Legal Fees Go Up in Smoke

As a brand owner have you ever wondered how efficiently you’re using your precious trademark enforcement budget?  During my nearly 10-year tenure heading up the intellectual property practice for The Home Depot, this was constantly at the forefront of my mind.  Unfortunately, this may not have been the case for whoever handles in-house legal matters at the Complainant company in the recent case of UTVG Europe Holding B.V. v. Vitali S, WIPO Case No. D2014-1345.

This Amsterdam-based e-cigarette producer owns a few trademark registrations for the terms PREMIUM VAPES and VAPE MASTER, although it was required to disclaim the word “premium” as merely laudatory in its US trademark application.  There are also some questions as to whether the word “vape” can function as a distinctive trademark in relation to the Complainant’s products. The Complainant’s earliest provable rights to these trademarks date to 2012.

The Respondent is based in the U.S. and registered the domains <premiumvape.com>, <premiumvapes.com> and <vapemaster.com> between 2009 and 2012 for websites promoting the sale of e-cigarettes. It seems that the Respondent and one of the Complainant’s owners were past business partners who set up a U.S. venture that, unfortunately, ended with a disagreement between the two individuals. However, during their tenure, the Respondent claims that the Complainant’s owner was aware of the disputed domains and consented to their use in promoting the U.S. venture.

The 3-member Panel in this case first addressed the question of whether the domains are confusingly similar to the Complainant’s trademarks under UDPR Par. 4(a)(i).  It quickly concluded that the word ‘premium’ is laudatory and descriptive of the Complainant’s goods and that the word “vape” is likely generic or merely descriptive for e-cigarettes. This left the Complainant with trademark rights only to the word “master” and the graphic components of its registrations.  The Panel ultimately concluded that the first two domains are not confusingly similar to the trademarks where the textual portions of such marks are not really protectable as such.

Next, the question of bad faith was addressed, and the Panel zeroed in on the prior business relationship between the parties.  It noted that there are many open questions surrounding this relationship, the creation of the trademarks, and whether the Complainant actually consented to the Respondent’s registration and use of the disputed domains.  Unfortunately, neither party provided sufficient details in their pleadings to answer these questions and so the Panel was left with little to go on in considering the par. 4(a)(iii) element of the UDRP.  In the end, it held that the words of a UDRP decision from 2000 still ring true today: “[t]o attempt 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.”  It also noted that there is a question as to whether two of the Respondent’s domains were created prior to the earliest date on which the Complainant could claim trademark rights.  In the end, the claim was denied and the Respondent’s use of its domains continues.

The upshot of this case is a lesson for would-be complainants to carefully study the circumstances of its dispute and decide if it is truly one that is within the scope of the UDRP.  This policy, which was created to address cases of genuine cybersquatting, is not the proper forum for broader legal disputes and fine questions of law involving trademark distinctiveness, ownership rights, and business disagreements.  If the Complainant had sought the advice of an attorney with longstanding experience in UDRP practice it could have saved itself the wasted expense of fees and costs which, in the end, left it holding an armful of nothing but smoke…