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You are here: BAILII >> Databases >> Nominet UK Dispute Resolution Service >> Zara Holdings Ltd -v- Commerce Internet Ltd [2002] DRS 576 (3 December 2002) URL: http://www.bailii.org/uk/cases/DRS/2002/576.html Cite as: [2002] DRS 576 |
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Nominet UK Dispute Resolution Service
DRS 00576
Zara Holdings Limited v Commerce Internet Limited
Decision of Independent Expert
1. PARTIES
Complainant: Zara Holdings Limited
Country: GB
Respondent: Commerce Internet Limited
Country: GB
2. DOMAIN NAME
zhl.co.uk (the "Domain Name")
3. PROCEDURAL BACKGROUND
The complaint was entered on to the Nominet system on 27 August 2002. Nominet validated the complaint on 2 September 2002 and on the same day despatched a copy of the complaint to the Respondent by post to the address recorded in the register entry for the Domain Name. The Respondent filed a response by email and fax on 24 September with supporting materials by post which were received on 26 September. On 7 October 2002 a reply was received from the Complainant. Mediation under the Dispute Resolution Service was then attempted but failed. On 12 November 2002 the Complainant paid Nominet the appropriate fee for a decision of an Expert pursuant to paragraph 6 of the Nominet UK Dispute Resolution Service Policy (the "Policy").
I, Stephen Bennett, the undersigned, (the "Expert") have confirmed to Nominet that I know of no reason why I cannot properly accept the invitation to act as Expert in this case and have further confirmed that I know of no matters which ought to be drawn to the attention of the parties, which might appear to call into question my independence and/or impartiality.
4. OUTSTANDING FORMAL/PROCEDURAL ISSUES
The last date for the Respondent to submit its response under the Dispute Resolution Service Procedure (the "Procedure") was 24 September 2002. Copy email and fax correspondence from the Respondent to Nominet on that date shows that the Respondent was having difficulty submitting its response through the Nominet website. Nominet, accordingly, extended the deadline for submission of the response. Nominet has the power to do this under paragraph 12 (a) of the Procedure in exceptional cases. There is no suggestion from the Complainant that the granting of the extension was a procedural irregularity and Nominet seems to have accepted that there was a fault with its website. Accordingly, I believe I can consider the response in giving this decision.
The facts in this case relate to the Domain Name becoming detagged, then not being renewed then becoming available for registration to the world at large. The Complainant alleges that it did not receive proper notice in relation to this process from Nominet and has indicated in correspondence to Nominet that it may take action against Nominet. Any such dispute between the Complainant and Nominet is clearly outside the scope of the Policy and is not something which will be addressed in this decision.
The Complainant is represented in this complaint by Sinton & Co. solicitors. The Respondent represents itself through its managing director Corin Hartland-Swann.
5. THE FACTS
The Complainant, Zara Holdings Limited, was incorporated on 3 February 1997. The company details from Companies House as supplied by Nominet indicate its activities to be "buying and sell own real estate" and "letting of own property". The Respondent, Commerce Internet Limited, was incorporated on 9 June 1999 and the information from Companies House as supplied by Nominet indicates its activities to be "manufacture computers and process equipment; hardware consultancy; software consultancy & supply; other computer related activities". The Domain Name currently resolves to a website which appears to be operated by the Respondent and which states:
"Ci Names Now
An Internet Domain Name Registration Service provided by Commerce Internet Limited
www.zhl.co.uk
the Domain Name "zhl.co.uk" has been registered by Names Now on behalf of a client
see who has registered the Domain Name click here
to see if any other Domain Names starting with "zhl" are available, click here.
To see if another Domain Name is available, enter a word, name or phrase into the box above and click Search"
The history of the Domain Name as provided by Nominet is as follows
Date Events
2 February 1999 Domain Name registered for the Complainant by Designer Servers Limited "DSVR".
30 January 2001 The Domain Name is detagged by DSVR.
7 February 2001 Nominet sends a renewal notice addressed to Sunil Mehra, the administration contact address on the Nominet database. A Sunil Mehra appears as a director of the Complainant in the Companies House information provided by Nominet
28 August 2001 The Domain Name is suspended for non-payment of the renewal invoice.
31 October 2001 Nominet cancel the Domain Name for non-payment.
31 October 2001 The Respondent registers the Domain Name.
5 June 2002 The Complainant writes to the Respondent seeking return of the Domain Name.
6. THE PARTIES’ CONTENTIONS
Complainant:
The Complainant's case as put in the complaint is short. Given its brevity, the complaint is reproduced in full below as follows:
"The Domain Name was owned and registered by Zara Holdings Limited. An expenditure of approximately £20,000 was incurred in connection with the printing of the Domain Name on Company letterhead and extensive advertising. Zara Holdings Limited never received a notice renewal by Nominet and unbeknown to them the Domain Name was then released by Nominet and sold to Commerce Internet Limited. Commerce Internet Limited propose to hold an auction to sell the name which is evidence that they have no commercial interest in the name unlike Zara Holdings Limited. Zara Holdings Limited wish to register a complaint against Nominet for failing to advise them of the renewal of the name and incorrectly releasing it and against Commerce Internet Limited for subsequently auctioning the name. Zara Holdings Limited have offered Commerce Internet Limited the amount for which the Domain Name was purchased . This offer has so far been rejected. Zara Holdings Limited assert that the Domain Name should still belong to them and it is an abusive registration by Internet Commerce Limited because the Respondent has taken unfair advantage and their actions have been unfairly detrimental to Zara's rights."
The only supporting material submitted by the Complainant is a copy of a letter dated 10 July 2002 from the Respondent to the Complainant in which the Respondent says that it intends to offer the Domain Name at a public auction.
Respondent:
The Respondent has provided substantially more detail in its argument and evidence.
The Respondent's case in relation to the Complainant's Rights is to deny that the Complainant has any Rights. Firstly, on the basis that it asserts the Complainant has no registered trade mark rights. Secondly, on the basis that it claims any three letter abbreviation must by its very nature be generic. Thirdly that the sign "ZHL" is capable of describing a large number of UK registered companies the initial letters of whose corporate names are ZHL. The Respondent provides a list of 87 UK registered companies the initial letters of whose names are ZHL and points out that the existence of so many companies whose initial letters are ZHL means that the Complainant cannot have any exclusive rights in "ZHL" (if it has any rights). Finally, it alleges that the Complainant and the Respondent do not have a "common field of activity" and that there is no likelihood of any confusion occurring.
On the issue of whether the Domain Name is an Abusive Registration in the hands of the Respondent, the Respondent states that it had no knowledge of the Complainant prior to its registration of the Domain Name. It also alleges that it did not acquire the Domain Name for the purposes of selling or transferring it to either the Complainant or to a competitor of the Complainant. The Respondent states that part of its business is the registration and sale of domain names. This involves the registration of three letter abbreviation domains all of which it claims to be generic. In support of this assertion, the Respondent has attached to its response a print-out of 351 domain names each consisting of a three letter abbreviation with the .co.uk suffix which it says are registered in its name, are generic and are to be offered for sale at public auction to any company or individual with an interest in them. In support of its claim to offer domain names for sale at public auction, the Respondent exhibits copies of the Domain Name Auction Agreement standard form and bidder registration form which it claims to use in this respect.
Complainant's Response
Following the submission of the Respondent's response, the Complainant filed a reply. The reply attacks the Respondent's assertion that it had never heard of the Complainant. Rather than putting forward any supporting evidence on this point, the Complainant simply stated that "the Respondent must have been aware of the Complainant as a prior registrant". The Complainant then states that the Domain Name was used on its letter headings, business cards and publicity material but these were printed after the Domain Name had been detagged "…unbeknown to the Complainant". The Complainant says that it only became aware that the Domain Name was not operational when the publicity material was circulated and attempts were made to the use the Domain Name. The Complainant claims that it was never informed that the Domain Name had been detagged and that its own behaviour was inconsistent with any such knowledge. The Complainant states that it spent £7,500 on a box at the Newcastle United Football Ground "…with the Domain Name on the front of it covering the football season August to May" and states that there would have been no reason for it to have done so if it had intended that the Domain Name would cease to belong to it.
The Complainant also asserts that once it had informed the Respondent of its alleged rights in the Domain Name, the Respondent did not act in good faith because it stated that it would put the name up for auction.
7. GENERAL
The procedure by which the Domain Name ceased to be registered in the Complainant's name and became available for registration by the Respondent is as set out below.
Chronology
Date Events
2 February 1999 Domain Name registered for the Complainant by Designer Servers Limited "DSVR".
30 January 2001 The Domain Name is detagged by DSVR.
7 February 2001 Nominet sends a renewal notice addressed to Sunil Mehra, the administration contact addressee on the Nominet database. A Sunil Mehra appears as a director of the Complainant in the Companies House information provided by Nominet
28 August 2001 The Domain Name is suspended for non-payment of the renewal invoice.
31 October 2001 Nominet cancel the Domain Name for non-payment.
31 October 2001 The Respondent registers the Domain Name.
5 June 2002 The Complainant writes to the Respondent seeking return of the Domain Name.
The registration of a Domain Name with Nominet will last for a period of two years. The host for this Domain Name when it was registered in the name of the Complainant, was DSVR. Nominet's letter to the Complainant on 12 September 2002 explaining the history of the registration, states that the reason that a host detags a name "…is that they [the host] no longer wish to provide hosting services and do not want to pay the renewal fees associated with it. The effect of a domain being detagged is two-fold. First the Domain Name Servers are removed from the record meaning that that domain cannot be used for email or website purposes and second Nominet sends any renewal invoices directly to the registrant rather than the host". Nominet go on in their letter of 12 September 2002 to state that from the date the Domain Name was detagged until its cancellation the Domain Name would have been unavailable for use. Further, Nominet states that if the Complainant had contacted Nominet during that period Nominet would have been able to advise them as to how to renew the Domain Name and reassign it to a new host.
8. COMPLAINANT'S RIGHT
The Complainant's case as to its Rights in the sign "ZHL" is not entirely clear. What is evident is that the Complainant does not rely on any registered trade mark rights. The specific matters on which it seems to rely are "…an expenditure of approximately £20,000…in connection with the printing of the Domain Name on Company letterhead and extensive advertising" as well as (in the reply) the use of the Domain Name on letter headings, business cards and publicity material and on a box at Newcastle United Football Ground. The Complainant's case in essence amounts to a claim that it has established rights in the sign "ZHL" through use of the Domain Name on business papers and on advertising material with Newcastle United Football Ground. Sufficient use of this kind is perfectly capable of establishing a reputation and goodwill in a name (these being elements of a case of passing off in English law). Rights in passing off are also perfectly capable of constituting Rights under the Policy, the definition not being restricted to registered trade marks as suggested by the Respondent.
The Respondent then makes a number of further attacks in relation to the ZHL name, in particular:
· ZHL is generic;
· Three letter abbreviations are generic;
· There are a number of companies in the UK whose initial letters are "ZHL" so the Complainant cannot have acquired any exclusive rights;
· There is no "common field of activity" between the Complainant and the Respondent.
It is clearly not the case that a business is never able to establish an exclusive goodwill and reputation in a three letter abbreviations - there are numerous companies who have done so in their own particular fields (for example, ICI and DHL). If the combination of letters is common place and/or represents a commonly used abbreviation then it will be more difficult for a business to establish its own exclusive goodwill and reputation. The fact that there are other businesses who may have the same initial letters does not of itself preclude one company from establishing an exclusive goodwill and reputation in those letters in, for instance, a particular field of business. In any event, the fact that a company name has certain initial letters does not mean they are used as its business name (this applies equally to the Complainant which makes no claim that it is generally known as "ZHL"). I find that there is no reason in principle why a business could not establish sufficient goodwill and reputation in the initials ZHL to sustain a case in passing off sufficient to demonstrate Rights under the Policy. There is no evidence before of any other undertaking using the sign "ZHL" in any line of business or in the Complainant's line of business. If the Complainant has made sufficient use of the ZHL sign then it could have acquired an exclusive goodwill and reputation in relation to those letters.
The evidence of use, however, is thin - particularly as to when the use was made. The Complainant relies on two uses of the domain name: (1) use on business papers (letterhead and business cards); and (2) use at Newcastle United Football Ground. The use on letter headings, business cards and publicity material was after the Domain Name had been detagged. There is no indication as to whether this use took place before the Respondent registered the Domain Name. The use at Newcastle United Football Ground is expressed to be "…covering the football season August to May". There is no indication of which season this is and therefore whether it is before or after the Respondent registered the Domain Name. I will return to the point on timing when addressing whether or not the Domain Name is an "Abusive Registration" in the Respondent's hands. However, whilst the timing issues are unclear, the complaint and reply have both been verified by the Complainant and both indicate the type of use of the initials ZHL prior to the date of the complaint which could be sufficient to establish a case in passing off. In determining this point I have taken note of what was said in the DRS Appeal decision Seiko UK Limited v Designer Time/Wanderweb (appealing DRS 00248) which stated that "…the requirement to demonstrate "Rights" is not a particularly high threshold test". The best that can be said on timing is that such use took place before the date of the complaint and after the Domain Name was detagged.
I find that, as of the date of the complaint, the Complainant had Rights in the "ZHL" name. Given the general lack of information and supporting evidence in relation to earlier use, I am not convinced that the Rights existed at the date the Domain Name was registered by the Respondent.
9. ABUSIVE REGISTRATION
An Abusive Registration is defined as follows:
"…a Domain Name which either:
(i) 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
(ii) has been used in a manner which took unfair advantage or was unfairly detrimental to the Complaint's Rights"
The first leg of the definition requires that the registration or acquisition of the Domain Name "…at the time when the registration or acquisition took place…" took unfair advantage or was unfairly detrimental to the Complainant's Rights. The problem in this case, which stems from the lack of detail in the complaint, is that it is not possible to tell when the Complainant acquired such Rights as it has. More specifically, the Claimant has not identified when it first started using the term "ZHL" in relation to its business. As stated above, the Complainant has not proved its case as to Rights at the date the Domain Name was registered by the Respondent. There were therefore no Rights of which the Respondent could take unfair advantage or to which he could be unfairly detrimental at the time when the registration took place.
Even if the Complainant had Rights at that time, the facts in the current case do not appear to fit clearly with the definition of Abusive Registration or any of the non-exhaustive list of factors set out in paragraph 3(a)(i) of the Policy (evidence of Abusive Registration). The closest would appear to be ground 3(a)(i)(a) which states that the Domain Name was registered or otherwise acquired "…primarily for the purposes of selling, renting or otherwise transferring the Domain Name to the Complainant or to a competitor of the Complainant for valuable consideration in excess of the Respondent's documented out of pocket costs directly associated with acquiring or using the Domain Name".
The Respondent has stated quite unequivocally that it was unaware of the Complainant at the time it registered the Domain Name. No evidence has been put forward by the Complainant to contradict this. If the Respondent did not know of the Complainant, its primary purpose for registering the Domain Name cannot have been to sell the domain to the Complainant or a competitor of the Complainant. There is no evidence in the case to show that the use of the ZHL name was widespread or high profile at the time of the Respondent's registration such that the Respondent could be expected to have heard of it. In its reply, all that the Complainant can muster by way of answer is that "the Respondent must have been aware of the Complainant as a prior registrant". No reason is given as to why that must be the case nor is any evidence put forward. I am not convinced that the Domain Name was registered in such a way as to render the Domain Name an Abusive Registration.
The second limb of the definition of Abusive Registration relates to use of the Domain Name. So far, the only use is to point to the Respondent's website (see above for the contents). The Respondent says it plans to offer the Domain Name for sale at a public auction. It is clear from the documents submitted by the Respondent that it will seek to obtain a price significantly higher than its out of pocket expenses in registering the Domain Name. I do not believe that amounts to use which renders the Domain Name an Abusive Registration. The evidence which the Complainant has had a chance to refute but has failed effectively to challenge, is that the Respondent was unaware of any Rights which the Complainant might have when it registered the name. It was later informed of the Complainant's assertion of its Rights but stated that it still planned on offering the Domain Name for sale at public auction.
Having found that the Complainant has by the date of the complaint acquired Rights in the sign "ZHL" I take the view that it would be possible for the Respondent's use of the Domain Name and continued threatened use to constitute an Abusive Registration. However, I cannot see that in the circumstances of this case with the Complainant's very weak rights and where the Domain Name was not registered unfairly. In this respect I note that the same conclusion was reached in the DRS Appeal decision Consorzio del Prosciuto di Parma v Vital Domains Limited (Appeal of DRS 00359) on similar facts in relation to the offer for sale even at a price substantially higher than the registration fee. The Complainant has only just managed to establish that it has Rights in the term "ZHL". No case has been put forward as to the detriment or unfair advantage involved in the Respondent's use. The Respondent has, on the other hand, identified a large number of potential legitimate users of the Domain Name. The evidence is that it will invite these people and the public in general to bid for the Domain Name at public auction. In those circumstances, it is not clear what possible advantage, unfair or otherwise, could be taken of the Complainant's Rights or the detriment which would ensue by their offer for sale.
DECISION
The Complainant has not shown it had Rights as at the date of registration of the Domain Name by the Respondent. The Complainant had Rights as of the date of the complaint. The Respondent has made no use of the Domain Name which could be considered to take unfair advantage of or be unfairly detrimental to the Complainant's Rights. The Respondent's use of the Domain Name does not render the Domain Name an Abusive Registration in the hands of the Respondent. The complaint is rejected.
Stephen Bennett Date: 3 December 2002