E-Floor Systems Ltd -v- Pengilly [2003] DRS 873 (22 April 2003)

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Note: At the time this decision was made the registrant of the domain name was StateHouse Corporation Limited

Based on the facts and analysis set out below, I conclude that the Complainant’s application to have the Domain Name transferred should succeed.

The Complaint was lodged with Nominet on 19 February 2003. Nominet validated the Complaint and notified the Respondent of the Complaint on 26 February 2003 and informed the Respondent that he had 15 days within which to lodge a Response.
The Respondent lodged a Response on 5 March 2003 and the Complainant replied to that Response on 13 March 2003.

The Informal Mediation process did not lead to a negotiated settlement. In accordance with Nominet’s practice, the Expert has not been provided with any of the materials, records or correspondence generated during the Informal Mediation stage.
On 25 March 2003, the Complainant paid Nominet the appropriate fee for a decision of an Expert pursuant to paragraph 6 of the Nominet UK Dispute Resolution Service Policy (“the Policy”).

On 31 March 2003, I, Simon Carne, the undersigned, confirmed to Nominet that I knew of no reason why I could not properly accept the invitation to act as Expert in this case and further confirmed that I knew 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.

On 17 March 2003, the Respondent made a further submission after the seeing Complainant’s Reply. The Respondent was notified by Nominet that this further submission did not comply with the Nominet DRS Procedure, because the Respondent had already responded to the Complaint. This further submission was included with the papers sent to me. Arguably, it should not have been so included, but since this additional submission does not contain any facts or assertions that alter the conclusions I would have reached in the absence of the submission, neither party has gained or lost as a result of the document being included in the papers I have seen.

Both the Complainant and the Respondent are suppliers of flooring systems. Mr John Wallace, a director of the Complainant, and Mr Neil Pengilly, the Respondent, were formerly co-directors and shareholders in a company, Smartfloor (UK) Ltd, also in the business of flooring systems, but Smartfloor played no direct part in matters under dispute.

The critical issue in this case is one of disputed fact: both parties claim to have ownership rights in the trade mark “e-floor.” I propose, therefore, to depart from the usual format for this section of DRS decisions and produce the two parties contentions together.

1 It is common ground between the parties that:
a) On 24 January 2002 the mark “e-floor” (“the Trade Mark”) was registered in the joint names of Adam John Wallace (as noted above, a director of the Complainant) and Neil Raymond Pengilly (the Respondent), whilst they were both directors of Smartfloor.
b) On 17 September 2002, the Complainant was incorporated as a company with the name DMS (Shelf) No. 177 Limited. On 23 September 2002, the Complainant changed its name to E-Floor Systems Limited. The Respondent played no part in the formation or management of the Complainant.
c) On or around 26 September 2002, Mr Wallace and the Respondent entered into a contract (“the Contract”) by which certain intellectual property rights, including a patent application relating to a flooring system, were transferred from the Respondent to Mr Wallace.

[Note: I have described the date of The Contract as “on or around “ 26 September 2002. The Complainant asserts that as the effective date of the contract. The Respondent has not challenged this date and, from the papers submitted by the Respondent, it is clear that the contract he entered into was after 23 September 2002 and before 8 October 2002. In any event, nothing turns on the precise date.]

2 The Complainant asserts that the Contract also included the transfer of the Trade Mark. The Respondent disputes this.

3 The Respondent says that the copy of the Contract submitted by the Complainant is not a true copy of the Contract. According to the Respondent, the first page of the Contract has been altered by adding the Trade Mark to the description of the intellectual property to be transferred.

4 The Complainant says that, also on 26 September 2002, Mr Wallace assigned his rights in the Trade Mark, to the Complainant. The Respondent has not expressly challenged this, but it is implicit in his submission that this assignment could not be an effective transfer of sole-ownership of the Trade Mark, since the Respondent says that the assignor, Mr Wallace, was not the sole owner of the Trade Mark.

5 The Complainant has produced a copy of a Trade Marks Assignment Certificate recording that the Complainant had been entered on the Trade Marks Register as the proprietor of the Trade Mark. The Respondent has not challenged the authenticity of this certificate, but once again, it is implicit in his submission that the assignment should not have been registered since there had been no valid transfer to the Complainant.

6 The Complainant submits that the registration of the Domain Name is an Abusive Registration in the hands of the Respondent. In support of this, the Complainant asserts that:
a) The Domain Name has been pointed at www.statehousecorp.com, the website of a company known as StateHouse Corporation Ltd, of which the Respondent is both a director and shareholder and which is in competition with the Complainant.
b) The website at www.statehousecorp.com includes details of a flooring system offered by StateHouse.
c) Any interested party accessing the website located at the Domain Name in an attempt to find details of the e-floor system will therefore access a competitor’s website containing details of StateHouse’s competing product(s).
d) This (says the Complainant) is clearly designed to divert legitimate business enquiries away from the Complainant by unfair means and will cause confusion to interested parties.

7 It is clear from the Respondent’s submission that he accepts the contentions at 6(a)-(c) above, ie that persons seeking to access information relating to e-floor via the internet will be directed to the StateHouse site, where products in competition with the Complainant’s are offered for sale.

8 The Respondent has not commented on the contention at (d), ie that business will be diverted “by unfair means” and/or that “confusion” will be caused, but it is implicit in his contentions that the Respondent submits that directing users to the StateHouse website is neither unfair, nor confusing.

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.”

If the Complainant is the sole owner of the Trade Mark, the situation is fairly straightforward. For the Respondent to use a trade mark owned by the Complainant in order to compete against the Complainant is plainly taking “unfair advantage of” and/or “unfairly detrimental to” the Complainant’s Rights and is, therefore, an Abusive Registration, as defined in the DRS Policy.

I note that the Respondent says he has “looked at our stats page” and “not one enquiry has been directed to StateHouse Corporation Limited (sic).” The meaning of this is not completely clear to me, but if the Respondent is asserting that no one has (yet) visited the website connected to the Domain Name, this does not help the Respondent. It is not necessary for the Complainant to establish that confusion has actually occurred. It is only necessary to establish that the Respondent has used the Domain Name in an unfair manner.

The Respondent has, however, said that the Complainant is not the sole owner of the Trade Mark. He says the Contract did not include the transfer of the Trade Mark and the copy of the Contract submitted to me by the Complainant is not a true copy of the Contract.
The DRS is not well-equipped to deal with conflicts of fact of this kind. The DRS procedures do not give the Expert an opportunity to see all the disclosable documentation which would be available to a court, nor to hear directly from the witnesses in the witness box, under examination and cross-examination.

In this case, however, the Complainant has submitted a copy of a Trade Marks Assignment Certificate recording that the Complainant had been entered on the Trade Marks Register as the proprietor of the Trade Mark. The Respondent has not challenged the authenticity of the certificate (and, indeed, I have consulted the online Trade Mark Registry and confirmed that the Complainant is the registered proprietor of the Trade Mark). For the purposes of the DRS, therefore, I must accept that (rightly or wrongly) the Complainant is now the registered owner of the Trade Mark.

Whilst it is plainly the Respondent’s case that the Complainant was not legally entitled to register ownership of the Trade Mark, any grievance the Respondent may have over the registration is something that he must address in a different forum.
Accordingly, for the reasons set out above, I find that the registration of the Domain Name is an Abusive Registration.

In light of the foregoing findings, namely that the Complainant has rights in respect of a name or mark which is identical to the Domain Name and that the Domain Name, in the hands of the Respondent, is an Abusive Registration, I direct that the Domain Name, e-floor.co.uk, be transferred to the Complainant.

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You are here: BAILII >> Databases >> Nominet UK Dispute Resolution Service >> E-Floor Systems Ltd -v- Pengilly [2003] DRS 873 (22 April 2003) URL: http://www.bailii.org/uk/cases/DRS/2003/873.html Cite as: [2003] DRS 873