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You are here: BAILII >> Databases >> Nominet UK Dispute Resolution Service >> Auto Exposure Ltd -v- Beard [2003] DRS 1063 (3 September 2003) URL: http://www.bailii.org/uk/cases/DRS/2003/1063.html Cite as: [2003] DRS 1063 |
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Nominet UK Dispute Resolution Service
DRS 01063
Auto Exposure Ltd –v- Mr Kevin Beard
Decision of Independent Expert
1. Parties:
Complainant: Auto Exposure Ltd
Country: GB
Respondent: Mr Kevin Beard
Country: GB
2. Domain Name:
superhighway.co.uk (“the Domain Name”)
3. Procedural Background:
The Complaint was received by Nominet in electronic form on 17 June 2003 and in hard copy form on 18 June 2003. It was validated by Nominet on 23 June 2003. The Response was received by Nominet in electronic form on 11 July 2003 and in hard copy form on 14 July 2003. The Reply was received by Nominet in both electronic and hard copy form on 22 July 2003.
The dispute proceeded to the mediation stage commencing on 25 July 2003 and concluding on 8 August 2003. No agreement was reached.
On 18 August 2003, the Respondent filed a further submission in response to the Complainant’s Reply. The Procedure does not provide for further submissions, but the Expert has read it and accepts it into the proceeding.
On 27 August 2003, the appropriate fee having been paid to Nominet by the Complainant, and Tony Willoughby, the undersigned Expert, having indicated to Nominet that there was no reason why he should not handle the case, the case was referred to the Expert for a decision.
4. Outstanding Formal/Procedural Issues (if any):
As indicated above, the Expert has accepted into the proceeding the further submission of the Respondent. The Reply introduced new material and the Expert deemed it fair and reasonable that the Respondent should have an opportunity of making submissions on that material.
5. The Facts:
The factual background to this case has not been easy to decipher and there are many areas of dispute between the parties as to what did or did not happen and as to the underlying circumstances generally.
The Complainant is a member of a network of companies with common shareholders. It specialises in web-based vehicle management systems for the UK motor trade. The Respondent is a web site designer and developer who from about September 2000 has been a shareholder and has held a senior executive position in one or more of those companies. From about April/May this year, the parties have been locked in an exceptionally hostile dispute of which this domain name dispute is but one part.
The relevant chronology, insofar as it has been possible to decipher it, appears to have been as follows:-
1. On 31 August 1999 a company was incorporated under the name Telecom Savings Direct Limited. The directors were a Mr A P O’Shea and a Mr F B Sharp. The shareholders were the directors and Betty Sharp and J R Johnson.
2. On 28 September 2000 the Respondent was appointed director of a company named Superhighway Limited. A copy of the relevant Companies Registry Consent Form signed by the Respondent on 28 September 2000 is before the Expert.
3. On the same day the Respondent (along with Mr F B Sharp, D Ward, A S Mallett, D Sharp, J R Johnson and A O’Shea) were allotted shares in Superhighway Limited.
4. On 4 October 2000 the Respondent purchased the Domain Name superhighway.co.uk in his own name for £1175 (inclusive of VAT). The Complainant has provided a copy of the invoice.
5. On 25 October 2000 Telecom Savings Direct Limited changed its name to Superhighway Business Limited.
6. On 24 January 2001, the Complainant was incorporated under the name Superhighway Data Limited, the directors being F B Sharp, the Respondent, J R Johnson and N J Mallett.
7. On 31 May 2001 (unless the document is a forgery) Mr Mallett produced a handwritten document headed:-
“SH Data
VAT Return
31/5/01”
The document sets out “sales/outputs” and “inputs” and identifies a net reclaim of VAT of £265.08. The inputs include a line reading:-
“Paid by K Beard 4497.88 [total] 3914.25 [net] 583.73 [VAT]”
8. Also on 31 May 2001 (and again, unless the document is a forgery) Mr Mallett produced a handwritten document headed:-
“SH Data Ltd
K Beard Payments
To 31/5/01”
which breaks down the figures identified in the previous paragraph. The first entry reads:-
“2000 Oct 4 Domain Name 1175 [gross] 175 [VAT] 1000 [net]”
9. On 28 June 2001, the Complainant filed a VAT return, the totals for sales/outputs and purchases/inputs coinciding with those given in the document identified at paragraph 7 above and resulting in reclaimed VAT of £265.08.
10. On 18 December 2001, Superhighway Business Limited went into insolvent liquidation.
11. On 16 August 2002, the Complainant changed its name to its current name, Auto Exposure Limited.
12. On 8 March 2003, the Respondent signed a Small Firms Loan Guarantee Scheme application form in his capacity as a director of Superhighway Limited.
Submitted with that application was a business plan which:-
(a) identified Superhighway Limited and the Complainant as being within the “Existing Group Corporate Structure”;
(b) identifies the directors and key personnel of Superhighway Limited as being the Respondent (managing director), N J Mallett (company secretary) and Frank Sharp (group sales consultant);
(c) relies heavily upon the past performance of the Complainant for “the merit of the proposal”;
(d) indicates that the Superhighway Limited website will be at www.superhighway.co.uk;
(e) contains in the draft terms and conditions a paragraph under the heading “Correspondence” reading as follows:-
“All correspondence relating to the website should be sent to:
Superhighway
4A Chilwell Road
Beeston
Nottingham
NG9 1EF
Tel: 0115 917 5531 (direct)
Fax: 0115 916 9595
Email: kevin@superhighway.co.uk”
13. On 4 April 2003, NatWest wrote to Superhighway Limited indicating at any rate provisionally that the application would be successful.
14. At some stage prior to the filing of the Complaint, the parties fell out and the Respondent’s employment with the Complainant was terminated.
15. Following the Respondent’s dismissal, the Complainant sought unilaterally to change the domain tags to give the Complainant control over the Domain Name. The Respondent then had the tags changed back and the Domain Name remains in the control of the Respondent.
16. As at 23 June 2003 the home page of the website connected to the Domain Name promoted the business of the Complainant and gave the Complainant’s telephone number.
17. On 4 July 2003 the Respondent resigned as a director of the Complainant.
18. Today, the Domain Name connects to a website of the Respondent promoting a Superhighway internet consultancy having no connection with either Superhighway Limited or the Complainant..
6. The Parties’ Contentions:
Complainant:
The substance of the Complaint runs to no more than 30 lines.
The Complainant contends that the Domain Name is identical or similar to a name or mark in which it has rights, the name or mark in question being SuperHighway.
The Complainant contends that the Domain Name is an abusive registration in the hands of the Respondent, the Respondent having:-
(a) registered the Domain Name for the Complainant and/or another member of the Group;
(b) been reimbursed by the Complainant for the cost of acquiring the Domain Name;
(c) agreed to update the Whois record to put the Domain Name registration in the name of the Complainant and then reneged on that agreement;
(d) promoted the Domain Name as a core feature of Superhighway Limited’s business plan; and
(e) now connected the Domain Name to a website promoting a Superhighway consultancy service unconnected with the Complainant or Superhighway Limited.
Respondent:
The Respondent has two primary contentions before getting to the issue as to whether or not the Domain Name is an abusive registration in the hands of the Respondent.
First, the Respondent asserts that the nature of the dispute is such that it is not one suitable to be resolved by way of the Nominet Dispute Resolution Service. It is a bitterly hostile dispute. There are numerous conflicts of fact. To resolve the dispute fairly the Expert would need to have the benefit of full disclosure, oral evidence, cross-examination etc. None of that is available to the Expert under the Policy.
Secondly, the Respondent contends that the Complainant has failed to demonstrate that it has rights in the name SuperHighway which, in the internet context, is generic. The Respondent points out that the Complainant changed its name nearly a year ago and no longer trades under the name SuperHighway. The Respondent claims that any subsequent use of the name SuperHighway by the Complainant is likely to render the directors being in breach of Section 216 of the Insolvency Act. The basis for this allegation is that Section 216 prohibits directors of a company which has gone into insolvent liquidation (ie Superhighway Business Limited – see The Facts above) carrying on business under a similar name.
As to the merits of the Complaint, the Respondent says that he acquired the Domain Name on his own account. He thought that it was an attractive and useful domain name to own. He could not have registered it for the Complainant because the Complainant had not been incorporated when the Domain Name was registered.
The Respondent says that when he joined the Complainant he permitted the Complainant to use the Domain Name. He is adamant that he was never reimbursed for the Domain Name. He says that the first time he saw the documents referred to above in paragraphs 7 and 8 of The Facts, was earlier this year, after relations between the parties broke down.
The Respondent asserts that the Complaint is defective in that it fails to identify by reference to the Policy why the Domain Name is an abusive registration. It does not allege mala fides on the part of the Respondent, when registering the Domain Name, nor does it allege confusing use of the Domain Name.
The Respondent alleges reverse domain name hijacking on the basis that the Complainant has used the Policy in bad faith in an attempt to deprive the Respondent of the Domain Name when the Complainant has known all along that it had no reasonable grounds for bringing the Complaint.
Further Submissions of the Parties
As is to be expected, when disputes of this nature and temperature arise, the submissions of the parties contain a wealth of detail relating to the alleged misdeeds of the opposing party, but much of it is irrelevant to what the Expert has to decide. The Expert does not deem it necessary to set it all out in this Decision.
However, the Complainant basically stands by the substance of the original Complaint. One of the fundamental points raised by the Respondent was that the Respondent could not have registered the Domain Name on behalf of the Complainant because the Complainant was not in existence at that time. The Complainant’s response appears to be that while the Complainant was not in existence at that time, another associated company or associated companies were in existence at the appropriate time and the Respondent was a director of one of them, namely Superhighway Limited.
As to whether or not the Respondent was ever reimbursed by the Complainant for the cost of acquiring the Domain Name, there is a continuing conflict of fact. The Complainant has produced documents showing that the Complainant had treated the matter as if the Respondent had been reimbursed, but the Respondent continues to deny that he received anything for the Domain Name.
7. Discussion and Findings:
General
To succeed in this Complaint the Complainant has to prove to the Expert pursuant to paragraph 2 of the Policy on the balance of probabilities, first, that it has rights (as defined in paragraph 1 of the Policy) in respect of a name or mark identical or similar to the Domain name and, secondly, that the Domain Name, in the hands of the Respondent, is an Abusive Registration (as defined in paragraph 1 of the Policy).
Paragraph 16(d) of the Procedure provides inter alia that if, after considering the submissions, the Expert finds that the Complaint was brought in bad faith, for example in an attempt at reverse domain name hijacking, the Expert shall state this finding in the Decision. Reverse domain name hijacking is defined in paragraph 1 of the Procedure as meaning “using the Policy in bad faith in an attempt to deprive a registered domain name holder of a domain name”.
Complainant’s Rights
The section of the Complaint dealing with the existence of the Complainant’s rights is sparse in the extreme. It reads “I confirm Domain Name(s) in dispute are [sic] identical or similar to a name or mark in which I have rights.”
The Complainant has produced none of the material that one would expect a Complainant to produce to demonstrate unregistered rights in the name or mark Superhighway. There are no sales figures, no advertising figures and no exhibited promotional material. To the extent that there is anything before the Expert to identify the nature and scope of the Complainant’s business, it is not clear whether the business was being conducted under the name Superhighway or the name Auto Exposure. The 30-page business plan provided with the Reply shows that the company planning to use the Domain Name was another company altogether, namely Superhighway Limited.
Ordinarily, one might have been prepared to make assumptions in the Complainant’s favour given the fact that for much of the period in question the Respondent, a director of the Complainant, appears to have regarded Superhighway as an effective brand; moreover the ‘rights’ test was never intended to be a high hurdle for a Complainant to overcome.
However, Superhighway, in the internet context, is a name having a strongly descriptive flavour. While descriptive names are perfectly capable of giving rise to unregistered rights, (eg. British Petroleum), the more descriptive the name, the greater the burden on the Complainant to establish that the rights exist.
A further complication in this case is that the Complainant did not exist at the time the Domain Name was acquired by the Respondent. It was another company, Superhighway Limited, which existed at that time. Other related companies included Superhighway Business Limited whose name predates the incorporation of the Complainant and Superhighway (UK) Limited, which is mentioned in the Respondent’s further submission, but the Expert has no detail relating to that company. If relevant rights to the name exist, who owns them? Why should it not be Superhighway Limited? If the rights have been licensed to the Complainant, where is the licence?
In the result, the Expert has insufficient information before him to determine whether or not rights in the name exist and, if they do exist, who owns them. The Expert contemplated seeking further clarificatory information from the parties but the Complainant has had ample opportunity to deal with the matter (the issue was raised fairly and squarely in the Response) and the Expert does not believe that giving the parties opportunities to file further submissions will lead to a satisfactory result. This is by no means the only area upon which the Expert would have required clarification.
Accordingly, the Complaint must fail basis that the Complainant has failed to satisfy the Expert that it has relevant rights in the name Superhighway.
Abusive Registration
In light of the above it is not necessary for the Expert to deal with the question of abusive registration.
8. Decision:
The Complaint is dismissed.
Reverse Domain Name Hijacking
While the Expert has dismissed the Complaint, the basis for the dismissal is simply that the evidence before the Expert is inadequate to enable the Expert to come to a fair determination on the issue as to whether or not the Complainant has relevant rights. The Expert suspects that the Complainant (in the person of Mr Sharp) has made the mistake of treating all the companies in the network as one, whereas they are not. They are separate legal entities.
Mere ineptitude in formulating a Complaint will rarely (if ever) constitute Reverse Domain Name Hijacking. To constitute Reverse Domain Name Hijacking the conduct of the Complainant has to have been in bad faith. In this case, the Respondent obtained the Domain Name when he was a director and shareholder of a company named Superhighway Limited, yet in the Response the impression given is that he plucked the name out of the sky. He says that he did not acquire the Domain Name on behalf of anybody else and he “thought it was an attractive and useful domain to own”. It was the name of a pre-existing company in which Mr Sharp was a key person. The Expert understands why the Complainant (in the person of Mr Sharp) felt that the merits of the case lay with the Complainant.
As to whether or not the Respondent was reimbursed his costs of acquiring the name, the Expert is unable to resolve that issue, but observes that if, as the Respondent claims, the Respondent never sought reimbursement because he acquired the Domain Name on his own account, then it seems strange that the Complainant should be in possession of the purchase invoice.
The Expert does not seek to make any findings in respect of these issues. The Expert simply mentions them to indicate why the Expert is in no doubt that the Complaint was filed in the genuine belief that it was likely to succeed.
The Expert finds that this was not a case of Reverse Domain Name Hijacking.
Tony Willoughby
Date: 3 September 2003