WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Jerome Stevens Pharmaceuticals, Inc. v. Watson Pharmaceuticals
Case No. D2003-1029
1. The Parties
The Complainant is Jerome Stevens Pharmaceuticals, Inc. of Bohemia, New York, United States of America, represented by Reed Smith LLP of Richmond, Virginia, United States of America.
The Respondent is Watson Pharmaceuticals of Corona, California, United States of America.
2. The Domain Name and Registrar
The disputed domain name (the "Domain Name") is registered with R.
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on December 23, 2003. On December 24, 2003, the Center transmitted by email to R a request for registrar verification in connection with the domain name at issue. On December 24, 2003, R transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details for the administrative, technical and zone contact. The Center verified that the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the "Policy"), the Rules for Uniform Domain Name Dispute Resolution Policy (the "Rules"), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the "Supplemental Rules").
In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on January 9, 2004. In accordance with the Rules, paragraph 5(a), the due date for Response was January 29, 2004. The Respondent did not submit any response. Accordingly, the Center notified the Respondent�s default on February 27, 2004.
The Center appointed Lawrence K. Nodine as the sole panelist in this matter on March 12, 2004. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.
4. Factual Background
Jerome Stevens Pharmaceuticals, Inc. ("Jerome Stevens" or "Complainant") was established under the laws of New York in 1979 (as Jerome Stevens, Inc.). In 1990, Jerome Stevens invented a secret formula and manufacturing process to stabilize orally-administered levothyroxine sodium ("LS"), which is used to treat hypothyroidism. LS is one of the top three prescribed drug products in the United States.
Complainant owns United States Trademark Registration No. 2,737,042 for the mark UNITHROID for a synthetic thyroid preparation to be used in the treatment of hypothyroidism and other diseases and disorders of the thyroid, in International Class 05. Complainant�s trademark registration constitutes "prima facie evidence of the validity of Complainant�s trademark." See Backstreet Productions, Inc. v. John Zuccarini, CupcakeParty, Cupcake Real Video, Cupcake-Show and Cupcakes-First Patrol, WIPO Case No. D2001-0654 Section 8A; see Susan Miller v. John Zuccarini, d/b/a Cupcake-Movie, WIPO Case No. D2001-0064 Section 5b.
On October 16, 2000, Jerome Stevens and Respondent, Watson Pharmaceuticals, Inc. entered into an Amended and Restated Sales, Marketing and Distribution Agreement, (the "Agreement") under which Complainant granted to Respondent the exclusive worldwide right to market UNITHROID products. The Agreement granted to Respondent the limited right to use the UNITHROID trademark to promote, markets sell and distribute the products solely during the term of the Agreement. The Agreement was for seven years, but was terminated after two years on December 31, 2002.
On November 4, 2000, Respondent registered the domain name with R. After the termination of the Agreement, Respondent continued to market the UNITHROID product on its corporate website and through the "www." website. In November 2003, the Complainant, via counsel, contacted the Respondent to complain that, among other things, the Respondent was marketing UNITHROID via the "www." website. The Respondent, via counsel, subsequently contacted the Complainant�s counsel by letter dated November 14, 2003, advising that Respondent had "discontinued the website and removed the Unithroid hyperlink from the home page of its corporate website." In that same response, Respondent stated that it has a right to use the mark in connection with selling its remaining inventory.
Complainant filed this Complaint in hopes of securing the transfer of the Domain Name to it to market its UNITHROID product to which it now holds distribution rights.
5. Parties� Contentions
A. Complainant
Complainant contends:
a) the domain name is identical and/or confusingly similar to trademarks in which the Complainant has rights;
b) the Respondent has no rights or legitimate interests in the domain name; and
c) the domain name was registered and is being used in bad faith.
B. Respondent
The Respondent did not reply to the Complainant�s contentions.
6. Discussion and Findings
To succeed in this proceeding, the Complainant must prove:
A. The Domain Name is identical or confusingly similar to a trademark or service mark in which the Complainant has rights; and
B. The Respondent has no rights or legitimate interests in respect of the Domain Name; and
C. The Domain Name has been registered and is being used in bad faith.
Policy paragraph 4(a). Even though the Center gave Respondent sufficient notice under Rule 2(a), Respondent has not responded to the Complaint. Where Respondent does not respond to the complaint, the Panel shall decide the dispute based upon the complaint. Rules paragraph 5(e), paragraph 14(a). The complaint is to be decided on the basis of the statements and documents submitted. Rules paragraph 15(a). Under Rule 14(b), Respondent�s failure to answer entitles the Panel to draw such inferences therefrom as it considers appropriate or accept Complainant�s allegations as undisputed facts. See also Birinyi Associates, Inc. v. Convert, WIPO Case No. D2001-0395 (finding that pursuant to Paragraph 5(e) of the Rules, in the absence of a Response from the Respondent, the Panel shall decide the dispute based on the complaint).
A. Identical or Confusingly Similar
It is clear that Complainant has rights in the trademark UNITHROID. Among other worldwide registrations, Complainant holds United States Trademark Registration No. 2,737,042 (the 0421 Registration) for the mark UNITHROID in connection with synthetic thyroid preparation to be used in the treatment of hypothyroidism and other diseases and disorders of the thyroid. The domain name is identical and/or confusingly similar to the mark UNITHROID. Thus, Complainant satisfies paragraph 4(a)(i) of the Policy.
B. Rights or Legitimate Interests
The Complainant has argued that the Respondent has no rights or interests in the domain name. Panelist notes that Policy paragraph 4(a)(ii) uses the present tense "have no legitimate rights" and does not refer to the time of registration. A Respondent may establish its rights or legitimate interests in a domain name by showing any of the following elements:
4(c)(i) before any notice to you [Respondent] of the dispute, your use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or
(ii) you [Respondent] (as an individual, business, or other organization) have been commonly known by the domain name, even if you have acquired no trademark or service mark rights; or
(iii) you [Respondent] 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 Respondent did not file a response with any explanation as to why the Respondent might have a legitimate interest in the Domain Name. This lack of response could be enough to find for Complainant. See Brown Thomas & Company Limited v. Domain Reservations, WIPO Case No. D2001-0592. This Panelist, nonetheless, reviews Complainant�s allegations and evidence for prima facie sufficiency.
This is not your typical cybersquatting case. Respondent is not a typical cybersquatter who clearly never had any legitimate rights to use the mark or the Domain Name and thus, clearly registered the Domain Name, or a variation of it, with the explicit purpose of diverting Internet traffic from the trademark owner.
This is a case where there was a prior relationship, a Marketing and Distribution Agreement, between the parties. In the Agreement, which was not included in the Complaint, Complainant granted to Respondent "the exclusive worldwide right to market Unithroid products." In addition, "[t]he Agreement granted to Respondent the limited right to use the Unithroid trademark to promote, market, sell and distribute the products solely during the term of the Agreement." The issue here is whether the Agreement authorized Respondent to register the Domain Name.
Complainant contends that this Agreement did not authorize Respondent to register the Domain Name. Because the Respondent did not file a Response, there is no evidence to the contrary, or to the effect that Respondent has or had any legitimate rights to the Domain Name. At least one panel has found that because of the value associated with the ownership and registration of a Domain Name, authorization to register it must be expressed, not implied. See Kambly SA Spécialités de Biscuits Suisses v. Swiss Connection Inc., WIPO Case No. D2003-0983.
Moreover, the Panelist in Kambly also referenced the Paris Convention and found that the Clause under the "Paris Convention which provides that an �agent, principal, representative or official distributor does not have the right to apply, in its own name, for registration of the principal�s mark,� must also apply to the registration of domain names, particularly if the owner of the mark is in the country of that distributor." Here, both the Respondent and the Complainant are United States citizens, and based on the facts submitted, it is highly unlikely that Respondent would have a right to register the trademark in the United States Patent and Trademark Office.
Complainant also contends that the mere fact that Respondent sold Complainant�s products does not give Respondent any rights, express or implied, to register the domain name. See Societé Civile Agricole Chateau Margaux v. Goldman Williams Ltd, WIPO Case No. D2001-1147 (December 2, 2001) (Transfer of domain name to trademark owner ordered where authorized seller of Chateau Margaux wines registered domain name); see also Volvo Trademark Holding v. Peter Lambe, WIPO Case No. D2001-1292 (January 20, 2002) ("It is a well known principle that [a seller] of [goods] is entitled to a certain limited use of the trademark of the manufacturer of the original products in connection with the bona fide offering of these goods, but this principle does not entitle the said manufacturer to incorporate the trademark in his business name or in any other type of business identifier such as a domain name").
The Panelist agrees with this contention. Panelists have consistently concluded that even if a respondent is an authorized retailer of complainant�s products, this, in itself, is not sufficient to give the respondent a right to use these trademarks as domain names. A licensee, dealer, agent or distributor of products of a trademark owner does not per se have a right to a domain name which includes that trademark. See, e.g., Motorola Inc. v. Newgate Internet Inc., WIPO Case No. D2000-0079 (finding use of a mark as a domain name clearly goes further than what is required merely to resell products); The Stanley Works and Stanley Logistics, Inc. v. Camp Creek Co., Inc., WIPO Case No. D2000-0113 (finding that even if respondent was a retail seller of complainant�s products, the collateral trademark use necessary to allow resale of complainant�s products is not enough to confer the right to use the trademark as a domain name); Ferrero S.p.A. v. Fistagi S.r.l., WIPO Case No. D2001-0262 (finding that registering a domain name is more than what is required to resell a product bearing the mark); Nokia Corporation v Nokia Ringtones & Logos Hotline, WIPO Case No. D2001-1101 (finding that respondent would only have the right to the domain name if complainant had specifically granted that right).
Even though the Panelist agrees with the above reasoning, the Panelist cannot ignore the fact that there is no evidence that Complainant contested Respondent�s registration or use of the Domain Name until after the Agreement terminated and Complainant, itself, became the exclusive distributor of the UNITHROID products. This seems to indicate that up until the termination of the Agreement, Respondent may have been making a bona fide use of the domain name, regardless of whether it had the right to register and use the Domain Name. It was only after termination of the Agreement, where Complainant continued to sell the products on the website, via the Domain Name, that the possibly legitimate or bona fide use terminated as well.
Upon notice to Respondent by Complainant, Respondent "discontinued the website and removed the Unithroid hyperlink from the home page of its corporate website." Complainant contends that this implies that Respondent concedes that it no longer has a right to use the domain name. The panelist agrees with this contention. There is no statement in the Policy that Respondent must have no legitimate interest both at the time of registration and thereafter. Thus, if one had legitimate use at one point, yet no longer is legitimately using the domain name, the Policy doesn�t prohibit a finding of no legitimate use pursuant to paragraph 4(a)(ii). Complainant submitted some case law to the effect that once an Agreement has terminated, the holder of a relevant domain name should transfer the domain name to the trademark owner. See, e.g., Geckodrive Inc. v. Jon Hollcraft, Case No. AF-1047 (eResolution, November 20, 2001); I & J Fisnar Inc. v. Almond Technieck, Case No. CPR-113 (CPR Institute for Dispute Resolution, March 13, 2002) (once the complainant had revoked its authorization of the respondent to use the complainant�s mark, the fact of respondent�s mere continued ownership of the domain name constituted "bad faith.").
Thus, now that the license is over, Respondent must recognize that it no longer has, if it ever had, a legitimate interest in the Domain Name. The fact that it did take down all material on the website at Complainant�s request also leads the Panelist to believe that Respondent has, and recognizes that it has, no legitimate interest in the domain name.
In light of the foregoing and in light of the fact that Respondent has not argued or represented, in anyway, that it has legitimate rights to the Domain Name, the Panel finds that, regardless of whether the Respondent ever did have rights to use the Domain Name, it is satisfied that Respondent does not currently have any legitimate rights to the Domain Name in satisfaction of the Policy.
C. Registered and Used in Bad Faith
The Policy requires registration and use in bad faith. Policy 4(a)(iii). Evidence of registration and use in bad faith include the following:
(i) circumstances indicating that you have registered or you have acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name; or
(ii) you have registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that you have engaged in a pattern of such conduct; or
(iii) you have registered the domain name primarily for the purpose of disrupting the business of a competitor; or
(iv) by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your website 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 website or location or of a product or service on your website or location.
This list is not exclusive and other indicia of bad faith may apply.
Complainant alleges that the domain name was registered in bad faith in order to prevent the Complainant or its licensees from reflecting the mark in a corresponding domain name because (i) nothing in the Agreement expressly authorized Respondent to register the domain name; (ii) the original term of the Agreement was seven years; (iii) Respondent knew that it had not been granted the right to register the domain name; (iv) Respondent also knew that it would not forever possess exclusive rights to sell the UNITHROID product and (v) Respondent knew that Complainant owned rights in the UNITHROID trademark.
These allegations, if assumed to be true, are not sufficient to prove bad faith. There is no rule that registering a domain name is per se bad faith in the absence of express authorization. On the contrary, many panel decisions recognize that persons other than mark owners can sometimes have legitimate interests in a domain name. See Oki Data Americas, Inc. v. ASD, Inc., WIPO Case No. D2001-0903. This being so, mere registration without express authorization cannot be considered bad faith per se, since implied authorization may exist.
Neither is it sufficient to allege that because the Agreement was short term (seven years), the Respondent registered the Domain Name in bad faith to prevent the Complainant from reflecting the mark in a corresponding domain name. This allegation is insufficient because, as the Agreement was for seven years and the Respondent registered the domain name for six years, it appears as though the Respondent registered the Domain Name within the period of the Agreement and not in perpetuity. Regardless, the Panel is not prepared to rule that registering a domain name is presumptively in bad faith whenever the contracts between the parties have a term shorter than the term of the domain name registration.
Finally, it is not enough to allege that Respondent knew the Complainant owned the trademark. This simply reverts to the question of implied rights.
The outcome here would be different if the allegations or proofs were different. See, e.g., Geobra Brandstätter GmbH & Co KG v. Only Kids Inc., WIPO Case No. D2001-0841; Birinyi Associates, Inc. v. Convert, WIPO Case No. D2001-0395. For example, allegations that there was no implied authority or acquiescence may have changed the outcome. Here, however, the opposite is true. The November 11, 2003, cease and desist letter implies that Complainant objected to Respondent�s registration only after the termination. There is no hint that Complainant contested the initial registration of the domain name or Respondent�s use of it prior to termination. The letter objects to Respondent�s "continued use." It says: "Therefore, given that the Agreement has been terminated, we request that Watson discontinues all efforts to market Unithroid and, in particular, remove from its website all marketing materials concerning Unithroid."
"[I]t is important to keep in mind that the Policy was designed to prevent the extortionate behavior commonly known as cybersquatting. It cannot be used to litigate all disputes involving domain names." See The T, LLC v. Jeffrey S. Poploff, WIPO Case No. D2000-1470. The Policy specifically requires bad faith registration and use and the duality of these requirements cannot be ignored. This is especially true in light of the likely legitimate use, at the outset, of the registration and the implied acquiescence and knowledge by Complainant thereto.
In Oki Data, the panelist said: "If trademark owners wish to prevent the use of their marks by authorized sales and repair agents in domain names, they should negotiate such protections through appropriate contractual language or, when permitted under the relevant law, seek recovery in classic trademark infringement or dilution litigations. In the absence, however, of some element of illegitimacy, they should not use the Policy to prevent uses that ICANN deemed to be legitimate, including the use of domain names in connection with the bona fide offering of goods and services."
Thus, given the insufficiency of the allegations and the failure of the letter to challenge the legitimacy of the pre-termination website activity, the Panel concludes that the petition should be denied because Complainant has not shown that the domain name was registered in bad faith.
7. Decision
For all the foregoing reasons, the Complaint is denied.
Lawrence K. Nodine
Sole Panelist
Date: March 26, 2004
Full & Egal Universal Law Academy