Del Monte International v. Del Monte Corporation: the Battle for the .delmonte Top-level Domain

• Publication year: 2015
• Author: MIKE RODENBAUGH Rodenbaugh Law

Del Monte International v. Del Monte Corporation: The Battle for the .DELMONTE Top-Level Domain

MIKE RODENBAUGH Rodenbaugh Law

INTRODUCTION

ICANN's new gTLD program has seen some 600 ".brand" applications to operate generic top-level domains (gTLDs) that correspond to the applicant's trademark. This article discusses the .delmonte controversy, the subject of a WIPO Legal Rights Objection¹ decided in favor of Del Monte Corporation, and a lawsuit filed in the Central District of California by Del Monte International GMBH, seeking to overturn the WIPO panel's decision. The California case was dismissed under Federal Rule of Civil Procedure 12(b)(6) for failure to state a cognizable claim,² and Del Monte International GMBH appealed to the Ninth Circuit. The appeal is currently pending. The appeal raises novel and intriguing issues that are likely to be important in future rounds of TLD expansion, when thousands more .brand gTLD applications are expected.

In 1989, Del Monte Corporation ("Del Monte"), headquartered in San Francisco, spun off its fresh produce division to become Fresh Del Monte Produce, Inc. ("Fresh Del Monte"). Fresh Del Monte received a fully paid, perpetual, exclusive, worldwide license to use the DEL MONTE trademark for fresh fruits, vegetables and other produce. The license agreement made no mention of domain names, much less top-level domain names.

This dispute arose when Fresh Del Monte's division, Del Monte International GmbH, applied to ICANN in 2012 to operate the .delmonte gTLD. This came as a surprise to licensor Del Monte, which had not submitted its own gTLD application to ICANN, and had not been notified of its licensee's plan to operate the gTLD.

LEGAL RIGHTS OBJECTION

In developing its new gTLD Program, ICANN established a number of rights protection mechanisms (RPM) that included the legal rights objection (LRO). Under the LRO procedure, trademark owners and intergovernmental organizations may file a formal objection to a third party's (the respondent's) application for a new gTLD if the objector considers that the new gTLD is an "impermissible infringement" of the objector's existing trademark, or Inter-Governmental Organization (IGO) name or acronym, as the case may be. WIPO was appointed the exclusive provider of LRO dispute resolution services. Del Monte availed itself of this procedure in March 2013 by filing a LRO against Del Monte International GMBH, and the parties elected for a three-person panel to be appointed by WIPO to adjudicate the dispute.

In order to prevail using the LRO dispute resolution procedure,³an objector must establish that the respondent's potential use of the applied-for gTLD:

• takes unfair advantage of the distinctive character or the reputation of the objector's registered or unregistered trademark or service mark; and/or
• unjustifiably impairs the distinctive character or the reputation of the objector's mark; and/or
• otherwise creates an impermissible likelihood of confusion between the applied-for gTLD and the objector's mark.

In deciding whether the objector has established any of three criteria, Section 3.5.2 of the Guidebook lists eight non-exclusive factors to be taken into consideration by the panel that will decide the matter:

• Identity or similarity of the mark/gTLD;
• The objector's bona fide acquisition/use of the mark;
• Relevant recognition by the public;
• Knowledge of the objector's mark, and any pattern of infringement;
• The applicant's use (including preparations) of the mark in connection with a bona fide offering;
• The applicant's rights in the mark, including whether such acquisition/use has been bona fide, and whether the intended gTLD use is consistent therewith;
• Whether the applicant is commonly known by the mark; and

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• Whether the applicant's intended use would create a likelihood of confusion.

The Del Monte panel evaluated all eight factors. It recognized that the objector Del Monte had used its DEL MONTE mark since 1891, and had registered it in 177 jurisdictions. The respondent Del Monte International GMBH, on the other hand, had only its licensed rights from the objector and some South African trademark registrations, which it acquired from third parties in 2011, close in time to its application to ICANN. The panel questioned whether the acquisition was bona fide, or a breach of the license agreements.

Based on its evaluation of the above eight factors, the Del Monte panel majority decided that the objector Del Monte had not proved that the respondent's use of the gTLD would "take unfair advantage" or "unjustifiably impair" the distinctive character or the reputation of the objector's registered or unregistered trademark or service mark. The panel majority, however, decided that the registration of the .delmonte gTLD to the respondent would create an "impermissible likelihood of confusion" with the objector's DEL MONTE trademark. In deciding the latter, the majority came to three ultimate conclusions:

• It is most likely that the relevant sector of the public would consider that use of the mark, whether by the objector or its licensees, including the respondent, is use which indicates the trade source of the objector;⁴
• The terms of the license agreements clearly express the intention of the parties that the objector would retain sole control over issues relating to the registration and enforcement of the DEL MONTE mark worldwide. This clearly extends to the right to control the registration of domain names and gTLDs comprising or incorporating the mark;⁵ and
• The respondent's intended use of the gTLD, to the exclusion of the objector and its other licensees, is likely to unsettle the delicate balance struck by the competing interests of the parties under the license agreements and, more importantly, is likely to create an impermissible likelihood of confusion with the mark as to the source, sponsorship, affiliation or endorsement of the gTLD.⁶

ICANN did not define "impermissible likelihood of confusion" in a LRO proceeding, and did not provide guidance on how the impermissible likelihood of confusion standard under the LRO compares with likelihood of confusion standards in a traditional trademark infringement case, such as the multi-factor test for deciding likelihood of confusion. Consequently, the Del Monte panel majority looked to two prior LRO decisions to support its decision that the respondent's use of the gTLD would create an impermissible likelihood of confusion, quoting as follows:⁷

For an Objector to prevail, "there must be

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