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On November 15, 2006, in a domain name dispute submitted to the National Arbitration Forum pursuant to the Uniform Domain Name Dispute Resolution Policy (the "Policy") of the Internet Corporation For Assigned Names and Numbers (ICANN), an arbitration panelist rendered a decision relevant to all businesses involved in a distributorship business relationship.

Case summary

In this case, the Respondent was the Complainant's Canadian distributor at the time it registered the domain name ezup-canada.com, which included the Complainant's registered trade-mark EZ-UP. Respondent had registered and was using the domain name for the purpose of selling Complainant's EZ-UP products in Canada in its capacity of authorized distributor. Its use of the domain name took place with Complainant's knowledge and approval. After the business relationship between the parties terminated, Complainant sought to obtain the transfer of the domain name, alleging (1) that the domain name was confusing with its registered trade-mark; (2) that following the termination of the distributorship relationship between the parties, Respondent could not establish a legitimate interest in the domain name; and (3) that the domain name had been registered and was being used in bad faith, because Respondent was using it to draw Internet users to its website for sales of products in competition with Complainant.

Findings

After finding that the disputed domain name was confusing with Complainant's trade-mark, the panelist was left to decide if Respondent had a legitimate interest in the domain name and if the domain name had been registered and was being used in bad faith.

The panelist noted that during the period when Respondent was a distributor of Complainant, it had a clear legitimate interest in the domain name (because the domain name was being used with the knowledge and approval of Complainant to sell Complainant's EZ-UP products in Canada). Therefore, the remaining question was whether Respondent retained that legitimate interest after the termination of its business relationship with Complainant.

The panelist considered that Respondent retained, at least for a certain period of time, a legitimate interest in the disputed domain name for two reasons:

• First, because, in order to keep on good terms with its customers, it had to maintain warranty and after-sales services related to the EZ-UP products it had sold, especially in a situation where Complainant refused to provide such services in relation to the products that Respondent had been selling.
• Secondly, because Respondent, during a changeover to new email addresses, needed to keep the email addresses linked to the domain name active in order to avoid disrupting communications with its customers and associates.

Having found that Respondent maintained a legitimate interest in the domain name, it was not strictly necessary for the panelist to deal with the issue of bad faith. The panelist nonetheless saw fit to restate the well established principle that in order to succeed under the Policy's "bad faith" criteria, it was necessary to prove, on the balance of probabilities, both that the disputed domain name had been registered in bad faith and that it was being used in bad faith. The panelist noted that it had already been determined that the domain name had been registered with the Complainant's knowledge and approval, and therefore there could not have been any bad faith at the time of registration. As for the use of the domain name after the termination of the business relationship, the panelist found that there was no bad faith on behalf of the Respondent since it was not using the disputed domain name in a website (Respondent had deactivated the website two months before the Complaint was filed) or for any improper or misleading purposes or in any way that could be regarded as deleterious to Complainant.

Daniel I. Lack
Sébastien J.-P. Gardère

The purpose of this document is to provide information as to developments in the law. It does not contain a full analysis of the law nor does it constitute an opinion of Ogilvy Renault LLP or any member of the firm on the points of law discussed.

© Ogilvy Renault LLP 2006 - All Rights Reserved

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Daniel I. Lack
Montréal
514.847.4471
dlack@ogilvyrenault.com
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Sébastien J-P Gardère
Montréal
514.847.4486
sgardere@ogilvyrenault.com
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