Another domain/trademark question

[noel_x99]

My client's asking me for an opinion. I've told him to seek a legal opinion, but I thought I'd see if anyone here has come across a similar situation.

My client is a distributor for XYZ company, a manufacturer. His business has official permission to use XYZ-Northwest as his name. He has that official name, logo and domain name.

About 8 years ago, he purchased the name XYZparts.com. He set up a site to sell parts and XYZ company was aware of this and gave their blessing. (XYZ did have a website at that point, but seemed totally unaware of the potential of the Internet.)

XYZ company is now telling my client that they are going to take his domains and set up their own parts site this summer. They do have a trademark on their XYZ name. I've asked my client to find anything in writing where they gave him permission to use the name or any written documents that shows they were aware of it years ago.

If anyone has an opinion or experience with this, feedback is welcome. I guess I'm most interested in knowing that if XYZ knew about this for 8 years and didn't do anything...could they do something now?

[weslinda]

The key question here is whether he has something in writing from them. I think that the time the site has been up, plus the specific relationship he has would negate them being able to do anything in the realm they are discussing.

I presume they could take his right to sell their products away, but the domain is legally his, and they can't force him to give it up, no matter what.

This would be an interesting case though. I'm not a lawyer so I can't comment on specific issues here. But it simply sounds like they want to take his 8 years of work and simply use it to their benefit, and that won't fly in most courts.

[SnerdeyWebs]

Totally seek professional trademark / web legal advise and I have someone in mind you can ask or ask them for advise who to check with. He's been doing this for years and specializes in this field.

His website is Michael W. Kinney | Law Office | Attorney At Law | California Legal Services | 760-631-2100

Tell him Snerdey sent you.. he knows me

[ArthurNYC]

Yea the in writing would be nice but the fact that they knew he has the website and business should be he is fine. Of course, who wins a pissing match like that when you are fighting with your vendor.

I would work out a deal whereby he gets paid on natural traffic to the old site and then let him start a new one. Because if they try to get their domain "back" and lose, how long do you think he will remain a distributor?

Just a thought.

[Terry Van Horne]

I think important to this is who has been paying for domain renewals? Who is the owner on the domain record if it isn't your client... good luck... possession is 9/10... they may also be able to take possession of whatever is on the domain. I'd get that settled before anything else if so he wants to get a new domain re-direct it and tell them to go F... themselves. Once redirected that domain is screwed!

[Dinghus]

WRONG! Permission to use a trademarked name can be revoked without warning for no reason. So IF XYZ is trademarked, they can say they are canceling the website owners' permission to use the trademarked name.

This happens all the time. Matter-of-fact, if you have kept up with the news, you can be forced by the courts to give domain names with trademarked names in them to the owner of the trademark. No compensation. So if XYZ really pushes it, your client could be forced to turn over the whole site to them and they would just have to change the sales portion to give them the money.

Can your client tie them up in court for years? Maybe. If client has the money to pay lawyers for years.

Another reason why I tell people to get a lawyer BEFORE entering into these agreements. Every webdesigner, web programmer, website owner etc etc needs to have a law firm who can review things for them. May sound like a sales pitch, but PrePaid Legal is the way to go if you are in USA or Canada. (except Alaska). Being able to call up a lawyer and get real live legal advice, instead of relying on people on the internet, is the best. They also review contracts for me. All for 1 low monthly rate. I have more than abused them. I have gotten my money's worth just in the bill collection area. I'm amazed at how many people will suddenly pay up when they get a letter from a law firm.

Okay, enough advertising. Actually I'm dead serious about PPL. I use the service and recommend it to everyone, in business or not.

[rudyhiebert]

Experience on this is minimal. An astute and internet savvy branded company would have a policy covering this topic. It's smart to comply to them and I think luckily, that's what happened here. It sounds like key decision makers in the corporate office woke up and blinked. One thing not to ignore is that corporations have lawyers and will pay them to do anything, including write scary letters. Permission isn't license to do what you want, however. If I were in this situation, I think I'd lean towards paying a lawyer to write a letter fighting fire with fire.
Wonder what would happen if selling the domain URL for a good price and creating a new one would look like? I suppose the corporation could refuse permission this time.

[a53mp]

He is selling their parts.. how is he getting their parts information and reselling it? Does he send them a spreadsheet with parts to ship?

I would think having those records would be proof enough that the company knew about it because they were working with him. If anything the company might say you are not allowed to be a reseller of our products..

but the domain is his. If I was him, I would say, you can have the domain for $x0,000

[Terry Van Horne]

All trademark disputes for domain are decided by ICANN. Trademarks can be held in more than one country. For instance iPhone trademark is owned by a small canadian firm in Canada. So the US courts make no sense for settling domains using trademarks. Allowing the company to break the trademark also has legal reperciusisions and will make this real messy if it goes to court.

[dracula]

If the trademark holder has accepted this for a long period without acting against means that they where aware and can't now come and getting this developed sites without any payment. They have the right to take his domains but they have to pay a damage to the one who developed it.
Many years ago I had a relationship with an airline i represented in another country and they let me use the name and develop the business and one day they said thank you we are now doing it ourselves we open an office of our own. We went to court they where finally agreeing to pay a considerable amount. even if its not exact the same but the have, by keeping quiet used him to develop this market and now as its interesting enough they want take it over.
Without legal representation this problem cannot be solved.

[zeo]

I can see how XYZ company may have rights for XYZ, but XYZparts is really a different name. Does XYZ hold a trademark on XYZparts? This is not a legal advice, just an idea.

[dwells87199]

get a lawyer or give it up.

[ron angel]

Originally Posted by noel_x99

My client's asking me for an opinion. I've told him to seek a legal opinion, but I thought I'd see if anyone here has come across a similar situation.

My client is a distributor for XYZ company, a manufacturer. His business has official permission to use XYZ-Northwest as his name. He has that official name, logo and domain name.

About 8 years ago, he purchased the name XYZparts.com. He set up a site to sell parts and XYZ company was aware of this and gave their blessing. (XYZ did have a website at that point, but seemed totally unaware of the potential of the Internet.)

XYZ company is now telling my client that they are going to take his domains and set up their own parts site this summer. They do have a trademark on their XYZ name. I've asked my client to find anything in writing where they gave him permission to use the name or any written documents that shows they were aware of it years ago.

If anyone has an opinion or experience with this, feedback is welcome. I guess I'm most interested in knowing that if XYZ knew about this for 8 years and didn't do anything...could they do something now?

Whatever happens they are going to take your franchise away you may or may not get compensated.
Try all legal ways then if all goes against you redirect the site to sites that make goteze or other hard core sites look like a Disney cartoon. lock it & leave as long as possible until a court tells you to hand over.
meanwhile (right now) buy another site name register it as your trademark put all the stuff you will need for new business on its template but DO NOT put on web. keep it up to date with prices ect. It may be preferable not to have the new site & trademark registered in your name in case you are sued for anything.
when (if) it all goes against you. make site live take down old site & put in redirects...

[cw1865]

The business is at risk and as such you should definitely consult a local attorney before proceeding. Naturally any writings are helpful; if no writings exist, any evidence that they consented or assented may be beneficial. What may be pertinent here may be the state's franchise law. Despite the absence of a formal franchise agreeement (and even if your client does not think of himself or herself as a franchise), the state's statutory elements to establish a franchise may be met. If so, they may or may not be able to terminate the franchise and even if the law permits the termination, typically state statute will provide that the franchisor has to buy out the franchisee.

Tell your client to speak to an attorney asap because this is the type of case where the person who 'wins the race to the courthouse' may prove to be the prevailing party.

[SEO]

Originally Posted by zeo

I can see how XYZ company may have rights for XYZ, but XYZparts is really a different name. Does XYZ hold a trademark on XYZparts? This is not a legal advice, just an idea.
__________________
Ask Centauria

Good point zeo.

[privatefleet]

Following is a very similar case that was defended by the original registrant. The key thing the complainant would have to prove if they are contesting the domain is bad faith. They might stuggle with this, trademark or no trademark.

WIPO Domain Name Decision: D2001-0903

In fact it's actually almost identical with the disputed domain okidataparts.com and the trademark owner Oki Data! So use that as your precedent and tell you client to tell the bullying manufacturer to shove it!

[Pico_Train]

They have tacitly allowed the client to run the business for 8 years. There is case law on this involving quite a large brand. Will post it later when I find it.

In the meantime, seek legal advice.

[NJ]

Originally Posted by Terry Van Horne

I think important to this is who has been paying for domain renewals? Who is the owner on the domain record if it isn't your client... good luck... possession is 9/10... they may also be able to take possession of whatever is on the domain. I'd get that settled before anything else if so he wants to get a new domain re-direct it and tell them to go F... themselves. Once redirected that domain is screwed!

Those three great points!
1) Who pays for the domain
2) Who is listed as the owner
3) Possession

I also wonder if the length of time isn't a factor. I understand that there have been legal cases where if you give your neighbors access through your property for some X period of time, it's considered a "right-of-way" and you can't shut it off. Even if there isn't a written agreement, I wonder whether this factor would come into play.

Another thing is who benefits most from this relationship, and what is your client's exit plan if he has to break the relationship.

[Pico_Train]

The case law is in South Africa and involves Scuba Diving product manufacturer Mares. Ask your lawyer to look that up. If you need more info, pm me and I will ask my wife to dig a bit for you, she is an IP lawyer and deals with this stuff daily! I don't check my pms, hehe, all the time, but will check over next couple of days!

Good luck!

[seopo]

Try to figure a deal to work with them on this otherwise it's going to cost you time and money.

[noel_x99]

WOW! What great feedback. Sorry for the delay.

I did recommend that my client talk to a lawyer. He does have an attorney, but not one experienced in domain names. (Thank's Snerdy, for the link).

Just to clarify a few points:

• My client owns the domain. Pays for it and has for years.
• XYZ is trademarked, XYZParts is not trademarked by either company.
• My client has been selling XYZ's parts and products for 30+ years using the distributor model - restricted to a specific region of the US
• XYZ has never sold product direct to customers before.
• XYZ gave "verbal" permission and has been completely aware of my client's site for 8 years.
• I suggested my client look for any email, phone log, letter,etc where they gave explicit or assumed permission.

I'll go through each of your points and opinions to pass on ideas to my customer.

THANK YOU!!

[jganders]

When did XYZ file the trademark on XYZ? Was it before or after your registration of XYZParts.com?
Which category did XYZ file in? Possibly your XYZParts is not in competition because XYZ registered their trade mark in a class that is outside the XYZParts.com business. As an example, avis.com cannot claim myavis.com because mysavis.com is not in the car rental business.

USPTO Law: http://www.uspto.gov/web/offices/tac/tmlaw2.pdf

Section 2.42: One could argue that XYZ implicitly allowed concurrent use of the XYZ trademark and must therefore make a good faith effort to purchase XYZParts.com.

"2.42 An application for registration as a lawful concurrent user shall specify and contain all the elements required by the preceding sections. The applicant in addition shall state in the application the area, the goods, and the mode of use for which applicant seeks registration; and also shall state, to the extent of the applicant’s knowledge, the concurrent lawful use of the mark by others, setting forth their names and addresses; registrations issued to or applications filed by such others, if any; the areas of such use; the goods on or in connection with which such use is made; the mode of such use; and the periods of such use."