Designer Skin LLC v. S & L Vitamins, Inc., et al.
McMullan Bros. Limited, et al. v. Web Names Ltd.
Case No. D2004-0078 (WIPO, April 16, 2004)
In this domain name dispute brought under the Uniform Domain Name Dispute Resolution Policy (UDRP), the Panel holds that Complainant is entitled to the transfer of a domain name containing its trademark that Respondent registered, but had not used in connection with the operation of a web site in the approximately six years since its registration. The Panel found that Respondent had registered the domain name in bad faith both because, in response to Complainant’s request, Respondent offered to sell the domain name for substantially more than the costs associated with its registration, and because Respondent had also registered two additional domain names containing the trademarks of third parties. In reaching this decision, the Panel held that it could consider as evidence of Respondent’s bad faith correspondence from its counsel sent as part of settlement negotiations between the parties unilaterally denominated as “without prejudice”.
Complainant consists of McMullan Bros. Limited and five subsidiaries. Complainant owns the trademark “Maxol” and several variants thereof, which marks are registered in both Ireland and the United Kingdom. Complainant, the third largest oil company in Ireland, uses the Maxol mark in connection with its sale of oil and gas through a network of 380 service stations and 50 distributors, each of whom do business under the “Maxol” name.
Respondent Web Names Ltd. was formed by individuals who originally did business as Websters. Websters registered the domain name maxol.com in 1997. Neither Websters nor Web Names Ltd. (collectively “Respondent”) ever operated a web site at the Maxol.com domain.
According to evidence submitted by Complainant, in August 1997, a representative of Complainant contacted Websters and sought a transfer of the maxol.com domain. In the ensuing conversation, the Websters representative stated the domain was being used for “training purposes” in connection with which various “training materials” had been prepared. Websters stated it was willing to transfer the domain for IR £7,000, which it claimed would reimburse it for the costs of modifying these “training materials” to reflect a new domain. Complainant did not agree to pay this sum, and the domain name remained with Websters.
Respondent denied that this communication ever occurred. However, the Panel credited the evidence submitted by Complainant on this score.
Approximately six years later, in April 2003, Complainant again requested that Respondent transfer the domain name to it. Lawyers for Respondent replied, in a letter marked “without prejudice,” that Complainant should make a proposal to settle the matter. Complainant replied with an offer of €750 for the domain, which Respondent did not accept.
In January 2004, Complainant commenced this UDRP proceeding, seeking to compel Respondent to transfer the maxol.com domain name. Finding Complainant entitled to such relief under the UDRP, the Panel directed the transfer of the domain name.
To prevail in a UDRP proceeding, a complainant must make a three part showing:
The Panel found that the domain name was identical to Complainant’s “Maxol” mark (the top level domain .com is not considered in this analysis) and thus that Complainant had established the first element necessary to succeed on its UDRP claim.
The Panel further found that Respondent had no legitimate interest in the maxol.com domain name. Respondent claimed that it had registered the domain to promote a business venture called Maximum-Online or MaxOnline, through which Respondent planned to offer various IT products and services to the public. When Respondent went to register maxonline.com, however, it found that that domain had already been registered. Respondent then claimed to have turned to maxol.com as an abbreviation of its MaxOnline name.
The Panel did not credit this evidence either. Despite Respondent’s submission of limited correspondence with third parties referencing MaxOnline, the Panel found insufficient evidence to establish that Respondent actually planned to do business under the MaxOnline name, let alone that it had registered the maxol.com domain in furtherance of such a business plan. In reaching this result, the Panel pointed to Respondent’s failure to produce a business plan for such a venture, which its solicitor had claimed existed, or other documentation supporting the solicitor’s claims that considerable time, effort and resources had been devoted to the project. The absence of documentary support for such a plan, among other things, caused the Panel to reject this evidence, and determine, instead, that Respondent had no legitimate interest in a domain compromised of Complainant’s mark.
Finally, the Panel found that Respondent had registered the domain in bad faith. In reaching this result, the Panel relied on the fact that Respondent was aware of Complainant’s use of the Maxol mark in 1997 when it registered Maxol.com, given, inter alia, the mark’s widespread use in Ireland where Respondent was based.
More importantly, the Panel relied on the fact that Respondent had offered to sell the domain name to Complainant in 1997 for IR £7000, a sum in excess of Respondent’s out-of-pocket costs directly related to the domain. Notably, the fact that such an offer was only made in response to a request by Complainant was of no moment. Said the Panel:
The Panel also rested its finding of bad faith on the fact that Respondent had registered two additional domains which consisted of the trademarks of well-known Irish companies.
Finding Complainant entitled to relief under the UDRP, the Panel resolved this domain name dispute by directing the transfer of the domain name in dispute, Maxol.com, to Complainant.
In reaching this result, the Panel addressed a number of interesting legal issues raised by the parties. Among the most interesting was an evidentiary objection raised by Respondent to the Panel’s consideration of the April 2003 “without prejudice” letter from Respondent’s solicitors as evidence of Respondent’s bad faith (insofar as it requested an offer for the domain name). While the Panel ultimately elected not to base its finding of bad faith on this letter, it held that it was entitled to consider it.
In reaching this conclusion, the Panel noted that prior Panels were not uniform in their approach to this question. The majority had reached the same result as this Panel – namely, that a Panel could consider unilateral “without prejudice” communications made during settlement negotiations that contain an offer to sell a domain as evidence of bad faith. Said the Panel:
The Panel noted that several Panels had reached a contrary result and “had considered that a letter marked “without prejudice” should render the correspondence inadmissible.”
In its decision, the Panel catalogued numerous decisions on the subject, and their reasoning, pro and con.
The Panel noted that it might alter its view if both parties had expressly agreed that their settlement negotiations should be “without prejudice” and not submitted to a Court or the Panel. Said the Panel:
However, no decision on this issue is necessary in this case.
Because that was not the fact pattern before this Panel, it did not resolve this question. Here, the Respondent’s solicitor had unilaterally designated its correspondence “without prejudice” and thus the Panel held that it could be considered as evidence of bad faith.