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Domain Portfolio vs UDRP (Trademark) Question

Labeled as question in Legal Discussion started by stub, Jul 19, 2019.

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  1. stub

    stub Top Member PRO VIP ★★★★★★★★★★

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    OK. We all know not to try to sell TM domain to the trademark owner. However the TM owner only has rights limited to the TM issuance, else they have prove they have a TM by usage. So we are OK to sell the domain outside the realms of their trademark. Is that correct assumption?

    Suppose I have a domain name, UsefulTool.com, and there is a trademark issued for UsefulTools.com, where the TM is for electrical tools eg, saws, drills, etc. I think I can sell my domain to any computer software company without threat of trademark infringement. Is that correct?

    Now for my question....

    I have my domain UsefulTool.com listed on my domain portfolio website and resolves to the domain page on the website. It is categorized in Software, and Tools. Most of the other domains in Tools are of the type used by the TM holder above, but not infringing on their TM. Could the TM holder use my categorization against me in a UDRP as evidence of bad faith registration (or anything else)? Would it make any difference, if it was only categorized in Software and not in Tools at all?

    Alternatively. Could I use my categorization in a UDRP as proof of my not infringing on the TM?

    The domains are not real. They are for illustration purposes only.

    Any insights would be well received. Thank you.
     
    Last edited: Jul 19, 2019
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  2. carob

    carob Top Member VIP ★★★★★★★★★★

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    If you are offering a domain for sale and someone has a TM on the term that predates your ownership of the domain, they have all they need to WIPO it. Unless you too have a TM on the term, say you were selling off a domain that you previously used for trade.
     
  3. stub

    stub Top Member PRO VIP ★★★★★★★★★★

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    I'm not sure if that is correct? Isn't the TM owner limited to the categories stated in the trademark? If their TM is for electrical tools, can they go after my domain for selling it to computer software companies? Outside the purview of their TM?
     
    Last edited: Jul 19, 2019
  4. carob

    carob Top Member VIP ★★★★★★★★★★

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    Their TM prevents others selling goods in that category. But for unused domains it is much broader - if you hold an unused domain and offer it for sale and there was a TM before you took ownership of the domain, the TM holder can successfully WIPO it. It happens. As you have no TM on the term and are not actively using it for an activity in another class of TM than theirs, you would expect to lose it. WIPO uses the term "passively holding" for people just holding domains they do not use.

    It's worth reading some WIPO cases since they always apply the same three simple tests to see if the owner is justified in keeping the name.
     
    Last edited: Jul 19, 2019
  5. 4pm

    4pm user VIP

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    if the name is confusingly similar to their TM and you got no other interest in the name other than offering it for sale the only thing they will have to prove is bad faith... no matter what category it is listed on your site vs whatever category the TM is under

    imho

    but as always @jberryhill knows better
     
  6. equity78

    equity78 Top Member TLDInvestors.com TheDomains Staff PRO Gold Account VIP ★★★★★★★★★★

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    It's obviously complicated and decisions happen all over the map. Some good, some bad, some the domainer wins the UDRP loses the ACPA with a $50,000, $100,000 penalty. Other times the domainer loses the UDRP and wins in court.

    Hopefully @jberryhill can give a quick opinion on your question.
     
  7. stub

    stub Top Member PRO VIP ★★★★★★★★★★

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    I thought there had been many decisions (probably in both directions) where just selling the domain was considered a legitimate business. Has that been definitely decided that selling a domain is automatically considered bad faith?
     
  8. 4pm

    4pm user VIP

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    No, what i meant was that you have no rights or legitimate interest if what you regged/bought/own it for is only reselling it for profit.
    And that's true and can be easily seen (you are a professional domainer with a big portfolio, the name never developed, etc).

    But there's no bad faith automatically, and the other party will need to prove there is.

    This (bad faith, or it's absence) is the only thing you can build your position on in case of UDRP.
    Because the other two requirements (no rights/interest, confusingly similar to TM) are already there.

    We have seen both types of decisions in similar cases, i believe.
    Depending on dates of TM vs reg date, generic or not, panelists' state of mind, lawyers professionalism, parking with infinging ads etc.

    Every case is individual when it comes to "bad faith".
    Contrary to "TM similarity" and "lack of rights/interest" which both are apriori granted and are in favor of complainant if the respondent is a domainer.
    At least from waht i've read on WIPO site.

    but again better ask @jberryhill or those who had real life UDRP experience with a situation like this you described

    imho
     
  9. Ategy.com

    Ategy.com NameCult.com Gold Account VIP

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    Although not directly related to your question .. this isn't entirely true. TM rights are USAGE based .. so it doesn't really matter what TM they officially registered or were issued. What matters is how they actually use it. With the only notable exception being that *IF* they registered the TM, then they have 2-3 years before they actually need to USE it. But if they aren't using it by then, then even a registered TM can be contested (best for @jberryhill to confirm this as I am not a lawyer)

    I think it really depends on the domain. If it's more generic and theoretically multi-usage then a judge/panellist will likely be ok with it. But if the first thing the judge/panellist thinks of with your domain name is the trademark owner, then your simple act of trying to sell the domain could be seen as trying to profit on the trademark owner's "goodwill".

    My guess with your example of "UsefulTool(s)", is that it is indeed generic enough to be considered safe. However .. if you had something like MastercraftTools.com (or conversely MicrosoftTools.com), then even if your plan was to sell it to someone selling software (or electrical tools for MicrosoftTools.com), you'd very likely still be found guilty.

    I think categorisation in general (not how you specifically listed it) most certainly would come into play for a judgement. But I don't think it'll be a big way to save you. While you might only have your domain listed in software, a judge/panellist could easily think you put it in a different category just to try to be smart and get away with it .. so I don't think it could ever save you. However, if you did have it only listed in the TM holder's "class", then there's a better chance that could be used against you. Again though .. it really depends on the actual domain and if the judge/panellist sees it having genuine alternate uses in other classes more than anything else.


    I'm pretty sure you're both right .. and both wrong .. lol. It really depends on the specific mark and how strongly a judge/panellist sees their claim on the potentially infringing mark. For a domain like UsefulTools, then a judge would likely see multiple other legitimate alternate uses and agree with @stub. However, if the domain was MasterCraftTools or DewaltTools, then even if the domain could still technically be used outside the scope of the original Trademark class, a judge/UDRP panellist would still likely agree with @carob.
     
    Last edited: Jul 19, 2019
  10. carob

    carob Top Member VIP ★★★★★★★★★★

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    Are you, is anyone here, basing replies on actually reading WIPO cases and their three basic tests? What is right or wrong or correct in law is not always what happens at WIPO.

    Yes we know the decisions are inconsistent and favour TM holders, but here are the tests:

    https://www.wipo.int/amc/en/domains/guide/#a4 where Test 3 is the bad faith test, which in a sense is a mindreading exercise about what the domain owner/registrant knew or intended when they became owner of the domain. I have read a lot of WIPO cases, and some discuss whether the respondent could or should have known of a trademark - one was dismissed because the individual complainant just was not famous enough to expect everyone to have heard of them, but it seems like companies have great success in grabbing names that correspond to their TMs.

     
    Last edited: Jul 19, 2019
  11. Ategy.com

    Ategy.com NameCult.com Gold Account VIP

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    That's pretty much what I meant by it depends on the specific domain. It's more about how the judge/panellist sees the domain vs the trademark and how it is being used by the TM holder. :)
     
  12. IMEZI

    IMEZI Top Member VIP ★★★★★★★★★★

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    what is the point the term of "limited categories"? if we assume the electrical tools TM owner were corporate, surely they have enough money to pay any fee/charges for broaden their categories and when they got the additional categories as same as you describe as software and tools that would be your end point....
     
  13. stub

    stub Top Member PRO VIP ★★★★★★★★★★

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    @Atergy & @carob

    I take some comfort from what you both have said, inasmuch most of my domains trademarked by other people, do mostly follow the example I mentioned in the beginning. Of course I'm talking in generalizations, from the worst to the best case scenarios. I have very few domains (maybe none) with trademarks which include the brand name of the trademark owner, like Microsoft et al. The biggest problem seems to be the panelists decisions which seem to go all over the place. It seems almost like a roll of the dice if you will win or lose. I will consider these domains carefully to decide if they are worth the trouble of holding each them.

    I take also some comfort also in the case of my attempting to sell a domain. I don't see anything in what @carob has said where I'm NOT trying to sell the name to the TM Holder or it's competitors, but I'm trying to sell the domain to a completely different set of people. And the meaning of "hardware tools" is completely different between the TM and the meaning of "software tools".

    And so I'm now going to take a fresh stock of my current portfolio to establish specifically which domains have trademarks. Can anybody recommend any bulk tools for checking the American and European TM Databases?
     
  14. IMEZI

    IMEZI Top Member VIP ★★★★★★★★★★

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    if the existing TM holder were very huge (popular) brand, it wouldnt logical even for another categories to buy your and or establish new website under the same brand. Most people or even corporate will back off when facing such huge brand

    not just the panelist decision... eventough the panelist decide not to seize your domain you still have to find matched buyer, i mean matched is the business, the money they willing to spent and their BOD decision too
     
  15. jberryhill

    jberryhill Top Member John Berryhill, Ph.d., Esq. VIP ★★★★★★★★★★

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    This is second on the list of "common domainer problems with trademarks". Number one would be an undue focus on whether a mark is registered.

    Trademarks come in varying degrees of strength, scope, and fame. Once you get past the initial issue of "what is a trademark", then the next thing you have to wrap your head around is "what sort of trademark are we dealing with".

    "Coca-Cola" is an extremely well-known mark for a soft drink. That fame confers a scope broader than simply whether or not it is used on a soft drink. If you attempted to sell "Coca-Cola" brand clothing, the fame of the mark is such that consumers might reasonably believe the brand has branched out in to clothing.

    Trademark "infringement" is when a mark is used on similar or competing goods, causing consumer confusion. There are things beyond infringement. One of those is "dilution". Trademark dilution occurs when a famous mark is subject to unauthorized use which erodes the distinctiveness of the mark.

    "Fame" is a term of art, but without getting too deep into the weeds here, the bottom line is whether - even if used on different goods or services - people might still associate that use with the mark owner.

    Another factor to consider is the degree of distinctiveness. Aside from some particular categories like surnames and a few others, the basic scale of inherent distinctiveness looks at the relationship between the mark and the goods or services:

    1. Is the mark descriptive, but nonetheless has acquired distinctiveness through longstanding substantially exclusive use? This would include things like "AMERICAN AIRLINES" which is an American airline or "BANK OF AMERICA" which is a bank of America, but both of which have acquired distinctiveness and are associated with a particular airline and a particular bank. Actually, "Coca-cola", a beverage originally made with extracts of coca and cola, started out as a descriptive mark.

    2. Is the mark suggestive, such that some mental step is required to connect the mark to the goods and services? For example a "trek" is a journey. "TREK" is a brand of bicycle. The word is not descriptive of a bicycle, but suggestive of what one might use it for.

    3. Is the mark abitrary, such that it is otherwise a dictionary word, but completely unrelated to the goods or services? For example "APPLE" as applied to computers, or "MONSTER" as applied to soft drinks, "TIDE" as applied to detergent.

    4. Is the mark fanciful - a made up word with no other meaning than as a reference to the mark. For example "VIAGRA" has no meaning other than as a trademark for the drug sildenafil. "JELLO" for gelatin. EXXON for motor fuel.

    That's the traditional scale of "strength" which will limit both the scope of goods or services which may or may not infringe or dilute, and also which will limit the range of what might be confusingly similar.

    In domain disputes, however, the descriptive marks are somewhat "stronger" than in normal trademark disputes, since the logical use of the term in the descriptive sense is what is protected. On the other hand, the range of variations which are confusingly similar, is smaller, since a descriptive mark is sometimes limited to that particular presentation.

    So, the answer to the question above - "Isn't the TM owner limited to the categories stated in the trademark?" - is "It depends on the fame and strength of the mark." What kind of trademark are we talking about?

    If it's a fanciful mark, like "VIAGRA", I don't care what you are doing with the domain name or who you are trying to sell it to. There's only one reason to register that as a domain name.

    ...and that's exactly where this kind of thing matters. If we are talking about a fanciful mark - i.e. something with no other meaning than a reference to the mark - then there's no reason to be selling that domain name other than to profit from the sole meaning of that mark. If we are talking about an arbitrary mark - i.e. something that, apart from the mark use, is otherwise a dictionary word - then the circumstances are very different.

    So, sure, selling a domain name corresponding to dictionary word, which might incidentally be a trademark for something, is perfectly legitimate. Selling a domain name which is a made-up word (or variation thereof) with no meaning other than as a trademark, is obvious cybersquatting.

    The effort required to prove that is going to depend on the fame and strength of the mark. If you are selling, say, Tomato.com, then the initial assumption would probably be that you are selling it because it is the name of a common vegetable (yeah, I know, its a fruit, but let's not get off track). Is "TOMATO" a trademark for something somewhere? Probably. I didn't look, but I'd bet it is.

    But the complainant with a mark for "TOMATO" for, say, lipstick, is going to have to prove a little more than "That guy was selling tomato.com" to prove that you were seeking to profit from his obscure trademark. They'll have to show that you did something that was premised on it being a mark for lipstick.

    On the other hand, if you are looking to sell ExxonMobil.com, nobody is going to have prove anything about your motivation. Why you think that might be a valuable name is obvious. Duh. It's a huge oil company, and it doesn't mean anything else. There's no conceivable good faith reason to register that domain name and put it up for sale.

    So, sure, if we are talking about ExxonMobil.com, then bad faith is pretty much automatic. If we are talking about Tomato.com, then we're going to need a lot more to prove bad faith relative to a trademark for lipstick, or whatever.
     
    Last edited: Jul 19, 2019
  16. jberryhill

    jberryhill Top Member John Berryhill, Ph.d., Esq. VIP ★★★★★★★★★★

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    Yep. That's a much shorter way of putting it. Exactly.
     
  17. Ategy.com

    Ategy.com NameCult.com Gold Account VIP

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    This is probably the best post on trademarks in the history of posting on trademarks. Thanks @jberryhill for all the info and details .. it goes a long way in helping people understand the organic nature of trademarks and that it isn't always black or white! :)


    Trademarks don't work that way. You aren't allowed to register trademarks in categories you don't commercially operate in.

    As @jberryhill mentioned above however, an extremely strong globally known brand might receive a favourable judgement outside of it's "official TM class" (like as he mentioned, if you were going to use Coca-Cola for your fashion brand). But otherwise trademarks are usage based, and you can't buy extra registered protection unless you are actually active in the particular TM classes in question.
     
    Last edited: Jul 19, 2019
  18. NameDeck

    NameDeck Design. Develop. Deploy. VIP

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    When can we expect your TED talk? :) As always, very informative. Don't you ever get tired of explaining TMs over and over again?!

    Good read. Cheers!
     
  19. stub

    stub Top Member PRO VIP ★★★★★★★★★★

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    @jberryhill and others

    I thank you all for your input. It's all very much appreciated. On a quick check of my domains with trademarks, I probably have a handful of domains with very known trademarks included in the domain name. I am going to delete them immediately from my portfolio.

    I have some domains with made-up names also. I'm going to check my acquisition date to the trademark first used date. I'm going to delete those where my acquisition date is after the first used date.

    As I said in my first post (but probably not emphasized enough). Most of my domains with trademarks are in 2 dictionary word domains. I will check the trademarks and make a call as to whether a UDRP is defendable or not, before deleting them.

    I did run my domains thru a bulk checker against the TESS database. Well some. I've only just started this process. It showed many positive results. Much more than I expected. But upon looking up the TM's they were Dead Marks, or my 2 words were included in a string of words in the trademark, which trademark had a specific basis, obvious from the wording. Which would have seemed necessary for them to have gotten the trademark accepted. I will make a judgement call on these too. Although my feeling is, even the TM holder is unlikely to be offended by my domains. Of the very small sample tested. Because the key words in the TM were not the 2 dictionary words in my domains.

    This process of cleaning out my domains with TM's is going to take quite some time to complete. Probably many months full-time work, with a calendar already full of work. So it's going to take some time to complete. I think the work is justified in order to better protect myself from UDRP's and TM infringement cases. I'll feel happier too. Without the sword of damocles hanging over my head. At this point I'm just taking time out of a busy schedule to compile the data.

    Is there anything else I might have forgotten to include in my cleaning?
     
    Last edited: Jul 20, 2019
  20. offthehandle

    offthehandle . Gold Account VIP

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    Thank you John once again for your valuable input as usual here, its appreciated. I was wondering about another couple threads we had on this “confusing”, issue.

    The name I called out as at high risk was TekApp.com, registered by someone here. Mixing the word TechApp, or TecApp, would be generic. I argued Tek would be risky and confusing should Tektronix decide otherwise.

    Remove the “R”, in Trek and you get the prefix to some registered domains that could be confused since like Coca Cola its a short version of Tek.com which is short for a well known brand Tektronix. We debated that here:

    https://www.namepros.com/threads/do...ith-the-brand-name-visa.1140535/#post-7270540

    https://www.namepros.com/threads/tek-tec-or-tech.349763/#post-7183991

    Any input appreciated.
     
  21. IMEZI

    IMEZI Top Member VIP ★★★★★★★★★★

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    well you dont know how creative human being was, let me explain it in detail :

    domain example is usefulltool.com
    there is TM owner with electrical tools as primary category
    and let say the TM owner were corporation with enough money and resource

    @stub want to sell the domain to another business with software tools as the primary category
    with money, this electrical tools TM owner could buy some lousy mumbo jumbo software tools and create legal entity on it plus additional trademark for software tools category. If you already owned good business with good TM (brand) you could easily obtain additional category right?

    When the electrical tools TM owner get their trade mark for software tools legalized, doesnt it mean the domain were doomed to be seized through URDP? Later when the electrical tools TM owner get the domain, the corporation could easily dissolved the software tools division, simply saying that software tools were not profitable enough for corporation. In the end TM owner get the domain.

    Of course there is cost for doing it, but the cost would be fully controlled by the electrical tools TM owner. It's entirely different from negotiating buying price of the domain which is almost fully controlled by domain owner
     
  22. Ategy.com

    Ategy.com NameCult.com Gold Account VIP

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    But that's exactly what I said .. trademarks are USAGE based .. so if they buy another company and then actively use their existing trademark in commerce for the new product (software), then they are in fact .. "using the trademark actively in commerce for software".

    *IF* the software class was clean for that particular trademark then they most certainly would be able to use it and defend it's usage from that point forward.

    That being said .. in your particular example I'm fairly sure it still wouldn't work.

    Judges and UDRP panellist will likely take into consideration that the domain seller owned the domain before the electrical tools TM holder started dealing in software. Which means theoretically the domain seller (who would have owned the domain BEFORE the electrical company bought the software company) would be totally fine selling the domain to a software tool company. (That being said, there might or might not be a conflict for the buyer if they themselves weren't already actively using the mark).

    Also .. if there was an existing software company using the trademark actively, I'm pretty sure that existing software company could (and should) contest the electrical tools company's new usage of the trademark to sell software.

    Just because one company has a valid trademark in one class, does not mean they can all of a sudden operate in another class (if there is already an existing company already using the same trademark in the new TM class).

    For example, you have Kraken the crypto trading platform and Kraken the rum. Just because Kraken (crypto) has a valid trademark to use "Kraken", that right is only for it's existing TM class, and does not allow them to start selling Kraken vodka.

    All that said .. it's important to factor in the global strength of the trademark as was explained above. If the particular electrical company was very well known, or if software was for some reason an OBVIOUS natural progression for them (that the seller reasonably should have known about), then there still could be trouble for the seller .. but if it's just some average small/medium business, then there would be no justification to think the seller was acting in bad faith by targeting companies already operating in other TM classes (software specifically in this example).

    (Again, I'm not a lawyer so best for @jberryhill to confirm 100%)
     
    Last edited: Jul 20, 2019
  23. jamesall

    jamesall Upgraded Member Gold Account VIP

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    They get what they paid for when registering, and subsequently being approved, for the TM.

    If it is international then it can't be used anywhere under the categories they have outlined.

    I see no TM's for Useful Tools in TESS or anywhere else.

    There are 4 TM entries in TESS. 2 are dead.

    THE MOST USEFUL TOOL IN YOUR TOOLBOX
    USEFUL OUTDOOR TOOLS -DEAD
    THE MOST USEFUL TOOL IN YOUR WORKSHOP - DEAD
    AMERICA'S MOST USEFUL TOOL

    'Useful tool' was probably too generic a term. "Oh that's a useful tool!". TESS is a 'useful tool' as well.
     
    Last edited: Jul 20, 2019
  24. stub

    stub Top Member PRO VIP ★★★★★★★★★★

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    My/Your example is exactly the kind of domains I have with TM's. Of course not all. I just have to sort the wheat from the chaff.
     
  25. dexdn

    dexdn Top Member VIP

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    Do not delete them, just don't renew them.
     

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