On August 13, 2013, in what appears to be the first lawsuit challenging an Expert Determination on a Legal Rights Objection under ICANN’s new gTLD Program, gTLD applicant Del Monte International GmBH (“DM International”) filed a complaint for declaratory relief against objector Del Monte Corporation (“DM Corp.”) in U.S. District Court, seeking to overturn the WIPO decision granting DM Corp.’s Legal Rights Objection to applicant’s registration of the gTLD .delmonte. The case is Del Monte Int’l GmBH v. Del Monte Corp., 2:13-CV-0591 (C.D. Cal. Aug. 13, 2013).
As DM International admittedly uses the DEL MONTE trademark pursuant to a license from DM Corp. in many jurisdictions, brand owners may debate the existence or scope of its alleged trademark rights. Nevertheless, if the case survives the inevitable motion to dismiss, it will be instructive regarding the U.S. courts’ legal treatment of the new gTLDs.
ICANN’s New gTLD Program and the Legal Rights Objection Process
A top level domain is everything “to the right of the dot” in an internet domain name—for example, the “.com” in “kelleydrye.com.” Last year, ICANN (the Internet Corporation for Assigned Names and Numbers) accepted applications from organizations to register new generic top level domains (“gTLDs”) – only now some will not be so “generic.” In addition to the gTLDs with which we are familiar, such as .com, .org, and .net, available gTLDs include brand names such as .kelleydrye or .yourbrand, geographic identifiers such as .nyc, and community or industry identifiers such as .beauty or .basketball. Over 1900 new gTLD applications were filed by applicants in 60 countries.
ICANN provided trademark owners until March 13, 2013 to file formal Legal Rights Objections to any gTLD application. Under this objection procedure, an independent panel (comprised of one or three neutral experts) of the World Intellectual Property Organization’s Arbitration and Mediation Center (“WIPO”) determines whether the applicant’s potential use of the applied-for gTLD would be likely to infringe the objector’s existing trademark. If a Legal Rights Objection is granted, ICANN will not issue the applied-for gTLD to the applicant.
The Del Monte Panel Expert Determination
DM International, a licensee of DM Corp. in many jurisdictions and the record owner of a South African trademark registration for the DEL MONTE trademark, filed an application for the gTLD .delmonte without permission of its licensor, DM Corp. The gTLD application disclosed that DM International intended to use the gTLD only for its own benefit and that of its affiliates. On March 2, 2013, DM Corp. filed a Legal Rights Objection to DM International’s gTLD application with WIPO. In a decision published August 6, 2013, a majority of the three-person expert panel upheld DM Corp.’s Legal Rights Objection, rejecting DM International’s gTLD registration. To date, only 2 of the 41 decisions rendered in Legal Rights Objection Proceedings were decided in favor of the trademark owner.
In granting the Legal Rights Objection, the majority questioned whether DM International had any bona fide rights in the DEL MONTE trademark, noted that it found “something untoward regarding Respondent [DM International’s] behaviour,” and determined that the applied-for gTLD .delmonte would create an impermissible likelihood of confusion between the gTLD and DM Corp.’s identical trademark, DEL MONTE.
Del Monte International’s Complaint for Declaratory Relief
Undaunted, on August 13, 2013, DM International filed a complaint for declaratory relief in the Central District of California naming DM Corp. as a defendant. In the complaint, DM International claims that the Expert Panel’s majority decision was “manifestly erroneous” and requests declaratory relief from the court, namely, a declaration stating that (1) DM International has bona fide rights in the DEL MONTE mark, is not in violation of the Anti-Cybersquatting Consumer Protection Act, and that the registration of the gTLD .delmonte would not create an impermissible likelihood of confusion, and (2) ordering DM Corp. to withdraw its Legal Rights Objection.
DM Corp. will likely move to dismiss the complaint for, among other things, failure meet the requirements of the Declaratory Judgment Act, which authorizes district courts to issue a declaratory judgment only where there is: (1) a substantial controversy, (2) between two parties having adverse legal interests, (3) of sufficient immediacy and reality to warrant an issuance of declaratory judgment.
DM International may argue it has suffered an injury-in-fact because it has been deprived of its gTLD application fee and other monies as well as its ability to operate the gTLD. However, based upon the facts alleged in the complaint, there is a question as to whether a justiciable controversy exists, because DM Corp. did not threaten to sue DM International and the expert panel made no final determination which alters the parties’ trademark rights.
While always a fact-intensive analysis, the court may deem the gTLD Legal Rights Objection proceeding akin to an Opposition Proceeding in the U.S. Patent and Trademark Office, which may prevent an applicant from obtaining a trademark registration, but cannot enjoin its use of a trademark in commerce. There is arguably analogous case law in most jurisdictions, including New York, holding that filing a formal opposition to a party’s application to obtain a U.S. trademark registration (without threatening suit to stop use of the applied for mark) does not alone create a case or controversy sufficient to create jurisdiction for a Declaratory Judgment action. However, some courts disagree, and courts within the Ninth Circuit are apparently split on this issue.
The WIPO Legal Rights Objection decision and the complaint filed by DM International suggest that there may be more to the parties’ relationship than first meets the eye. However, as trademark law dictates that a licensee’s use of a trademark should inure to the benefit of the licensor, if DM International is truly a licensee of DM Corp., it will be interesting to learn whether the court ultimately finds that DM International has any “rights” to operate the gTLD without permission from DM Corp. Regardless of the outcome, this is a case which all brand owners should follow with interest, as it may prove valuable in learning what treatment courts will give to the new gTLDs in the context of intellectual property and other rights