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Bakers Delight Vs Bakers Delight Lies: the Future of Free Speech on the Internet

andrew asked:

A classic “David and Goliath” battle between Bakers Delight and Bakers Delight Lies, finally comes to an end. The WIPO decision in favour of Bakers Delight Lies sends a strong message to big business who have traditionally used the vast resources at their disposal to censor information.

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Bakers Delight Lies

Or read the full case below.

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Bakers Delight Holdings Ltd v. Bakers Delight Lies

Case No. D2008 0006

1. The Parties

The Complainant is Bakers Delight Holdings Ltd, Victoria, Australia, represented by Melbourne IT CBS, Ltd, United Kingdom of Great Britain and Northern Ireland.

The Respondent is Bakers Delight Lies, Queensland, Australia.

2. The Domain Name and Registrar

The disputed domain name is registered with Allindomains, LLC.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on January 2, 2008. An amended electronic Complaint was filed on January 14, 2008. On January 3, 2008, the Center transmitted by email to Allindomains, LLC a request for registrar verification in connection with the domain name at issue. On January 7, 2008, Allindomains, LLC 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 together with the amendment to the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy”), the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the “Supplemental Rules”).

In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on January 14, 2008. In accordance with the Rules, paragraph 5(a), the due date for Response was February 3, 2008. The Respondent did not submit any formal response.

The Center appointed John Swinson as the sole panelist in this matter on February 11, 2008. 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 Rules, paragraph 7.

On January 28, 2008, and January 30, 2008, the Complainant sent an email to the Center advising that a copy of the complaint had been published on the disputed domain name website. The Center invited the Respondent at the Complainant’s request to remove the complaint from the website pending the outcome of this dispute. On January 31, 2008, the Respondent sent an email to the Center advising that the complaint had been removed.

4. Factual Background

The Complainant Bakers Delight is an Australian owned company established 27 years ago. The Complainant operates a bakery franchise, where (according to the Complainant’s website), 90% of its bakeries are franchised and 10% are company owned.

The Complainant Bakers Delight has over 600 bakeries in Australia and over 30 in New Zealand. The Complainant also operates bakeries in the United States and Canada, trading under a different name (COBS Bread).

The Complainant operates a website at “www.bakersdelight.com.au”.

The Respondent is an individual residing in Queensland, Australia. The Respondent used to be a franchisee of the Complainant.

The Respondent uses the disputed domain name to attack the Complainant, and in particular their treatment of franchisees.

According to the whoIs record, the disputed domain name was created on June 22, 2007.

5. Parties’ Contentions

A. Complainant

The Complainant “Bakers Delight” makes the following contentions:

The Complainant “Bakers Delight” has registered several trademarks in Australia for BAKERS DELIGHT. This trademark is a well known brand in Australia, as the Complainant is the world’s largest franchise bakery, with over 700 bakeries across four countries, and serving 2,500,000 customers each week.

The disputed domain name is confusingly similar to the Complainant’s trademarks.

The content of the disputed domain name website demonstrates that the Respondent is aware of the Complainant’s trademark.

While the Respondent can publicly criticize the Complainant “Bakers Delight”, under the Policy the Respondent cannot use a domain name which is identical or confusingly similar to the Complainant’s trademark to do so. This is because a member of the public viewing the disputed domain name will think that it leads to a website endorsed by the Complainant “Bakers Delight” . The similarity between the disputed domain name is obvious and could confuse Internet users, particularly because the Respondent is using the registered logo of the Complainant “Bakers Delight” in the content of the website.

The Respondent does not appear to be the owner of any trademark registration or intellectual property rights of the terms “bakers” or “delight”. Nor has the Respondent been known by these terms. A Google search of “bakers delight” does not return any results relating to the Respondent.

The Respondent was not working for the Complainant at the time he registered the disputed domain name, and therefore has no rights or a legitimate interest in the disputed domain name through a franchisee agreement.

Once the disputed domain name is found to be identical or confusingly similar to the Complainant’s trademark, the name cannot qualify as being used for “legitimate” or “fair use” purposes, even if the website is truly a criticism site which does not seek to divert custom from or tarnish the Complainant “Bakers Delight”.

By using the “.com” domain, the Respondent implied that he wanted to make commercial use of the disputed domain name as opposed to creating a group comment site, for which he should have used the “.org” domain.

In November 2007, the Complainant sent a cease and desist letter to the Respondent advising that the disputed domain name was infringing the Complainant’s intellectual property rights, but the Respondent did not respond.

The Respondent is tarnishing the reputation of the Complainant “Bakers Delight” by treating as fact some elements that the Complainant “Bakers Delight” can prove are wrong.

The disputed domain name website is causing problems for the Complainant “Bakers Delight” . This can be seen from visitor’s comments that they are discouraged from entering into a franchise because of the content of the website (where those visitors have had no prior experience with the Complainant “Bakers Delight”).

Bad faith can be proved because the Respondent is attracting Internet users with a confusingly similar domain name to the Complainant’s trademarks, in circumstances where the Respondent has acknowledged the existence of the trademark prior to registration of the disputed domain name.

The Respondent is also disrupting the Complainant’s business due to the content on the website, and has failed to respond to the Complainant’s attempts to contact him. The Respondent is also infringing the Complainant’s trademark and copyright rights, and has abused the prior relationship between the parties.

B. Respondent

The Respondent did not make any formal reply to the Complai
nant’s contentions. However, in his email of January 31, 2008, the Respondent noted that the reason he posted the complaint on the disputed domain name website was to seek advice from the public regarding the complaint, as he could not obtain legal advice.

The Respondent stated that there was no commercial motivation behind his we
bsite, and he used it as an outlet where he could share his experiences with the Complainant.

6. Discussion and Findings

In order to succeed on its claim, the Complainant must show that all the elements set out in paragraph 4(a) of the Policy have been satisfied. The burden of proof is on the Complainant to show:

(i) the disputed domain names are identical or confusingly similar to a trademark or service mark in which the Complainant has rights; and

(ii) the Respondent has no rights or legitimate interests in the disputed domain names; and

(iii) the disputed domain names have been registered and are being used by the Respondent in bad faith.

A. Identical or Confusingly Similar

The Complainant “Bakers Delight” has registered several trademarks in Australia which contain the words “Bakers Delight”. The earliest registered marks are two BAKERS DELIGHT word and image marks (trademark registration numbers 588440 and 588441), both registered from October 14, 1992. The Complainant clearly has registered trademark rights in BAKERS DELIGHT. The BAKERS DELIGHT brand is well known throughout Queensland and Australia.

The Complainant “Bakers Delight” makes a simple assertion that the disputed domain name is confusingly similar to the Complainant’s trademarks, but does not support this statement.

The disputed domain name does contain the Complainant’s entire trademark. However, it also contains at the end the word “lies”. The disputed domain name therefore appears to fall within the category of so called “sucks” cases (where a trademark is joined with a negative term).

Panels dealing with “sucks” cases have found that a domain name can be confusingly similar to the trademark for various reasons, including because the domain name contains a trademark and a dictionary or generic word; or because the disputed domain name is highly similar to the trademark; or because the domain name may not be recognized as negative. This view (that “sucks” domain names are confusingly similar to the trademark) is the majority view of previous panels.

However, in some instances, previous panels have found that these type of domain names are not confusingly similar, because it is obvious to Internet users that the Complainant would not use a domain name which consists of its trademark and a derogatory term. As noted in Wal Mart Stores, Inc. v. Richard MacLeod d/b/a For Sale, WIPO Case No. D2000 0662, the Panel in that case considered that “the fame of a mark does not always mean that consumers will associate all use of the mark with the mark’s owner. No reasonable speaker of modern English would find it likely that Wal Mart would identify itself using wal martsucks.com”.

However, while Internet users may not be confused as the source of the disputed domain name under the majority view, the trademark and disputed domain name can still be confusingly similar when directly compared.

In the Panel’s opinion, even if one were to approach the issue from a minority perspective “sucks” is a more forceful, obvious and derogatory term than the term “lies”. It is not obvious from looking at the disputed domain name that the Respondent is attacking the Complainant. For example, if the “l” in “lies” were not seen (which is quite possible given the length of the name), the disputed domain name would read “bakersdelighties” which is not offensive at all. “Lies” is also a common, everyday dictionary word which does not necessarily have an offensive meaning, whereas “sucks” is slang and in the majority of cases, insulting. As Internet users may not immediately recognize the disputed domain name as involving negative connotations, and because the “lies” component (when added to the much larger term of “bakersdelight”) is not the most prominent or obvious feature of the name, the Panel would have little hesitation in finding even under the minority view that the disputed domain name is confusingly similar to the Complainant’s trademark.

In any event, applying the majority view the Panel finds the disputed domain name to be confusingly similar to the BAKERS DELIGHT mark. The Panel agrees with previous decisions which note that a finding of confusing similarity in the first element is not fatal for true protest sites, as the “legitimate interest” and “bad faith” factors should afford adequate protection to the Respondent, especially as the Complainant “Bakers Delight” retains the burden of proof on each factor.

B. Rights or Legitimate Interests

Under paragraph 4(a)(ii) of the Policy, the Complainant has the burden of establishing that the Respondent has no rights or legitimate interests in the disputed domain name.

However the Complainant is only required to make out an initial prima facie case. Once that prima facie case is made, the Respondent carries the burden of demonstrating rights or legitimate interests. The Respondent may establish rights or legitimate interests by demonstrating any of the elements in Paragraph 4(c) of the Policy including:

(iii) the Respondent is making a legitimate non commercial or fair use of the disputed domain names, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.

As stated in Mission KwaSizabantu v. Benjamin Rost, WIPO Case No. D2000 0279, there are four elements to succeeding under this limb:

1. The Respondent’s use must be legitimate noncommercial or fair use

2. The use must be without intent for commercial gain

3. The use must be without intent to misleadingly divert consumers; and

4. The use must be without intent to tarnish the trademark of the complainant.

While the Respondent has made no formal reply, his email of January 31, 2008 alludes to paragraph 4(c)(iii), by stating that his website is a non commercial site which he uses to vent his frustration with the Complainant. The Respondent is a former franchisee of the Complainant “Bakers Delight”, and his complaints on the website are related to his treatment as a franchisee.

Is there a prima facie case?

The Respondent does not appear to own any trademark or service mark rights in “bakers”, “delight” or “bakersdelight”, or be known by any of those terms.

While the Respondent used to be a franchisee of the Complainant and may have had a right to use the “bakersdelight” name at a particular time (when a franchise agreement was in place), he was no longer a franchisee at the time he registered the disputed domain name.

Accordingly the Panel finds that the Respondent deliberately chose a domain name which is confusingly similar to the Complainant’s trademark, and which he is using without the Complainant’s permission. The Complainant “Bakers Delight” has therefore established a prima facie case that the Respondent does not have any rights or legitimate interests in the disputed domain name.

Does the Respondent have rights or legitimate interests?

The next question is whether the Respondent is using the disputed domain name as a genuine criticism site, and if so, whether that gives him rights or legitimate interests in the disputed domain name (see Chubb Security Australia PTY Ltd v. Mr. Shahim Tahmasebi, WIPO Case No. D2007 0769).

In the complaint, the Complainant asserts that once a disputed domain name is found to be identical or confusingly similar to the Complainant’s trademark, the name cannot be used for legitimate or fair use purposes, even if the website is truly a criticism site. While this is one view taken by prev
ious panels (see for example, Estée Lauder Inc. v. estelauder.com, estelauder.net and Jeff Hanna, WIPO Case No. D2000 0869), it is not the only, or in this case necessarily correct view.

As noted in Legal & General Group Plc v. Image Plus, WIPO Case No. D2002 1019, there are two conflicting approaches ta
ken by Panels as to whether a domain name which is confusingly similar to a trademark, can generate rights or legitimate interests. These opposing views and references to supporting panel decisions are comprehensively set out in Chubb Security.

The Complainant relies on the prior decision of Covance, Inc. and Covance Laboratories Ltd. v. The Covance Campaign, WIPO Case No. D2004 0206. However, that decision does not support the Complainant in the circumstances of this dispute. That decision concerned the domain name for a criticism website, and it was decided that:

“upon consideration of the degree of initial confusion arising from use of the Disputed Domain Name coupled with the very limited potential for the public to be misled in the actual circumstances of use, the Panel finds that the Respondent is making a legitimate non commercial or fair use of the Domain Name for the purposes of the first limb of paragraph 4(c)(iii) of the Policy.”

The respected panelist in that case also stated:

“The overriding purpose of the Policy is to prevent cybersquatting in favour of legitimate trademark owners but in doing so paragraph 4(c)(iii) of the policy clearly seeks to balance the trademark owner’s right against the rights of a domain name owner in circumstances where use of the trademark as part of the domain name is truly for the purposes of criticism and the domain name owner in no way seeks to make a commercial use of the trademark or to tarnish it. Nowhere is it expressly anticipated by the Policy that this paragraph may not operate if the domain name at issue is found to be identical or confusingly similar to the Complainant’s trademark.”

When considering a domain name used for a criticism website, paragraphs 4(a) and 4(c)(iii) of the Policy have different tests and rationales. Success by a Complainant in relation to paragraph 4(a) does not immediately result in failure by the Respondent in relation to paragraph 4(c)(iii). To hold otherwise would mute paragraph 4(c)(iii).

Moreover, contrary to what the Complainant appears to assert in the Complaint, the application or interpretation of paragraph 4(c)(iii) of the Policy should not depend on the geographical location of the complainant or respondent.

Prior to the Policy coming into effect, many trademark lawyers did not consider registration or use of a domain name per se to be trademark use. Just as it is not usually regarded as trademark use or infringement to stand outside a businesses’ premises with a sign that says “Baker’s Delight Lies To Franchisees” or to write a book titled “Baker’s Delight Lies”, it is not necessarily contrary to the Policy to register and use a domain name for a legitimate criticism website that includes a trademark as part of the domain name.

Paragraph 4(c)(iii) can be satisfied if the website is a genuine “complaints” website, provided that the Respondent is not using the website as a sham to sell the domain name, to put pressure on the Complainant to settle another dispute between them (see for example Asset Loan Co. Pty Ltd v. Gregory Rogers, WIPO Case No. D2006 0300), to advertise goods or services, or to provide links to or advertising for competitors’ websites. It is necessary of course to thoroughly examine the website to assess whether it is truly a genuine “complaints” website.

On the homepage of the website, the Complainant’s logo appears with a cross through it. The main heading reads “The truth behind Bakers Delight lies”. It also contains certain statements (the truth or merit of which the Panel is not in a position to judge) clearly intended to be critical of the Complainant, and complaining about certain aspects of Complainant’s conduct including in relation to its franchises.

Other pages on the website are called “Media coverage”, “Franchisee stories”, “Research on franchising”, “Current franchisee testimonials”, “Feedback”, “BD [the Complainant] in Parliament”, “BD and the Guru”, “Cobs v Franchised”, “Franchise Churning” and “BD Facts”.

These pages (apart from the BD and the Guru page) contain content relating to the Complainant’s franchises or information relating to franchises in Australia generally. (The BD and the Guru page replicates a newspaper article which refers to the Complainant’s involvement with a yoga teacher).

In some instances the pages contain direct content (such as personal accounts of people’s experiences with the Complainant, articles, feedback on the website and parliamentary commentary). The Respondent provides his own account of his experience with the Complainant under the “Franchisee Stories” page. In other instances, the pages contain links which direct to publicly available articles, radio interviews, statistics, or other non commercial sites (such as the Australia Competition and Consumer Commission). The “BD Facts” page contains statements which appear to have been written by the Respondent, but are not necessarily supported by objective evidence.

There is no advertising on the website, nor are there any links to commercial websites. The disputed domain name is therefore non commercial, as is the website. The only content on the website relates directly to the Complainant “Bakers Delight” or the topic of franchises generally.

On one hand, the Respondent’s website does not include an express disclaimer that the Respondent’s website is not associated with the Complainant “Bakers Delight” and the website does feature the Complainant’s trademarks (albeit with a cross through them). This could potentially lead to customer confusion. However, the Respondent’s website does have wording which is strongly critical of the Complainant “Bakers Delight”, and the Panel finds that it would be clear to most users that the Respondent’s website is a third party criticism website, which is not controlled or authorized by the Complainant “Bakers Delight”. So, if any Internet user were to accidentally stumble upon the Respondent’s website while looking for the Complainant’s website, they would most likely immediately realize that they were visiting a completely different site with a different author, due to the content on the Respondent’s website. There is no evidence that the Respondent is promoting the disputed domain name elsewhere, or using it other than in relation to the associated website.

In summary, the website does not have any commercial content, and is apparently dedicated to genuine criticism, with relevant non commercial links. There is nothing before the Panel to establish that the Respondent is making any commercial gain, from visitors or advertising or otherwise, and is apparently not attempting to divert users looking for the Complainant’s site. Accordingly, the Panel finds that all four elements in paragraph 4(c)(iii) have been established, and the Respondent has on the face of it a legitimate interest in respect of the disputed domain name.

The Complainant “Bakers Delight” notes in the complaint that the content of the website is causing problems for it, because it is possible that people viewing the site will be discouraged from entering into a franchise with the Complainant “Bakers Delight”. The Complainant “Bakers Delight” also notes that the Respondent is infringing its intellectual property rights. The Panel’s only power is to determine domain name disputes using the criteria specified in the Policy. The issues whether the Complainant “Bakers Delight” is suffering financial loss due to incorrect statements being made by the Respondent, or infringement of intellectual property,
is outside the realm of the Panel’s powers. As noted in Legal & General Group Plc, “the goals of the Policy are limited and do not extend to insulating trademark holders from contrary and critical views when such views are legitimately expressed without an intention for commercial gain”.

C. Registered and Used in Bad Faith

As
the Complainant “Bakers Delight” has failed to establish that the Respondent lacks rights or legitimate interests, it is unnecessary to determine whether the Respondent registered or used the disputed domain name in bad faith.

7. Decision

For all the foregoing reasons, the Complaint is denied.

John Swinson

Sole Panelist

Dated: February 25, 2008

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