Split panel applies 'fair use' test to transfer 'davidoffshop.com'

In Davidoff & Cie SA v Muriel, a split National Arbitration Forum (NAF) panel has ordered the transfer of 'davidoffshop.com' to Swiss company Davidoff. A majority of the panel held that the registration and use of the domain name to sell legitimate DAVIDOFF marked tobacco products alongside goods produced by Davidoff's competitors did not constitute bona fide or fair use.

The majority of the NAF panel held that all the requirements for transfer under Paragraph 4 of the Uniform Domain Name Dispute Resolution Policy (UDRP) had been fulfilled. The disputed domain name was confusingly similar to Davidoff's famous DAVIDOFF mark, ruled the majority, since Davidoff owns numerous Davidoff shops and is known worldwide under that name.

The majority further held that the registrant, an individual named Dario Muriel, did not have a legitimate interest in the domain name because he was selling competing brands as well as DAVIDOFF marked products and he was not part of Davidoff's official distribution network.

Muriel, said the majority, had also registered and used 'davidoffshop.com' in bad faith. Following the guidance in a previous NAF panel UDRP decision (Fossil Inc v NAS) the majority applied a 'fair use' test, holding that, while Muriel was trading off the prestige of Davidoff's internationally famous mark, the sale of DAVIDOFF marked goods on his website constituted only a small fraction of his overall business; the proportion of competitors' goods sold was far higher. Muriel's use, said the majority, was therefore not a bona fide or fair use.

The dissenting panellist, G Gervaise Davis III, argued that the majority's test of 'fair use', based on the percentage of Davidoff products that Muriel sold, has no precedent and is unworkable in practice. Davis rejected the majority's reasoning that Fossil allows a finding of bad faith where a registrant sells both the complainant's goods and competing products under a domain name incorporating the complainant's famous mark. In the Fossil Case, said Davis, the registrant did not sell the complainant's FOSSIL marked goods at all.

Although Davis may have been correct in his assertion that the NAF Fossil Case was not an appropriate precedent, UDRP decisions issued by the World Intellectual Property Organization (eg, Weber-Stephen Products Co v Armitage Hardware and DaimlerChrysler AG v Drummonds) seem to support the majority's opinion on the issue of fair use.

Mark Schweizer, Meyer Lustenberger, Zurich