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WIPO Arbitration and Mediation Center

The Complainant is Giddings & Lewis L.L.C, a Wisconsin limited liability company with a principal place of business at 142 Doty Street, Fond du Lac, Wisconsin, USA 54935.

As named in the Complaint, the Respondent is Neal McKean a/k/a Machineworks, Inc. a/k/a IMachineTools.com, with a principal place of business at 600 Hollister Road, Teterboro, New Jersey USA 07608. In the Response, the Respondent identifies itself as Machine Works, Inc. d/b/a imachinetools.com and Neal McKean of 600 Hollister Road, Teterboro, NJ 07608. There being no material difference in the parties’ identification of the two entities and the individual forming the Respondent (nor, as noted below, in the registrar’s identification of the registrants of one or more of the disputed domain names), and it is undisputed that they are affiliated, the Panel accepts their collective designation as the Respondent.

The disputed domain names are: "usedfadal.net", "usedfadal.com", "used-fadal.com", "fadal-used.com", "usedfadalcnc.com", "usedfadals.net", "usedfadals.com", "used-fadals.net", "used-fadals.com", "fadalsused.com", "fadalused.com". (Footnote 1) The domain names are registered with Network Solutions, Inc. ("NSI") of Herndon, Virginia, USA.

The Complainant filed its Complaint electronically with the World Intellectual Property Organization Arbitration and Mediation Center ("the Center") on August 31, 2000, and in hard copy on September 1, 2000.

On September 18, 2000, at the Center’s request, NSI submitted a verification confirming that it was the registrar of each of the disputed domain names and that the domain names were registered to one of three registrants: imachinetools.com, Machineworks, Inc., or Neal McKean, all located at 600 Hollister Road, Teterboro, NJ.

On September 21, 2000, after verifying that the Complaint conformed with the technical requirements of the Uniform Domain Name Dispute Resolution Policy ("Policy"), the Rules for Uniform Domain Name Dispute Resolution Policy ("Rules"), and the Center’s Supplemental Rules for Uniform Domain Dispute Resolutions Policy, the Center sent the Respondent a formal a Notification of Complaint and Commencement of Administrative Proceeding by express courier, fax and e-mail. See Rules ¶¶ 2,4.

On October 20, 2000, after obtaining an extension of time, the Respondent filed its response, which the Center acknowledged to the parties on October 24, 2000. On November 22, 2000, without having been requested or seeking permission to do so, the Complainant submitted a Reply to the Respondent’s Response. On December 5, 2000, the Respondent filed an Objection and a Sur-Reply to Complainant’s Unsolicited Reply Submissions.

As requested by the Complainant, the Center proceeded to appoint a three-member panel, completing the appointment process on December 5, 2000.

The allegations and evidence submitted by the Complainant and the Respondent show as follows:

The Complainant is in the business of selling both new and rebuilt or remanufactured machine tools and computer controls for the operation of machine tools. It owns, holds numerous registrations to, and actively uses the marks FADAL and FADAL (stylized) in connection with these tools and computer controls. The Complainant and its predecessors have used the FADAL mark in connection with machine tools and related products since 1974.

Through one of its subsidiaries, the Complainant currently utilizes its trademark in seven domain names: "fadaleng.com", registered in July of 1996; "fadalengineering.com", registered in March of 1998; "fadal.com", registered in May of 1998; "fadalmachiningcenters.com", registered in January of 2000; and "fadalpart.com", "fadalreman.com", "fadalparts.com", all registered in May of 2000.

Neal McKean ("McKean"), the individual designated as the Respondent is the principal of the two entities also so designated. Through these and other currently existing, as well as predecessor, entities, McKean and his family have been engaged in the business of selling used machine tool equipment for over 52 years, for the past 40, from a "brick and mortar" location in Teterboro, New Jersey. In 2000, McKean added an e-commerce component to his business and formed imachinetools.com, Inc. to conduct the sale and brokering the sale of used machine tool equipment over the Internet.

Since September 1999, McKean has registered or caused Machineworks, Inc. or imachinetools.com to register, the disputed domain names. As of August 23, 2000, only one of these, "usedfadals.com", linked to an active web site, which described itself as "the best place to buy and sell used machinery on the Internet" and offered visitors to the web site, among other things, an opportunity to submit electronic replies regarding machines they were looking for or machines they had for sale. Since the web site became accessible to the public, the following disclaimer has appeared at the bottom of its home page: "UsedFadals.com is not affiliated with Fadal Machining Centers or Giddings & Lewis." Recently, this disclaimer has been copied to the top of the Respondent’s home page as well and a link to the Complainant’s web site has been added.

As a preliminary matter, the Panel grants the Respondent’s Objection to Complainant’s Unsolicited Reply Submission and, therefore, declines to consider either the Reply or the Sur-Reply in its examination of the parties’ respective contentions. The Panel’s ground for this procedural ruling is that the Complainant made no effort to obtain prior leave for its supplemental submission or even to include in it a showing of good cause for needing to make it. In a proceeding intended to be as streamlined and cost-effective as UDRP, repeated rounds of briefing must be avoided except for compelling reasons.

A. The Complainant concedes that the Respondent has "a limited right to use the FADAL trademark properly within a web site to nomitively [sic] describe genuine pre-owned FADAL machine tools," Complaint at p. 22 (emphasis in the original), but challenges the Respondent’s incorporation of the FADAL mark in its domain names. Each of the domain names, the Complainant asserts, is identical or confusingly similar to its FADAL mark, notwithstanding the addition of various components, be it the hyphen, the letter "s," or the word "used" as a prefix or suffix. The Complainant goes on to dispute that the Respondent has any right or legitimate interests in the contested domain names on the grounds that it has never been commonly known by them, is making no use of eleven of them in connection with a bona fide offering of goods or services, and its use of the twelfth is not a legitimate noncommercial or fair use. Finally, the Complainant contends that the Respondent has registered and used the disputed domain names in bad faith for the following purposes: to prevent the Complainant from reflecting its mark in corresponding domain names, as part of a pattern of such conduct with respect to the trademarks of numerous other companies; to disrupt the business of the Complainant, which sells both new and used machine tools and is thus a competitor of the Respondent; and to divert customers to its imachinetools.com web site.

B. The Respondent concedes that "fadals.com" is similar to the Complainant’s mark and offers to transfer it to the Complainant. Response at p. 6, n. 2. With respect to the remaining eleven domain names, however, the Respondent insists that they are not confusingly similar because the incorporation of the word "used" renders them descriptive, not source identifying, particularly against the background of the Complainant’s effort to distinguish its "remanufactured" machines from the used Fadals that can be obtained on the used market. The Respondent adds that it has deliberately sought to dispel any risk of customer confusion by means of its disclaimer on the usedfadals.com website of any affiliation with the Complainant’s businesses, which it has recently also placed on the top of its home page and amplified with prominently placed links to the Complainant’s home page. The Respondent recites its long history in the used machine tool business and its recent concerted and well-financed effort to implement an e-commerce business plan as evidence that it uses one of the disputed domain names and has made preparations to use the remaining ones in connection with its bona fide offering of used Fadal machines and related services. In that context, it argues, its use of the FADAL mark is fair nominative use made for the sole purposes of describing the products it sells and to grow its own business, is not intended to and has not, in fact, interfered with the Complainant’s ability to reflect its mark in its own domain names, nor otherwise to disrupt the Complainant’s new and remanufactured tool business. The Respondent concludes by, once again, citing its disclaimers and links as evidence of the absence of any bad faith on its part.

In addition, the Respondent suggests that, to the extent this case raises certain issues of trademark law, they are beyond the scope of the Policy, which is designed to provide simplified administrative resolution of only a small class of disputes relating to abusive registrations.

Pursuant to Paragraph 4(a) of the Policy, in order to prevail, the Complainant must prove each of the following elements:

(i) that the disputed domain names are identical or confusingly similar to a trademark or service mark in which Complainant has rights;

(ii) that the Respondent has no rights or legitimate interests in respect to the domain names; and

(iii) that the disputed domain names were registered and are being used in bad faith.

The question of whether the contested domain names are confusingly similar to a trademark in which the Complainant has rights is not free from doubt. However, it need not be resolved because the evidence as to the Respondent’s interest in the domain names and its state of mind in registering and using them overcomes the Complainant’s proof.

i. The Respondent’s Rights or Legitimate Interests in Respect to the Domain Names

Paragraph 4(c) of the Policy provides that a finding of certain circumstances based on a panel’s evaluation of all the evidence presented "shall demonstrate" a respondent’s rights and legitimate interest to a domain name. Such circumstances include, without limitation, (1) that, prior to any notice of the dispute, the respondent used, or made demonstrable preparations to use, the contested domain name in connection with a bona fide offering of goods or services, as well as (2) that the respondent’s use of the domain name is "legitimate . . . fair use . . . without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark at issue.

The Panel finds that the preponderance of the evidence in this case warrants a finding of both of these circumstances. The Respondent has shown, and the Complainant has failed to rebut, that the Respondent is continuing a long-established family business of selling used machine tools, including those manufactured by the Complainant. In September 1999, long before it had notice of this dispute, the Respondent began registering the contested domain names in preparation for taking its business into cyberspace by means of a web business platform. It has partially implemented this business plan with actual use of "usedfadals.com" in connection with a working web site and has submitted persuasive evidence of preparations to complete the implementation, including substantial expenditures of time and money on technical development and testing by its consultants. It is a fair inference from this evidence that the Respondent’s stated intention to "ultimately point" all of the contested domain names to active web sites is concrete and real and that their current "parked" status is temporary.

Furthermore, as the Complainant forthrightly acknowledges, "used Fadal machine tools" or the colloquial equivalent, "used Fadals," accurately describe the line of products, which the Respondent has long been selling in a legitimate manner. Therefore, combining "used" and "Fadal" in a domain name is a fair, nominative use to describe the products that the registrant offers in its "brick and mortar" and e-commerce business ventures.

The Complainant counters with a distinction that may have some superficial appeal but upon scrutiny is one without a difference. According to the Complainant, using the FADAL mark "within a web site" is fair nominative use but not within "domain names or banners" because the latter use is likely to create confusion as to source, sponsorship or affiliation. Paragraph 4(c)(iii), however, expressly addresses "fair use of the domain name" and thus envisions that an entire domain name may be used in a nominative manner to describe a product. Although domain names can be used as a virtual equivalent of a store name sign, such use is not exclusive either as a matter of law or actual practice. The use of domain names to describe products and services, rather than announce the name of the business offering them on the Internet, has been noted and affirmed as fair nominative use in a number of UDRP cases. See, e.g. The Kittinger Company Inc. v. Kittinger Collector, Case Nos. AF-0107a and AD-0107b(eResolution, May 8, 2000); Consorzio del Prosciuto di Parma v. Domain Name Clearing Company, LLC, Case No. D2000-0629 (WIPO, September 18, 2000).

ii. Bad Faith

In view of the above finding regarding the Respondent’s legitimate interest in respect of the contested domain names, the resolution of this dispute does not require reaching the third element of the Complainant’s case, namely proof of bad faith on the part of the respondent. However, since the inference with respect to the Respondent’s preparations to use the ten domain names that do not yet resolve to active, functioning web sites is - concededly - weak, it is useful to evaluate the impact of the bad faith element on the case in the absence of this inference. The non-exclusive listing in Paragraph 4(b) of the Policy of the types of circumstances that evidence bad faith illustrates the concerns that underlies the bad faith element. The panel finds that the evidence in this case is insufficient to support a finding that the Respondent has displayed any state of mind that is either expressly or by implication encompassed by Paragraph 4(b). There is no allegation, much less evidence, that the Respondent has manifested any desire to sell any of the unused domain names for profit. In the absence of evidence that its registration of the "used Fadal" domain names either can, or has, prevented the Complainant from reflecting its mark in a number of domain names, or disrupted the Complainant’s business of selling new and remanufactured machines, or diverted from it any customers who were not specifically interested in used machines, any inference that these were the Respondent’s purposes would be implausible. Lastly, and perhaps, most importantly, attributing bad faith to the Respondent would be difficult to reconcile with its early and diligent effort to distinguish itself from the Complainant through an appropriate disclaimer, even if the subsequent additional measures that might have been taken after the emergence of this dispute are discounted.

In sum, the Panel concludes that even if the Complainant has satisfied the first element of its case, it has not satisfied the second and third elements.

7. DECISION

For the reasons stated above, it is ordered that the domain name "fadals.com" be transferred to the Complainant, Giddings & Lewis, L.L.C. With respect to the remaining contested domain names, "usedfadal.net", usefadal.com", "used-fadal.com", "fadal-used.com", "usedfadalcnc.com", "usedfadals.net", "usedfadals.com", "used-fadals.net", "used-fadals.com", "fadalsused.com", and "fadalused.com", the Complainant’s request for transfer is DENIED.

Natasha C. Lisman
Presiding Panelist

James Dabney
Panelist

Jordan Weinstein
Panelist

Dated: March 14, 2001

Footnote:

1. Although the Complaint includes "fadals.com" in the list of the disputed names, the Respondent’s stipulation that it is similar to the Complainant’s mark and offer to transfer it, Response at p. 6, n. 2, moot the issue and the Panel will simply ratify the Respondent’s offer in its order.