The World Intellectual Property Organisation (WIPO) has stepped in to effectively force the shutdown of an Australian e-tailer, following a trademark dispute with a U.S. company of the same name.
The operators of 1SaleADay.com.au - which advertised stock of the Apple iPad before its official launch - were forced by WIPO to transfer ownership of the domain name to the US e-tailer.
WIPO is a specialised agency of the United Nations that deals with intellectual property disputes.
WIPO found that Australians Simon Mochkin and Eli Feigli, sole shareholders of One Sale A Day Australia Pty Ltd and former owners of onesaleaday.com.au and 1saleaday.com.au, had registered the names in "bad faith", according to case documents.
CRN has contacted Mochkin and his lawyers Guy & Hinton Lawyers Australia, seeking comment.
The duo were forced to transfer the ownership of the domain names to the US-based owner of 1SaleADay, Benyamin Federman.
Federman's company has subsequently pulled the 1SaleADay.com.au site, hosted by TPP internet, offline, and posted the following message.
"The former holders of the domain names were found to be infringing on the intellectual property rights of the 1SaleADay US website.
"The website may be out of service for a while as a result of this transition. We will keep you posted. Sorry for any inconvenience this may have caused."
Screen shot taken by CRN October 21
Vice president of 1SaleAday LLC Eli Federman has apologised to customers impacted by the closure.
"1SaleADay sincerely apologises to any unwitting customers that assumed affiliation between the US and AU companies", Eli Federman, vice president of 1SaleAday told CRN via email.
"After taking control of the highjacked website, we received and continue to receive emails from customers asking where their orders are. We cannot take responsibility for the illegal actions of the unauthorised AU franchise, but we will do everything in our power to compensate those victims.
"Our company is approved by the U.S. Better Business Bureau and plans on continuing to live up to its exceptional reputation. When 1SaleADay opens up a franchise in AU we will provide exceptional customer service," he said.
The decision was handed down in September by sole WIPO panelist Andrew F. Christie following Benyamin Federman's filing to WIPO's Arbitration and Mediation Centre on July 23, 2010. Proceedings commenced via email a month later.
A TPP spokesperson told CRN that it "does not have any control" over the dispute.
"This is a decision of both auDa [The Australian Domain Name Authority] and WIPO. Since TPP Internet is an accredited registrar we are bound to comply with any decision made by either governing body," the spokesman for TPP Internet said.
NEXT: What led to the disagreement
Benjamen Federman claimed to have founded 1saleaday.com in October 2006 and has since generated more than $US25 million in gross sales, case document revealed.
According to WIPO documents, Federman applied to register the 1SALEADAY trademark with the Australian Trade Marks Office on August 26, 2009.
Simon Mochkin and Eli Feiglin incorporated One Sale A Day Pty Ltd on June 30, 2008 after registering onesaleaday.com.au and 1saleaday.com.au on May 20, 2008.
In October 2008, Mochkin and Feiglin contacted Federman to establish a "1SaleADay" website in Australia. A verbal agreement was reached for them to begin a "1SaleADay" business in Australia.
According to the WIPO documents, for the next two years there was disagreements about the use of the 1SALEADAY trademark "over sale of certain goods and services" and about the non-payment by Mochkin and Feiglin of invoices supplied by Federman.
On May 12, 2010, Federman "sent a cease and desist letter" requesting that the pair no longer use the 1SALEADAY trademark. The respondents "did not respond to this letter" and "continued to operate the website".
NEXT: Contention and final decision
Bad faith versus first in, best dressed
According to the case documents, the US owners of 1SaleADay contended that the domain name 1saleaday.com.au and onesaleaday.com.au was "identical or confusingly similar".
Mochkin and Feigli conceded that the domain names were "identical". However, they "contended that the complainants had not established trademark rights in Australia prior to the registration".
Further, Benyamin Federman contended that the respondents Mochkin and Feigli formed a company using his company's trade name without his consent. He also contended "that they failed to use the disputed domain names in connection with a bona fide offering of goods and services".
"Instead they tried to profit off [1SaleADay's] intellectual property and goodwill," he said.
Finally, Federman contended that the domain names were registered and used in bad faith.
According to the documents, the respondents said their business agreement gave them "legitimate rights in the disputed domain names". Further, the domains were registered for a legitimate business purpose. They argued that the complainants had not "supplied evidence to support their claim that they sought to trade on the complainants' reputation".
The respondents contended that before they received any notice of this dispute, they used the disputed domain names in connection with a bona fide offering of goods or services.
Discussion and Findings
Sole WIPO panelist Andrew F. Christie concluded that Australian respondents registered the disputed domain names so as to benefit from the reputation and goodwill of the U.S. business because the disputed domain names were either identical or confusingly similar to the complainant's trademark. No other reason for registering the disputed domain names was proffered, the case documents showed.
WIPO also found that the respondents had "no rights or legitimate interests" in the disputed domain names.
"The complainants have made out a prima facie case of the respondents having no right or legitimate interest in the disputed domain names, and the respondents have not rebutted this prima facie case.
"This panel finds that the respondents registered the disputed domain names so as to benefit, without first obtaining consent, from the goodwill and reputation of the complainants' trademark - which, in this panel's opinion, constitutes registration of the disputed domain names in bad faith," the case documents showed.