DECISION

 

KTM Sportmotorcycle USA, Inc. v. Cycle Hutt, Inc. a/k/a Justin Bohn and Tammy Bohn a/k/a Tammy Bohn

Claim Number: FA0304000155894

 

PARTIES

Complainant is KTM Sportmotorcycle USA, Inc., Amherst, OH (“Complainant”) represented by Gordon D. Kinder of Renner, Otto, Boisselle & Sklar, LLP.  Respondent is Cycle Hutt, Inc. a/k/a Justin Bohn and Tammy Bohn a/k/a Tammy Bohn, Bismark, ND (“Respondent”) represented by Jonathan P. Sanstead of Pearce & Durick.

 

REGISTRAR AND DISPUTED DOMAIN NAMES

The domain names at issue are <ktmpowersports.com>, <ktmtech.com>, <oldktm.com>, <vintagektm.com>, <teamktm.com> and <ridektm.com>, registered with Register.com; <racektm.com>, <ktmunderground.com>, <ktmsportmotorcycles.com>, <ktmsportminicycles.com>, <ktmsales.com>, <ktmroadbikes.com>, <ktmpowerwear.com>, <ktmowners.com>, <ktmonline.com>, <ktmnews.com>, <ktmmotorcycles.com>, <ktmmagazine.com>, <ktmhardequipment.com>, <ktmdirect.com>, <ktmbikes.com>, <ktmagazin.com> and <ktmadventuretours.com>, registered with and Go Daddy Software, Inc.; and <ktm.com>, registered with Network Solutions, Inc.

 

PANEL

The undersigned certifies that he or she has acted independently and impartially and to the best of his or her knowledge has no known conflict in serving as Panelist in this proceeding.

 

Terry F. Peppard, Houston Putnam Lowry and David P. Miranda, Chair, as Panelists.

 

PROCEDURAL HISTORY

Complainant submitted a Complaint to the National Arbitration Forum (the “Forum”) electronically on April 25, 2003; the Forum received a hard copy of the Complaint on April 28, 2003.

 

On April 28, 2003, Register.com confirmed by e-mail to the Forum that the domain names <ktmpowersports.com>, <ktmtech.com>, <oldktm.com>, <vintagektm.com>, <teamktm.com> and <ridektm.com> are registered with Register.com and that the Respondent is the current registrant of the names. On April 28, 2003, Go Daddy Software, Inc. confirmed by e-mail to the Forum that the domain names <racektm.com>, <ktmunderground.com>, <ktmsportmotorcycles.com>, <ktmsportminicycles.com>, <ktmsales.com>, <ktmroadbikes.com>, <ktmpowerwear.com>, <ktmowners.com>, <ktmonline.com>, <ktmnews.com>, <ktmmotorcycles.com>, <ktmmagazine.com>, <ktmhardequipment.com>, <ktmdirect.com>, <ktmbikes.com>, <ktmagazin.com> and <ktmadventuretours.com> are registered with Go Daddy Software, Inc. and that the Respondent is the current registrant of the names. On April 29, 2003, Network Solutions, Inc. confirmed by e-mail to the Forum that the domain name <ktm.com> is registered with Network Solutions, Inc. and that the Respondent is the current registrant of the name. Register.com, Go Daddy Software, Inc. and Network Solutions, Inc. have each verified that Respondent is bound by their respective registration agreements and has thereby agreed to resolve domain-name disputes brought by third parties in accordance with ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”).

 

On May 9, 2003, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of May 29, 2003 by which Respondent could file a Response to the Complaint, was transmitted to Respondent via e-mail, post and fax, to all entities and persons listed on Respondent’s registration as technical, administrative and billing contacts, and to postmaster@ktm.com, postmaster@ktmadventuretours.com, postmaster@ktmagazin.com, postmaster@ktmbikes.com, postmaster@ktmdirect.com, postmaster@ktmhardequipment.com, postmaster@ktmmagazine.com, postmaster@ktmmotorcycles.com, postmaster@ktmnews.com, postmaster@ktmpowersports.com, postmaster@ktmonline.com, postmaster@ktmowners.com, postmaster@ktmpowerwear.com, postmaster@ktmroadbikes.com, postmaster@ktmsales.com, postmaster@ktmsportminicycles.com, postmaster@ktmsportmotorcycles.com, postmaster@ktmtech.com, postmaster@ktmunderground.com, postmaster@oldktm.com, postmaster@racektm.com, postmaster@ridektm.com, postmaster@teamktm.com and postmaster@vintagektm.com by e-mail.

 

A timely Response was received and determined to be complete on May 29, 2003.

 

An untimely Additional Submission was received from Complainant on June 5, 2003.

 

An untimely Additional Submission was received from Respondent on June 12, 2003.

 

On June 25, 2003, pursuant to Complainant’s request to have the dispute decided by a three-member Panel, the Forum appointed Terry F. Peppard, Houston Putnam Lowry and David P. Miranda, Chair, as Panelists.

 

RELIEF SOUGHT

Complainant requests that the domain names be transferred from Respondent to Complainant.

 

PARTIES’ CONTENTIONS

A. Complainant

 

Complainant KTM Sportmotorcycle USA, Inc. (“KTM” or “Complainant”) is the owner of registered trademark KTM for motorcycles (Reg. No. 1,664,945 registered on November 19, 1991).  Complainant sells its KTM products through a network of dealers who in turn sell to retail customers.  Complainant contends that its products are widely known within the community of motorcycle riders, dealers and manufacturers.

 

On or about June 19, 2000 KTM entered into a dealer agreement with the Respondent Cycle Hutt (“Respondent”).  KTM contends that Respondent has registered and used the domain name <ktm.com> and other domain names listed above, that begin with or include KTM’s registered mark, KTM.  KTM contends that customers and dealers are likely to be confused about the sponsorship of the <ktm.com> website and other domain names at issue.  KTM contends that the Respondent has no right or legitimate interest in the domain names which are the subject of this Complaint because Justin and Tammy Bohn (owners of Cycle Hutt) never had any right or permission as individuals to use the KTM mark and Respondent Cycle Hutt is no longer a dealer authorized by KTM to sell Complainant’s motorcycles, parts or accessories or use the KTM mark.  KTM contends that the domain name should be considered as having been registered and used in bad faith because the dealership agreement between the parties has been terminated and use of the domain names after such determination is for the purpose of disrupting KTM’s business.  KTM also contends that Respondent’s bad faith is exhibited by the multiple domain names registered by Respondents, demonstrating an attempt to prevent Complainant KTM from registering its mark as a domain name and blocking alternate names.

 

B. Respondent

 

Respondent does not dispute that its domains are identical or confusingly similar to Complainant’s KTM mark.  Respondent contends that it has rights to and legitimate interest in the disputed domain names because each of the domain names was registered and used to promote its KTM dealership activities.  Respondent contends that the dealer agreement between the parties was wrongfully terminated by KTM in an attempt to acquire the <ktm.com> domain name and other domain names.  Respondent contends that its registration and use of the disputed domain names are for the bona fide business purpose of offering goods and services prior to notice of the present dispute.  Respondent contends that while negotiating the dealer agreement with KTM, it notified KTM that it intended to use the domain names <ktmsales.com> and <ktmonline.com> for sales and information pertaining to its KTM dealership.  Respondent contends that before purchasing the domain name ktm.com it contacted a KTM representative about its intent to purchase the domain name and received encouragement from KTM regarding its purchase of the domain name.  Respondent contends that it purchased the domain name <ktm.com> for $80,000 and continued its efforts to sell KTM goods via the Internet through its various KTM related websites.

 

C. Additional Submissions

 

Complainant submitted an additional response that was considered by the Panel.  Complainant’s additional response included reference to exhibits that were not originally provided to the Panel and Complainant was provided with an opportunity to supplement its additional response to include said exhibits, all of which were considered by the Panel.  Complainant’s additional response contends that certain Respondent domain names were registered prior to execution of the dealership agreement, thus prior to Respondents having any interest in those domains, and as such, the registrations are presumptively in bad faith.  KTM contends that the language of the dealer agreement permits the Respondent to use “the trade names and trademarks of KTM Sportmotorcycle, KTM Sportminicycle and K-style Trademarks (alone)… during the term of this agreement for promotion of KTM products.”  KTM contends Respondent is limited to use only the three trademarks mentioned in the agreement and not permitted to otherwise use the KTM mark.  KTM does not submit any proof disputing the contention by Respondent that KTM encouraged Respondent to register the domain name <ktm.com>.

 

The Panel also considered Respondent’s additional response in which it contends that pursuant to an addendum to the dealer agreement, it was permitted to use “the trade names and trademarks of KTM”.  Respondent also contends that the disputed domain names which were registered prior to the execution of the dealer agreement were based upon a good faith intention to become a KTM dealer.  Respondent contends that its good faith efforts are evidenced by its subsequent negotiation and consummation of a dealer agreement with KTM and the fact that it disclosed to KTM in Respondent’s business plan that it had registered and had intended to use certain KTM related domain names with respect to its intended business of selling KTM goods.

 

FINDINGS

Based upon its review of all the evidence of record, the panel finds that: (1) The disputed domain names are confusingly similar to the trademark KTM to which Complainant has rights; (2) Complainant has failed to establish that Respondent has no rights or legitimate interest in the domain names at issue; and (3) Complainant has failed to establish that the domain names were registered and are being used in bad faith.

 

DISCUSSION

Paragraph 15(a) of the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”) instructs this Panel to “decide a complaint on the basis of the statements and documents submitted in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable.”

 

Paragraph 4(a) of the Policy requires that the Complainant must prove each of the following three elements to obtain an order that a domain name should be cancelled or transferred:

 

the domain name registered by the Respondent is identical or confusingly similar to a trademark or service mark in which the Complainant has rights;

the Respondent 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.

 

Identical and/or Confusingly Similar

Complainant has produced evidence that it holds a trademark registration with the United States Patent and Trademark Office (“USPTO”) for the KTM mark (Reg. No. 1,664,945 registered on November 19, 1991) related to motorcycles. The Panel concludes that this evidence supports Complainant’s assertion that it has rights in the KTM mark pursuant to Policy ¶ 4(a)(i). See The Men’s Wearhouse, Inc. v. Brian Wick, FA 117861 (Nat. Arb. Forum Sept. 16 2002) (“Under U.S. trademark law, registered marks hold a presumption that they are inherently distinctive and have acquired secondary meaning”).

 

Complainant contends that Respondent’s <ktm.com>, <ktmadventuretours.com>, <ktmagazin.com>, <ktmbikes.com>, <ktmdirect.com>, <ktmhardequipment.com>, <ktmmagazine.com>, <ktmmotorcycles.com>, <ktmnews.com>, <ktmpowersports.com>, <ktmonline.com>, <ktmowners.com>, <ktmpowerwear.com>, <ktmroadbikes.com>, <ktmsales.com>, <ktmsportminicycles.com>, <ktmsportmotorcycles.com>, <ktmtech.com>, <ktmunderground.com>, <oldktm.com>, <racektm.com>, <ridektm.com>, <teamktm.com> and <vintagektm.com> domain names (hereinafter “disputed domain names”) are identical or confusingly similar to Complainant’s KTM mark because each of them appropriates the mark and all but one add a generic term or generic terms to the end of Complainant’s mark.

 

Respondent does not dispute that its domain names are identical or confusingly similar to Complainant’s mark.  Complainant has established that the domain names registered by the Respondent are identical or confusingly similar to the trademark in which the Complainant has rights.

 

Rights or Legitimate Interests

 

Respondent contends that it has rights to and legitimate interests in the disputed domain names because each of the domain names was registered and used to promote its KTM dealership. Respondent argues that the dealer agreement between the present parties was wrongfully terminated by Complainant in bad faith.  The Panel finds that before any notice of this dispute Respondent was making a bona fide offering of goods and services with regard to Policy ¶ 4(c)(i) because Respondent was a distributor of Complainant’s goods. See K&N Eng'g., Inc. v. Kinnor Serv., D2000-1077 (WIPO Jan. 19, 2001) (finding legitimate interest because “Respondent has been an authorized distributor of the Complainant's goods for many years. The Respondent is in the business of selling the Complainant's products and is using the Domain Name in connection with that business”); see also Draw-Tite, Inc. v. Plattsburgh Spring Inc., D2000-0017 (WIPO Mar. 14, 2000) (finding a bona fide sale of goods under the domain name <drawtite.com> where Respondent used the website to sell Complainant’s towing equipment and trailer accessories).

 

KTM contends that the dealer agreement between the parties no longer provides Respondent with the right or legitimate interest in the domain names because the dealer agreement has been terminated.  Respondent contends that KTM terminated the agreement in bad faith in an effort to acquire the domain names at issue.  The dispute between the parties thus also includes an issue based in contract which is beyond the scope of the UDRP and cannot be the basis for the transfer of the disputed domain names.  See Discover New England v. The Avanti Group, Inc. FA 123886 (Nat. Arb. Forum Nov. 6, 2002) (finding the dispute outside the scope of the UDRP because the dispute centered on interpretation of contract language and whether or not a breach existed); see also Thread.com, LLC v. Poploff, D2000-1470 (WIPO Jan. 5, 2001) (refusing to transfer the domain name and stating that the ICANN Policy does not apply because attempting “to shoehorn what is essentially a business dispute between former partners into a proceeding to adjudicate cybersquatting is, at its core, misguided, if not a misuse of the Policy”).

 

Registration and Use in Bad Faith

Respondent’s registration and use of the disputed domain names does not amount to bad faith because Respondent was making a bona fide offering of goods and services prior to notice of the present dispute.  See DJF Assocs., Inc. v. AIB Communications, FA 95612 (Nat. Arb. Forum Nov. 1, 2000) (finding Respondent has shown that it has a legitimate interest in the domain name because Respondent selected the name in good faith for its website, and was offering services under the domain name prior to the initiation of the dispute); see also Gorstew Ltd., Jamaica & Unique Vacations v. Twinsburg Travel, No. FA 94944 (NAF July 7, 2000) (finding no bad faith where Respondent used <sandalsoutlet.com> and other domain names incorporating the SANDALS mark, as an agent, in good faith, on behalf of Sandals Resorts).

 

In addition, both prior to and during the dealer agreement, Respondent notified Complainant that it intended to and was in fact using domain names that included the KTM mark for the purposes of offering KTM related goods online.  KTM entered into the dealer agreement with the knowledge of Respondent’s intentions, did not object to this use by Respondent and there is evidence that Complainant encouraged Respondent to register at least one of the domain names, <ktm.com>, for the purpose of promoting and selling KTM goods online.  A trademark owner may not actively encourage a third party to expend substantial money and effort to purchase and promote a domain name containing its trademark and then use the UDRP arbitration process to obtain a transfer of that domain name.

 

DECISION

Having failed to establish the second and third elements required under ICANN Policy, the Panel concludes that relief requested shall be DENIED.

 

Accordingly, it is Ordered that the <ktm.com>, <ktmadventuretours.com>, <ktmagazin.com>, <ktmbikes.com>, <ktmdirect.com>, <ktmhardequipment.com>, <ktmmagazine.com>, <ktmmotorcycles.com>, <ktmnews.com>, <ktmpowersports.com>, <ktmonline.com>, <ktmowners.com>, <ktmpowerwear.com>, <ktmroadbikes.com>, <ktmsales.com>, <ktmsportminicycles.com>, <ktmsportmotorcycles.com>, <ktmtech.com>, <ktmunderground.com>, <oldktm.com>, <racektm.com>, <ridektm.com>, <teamktm.com> and <vintagektm.com> domain names are not transferred.

 

 Dated: July 10, 2003

  

Terry F. Peppard, Panelist
Houston Putnam Lowry, Panelist
David P. Miranda, Panel Chair

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