Tunes Ltd v Sitelink Technology [2004] DRS 1395 (20 February 2004)

BAILII is celebrating 24 years of free online access to the law! Would you consider making a contribution?
No donation is too small. If every visitor before 31 December gives just £1, it will have a significant impact on BAILII's ability to continue providing free access to the law.
Thank you very much for your support!

The Complaint was lodged with Nominet on November 12, 2003. Nominet validated the Complaint and notified the Respondent of the Complaint on November 18, 2003 and informed the Respondent that he had 15 working days within which to lodge a Response. The Respondent provided a Response on December 8, 2003 which was communicated to the Complainant the same day. Complainant’s Reply was received on December 16, 2003 and communicated to the Respondent the same day. The Respondent provided a non standard Reply to the Reply on 6 January 2004.

Mediation not succeeding, on February 6, 2004 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”).

Dawn Osborne, the undersigned, (“the Expert”) confirmed to Nominet that she knew of no reason why she could not properly accept the invitation to act as expert in this case and further confirmed that she knew of no matters which ought to be drawn to the attention of the parties, which might appear to call into question her independence and/or impartiality.

The Complainant is an on-line music web site. It is presently using the Domain Name for its business.

The Defendant registered the Domain Name before the Complainant’s business was up and running, however, the basis on which it was registered is in dispute.

1. The Domain Name is identical or similar to a name in which the Complainant has rights.
2. The Domain Name in the hands of the Respondent is an abusive registration.
3. The Domain Name was originally registered by the Respondent on behalf of the Complainant a time when the Respondent was a majority shareholder in the Complainant.
4. The Complainant is using the Domain Name for its web site and business and has done so since its existence as a separate company in 1999.
5. In September 2002 the Complainant and the Respondent separated and an agreement was signed that each company would continue to trade with separate ownership. The settlement agreement included the condition that the Respondent release, waive and withdraw all actions against the Complainant. Since this time the Complainant has been trying to arrange that the Domain Name be transferred to the Complainant without success. A letter was sent by Solicitors for the Respondent to the Complainant attempting to sell the Domain Name to the Complainant and threatening to sell the Domain Name to a third party.

1. The Complainant does not have rights in the Domain Name. The Domain Name is not an Abusive Registration.

2. It is untrue that the Domain Name was registered by the Respondent on behalf of the Complainant. The Domain Name was registered by the Respondent using the Respondent’s money. The Complainant did not exist at the time of the registration.

3. It is untrue that the Complainant was trading in 1999 as it was not formed until October 2000.

4. The Settlement does contain a clause that the Respondent release, waive and withdraw all actions against the Complainant. However, this is irrelevant as the Respondent is not claiming anything against the lawyers. However, Clause 5.1 of the Settlement Agreement provides that the Complainant releases, waives and withdraws all actions, claims and other liabilities against the Respondent. So even if the Complainant has any claims or rights of action (which is denied) they have been waived. Further by clause 6.2 two directors of the Complainant covenanted that they has not incurred any liabilities or commitments on behalf of the Respondent, so there can be no argument that the Domain Name was registered by the Respondent on behalf of the Complainant. Also, the Respondent has been left with tax bills and liabilities which it would have been able to claim back from the Complainant had the settlement not been reached and all claims waived. The two directors of the Complainant also received monies under the settlement agreement.

5. As the Complainant did not exist at the time of registration of the Domain Name the Respondent could not have taken advantage of the Complainant at the time of registration. Nor has the registration been used in a manner which took unfair advantage of or was detrimental to the Complainants rights. Indeed the Complainant has had free use of the Domain Name for many years and renewal fees have been paid by the Respondent. The Respondent has also agreed as a gesture of goodwill to permit the Complainant to continue to use the name free of charge until July 2004 and to sell the name to them. This gives the Complainant time to change to a new name if they wish.

6. The Respondent is also willing to transfer uktunes.co.uk to the Complainant for a nominal amount to cover legal fees, renewal fees and other expenses occurred in the registering of that name.

7. The Respondent has no intention to sell to a competitor of the Complainant. Instead it will use the Domain Name for its own business, the design of web sites in the media industry.

8. The Competitor tried to apply to Nominet to have the Domain Name transferred into their name, but this attempt was not allowed to proceed by Nominet.

1. It is correct that “Tunes” was operated and managed by the Respondent (primarily by two individual directors Robert Endersby & John Banks) before later being established as a separate company. After the Complainant was incorporated the overheads of the two businesses were shared.

2. There is no dispute that Robert Endersby registered the Domain Name on behalf of the Respondent, but whilst Robert Endersby and John Banks were directors of the Respondent they made arrangements to have the name transferred to the Complainant. A third director Zoe Camper delayed in responding to Nominet until after the Settlement Agreement was signed and then blocked the transfer to the Complainant. This intention was not communicated to the then directors of the Respondent before the Settlement Agreement was signed and the Settlement Agreement does not explicitly deal with the issue of the Domain Name.

3. Any switch to another domain name for the Complainant at this point in time would cause severe disruption to its business.

There was a further submission from the Respondent the only key points in which are as follows:
1. The Minutes of meetings of the Respondent are silent on the issue of the Domain Name.
2. How could two of the Directors of the Respondent agree to pass the Domain Name to the Complainant as there was no Director’s meeting to make that decision. They did not communicate this decision to the third director Zoe Camper and they were trying to transfer the domain name surreptitiously. Zoe Camper did not “delay” and, in fact, did not know about the transfer until a member of Nominet contacted her about it. The agreement to transfer to the Complainant by the two directors without the third was ultra vires and in breach of their duty of good faith as directors of the Respondent.

To succeed in this Complaint the Complainant has to prove to the Expert pursuant to paragraph 2 of the Policy on the balance of probabilities, first, that it has rights (as defined in paragraph 1 of the Policy) in respect of a name or mark identical or similar to the Domain name and, secondly, that the Domain Name, in the hands of the Respondent, is an Abusive Registration (as defined in paragraph 1 of the Policy).

The Complainant must prove it has enforceable legal rights in a name or mark which is identical or similar to the Domain Name. The definition of “Rights” in the Policy is not confined to intellectual property rights and could conceivably extend to other enforceable legal rights such as contract, however, the Complainant does not adequately demonstrate contractual rights to the Domain Name on the evidence placed before the Expert in this case.

The Complainant does not appear to have any registered trade marks for “TUNES”. It is possible that the Complainant has built up some goodwill in the name for its services, but apart from the assertion that the name has been used since it began trading as a separate company in 1999 (the date which is disputed by the other side.) there are no further details of alleged intellectual property rights in the TUNES name. It is certainly possible that TUNES is purely descriptive of music which the Complainant delivers as part of its services. However, the Complainant does appear to offer other forms of services relating to music on its web site apart from the music itself. The panellist believes that there is a possibility that were the name tunes.co.uk used in relation to a similar site to the Complainants offering the same value added services as well as music, there could be a possibility of confusion and therefore the Complainant’s may be able to stop such a confusing use of the tunes.co.uk name in passing off. However, it is unsatisfactory that the Panel is left to guess at the position and it has not been adequately addressed in the Complaint. There is, however the question of the company name of the Complainant Tunes Limited. It is clear that the company has rights in this company name and it is similar to the domain name.

Accordingly, the Expert finds that the Complainant has demonstrated that has rights in respect of a name or mark, which is similar to the Domain Name.

This leaves the second limb. Is the Domain Name, in the hands of the Respondent, an Abusive Registration? 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.”

A non-exhaustive list of factors, which may be evidence that the Domain Name is an Abusive Registration is set out in paragraph 3a of the Policy. There being no suggestion that the Respondent has engaged in a pattern of making Abusive Registrations and there being no suggestion that the Respondent has given to Nominet false contact details, the only potentially relevant ‘factors’ in paragraph 3 are to be found in subparagraph i and ii, which read as follows:

i “Circumstances indicating that the Respondent has registered or otherwise acquired the Domain Name:

A. 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;
B. as a blocking registration against a name or mark in which the Complainant has Rights; or
C. primarily for the purpose of unfairly disrupting the business of the Complainant;”
ii “Circumstances indicating that the Respondent is using the Domain Name in a way which has confused people or businesses into believing that the Domain Name is registered to, operated or authorised by, or otherwise connected with the Complainant.”

Since the Complainant did not exist at the time of registration it is impossible to say that the name was registered to sell to the Complainant, to block the Complainant’s business or to disrupt the Complainant’s business.

It is also impossible to say that the Respondent is presently using the name to the detriment of the Complainant having agreed to allow the Complainant to use the name free of charge since the Settlement Agreement and until July 2004.

The facts surrounding the issue of the intention of the parties and their conduct regarding the Domain Name at the time of the Settlement Agreement is in dispute and appears to be much more suitable to a decision of the Court. Unfortunately, the Settlement Agreement appears on its face to have had the effect that each party has waived all claims against each other in existence as at the date of the Settlement Agreement. The effect of the relevant clause in the Agreement would have to be construed by a Court, most probably as a preliminary issue, were a party to attempt to bring a claim which was in existence at the relevant time. However, the issues are sufficiently unclear that it is not possible for the Expert, at present, to decide if the offer to sell the domain name to the Complainant by the Respondent or the threat to use the domain name for a different web site for the purposes of the Respondent is abusive.

There remains the interesting question that although the Respondent has not yet used the domain name or prevented the Complainant from using it, it might do so in the future when depending on the circumstances a new claim might theoretically arise under the Policy benefiting the Complainant which was not in existence at the time of the settlement agreement and, therefore, presumably could not have been waived. However, that cannot affect the present decision.

It is indeed a pity that the parties were not able to resolve this matter at mediation and they should perhaps be urged to renew their negotiations to resolve this matter.

Accordingly, the Expert is unable to determine that the registration is an Abusive Registration within the definition of that term in paragraph 1 of the Policy.

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 but that it cannot be said that the Domain Name, in the hands of the Respondent, is at present an Abusive Registration, the Expert directs that the Domain Name remain in the hands of the Respondent.

	[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	Nominet UK Dispute Resolution Service
You are here: BAILII >> Databases >> Nominet UK Dispute Resolution Service >> Tunes Ltd v Sitelink Technology [2004] DRS 1395 (20 February 2004) URL: http://www.bailii.org/uk/cases/DRS/2004/1395.html Cite as: [2004] DRS 1395