Property, intangible

a blog about ownership of intellectual property rights and its licensing

Del Monte vs. Del Monte

My last post was on the Legal Rights Objection (LRO) between Merck KGaA and Merck & Co., and today it’s the one between Del Monte Corp. and Del Monte International GmbH. Both are proceedings between parties that have a common history and an ongoing relationship defined by agreements. Nevertheless, in Merck, the Panel found that the Respondent was entitled to the domain name, but in Del Monte we have the very first and, thus far, only valid objection to registration of a top level domain.  We’ll do a little compare-and-contrast on the two cases.

A Legal Rights Objection is the vehicle whereby one can object to the award of a proposed generic top level domain name (“gTLD”) based on a likelihood of confusion with an existing trademark. In Merck v. Merck, we had two companies that, despite a common heritage, have been entirely separate entities for 100 years. In Del Monte Corp. v. Del Monte International GmbH, the applicant, Del Monte Corp., is only a licensee of Del Monte International. (We’ve seen a spat between the two companies before.)

But, nevertheless, the same legal standard applies, and that legal standard requires an element of bad faith:

In order to prevail, the Objector must establish (under Section 3.5.2 of the Guidebook) that the potential use of the applied-for gTLD by the Respondent:

1.takes unfair advantage of the distinctive character or the reputation of the Objector’s registered or unregistered trademark or service mark (“mark”); and/or
2. unjustifiably impairs the distinctive character or the reputation of the Objector’s mark; and/or
3. otherwise creates an impermissible likelihood of confusion between the applied-for gTLD and the Objector’s mark.

The Panel did not find any bad faith in the Merck case. In the Del Monte case, however, considering the eight, non-exclusive factors used to aid in deciding whether the registration should be allowed, the panel found bad faith several ways.

Most damning perhaps is that Del Monte Corp., the licensee, didn’t own any trademarks except some in South Africa, but even those were suspect:

The Panel majority concludes it is at least arguable … that the assignment of the South African registrations into the name of the … Respondent, was in breach of the Licence Agreements and therefore, for the purposes of the Guidebook and the Procedure, not bona fide.

The Panel majority would also query whether it is possible that … the Respondent sought to have these registrations assigned to it to bolster an eventual gTLD application for the gTLD string.

And unlike the Panel in the Merck LRO, which did not find it necessary to examine the coexistence agreements between the two parties, the Panel here dug in:

The Panel majority rejects the Respondent’s assertion that, as the Licence Agreements do not expressly prohibit the registration of the applied-for gTLD string by the Respondent, therefore the Respondent is free to do so under the terms of the License Agreements, or otherwise.

To the contrary, the terms of the Licence Agreements clearly express the intention of the parties that the Objector would retain sole control over issues relating to the registration and enforcement of the Trade Mark worldwide. This, in the opinion of the Panel majority, clearly extends to the right to control the registration of domain names and gTLDs comprising or incorporating the Trade Mark, or similar marks.

Thus allowing the registration of the gTLD would create an “impermissible” likelihood of confusion, and the objection to the .delmonte gTLD was upheld.

One panelist dissented; he was not satisfied that the South African registrations were improper and would instead have found that, more likely than not, the applicant had bona fide trademark rights in South Africa. His opinion was also that of the Panel in Merck v. Merck, that is, let the parties sort it out themselves:

Another factor weighing in favor of Respondent is, as the Panel majority puts it, “the 24 year history of coexistence in the global marketplace of food products manufactured, marketed, sold and distributed under the [DEL MONTE] Trade Mark by the Objector, the Respondent and the other licensees.” Whereas the majority apparently finds that such coexistence supports the Panel majority decision to uphold the Objection, I respectfully disagree.

In my view, Respondent has a bona fide basis for owning this gTLD, even if Objector would also have had a bona fide basis if it had been the applicant for this gTLD.

Moreover, in the event Respondent’s actual use of the gTLD turned out to be violative of the trademark rights of Objector and/or its other licensees, then Objector would have recourse under the various license agreements or applicable laws.

Two fairly similar situations, i.e., a common history and a later relationship defined by agreements: co-existence agreements in one case and licenses in the other. I don’t know that the two types of relationships, while named differently, are, in these two situations, so different that they militate a different outcome in an LRO. I tend to agree with the outcome in Merck v. Merck and the dissent here—these are not legal strangers, which is the relationship that the LRO was designed for; this is much more complicated. The parties already have (dysfunctional) relationships, so let them sort it out for themselves. But that’s litigation for you.

Del Monte. Corp. v. Del Monte International Gmbh, No. LRO2013-0001 (WIPO July 29, 2013).

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