Selling goods made by trademark owner

[DomainPairs]

I've just reg'd a domain for a shop owner who sells a product which I shall call a widget. One of the major manufacturers of widgets is the XYZ company. The domain I have reg'd is

XYZwidgets.com

In fact the real product is in everyones home and is a mega-million dollar industry. Can my client use this domain to advertise and sell the products of the XYZ company if he does not advertise any other products on this site?

 

[MarkMitford]

(I'm not a lawyer, this is not legal advice)

Companies often go after their resellers/distributors that use the company or product name in domain names.

Replace "Widget" with "Windows XP" and "XYZ" with "Microsoft", do you think Microsoft would be annoyed if Joes Computer Store registered and started using "MicrosoftWindowsXP.com"?

Here's another example: Replace "Widget" with "Coffee" and "XYZ" with "Starbucks", do you think Starbucks would be annoyed if Joes Coffee Shop registered and started using "StarbucksCoffee.com"?

 

[DomainPairs]

I can understand your point Mark, and certainly in the MS case I'm sure this is true. I'm not so sure about the coffee case though (I don't know Starbucks, so this is general rather than specific). If a coffee shop advertises that it sells Starbucks coffee as a quality product, then the advertising may do both companies some good. In fact many companies actually suply the advertising to support this. Using my example, I can see that xyz would not be happy if the site promoted abc widgets, but if it is supportive of xyz, I feel that there may be some scope. But I'm not a lawyer, and I was concerned that the trademark owner may just say "NO" without looking at the merits.

 

[izoot]

I can pose it another way.... If your a company that has spent countless dollars & time creating, marketing and branding a product. Why would you want someone else to profit off all that effort other than your own company?

Even if they are selling your product, wouldn't you rather have, for instance,
NikeShoes.com pointing to Nike.com instead of Joe's shoe store? Is Joe's shoe store going to sell enough product to make Nike look away? Probably not. How will your clients shop offer the company more value and profit in the use of their name than they can do for themselves?

I am in a business that relies heavily on licensing brand names...we pay big dollars to use Warner Bros or Disney character names. They don't care that we produce a couple hundred thousand pieces of product at a time...they want to be paid. Thats the way they make their money, we give them a piece of sales and a upfront licensing fee. It's their property, the name has as more value than the product in most cases.

Supportive or not of their product they won't be happy. I know I wouldn't be happy if someone had a verbatim name of one of my products.

You should steer your client away from use of the name....if not get a contract releasing you from any liability ( stating you recommended not to use ) from the use of that name ( not even sure you can do that )

my 2¢ ( not a lawyer, nor do I play one on tv )

 

[DomainPairs]

I take your point. In fact nikeshoes.com is owned by nike but is unused. I would have thought it worth aliasing it to one of their other domains.
Maybe I'll write to the company and see what they say.

 

[HOWARD]

I've seen cases go both ways. I had a client who owned Nathanshotdogs.com and was the distributor of Nathan's Hot dogs in Texas. Nathan's sent him a C & D letter, but we resisted and ended up settling the matter by my client keeping the domain. The same thing happened with Godiva.com.

 

[DomainPairs]

That seems encouraging Howard. Is the best thing to write to the trademark owner first to see what they say, or does that make things more difficult later? Obviously my client does not want to mess up his relationship with the manufacturer.

 

[izoot]

How was it settled?

Was there a payment involved, a pecentage or simply a statement of well we sell your product...we should be able to use the name?

What was the argument that swung the decision in your clients favor?
Did it make a difference that your Nathan's client had a franchise/distributorship already? ( I assume he did have one, anyhow)

I'd be interested in hearing more...as I'm sure we all would.


Thanks for the time..

 

[DomainPairs]

Well here is an update on my situation.

The XYZ company have 12 cases in WIPO involving multiple names. They have not lost one, all ended in transfers or cancellations. Looking through google, I would guess that they own 300-500 domains worldwide. My two word combination including their trademark gives just under 3 million pages.

One WIPO case which they won involved someone writing to them and offering to sell a name that is not as good as mine for $150,000.

I'm now reviewing the whole situation and wondering if I need a legal partner here, or if I should just walk away (never done that before in my life though).

 

[HOWARD]

The best way, of course, is to have a written licensing agreement. short of that, so long as you have a legitimate business interest for using the name,(i.e. sell the product), you have a stronger negotiating position.

In the Nathans case, they didn't have the foresight to register the domain when it was available, EVEN THOUGH IT WAS BROUGHT TO THEIR ATTENTION BY MY CLIENT! Therefor, they agreed that he could continue to use the domain through its then existing expiration date.

 

[izoot]

Thanks for the reply Howard. I appreciate you taking the time.

Sounds like a fair agreement with Nathan's....maybe they will forget the name again and your client can keep it

 

[DomainPairs]

I have found a site that has one of their trade marks in its name and uses their coporate trademarks on the main site. It is an information and review site for their products.

It looks as if the best thing to do is to create a flattering information site (not difficult because I believe their products to be some of the best on the market.), and add some sales links later.