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WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Escada International Inc. and Medical Quant USA, Inc. v. tuOmQidnAamZDNR9, A S, N/A, Audrius Seskanas

Case No. D2008-1885

1. The Parties

The Complainants are Escada International, Inc. and Medical Quant USA, Inc. (doing business as Multi Radiance Medical, Inc.) both of Ohio, United States of America, represented by Rankin, Hill, Porter & Clark LLP, of the United States.

The Respondent is tuOmQidnAamZDNR9, A S, N/A, Audrius Seskanas of London, United Kingdom of Great Britain and Northern Ireland, and Panevezys, Lithuania.

2. The Domain Names and Registrars

The disputed domain names <terraquant.com> and <terraquant.org> are both registered with Tucows Inc.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on December 9, 2008 in hardcopy only. On December 9, 2008, the Center transmitted by email to Tucows Inc. a request for registrar verification in connection with the disputed domain names. On December 9, 2008, Tucows Inc. transmitted by email to the Center its verification response disclosing registrant and contact information for the disputed domain names which differed from the named Respondent Audrius Seskanas and contact information in the Complaint. The Center sent an email communication to the Complainants on December 16, 2008, providing the registrant and contact information disclosed by the Registrar, and inviting the Complainants to submit an amendment to the Complaint. The Center in that email communication also requested the Complainants to submit an electronic copy of the Complaint as required by paragraph 3(b) of the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”). The Complainants submitted the electronic copy of the Complaint on December 16, 2008 and further filed an amendment to the Complaint on December 17, 2008. 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” or “UDRP”), 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 19, 2008. In accordance with the Rules, paragraph 5(a), the due date for Response was January 8, 2009. The Response was filed with the Center on January 8, 2009.

The Center appointed John Swinson as the sole panelist in this matter on January 16, 2009. 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. Supplemental Filings

The Complainants submitted a Reply to the Respondent’s Response on January 21, 2009.

On January 29, 2009, the Panel received an email from the Respondent requesting the opportunity to submit a Sur-Reply to the Complainant’s Reply.

On February 2, 2009, the Center issued Administrative Panel Order No. 1, informing both parties that the Respondent could submit a Sur-Reply by February 7, 2009, and that the due date for the Panel’s decision was extended to February 16, 2009.

The Respondent submitted a Sur Reply on February 9, 2009. The Panel decided to accept the Respondent’s Sur-Reply despite being two days late so that the Respondent could have an opportunity to respond to the serious accusation that it forged correspondence from Medical Quant Ltd’s.

5. Correspondence From Third Parties

The Center received an email from a third party, Konstantin Weber, on January 24, 2009, from the email address “info@quantta.de”. On January 27, 2009, the Center asked the third party to explain their relationship to the Respondent and explain the legitimacy of their submission to the current proceedings. Konstantin Weber responded to this request on January 27, 2009. The Panel found that the evidence provided by the Parties was sufficient to make a decision and therefore did not take into account the information provided by the third party.

6. Factual Background

The Complainants distribute medical products known as TerraQuant. The TerraQuant products are manufactured by an Israeli company, Medical Quant Ltd and are for laser therapy for pain relief. Medical Quant Ltd is not a party to this dispute.

The Complainant Escada International Inc. owns a United States trademark for the word TERRAQUANT (registration number 3,183,028) and a United States trademark for TERRAQUANT in logo form (registration number 3,034,678). The first use date for both of these trademarks is stated to be January 1, 2000. The Complainant Escada International Inc. also owns a trademark for TERRAQUANT in the United Kingdom (registration number 2,465,905) which was registered on September 4, 2007.

The Respondent distributes Medical Quant Ltd’s TerraQuant products in the United Kingdom via a website store at the dispute domain names.

7. Parties’ Contentions

A. Complainants

The Complainants contend that:

The disputed domain names are identical or confusingly similar to the Complainants’ TERRAQUANT trade marks.

The disputed domain names, but for the addition of the “.org” and “.com”, are identical to the Complainants’ TERRAQUANT trademarks. The disputed domain names are identical to the Complainants’ TERRAQUANT trademarks in appearance, spelling, pronunciation, letters used and sequence of letters.

The Respondent has no rights or legitimate interests in respect of the disputed domain names.

The Respondent has no rights or legitimate interests in the disputed domain names. There is no evidence that the Respondent is using, or undertaking any demonstratable preparations to use, either of the disputed domain names with a bona fide offering of goods or services, prior to the first use date by the Complainants which is January 1, 2000.

One of the Complainants’ website “www.multiradiance.com” lists the family of products available from the Complainant, Multi Radiance Medical, Inc. under the TERRAQUANT trademark which include Terraquant Pro, Terraquant LS50, Terraquant LaserStim, and Terraquant Elite. The disputed domain name <terraquant.org> offers for sale an essentially identical product under the name TerraQuant MQ2000 PRO v5. The Complainants have never consented to or authorized the use of their trademark TERRAQUANT by the Respondent.

The Respondent directly copied from the Complainants’ website. The customer testimonials provided on the disputed domain name <terraquant.org> are the exact same testimonials that were taken from the Complainant’s website pages.

The Respondent is not authorized to promote, advertise, offer to sell, sell or engage in any commercial activity involving the products designated under the TERRAQUANT trademark. The Complainant Escada, through its affiliate company Medical Quant USA, Inc., is an exclusive representative, importer and distributor of the TerraQuant products.

The Complainants wrote to Medical Quant Ltd to enquire if the Respondent was an authorized distributor of TerraQuant products. The Complainants exhibited two letters from Medical Quant Ltd dated January 20, 2009, stating that the Respondent was not an authorized distributor of their TerraQuant Laser product or any other of their products.

The disputed domain names were registered and are being used in bad faith.

The Complainants have been commercializing products in association with the mark TERRAQUANT since at least as early as January 1, 2000. That was several years prior to the registration date of the disputed domain name <terraquant.com> in 2003, and over seven years prior to the registration date of the disputed domain name <terraquant.org>.

It was only after the Complainants expended considerable time, effort and financial resources into developing their product line and TERRAQUANT trademark that the Respondent decided to enter the same market, sell essentially the same products, under the Complainant’s TERRAQUANT trademark, and use the disputed domain names which contain the Complainant’s TERRAQUANT trademark.

In April 2007, the Complainants contacted the Respondent to request that the Respondent cease marketing and sales activities related to the TerraQuant product line. No reply was ever received.

The Respondent is intentionally attracting, for commercial gain, Internet users to the disputed domain names, by creating a likelihood of confusion with the Complainants’ TERRAQUANT trademark as to source, sponsorship, affiliation and/or endorsement of the Respondent’s website and products.

The apparently deceptive and unintelligible information provided for the identity of the registrant of the disputed domain name, such as “tuOmQidnAamZDNR9” and “AS” and “N/A” is further evidence of the bad faith use of the disputed domain names by the Respondent.

The Respondent attempted to sell the disputed domain name <terraquant.org> for USD9,900 which far exceeds his out of pocket expenses for registering and maintaining the disputed domain name.

B. Respondent

The Respondent contends that:

The Respondent does have rights and legitimate interests in respect of the disputed domain names.

The TerraQuant medical products are manufactured by Medical Quant Ltd, an Israeli company. Both the Complainants and the Respondent are authorized distributors of Medical Quant Ltd’s TerraQuant products.

The Respondent is legitimately using the TERRAQUANT name to advertise Medical Quant Ltd’s TerraQuant products. The Respondent acquires the TerraQuant products from MEDITEC, a German company who is the official importer of the TerraQuant products into the European Union. The Respondent has been authorized by MEDITEC to distribute the TerraQuant products in the United Kingdom. Medical Quant Ltd authorizes all resellers to use the TERRAQUANT name for marketing and resale purposes.

The present case should be decided, not before the Center, but under trademark rules. The whole claim made by the Complainants is based under their claimed rights under the trademark laws, but, strangely enough, the Complainant decided to ask the Panel to cancel the domain names instead of claiming their rights under trademark laws.

The disputed domain names were not registered and are not being used in bad faith.

The Respondent attempted to sell the disputed domain name <terraquant.org> so that the Respondent could exit the business and concentrate on other commercial pursuits. The Respondent offered to sell the disputed domain name for more than his out of pocket costs because by selling the disputed domain name he was also selling his business. The Respondent later changed his mind and revoked his offer of sale. He decided to purchase <terraquant.com> to increase the visibility of his business and acquire new customers.

Both of the disputed domain names were registered before the Complainants filed their application for their TERRAQUANT trademark in the United Kingdom.

The Complainants are known for registering TERRAQUANT trademarks in various countries and then trying to push authorized distributors of the TerraQuant products out of the market. The Respondent exhibited a letter from Medical Quant Ltd dated January 8, 2009. The letter stated that ESCADA International USA has been registering TERRAQUANT trademarks “in various countries including their own, and by using uncivilized methods attempting to take credit for this trademark”.

The Respondent did not attempt to conceal his identity. The Respondent clearly stated his true initials A.S. (Audrius Seskanas) and gave the correct address where he lived at the time of the registration ([…] London, SW19 1ED). The fact that the Respondent chose to conceal his identity does not mean that he was acting in bad faith. The Respondent took advantage of the “Who is” privacy service to avoid nuisances such as spam emails and unwanted phone calls.

The Complainants’ accusation that the Respondent forged communications from Medical Quant Ltd are completely unfounded.

The correspondence from Medical Quant Ltd received by the Complainant does not prove that the Respondent is not authorised to sell the TerraQuant products. The letter states that the Respondent has not been authorised by Medical Quant Ltd to sell the TerraQuant products. This is because the Respondent has been authorised by Meditec, the European Union importer of the TerraQuant products, to sell TerraQuant products in the United Kingdom. The email correspondence between the Respondent and Medical Quant Ltd evidences that Medical Quant Ltd is aware of and approves the Respondent’s activities.

8. Discussion and Findings

To succeed, the Complainants must demonstrate that all of the elements enumerated in paragraph 4(a) of the Policy have been satisfied:

(i) the disputed domain names are identical or confusingly similar to a trademark or service mark in which the Complainants have rights; and

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

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

The onus of proving these elements is on the Complainants.

A. Identical or Confusingly Similar

To prove this element, the Complainants must have rights in a trademark or service mark, and the disputed domain names must be identical or confusingly similar to the Complainants’ trademark or service mark.

The Complainants are the proprietors of three TERRAQUANT trademarks, two in the United States and one in the United Kingdom. The Complainants’ TERRAQUANT trademarks are outlined above in Section 6. The Panel is therefore satisfied that the Complainants have registered trademark rights in TERRAQUANT.

The disputed domain names completely incorporate the Complainants’ TERRAQUANT trademarks and merely add the “.org” and “.com” suffixes respectively. The addition of, for example the “.com” suffix does not impact the analysis of whether a disputed domain name is identical or confusingly similar to the disputed domain name (see Priority One Financial Services Inc. v. Michael Cronin, WIPO Case No. D2006-1499 and Laramar Group, L.L.C. v. XC2, WIPO Case No. D2006-0617).

The Respondent did not make any response to the Complainants’ submission that the disputed domain names are identical or confusingly similar to the Complainants’ TERRAQUANT trademarks.

The Panel therefore finds that, in the circumstances of this case, the disputed domain names are identical or confusingly similar to the Complainants’ TERRAQUANT trademarks. Consequently, the Panel finds that the requirement of paragraph 4(a)(i) of the Policy is satisfied.

B. Rights or Legitimate Interests

The Respondent is selling, in the United Kingdom, a product using TerraQuant branding that the Respondent acquires indirectly (via a German distributor) from the manufacturer in Israel, Medical Quant Ltd. Medical Quant Ltd has a registered trademark in the word TERRAQUANT (registration number 161670) which was registered in 2003 in Israel.

Medical Quant Ltd, the manufacturer of the TerraQuant products, is not a party to this dispute. Rather, the Complainants are North American distributors of Medical Quant Ltd. The Complainants have registered relevant trademarks in the United States, where they operate their business.

The Respondent is selling the TerraQuant products in the United Kingdom, and registered at least one of the disputed domain names, prior to the Complainants applying for a trademark registration in the United Kingdom. There is no disagreement between the parties that the Respondent is selling genuine TerraQuant products that were manufactured by Medical Quant Ltd.

There is no evidence that the Complainants sell TerraQuant products in the United Kingdom.

The question that has to be determined by the Panel is: does the Respondent, a distributor or reseller of the TerraQuant products in the United Kingdom, have rights or legitimate interest in the disputed domain names, when the Complainants, other distributors of the TerraQuant products, have a United Kingdom registered trademark for the word TERRAQUANT?

A large part of the parties’ submissions concentrated on whether the Respondent was authorized to distribute the TerraQuant products, and by whom. Prior decisions have held that depending on other facts of record, whether a respondent is authorized by the trademark owner to distribute the trademark products is not necessarily a deciding consideration. According to prior decisions, a respondent who is distributing or reselling another’s product may have a legitimate interest in using that party’s trademark in a domain name as long as:

(i) they are actually offering the goods or services at issue;

(ii) they are using the domain name to sell only the trademark goods;

(iii) the website accurately discloses the respondent’s relationship to the trademark owner; and

(iv) they are not trying to corner the market in all relevant domain names.

See Oki Data Americas, Inc. v. ASD, Inc., WIPO Case No. D2001-0903 and ITT Manufacturing Enterprises Inc., ITT Corporation v. Douglas Nicoll, Differential Pressure Instruments Inc, WIPO Case No. D2008-0936.

The Respondent’s activities satisfy all of the above requirements. The Respondent has provided sufficient evidence to the Panel to demonstrate that the Respondent uses the disputed domain names to sell genuine TerraQuant products made by Medical Quant Ltd to people in the United Kingdom. The Respondent only sells the TerraQuant products at the disputed domain names, and no other products. The Respondent discloses on its websites that the he is a distributor of the TerraQuant products for the manufacturer, Medical Quant, Ltd. Lastly, there is no evidence that the Respondent is trying to corner the market for all TerraQuant related domain names.

The Panel is therefore satisfied that the Respondent has rights and legitimate interests in the disputed domain names because he is making a bona fide offering of legitimate TerraQuant products to the public. Whilst the Complainant may have a registered trademark for the word TERRAQUANT, domain names are registered on a first come first served basis (see Paul Plumadore, James Tindell, River Road Antiques, Ltd v. William Kilgore, WIPO Case No. D2007-1922 and International Organization for Standardization ISO v. Sunrise Holdings, WIPO Case No. D2008-1782). Just because the Complainants have a registered trademark for the word TERRAQUANT does not necessarily prevent the Respondent, or anyone else, from registering a domain name that contains the word “TerraQuant”, as long as they have a right or legitimate interest in the disputed domain name and otherwise comply with the Policy.

On balance, the Panel finds that paragraph 4(a)(ii) of the Policy is not satisfied by the Complainants.

C. Registered and Used in Bad Faith

In light of the fact that the Panel has found the Complainant not to have satisfied the burden under paragraph 4(a)(ii) of the Policy, it is unnecessary to consider the submissions in relation to bad faith. However, the Panel wishes to make some observations on the Complainants’ submissions.

The Complainants have not put forth evidence of their use of the TERRAQUANT mark from their stated first use in commerce (2000) to Respondent’s registration of the domain names (2003 and 2007) thus the Panel has no evidence on which to base findings of bad faith registration. See WIPO Overview of WIPO Panel Views on Selected UDRP Questions paragraph 3.1. Nor is there any evidence of record that the Respondent targeted the Complainants when it registered the disputed domain names. See e.g., ExecuJet Holdings Ltd. v. Air Alpha America, Inc., WIPO Case No. D2002-0669.

The Complainants’ argued that the Respondent’s attempt to sell one of the disputed domain names is evidence bad faith. Pursuant to paragraph 4(b)(i) of the Policy, one of the ways in which bad faith can be demonstrated is if a respondent acquires a domain name with the intention of selling it to the complainant, or a competitor of the complainant, for substantially more than the respondent’s out of pocket costs. In this case, there is no evidence that the Respondent acquired the disputed domain names with the intention of selling them to the Complainants or a competitor of the Complainant. From the Complainants’ own evidence, the Respondent publicly advertised the disputed domain name for sale on Sedo’s Domain Marketplace. The Respondent, at the time, apparently wanted to exit the business of selling TerraQuant products.

The Complainants also submitted that the Respondent was infringing their TERRAQUANT trademark. The Complainant cannot use the Center’s process to enforce their trademark rights. As stated in Dr. Ing. h.c.F. Porsche AG v. Del Fabbro Laurent, WIPO Case No. D2004-0481, “the Policy was designed to prevent the extortionate behavior commonly known as cybersquatting. Particularly, the Policy was not designed to establish for the holder of a strong trademark a bar to entry of any online competitors or other online legitimate sellers. Whether the use of Complainant’s trademark on Respondent’s website constituted trademark infringement is not for the Panel to decide. If Complainant wishes to pursue that issue, other forums are available”. Perhaps equally importantly, as stated in Interactive Study Systems Inc. v. BFQ, WIPO Case No. D2008-0205, the above findings “turn on credibility of each party’s evidence. Without live testimony, cross-examination, and a record fully developed through discovery a panel under the Policy is ill-equipped to resolve such matters and, far more importantly, is granted no authority by the Policy []to do so.”

9. Decision

For all the foregoing reasons, the Complaint is denied.

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John Swinson
Sole Panelist

Dated: February 18, 2009