Storz & Bickel GmbH & Co. KG v. MSI Imports LLC, Adam Schoenfeld
Case No. D2009-1769
1. The Parties
The Complainant is Storz & Bickel GmbH & Co. KG of Tuttlingen, Germany, represented internally.
The Respondent is MSI Imports LLC, Adam Schoenfeld of Lacey, Washington, United States of America, New York, New York, United States of America, and Brooklyn, New York, United States of America, represented by Lewis & Hand, LLP, United States of America.
2. The Domain Names and Registrars
The 51 disputed domain names (hereinafter the “Disputed Domain Names”), which are set out in Annex A to this decision, are registered with GoDaddy.com, Inc., with the exception of <volcanovaporizer.com>, which is registered with Moniker Online Services, LLC.
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on December 23, 2009. On December 23, 2009, the Center transmitted by email to GoDaddy.com, Inc. and Moniker Online Services, LLC a request for registrar verification in connection with the Disputed Domain Names. On December 24, 2009, GoDaddy.com, Inc. transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details. On December 25, 2009, Moniker Online Services, LLC transmitted by email to the Center its verification response disclosing registrant and contact information for the disputed domain name <volcanovaporizer.com> which differed from the named Respondent and contact information in the Complaint. The Center sent an email communication to the Complainant on January 11, 2010 providing the registrant and contact information disclosed by the Registrar, and inviting the Complainant to submit an amendment to the Complaint. The Complainant filed an amendment to the Complaint on January 15, 2010. 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 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 January 18, 2010. In accordance with the Rules, paragraph 5(a), the due date for Response was February 7, 2010. The Response was filed with the Center on February 7, 2010.
The Center appointed Alistair Payne, Torsten Bettinger and Diane Cabell as panelists in this matter on February 26, 2010. The Panel finds that it was properly constituted. Each member of 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 is the owner of a business which distributes a product called the “Volcano Vaporizer”. The Respondent was until December 2009 its authorised distributor in the United States of America at which time the Complainant purported to terminate the distributorship agreement. The Respondent has subsequently commenced proceedings in the United States District Court for the Southern District of New York seeking a declaration that the Disputed Domain Names are validly owned by the Respondent and that their use does not dilute the Complainant's rights or constitute cyberpiracy.
5. Parties' Contentions
The Complainant submits that it has been assigned use of various registered trade marks incorporating the word mark VOLCANO by one of its owners and Chief Executive Officers, Mr. Markus Storz. These registrations include in particular German trade mark 30064537, Community trade mark 2823375, United States of America trade marks 3084430 and 3208036 and Canadian trade mark 691212. The Complainant's products have been sold in North America since 2002.
The Complainant further submits that the Disputed Domain Names are confusingly similar to its trade marks because they contain the Complainant's VOLCANO trade mark and contain additional generic terms such as “vaporizer” or “vape”, or “classic” or “digital”, the latter terms being a reference to the classic or digital vaporizers sold by the Complainant.
The Complainant says that the Respondent has no rights or legitimate interests in the Disputed Domain Names because although the Respondent used to be an authorized dealer of the Complainant's products, this agreement was terminated from December 21, 2009 and the Respondent is therefore no longer licensed or authorised to use the trade mark VOLCANO or to act on the Complainant's behalf. The Complainant says that the Respondent, without authority, still offers “Volcano Vaporizer” products on its websites at <thevolcanovaporizer.com> and <volcanovaporizersystem.com> to which most of the other Disputed Domain Names are re-directed but cannot understand where these products come from as it no longer ships products to the Respondent. In addition the Complainant says that the Respondent is using some of the Disputed Domain Names for monetized domain name parking sites to divert members of the public to targeted sites.
As far as registration in bad faith is concerned, the Complainant says that the Respondent failed to advise it during the term of the distributorship agreement between the Parties that it had registered the Disputed Domain Names and subsequently following termination failed to transfer or withdraw the Disputed Domain Names. The Complainant says that the Respondent is using the Disputed Domain Names in bad faith because its right to use them expired on December 21, 2009. In addition, by using some of the Disputed Domain Names for monetized domain name parking, the Respondent is trading on the fame and reputation of the “Volcano Vaporizer” and in doing so is confusing the relevant public.
The Respondent says that it has not submitted full argument in relation to the Complainant's submissions concerning the first element under the Policy because it says that this is unnecessary in circumstances, that this issue is to be determined in the pending United States District Court proceedings and in any event the issue of similarity is irrelevant because registration of the Disputed Domain Names was made in good faith and with the Complainant's acquiescence and consent in the course of acting as the Complainant's authorized distributor in the United States of America.
The Respondent submits that the Complainant has not met the burden of demonstrating that the Respondent had no rights or legitimate interests in registering the Disputed Domain Names. It says that it has acted in accordance with the principles set out in Oki Data Americas, Inc. v. ASD, Inc.,
WIPO Case No. D2001-0903 in acquiring and registering the Disputed Domain Names in the course of a fully sanctioned distribution relationship for the purposes of selling the Complainant's products on a website that contained a disclaimer of affiliation with the Complainant and overall with the Complainant's knowledge, acquiescence and consent. It further says that a few of the Disputed Domain Names were parked by its Registrar when it omitted to update the DNS for those domain names but this was unintentional on its part and it made no financial gain from this arrangement.
The most recently registered of the Disputed Domain Names were registered on 15 October 2009 at which time it had no idea that the Complainant was going to terminate the distributorship agreement and in spite of termination the Respondent was still receiving shipments of the Complainant's products in such quantities that it could not have been unaware that they were for distribution to third parties.
In relation to registration and use in bad faith the Respondent says that the Complainant was fully aware and consented to its registration of the Disputed Domain Names and therefore registration could not have been made in bad faith.
It submits that the Complainant suggested a number of domain names for the Respondent to register, including <volcanovaporizer.com>, and was fully aware that the Respondent was registering such domains as a part of its general strategy for marketing the VOLCANO products on the Internet. At least as early as November 2005, the Complainant was aware of the Respondent's registration and use of the <thevolcanovaporizer.com> domain name.
In 2008, the Respondent says that the Complainant immediately withdrew and terminated a UDRP complaint it had filed for the <volcanovaporizer.com> domain name, when informed that the registrant of the domain name was the Respondent. The Respondent had just purchased the domain name for more than USD 7,000 from one of the Complainant's terminated distributors having spent more than two years convincing that former distributor to sell the domain name in response to the Complainant's own suggestionthat the Respondent should try to buy the <volcanovaporizer.com> domain name in June 2005. When the Complainant and the Respondent were discussing plans to have the Respondent expand its distribution to outside of the U.S., the Complainant's management team in Oakland offered suggestions of possible domain names to register in connection with the Respondent's contemplated expansion. The Respondent says that in the five years preceding this dispute, not once did the Complainant request that any of these Disputed Domain Names be registered or re-registered in any name other than the Respondent's.
According to the Respondent, over the course of several years, the Complainant registered more than 200 domain names, many of which include the VOLCANO mark and other related keywords. It says that it is not credible to believe that the Complainant was not aware of the Disputed Domain Name registrations in the Respondent's name. On the contrary, the Respondent submits that this Panel should reasonably infer that, until the Complainant abruptly purported to terminate its distribution relationship with the Respondent, the Complainant was quite content to have the Respondent funding the cost of registering and acquiring the Disputed Domain Names in order to drive Internet traffic to the Respondent's websites and generate more sales for the Complainant.
Finally, the Respondent says that during the month of December 2009, after the purported notice of termination was delivered to the Respondent, the Complainant continued to accept payment from the Respondent and to fulfill invoices for VOLCANO merchandise totaling nearly USD 200,000. In fact, the Complainant was still shipping VOLCANO products to the Respondent even after the supposed termination date of December 21, 2009.
6. Discussion and Findings
A preliminary issue arises under paragraph 3(c) of the Rules in relation to the multiple filing of domain names which are not held by the same domain name owner. The issue arises in relation to <volvanovaporizer.com> which is owned not by the Respondent MSI Imports LLC, but by Mr. Adam Schoenfeld personally, whom the Complainant says is known to it as the owner and Chief Executive Officer of the Respondent MSI Imports LLC. Mr. Schoenfeld's position is confirmed by the Respondent in its Response and the Respondent MSI Imports LLC has not taken issue with the inclusion of these domain names within the Disputed Domain Names. The Panel therefore accepts that in view of Mr. Schoenfeld's position in and relationship with the Respondent that this domain name should be included within the Disputed Domain Names for the purposes of this Complaint and under paragraph 3(c) of the Rules.
A. Identical or Confusingly Similar
The Complainant has submitted that it has been assigned usage rights for various registered trade mark rights incorporating its VOLCANO trade mark and that the Disputed Domain Names are confusingly similar to these trade marks. It is not apparent to the Panel on what basis the marks have been assigned or licensed to the Complainant by Mr. Markus Storz, its Chief Executive Officer. The evidence of registrations indicates ownership by Mr. Storz and it would be usual for the Complainant to provide evidence of the basis on which it is entitled to use the trade marks.
However the Respondent has not disputed this issue and nor has it challenged the allegation of confusing similarity in relation to any of the Disputed Domain Names. It has not done so on the basis that this Complaint must necessarily fail in any event because the Respondent submits that it registered each of the Disputed Domain Names in good faith in the course of acting as the Complainant's authorised distributor. The Respondent further says that this dispute is therefore not concerned with cybersquatting and in fact involves a set of complex issues which go beyond the terms of the Policy and should be determined by the pending action in the United States District Court.
For the reasons set out below the Panel has considerable sympathy with the Respondent's submission. Even if the Panel proceeds on the presumption that the Complainant has demonstrated adequate trade mark rights and confusing similarity for the purposes of the first element of the Policy the Complaint must in the Panel's view nevertheless fail under the third element which effectively leaves matters to be determined in the pending United States District Court proceedings. For this reason the Panel sees no requirement to consider the first and second elements further and turns directly to the third element of the Policy.
B. Registered and Used in Bad Faith
It is a fundamental requirement under paragraph 4(a)(iii) of the Policy that the Disputed Domain Names must be registered and used in bad faith for the Complainant to succeed under this element.
In this case the Respondent has submitted and the Complainant has acknowledged that the Respondent acted for many years as the Complainant's authorised distributor in the United States of America. The Panel accepts that in the context of this relationship and based on the evidence presented by the Respondent and as outlined in the summary of the Respondent's case at paragraph 5(B) above, it is not credible to believe that the Complainant was not aware of the Respondent's activities in registering the Disputed Domain Names.
In the circumstances of a longstanding and profitable business relationship it appears to the Panel and the Panel infers that the Complainant must have known of the Respondent's activities. In relation to certain of the Disputed Domain Names it appears that the Complainant suggested that the Respondent attend to registration. As to another of the Disputed Domain Names, the Complainant ceased a UDRP proceeding when it found out that the Respondent was the registrant. Further it appears that the Parties worked together to identify possible cybersquatters.
The Complainant has not alleged that any particular domain name amongst the Disputed Domain Names was registered in bad faith but rather that the Respondent failed to advise it of its registration of the Disputed Domain Names and failed to cancel or transfer the Disputed Domain Names following termination of the distribution arrangement. It is indicative that nowhere does the Complainant categorically deny knowledge of the Disputed Domain Names and the Panel infers that the Complainant could not do so because it was in fact aware of and had acquiesced in the Respondent's registration of the Disputed Domain Names.
In similar cases and circumstances, previous panels have found that registration was not made in bad faith and accordingly that the complaint failed. In Fuji Heavy Industries Ltd. (Fuji Jukogyo Kabushiki Kaisha) v. Radacini Autotrading SRL,
WIPO Case No. DRO2007-0009, the respondent was an authorized dealer for the Subaru cars at the time of registration. The panel found that at the start of the parties' relationship the respondent was able to show a bona fide offering of goods and that this was compelling evidence of the respondent's good faith intentions, at least at the time of the registration of the disputed domain name such as to deny the complaint. Other panels have also denied complaints in circumstances where there was lack of evidence of bad faith registration, for example, Seoul Laser Dieboard System Co., Ltd. v. SDS USA, Inc., WIPO Case No. D2008-0306; Celebrity Signatures International, Inc. v. Hera's Incorporated Iris Linder,
WIPO Case No. D2002-0936; and Urbani Tartufi s.n.c. v. Rosario's Epicureo Ltd., WIPO Case No. D2003-0081.
Accordingly and for the reasons set out above, the Panel finds that in this case the Disputed Domain Names were not registered in bad faith and as the Complaint does not succeed under this element of the Policy, it must therefore fail overall.
For all the foregoing reasons, the Complaint is denied.
Alistair Payne Presiding Panelist
Torsten Bettinger Panelist
Diane Cabell Panelist
Dated: March 19, 2010
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