WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Eddy’s (Nottingham) Limited, trading as Superfi v. Mr. Kingsley Smith
Case No. D2000-0789
1. The Parties
The Complainant is Eddy’s (Nottingham) Limited a company incorporated with limited liability under the laws of England with its registered office and prime place of business at 116-118 Alfreton Road, Nottingham NG7 3NR, United Kingdom and it is represented by John Lambert, Counsel, instructed by Masser & Co.
The Respondent is Mr. Kingsley Smith of 43 Hallbrook Road, Keresley Green, Coventry CV6 2GJ, United Kingdom.
2. The Domain Names and Registrars
The domain names upon which this Complaint is based are superfi.com and superfi.net
The Registrar of the superfi.com as at the date of the Complaint is NAMESECURE.COM of P O Box 127, Moraga, California 94556, USA ("Namesecure"). The Registrar of superfi.net as at the date of the Complaint is Network Solutions Inc. of 505 Huntmar Park Drive, Herndon, Virginia 20170, USA ("NSI").
3. Procedural History
On July 14, 2000 a Complaint was received by the WIPO Arbitration and Mediation Center (the "Center") by email pursuant to the Uniform Dispute Resolution Policy ("the Policy") of the Internet Corporation for Assigned Names and Numbers ("ICANN") and under the Rules for the Policy implemented by ICANN ("the Rules"). A single hard copy of this with Annexes was received on July 19, 2000 and four additional sets of the Complaint were received by the Center on July 26, 2000.
The Complainant stated that a copy of the Complaint had been simultaneously sent to the Respondent as well as to Namesecure and NSI by email and post.
Upon receipt of the email copy of the Complaint, the Center sent to the Complainant an "Acknowledgement of Receipt of Complaint" on July 19, 2000 by email, with a copy being sent to the Respondent by email. On July 21, 2000, the Center notified the Complainant that under the Rules it required 4 additional copies of the Complaint. These were despatched on July 24, 2000.
The Center sent a Request for Registrar Verification to NSI on July 19, 2000.
NSI responded to the Center’s request by email on July 21, 2000 verifying: (1) that at that time it was not yet in receipt of the Complaint, (2) that it was the Registrar for the domain name in dispute, (3) that the current registrant of the domain name in dispute was Superfi (Superfi 12-dom) of which the Respondent was the Administrative Contact at the same address, (4) that the Respondent’s contact details were correct, (5) that NSI’s 4.0 Service Agreement was in effect in relation to the domain name superfi.net, and (6) that the current status of the domain name was "Active".
The Center sent a Request for Register Verification to NameSecure.com by email on July 19, 2000. This was undeliverable, and the Center sent a further Request by email to a different address on July 26, 2000. On August 3, 2000 NameSecure.com responded verifying: (1) that it was in receipt of the Complaint, (2) that it was the Registrar for the domain name in dispute, (3) that the Respondent was the current registrant of the domain name in dispute, (4) that the Respondent’s contact details were correct, and (5) that the domain name was currently active.
The Center sent the Notification of Complaint and Commencement of Administrative Proceeding to the Respondent and to the Complainant on August 9, 2000.
On August 18, 2000, the Respondent sent his response by email to the Center with a copy to the Complainant. On the same day, the Center sent to the Respondent a Response Deficiency Notification, notifying him: (1) that he had sent only one original copy of the Response; (2) that there was no preferred address for communications; (3) that there was no preferred method of communication; (4) that there was no documentary evidence; and (5) that the Response contained no confirmation that a copy had been sent to the Complainant.
On the same day, the Respondent replied by email remedying some of these deficiencies, but saying that "he had neither the time nor the money" to do any more.
The Center sent a Notification of Appointment of Administrative Panel and Projected Decision Date to the Respondent and the Complainant on August 22, 2000 via email. A copy was also sent to the Panel on the same date by email.
The Center dispatched a Transmission of Case File to the Panel, to the Respondent and to the Complainant on August 22, 2000. The Panel received hard copies of this material on August 24, 2000.
All other procedural requirements appear to have been satisfied.
4. Factual Background
Activities of the Complainant
The following information was asserted as fact by the Complainant and remains uncontested –
The Complainant was first incorporated in December 1944 and has carried on business as an electrical retailer under the name SUPERFI in the United Kingdom since 1983.
The Complainant has 14 shops trading as SUPERFI in various towns and cities in the U.K., including Coventry where the Respondent is the manager. The sales area of these shops varies in size between 167 square feet in the smallest to 900 square feet in the largest.
In these shops the Complainant sells consumer electrical goods, especially hi-fi separates and accessories such as mini-disc players, speakers, amplifiers, cassette decks, DVD players, headphones, discs, tapes, tuners and the like.
65 persons are employed in the Complainants’ business, and its turnover increased between 1996 and 2000 from £4.3 million to £7.3 million.
The name SUPERFI is prominently displayed on the outside fascia board of each of the 14 shops and on all point of sales material within each shop.
In every town or city where the Complainant trades as SUPERFI, it is listed under that name in the local telephone directory and in ‘Yellow Pages’.
The Complainant has registered the domain name superfi.co.uk and it uses this site to advertise its goods and services.
In addition to advertising on the above website, the Complainant advertises its goods and services in local newspapers, in specialist magazines and at Exhibitions. It spends varying amounts annually on advertising and promoting its SUPERFI goods and services, but in the last financial year, 1999/2000, the Complainant has spent approximately £75,500.
The Complainants’ trade mark
The Complainant claims to own the trade mark SUPERFI, which it has filed as a Community trade mark. The Panel has established that this trade mark was applied for on July 10, 2000 for goods in Class 9 and it was given the number 1749084. This application was made only just prior to the Complaint being submitted, and in this dispute the Complainant relies principally on its Common Law rights in the name SUPERFI.
The Respondent refers to the possible future filing of Community trade mark applications for SUPERFI and SUPERFI.COM in Classes 35 and 41 by his friend Mr Oliver Shepherd but, at the date hereof, there is no record of these applications having been filed.
The word SUPERFI is certainly reminiscent of the Complainant’s business, namely ‘superb hi-fi equipment’. It is therefore mildly descriptive, and may not be sufficiently distinctive to achieve registration as a trade mark. However the name does appear to be exclusive to the Complainant. The only reference in the London telephone directory is to one of the Complainant’s stores, and a web search threw up only 54 references, 18 of which were to the Complainant’s own website. (All 3 of the references to the Respondent’s sites make clear references to the Complainant.)
Activities of the Respondent
The Respondent is an employee of the Complainant. He was first employed in February 1996 and rose from being a sales assistant to become manager of the Complainant’s shop in Coventry.
He has been sick and absent from work since May 25, 2000, i.e. for some 7 weeks prior to the filing of the Complaint.
Both of the disputed domain names are registered in the Respondent’s own name, and have been so for about 18 months prior to the filing of this Complaint.
The Respondent has operated the websites in his own time and at his own expense, but advertising his employer’s business and products on them.
In the period pre-Christmas 1999, the respondent generated over £150,000 of business for the Complainant through the disputed websites.
Until April 2000, the disputed websites were operated by the Respondent with the tacit approval of the Complainant.
Some time after April 2000, the content of the websites was radically altered, to exclude any reference to the Complainant.
5. Parties’ Contentions
The Complainant contends that it has considerable reputation and goodwill in the name SUPERFI, and a pending trade mark application for the name.
The Complainant also contends that the Respondent registered the disputed domain names in his own name unlawfully, and without permission, and contrary to his contract and terms of employment with the Complainant. He therefore holds the domain names on constructive trust for the Complainant, who has offered to reimburse his costs in return for a transfer of the names to itself, and consequently he has no legitimate rights in the disputed domain names.
The Complainant further contends that in refusing to transfer the disputed domain names to itself, except for more than the cost of their registration, the Respondent has acted in bad faith.
The Respondent contends that when he registered the domain names, the Complainant had no interest in creating an e-commerce business over the internet and that, having used his own initiative in opening a website to further the Complainant’s business through the store of which he is the manager, he acted exclusively on the Complainant’s behalf.
The Respondent also contends that the websites he had created generated so much extra business for the Complainant’s store of which he was the manager, that he required additional staff to assist him, but that this was refused by the Complainant whose only response was to complain about the increased telephone charges.
The Respondent was also very hurt when, in March 2000, and without reference to him or his work, the Complainant appointed someone to create and manage a new internet site and mail order hotline under the name www.hotkit.co.uk. He contends that this new site copied from the website created by him, some material that was actually his copyright.
The Respondent further contends that matters came to a head when he was ‘hassled’ by the Complainant to sell it the disputed domain names; when he was not allowed to sell the Complainants’ goods from ‘his’ website; and when the Complainant sold items through ‘its’ website, at prices lower than those quoted in the Coventry store of which he was the manager.
Because of the stress and depression caused to the Respondent by these activities, he became ill and reported sick.
The Respondent believes he acted entirely correctly, that he volunteered to sell the disputed domain names to the Complainant in return for a repayment only of his costs, and that only after that, when this offer was not followed up and the Complainant appointed a new manager and created a new website, did his relationship with the Complainant break down.
The Respondent contends that after that he has been treated with contempt by the Complainants and that he has now been constructively dismissed by them.
6. Discussion and Findings
This case would test the wisdom of Solomon, as neither party has at all times acted with propriety towards the other. There is right and wrong on both sides and the Panel is of the impression that at times both have behaved unwisely.
The Panel has not been able to identify any other cases decided under the Policy involving similar circumstances.
According to paragraph 4(a) of the Policy, in order to be successful the Complainant has the burden of proving, on the balance of probabilities, that all of three elements are present in its Complaint. The Panel will therefore now consider each of these three elements in detail.
Paragraph 4(a)(i) provides:
"(i) your domain name is identical or confusingly similar to a trademark or service mark in which the Complainant has rights."
The Complainant does have a trade mark, but only applied to register it a few days prior to the filing of the complaint. However the mark has been used extensively over a number of years, and the Complainant alleges that as a result, it has established Common Law rights in the name. In a recent case under the Policy (D2000-0730 Gallerina v. Mark Wilmhurst, as yet unpublished) this Panel extensively reviewed all the cases decided under the Policy in which Common Law rights - as opposed to registered trade mark rights - played a part, and concluded in that case that when a Complainant has sufficient Common Law rights to sustain a passing off action, and if both the Complainant and the Respondent are domiciled and subject to United Kingdom law where a passing off action can be mounted, then that is sufficient to justify rights under paragraph 4(a)(i) of the Policy.
The Panel finds that the Complainant has more than established that its use of the name SUPERFI is sufficient for it to have substantial Common Law rights in this name, and it therefore finds that paragraph 4(a)(i) of the Policy has been proved in this case.
Paragraph 4(a)(ii) provides:
"(ii) you have no rights or legitimate interests in respect of the domain name."
Two domain names are involved in this case. The Respondent claims that he "had to purchase" both of them. However he also claims that he originally started building a website on superfi.net because superfi.com "had already been registered by the Dixons Group". How or when it came into the possession of the Respondent is not clear, nor for how much it was purchased, as nowhere in the papers is any purchase price mentioned for either name. Nor is it clear whether only one site was ever used or both, and if both whether they contained different material or the same.
What is clear, however, is that either one or both sites were used from the outset by the Respondent to further the sales of goods from the SUPERFI store in Coventry which he managed on behalf of the Complainant. For well over a year this was done with the knowledge of the Complainants, who raised no objection until earlier this year. This objection was first made verbally by Mrs. Juliette Abrams, the Complainant’s Resources Manager, on April 8, 2000 and it was followed up by a confirmatory letter on the same day by Mr. Dan Abrams, the Complainant’s Managing Director. There was apparently no further written communication between the two parties until June 2, 2000 when Mrs. Abrams wrote a further letter. This was friendly in tone and solicitous about the health of the Respondent who had just reported sick. However, according to the Respondent the period of time between these two communications was when his health broke down as a result of the stress he was under. The friendly tone quickly changed, as Mrs. Abrams wrote a markedly hostile letter to the Respondent only a few days later on June 6, 2000. After that, the relationship between the parties appears to have broken down completely.
The Respondent claims that either one or both of the disputed sites were operated exclusively for the Complainant. On the face of it, this claim fits strangely with the following statements that appeared on the site, put there by the Respondent: "All rights, including copyright, in the content of these Superfi web pages are owned or controlled for these purposes by Kingsley Smith", and that any copying or downloading etc of them is not permitted "without the prior permission from Kingsley Smith". However the sites also carried statements identifying "Superfi and Eddys of Notts Ltd" as the owner of various images and logos appearing on the site. Without being able to view the entirety of the sites the Panel is unable to ascertain for certain what they contained. So, absent any denial from the Complainant, and in view of its inaction for over a year, the Panel is prepared to give the Respondent the benefit of any doubt and to take as truthful his statement that he purchased the domain names and operated the site "with the intention of boosting my shop sales and in turn the profits of the Complainant".
The Complainant has asserted that in registering the domain names and operating the site, the Respondent was in breach of his contract of employment. The Panel has only been supplied with one page of the Respondent’s Contract of Employment. It is dated February 19, 1996 when he was first employed as a Sales Assistant. If it was subsequently updated, for example when the Respondent was promoted to manager of the Coventry store, the Panel has not been told. There is nothing in this single page which would prevent the Respondent from creating a website to promote the sale of his employer’s goods. The Complainant has also supplied what is described as "relevant extracts from the staff hand book" and this does contain several statements that might be considered as applicable to this case. For example:
1. "In any case where your performance is considered to be below the Company’ requirements, it is the Company’s first aim to bring that performance up to an acceptable standard"
2. "You are also reminded that because of the special nature of our business you may also be asked to work additional time beyond your normal hours. However the Company seeks both to minimise the additional hours worked by staff and also to spread them equally between as many employees as possible."
3. "Your attention is drawn to the responsibility that we each share in ensuring that the presentation of our Branches projects the correct Company image."
4. "It is a condition of employment that staff shall not undertake any private work or participate in any business for monetary or other reward, in respect of any activity that is connected with the Company’s business.
Because of the demanding nature of our business you should also carefully consider the effect that any additional employment could have on your work performance for the Company. You are therefore urged to discuss this with your Manager before commencing any form of additional employment."
If, as the Complainant contends, the creation and operation of the disputed websites was for the Respondent’s own benefit, then he is probably in breach of the first paragraph of No. 4, but the work was not done for his own personal reward, and furthermore (see the second paragraph) the Respondent did make the management of the Company aware of what he was doing - without any objection by them for over a year. Furthermore the Respondent appears to have complied with No. 3 by projecting the Company’s image on the sites, while the Company itself may have failed to comply with No. 2 above by not appointing new staff to relieve the Respondent of his additional workload.
As was said above, there is right and wrong on both sides in this case, but for purposes of the present case the Panel concludes that the Respondent has not clearly breached any of the terms contained in those parts of his contract of employment with which it has been supplied.
However, in addition to the express terms of the Respondent’s contract, the Complainant alleges that he also owed "an implied duty of fidelity at common law which requires him to promote his employer’s business and to avoid a conflict between such duty and his personal interests". The Panel has concluded that this is a matter outside the realms of this domain name dispute, but nevertheless notes that the Complainant has not contested the Respondent’s statements that at all times he has done nothing more than to promote his employer’s goods and services, and that this was within their knowledge.
As a result, the Panel finds that when the domain names were registered, the Respondent did have a legitimate interest in them, although this may have changed when he later failed to transfer them to the Complainant at cost when asked to. As for rights, these seem to be shared between the parties.
In conclusion the Panel finds that the Complainant has not, to the Panel’s satisfaction, sufficiently proved paragraph 4(a)(ii) of the Policy.
Paragraph 4(a)(iii) provides:
"(iii) the domain name has been registered and is being used in bad faith."
The Panel notes that paragraph 4(a)(iii) of the Policy requires both registration in bad
faith AND use in bad faith, and that it is in the past tense. Consequently the Panel needs to look more closely at the situation when the domain names were registered, than at what might be happening now.
Paragraph 4(b) of the Policy provides that a number of different circumstances can be
evidence of bad faith registration and use, but it is not exhaustive. The Panel will
consider each of them in turn, with specific reference to the facts in this case:
"(i) circumstances indicating that you have registered or you have acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trade mark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name."
The Complainant alleges that the Respondent’s letter of June 27, 2000 constitutes a threat to dispose of the disputed domain names to a competitor or other third party. (It refers to paragraph 4(c) of the Policy but that only relates to the methods by which a Respondent might demonstrate his legitimacy so it does not seem to be relevant here.) There is no such threat in this letter, which merely refers to the fact that in the Respondent’s view the value of the domain names is more than the Complainant was offering, and that he is looking for a "proper market price" for them. His justification for this was that they were registered in his name (albeit for the benefit of the Complainant) and that he was therefore entitled by law to dispose of them at a market price. There is no hint of any offer to or by a third party.
"(ii) you have registered the domain name in order to prevent the owner of the trade mark or service mark from reflecting the mark in a corresponding domain name, provided that you have engaged in a pattern of such conduct;"
It is quite clear that this section is not relevant. The Respondent is not a cybersquatter, and he has maintained throughout that he always operated the domain names on behalf of and for the benefit of the Complainant. [However see (iv) below.]
"(iii) you have registered the domain name primarily for the purpose of disrupting the business of a competitor;"
Far from disrupting the business of the Complainant, the Respondent actually has enhanced it, so this section too clearly does not apply.
(iv) by using the domain name, you have intentionally attempted to attract, for commercial gain, internet users to your web site or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your web site or location or of a product or service on your web site or location."
Certainly the Respondent initially attracted business to the sites, not to create confusion but to sell more of the Complainant’s goods. Consequently, the Panel finds that this section was not relevant at the time the sites were registered and for a long period after that.
However once his relations with the Complainant broke down, the Respondent has gone out of his way to change the entire nature of the sites. At one stage, he placed his CV on them, but they now seem to be offering a web design service and they contain the statement "The word ‘Superfi’ and the above logo has (sic) no connection with Eddy (Notts) Ltd or any similar sounding company". The Respondent informs us that this web design and business advice service is to be operated by his friend, Mr. Oliver Shepherd, who will be applying for registration of SUPERFI and SUPERFI.COM as Community trade marks.
Thus, although there was no initial bad faith on behalf of the Respondent, which in the Panel’s view is what has to be proved, there clearly is now.
In the Panel’s view, the Complainant has not conclusively proved its case, although this is not to say that some of the Respondent’s claims could not be successfully challenged in a court of law. The Panel therefore has no alternative but to decide: (1) that both of the disputed domain names are identical to a name in which the Complainant has exclusive rights, (2) that the Complainant has not sufficiently proved that the Respondent has absolutely no rights or legitimate interest in the disputed domain names; and (3) that, except for a short period immediately prior to the filing of the Complaint, the Respondent has not acted in bad faith.
The Panel therefore decides that the registration of both domain names superfi.com and superfi.net should not be transferred to the Complainant.
David H. Tatham
Dated: September 7, 2000