complainant does not sell directly to end users, the use of Complainant’s mark by authorized dealers and service providers is virtually required.
Respondent argues that it is not diverting Complainant’s customers by taking advantage of its goodwill. Respondent states that Complainant’s distributors are encouraged to make sales using its trademark. That is Complainant’s method of doing business.
Respondent indicates that its practice of stocking and sale of products of other manufacturers does not evidence bad faith. This is typical of Complainant’s non-exclusive distributors.
Respondent notes that Complainant did not object to its domain name registration for more than one year. When it objected, it did so based on Complaints from other distributors that considered Respondent to have an unfair advantage over them. This, according to Respondent, has not diverted sales from Complainant.
Respondent states that it has not evidenced bad faith such as by attempting to occupy the field of potential domain names relating to Complainant, and that Complainant remains free to adopt other variations on its mark (and has done this).
Respondent states that it is an authorized distributor, and is not creating a false impression of association with Complainant.
Respondent notes that refusal to transfer a domain name on demand is not independent evidence of bad faith.
Respondent indicates that Complainant has provided no evidence that its business has been disrupted by Respondent’s actions.
Respondent requests that the Panel reject Complainant’s request for transfer of the disputed domain name.
6. Discussion and Findings
The Policy is addressed to resolving disputes concerning allegations of abusive domain name registration and use. The Panel will confine itself to making determinations necessary to resolve this administrative proceeding.
It is essential to dispute resolution proceedings that fundamental due process requirements be met. Such requirements include that a Respondent have notice of proceedings that may substantially affect its rights. The Policy, and the Rules for Uniform Domain Name Dispute Resolution Policy (the "Rules"), establish procedures intended to assure that Respondents are given adequate notice of proceedings commenced against them, and a reasonable opportunity to respond (see, e.g., paragraph 2(a), Rules).
In this case, the Panel is satisfied that WIPO took all steps reasonably necessary to notify the Respondent of the filing of the Complaint and initiation of these proceedings. Respondent has filed a detailed response (and a reply) to the Complaint indicating that it received notice and was afforded an adequate opportunity to respond.
As a preliminary matter, Complainant submitted a request to file and for consideration of a reply to the response, and Respondent submitted a similar request and a reply to Complainant’s reply. Complainant’s reply consisted solely of its rejection of Respondent’s legal characterization of certain evidence. Had this reply been transmitted without further submission from Respondent, the Panel would not accept it. However, Respondent’s reply to Complainant’s supplemental submission included additional relevant evidence. Taking into account the interests of the parties in being heard, the Panel accepts and considers both supplemental submissions.
Paragraph 4(a) of the Policy sets forth three elements that must be established by a complainant to merit a finding that a Respondent has engaged in abusive domain name registration and use, and to obtain relief. These elements are that:
(i) Respondent’s domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and
(ii) Respondent has no rights or legitimate interests in respect of the domain name; and
(iii) Respondent’s domain name has been registered and is being used in bad faith.
Each of the aforesaid three elements must be proved by a complainant to warrant relief.
Complainant presented a prima facie case that it has rights in the stylized "MILWAUKEE" mark and that the disputed domain name <milwaukeetool.com> is confusingly similar to that mark. Respondent has accepted Complainant’s submission on these points. The Panel finds that Complainant has rights in the trademark and that the disputed domain name is confusingly similar to it. Complainant has satisfied the first element in demonstrating abusive domain name registration and use.
The second element of a claim of abusive domain name registration and use is that the Respondent has no rights or legitimate interests in respect of the domain name (Policy, paragraph 4(a)(ii)). The Policy enumerates several ways in which a Respondent may demonstrate rights or legitimate interests:
"Any of the following circumstances, in particular but without limitation, if found by the Panel to be proved based on its evaluation of all evidence presented, shall demonstrate your rights or legitimate interests to the domain name for purposes of Paragraph 4(a)(ii)
(i) before any notice to you of the dispute, your use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or
(ii) you (as an individual, business, or other organization) have been commonly known by the domain name, even if you have acquired no trademark or service mark rights; or
(iii) you are making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue." (Policy, paragraph 4(c))."
Respondent asserts that it has legitimate interests in the disputed domain name because it is an authorized distributor of Complainant’s products and it used the disputed domain in connection with a bona fide offer of goods or services before notice to it of a dispute. Respondent has used the disputed domain name to direct Internet users to its commercial website at which it advertises and offers for sale Respondent’s power tool products. Although it also advertises the trademarked products of persons other than Complainant, Respondent’s is acting consistently with Complainant’s other authorized distributors that also advertise and sell power tools. Respondent indicates that Complainant did not adopt terms of sale and a policy that prohibit the use of its mark in a domain name (absent its express consent) until at least one year following its registration of the disputed domain name, and after it began using it in connection with its website.
Complainant acknowledges that Respondent is its authorized distributor. It contends, however, that Respondent (a) is violating its "Sales Policy" and "Distributor Policy – Internet" furnished to it December 2001 (and orally advised in July 2001); (b) is not using the name legitimately because it is directing Internet users to a website where competing products are sold, and; (c) is holding itself out to have a closer affiliation to Complainant than it does in fact have.
Respondent registered the disputed domain name and began using it well before Complainant adopted and/or communicated its Internet policy. Prior to its adoption, Complainant had not objected to Respondent’s actions. Respondent registered the disputed domain name and began using it before notice of a dispute with Complainant. Respondent, as an authorized distributor, offered Complainant’s trademarked products for sale. It offered the products of other trademark holders for sale as well. This was (and is) the typical practice of Complainant’s authorized distributors. The Panel does not consider that Respondent’s offering for sale of other trademarked products consistently with Complainant’s typical business practices de-legitimizes (or makes non-bona-fide) its sales of Complainant’s products. There is no deception of Internet users. Genuine and warranted "MILWAUKEE" power tools are found by entering "www.milwaukeetool.com" as a URL. Internet users are not likely to believe that the "DEWALT" power tools offered at "www.thepowertoolstore.com" are, in fact, made or offered on behalf of Complainant. (Complainant’s website today lists Respondent as an authorized dealer, and specifically mentions Respondent’s website where it offers the power tools of various producers for sale.)
Had Complainant adopted and communicated its terms of sale and Internet policy prior to Respondent’s registration and use of the disputed domain name in the same manner, Respondent would have had notice of a dispute and might have been acting in an illegitimate manner. However, in the context in which Complainant typically allowed (and even compensated for) advertising and promotion of multiple product lines in the physical world, Respondent should not be charged with foreseeing that Complainant would object to a seemingly consistent practice in the virtual world.
The Panel is not persuaded the Respondent held itself out as having a closer affiliation with Complainant than it really does, and certainly not in an ill-intended way. Respondent is an authorized seller of "MILWAUKEE" power tools, and it used the domain name <milwaukeetool.com> to attract customers. It is apparent from viewing Respondent’s website that it is in the nature of a virtual "hardware store" offering the products of many producers. Respondent offered to add an express disclaimer to ameliorate Complainant’s concerns about affiliation, but Complainant rejected this. Respondent’s website, nonetheless, does not hold out that Respondent is in fact Complainant, or the exclusive provider of Complainant’s products.
The Panel appreciates that a domain name may in various contexts be understood by Internet users to identify the trademark holder as the source of a product or service. The Panel further appreciates that in certain contexts a reseller of products may take unfair advantage of a trademark holder by pre-empting its opportunity to identify itself as the source of its products. In this proceeding, however, Complainant does not sell to consumer end-users, and has conducted its business by authorizing multiple non-exclusive distributors to advertise and sell its products under its mark. Complainant apparently is under pressure from its other distributors not to allow Respondent to be favored over them. Complainant has adjusted it terms of sale and Internet policy, and is refining its electronic commerce model.
Today, Respondent might be in breach of Complainant’s terms of sale and Internet policy. Today, Respondent might not be able to register and use Complainant’s mark in a domain name and make a bona fide offering of goods, because of an express breach of contract. The Panel is offering no opinion on those matters. Respondent’s assertion of legitimate interests in the domain name is based on conduct occurring before Complainant adopted its terms and policy. Respondent acted reasonably in deciding that Complainant did not object to its use of "MILWAUKEE" in a domain name in connection with its authorized sale of products.
Complainant has referred to several decisions of administrative panels under the UDRP in support of its arguments. The Panel notes that UDRP cases are context specific. In Carlton Meter Company v. Jon Jerman, WIPO Case No. D2002-0553, the Respondent as an authorized distributor asserted an absolute right to use the complainant’s trademark in a domain name for marketing and selling the complainant’s products. The panel rejected that broad claim. The decision otherwise provides limited information regarding the business relationship between the complainant and Respondent. In Ferrero S.p.A. v. Fistagi S.r.l., WIPO Case No. D2001-0262, the Respondent, an authorized reseller, had never used or provided evidence of preparations to use the disputed domain name. There was no indication of how the complainant typically organized its business relationships with its authorized resellers (neither party having submitted terms and conditions of sale). In Black & Decker Corp. v. Eric Savelle dba Tools Plus, Inc., FA 0102000096700, the Respondent had registered multiple variations of the complainant’s mark and was found not to be authorized to use the mark. In the present case, Respondent is authorized even under the terms of the 2001 Sales Policy to use Complainant’s mark for the purpose of advertising Complainant’s products. It is now contractually prohibited from using the mark in a domain name, but this is a development that post-dated the registration and initial use of the name.
The Panel in this proceeding is not suggesting a general rule regarding relationships between trademark holders and authorized distributors. The Policy addresses abusive domain name registration and use. Here an authorized distributor of several years standing registered the trademark holder’s mark in a domain name in circumstances in which it had reason to conclude that the trademark holder would not object. Later, the trademark holder adopted a policy with respect to its authorized distributors that may have contractually precluded the registrant’s initial course of action, had it been adopted earlier. At that point, if the trademark holder considered that its distributor was acting improperly, it might have terminated the distribution relationship. If the distributor continues to buy and resell products in violation of the terms of a new legal relationship, the trademark holder might have some other legal recourse. None of these circumstances, however, makes out a case of abusive domain name registration and use.
The Panel determines that Respondent has legitimate interests in the disputed domain name within the meaning of paragraph 4(a)(ii) and 4(c)(i) of the Policy, and on this basis rejects Complainant’s allegation of abusive domain name registration and use.
Based on its finding that Complainant, Milwaukee Electric Tool Corporation, has failed to demonstrate that Respondent, Bay Verte Machinery, Inc., doing business as The Power Tool Store, has no rights or legitimate interests in the disputed domain name within the meaning of paragraph 4(a)(ii) and 4(c)(i) of the Policy, the Panel determines that Respondent did not register and use the disputed domain name in bad faith, and declines to direct the Registrar to transfer the disputed domain name to Complainant.
Frederick M. Abbott
Dated: October 26, 2002