Nominet UK Dispute Resolution Service
DRS 02752
Apollo Electronics Group Limited v Pritesh Patel/CMC Trading Ltd
Decision of Independent Expert
Complainant: Apollo Electronics Group Limited
Country: Hong Kong
Respondent: Pritesh Patel/CMC Trading Ltd
Country Great Britain
next-base.co.uk ("the Domain Name")
The Complaint was lodged with Nominet on 27 June 2005. Nominet validated the Complaint and informed the Respondent on 1 July 2005 that the Dispute Resolution Service ("DRS") had been invoked and that the Respondent had 15 working days to submit a Response. A Response was received on 12 July 2005 and a copy was sent to the Complainant on 12 July 2005. The Complainant filed a Reply on 18 July 2005. The informal mediation stage did not result in a resolution and the parties were informed accordingly. On 31 August 2005, the Complainant paid Nominet the appropriate fee for a decision of an expert pursuant to paragraph 7 of the Nominet DRS Policy Version 2 ("the Policy").
On 7 September 2005 Nominet appointed Andrew Clinton ("the Expert"). The Expert has confirmed to Nominet that he knows of no reason why he could not properly accept the invitation to act as expert in this case, and further confirmed that he knows 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.
None.
The Domain Name was registered on 8 April 2004 in the name of Pritesh Patel. The Complaint identifies the Respondent as Pritesh Patel. The Response identifies the Respondent as CMC Trading Limited and identifies Pritesh Patel as the Contact. The Response is signed by Pritesh Patel. The Expert has included both Pritesh Patel and CMC Trading Limited as the Respondent.
Complainant
The Complaint, so far as is material, is as follows:-
1. The Complainant, Apollo Electronics Group Limited is a famous and leading Hong Kong designer and manufacturer of electronic equipments and AV products bearing the distinctive trade mark "NEXT BASE" ["Trade Mark"]. The copy certificate of incorporation of the Complainant is exhibited at Exhibit "A". 2. The Trade Mark is originally devised by Mr. Chen Kuo Hsiung of the Complainant. 3. The Complainant's Trade Mark is registered in the European Community on 24 February 2005 under Registration No.003311966 in Class 9 in respect of "digital video equipment for studio use; digital video apparatus for television use; remote control apparatus; sounding apparatus and machines; all included in Class 9". The Trade Mark is also registered in Hong Kong, Switzerland and Taiwan in Class 9 in respect of the same goods as in the said European Community trade mark registration. In addition, there are pending applications for the Trade Mark in Class 9 in the Philippines, Malaysia, U.S.A., U.A.E., Norway and Chile which are expected to become registered in due course. The said trade mark registrations and applications of the Trade Mark are evidenced by the enclosed copy registration certificates, trade mark printouts and/or official filing receipts exhibited at Exhibit "B". 4. The Complainant has used the Trade Mark in respect of the good "DVD players" in its home country, Hong Kong since 2001 and the Trade Mark has been continuously and extensively used ever since. Goods bearing the Trade Mark have been sold and marketed and extensively advertised in several countries including but not limited to the United Kingdom, Sweden, Norway, Switzerland, Italy, the Netherlands, Denmark, France, Belgium, Spain, German, Hungary and Chile. Copies of the Complainant's pamphlets and catalogues are exhibited at Exhibit "C". 5. The date of first use of the Trade Mark on the Complainant's products and sales turnover thereof in 2004 in the European Countries are as follows:- Country Sales Turnover 2004 First Use a. United Kingdom HK$40 millions late 2003 b. Sweden HK$20 millions late 2003 c. Norway HK$35 millions late 2003 d. Switzerland HK$2 millions early 2004 e. Italy HK$3.5 millions early 2004 f. The Netherlands HK$35 millions late 2003 g. Denmark HK$1 million early 2004 h. France HK$8 millions late 2003 i. Belgium HK$10 millions late 2003 j. Spain HK$5 millions mid 2004 k. Germany HK$21.2 millions early 2004 l. Hungary HK$1.4 millions mid 2004 The above are evidenced by the copy invoices exhibited at Exhibit "D". 6. The Complainant has been continuously and extensively promoting the Trade Mark by organizing booths in trade fairs such as Hong Kong Electronics Fair, Consumer Electronics Show in Las Vegas, U.S.A., CEBIT Show in Hanover, Germany, IFA Show in Berlin, Germany and Electronics & Components China Sourcing Fair in Shanghai, China and distributing the pamphlets, catalogues and promotional materials as referred to at Exhibit "C" above in the said trade fairs. The Complainant also advertises the Trade Mark on the Internet through the website, www.next-base.com. Copy relevant pages of the website are exhibited at the Exhibit "E". Through extensive promotion of the Trade Mark, it has through years been associated exclusively to the trade and the public as the mark of the Complainant. 7. The Domain Name in dispute, i.e. www.next-base.co.uk ["Domain Name"] incorporates the Complainant's Trade Mark. In light of the aforesaid, the Complainant confirms that it should have the rights in the Domain Name. 8. The Complainant submits that the Domain Name in the hands of the Respondent is an abusive registration in that the registration of the Domain Name by the Respondent would unfairly prejudice the business interests of the Complainant. 9. The Complainant and the Respondent are not related to each other and have no business relationship. The Respondent without the Complainant's authority registered the Domain Name which incorporates the Trade Mark. 10. The Respondent has been selling and/or offering for sale the Complainant's Portable DVD players bearing the Trade Mark in the Domain Name such as Model Nos.SDV37-A, SDV37-S, SDV185-A, SDV756-B, SDV77-B. Copy relevant pages of the Domain Name are exhibited at the Exhibit "F". When you compare the pictures in the Domain Name and the Complainant's promotional materials in Exhibit "C", you may note that the Respondent is using the pictures depicted in the Complainant's promotional materials in the Domain Name. 11. In light of paragraph 10, the use of the Domain Name by the Respondent is likely to deceive the public that the Domain Name was controlled by and/or has some connection with the Complainant, especially the products for sales in the Domain Name are indeed the Complainant's products bearing the Complainant's Trade Mark. The Domain Name was registered by the Respondent in bad faith, as the Respondent is trying to ride on the goodwill and reputation established by the Complainant in its electronic and AV products and the Trade Mark. 12. In the circumstances, the Complainant respectfully submits that the Respondent be ordered to transfer the Domain Name to the Complainant.
Remedies Requested
Transferred
Respondent
The Response, so far as is material, is as follows:-
We did not intend to portray our self as Next Base our site clearly shows we are CMC TECH we do sell Next Base products but also sell other company products. We have never been asked by anyone at Apollo to stop using the domain name despite regular contact with Mr Lawrence Chang of Apollo including a face to face meeting with Mr Chang last August in London UK. Mr Chang as a senior member of Apollo Worldwide has my personal mobile number and email address as well as my office numbers and office email addresses and despite regular contact has never asked me to stop using the domain. We have with immediate effect stopped using the domain and will give you our written assurance that from this date we will not use the domain to point to any web site again. If Apollo wishes they may make us an offer either in goods or money to purchase the domain from us, if however they do not wish to do this I will keep the domain but not use it as I have already stated.
Reply
The Complainant has lodged a Reply which, so far as is material, is as follows
We respond to the statement "We have never been asked by anyone at Apollo to stop using the domain name despite regular contact with Mr Lawrence Chang of Apollo including a face to face meeting with Mr Chang last August in London UK." in the Response made by the Respondent, CMC TRADING LTD ("CMC"). We submit that a "friend" of the staff of CMC had told Mr Chang during the meeting that CMC would return the domain name "www.next-base.co.uk" to Apollo Hong Kong if Apollo Hong Kong wished so. Mr. Chang did not consider such offer seriously as it came from a "friend" of the staff of CMC only.
General
Under paragraph 2 of the Policy the Complainant has to prove on the balance of probabilities: firstly, that it has Rights in respect of a name or mark which is identical or similar to the Domain Name; and, secondly that the Domain Name, in the hands of the Respondent, is an Abusive Registration.
Complainant's Rights
Rights are defined in the Policy as including, but not limited to, rights enforceable under English law. This is usually demonstrated by reference to a trade mark registration or evidence of active trading using the name or mark in question. The Complainant designs and manufactures a variety of audio visual products, including portable and handy DVD players, which it markets and sells using the brand name NEXT BASE. The Complainant relies upon both its registered and unregistered rights in the mark NEXT BASE. The Complainant has a series of trade mark registrations in various countries including Switzerland, Hong Kong and Taiwan. The Complainant also has the benefit of a Community Trade Mark filed on 13 August 2003 and registered on 24 February 2005.
In addition, the Complainant relies upon common law rights in that it has promoted the brand NEXT BASE through marketing and advertising in many countries, including the UK since late 2003. The Complainant says that its turnover in the UK for 2004 was HK$40m (about £2.6m). Various examples of the pamphlets and catelogues have been provided with the Complaint. The Complainant also has a website at the domain name next-base.com.
The threshold for establishing rights is not particularly high. The Respondent does not seek to challenge the Complainant's assertion that it has Rights in the mark NEXT BASE. Indeed, the Respondent says that it sells Next Base products and presumably that is why it decided to register a domain name that incorporated that mark. The only difference between the mark and the Domain Name is the addition of a hyphen to the Domain Name. This is consistent with the Complainant's own website at the domain name next-base.com. The Expert is satisfied that the Complainant has Rights in respect of the mark NEXT BASE which is similar to the Domain Name (disregarding, for these purposes, the generic domain suffix).
Abusive Registration
Abusive Registration is defined in paragraph 1 of the Policy to mean 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.
Non-exhaustive factors – paragraph 3 of Policy
A non-exhaustive list of factors which may be evidence of an Abusive Registration is set out in paragraph 3a of the Policy is as follows:
(i) Circumstances indicating that the Respondent has registered or otherwise acquired the Domain Name primarily:
A. 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;
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 of that pattern;
(iv) It is independently verified that the Respondent has given false contact details to Nominet; or
(v) 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.
Under paragraph 3b of the Policy failure to use the Domain Name for the purposes of e-mail or a web-site is not in itself evidence that the Domain Name is an Abusive Registration.
It is clear from the wording of the Policy that the list of factors at paragraph 3 is non-exhaustive and that a Complainant can succeed in proving Abusive Registration without the need to prove any of those factors. However, in order to do so it is necessary to prove that the definition of Abusive Registration, as set out in paragraph 1 of the Policy, has been satisfied.
Non-exhaustive factors – paragraph 4 of Policy
There is a list of non-exhaustive factors which may be evidence that the Domain Name is not an Abusive Registration at paragraph 4 of the Policy.
Under paragraph 5(c)(ii) of the Procedure the Response shall include any grounds that the Respondent wishes to rely upon to rebut the Complainant's assertions in the Complaint including any relevant factors set out in paragraph 4 of the Policy.
Discussion and findings regarding Abusive Registration
The Respondent concedes that it sells Next Base products but it says that it also sells other companies' products. The print-out supplied by Nominet as at 1 July 2005 and the print-outs supplied by the Complainant show that the Domain Name pointed to a website headed "CMCTECH" that offered for sale various "car gadgets", including portable DVD players, manufactured by the Complainant. There appears to be a facility that enables a user to "find and compare portable DVD Players" and the products of other companies appear to also be offered for sale.
The Complainant says that there is no business relationship with the Respondent and the registration of its trade mark as a domain name was without its authority. The Complainant claims that the use of the Domain Name is likely to deceive the public into believing that the Domain Name was controlled by and/or has some connection with the Complainant.
This case raises the issue of whether it amounts to an Abusive Registration for a reseller of the goods of a trade mark owner to register a domain name that is identical or similar to the trade mark. Put another way, does the reselling of the trade mark holder's products give rise to a right to use that trade mark as the basis for a domain name.
In the case of Seiko UK Limited v Designer Time/Wanderweb (DRS 00248) the Appeal Panel had to consider similar issues in the context of the domain names seiko-shop.co.uk and spoonwatchshop.co.uk. The Complainant in that case was Seiko UK Limited which owns the trade marks SEIKO and SPOONWATCH. The registrant said that it had only ever used the names as a means of promoting and thereby increasing the sales of Seiko watches and so claimed that the registrations were not abusive.
The Appeal Panel held it was unfair for the registrant to appropriate Seiko's trade marks as a domain name. The Appeal Panel said that if the domain names make, or are liable to be perceived as making, a representation that there is something approved or official about the website that would constitute unfair advantage being taken by the registrant or unfair detriment caused to the trade mark owner.
In this case there is no evidence of actual confusion such that the Complainant can be said to have made out paragraph 3(a)(ii) of the Policy. However, the list of factors at paragraph 3 is non-exhaustive and it can still amount to an Abusive Registration, as long as the definition of Abusive Registration is satisfied.
The Respondent says that it did not intend to portray itself as Next Base, that it was never asked to stop using the Domain Name, that it has with immediate effect stopped using the Domain Name and that it will not use the Domain Name to point to any website again. There is however no explanation as to why the Respondent decided to choose a domain name that incorporated the trade mark of the Complainant. It seems clear, in the absence of any other explanation, that it did so in order to attract internet users who were looking for Next Base products to its website.
The fact that the Respondent was not asked to stop using the Domain Name is not determinative of the issues before the Expert. The Complainant asserts the Domain Name is, in the hands of the Respondent, an Abusive Registration and, if that assertion is made out, it seeks a transfer of the Domain Name. The fact that the website no longer points to the Respondent's website (in fact it now points to the Complainant's website) does not assist the Respondent as the Complaint is put on the basis of the use of Domain Name before the Complainant made its complaint. The Respondent has, in the Response, invited the Complainant to make an offer to purchase the Domain Name in goods or cash.
The Expert is of the opinion that the Domain Name was liable to have been perceived as making a representation that there is something approved or official about the website. The Respondent was using the Complainant's trade mark to attract internet users to its site in the hope of securing sales of those products. It was also offering products from other companies. The Expert is of the opinion that the use of the Domain Name took unfair advantage of or was unfairly detrimental to the Complainant's rights.
The Expert finds on the evidence before him that, on the balance of probabilities, the Domain Name, in the hands of the Respondent, is an Abusive Registration.
The Expert finds, on the balance of probabilities, that the Complainant has rights in a name which is similar to the Domain Name and that the Domain Name, in the hands of the Respondent, is an Abusive Registration. The Expert directs that the Domain Name be
transferred to the Complainant.
Andrew Clinton
21 September 2005