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Trademark owner loses domain name claim against unauthorised reseller

Court rules against ITT

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Dealers and resellers can use a manufacturer's trademark as a domain name even when their sales are not authorised by the manufacturer, an arbitration panel has ruled.

Pressure gauge maker ITT failed in its claim for the domain name ITTbarton.com and 12 other domain names owned by a seller of ITT pressure gauges, Douglas Nicoll, and his company Differential Pressure Instruments.

ITT argued trademark infringement before an arbitration panel of the World Intellectual Property Organisation (WIPO). The US company holds over 700 registered marks incorporating the ITT mark in more than 100 countries.

Nicoll, based in Norfolk, Virginia, sells products that were made by ITT and purchased by the US Government but never used. The government sold off its surplus stock to Nicoll and others who bought them for resale.

ITT argued that Nicoll had no rights or legitimate interests in the domain names. The three-member WIPO panel applied a test laid down in a 2001 case. In that case, a computer accessories maker, Oki Data Americas, took action over another company's use of the domain name Okidataparts.com. The panel in the ITT case wrote:

The Panel in Oki Data concluded that the use of a manufacturer’s trademark as a domain name by a dealer or reseller (an authorized dealer in that case) should be regarded as a 'bona fide offering of goods or services' […] if the following conditions are satisfied:
  • The respondent must actually be offering the goods or services at issue
  • The respondent must use the site to sell only the trademarked goods (otherwise there is the possibility that the respondent is using the trademark in a domain name to bait consumers and then switch them to other goods)
  • The site itself must accurately disclose the respondent’s relationship with the trademark owner
  • The respondent must not try to “corner the market” in all relevant domain names, thus depriving the trademark owner of reflecting its own mark in a domain name.

ITT argued that the Oki Data test should be limited to authorised resellers only. The WIPO panel disagreed.

"The Complainants argue that the Oki Data rationale should not apply to an unauthorized reseller," said the ruling. "The Panel concludes, however, that the issues of legitimate reseller interests in accurately describing a lawful business, on the one hand, and of potential abuses of trademark, on the other, are similar whether or not there is a contractual relationship between the parties."

It concluded that "the Oki Data criteria are appropriate here to assess the rights or legitimate interests of the unauthorized reseller for purposes of this element of the Policy."

The panel said that Nicoll had "a legitimate interest in making nominative use of the ITT mark consistent with the Oki Data requirements; consequently this does not reflect bad faith."

ITT's complaint was dismissed.

Copyright © 2008, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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