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Reasonable Grounds to Believe that the Use of the Domain Name is Fair Use or Otherwise Lawful

Of 19 UDRP proceedings commenced by SAP AG 5 were terminated and in 9 the Panels ordered the disputed domain names transferred. The remaining 5 complaints including the most recent SAP AG v. Stephen M Meli, D2010-0760 (WIPO July 27, 2010) were denied. It is not bad faith to incorporate another’s trademark where the use describes the respondent’s business. The Panel in DaimlerChrysler A.G. v. Donald Drummonds, D2001-0160 (WIPO June18, 2001) held

Under the present facts, if the Panel were to find for the Complainant, the majority can conceive of no case in which a legitimate competitor in the sale of parts and aftermarket accessories could ever register a domain name descriptive of that business.

Similar reasoning was then (a few months later) applied to unauthorized dealers in Oki Data Americas, Inc. v. ASD, Inc., D2001-0903 (WIPO November 6, 2001). The Panel concluded that a respondent could succeed where it proved that it (1) actually offers the goods or services at issue; (2) uses the site to sell only the trademarked goods; (3) accurately discloses or disclaims the registrant’s relationship with the trademark owner; (4) tries not to corner the market in all domain names. The right created for respondents extends to authorized and unauthorized resellers and dealers and consultants.

Nominative fair use is regularly applied in UDRP cases. Oki Data and its progeny are frequently cited as precedent for the proposition. The defense has been endorsed by U.S. Circuit Courts most recently in Toyota Motor Sales USA Inc. v. Tabari, 07-55344 (9th Cir. July 8, 2010) discussed in the Note for July 19. The proposition can also be found in the Anticybersquatting Consumer Protection Act, 15 U.S.C. Sec 1125 (d)(B)(ii). The section reads in full, “Bad faith intent described under subparagraph (A) shall not be found in any case in which the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful.”

Unusual is that in SAP against Meli (to distinguish the case from the other 18 proceedings) Respondent Meli defaulted in appearance. It appears, however, as though the Complainant made the Respondent’s case. Its submission included the Respondent’s position, namely that “he noted differences in the parties’ channels of trade and a number of other users of SAP….” It also included a description of the Respondent’s business sufficient for the Panel to conclude in Respondent’s favor despite the default. Thus, the record demonstrated that

the Respondent is the managing director of an entity called SAP Resources Group LLC, which company name is identical to the disputed domain name, that the services that SAP Resources Group LLC offers and apparently has been offering for some time are consulting services that are at least partly related to SAP software and that the Respondent is making use of the disputed domain name for the purpose of a company website of SAP Resources Group LLC. The Respondent, on this website, is making an express disclaimer that SAP Resources Group LLC is not affiliated to SAP AG or any SAP Company.

Although the Panel in SAP against Meli made no reference to Oki Data, its progeny or to the ACPA (in fact the decision is curiously sparse in citing precedential cases on any material issue), these authorities are nevertheless implicit. The Panel concluded that “it is not implausible that the Respondent, as the business SAP Resources Group LLC, may be commonly known by the disputed domain name and/or that he may be making fair use of the mark as a designation of the content or target of his services without intention to misleadingly divert consumers or to tarnish the trademark at issue.”

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

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