A UK company ran a website offering merchandise carrying the famous Jack Daniel’s Tennessee whiskey brand. It was not, however, authorised by the whiskey maker, which challenged the website url. Ray Coyle reports on the perhaps surprising outcome.
Topic: Domain names
Who: WIPO Arbitration and Mediation Centre (the "Panel")
When: 20 November 2007
Where: World Intellectual Property Organisation
Law stated as at: 2 January 2008
What happened:
Jack Daniel's Properties Inc. of California sought to prevent the use of the domain name "jackdanielsgifts.com" on the basis that, contrary to the Uniform Domain Name Dispute Resolution Policy (the "Policy"), the site breached the rights of Jack Daniels. The company that ran the web site ("the Company") sold, in the UK, branded merchandise bearing logos of Jack Daniels and also licensed merchandise of other drinks manufacturers such as Guinness and Jim Beam.
In order to succeed, Para 4(a) of the Policy required Jack Daniel's to demonstrate:
- the disputed domain name is identical or confusingly similar to a trademark or service mark in which the Complainant has rights; and
- the Respondent has no rights or legitimate interests in respect of the disputed domain name; and
- the disputed domain name has been registered and is being used in bad faith.
The Panel found no difficulty in deciding that the domain name was confusingly similar to Jack Daniels' trade mark and so went on to consider whether the Company had any rights or legitimate interests in respect of the disputed domain name.
Para 4(c) of the Policy sets out how a company can demonstrate that it has a legitimate interest in a domain name:
- before any notice to you of the dispute, your use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or
- you (as an individual, business, or other organization) have been commonly known by the domain name, even if you have acquired no trademark or service mark rights; or
- you are making a legitimate non-commercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trade mark or service mark at issue.
The Company failed to convince the court that it was commonly known by the domain name and clearly could not claim non-commercial fair use, so it was left with the one remaining means of demonstrating its legitimate right to use the name under (i) above. It had to show that its use was "bona fide".
The Policy is not particularly helpful in this regard but the Panel has developed its own four part test for "a bona fide offering of goods or services":
- The Respondent must actually be offering the goods or services at issue.
- The Respondent must use the site to sell only the trademarked goods; otherwise, it could be using the trademark to bait Internet users and then switch them to other goods.
- The site must accurately disclose the registrant's relationship with the trademark owner; it may not, for example, falsely suggest that it is the trademark owner, or that the website is the official site, if, in fact, it is only one of many sale agents.
- The Respondent must not try to corner the market in all domain names, thus depriving the trademark owner of reflecting its own mark in the domain name.
The Panel found that the Company "easily satisfied" elements one, three and four. However, element two was clearly going to be a cause for concern and, no doubt, the area where Jack Daniel's would have felt most confident about their case. The Company was using Jack Daniels' trade mark to attract users to the site and then offering them, for example, branded Jim Beam merchandise.
However, the four part test above is used to determine whether the use of the domain name breaches para. 4(c)(i) which, as underlined above, starts with the phrase "before any notice of the dispute". The Company was able to demonstrate that, up until it received correspondence from Jack Daniel's, it had only sold Jack Daniel's branded merchandise. They claimed that merchandise with third party trade marks, such as Jim Beam, was only introduced in order to differentiate the web site from the official Jack Daniel's site.
The panel therefore found that "before any notice of the dispute" the site was used for "a bona fide offering of goods or services".
On this basis, Jack Daniel's lost the case.
Why this matters:
This seems, on the face of it, to be a harsh decision. The current use of the web site is clearly in breach of the WIPO Policy. However, the Policy is clear on this. The operator of a web site only has to show bona fide use before any notice of the dispute. Once they receive notice, this provision no longer applies.
Brand owners should be careful to bear this legal quirk in mind before entering into any correspondence in respect of confusingly similar domain names. Unless there is clear evidence that the use of the site is not "bona fide" before correspondence is entered into, setting a dispute in motion could be severely counter productive as it will free up the business running the web site to no longer concern themselves with bona fide use.
Jack Daniel's are certainly in a worse position now than when they commenced correspondence. Where there had been a web site selling only Jack Daniels' branded merchandise which could have been prevented from cross selling to other branded goods, their trade mark is now being used to attract consumers to a site that sells their competitor's goods. Under the current WIPO Policy, it does not appear that there is anything that they can do about it.
