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WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
LION NATHAN LIMITED v. WALLACE WAUGH
Case No. D2000-0030
1. The Parties
Complainant is Lion Nathan Limited of Level 5, Tower 2, 55-65 Shorthand Street, Auckland, New Zealand ("Lion"), whose authorised representative is Baldwin Shelston Waters. Respondent is Wallace Waugh, of River Road, RD1, Hamilton, Waikato, New Zealand ("Mr. Waugh"), whose authorised representative is Knowles & Associates.
2. The Domain Name and Registrar
The domain name in issue is "steinlager.com", the Registrar of which is Network Solutions Inc.
3. Procedural History
The WIPO Arbitration and Mediation Center (the Center) received Lion’s complaint on January 18, 2000 (electronic version) and on February 1, 2000 a hard copy of the Complaint and accompanying documents. The Center verified that the complaint satisfies the formal requirements of the ICANN Uniform Domain Name Dispute Resolution Policy (the Policy), the Rules for Uniform Domain Name Dispute Resolution Policy (the Rules), and the Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the Supplemental Rules). Lion made the required payment to the Center. The formal date of the commencement of this administrative proceeding is February 3, 2000.
On January 31, 2000, the Center transmitted via e-mail to Network Solutions a request for registrar verification in connection with this case. On February 4, 2000 Network Solutions transmitted via e-mail to the Center Network Solutions’ Verification Response, confirming that the registrant is Mr. Waugh and both the administrative and billing contacts are Mr. Waugh.
On February 3, 2000, the Center transmitted to email@example.com, Notification of Complainant and Commencement of the Administrative Proceeding. The Center advised that the Response was due by February 22, 2000. On the same day copies were sent by facsimile and priority mail to Mr. Waugh.
On February 22, 2000, Knowles & Associates submitted via e-mail and facsimile to the Center Mr. Waugh’s Response dated February 22, 2000.
On February 29, 2000, the Center advised the parties via fax that Mr. Christopher Tootal had been appointed as the Panelist in this proceeding and enclosed a copy of the Panelist’s Statement of Acceptance and Declaration of Impartiality and Independence.
By e-mail dated February 23, 2000 addressed to the Center Lion’s solicitors acknowledged receipt of Mr. Waugh’s Response, and raised the following issues:-
"In terms of the above, we note that the Response raises certain matters not previously disclosed to the Complainant. We respectfully submit these require a response. We seek leave pursuant to paragraphs 10(b) (fair opportunity to present case) and 12 (further statements) of the ICANN Rules to lodge further statements or documents to respond to these issues.
We also seek clarification on one issue. Our client’s Complaint was not accompanied by sworn evidence as we did not see this as a requirement of the Rules and indeed not in keeping with the purpose of the procedure.
However, we see that the Respondent has lodged evidence in sworn form. We do not wish to unnecessarily complicate the procedure. However, nor do we wish our client to be disadvantaged in any way and we seek your comment on whether our client’s evidence in chief and/or in response should be in sworn form."
In relation to the issue concerning sworn evidence, the Center replied by email on February 25, 2000, as follows:-
"The Rules neither envisage nor call for evidence submitted in support of a Complaint or Response to be sworn. As a factual matter, the weight to be given to sworn evidence is ultimately a matter of the Panelist."
The Panelist respectfully agrees with the Center.
In relation to the second issue, Mr. Waugh raised a number of objections, and the matter was referred for decision to the Panelist.
The Panelist, by email dated March 1, 2000 issued the following request:-
"1. The Panel has noted the e-mails of the Complainant dated 23 February and of the Respondent dated 24 February.
2. The Panel hereby requests the Complainant to lodge, within 10 days of today’s date, a statement by way of Answer to the Response. The Answer shall be strictly limited to replying to matters raised for the first time by the Respondent in his Response, and which the Complainant was in no position to raise in the Complaint.
3. The Panel has Rule 10(b) well in mind, and reserves the right to request the Respondent to file a further Response should this prove necessary."
Lion submitted its "Answer to new issues raised in Respondent’s Response" on March 10, 2000, whereupon Mr. Waugh sought leave to file a further response.
The Panelist took the view that Mr. Waugh should be given the opportunity of dealing with some of the matters raised in the Answer, and a "Respondent’s Answer to Complainant’s Submission dated 10 March 2000" was lodged on March 23, 2000.
4. Factual Background
- The Trade Marks – Lion
The complaint is based on the trade mark STEINLAGER registered in over 36 countries around the world in various formats, but particularly as the word STEINLAGER, and primarily for beer. For the purposes of this complaint, the Panelist notes that the Complaint:
- Lists 9 separate registrations in New Zealand, extending to a wide range of services and consumer goods.
- Identifies 2 registrations in the U.S.A., one for lager beer, and the other for "Articles of clothing; namely T-shirts and sweatshirts, hats".
No dates of registration are given in the Complaint, but the Panelist assumes that the trade marks had all been registered (at least in New Zealand, the U.S.A. and other major economies) before the events leading to the present dispute. (Indeed, Mr. Waugh’s Response clearly shows that the U.S.A. trade marks had been so registered).
- The Trade Marks – Mr. Waugh
Mr. Waugh’s son, Ian Wallace Waugh, who has sworn an affidavit in support of Mr. Waugh, filed a trade mark application on April 22, 1998 at the United States Patent and Trade Mark Office for STEINLAGER in respect of "Road painting and striping machines". Notice of Allowance of that application was issued on January 18, 2000.
- The Domain Name – steinlager.com
"steinlager.com" was registered in the name of Mr. Waugh on April 25, 1997 with NSI. Following a complaint from Lion’s attorneys dated June 19, 1997, NSI placed the domain name on "hold" under NSI’s Domain Name Dispute Policy (Rev. 02).
5. The Complaint
- The Complaint (para. (i)) contains a "Confidentiality Notice" in the following terms:-
"The Complaint and Annexure A contain information and documents which are commercially sensitive and confidential. The information and documents are supplied to WIPO, the Panelist and the Respondent solely for the purpose of dealing with the Complaint. The Complainant does not consent to the use or disclosure of such information or documents to any other person or entity for any other purpose whatsoever."
Unfortunately, Lion do not identify what information and documents they consider are confidential, and while the Panelist accepts that he should not use the information and documents for any purpose other than dealing with the Complaint, Lion and its advisers must be aware that the Panelist’s decision must be published. In the circumstances, the Panelist has tried to avoid disclosing information which may be confidential, but the Panelist recommends that if confidentiality questions arise in future cases parties should identify specifically what matters they consider to be confidential.
- All Lion’s brands were valued in its 1998 Annual Report at NZ$1,993.7 million. STEINLAGER was not separately valued, but as one of Lion’s major brands it is alleged to be "clearly of very considerable commercial value and importance" to Lion. The Complaint provides further details of Lion’s sales of STEINLAGER beer, in particular to the U.S. market where sales of some US$9 million in 1999 were supported by marketing expenditure of US$550,000. The Complaint points to the international promotion of STEINLAGER through Lion’s sponsoring of yachts bearing the name STEINLAGER in the Whitbread Round the World Race and other yachting events. The Complaint asserts that STEINLAGER is an "international" brand and that Lion wishes to use the "steinlager.com" address to "attract added international profile and sales."
- The Complaint alleges that the "steinlager.com" domain name is identical to the STEINLAGER word mark and confusingly similar to the STEINLAGER label mark.
- Lion relies inter alia on the following matters as evidence that Mr. Waugh has no rights or legitimate interests in the domain name, and that the domain name "steinlager.com" has been registered and is being used in bad faith:-
- The domain name has been acquired primarily for the purpose of selling it to Lion.
- Lion has attempted to obtain a transfer of the domain name from Mr. Waugh. It is alleged as follows:-
"However, the Respondent has said he would only transfer the domain name upon payment of a sum in the order of NZ$20,000".
- Mr. Waugh has not himself used the domain name and could be prevented from doing so in New Zealand under the precedent of New Zealand Post v. Leng 3 NZLR 219, and possibly in other countries. Accordingly, any use would not be bona fide.
- Lion rely on an article in The Dominion, a New Zealand newspaper, on April 16, 1998, in particular a reported statement made by Mr. Waugh that he had been looking for an Internet site for his various business interests outside farming. He is reported as having said "The name Steinlager seemed ideal as it would generate many hits". The article also reported that Mr. Waugh told Lion he would settle for $20,000.
- Lion also submit that one reason for Mr. Waugh registering "steinlager.com" was to embarrass Lion and in addition to deprive it of a valuable commercial asset rather than to acquire and use the domain name for legitimate commercial reasons.
6. The Response
In the Response, Mr. Waugh disputes much of the Complaint. The following are the principal matters raised:-
- The trade mark STEINLAGER for beer cannot be described as internationally famous, nor as a famous mark in the U.S.A. Mr. Waugh contrasts Anheuser Busch Corporation first quarter of 1999 gross sales of US$3,157 million with Steinlager’s total U.S. sales for the year ending August 1999.
- The domain name "steinlager.com" cannot be regarded as a critical part of Lion’s international marketing strategy because Lion chose instead to register "steinlager.co.nz" in 1996, and was apparently not interested in registering "steinlager.com" until it became aware of Mr. Waugh’s registration in 1997.
- The domain name "steinlager.com" has not been acquired by Mr. Waugh primarily for the purposes of selling it to Lion.
- The Respondent states "It has always been the Respondent’s intention to develop a STEINLAGER brand in relation to its road marking equipment". Mr. Waugh submits that he or his business entity Ink Electronic Media Limited is entitled to use that mark in New Zealand and elsewhere in relation to road-marking and related equipment. Evidence as to the Respondent’s intended use is given by Mr. Ian Waugh, Mr. Waugh’s son.
- The mark is not famous as a brand of international repute. The Response then states:-
"Instead, the name STEINLAGER is of Germanic origin and can be approximately translated into English as meaning "stone layer". The Respondent considered that as such, the mark made fanciful reference to road laying or road marking equipment, therefore the Respondent’s road marking products could be sold under the name STEINLAGER.
- Confusion is unlikely, since anyone going to Mr. Waugh’s intended website would immediately realise that it had no connection with beer.
- INK Electronic Media Limited, has been trading in a product which is referred to as, and bears, the trade mark STEINLAGER. As evidence of such use, Mr. Waugh relies on:-
- the Declaration of Use signed on February 20, 2000 by Mr. Ian Waugh, asserting first use on October 24, 1999, and filed at the USPTO;
- the evidence of Mr. Ian Waugh that "I as Director of INK have used the mark and have an order for substantial volume of product, amounting to approximately NZ$400,000 per annum.";
- his own affidavit, where he states:
"WT has marketed road marking products in the U.S.A. under the trade mark STEINLAGER. In particular, a substantial order of approximately NZ$400,000 per annum for road marking equipment was received in November, 1999."
("WT" is WT Design and Engineering, a business set up by Mr. Ian Waugh in 1989.)
7. Lion’s Answer
In its Answer, Lion replies to three issues, namely Mr. Waugh’s arguments that the domain name was registered for a legitimate commercial purpose, that he is not a cybersquatter, and that the veracity of The Dominion article is denied. The Panelist has ignored Lion’s further submissions in relation to The Dominion article on the ground that Lion could have dealt more formally with that issue in the Complaint had it chosen to do so. However, Lion’s further submissions in relation to the first two issues are in the Panelist’s opinion admissible. The Panelist notes in particular the following matters raised by Lion:-
- Lion submits that the business that would promote road marking equipment in the U.S.A. ("the Alleged Business") does not exist. The comment is made tht no supporting documents such as stationery, business cards, advertising material and product brochures have been put in evidence. Likewise there is no supporting evidence of promotion, receipt of a substantial order, or sale of "a significant volume of product marked with the trade mark STEINLAGER".
- The sole piece of evidence in relation to the Alleged Business is a printout of the planned website (exhibited to Mr. Ian Waugh’s affidavit). The only product shown appears identical to one advertised on the website of WT and cannot be described as road-marking equipment.
- The affidavit of Tony Hillson which reveals that Mr. Waugh and his affiliates have at least 61 domain names registered within the .com domain.
A significant proportion of these domain names are alleged to contain company names or trade marks associated with large multi-national companies. The registration of such domain names is said to demonstrate a pattern of behaviour which demonstrates bad faith within the scope of Paragraph 4(b)(ii) of the ICANN Policy and constitutes cybersquatting.
8. Respondent’s Answer
In response to Lion’s Answer, Mr. Waugh submitted a 4-page statement, accompanied by an affidavit of Philip Robin Hart, a chartered accountant, who has acted for Mr. Waugh and his family for 23 years. The following substantive matters are raised:-
- Para. 3 of the Statement:-
"The Respondent and his son operate a well-known business, which has been manufacturing electronics since 1989 and road marking equipment since 1995".
- In purported support of (a), Mr. Hart says (in para. 2 of his affidavit):-
"I can confirm that Iain Wallace Waugh trading as W T Design has been in business since 1989 and since 1995 has been actively involved in the design and development of a range of equipment for the application and monitoring of road painting equipment".
Mr. Hart (in para. 3) goes on to recall a visit to "the" factory (which factory is not specified). He says:-
"During that visit I saw a number of electronic traffic display signs, and the controllers for those signs.". He also confirms "that at that stage there was a definite and significant business in these products".
After stating that the Waugh family has invested many hundreds of thousands of dollars in research and development, Mr. Hart concludes his affidavit with the following sentence:-
"Although the road painting equipment division is only a part of the group’s overall substantial activities it is crucial to the desired spread of activities over manufactured products, Internet retailing and IT design".
- In para. 11 of the Statement an explanation is given for the large number of domain names registered by Mr. Waugh and INK.
- For the rest, the Statement is in the main directed to denying Lion’s further submissions in its Answer.
9. Discussion and Findings
Paragraph 4.a of the Policy directs that Lion must prove each of the following:-
(i) The domain name in issue is identical or confusingly similar to one of Lion’s trade marks or service marks, and
- Mr. Waugh has no rights or legitimate interests in respect of the domain name, and
- The domain name has been registered and is being used in bad faith.
- Identity or Confusing Similarity
Clearly, the domain name "steinlager.com" is identical to Lion’s many registrations of the word STEINLAGER.
- Rights or Legitimate Interests
Mr. Waugh relies in support of his having rights or legitimate interests in the domain name "steinlager.com" on the alleged use of the trade mark STEINLAGER in relation to road-marking products. The Panelist is not persuaded that any such use has occurred. The evidence put forward by or on behalf of Mr. Waugh is unconvincing and/or contradictory. The Panelist notes in particular the following matters:-
(i) The conflict between the statement in the Response
"INK Electronic Media Limited has been trading in a product which is referred to as, and bears the trade mark STEINLAGER"
and (in reply to the submission that all steps taken by Mr. Waugh in relation to the Alleged Business, including incorporation of INK, occurred after registration of the domain name).
"The date at which INK Electronic Media was incorporated has absolutely nothing to do with the Steinlager domain name, WT design or the marketing of road marking products. INK Electronic Media is a separate business specialising in the sales of pharmaceuticals and electronics products over the Internet."
- The fact that Mr. Ian Waugh has sought to register STEINLAGER in the U.S.A. as a trade mark for "road painting and striping machines" might carry some weight had he done so before Lion complained of Mr. Waugh’s activities. The fact that Mr. Ian Waugh has signed a declaration of use takes matters no further in the absence of any convincing evidence of that use.
- Mr. Ian Waugh exhibited to his affidavit sworn in support of the response a "screen shot" of the proposed home page for the "steinlager.com" website. He said:-
"As can be seen from the screen shot, the intended use of the name STEINLAGER was clearly intended to relate to road marking equipment, not beers."
When it was pointed out by Lion that this was the sole piece of evidence provided by Mr. Waugh in support of the existence of the Alleged Business and that the only product illustrated appeared to bear the logo "WT" and was not road marking equipment, Mr. Waugh’s Answer stated that the product shown (an odometer, a distance-measuring device) "is specially designed for the road painting industry". This may be true, but is hardly evidence of use of STEINLAGER in relation to road-marking products.
- Despite the assertion in Mr. Waugh’s response that Mr. Waugh had made preparations to use the domain name in connection with a bona fide offering of goods in the U.S.A. under the trade mark STEINLAGER, the Panelist finds that there is no evidence to such effect.
The Panelist finds that Mr. Waugh has no rights or legitimate interests in respect of the domain name "steinlager.com".
- Registration and use in bad faith
(i) On the basis of Mr. Waugh’s Response and his and Mr. Ian Waugh’s affidavits, the evidence appeared to be that:
- Mr. Ian Waugh thought of the name "STEINLAGER".
- Mr. Waugh registered the domain name "steinlager.com" because Mr. Ian Waugh did not have his credit card with him.
- WT has a website.
- INK operates other websites selling pharmaceutical products and telecommunications products.
- Websites run by INK include www.wallabies.com.
- Mr. Ian Waugh states in relation to the INK websites:-
"In each case, we have set about finding a domain name for the site, and then developing the brand once the domain name had been obtained".
- Lion’s Answer, and in particular the affidavit of Mr. Tony Hillson revealed that:
- Mr. Waugh has a total of 9 .com domain names registered in his name. These include Generale Bank.com, the name of 4 large Japanese pharmaceutical companies and cuttysark.com" (CUTTY SARK being a well-known brand of Scotch Whisky).
- INK has at least 50 .com domain names registered. Mr. Hillson states that the search engine aborted his search, and hence INK has more than 50 domain names registered to it. (It should be noted that Mr. Waugh ignored the Panelist’s suggestion that he might wish to provide the Panel with a full list of domain names registered by INK).
- Mr. Ian Waugh has 2 .com domain names, both descriptive of pharmaceutical business, and apparently unexceptional.
- Kirsty Waugh has one, "RU58841.com", apparently the code number of a pharmaceutical product developed by Roussel Corporation.
- In Mr. Waugh’s Response to Lion’s Answer, it is alleged that Kirsty Waugh initiated the registration of 6 of Mr. Waugh’s .com registrations. Apparently Mr. Waugh intends to let these lapse, clearling recognising they should not have been registered. The Response to the Answer goes on to make the following statement (Panelist’s emphasis):-
"If any rightful party contacts the Respondent wanting any of these names the Respondent would happily transfer without charge, in the same fashion as the Respondent has transferred merck.co.nz".
(INK had also registered "merck.co.nz" allegedly to promote Merck products).
- It is against the full background of Mr. Waugh and INK’s registration activities that the registration of the domain name "steinlager.com" should be examined. The Panelist considers that the trade mark STEINLAGER in relation to beer is well-known internationally, and that in the eyes of New Zealanders it must be considered as famous. That fact must be known to every New Zealander. Lion chose to register their well-known trade mark using the gTLD which is specific to New Zealand, i.e. as the domain name "steinlager.co.nz" in December, 1996. Did Lion’s failure to use the .com gTLD entitle Mr. Waugh to do so in April, 1997? The Panelist considers it did not.
- The following chronology of events after Mr. Waugh’s registration of "steinlager.com" is of relevance:-
- June 19, 1997 – Baldwin Son and Carey notify Mr. Waugh of Lion’s complaint – this letter upsets Mr. Waugh.
- April 3, 1998 – INK is incorporated.
- April 22, 1998 – Mr. Ian Waugh applies to register STEINLAGER as a U.S. trade mark.
- October 24, 1999 – first alleged use of the U.S. trade mark.
- According to the article published in The Dominion on April 16, 1998 Mr. Waugh "told Lion he would settle for $20,000, which he considered a paltry sum when Mr. Myers’ salary was revealed as being $1.29 million". (Mr. Myers was Lion’s chief executive). In Mr. Waugh’s Response, the veracity of the Dominion article is denied. In his sworn affidavit, however, Mr. Waugh is a little more cautious. Mr. Waugh states as follows:-
"A reporter from that newspaper did call me about my conversation with the Lion Nathan representative. Although the conversations occurred some years ago, I doubt the veracity of the article as reported. I may have mentioned NZ$20,000, but only in connection with the costs of developing a website. I was upset at Lion Nathan’s attitude and their obvious assumption that we had no rights to the domain name."
The Panelist has carefully read the Dominion article, and considers that it is substantially accurate and that Mr. Waugh cannot seriously challenge it. It is clear that Mr. Waugh was very upset by what he saw as Lion’s high-handed approach to him, and was determined to make Lion pay for that. Mr. Waugh’s and his son’s subsequent actions seem to have been designed to attempt to prevent Lion securing the domain name "steinlager.com".
In the light of the foregoing matters the Panelist concludes that Mr. Waugh registered the domain name "steinlager.com" in bad faith. The domain name is being used in bad faith in that Mr. Waugh is preventing Lion from registering its trade mark STEINLAGER in the .com gTLD.
In light of the foregoing the Panelist decides that the domain name registered by Mr. Waugh is identical to the trade mark of Lion, Mr. Waugh has no legitimate interests in respect of the domain name, and the domain name in issue has been registered and is being used in bad faith.
Accordingly, the Panelist orders that the registration of the domain name "steinlager.com" be transferred to Lion Nathan Limited.
Dated: April 3, 2000