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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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Safeguard Operations LLC v. Safeguard Storage

Claim No. FA0604000672431, (NAF June 5, 2006)

In this domain name dispute resolved in accordance with the Uniform Domain Name Dispute Resolution Policy (“UDRP”), the Panel holds that Respondent has a legitimate interest in the domain name because of the preparations it undertook to operate a self storage business under the name “Safeguard Storage” prior to receiving notice of the instant domain name dispute.  As a result, the Panel refused to direct Respondent to transfer the disputed domain to Complainant Safeguard Operations LLC, owner of several federally registered trademarks containing the word “Safeguard,” which marks its uses in connection with its operation of self storage facilities.

Complainant Safeguard Operations LLC owns the federally registered trademark “Safeguard Self Storage” which it has used since 1992 in connection with its operation of self storage facilities.  Importantly, however, Complainant disclaimed the phrase ‘self storage’ in its registrations of this mark.  Complainant promotes its services on a web site it operates at, in which it claims common law trademark rights.  Complainant does not operate self storage facilities in Michigan, where Respondent planned on commencing operations. 

Respondent registered the domain name on January 26, 2005 to promote a self storage business it planned to open in Michigan.  Prior to registering this domain, Respondent had undertaken a number of activities in furtherance of its plan to open this business, including purchasing land on which to operate, and engaging an architectural firm to design, its facility, as well as registering with Michigan authorities for permission to operate its business under the assumed name “Safeguard Storage.”  After its registration of the domain name, and before receipt of any notice from Complainant that it objected to such use, Respondent continued its preparations by purchasing advertisements for its “Safeguard Storage” business in various ‘Yellow pages,’ registering with additional Michigan governmental entities for permission to do business under the “Safeguard Storage” name, and purchasing the building materials necessary to construct its self storage facility.

Respondent had not, however, started operating its business by the time this proceeding was commenced.  As a result, Respondent was not then operating a website at that promoted its business.  Visitors to that URL found, instead, a web page containing links to the websites of a number of purveyors of self storage facilities, including links to Complainant’s website.  Respondent claimed that its domain registrar set-up this page, and that Respondent did not receive any revenue from its operation.

Complainant commenced this UDRP proceeding, seeking to compel Respondent to transfer the domain name.  Finding Complainant had failed to make the showing necessary for such relief, the Panel denied its application, leaving the disputed domain name with Respondent.

To prevail in a domain name dispute, a Complainant must make a three part showing.  Thus, Complainant must demonstrate:

(1) the domain name registered by Respondent is identical or confusingly similar to a trademark or service mark in which Complainant has rights;

(2) Respondent has not rights or legitimate interests in respect of the domain name; and

(3) the domain name has been registered and is being used in bad faith.

The Panel held that Complainant’s application failed because Respondent had a legitimate interest in the domain name at issue.  Under the UDRP,  “a respondent has rights and legitimate interests [in a domain] if, before Respondent received any notice of the dispute,  Respondent has made ‘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.’”

The Panel held that such was the case here.  As stated above, Respondent had undertaken a number of steps in furtherance of its plan to commence operating a self storage facility under the name Safeguard Storage before receiving notice by Safeguard Operations of its objections to Respondent’s continued use of the disputed domain.  These included buying the land and obtaining plans for such a facility, purchasing the necessary building materials, registering to operate a business under the Safeguard Storage name, and purchasing advertising for its prospective business.

By those actions, held the Panel, Respondent established a legitimate interest in the domain sufficient to defeat Complainant’s application.

In reaching this result, the Panel noted that it was a body of limited jurisdiction.  The Panel offered no opinion as to whether Respondent’s use of the disputed domain infringed Complainant’s “Safeguard” trademarks, or constituted unfair competition.  These questions, instead, were for the appropriate judicial tribunal to resolve.  As such, the Panel rejected Complainant’s argument that Respondent had no legitimate interest in the domain, because it was preparing to commence operations under a business name that infringed Complainant Safeguard Operation’s  trademarks.

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