WARRANTY DIRECT does not warrant name transfer

In Interstate National Dealer Services Inc v Colley, a World Intellectual Property Organization (WIPO) panel has refused to order the transfer of 'carwarrantiesdirect.com' and 'carwarrantiesdirect.net' to the complainant - the owner of the mark WARRANTY DIRECT. It held that the complainant's mark was not sufficiently distinctive to allow the transfer of the domain names.

Interstate National Dealer Services Inc (INDS) registered the US trademark WARRANTY DIRECT in 1997 for use in association with "providing service contracts and extended warranty contracts" for various types of vehicles, appliances and equipment, including "new and used motor vehicles". Selwyn Colley, an individual based in the United States, later registered 'carwarrantiesdirect.com' and 'carwarrantiesdirect.net', and used them in association with a website that offered extended automobile warranties. INDS filed a complaint with WIPO, arguing that Colley had infringed its trademark rights.

The panel noted that both parties were in the same line of business and that INDS's trademark registration had become incontestable. However, it held that INDS had failed to meet all the requirements for transfer in Paragraph 4(a) of the Uniform Dispute Resolution Policy (UDRP). The panel reasoned that INDS had not proved that Colley did not have rights or a legitimate interest in the disputed domain names. In particular, it held that INDS's mark was not sufficiently distinctive to allow it to claim a monopoly over close variations of the mark.

The panel went on to consider the issue of bad-faith registration and use, although there was no requirement to do so given that INDS had failed on the legitimate interest prong of the UDRP test. It held that the disputed domain names were not registered in bad faith and stated that Colley's offer to sell the domain names in exchange for the cost of changing the name of his business and advertising expenditure was offset by the fact that he had been actively using the domain names for two years. Further, the panel held that the weakness of INDS's mark undermined a claim that Colley had adopted the domain names to disrupt INDS or to create a likelihood of confusion among internet users so as to attract traffic to his website for commercial gain.

Eric Macramalla, Gowling Lafleur Henderson LLP, Ottawa