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Invitation to Refile a Complaint Where License Wrongfully Terminated

This Note reviews an issue not frequently before a Panel, namely complainant’s right to maintain a subsequent proceeding where the current status indicates that its license to use a trademark has, rightly or wrongly, been terminated in favor of the respondent. Licensees are among those included as allowable complainants under paragraph 3(a) of the Rules of the Policy. Ordinarily, the jurisdictional requirement “can be satisfied by proof that the Complainant is the owner or licensee of a registered mark anywhere in the world,” Advanced Magazine Publishers Inc. v. Computer Dazhong, D2003-0668 (WIPO December 12, 2003).

In Jetfly Aviation SA v. Jens K. Styve / Domains by Proxy, Inc. and Happy Landings S.A., D2010-0244 (WIPO April 5, 2010) the complainant was the terminated licensee of JEFLY. The question of wrongful termination of license of one party and its grant to another party is outside the scope of the Policy. In Jetfly, the Complainant has already commenced proceedings against the Respondent in Geneva in relation to the latter’s use of JETFLY and the corresponding domain name, <jetfly.com>. The matter in the Geneva court is pending. The Complainant’s right to use the trademark depends on the court’s decision. The facts read like a boardroom farce. The Complainant and Respondent were both formed by the same founders, the Respondent more recently. More recently still the founders terminated their firstborn in favor of their second. The taking from one and giving to another suggests a falling out between investors in the Complainant and the founders, which the founders resolved by taking their ball to another playground. Adding spice and intrigue to the equation, the Complainant either in retaliation or, perhaps, in anticipation of the founders’ action, obtained a Community registration for JETFLY (evidently without opposition) against which the founders recently instituted a cancellation action.

The Policy does not authorize commencing a proceeding “during the pendency of a related civil action,” Automobile Atlanta, Inc. v. Treadway Solutions, FA0905001264729 (Nat. Arb. Forum July 20, 2009). Rule 18(a) reads: “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.”

However, a number of panelists have expressly authorized the complainant to refile its complaint if the factual circumstances change. Thus, in Cluett, Peabody & Co., Inc. v. Sanford Bus. Writing Serv., FA 95842 (Nat. Arb. Forum December 12, 2000) the panel allowed a complaint to be refiled because the previous Panelist had “expressly reserved the right of Complainant to recharge bad faith registration and use of the domain name in issue.”

The Panel in Jetfly noted

It may be, of course, but the Panel is in no position to judge, that the termination of the license to the Complainant … was unlawful and that the license to the Respondent and the Respondent’s subsequent use of the trade mark are also unlawful…. However, on the face of it, the Respondent is acting under license of an owner of the trade mark.

Since the Respondent is under license and no court has ruled against it the “Panel is unable to conclude … that the Domain Name was acquired by the Respondent and is being used in bad faith.” That is the only conclusion that can be drawn from the record. However, “if the Geneva court hands down a decision to the effect that the Respondent has no rights or legitimate interests in respect of the Domain Name, but does not order transfer of the Domain Name to the Complainant,” then, if the Complainant wishes to refile its complaint the Panel believes that the Complainant should be permitted to do so.”

Gerald M. Levine <udrpcommentaries.com>

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