Rysell Distributors, INC v. Vargas International, LLC and Juan Vargas
Claim Number: FA0710001092848
PARTIES
Complainant is Rysell Distributors, INC (“Complainant”), 80 Railroad Ave, Ridgefield Park, NJ 07660, USA. Respondent is Vargas International, LLC and Juan Vargas (“Respondent”), 95-60 Queens Blvd. Suite 105, Rego Park, NY 11374 USA.
REGISTRAR AND DISPUTED DOMAIN NAME
The domain name at issue is <lemisol.com>, which is registered with Register.com, Inc.
PANEL
The undersigned, David H Tatham, certifies that he has acted independently and impartially and to the best of his knowledge has no known conflict in serving as Panelist in this proceeding.
PROCEDURAL HISTORY
Complainant submitted a Complaint to the National Arbitration Forum ("the Forum") electronically on October 10, 2007; the Forum received a hard copy of the Complaint on October 15, 2007.
On October 11, 2007, Register.com, Inc. confirmed by e-mail to the Forum that the <lemisol.com> domain name was registered with it and that the Respondent was the current registrant of the name. Register.com, Inc. has verified that Respondent is bound by its registration agreement and has thereby agreed to resolve domain-name disputes brought by third parties in accordance with ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”).
On October 23, 2007, a Notification of Complaint and Commencement of Administrative Proceeding, setting a deadline of November 13, 2007 by which Respondent could file a Response to the Complaint, was transmitted to Respondent via e-mail, post and fax, to all entities and persons listed on Respondent’s registration as technical, administrative and billing contacts, and to postmaster@lemisol.com by e-mail.
A Response was received on November 13, 2007. The Response was deficient under ICANN Rule 5 as the hard copy was not received until after the deadline for the Response.
On November 20, 2007, pursuant to Complainant’s request to have the dispute decided by a single-member Panel, the Forum appointed Mr. David H Tatham as the Panelist in this proceeding.
RELIEF SOUGHT
Complainant requests that the domain name be transferred from Respondent to Complainant.
PARTIES’ CONTENTIONS
The submissions by Complainant and Respondent were, mercifully, brief so they are set out here in full. There were no Additional Submissions by either party.
A. Complainant
LEMISOL is the trademark of Rysell Distributors, INC. LEMISOL is a brand of feminine wash and is listed in the Trademark Electronic Search System (TESS) as a “cleansing solution for feminine hygiene.” The first commercial use of the LEMISOL name was March 1, 1986. The Registration Number is 1,975,551 and it was registered in 1996.
LEMISOL brand feminine wash was created by Laboratorios Rysell, s.a for distribution in the Dominican Republic in 1978. The LEMISOL brand was first exported to the United States in 1984 and has continued in trade.
The LEMISOL brand has been expanded to LEMISOL Plus, LEMISOL Kids, and is planned to be further extended to other personal care products.
This Complaint is based on the
following factual and legal grounds:
[a.] The URL <lemisol.com> is identical to our trademark LEMISOL.
[b.] Respondent has no rights to the trademark
LEMISOL. The Complainant holds Trademark registration number 1,975,551 –
LEMISOL.
Respondent was previously under contract to act as distributor of the LEMISOL
brand product in the United States. This
right was revoked in 2005.
The distribution agreement was terminated on September 22, 2005 based on evidence of the Respondent distributing counterfeit LEMISOL brand feminine wash.
[c.] Respondent registered and used the
domain <lemisol.com>
in bad faith. The original purpose of
the registration was to aid in the sale of the LEMISOL brand product. Once the contract was terminated in 2005,
Respondent used the domain to point to a web site where their competitive
product (LaFresca) was sold.
After receiving a cease and desist letter, Respondent stopped transferring web
users to information for their competing product and as of August 2007 the site
<lemisol.com>
leads to an “under construction” page – indicating to some users that LEMISOL
does not have an online presence, disrupting our business.
Annexed to the Complaint were copies of:
The registration details of the LEMISOL trademark;
An
Agreement between Rysell International, INC and Vargas International, LLC dated
September 18, 2003;
A Letter terminating the above Agreement, dated
September 22, 2005;
A printout of the website at <lemisol.com> taken on November 22, 2005;
A Cease and Desist letter dated November 29, 2005.
The
‘under construction’ page posted by WebSiteNow at <lemisol.com> as at August 15, 2007
B. Respondent
[a.] The
domain <lemisol.com> is identical to a trademark owned by
Complainant.
[b] Respondent and Complainant entered into a distribution agreement on September 18, 2003 granting Respondent exclusive distribution rights of all products bearing the Lemisol brand in the entire United States.
Complainant claims to have terminated the distribution agreement due to Respondent having distributed counterfeit Lemisol. Complainant has yet to show proof of Respondent distribution of counterfeit Lemisol. Respondent denies any and all allegations of having distributed counterfeit Lemisol.
Since the inception of the distribution agreement Respondent has purchased from Complainant $337,124.00 USD worth of Lemisol Products. Respondent has since been selling and marketing such Lemisol Products in accordance with the distribution agreement.
Respondent invested over $135,000.00 USD advertising Lemisol on major radio stations beginning January 2004. Since then Respondent has been known as the exclusive distributor of Lemisol Products in the United States.
Respondent still has a significant amount of Lemisol Products, purchased from Complainant, in stock, and hopes to sell such Lemisol Products soon.
Respondent has a bona fide intent to use the domain lemisol.com to aid in the sale and marketing of such Lemisol Products.
[c.] Respondent registered the domain <lemisol.com> with the intentions of selling and marketing Lemisol Products on the Internet. In May 2004 the FDA banned the sale of Lemisol Products in the United States. Respondent then used the domain to sell other feminine products similar to Lemisol Products. In 2005 the FDA lifted the ban on Lemisol Products and Respondent stopped selling such similar products.
Lemisol has an online presence on a domain registered by Complainant known as <rysell.com>.
FINDINGS
Complainant is the owner of the trademark LEMISOL which has been registered at the USPTO since 1996. Respondent has acted as the authorized distributor in the US for the LEMISOL brand of feminine hygiene products by virtue of a Distribution Agreement between the parties dated September 18, 2003. This Agreement was terminated by Complainant through a letter from its attorneys dated September 22, 2005.
DISCUSSION
Preliminary Issues
There are two preliminary issues to be decided:
1.
Should the Panel take into account Respondent's Response?
The hard copy of the Response was
received one day after the deadline for doing so set by the Forum. Under Rule 10 of the Rules for the UDRP, the
Panel must conduct the proceeding in such a manner as it considers appropriate,
and it has been held that it is entirely within the Panel's sole discretion
whether or not to accept a late filed document, see Telstra Corp. v. Chu, D2000-0423 (WIPO June 21, 2000) where it was found that
any weight to be given to the lateness of the response is solely in the
discretion of the panelist. In
fact the hard copy was received only 1 day late and the Panel believes it would
be unfair to the Respondent to reject its submission on a mere technicality. In doing so, the Panel is mindful of the
Decisions in The Board of Governors of the
University of Alberta v. Katz, D2000-0378 (WIPO June 22, 2000) in which it
was found that a panel may consider a response which was one day late, and
received before a panelist was appointed and any consideration made); and in
Gaiam, Inc. v. Nielsen, FA 112469 (Nat. Arb. Forum July 2, 2002) where it was held that “In the interest of
having claims decided on the merits and not by default and because Complainant
has not been prejudiced in the presentation of its case by the late submission,
Respondent’s opposition documents are accepted as timely.”
2. Is this a case which is proper for a Decision under the UDRP?
Respondent contends, and Complainant admits, that Respondent was formerly authorized as an exclusive distributor of certain “Lemisol” products in the continental United States. Complainant contends that Respondent’s right to distribute Complainant’s products was revoked in 2005 because Respondent had been marketing counterfeit variations of Complainant’s product at a time when sales of genuine “Lemisol” was prohibited by the US Food & Drug Administration. Complainant further contends that after the Agreement was terminated, Respondent used the disputed domain name to direct customers to a website advertising its own competing product. Respondent claims that it has not sold counterfeit variations of Complainant’s product, and that in fact it still has a supply of Complainant’s product which it wishes to sell using the disputed domain name.
Complainant’s attorneys wrote to Respondent on November 29. 2005 asking them to cease making any further use of the disputed domain name and demanding that it be transferred to Complainant. The Panel has not been apprised of any further activity by either party between this date and the filing of the Complaint in October 2007.
This matter is, in reality, a dispute
between Complainant and Respondent over a contract, and one also involving
accusations of bad faith on the part of the Respondent. The Panel believes that
it is therefore outside the scope of the Policy. For example,
in Sludgehammer Group, Ltd. v. McClernan, FA 977484 (Nat. Arb.
Forum June 25, 2007) it was held that “When an individual registers a domain
name on behalf of another party and then subsequently refuses to relinquish
control, the cause of action is for breach of contract or breach of fiduciary
duty and is outside the scope of UDRP Policy.” It was also held in Latent Technology
Group, Inc. v. Fritchie, FA 95284 (Nat. Arb. Forum Sept. 1, 2000) that a
dispute concerning an employee’s registration of a domain name on his or her
own behalf when working for an employer and then their later refusal to
transfer it was outside the scope of the Policy because it involved issues of
breach of contract and breach of fiduciary duty.
DECISION
Because this proceeding is outside the scope of the Policy, the Panel concludes that relief shall be DENIED, however without prejudice to Complainant’s right to bring proceedings in another forum, with proper jurisdiction.
David H Tatham,
Panelist
Dated: December 3, 2007
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