WIPO Arbitration and Mediation Center

The parties are Koninklijke Philips Electronics N.V. of Groenenwoudseweg 1, 5621 BA Eindhoven, The Netherlands (Complainant) and Cun Siang Wang, PTGudang Elektronik of Jl Puri Kembangan Raya No. 13, Jakarta Barat, WJ 11610 Indonesia (Respondent).

The domain name in dispute is "philips-indonesia.com" ("the Domain Name"). The Registrar is eNom Inc. of Redmond, Washington, USA ("eNom").

The Complaint was originally filed by the Complainant with the WIPO Arbitration and Mediation Center ("the Center") on December 21, 2000. The Center advised the Complainant of deficiencies in the identification of the Respondent and Registrar by notices of January 4 and January 8, 2001. A revised Complaint was filed on January 9, 2001.

The revised Complaint was sent to the Respondent on January 11, 2001, without attachments by email to "philips_id@bolehmail.com", "webmaster@domainzero.com" and "postmaster@philips-indonesia.com" (the first being the email address of the Respondent and the second being the email address of the Billing Technical and Administrative Contacts for the Respondent as recorded on the Registrars whois database). No return notifications were received. The revised Complaint was also sent without attachments on the same date by fax to 912.527.4596 (being the fax number of the Billing Technical and Administrative Contacts for the Respondent as recorded on the Registrars whois database). The revised Complaint was also sent with attachments by Federal Express to Cun Siang Wang, PTGudang Elektronik of Jl Puri Kembangan Raya No. 13, Jakarta Barat, WJ 11610 Indonesia and to Network Commerce Inc, DomainZero.com, 500 Business Center Drive Suite 1000, Savannah, Georgia 31405 USA (the first being the postal address of the Respondent and the second being the postal address of the Billing Technical and Administrative Contacts for the Respondent as recorded on the Registrars whois database).

By email of January 15, 2001, eNom verified that it is the Registrar of the disputed Domain Name, that the Uniform Domain Name Dispute Resolution Policy ("the Policy") applies to the Domain Name and that it had received a copy of the Complaint. The Centers Notification of Complaint and Commencement of Administrative Proceeding ("the Notification") records that the fee in the required amount had been duly paid.

Having reviewed the file, the Panel considers that the revised Complaint complied with the applicable formal requirements and was properly notified to the Respondent in accordance with paragraph 2(a) of the Rules for Uniform Domain Name Dispute Resolution Policy ("the Rules").

On February 6, 2001, the Center sent Notification of Respondent Default by email to "philips_id@bolehmail.com", "webmaster@domainzero.com" and postmaster@philips-indonesia.com". No return notification was received. No response to the Complaint has been received at any stage from the Respondent.

The single member Panel, Jonathan Turner, submitted a Statement of Acceptance and Declaration of Impartiality and Independence and was duly appointed on February 19, 2001. In accordance with paragraph 15 of the Rules, the Panel was required to forward its decision to the Center by March 6, 2001, in the absence of exceptional circumstances. This case raised an important issue as to whether and in what circumstances an unauthorized distributor of branded goods may register and use a domain name incorporating the brand name. The Panel gave careful consideration to its decision and in consequence exceeded this time limit by several days.

The Complainant is a very well-known manufacturer and supplier of electrical and electronic goods. Its primary branding is its name "Philips" and a logo incorporating this name. It has registered "Philips" as a trademark in numerous countries, including Indonesia.

The Respondent has registered the Domain Name and has established a website at this address with a first page headed "Un-Official Indonesia Philips Electronics Store Online". The page goes on to say "Welcome To Un-Official Indonesia Philips Electronics Store Online / Enter Store". The last phrase links to further pages also at the domain "Philips-Indonesia.com" which advertise and offer for sale electrical and electronic goods apparently manufactured and placed on the market by the Complainants group.

The Complainant sent the Respondent a cease and desist letter on November 20, 2000. The evidence does not refer to any reply to this letter.

The Complainant contends that the Domain Name is confusingly similar to its registered trademark "Philips" and that the Respondent has no rights or legitimate interest in using it, in that it is showing a web page which is identical to a web page from the Complainants own website and continues to do so after receipt of a cease and desist letter. The Complainant further alleges that the Respondent registered and is using the Domain Name in bad faith in order to deceive customers and with the intention of selling it to the Complainant at a profit. The Complainant refers also to the fact that the address in the registration of the domain name incorrectly gives the country as the US. The Complainant submits that this is an indication of concealment and hence bad faith.

The Respondent has not submitted a response to these contentions.

In accordance with paragraph 4 of the Policy, the Complainant must prove (i) that the Domain Name is identical or confusingly similar to a trademark or service mark in which the Complainant has rights; (ii) that the Respondent has no rights or legitimate interests in respect of the Domain Name; and (iii) that the Domain Name has been registered and is being used in bad faith.

As to the first requirement, the Panel considers that the Domain Name is confusingly similar to the "Philips" mark in which the Complainant has rights in Indonesia and other countries. The Panel reaches this conclusion on the basis that the first requirement of the Policy merely involves a mark for name comparison, and not a consideration of whether the Respondents actual use is likely to deceive. The former approach accords with the language and structure of the Policy. Whether the actual use is deceptive is a matter to be considered under the second and third requirements, not the first.

As to the second requirement, it appears that the Respondent had already established a website at the address with a first page headed "Un-Official Indonesia Philips Electronics Store Online" when the Complainant wrote its letter of Complaint. The Panel infers this from the fact that the Complaint refers to the Respondent "continuing with the display of the existing web page even after [being] in receipt of the Complainants cease and desist letter" [emphasis added]. Thus if the Respondents website is a bona fide offering of goods or services, it would have an existing legitimate interest of the kind referred to in paragraph 4(c)(i) of the Policy.

(Although paragraph 4(c)(i) refers to matters which a Respondent is expected to show to demonstrate a legitimate interest, the Panel considers that the corresponding requirement which the Complainant is required to prove under paragraph 4(a) must be interpreted in the same way. Thus if the evidence submitted by the Complainant itself indicates that the Respondent has or is likely to have a legitimate interest of the kind recognized in paragraph 4(c), the Complaint should fail under paragraph 4(a) even if the Respondent has not availed itself of its entitlement to respond under paragraph 4(c).)

The Respondents website appears to be advertising products made and placed on the market by the Complainants group. There is no evidence that it is bogus in the sense that the Respondent is not selling products at all, or that the Respondent is using it to sell products other than those placed on the market by the Claimants group.

It appears that graphics and text have been copied by the Respondent from the Complainants website and/or its other marketing material. However, it is not correct to say that the first page of the Respondents website is identical to a page of the Complainants website. Nor does the Panel accept the Complainants assertion that this page is liable to mislead consumers into believing that the Respondents operation is sponsored or endorsed by the Complainant. On the contrary, the page makes it clear that it is an unofficial site. The Panel considers that consumers would take it to be a site selling genuine Philips goods but operated without Philips agreement.

The Panel notes that there have been differing decisions under the Policy on whether a complainant can object to the use of a domain name corresponding to its mark for a website selling the complainants own products. Complaints succeeded in "heelquick.com", "fanuc.com" and "cunardcruise.com", but failed in "militec.com", "drawtite.com" and "kittinger.com".

Under paragraph 15(a) of the Rules for Uniform Domain Name Dispute Resolution Policy ("the Rules") the Panel should decide the Complaint on the basis of any rules and principles of law that it deems applicable. It is a widely recognized principle of trademark law, sometimes referred to as "exhaustion of rights", that the owner of a trademark cannot object to the resale of goods which it has placed on the market bearing the mark unless there is some good reason, such as interference which might affect the quality of the goods: see for example the decisions of the US Supreme Court in Prestonettes v Coty (1924) 264 US 359, the German Federal Supreme Court in Case I ZR 85/71 Cinzano v Java [1974] 2 CMLR 21 and the European Court of Justice in Case 16/74 Centrafarm v Winthrop [1974] ECR 1183. This principle reflects the fact that the primary function of a trademark is to identify the trade origin or at any rate the person responsible for the quality of the product.

It is a controversial question as to whether this principle should apply where the resale is in a different country or economic area to the original sale ("international exhaustion"). However, there is no need to answer this question here, since there is no evidence as to where the goods advertised by the Respondent were first placed on the market or as to whether the Respondent is supplying them to customers outside Indonesia.

Where the principle of exhaustion applies, it has also been recognized that a trader is permitted to advertise goods using the mark under which they were placed on the market, provided that it does not do so in a way which causes confusion or damage to the reputation of the mark: see, for example, Volkswagenwerk v Church (CA9, 1969) 411 F2d 350, 161 USPQ 769, Case C-337/95 Parfums Christian Dior v Evora (ECJ, 1997) [1997] EC I-6013 and Case C-63/97 BMW v Deenik (ECJ, 1999) [1999] ECR I-905. If this is the position under the applicable trademark law or laws, the Panel considers that a trader in genuine branded goods can have a legitimate interest in using a domain name incorporating the brand name for a website promoting and selling the branded goods, provided that the trader does not use the domain name so as to cause confusion, for example by indicating that the website is approved by the brand owner.

The Panel accepts that it is possible for a trader in branded goods to advertise and sell goods under the brand without using a domain name incorporating the brand name. Nevertheless such a domain name is of considerable assistance to a business selling the branded goods. The Panel considers that a person can have a legitimate interest in using a particular domain name even if it is not an essential requirement for him to do so.

In this case there is no evidence that the Respondent is trading in any country other than Indonesia and it would appear that the only applicable law is that of Indonesia. The Complainant has not shown that the use apparently being made by the Respondent of the Domain Name infringes the Complainants trademark rights under Indonesian law. The Panel concludes that on the available evidence the Complainant has not shown that the Respondent does not have a legitimate interest in using the Domain Name to market and sell genuine Philips goods in Indonesia.

As to the third requirement, the Panel is not satisfied that registration or use in bad faith has been established. None of the examples of evidence of bad faith set out in paragraph 4(b) of the Policy has been demonstrated.

There is no evidence of any attempt to sell the domain name to the Complainant or a competitor of the Complainant. While the Respondents registration may block the Complainant from using a domain name, which would be suitable for its Indonesian subsidiary, branch or distributor, there is no evidence of such an intention on the part of the Respondent and certainly no evidence of a pattern of such conduct. The Panel also notes that, despite being a major international consumer products company, the Complainant has not previously felt the need to have this particular domain name, but has found it sufficient to have pages for Indonesia on its website at "www.philips.com".

The Panel is not satisfied that the domain name was registered primarily for the purpose of disrupting a competitor. Although from one point of view an unauthorized distributor may be regarded as disrupting a distribution network, the Panel considers that this provision of the Policy should be interpreted taking into account the principle of exhaustion discussed above. The Panel considers that the resale of genuine products placed on the market by the owner of the mark or with its consent in their original condition does not constitute "bad faith" within the meaning of the Policy where it is permitted by the applicable law, even if the distributor is not authorized by the owner of the mark.

While the Respondent is no doubt using the Domain Name intentionally to attract Internet users to its website for commercial gain, the Panel is not satisfied that it is doing so by creating a likelihood of confusion with the complainant's mark as to the source, sponsorship, affiliation, or endorsement of the website or of a product or service on it. The first page of the Respondents website makes it clear that it is not affiliated to or sponsored or endorsed by Philips. While the website indicates that the products offered for sale are products manufactured and placed on the market by the Complainants group, if in fact this is true, it is not causing confusion. In the absence of any evidence that the Respondent is not selling genuine Philips products, the Panel is unable to conclude that the Respondent is using the Domain Name in bad faith on this basis.

Although the Respondent may have infringed the Complainants copyright in part of the content of its website, this is something which is outside the scope of the present Policy (see paragraph 168 of the Final Report of the WIPO Internet Domain Name Process) and the Panel does not consider that it is sufficient to establish bad faith within the meaning of the Policy.

The incorrect inclusion of the US as the country in the Respondents address in the Registrars whois database is not evidence of bad faith. The address gives the city as "Jakarta Barat" and the state as "WJ", which are presumably correct. The reference to the US is probably due to a failure to amend a default in the Registrars registration form.

The Panel concludes that the Complainant has not shown that the Domain Name was registered and is being used in bad faith.

The Panel decides that the Complaint should be rejected.

Jonathan Turner
Sole Panelist

Dated: March 15, 2001