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					                              Nominet UK Dispute Resolution Service


                                             DRS 00576



                         Zara Holdings Limited v Commerce Internet Limited



Decision of Independent Expert



1.      PARTIES


Complainant:               Zara Holdings Limited

Address                    6 Portland Terrace
                           Jesmond
                           Newcastle Upon Tyne
                           Tyne and Wear


Postcode:                  NE2 1QQ
Country:                   GB


Respondent:                Commerce Internet Limited

Address:                   22 Cavendish Buildings
                           Gilbert Street
                           Mayfair
                           London

Postcode:                  W1K 5HJ
Country:                   GB



2.      DOMAIN NAME

        zhl.co.uk (the "Domain Name")


3.      PROCEDURAL BACKGROUND

        The complaint was entered on to the Nominet system on 27 August 2002. Nominet
        validated the complaint on 2 September 2002 and on the same day despatched a copy of
        the complaint to the Respondent by post to the address recorded in the register entry for
        the Domain Name. The Respondent filed a response by email and fax on 24 September
        with supporting materials by post which were received on 26 September. On 7 October
        2002 a reply was received from the Complainant.           Mediation under the Dispute


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        Resolution Service was then attempted but failed.           On 12 November 2002 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").


        I, Stephen Bennett, the undersigned, (the "Expert") have confirmed to Nominet that I
        know of no reason why I cannot properly accept the invitation to act as Expert in this case
        and have further confirmed that I know 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.


4.      OUTSTANDING FORMAL/PROCEDURAL ISSUES

        The last date for the Respondent to submit its response under the Dispute Resolution
        Service Procedure (the "Procedure") was 24 September 2002.              Copy email and fax
        correspondence from the Respondent to Nominet on that date shows that the
        Respondent was having difficulty submitting its response through the Nominet website.
        Nominet, accordingly, extended the deadline for submission of the response. Nominet
        has the power to do this under paragraph 12 (a) of the Procedure in exceptional cases.
        There is no suggestion from the Complainant that the granting of the extension was a
        procedural irregularity and Nominet seems to have accepted that there was a fault with its
        website. Accordingly, I believe I can consider the response in giving this decision.

        The facts in this case relate to the Domain Name becoming detagged, then not being
        renewed then becoming available for registration to the world at large. The Complainant
        alleges that it did not receive proper notice in relation to this process from Nominet and
        has indicated in correspondence to Nominet that it may take action against Nominet. Any
        such dispute between the Complainant and Nominet is clearly outside the scope of the
        Policy and is not something which will be addressed in this decision.

        The Complainant is represented in this complaint by Sinton & Co. solicitors.            The
        Respondent represents itself through its managing director Corin Hartland-Swann.

5.      THE FACTS

        The Complainant, Zara Holdings Limited, was incorporated on 3 February 1997. The
        company details from Companies House as supplied by Nominet indicate its activities to
        be "buying and sell own real estate" and "letting of own property". The Respondent,
        Commerce Internet Limited, was incorporated on 9 June 1999 and the information from
        Companies House as supplied by Nominet indicates its activities to be "manufacture
        computers and process equipment;        hardware consultancy;      software consultancy &
        supply; other computer related activities". The Domain Name currently resolves to a
        website which appears to be operated by the Respondent and which states:



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                "Ci Names Now

                An Internet Domain Name Registration Service provided by Commerce Internet
                Limited

                www.zhl.co.uk

                the Domain Name "zhl.co.uk" has been registered by Names Now on behalf of a
                client

                see who has registered the Domain Name click here

                to see if any other Domain Names starting with "zhl" are available, click here.

                To see if another Domain Name is available, enter a word, name or phrase into
                the box above and click Search"

        The history of the Domain Name as provided by Nominet is as follows

        Date                                       Events

        2 February 1999                            Domain Name registered for the Complainant
                                                   by Designer Servers Limited "DSVR".

        30 January 2001                            The Domain Name is detagged by DSVR.

        7 February 2001                            Nominet sends a renewal notice addressed to
                                                   Sunil Mehra, the administration contact
                                                   address on the Nominet database. A Sunil
                                                   Mehra appears as a director of the
                                                   Complainant in the Companies House
                                                   information provided by Nominet

        28 August 2001                             The Domain Name is suspended for non-
                                                   payment of the renewal invoice.

        31 October 2001                            Nominet cancel the Domain Name for non-
                                                   payment.

        31 October 2001                            The Respondent registers the Domain Name.

        5 June 2002                                The Complainant writes to the Respondent
                                                   seeking return of the Domain Name.




6.      THE PARTIES’ CONTENTIONS

Complainant:
The Complainant's case as put in the complaint is short. Given its brevity, the complaint is
reproduced in full below as follows:


        "The Domain Name was owned and registered by Zara Holdings Limited. An expenditure
        of approximately £20,000 was incurred in connection with the printing of the Domain



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        Name on Company letterhead and extensive advertising. Zara Holdings Limited never
        received a notice renewal by Nominet and unbeknown to them the Domain Name was
        then released by Nominet and sold to Commerce Internet Limited. Commerce Internet
        Limited propose to hold an auction to sell the name which is evidence that they have no
        commercial interest in the name unlike Zara Holdings Limited. Zara Holdings Limited
        wish to register a complaint against Nominet for failing to advise them of the renewal of
        the name and incorrectly releasing it and against Commerce Internet Limited for
        subsequently auctioning the name.       Zara Holdings Limited have offered Commerce
        Internet Limited the amount for which the Domain Name was purchased . This offer has
        so far been rejected. Zara Holdings Limited assert that the Domain Name should still
        belong to them and it is an abusive registration by Internet Commerce Limited because
        the Respondent has taken unfair advantage and their actions have been unfairly
        detrimental to Zara's rights."


        The only supporting material submitted by the Complainant is a copy of a letter dated 10
        July 2002 from the Respondent to the Complainant in which the Respondent says that it
        intends to offer the Domain Name at a public auction.


        Respondent:


        The Respondent has provided substantially more detail in its argument and evidence.


        The Respondent's case in relation to the Complainant's Rights is to deny that the
        Complainant has any Rights. Firstly, on the basis that it asserts the Complainant has no
        registered trade mark rights.    Secondly, on the basis that it claims any three letter
        abbreviation must by its very nature be generic. Thirdly that the sign "ZHL" is capable of
        describing a large number of UK registered companies the initial letters of whose
        corporate names are ZHL.         The Respondent provides a list of 87 UK registered
        companies the initial letters of whose names are ZHL and points out that the existence of
        so many companies whose initial letters are ZHL means that the Complainant cannot
        have any exclusive rights in "ZHL" (if it has any rights).      Finally, it alleges that the
        Complainant and the Respondent do not have a "common field of activity" and that there
        is no likelihood of any confusion occurring.


        On the issue of whether the Domain Name is an Abusive Registration in the hands of the
        Respondent, the Respondent states that it had no knowledge of the Complainant prior to
        its registration of the Domain Name. It also alleges that it did not acquire the Domain
        Name for the purposes of selling or transferring it to either the Complainant or to a
        competitor of the Complainant. The Respondent states that part of its business is the
        registration and sale of domain names. This involves the registration of three letter
        abbreviation domains all of which it claims to be generic. In support of this assertion, the

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        Respondent has attached to its response a print-out of 351 domain names each
        consisting of a three letter abbreviation with the .co.uk suffix which it says are registered
        in its name, are generic and are to be offered for sale at public auction to any company or
        individual with an interest in them. In support of its claim to offer domain names for sale
        at public auction, the Respondent exhibits copies of the Domain Name Auction
        Agreement standard form and bidder registration form which it claims to use in this
        respect.


        Complainant's Response


        Following the submission of the Respondent's response, the Complainant filed a reply.
        The reply attacks the Respondent's assertion that it had never heard of the Complainant.
        Rather than putting forward any supporting evidence on this point, the Complainant
        simply stated that "the Respondent must have been aware of the Complainant as a prior
        registrant". The Complainant then states that the Domain Name was used on its letter
        headings, business cards and publicity material but these were printed after the Domain
        Name had been detagged "…unbeknown to the Complainant". The Complainant says
        that it only became aware that the Domain Name was not operational when the publicity
        material was circulated and attempts were made to the use the Domain Name. The
        Complainant claims that it was never informed that the Domain Name had been detagged
        and that its own behaviour was inconsistent with any such knowledge. The Complainant
        states that it spent £7,500 on a box at the Newcastle United Football Ground "…with the
        Domain Name on the front of it covering the football season August to May" and states
        that there would have been no reason for it to have done so if it had intended that the
        Domain Name would cease to belong to it.


        The Complainant also asserts that once it had informed the Respondent of its alleged
        rights in the Domain Name, the Respondent did not act in good faith because it stated
        that it would put the name up for auction.


7.      GENERAL

        The procedure by which the Domain Name ceased to be registered in the Complainant's
        name and became available for registration by the Respondent is as set out below.

        Chronology

        Date                                         Events

        2 February 1999                              Domain Name registered for the Complainant
                                                     by Designer Servers Limited "DSVR".

        30 January 2001                              The Domain Name is detagged by DSVR.




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        7 February 2001                           Nominet sends a renewal notice addressed to
                                                  Sunil Mehra, the administration contact
                                                  addressee on the Nominet database. A Sunil
                                                  Mehra appears as a director of the
                                                  Complainant in the Companies House
                                                  information provided by Nominet

        28 August 2001                            The Domain Name is suspended for non-
                                                  payment of the renewal invoice.

        31 October 2001                           Nominet cancel the Domain Name for non-
                                                  payment.

        31 October 2001                           The Respondent registers the Domain Name.

        5 June 2002                               The Complainant writes to the Respondent
                                                  seeking return of the Domain Name.



        The registration of a Domain Name with Nominet will last for a period of two years. The
        host for this Domain Name when it was registered in the name of the Complainant, was
        DSVR. Nominet's letter to the Complainant on 12 September 2002 explaining the history
        of the registration, states that the reason that a host detags a name "…is that they [the
        host] no longer wish to provide hosting services and do not want to pay the renewal fees
        associated with it. The effect of a domain being detagged is two-fold. First the Domain
        Name Servers are removed from the record meaning that that domain cannot be used for
        email or website purposes and second Nominet sends any renewal invoices directly to the
        registrant rather than the host". Nominet go on in their letter of 12 September 2002 to
        state that from the date the Domain Name was detagged until its cancellation the Domain
        Name would have been unavailable for use.           Further, Nominet states that if the
        Complainant had contacted Nominet during that period Nominet would have been able to
        advise them as to how to renew the Domain Name and reassign it to a new host.

8.      COMPLAINANT'S RIGHT

        The Complainant's case as to its Rights in the sign "ZHL" is not entirely clear. What is
        evident is that the Complainant does not rely on any registered trade mark rights. The
        specific matters on which it seems to rely are "…an expenditure of approximately
        £20,000…in connection with the printing of the Domain Name on Company letterhead
        and extensive advertising" as well as (in the reply) the use of the Domain Name on letter
        headings, business cards and publicity material and on a box at Newcastle United
        Football Ground. The Complainant's case in essence amounts to a claim that it has
        established rights in the sign "ZHL" through use of the Domain Name on business papers
        and on advertising material with Newcastle United Football Ground. Sufficient use of this
        kind is perfectly capable of establishing a reputation and goodwill in a name (these being
        elements of a case of passing off in English law). Rights in passing off are also perfectly



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        capable of constituting Rights under the Policy, the definition not being restricted to
        registered trade marks as suggested by the Respondent.

        The Respondent then makes a number of further attacks in relation to the ZHL name, in
        particular:

        •       ZHL is generic;

        •       Three letter abbreviations are generic;

        •       There are a number of companies in the UK whose initial letters are "ZHL" so the
                Complainant cannot have acquired any exclusive rights;

        •       There is no "common field of activity" between the Complainant and the
                Respondent.

        It is clearly not the case that a business is never able to establish an exclusive goodwill
        and reputation in a three letter abbreviations - there are numerous companies who have
        done so in their own particular fields (for example, ICI and DHL). If the combination of
        letters is common place and/or represents a commonly used abbreviation then it will be
        more difficult for a business to establish its own exclusive goodwill and reputation. The
        fact that there are other businesses who may have the same initial letters does not of
        itself preclude one company from establishing an exclusive goodwill and reputation in
        those letters in, for instance, a particular field of business. In any event, the fact that a
        company name has certain initial letters does not mean they are used as its business
        name (this applies equally to the Complainant which makes no claim that it is generally
        known as "ZHL"). I find that there is no reason in principle why a business could not
        establish sufficient goodwill and reputation in the initials ZHL to sustain a case in passing
        off sufficient to demonstrate Rights under the Policy. There is no evidence before of any
        other undertaking using the sign "ZHL" in any line of business or in the Complainant's line
        of business. If the Complainant has made sufficient use of the ZHL sign then it could
        have acquired an exclusive goodwill and reputation in relation to those letters.

        The evidence of use, however, is thin - particularly as to when the use was made. The
        Complainant relies on two uses of the domain name:            (1) use on business papers
        (letterhead and business cards); and (2) use at Newcastle United Football Ground. The
        use on letter headings, business cards and publicity material was after the Domain Name
        had been detagged. There is no indication as to whether this use took place before the
        Respondent registered the Domain Name. The use at Newcastle United Football Ground
        is expressed to be "…covering the football season August to May". There is no indication
        of which season this is and therefore whether it is before or after the Respondent
        registered the Domain Name. I will return to the point on timing when addressing whether
        or not the Domain Name is an "Abusive Registration" in the Respondent's hands.
        However, whilst the timing issues are unclear, the complaint and reply have both been
        verified by the Complainant and both indicate the type of use of the initials ZHL prior to



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        the date of the complaint which could be sufficient to establish a case in passing off. In
        determining this point I have taken note of what was said in the DRS Appeal decision
        Seiko UK Limited v Designer Time/Wanderweb (appealing DRS 00248) which stated that
        "…the requirement to demonstrate "Rights" is not a particularly high threshold test". The
        best that can be said on timing is that such use took place before the date of the
        complaint and after the Domain Name was detagged.

        I find that, as of the date of the complaint, the Complainant had Rights in the "ZHL" name.
        Given the general lack of information and supporting evidence in relation to earlier use, I
        am not convinced that the Rights existed at the date the Domain Name was registered by
        the Respondent.

9.      ABUSIVE REGISTRATION

        An Abusive Registration is defined as follows:

                "…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 or was unfairly
                detrimental to the Complaint's Rights"

        The first leg of the definition requires that the registration or acquisition of the Domain
        Name "…at the time when the registration or acquisition took place…" took unfair
        advantage or was unfairly detrimental to the Complainant's Rights. The problem in this
        case, which stems from the lack of detail in the complaint, is that it is not possible to tell
        when the Complainant acquired such Rights as it has. More specifically, the Claimant
        has not identified when it first started using the term "ZHL" in relation to its business. As
        stated above, the Complainant has not proved its case as to Rights at the date the
        Domain Name was registered by the Respondent. There were therefore no Rights of
        which the Respondent could take unfair advantage or to which he could be unfairly
        detrimental at the time when the registration took place.

        Even if the Complainant had Rights at that time, the facts in the current case do not
        appear to fit clearly with the definition of Abusive Registration or any of the non-
        exhaustive list of factors set out in paragraph 3(a)(i) of the Policy (evidence of Abusive
        Registration). The closest would appear to be ground 3(a)(i)(a) which states that the
        Domain Name was registered or otherwise acquired "…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




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        documented out of pocket costs directly associated with acquiring or using the Domain
        Name".

        The Respondent has stated quite unequivocally that it was unaware of the Complainant at
        the time it registered the Domain Name. No evidence has been put forward by the
        Complainant to contradict this. If the Respondent did not know of the Complainant, its
        primary purpose for registering the Domain Name cannot have been to sell the domain to
        the Complainant or a competitor of the Complainant. There is no evidence in the case to
        show that the use of the ZHL name was widespread or high profile at the time of the
        Respondent's registration such that the Respondent could be expected to have heard of
        it.   In its reply, all that the Complainant can muster by way of answer is that "the
        Respondent must have been aware of the Complainant as a prior registrant". No reason
        is given as to why that must be the case nor is any evidence put forward. I am not
        convinced that the Domain Name was registered in such a way as to render the Domain
        Name an Abusive Registration.

        The second limb of the definition of Abusive Registration relates to use of the Domain
        Name. So far, the only use is to point to the Respondent's website (see above for the
        contents). The Respondent says it plans to offer the Domain Name for sale at a public
        auction. It is clear from the documents submitted by the Respondent that it will seek to
        obtain a price significantly higher than its out of pocket expenses in registering the
        Domain Name. I do not believe that amounts to use which renders the Domain Name an
        Abusive Registration. The evidence which the Complainant has had a chance to refute
        but has failed effectively to challenge, is that the Respondent was unaware of any Rights
        which the Complainant might have when it registered the name. It was later informed of
        the Complainant's assertion of its Rights but stated that it still planned on offering the
        Domain Name for sale at public auction.

        Having found that the Complainant has by the date of the complaint acquired Rights in
        the sign "ZHL" I take the view that it would be possible for the Respondent's use of the
        Domain Name and continued threatened use to constitute an Abusive Registration.
        However, I cannot see that in the circumstances of this case with the Complainant's very
        weak rights and where the Domain Name was not registered unfairly. In this respect I
        note that the same conclusion was reached in the DRS Appeal decision Consorzio del
        Prosciuto di Parma v Vital Domains Limited (Appeal of DRS 00359) on similar facts in
        relation to the offer for sale even at a price substantially higher than the registration fee.
        The Complainant has only just managed to establish that it has Rights in the term "ZHL".
        No case has been put forward as to the detriment or unfair advantage involved in the
        Respondent's use. The Respondent has, on the other hand, identified a large number of
        potential legitimate users of the Domain Name. The evidence is that it will invite these
        people and the public in general to bid for the Domain Name at public auction. In those



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        circumstances, it is not clear what possible advantage, unfair or otherwise, could be taken
        of the Complainant's Rights or the detriment which would ensue by their offer for sale.




        DECISION

        The Complainant has not shown it had Rights as at the date of registration of the Domain
        Name by the Respondent. The Complainant had Rights as of the date of the complaint.
        The Respondent has made no use of the Domain Name which could be considered to
        take unfair advantage of or be unfairly detrimental to the Complainant's Rights. The
        Respondent's use of the Domain Name does not render the Domain Name an Abusive
        Registration in the hands of the Respondent. The complaint is rejected.




______________________                                  _________________
Stephen Bennett                                          Date




LIB02/B9SDB/1380715.01                                                                       Lovells

				
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