Original Health Soap v Wizzegroup [2004] DRS 01994 (15 November 2004)


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Nominet UK Dispute Resolution Service
You are here: BAILII >> Databases >> Nominet UK Dispute Resolution Service >> Original Health Soap v Wizzegroup [2004] DRS 01994 (15 November 2004)
URL: http://www.bailii.org/uk/cases/DRS/2004/01994.html
Cite as: [2004] DRS 1994, [2004] DRS 01994

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    Original Health Soap v Wizzegroup [2004] DRS 01994 (15 November 2004)

    Nominet UK Dispute Resolution Service

    DRS 01994

    Original Health Soap Ltd -v- Wizzegroup

    Decision of Independent Expert

  1. Parties:

    2. Complainant: Original Health Soap Ltd
    Address:  
    Postcode:  
    Country: GB
       
    Respondent: Wizzegroup
    Address:  
    Postcode:  
    Country: GB

  2. Domain Name:

    3. originalhealthsoap.co.uk ("the Domain")

  3. Procedural Background:

    4. A brief chronology is as follows:

    1 September 2004: Complaint lodged with Nominet electronically
    7 September 2004: Hardcopy complaint received by Nominet
    14 September 2004: Nominet forwarded complaint to Respondent
    7 September 2004: Hardcopy response received
    28 September 2004: Nominet forwarded response to Complainant
    6 October 2004: Reply lodged with Nominet electronically
    6 October 2004: Hardcopy reply received
    6 October 2004: Nominet forwarded reply to Respondent
    28 October 2004: Fee received from Complainant

    On 3 November 2004 I, Adam Taylor, the undersigned, confirmed to Nominet that I knew of no reason why I could not properly accept the invitation to act as expert in this case and further confirmed that I knew of no matters that 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:

    5. The response was not filed electronically as required by rule 5c of Nominet's DRS Procedure. However, the hard copy response was filed on time and the Complainant has suffered no prejudice. I will therefore disregard the omission.

  5. The Facts:

    6. On a date unknown, two brothers Eric and Albert Rutter set up a health soap business called "E&A Rutter – The Original Health Soap Company". The complaint says Eric Rutter was a "director" thereof but no corporate details have been provided. I suspect that this entity was in fact a partnership of the two brothers but nothing turns on its exact status. I will refer to it as "E&A Rutter".

    Eric Rutter commissioned the Respondent to register the Domain in November 2003 on behalf of E&A Rutter. The Respondent registered the Domain on 14 November 2003 but in its own name.

    The complaint says that "the company later became a LTD company, full name The Original Health Soap Company, in January 2004." and that the directors included Eric and Albert Rutter. A Companies House search shows that a company called "The Original Health Soap Company Ltd" was incorporated on 27 February 2004.

    Thereafter The Original Health Soap Company Ltd operated an e-commerce website at the Domain.

    In February 2004 The Original Health Soap Company Ltd contracted Blue Maple Ltd to carry out all of its sales, marketing and distribution. The Respondent supplied access codes so that Blue Maple Ltd could operate, redesign and develop the website at the Domain.

    In about May 2004 Eric Rutter was dismissed as an employee and director of the company.

    On 16 August 2004 The Original Health Soap Company Ltd changed its name to Scott Soap Ltd. Its current registered office is at Manor House, Front Street South, Trimdon, Co Durham TS29 6LY.

    Also on 16 August 2004 a different company was incorporated: "The Original Health Soap Ltd". On 20 August 2004 this company changed its name to "Original Health Soap Ltd". The current registered office of Original Health Soap Ltd is also Manor House, Front Street South, Trimdon, Co Durham TS29 6LY.

    The Respondent continued to co-operate with Blue Maple Ltd concerning operation of the website until 31 August 2004 when it made certain changes to the website on the instructions of Eric Rutter (see further below).

    On 1 September 2004, this complaint was filed in the name of Original Health Soap Ltd.

    I visited the website at the Domain on 16 November 2004. The home page was headed "Original Health Soap" and it stated amongst other things: "Our product was first developed as a floating soap by two brothers, Albert and Eric Rutter, and was featured on BBC television's tomorrow's world programme in 1991. Users of the soap reported it appeared to have healing qualities." The following contact details appeared on the About Us page: "E Rutter Health Soaps, 28 Luke Street, Trimdon Colliery, Co.Durham TS29 6DP". Original health soap

  6. The Parties' Contentions:

    7. Complaint:

  7. Since the initial signing of contracts in March 2004, Blue Maple Ltd has invested a great deal of time and money in marketing the products of The Original Health Soap Company and has used this web domain as a main point of reference and purchase for customers.

  8. Eric Rutter instructed the Respondent to change the website at the Domain despite having no power to act on behalf of The Original Health Soap company. Visitors will not be transacting with the company they think they are dealing with. By 'hijacking' both the domain address and the Original Health Soap Ltd company name, Eric Rutter is effectively stealing business from The Original Health Soap Company and defrauding its customers. The Original Health Soap Company and its agent Blue Maple Ltd are losing business every hour that this domain remains 'hijacked'.

  9. The website and email systems were changed without notification and so a number of email correspondences being carried on through the domain address were interrupted. This tampering with private communication could result in further loss of business or damage to the Original Health Soap Company's reputation. Even if Eric Rutter is intending to start up in business to manufacture and sell the same products as the Original Health Soap Company Ltd, he cannot legally operate under the same name as an existing registered company and by extension therefore cannot operate through a web domain inextricably linked to and previously operated as the home of that registered company.

    10. Response:

  10. The Respondent was asked to develop the website by Eric Rutter on behalf of E&A Rutter in November 2003. Eric Rutter paid for this himself. At Eric Rutter's request, the Respondent moved control of the website but not the Domain to Blue Maple Ltd. There was no mention of change in ownership of the company or the Domain.

  11. The Respondent has been informed by Eric Rutter that he has begun legal proceedings in relation to the supposed company transfer and is awaiting the results of this action.

  12. Eric Rutter was the Respondent's original customer and to the Respondent's knowledge is still the only person who has any authority regarding the Domain.

    13. Reply:

  13. The response has not come from the registrant. Eric Rutter is the individual currently in control of and operating a business through the Domain. The Respondent is a third party supplier.

  14. Eric Rutter in fact paid for the site to be developed using company funds - cash in advance - and the company is still awaiting a VAT invoice and receipt.

  15. The Original Health Soap Ltd has received no notice of legal proceedings regarding any "supposed company transfer", so there is consequently no resulting action to be awaited.

  16. Eric Rutter is continuing to publish a website using the disputed domain name and since the complaint it has come to light that orders are being solicited and payments taken and processed but no product is being despatched. The company is receiving an increasing number of calls from angry members of the public who have paid Mr Rutter for goods after visiting the site but have not received anything. This activity is being carried out under the same name as the limited company and through the original company website. This is damaging the company's reputation. The company is incurring costs in placating these angry customers and defending its reputation with suppliers, the media and various other organisations.

  17. Discussion and Findings:

    18. General

    To succeed, the Complainant has to prove in accordance with paragraph 2 of Nominet's DRS Policy ("the Policy) on the balance of probabilities, first, that it has rights (as defined in paragraph 1 of the Policy) in respect of a name or mark identical or similar to the Domain and, second, that the Domain, in the hands of the Respondent, is an abusive registration (as defined in paragraph 1 of the Policy).

    Complainant's Rights

    Corporate names cannot of themselves constitute rights and there is no registered trade mark.

    What about common law rights? The term ORIGINAL HEALTH SOAP consists of descriptive / laudatory words. The issue is whether the term has become distinctive of the Complainant's business. The complaint says little on the subject. Instead a rather confused picture emerges.

    Original Health Soap Ltd, the later of the two companies mentioned above, is named as the Complainant. This company was incorporated on 16 August 2004 – only two weeks before the complaint was filed. The body of the complaint, however, assumes that the complainant is the earlier company The Original Health Soap Company Ltd (renamed Scott Soap Ltd) incorporated on 27 February 2004. (Indeed the complaint refers to both company names and also variations of these names.) It may be that the later company took over the business of the earlier company on 16 August 2004. The relationship between these companies should have been addressed in the complaint but the person drafting it was obviously unaware of the corporate structure. Given that the threshold for the rights test is low, that the DRS is intended to be usable by non-lawyers and that the companies are probably under common control (because they share a registered office and their names were changed in tandem), I will not draw any distinction between the two companies. Hereafter I will refer to both as "the Complainant".

    The Complainant has provided no information or evidence about the extent or length of its trading activity. DRS experts have been prepared to assume the existence of common law rights where complainants have traded for long enough but even if the Complainant started trading on the date of incorporation of the earlier company (27 February 2004), that pre-dates the complaint by only six months. This is too short a period to justify an assumption about acquired distinctiveness in the case of such a descriptive name.

    The complaint says nothing either about the extent or length of trading by E&R Rutter before 27 February 2004 nor whether – and if so how – such rights were assigned to the Complainant. Nevertheless, as I have said, the threshold for establishing rights is low. It appears from the website that the business has been around since at least 1991 and I am prepared to infer that the name did become distinctive of the E&R Rutter business over that period. Given that Eric and Albert Rutter both became directors of the new limited company, I think it reasonable to infer that the goodwill in the name ORIGINAL HEALTH SOAP was transferred to the Complainant.

    I conclude therefore that the Complainant has – narrowly - established rights in respect of a name or mark identical to the Domain.

    Abusive Registration

    Is the Domain an abusive registration in the hands of the Respondent? Paragraph 1 of the Policy defines "abusive registration" as 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 of or was unfairly detrimental to the Complainant's Rights."

    The Complainant does not claim that it had any proprietary rights in the Domain and that the Respondent acted wrongly in registering or maintaining the Domain in its own name. Indeed the Domain was registered some three months before incorporation of the Complainant on 27 February 2004 (ie the earlier company) and I have seen no evidence suggesting that the Complainant ever had anything more than a right to use the Domain for its website.

    The Complainant's case instead hinges on the events of 31 August 2004. The Complainant says that the Respondent, acting on Eric Rutter's instructions, substituted Eric Rutter's contact details for those of the Complainant on the website and arranged for website payments and emails to be rerouted to Eric Rutter. The Complainant claims that, as a result, customers who think they have been dealing with the Complainant have in fact been dealing with someone else, email communications have been disrupted, orders have not been fulfilled and all of this has seriously damaged the Complainant's business as well as that of Blue Maple Ltd.

    Although the Complainant has not provided any supporting evidence such as website printouts showing the exact changes made, when I visited the site on 16 November 2004 it still had the Complainant's branding "Original Health Soap" yet the contact name was "E Rutter Health Soaps". I presume this is a trading name of Eric Rutter. The address was different to the Complainant's address.

    The Respondent has not contested any of the Complainant's assertions.

    On the balance of probabilities therefore I accept that the Complainant's version of events is largely correct (excluding the alleged use of the Complainant's exact corporate name which I did not see) and its business has effectively been hijacked as a result.

    The Respondent's position is that it was complying with the instructions of Eric Rutter who it believed was the person with ultimate authority over the Domain. That does not however afford a defence to the Respondent which is the registrant and therefore prima facie responsible for use of the Domain. If the Respondent did not want this responsibility it should not have registered the Domain in its own name in the first place or else should have transferred it away later.

    I conclude that the Domain has been used in a manner which took unfair advantage of or was unfairly detrimental to the Complainant's rights and that abusive registration has therefore been established.

  18. Decision:

    19. The domain name originalhealthsoap.co.uk should be transferred to the Complainant.

    ______________________ _________________

    Adam Taylor Date

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URL: http://www.bailii.org/uk/cases/DRS/2004/01994.html