Nominet UK Dispute Resolution Service

DRS 03205

Novus Credit Services, Inc.

– v –

Discover Financial Services LL C

Decision of Independent Expert

1.	Parties

Complainant:	Novus Credit Services Inc.		
Country:	USA

Respondent:	Discover Financial Services LLC		
Country:	UK

2.	Domain Name
<discoverfinancial.co.uk>
(“the disputed domain name”)

3.	Procedural Background
The Complaint was lodged with Nominet UK (“Nominet”) on December 9, 2005, with hard copies being received in full on December 13, 2005. Nominet validated the Complaint and notified the Respondent of the Complaint on December 13, 2005, giving it 15 working days within which to lodge a Response. No Response was filed and so Nominet did not initiate its Informal Mediation procedure. On January 17, 2006 the Complainant paid to Nominet the appropriate fee for a Decision by an Expert pursuant to paragraph 6 of Nominet’s Dispute Resolution Service Policy (“the Policy”).

On January 17, 2006 the undersigned, Mr.. David H Tatham (“the Expert”), confirmed to Nominet that he knew of no reason why he could not properly accept the invitation to act as an 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 and he was selected by Nominet as the Expert for this case on the same day.

4.	Outstanding Formal/Procedural Issues 
1.    Only one Complainant – Novus Credit Services Inc. – was named in the Complaint Form submitted by the Complainant’s representative, but the actual Complaint describes it as “the lead Complainant”, and names Discover Financial Services LLC as “The second Complainant”. This latter corporation is said to be “a wholly owned direct subsidiary of the lead Complainant”. The Complaint refers throughout either to “the Complainants” or, where a distinction is required as between the two corporations, to “the lead Complainant” and “the second Complainant”. The Expert has decided to follow the example of the Complaint rather than the Complaint Form and treat both corporations as, jointly, ‘the Complainants’.

2.    It will be seen from the Facts as set out below that the Respondent has supplied an address that does not exist. (There is also some doubt about the veracity of the Respondent’s name.) As a consequence, the papers could not be served on the Respondent, even though Nominet sent them by e-mail and by post. The Expert was not supplied with any information as to the fate of the e-mail, but the mailed pacakage was returned by the Post Office marked “no such address in Park Lane”. The Complainant quite correctly identified the Respondent in the Complaint by the name and address it gave when registering the disputed Domain name, and Nominet used the same details. Indeed the only ones. It would therefore appear to be the fault of the Respondent if it remains unaware of these proceedings.

5.	The Facts
The Complainants are both wholly owned indirect subsidiaries of Morgan Stanley, one of the world’s largest diversified financial services companies, and are part of the Morgan Stanley’s Credit Services division. Attached to the Complaint was evidence relating to Morgan Stanley’s rights in the Morgan Stanley name.

Morgan Stanley’s Credit Services division is one of the largest issuers of credit cards in the USA, with nearly 50 million holders of their general purpose credit cards, including the Discover Card. The cards are accepted on the Discover Network, the largest proprietary credit card network in the USA with more than 4 million merchant and cash access locations, and at more of the top 100 US retailers than any other credit network. The Complainants also offer a range of other financial services under the names “DISCOVER” and “DISCOVER FINANCIAL” (the “Discover Names”), including home loans and car insurance, and are one of the leading credit card businesses on the Internet, with more than 13 million Discover card members registered at its website at  <www.discovercard.com>. 

Internationally, the Complainants have formed a partnership with China UnionPay, China’s largest payment network with 800 million cards, which will lead to the acceptance of Discover Network Cards in China. Discover Network Cards are also accepted in other regions popular with US tourists, including the Caribbean, Mexico and Canada. 

The lead Complainant is the registered proprietor of numerous trade marks around the world which consist of, or contain, the word “Discover”. These include UK Trade Mark Registration No. 1272839 for the word DISCOVER in class 36, registered with effect from 1986; Community Trade Mark Registration No. 000152389 for the word DISCOVER in class 36, registered with effect from 1996; and US Trade Mark Registration No. 1,479,946 for the word DISCOVER in class 36 (showing use in commerce since 1985). 

The Complainants, and/or their predecessors in interest to the Discover Names, have continuously traded under and by reference to the Discover Names from at least 1985. The Complainants’ business has been, and is, promoted under and by reference to the Discover Names across a wide range of advertising media. The Discover Names are very well known, not just in the USA, and are important assets of the Complainants which enjoy significant and substantial goodwill. The second Complainant owns 31 domain names comprising the term “DISCOVERFINANCIAL”, including <discoverfinancial.com>. It also owns the names <discovercard.com>, and <discovernetwork.com>. 

Evidence in support of all of the above facts was attached to the Complaint 

6.	The Parties’ Contentions

Complainant
The Complainants first make the point that if the Respondent were to suggest that they cannot rely on their Rights (as defined in paragraph 1 of the Policy ) because Discover Financial is “wholly descriptive” of the Complainants’ business (such as the issuing of credit cards), then it is submitted that the word ‘Discover’ does not have any specific reference to financial products or services, or to any of their characteristics, and ‘Discover Financial’ is not a usual or natural conjunction of words, so that it cannot be seen as being descriptive. 

The Complainants’ main submission is that the disputed Domain Name, in the hands of the Respondent, is an Abusive Registration as defined in paragraph 1 of the Policy. The Complainants further submit, in particular, that the Respondent’s primary purpose in registering the disputed Domain Name, and the subsequent use which the Respondent has made of it, fall within, respectively, paragraphs 3(a)(i)(B) and (C), and 3(a)(ii) of the Policy, and that other activities of the Respondent fall within paragraphs 3(a)(iii) and 3(a)(iv) of the Policy. 

The Respondent registered the disputed Domain Name on 27 February 2005, long after the Complainant established its Rights in the Discover Names. Disregarding the generic .co.uk suffix, the disputed Domain Name is identical to the Discover Financial name used by the Complainants, and is also confusingly similar to the Complainant’s registered trade marks for DISCOVER.

The Respondent has no connection with the Complainants or Morgan Stanley’s other companies, and is not authorised to use the Discover Financial name. 

The Complainants believe that the Respondent’s name and address are fictitious and that certain individuals are using the Discover Financial Services LL C name (which is virtually identical to that of the second Complainant) in a campaign which is intended to cause economic or other harm to the Complainants and to Morgan Stanley, and/or to bring financial or other benefit to the individuals concerned. They are concerned that the disputed Domain Name may be used as an instrument of fraud. Attached to the Complaint was a copy of an investigators’ report which showed that false contact details and/or false information have been provided to Nominet about the Respondent. 

The Complainant also attached evidence alleging that the people behind the Respondent are involved in a network of domain names and alleged companies which use proprietary names (or ones similar to them) belonging to the Complainants and/or Morgan Stanley. The individuals involved are believed to include Luis Eduardo Silva de Balboa (aka Luis Eduardo Silva) and/or his son, Luis Eduardo Silva Fitz-James (aka Luis Eduardo Fitz-James Silva and/or Edward Fitz-James), and the Complainant filed evidence to show that these people are engaged in a pattern of registration of domain names in which they have no apparent rights and which correspond to well known names or trade marks of the Complainants and/or Morgan Stanley. The Complainants allege that the disputed Domain Name is part of this pattern. The registrants for these domain names are either Mr. Silva or Mr. Fitz-James individually; or a Nova Scotia incorporated company, Cititrust Group Limited, of which Mr. Silva and Mr. Fitz-James are directors; or one of the fictitious companies (Morgan Stanley Latin America LL C or Discover Financial Services LL C) for which Mr. Silva’s e-mail addresses are given as the contacts. 

In April 2005 Morgan Stanley filed an action in Chile in respect of the domain name <morganstanley.cl>. In response, Mr. Silva stated that the named registrant, Discover Financial Services Inc (i.e. the same name as the former name of the second Complainant) was a subsidiary of a Delaware company called Morgan Stanley Investments Inc, and that both companies are related to a company called Morgan Stanley, S.A. None of these companies, even if they exist at all, are related in any way to the Complainants or to Morgan Stanley, and it is submitted that these companies were registered, or the names used, solely for the purpose of adding apparent legitimacy to the activities of Mr. Silva and Mr. Fitz-James. Mr. Silva also stated that he could be contacted at certain e-mail addresses (luisesilva@morganstanley.law.pro, legal@discoverfinancial.co.uk and info@morganstanley-chile.com) which correspond to some of the domain names listed in one of the Exhibits to the Complaint, and also that the companies referred to in his response were responsible for registering domain names such as <discoverfinancial.co.uk>, <morganstanley-chile.com> and <morganstanley.law.pro>. 

On 3 October 2005 Morgan Stanley also filed actions with the National Arbitration Forum under the UDRP in respect of the domain names <morganstanley-chile.com>, <morganstanleycorp.com> and <morganstanley.law.pro>. Attached to the Complaint were copies of the Decisions in these complaints ordering all of these domain names to be transferred to Morgan Stanley. Also attached were Exhibits relating to the action in Chile and to Mr. Silva and Mr. Fitz-James

On 20 October 2005 Morgan Stanley also filed a complaint under the Policy in respect of the domain name <morganstanley-la.co.uk>, registered in the apparently fictitious name Morgan Stanley Latin America LL C, whose address is virtually the same as that of the present Respondent, and a copy of this Complaint was attached to the present Complaint.. 

The Complainants submit that these activities are evidence of an Abusive Registration both under paragraphs 3(a)(iii) and 3(a)(iv) of the Policy, and generally. 

The Complainants’ Discover Names are very well known, and the Complainants contend thaty the Respondent was clearly aware of the Complainants’ use of these names when it chose the disputed Domain Name. They claim that t is difficult to imagine any reason for the choice of disputed Domain Name other than an intention to take unfair advantage of, and/or to use the disputed Domain Name to the detriment of the Complainants’ Rights. 

The Complainants further contend that the Respondent is using the disputed Domain Name to display as a frame, the content of which is an exact copy of the Complainants’ own website at <www.discovercard.com>. This was shown by the copies of the screen shots which were attached to the Complaint. 

The Complainants contend that Internet users who come across the disputed Domain Name will clearly assume it belongs to the Complainants. For example, if they enter the Respondent’s website address they will reach the Complainants’ own website which will confirm this initial assumption and will suggest that the Respondent is a legitimately constituted business of the Complainants. This false representation of a connection between the Respondent and the Complainants is likely to damage the Complainants. For example, the Respondent could seek to give credibility to emails sent from the disputed Domain Name (e.g. requesting information) by including within them a link to the Respondent’s website address which appears to be legitimately associated with the Complainants. This whole practice is known as “phishing”. Similarly, damage would be likely to be caused if the Respondent used the Domain Name to point to another website not belonging to the Complainants, because people would suppose that such other website did in fact belong to, or was associated with, the Complainants. 

All of this strongly suggests to the Complainants that the Respondent registered the disputed Domain Name primarily for the purpose of unfairly disrupting the Complainants’ business (paragraph 3(a)(i)(C) of the Policy), because it is difficult to imagine any innocent explanation for its behaviour. 

It also shows that the Respondent registered the disputed Domain Name as a blocking registration against a name or mark in which the Complainants have Rights (paragraph 3(a)(i)(B) of the Policy), because it prevented the Complainants from registering, in the .uk domain, the identical domain name which they already own in other domains. 

Furthermore, it shows that the Respondent is using the disputed Domain Name in a way which is extremely likely to confuse, and to have confused, people and/or businesses into believing that the disputed Domain Name is registered to, operated by, or authorised by, or otherwise connected with the Complainants (paragraph 3(a)(ii) of the Policy). It seems natural to conclude that the Respondent intended there to be confusion, because there is no other reason for the Respondent to have chosen the disputed Domain Name and to have used it to point to the Complainants’ website, and that confusion is bound to have arisen. 

It is submitted that this case falls clearly within paragraphs 3(a)(iii), 3(a)(iv), 3(a)(i)(B), 3(a)(i)(C) and 3(a)(ii) of the Policy. However, the Complainants point out that these are just five non-exhaustive factors which may be evidence of an Abusive Registration. The actual definition of an Abusive Registration is set out in paragraph 1 of the Policy, and, on the facts presented, it seems clear to the Complainants that both the original registration of the disputed Domain Name and the subsequent use made of it took/take unfair advantage of and were/are unfairly detrimental to the Complainants’ Rights. It is difficult to imagine any innocent explanation or legitimate reason as to the Respondent’s choice of the disputed Domain Name other than to take unfair advantage of, and/or to use it to the detriment of, the Complainants’ Rights.

Respondent
As has already been pointed out, there was no Response.

7.	Discussion and Findings:

Preliminary
Although the Policy sets a limit on the number of words that a Complaint can contain, there is no limit to the number or size of any enclosures to it. In this Complaint, there were 12 Annexes which were contained in 3 massive files, measuring some 14 centimetres high, that included a lot of material (e.g. copies of all of the UDRP Complaints rather than just the Decisdions). In view of the nature of the Complaint and of the Respondent, one could perhaps describe this as overkill. It certainly put a burden on the Expert. 

General
According to paragraph 2 of the Policy, in order to succeed in a Complaint, the Complainant has to prove to the Expert that, on the balance of probabilities –

i   the Complainant has Rights in respect of a name or mark which is identical or similar to the disputed domain name; and
	ii  the disputed domain name, in the hands of the Respondent is an Abusive
 	Registration. 

The absence of a response from a Respondent does not mean that he has no answer to the Complaint. A Complainant must still make out its case and, having done so, the burden is on a Respondent to prove otherwise.

Complainant’s Rights
The lead Complainant has trade mark rights in the word DISCOVER by itself in the USA, UK and EU, as proved by the copies of the registration certificates that were filed. It also owns several US registrations of the word as part of a figurative device and it has registrations in the USA of a number of trade marks consisting of the word DISCOVER followed by a descriptive word or phrase. It has no registrations of DISCOVER FINANCIAL. However this is the name of the second Complainant, and in view of its extensive and wide-ranging activities since its formation in 1985 and the presumed use of its numerous ‘discoverfinancial’ domain names, it is reasonable to assume that it has accrued substantial common law rights in the name. The Expert agrees with the Complainants when they say that this term is not wholly descriptive of the second Complainants’ business. 

The Complainants are based in the USA and they claim to be the largest issuer of credit cards in that country. They also claim that these cards are accepted in the Caribbean, Mexico and Canada, and are shortly to be accepted in China. The Expert notes that there is no specific claim that the names are known in Europe. However the Policy makes no distinction as to where a Complainant must have Rights, only that they must be “enforceable under English law”. This would include the lead Complainant’s UK and EU trade mark registrations as well as, almost certainly, the second Complainant’s Common law rights. Therefore the Expert has concluded that the Complainants do, between them, have sufficient Rights for a legitimate claim under the Policy.

When comparing a trade mark with as domain name under the Policy It is usual to disregard the suffix ‘.co.uk’ and, having done so in this case, it is clear to the Expert that the disputed Domain Name is both identical and similar to the Rights of the Complainants. Thus, it is concluded that paragraph 2(a) (i) of the Policy is proved. 

Abusive Registration
An ‘abusive registration’ is defined in paragraph 1 of the Policy as being “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.” 

Paragraph 3 of the Policy sets out a number of factors that define what can be an Abusive Registration, and the following would appear to be relevant in this case:

3(a)(i) Circumstances indicating that the Respondent has registered or otherwise acquired the Domain Name primarily:
  B.  as a blocking registration against a name or mark in which the Complainant has rights; or 
  C  for the purpose of unfairly disrupting the business of the Complainant.
(ii) 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;
(iii) the Complainant can demonstrate that the Respondent is engaged in a pattern of registrations where the Respondent is the registrant of domain names (under .uk or otherwise) which correspond to well known names or trade marks in which the Respondent has no apparent rights, and the Domain Name is part pf that pattern;
(iv) It is independently verified that the Respondent has given false contact details to us;

The Complainants have undoubtedly made out an extremely strong case. In fact, as already mentioned, once a bona fide case is made out, the onus shifts to a Respondent to refute it. In this case, the Respondent has failed to reply. Thus the Expert has accepted all of the Complainants’ contentions as being true.

There is little doubt in the mind of the Expert that both of the requirements of paragraph 1 apply in this case. For example – 

•	The Report by the private investigator employed by the Complainants (Exhibit 8) clearly shows that the address supplied by the Respondent is a false one. “Number 1 Park Lane, London W1” does not exist. The lowest existing numbered address in Park Lane, which is a major thoroughfare in the heart of London, is No. 22. The name of the Respondent is also, probably, false. The acronym ‘LLC’ does not exist in the UK. Also, the only difference between this name and that of the second Complainant is a gap between the letter C and the second letter L. Two such similarly named corporations could not co-exist. To give false contact details is in breach of paragraph 3(a)(iv) of the Policy, provided this has been independently verified. It has been in this case, both by a private investigator and by the Post Office.
•	It is a breach of paragraph 3(a)(iii) of the Policy if a Respondent has engaged in a pattern of registering domain names (in any gTLD or ccTLD) corresponding to well known names or trade marks in which he has no apparent rights. In this case the Respondent is just one of many names adopted by a group of companies, businesses or individuals coming, primarily, from Chile, and the Complainant has supplied evidence of registrations by these people of numerous domain names which incorporate name of Morgan Stanley or of its subsidiaries. 
•	It is clear from the evidence that the disputed Domain Name constitutes a ‘block’ against the Complainants’ DISCOVER Marks and this is in breach of paragraph 3(a) (i) (B) of the Policy.
•	Likewise, it is a breach of paragraph 3(a) (i) (C) of the Policy to register a domain name in order to unfairly disrupt the business of a Complainant and it is difficult to imagine a more blatant example of this than the action of placing on the website at the disputed Domain Name an exact copy of the Complainants’ own ‘Discover’ website as the Respondent has done in this case. This also, in the opinion of the Expert, would confuse anyone into thinking that the disputed Domain name is owned by the Complainants, which is in breach of paragraph 3(a) (ii) of the Policy.

The Complainants have provided substantial evidence that the Respondent, and individuals and companies associated with it are in the business of the pernicious practice of ‘phishing’ which consists of creating fictitious domain names and websites all with a view to extracting bank account details from gullible individuals. It is a pity that, by providing a false name and address, the Respondent will probably never be aware that the disputed domain name is to be transferred (see below) or why.  

8.	Decision
The Expert finds that the Complainant has Rights in the names DISCOVER and DISCOVER FINANCE and that they are similar to the disputed Domain Name.

The Expert further finds that the disputed Domain Name is an Abusive Registration in the hands of the Respondent. 

The Expert therefore directs that the disputed Domain Name <discoverfinancial.co.uk> be transferred to the Complainant.

David H Tatham

January 27, 2006