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Arbitration and Mediation Center
Kambly SA Spécialités de Biscuits Suisses v. Swiss Connection Inc.
Case No. D2003-0983
1. The Parties
The Complainant is Kambly SA Spécialités de Biscuits Suisses of Trubschachen, Switzerland, represented by Koster & Partner Ltd. of Berne, Switzerland.
The Respondent is Swiss Connection Inc. of Orlando, Florida, United States of America.
2. The Domain Names and Registrar
The disputed domain names <kambly.com> and <kambly.net> are registered with eNom Inc.
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on December 11, 2003. On December 12, 2003, the Center transmitted by email to eNom Inc. a request for registrar verification in connection with the domain names at issue. On December 16, 2003, the Registrar having failed to submit a Verification Response, the Center made a WHOIS printout from eNom Inc.’s web site, which showed that the disputed domain names were registered with eNom Inc., and that Respondent, Swiss Connection Inc., was the current registrant of the disputed domain names. The Center verified that the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the "Policy"), the Rules for Uniform Domain Name Dispute Resolution Policy (the "Rules"), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the "Supplemental Rules").
In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on December 16, 2003. In accordance with the Rules, paragraph 5(a), the due date for Response was January 5, 2004. An extension request by Respondent was granted for four days and the Response was filed with the Center on January 9, 2004.
The Center appointed Gerd F. Kunze as the sole panelist in this matter on February 9, 2004. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.
4. Factual Background
The Complainant is the largest biscuit manufacturer of Switzerland and is internationally reputed for its high quality biscuits that are advertised and sold in many countries under the trademark KAMBLY. The Complainant has used this trademark in Switzerland since 1910, and has been selling cookies in the United States since at least the 1960’s.
The Complainant is the registered owner of the trademark KAMBLY in Switzerland (since at least 1958) and in over 40 countries, including the United States, where the registration No 997,892 for bakery products in class 30 has the filing date of October 30, 1972.
The Respondent is selling Swiss and other chocolate and confectionery products of different manufacturers. It also sold KAMBLY products in the United States during the 1990’s, and probably until the summer of 2002. Whilst these products were ordered from the Complainant, respectively its representative in the United States, the Respondent has never been an official representative of the Complainant.
On November 6, 1996, the Respondent registered the domain name <kambly.com> and linked it to its website "www.swissconnection.com."
By letter of March 13, 1998, the Complainant asked the Respondent to hand over the domain name <kambly.com> to it, mentioning that it might be prepared to establish links on the respective websites of the two companies. The Respondent refused, by letter of March 18, 1998, to transfer the domain name to the Complainant, pointing out that it considered that domain name to be an asset of its company. In a further letter dated May 22, 1998, the Respondent offered the domain name for sale for the amount of US$100,000.00 plus three complete sets of the so-called Kambly artist tins. As an alternative, it offered its services for an exclusive mail order shopping site for the Web marketing of the KAMBLY products in the United States.
On June 22, 1998, the Respondent registered the domain name <kambly.net>.
At the time of filing the Complaint, the domain names <kambly.com> and <kambly.net> are both lead to a website with the following content:
"Welcome to Kambly.com. This site is currently under construction. In the meantime, if you wish to receive any information on Kambly’s fine confections and cookies, please direct your inquiries to "email@example.com" or visit us at "www.swissconnection.com"."
On the website of the Respondent referred to, no reference is made to KAMBLY products, however, cookies and chocolate products of competitors of the Complainant are offered.
5. Parties’ Contentions
The Complainant submits that (a) the domain names <kambly.com> and <kambly.net> are identical to marks in which it has rights; (b) the Respondent has no rights or legitimate interests in respect of the domain names; and, (c) the domain names have been registered and are being used in bad faith.
The Respondent submits that, effective June 1, 1995, the Complainant had appointed Walkers Shortbread as its representative for North America and that this representative had, by letter dated November 5, 1996, approved the home page that Respondent had developed for the Complainant. Furthermore, the Respondent was acknowledged as one of 10 distributors of the Complainant (a list of 10 distributors, displaying 6 distributors in Florida, is annexed to the Response).
The Respondent also submits a copy of a letter from the Complainant dated February 3, 1997, in which Complainant demonstrated its support for the information about Kambly on the Internet by offering current documentation, photos and a video to be used by the Respondent to develop the Internet commerce. Contrary to the statement of the Respondent that this support related to the domain name <kambly.com>, Complainant’s letter does not expressly refer to that domain name, but uses the neutral phrase "information about Kambly on the Internet" (this could also refer to information to appear on the Respondent’s homepage "www.swissconnection.com").
According to the Respondent, in August 1998, a personal meeting took place in Switzerland between the owners of the Complainant and the Respondent, in which the issue of the domain name <kambly.com> was discussed, however, without result (apparently at that time the Complainant was not yet aware of the Respondent’s registration of the domain name <kambly.net> dated June 22, 1998).
However, the existing business relationship between the parties and their owners, who knew each other personally, continued at that time, since the Complainant sent on August 21, 1998, samples of products to the Respondent for exhibition in a food show.
The Respondent claims that further discussions of the domain name issue resulted in an agreement by the Complainant for the Respondent to develop a prototype of an Internet commerce site. The Respondent submits, as annex to the Response, its letter dated November 20, 1998 to the Complainant in the context of the "Internet project." Furthermore, in a telefax-letter dated November 20, 1998, which according to the Respondent’s submission was misdated and was written on January 12 (as recognized by the Complainant in its response), the Respondent followed up asking about the Complainant’s strategic plans for the United States and showing a chart illustrating its proposal for the mapping of domain names. In its reply dated February 19, 1999, the Complainant proposed to postpone a decision about the United States marketing strategy and to discuss at the occasion of the next visit of the owner of the Respondent the further proceeding, both as to the establishment of a direct mailing system and concerning the Internet and domain name. Apparently the ensuing discussions failed to lead to an understanding because during the summer of 2002, the Complainant’s United States representative, Walker Shortbread, on behalf of Complainant, refused to deliver KAMBLY products to the Respondent and, according to the Respondent, this interruption of the former business relationship was due to the present domain name conflict.
Even if, at present, the domain names <kambly.com> and <kambly.net> are only used in the manner as submitted by the Complainant, the Respondent previously displayed KAMBLY products on the website "www.kambly.com" and on its home page "www.swissconnection.com."
The Respondent submits that it has used the domain names in connection with a bona fide offering of goods and, therefore, has a legitimate interest in these domain names. It denies having registered and used the domain names in bad faith.
6. Discussion and Findings
A. Identical or Confusingly Similar
The domain names <kambly.com> and <kambly.net> are identical to the trademark KAMBLY in which the Complainant has rights in Switzerland, the United States of America and may other countries, such as Canada. The Respondent acknowledges these rights of the Complainant.
B. Rights or Legitimate Interests
Despite the existing business relationship between the parties, the Respondent registered the domain name <kambly.com> without consent and apparently without the prior knowledge of the Complainant. As expressly acknowledged by the Respondent, there never existed any contractual relationship, even if their owners were in regular contact and discussed the possible establishment of an Internet commerce project for KAMBLY products during the years 1996 to 1999. Furthermore, the Respondent sold Complainant’s products and was, at one time, one of its official distributors in the United States. However, the KAMBLY products were sold through the Respondent under its name Swiss Connections and were also advertised on its homepage "www.swissconnections.com."
Taking into account the Complainant’s rights in its mark KAMBLY, the Respondent, therefore, has no rights in the domain name <kambly.com>.
In view of the existing business relationship between the parties, the Respondent could easily have requested the Complainant’s approval for its registration of the domain name <kambly.com>. When, after registration of the domain name <kambly.com>, the Respondent used it for a website, "www.kambly.com," without the express consent of the Complainant, being aware of the Complainant’s rights in the trademark KAMBLY, this use cannot be considered to be a bona fide offering of goods or services. In view of the Complainant’s letter dated March 13, 1998, requesting transfer of the domain name <kambly.com>, the Respondent cannot argue that the Complainant had constructively approved or acquiesced in the registration. Even if in correspondence before that date the Complainant did not expressly disapprove of the Respondent’s registration, it never expressly approved of it, and it had become clear with the Complainant’s letter of March 13, 1998, that it considered the domain name <kambly.com> to be its proprietorship and not to be an asset of the Respondent as submitted by the Respondent in its response of March 18, 1998.
In that context, the approval of the home page that the Respondent had developed for Kambly by fax memo from Walkers Shortbread, the Complainant’s official representative in the United States, in November 1996, cannot be interpreted as consent to the registration of the domain name <kambly.com> by the Respondent. Walkers approved the contents of the home page, not the registration of the domain name in the name of the Respondent. The prototype home page, as annexed to the Response, does not even show a reference to <kambly.com> and the domain name <kambly.com> was not discussed between the Respondent and Walkers. Also the letter of the owner of the Complainant, dated February 3, 1997, demonstrating support for the information about Kambly on the Internet by offering current documentation, photos and a video to be used by the Respondent to develop the Internet commerce, cannot be considered to be evidence of the Complainant’s consent to the registration of the domain name <kambly.com> by the Respondent. The letter did not say anything about the website to be used for information about the Complainant (it could also have been the Respondent’s home page). More importantly, the letter did not discuss ownership of the domain name <kambly.com> which was not even mentioned. The domain name issue was mentioned in correspondence between the parties for the first time when the Complainant requested the transfer of the domain name to it in its letter of March 13, 1998.
Clearly, the Respondent has not become known by the domain name <kambly.com>, since the website operated under that domain name only promoted products of the Complainant, referring expressly to Kambly SA Switzerland, and not to its own company, Swiss Connection, (as can be seen from printouts of web pages from the years 1996 to 1999, submitted by the Respondent).
As concerns the domain name < kambly.net>, there cannot be any doubt that the Respondent has no right or legitimate interests in that name. It registered the domain name <kambly.net> without the Complainant’s consent shortly after Complainant’s request to transfer to it the domain name <kambly.com> and despite this request. Furthermore, that domain name has apparently never been actively used. Even now, it only leads to the same web site as the domain name <kambly.com>, where the visitor is welcomed to "Kambly.com."
The Panel is therefore satisfied that the Respondent has no rights or legitimate interests in the domain names <kambly.com> and <kambly.net>.
C. Registered and Used in Bad Faith
For a Complainant to succeed, the Panel must be satisfied that a domain name has been registered and is being used in bad faith. As an example, the Policy mentions in Paragraph 4(b)(i) registration of the domain name primarily for the purpose of selling, renting or otherwise transferring the domain name registration to the Complainant who is the owner of the mark or to a competitor for valuable consideration in excess of his documented out-of pocket costs directly related to the domain name.
When, by letter dated March 13, 1998, the Complainant requested the transfer of the domain name <kambly.com>, the Respondent replied that it considered that domain name to be its asset. It continued: "We are open to pursuing an Internet Commerce initiative with you for <kambly.com>. Should this not be an option for Kambly of Switzerland, then we will retain <kambly.com> for some future use unrelated to your industry, or dispose of the asset in the market place." In a follow-up letter dated May 22, 1998, the Respondent offered the transfer of ownership of the domain name for the amount of US$100,000.00 and three complete sets of the so-called Kambly Artist Tins. It continued: "The basis for the above amount is based on domain name value and sales of similar domains by broker services. It is our opinion that this is below market value."
In addition to that, the Respondent offered the option of pursuing an aggressive Internet commerce and national mail order program for KAMBLY products with the Complainant.
From these letters and the submissions of the Respondent, the following conclusions can be drawn: The Respondent has registered the domain name <kambly.com> as an asset of its company. In the first place it, apparently believed that it could develop under that domain name an Internet commerce business for products of the Complainant, and despite the fact that the Complainant, whose official representative in the United States at that time was already and continued to be Walker’s Shortbread, repeatedly expressed its unwillingness to develop such business with the Respondent, the Respondent developed a website linked to the domain name <kambly.com> in which it promoted goods of the Complainant in a manner that gives the impression that this was an official website of the Complainant. Secondly, when the Respondent had been informed by the Complainant that it, itself, intended to use the domain name <kambly.com> generally for its business activities in the United States and worldwide, the Respondent was prepared to transfer the ownership of the domain name to the Complainant only for an amount that is clearly in excess of its out-of-pocket expenses even if one takes into account that the Respondent had invested some money in the website linked to the domain name).
Under the Policy, bad faith can be found when a Respondent has attempted to sell the domain name for a sum in excess of the Respondent’s out-of-pocket expenses in registering the domain name. Applying this test the Respondent, with its offer to transfer the domain name for the sum of US$100,000.00 acted in bad faith. However, the Panelist has doubts that the Respondent had the domain name registered primarily for the purpose of selling it to the Complainant for valuable consideration in excess of his documented out-of-pocket costs directly related to the domain name, as requested in paragraph 4(b)(i). The facts, as evidenced by the Respondent, rather suggest that it primarily intended to develop an Internet commerce business with products of the Complainant. Yet, this intention does not exclude bad faith. As said before, the Complainant clearly considered that domain name registration to be its asset, despite the fact that even before the registration date, the Complainant had an official representative in the United States and that the (Swiss) owner of the Respondent had personal contacts with the owner of the Complainant, whom he met regularly at food fairs and even on the occasion of visits to Switzerland. In view of this business relationship, the Respondent abused the principle of first come, first served, when registering in its name the company name and trademark KAMBLY of the Complainant as domain name in the .com domain. Under the circumstances, the Respondent must have been conscious that he should have informed the Complainant about his intention to have KAMBLY registered in the name of his company. The Panelist is satisfied that the Respondent registered the domain name <kambly.com> in order to be used in the business relationship with the Complainant to pursue its intentions to establish an Internet commerce business for Complainant’s KAMBLY products. This intention is confirmed by the fact that the Respondent, on June 22, 1998, registered the domain name <kambly.net>, again, in its name, after the Complainant had, in March, informed it about its intentions to control the use of all domain names containing the word "kambly," and one month after the Respondent had offered the transfer of the domain name <kambly.com> to the Complainant for US$100,000.00. In that context, reference is made to paragraph 4(b)(ii) considering as bad faith registration and use a Respondent’s registration of a domain name in order to prevent the owner of a mark from reflecting that mark in a corresponding domain name. With its registration first of <kambly.com> and, in June 1998, of <kambly.net>, the Respondent has continuously prevented the Complainant from reflecting its internationally registered and reputed mark KAMBLY in a generic top level domain. Users of the Internet outside Switzerland, and particularly in the United States, who are intending to visit the Complainant’s homepage will be tempted to type <kambly.com> or <kambly.net> and not <kambly.ch>, since the country code ".ch" for Switzerland is rather unknown internationally. These considerations applied particularly in the late nineties, when other gTLDs such as ".biz" or ".info" were not yet available. The owner of the Respondent, who is of Swiss origin, was, of course, aware of this fact and at the very latest since March 1998, when the Complainant informed him about its intentions to use his mark in the United States and internationally in the gTLD ".com," he knew that the Complainant was also aware of this problem for its company, created by the Respondent. When the Respondent, nevertheless, in June 1998, after the gTLD ".net" had become available, registered the domain name <kambly.net>, this is a clear sign of registration in bad faith and confirms that it acted in bad faith when registering <kambly.com>. Interestingly, the Respondent, in its Response, does not give any plausible explanation for its registration of <kambly.net>. It writes: "On June 22, 1998, the Respondent registered the domain name <kambly.net> with Network Solutions, Inc., after several offers from Network Solutions, Inc. to register the new ".net" extensions. The ".net" extension was not available at the time of the original registration of <kambly.com>. At this time, the domain name was registered in good faith by the Respondent, as a distributor and mail-order retailer of KAMBLY products. The registration at this time was in adherence to the policies regarding domain name registration. The Respondent had knowledge of the wish of the Complainant to control top-level country code domain names containing the word KAMBLY." For the latter statement, the Respondent refers to its letter dated March 18, 1998, written in response to the Complainant’s letter of March 13, 1998, in which it expressed its wish to be able to use the gTLD domain name <kambly.com> in the United States and worldwide. Furthermore, if the Respondent’s arguments were correct, each of the (at that time) 10 distributors of the Complainant in the United States would have had the right to register <kambly.com> "in adherence to the policies regarding domain name registration." However, the Panelist does not accept the arguments of the Respondent:
The Respondent expressly recognizes the trademark rights of the Complainant in the mark KAMBLY. Even if the Complainant had not been the owner of a registration for the trademark KAMLBY in the United States, the Respondent would legally not have been permitted to register the mark KAMBLY in its own name, since the Paris Convention provides that the proprietor of a mark is entitled to oppose the application for registration by an agent or representative without the proprietor’s authorization, or to demand its cancellation. Even if the Respondent was never the appointed representative of the Complainant for the United States, the very fact that it was one of its official distributors, and even the exclusive distributor of Kambly artist tins, makes the principle of the Paris Convention applicable. The Paris Convention, of course, does not deal with domain names, and domain names, as such, are not an intellectual property right. However, the underlying principle, that an agent, representative or official distributor does not have the right to apply in its name for registration of the principal’s mark must also apply to the registration of such mark as a domain name, particularly if the principal is the registered owner of that mark in the country of the distributor. Consequently, in relation to the Complainant with whom it had an established business relationship, the Respondent had no right to register the domain names <kambly.com> and <kambly.net> and it was no doubt aware of this fact.
Taking together the intention of the Complainant to use the domain name <kambly.com> in its efforts to become the Internet commerce distributor of the Complainant for its products in the United States and its consideration that this domain was its asset which, should the Complainant not agree with its plans, either would have to be acquired by the Complainant for an amount clearly in excess of its out-of-pocket expenses related to the registration or might be disposed of otherwise on the market, the Panelist is satisfied that the Respondent has registered and is using the domain name <kambly.com> in bad faith. This is even more the case given that the Complainant, when requesting the transfer of the domain name <kambly.com> offered the possibility to provide for mutual links between the Complainant’s website and the Respondent’s homepage "www.swissconnection.com". This offer was not even considered by the Respondent in its response. Furthermore, the conclusion that the Respondent has registered and is using the domain name <kambly.com> in bad faith is confirmed by the present use made by the Respondent of this domain name for a website in which persons interested in information about KAMBLY products are invited to visit its homepage "www.swissconnection.com," whilst on this homepage no products of the Complainant, rather products of competitors of the Complainant are offered. The fact that the Respondent can no longer offer any more the Complainant’s products, because Walkers Shortbread, since the summer of 2002, has refused to deliver KAMBLY products to it, does not alter the fact that visitors to the website "www.kambly.com" are invited to visit the Respondent’s homepage if they are interested in KAMBLY products, and that at that homepage, competitors’ products are offered. Consequently, by using the domain name, the Respondent intentionally attempts to attract, for commercial gain, Internet users to its website, by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship, affiliation or endorsement of its website.
As concerns the domain name <kambly.net>, the Panelist is satisfied that the Respondent registered it after it had become aware that registrations in the ".net" domain had become possible, and after the Complainant had requested the transfer of the domain name <kambly.com> to it, in order to reinforce its position in the pending negotiation with the Complainant. For all the aforementioned reasons, the Respondent had no right to register the domain name <kambly.net> and has registered it in bad faith. The Respondent uses the domain name as a link to the website "www.kambly.com" "under construction." This use must be considered as being use in bad faith for the same reasons that the present use of the domain name <kambly.com> by the Respondent is use in bad faith.
For all the foregoing reasons, in accordance with Paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the domain names <kambly.com> and <kambly.net> be transferred to the Complainant.
Gerd F. Kunze
Dated: February 19, 2004