Ip Newsletter Dec08-1

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Unauthorized Use of Registered Trademarks in Domain Names: WIPO Panel Decision Creates Middle Ground December 2008 Vol. 21: Issue 12 A WIPO arbitration panel recently held that an original manufacturer may not have an infringement complaint when an unauthorized dealer’s domain name contains the manufacturer’s trademark. This decision has been greeted with criticism in some quarters but when closely examined, the decision sits well with common sense and fairness. The complaint which gave rise to the decision was brought by ITT, a pressure gauge manufacturer, against Douglas Nicoll and his company Differential Pressure Instruments. The respondent’s (Douglas Nicoll) company had acquired surplus ITT pressure gauges and registered several domain names to sell the excess product without authorization from ITT. Evidence showed that the domain names of Douglas Nicoll’s company included the ITT trademark by using web addresses such as ittbarton.com and ittbarton.com. In the complaint, ITT argued that Nicoll had no right or legitimate interest in the domain names and asked WIPO to adopt a favourable interpretation of a 2001 case that dealt with a similar issue. It should be recalled that the 2001 case

involved the unsuccessful complaint brought by Oki Data Americas, a computer accessories manufacturer, against an authorized reseller who was using the domain name okidataparts.com. In dismissing ITT’s complaint against Differential Pressure Instruments, the WIPO panel applied the four conditions laid down in the 2001 Oki Data case, to determine whether Nicoll’s company had a legitimate interest in the domain names. The four conditions are that: • the respondent must actually be offering the goods or services at issue; • the respondent must use the website to sell only the trademarked goods (in order to prevent a possible bait-andswitch scenario where consumers are duped) • the site must accurately disclose the relationship between itself and the trademark owner • the respondent must not try to “corner the market” in all relevant domain names, depriving the trademark owner of reflecting its own mark in a domain name In its decision, the WIPO panel held that the four conditions were met. In addressing the argument that the Oki Data case was limited to situations where the reseller was authorized, the

©Blackfriars LLP 2008. All rights reserved. This document is for general guidance only. Definitive advice should be sought from counsel if required. Blackfriars LLP is a Nigerian law firm with a representative office in Toronto, Canada.

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panel decided 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.” A central thrust of the criticisms so far leveled against the WIPO decision in ITT is that the decision of the panel does not sit well with the facts of the case. However, a careful review of the facts of the case suggests that some of the critics of the decision have overstated the importance of the facts alleged to have been given the short shrift. To the extent that the WIPO Panel decision was premised on a holistic application of the four conditions earlier laid down in the Oki Data case, it is difficult to quarrel with the reasoning of the panel. It is generally accepted that a key policy imperative of the law of trademarks is that the protection of trademarks puts the public in an informed position on the quality, source, and provenance of goods and services. If this policy imperative still holds true, the recent WIPO decision is justifiable on both the law and policy of trademark protection. To the extent that Nicoll’s company was not presenting its goods as those of ITT, the WIPO panel ruling provides a pragmatic and principled application of trademark law.

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©Blackfriars LLP 2008. All rights reserved. This document is for general guidance only. Definitive advice should be sought from counsel if required. Blackfriars LLP is a Nigerian law firm with a representative office in Toronto, Canada.