Nominet UK Dispute Resolution Service

DRS 03078

Jemella Limited -v- Landlord Mortgages Limited

Decision of Independent Expert

a.	Parties

Complainant:	Jemella Limited
Country:	GB

Respondent:	Landlord Mortgages Limited
Country:	GB

b.	Domain Name

ghd.co.uk (“the Domain Name”)

c.	Procedural Background

The Complaint was lodged with Nominet on 26 October 2005 and Nominet notified the Respondent of the validated Complaint on 27 October 2005.  The Respondent filed a Response to the Complaint on 31 October 2005 and Nominet so informed the Complainant on the same date.  The Complainant filed a Reply to the Response on 9 November 2005, which was forwarded by Nominet to the Respondent on 10 November 2005.  Nominet informed the parties on 29 November 2005 that informal mediation had failed to achieve a resolution to the dispute.  The Complainant paid Nominet the appropriate fee on 29 November 2005 for a decision of an Expert, pursuant to §7 of the Nominet UK Dispute Resolution Service Policy (“the Policy”).  

Steve Ormand, the undersigned, (“the Expert”) confirmed to Nominet on 5 December 2005, that he knew of no reason why he could not properly accept the invitation to act as expert in this case and that he knew of no matters which ought to be drawn to the attention of the parties, which might appear to call into question his independence and/or impartiality.

The Respondent filed a non-standard submission on 21 December 2005 and the Complainant replied on 22 December 2005.

d.	Procedural Issues

The Respondent's letter dated 21 December 2005 is a non-standard submission under the definition in §13b of the Nominet UK Dispute Resolution Service Procedure (“the Procedure”).  The Respondent stated that it had not taken legal advice at the time it submitted its Response and, having now taken legal advice, there was an exceptional need for its non-standard submission.  The Expert exercised his discretion, granted by §13b of the Procedure, and requested that the Respondent’s non-standard submission be passed to him for consideration.  

The Complainant objected to the Respondent’s non-standard submission on the grounds that the Respondent had had plenty of time to seek legal advice (from 27 October 2005) and, due to the Christmas break (commencing on 22 December through to 28 December; the latter being the due date for the Expert’s decision), the Complainant had been placed under unrealistic time pressure to respond.  Nevertheless the Complainant submitted a reply to the Respondent’s non-standard submission on 22 December 2005.

The Expert requested Nominet to allow the Complainant an extension of time, to 29 December 2005, to re-consider its reply to the Respondent's non-standard submission.  On 28 December 2005 the Complainant declined to add to or change its submission.  The Expert will therefore proceed to a decision under §16 of the Procedure.

e.	The Facts

Complainant

The Complainant is a UK based haircare product company and was one of the first companies to introduce ceramic hair styling technology into the UK.  The company was established in 2001, trading as GHD, and has quickly grown to a turnover of £46 million in 2004.  GHD/ghd is now one of the leading brands in ceramic styling irons.

The Complainant has registered European Community trade mark rights in the name GHD.

Respondent

The Respondent is a broker in the financial services market and specialises in arranging mortgages for the buy-to-let market.  The company was incorporated in 1998.

The Respondent registered the Domain Name on 3 July 1999.  

f.	The Parties’ Contentions

Complainant

The Complaint

The Complainant’s assertions are:

1.	That the Domain Name is identical or similar to a name or mark, ghd, in which the Complainant has Rights (as defined in §1 of the Policy) because the Complainant:
a.	has traded under the name GHD since 2001;
b.	offers a range of products under the ghd brand which include ceramic hair styling irons, shampoos, conditioners and hair styling products; 
c.	has spent in excess of twelve million pounds on advertising the ghd brand by way of the internet, newspapers and television (copies supplied of a summary sheet and some of the advertising and materials used for direct marketing, in magazines, at point of sale, within the general press and on television);
d.	entered into a deal costing £1.3m to sponsor the Channel 4 programme entitled “The Salon” (copy supplied of an article published on the Channel 4 website);
e.	has sold 6,583,210 ghd branded products to date;
f.	has several trade mark registrations and applications in respect of the mark GHD and/or ghd:
i.	copy supplied of European Community Trade Mark Registration (in respect of GHD) Certificate Number 002860518 in classes 3, 8, 9, 11, 21 and 25, which was registered on 21 April 2004;
ii.	copies supplied of a summary of the trade mark registrations and applications (in respect of ghd or GHD) in Australia, New Zealand, South Africa, Canada and Hong Kong together with scanned copies of the Trade Mark Certificates for Australia, New Zealand and Hong Kong;
g.	is widely recognised as the market leader in the ceramic hairstyling irons market and regularly receives favourable press coverage (copy supplied of an Instyle Magazine article of April 2004 in which the ghd Professional Hairstyling Iron was voted “Best Flat Iron”);
h.	has a number of celebrity clientele such as Jennifer Anniston and Victoria Beckham (copy supplied of an article from New Woman);
i.	was recently awarded the Ernst & Young Consumer Products and North Region Overall Entrepreneur of the Year Award (copy supplied of an article from the Times Online newspaper).

2.	That the Domain Name in the hands of the Respondent is an Abusive Registration (as defined in §1 of the Policy) because:

a.	whilst it is accepted that the Domain Name was registered prior to the date upon which the Complainant began use of the ghd brand, the Respondent primarily registered the Domain Name for the purposes of selling, renting or otherwise transferring it to an entity to whom the Domain Name would be of relevance for a price in excess of its out of pocket costs.  The following evidence is submitted:
i.	copy of an email between the Respondent and Chris Holland, an IT Consultant, which clearly shows that the Respondent: 
1.	has registered a number of three character domain names (in which the Respondent has no apparent interests or rights) which, in the Respondent’s own words will “mean something to someone one day”; 
2.	has already sold one to someone and is consequently using the figure of £5,000 as a bench mark for the sale of these three character domain names (irrespective of its out of pocket costs);
3.	clearly sets out its intentions by stating that it is “only interested in corporate clients who can afford [its] price tag”.  This clearly illustrates that the Respondent registered the Domain Name and other three character domain names primarily for the purpose of selling them to third parties at a price well in excess of its out of pocket costs;
ii.	copies of emails between the Respondent and an authorised distributor of the Complainant’s products which shows that the Respondent has offered the Domain Name to a number of authorised stockists of the Complainant’s products in order to try and elicit the best price possible;
b.	the Respondent is using the Domain Name in a manner which takes unfair advantage of the Complainant’s rights by offering to sell the Domain Name to the Complainant and authorised stockists of the Complainant’s products for a sum significantly in excess of its out of pocket costs and is using the Complainant's significant goodwill and reputation in the term ghd to make money.  The following evidence is submitted:
i.	a copy of a fax sent to the Complainant by the Respondent offering to sell the Domain Name to the Complainant; 
ii.	copies of emails showing that when the Complainant confirmed that it would be interested in the purchase of the Domain Name the Respondent stated that the cost of the Domain Name would be £15,000, which is clearly in excess of its out of pocket costs because the Domain Name is not being used in respect of a genuine offering of goods or services and there appear to be no demonstrable preparations to utilise the Domain Name; 
iii.	copy of an email in which the Respondent increased the price at which it was willing to sell the Domain Name from £15,000 to £20,000 following some further research on the Complainant; 
iv.	copies of correspondence showing that the Respondent was seeking to take unfair advantage of the Complainant’s rights by extorting a significant sum of money in excess of the Respondent’s out of pocket costs for a Domain Name which is of significance to the Complainant (and to authorised stockists of the Complainant’s products) but in which the Respondent appears to have no specific rights.  Such intentions and actions are clearly abusive.

Reply to the Response

In reply to the Respondent's Response the Complainant states:

a.	with reference to para 2a of the Response (below), that the Complainant does not deny that third parties have obviously attempted to purchase the Domain Name but the evidence provided by the Respondent does not make it clear whether these offers to purchase were as a consequence of an initial approach made by the Respondent in the same way it approached the Complainant.  These emails do not, therefore, show or prove that the Domain Name is not being used in an abusive manner;
b.	with reference to para 2b of the Response (below), first, the Respondent has confirmed that it approached the Complainant with the sole intention of making more money on the Domain Name than it had been offered and at a level which bore no relation to the value of its “out of pocket costs” i.e. a clear intention to make a profit.  Secondly, the Respondent states that the figures were only offered because the Complainant was “less committal”.  The Complainant has submitted copies of emails to show that the figures were offered as a direct result of the Complainant confirming that it would be interested in purchasing the Domain Name and were given to the Complainant within approximately one hour of the Complainant confirming such interest.  Furthermore, the increased figure of £20,000 was given within 2 days. These are not the indications of the Complainant being “less committal”.  Thirdly, if the Respondent intended to put figures to the Complainant that it was “convinced they wouldn’t accept” then why approach the Complainant in the first place and, furthermore, these figures were given to the Complainant on the same day as the approach made by the Respondent;
c.	with reference to para 2h of the Response (below), the emails attached by the Respondent as evidence relate to a project called tunisia-holidays.com and make no specific reference to the Domain Name.  The fact that the Respondent may or may not have a large number of domain names is not an issue in this dispute.  The Respondent is attempting to use this evidence to show that it has “made demonstrable preparations to utilise the Domain Name”.  However, the email evidence produced dates back to 2003, makes no specific reference to the Domain Name and the Respondent in its Response clearly states that “given the delay in creating the two brands HOME and LettingAgent.com it was not possible to initiate development of ghd.co.uk”.  This clearly confirms that no demonstrable preparations to utilise the Domain Name have been made;
d.	on an email dated 11 October 2005 (submitted as evidence by the Respondent) the Respondent has written “the person who has brought the Complaint against me did state they were interested in purchasing [the Domain Name]”.  The Complainant does not deny expressing an interest in purchasing the Domain Name.  However, it did not anticipate the Respondent placing a price on the Domain Name which was so significantly in excess of its “out of pocket costs”, particularly as the Respondent has confirmed that it has not initiated any development the Domain Name;
e.	on an email dated 28 October 2005 (submitted as evidence by the Respondent) the Respondent has written “my confirmation to Jemella Limited of the domain development”.  This email was clearly sent after the date when the Complainant had submitted its Complaint and it had been forwarded to the Respondent.  It is a clear attempt to back track from the position in which the Respondent finds itself.

Reply to the Respondent’s non-standard submission

In its reply to the Respondent’s non-standard submission the Complainant states:
a.	the Respondent states that it “has incurred considerable expense in developing the “GHD” brand” and encloses copy invoices and correspondence from GCT Design Works Limited to “confirm the cost incurred by [the Respondent] in respect of artwork and the researching and writing and development of the HOME brand”.  This clearly enforces the point that there is no “GHD” brand simply a “HOME” brand.  Furthermore, in its Response to the Complaint the Respondent states that the Domain Name would only be developed to support the “HOME” brand and LettingAgent.com.  This clearly illustrates that the costs associated with development of the “HOME” brand do not relate specifically to and do not bear any direct relation to the Domain Name;
b.	the supplied evidence which purports to illustrate postage costs relating to the “HOME” brand, namely copies of Royal Mail invoices, provides no evidence at all because the items listed could relate to any correspondence or parcels sent by the Respondent;
c.	most importantly, §3aiA of the Policy, which provides a non-exhaustive list of factors which may be evidence that a domain name is an abusive registration, specifically refers to “for valuable consideration in excess of the Respondent’s documented out of pocket costs directly associated with acquiring or using the domain name”.  The costs which the Respondent has put forward in respect of “expenses” clearly do not relate to costs directly associated with acquiring or using the Domain Name and therefore should be disregarded.  The Respondent has already previously confirmed in its Response to the Complaint that “it was not possible to initiate development of ghd.co.uk”;
d.	the Respondent states that “at the time of registration ... the Complainant was not trading”.  The Complainant refers to its response at paragraph 2a above;
e.	the Respondent states that it “did not instigate the selling of the Domain Name”.  Whether the Respondent did or did not instigate discussions with other parties is unclear and in many respects irrelevant as the fact of the matter is that the Respondent did instigate the proposed sale of the Domain Name to the Complainant, purely in an attempt to make a considerable amount of money in excess of out of pocket expenses;
f.	with regard to the emails between the Respondent and Chris Holland, the abusiveness or otherwise of these have no relevance to the Complaint as they do not involve the Complainant nor do they express the views of the Complainant;
g.	with regard to the Complainant acknowledging that “our only interest is in purchasing the Domain Name” the Complainant reiterates, as set out in the Reply (above), that the Complainant does not deny expressing an interest in purchasing the Domain Name.  However, the Complainant did not anticipate the Respondent placing a price on the Domain Name which was so significantly in excess of its “out of pockets costs”, particularly as the Respondent has confirmed that it has not initiated any development in respect of the Domain Name;
h.	the Respondent states that it “is not endeavouring to take unfair advantage or create a situation that was unfairly detrimental to the Complainant’s rights”.  The Complainant refers to paragraph 2b above which clearly sets out why this is not the case;
i.	the Respondent states “the proposed sale price did not exceed [it’s] out of pocket expenses incurred to date”.   The Complainant refers to paragraph 4a-d above which sets out why the figures put forward by the Respondent as out of pocket expenses should be disregarded.

Respondent

The Response to the Complaint

The Respondent's assertions in his Response are:
1.	That the Complainant does not have Rights in the Domain Name because:
a.	the Respondent registered the Domain Name on 3 July 1999 to help with future business growth;  
b.	the Respondent planned to run the Domain Name under the brand 'Getta Home Deal' and to develop the website to support the HOME brand (credit licence issued 2004) and LettingAgent.com (company reg 05563166 - registered 14/9/05); 
c.	given the delay in creating the two brands, HOME and LettingAgent.com, it was not possible to initiate development of the Domain Name; 
d.	the Complainant did not start trading under the name ghd until 2001 after the registration of the Domain Name.
2.	That the Respondent’s registration and use of the Domain Name is not an Abusive Registration because:
a.	the Respondent was approached on several occasions by two separate individuals with offers to buy the Domain Name (copies will be sent in post) and did not want to release it for 'pocket money' due to its plans for the Domain Name.  Previous experience suggested a price of £5000; 
b.	Chris Silverwood (a third party) approached with an offer to buy at £5000 and the Respondent decided to accept but on reflection thought it was worth more and therefore asked the Complainant if it wanted to buy it at a more meaningful level.  The Complainant was less committal and because the Respondent's development plans could not stay on hold forever the Respondent decided to give a few figures to the Complainant that it was convinced would not be accepted;
c.	considerable time has now lapsed so the Respondent's original plans have now commenced;
d.	the Respondent's statement that the Domain Name will "mean something to someone one day", as noted by the Complainant, was made in respect of whoever eventually runs or buys the Respondent's business i.e. the owner of the Domain Name;
e.	in respect of the Respondent's statement that it has "registered several three character domain names", as noted by the Complainant, the Respondent runs www.lml.co.uk and www.lmsl.co.uk.  Therefore, three or four character domain names are important for its current and future business needs; 
f.	the Respondent's statement that it has "already sold [a domain name] to someone and is consequently using a figure of £5,000 as a bench mark for sale", as noted by the Complainant, is partly correct in that the Respondent was approached a few years ago by Chrysallis Group to sell dnn.co.uk and decided to change its plans for this domain for the sum of £5,000; 
g.	the Respondent's Nominet records will show that it is not in the business of selling domain names for profit.  The Respondent has many live websites, has only ever sold one domain name, and has never approached any person or individual unless someone has approached the Respondent first.  The Respondent only approached the Complainant as offers to buy the Domain Name were already with the Respondent; 
h.	the Respondent will forward emails that it sent to its web designer that clearly show a vision to create many websites and under free trade such a vision should be protected.

The Respondent’s non-standard submission

The Respondent's additional assertions in its non-standard submission are that:

a.	the Respondent specialises in arranging mortgages for the buy-to-let market and the development of GHD.co.uk was a natural extension of its business.  GHD stands for Getta Home Deal;
b.	a cost of greater than £20,000 has been incurred in developing the GHD brand (copies submitted of invoices and correspondence re the cost of artwork and development of the HOME brand);
c.	direct labour costs have also been incurred in sourcing and maintaining the Domain Name, and design and implementation of the mortgage sourcing system which is an integral part of the on-line mortgage application form;
d.	the Respondent did not instigate the selling of the Domain Name but was approached by Christopher Holland (a third party), enquiring whether the Domain Name was for sale, and also by Christopher Silverwood (copies of emails submitted).  Mr Holland was “considerably abusive” in the exchange of emails with the Respondent.  Prior to these approaches the Respondent had no intention of selling the Domain Name;
e.	the Respondent then entered into communication directly with the Complainant during which the Complainant acknowledged that its only interest “was in purchasing the Domain Name” (copies of emails submitted);
f.	the Respondent has now decided not to dispose of the Domain Name and to maintain and develop it for his own purposes, which was the original reason for registration;
g.	the Respondent is not endeavouring to take unfair advantage of or create a situation that was unfairly detrimental to the Complainant’s rights. 

g.	Discussion and Findings

General

To succeed in this Complaint, the Complainant has to prove to the Expert on the balance of probabilities, pursuant to §2 of the Policy, both limbs of the test that:

1.	it has Rights in respect of a name or mark identical or similar to the Domain Name; and
2.	the Domain Name, in the hands of the Respondent, is an Abusive Registration.

Complainant’s Rights

The wholly generic domain suffix “.co.uk” is discounted for the purposes of establishing whether the Complainant has Rights in a name or mark which is identical or similar to the Domain Name.

Rights is defined in §1 of the Policy as including, but not limited to, rights enforceable under English law, but a Complainant may not rely on rights in a name or term that is wholly descriptive of the Complainant’s business.  The date at which the Complainant’s Rights must be established is not defined.  However, Abusive Registration is defined in §1 of the Policy as meaning 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 [emphasis added], 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.

The first limb of this definition clearly requires that the Complainant's Rights be established at the date of registration of the Domain Name.  The second limb of the definition requires the Complainant's Rights be established prior to the Respondent’s unfair or detrimental use of the Domain Name.

The question of whether a complainant has to demonstrate rights at the date of registration of a domain name or at the date of the complaint was raised in a previous dispute (see DRS02215 ATOC Limited v Lee Bird).  On the facts of that dispute the expert concluded that the relevant date must be the date of registration of the domain name, but that was not to say that this must always be the relevant date.  An expert may well be justified in concluding that rights may be established at a later date in order to reach an equitable decision, and the expert described such circumstances.  Those circumstances would fall under the second limb of the definition of Abusive Registration.  

The Complainant has submitted evidence to show that it is the registered owner of a European Community trade mark right in the mark GHD, which is enforceable under English law.  The trade mark was filed on 25 September 2002 and registered on 21 April 2004.  Furthermore, the Complainant has presented evidence that it has established substantial goodwill in the mark since commencing trading in 2001.  The Domain Name was registered on 3 July 1999.  

The Complainant has established Rights in respect of a name that is identical to the Domain Name, but did not have such Rights at the date of registration of the Domain Name.  Thus, the Complainant fails to establish Rights if it intends to rely on abuse that falls under the first limb of the definition of Abusive Registration.  However, the Complainant has established Rights in respect of abuse that falls under the second limb of the definition and where such abuse occurs after those Rights have been established.

Abusive Registration

The Complainant has, in summary, alleged Abusive Registration under §3a i A of the Policy (that the Respondent registered or otherwise acquired the Domain Name primarily for the purposes of selling, renting or otherwise transferring the Domain Name to the Complainant or to a competitor of the Complainant, for valuable consideration in excess of the Respondent's documented out of pocket costs directly associated with acquiring or using the Domain Name) and by the definition in §1 of the Policy (that the Respondent has used the Domain Name in a manner which took unfair advantage of the Complainant's Rights).  The Complainant has submitted evidence in the form of emails between the Respondent and third parties, and the Respondent and the Complainant, to substantiate this allegation.

The Respondent claims that it registered the Domain Name for the legitimate purpose of developing its business in the financial services market and that GHD stands for "Getta Home Deal".  The Respondent submits documentary evidence to support this claim.

On balance, the Expert considers the Respondent's assertions to lack credibility.  The submitted invoices and letters from its website developer do not provide any evidence of the purpose of its registration of the Domain Name nor of development of the "Getta Home Deal" brand.  The Respondent’s explanations of his statements in the emails submitted as evidence suggest a degree of backtracking.  However, the emails submitted by both the Complainant and the Respondent point towards the registration of the Domain Name as opportunistic; that one day it may prove profitable to the Respondent.  The Expert would not have any difficulty in ordering the transfer of the Domain Name had the Complainant established Rights at the date of registration of the Domain Name.  
Since the Complainant had not established Rights at the date of registration, the Respondent’s offer to sell the Domain Name to the Complainant cannot be abusive; the Respondent is offering something that it owns and the price is a reflection of the value to the Complainant and the Respondent.

Thus, the Complainant must show that the Respondent has been using or is using the Domain Name in a manner which took unfair advantage of or was unfairly detrimental to the Complainant's Rights, and at a time when the Complainant had established those Rights.  Notwithstanding this, had the Respondent's past or present use of the Domain Name been a genuine business offering in the financial services market, it would not be abusive.  

The list of factors in §3 of the Policy is non-exhaustive.  The Expert considers that an attempt to sell or actual sale of a domain name, in which a complainant has established Rights, to a competitor or distributor of that complainant can amount to the taking of unfair advantage of and/or be detrimental to the complainant’s Rights, and can amount to an unfair disruption to a complainant’s business.  Furthermore, to offer a domain name to competitor(s) and/or distributor(s) and then to approach a complainant and use the price offered by those other parties as a means to drive up the price to a complainant can be abusive.  The use of a domain name in which a complainant has Rights, by a competitor, would almost certainly infringe the complainant's trade mark rights.  Similarly, use of the Domain Name by a supplier or distributor of the complainant’s products would also be likely to infringe a complainant's trade mark rights.  

The Respondent has offered the Domain Name to third parties, including suppliers of ghd products, and in doing so has, in the Expert’s opinion, used the Domain Name in a manner which seeks to take unfair advantage of, is detrimental to, and seeks to profit from the Complainant’s Rights.  Furthermore, the Respondent’s actions amount to an attempt to disrupt the Complainant’s business.

Accordingly, the Expert finds on the balance of probabilities that the Respondent has used the Domain Name for purposes which take unfair advantage of and are unfairly detrimental to the Complainant's Rights which is an Abusive Registration in contravention of the Policy.

h.	Decision

In light of the foregoing findings, namely that the Complainant has Rights in respect of a name which is identical to the Domain Name and the Domain Name, in the hands of the Respondent, is an Abusive Registration, the Expert directs that the Domain Name, ghd.co.uk, be transferred to the Complainant.

Signed:							Date: 	29 December 2005	
		Steve Ormand