Asco Group Limited; Pentland USA Inc. v. Garth Marriot

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL

DECISION

Pentland USA Inc. , Asco Group Limited v. Garth Marriot

Case No. D2004-0031

1. The Parties

The Complainant is Pentland USA, Inc., New York, New York, United States of America and Asco Group Limited, Freeport, Bahamas, both of which provide as their contact details, Pentland Brands Plc, Squires Lane, London, United Kingdom of Great Britain and Northern Ireland, represented by Dawn Osborne of Willoughby & Partners Solicitors, United Kingdom of Great Britain and Northern Ireland.

The Respondent is Garth Marriot, Eugene, Oregon, United States of America represented by Carol A. Busby, United States of America.

2. The Domain Name and Registrar

The disputed domain name <kangaroosusa.com> is registered with Network Solutions, Inc. Registrar.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the

"Center") on January 15, 2004. On January 16, 2004,

the Center transmitted by email to Network Solutions, Inc. Registrar a request

for registrar verification in connection with the domain name at issue. On January 20, 2004,

Network Solutions, Inc. Registrar transmitted by email to the Center its verification

response confirming that the Respondent is listed as the registrant and providing

the contact details for the administrative, billing, and technical contact.

The Center verified that the Complaint satisfied the formal requirements of

the Uniform Domain Name Dispute Resolution Policy (the "Policy"),

the Rules for Uniform Domain Name Dispute Resolution Policy (the "Rules"),

and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy

(the "Supplemental Rules").

In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally

notified the Respondent of the Complaint, and the proceedings commenced on January 21, 2004.

In accordance with the Rules, paragraph 5(a), the due date for Response was

February 15, 2004. Respondent's lawyer indicated that she was representing

Respondent in an email dated January 23, 2004. The Response was due

on February 10, 2004. By email dated February 10, 2004,

Respondent requested an extension until February 13, 2004, to file

a Response. The Center granted an extension until February 15, 2004.

The Response was filed with the Center on February 13, 2004. On February 20, 2004,

the Complainant filed comments on the Response. These comments were not part

of the file and were not considered in these proceedings due to the fact that

they did not comply with the requirements of the Rules.

The Center appointed Thomas Webster as the sole panelist in this matter on

February 23, 2004. The Panel finds that it was properly constituted.

The Panel has submitted the Statement of Acceptance and Declaration of Impartiality

and Independence, as required by the Center to ensure compliance with the Rules,

paragraph 7.

4. Factual Background

It is not disputed that the First Complainant is a brand management company

operating in the sports, outdoor and fashion markets. It began trading in 1932

and since then has developed and marketed numerous sports, outdoor and fashion

brands.

It is not disputed that the First Complainant's subsidiaries hold a number

of domain names, such as:

<kangaroos.biz>

<kangaroos-usa.com>

<kangaroos.se>

<kangaroos.com>

<kangaroosamerica.com>

<kangaroosus.com>

<kangaroos.me.uk>

<kangaroos.us>

It is also not disputed that the Second Complainant is the proprietor of numerous

trademark registrations for the word KangaROOS around the world including the

following trademarks ("the KangaROOS marks"):

Country

Trademark

Classes

Reg.

No.

USA

KangaROOS

(word)

18,

25 and 28

2096351

UK

KangaROOS

(word)

18

and 25

1520188

Sweden

KangaROOS

(word)

18,

25 and 28

317070

Germany

KangaROOS

(word)

18,

25 and 28

2901548

Denmark

KangaROOS

(word)

18,

25 and 28

1996

4974 VR

Canada

KangaROOS

(word)

18

and 25

TMA316599

Benelux

KangaROOS

(word)

18,

25 and 28

550548

According to the Complainants, the First Complainant acquired the KangaROOS

brand in 1990. The KangaROOS brand was assigned to the First Complainant by

KangaROOS USA Inc in 1990 including all rights in registered and unregistered

trademarks and the goodwill connected thereto to promote the KangaROOS brand

throughout the world.

At some point the Respondent began selling KangaROOS branded footwear via his

website at "www.coolestshop.com". The Respondent maintains that this

was in February 2002.

The Complainant alleges that, in around October 2001 the Respondent approached

the Complainant to see if they were willing to appoint the Respondent as an

official retailer/licencee of the KangaROOS brand in the USA. There were negotiations

between the parties but, eventually, the First Complainant finally awarded the

licence to another candidate.

The Respondent registered the domain name on February 1, 2002, during

the course of negotiations.

The Complainant maintains that it "first became aware of the registration

and use of the disputed domain name in January 2003", although this is

denied by the Respondent.

The Respondent had linked the disputed domain name to a home page which comprised

the words ‘KangaROOS®@www.Coolestshop’. "The page contained a link

to the Respondent’s homepage at "www.coolestshop.com" on which the

Respondent sold Adidas, Ben Sherman and other famous brands as well as KangaROOS

products."

The Complainant requested that the Respondent transfer the disputed domain

name to one of its subsidiary and proposed compensation for the losses incurred

in registering the domain name.

The Respondent replied that he was ready to transfer the domain name in exchange

for $25,000 which comprised the costs incurred during the negotiation period

and the costs in registering the domain name.

The Complainant informed the Respondent that he would not compensate him for

the losses incurred during the negotiation period, "because it is simply

not standard business practice".

5. Parties’ Contentions

A. Complainants

The Complainants argues that the disputed domain name is "identical

to the mark KangaROOS USA in which the Complainants have common law and unregistered

trademark rights and confusingly similar to the name KangaROOS in which the

Complainants have common law and registered trademark rights."

The Complainants also argues that the Respondent has received no authorization

for such registration.

The Complainants "believe that the Respondent has no rights or legitimate

interest in respect of the disputed domain name as it does not appear to hold

any registered trademarks which are identical or similar to the disputed domain

name."

"Furthermore, the Complainants submit that the Respondent intended to

commercially capitalize on the KangaROOS marks and Kanga ROOS USA mark by registering

the disputed domain name".

"The Complainants submit that one of the driving factors behind the Respondent’s

registration of the disputed domain name was to give the Respondent bargaining

power over the Complainants."

The Complainants submit that "the costs incurred negotiating cannot legally

be claimed from the Complainants and therefore it has no right to withhold the

disputed domain name from the Complainants in lieu of the Complainants meeting

this costs."

Furthermore, the Complainants argue that the domain name has been registered

and used in bad faith by the Respondent.

The Respondent "has stated that it registered the domain name ‘in the

honest belief that he had a deal with KANGAROOS’ to become the exclusive licensee

of the KangaROOS brand in the United States". The Complainants, however

respond that: "the Respondent knew all along that they were just one of

a number of prospective licensees having been made fully aware that this was

the case."

The Complainants also note that: "While the Respondent may have registered

the disputed domain name in anticipation of becoming the exclusive US licensee,

the Respondent also intended to use the disputed domain name in order to sell

KangaROOS branded products on his website whether he became the exclusive licencee

or not and to use the name in relation to other brands."

"The Complainants submit that the Respondent’s registration and use of

the disputed domain name constitutes bad faith as it has been registered and

used in a manner which intentionally creates a likelihood of confusion with

the Complainants’ KangaROOS marks and KangaROOS USA mark as to the source, sponsorship,

affiliation, or endorsement of the Respondent’s website or the products or services

provided by the Respondent’s website. The Complainants submit that any such

confusion is extremely likely given that the disputed domain name is identical

to the Complainants’ KangaROOS USA mark."

The Complainants also argue that the $25,000 offer made by the Respondent to

transfer the domain name "far exceeds the Respondent’s out-of-pocket expenses

in registering the disputed domain name and, by the Respondent’s own admission,

includes extraneous costs such as travel expenses."

"Further or in the alternative the Complainants submit that the Respondent

registered the disputed domain name in order to gain commercial bargaining power

over the Complainants. The Complainants rely on the fact that the registration

took place during the currency of the licence discussions between the parties,

that the Respondent has not registered any other names of the brands it sells

on its website as domain names."

"Further or in the alternative the Complainants submit that the Respondent

has registered the domain name primarily for the purpose of disrupting the business

of a competitor."

" The Complainants again submit that the Respondent at no time intended

to transfer the disputed domain name to the Complainants in the event that the

negotiations broke down for its out-of pocket expenses in registering the disputed

domain name. In fact the Complainants believe that it was the Respondent’s intention

all along to use the disputed domain name to sell KangaROOS and other products

not connected with the Complainant on its website in the event that the Complainants

licensed the use of the KangaROOS brand to another party."

B. Respondent

The Respondent concedes that the domain name is identical or confusingly similar

to a trademark in which the Complainant has rights.

The Respondent argues that "there is no attempt to redirect the consumer

to purchase a different brand of shoes – the KangaROOS are for sale right on

the main website. The domain name assists the customer in finding a legal seller

of the goods. Because he sells KangaROOS, Respondent has no reason to "bait

and switch" the customer to other brands."

"Respondent acquired and has used the domain name to promote the sales

of KangaROOS items on his main website. Therefore, he has not acted in bad faith."

The Respondent claims that he "has not prevented Complainant from reflecting

its mark; in fact, it states in the complaint that it owns eight similar domain

names. Therefore, he has not acted in bad faith".

Respondent also argues that he "has not disrupted a competitor’s business.

He is selling KangaROOS purchased from Complainant’s distributor."

Furthermore, the Respondent contends that the $25,000 offer to the Complainants

"was based on his needs; since it was rejected and since he had a good

and valid reason to keep the site, he did so."

" In this case, Respondent is indeed offering goods on the site. Although

the site does not include a disclaimer, it advertises only Complainants’ product

without purporting or appearing to be the official website. In fact, the page

includes a link to Respondent’s site which is clearly not a site of Complainants.

Respondent owns no other domain names using the term KANGAROOS and Complainant

owns eight sites with that term in it."

6. Discussion and Findings

Under the Policy, paragraph 4 (a) the Complainants must prove that each of

the following three elements are present:

(i) the Domain Name is identical with or confusingly similar to a trademark

in which the Complainant has rights

(ii) the Respondent has no right or legitimate interest in respect of the Domain

Name;

and

(iii) the Domain Name has been registered and is being used in bad faith.

A. Identical or Confusingly Similar

This point is not denied by the Respondent.

Complainants have satisfied the requirements of the Policy, paragraph 4 (a)

(i).

B. Rights or Legitimate Interests

Paragraph 4 (c) of the Policy gives three examples of how a Respondent can

demonstrate his rights or legitimate interests in a domain name. They are:

"(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 non-commercial 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."

The Respondent's basic position is that he registered the domain name when

he began selling the relevant products which he lawfully acquired from other

sources. Therefore, the domain name is being used to sell the First Complainant's

products, albeit indirectly.

However, the Panel is not convinced that this activity establishes that Respondent

has rights or legitimate interests to the domain name. If Respondent wished

to simply indicate that he had Kangaroosusa products for sale, he could do it

in various ways without using a domain name so that the various search engines

would locate his site. Moreover, by redirecting searches from the Kangaroosusa

domain name to his own domain name (where various products are sold), there

is a risk that a person looking for one product initially will purchase another

product. Therefore, the Panel finds that the Respondent has not demonstrated

that he has rights to or a legitimate interest in the domain name.

C. Registered and Used in Bad Faith

Paragraph 4 (b) of the Policy sets out four illustrative circumstances, which

for the purposes of the Policy, paragraph (a) (iii) shall be evidence of the

registration and use of the domain name in bad faith, including:

"(i) circumstances indicating that you have registered or you have acquired

the domain name primarily for the purpose of selling, renting, or otherwise

transferring the domain name registration to the complainant who is the owner

of the trademark or service mark or to a competitor of that complainant, for

valuable consideration in excess of your documented out-of-pocket costs directly

related to the domain name; or

(ii) you have registered the domain name in order to prevent the owner of the

trademark or service mark from reflecting the mark in a corresponding domain

name, provided that you have engaged in a pattern of such conduct; or

(iii) you have registered the domain name primarily for the purpose of disrupting

the business of a competitor; or

(iv) by using the domain name, you have intentionally attempted to attract,

for commercial gain, Internet users to your website or other on-line location,

by creating a likelihood of confusion with the complainant's mark as to the

source, sponsorship, affiliation, or endorsement of your website or location

or of a product or service on your website or location."

The Panel is satisfied that Respondent registered the domain name to sell products

of the First Complainant and perhaps with a view to becoming the licensee or

distributor of the First Complainant. After the fact, the Respondent has offered

to sell the domain name to the Complainants for a sum of $25,000 and the Panel

is satisfied that this amount largely exceeds the Respondent’s out-of-pocket

costs directly related to the domain name. However, that is not enough. The

issue under (i) is the primary purpose at the time of registration.

Paragraph (i) above is usually applicable in cases where there is no such legitimate

intended business activity as Respondent points out. Therefore, the Panel is

not satisfied that paragraph (i) is applicable.

The Panel is satisfied that a businessman, such as Respondent, would register

this type of domain name to prevent the holder of the trademark from registering

the domain name. The fact that the First Complainant's subsidiaries have a number

of similar domain names does not prevent this from being applicable. However,

there is no evidence that Respondent has engaged in a pattern of conduct in

this respect and therefore paragraph (ii) is not applicable.

The Panel is also not convinced that the primary purpose of the domain name

registration was the disruption of the business of a competitor within the meaning

of paragraph (iii). As noted above, the primary purpose of Respondent appears

to have been to sell the relevant products.

However, the Panel is satisfied that Respondent registered the domain name

to give the impression that he was affiliated in some way with the First Complainant.

Respondent is clearly aware of the value of the trademarks in this sector and

is surely aware of the prima facie right of a trademark holder to use of a corresponding

domain name. Indeed, the parties did seek unsuccessfully to negotiate such an

arrangement at the time when Respondent registered the domain name. For the

Panel, if a party is negotiating this type of arrangement, it is difficult for

the potential licensee or distributor to justify registration of a domain name

corresponding to that of the trademark without the consent of the proposed licensor

or supplier. Therefore, the use of this domain name during and after such negotiations

is evidence of bad faith.

These circumstances are evidence that the Respondent is using the domain name

in bad faith within the meaning of paragraph (iv) above.

7. Decision

For the foregoing reasons, in accordance with Paragraphs 4(i) of the Policy

and 15 of the Rules, the Panel orders that the domain name, <kangaroosusa.com>

be transferred to the Complainants.

Thomas Webster

Sole Panelist

Date: March 4, 2004