YachtWorld sails to victory based on licensor’s use

In YachtWorld v Clift’s Marine Sales (1992) Ltd (Case DCA-1113-CIRA, January 30 2009), a Canadian Internet Registration Authority (CIRA) panel, ruling under the CIRA Domain Name Dispute Resolution Policy (CDRP), has concluded that a licensee was able to rely on the trademark rights of the licensor, even though the rights predated the licensing agreement.
YachtWorld is the Canadian licensee of Dominion Enterprises, the owner of the trademark YACHTWORLD in the United States, Canada and other countries. Since 1995, Dominion has operated a website in association with the domain name 'yachtworld.com', which provides information about the sale and charter of boats and other services related to the boating industry. The YACHTWORLD mark had been used in Canada by Dominion since 1996. However, YachtWorld had been a licensee of the mark only since 2003. Dominion was not a party to the CDRP proceeding.
The registrant, Clift’s Marine Sales (1992) Ltd, is a competitor of YachtWorld in the online boat sale industry. Clift registered the domain name 'yachtworld.ca' on November 9 2000. At all material times, internet users accessing the domain name 'yachtworld.ca' were redirected to Clift's website, located at 'cliftsmarine.com'.
In order to be successful under the CDRP, a complainant must establish that:

  • the domain name at issue is similar to a trademark in which it has rights which predate the registration date of the domain name;
  • the registrant registered the domain name in bad faith; and
  • the registrant does not have a legitimate interest in the domain name.
With respect to the first criterion, a complainant must establish that the registrant's '.ca' domain name is confusingly similar to a mark in which it had rights prior to the date of registration of the domain name at issue. Therefore, it is clear that the rights in the mark at issue must be rights that inure to the complainant, not a third party.
The panel had no trouble in finding that the domain name 'yachtworld.com' was similar to the YACHTWORLD mark. However, YachtWorld was still required to show that it had rights in the mark which predated the registration date of the domain name. In this case, the mark was not yet registered in Canada. Accordingly, the panel examined whether YachtWorld had prior common law rights in the mark in Canada. The CDRP defines a 'mark' as including an unregistered trademark, provided that it has been used in Canada by an entity for the purpose of distinguishing the goods, services or business of that entity from those of another.   
The panel found that Dominion had used the mark in Canada in association with various services related to the boat sale industry since as early as July 1996. Accordingly, the panel concluded that by the time the domain name was registered in 2000, Dominion had prior rights in the mark. 
However, the panel went further and concluded that YachtWorld also had prior rights in the mark. It is unclear from the panel’s decision on what basis it was able to conclude that YachtWorld had rights in the mark which predated the registration of the domain name. YachtWorld became a licensee of Dominion (and the mark) only in 2003. Accordingly, one can conclude that the earliest date from which YachtWorld could establish rights is the date on which it became a licensee of the mark. However, this would be after the registration of the domain name.
A related issue, which was not addressed in the panel’s decision, was whether the licensing agreement permitted YachtWorld to be the registrant of a domain name which includes the YACHTWORLD mark.
Since Clift had failed to respond to the proceeding, the panel had no trouble concluding that Clift had no legitimate interest in the domain name. With respect to bad faith, the panel concluded that Clift had registered the domain name for the purpose of disrupting the business of YachtWorld or Dominion, both of whom were competitors. Accordingly, the registration was found to have been undertaken in bad faith.
Consequently, the panel ordered the transfer of the domain name to YachtWorld.
Antonio Turco, Blake Cassels & Graydon LLP, Toronto

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