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Unauthorized But Legally Permissible Use of Trademark

A respondent acquires no right or legitimate interest in a domain name that incorporates a trademark by registering or renewing it. Nokia Corporation v. Nokia Ringtones & Logos Hotline, D2001-1101 (WIPO October 18, 2001) (“[Respondents] only have a right to the domain name … if Complainant had specifically granted that right.”) Respondents succeed, however, where the trademark compositions they use – in noun or adjectival phrases – truthfully convey what the names promise. A respondent’s choice of a domain name incorporating a trademark for the purpose of identifying its business rather than competing with the owner does not require the owner’s authorization. Adaptive Molecular Technologies, Inc. v. Woodward, D2000-0006 (February 28, 2000); Giddings & Lewis LLC v. McKean, D2000-1150 (WIPO March 14, 2001); Nicholas v. Magidson Fine Art, Inc., D2000-0673 (WIPO September 27, 2000) (U.S. parties).

The sale of the goods or services that are properly identified by the incorporated trademark does not as a general rule constitute bad faith under the Policy despite owner’s objection. The right or legitimate interest may arise either by contract or (in the absence of one) acquiescence. Red Bull GmbH v. Roy Kenneth Nabben, D2010-1358 (WIPO September 30, 2010); A. Nattermann & Cie. GmbH and Sanofi-aventis v. Watson Pharmaceuticals, Inc., D2010-0800 (WIPO August 31, 2010) (A company “can readily protect itself by securing a clear written agreement.”). If it fails to protect itself and the respondent continues to use the disputed domain name the complainant’s recourse is to a court of law. The same Panel noted that such a “situation is a long way from the mischief which the UDRP was devised and adopted to address.”

Silence with knowledge of respondent’s registration and use of a domain name incorporating the complainant’s trademark – the more typical defense under paragraph 4(c)(i) of the Policy – is filially related to acquiescence, but acquiescence has the added factor of there being a prior commercial relationship between the parties. Longevity of use with knowledge is a good defense. The majority of the Panel notes in A. Nattermann that the registration of the Domain Name was consistent with the agreements between the parties.

Unauthorized but permissible use formulated under U.S. trademark law known as “nominative fair use” has been incorporated into UDRP jurisprudence. The theory traces its route to Oki Data Americas, Inc. v. ASD, Inc, D2001-0903 (WIPO November 6, 2001). Its application is discussed in General Motors LLC v. Flashcraft, Inc DBA Cad Company, D2011-2117 (WIPO January 30, 2012). In General Motors, the Respondent’s principal alleged that he “has been a racing car driver and active provider of parts, services, and support to those running Cadillac cars as daily drivers, competition vehicles, and show vehicles around the world.” Complainant questions the incorporation of its trademark, not the legitimacy of Respondent’s business. Note, however, that the trademark is used adjectivally. In common parlance “Cadillac” signifies value. In most nominative fair use cases the trademark is incorporated into a noun phrase as in “okidataparts.”

A defense of “nominative fair use” is available under paragraph 4(c)(iii), not 4(c)(i). Paragraph 4(c)(iii) is expressed as either/or: either “noncommercial” or “fair use.” The full provision reads:

you are making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.

The defense trumps paragraph 4(b)(iv) which reads:

by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your web site or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your web site or location or of a product or service on your web site or location.

Initially, the Oki Data test applied to unauthorized resellers, but quickly expanded to other unauthorized uses such as consulting services and packaged tours. There is presently a significant body of UDRP cases approving noun and adjectival trademark phrases for used products and after market replacement parts. Although initially hesitant, the Panel in General Motors noted that in the circumstances “of this case … the Oki Data principles should be used to consider whether the Respondent has a right or legitimate interest, for two reasons”:

First, as the Respondent notes (and as any United States car owner well knows), parts and service on any brand of automobile are readily available from third parties that have and claim no affiliation with the applicable automobile maker. This is generally seen as precompetitive and an accepted practice, which lends some force to the Respondent’s contention that Internet users do not automatically associate a brand name with the automobile manufacturer.

Second, and more importantly, UDRP panels have consistently followed the Oki Data approach when dealing with unauthorized resellers in the automotive field.

The Panel in General Motors also points out in footnote 1 that there are limits to applying the Oki Data principles. “A different result might obtain … in case[s] involving an industry that is heavily regulated, such as pharmaceutical products, or one involving a distributor whose contract has been terminated by its manufacturer prior to registration of the disputed domain name.” There are free speech examples for pharmaceutical products — websites concerned with side effects qualify — but examples of domain names succeeding for nominative fair use for those goods are rare.

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