Nominet UK Dispute Resolution Service

 


Nominet UK Dispute Resolution Service

DRS Number 05200

Parties: Hairmarker LLC/Colormetrics LLC v Element Design Studio

Decision of Independent Expert

1. Parties

Complainant: Hairmarker LLC/Colormetrics LLC

Country: US

Respondent: Element Design Studio

Country: Great Britain

2. Domain Names

Colormark.co.uk

Colormarkpro.co.uk

This domain names are referred to below as the "Domain Names".

3. Procedural Background

A hardcopy of the Complaint was lodged with Nominet on 15 November 2007. Nominet validated the Complaint and notified the Respondent. In this correspondence Nominet informed the Respondent that it had 15 working days within which to lodge a Response to the Complaint. No Response was submitted. It not being possible to resolve the dispute in mediation, on 19 December 2007 the Complainants paid Nominet the appropriate fee for a decision of an Expert pursuant to paragraph 7 of the Nominet Dispute Resolution Service Policy ("the Policy").

Sallie Spilsbury, the undersigned ("the Expert") has confirmed to Nominet that she knew of no reason why she could not properly accept the invitation to act as Expert in this case and further confirmed that she knew of no matters which ought to be drawn to the attention of the Parties which might appear to call into question her independence and impartiality.

4. Outstanding Formal/Procedural Issues

Under Paragraph 5a of the Dispute Resolution Service Procedure ("the Procedure") the Respondent was required to submit a Response to the Complaint to Nominet by 7 December 2007. The Respondent failed to do so.

Paragraph 15b of the Procedure provides as follows:

If, in the absence of exceptional circumstances, a Party does not comply with any time period laid down in this Policy or Procedure, the Expert will proceed to a Decision on the Complaint.

It is the view of the Expert that there are no exceptional circumstances relevant to this matter.

The Expert is accordingly authorised under the Procedure to proceed to decide the Complaint. Under paragraph 16a of the Procedure the Expert should reach a decision based on the Parties' submissions (which consist of the Complaint and its supporting documents) and the Policy and Procedure.

The Complainant in this matter consists of 2 affiliate businesses, HairMarker and ColorMetrics, (the details of the arrangement are set out in the following section of this decision). Technically the businesses ought to be designated as "first and second Complainants". For convenience the Expert has adopted the terminology used in the Complaint to refer to both businesses as "the Complainant" except where it is necessary to distinguish between them.

5. The Facts

The Complainant

The Complainant, HairMarker, is an intellectual property rights holding company which owns trademark rights in various countries for the mark COLOR MARK. The Complainant bases its complaint on HairMarker's Community Trademark Registration 3456829 for the word mark COLORMARK which was registered 1 April 2005, for "hair colour and decolorizing products; hair care products, including shampoos, conditioners, hair fixatives, hair sprays and styling lotions; hair gels, mousses, dressing and treatment products" and related services in classes 41 and 44 of the register ("the CTM"). Details of the CTM are annexed to the Complaint at Annex A.

HairMarker licenses the trademark COLOR MARK to its affiliate, ColorMetrics LLC, which manufactures and distributes hair-colour and hair-care products and related goods under the COLOR MARK brand. ColorMetrics operates a website at www.colormarkpro.com where consumers and retailers can find out about and order the second Complainant's goods. A printout from this website is annexed to the Complaint at Annex B. The Expert visited the website on 20 January 2008. The website appears to be aimed primarily at the US market, for example prices are shown in US dollars and the contact details on the site relate to the US.

The Complaint records that the Complainant has been taking "concerted steps" to expand its trade mark into the UK and Europe, as evidenced by the registration of its CTM in 2005. The Complainant states that it is currently in active discussions with a major UK retailer who is interested in carrying the Complainant's goods in its UK stores. The Complainant has no apparent authorised trading presence in the UK at this time.

In 2006 the Complainant had discussions with a UK company, Focalserve Limited, concerning the possibility that the Complainant would engage Focalserve as its UK distributor. The Complaint records that the Complainant sent a few sample goods to Focalserve for review (but not for resale) but ultimately for business reasons it did not go on to engage Focalserve as a distributor. This information is given in a signed declaration of Robert Sobel, Chairman and CFO of the Complainant dated 2 November 2007. The declaration is annexed to the Complaint at Annex D with attachments to the declaration. The earliest reference to the negotiations between the Complainant and Focalserve refers to a meeting in Paris on 21 April 2006 (email from Focalserve to the Complainant dated 26 September 2007). It is not clear when the negotiations broke down. There is a letter dated 25 September 2007 from the Complainant to Focalserve indicating that the negotiations had broken down before 25 September 2007, but no indication of precisely when.

A printout from the Focalserve website is also annexed to the Complaint at Annex C. The printout indicates that Focalserve acts as UK distributor for a number of beauty products; including a product called "Frownies" (the relevance of this is discussed below).

The Respondent

The Complainant asserts that the Respondent appears to be a website development company acting as the agent of Focalserve.

Relationship between the Respondent and Focalserve

The Complainant's offers evidence to supports its interpretation of the relationship between the Respondent and Focalserve in Annex E to the Complaint. This consists of a printout from the Respondent's website dated 22 October (the year is unclear). The Respondent's website describes its key services as including website design. The site also features a link to another website at www.frownies.co.uk. Annex E includes a printout from the Frownies website to which the link relates. The Frownies website includes a copyright notice to the effect that copyright in the website belongs to Focalserve Limited. In addition, as stated above, the main Focalserve website also confirms that the company is a UK distributor for Frownies. The Complainant relies on the link from the Respondent's website to a website operated by Focalserve to suggest that there is a connection between them. The Expert considers this matter further below in section 6 of this Decision.

The Domain Names

The Respondent registered the Domain Names on 22 March 2006 (a Whois search confirms this position) and remains the registrant.

The Complaint asserts that Focalserve, through the Respondent, is operating a website at www.colormark.co.uk. A printout of the website dated 17 October 2007 is annexed to the Complaint at Annex F. The site features a copyright notice indicating that copyright belongs to Focalserve Limited. The site purports to offer Color Mark products for sale in the UK through the website. Prices are given in sterling and the site states that payment should be sent to Focalserve. The Complaint's submissions about the design and content of this website are described in the following section of this Decision.

A search by the Expert on 20 January 2008 indicates that no site was operating under the Domain Name at that date.

The Complaint does not assert that the www.colormarkpro.co.uk has been used for a website. A search by the Expert on 20 January 2008 indicates that no site was operating under the Domain Name at that date.

None of the above matters have been disputed by the Respondent which has not filed a Response.

The Position of Focalserve

Focalserve is not a party to this Complaint. It has had no formal opportunity to comment on the above matters.

However an indication of Focalserve's position can be seen from copies of email correspondence between the Complainant and Focalserve which are attached to Annex D of the Complaint (i.e. as attachments to the signed declaration of Mr. Sobel). Of relevance to the Domain Names is an indication by the Complaint in a letter dated 25 September 2007 to Focalserve that it wished to purchase the colormark.co.uk domain name. Focalserve then offered to sell the domain name for a figure which Focalserve suggests would cover its expenses in setting up its Color Mark website (£5,460) (email dated 26 September 2007). This offer was rejected by the Complainant who made a counter offer to buy the Domain Name for US$1,500 (email dated 26 September 2007). The counter offer was in turn rejected by Focalserve on the ground that it did not cover its costs (email dated 27 September 2007).

The Parties' Contentions

Rights

The Complainant relies on its CTM and its own domain name registration for the colormarkpro.com domain name (under which its website operates) as giving rise to rights in the COLOR MARK mark.

It asserts that the Domain Names are identical or similar to the COLOR MARK mark for the purposes of the Policy. The Complainant asserts that it objects to the Respondent's domain name registrations because these registrations are likely to be confused with the CTM. The Domain Names are- the Complaint asserts- unquestionably similar to the Complainant's COLOR MARK mark. COLOR MARK (.co.uk) is identical to the CTM. COLORMARKPRO.COM also meets this test.

Abusive Registration

The Complaint makes the following submissions:

•    Neither the Respondent nor its customer, Focalserve, has rights to any trademark or service mark consisting of the term "COLOR MARK" either in the UK or in other countries.

•    It is obvious that Respondent and its customer were aware of the Complainant's Rights when registering the Domain Names. The Respondent registered the Domain Names on March 22, 2006, during negotiations between Focalserve and the Complainant.

•    The Complaint states that "[The] Complainant has subsequently informed Focalserve that it has no right to use COLOR MARK in a domain name, once it was clear that FocalServe that would not be engaged as Complainant's UK distributor".

•    Even if Focalserve, through its agent, the Respondent, had registered the Domain Names in good faith, which is not conceded, the Respondent is now using the Domain Names in an abusive manner. The content of Focal Serve's website at www.colormark.co.uk is problematic. A comparison of the Complainant's website at www.colormarkpro.com, and the Respondent's website at www.colormark.co.uk, shows that colormark.co.uk has copied much of the content of Complainant's own website, and uses the same aqua blue colour scheme trade dress. The site also copies the use of Complainant's registered trademark COLORMETRICS which appears on the Complainant's website in the exact same location, font and colour. The Respondent has therefore created a situation that is very likely to cause consumers to be confused and which unfairly disrupts the business of the Complainant. Disruption may result from misleading consumers either into believing that anything appearing under the Domain Names is affiliated with the Complainant or that because nothing appears under the address www.colormarkpro.co.uk that Complainant does not have a presence on the Internet.

•    Focalserve is continuing to hold itself out as associated with the Complainant by maintaining the damaging and infringing content on its website, while attempting to ransom the domain name for an excessive amount of money. Not only is this a false association with the Complainant, but it could further damage the Complainant since, on information and belief, Focalserve has no stock of authentic COLOR MARK products to sell in the UK. Moreover, if Focalserve is accepting payment over the internet for goods, the Complainant has no knowledge or control over whether appropriate secure payment methods are being used. Failure to do so could injure consumers and further tarnish the reputation of the Complainant and its brands.

•    Focalserve has appropriated the Complainant's look and feel trade dress, as well as the distinctive aqua blue design element, in other parts of its business in connection with a product called "Save My Face". A printout of the Focalserve website for this product is annexed to the Complaint at Annex G.

•    The maintenance of FocalServe's website www.colormark.co.uk implies that the Complainant's products can be obtained in the UK. The Complainant has not provided any more goods, other than an initial sample, to Focalserve. Nor has the Complainant distributed any genuine goods anywhere in the European Union. European and UK law on grey-market goods provides that Focalserve would be prohibited from importing goods from outside the EU without the owner's permission.

•    The offer to sell the Domain Names back to the Complainant for a sum far exceeding the registration cost is evidence of abusive registration.

•    Either the Respondent registered the Domain Names for the purpose of blocking Complainant, or the Respondent, as agent for FocalServe, is maintaining the Domain Names for the purposes of selling, renting or otherwise transferring the Domain Names back to the Complainant for valuable consideration exceeding the Respondent's costs.

The Response

No Response has been served.

6. Discussion and Findings

General

Clause 2a of the Policy provides that a Respondent must submit to proceedings under the Dispute Resolution Service if a Complainant asserts according to the Procedure, 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.

The Complainant is required to prove to the Expert that both elements are present on the balance of probabilities (clause 2b of the Policy).

Complainant's Rights

Rights are defined in clause 1 of the Policy as including but not limited to "rights enforceable under English law".

Although there is currently no trading presence in the UK the CTM is sufficient to confer Rights on the Complainant (as proprietor and licensee respectively) for the purposes of the Policy. The domain name colormark.co.uk is identical to the CTM (it being customary to ignore the suffix .co.uk). The domain name colormarkpro.co.uk is sufficiently similar to the CTM to engage the Policy because the main focus of the domain "colormarkpro" is "colormark". The addition of "pro" does not detract from this.

It should be noted that the Complainant's US trading presence under the COLOR MARK brand and its US website at colormark.pro.com would not in itself give rise to rights under English law. The definition of Rights in the Policy is however not limited to rights that are enforceable under English law and it may be that if its US trading presence and reputation were all that the Complainant had to rely on in this Complaint that a finding of Rights could still be made. It is not however necessary for the Expert to pursue this further- there clearly being Rights recognised by English law in the form of the CTM.

The Complainant has therefore demonstrated that it has Rights in the COLOR MARK mark and that this mark is identical or similar to the Domain Names for the purposes of the Policy. The first criterion under the Policy has been satisfied.

Abusive Registration

Abusive Registration is defined in clause 1 of the Policy as follows:

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 [italics for emphasis];

OR

ii. has been used in a manner which took unfair advantage of or was unfairly detrimental to the Complainant's Rights.

Before proceeding to examine these grounds further it is necessary to consider an important preliminary issue, namely to what extent is the Respondent in this matter to be considered responsible for the activities of Focalserve Limited. There is no direct evidence before the Expert about the relationship between these entities. It is therefore a matter of inference. The following is clear. The Respondent registered the Domain Names and remains the owner. Focalserve have used the www.colormark.co.uk domain name to operate a website. Focalserve made an offer to sell this domain name to the Complainant and it also rejected a counter offer from the Complainant. This gives rise to an inference that Focalserve controls the Domain Names and that the Respondent holds the Domain Names as its agent.

In addition there is a link on the Respondent's website to a website operated by Focalserve (the Frownies website) which is also suggestive of a closer business connection between the parties than might ordinarily be expected to flow from a design house: client relationship.

Finally the Respondent has not filed any Response indicating that the Complainant's assertion of an agency relationship is incorrect.

For these reasons the Expert finds on the balance of probabilities that the Respondent acts as agent for Focalserve and that it is Focalserve rather than the Respondent who controls the use to which the Domain Names are put. Should the Expert find that Focalserve has committed Abusive Registrations under the Policy it would be permissible to order that the Domain Names be transferred from the hands of its agent, the Respondent. To find otherwise would enable the Policy to be readily circumvented simply by putting domain name registrations into the hands of third party agents.

Registration

The Complainant asserts that the registration of the Domain Names by the Respondent was in bad faith and that this amounted to taking unfair advantage of and/or causing unfair detriment to the Complainant's Rights.

The Expert is not convinced by this submission. The Complainant must show that the initial registrations were in bad faith at the time they were made in March 2006 in the sense that they took unfair advantage of or were unfairly detrimental to the Complainant's Rights (clause 1 of the Policy, as set out above). The initial registrations took place just before or during negotiations between Focalserve and the Complainant. There is no indication that the registrations were being used to obtain a favourable bargaining position with the Complainant or otherwise to influence the negotiations. The Complainant's own submissions are curious in this regard. Whilst asserting that it is not accepted that the initial registrations were in order, there is a reference in the Complaint to Focalserve having been informed by the Complainant that it had no entitlement to the Domain Names once the negotiations had broken down. The following extract is taken from the Complaint:

"[The] Complainant has subsequently informed Focalserve that it has no right to use COLOR MARK in a domain name, once it was clear that FocalServe that would not be engaged as Complainant's UK distributor" "[italics for emphasis]

As stated above the date on which negotiations broke down is unclear, but it can be seen that the breakdown occurred after the registration of the Domain Names had taken place, given that a meeting to progress matters took place in Paris in April 2006, a month or so after the registration (information taken from Annex D (declaration of Mr. Sobel) and its attachments).

In the opinion of the Expert the above suggests that there may have been a bona fide reason behind the initial registrations. There is no evidence to indicate that the Respondent/Focalserve was, at the time of registration, motivated by a desire to make a profit from its registrations by selling the Domain Names or to block the Complainant's own registration of the UK Domain Names. Nor does the Expert find on the evidence before her that at the time of registration the primary motivation for the registrations was to unfairly disrupt the Complainant's business.

The offer to sell the colormark.co.uk domain name for £5,460 took place on 26 September 2007, over a year after the registration of that domain name and some time after the name had been used in connection with Focalserve's website. The Policy requires that the offer by a Respondent to sell a domain name for consideration in excess of the out-of-pocket costs directly associated with acquiring the name should be made in circumstances indicating that the motivation in acquiring the domain name was primarily for making such an offer (clause 3aiA of the Policy). The time lapse between registration and offer, together with the context of the distributorship negotiations between the Complainant and Focalserve, suggest that the registration of the Domain Names was made for other purposes and not primarily to sell the registrations at a profit. This is reinforced by the fact that the initial offer to buy the colormark.co.uk domain name was made by the Complainant in a letter to Focalserve dated 25 September 2007.

As such the Complainant's submissions about the initial registration of the Domain Names fail. The Complainant has not discharged its burden to show that the registration of the Domain Names was abusive at the time that registration took place.

Use

A non-exhaustive list of factors which may be evidence that the use of the Domain Name is an Abusive Registration is given in clause 3a of the Policy. The following is relevant to this Complaint:

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.

Only the colormark.co.uk has been actively used to operate a website.

The Expert has reviewed the website operated by Focalserve at colormark.co.uk (Annex F to the Complaint) and compared it with the Complainant's website at colormarkpro.com (Annex B to the Complaint). The layout, look and feel and content (including the use of the same images) are strikingly similar. While there is no evidence of confusion having occurred the Expert finds on the balance of probabilities that potential customers visiting the Focalserve website would be under a clear misimpression that the company was an approved outlet for the Complaint's products. Not only has Focalserve made use of a domain name featuring a mark in which the Complainant has Rights, it has done so in a way which mirrors almost exactly the trading style, branding and image of the Complainant. It is unclear to the Expert whether Focalserve was ever under the impression that they were free to operate as they did. The suggestion in the attachments to Mr. Sobel's declaration at Annex D to the Complaint is the company was never under such an impression. But it is clear from the attachments that from 25 September 2007 the company was on notice that the website was not authorised. Having been put on notice it continued to trade in this way, at least until 17 October 2007 (the date on the website printout at Annex F to the Complaint), although use of the website now appears to have stopped.

The Expert finds on the balance of probabilities that the effect of the operation of the website under the www.colormark.co.uk domain name has been to cause visitors to the website to associate the website with the Complainant. The effect of this has inevitably been to remove the control that the Complainant has over its own launch in the UK marketplace and to jeopardise its UK reputation and potential goodwill. This is unfairly detrimental to the Complainant's Rights and constitutes an Abusive Registration in respect of the colormark.co.uk domain name.

Colormarkpro.co.uk

The colormarkpro.co.uk has not been used todate. The Policy provides at clause 3b that failure to use a Domain Name is not in itself evidence that the registration is Abusive and the Complainant's submission that it causes the damaging impression that the Complainant has no Internet presence is rejected. However this matter is not an instance of an isolated lack of use. Both Domain Names were registered at the same time and under identical circumstances. As such they are clearly "linked". It seems a matter of pure chance that one of them was to put to active use and the other was not. Neither the Respondent nor Focalserve have a legitimate reason for owning a domain name that so closely resembles the Complainant's mark. It is difficult to foresee how any future use of the colormarkpro.co.uk mark in connection with hair or beauty products could avoid causing confusion and infringing the Complainant's Rights. These factors, coupled with the way in which Focalserve actually used the colormark.co.uk domain name to incorrectly imply a connection between the Complainant and itself, gives rise to a strong case for finding Abusive Registration in relation to the colormarkpro.co.uk domain name.

On the other hand the Policy is clear that Abusive Registration relates either to a registration which at the time registration took place was abusive or to actual use (clause 1 of the Policy). Neither of these applies to the colormarkpro.co.uk domain name and therefore, on a technical reading, no finding of Abusive Registration should be made where a domain name was not registered in bad faith and has not been used.

There is a provision in the Policy for an Abusive Registration to be found where a Complainant can demonstrate that a domain name registration is part of a pattern of Abusive Registrations (clause 3a.iii). Whilst the Expert does not regard the registration of the two Domain Names in this matter as forming a pattern in themselves, the provision does suggest that there is scope for an Expert in an appropriate case to regard domain name registrations as being so linked that an abusive registration finding for one domain name would also apply to the other.

The Expert is satisfied that both Domain Names in this matter are inextricably linked to their surrounding circumstances and to each other. The Domain Names were registered at the same time in relation to Focalserve's aspirations to become associated with the Complainant and to supply the Complainant's products in the UK. Where one registration falls, as here, then so must the other. Unusually therefore, the Abusive Registration status of the colormark.co.uk name carries over to its related sister registration colormarkpro.co.uk. As a result the latter mark also has the status of an Abusive Registration under the Policy.

Other Matters

The Complainant made a submission that Focalserve carried over its use of a similar trading style to that of the Complainant to other aspects of its business (most notably in relation to its supply of a product called "Save My Face"). The Expert does not find this submission to be relevant to the manner in which the Domain Names were used and excludes it from her decision for lack of relevance.

For completeness the Expert noted the Complainant's submissions about the lack of stock that Focalserve had to complete orders. However in the absence of evidence from disappointed customers the Expert makes no finding on this point. Similarly the Expert finds that there is insufficient evidence to support the Complainant's submission that Focalserve could have used unlawful means in order to obtain stock of the Complaint's products. For the avoidance of doubt no finding of unlawful activity has been made against the Respondent or Focalserve.

8. Decision

The Expert finds that the Complainant has proved on the balance of probabilities that it owns Rights in respect of a name or mark which is identical or similar to the Domain Names and that the Domain Names in the hands of the Respondent are Abusive Registrations.

Accordingly the Expert finds in favour of the Complainant and directs that the Domain Names are transferred to the Complainant.

Sallie Spilsbury

21 January 2008