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	Nominet UK Dispute Resolution Service
You are here: BAILII >> Databases >> Nominet UK Dispute Resolution Service >> Delecto Gifts Ltd v MacPherson [2007] DRS 4376 (29 March 2007) URL: http://www.bailii.org/uk/cases/DRS/2007/4376.html Cite as: [2007] DRS 4376

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NOMINET UK DISPUTE RESOLUTION SERVICE

DRS 04376

DECISION OF INDEPENDENT EXPERT

DELECTO GIFTS LIMITED v ALASDAIR MacPHERSON

1. Parties

Complainant : Delecto Gifts Limited

Country : GB


Respondent : Alasdair MacPherson

Country : GB

2. The Domain Name

hamperco.co.uk

3. Procedural Background

3.1 On 16 January 2007 the Complaint was lodged with Nominet in accordance with the Nominet UK Dispute Resolution Service Policy ("the Policy"). Hard copies of the Complaint and its attachments were received in full by Nominet on 17 January 2007.

3.2 On 17 January 2007 Nominet validated the Complaint. On 22 January 2007 it sent a copy of the Complaint to the Respondent, and inter alia advised the Respondent that the Procedure for the conduct of proceedings under the Nominet UK Dispute Resolution Service ("the Procedure") had been invoked and allowed the Respondent 15 working days within which to respond to the Complaint.

3.3 On 2 February 2007 a non-standard submission was received from the Respondent by Nominet. On 9 February 2007 the Respondent confirmed that this submission was his official Response. The Complainant was advised accordingly. 

3.4 A Reply was received from the Complainant by Nominet on 14 February 2007. Although mediation was attempted, no resolution was possible. On 15 March 2007 the relevant fee was received by Nominet from the Complainant in order for the matter to be referred to an independent expert for a decision.

3.5 On 15 March 2007 Bob Elliott was selected and duly appointed as Expert and the file was transmitted to the Expert pursuant to paragraph 11 of the Procedure.

4. Outstanding Formal/Procedural Issues

4.1 A further non-standard submission was received by Nominet from the Complainant on or about 19 March 2007. Nominet forwarded to the Expert the paragraph which explains the reason for the further non-standard submission, on or about 20 March 2007. This reads as follows "I have included further evidence to support our case that hamperco.co.uk has always been used by The Christmas Hampers Company which was renamed Delecto and was operated as a division of FHSC. The Administrators of FHSC sold us the domain name as has already been submitted".

4.2 The explanatory paragraph does not in any way suggest why the information could not have been provided earlier. Given that the Complainant had already had the opportunity of a Reply, the Expert decided at his sole discretion not to admit such a further statement, pursuant to paragraph 13.b of the Procedure.

5. The Facts

5.1 The Complainant is a company incorporated on 8 March 2006. It appears to be the successor in business to at least part of the business previously carried on by FHSC Limited, Company Number 04413304, which traded as The Christmas Hampers Company until 2005 when it was apparently rebranded as Delecto. FHSC Limited appears to have traded from at least 2000 onwards, advertising luxury Christmas and corporate food hampers, both through brochures, and online.

5.2 According to evidence provided by the Complainant, The Christmas Hampers Company actively used the Domain Name, through the website at www.hamperco.co.uk. Extracts have been provided from brochures from 2000 and 2004, which actively promoted the website.

5.3 The Complainant has provided historical evidence of the website involved, by way of printouts of pages from 2001, 2004 and 2005. Both the printouts for 2004 and 2005 give a contact telephone number of 0845 3045300. The 2001 and 2004 printouts show a home page advertising The Christmas Hampers Company, with a link to a supporting website, details of which have not been provided.

5.4 The full text of the 2005 printout is as follows:-

"As part of our continuing development and improvements, The Christmas Hampers Company has now changed to Delecto. Delecto offers a range of quality gourmet hampers and gifts for both businesses and consumers.

To visit our new website, where you can order and pay online and even build your own unique hamper, visit www.delectogifts.co.uk.

If you are a corporate customer, please visit www.fhcorporate.biz for our complete offering of hampers & gifts, promotional merchandise, inventive incentives and gift vouchers.

Call 0845 3045300 for Customer Services or 0113 3878001 for our sales team."

5.5 The turnover of FHSC Limited, according to information provided by the Complainant, appears to have been in excess of £1,000,000 per annum since at least 2000, with a marketing spend of in the region of £100,000 per annum.

5.6 FHSC Limited entered into administration on or about 15 February 2006. On 28 March 2006 the Complainant entered into an agreement with FHSC Limited and its administrators, under which the Complainant bought certain assets from FHSC Limited. Those assets appear to have included the Domain Name (as well as four other domain names), as part of the Intellectual Property, which in turn included the rights in the internet websites operating under the domain names. Only extracts from the agreement in question have been provided to the Expert, but the principal operative clause proceeds on the basis that the sale is of "whatever right, title or interest (if any) [FHSC Limited] may have in the following Assets…". The Assets (as defined) include the Intellectual Property, which in turn (as defined) includes the five domain names, and associated websites.

5.7 The Domain Name itself was purchased by the Respondent from an individual by the name of Mr Graham Smith. Mr Smith was the previous registrant of the Domain Name, and according to the Complainant's evidence, was an employee of FHSC Limited who left that company prior to its entry into administration. The Complainant says that Mr Smith purchased the Domain Name in 2000, using his own credit card, as an asset which was intended for the use of FHSC Limited, and which was so used for a number of years. No date is given for the transfer of the Domain Name from Mr Graham Smith to the Respondent, but it appears to have been at some time during 2006, and in any event, prior to July 2006.

5.8 The Respondent appears to run a business known as "Scottish Food Overseas", which the Complainant says is a competitor to the Complainant's business. As at 15 January 2007 the website currently at the Domain Name, which uses the name The Christmas Hampers Company, advertised corporate hampers and christmas hampers delivered worldwide. The text of the home page of the website as at 15 January 2007 is as follows:-

"As part of our continuing development and improvements, The Christmas Hampers Company has launched a new range of hampers for the 2006 festive season. The Christmas Hampers Company offers a range of quality Xmas gourmet hampers and gifts for both businesses and private customers.

To visit our main website, where you can order and pay online and even create your own unique hamper: visit our main Christmas Hampers Store.

If you are a corporate customer, please visit our Corporate Gift Hampers section for our complete offering of hampers & gifts, promotional merchandise, inventive incentives and gift vouchers.

Or call us on 01786 813002 to speak to our Sales Team".

5.9 The Complainant says that it approached the Respondent in July 2006 to query the Respondent's ownership and to stake a claim to the Domain Name, however the Respondent argued that he had bought it in good faith from Mr Graham Smith. The Respondent refused to hand over ownership of the Domain Name, or to change the text on the home page (which the Complainant said it felt was misleading).

5.10 As at 27 March 2007, the home page at the website linked to the Domain Name remains unaltered from the wording as set out in paragraph 5.8 above. It has links to the website at www.scottishfoodoverseas.com. That website indicates that Scottish Food Overseas was formed in 2000 and has grown to become "one of the biggest gift hamper companies in the UK".

6. The Parties' Contentions

Complainant's Submissions

Rights

6.1 The Complainant says that it has rights in the Domain Name because of its purchase of the Domain Name from FHSC Limited in March 2006 as described above. It says that the Domain Name was previously used to promote The Christmas Hampers Company, which was re-branded Delecto in 2005. Although FHSC Limited then used a new website, www.delectogifts.co.uk, the Domain Name was still used for the purposes of re-direction of traffic to the new website.

6.2 The Complainant also points to the previous marketing costs (including costs to promote the Domain Name) of in excess of £500,000.

Abusive Registration

6.3 The Complainant says that, as a competitor, the Respondent was known to the Complainant. The Respondent will have known that the Domain Name was used by FHSC Limited. The Complainant says that it was common knowledge in early 2006 that FHSC Limited was in administration, with the administrators being in the process of selling off the assets of FHSC Limited.

6.4 The Complainant suggests that the Respondent approached Mr Graham Smith, shortly after FHSC Limited went into administration. Mr Graham Smith as an individual had no right to sell the Domain Name, due to his having purchased the Domain Name in 2000 when an employee of FHSC Limited as part of the business of FHSC Limited (and having been reimbursed the cost of doing so from company expenses).

6.5 Finally, the Complainant refers to the Respondent's current use of the Domain Name, which is in many respects identical to the home page text from the pre-administration website used by FHSC Limited in 2005, except for the alteration of contact information and the logo, thereby clearly attempting to mislead customers.

6.6 The Complainant seeks the transfer of the Domain Name to itself.

Reply

6.7 In its Reply, the Complainant indicates that it tried to obtain registration of the Domain Name, following its "purchase" from FHSC Limited in March 2006, but realised that it could not do so, as the Domain Name was in the name of Mr Graham Smith. It tried to track down Mr Graham Smith without success, and was in the process of preparing documentation to ask Nominet to transfer the Domain Name, when it realised that the Respondent had taken over the Domain Name and site. The Complainant also says that the employee who actually registered the Domain Name for FHSC Limited, using Mr Smith's credit card, one Angela Bromley, did so on behalf of FHSC Limited. Angela Bromley is now employed by the Complainant.

Respondent's Submissions

6.8 The Respondent's case is fairly simple. He says he purchased the Domain Name in good faith from Mr Smith, who had registered the Domain Name in 2001 as an individual. Mr Smith used his own personal credit card, not a business cheque or corporate credit card. Mr Smith signed the appropriate domain transfer paperwork to transfer the Domain Name to the Respondent. The Respondent "took the legally correct and appropriate measures before paying Graham Smith for taking ownership of the domain".

6.9 The Respondent refutes "all allegations made otherwise".

7. Discussion and Findings:

General

7.1 In order to succeed in these proceedings, paragraph 2.b of the Policy requires the Complainant to prove on the balance of probabilities that both elements of the test set out in paragraph 2.a are present namely that:

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

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

Complainant's Rights

7.2 Although the Complaint is a little confusing as to the nature of the Rights which the Complainant asserts that it has in respect of a name or mark which is identical or similar to the Domain Name, it seems to the Expert that the Complainant is effectively saying that it has acquired, through its agreement in March 2006, the goodwill and such rights as there may be in the Domain Name, arising from its previous promotion and use in respect of the associated website (www.hamperco.co.uk). The Domain Name had been used extensively for a number of years to promote the business known as The Christmas Hampers Company (the trading name of FHSC Limited), and subsequently in 2005 to link to the successor "Delecto" website. Therefore, by virtue of the March 2006 agreement, the Complainant had effectively acquired any goodwill associated with the Domain Name, even if FHSC Limited and the administrators were not actually in a position to transfer the Domain Name itself, given that it was registered in the name of Mr Graham Smith, an ex-employee.

7.3 It is clear that, under UK trade mark law, use of a domain name can generate rights which are protectable either by the common law remedy of passing-off, or in certain cases by registration of a trade mark. The Patent Office's own guidance in respect of registration of trade marks provides as follows:

"A domain name is a written representation of an Internet electronic address, eg www.patent.gov.uk, which is the Office's website address. It is common-place for goods and services to be sold in the UK under such a name, ie the domain name is being used as a trade name or trade mark, and the Registrar will, subject to the usual criteria of the Act, permit domain names to be registered as trade marks.

Elements of the domain name such as ".com" or ".co.uk" are considered to be totally non-distinctive, much in the same way as "Ltd" and "Plc". As a general rule, one should consider whether the remainder of the mark is descriptive or non-descriptive; if so, there is likely to be an objection under Section 3(1)(b) of the Act." (Manual of Trade Marks Practice, Chapter 3 Examination and practice, Section 28)

7.4 The Expert is satisfied that, in this case, FHSC Limited had acquired common law rights in the use of the Domain Name itself, and that the transfer from FHSC Limited to the Complainant in March 2006 was effective to transfer those common law rights (if not ownership of the Domain Name itself).

7.5 The Expert is therefore prepared to find that the Complainant has succeeded in making out the first element of the test as set out in paragraph 2.a(i) of the Policy, in establishing reputation and goodwill in the name or mark hamperco.co.uk, which is identical to the Domain Name.

Abusive Registration

7.6 There seems to be little doubt that the Respondent would have been aware of the previous trading of FHSC Limited, including its previous use of the Domain Name to promote the products of The Christmas Hamper Company, and subsequently Delecto. This is not denied by the Respondent. It appears to the Expert that the Respondent probably saw an opportunity, once he heard of the administration of FHSC Limited, to acquire the Domain Name, for the use of his own competing business, and that he did so by arranging a transfer from Mr Graham Smith, in whose name the Domain Name was registered.

7.7 It does not seem to be disputed by the Respondent that Mr Graham Smith was an ex-employee of FHSC Limited. However, it is effectively the whole of the Respondent's case that he is the legally entitled owner of the Domain Name, because it was previously registered under Mr Smith's individual name, using his personal credit card, rather than in the name of FHSC Limited.

7.8 Paragraph 3.a of the Policy contains a non-exhaustive list of factors which may be evidence that the Domain Name is an Abusive Registration. These include:-

a) Circumstances indicating that the Respondent has registered or otherwise acquired the Domain Name primarily for the purpose of unfairly disrupting the business of the Complainant (paragraph 3.a.i.C);

b) 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 (paragraph 3.a.ii); and

c) The domain name was registered as a result of a relationship between the Complainant and the Respondent, and the Complainant:

A has been using the domain name registration exclusively; and

B paid for the registration and/or renewal of the domain name registration (paragraph 3.a.v)

7.9 Although the Complaint does not specifically refer to any of the non-exclusive list of factors set out above, it seems to the Expert that it is likely that all three factors identified above are relevant.

7.10 Firstly, in relation to unfair disruption of the Complainant's business, given that FHSC Limited was indeed in administration (rather than liquidation), there was clearly a significant chance that its business (or part of it) would be bought by a third party. In the event, part of the business, including the rights to the Domain Name, appears to have been bought by persons previously associated with running FHSC Limited. The business acquired effectively included any goodwill in the Domain Name and its previously associated website. Therefore, the acquisition and use of the Domain Name for the purposes of linking to the Respondent's website (as a competitor), through the use of a largely unaltered home page (including the name The Christmas Hampers Company) was clearly capable of unfairly disrupting the business of the Complainant, as a successor in business to FHSC Limited.

7.11 Secondly, the way in which the Respondent has actually used the Domain Name appears to be intended deliberately to confuse people into believing that the Domain Name is connected to FHSC Limited's previous business, or that of its successor. The Respondent has hardly changed the wording of the home page at the website. It uses the name "The Christmas Hampers Company" (which is manifestly not its own trading name, and was one in which FHSC Limited previously acquired goodwill). It refers to "continuing development and improvements". The overall impression is one of trying to suggest that the business in question is the same as the one which had previously been found at the website associated with the Domain Name for the previous 5 or 6 years. Any customer returning to the website following a previous purchase, would understandably be likely to be confused.

7.12 Thirdly, although the Respondent's own position is not directly within the wording of paragraph 3.a.v of the Policy, the circumstances in which Mr Smith acquired ownership of the Domain Name appear to have been those which are envisaged under that paragraph. Mr Smith registered the Domain Name as a employee of FHSC Limited, he appears to have been reimbursed for his acquisition of the Domain Name by FHSC Limited, and FHSC Limited used the Domain Name registration exclusively for a period of a number of years. Any claim which the Respondent may make to have acquired the Domain Name legitimately must surely be tainted by the fact that, if the Domain Name had remained registered to Mr Smith, it would have been likely to have been found to have been an Abusive Registration under this head.

7.13 There is also a non-exhaustive list of factors which may be evidence that the Domain Name is not Abusive Registration, set out in paragraph 4.a of the Policy. The Respondent has not specifically referred to any of these. However, having considered them, the Expert does not feel that any are likely to apply.

7.14 In particular, given the Respondent's position as a competitor of the Complainant (and of its predecessor), the Respondent would have been likely to have known of the Complainant's cause for complaint, before using the Domain Name in connection with the offering of his own goods or services (paragraph 4.a.(i)A of the Policy). Similarly, although there may at one stage have been an argument that the Domain Name was possibly generic or descriptive (paragraph 4.a(ii) of the Policy), in the Expert's view, the Respondent could hardly claim to have been unaware of the previous use of the Domain Name, and the acquisition of associated goodwill. In those circumstances, the Respondent could not genuinely claim in 2006 when he acquired the Domain Name that it remained generic or descriptive, nor that he was "making fair use of it" given what appears to have been a deliberate attempt to trade upon the reputation previously built up by The Christmas Hampers Company.

7.15 In the circumstances, the Expert finds that the Domain Name, in the hands of the Respondent, is an Abusive Registration. Therefore, the Complaint succeeds.

8. Decision

8.1 The Expert finds that the Complainant has Rights in the name or mark hamperco.co.uk, which is identical to the Domain Name. The Expert further finds that the Domain Name, in the hands of the Respondent, is an Abusive Registration.

8.2 The Expert therefore decides that the Domain Name should be transferred to the Complainant.

Bob Elliott

29 March 2007