Domain name transfer ordered despite business agreement

International
In 1SaleADay LLC v LivinWireless (Case DAU2010-0016, September 27 2010), a World Intellectual Property Organisation (WIPO) panel has ordered the Australian owner of the domain names 'onesaleaday.com.au' and '1saleaday.com.au' to transfer them to the US owner of the corresponding trademark.
 
This decision is an example of a common problem that may arise when a trademark owner that carries on business in one country allows (or allegedly allows) another company in another country to use its trademark (including as a domain name) under some form of informal licensing, agency, representation or marketing/distribution/reseller arrangement.
 
In this case, the Australian registrant of the disputed domain names (the respondent) claimed that it had sought and obtained consent from the US owner of the trademark 1SALEADAY (the complainant) pursuant to a 'business agreement' under which the respondent would operate a 1SaleADay website in Australia and incorporate a local company under the name One Sale A Day Australia Pty Ltd. It was not disputed that a verbal agreement was reached between the parties for the respondent to begin a 1SaleADay business in Australia. However, as is sometimes the case, a dispute subsequently developed between the parties as to the exact terms of this verbal agreement. Nevertheless, the respondent asserted that it had a right or a legitimate interest in the disputed domain names and that they had not been registered or used in bad faith.
 
Although the WIPO dispute procedure is not equipped to deal with substantive contractual disputes, the simple facts in this case did not support the respondent’s argument. The respondent conceded that it was aware of the complainant’s 1SaleADay website and business prior to its registration of the disputed domain names and the incorporation of One Sale A Day Pty Ltd.  Even more importantly, the registration of the disputed domain names and the incorporation of the company both occurred some months prior to the respondent first contacting the complainant and proposing to establish a 1SaleADay website in Australia – and, thus, prior to any agreement (whatever its terms might have been) with the complainant in respect of the respondent’s use of the 1SALEADAY trademark.
 
The inevitable conclusion that the panel drew from these facts was that the respondent registered the disputed domain names so as to benefit from the reputation and goodwill of the complainant’s 1SALEADAY trademark and business activities in the United States. Accordingly, the panel decided that the respondent had no rights or legitimate interests in the disputed domain names and that they had been registered in bad faith. The respondent was thus ordered to transfer the domain names to the complainant.

Julian Gyngell, Kepdowrie Chambers, Wahroonga

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