DISPUTE RESOLUTION SERVICE

DRS 6558

Decision of Independent Expert

FLIR Systems AB, FLIR Systems Limited and FLIR Systems Inc 

and

Fraser Coutts 

1.	The Parties:

Complainant (1):	FLIR Systems AB
Country:		Sweden

Complainant	(2)	FLIR Systems Inc
Country:		United States

Complainant (3)	FLIR Systems Limited
Country:		United Kingdom

Respondent:		Fraser Coutts
Country:		United Kingdom

2.	The Domain Name(s):

<flir.co.uk> (the “Domain Name”)

3.	Procedural History:

3.1	The Complaint entered Nominet’s system on 21 November 2008. The Complaint was validated under Nominet’s dispute resolution service policy (the “Policy”) and sent to the Respondent on 24 November 2008.  The Respondent filed a Response on 15 December 2008 and the Complainants filed a Reply on 22 December 2008.  The Complaint entered Mediation on 22 December 2008.  Mediation not being successful and the Complainants having paid the relevant fee, the Complaint was referred to me. I confirmed that I was not aware of any reason why I could not act as an Independent Expert in this case and I was appointed as such on 10 March 2009.

4.	Factual Background

4.1	The Complainants are all part of the FLIR group, of which FLIR Systems Inc is the parent company.   The FLIR group has for the past 30 years dealt in infrared camera, night vision and thermal imaging products.  It employs 1900 people worldwide in various facilities in the United States and elsewhere and its total turnover in 2007 approached US$800 million.  It has operated in the United Kingdom through FLIR Systems Limited since 1998.  UK turnover was about £10 million in 2000 and £26 million in 2007.  

4.2	The Complainants are the owners of various trade marks around the world that incorporate the text “FLIR Systems” in stylised text in combination with a diamond design.   They include Community Trade Mark No. 3256567 in the name of FLIR Systems AB.  This trade mark was filed on 4 July 2003 in classes 9 and 10 and takes the following form:

4.3	The Complainants also have a large portfolio of domain names that incorporate the term “FLIR”.

4.4	The Respondent would appear to be an individual located in Edinburgh.  

4.5	The Domain Name was registered on 19 April 2000.

4.6	On 27 November 2007, the Complainants approached the Respondent by letter with a view to using or acquiring the Domain Name.  In a letter in response the Respondent claimed that the Domain Name had “attracted a lot of interest” and he sought a rental of £5,600 plus VAT per year.   

4.7	On 9 January 2008, the Respondent sent a letter to the Complainants stating that he was setting a closing date for offers in relation to the Domain Name of 25 January 2008.    It would appear that the Complainants were also provided with a letter to Raytheon Systems Limited (“Raytheon”) in identical terms.   Raytheon is a competitor of the Complainants. 

4.8	During negotiations between the Complainants and the Respondent the Complainants offered to purchase the Domain Name for £7,500.   The Respondent did not accept that offer. 

4.9	In or around July 2008 the Complainants noticed that that the Domain Name was being used to divert internet users to the website operated by Raytheon from the <raytheon.co.uk> domain name.   The Complainants’ Swedish lawyers sent a letter on 4 July 2008 to the Respondent claiming that the Domain Name was being used in bad faith and its use involved trade mark infringement.   It demanded that the Respondent transfer the Domain Name to Flir Systems AB.   

4.10	The Respondent responded by letter on 25 July 2008.  That letter contained the statement “the [D]omain [N]ame should not have been pointing to Raytheon and this has been addressed following receipt of this letter but purely at my own discretion”.

4.11	As at the date of the decision the Domain Name resolves to the web site operated by “Etellect”.   Etellect would appear to be a supplier of web based products and services based in Glasgow.

5.	Parties’ Contentions

The Complaint

5.1	The Complainants rely on their registered trade mark rights and also claim that their activities in the UK mean that it also has rights “in its name” under the English law of passing off. 

5.2	The Complainants contend that the Domain Name is identical to “the name used in the UK and worldwide”.  They further contend that the Domain Name is confusingly similar to their registered trade marks and company names and identical to the “main” element of these marks and names.

5.3	The Complainants contend that the Respondent has no legitimate reason for having registered the Domain Name.  They claim that the Respondent has sought an “inflated price” for the Domain Name in negotiations and refer to the diversion of internet users to the Raytheon website.  So far as diversion is concerned, the Complainants claim that a particularly worrying aspect of the Respondent’s activity is that this nearly brought the Complainants and Raytheon into dispute.   

5.4	So far as the Respondent’s letter to Raytheon dated 9 January 2009 is concerned, the Complainants’ assert that they do not know “the exact extent of the negotiations between Raytheon and the Respondent”.   However, they claim that this letter and the equivalent letter to them on that date show that the Respondent was attempting to auction the Domain Name between them and Raytheon.

5.5	In the circumstances, the Complainants allege that the Domain Name constitutes an abusive registration.  The Complainants also allege that the the Domain Name is a potential instrument of fraud, relying upon the now well known decision of the Court of Appeal in One in a Million and the decision of the High Court in Citygroup.

5.6	In the Complaint the Complainants also state:

“One line of argument that might be raised by the Respondent is that FLIR is an acronym for Forward Looking Infra Red.  To the extent that sometimes the letters might be used in this context, the Complainant submits that such use is relatively minor and does not detract from the rights FLIR has built up in its name”  
   
The Response

5.7	The Respondent puts the Complainants to “strict proof” of their rights.  

5.8	The Respondent contends that it has held the Domain Name perfectly legally since 2000.  He notes that the Complainants rights extend to certain fields only and claims that “FLIR” is:

(i)	an acronym for Forward Looking Infra Red;
(ii)	an acronym for Facelift Image Replacement;
(iii)	a type of body protein in microbiology; and
(iv)	a meaningless word used in slang.

5.9	He claims, therefore, that the Domain Name should be seen as generic or descriptive and the Respondent was simply making “fair use” of it.  He also asserts that “FLIR” is a “made up name” and the fact that this “happens to be the same as that used by the Complaint, as part of a domain name, does not in itself mean that the Respondent deliberately copied the name or registered the domain name in bad faith.”

5.10	The Respondent makes reference to the fact that he has owned the Domain Name for seven years before being approached by the Complainants.   He asserts:

	“The Respondent then offered the mark for sale to the Complainant, but the amount offered by the Complainant was not acceptable to the Respondent.  It was only at this stage that the Respondent decided to offer the domain name to other manufacturers of infra-red equipment” 

The Reply

5.11	It is unnecessary to set out in any detail the contents of the Complainants Reply, which for the most part reiterate points made in the Complaint.   However, the Complainants deny in their Reply any suggestion by the Respondent that he approached Raytheon after negations regarding the   Domain Name had broken down.    

5.12	The Complainants also pick up on a statement in the Response that in addition to the Complainants he offered the Domain Name to other manufacturers in the infra-red field.  This is said to constitute further evidence of abuse.

5.13	Lastly the Complainants assert that “any interest in the [D]omain [N]ame by Raytheon could only have been for the purpose of the ownership of a domain containing a competitor’s name”. 

6.	Discussions and Findings

	General 

6.1 	To succeed under the Policy, the Complainants must prove on the balance of probabilities, first, that they have Rights in respect of a "name or mark" that is identical or similar to the Domain Name (paragraph 2(a)(i) of the Policy) and second, that the Domain Name is an Abusive Registration in the hands of the Respondent (paragraph 2(a)(ii) of the Policy). The Complainants are required to prove to the Expert that both elements are present on the balance of probabilities (paragraph 2(b) of the Policy).

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

"Abusive Registration means 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." 

Complainants' Rights

6.3	I accept that the Complainants have rights in a number of registered trade marks that incorporate the text “FLIR systems”.   “FLIR” is by far the most prominent element of both that text and the trade mark as a whole.   The Domain Name simply comprises the term “flir” with the addition of the “.co.uk” suffix.    In the circumstances, this aspect of the case is very straight forward.   The Complainants (or at the very least FLIR Systems AB) have Rights in a mark or name that is similar to the Domain Name.   This is sufficient for the purposes of paragraph 2(a)(i) of the Policy.
 
Abusive Registration
   
6.4	In this case there is a lack of evidence as to why it is that the Respondent registered the Domain Name.   The Respondent set out in his Response a series of uses that he claims the Domain Name could be used for now, and these range from microbiology to web development, but no direct and unambiguous explanation is offered as to why he chose the Domain Name in the first place.   This is notwithstanding the Complainants’ clear and unambiguous assertion in the Complaint that “the Respondent registered the domain name in an abusive manner”.     

6.5	The Respondent does, however, make a number of statements that suggest that he registered the Domain Name without the Complainants in mind.  In particular after asserting that the term “FLIR” should be seen as “generic or descriptive” he asserts:

“The name FLIR has no inherent meaning per se, and can be seen simply as a made up name.  Just because the Respondent chose to register this made up name, which happens to be the same as that used by the Complainant as part of a domain name, does not in itself mean that the Respondent deliberately copied the name, or registered the domain name in bad faith” 

6.6	It is easy to pick holes in the way in which the Respondent has expressed himself, but when the Response is read as a whole the impression one forms is that the Respondent maintains that he registered the Domain Name without any knowledge of the Complainants and because it was some interesting combination of four letters that might be a value to someone at a future date.   

6.7	If this is so, there is unlikely to have been registration in bad faith.   Domain name trading is not abusive per se and it is not abusive to register a domain name that incorporates a particular term because someone in the future might want to use that term in connection with its business provided that there was no intention at the time of registration of taking advantage of any potential trade mark meaning of that term.    Of course, if the term used in a domain name corresponds to a trade mark that existed at the date of registration, the more unusual and inherently distinctive that term is the less likely that an Expert will believe that it was registered without that trade in mind.   However, that is an issue of evidence not principle. 

6.8 	Under any domain name dispute resolution policy that requires both bad faith registration and use (for example the UDRP) any such conclusion might be fatal to a complainant’s claim.  However, the Nominet Policy operates in a different fashion.   A complainant can succeed under the Policy if there has been either abusive registration OR abusive use.   

6.9	That is not to say that the circumstances of registration are not relevant to the assessment of abusive use.    The mere continuation of an activity that was not abusive at the time of registration is unlikely to constitute abusive use for the purposes of the Policy.  So, for example, if a domain name was registered in a non-abusive fashion, the mere continued holding of that domain name without anything more will not be abusive use.  Similarly, the continued use of a domain name to generate click through revenue will not constitute abusive use, provided that the registrant does not take advantage of the meaning of any trade mark term embodied in the domain name.   

6.10	When an old legitimate use turns into a new illegitimate use, can sometimes be difficult to discern.  For a detailed examination of the issues and difficulties here see the decisions of the Appeal Panel in Verbatim Ltd -v- Michael Toth DRS 4331, the Appeal Panel in MySpace, Inc v Total Web Solutions Limited DRS 4962 and my recent decision in Oasis Stores Limited v Dale DRS 6365.  However, the basic principles that apply here now seem to be reasonably settled.

6.11	In the present case, notwithstanding the Complainants’ allegations of abusive registration, it is clear that the main thrust of the Complaint is one of abusive use.   That abuse is said to arise out of the fact that during negotiations the Respondent sought to engineer an auction between the Complainants and the Respondent for the Domain Name and then subsequently diverted internet traffic from the Domain Name to Raytheon. 

6.12	So far as the auction is concerned, a key factor is the extent to which “FLIR” is a term which refers to the Complainants’ business and to what extent it is simply a generic term in relation to goods or services offered by the Complainants.    On this point the Complainants’ evidence is less than ideal.  There is plenty of evidence from the Complainants as to the size of their business and extent of their activities both worldwide and in the United Kingdom.   There is much less evidence as to the extent to which “FLIR” alone has come to be associated with the Complainants rather than a specific type of product.  

6.13	There is, however, some evidence before me of this sort.  It includes, for example, the fact that FLIR is the ticker symbol for FLIR Systems Inc on the Nasdaq stock exchange.  More significant is the fact that the Complainants operate a series of websites from Domain Names that comprise the term “FLIR” alone in combination with various TLDs.   They include <flir.com>, which appears to be give access to the Complainants’ main corporate website and no less than 18 other domain names that comprise the term “FLIR” and a country code TLD, which direct internet user to the appropriate language version of that website.   There is certainly no evidence from the Respondent that the term is still generally considered to be generic.  In the circumstances, I accept for the purposes of this case that the term FLIR is one that has become associated with the Complainants’ business over and beyond its meaning as an acronym for “Forward Looking Infra Red” and that, to use the words of the Complainants, this acronym use is “relatively minor”.

6.14	Further and crucially, I accept that the Respondent had some degree of knowledge of this at the time he approached Raytheon.   The fact that he made that approach is of itself evidence of the fact that at the time he must have spent some time researching how the term FLIR was understood and who were the Complainants’ major competitors.   To my mind even if it is accepted that the Respondent innocently registered the Domain Name, the Respondent by making that approach crossed a line he should not have crossed.  By seeking to engage Raytheon in a bidding war in relation to the Domain Name the Respondent was no longer merely continuing to hold and extract the maximum price for a domain name which may have been innocently registered and had a number of descriptive uses.  He had instead sought to extract financial advantage from the trade mark meaning of the term by threatening to sell the Domain Name to the one of the Complainants’ competitors.  

6.15	This conclusion is further supported by the fact that the Respondent subsequently linked the Domain Name to Raytheon’s own website.   The Respondent himself in his letter of 25 July 2008 appears to accept that this was wrong.   But that of itself is curious.  If he honestly considered that the Domain Name could be innocently used by Raytheon because of some alleged descriptive meaning of the term “FLIR”, it is unclear why he thought this link to be wrongful.   Of course, if he accepted that the term was one that was associated with the Complainants over and above any alleged descriptive meaning, then his change of heart makes sense.       

6.16	In the circumstances the Complainants have made out the requirements of paragraph 2(a)(i) of the Policy.

6.17	In coming to this conclusion, I have taken no regard of the Complainants’ contentions in relation to the decisions in One In A Million and Citygroup.  A similar attempt to rely upon the One In A Million decision was made by the appellant in Comité Interprofessionnel du Vin de Champagne v Steven Terence Jackson DRS 4479.  Although the Appeal Panel found in favour of the appellant in that case, it expressly declined to do so by reference to, or in reliance upon, the One In A Million decision.   

6.18	In doing so the Appeal Panel referred to and endorsed as applicable to allegations of passing off the following statement of an earlier Appeal Panel in Seiko UK Limited v Designer Time/Wanderweb DRS 00248:   

The Panel considers that parties and Experts should not be overly concerned with whether or not an allegedly abusive registration also constitutes an infringement of registered trade mark. The question of trade mark infringement is, as both parties (and the Expert) agree, one for the courts to decide. The question of abusiveness is for the Expert to decide. The two jurisdictions co-exist alongside each other, and no doubt there will be considerable overlap. However there may well be factual scenarios in which an abusive registration under the Policy would not be an infringement of trade mark under the 1994 Act, and where an infringement of trade mark under the 1994 Act would not be an abusive registration under the Policy. The safest course for parties and Experts is simply to address the terms of the Policy

6.19	Neither Appeal Panel completely shut the door on a party’s reliance on trade mark and passing off cases when assessing the question of abuse.  However, I have yet to be involved in a case under the Policy in which I found submissions that made reference to such case law to be of any real assistance in determining this issue.   

7.	Decision

7.1	I find that the Complainants have Rights in a trade 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. 

7.2 	I, therefore, determine that the Domain Name should be transferred to the Complainant FLIR Systems AB.

Signed: Matthew Harris			Dated:  18 March 2009