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Incorporating a Well Known Trademark Plus Distinguishing Suffix in Domain Name

The Panel noted about Wal-Mart Stores, Inc. v. Sergio Cabrera, FA1008001344053 (Nat. Arb. Forum November 8, 2010) that is was an “extremely rare case.” The Complainant requested that the Panel issue an order to transfer registration of <walmartvendor.com>. The addition of the generic term “vendor” does not (the Complainant alleges) create a name distinctive from the trademark. However, the Panel held that “[w]hile Respondent … is not a reseller, he does operate a bona fide business that relates exclusively to consulting services in support of vendors who want to do business with Complainant.” Nominative fair use is not mentioned in Wal-Mart Stores, but is clearly the underlying theory in denying the complaint. The Respondent argued that his use of the Complainant’s trademark “is strictly for purposes of differentiating vendors who may sell to other retailers.” There is also a suggestion, although not followed through in the legal analysis, of equitable estoppel against the Complainant in knowingly allowing the Respondent’s use of the domain name for over five years.

In this respect, Wal-Mart Stores is not much different from a recent case in the 9th Circuit Toyota Motor Sales USA Inc. v. Tabari, dated July 8, 2010 discussed in my Note of July 19. The Court reasoned in that case

It is the wholesale prohibition of nominative use in domain names that would be unfair. It would be unfair to merchants seeking to communicate the nature of the service or product offered at their sites. And it would be unfair to consumers, who would be deprived of an increasingly important means of receiving such information. As noted, this would have serious First Amendment implications. The only winners would be companies like Toyota, which would acquire greater control over the markets for goods and services related to their trademarked brands, to the detriment of competition and consumers. The nominative fair use doctrine is designed to prevent this type of abuse of the rights granted by the Lanham Act.

What distinguishes Wal-Mart Stores from many others (in the Panel’s view) is that “Respondent’s business activity involves offering consulting services for the process of becoming or being a Walmart vendor and selling to Walmart.” Moreover, “[o]nce a potential vendor arrives at Respondent’s site, the information contained therein, including a disclaimer, indicates that there is no affiliation with or sponsorship by the Complainant, and Respondent stated that this non-affiliation is also made clear in initial contacts with clients or potential clients.” However, this is offset by counter facts. Complainant pointed out that it offers similar service without charge, that there are other competitive vendor-consultants who use appropriate domain names and “there are other domain names available [to Respondent] that do not incorporate its WALMART marks, which would allow Respondent to carry out its business intentions” and that Complainant itself.

In reaching its conclusion the Panel implicitly makes another point that differentiates UDRP jurisprudence from trademark law, namely that it is not a trademark court. “I make no comment whatsoever” (the Panel states) “on whether or not Respondent’s use of the Domain Name and Complainant’s WALMART marks on its website might otherwise be in violation of relevant United States state or federal trademark laws. He is simply concluding that “for purposes of the Policy, paragraph 4(a)(ii), Respondent has established a right or legitimate interest in the Domain Name through its continuous use for his consulting business.”

Levine Samuel, LLP <researchtheworld.com>
Gerald M. Levine <udrpcommentaries.com>
E-Mail gmlevine@researchtheworld.com

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