Nominet UK Dispute Resolution Service

 
Nominet Dispute Resolution Service DRS 05640 Sofina GmbH v Daren + Cole T/A Future Web Designs Decision of Independent Expert
1. PARTIES

Complainant: Sofina GmbH

Country: Germany

Represented by: Pritchard Englefield

London

Respondent: Daren + Cole T/A Future Web Designs

Country: US

2. DOMAIN NAME

2.1     telebid.co.uk ("the Domain Name")

3. PROCEDURAL BACKGROUND

3.1     On 15 April 2008, Nominet entered on its system the complaint from Pritchard Englefield on behalf of the Complainant and on 30 April 2008 hard copies of the complaint were received. On 1 May 2008 the complaint was validated and the complaint documents generated. On 27 May 2008 the electronic response was entered on the Nominet system and hardcopies of the response were received. On 5 June 2008 the reply stage was extended until 6 June 2008 as the wrong on-line form had been used. On 6 June 2008 the electronic reply was entered on the system and the reply hardcopies received. On 15 August 2008 Nominet received the complaint fees from the Complainant.

3.2     On 15 August 2008 Patricia Jones ("the Expert") 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 call into question her independence and/or impartiality.

3.3     The Expert was appointed on 19 August 2008.

4. THE FACTS

4.1     The Respondent registered the Domain Name on 18 March 2004.

4.2     The Complainant was founded and registered in Munich on 6 April 2005. In September 2005 the Complainant began operating an on-line auction site using the domain name telebid.de.

4.3     On 5 November 1996 the domain name telebid.com was created and in March 2007 was assigned to the Complainant. On 14 December 2007, TeleBid was launched in the UK under telebid.com.

4.4     The on-line auction sites at telebid.de and telebid.com sell technology and consumer items such as computers and watches, using a system where the bids go up in a fixed amount, with the winner being the highest bidder. The Complainant has filed a related US patent.

4.5     The majority of the visitors to telebid.de are based in Germany. Since launch in the UK, 100,000 new UK customers have registered at telebid.com and in total 750,000 customers are registered.

4.6     The Complainant is the owner of German trade mark registrations for TeleBid and an international trade mark registration for TeleBid which covers the UK, registered on 3 January 2007 in classes 35, 38 and 41. The Complainant is also the owner of various telebid domain names which were registered in 2005 and 2006.

4.7     Between August and October 2007, there was an exchange of correspondence between the Complainant and the Respondent on the purchase of the Domain Name. The Complainant was represented by Mr Whiteoak, who had just been employed as the UK marketing and sales manager:

(a) On 15 August, Mr Whiteoak enquires whether the Domain Name is for sale and states "I'm looking at entrepreneurial opportunities in the auction space (having previously worked at e-Bay) and looking at potential business names/domain names."

(b) The Respondent does not reply. Mr Whiteoak offers $2650 for the Domain Name via Afternic's broking service. The Respondent does not reply to this offer.

(c) On 20 September the Respondent e-mails Mr Whiteoak "You are right its not being used, it was registered (together with telepay.co.uk) for an auction site idea I had a while ago, I have not developed that idea any but was not planning on selling the domain."

(d) On 21 September Mr Whiteoak responds "I've also got an idea for an auction site here in the UK and would love to use the telebid.co.uk domain to do it. What would it take to persuade you to part company with it?"

(e) On 26 September Mr Whiteoak chases for a response, indicating he would pay a fee for the Domain Name.

(f) On 27 September the Respondent responds, "As I said before, the domain is not for sale. Could I be persuaded to sell? Sure, I guess I could, if you have an offer in mind that represents its value to you then please make it and we can move on."

(g) On 27 September 2007 Mr Whiteoak e-mails, "I'd be keen to use this name…but also have to think about other marketing expenses to acquire customers and get the business going". Mr Whiteoak offers $2,300 for the Domain Name.

(h) On 1 and 8 October 2007 Mr Whiteoak chases for a response and asks what price the Respondent would consider.

(i) On 15 October Mr Whiteoak e-mails that he assumes the Respondent no longer wishes to sell the Domain Name and he has decided to launch the UK business using a different domain.

(j) On 15 October, the Respondent replies, "I never did wish to sell the [Domain Name], I did however concede, following your suggestion, that I might be persuaded to sell and invited you to tell me what the domain was worth to you. You did and I was unpersuaded." The Respondent suggests Mr Whiteoak is free to increase his offer, he will not haggle and states if he "was in the domain buying/selling game then [he] would be more inclined to haggle, but [he is] not."

(k) On 24 October, Mr Whiteoak responds that he is still interested in buying the Domain Name, it would be helpful to know how much the Respondent would accept and offers $3450.

(l) No response is received and there are no more direct communications between the parties.

4.8     Until this exchange of correspondence, the Domain Name was not active. On 2 November 2007, the Complainant became aware that the Domain Name resolved to a Sedo parking site which showed the Domain Name available for sale.

4.9     The Respondent refused offers of £3500 and £4000 for the Domain Name made by Sedo on behalf of the Complainant. The Respondent has set the minimum price for the sale of the Domain Name on Sedo at £10,000.

4.10     The Sedo parking page links to other related websites, which earns the Respondent a click through revenue. These have included links to other on-line auction sites, sites which provide for automatic bidding in the last few moments of an e-bay auction and a direct link to telebid.com. There is also a list of related searches, including one named Tele bid which redirects the user to a further page of sponsored listings, which changes each time the page is refreshed.

5. THE PARTIES' CONTENTIONS

The Complainant

5.1     The Domain Name is an Abusive Registration because it has been maintained and/or used in a manner which took unfair advantage of or was unfairly detrimental to the Complainant's rights:

(a) The Respondent has engaged in a deliberate course of conduct of demanding £10,000 from the Complainant for the transfer of the Domain Name.

(b) The Respondent offered the Domain Name to the highest bidder and the website at the Domain Name became active after the Complainant commenced negotiations for the sale of the Domain Name in August 2007.

(c) The Respondent has deliberately engaged in a course of conduct of placing the Domain Name on the Sedo parking space which provides links to other sites through Google Adsense including direct competitors of the Complainant and others with whom the Complainant may not be wished to be associated. The Respondent is earning a click through revenue, including from the link to telebid.com. This further underlines the intention to confuse those who may wish to access the Complainant's website.

(d) Two of the sites linked from the Domain Name refer specifically to eBay, directing potential bidders away from the Complainant.

(e) The Respondent has renewed the Domain Name prior to the renewal date of 18 March 2008 despite being aware of the Complainant's rights.

5.2     The Complainant contends that the use of the Domain Name is trade mark infringement and passing off and has cited a number of UK Court decisions in support of this. The Complainant is also concerned that confidential emails from its customers and/or potential customers might accidentally be sent to the Respondent.

The Respondent

5.3     The Complainant has no claim because:

(a) The Complainant did not exist and did not have Rights at the time the Respondent registered the Domain Name.

(b) The Complainant has no Rights as the word telebid is wholly descriptive of the Complainant's business.

(c) The Complainant did not make the Respondent aware of any claims to any Rights during the email exchange in September/October 2007.

(d) The Respondent had no knowledge of any of the Complainant's press releases, advertising, patents and trademarks until 1 May 2008.

5.4     The registration in the hands of Respondent is not Abusive because:

(a) The Respondent is not attempting to mislead or confuse anyone. He registered the Domain Name in March 2004 after seeing how popular telephone based auction channels were on UK television and intended to develop an auction related site using the Domain Name and telepay.co.uk. The Respondent still has plans to develop the Domain Name.

(b) The Respondent has never demanded £10,000 from Complainant or offered the Domain Name to the highest bidder. The Respondent moved the Domain Name to Sedo as it offered a system for interested parties to make offers without bothering the Respondent direct. The Respondent is associated with many domains and receives many e-mails on buying unused domains. The Respondent set a minimum price of £10,000 for the Domain Name as that was the maximum value the Sedo system would allow so that he would not be pestered by offers. The Respondent believed he would receive little money from click through revenue.

(c) The Domain Name became active after the negotiations between Mr Whiteoak and the Respondent concluded before the launch of TeleBid in the UK. There were no advertisements for telebid.com at that time as the Complainant did not launch telebid.com until the end of 2007.

(d) The Respondent was unaware of the claim of any Rights relating to the Domain Name until receiving the complaint letter from Nominet and was entitled to renew the Domain Name.

(e) There is a disclaimer at the bottom of the Sedo parking page in terms that the Respondent and Sedo maintain no relationship with third party advertisers, reference to any specific service or trade mark is not controlled by them and does not constitute or imply their association, endorsement or recommendation.

(f) There is very little difference between the way advertising is targeted at Sedo than on any other domain name registrar's parking page.

(g) Sedo have an IP policy which the Complainant could have used, demonstrating that the Complainant's primary motive is to obtain the Domain Name.

5.5     The Complaint is incorrect and misleading because:

(a) There were no negotiations to resolve the dispute amicably. The Respondent was unaware that there was a dispute until receipt of the complaint.

(b) If the Complainant had not launched under the TeleBid name, the Respondent would not be earning a commission in the manner complained of. The Complainant has the ability to block its adverts from appearing on the Domain Name should it wish.

(c) The Complainant does not have to be associated with the advertisers on the Domain Name. The Complainant's site is not always listed at the Domain Name by the automated system.

(d) There is no intention to confuse those who wish to access the Complainant's website.

5.6     The Respondent denies trade mark infringement and passing off. Regarding the risk of receiving confidential e-mails, the Respondent states he has no means to receive email for the Domain Name.

5.7     The Complainant is Reverse Domain Name Hijacking.

The Reply

5.8     Third parties are likely to be confused by the content of the website at the Domain Name. Potential UK customers are highly likely to type in telebid.co.uk when looking for the Complainant's site and would then be linked to the Respondent's website without realising their error. They may also be directed to it by undertaking Google key word searches.

5.9     The Respondent was aware of the Complainant's rights or at least interest in TeleBid when the Domain Name was renewed on 18 March 2008.

5.10     The Complainant has no control over the links on the Respondent's website whereas the Respondent does.

5.11     The Respondent's website actually and potentially redirects potential customers to competitors of the Complainant.

5.12     The Respondent would be willing to sell the Domain Name if a price acceptable to the Respondent was offered.

5.13     The Respondent is associated with the business trading under "Nomber.com" which owns about 33 other domains one of which, bigfreehost.com, is also for sale via Sedo. Nomber.com is a domain management site which could have managed the Domain Name rather than Sedo.

5.14     The Complainant is not Reverse Domain Hijacking.

6. DISCUSSION AND FINDINGS

6.1     Paragraph 2 of the Nominet Dispute Resolution Policy ("the Policy") sets out that for the Complainant's complaint to succeed it must prove to the Expert, on the balance of probabilities, 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.

6.2     The Complainant is required to prove to the Expert that both elements are present on the balance of probabilities. I will turn to this later in this decision.

6.3     It is worth emphasising that the issue of whether the use of a domain name constitutes trade mark infringement and/or passing off is not a matter for the Policy. Therefore, whilst the Complainant has cited and relied upon a number of UK Court decisions in support of its contention that the Domain Name is an Abusive Registration and constitutes trade mark infringement and passing off, these will not be substantively considered in this decision. Instead I will focus on whether the Complainant has proved on the balance of probabilities the requirements of the Policy.

Complainants Rights

6.4     Paragraph 1 of the Policy states 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 which is wholly descriptive of the Complainant's business."

6.5     It is well accepted that the question of Rights falls to be considered at the time that the Complainant makes its complaint and not at the time when the Domain Name was registered. In view of its registered trade marks and the trading goodwill it has established in TeleBid I am satisfied that the Complainant has Rights.

6.6     The Respondent contends that telebid is wholly descriptive of the Complainant's business. I have considered the Respondent's evidence that the prefix "tele" is used to describe any action or thing that can be performed or controlled remotely and that telebid has been used in the past for a proxy bidding telephone service. However, whilst telebid is suggestive of internet auctions, it is not wholly descriptive of internet auctions.

6.7     I therefore consider the Complainant has Rights in a name or mark which is identical or similar to the Domain Name.

Abusive Registration

6.8     The question is therefore whether the Domain Name, in the hands of the Respondent, is 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.

6.9     Whilst the evidence has been primarily directed to paragraph (ii) of the Policy, the Complainant has not accepted that when the Domain Name was registered it did not take advantage of and was not unfairly detrimental to the Complainant's Rights. In my view, the Complainant could have reasonably conceded on this point, given that the Complainant was not in existence when the Domain Name was registered. For paragraph (i) to apply it must be established that the Respondent had knowledge of the Complainant and/or its rights at the time of registration which is not the case here. Although the Complainant alleges that the Respondent had knowledge of the Complainant's Rights at the time of renewal of the Domain Name, paragraph (i) of the Policy relates to at the time of registration or otherwise acquisition of the Domain Name, not at the time of renewal.

6.10     I therefore consider that the issue to focus on is whether the Domain Name has been used in a manner which took advantage of or was unfairly detrimental to the Complainant's Rights.

6.11     Both parties have drawn my attention to the Decision of the Nominet Appeal Panel in MySpace Inc v Total Web Solutions (DRS 04962). Whilst I am not bound by that decision, I believe that it is useful to consider it further as it has certain facts analogous to those in this case and certain of the arguments advanced in this case mirror those in MySpace.

6.12     The facts of MySpace were that the respondent resolved the domain name to a Sedo parking page after the MySpace business was founded but before the MySpace UK business was launched. Following the increase in awareness of MySpace in the UK, the sponsored links on the Sedo site that were automatically generated by the Sedo software contained links to the MySpace complainant and others engaged in the same field as MySpace. The arguments of the MySpace respondent were very similar to those of the Respondent in this case, including that the links on the site and the possibility that some users might visit the respondent's website when looking for the complainant's website were not a consequence of anything the respondent had done but were the result of the complainant adopting the respondent's name.

6.13     The Appeal Panel took the view that if the change to the Sedo parking page had taken place after the respondent had become aware of the complainant's business, the Panel would have had evidence to support a conclusion that the change had been motivated by a desire to profit on the back of the reputation and goodwill of the complainant. I concur with that view.

6.14     The Appeal Panel had to consider whether the respondent had made the change to the Sedo parking site after publicity surrounding the acquisition of MySpace. The respondent stated that the change was made before the publicity and whilst the Panel had grave suspicions, they considered that there was insufficient evidence to conclude that the Respondent was not being truthful on the point. Accordingly, the Appeal Panel considered that the Complainant had failed to discharge its burden to establish that the date of first use of the Sedo page postdated the publicity surrounding the acquisition of MySpace.

6.15     In this case, the Domain Name was registered on 18 March 2004. On the Respondent's case the change to the Sedo parking site was made after the e-mail exchange on the purchase of the Domain Name had concluded, October 2007, but prior to the Complainant's launch in the UK (the Complainant did not become aware of the change until 2 November 2007). Was the Respondent aware of the Complainant's business in October 2007?

6.16     The Respondent states:

(a) The Complainant did not make the Respondent aware of any claims to any rights during the e-mail exchange with the Complainant;

(b) The Respondent had no knowledge of any of the press releases, advertising, patents, trademarks until 1 May 2008;

(c) When he changed the Domain Name to resolve to the Sedo parking site, he had no reason to believe the Complainant was doing anything of any significance relating to the telebid name, in fact the Complainant all but stated the opposite, he was not aware of the Complainant's intentions for the Domain Name or of any claimed rights;

(d) Telebid in the UK did not exist until December 2007 and no English press releases have been claimed before that time;

(e) The Complainant has not provided anything to support the case that an English person would know anything about the German TeleBid company when the domain names were placed with Sedo. He could not reasonably be expected to have heard of the existence of telebid.de.

6.17     There is no evidence to suggest that the Complainant's German business was well known in the UK (or in the USA, where the Respondent is located) before October 2007. Before the UK launch in December 2007 the Complainant's business was primarily German. There is no evidence of its use in the UK before December 2007 and the Complainant has presented evidence of only very limited use in the USA in October 2007. There is no evidence of any publicity in the UK or the USA before October 2007. The Complainant does not contend that the Respondent has used telebid.de at any time. I would not, therefore, expect the Respondent to have been aware of the Complainant's business in October 2007.

6.18     During his e-mail exchange with the Respondent Mr Whiteoak did not identify that he acted on behalf of the Complainant and did not inform the Respondent about the German business or its rights. I am satisfied that the Respondent would not have become aware of the Complainant's business or of any claim to rights from the content of Mr Whiteoak's correspondence. Nevertheless, was the Respondent aware of the Complainant's business in October 2007? This prompts the question as to why the change to the Domain Name was made.

6.19     The Respondent says that Mr Whiteoak's correspondence made him make the change to Sedo to prevent unsolicited e-mails for the purchase of domains in his portfolio. Although the Respondent relies on his many other domains, he has not presented any evidence of them or of the approaches made for the purchases of those domains. He has also not shown that all his other domain names were resolved to a Sedo parking site at the same time as the Domain Name. The change to the Sedo parking site was made after the Domain Name had been inactive for 3 ½ years since registration. If the Respondent had received many unsolicited e-mails on the sale of his domain names over this time, I am unclear why the correspondence with Mr Whiteoak prompted him to immediately move his domain names to Sedo. Overall, I find the Respondent's explanation for the change to Sedo to be weak.

6.20     It may have been that Mr Whiteoak's correspondence prompted the Respondent to investigate who would be interested in buying the Domain Name and to then find out about the Complainant's business before the change to Sedo was made. However, it is the Complainant's burden to satisfy me, on the balance of probabilities, that the Respondent knew of the Complainant's business when the change to the Sedo parking site was made. The Complainant does not suggest how the Respondent could have become aware of the Complainant's business before the change to Sedo was made. There is no evidence on how the Respondent would have become aware of the Complainant, if Mr Whiteoak's correspondence had prompted the Respondent to investigate potential purchasers for the Domain Name (for example the results of Google searches from that time). In the absence of evidence from the Complainant, I can only speculate on how the Respondent would have become aware of the Complainant's business before the change was made. Therefore, although I consider that the Respondent's explanation for the change is a weak one, I find that the Complainant has failed to discharge its burden to establish that the Respondent knew of the Complainant's business when the change to Sedo was made. I therefore do not conclude that the change was motivated by a desire by the Respondent to profit on the back of the reputation and goodwill of the Complainant.

6.21     It also falls on me to consider the site content after the Domain Name was resolved to the Sedo parking site. There is nothing in the evidence to suggest that the Respondent controls the links, but rather that they are generated automatically by the Sedo software. In similar circumstances, the Appeal Panel in MySpace also considered whether a failure by the Respondent to control the site content meant that the domain name is an Abusive Registration. The Appeal Panel recognised that the reasonably consistent view that has been taken to the application of the Policy, is that the registrant is entitled in principle to hold onto the domain name and to use it, notwithstanding that "initial interest" confusion may arise and that in such circumstances it is not of itself abusive for the registrant to demand a high price for the transfer of the domain name. Problems only arise for a registrant who actively does something to take advantage of or actively exploits his position, such as in the "i-tunes" decision (DRS 02223) where the registrant had threatened to transfer the domain name to a competitor of the complainant. I agree with that approach.

6.22     In this case, the Respondent has refused the Complainant's offers to purchase the Domain Name. Whilst the Sedo parking site indicates the Domain Name is for sale, this is merely "an invitation to treat" where the Respondent is inviting offers for the Domain Name and has indicated a minimum sale price, which is no doubt what he regards as market value. I do not consider that in so doing or in failing to exercise control over the site content the Respondent is taking advantage of or actively exploiting his position.

6.23     Finally, in relation to confidential e-mails being accidentally sent to the Respondent instead of the Complainant, there is no evidence of this or of any misuse of confidential information by the Respondent.

6.24     For the reasons set out above I do not find that the Domain Name has been used in a manner which took unfair advantage of or was unfairly detrimental to the Complainant's Rights.

6.25     I do not find the complaint was brought in bad faith in an attempt to deprive a registered domain-name holder of a domain name and do not find Reverse Domain Name Hijacking.

7. DECISION

7.1     I find that the Complainant has Rights in a name or mark which is identical or similar to the Domain Name.

7.2     I do not find that the Domain Name in the hands of the Respondent is an Abusive Registration.

7.3     I direct that the NO ACTION be taken in relation to the complaint.

Dr Patricia Jones

10 September 2008