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The Complainant in this proceeding is Paradox Security Systems Ltd., a corporation duly incorporated under the provisions of the Quebec Companies Act having its head office and principal place of business at 780 Industrial Boulevard, Saint-Eustache, Quebec, Canada.

The Respondent in this proceeding is Webmaster Webmaster, Proceeding Engineering Co Ltd., RM 1302-03, Seapower Centre, 73, Lei Muk Road, Kwai Chung, Hong Kong, SAR of China.

This dispute concerns the domain name <paradoxcanada.com> (the "Domain Name").

The Domain Name was registered on July 26, 2001

The Registrar with whom the Domain Name is registered is Register.com, Inc. 75 8^th Avenue - 11^th Floor, New York, United States of America.

A complaint pursuant to the Uniform Domain Name Dispute Resolution Policy ("the Policy") and the Rules for Uniform Domain Name Dispute Resolution Policy ("the Rules") both of which are implemented by Internet Corporation for Assigned Names and Numbers ("the ICANN") on October 24, 1999, was received by WIPO Arbitration and Mediation Center ("the Center") in electronic format on March 22, 2002, and in hardcopy on March 25, 2002. Payment in the required amount to the Center has been made by the Complainant.

On March 27, 2002, a request for registrar verification was sent to the Registrar requesting confirmation that it had received a copy of the complaint from the Complainant, that the Domain Name was currently registered with it and that the Policy was in effect, and requesting full details of the holder of the Domain Name and advice as to the current status of the Domain Name.

On April 15, 2002, an amendment to the complaint was received.

On May 3, 2002, a response was received from the Respondent.

On May 23, 2002, a notification of appointment of administrative panel and projected decision date ("the appointment notification") was sent to the Complainant and the Respondent. In accordance with the Complainant’s request, the appointment notification informed the parties that the administrative panel would be comprised of a single panelist, Clive Elliott.

On June 7, 2002, a decision was submitted to the Center.

The Complainant is in the business of selling security system equipment and accessories in over 45 countries around the world, including Hong Kong, SAR of China using the mentioned trademarks in connection with the advertising and sale of its products.

The Complainant registered the trademark PARADOX in Canada (Registration no. TMA455449) on March 15, 1996, and on May 7, 1996, in the United States of America (Registration no. 1972995), for security detectors, alarm sensors, detectors, control panels for alarm sensors and detectors and key pads for control panels. Copies of the registration certificates have been provided.

The Complainant registered the trademarks PARADOX PRO in Canada (Registration no. TMA525085) and PARADOX PRO & Design (Registration no. TMA528864) in Canada respectively on March 16, 2000, and June 8, 2000, and on September 5, 2000, in the United States of America (Registration Nos. 2383461 and 2383462)., for security motion detectors for building's burglar alarm. Copies of the registration certificates have been provided.

The Complainant registered the trademark PARADOX DIGITAL PROTECTION & Design in the United States of America on May 29, 2001 (Registration no. 2454345), for security systems namely, motion detectors. Copies of registration certificates have been provided.

The Respondent is a trading company based in Hong Kong, SAR of China.

The Complainant asserts that it is one of the top ten manufacturers of security systems in the world and has invested substantial sums of money in developing and marketing its products and trademarks all over the world.

The Complainant states that in April 1996, it contracted with the Respondent to distribute, on a non-exclusive basis, Paradox products in Mainland, China. At no time during this contractual relationship was the Respondent given permission to use the name PARADOX in any other way, other than as a distributor of Paradox products. Accordingly, on December 4, 1997, Paradox and the Respondent signed a Confidentiality and Non-Disclosure Agreement. Under this agreement, the Respondent covenanted not to use any proprietary and confidential information of the Complainant for its own benefit including the registration of domain names incorporating or comprising the Paradox trademarks. A copy of the Confidentiality and Non-Disclosure Agreement has been provided.

On October 19, 2000, the Complainant cancelled its distribution agreement with the Respondent.

On July 26, 2001, long after the Complainant cancelled the Respondent's distribution rights, the Respondent registered the Domain Name.

The Complainant claims that because the Respondent is no longer an authorized distributor of Paradox's products, that the Respondent has no rights or legitimate interests in the Domain Name. The Complainant further claims that the Respondent is being misleading in doing so.

It is alleged that the Respondent has not made any use of the Domain Name since it was registered over seven months ago.

The Complainant states that the Respondent is still selling in Hong Kong and Mainland China various models of security systems products identical to Paradox's models with the same product name, package and user manual bearing the trademarks "P▲R▲DOX ".

It is argued that the Respondent's bad faith is further evidenced by the fact that it has been promoting so-called knock-offs of Paradox's products in exhibitions in Shanghai, Chengdu and Guangzhou Export Merchandise Exchange Exhibition.

The March 2001 sales catalogue of the Respondent is said to contain Paradox's trademarks and a picture of the Paradox factory.

It is asserted that the Respondent falsely represents itself to be an authorized wholesaler of Paradox alarm and access control equipment, as evidenced by the home page of Respondent's web site.

Finally, it is asserted that the Respondent has also set up a website at the following address <http://proceeding.com.hk>advertising sale of Paradox's products on the web.

The Respondent states that it is not a legal agent of Paradox Security Systems Limited but buys goods directly from the manufacturer and resells them to other companies. It says that its relationship is just a seller and buyer.

The Respondent disputes the claim that it has signed any contract with the Complainant.

The Respondent admits that it has not used the Domain Name since it was registered.

However, it argues that there is a significant difference between the domain names <paradoxcanada.com> and <paradox.ca> and that it has eleven alphabetical differences.

Paragraph 4(a) of the Policy requires that the Complainant must prove each of the following:

(i) The Domain Name is identical or confusingly similar to the trade or service mark; and

(ii) The Respondent has no right or legitimate interest in respect of the Domain Name; and

(iii) The Domain Name has been registered and is being used in bad faith.

Paragraph 4(b) of the Policy sets out four illustrative circumstances that, if proved, constitute evidence of bad faith as required by Paragraph 4(a)(iii) referred to above.

Paragraph 4(c) of the Policy sets out three illustrative circumstances that, if proved, constitute evidence of a right or legitimate interest as described in Paragraph 4(a)(ii) referred to above.

It is alleged by the Complainant, and not disputed by the Respondent, that the Complainant has rights in the Paradox trade mark and name. It is likewise, asserted and not denied, that these rights extend internationally and include not just Canada but the territory in which the Respondent trades.

The Complainant makes, markets and sells security systems under the Paradox trade mark and name and is based in Canada. Accordingly, the addition of the word "Canada" is directly descriptive of and identifies the location of the Complainant. The addition of a purely descriptive term to a distinctive trade mark does little to alter the essential character of that trade mark.

Accordingly, it is found that "Paradoxcanada" is confusingly similar to the Complainant's Paradox trade marks. Accordingly, this ground is made out by the Complainant.

The Complainant relies in part, on the so-called confidentiality and non-disclosure agreement as its basis for it allegation that the Respondent lacks any legitimate interest in the Domain Name. It is asserted in the complaint that the Respondent covenanted not to use any proprietary and confidential information of Paradox for its own benefit including the registration of a domain name incorporating or comprising Paradox's trade marks. This is not exactly correct. The agreement does not expressly refer to trade marks or domain names and applies solely to confidential information, as defined in that agreement.

Having said this, it is clear that even if such written agreement did not apply, a distribution arrangement was in place and according to annexure 8 of the complaint it was terminated by the Complainant on October 19, 2000. The termination of the distribution rights was addressed to Mr. Frankie Kan, the same person who identifies himself as a director of the Respondent and signed the confidentiality and non-disclosure agreement on behalf of Proceeding Engineering. On this basis, it is reasonable to infer that the parties did enter into an oral distribution arrangement and that this was terminated on October 19, 2000.

It is also reasonable to infer that at the time the Domain Name was registered by the Respondent, that it no longer had any relationship with the Complainant and was therefore not entitled to register the Domain Name in the way that it has. This is, particularly so, given the past relationship of the parties and the clear knowledge that the Respondent had of the Complainant's rights in the Paradox trade mark and name.

Accordingly, this ground is made out.

As indicated above, as at the registration date of July 26, 2001, the distribution arrangement had been terminated and the registration of the Domain Name on that date amounts, prima facie, to an act in bad faith. The Respondent asserts that because it has not used the Domain Name since it was registered that this implies that it is not being used in bad faith. However, it is clear from previous decisions under the Policy that the registration and mere "holding" of a domain name is sufficient to amount to use in bad faith, if all the other elements found above exist.

The Respondent has provided no real basis for resisting the allegations made by the Complainant. The main thrust of its position is that no legally binding agreement exists. However, as I have found, an oral agreement did exist and once it was terminated the Respondent's actions in both registering and using the Domain Name (in the case of the latter albeit by merely holding the Domain Name) is found to be in bad faith.

Accordingly this ground is made out.

Therefore, and in consideration to the Complaint’s compliance with the formal requirements for this domain dispute proceeding, to the factual evidence and legal contentions that were submitted, to the confirmation of the presence of each of the elements contemplated in Paragraph 4(a)(i), (ii), and (iii) of the Policy, and on the basis of the statements and documents submitted and in accordance with the Policy, the Rules and other applicable rules and principles of law, as directed by Paragraph 15(a) of the Rules, it is found:

(i) that the Domain Name is confusingly similar to the Complainant’s Paradox trade or service mark and name.

(ii) that the Respondent has no rights or legitimate interests in respect of the Domain Name; and

(iii) that the Domain Name has been registered and is being used in bad faith by the Respondent.

Therefore, the Panel requires, pursuant to what is provided for under the Policy, that the Domain Name be transferred to the Complainant.