Learning South West v Conscribe Ltd [2004] DRS 1560 (10 May 2004)

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The complaint was entered into Nominet’s system on 9th February 2004. Nominet validated the complaint and informed the Respondent by letter dated 17th February 2004, noting that the Dispute Resolution Service had been invoked and that the Respondent and/or its liquidators had 15 working days (until 10th March 2004) to submit a Response. After a minor difference of opinion concerning service of the Complaint, a Response was received on 9th March 2004; and a Reply from the Complainant was submitted and received on 15th March 2004. It seems that the next three weeks or so were taken up with mediation between the parties, but in accordance with Nominet’s practice I have not seen any of the mediation materials and do not know what went on, save that (regrettably) it did not result in a mediated settlement of the Complaint.

On 6th April 2004 the Complainant was invited to pay the fee to obtain an Expert Decision pursuant to paragraph 6 of the Nominet UK Dispute Resolution Service Policy (“the Policy”). I have seen no evidence that the fee was paid, but I assume from the fact that I have been asked to give an Expert Decision that it has been paid.

On 23rd April 2004 Nominet invited me to provide a decision in this case and, following confirmation to Nominet that I knew of no reason why I could not properly accept the invitation to act in this case and of no matters which ought to be drawn to the attention of the parties which might appear to call into question my independence and/or impartiality, Nominet duly appointed me as Expert with effect from 26th April 2004.

The Complainant is a UK registered charity (Charity Number 1020027) and a company limited by guarantee (Company Number 2806593). That company has since 20th February 2004 been called ‘Learning South West’. Prior to that date it was called South West Association For Education And Training.

The Complainant and the Respondent are agreed that in or around April 2003 there was a commercial relationship of some kind between them, relating to the Complainant’s intended re-branding; but the extent and contractual terms of that relationship are disputed.

The Nominet WHOIS search with which I have been provided shows that the Domain Name, learningsouthwest.org.uk, was registered on behalf of the Respondent on 29th April 2003. The parties appear to agree that the Respondent did so pursuant to a request from the Complainant. What is disputed is in whose name the Domain Name should have been registered and on what terms.

The URL http://www.learningsouthwest.org.uk currently displays the web site of a software development company variously styling itself as ‘EvolvIT Ltd’ and ‘Conscribe Limited’ (the latter, displayed under the ‘Products’ and ‘About Us’ tabs, being the Respondent’s corporate name).

The Complainant requests that the Domain Name be transferred to it on the basis of the following submissions:

“The Complainant is a UK registered charity (Charity Number 1020027) and a company limited by guarantee (Company Number 2806593). As part of their continual development the Complainant decided to re-brand from its old name of South West Association for Education and Training (or SWAFET) to the name Learning South West. It has spent considerable resources and time developing this brand.

Part of this re-brand involved the registration of its domain name. The Complainant had instructed Evolvit Limited(an IT company) to undertake various projects to assist them with their IT needs and on the 28th April 2003 the Complainant instructed the Respondent to register the domain name learningsouthwest.org.uk on their behalf. The Respondent’s did this and invoiced the Complainant the sum of £25 plus VAT which it duly paid.

It should be noted that the Respondent and Evolvit Limited trade from the same address and have the same directors. Since 28th April 2003, the Complainant reviewed their IT needs and their contract for IT service was put up for tender. Unfortunately, the Respondent was unsuccessful. In the course of transferring their IT business over, the Complainant discovered that the above domain name had been registered in the Respondent’s name. The Complainant immediately contacted Evolvit Limited to ask them to transfer the domain name to their ownership as they were re-launching the name on 10th December 2003, but Evolvit Limted refused.

In a letter dated 2nd December Evolvit Limited made a number of disputed allegations in respect of an alleged contract to provide database services. In the same letter Evolvit Limited stipulated that the Complainant had been offered the chance to either register the domain name for £75 or have it placed on ‘hold’ for £25. The Complainant disputes this offer although in an attempt to remedy this issue the Complainant offered to pay the additional £50 to resolve this issue but this was refused. As a consequence of Evolvit Limited's refusal to transfer the domain name the Complainant was forced to register an alternative domain name as an interim measure.

In the letter from Evolvit Limited dated 2nd December 2003, Evolvit Limited stated that ‘while the database issue remains unresolved and while there is an outstanding issue we reserve the right to remain the owners. Once this dispute has been resolved and SWAFET either continue employment us as per the contract to develop the database or compensate Evolvit Ltd for its losses the domain will remain in our ownership.’

Furthermore, it has now come to the attention of the Complainant that the Respondent is not simply ‘holding’ the domain name but has also set it up to point to Evolvit Limited's own commercial website.

It is submitted that the Claimant clearly has the Right to the domain name. The domain name was developed as part of its corporate brand and the only reason that the Respondent registered the same was on the basis of instructions from the Claimant. This is substantiated by Evolvit Limited accepting payments for the same.

It is submitted that the registration is abusive. The Respondent is clearly using the registration to negotiate an entirely separate dispute by holding the Claimant to ransom. Furthermore, the use of the domain name to point to Evolvit Limited's own web site is a clear indication that it intends to benefit from the Claimant’s goodwill by increasing traffic to its own site. The Respondent has no legitimate interest in the domain name and is not associated with the provision of any ‘learning’ services.”
Annexed to the Complaint were three letters and a document headed ‘draft responses’:

(i) The first letter is dated 24th November 2003. It was from the Complainant’s solicitors Bevan Ashford to DH of EvolvIT Limited. It is a conventional ‘letter before action’ threatening EvolvIT Limited with legal proceedings for passing off and/or breach of contract. In the letter it is asserted that the Complainant was at that time ‘currently in the process of re-branding to “Learning South West”’; and the Complainant is accused of breach of contract, passing off and of having registered the Domain Name in breach of warranty (the wording of clause 5.3 of Nominet’s Terms and Conditions is quoted, pursuant to which the Complainant warranted that the Domain Name “will not knowingly infringe the intellectual property rights of a third party [and] that [you] are entitled to register the Domain Name, and that [you] have not registered the Domain Name in breach of trust.”)

(ii) The second letter is a response from DH, on EvolvIT Limited headed paper, to LM of the Complainant dated 2nd December 2003. In that letter he alleges that “On 28th April 2003 we [the Respondent] offered you [the Complainant] the opportunity of registering for £75.000 plus £75.00 per year hosting or £25.00 to hold the domain. You decided to pay £25.00 to hold the domain pending a final decision from the board … we did not make you the owner because you had not made a final decision about whether you would use it. It is our intention and has always been our intention to transfer this domain to you once you have told us you wish to use it and have paid the additional £50.00 to have it registered in your name.” DH goes on to state that pending the resolution of a further contractual dispute between the parties regarding a ‘database project’, EvolvIT will nevertheless retain the domain name; but notes that the Complainant has been offered “the option of using the domain name as if you were the owners until our dispute has been resolved but you declined this offer.”

(iii) The third letter is dated 4th December 2003 from LM to DH. The material paragraph in response to the one quoted above is as follows: “In so far as the domain name is concerned it is clear that the domain name was purchased for us. On talking to other people it is clear that £25 would be a realistic price for the domain name and so we had no reason to believe that we had done anything other than purchase it. On a without prejudice basis and without admission of liability we are prepared to pay an additional £50 provided that the domain name is released immediately”.

(iv) The ‘draft responses’ document is more curious. It appears to have been written by LM and I infer from the fact that most of the wording is identical that it was the draft upon which the 4th December 2003 letter was based. However the paragraph corresponding to that quoted above is slightly different in its emphasis: “I was unaware of the difference between registering the domain name and holding the domain name. Which ever of those I asked you to do – it was clearly for us – indicated by the fact that you charged us for the activity. If we owe you another £75, send and invoice and release the name”.

The Respondent disputed that the Domain Name should be transferred to the Complainant on the basis of the following submissions:

“We were asked by Evolvit Ltd to purchase on their behalf a domain name on the basis that it may be used some time in the future. The agreement was that we would invoice them a small admin fee for the process involved and should the domain need to be used in the future we would host it for them and charge our usual hosting rate. We invoiced Evolvit for the admin work and have been paid.
Because the domain name is of a generic nature and because at the time of purchase there was no obvious entitlement from a company of the same name we undertook the instruction. In fact looking at the Companies House register we note that a company of the same name didn't exist until 20/02/2004 some 10 months after the registration of the domain in question.
Conscribe Ltd and Evolvit Ltd do not have the same Directors as suggested and are completely separate legal entities. Its obvious on reading the documentation that you sent that SWAFET and Evolvit Ltd have some kind of dispute. We cannot see how we may be implicated and how the Registration of learningsouthwest.org.uk could be seen on our part as an Abusive Registration.”

“a. We cannot comment on the Respondent's "agreement" with Evolvit Ltd as we were not a party to this.
b. The claim that Conscribe Limited and Evolvit Limited do not have the same directors is incorrect. The last annual return filed at Companies House shows that DH is a director of both companies as well as a principal shareholder. It is clear that any "agreement" between the two companies was not at arms length. Whilst the addresses registered for the two persons are different they share the same locality and date of birth and it is submitted are clearly the same person.
c. The Respondent's contention that the domain name was only purchased on the basis that it may be used at some time in the future is incorrect. The domain name was subsequently used by Evolvit Ltd to point to their web site.
d. The domain name is not of a generic nature. The Complainant had expended considerable resources preparing for the launch under the new name. Notwithstanding this any generic nature of the domain name is irrelevant as to whether it is an abusive registration as the use of the domain name in the manner by Conscribe Limited (ie authorising Evolvit Ltd to use the name) is not "fair use".
e. The Company did not exist under the corporate name "Learning Southwest" because as already stipulated and made clear to Evolvit Ltd this was part of the rebrand process.
f. It is clear that Conscribe Limited and Evolvit Limited are controlled by the same person and that the any contractual agreement between the two could not be on arms length terms. It is further submitted that the Respondent is clearly using the domain name as a blocking registration to assist in resolving an unrelated dispute. ”

Paragraph 2 of the Policy requires that, in order for the Complainant to succeed, it must prove to the Expert, on the balance of probabilities, both that it 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.
Complainant’s Rights

The Complaint appears to be made on two bases: first, the initial registration on 29th April 2003 is said to have been Abusive; second, the use that is currently made of the domain name to point to the Respondent’s web site is said to render the registration Abusive. Therefore I will consider whether the Complainant had ‘Rights’ on two separate dates: as at the date of initial registration and as at the date of this Decision (May 2004).

On 29th April 2003 the Complainant was called ‘South West Association For Education And Training’. The Respondent concedes that the Complainant had at that stage at least a tentative intention to use the designation ‘Learning South West’ in the future; but there is no evidence that the designation was formally or publicly adopted by the Complainant until at least 10th December 2003. It did not change its corporate name until 20th February 2004 (11 days after submission of the Complaint) and as at 24 November 2003 its solicitors described it as being ‘currently in the process of re-branding.’ No evidence of any registered or unregistered intellectual property rights as at April 2003 date has been submitted to me.

On this basis, even bearing in mind that the threshold requirement for ‘Rights’ is a low one, I consider that the Complainant has not discharged the burden of proving that it owned ‘Rights’ in the designation ‘Learning South West’ as at 29th April 2003.

As at May 2004 the factual position has moved on. The Complainant’s corporate name is now ‘Learning South West.’ It is submitted (though no quantitative evidence of this has been submitted) that the Complainant ‘has spent considerable resources and time developing this brand’. The designation certainly appears to be in use, though I bear in mind that it is fairly descriptive of the Complainant’s charitable objects and activities and hence would require quite substantial usage in order to become distinctive of the Complainant in the perception of the public. Though no evidence has been submitted to suggest that the Complainant owns any registered trade mark rights, it is well established that the definition of ‘Rights’ in the Policy can encompass corporate names and common law rights built up through use. On balance I am satisfied that the Complainant currently owns ‘Rights’ in the designation ‘Learning South West.’ I am further satisfied that this name is identical to the Domain Name (ignoring, as I am required to do, the first and second level suffixes).

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.

I have already concluded that the Complainant has not proven that it owned any relevant ‘Rights’ at the date of registration / acquisition by the Respondent. Nonetheless, even if I had concluded that the Complainant had ‘Rights’, I would not have held initial acquisition to have been an Abusive Registration.

This is because: (a) it is agreed that the original registration took place on the express instructions of the Complainant; and (b) I am unable to resolve the parties’ dispute concerning the contractual terms upon which the initial registration took place. As to the latter, the Respondent contends that the Complainant was given two options: £25 for registration in the name of the Respondent as a ‘holding’ measure; or £75 for full registration in the name of the Complainant. The Complainant “disputes” this, but I am not told what its alternative version of events is; and the exchange of correspondence and the ‘draft responses’ document included with the Complaint are at best neutral on this issue.

The Nominet DRS procedure is not designed to resolve contractual disputes between parties; that is the province of the Courts. This is not just because many of the Nominet Experts have no formal legal training. Where there is no dispute as to the key contractual terms governing the registration of the Domain Name, an Expert may feel able to decide whether or not there has been a breach of contract as part of his or her broader analysis of whether there has been an Abusive Registration; but where the parties are in serious dispute over such fundamental matters as the intended registrant or the availability of a contractual lien, it is inappropriate for an Expert to attempt to resolve such disputes on the basis of brief written submissions. Moreover, in such circumstances it is difficult to see how the Respondent’s registration or use of a domain name could be characterised as ‘unfair’ or ‘abusive’ with any degree of confidence when there exists a realistic prospect that the Respondent has in fact done nothing more than perform the agreement in accordance with the parties’ intentions.

It will be noted that I have drawn no distinction between Conscribe Limited (the Respondent properly so called) and Evolvit Limited (the company with which the Complainant seemingly contracted), as for present purposes there is no relevant distinction between the two companies. It is unhelpful and somewhat disingenuous for the Respondent to claim that the two companies have no knowledge or involvement of the other’s dealings (as is implicit from the tenor of the Response: “Its obvious on reading the documentation that you sent that SWAFET and Evolvit Ltd have some kind of dispute. We cannot see how we may be implicated.”) in circumstances where the two companies have a common director and shareholder (DH), trade from the same address, are referred to interchangeably on the EvolvIT website and are referred to interchangeably by DH in correspondence.

For the above reasons it only remains for me to consider the second limb of the ‘Abusive Registration’ test set out above i.e. whether the Domain Name has been used in a manner which took unfair advantage of or was unfairly detrimental to the Complainant’s Rights.

Moreover, given that I am unable to determine on the evidence before me the issue at the heart of the Complainant’s case (namely whether the Respondent was entered as registrant in breach of contract and/or is entitled to exercise some kind of contractual lien over the Domain Name), the only way the Complainant can succeed under this limb is to demonstrate that the Respondent’s use of the Domain Name to point to EvolvIT’s commercial website in itself takes unfair advantage of or is unfairly detrimental to the Complainant’s Rights. It will be appreciated that this is a much narrower complaint. The nub of it is that “… the Respondent is not simply ‘holding’ the domain name but has also set it up to point to Evolvit Limited's own commercial website … the use of the domain name to point to Evolvit Limited's own web site is a clear indication that it intends to benefit from the Claimant’s goodwill by increasing traffic to its own site.”

A non-exhaustive list of factors which may be evidence that the Domain Name is an Abusive Registration are set out in Paragraph 3(a) of the Policy. A non-exhaustive list of countervailing factors are set out in Paragraph 4(a) of the Policy. The Complainant appears to rely upon paragraphs 3(a)(i)(B) and 3(a)(i)(C) of the Policy. These paragraphs provide that it is indicative of Abusive Registration if the Respondent has registered or otherwise acquired the Domain Name as a blocking registration against a name or mark in which the Complainant has Rights [paragraph 3(a)(i)(B)] and/or primarily for the purpose of unfairly disrupting the business of the Complainant [paragraph 3(a)(i)(C)]. Both of these paragraphs refer to initial acquisition rather than subsequent use, but as they are only illustrative and non-exhaustive I will consider more broadly whether the Domain Name is currently being used as a blocking registration or primarily for the purpose of unfairly disrupting the business of the Complainant.

The Complainant argues that, even on the Respondent’s case, the Domain Name was purchased on the Complainant’s behalf as a ‘holding’ registration for the Complainant’s own future use; and that by pointing it at the Respondent’s site, precisely the opposite effect has been achieved. Whilst there is a certain superficial attraction to this argument, I am ultimately unable to conclude that in this case the pointing of the Domain Name to the Respondent’s own site per se (as opposed to pointing it at a neutral ‘holding page’ or no page at all) takes unfair advantage of, or is unfairly detrimental to, the Complainant’s Rights. This is not a case where a domain name has been pointed to the website of a commercial competitor of the Complainant, or to a site containing offensive or derogatory material. Further, it would be harsh to condemn the Respondent for the manner in which it has used the Domain Name when the evidence suggests that it had offered the Complainant “the option of using the domain name as if you were the owners until our dispute has been resolved but you declined this offer.”

I have considered whether, on the evidence as a whole, the Complainant has discharged the burden of proving that the Domain Name has been used in a manner which takes unfair advantage of or is unfairly detrimental to the Complainant’s Rights.

My overall assessment on the balance of probabilities is that the Complainant has failed to discharge that burden, primarily because I am not in a position to decide the contractual dispute at the heart of the Complaint and I am consequently ill-equipped to determine whether or not that the Respondent has conducted itself unfairly or abusively. I would respectfully suggest that the more appropriate forum for the resolution of disputes such as the present one is the court (or, better still, some form of ADR).
Accordingly I am not satisfied that the Domain Name, in the hands of the Respondent, is an Abusive Registration.

Having concluded that the Domain Name is not an Abusive Registration, the Expert determines that no action should be taken in relation to the Domain Name, LearningSouthWest.org.uk.

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You are here: BAILII >> Databases >> Nominet UK Dispute Resolution Service >> Learning South West v Conscribe Ltd [2004] DRS 1560 (10 May 2004) URL: http://www.bailii.org/uk/cases/DRS/2004/1560.html Cite as: [2004] DRS 1560