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CanadaDrugs.com Partnership v. NC Britton Holdings Ltd., British Columbia International Commercial Arbitration Centre, CIRA Dispute No. 00028 - by Eric Macramalla

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Domain Name: canadadrugs.ca
OutCome: Transfer Granted
Response Filed: Yes
Panellist: David R. Haigh, Q.C., David Wotherspoon, and Barry C. Effler

In the second Internet pharmacy case decided under the CIRA Domain Name Dispute Resolution Policy ("CDRP"), the Panel refused to apply the CDRP in an overly technical fashion and instead adopted a purposive interpretive approach. Aiming "to provide a forum in which cases of bad faith registration of dot-ca domain names can be dealt with relatively inexpensively and quickly", the Panel construed the CDRP liberally and extended the ambit of its protection to a greater number of Complainants. Specifically, Complainants who do not meet the Canadian Presence Requirements for Registrants ("CPR") may be granted standing to bring a Complaint based on their rights as trade-mark licensees.

Under the CIRA Domain Name Dispute Resolution Policy ("CDRP"), Complainants must establish three elements. Firstly, the disputed domain name must be confusingly similar to a mark in which the Complainant had, and continues to have, rights. Secondly, the domain name must have been registered in bad faith. Finally, the Registrant must have no legitimate interest in the domain name.

The Complainant in these proceedings operated a large international Internet pharmacy from a website at www.CanadaDrugs.com. Its dot-com domain name was purchased by the Chief Executive Officer, Kristjan Thorkelson ("Thorkelson"), from a prior owner, believed to be Alvin Rose ("Rose"). Six days after the purchase of the dot-com domain name, Rose registered the corresponding dot-ca domain name. Subsequent to these registrations, Thorkelson applied for and acquired trade-mark registrations for CANADADRUGS.COM and CANADA DRUGS. Both marks were licensed to the Complainant.

The canadadrugs.ca domain name remained inactive for three years following its registration until Rose contacted Thorkelson, offering the name for sale. Thorkelson refused the offer and Rose sold the name to the Registrant. Shortly thereafter, the Registrant established an online pharmacy service at canadadrugs.ca, competing with the Complainant's business.

The Panel began its analysis by considering the Complainant's eligibility to file a Complaint under the CDRP. Although the Complainant stated that it was a Canadian partnership, registered under the laws of Manitoba, it did not submit evidence to establish compliance with the CPR. Complainants who do not meet the CPR are only entitled to bring arbitration proceedings if they qualify for CPR compliance exception under paragraph 1.4 of the CDRP. This exception requires that the Complaint relate to a trade-mark registered in the Canadian Intellectual Property Office ("CIPO") of which the Complainant is the registered owner . The Respondent argued that the Complainant was merely a trade-mark licensee, and thus had no standing to file the Complaint. The Panel, however, disagreed. It stated that "in interpreting any word or phrase in the [CDRP], the [CIRA Domain Name Dispute Resolution Rules ("CDRR")] or the CPR, the Panel must consider the context of the [CDRP], [CDRR] and the CPR in their entirety, so as to render them an integrated whole to the greatest extent possible." This interpretation should be guided by the CDRP's overall purpose which is to facilitate the rapid and inexpensive resolution of cases of bad faith registration. This approach led the Panel to conclude that the limitations expressed in paragraph 1.4 of the CDRP were included to ensure that only those parties with a sufficiently close connection to Canada can initiate arbitration proceedings. Consequently, the Panel refrained from interpreting the term "owner" in a highly "technical fashion" and held that a Canadian connection is maintained if the Complainant is a licensee of a trade-mark registered in Canada. A licensee holds intellectual property rights within Canada and thus should not be denied eligibility on the basis of a technicality. To do so would "give insufficient weight to the spirit and purpose of paragraph 1.4 of [the CDRP]".

Having established that the Complainant had standing to initiate the proceedings, the Panel turned its attention to the Complainant's allegations of confusing similarity, bad faith registration and absence of a legitimate interest on the part of the Registrant.

To establish confusing similarity, the Complainant must show that the domain name is confusingly similar to a mark in which it had rights prior to the date of domain name registration. The first component of this test was easily met as the domain name was identical to the Complainant's CANADA DRUGS mark. Finding that the Complainant had rights in this mark, prior to the date of domain name registration was a much more difficult task. The Panel approached this issue with the CDRP's purpose in mind. It first considered Rose's registration of canadadrugs.ca, immediately after selling the corresponding dot-com name, followed by his attempt to sell this name to the Complainant. These activities supported a finding that Rose acted in bad faith. Given this conclusion, the Panel decided to assess the Complainant's rights in its mark on the date when the Registrant purchased the domain name from Rose "with the intention of actually using it", not the date when Rose registered the name in bad faith.

Although the Complainant had not yet applied for its trade-mark registrations when the Registrant purchased the domain name, the definition of a "Mark" in paragraph 3.2(a) of the CDRP does not require a trade-mark registration. Any mark will qualify, provided it has been used in Canada for the purpose of distinguishing one's wares, services or business from the wares, services or business of others. As the Complainant was able to provide evidence of a prescription order prior to the Registrant's purchase, the Panel held that it had rights in the mark.

Having established confusing similarity, the Panel went on to consider bad faith registration. The Complainant argued that the Registrant's primary purpose in purchasing the domain name was to disrupt its business, contrary to paragraph 3.7(c) of the CDRP. The Panel agreed that the Registrant's use of the disputed domain name was disruptive to the Complainant's business and that it is "inconceivable that the Registrant would not have been aware of the business of the Complainant and its use of the <www.canadadrugs.com> website." In concluding that the domain name was registered in bad faith, the Panel drew support from the decision of Houle v. Jean-Pierre Ranger International Inc., (BCICAC, CIRA Dispute No. 00010), where redirection of Internet users led to the inference that the Registrant's purpose was to disrupt the business of the Complainant.

The Panel next considered whether the Registrant had a legitimate interest in the domain name. The evidence failed to establish that the Registrant had used "CanadaDrugs" as a mark or a domain name, in good faith, prior to receiving the Complaint; the Registrant operated only under the names Minit Drugs or Pharmacy Online. It attempted to argue that it had used "Canada Drugs", as these words are purely descriptive of the character of its business and place of origin. The Panel rejected this argument and held that the Registrant was not using the mark, apart from use as a domain name, thus was not using the name in good faith prior to receipt of the Complaint.

Given the Panel's finding of confusing similarity, bad faith registration and absence of legitimate interest, it ordered the disputed domain name transferred to the Complainant.

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