Nominet UK Dispute Resolution Service

 


Nominet UK Dispute Resolution Service

DRS 04213

Blokart International Limited and Mr T Duffin trading as Another Planet

Decision of Independent Expert

1. Parties

Complainant: Blokart International Limited

Country: New Zealand

Respondent: Mr T Duffin trading as Another Planet

Country: Great Britain

2. Domain Name

blokart.co.uk

3. Procedural Background

The Complaint was lodged with Nominet on 20 November 2006. Nominet validated the Complaint and notified the Respondent of the Complaint on 21 November 2006 and informed the Respondent that he had until 13 December 2006 to lodge a response. Nominet received a response from the Respondent on 13 December 2006 and informed the Complainant that it had until 22 December 2006 to lodge a reply. On 20 December 2006 the Respondent informed Nominet that the Complainant had obtained an interim interdict in the Court of Session in Edinburgh in respect of the Domain Name. Nominet informed the parties it was suspending the Dispute Resolution Service ("DRS") in accordance with paragraph 20 of the Dispute Resolution Service Procedure ("the Procedure").

On 18 January 2008 the Complainant informed Nominet that the interim interdict had expired and requested that Nominet continue with the DRS proceedings. On the same day Nominet informed the Complainant that it had until 25 January 2008 to reply to the Respondent's response. Nominet received a reply from the Complainant on 23 January 2008. Nominet initiated it mediation procedure but, on 18 March 2008, it informed the parties that they had not been able to resolve the dispute in mediation and invited the Complainant to pay the fee to obtain an Expert Decision by 3 April 2008. On 2 April 2008 the Complainant paid Nominet the appropriate fee for a decision of an Expert pursuant to paragraph 7 of the Nominet UK Dispute Resolution Service Policy ("the Policy").

On 7 April 2008 the undersigned David King ("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 further confirmed that he knew of no matters which ought to be brought to the attention of the parties which might appear to call into question his independence and/or impartiality. Nominet appointed the Expert in this matter on 9 April 2008.

4. Outstanding Formal/Procedural Issues (if any)

Following the appointment of the Expert, both parties informed Nominet that they wished to submit further statements in accordance with paragraph 13b of the Procedure. The Expert did not consider that there was an exceptional need for the statements to be considered and, therefore, did not request the statements. The Expert did, however, consider that he needed to see a copy of the judgment of the Court in the interim interdict proceedings and he asked Nominet to obtain a copy from the Complainant, which sent Nominet copies of the Summons, Pleadings and the Court Order issued on 21 December 2006. Copies of these documents were already included in Nominet's file supplied to the Expert in 9 April 2008.

Ultimately, on 13 June 2008, Nominet informed the Expert that the Complainant had provided an e-mail from the Complainant's solicitors confirming that there was no transcript of the Judgment as the Court does not produce transcripts of interim interdict proceedings. With the e-mail the solicitors provided copies of the Summons and Pleadings (already seen by the Expert) and the solicitors' own notes of the hearing. The Expert agreed to see the notes, to which he will refer in paragraph 7 below.

The Expert is satisfied that he now has sufficient information to proceed with this decision.

5. The Facts

The Complainant is a company based in New Zealand which sells products relating to outdoor activities including the Blokart landsailor, which is a three-wheeled land-based vehicle with a sail.

The Complainant owns the following CTM registrations: Trade mark number 001998657 for the name "blo.kart" and a stylised version of the name and Trade mark number 003238755 for the name "BLOKART".

The Complainant owns a web-site at www.blokart.com.

The Respondent, who trades as Another Planet, is based in Edinburgh. He also sells products relating to outdoor activities including paragliding and kites.

The Respondent registered the Domain Name on 28 November 2000 shortly after his return from his honeymoon in New Zealand when he purchased a Blokart landsailor from the Complainant. In April 2001 the Complainant appointed the Respondent as its UK distributor for the Blokart landsailor. The Complainant terminated this arrangement in early 2005.

The Respondent also owns a company "X-Sail Limited" which sells a landsailor called the "X-Sail".

6. The Parties' Contentions

Complainant

The Complaint can be summarised as follows:

The Complainant has rights in the name "blokart" because it has registered trademarks in the European Union and numerous countries in "blokart" and the stylised version of the name and the "b" logo associated with it. The mark was first registered by the Complainant in New Zealand in early 2000. The first public use of the name was in June 2000. "Blokart" is the name of the Complainant's product and the "about us" section of the Domain Name web-site refers directly to the Complainant based in Taurangua New Zealand. The Complainant's entire marketing budget is spent promoting the name and brand "blokart". The Respondent has, in the past, acknowledged the Complainant's rights to the Domain Name.

While on honeymoon in New Zealand in November 2000, the Respondent purchased a Blokart and he expressed interest in retailing and distribution the product in the UK. When he registered the Domain Name, this was questioned by the Complainant and the Respondent agreed to transfer it to the Complainant but that never happened. Over the next few years the Complainant and the Respondent developed a reasonable working relationship and transfer of the Domain Name was not an urgent priority. From 2001 to 2004, things went well and the Complainant won two major European design awards. The Complainant's staff made numerous visits to the Respondent in Scotland and had a meeting with him in Germany.

Over time, the working relationship was not ideal and eventually the Complainant stopped supplying products to the Respondent, although the Respondent was still able to purchase products through a distributor. At this point the Complainant requested transfer of the Domain Name but the Respondent said that he would only do so for about 80,000 New Zealand dollars worth of stock, which was not acceptable to the Complainant. The Respondent continued to retail the Complainant's products, buying through the European distributor.

In late 2006, the Complainant became aware that the Respondent had copied the blokart design and was using the Domain Name's e-mail address to market the copied product "X-Sail".

The Respondent's registration of the Domain Name is Abusive because, once the Complainant stopped supplying the Respondent direct and requested the transfer of the Domain Name, the Respondent asked for about 80,000 New Zealand dollars worth of stock. All correspondence regarding the Respondent's X-Sail product came from the Domain Name's e-mail address, which is potentially very confusing to customers looking for the Complainant's products as indicated in several e-mails attached to the Complaint. One of the e-mails is to a Blokart user group offering a new stainless steel model for £997 for a limited time with replies to be made to the Domain Name's e-mail address. The Respondent is trying to pass off the X-Sail as a Blokart. He is using the Domain Name's e-mail address to contact names on the Complainant's data base of customers and making false statements in an attempt to promote the X-Sail. In early November 2006, the Respondent offered to sell the Domain Name to the Complainant's European distributor for £25,000.

The Expert has perused all the documentation, which the Complainant has supplied in support of its contentions.

Respondent

The Respondent's response can be summarised as follows:

The Respondent registered the Domain Name three days before the Complainant filed the first of its trademarks in the UK. Shortly afterwards, he offered to transfer the Domain Name to the Complainant, which did not take up the offer. Subsequently he used the Domain Name to promote blokart and other products for nearly six years and the content of the web-site was approved by the Complainant.

All the Respondent's marketing advertising and PR efforts were directed towards the name blokart and some £175,000 has been spent on promoting the name. Although the Respondent is no longer the sole UK distributor the name is still the focus for a profitable business with a great of goodwill attached to it and generated by the Respondent's efforts and not by the Complainant's brand and certainly not by the Complainant's expenditure. The Complainant promotes a different domain name. To be offered transfer of a domain name which has never been used as a web-site is very different from demanding transfer of the name once a successful business has been set up by using and promoting it.

The Respondent has made strong working relationships with customers who expect to communicate using the name and e-mail address associated with it. Although the Respondent sells similar alternative products, those products have never been referred to on the Domain Name web-site and there have been no links to sites selling them. The Respondent has not used the goodwill of the blokart brand to market the X-Sail; he simply reserves the right to sell a range of products to his customers.

As regards communications with a smartgroup forum, one of which is owned by the Respondent, if he was attempting to capitalise on the goodwill of the Complainant's brand, he would have made a similar communication with the other five smartgroups in New Zealand, Australia, Europe, the United States and Ireland, of which he is a member. He simply felt entitled to communicate with groups with whom he had built up a relationship using his own resources. All smartgroup services ended on 30 November 2006 and are no longer available.

The accusation of passing off is spurious and provides the Complainant with an excuse for non-competitive behaviour and bullying tactics. The X-Sail can be seen at www.x-sail.com which has never referred to any of the Complainant's products. It is not a copy of the Complainant's product and customers are left in no doubt as to the differing origins of the Respondent's products.

The Complainant instructed its European distributor, Bbizz, to stop supplying Blokart equipment to the Respondent because he was selling a competing product. This is breach of Competition Law and, when he notified Bbizz of advice obtained from the Office of Fair Trading, Bbizz agreed to recommence supplying to him.

Loss of the UK distributorship at short notice left the Respondent in a difficult position as he had committed to a marketing drive that year and he argued for a longer period but this was ignored. In fact the Complainant has not reached an agreement with any other UK agent.

The Respondent approached Bbizz to mediate in the dispute with the Complainant. The approach was not an offer to sell the name for £25,000 but was an attempt to make it clear to the Complainant that the loss of the Domain Name would constitute a considerable material loss to the Respondent and a considerable gain to the recipient. It was not the barefaced profiteering suggested in the Complaint.

The Respondent has used or made demonstrable preparations to use the Domain Name or a similar name in connection with a genuine offering of goods or services for six years with the knowledge of the Complainant.

The Respondent's business has been commonly known by the name or legitimately connected with a mark which is identical or similar to the Domain Name and remains as sellers of blokart products and cannot be refused supply on the basis of supplying a competing product.

The Respondent has made legitimate non-commercial or fair use of the Domain Name and continues to do so.

The Expert has perused all the documentation which the Respondent has supplied with his response.

Complainant

The Complainant's reply to the Respondent's response can be summarised as follows:

It is not true that the Complainant did not take up the Respondent's offer to transfer the Domain Name. The offer was made and accepted but not acted upon.

The Complainant questions the Respondent's claim to have spent £175,000 promoting the Complainant's products.

The Domain Name did have links to other web-sites but not direct promotion of the products on the Domain Name web-site.

When customers go to any Blokart domain name including the Domain Name, they are looking specifically for Blokart products not for the people controlling the web-site and the reputation that they may or may not have.

Although there has been no mention of the X-Sail specifically on the web-site the Respondent has used the Domain Name e-mail addresses of info@blokart.co.uk and sales@blokart.co.uk not only to market the X-Sail but also to extend bad faith in the Blokart brand. The main point of contact encouraged on the Domain Name web-site is a telephone number and, when this number is called, staff are quick to point out that they no longer carry Blokart products and offer the X-Sail instead.

Although the smartgroup service is no longer available, there was a clear attempt to mislead customers by mentioning a "new Model" on a "Blokart user group" with the e-mail contact linked to a blokart.co.uk address. It appeared that this "new Model" was of Blokart production but it was in fact an X-Sail product.

The Respondent denies that the X-Sail is a copy of the Complainant's product but the Complainant has attached a copy of the user manual for the X-Sail on which is highlighted text directly taken from the Complainant's user manual. It is obvious from the web-sites for the X-Sail and the blokart that the two products are similar. The attached statutory declaration made by a customer refers to a telephone conversation with member of the Respondent's staff, who said that an X-Sail "is the same as a Blokart". The Court did not believe that the passing off allegation was spurious when it issued the interim injunction.

As regards Bbizz, the Complainant is not in a position to instruct distributors who they may or may not supply. Bbizz recommenced supplying the Respondent as a result of threatening and bullying tactics from the Respondent until it was confirmed that they and a newly appointed sub-distributor in the UK had no obligation to supply the Respondent. It is the Complainant's brand and good name the Complainant wishes to protect and the Complainant does not wish to have people looking for its products and finding imitations.

As regards the Respondent's submissions about his use of the Domain Name, the Complainant refers to the evidence referred to in the Complaint and the statutory declaration referred to above. Genuine Blokart products are not being offered through the use of the Domain Name. In all dealings with the Respondent he was commonly known as "Another Planet" or "Blozone", never blokart and they are no longer authorised resellers. The Complainant does not consider the Respondent's use of the Domain Name as fair or legitimate.

In conclusion, the offer to transfer the Domain Name was made, accepted and never delivered upon. The Complainant has no wish to separate the Respondent from his legitimate clients but is seeking the Domain Name to ensure customers looking for a Blokart product do indeed find Blokart and not X-Sail as offered in bad faith by following the contact details currently on the Domain Name web-site. In terms of competition law, the Complainant's actions have been legal and no action has been taken by the Respondent.

The Expert has perused all the documentation which the Complainant has supplied with its reply to the Respondent's response.

7. Discussion and Findings:

General

Paragraph 2 of Nominet's Dispute Resolution Policy ("the Policy") requires that, to succeed, the Complainant must prove to the Expert, on the balance of probabilities, both that the Complainant has Rights in respect of a name or mark which is identical or similar to the Domain Name and that the Domain Name, in the hands of the Respondent, is an Abusive Registration as defined in paragraph 1 of the Policy.

Complainants' Rights

Although the Complainant has not provided any details of its trade mark registration in New Zealand in early 2000, the Expert is satisfied that the Complainant has Rights in the name BLOKART by virtue of its registered Community Trade Marks. The Expert is also satisfied that the Complainant has established substantial goodwill in the name. The Domain Name is almost identical to the Complainant's trading name.

The Expert finds that, for the purposes of the Policy, the Complainant has Rights in respect of a name or mark which is similar to the Domain Name.

Abusive Registration

This is an unusual DRS case as it was suspended between December 2006 and January 2008 as a result of the Court proceedings in Edinburgh. Before considering the issue of "Abusive Registration" under the Policy, the Expert wishes to comment on the Court proceedings.

As mentioned above the Expert has had sight of the Summons, Pleadings, the Court Order and the notes of the hearing prepared by the Complainant's solicitors. The notes of the hearing are 14 pages long and give a detailed account of the proceedings and the Judgment which was delivered by Lord Emslie on 21 December 2006. The Expert has no reason to doubt that the notes give an accurate account of the proceedings and the Judgment.

Essentially, the Complainant applied for an interim interdict (in other words an interim injunction) against the Respondent trading as Another Planet and his company X-Sail Limited (together referred to as "the Defenders") 1. from infringing the Complainant's Community Trade Mark rights 2. for an order under Section 16 of the Trade Marks Act 1994 for delivery of any infringing goods to the Complainant 3. from passing off goods and services as those of the Complainant 4. for an order to transfer the Domain Name to the Complainant.

The notes of the hearing indicate that Lord Emslie was satisfied that the Complainant had clearly made out a prima facie case of Trade Mark infringement and infringement of its intellectual property rights. They also indicate that nothing the Respondent had said during the hearing could be seen as negating the Complainant's prima facie case of passing-off and Trade Mark infringement.

Lord Emslie made interim orders in respect of the Complainant's first and third applications subject to the following exclusions: i) any activities subsequently authorised in writing by the Complainant ii) any activities directly concerned with the sale or supply by the Defenders of genuine Blokart products legitimately in their possession iii) provided it was used for that latter purpose only, the maintenance of the Domain Name web-site. Lord Emslie did not make an order in respect of the Complainant's second application as he considered that the above orders gave the Complainant all it needed; nor did Lord Emslie order the transfer of the Domain Name as the Respondent believed that he had a legitimate commercial interest. Lord Emslie stressed that these were interim measures only and were ordered on the strength of the limited information before the Court where the final outcome remained uncertain. He said that it was open to either party to seek to have the Orders reviewed on a change of circumstances. The Expert notes that that will still be the case following the issue of this decision.

The Court's Orders expired in December 2007 and there has been no indication from either of the parties that further applications have been or are likely to be made to the Court for a final outcome of the case. It is, therefore, now necessary to decide whether the Respondent's use of the Domain Name is Abusive within the terms of the Policy.

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 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 be evidence that the Domain Name is an Abusive Registration, is set out in paragraph 3 of the Policy.

The Complainant contends that the Respondent has used the Domain Name in a way which has confused and potentially is confusing customers who are looking for the Complainant's products. Under paragraph 3 a ii of the Policy, there may be evidence of Abusive Registration if there are 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. The Complainant has provided evidence of actual confusion having occurred. Customers in the UK looking for the Complainant's web-site are likely to access the Domain Name. The potential for confusion is obvious.

The Complainant has also provided evidence that the Respondent has used the e-mail address of the Domain Name to promote the X-Sail when he could have used other e-mail addresses. As mentioned above, Lord Emslie considered that the Complainant had a prima facie case for passing-off and Trade Mark infringement. It is the Expert's view that, while the Respondent has used the Domain Name in connection with genuine offers of products, he has also taken unfair advantage of the Complainant's Rights in his use of the Domain Name.

The Complainant has not alleged that the Respondent registered the Domain Name primarily for the purpose 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. This would be a factor which might indicate Abusive Registration under paragraph 3 a i A of the Policy. The evidence does not suggest that this was the Respondent's prime motive in registering the Domain Name.

The Complainant, however, does argue that, following termination of the distributorship in 2005, the Respondent's offer to transfer the Domain Name to the Complainant for 80,000 New Zealand dollars worth of stock and offer to transfer the Domain Name to Bbizz indicates Abusive Registration. The Respondent submits that he has a legitimate interest in the Domain Name, that the Complainant tolerated his use of the Domain Name for a number of years and he should be compensated for the effort and expense which he has incurred in promoting the Blokart name.

The Respondent registered the Domain Name on 28 November 2000, shortly after his return from New Zealand and just three days before the Complainant filed its first Community Trade Mark registration. The evidence supplied by the Complainant includes a note of a telephone conversation with the Respondent on 2 December 2000, which records that the Respondent was happy to transfer the Domain Name to the Complainant.

Clearly the Respondent registered the Domain Name for commercial reasons. He was enthusiastic about the Blokart product and wished to promote it. There is nothing inherently wrong with that. In doing so, however, he chose to register the Complainant's own name (the significant part of which is "Blokart") and then to use the Domain Name in the knowledge that the Complainant had concerns and wanted it to be transferred, albeit that the Complainant did not pursue the issue at the time. The Respondent therefore took the risk of promoting the web-site and incurring expenses in the context of a business relationship with the Complainant which might ultimately not work out. This is exactly what happened and, as a result, the Complainant terminated the distributorship in 2005 and requested a transfer of the Domain Name.

In all the circumstances the Expert concludes that the Respondent's use of the Domain Name is an Abusive Registration.

8. Decision

In light of the above findings, namely that the Complainant has Rights in respect of a name or mark 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 www.blokart.co.uk be transferred to the Complainant.

David King 27 June 2008