Nominet UK Dispute Resolution Service

DRS 05477

Adrian Slatter and Searchmate UK Limited v. Russell Leach

Decision of Independent Expert

1.	Parties

Complainant 1:	Adrian Slatter

Country:	GB

Complainant 2:	Searchmate UK Limited

Country:	GB

Respondent:	Russell Leach

Country:	GB

2.	Domain Name

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

3.	Procedural Background

The Complaint was submitted to Nominet on 20 February 2008.  Hardcopies were received in full on 25 February 2008 and on the same date the Complaint was validated by Nominet and sent to the Respondent (1) by post; (2) by email to postmaster@[the Domain Name] and info@[the Domain Name]; and (3) by facsimile transmission to a fax number for the Respondent listed in Nominet's register database - the relative receipt indicated successful transmission.  The Respondent was informed in this correspondence that he had 15 working days, that is, until 18 March 2008 to file a response to the Complaint.   On 29 February 2008 the postal copy of the Complaint was returned to Nominet by the post office marked "Not at 15 Wheeler Gate.  Return to Sender 26/02/2008".

The Respondent did not file a response and the case did not proceed to the mediation stage.  On 26 March 2008, the Complainants paid the fee for referral of the matter for an expert decision pursuant to paragraph 8 of Nominet's Procedure for the conduct of proceedings under the Dispute Resolution Service Version 2 ("the Procedure") and paragraph 7 of the corresponding Dispute Resolution Service Policy Version 2 ("the Policy").  On 27 March 2008, Andrew D S Lothian, 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 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. Nominet duly appointed the Expert with effect from 2 April 2008.

4.	Outstanding Formal/Procedural Issues

No response

The Respondent has failed to submit a response to Nominet in time in accordance with paragraph 5(a) of the Procedure.  The Expert is satisfied that Nominet provided the Respondent with suitable notice of the Complaint in accordance with paragraph 2 of the Procedure, notwithstanding the return of the original letter by the postal service.  In particular, it is clear from the fax copy receipt that Nominet's fax message was successfully received by the machine at the fax number listed for the Respondent in Nominet's database.

Paragraph 15(b) of the Procedure provides inter alia that "If, in the absence of exceptional circumstances, a Party does not comply with any time period laid down in the Policy or this Procedure, the Expert will proceed to a Decision on the complaint."

Paragraph 15(c) of the Procedure provides that "If, in the absence of exceptional circumstances, a Party does not comply with any provision in the Policy or this Procedure or any request by us or the Expert, the Expert will draw such inferences from the Party's non compliance as he or she considers appropriate." 

In the view of the Expert, if the Respondent does not submit a Response the principal inference that can be drawn is that the Respondent has simply not availed himself of the opportunity to attempt to demonstrate that the Domain Name is not an Abusive Registration.  This does not affect the primary requirement upon the Complainants, on whom the burden of proof rests, to demonstrate Abusive Registration, nor does it in the Expert's view entitle an expert to accept as fact all uncontradicted assertions of a Complainant, irrespective of their merit.

The proper party complainant

The case as provided to the Expert listed the Complainant merely as 'Searchmate UK' with a  contact name of 'Mr Adrian Slatter'.  It will be evident from the facts noted below that the case has a rather complicated history involving two corporate entities and two individuals one of whom, Mr Slatter, is the proprietor of a relevant registered trade mark.  Having considered all the facts and circumstances, the Expert notes that the term 'Searchmate UK' encompasses both Mr Slatter (being the business, brand and trading name of an introductions/dating agency purchased by Mr Slatter in or around May 2005) and his more recently incorporated company, Searchmate UK Limited which now operates the agency and in which are vested certain related rights following a court action.  Both Mr Slatter and his company have interests which are relied upon in the Complaint and which seem to the Expert to be aligned in this case.  Consequently these two parties should really have been listed as joint complainants.  This is, however, a rather narrow legalistic point and it is evident that the first Complainant is not legally represented in this case.  Accordingly, given that Mr Slatter clearly controls Searchmate UK Limited and evidently speaks for both it and himself in the Complaint, the Expert determines that both Searchmate UK Limited and Mr Slatter should be treated as joint complainants.

5.	The Facts

The Complainants have traded under the name 'Searchmate' as an introduction/dating agency since May 2005.  The history, so far as evident from the Complaint, appears to be as follows:-

The Domain Name was registered in the personal name of the Respondent on 1 June 2000.

On 22 May 2005 the first Complainant, Mr Adrian Slatter, entered into a Master Franchise Sale Agreement with a company named Searchmate International Limited whereby, in consideration of £30,000 plus VAT together with an additional monthly fee of £500 payable to the Respondent (therein described as the Chairman of Searchmate International Limited), Mr Slatter was to receive exclusive use of and goodwill inherent in the Searchmate brand name together with "the rights to the company Website" and "all other unspecified Intellectual Property and Know-how".

From 22 May 2005, in accordance with the Master Franchise Sale Agreement, Mr Slatter took over the Searchmate introduction/dating agency business and used the Domain Name for the relative commercial website and email addresses.

On 26 March 2007 Searchmate International Limited was dissolved.  On 6 December 2007, upon the application of Mr Slatter, a Vesting Order was granted by the English High Court as follows:-

…all of the property previously owned by Searchmate International Limited both real and intellectual as set out in the Agreement dated the 22nd May 2005 between Searchmate International Limited and Adrian Slatter be and is hereby vested in Searchmate UK Limited for all the estate and interest therein which immediately prior to its dissolution were vested in Searchmate International Limited.

Searchmate UK Limited, the recipient of the property under the Vesting Order and the second Complainant in this dispute, is a new company set up and controlled by Mr Slatter.  This entity now appears to be Mr Slatter's trading vehicle for the Searchmate branded introduction/dating agency.

Mr Slatter is the proprietor of UK registered trade mark no. 2441308 filed on 12 December 2006 and registered on 15 June 2007 for a series of six marks, namely:-

SEARCHMATE;
SEARCH MATE;
SearchMate;
Search Mate;
searchmate; and
search mate

in classes 16 (printed material); 41 (educational/seminars etc. including online publications) and 45 (personal introduction agency services etc.).

At the date of this Decision, the website associated with the Domain Name was a website operated by the second Complainant for the Searchmate branded introduction/dating agency.  Accordingly, it is the second Complainant which evidently has de facto control and continues to make use of the Domain Name both for web and email purposes.  

6.	The Parties’ Contentions

Complainants

In summary, the Complainants' contentions are as follows:-

Rights

The first Complainant was assigned rights to the name, domain name and website in the Agreement of 22nd May 2005.   The Complainants trade in an introduction/dating agency service under the name Searchmate and have done so since that date, using the Domain Name for web and email.  The Complainants have spent about £48,000 on advertising under the name Searchmate.  The first Complainant also asserts rights in its registered trade mark described at section 5 above for the series of six SEARCHMATE variants.  Finally, the second Complainant claims rights via the vesting order described at section 5 above.

Abusive Registration

The Complainants assert that the Domain Name is an Abusive Registration because (1) it should have been transferred in terms of the Agreement of 22 May 2005; (2) it is in the hands of a competitor given that the Respondent is now involved in an alternative agency named TopMatch and (3) the Respondent's contact details are incorrect in that the Respondent has not resided at the address on the WHOIS since May 2005.

Respondent

The Respondent has not filed a response. 

7.	Discussion and Findings:

General

In terms of paragraph 2(b) of the Policy the primary onus is on the Complainants to prove to the Expert on balance of probabilities each of the two elements set out in paragraph 2(a) of the Policy, namely that:

(i) The Complainants have 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.

Complainants' Rights

Paragraph 1 of the Policy provides that Rights "includes, but is not limited to, rights enforceable under English law.  However, a Complainant will be unable to rely on rights in a name or term which is wholly descriptive of the Complainant's business".  Accordingly there are three questions to consider - (1) whether the Complainants have Rights in the name or mark; (2) if the Complainants do have Rights, whether the name or term in which they have these is wholly descriptive of their business; (3) if not wholly descriptive, whether the name or mark is identical or similar to the Domain Name.

The requirement to demonstrate Rights under the Policy is not a particularly high threshold test.  Under English Law, rights may be established in a name or mark by way of a trade mark registered in an appropriate territory, or unregistered rights such as the entitlement to bring a claim for passing off to protect goodwill inherent in any such name or mark.  

Complainants' Rights in the mark SEARCHMATE

The first Complainant is the proprietor of a UK registered trade mark in respect of the word SEARCHMATE (a series of six marks all of which are variations on that term) as set out in the facts at section 5. above.  In the Expert's view this is sufficient for the first Complainant to establish Rights in the name or mark SEARCHMATE under the Policy.  The Complainants also claim contractual rights by virtue of the Agreement of May 2005, common law rights arising from the trading history since that date and rights in terms of the Vesting Order but given the existence of the registered trade mark the Expert takes the view that it is not necessary to consider these others for the purposes of the determination of Rights under the Policy.

The second question for the Expert is whether the mark is wholly descriptive of the Complainants' business, namely the operation of an introductions/dating service.  In the Expert's view the mark SEARCHMATE is not wholly descriptive of such services.

The remaining question therefore is whether the mark is identical or similar to the corresponding domain name.  The first (.uk) and second (.co) levels of the Domain Name can be disregarded as being wholly generic.  The Expert is then left with a comparison between the mark SEARCHMATE and the third level part of the Domain Name 'searchmate'.    In these circumstances, the Expert finds that the mark SEARCHMATE is identical to the Domain Name.

Abusive Registration

Is the Domain Name, in the hands of the Respondent, an Abusive Registration? 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."

A non-exhaustive list of factors which may constitute evidence of Abusive Registration is set out in paragraph 3 of the Policy.  

The Complainants' submissions focus primarily upon the contract between the first Complainant and the Respondent's company of 22 May 2005 in terms of which the Complainants assert that the Domain Name should have been transferred from the Respondent to the first Complainant.  In light of the Decision of Appeal Panel in David Munro v Celtic.com, Inc. DRS 04632, it is clear that experts should be extremely cautious when such issues are raised by a party to a dispute under the Policy, particularly where the expert is being asked to give effect to one or more contractual provisions.  The Appeal Panel in that case stated:-

The members of the Panel consider that the parties in this case may well have entered into a contract in respect of the Domain Name so that in refusing to transfer the Domain Name to the Complainant the Respondent is in breach of contract. But the members of the Panel each recognise that they were not appointed as experts in the law of contract. This Panel happens to comprise three experienced Intellectual Property lawyers. Their experience outside that specialist field is variable. A significant minority of the body of Experts are not lawyers at all.

Although it may be said that at first sight the contractual issues in the case are apparently straightforward, the dispute between the Complainant and the Respondent has raised a number of contested legal issues. These concern questions such as jurisdiction, was a binding and enforceable contract entered into, where was any contract made, what is the proper law of the contract, what are the terms of any contract, and what statutory provisions might govern the enforceability of the contract.

The members of the Panel are not in a position to come to a clear view on the contractual issues. The Panel is well aware that other Experts will be at least as uncomfortable on the topic. Had Nominet contemplated that pure, possibly complex, contractual disputes would fall to be resolved under the Policy, its system for selecting and appointing Experts to cases would have been very different and the procedure for dealing with the disputes more comprehensive than the simple paper-based system it is.

Ultimately, the Appeal Panel determined that 'pure contractual disputes' (such as where the complainant is effectively seeking specific performance of a contract to transfer a domain name) are beyond the scope of the Policy.  Nevertheless, the Panel went on to distinguish a number of previous cases under the Policy which contained contractual issues, including cases where the disputed domain name had been registered by the respondent on behalf of the complainant.  

One of the distinguished cases, Delecto Gifts Limited v Alasdair MacPherson, DRS 4376, has facts which are somewhat similar to the present case.  In that case, the complainant bought certain assets from a company in administration apparently including the disputed domain name as part of the intellectual property, together with the rights in the relative website.  However, the disputed domain name had been registered in the personal name of an employee of the vendor and rather than being transferred to the complainant, it was ultimately transferred by that employee to a third party who was a competitor of the complainant.  The expert in that case found that the disputed domain name was indeed an Abusive Registration on a number of different grounds, the most relevant of which, to the present case, is paragraph 3(a)(v) of the Policy.

Paragraph 3(a)(v) of the Policy contains a non-exhaustive factor which may be evidence that a domain name is an Abusive Registration where:-

"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."

In the present case, the Domain Name was registered in June 2000, not as a result of any relationship between the Complainants and the Respondent but most probably in connection with a relationship or proposed relationship between the Respondent and the now-dissolved Searchmate International Limited, a company of which, according to the Master Franchise Sale Agreement, the Respondent was Chairman.  It is probable in the Expert's view that Searchmate International Limited (as the Respondent's trading vehicle for the Searchmate introduction/dating service) used the Domain Name exclusively until the first Complainant took over the operation of the business in May 2005.  As such, Searchmate International Limited may well have paid for the renewal of the Domain Name in 2002 and 2004, albeit that there is no direct evidence as to who made these payments and one could not reasonably expect the Complainants to have this information.  

The assets of Searchmate International Limited pertaining to the introduction/dating business are now vested in the second Complainant, by virtue of the first Complainant's action in the English High Court.  The Complainants have, between them, exclusively operated the business and website connected with the Domain Name since May 2005.  Although the Complainants do not say so expressly, it seems likely to the Expert, and indeed probable, that the first Complainant paid for the renewal of the Domain Name in June 2006.  Clearly the circumstances are not identical to the provisions of paragraph 3(a)(v) of the Policy.  However, as with the case of Delecto Gifts Limited, the facts in the present case are very close to those envisaged.  

Turning briefly to the situation of the Respondent, it is clear from the evidence of the Complainants that the Respondent has moved on to other things. The Complainants note that the Respondent has now in fact become a competitor of theirs.  Indeed, the Respondent expressly refers to the Complainants' business on the Respondent's new website in the following terms:-

The TopMatch business model has been developed over the past five years during the previous ownership and development of another Introductions Franchise network (SearchMate - with Franchise Areas still operating throughout the UK). 

Unlike Delecto Gifts Limited, in the present case the Respondent does not currently operate the Domain Name in competition with the Complainants because the Domain Name is being used by the Complainants and de facto technical control remains with them.  The Respondent does not appear or purport to have any ongoing interest in the Domain Name (particularly bearing in mind his use of the expression 'previous ownership and development' regarding the Searchmate business).  Were there any such interest, it would be reasonable for the Respondent to have provided a response in the present case.  In the absence of such a response, the Expert considers that the circumstances are sufficiently close to those envisaged in paragraph 3(a)(v) to entitle the Expert to find on balance of probabilities that the Domain Name, in the hands of the Respondent, is an Abusive Registration.  

It is worth adding that the submissions of the Complainants regarding incorrect contact details do not, in the Expert's view, entitle the Complainants to a finding of Abusive Registration on the grounds of paragraph 3(a)(iv), namely where it is independently verified that the Respondent has given false contact details to Nominet.  The fact that the Respondent's contact details are incorrect may amount to a breach of his contract with Nominet but that is not particularly relevant to this dispute.  In the Expert's view it is merely yet another indication of the fact that the Respondent has no particular interest in the Domain Name in that the contact details which he has supplied to Nominet evidently date back to before May 2005.  This is not, however, a situation where the Respondent has given contact details which were false, as the materials produced by the Complainants indicate clearly that the details were originally correct.

8.	Decision

The Expert finds that the Complainants have proved that they have Rights in a mark 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 directs that the Domain Name be transferred to the first Complainant.

Andrew D S Lothian

7 April 2008