WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Gymworld Inc. v. Vanbelle Law

Case No. DNL2017-0035

1. The Parties

Complainant is Gymworld Inc. of Seoul, Republic of Korea, represented by Billiet & Co Lawyers, Belgium.

Respondent is Vanbelle Law of Brussels, Belgium, internally represented.

2. The Domain Name and Registrar

The disputed domain name <magformers.nl> (the “Domain Name“) is registered with SIDN through EuroDNS S.A.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on June 23, 2017. On the same day, the Center transmitted by email to SIDN a request for registrar verification in connection with the disputed domain name. On June 26, 2017, SIDN transmitted by email to the Center its verification response confirming that Respondent is listed as the registrant and providing the contact details. The Center verified that the Complaint satisfied the formal requirements of the Dispute Resolution Regulations for .nl Domain Names (the “Regulations”).

In accordance with the Regulations, articles 5.1 and 16.4, the Center formally notified Respondent of the Complaint, and the proceedings commenced on June 28, 2017. In accordance with the Regulations, article 7.1, the due date for Response was July 18, 2017. Following Respondent’s request, the due date for Response was extended until July 24, 2017. The Response was filed with the Center on July 24, 2017.

On July 26, 2017 SIDN commenced the mediation process. On August 31, 2017 SIDN extended the mediation process until September 22, 2017. On September 25, 2017 SIDN further extended the mediation process until October 22, 2017. On November 10, 2017 SIDN confirmed to parties that the dispute had not been solved in the mediation process.

The Center appointed Remco M. R. Van Leeuwen as the panelist in this matter on November 27, 2017. The Panel finds that it was properly constituted. The Panelist has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required to ensure compliance with the Regulations, article 9.2.

4. Factual Background

Complainant is a manufacturer of educational magnetic toys. Magformers LLC, established in Salt Lake City, United States of America (“US” or “USA”), is a wholly owned subsidiary company of Complainant. Complainant has built a distributor network across the world for its prize-winning 3D educational magnetic toy “Magformers”.

Magformers LLC is the owner of the well-known figurative US wordmark MAGFORMERS, registered on July 2, 2013, registration number 4361063, for goods in class 28.

Complainant is the owner of the well-known figurative European Union (“EU”) wordmark MAGFORMERS, registered on January 24, 2014, registration number 1198801, for goods in class 28 (the “Trademark”).

Complainant owns and operates websites linked to numerous domain names incorporating the Trademark including <magformersworld.com>, which was registered on January 19, 2011.

The Domain Name was created on May 5, 2010 and registered by Respondent on February 22, 2017. At the date of the Complaint and through today, the Domain Name does not resolve to an active website.

5. Parties’ Contentions

A. Complainant

Complainant bases the Complaint on the Trademark. Complainant states that it is the sole proprietor of the Magformers tradename, brand name and Trademark, due to its successful development and maintenance of a successful distributor network across the world.

Complainant states that the Domain Name was registered by a company called “Smart Industries NV”, one of Complainant’s former distributors in Belgium, without Complainant’s consent on May 5, 2010. Despite several attempts by Complainant, the first of which was on November 4, 2016, “Smart Industries NV” refused to transfer the Domain Name to Complainant after the termination of the distributor relationship with Complainant. The Domain Name as well as the domain names <magformers.be> and <magformers.eu> were sold by “Smart Industries NV” to Respondent in early 2017.

The Domain Name is identical or confusingly similar to the Trademark

Complainant argues that the Domain Name is identical or at least confusingly similar to the Trademark in which Complainant has rights under Dutch law (and across all EU countries), for the Domain Name wholly incorporates the Trademark. Furthermore Complainant states that the country code Top-Level Domain (“ccTLD”) suffix “.nl” is merely a reference to the geographical location that the Domain Name corresponds to and should be disregarded when assessing the identity or confusing similarity of a domain name.

No rights to or legitimate interests in the Domain Name

Complainant argues that Respondent has no rights or legitimate interests in the Domain Name. Respondent is not associated with or commonly known by the Trademark nor is there an indication that the Domain Name corresponds to Repondent’s name and/or brand names and/or trademarks.

Complainant asserts that Respondent has no legitimate interests in the Domain Name as Complainant and Magformers LLC are the respective exclusive owners of the trademark right in the EU and the USA and as such are the only entities with legitimate interests in the MAGFORMERS trademarks.

Complainant further asserts that it is not associated with Respondent, that Respondent is not a licensee or distributor of Complainant and that Respondent is not authorized to use the Domain Name or sell Complainant’s products through a website connected to the Domain Name. By doing so, Respondent is likely to mislead and deceive consumers into believing that Respondent has a commercial relationship with Complainant.

The Domain Name constitutes trademark infringement and Respondent must have had knowledge of Complainant’s rights when acquiring the Domain Name since the MAGFORMERS trademarks are well known.

The Domain Name has been registered or is being used in bad faith

Complainant asserts that since the termination of the distributor relationship between Complainant and “Smart Industries NV”, the Domain Name is being used in bad faith.

Complainant argues that the Domain Name is not being used for a bona fide offering of Complainant’s products since the Domain Name does not resolve to an active website.

The Domain Name together with the domain names <magformers.be> and <magformers.eu> were offered for sale to Complainant by Respondent for an amount of EUR 30,000. Complainant contends that the Domain Name was acquired by Respondent primarily for the purpose of selling it to Complainant for a valuable consideration in excess of the costs of registration which constitutes evidence of bad faith registration.

With reference to article 437 of the Belgian Judicial Code, Complainant asserts that Respondent is a Belgian law firm regulated by the Brussels Bar and as such it is not allowed to hold the Domain Name for commercial gain.

Finally, Complainant contends that Respondent, by registering the Domain Name distorts competition in the sense that it intentionally tries to limit Complainant’s business operations in the EU by giving potential clients of Complainant the impression that Complainant is no longer operating in the EU.

The Complainant requests that the Domain Name be transferred to it.

B. Respondent

Inadmissible action

Respondent confirms Complainant’s assertion that Respondent has no legitimate interests in the registration of the Domain Name due to the fact that neither its professional activity nor its commonly used name would show any legitimate connection with the registration of the Domain Name.

Respondent argues that it is only the third-party holder of the Domain Name and that it is not the legal owner or final user of the Domain Name. According to Respondent the legal owner and final user is “Magforce Invest SA”, established in Brussels, Belgium in May 2014.

Respondent submits that “Magforce Invest SA” purchased the Domain Name as well as the domain names <magformers.be> and <magformers.eu> from “Smart Industries NV” for an amount of EUR 24,000, by virtue of a purchase agreement dated December 22, 2016, confirmed in a letter of Respondent of January 9, 2017, and a more elaborate agreement dated February 25, 2017.

Respondent argues that the Complaint as addressed against Respondent is inadmissible.

The arguments submitted by Respondent regarding the registration and legitimate use of the Domain Name by “Magforce Invest SA” are the following:

Article 2.1 (a) of the Regulations

- “Magforce Invest SA” is a Belgian holding and investment company which is in the business of regrouping shares, management and investment interests on a group level, concerning participations and assets that are beneficial to its subsidiaries. According to Respondent, the Belgian company “Magforce BE” and the French company “Magforce International” form part of the “Group Magforce” responsible for international sales in certain territories. Respondent further submits that “Group Magforce” is active in the areas of infrastructure, housing, transportation, clothing, equipment and similar products and services both for civil and military use.

- The trademark MAGFORCE is registered in the European Union, initially by “Magforce International”, for goods in classes 6, 8, 9, 18 and 25. Reference is made by Respondent to annex 4 attached to the Response from which it shows that “Teng-Yao Chang” is de owner of the EU trademark MAGFORCE, registration number 1323047, registration date May 30, 2016, for goods and services in class 25.

- Complainant cannot successfully demonstrate that there exists a certain notoriety of its products nor is there a risk of confusion between Complainant’s products and those sold by “Group Magforce” because (i) Complainant sells toys and/or games; (ii) “Group Magforce” is active in another business domain, and (iii) the Trademark is registered only for goods in class 28.

Article 2.1(b) of the Regulations

- “Group Magforce” started planning an educational program as a side project complementary to its main activities.

- “Former” means “to educate” in French. A name regrouping both – Magfor-mers or Mag-formers – was seen as more than useful.

- For the purpose of preserving its (online) interests within the process of development, the group wanted to register domain names that would refer to the products. The search for such domain names resulted in the three domain names held by “Smart Industries NV”. A principle agreement was reached, first confirmed on December 26, 2016. Respondent was designated by the parties to the agreement for temporarily registering the domain names (including the Domain Name) and transferring the domain names (including the Domain Name) to Magforce Invest SA once the transaction would be completed.

- The aforementioned purchase was completed for the amount of EUR 24,000 by final agreement, executed in January 2017. The parties agreed that final payment under the agreement must be effected by the end of 2017 at the latest.

- The transaction was completed in anticipation of the legitimate use of the domain names (including the Domain Name) for the purpose of commercialization of the products of “Group Magforce” without knowledge of the business of Complainant or detriment thereto.

- The acquisition of the domain names (including the Domain Name) is an understandable practice for “Group Magforce” in view of the envisaged use since the registration of domain names is usually one of the first commercial steps in order to preserve and protect easily movable and changeable assets. There is no (legal) necessity to launch an “under construction” website to justify the rightful detention or protection of a domain name.

- Reference is made to the consolidated decisions of the panelist on the matter of fair use which took not only the actual online use into consideration but also the intended use which is in accordance with the business expectations of “Group Magforce”.

- The Domain Name and its holder are evidently connected in view of the literal composition of the two words “mag-force” and “mag-formers”. “Group Magforce” and its products are known in the relevant market since 1953. Its name together with the word “formers” and the literal meaning “to form, to educate“ of the latter in English and French (the relevant market of “Group Magforce”) sufficiently prove the use and utility of the domain names (including the Domain Name) for the “Group Magforce” and its intended scope of activities.

- Therefore the Domain Name purchase and use by the group Magforce is consistent with a pattern of bona fide activities and consideration based on the strict connection between the domain name holder’s name and its intended promotion of products through the Domain Name.

Article 2.1 sub c of the Regulations

- “Magforce Invest SA” has no responsibility with regard to or knowledge of any previous use or not of the Domain Name by its previous owner “Smart Industries NV”: Respondent only has to answer the allegations of bad faith as directed towards itself, not a third party.

- It has sufficiently been established that as from the moment of its purchase, “Magforce Invest SA” held the Domain Name in good faith, for a legitimate intended use, and in accordance with bona fide commercial practices.

- Panelists in previous domain name disputes have shown that the mere fact of certain domain names proving identical or confusingly similar to third-party trademarks pursuant to a search does not mean that such registrations cannot be undertaken or would automatically be considered to be in bad faith. This is exactly the case of “Magforce Invest SA”, that registered the Domain Name in good faith and without the knowledge of the brand of Complainant that is, in addition to all that, registered in a totally different area of business and does not compete with the one of “Group Magforce”.

- The claims of Complainant that the relative notoriety of the Trademark would imply a presumption of knowledge by “Magforce”, have to be rejected as they are contradicted by the evidence that (i) both parties operate in diametrically opposite markets, with no reason or possibility for Magforce to be aware of the existence of the MAGFORMERS trademark within such area of business, and (ii) Complainant’s trademark did not acquire distinctiveness in the EUIPO register, which leads to the conclusion that the trademark is not deemed to be known by the general public in the EU.

- With regard to the alleged bad faith in requesting a remuneration in return for the requested immediate transfer, it is noted that Complainant requested the transfer of the Domain Name together with <magformers.be> and <magformers.eu> against no numeration. “Magforce Invest SA”, opposed the terms of such transfer and informed Complainant through Respondent that no transfer could even be considered under a price of EUR 30,000, which amount was higher than its own purchase price.

- The asking price for the domain names (including the Domain Name) is not in excess of the costs relating directly to the acquisition of the Domain Name given the purchase price of EUR 24,000 for <magformers.be>, <magformers.eu> and the Domain Name.

- The starting price of EUR 30,000 proposed by Respondent on behalf of “Magforce Invest SA” must be considered appropriate within the normal expectation of a business operator not to incur losses. The small margin of EUR 6,000 must be reappraised by taking into account the efforts and costs for the purchase and defense of the domain names (including the Domain Name) and the fair expectation of its intended use, which would be irremediably frustrated by its cession.

- Since “Group Magforce” operates in a totally different domain of activities than Complainant, no distortion of competition could possibly occur.

- The activity of Complainant was undertaken in Europe, as well as in all other markets, through the use of different web pages, trademarks and points of sale. The Domain Name was never used by Complainant, with the consequence that its absence could not lead to any negative impression towards its clients.

- Furthermore, the degree of distinctiveness and reputation of the Trademark has to be taken into consideration in the assessment of a possible bad faith acquisition. In this case, one has consider that the Trademark is not well-known outside its specific market and that therefore the registration by “Magforce Invest SA” of a homonymous domain name shows no intent to jeopardize or illicitly obtain advantages from Complainant’s trademark.

- Moreover, Respondent brought proof of the intended use in good faith of the Domain Name, of the timing of foreseen implementation and of the justification of the registration of a domain that includes the prefix “magfor-" as totally in accordance with bona fide commercial practices.

- The choice of the Domain Name, together with the circumstance of the similarity/derivative character of the two names “Magforce” and “Magformers” and with the very sectorial notoriety of the brand of Complainant should also be taken into consideration to ensure the absence of bad faith in its purchase and possession.

Respondent requests the Panel to rule that Complainant fails to demonstrate Respondent bad faith in the registration of the Domain Name and would reject the request to transfer the Domain Name to Complainant.

6. Admissibility of Complaint

Respondent requests that the Complaint is found inadmissible due to Respondent only being a third-party holder of the Domain Name and not the legal owner or final user. Respondent contends that the Complaint should be formulated towards the real holder of the Domain Name being “Magforce Invest SA”, which is the client of Respondent and of which Respondent is only to be considered the legal representative.

According to section B. of the Regulations, the registrant of a domain name is the party in whose name a domain name has been entered in the SIDN register. The respondent, according to the Regulations, is the registrant against whom a complaint is submitted in accordance with the Regulations. On the basis of the record before it, the Panel concludes that Respondent is registered as the registrant of the Domain Name in the SIDN register. Neither “Magforce Invest SA” nor “Group Magforce” as referred to by Respondent is registered as the registrant in such SIDN register.

The Panel concludes that the Complaint is correctly names Respondent and that the Complaint is admissible.

7. Discussion and Findings

The Panel finds that Respondent and not “Magforce Invest SA” and/or “Group Magforce” is/are the respondent for the purpose of the Complaint. However, the Panel will, to the extent relevant, also consider “Magforce Invest SA” in the assessment of the second and third requirements under the Regulations.

Pursuant to article 2.1 of the Regulations, Complainant’s request to transfer the Domain Name must meet three cumulative conditions:

a. the Domain Name is identical or confusingly similar to a trademark or trade name protected under Dutch law in which Complainant has rights, or other name by means of article 2.1(a) under II of the Regulations; and

b. Respondent has no rights to or legitimate interests in the Domain Name; and

c. the Domain Name has been registered or is being used in bad faith.

The Panel has taken note of a panel decision rendered under the .eu Alternative Dispute Resolution (“ADR Rules”) regarding the aforementioned domain name <magformers.eu>, involving both Complainant and Respondent in the present case (see, Gymworld Inc. and Magformers UK Limited v. Vanbelle Jo, Vanbelle Law, WIPO Case No. DEU2017-0001). This .eu decision addresses facts that are also material to the present case. Where applicable, the Panel’s findings refer to those in the .eu decision.

A. Identical or Confusingly Similar

Complainant has based the Complaint on the Trademark. Complainant has submitted a copy of the registration of the Trademark demonstrating that Complainant is the holder of the Trademark. The Trademark is protected under Dutch law. The Panel will review the Complaint on that undisputed basis.

It is well established that the ccTLD suffix “.nl” may be disregarded in assessing the similarity between the relevant trademark(s) on the one hand, and the disputed domain name on the other hand (see, Caterpillar Inc. v. H. van Zuylen Materieel, WIPO Case No. DNL2011-0073; Roompot Recreatie Beheer B.V. v. Edoco LTD, WIPO Case No. DNL2008-0008).

The Domain Name is identical to the Trademark. Therefore, the first requirement of article 2.1(a) under I of the Regulations is met.

B. Rights or Legitimate Interests

Article 2.1(b) of the Regulations requires Complainants to demonstrate that Respondent has no rights to or legitimate interests in the Domain Name. This condition is met if Complainants make out a prima facie case that Respondent has no such rights or legitimate interests and if Respondent fails to rebut this (see, e.g., Technische Unie B.V. and Otra Information Services v. Technology Services Ltd., WIPO Case No. DNL2008-0002).

Complainant alleges that Respondent lacks rights to or legitimate interests in the Domain Name for the reasons set out in Section 5.A above. The Respondent acknowledges this in the Response.

In addition, there is no indication brought before the Panel that Respondent and/or “Magforce Invest SA” are commonly known by the Domain Name. Furthermore, according to the printout which Respondent provided as annex to the Response, the EU trademark MAGFORCE (registration number 1323047) is not registered by Complainant or “Magforce Invest SA. Respondent has not provided an explanation in this regard.

Further to the panel decision in the related case Gymworld Inc. and Magformers UK Limited v. Vanbelle Jo, Vanbelle Law, supra, the Panel finds that the evidence submitted by Respondent to substantiate “Magforce Invest SA’s” intended use of the Domain Name for a project involving educational and training activities under the name “Magformers”, being an undated four page working document entitled “Magformers project - First look”, which apparently originates from “Magforce BE” (Belgium), not being “Magforce Invest SA”, is not independently verifiable. The Panel is not in the position to determine its authenticity and whether the asserted project was actually conceived by “Magforce Invest SA” before having received any notice of the present dispute.

The Panel finds that Respondent has not demonstrated that “Magforce Invest SA” has used, or made preparations in that regard, the Domain Name in connection with a bona fide offering or goods and/or services, nor has it shown legitimate and noncommerial or fair use of the Domain Name.

In view of the above, the Panel concludes that Complainant has met the second requirement of article 2.1(b) of the Regulations.

C. Registered or Used in Bad Faith

For a number of reasons, it is clear to the Panel that Respondent and/or “Magforce Invest SA”, at the time of registration of the Domain Name, knew or should have known of Complainant’s rights in the Trademark. First, the Trademark appears to enjoy a certain reputation. Second, the Respondent alleges that it paid the considerable sum of EUR 24,000 to obtain the Domain Name and the two related further ones. Third, the purchase was apparently undertaken by legal counsel. Fourth, the case file contains indications of a certain commonality of individuals involved in both “Smart Industries NV” and “Group Magforce”. These factors compel a finding of bad faith registration under paragraph 3.2 (a) and 3.2 (d) of the Regulations.

The Panel further notes the lack of an active website under the Domain Name, the expectation for the seller of the Domain Name to disclose the underlying dispute, and Respondent’s failure to deny knowledge of the dispute.

The Panel further refers to applicable considerations and findings in the panel decision in the parallel case Gymworld Inc. and Magformers UK Limited v. Vanbelle Jo, Vanbelle Law, supra.

The Panel finds that the requirement of registration in bad faith of the Domain Name pursuant to article 2.1(c) of the Regulations has been met.

8. Decision

For all the foregoing reasons, in accordance with articles 1 and 14 of the Regulations, the Panel orders that the Domain Name <magformers.nl> be transferred to Complainant.

Remco M.R. van Leeuwen
Panelist
Date: December 13, 2017