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WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Pearl Musical Instrument Company v. Noteworthy Musical Instruments LLC

Case No. D2007-1198

1. The Parties

The Complainant is Pearl Musical Instrument Company, Japan, represented by Akin, Gump, Strauss, Hauer & Feld, United States of America.

The Respondent is Noteworthy Musical Instruments LLC, of., San Antonio, Texas, United States of America, represented by Ronald J Shaw, United States of America.

2. The Domain Name and Registrar

The disputed domain name, <pearlflutes.com> (the “Domain Name”) is registered with GoDaddy.com, Inc. (the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on August 13, 2007. On August 16, 2007, the Center transmitted by email to the Registrar a request for registrar verification in connection with the Domain Name. On the same day, the Registrar 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 an amendment to the Complaint on August 17, 2007.

The Center verified that the Complaint together with the amendment 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 August 24, 2007. In accordance with the Rules, paragraph 5(a), the due date for the Response was September 13, 2007. The Response was filed with the Center on September 10, 2007.

The Center appointed Tony Willoughby as the sole panelist in this matter on September 25, 2007. 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 July 27, 2007, the Complainant launched civil proceedings before a Texas Court against ten defendants of which the Respondent is one. The action concerns the break up of a commercial relationship between the Complainant and another of the defendants, Orpheus Music Inc. (“OMI”). The Respondent appears in the action as being a company associated with OMI and as the owner of the Domain Name, which is connected to a website to which the Complainant objects, and which itself is said to infringe the Complainant’s rights. While the papers before the Panel do not expressly call for an order that the Respondent transfers the Domain Name to the Complainant, it seems to the Panel to be a likely result if the Complainant wins the action, which is for breach of contract and a miscellany of torts and statutory violations.

The Respondent has asked that the Panel terminate this administrative proceeding on the basis that the lawsuit was commenced in advance of this proceeding and covers the same ground.

Paragraph 18(a) of the Rules reads:

“(a) In the event of any legal proceedings initiated prior to or during an administrative proceeding in respect of a domain-name dispute that is the subject of the complaint, the Panel shall have the discretion to decide whether to suspend or terminate the administrative proceeding, or to proceed to a decision.”

While, as indicated, it appears to the Panel that transfer of the Domain Name is a possible result in both sets of proceedings, the civil action concerns a large number of issues irrelevant to these proceedings and there seems no reason why the Panel should not proceed to a decision under the Policy on the facts before it. The criteria underlining the operation of the Policy are very different from any of the causes of action the subject of the civil action; moreover, nothing that the Panel does can in any way impinge upon the Court and since both parties are before the Court in the civil action, the Court is well able to ‘rectify’ the effect of this decision if it so wishes. The Panel declines the Respondent’s request.

On September 20, 2007, the Complainant sought to put before the Panel a further submission. However, since the Panel is in any event proposing to find in favour of the Complainant on the papers before him, the Panel does not feel the need to admit the further submission into the proceedings and declines to do so.

4. Factual Background

The Complainant is a well-known manufacturer of musical instruments, which it markets under and by reference to the trademark, PEARL. The Complainant¹ is the proprietor of US trademark registration No. 1076376 dated November 1, 1977 (filing date October 22, 1976) for the word “Pearl” in a stylized form in class 15 for a variety of musical instruments (including flutes).

From about 1990 the Complainant’s PEARL flutes and flute parts were distributed in the United States of America exclusively by OMI.

On July 2, 1997, OMI registered the Domain Name, which OMI used to promote sales of the Complainant’s PEARL flutes and flute parts.

On July 8, 2004, the Complainant registered the domain name, <pearlflute.com>. By agreement between the Complainant and OMI visitors to OMI’s website were given a link, should they wish to use it, to the Complainant’s website at “www.pearlflute.com”.

The relationship between the Complainant and OMI deteriorated and in May 2007 the Complainant terminated the distributorship agreement with OMI.

Shortly thereafter OMI sold the Domain Name to the Respondent. The Respondent uses the Domain Name to link to a site at “www.orpheusmusicalinstruments.com” operated by Orpheus Musical Instruments, a business with an address adjacent to that of the Respondent.

The Respondent is the proprietor of the <orpheusmusicalinstruments.com> domain name.

5. Parties’ Contentions

A. Complainant

The Complainant contends that the Domain Name is confusingly similar to its PEARL registered trademark.

The Complainant contends that the Respondent has no rights or legitimate interests in respect of the Domain Name. The Complainant contends that the Respondent acquired the Domain Name from an associated company, OMI, with a view to linking it to a website operated by another associated business, Orpheus Musical Instruments, dealing in musical instruments of the Complainant’s competitors. The Complainant contends that this is not use of the Domain Name for a bona fide offering of goods. The Complainant further contends that neither of the other examples of rights or legitimate interests set out in paragraph 4(c) of the Policy is applicable.

The Complainant further contends that the Domain Name was registered and is being used in bad faith. It asserts that the acquisition of the Domain Name by the Respondent from the Complainant’s erstwhile distributor (an associated company of the Respondent) constitutes a new registration of the Domain Name for the purposes of paragraph 4(a)(iii) of the Policy. The Complainant contends that the Respondent acquired the Domain Name from OMI with a view to continuing to trade with the benefit of the Complainant’s trademark and notwithstanding the termination of OMI’s distributorship agreement.

The Complainant contends that the Respondent is using the Domain Name in bad faith to divert for commercial gain Internet users interested in the Complainant’s products to the trading site of the Respondent’s associated business, selling musical instruments of the Complainant’s competitors. The Complainant contends that the Domain Name is likely to lead Internet users to believe that the Respondent’s business and/or the musical instruments there promoted are in some way associated with the Complainant.

B. Respondent

The Respondent does not dispute that the Domain Name is confusingly similar to the Complainant’s trademark.

The Respondent asserts that it has rights or legitimate interests in respect of the Domain Name by virtue of the fact that prior to having any notice of the Complaint it had been using the Domain Name in connection with a bona fide offering of goods or services.

The Respondent asserts on information provided to it by OMI that the Domain Name was used exclusively by OMI, not the Complainant, for an extensive period of 17 [sic] years as a result of which the Domain Name and the site to which it was connected became associated in the minds of Internet users exclusively with OMI, not the Complainant.

The Respondent objects to the Complainant’s characterization of OMI, the Respondent and Orpheus Musical Instruments as being alter egos of each other. The Respondent asserts that they are distinct corporate entities.

The Respondent contends that none of the paragraphs of paragraph 4(b) of the Policy is applicable. It contends that it is using the Domain Name in precisely the same way that OMI had been using the Domain Name for the previous17 years, a use to which the Complainant took no objection. The Respondent claims that it has fair defences of laches, estoppel and acquiescence.

Finally, the Respondent accuses the Complainant of reverse domain name hijacking on the basis that the Complainant’s sole objective in launching this administrative proceeding was to harass the Respondent.

6. Discussion and Findings

A. General

According to paragraph 4(a) of the Policy, for this Complaint to succeed in relation to the Domain Name, the Complainant must prove that:

(i) The Domain Name is 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 Name; and

(iii) The Domain Name has been registered in bad faith and is being used in bad faith.

If the Complaint fails, the Panel has to have regard to paragraph 15(e) of the Rules and in particular the following sentence namely:

“If after considering the submissions the Panel finds that the Complaint was brought in bad faith, for example in an attempt at reverse domain name hijacking or was brought primarily to harass the domain name holder, the Panel shall declare in its Decision that the Complaint was brought in bad faith and constitutes an abuse of the Administrative Proceeding.”

Reverse Domain Name Hijacking is defined in paragraph 1 of the Rules as meaning “using the Policy in bad faith to attempt to deprive a registered domain name holder of a domain name.”

B. Identical or Confusingly Similar

There is no dispute between the parties that the Domain Name is confusingly similar to a trademark in which the Complainant has rights and the Panel so finds.

C. Rights or Legitimate Interests

The Complainant accepts that the Respondent is using the Domain Name for a commercial offering of goods, but denies that it can be characterized as a bona fide offering. The Complainant contends that Internet users visiting the Respondent’s site will be expecting to find something concerning the Complainant’s musical instruments, but will be deceived, because they will find themselves at the Respondent’s site, which deals in musical instruments competing with the Complainant’s musical instruments.

The Respondent does not answer this point, save to say that because the Respondent’s predecessor had used the Domain Name for the previous 17² years with the permission of the Complainant and because the Respondent was using it in precisely the same way, the Complainant cannot complain. The Respondent says: “The domain name is used fairly and in good faith only to describe the goods or services being offered for sale to the general public first by OMI and now by Orpheus”.

The Respondent does not mention a significant difference between OMI’s registration and use of the Domain Name and the Respondent’s registration and use of the Domain Name. When OMI registered the Domain Name it was an authorized distributor of the Complainant. It registered and then used the Domain Name with the permission of the Complainant and to promote the Complainant’s PEARL branded musical instruments. The Respondent is clearly closely associated with the previous registrant and when it acquired the Domain Name from the previous registrant, it knew that the previous registrant’s authorized distributorship had been terminated by the Complainant. Furthermore, the Domain Name is connected to a website, which deals exclusively, insofar as the Panel can determine, in musical instruments having nothing to do with the Complainant.

The Panel can see no justification for the Respondent’s adoption of the Domain Name for a website promoting the goods of the Complainant’s competitors.

The Panel finds that the Respondent has no rights or legitimate interests in respect of the Domain Name.

D. Registered and Used in Bad Faith

Using an admittedly confusing domain name for commercial gain for the purpose of promoting the goods of the trademark owner’s competitors is a very weak starting position.

PEARL is a well-known brand in the field of musical instruments. It seems inevitable to the Panel that someone seeing the Domain Name will assume that the website to which it is connected contains information on PEARL flutes, the Complainant’s flutes. Prior to termination of OMI’s distributorship agreement that is precisely what a visitor to the website would have found.

Now in the hands of the Respondent, who is not licensed by the Complainant to use the Complainant’s trademark, the Domain Name will be deceptive. In the view of the Panel, a significant proportion of Internet users visiting the Respondent’s website are likely to be surprised at finding nothing on PEARL flutes or any other instruments of the Complainant, simply competitors’ instruments.

By this deception the Respondent hopes to sell its own musical instruments to visitors looking for the Complainant’s instruments. This was the sole apparent reason for the Respondent’s acquisition of the Domain Name.

The Panel finds that this constitutes abusive registration and use within the meaning of paragraph 4(b)(iv) of the Policy.

The Panel finds that the Domain Name was registered and is being used in bad faith. Thus, the reverse domain name hijacking allegation is misconceived.

7. Decision

For all the foregoing reasons, in accordance with Paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the Domain Name, <pearlflutes.com>, be transferred to the Complainant.

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Tony Willoughby
Sole Panelist

Dated: October 9, 2007

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¹ The registrant is identified on page 1 of Annex 10 as “Pearl Musical Instrument Manufacturing Company Limited”, but no issue is raised in relation to this discrepancy and the Panel assumes that either the registrant is an associated company of the Complainant or that the name has changed. The Panel notes that from the outset the Respondent’s counsel was prepared to accept (subject to verification) that the Complainant owned the trademark.

² The Domain Name was in fact registered 10 years ago