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WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Linak A/S v. Elsar Ltd.

Case No. D2007-1726

1. The Parties

The Complainant is Linak A/S, Nordborg, Denmark, represented internally, Denmark.

The Respondent is Elsar Ltd., Tel-Aviv, Israel, represented by Barnea & Co. Law Offices, Israel.

2. The Domain Name and Registrar

The disputed domain name <linak-israel.com> is registered with Wild West Domains, Inc.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on November 22, 2007. On November 26, 2007, the Center transmitted by email to Wild West Domains, Inc. a request for registrar verification in connection with the domain name at issue. On November 26, 2007, Wild West Domains, Inc. transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details. In response to a notification by the Center that the Complaint was administratively deficient, the Complainant filed amendments to the Complaint on December, 7 and 12, 2007. The Center verified that the Complaint together with the amendments to 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 December 14, 2007. In accordance with the Rules, paragraph 5(a), the due date for Response was January 10, 2008. The Response was filed with the Center on January 10, 2008.

The Center appointed Adam Samuel as the sole panelist in this matter on January 28, 2008. 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

The Complainant develops, produces and sells actuators and actuator systems. It has a number of trademark registrations for LINAK in a variety of different countries going back to its Danish registration in 1981 No. VR1981 00090. In September 2003, the Respondent became a distributor for the Complainant in Israel. That lasted until at least August 6, 2007.

5. Parties’ Contentions

A. Complainant

The Complainant’s arguments are as follows. LINAK is the main trademark of the Complainant’s products. It is registered as a Community trademark and as a national trademark in 20 countries, starting with its Danish registration which goes back to 1981. The domain name in issue is confusingly similar with the trademark because it contains the trademark name.

The Complainant terminated the distribution agreement with the Respondent with effect from August 6, 2007. No authorization has been given to the Respondent to use LINAK as a domain name or as part of a domain name. The registration of the domain name in issue was done in bad faith knowing that the Complainant uses a similar domain name for its business in Israel. Now that the distribution agreement has been terminated, the Respondent is acting in bad faith in continuing to use and keep the registration for the domain name in issue. A request to transfer or cancel the domain name has gone unanswered.

B. Respondent

The Respondent’s reply is in the following terms. The Complaint was filed after the Respondent had failed a claim against the Complainant for damages in the Tel-Aviv Jaffa District Court. The Statement of Claim refers to the disputed domain name.

The domain name relates to internet users specifically from Israel. The website to which it resolves is in Hebrew. So, the Complaint relates to a very specific domain name that is being used and can only be used in Israel. The Complainant is not relying on any trade or service mark registered in Israel. The parties entered into an exclusive distribution agreement on September 17, 2003, subsequently amended later that month under which the Respondent had to build up a market in Israel for the Complainant’s products. The Respondent registered the domain name in 2003. The following year, the Complainant named the Respondent ‘Distributor of the Year’.

The website to which the domain name resolves clearly indicates that it is not the official website of the Complainant. The Respondent did not register the domain name for the purposes of selling, renting or transferring it to the Complainant nor has it tried to block the Complainant from registering LINAK as part of relevant domain names. The Respondent did not register the domain name in dispute to disrupt the Complainant’s business but to promote it. Its use of the domain name has not created confusion as to the source, sponsorship or affiliation since the Respondent was the Complainant’s distributor and was identified as such by the Complainant.

The Respondent has only sold genuine LINAK products and only presented those products in the website to which the domain name resolves.

The Statement of Claim in the Israeli proceedings was filed on October 14, 2007 prior to the Complaint and the Court has already ruled that it has jurisdiction over the case. It is a legitimate right of the Respondent to hold the domain name until payment of sums due under the agreement is made. The Complainant’s webmaster e-mailed the Respondent on July 17, 2007 acknowledging the Respondent’s legitimate interests as owner of the disputed domain name. He refers to it as “your domain”. There is no evidence that the Complainant’s business has been disrupted by the Respondent’s actions.

The Respondent submits that it is sufficient for the Respondent to show that he registered the domain name in good faith to succeed in his defense. The Complainant encouraged the Respondent to register the domain name and set up the website to which it resolves. The Complainant linked its own websites at <linak.com> and <linak.co.il> to the Respondent’s website on the disputed domain name. Traffic was forwarded from <linak.co.il> to the disputed domain name. A number of other websites of the Complainant such as “www.linak.fr” and “www.linak.dk” still remain linked to it. On July 19, 2007, the Complainant’s webmaster wrote to the Respondent:

“As agreed with Mr. [- -] Nielsen, I have re-established the link from our Israel domain, to your domain:

http://www.linak.co.il ->http:/www.linak-israel.com. Also, I have cancelled the domain owner change.”

The Complainant was well aware, the whole time since December 2003 and until July 2007 (almost 4 years) that the Respondent had registered the domain name. The knowledge of the Respondent’s registration negatives a finding of bad faith in registration.

Finally the Respondent submits that the UDRP proceedings are a clear attempt to respond to the legal proceedings issued by the Respondent in Israel.

6. Discussion and Findings

Under the Policy, the Complainant must prove that

(i) the domain name is identical or confusingly similar to a trademark or service mark in which it has rights; and

(ii) the Respondent has no rights or legitimate interests 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

The domain name consists of the Complainant’s trademark with the addition of “-israel.com”. The Respondent has argued that since the Complainant does not own any trademark rights in Israel, the domain name is not confusingly similar to a trademark in which the Complainant has rights. The Policy does not require the Complainant to have rights in a trademark in any particular country or under any particular system of law: Thaigem Global Marketing Limited v. Sanchai Aree, WIPO Case No. D2002-0358. Nor do the Complainant’s rights have to be exclusive in any way. The Panel consequently rejects this argument of the Respondent.

The addition of a country’s name to a trademark does not remove the confusing similarity between the mark and the resulting domain name. In LEGO Juris A/S v. LogoFusion, WIPO Case No. D2006-0270, the Panel said:

“The Panel agrees with the Complainant that the addition of “Israel” to LEGO is not sufficient to render the domain name dissimilar or to prevent consumer confusion. The Panel further remarks that the minor differences constituted by the addition of “.com” is not sufficient to render the domain name dissimilar or to prevent consumer confusion.”

For the same reasons, the Panel concludes here that the domain name in dispute is confusingly similar to LINAK, a trademark in which the Complainant has rights.

B. Rights or Legitimate Interests

The question of whether the Respondent has rights or legitimate interests in respect of the domain name depends to a large extent on the outcome of the dispute between the parties currently being litigated.

The Complainant states that the distributorship was terminated in August 2007. The Respondent denies this. The Complainant has not produced a copy of the distribution agreement without which it would be impossible to tell which party is correct. The Complainant has the burden of proof here.

Paragraph 4(c) of the Policy says:

“Any of the following circumstances, in particular but without limitation, if found by the Panel to be proved based on its evaluation of all evidence presented, shall demonstrate your rights or legitimate interests to the domain name for purposes of Paragraph 4(a)(ii):

(i) before any notice to you of the dispute, your use of […] the domain name […] in connection with a bona fide offering of goods or services”.

Here, the Complainant accepts that the Respondent was an authorized distributor of the Complainant’s products in Israel. It does not assert in the Complaint that the Respondent’s website in any way broke that distribution agreement except by way of the argument that it did not authorize the creation of the domain name.

In an e-mail dated July 19, 2007, the Complainant acknowledged that the Respondent had the right to register and use the domain name. Evidence of an undated webpage of the Complainant’s website shows a link to the Respondent’s website. The domain name was registered four years before the making of the Complaint. A year after registration, the Complainant named the Respondent as its Distributor of the Year. The Complainant must have known about the Respondent’s registration of the domain name at that time since the Respondent was using it to advertise the Complainant’s products pursuant to the distribution agreement. It seems not to have objected at the time.

The Respondent argues that the domain name was set up with the knowledge and approval of the Complainant. The exchange of e-mails in 2007 supports that view or at the very least makes it clear that the Respondent has the right from that date onwards to use the domain name as part of its activities as a distributor of the Complainant. The Complainant has to produce some evidence to show why the position was different when the Complaint was filed just over four months later.

Without a copy of the distribution agreement or any other evidence relating to the dispute that has arisen between the parties, it is impossible for this Panel to conclude for the purposes of these proceedings that that agreement was validly terminated and that the rights that existed in July 2007 had ceased to exist in November 2007 when the Complaint was filed. Subsequent litigation may establish otherwise. However, the Panel can only deal with the evidence supplied to it. The material supplied to the Panel supports the view that the Respondent was using the domain name in connection with a bona fide offering of goods. For that reason alone, paragraph 4(c) of the Policy establishes the Respondent’s right to or legitimate interest in the domain name. Even if it did not do so, the Complainant’s lack of evidence supporting its claim relating to the termination of the distribution agreement means that it has not discharged its burden of proving for the purposes of these proceedings that the Respondent does not have the relevant rights or legitimate interest.

The panel in Luvilon Industries NV v. Top Serve Tennis Pty Ltd., WIPO Case No. DAU2005-0004 took a very similar approach in rejecting the complaint:

“It has already been noted that the Complainant did not prove the nature of its relationship with the Respondent (other than playing a role in the chain of supply of branded tennis racket strings to the Respondent for retail sale) or the terms which might have governed that relationship. Quite aside from the question of proper ownership of the disputed domain names, there are references to other intellectual property issues and no clear evidence that those matters were regulated by agreement either. Nonetheless, what the Complainant argues is that at no time did it or Luxilon Sports authorize the Respondent to register or use the disputed domain names. The Complaint reads at one point:

“The Complainant acknowledges that during the course of the Agreement between Sports and the Respondent, the Respondent could conceivably have utilized an argument of fair use of the Contested Domain Names (under Trade Mark Law) to use the Marks and register the domain names for the exclusive purpose of selling genuine Luxilon and Bigbanger products which it was authorized to do. Any argument of an implied authorization or fair use right or any claim of a close and substantial connection to the Contested Domain Names was clearly negated when the Agreement between the parties was terminated.”

The issues between the parties are not limited to the law of trade marks. There are other intellectual property issues. There are serious contractual issues. There are questions of governing law and proper forum if the matter were litigated. Were all the issues fully ventilated before a Court of competent jurisdiction, there may be findings of implied contractual terms, minimum termination period, breach of contract, estoppels or other equitable defenses. So far as the facts fit within trade mark law, there may be arguments of infringement, validity of the registrations, ownership of goodwill, local reputation, consent, acquiescence, and so on.

What is perfectly clear to this Panel is that the Complainant has fallen short of showing that the Respondent has no rights or legitimate interests in the domain names. The evidence before the Panel is that the Respondent had perhaps an exclusive arrangement to sell the Complainant’s goods in Australia without any control provisions regarding name usage or local goodwill and during which time the Respondent apparently invested in developing other tennis products under the Luxilon name with the Complainant’s collaboration. This arrangement appears never to have formalized in writing and lasted from 2001 or earlier until October 2004, when the Complainant claims to have unilaterally terminated it.

In terms of the examples of legitimate usage given in the Policy and cited above, the Respondent registered and used (or at least made preparations to use) the domain names in connection with an offering of goods before notice of this dispute, albeit that chronologically there is a rather thin margin in the Respondent’s favour. The question is then whether the use or preparations for use were bona fide. The close timing weighs against the Respondent but only if it is accepted that the Respondent had no rights in the names. The Panel finds that on the facts there is a serious question to be tried as to whether the Respondent does have rights or legitimate interests in the names. That question, and others, needs to be brought in an appropriate forum. So far as this Complaint is concerned, the Panel holds that the Complainant has not discharged its onus to show that the Respondent has no legitimate interests in the two disputes domain names and so decides that the Complainant has failed to satisfy the second element in Paragraph 4(a) of the Policy.”

The key UDRP decision in this area is Oki Data Americas, Inc. and ASD, Inc., WIPO Case No. D2001-0903 where again the complainant purported to terminate a licensing arrangement. The panel said:

“This case raises the difficult question of whether an authorized sales or service agent of trademarked goods can use the trademark at issue in its domain name.

Paragraph 4(c)(i) of the Policy provides that a use is legitimate if, prior to commencement of the dispute, Respondent used the domain name or a name corresponding to the domain name in connection with the bona fide offering of goods or services. Here, there is no dispute concerning Respondent’s status: It is an authorized Oki Data repair facility, and has been offering OKIDATA goods and services since prior to the commencement of this case. The only issue before the Panel, then, is whether Respondent’s offerings may be characterized as “bona fide.”

To be “bona fide,” the offering must meet several requirements. Those include, at the minimum, the following:

- Respondent must actually be offering the goods or services at issue. E.g., World Wrestling Federation Entertainment, Inc. v. Ringside Collectibles, WIPO Case No. D2000-1306 (January 24, 2001) (respondent failed to show demonstrable preparations to use the domain name in connection with a bona fide offering).

- Respondent must use the site to sell only the trademarked goods; otherwise, it could be using the trademark to bait Internet users and then switch them to other goods. Nikon, Inc. v. Technilab, WIPO Case No. D2000-1774 (February 26, 2001) (use of Nikon-related domain names to sell Nikon and competitive cameras not a legitimate use); Kanao v. J.W. Roberts Co., WIPO Case No. 0109 (CPR July 25, 2001) (bait and switch is not legitimate).

- The site must accurately disclose the registrant’s relationship with the trademark owner; it may not, for example, falsely suggest that it is the trademark owner, or that the website is the official site, if, in fact, it is only one of many sales agents. E.g., Houghton Mifflin Co. v. Weatherman, Inc., WIPO Case No. D2001-0211 (April 25, 2001) (no bona fide offering where website’s use of Complainant’s logo, and lack of any disclaimer, suggested that website was the official Curious George website); R.T. Quaife Engineering v. Luton, WIPO Case No. D2000-1201 (November 14, 2000) (no bona fide offering because domain name <quaifeusa.com> improperly suggested that the reflected site was the official U.S. website for Quaife, an English company; moreover, respondent’s deceptive communications with inquiring consumers supported a finding of no legitimate interest); Easy Heat, Inc. v. Shelter Prods., WIPO Case No. D2001-0344 (June 14, 2001) (no bona fide use when respondent suggested that it was the manufacturer of complainant’s products).

- The Respondent must not try to corner the market in all domain names, thus depriving the trademark owner of reflecting its own mark in a domain name. Magnum Piering, Inc. v. Mudjackers, WIPO Case No. D2000-1525 (January 29, 2001) (“a single distributor is extremely unlikely to have a legitimate interest in precluding others from using numerous variants on a mark”).

In this case, Respondent’s conduct meets all these factors. Respondent is an authorized seller and repair center, is using the <okidataparts.com> site to promote only OKIDATA goods and services, and prominently discloses that it is merely a repair center, not Oki Data itself. It has not registered numerous okidata-related domain names, and has not improperly communicated with Oki Data customers.

Complainant has not presented any other evidence that undermines the bona fides of Respondent’s use. Accordingly, the Panel finds that the Respondent, as an authorized sales and repair dealer for Complainant’s goods, has a legitimate interest (under the Policy) in using the Domain Name to reflect and promote that fact. See, e.g., Columbia ParCar Corp. v. S. Burstas GmbH, WIPO Case No. D2001-0779 (August 23, 2001); ABIT Computer Corp. v. Motherboard Superstore, Inc., WIPO Case No. D2000-0399 (August 8, 2000); Weber-Stephen Products co. v. Armitage Hardware, WIPO Case No. D2000-0187 (May 11, 2000). See also K&N Engineering, Inc. v. Kinnor Services, WIPO Case No. D2000-1007 (January 19, 2001) (finding that the use of a manufacturer’s mark in a Domain Name merely “provide[s], via an electronic medium, the advertising and sales functions related to the business of an authorized distributor of the Complainant”).

It is important to keep in mind that the Policy was designed to prevent the extortionate behavior commonly known as cybersquatting. It cannot be used to litigate all disputes involving domain names. The Thread.com, LLC v. Poploff, WIPO Case No. D2000-1470 (January 5, 2001). If trademark owners wish to prevent the use of their marks by authorized sales and repair agents in domain names, they should negotiate such protections through appropriate contractual language or, when permitted under the relevant law, seek recovery in classic trademark infringement or dilution litigations. In the absence, however, of some element of illegitimacy, they should not use the Policy to prevent uses that ICANN deemed to be legitimate, including the use of domain names in connection with the bona fide offering of goods and services.”

In this case, the Complainant has not suggested that the Respondent has failed to meet any of the three conditions listed. The Complainant has not provided a translation into English, the language of the proceedings, of the website to which the domain name resolves (which is in Hebrew, a language in which the Panel is conversant). It cannot and does not assert, though, that the Respondent sells competitors’ products from the domain name in issue, falsely describes the relationship between the Respondent and the Complainant or that the Respondent has sought to corner the market in domain names.

The Complainant has the burden of proving each of the three Policy elements. For all the above reasons, the Panel concludes that it has failed to discharge that burden in the case of the second element.

C. Registered and Used in Bad Faith

The Panel finds that the disputed domain name was not registered in bad faith and that the Complainant has failed to prove that it was used in bad faith.

The Respondent registered the domain name in order to promote the Complainant’s products. The Complainant has not suggested otherwise. The Complainant asserts that it never gave the Respondent authority to register the domain name in issue. Yet, the Response provides evidence that the Complainant knew about the website and acknowledged it to be legitimate in July 2007 in writing. If it believed otherwise, the Complainant would not have created links on its websites to the domain name in issue, a fact demonstrated by the reproduction of a webpage in Annex F of the Response. This all supports the view that the domain name was not registered in bad faith.

For these reasons, the Panel concludes that the domain name was not registered in bad faith. It follows that the Complainant has not discharged its burden of proving this element of the Policy.

The Complaint does not include a translation into English, the language of the proceedings, of the website to which the domain name resolves. The site is almost entirely in Hebrew. A cursory look does not reveal anything that in anyway denigrates the Complainant. Indeed, it appears to be very supportive of the Complainant and its products and does not market anyone else’s merchandise.

The only evidence that the Complainant has produced to show bad faith use is the fact that it has purported to terminate the distribution agreement. However, without a copy of that agreement, it is impossible to know whether on termination, the Respondent was required to stop using the trademark name to promote the sale of the Complainant’s products. The Respondent in its Statement of Claim in the Israeli litigation has denied the validity of the termination. In the circumstances, the Complainant has not proved for the purposes of these proceedings registration or use in bad faith.

7. Decision

For all the foregoing reasons, the Complaint is denied.

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Adam Samuel
Sole Panelist

Dated: February 8, 2008