What to Do With Domain Names Such as starbucksnestle.com and starbucks-nestle.com?

The announcement of a commercial partnership between Nestlé (nestle.com, May 7, 2018) and Starbucks (starbucks.com, August 28, 2018) led to cybersquatting cases. Many domain names combining the “nestle” and “starbucks” trademarks were registered. DRP proceedings were initiated, including the D2018-1183 procedure undertaken by the Nestlé Products Corporation against a US citizen who had registered two domain names, including one on May 7, 2018, the same day as the announcement (WIPO, D2018-1183, Nestlé Products Corporation SA v. R., L., August 27, 2018, starbucksnestle.com and starbucks-nestle.com, transfer). This decision – like others concerning this partnership (WIPO, D2018-1398, Nestlé SA Product Company v. TPD, 7 tháng 8 năm 2018 (nestlestarbucks.com và nestle-starbucks.com, transfer)), offers the opportunity to revisit the legal points that arise in such situations.
Mergers and commercial partnerships between two well-known trademarks almost always lead to cybersquatting cases. In many cases, the mere announcement of such an event provokes a flow of abusive registrations of domain names on the same day or the following days. Sometimes the domain name is registered before any public announcement, which reveals a weakness in the chain of confidentiality.
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One also saw two competing trademarks in the same domain name. As examples, the following ones the subject of DRP proceedings before WIPO:

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We can also mention the case of the association of trademarks of a manufacturer and a distributor.

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The presence of trademarks belonging to different parties raises strategic, contractual and procedural issues.

Strategic and Contractual Issues

The situation obliges trademark owners to agree on the way in which the DRP will be implemented: by whom should the costs be borne? Should the domain names be canceled or transferred? If so, who should be responsible for managing and maintaining domain names? Should the costs be allocated and, if so, how?
In the case of a merger, acquisition or commercial partnership, the answers to these questions must be provided for in the contract. In this same case, it is also advisable to proceed with the preventive registration of a selection of domain names, just to cut the grass under the feet of the opportunist cybersquatters, being agreed that the total cost of these registrations will remain lower than that of one or more DRP procedures. Such registrations should be made no later than the day of the announcement of the merger, acquisition, or commercial partnership. If it is considered difficult to proceed before the announcement, it is not useless to register the domain names anonymously.

Procedural Issues

The question is: in case of a domain name such as <mark1+mark2.tld>, can panelists order the transfer of the domain name to the owner of mark 1 without taking into account the consent of the owner of trademark 2 when the later is not a party to the proceedings? Panelists are divided (WIPO Jurisprudential Overview 3.0, para 4.13). A first option consists in providing the panelist with the power to transfer the domain name, without prejudice to the rights of the third party (eg, WIPO, D2016-2219, Aldi GmbH & Co. KG, Aldi Stores Limited v. RB, January 13, 2017 (aldiorlidl.com and lidloraldi.com, transfer), WIPO, D2011-1057, LEGO Juris A / S v. Suka LLC, August 14, 2011 (legohalo.org and legospiderman.net, transfer)). The second option, reasonably slower but certainly more prudent, is to issue a procedural order to ensure that the third party will not oppose the transfer of the domain name (WIPO, D2015-1507, Kabbage, Inc. v. Oneandone Private Registration, 1 & 1 Internet Inc., 1and1.com, RH, Ridiculous File Sharing, November 20, 2015 (kabbagefund.com, kabbagefunding.com, kabbagemail.com, kabbageworkingcapital.com, kabbage4amazon.com and kabbage4etsy.com, transfer)) . In the event of a merger, acquisition or business partnership, this second alternative seems the most reasonable, unless the party initiating the DRP produces a copy of the contract expressing the third party’s consent in a non-equivocal manner. In doubt, caution requires the panelist to order the cancellation of the domain name. In the presence of competing trademarks, doubt is not permitted and, in the absence of the agreement of the parties, the latter option seems to be the only outcome possible (WIPO, D2003-0725, Dr. Ing. Hc F. Porsche AG v. Automotive Parts Solutions, November 17, 2003 (porschepartx.com, transfer; 911hyundai.com, cancellation)).
If the trademark owners decide to act in concert against the domain name holder, it goes without saying that the panelist will have to verify that the plaintiffs have a common interest in bringing the defendant into action and that this will not undermine the principle of equity (WIPO Jurisprudential Overview 3.0, para 4.11.1).

About IP Twins

IP Twins offers domain name registration, management, and monitoring services. Thanks to Detective, we collect evidence of cybersquatting acts. Our team is composed of lawyers specializing in trademark law in the digital space. We advise you on all questions relating to domain names. We can also advise you or represent you in extrajudicial procedures (UDRP and other DRP).