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The Line Dividing Infringing from Legal Conduct is Sometimes Difficult to Draw

I briefly mentioned Quester Group, Inc. v. DI S.A., D2010-1950 (WIPO February 14, 2011) in my Tuesday March 15 Note and think it worth another visit. The Complainant is in the business of selling guitars; the Respondent is in the business of aggregating links for buyers of guitars. It is mainly interesting because of the split decision in the Respondent’ favor. The majority noted that “[t]he dividing line can be difficult to draw,” particularly where the trademark is composed of a descriptive phrase, ULTIMATE GUITAR. In this respect, the problem is self created. “In fact, it is the very ability to draw consumers by the descriptiveness that leads mark owners to choose such terms in the first place.” For a trademark holder of generic and descriptive terms it must present evidence of targeting, which was lacking in Quester Group’s record.

The record in Quester Group revealed that the Respondent acquired the domain name prior to the registration of the trademark. In itself, this would not prevent a complainant from maintaining a UDRP proceeding if shows common law rights to the term. In fact, “[t]he [Quester] Complainant provided copies of six United States trademark registrations as Exhibits to its Complaint. Three of these registrations are on the Supplemental Register; the other three are on the Principal Register but refer to Section 2(F).” This signifies for the Section2(F) registrations that the phrase ULTIMATE GUITAR was registrable only because the Complainant established secondary meaning to the mark. “Registration of a mark on the Supplemental Register … constitute[s] an admission that the mark is merely descriptive,” 15 U.S.C. § 1115(a), although it does not preclude proof of acquired distinctiveness, 15 U.S.C. § 1095.

Registering a descriptive term is not for that reason alone evidence of abusive registration. More is required. In this case, “Respondent supplied evidence of its business model which is based on registration and monetization of domains that use terms of common meaning.” The majority noted that

Because many marks are based on commonly used words, such a business model will quite likely occasionally register domain names that are identical or similar to someone’s mark somewhere in the world.

The question is whether the domain name was acquired for an illicit reason to take advantage of the trademark. “In this case,” (noted the dissent) “the website at the disputed domain name links to websites and itself contains material that is directly competitive with the Complainant’s business.” He offers the following analogy:

The majority would say, for example, that a website at a domain name “ultimateapple.com” that has PPC links to a website about fruit would be legitimate. I agree. However, in my view, that a website at a domain name “ultimateapple.com” that has some PPC links to a website about fruit and other PPC links to a website about computers would not be legitimate. I believe that, applying the rationale of the majority decision, that the majority would find otherwise.

The dissent concluded that the Respondent “is intentionally capitalizing on the similarity between the Complainant’s trademarks and the disputed domain name and the confusion caused to Internet users.”

The majority’s belief that the Complainant’s argument is weakened because the Respondent acquired the domain as part of a sizable portfolio purchased from another dealer is challengeable and not satisfactory because domainers have a duty on acquisition – remember acquisition = registration – to investigate whether any domain in a “sizable portfolio” infringed “upon or otherwise violate[d] the rights of any third party.” There was no evidence of any investigation in Quester Group.

 

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