A contractual right is a grant for a limited time to use the grantor’s trademark. It is not such a “right” as to triumph over the trademark holder, but akin to a “legitimate interest” which either terminates upon notice or expires with the contract. It has been established that the timing of the expiration may be a factor in determining whether the complainant is entitled to a transfer eo instante or its request is premature. International E-Z UP, Inc. v. PNH Enterprises, Inc., FA0609000808341 (Nat. Arb. Forum November 15, 2006) (The Respondent “is merely unwinding the detail that comes from having stock already acquired that it must dispose of. Moreover, Respondent is not claiming a legitimate interest that comes from a right to resell Complainant’s goods, but a legitimate interest in maintaining its reputation and avoiding disruption”). Other than that there is no general theory to support continued use of a trademark after the limited right has expired.
The issue in RE/MAX International Inc. v. NCR Northcoast Realty, FA0906001266756 (Nat. Arb. Forum August 4, 2009) is not of the International E-Z Up kind. There was no winding up of business. There was continuation of business by a corporate entity different from (but spored by) the former RE/MAX franchisee. The corporate entity sought to legitimize an interest in <remaxnorthcoast.com> by claiming a common law right which it argued arose
during the period [that its transferor and major shareholder, Bommarito] held a RE/MAX franchise and that the present dispute merely involves a contractual dispute regarding its right to continue to use the domain name after the termination of the franchise.
However, the “record contains no evidence that an entity called NCR Northcoast Realty ever had a right to use the RE/MAX mark.” Even if there were an arms' length assignment (and it were permitted), a stranger to a contract has no standing to raise a post-termination claim. Its rights are limited by those of its assignor. The Respondent’s presumed interest in RE/MAX arose subsequent to the termination of the franchise that authorized use of the trademark as a trade name. Morever, the disputed domain name had been registered by the franchisee without the knowledge or approval of the complainant and in violation of the standard governing the format of domain names in Complainant’s trademark manual.
In response to this line of attack, the terminated franchisee contended that it was “ridiculous” to distinguish between himself and “an entity in which he asserted he was majority shareholder.” This contention, however, is misplaced. Transfers as a matter of domain name law constitute a new registration. A transferee receives not immunity, but inherits the transferor’s bad faith registration. In addition, the Respondent used the domain name to compete with the Complainant by diverting “Complainant’s customers to Respondent’s competing business.” A geographic designation added to the trademark does not legitimize an appropriation.
