Hughes Electronics Corporation -v- Chuks [2004] DRS 1746 (4 August 2004)

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3.1 On 10 May 2004, the Complainant submitted a Complaint under the Nominet Dispute Resolution Service Policy (the “Policy”) to Nominet UK (“Nominet”) electronically, and sent a hard copy of the same by post. The hard copy of the Complaint was received by Nominet on 10 May 2004 and entered into the system on the same day. The Complaint documents were validated and sent to the Respondent on 13 May 2004. No response had been received from the Respondent by Nominet by 8 June 2004. On receipt by Nominet on 14 July 2004 of the relevant fee from the Complainant, the matter was referred for a decision by an expert. On 21 July 2004, I was appointed as the Expert in relation to this matter.

4.1 The Complainant is Hughes Electronic Corporation, a provider of goods and services in the satellite telecommunications industry. The Complainant is the registrant of the domain name <direcway.com>.

4.2 The Domain Name was registered in the name of the Respondent (by whom it continues to be held) on 9 August 2001. The Respondent is an individual.

5.1 The Complainant seeks transfer of the registration of the Domain Name into its name on the grounds that it is identical to a name(s) or mark(s) in which it has rights and the registration of the Domain Name in the name of the Respondent is an Abusive Registration. The Complainant asserts that it is a “global leader in providing goods and services in the satellite telecommunications industry.” It has used and owned rights in the mark DIRECWAY for its satellite telecommunications goods and services “since at least October 2000.”

5.2 The Complainant owns a number of trade mark registrations for its DIRECWAY mark, including Community Trade Mark (“CTM”) Registration No. 1167170 for the word mark DIRECWAY in classes 9, 16 and 38 (registered on 24 July 2000) and CTM Registration No. 2132363 for the word mark DIRECWAY in classes 9 and 38 (registered on 8 April 2002). Other registrations include Japanese Registration No. 4612484, Chinese Registration No. 1917491, German Registration No. 494936, Norwegian Registration No. 215619, Australian Registration No. 889788, and United States Registration Nos. 2184385 and 2493120.

5.3 However, all of the trade marks save for CTM Registration No. 1167170 and United States Registration No. 2184385 post-date the registration of the Domain Name. Furthermore, United States Registration No. 2184385 is for the mark DIRECPC and not DIRECWAY.

5.4 The Complainant asserts that the Domain Name is identical to the Complainant’s distinctive, “arbitrary” DIRECWAY mark.

As noted above, the domain name is identical to Complainant’s distinctive, arbitrary DIRECWAY mark and therefore serves as a blocking registration in the UK domain. Indeed, Respondent admitted as much in an August 21, 2001 email to Complainant’s European representative at Hughes Network Systems. For example, Respondent stated: “I am the owner of the domain name, Direcway.Co.Uk . . . However, it has come to my attention that Direcway is also the name of one of your company’s concerns, Direcway.” Furthermore, Respondent acknowledges that Complainant is “the party who would benefit most from buying this domain name,” and that Complainant already owns <direcway.com>. Given the arbitrary nature of the term “Direcway” and Respondent’s admitted knowledge that Complainant owns the <direcway.com> domain name, Respondent cannot have a good-faith defense to his blocking registration of <direcway.co.uk>.

Respondent’s August 21, 2001 email and additional correspondence to Complainant further demonstrate the abusive nature of Respondent’s registration of the domain name. Specifically, Respondent’s August 21, 2001 communication was sent only 12 days after he registered the domain name (further suggesting Respondent’s knowledge of Complainant’s rights to the name), and makes clear his general intention to sell the domain name to Complainant for a profit: “I have received numerous offers from other parties interested in buying this domain name from me . . . Please mail any bids to me at your earliest convenience.” In an email dated July 2, 2002, Respondent specifically offered to sell the domain name to Complainant for £1100, far in excess of what he paid to register the domain name. When Complainant rejected that offer, Respondent on July 17, 2002 reduced his demand to the still exorbitant sum of $950. These circumstances clearly indicate that Respondent acquired the domain name primarily for the purpose of selling it to Complainant for profit. Therefore, Respondent’s registration was abusive.”

6.1 To succeed under the Policy the Complainant must prove on the balance of probabilities, first, that he has rights in respect of a “name or mark” that is identical or similar to a Domain Name and secondly, that the Domain Name is an Abusive Registration.

6.2 Abusive Registration is defined in paragraph 1 of the Policy in the following terms:

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;

6.3 As set out above, the Complainant has provided evidence of the existence of certain trade mark registrations that it holds. The Complainant’s application for CTM No 1167170 was published on 24 January 2000 and the trademark was granted on 24 July the same year. Accordingly, it is clear that as at the date of the registration of the Domain Name on 9 August 2001, the Complainant had rights in a name or mark “identical or similar” to the Domain Name. Accordingly the Complainant has successfully made out the requirement of paragraph 2(a)(i) of the Policy.

6.4 In light of the above conclusion based upon the Complainant’s CTM it is not necessary to consider further the Complainant’s contentions based upon other registered trademarks.

6.5 In its Complaint, the Complainant makes two allegations as to why it was that the Respondent registered the Domain Name. It is alleged that the purpose of registration was (i) as a “blocking registration” and (ii) to “sell the Domain Name for profit”. It is convenient first to deal with the allegation of sale for profit.

6.6 A non-exhaustive list of factors which may evidence that a Domain Name is an Abusive Registration are set out in paragraph 3 of the Policy. Included in this list at paragraph 3(a)(i)A are circumstances indicating that the respondent registered or acquired the Domain Name:

“primarily for the purposes of selling, renting or otherwise transferring the Domain Name to the Complainant or to a competitor for valuable consideration in excess of the Respondent’s documented out-of-pocket costs directly associated with acquiring or using the Domain Name.”

6.7 The most significant evidence before me on this issue is in the email correspondence included with the Complaint. One curious aspect of this material is that it does not appear to comprise all the relevant correspondence between the parties. Only three emails from the Respondent to the Complainant are disclosed and it seems reasonably clear from the contents of those emails that they reply to other e-mails or correspondence from the Complainant that have not been provided.

6.8 A party who presents evidence in this fashion leaves himself open to allegations that material is taken out of context and/or its presentation is otherwise misleading. However, there is no allegation to this effect on the part of the Respondent in this case.

6.9 Does the Complainant in this case put forward a prima facie case to the effect that the Respondent knew of the Complainant’s name at the time of registration of the Domain Name and had registered the Domain Name for the purpose of sale to the Complainant? I am of the view that the answer to this question is yes. The reasons for this are as follows:

(i) The Respondent’s email to the Complainant dated 21 August 2001 asserts that “it has come to [the Respondent’s] attention that Direcway is also the name of one of your company’s concerns, Direcway.” Exactly when it came to the Respondent’s attention is not revealed. However, insofar as the Respondent claims that he did not know of the Complainant’s use of this name prior to registration, that claim is rejected. The email was sent just 12 days after registering the Domain Name. It is implausible to say the least that the Respondent discovered the existence of the Complainant purely by chance so soon after the registration of the Domain Name was effected.

(ii) The wording of the 21 August 2001 email suggests that it was the Respondent who first made contact with the Complainant. This is confirmed in the Respondent’s email of 2 July 2002 in which he states “I contacted Hughes Electronics with an offer to sell in the first instance after discovering that there was a Direcway.com”. In the first email of 21 August 2001, the Respondent asks the Complainant to “mail any bids to [the Respondent] at [the Complainant’s] earliest convenience”.

(iii) The Respondent in his 21 August 2001 email acknowledges that the Complainant is “the party who would benefit most from buying this domain name from me”.

(iv) In his 21 August 2001 email the Respondent asserts “I have received numerous offers from other parties interested in buying [the Domain Name] from me.” This is an inherently implausible assertion in circumstances where only 12 days had elapsed since the registration of the same. Accordingly, these words appear to be an attempt on the part of the Respondent simply to inflate the price of the Domain Name given the supposed amount of third party interest in it.

(v) The Respondent is inconsistent in his reasons given in email correspondence with the Complainant for wanting to register the Domain Name. In his email of 21 August 2001 he states that “I bought this domain name for a private site that I was due to build.” In a later email on 2 July 2002 he states that the purchase of the Domain Name “was made in order to provide a suitable domain name for a new UK insurance web initiative”.

(vi) In his email of 2 July 2002 the Respondent sought payment of £1,100 in relation to transfer of the Domain Name.

(vii) The Domain Name was registered nearly 3 years ago. There is no evidence put before me to suggest that the Respondent has used the Domain Name since registration either as a “private site” as asserted in the 21 August 2001 email or in order to provide a “new UK insurance web initiative” as asserted in the 2 July 2002 email.

6.10 Of course, under paragraph 3(a)(i)A of the Policy it is also necessary to show that the sum sought is greater than the Respondent’s “out-of-pocket costs”. Here the sum sought in the 2 July 2002 email was £1,100. This is a relatively small figure. In his email of 17 July 2002 the Respondent sought the even smaller sum of US$950. Could these not represent “out-of-pocket costs”?

6.11 What constitutes out-of-pocket expenses will inevitably depend upon the individual case (see for example the decision in DRS 573 (Quest Motors (Maldon Limited) -v- Internet Assist Limited) where a request by the Respondent for £2000 was found to be wholly disproportionate to the Respondent’s out-of-pocket costs). I am of the view that in the circumstances of this case more than “out-of-pocket costs” have been sought. The reasons for this are as follows:

(i) What matters under paragraph 3(a)(i)A of the Policy is the Respondent’s intention at the time that the domain name was registered or acquired. Here the wording of the 21 August 2001 and its solicitation of “bids” makes it clear that the Respondent’s hope and intention was to obtain a sum in excess of out-of-pocket costs. The fact that at a later date he may have been prepared to accept a lesser sum does not detract from this fact.

(ii) The sums subsequently sought are relatively small. Indeed, I note that the sum ultimately sought by the Respondent is less than the costs that the Complainant will have incurred in fees to Nominet in relation to this dispute. However, this is of no consequence. The sums sought are still significantly greater than the fees charged by Nominet to register a “.co.uk” domain name. That is not to say that other costs will not be relevant here, but paragraph 3(a)(i)A requires those other out-of-pocket costs to be “documented”. No documentation has been placed before me in relation to any costs claimed by the Respondent over and above registration fees.

6.12 Therefore, for the reasons given above, the Complainant has prima facie shown that the circumstances identified under paragraphs 3(a)(i)A of the Policy apply in this case at the date of registration of the Domain Name and that the Domain Name is consequently an Abusive Registration. In the absence of any credible evidence from the Respondent to the contrary I conclude this is correct.

6.13 In light of this conclusion it is not necessary to form any view on the Complainant’s contention that the Domain Name was registered as a blocking registration.

6.14 In the circumstances I find that the Complainant has successful made out the requirements of paragraph 2(a)(ii) of the Policy.

7.1 I find that the Complainant has Rights in the name DIRECWAY, which is identical to or similar to the Domain Name, and that the Domain Name, in the hands of the Respondent, is an Abusive Registration.

7.2 I therefore determine that the Domain Name should be transferred to the Complainant.

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