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WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Schleich GmbH v. P. Schellens, Cosch BV

Case No. DEU2017-0005

1. The Parties

The Complainant is Schleich GmbH of Schwäbisch Gmünd, Germany, represented by The GigaLaw Firm, Douglas M. Isenberg, Attorney at Law, LLC, United States of America.

The Respondent is P. Schellens, Cosch BV of Eindhoven, the Netherlands, represented by Bernhaege Advocaten, the Netherlands.

2. The Domain Name, Registry and Registrar

The Registry of the disputed domain name <schleich-shop.eu> is the European Registry for Internet Domains ("EURid" or the "Registry"). The Registrar of the disputed domain name is Flexwebhosting BV.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on August 1, 2017. On August 2, 2017, the Center transmitted by email to the Registry a request for registrar verification in connection with the disputed domain name. On August 4, 2017, the Registry transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details.

The Center verified that the Complaint satisfied the formal requirements of the .eu Alternative Dispute Resolution Rules (the "ADR Rules") and the World Intellectual Property Organization Supplemental Rules for .eu Alternative Dispute Resolution Rules (the "Supplemental Rules").

In accordance with the ADR Rules, Paragraph B(2), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on August 10, 2017. In accordance with the ADR Rules, Paragraph B(3)(a), the due date for Response was September 22, 2017. The Complainant sent an unsolicited email to the Center on August 29, 2017. The Response was filed with the Center on September 20, 2017.

The Center verified that the Response satisfied the formal requirements of the ADR Rules and the Supplemental Rules.

The Center appointed Steven A. Maier as the sole panelist in this matter on September 29, 2017. 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 ADR Rules, Paragraph B(5).

4. Factual Background

The Complainant is a limited liability company founded in 1935 and registered in Germany. It is a toy manufacturer specializing in traditional figurines and realistic play-world concepts, enabling children to create their own play landscapes. The Complainant states that it operates offices in seven countries around the world and distributes its products via distributors in 51 countries with annual sales of EUR 132 million.

The Complainant is the registrant of numerous trademarks for the name and mark SCHLEICH, including European Union Trade Mark ("EUTM") number 1021176 for the word mark SCHLEICH, registered on September 29, 2009 in Classes 16, 28 and 41 for goods and services including toy figures.

The Complainant is also the registrant of EUTM number 004137584 for a figurative mark comprising the name "Schleich" in stylized black lettering together with the letter "S" in a circle in red (the "Schleich Logo Trademark").

The disputed domain name was registered on August 25, 2009. The Respondent has used the disputed domain name for the purposes of a website offering the Complainant's products for sale online to retail customers.

5. Parties' Contentions

A. Complainant

The Complainant submits that the disputed domain name is identical or confusingly similar to its trademark SCHLEICH. In particular, the Complainant contends that the disputed domain name fully incorporates that trademark together with the addition of the descriptive term "shop", which is not effective to eliminate any confusing similarity.

The Complainant submits that the Respondent has no rights or legitimate interests in respect of the disputed domain name. The Complainant states that it has never authorized the Respondent to use its SCHLEICH trademark, that the Respondent has not commonly been known by the disputed domain name and that the Respondent is not making legitimate noncommercial or fair use of the disputed domain name, which is being used commercially for the purpose of a retail website.

Further, the Complainant denies that the Respondent is making bona fide commercial use of the disputed domain name. While accepting that the Respondent may be reselling the Complainant's products, the Complainant states that the Respondent is not an authorized reseller of its goods and that the Respondent's use of the disputed domain name does not in any event satisfy the criteria set out in Oki Data Americas, Inc. v. ASD, Inc., WIPO Case No. D2001-0903. In particular, the Complainant argues that the Respondent has failed accurately and prominently to disclose on its website its relationship with the Complainant. On the contrary, the Complainant contends that by prominently using the Schleich Logo Trademark on its website, without any disclaimer or statement of the true ownership of the site, the Respondent is misleadingly representing that its website is operated, endorsed by or affiliated with the Complainant. The Complainant also argues that the Respondent is attempting to "corner the market" in domain names reflecting the trademark: the Complainant states that the Respondent is also the registrant of the domain name <schleich-nederland.nl> which is the subject of a separate administrative proceeding.

The Complaint points out that, under the ADR Rules, once a Complainant has established that the Respondent lacks rights or legitimate interests in a disputed domain name, it is not then necessary also to establish bad faith on the part of the Respondent. Nevertheless, the Complainant argues that bad faith is present in this case. The Complainant submits in particular that the disputed domain name has been used to attract Internet users to the Respondent's website for commercial gain by creating a likelihood of confusion with the Complainant's trademark as to the source, sponsorship, affiliation or endorsement of that website or the products found on that website (Paragraph B(11)(f)(4) of the ADR Rules).

The Complainant also submits that it has evidence of actual confusion caused by the Respondent's website. The Complainant states that it has since 2014 received enquiries from customers who believed the Respondent's website was an official website of the Complainant and asking why the prices shown on that website were different from the Complainant's recommended retail prices. The Complainant also produces an email dated August 24, 2017 from an individual enquiring whether the Respondent's website is authorized, because he has ordered goods that have not arrived.

The Complainant exhibits correspondence and refers to conversations with the Respondent between December 2016 and June 2017. The Complainant states that it offered the Respondent various arrangements, including an opportunity to continue to use the disputed domain name for at least three years, which the Respondent did not accept.

The Complainant requests the transfer of the disputed domain name. It submits that it meets the general eligibility criteria for transfer as set out in Paragraph 4(2)(b) of Regulation (EC) No 733/2002 because its registered office is located within the European Community.

B. Respondent

The Respondent states that it has been in operation since 2009 and has sold the Complainant's official products which it has bought from the Complainant's official distributors. The Respondent states that the Complainant has been well aware of the Respondent's activities and that there has been a good relationship between the parties over the years. The Respondent states that, by doing honest business of this nature, the Respondent has contributed significantly to the Complainant's sales and revenue.

Concerning confusing similarity, the Respondent does not contest the Complainant's submissions that the disputed domain name combines the Complainant's trademark SCHLEICH with the term "shop" and that the addition of this term does not prevent the disputed domain name from being similar to the Complainant's trademark. The Respondent points out, however, that the Complainant does not hold the domain name <schleich.com>, which it assumes is lawfully registered by another party: the Respondent states that the Complainant uses the domain name <schleich-s.com> instead.

The Respondent submits that the Complainant has known of the Respondent's registration and use of the disputed domain name since 2009 and has not attempted to prevent the Respondent from selling its trademarked products obtained from its official distributors. The Respondent submits that in these circumstances the Complainant has impliedly consented to the Respondent's registration and use of the disputed domain name.

The Respondent further contends that, under the doctrine of exhaustion of rights, it is entitled to use the Complainant's trademarks in connection with the resale of goods that have been placed on sale within the European Union by the Complainant.

The Respondent submits that its registration and use of the disputed domain name meet all four of the criteria set out in the Oki Data case (supra). In particular:

(i) The Respondent is offering the Complainant's goods and has done so for decades.

(ii) The Respondent's website has only ever offered the Complainant's trademarked goods and customers are not directed to any other products.

(iii) The Respondent's website has accurately disclosed the Respondent's relationship with the trademark owner: the Respondent has always stated that the website belongs to Cosch BV (or Cosch VOF since January 2017) and has included the Cosch logo and sufficient information to make clear that Cosch is a separate company from the Complainant.

(iv) The Respondent has registered only two relevant domain names and is not seeking to "corner the market" in domain names relating to the trademark.

The Respondent states that it altered the header of its website in response to the Complainant's original letter of complaint dated December 21, 2016, but denies that the website has ever failed to disclose that it was operated by Cosch.

The Respondent denies that its website has caused actual confusion and states that the email dated August 24, 2017 exhibited by the Complainant does not evidence such confusion, but rather an enquiry from a customer concerning goods that were delayed by the courier company.

The Respondent states that the Complainant has until recently acted only as a wholesaler and has not sold its products to the public directly. However, the Complainant started to sell directly to retail customers in 2016 and the Respondent submits that it is this change of policy that has motivated the present proceedings. The Respondent contends that the Complainant has identified direct online sales as a commercial opportunity is and is now attempting to take over the business of parties such as the Respondent and to remove them as competitors.

The Respondent acknowledges the correspondence and communications with the Complainant since December 2016. The Respondent states that, in view particularly of the significant contribution made by the Respondent to the Complainant's sales over the years, it could not accept the Complainant's offer of a license to use the disputed domain name which the Complainant could terminate after three years.

6. Discussion and Findings

In order to succeed in its Complaint, the Complainant is required under Paragraph B(11)(d)(1) of the ADR Rules to demonstrate the following:

A. that the disputed domain name is identical or confusingly similar to the name or names in respect of which a right or rights are recognized or established by national and/or Community law; and either

B. that the disputed domain name has been registered by its holder without rights or legitimate interests in respect of the domain name that is the subject of the Complaint; or

C. that the disputed domain name should be considered as having been registered or being used in bad faith.

A. Identical or Confusingly Similar to a name in respect of which a right or rights are recognized or established by national law of a Member State and/or Community law

The Complainant has established that it is the owner of an EUTM for the mark SCHLEICH. The disputed domain name comprises that trademark together with a hyphen and the term "shop", as well as the country code Top-Level Domain ".eu", which may be ignored for the purposes of assessing confusing similarity. The Panel finds that the descriptive term "shop" is not effective to distinguish the disputed domain name from the Complainant's trademark and concludes, therefore, that the disputed domain name is identical or confusingly similar to a name in respect of which a right or rights are recognized or established by national law of a Member State and/or Community law.

B. Rights or Legitimate Interests; and C. Registered or Used in Bad Faith

It is appropriate in this case to consider the second and third requirements under Paragraph B(11)(d)(1) of the ADR Rules together.

It is not disputed that the Respondent registered and has used the disputed domain name to refer to the Complainant's trademarked products and to sell those products online to retail customers. In this regard, the Panel finds it to be well established within domain name jurisprudence that a third party may, in certain circumstances, incorporate a trademark owner's mark within a domain name for the purpose of the resale of that trademark owner's goods or services: that principle is embraced under the Uniform Domain Name Dispute Resolution Policy ("UDRP") and in particular in the decision in Oki Data Americas, Inc v. ASD, Inc., supra as cited by the Complainant. The doctrine has also been accepted in cases under the ADR Rules: see, e.g., Lego Juris A/S v. Jeff Fidler, Czech Arbitration Court Case No. 05957, domain name <harrypotterlego.eu>. In the circumstances, the Panel finds that the Oki Data principles are properly applicable to the present case.

The Oki Data principles provide that an offering of goods or services in the circumstances set out above may be bona fide where all of the following conditions are met:

1. the respondent must actually be offering the goods or services at issue;

2. the respondent must use the relevant website to sell only the trademarked goods;

3. the site must accurately disclose the respondent's relationship with the trademark owner; and

4. the respondent must not try to corner the market in all domain names, thus depriving the trademark owner of reflecting its own mark in a domain name.

In this case, the Panel finds that the first and second conditions are clearly met and the Panel rejects the Complainant's submission concerning the fourth condition: the Respondent's registration of two domain names does not constitute an attempt to "corner the market". The case therefore turns upon the third condition, namely whether the Respondent's website has accurately disclosed the Respondent's relationship with the Complainant.

The Panel has reviewed the content of the Respondent's website with the benefit both of print-outs exhibited by the Complainant and by use of the archive services at "www.archive.org" and "www.screenshots.com". The Panel's findings in this regard are as follows:

1. That from June 2010, the Respondent's website was merely headed "Welkom in de winkel van schleich-shop!", or "Welcome to the Schleich-shop shop!"

2. That from July 2012, the website included a prominent header "Schleich-Shop.eu" in a style which, in the view of the Panel, strongly resembled the stylized black lettering used in the Schleich Logo Trademark.

3. That from about September 2015, the website continued to include the header referred to above and also included the Schleich Logo Trademark itself, below that header.

4. That from a date in early 2017, the website was prominently headed "Dit is de Schleich-shop van Cosch vof", or "This is the Schleich-shop of Cosh vof" together with a stylized "Cosch" logo.

While the Panel notes that information obtained from archive services may not always be wholly accurate or complete, the Panel did not find any statement on any of the versions of the website referred to above to the effect that the Respondent was independent of, and not authorized by, the Complainant. Furthermore, while the Respondent submits that its website has always made clear that it was operated by Cosch, the Respondent has not submitted any print-outs in support of that contention and the Panel was not readily able to find any prominent reference to Cosch on any of the versions of the website other than the last version referred to above: the earlier versions primarily identify the operator as "Schleich Shop" with contact details accordingly. While the Panel was able to find some limited references to Cosch BV from at least 2015, these were included in the "small print" in the footer of the website homepage.

In the view of the Panel, the Respondent has not done enough accurately to disclose its relationship with the Complainant as the relevant trademark owner and, in particular, has failed to make it sufficiently clear that was independent of, and not authorized by, the Complainant. On the contrary, the Panel finds that the Respondent's use of the header resembling the Schleich Logo Trademark and that trademark itself would add to any confusion created by the disputed domain name as to the Complainant's association or otherwise with the website. While the Respondent submits that it has always been clear that Cosch was the operator of the website, the Panel does not consider that the Respondent identified Cosch as that operator with sufficient prominence until the changes made in 2017. Even then, the website failed to make clear that Cosch was independent of, and not authorized by, the Complainant and the Panel finds no reason to believe that members of the public would simply assume this.

For the above reasons, while accepting that the Respondent's website has offered the Complainant's goods and only the Complainant's goods, the Panel is unable to conclude that the Respondent's website meets third of the Oki Data principles in accurately disclosing the Respondent's relationship with the trademark owner. The Panel does not find, therefore, that the Respondent's offering of goods or services constituted a bona fide use of the Complainant's trademark for the purposes of the disputed domain name. The Panel notes that (in contrast with the UDRP) Paragraph B(11)(e)(1) of the ADR Rules does not expressly require that an offering of goods or services be bona fide in order to give rise to rights or legitimate interests; although common sense would dictate that a bona fide offering is necessary. In any event, even if the Respondent were to have rights or legitimate interests in the disputed domain name under a narrow reading of the ADR Rules, the Panel would nevertheless find that the disputed domain name has been used in bad faith owing to the Respondent's failure to disclose the nature of its relationship to the Complainant. In particular, the Panel concludes that the disputed domain name has intentionally been used to attract Internet users to the Respondent's website for commercial gain by creating a likelihood of confusion with the Complainant's trademark as to the source, sponsorship, affiliation or endorsement of that website or the products found on that website (Paragraph B(11)(f)(4) of the ADR Rules).

The Panel has considered the Respondent's submissions concerning the Complainant's apparent acquiescence over a period of several years in the Respondent's use of the disputed domain name. However, the Panel does not consider that any such acquiescence amounts to an implied license, or otherwise bars the Complainant from succeeding in this Complaint.

7. Decision

For the foregoing reasons, in accordance with Paragraph B(11) of the ADR Rules, the Panel orders that the disputed domain name <schleich-shop.eu> be transferred to the Complainant.

Steven A. Maier
Sole Panelist
Date: October 4, 2017

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