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WIPO Arbitration and Mediation Center

 

ADMINISTRATIVE PANEL DECISION

Trak Kayaks Inc. v. Mark J. Abernethy

Case No. D2006-0960

 

1. The Parties

The Complainant is Trak Kayaks Inc., Calgary, Alberta, Canada, represented by Field LLP, Canada.

The Respondent is Mark J. Abernethy, Toronto, Ontario, Canada, represented by Gowling Lafleur Henderson LLP, Canada.

 

2. The Domain Names and Registrars

The disputed domain names are <trakkayaks.com>, which is registered, with Network Solutions, LLC and <trakkayak.com> which is registered with DreamHost.

 

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on July 29, 2006. On July 31, 2006, the Center transmitted by email to Network Solutions, LLC a request for registrar verification in connection with the domain names at issue.

On August 2, 2006, Network Solutions, LLC transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant of domain name <trakkayaks.com> and providing the contact details for the administrative, billing, and technical contact. In the said email, Network Solutions, LLC informed the Centre that “[it is] not the registrar for trakkayak.com. (Current Registrar: NEW DREAM NETWORK, LLC)Dreamhost”.

On August 25, 2006, DreamHost transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant of domain name <trakkayak.com> 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 August 25, 2006. In accordance with the Rules, paragraph 5(a), the due date for the Response was September 14, 2006.

The Response was, however, filed with the Center on August 15, 2006. On August 16, 2006, the Center informed the parties by email that the “administrative proceeding […] has not been formally commenced. The formal due date for the filing of a Response will be communicated to both parties through a “Notification of Complaint and Commencement of Administrative Proceeding”.

On August 18, 2006, the Center wrote to the parties and stated that “the Respondent will be provided with an opportunity to file a formal response to the Notification of Complaint. [The Center] kindly ask[s] that following notification, the Respondent advise the Center if the Response filed on August 15, 2006, is to be considered its formal response or if it will be replacing that submission with a new response.”

By email dated August 24, 2006, transmitted to the Center and the Complainant, the Respondent replied to the Center’s email of August 18, 2006 and stated that “the Response that was previously submitted on August 15, 2006 will constitute the Respondent’s formal response.” By email dated August 31, 2006, transmitted to the parties, the Center informed the parties that “in view of the respondent’s confirmation that the pre-commencement response constitutes their formal response the Center will proceed to appoint a panel in this matter.”

On September 6, 2006, the Complainant transmitted by email to the Center its reply to the Respondent’s Response. The Respondent objected to the filing of the Complainant’s Response by an email transmitted to the Center and the Complainant on August 24, 2006, and by an email transmitted to the Center on September 13, 2006. In the latter email, the Respondent stated that the “reply evidence contains a number of unsubstantiated allegations and raises issues that should properly have been contained in the Applicant’s initial Complaint. Therefore, the Respondent respectfully submits that this reply should not be considered by the Panel as it is prejudicial to the Respondent.”

The Center appointed Thomas Webster as the sole panelist in this matter on September 13, 2006. 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.

On September 22, 2006, the Panel requested Annex I to the Complaint which was not in the electronic or hard copy file. On September 27, 2006, the Complainant furnished a copy of Annex I.

 

4. Factual Background

The Complainant is in the business of designing, manufacturing, marketing and distributing kayaks. The Complainant is a Saskatchewan corporation. The parties disagree as to the date on which it was incorporated. However, they appear to agree that on or about July 13, 2004, the Complainant was registered to conduct business in Alberta under the name TRAK Kayaks Inc.

The Respondent is the son of a former director and shareholder of the Complainant.

On or about April 22, 2005, the Complainant engaged the services of the Respondent pursuant to a consulting agreement (the “Agreement”).

The Agreement was terminated and the parties have been in a dispute since.

On August 30, 2005, the Complainant filed in the United States of America for registration of the word mark “TRAK” and filed for registration of the same word mark in Canada on February 28, 2006. Later, on May 3, 2006, the Complainant filed in the United States of America and in Canada on May 12, 2006, for registration of the same design mark “TRAK KAYAKS.”

 

5. Parties’ Contentions

A. Complainant

The Complainant claims that “[s]ince about July 1999, first as a trade name, and then as an unregistered trademark, the Complainant has established rights and recognition in the words “TRAK KAYAKS” by using those words in conjunction with its Business.” The Complainant also claims that “629882 Saskatchewan Ltd. has continued operating as “TRAK Kayaks” since 2001.”

The Complainant submits that “the domain name trakkayaks.com was registered by the Respondent on April 29, 2002, three years after [the Complainant] had commenced business under the trade name “TRAK KAYAKS”. At that time, the Respondent had no interest, right, title or reason to register any intellectual property related to “TRAK KAYAKS,” other than as a courtesy to his father, a founder of the Complainant.”

Further, the Complainant states that “[t]he Respondent was not a founder, director, voting shareholder or stakeholder of the Complainant at that time or at any time thereafter.”

The Complainant claims that the Respondent furnished to the Complainant an invoice dated April 14, 2004, for the registration of the Domain Names on behalf of the Complainant. The Complainant says it paid the invoice on July 22, 2004.

On or about April 22, 2005, the Complainant and the Respondent entered into the Agreement, whereby the Respondent was engaged to “perform the services of […] web design, and to implement the Complainant’s website.” Pursuant to this agreement, “[i]n or about June 2005, the Respondent designed and launched the Complainant’s website, www.trakkayaks.com.”

On January 27, 2006, the Complainant claims that “[t]he Respondent terminated his relationship with the Complainant […]. Soon thereafter, the Complainant discovered that the Respondent had actually registered the ownership of the domain name: <trakkayaks.com> […] in his own name, rather than the Complainant’s name. Furthermore, the Complainant discovered that the Respondent had registered the domain name <trakkayak.com> in his own name also in previous years. It was […] always the Complainant’s understanding that the Respondent registered that domain name for the Complainant as a courtesy to his father.”

The following day, on January 28, 2006, the Complainant registered the domain name <trakkayaks.net> in its own name.

On February 13, 2006, the Complainant wrote to the Respondent and claimed that the Respondent had “highjacked” the Domain Names, that the Complainant had paid for the registration of the Domain Names, that only the Complainant had used and had use for the Domain Names and requested the Respondent to voluntarily transfer the Domain Names.

On February 21, 2006, counsel for the Respondent replied to the Complainant’s letter with a “without prejudice” letter (Annex “F” to the Complaint). The Respondent did not object to the admissibility of this letter in these proceedings.

The Complainant claims that the Domain Names are identical and confusingly similar to the Complainant’s mark, namely “TRAK KAYAKS” as used in connection with kayaks and kayak parts, and “are also similar and confusing with the Complainant’s domain name trakkayaks.net”.

The Complainant also claims that the Respondent has no rights or legitimate interests in respect of the domain names for the following reasons:

- “The Respondent has not made prior use of the trade-mark “TRAK KAYAKS” in association with kayaks, or respective parts and accessories, nor does the Respondent have any reason to make use of the Complainant’s trade-marks or the Domain Names.”

- “The Respondent does not and has not, at any time designed, produced, manufactured, sold and/or does not make available for sale at the web pages hosted at the Domain Names […] any item or product associated with kayaks.”

- “The Respondent […] has not ever been known by the Domain Names, and the Respondent has acquired no corresponding or related trade-mark rights. The Respondent is not a part of the Complainant, other than having an independent contractor/consultant relationship with the Complainant for approximately nine months.”

- “At all times, the Respondent’s involvement with the Complainant’s trade-marks and other intellectual property, including the Domain Names was always for and on behalf of the Complainant.”

- “The Respondent is not making a legitimate non-commercial or fair use of the Domain Names [and] has every intention to misleadingly divert consumers, to tarnish the trade-marks at issue, and to tarnish the reputation of the Complainant.”

- “[…] the Respondent’s website at “trakkayaks.com” serves a very similar purpose to the Complainant’s website at trakkayaks.net. [T]he content of trakkayaks.com […] is and can be harmful to the Complainant’s business.”

- As the Respondent’s counsel admits to registering Domain Names “to assist [the Respondent’s] father” in its letter to the Complainant dated February 21, 2006, the Complainant considers that this confirms that the Respondent had no legitimate use or right to the Domain Names for himself. Further, “[i]t was always the Complainant and the Respondent’s intention that the Complainant own any and all intellectual property associated with the Business.”

The Complainant alleges that the Domain Names were registered and are being used in bad faith for the following reasons:

- “[T]he Respondent registered the Domain Names primarily to hold the Complainant’s website hostage for the purposes of selling, renting or otherwise transferring the Domain Names to the Complainant, a competitor of the Complainant, or a third party for valuable consideration in excess of the Respondent’s out-of-pocket costs directly related to the domain names.”

- “[T]he Respondent is clearly showing his intention and conduct in sabotaging a mode by which the Complainant interacts and communicates with its target market and stakeholders.”

- “[T]he Respondent registered the Domain Names in order to prevent the Complainant […] from reflecting the mark in a corresponding domain name, to interfere with and to sabotage the Complainant’s business activities, branding and trademarks.”

- “[T]he Respondent is intentionally creating a likelihood of confusion with the Complainant’s mark as an affiliation or relationship with the Respondent that does not exist.”

The Complainant relies upon WIPO Case No. D2005-0093 Alexander Hughes International v. Rick Fogle (the “Alexander Hughes case”). In that case, the Respondent was an independent contractor of the Complainant in Europe. Upon terminating his contract with the Complainant, the Respondent registered two “Alexander Hughes” domain names in the United States of America in competition with the Complainant, claiming the Complainant’s marks were not used or protected in the United States of America. The Respondent also requested from the Complainant a fee for transfer of the domain names in excess of the registration fee. The Panel held the Respondent had no rights or legitimate interest in the domain names, that they were registered and used in bad faith and should be transferred to the Complainant.

Accordingly, the Complainant requests that the Domain Names be transferred to the Complainant.

B. Respondent

The Respondent claims that he is a shareholder of the Complainant, and that he registered the domain name <trakkayaks.com> in 1999 with Network Solutions. At that time, the Respondent contends that the Complainant “was not operating under the name Trak Kayaks. Rather, the Complainant was registered to do business […] as 6629882 Saskatchewan Ltd [and] continued to operate as 6629882 Saskatchewan Ltd. until June 15, 2004, at which time the Complainant’s headquarters were moved from Saskatchewan to Alberta under the name KayArq.”

The Respondent contends that the Complainant changed its name from KayArq to Trak Kayaks on July 2, 2004. “However, it was not until 2006 that the Complainant began using the name Trak Kayaks in commercial use.” Further, “as of the date of filing this Response, the Complainant has not made any sales of its wares to the public.”

The Respondent also submits that he registered the domain name <trakkayaks.com> “a number of years prior to his involvement with the Complainant to assist his father [who was] the Complainant’s co-founder and shareholder.”

The Respondent considers that, as the domain name <trakkayaks.com> was registered prior to the registration of the Complainant’s corporate name of Trak Kayaks Inc. in July 2004, its registration prevails in time. In this regard, the Respondent considers that “the Complainant […] is relying on its after-acquired trade-mark rights and recently filed trade-mark applications to interfere with the Respondent’s rights as a domain name holder.”

With respect to the Complainant’s marks applications in the United States of America and Canada, the Respondent notes that “the Complainant has not filed any applications for the word mark TRAK KAYAKS.”

The Respondent denies that he is in competition with the Complainant. He says that he uses the domain name <trakkayaks.com> “as a weblog for the benefit of Trak shareholders in order to ensure that management is being held accountable to existing shareholders. [T]he weblog is not intended to publish any information about Trak’s wares or services, nor is the weblog intended to misrepresent or denigrate the wares and services provided by the Complainant.”

The Respondent states he commenced constructing the weblog in February 2006, and that the weblog was launched after April 24, 2006.

The Respondent claims that “[i]n January 2006, the Respondent designed a website for the Complainant which he published on the trakkayaks.com domain.” The Respondent denies that it was a term of the Agreement to register, nor did the Complainant request him to register the domain name <trakkayaks.com>.

The Respondent also considers its use of the <trakkayaks.com> domain name as legitimate, and “has no intention of diverting consumers or tarnishing the Complainant’s trade-marks.”

The Respondent denies registering and using the Domain Names in bad faith for the following reasons:

- “The Respondent did not register the domain names for the purpose of selling, renting or otherwise transferring the domain name registrations to the Complainant, or to a competitor, for valuable consideration.”

- “[T]he Respondent and Complainant are not competitors and the domain names were not registered by the Respondent to disrupt the Complainant’s business [or to create] a likelihood of confusion with the Complainant’s mark.”

-The Respondent relies on John Ode d/ba ODE and ODE –Optimum Digital Enterprises v. Intership Limited, WIPO Case No. D2001-0074; and Digital Vision Ltd. v. Advanced Chemill Systems, WIPO Case No. D2001-0827 to support his claim of good faith and legitimate use by registering the <trakkayaks.com> domain name prior to the existence or ‘establishment’ of the Complainant’s trademark.

The Respondent submits that the facts of this matter are distinguishable to the Alexander Hughes case. The Respondent argues that, unlike in the Alexander Hughes case, the Respondent is not, and has not been in competition with the Complainant, nor did he register the Domain Names to be in competition.

 

6. Discussion and Findings

Under paragraph 10(b) of the Rules,

“In all cases, the Panel shall ensure that the Parties are treated with equality and that each Party is given a fair opportunity to present its case.”

Under paragraph 10(d) of the Rules,

“The Panel shall determine the admissibility, relevance, materiality and weight of the evidence.”

Under Paragraph 15(a) of the Rules,

“A Panel shall decide a complaint on the basis of the statements and documents submitted and in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable.”

A. Supplementary filing

On September 6, 2006, without being requested by the Panel (which had not yet been constituted) or the Center, the Complainant filed its “Reply” to the Respondent’s Response. The Respondent objected to the filing of the Reply, claiming the Rules do not permit such a filing.

The Rules do not expressly provide for the filing of supplementary documents. In accordance with paragraphs 10(b), 10(d) and 15(a) of the Rules, the Panel is to determine the dispute based on the documents submitted before it, determine the admissibility of those documents and afford equal treatment to the parties.

There are cases in which the Panel has nonetheless considered the filing of additional documents for specific purposes (see Metropolitan Life Insurance Company v. HLP General Partners Inc., WIPO Case No. D2005-1323).

As set out below, the submissions of the parties raise factual inconsistencies. Insofar as the Reply is able to assist in ascertaining, or clarifying the factual matrix of this case, the Panel will consider and make reference to the Reply. Otherwise, the Reply does not raise new material issues of fact or law. Accordingly, it will not be considered to have any persuasive value on the Panel.

B. Issues for consideration

Pursuant to paragraph 4(a) of the Policy, in order for a Panel to divest the Respondent of the Domain Names, the Complainant must satisfy each of the following elements:

(i) the Domain Names are identical or confusingly similar to a trademark or service mark in which the Complainant has rights; and

(ii) the Respondent has no rights or legitimate interests in respect of the Domain Names; and

(iii) the Domain Names have been registered and are being used in bad faith.

In order to consider the above, it is necessary to determine whether the Complainant does have rights in a trademark or service mark.

Whether the Complainant has a Trademark or Service Mark

The Complainant filed for the “Trak” trademark in the United States on August 30, 2005 and Canada February 28, 2006. The Complainant filed for the “Trak Kayaks” trademark in the United States on May 3, 2006 and Canada on May 12, 2006. That is over five years after the Respondent registered the domain name <trakkayaks.com>.

In the present case, the parties do not appear to agree on when the Complainant was incorporated and when it began to use the name “Trak Kayaks”. Annex “J” to the Complainant’s Reply is a company search from the Alberta companies registry dated August 3, 2004. That search states that the Complainant was formerly known as KYARQ Ltd and changed its name to TRAK KAYAKS Inc. on July 13, 2004.

The Complainant asserts a common law trademark right and that this right predates its registered trademarks. The burden of proof therefore lies on the Complainant to demonstrate that the mark has become a distinctive identifier associated with the Complainant or its goods and services. This includes the length and amount of sales under the mark, the nature and extent of advertising, consumer surveys and media recognition; that is, the Complainant is required to provide evidence that its product is known in the public domain.

The Complainant has failed to meet this burden of proof. To establish a common law trademark, one expects to see marketing and sales over a period of several years that establish the importance of the trademark and associate it with the holder (see WIPO Case No. D2005-0472 Hexagon AB, Hexagon Metrology AB, Hexagon Holdings, Inc., Hexagon Metrology GmbH, Hexagon Metrology Nordic AB, Hexagon Metrology SpA, Brown & Sharpe, Inc., C.E. Johansson Ltd., Sheffield Measurement, Inc., Romer, Inc., Wilcox Associates, Inc. v. Xspect Solutions Inc.; Pet Warehouse v. Pets.com, WIPO Case No. D2000-0105; Sealite Pty Limited v. Carmanah Technologies, Inc. WIPO Case No. D2003-0277; Successful Money Management Seminars, Inc. v. Direct Mail Express, NAF Case No. 96457; Business Architecture Group, Inc. v. Reflex Publishing, NAF Case No. 97051. The Complainant fails to meet that test and only cites limited marketing activities that occurred after the date on which it had registered the “Trak” mark in any event.

Therefore, the relevant trademarks are those that have been registered and not the common law trademark asserted by the Complainant.

It is common ground that the Respondent registered at least one of the domain names over five years prior to the date on which the Complainant registered the “Trak” trademark and six years prior to the date on which the Complainant registered the “Trak Kayaks” trademark. For some panelists, if the domain name predates the trademark there can be no cybersquatting within the meaning of the Policy. Whether that is or should be the case, is not an issue that has to be decided in this case, as this Panel holds that the Complainant has failed to establish that the registration of the domain names was made in bad faith.

(i) Identical or Confusingly Similar and (ii) Rights or Legitimate Interests

Since the Complaint fails based on the issue of bad faith, the Panel does not have to address the issue of whether the domain names are identical or confusingly similar to the trademarks or whether the Respondent has any rights or legitimate interests in the domain names.

(iii) Registered and Used in Bad Faith

As evidenced in Annex “A” to the Response, the Respondent registered the domain name <trakkayaks.com> on or prior to November 1999. The date of registration of the <trakkayak.com> domain name is unclear, although the Complainant acknowledges that it was registered several years ago at page 6 of the Complaint.

The Complainant argues that, at all times, the Domain Names should have been registered in its name. Further, it claims that it paid for the registration of the <trakkayaks.com> domain name following the issuance of an invoice from the Respondent to the Complainant dated April 14, 2004 (Annex “I” to the Complaint). However, that document is unsigned and it is not clear to what use it was put or whether it was paid.

On a more general level, a Complainant has at the very least great difficulty showing bad faith with respect to the registration of a domain name when the registration pre-dated the registration of the trademark or service mark or the effective demonstrable creation of a common law trademark.

The Complainant points to several anomalies. The Respondent carried out services relating to a website for the Complainant pursuant to the Agreement. The Respondent’s father was active as a director and shareholder of the Complainant. Therefore, there may well have been some sort of understanding as to the intellectual property rights. Moreover, it is clear from this case that there is a serious dispute among what appear to have been former partners and that the dispute relating to the domain names is simply one facet of that dispute. In fact, the website is being used in connection with that dispute. However, the Policy was not designed to deal with issues of whether parties had breached their obligations under agreements or their obligations as directors. Those are issues to be decided by the courts which may well also decide, based on extensive evidence, who is entitled to various rights including the right to use the domain names in question.

As a result, the Complainant has failed to establish the Respondent’s bad faith within the meaning of the Rules and the Complaint fails.

 

7. Decision

For all the foregoing reasons, the Complaint is denied.

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Thomas Webster
Sole Panelist

Dated: October 6, 2006