500 Future Labs Ltd v Towse [2002] DRS 500 (17 September 2002)

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Nominet UK Dispute Resolution Service
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Cite as: [2002] DRS 500

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Nominet UK Dispute Resolution Service

DRS 00500

Future Labs Ltd -v- Stephen Towse

Decision of Independent Expert

  1. Parties:
    Complainant: Future Labs Ltd
    Country: GB
     
    Respondent: Stephen Towse
    Country: GB
  2. Domain Name:

    Computabits.co.uk ("the Domain Name")

  3. Procedural Background:

    The complaint was lodged on the 17 July 2002 and received in full by Nominet on the 17 July 2002. On the 18 July 2002 Nominet validated and notified the Respondent of the complaint stating that a response was due within 15 working days.

    On the 6 August 2002 Nominet received the response from the Respondent which was forwarded to the Complainant on the 7 August 2002. The Complainant submitted a reply on the 12 August 2002 and this was forwarded to the Respondent on the 13 August 2002.

    Also on the 13 August 2002 Nominet informed the parties that the dispute was entering the informal mediation stage. On the 27 August 2002 Nominet confirmed that mediation had been unsuccessful and a proforma invoice for the referral of the dispute was issued and sent to the Complainant and a copy was forwarded to the Respondent. Nominet received the fee for an Expert's decision pursuant to paragraph 8 of the Nominet UK Dispute Resolution Service Procedure (the "Procedure") and a letter of approval to forward the case to the independent expert from the Complainant on the 5 August 2002 in advance of the mediation proceedings. On the 27 August 2002, Nominet forwarded a copy of the letter and of the cheque in respect of the fees for an independent expert received from the Complainant, to the Respondent.

    On the 28 August 2002, Richard Kemp, the undersigned (the "Expert") confirmed to Nominet that he knew of no reason why he could not properly accept the invitation to act as expert in this case and further confirmed that he knew of no matters which ought to be drawn to the attention of the parties, which might appear to call into question his independence and/or impartiality. The appointment date for the Expert is 3 September 2002 and the deadline for the decision is set at 17 September 2002.

  4. Outstanding Formal/Procedural Issues (if any):

    There are no outstanding formal or procedural issues.

  5. The Facts

    The Complainant is a company incorporated under the laws of England and Wales. On 7 October 2000, a UK registration for the trade mark "COMPUTABITS" was issued in the name of Future Labs Ltd in classes 9, 37, 38 and 42. A copy of the registration certificate for registration No. 2248107 is annexed to the complaint (as Annex E). Future Lab Ltd operates a website at www.computabits.com. The registered UK company Computabits Ltd is owned by Michael Casey, director of Future Lab Ltd, company registration number 3802815. A copy of the certificate of incorporation of Computabits Limited dated 8th July 1999 is annexed to the complaint (Annex F).

    The Complainant filed a complaint to Nominet in respect of the Domain Name on 4 October 2000 and informed Nominet of Future Labs Ltd intention to register the mark "COMPUTATBITS". Both Computabits Ltd and www.computabits.com were in existence at the time of the initial complaint. On the 16 November 2000 Nominet reached a decision not to take any action but did note that if Mr Towse or any future registrant were to use the Domain Name in the future in a manner likely to cause confusion to internet users, Nominet reserved the right to review its decision.

    On 12 October 1999 the Respondent registered the domain name computabits.co.uk. A Nominet WHOIS search confirms that the registration was made via the service provider EXPLOIT.

  6. The Parties' Contentions:

    Complainant:

    The Complainant's contentions are summarised as follows:-

    1. The mark "COMPUTABITS" is a registered trade mark held by Future Labs Ltd. and issued on 7 October 2000. The company Computabits Ltd which is owned by Michael Casey, director of Future Labs Ltd was incorporated on the 8 July 1999. The Complainant submits a copy of a certificate of the trade mark registration and a copy of the certificate of incorporation for Computabits Ltd.

    2. The Domain Name is identical and/or similar to a mark in which the Complainant has rights.

    3. The Domain Name in the hands of the Respondent is an abusive registration because it has been used in a manner which was unfairly detrimental to the Complainant's rights.

    4. The registration of the Domain Name and the way in which the Respondent used the Domain Name has confused people and businesses into believing that the Domain Name is registered to, operated or authorised by, or otherwise connected with the Complainant.

    5. On the 8 of May 2000 and 4 of October 2000 the Complainant lodged a dispute with Nominet and submitted copies of customer statements noting their confusion between the Domain Name and the Complainant's domain name. Nominet did not take any action but did state in their decision that should the Respondent or any future registrant use the Domain Name in the future in a manner likely to cause confusion to internet users, Nominet reserved the right to review its decision. The Complainant submits a copy of the decision by Nominet.

    6. The Respondent's site has the name COMPUTABITS clearly shown. The design and the content of the site have changed since the original dispute in October 2000. There is a characteristic use of the colours blue and grey which is similar to the www.computabits.com site. Screen shots have been taken by independent witnesses on 16 July 2002. The Complainant submits copies of the screen shots.

    7. Future Labs Ltd confirm that the Respondent's site contains the same trade mark COMPUTATBITS on several pages.

    8. The Respondent has since the initial dispute changed the products advertised on his site from second hand computer to selling new computer products therefore increasing the likelihood of confusion between the two sites.

    9. The Respondent has improved his site both in design and in content in such a manner which is likely to cause confusion to internet users.

    10. Accordingly this Domain Name registration is without question an abusive registration.

    11. The Complainant rejects the Respondent offer of compromise.

    Respondent:

    The Respondent's response is summarised as follows:-

    1. The Domain Name was registered in the name of Stephen Towse on the 12 October 1999.

    2. The Respondent states that the site was set up to sell redundant and used computer parts and that this is clearly indicated on the site. This can be seen from the screen shots that the Complainant submitted.

    3. The Respondent does admit that a large quantity of the stock advertised on the website is new but states that due to the nature of the business the time span from the latest product to the obsolete is shrinking daily.

    4. In respect of the change in design of the site, the Respondent states that he bought an off the shelf package from www.3d3.com called Shop Factory which is shown on all screens. The package provided templates, one of which is the scheme used and this has been a personal choice without knowledge of the Complainants site.

    5. The Respondent states that since the re-launch of the site in May 2000 it has had 2165 hits which is around 27 a day; and that if there had been any confusion between the two sites the number of hits would have increased due to the suspected size and reputation of Computabits.com

    6. The Respondent states he had no intention of trading off the Complainant.

    7. The Respondent has offered the following compromises; make it clear on the front page that the site is not computabits.com and offer a hyperlink to the Complainant's site on the understanding that the Complainant offers a link to computabits.co.uk and finally the Respondent is prepared where possible, to make alterations to the colour scheme and name.

  7. Discussion and Findings:

    General

    Under paragraph 2 of the Nominet UK Dispute Resolution Service Policy (the "Policy") the Respondent must submit to proceedings under the Dispute Resolution Service if a Complainant asserts that:-

    1. the Complainant has Rights in respect of a name which is identical or similar to the Domain Name; and

    2. the Domain Name, in the hands of the Respondent, is an Abusive Registration.

    "Rights" and "Abusive Registration" are defined in paragraph 1 of the Policy.

    The Complainant does make these assertions in the Complaint. The Expert therefore finds that the Respondent must submit to these proceedings.

    Burden of Proof

    The Complainant must prove both elements (i) and (ii) above on the balance of probabilities to succeed in its complaint.

    Complainant's Rights

    "Rights", for the purposes of the Policy, "includes, but is not limited to, rights enforceable under English law". The Policy also provides that "a Complainant will be unable to rely on rights in a name or term which is wholly descriptive of the Complainant's business".

    When assessing whether the Complainant has Rights in an identical or similar name to the Domain Name, the first and second level suffixes of the Domain Name, being generic should be discounted. The questions are therefore (a) whether the Complainant has Rights in the name "Computabits", and (b) if so, whether the Complainant can rely on such Rights in these proceedings.

    The Complainant:

    From the computabits.com website, the business of the Complainants is described as selling computer products to business clients. It follows that the Expert finds that 'computabits' is not wholly descriptive of the Complainant's business.

    The Expert finds on the balance of probabilities the Complainant has Rights in a name identical to the Domain Name (discounting the first and second level suffixes), which may be relied upon in these proceedings.

    Abusive Registration

    An "Abusive Registration", for the purposes of this Policy, is "a Domain Name which either:-

    1. was registered or otherwise acquired in a manner which, at the time when the registration or acquisition took place, took unfair advantage of or was unfairly detrimental to the Complainant's Rights; OR

    2. has been used in a manner which took unfair advantage of or was unfairly detrimental to the Complainant's Rights".

    The Policy provides non-exhaustive lists of factors which may be evidence that a domain name is an Abusive Registration (at paragraph 3 of the Policy) and factors which may be evidence that the Domain Name is not an Abusive Registration (at paragraph 4).

    Paragraph 3(a)(ii) of the Policy sets out one of the non-exhaustive list of factors pointing towards an Abusive Registration as "circumstances indicating that the Respondent is using the Domain Name in a way which has confused people or businesses into believing that the Domain Name is registered to, operated or authorised by, or otherwise connected with the Complainant".

    Paragraphs 4(a)(i) and (ii) set out on the list of non-exhaustive factors pointing away from an Abusive Registration factors including the following:

    1. Before being informed of the Complainant's dispute the Respondent has:

      1. used or made demonstrable preparations to use the Domain Name [] in connection with a genuine offering of goods or service

      2. been commonly known by the name or legitimately connected with a mark which is identical or similar to the Domain Name

      3. []

    2. The Domain Name is generic or descriptive and the Respondent is making fair use of it."

    The Expert finds as follows:-

    1. On 16 November 2000, in response to complaints by the Complainant earlier that year, Nominet, in applying the then current Rules for the .uk Domain and its Sub-domains (the "Rules"), found that the Domain Name was not at that time "currently being used in a manner likely to cause confusion to internet users" and that there was at that time "no basis for finding that the Domain Name was likely to be used in a manner likely to cause confusion to internet users" (Paragraph 24 of the decision). Consequently, Nominet decided not to take any action in that instance, whilst reserving its right to review that decision "if Mr Towse or any future registrant were to use the Domain Name in future in a manner likely to cause confusion" (Paragraph 27).

    2. Paragraph 23 of that decision stated that "it is clear that the complainant's site at computabits.com is a sophisticated site offering the latest equipment from a range of leading suppliers. The registrant's site, computabits.co.uk is a simple site of completely different style, and it is clear from the home page that he deals in second hand computer parts at computer fairs."

    3. It is clear from the Nominet's November 2000 decision that the both the use of the Domain Name for second user computer parts and the fact that it was a 'simple site' were material factors in deciding that, under the then current Rules, the Domain Name was not then being used or likely to be used in a manner likely to cause confusion.

    4. In the case of the current Complaint, the Respondent does not dispute that the Domain Name is being used to sell new goods. At lines 3 and 4 of the Response, it is stated that "I appreciate that a lot of the stock is new ...".

    5. Neither does the Respondent dispute that the site has been changed since the November 2000 Nominet decision. The Expert finds, in relation to the Respondent's site under the Domain Name:

      1. that it prominently displays the mark 'COMPUTABITS' in relation to the sale of various parts for computers

      2. it adopts design features that are at least not dissimilar between the two sites - a vertical navigation bar on the left hand side of the page, a horizontal navigation bar at or towards the top of the page and a facility making sales, for example.

    6. If the Rules in place at the time the November 2000 decision was made by Nominet remained in place today, the Expert would find that the use of the Domain Name was now of such a nature as to be likely to cause confusion, within the right stated to be reserved by Nominet to review its decision.

    7. However, the Rules that applied then have been replaced by the Policy. As stated above, the Policy defines an Abusive Registration and then provides non-exhaustive lists of factors pointing towards (Paragraph 3 of the Policy) and against (Paragraph 4) an Abusive Registration.

    8. The Expert finds that the Respondent has not demonstrated in its response that the Domain Name is not an Abusive Registration. The Expert finds that the Respondent is not making legitimate fair use of the Domain Name (within Paragraph 4(a)(i)(C) of the Policy) and, even if it could be said that the Domain Name was descriptive, that the Respondent is making fair use of it before being informed of the Complainant's dispute (within Paragraph 4(ii)). The Domain Name is identical to a registered trade mark held by the Complainant and a UK company name registered in the name of a person connected with the Complainant. Further, the Respondent knew generally of the existence of the Complainant and the compuatbits.com site and indeed underwent a dispute resolution procedure over the Domain Name in 2000. Specifically, as a result of the November 2000 decision by Nominet, the Respondent knew that if the Domain Name were used in future in a manner likely to cause confusion then Nominet could review its decision. The changes in use that have occurred - selling new as well as second user equipment, and operating a more sophisticated site - are of the type that Nominet drew attention to in November 2000.

    9. The Expert finds that the Complainant has not in fact adduced new evidence (after 2000) as to actual confusion leading to a belief that the Domain Name is registered to, operated or authorised by, or otherwise connected with the Complainant (within Paragraph 3(a)(ii) of the Policy).

    10. However, the Expert finds that not demonstrating actual confusion is not fatal to the Complainant's Complaint in the particular circumstances. The list of factors at Paragraph 3 of the Policy is expressly stated to be non-exhaustive. Whilst the Expert believes that reliance on factors not included in the non-exhaustive list of factors should be made only sparingly, the Expert believes that this is such a case, particularly in view of the Nominet decision of 16 November 2000, the nature and scope of the review right reserved in that decision and the actions of the Respondent subsequently as referred to above.

    11. Accordingly the Expert finds that the Domain Name is an Abusive Registration as a Domain Name which has been used in a manner which was unfairly detrimental to the Complainant's Rights.

  8. Decision:

    The Expert finds that on the balance of probabilities the Complainant has Rights in a name which is identical to the Domain Name and that the Domain Name , in the hands of the Respondent, is an Abusive Registration. The Expert therefore grants the Complainant's requested remedy of transfer, and directs that the Domain Name be transferred to the Complainant.

Richard Kemp

Date: 17 September 2002

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URL: http://www.bailii.org/uk/cases/DRS/2002/500.html