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Prior Right to Domain Name Through Purchasing Predecessor’s Assets

A successor in interest related to a predecessor who acquired the disputed domain name in good faith is not a new registrant whose right is vulnerable to forfeiture to a well known trademark holder. It not only succeeds to its predecessor’s good faith registration, it holds the domain name as an asset to use (consistent with trademark law and the Policy) or sell as it determines. It cannot be compelled to sell it, which was the thrust of plaintiff’s case in Southern Grouts & Mortars, Inc. v. 3M Company, 575 F.3d 1235 (11th Cir. 2009). 3M had come into possession of <diamondbrite.com> legally by acquiring the company that owned it years earlier. Its offense (as the plaintiff saw it) was not that it was using the domain name, but that it wasn’t. Southern Grouts “accuse[d] 3M not of a design to sell a domain name for profit but of a refusal to sell one.”

There is some similarly between Southern Grouts and Genomatix Software GmbH v. Intrexon Corporation, D2010-0778 (WIPO July 8, 2010), although in the latter while the Complainant was an interested purchaser it was unwilling to pay what the Respondent demanded. In an exchange of e-mails in which the Complainant offered $10,000, the Respondent replied “that it would not be interested in any offer which was not substantially in excess of this sum.” This is not a violation of paragraph 4(b)(i) of the Policy. “Where several years and a corporate reorganisation and rebranding elapse between the registration of a domain name and a discussion of its possible sale, it cannot be inferred that it was registered at the outset for the purpose of sale to the Complainant or a competitor of the Complainant.”

If the related respondent “merely intends to continue to do what [its related predecessor] has always legitimately done, then it is difficult to see how that continued use could be characterized as use in bad faith,” ehotel AG v. Network Technologies Polska Jasinski Lutoborski Sp.J., D2009-0785 (WIPO August 5, 2009). But, in that case, the Panel found that the original registrant did not continue to use the domain name legitimately, “[i]nstead, he effectively abandoned his own prior use and actively sought to associate the Domain Name with the Complainant’s business.” In that event the related successor cannot rely on the original good faith registration but inherits its predecessor’s subsequent bad faith.

In contrast, no inference of bad faith can be drawn against the successor in interest where its predecessor operated a bona fide business. “The Panel finds on the evidence that the Domain Name was registered by the Respondent’s predecessor in business Genomatix Ltd for the purpose of bona fide use in connection with a bona fide business carried on under the mark GENOMATIX and the name Genomatix Ltd. The Panel also finds that the transfer of the Domain Name to the Respondent, at that time called Genomatix Corporation, was made in good faith.” “These findings” (the Panel continued) “cannot be negated by any subsequent willingness of the Respondent to sell the Domain Name for a substantial price.”

The Complainant acquired its trademark in Genomatix Software prior to the registration of the domain name. Ordinarily, this could signal a problem for the Respondent, but here the parties operate in different streams of commerce. The Respondent is a biotechnology company. “[T]he Complainant emphasises that it has prior rights to the ‘Genomatix’ name, that it has remained active since its foundation in both Europe and the USA, and that (in contrast) the Respondent’s use of the ‘Genomatix’ name in its business ceased a long time ago.” However, there is no evidence that the commercial use of the Domain Name and corresponding mark by the Respondent and its predecessor was in bad faith to take unfair advantage of the Complainant’s rights.” Nor that “its commercial use at any time between then [1998] and the filing of this Complaint nearly 12 years later in May 2010 suggests that this use was not regarded as infringing whatever rights the Complainant may have had.”

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

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