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WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Lescottstewart Limited v. Saeed Izadifar

Case No. D2012-1998

1. The Parties

The Complainant is Lescottstewart Limited of Edgbaston, United Kingdom of Great Britain and Northern Ireland, represented by McEntegart Legal Limited, United Kingdom of Great Britain and Northern Ireland.

The Respondent is Saeed Izadifar of Crewe, Cheshire, United Kingdom of Great Britain and Northern Ireland.

2. The Domain Name and Registrar

The disputed domain name <lescottstewart.com> is registered with LCN.COM Ltd. (the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on October 10, 2012. On October 11, 2012, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain name. On October 15, 2012, the Registrar transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details for the disputed domain name.

The Center verified that the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy” or “UDRP”), the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the “Supplemental Rules”).

In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on October 23, 2012. In accordance with the Rules, paragraph 5(a), the due date for Response was November 12, 2012. The Response was filed with the Center on November 12, 2012.

The Center appointed Andrew D. S. Lothian as the sole panelist in this matter on November 20, 2012. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.

4. Factual Background

The Complainant, designed in the Complaint as Lescott Stewart Limited however correctly named Lescottstewart Limited is a company incorporated in England and Wales, United Kingdom of Great Britain and Northern Ireland (“United Kingdom”) under company number 07747698. The Complainant was incorporated on August 22, 2011. The Complainant carries on business as a clothing manufacturer and retailer.

The Complainant is the proprietor of three United Kingdom registered trade marks as follows: (1) trade mark number 2614230 in respect of the words LS LESCOTT STEWART and device, registered on July 13, 2012, in class 25; (2) trade mark number 2617121 in respect of the words LS LESCOTT STEWART EST.2011 and device, registered on July 20, 2012, in classes 3, 9, 14,18, 24 and 25; and (3) trade mark number 2617123 in respect of the words LS LESCOTT STEWART and device, registered on July 20, 2012, in classes 3, 9, 14,18 and 24.

The Respondent, Saeed Izadifar, is a private individual. The Respondent's company, CNVT Limited is incorporated in the United Kingdom under company number 07729691. CNVT Limited provides sales and commercial consultancy services. The Complainant's founders engaged CNVT Limited to provide various consultancy services including brand and market development services. During 2011, a formal contractual agreement (“the 2011 Agreement”) was drawn up between the Complainant and CNVT Limited whereby the latter would provide the former with consultancy services in return for payment of a fixed fee together with a percentage of the value of the Complainant's wholesale sales. The 2011 Agreement also provided that CNVT Limited would become a shareholder in the Complainant immediately following the signing of the agreement. Although the 2011 Agreement was never executed, the Respondent has proceeded on the understanding that it governed the terms of the Respondent and CNVT Limited's arrangements with the Complainant.

On August 11, 2011, the founders of the Complainant wrote to the Respondent with a series of instructions regarding a clothing range to launch in March 2012, including a reference to a “webpage” which was required “asap”. On August 12, 2011, the Respondent wrote to the founders of the Complainant to provide “a quick reminder” on a range of points which included the incorporation of the Complainant, trade mark registrations and the registration of the disputed domain name.

The disputed domain name was created on August 15, 2011, by the Respondent. The Respondent also appears to have handled communications on the Complainant's behalf with the United Kingdom Intellectual Property Office regarding the advertisement of the Complainant's trade marks.

In June 2012, the Parties' relationship deteriorated. The Parties instructed solicitors who entered into correspondence regarding the Parties' obligations to one another. The Respondent's solicitors issued a formal Letter of Claim to the Complainant's solicitors on October 2, 2012. The said letter indicated the Respondent's intention to issue proceedings on behalf of both the Respondent and CNVT Limited for payment of GBP 27,526.21 and for specific performance of the 2011 Agreement in respect of the transfer of the shareholding in the Complainant to CNVT Limited. As far as the Panel has been informed, legal proceedings have not yet commenced.

5. Parties’ Contentions

A. Complainant

The Complainant contends that the disputed domain name is confusingly similar to trademarks in which it owns rights; that the Respondent has no rights or legitimate interests in the disputed domain name; and that the disputed domain name was registered and is being used in bad faith.

The Complainant narrates the terms of its registered trade marks and submits that the disputed domain name is identical or confusingly similar thereto as the disputed domain name uses the Complainant’s trading name which is incorporated into the trade marks, those names being “Lescott” and “Stewart”, which also happen to be the surnames of the directors and owners of the Complainant.

The Complainant submits that the Respondent has no rights or legitimate interests in respect of the disputed domain name because the Respondent has not and does not trade under the name “Lescott Stewart” or any similar trading name.

The Complainant states that the Respondent was contracted by the Complainant to register the disputed domain name on behalf of the Complainant and that the Complainant made payment therefor. The Complainant produced an invoice from the Respondent titled “Lescott Stewart 00108.11.2011” in the sum of GBP 1,604.40 which contains a line item “Domain name for website”. The Complainant also produced its bank statement dated February 1 to 29, 2012, showing a payment to the Respondent of GBP 8,500 dated February 17, 2012.

The Complainant notes that a dispute arose between the Complainant and Respondent over matters unrelated to the disputed domain name and the Respondent has chosen to retain the disputed domain name and prevent access to the associated website until the unrelated dispute is resolved to the satisfaction of the Respondent. The Complainant states that as a result the Complainant cannot access its own website and is suffering losses namely, loss of potential customers and profits as a consequence.

B. Respondent

The Respondent denies that: the disputed domain name is identical or confusingly similar to the Complainant’s trade mark; that the Respondent has no rights or legitimate interests in the disputed domain name; or that the disputed domain name was registered or used in bad faith.

The Respondent states that it is disingenuous for the Complainant not to attach to the Complaint evidence of its claimed trade mark registrations and accordingly, the Respondent provides copies. The Respondent notes that none of the trade marks are plain word marks; each is a figurative mark containing inter alia the verbal element “Lescott Stewart”. The Respondent therefore denies that the disputed domain name is identical to any of the Complainant's registered trade marks. The Respondent also notes that the applications to register the trade marks were filed long after the date on which the Respondent registered the disputed domain name. The Respondent also notes that the Complainant was not incorporated until August 22, 2011, after the registration of the disputed domain name.

The Respondent admits that it does not trade under the name “Lescott Stewart” or any similar trading name but states that it does not follow that the Respondent has no rights or legitimate interests in the disputed domain name. The Respondent states that it is withholding the disputed domain name as a lien, which it asserts is perfectly legitimate under English law, due to the failure of the Complainant to pay the Respondent for services rendered. The Respondent cites Clinomics Biosciences, Inc. v. Simplicity Software, Inc., WIPO Case No. D2001-0823 and Amy’s Orchids v. EIC, WIPO Case No. D2009-0466 in support of its proposition.

The Respondent asserts that it was not contracted by the Complainant to register the disputed domain name on behalf of the Complainant. The Respondent admits that it did invoice the Complainant for the registration of the disputed domain name. The Respondent admits that the Complainant made a payment to the Respondent of GBP 8,500 on February 17, 2012, however submits that this was not a payment in repect of the Respondent's invoice named “Lescott Stewart 00108.11.2011” for the sum of GBP 1,604.40. The Respondent asserts that the Complainant's own accountants have confirmed that the payment of GBP 8,500 had nothing to do with the invoice relating to the disputed domain name and states that payment in respect of the latter invoice is still outstanding. The Respondent produced an invoice from the Complainant's accountants dated July 11, 2012, which it says confirms that the payment of GBP 8,500 related to the Respondent's invoices numbers 4 and 7.

The Respondent asserts that contrary to the Complainant's contentions the dispute between the Parties is not unrelated to the disputed domain name. The Respondent notes that the Complainant built and operates a website under the domain name <lescottstewart.co.uk> and that consequently the Complainant is not suffering losses and loss of potential customers and profits as claimed.

The Respondent states that it has always acted in good faith in its dealings with the Complainant and its owners. The Respondent adds that until early July 2012 the Respondent believed it was a partner in a joint venture with the owners of the Complainant and a key player in pursuing the agreed objectives of this joint venture, for which the Respondent’s own company CNVT Limited would join the Complainant as a shareholder. The Respondent produced various emails with the Complainant's owners which it states demonstrate its good faith and goodwill.

In light of the deterioration of the relationship between the Parties, the Respondent states that it instructed solicitors who will be issuing legal proceedings. The Respondent therefore submits that the Complaint should be denied on the ground that it involves a commercial dispute which is outside the scope of the Policy or alternatively on the ground that the withholding of the disputed domain name as a lien is an exercise of the Respondent's legitimate interests in respect of the disputed domain name. The Respondent submits that such legitimate action by the Respondent cannot result in a finding that the disputed domain name was registered and is being used in bad faith. The Respondent adds that, also in the alternative, the Complaint should be denied because the Complainant has failed to establish that the Respondent's registration of the disputed domain name was made in bad faith.

6. Discussion and Findings

To succeed, the Complainant must demonstrate that all of the elements enumerated in paragraph 4(a) of the Policy have been satisfied, namely that:

(i) the disputed domain name is identical or confusingly similar to a trade mark or service mark in which the Complainant has rights;

(ii) the Respondent has no rights or legitimate interests in respect of the disputed domain name; and

(iii) the disputed domain name has been registered and is being used in bad faith.

A. Identical or Confusingly Similar

The Complainant relies upon its registered trade marks for the purposes of this element, while the Respondent seeks to challenge the Complainant's trade marks first on the ground that these were registered after the creation of the disputed domain name and secondly on the basis that they are not identical or confusingly similar to the disputed domain name because the trade marks are figurative in nature.

The WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition ("WIPO Overview 2.0") deals with the question of trade marks which post date the creation of the disputed domain name at paragraph 1.4, under the heading “Does the complainant have UDRP-relevant trademark rights in a trademark that was registered, or in which the complainant acquired unregistered rights, after the domain name was registered?”, which provides the following consensus view:

“Registration of a domain name before a complainant acquires trade mark rights in a name does not prevent a finding of identity or confusing similarity under the UDRP. The UDRP makes no specific reference to the date on which the holder of the trade mark or service mark acquired rights. However, in such circumstances it may be difficult to prove that the domain name was registered in bad faith under the third element of the UDRP.”

The Panel respectfully adopts the consensus view. Accordingly, the Respondent's submission is not of significance for this element of the Policy and the Panel therefore turns to the question of the figurative nature of the Complainant's trade marks.

The WIPO Overview 2.0 also deals with the question of figurative trade marks at paragraph 1.11, under the heading “Are disclaimed or design elements of a trade mark considered in assessing identity or confusing similarity?” where it is stated:

“Textual content which has been expressly disclaimed in a complainant's relevant trade mark registration is generally disregarded by panels when assessing a domain name's identity or confusing similarity under the first element of the UDRP. Also, as figurative, stylized or design elements in a trade mark are generally incapable of representation in a domain name, such elements are typically disregarded for the purpose of assessing identity or confusing similarity, with such assessment generally being between the alpha-numeric components of the domain name, and the dominant textual components of the relevant mark. However, design elements in a trade mark may be relevant to the decision in certain circumstances - such as where, for example, they form an especially prominent or distinctive part of the trade mark overall. Some panels have found it to be a matter of impression in the circumstances of each case. Where the entire textual component of a complainant's relevant trade mark has been disclaimed, or the only protectable component of such mark is comprised of design elements which generally cannot be represented in the alpha-numeric string of a domain name, then (absent a showing of acquired distinctiveness through use of the relevant mark) the complainant may lack any relevant rights under the UDRP on the basis of such mark, rendering moot any assessment of the disputed domain name's identity or confusing similarity with it.”

The Panel respectfully adopts the consensus view. In the present case, there is no disclaimer of any textual content in the Complainant’s trade mark registrations. In the Panel's view, the textual elements of the trade marks, LS LESCOTT STEWART and LS LESCOTT STEWART EST.2011 are clearly legible, and are the dominant elements of the figurative representations. The non-textual elements of the trade marks are first, a label symbol consisting of a square on which is superimposed a circle in which the legend appears with three stars; and second, a square on which is superimposed an approximately oval design in which the legend appears. In the opinion of the Panel the non-textual elements do not detract from the textual component, and, as they are incapable of representation in a domain name, may be disregarded for the purpose of assessing identity or confusing similarity under the Policy. As such, the Panel is left with a comparison between the disputed domain name <lescottstewart.com> and the textual components of the trademarks, namely, LS LESCOTT STEWART and LS LESCOTT STEWART EST.2011. The Panel is satisfied that the dominant element of both the trade marks and the disputed domain name is shared, namely the Complainant's trading name “Lescott Stewart”, and that the absence of white space in the disputed domain name is of no significance, given that white space is not permitted in a domain name for technical reasons.

Accordingly, the Panel finds that the Complainant’s trade marks are confusingly similar to the disputed domain name and thus that the first element under the Policy has been established.

B. Rights or Legitimate Interests

Paragraph 4(c) of the Policy lists several ways in which the Respondent may demonstrate rights or legitimate interests in a disputed domain name:

“Any of the following circumstances, in particular but without limitation, if found by the Panel to be proved based on its evaluation of all evidence presented, shall demonstrate your rights or legitimate interests to the domain name for purposes of paragraph 4(a)(ii):

(i) before any notice to you of the dispute, your use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or

(ii) you (as an individual, business, or other organization) have been commonly known by the domain name, even if you have acquired no trademark or service mark rights; or

(iii) you are making a legitimate non-commercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.”

In the present case, the Complainant states that the Respondent has not and does not trade under the name “Lescott Stewart” or any similar trading name. The Respondent admits this however, and explains that it is withholding the transfer of the disputed domain name in connection with a wider dispute. The Respondent claims a lien under English law in respect of the disputed domain name. The Respondent also produces a series of documents demonstrating that the Parties had entered into a contractual relationship, and equally that aspects of that relationship have given rise to a dispute between the Parties which is wider than that relating to the disputed domain name.

The Respondent cites the cases of Clinomics Biosciences, Inc. v. Simplicity Software, Inc., WIPO Case No. D2001-0823 and Amy’s Orchids v. EIC, WIPO Case No. D2009-0466, in support of its contention that the circumstances in the present case entitle it to a finding that it has rights and legitimate interests in the disputed domain name. The essence of both of these cases is that a dispute, if properly documented and supported by applicable law, could give rise in certain circumstances to a legitimate interest in the domain name as a lien to secure payment and as such would result in dismissal of the relative complaint.

In the Panel's opinion, there is good reason for panels to exercise caution when faced with a respondent's claim to a lien over a disputed domain name in proceedings under the Policy. No such claim should automatically lead to a finding that the respondent has rights and legitimate interests in the domain name at issue. Any such claim must be carefully reviewed by the panel in order to ensure that it is underpinned by at least a prima facie basis and is not merely pled as a device to circumvent the aims of the Policy.

The Panel must confess to some skepticism regarding the Respondent's entitlement to exercise a lien over the disputed domain name in this case. It seems curious to say the least that if the Respondent was given the task of handling the administration in respect of both the applications for the Complainant's registered trade marks and the disputed domain name, it would arrange for the former to be taken in the name of the Complainant while taking the latter in the Respondent's name. That said, the Panel also finds the following factors to be of significance: (1) the Respondent was evidently in a contractual relationship with the Complainant and the Complainant’s predecessors; (2) the Complainant's founders requested the Respondent to register the disputed domain name; and (3) a dispute has since arisen between the Parties regarding the extent of payments due to both the Respondent and the Respondent's company. With some reluctance, in light of its skepticism expressed above, the Panel accepts that these factors constitute a prima facie basis for the Respondent's claim to a lien in this specific case.

As the Parties are aware, it is neither the function of the Panel to determine the extent of the Parties' contractual rights in the present case nor in particular the scope or effect of the Respondent’s claimed lien. Such a determination would nevertheless be required for the Panel to be able to reach a decision regarding the Respondent's rights or legitimate interests in the disputed domain name. In the circumstances, this places the present dispute beyond the scope of paragraph 4(a) of the Policy.

It follows that the Complainant has failed to prove that the Respondent has no rights or legitimate interests in the disputed domain name.

C. Registered and Used in Bad Faith

Paragraph 4(b) of the Policy provides four, non-exclusive, circumstances that, if found by the Panel to be present, shall be evidence of the registration and use of a domain name in bad faith:

“(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 trademark 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; or

(ii) you have registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that you have engaged in a pattern of such conduct; or

(iii) you have registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(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”.

In a case such as the present where a lien has been asserted over the disputed domain name and where the circumstances indicate that there is at least a prima facie basis for that assertion, the Panel is unable to make a finding regarding whether or not the Complainant registered and is using the disputed domain name in bad faith. On the one hand, the Panel's skepticism of the Respondent's position points in the direction of registration in bad faith for the simple reason that there is no evidence that the Respondent had received any permission from the Complainant or its founders to take the disputed domain name in the Respondent's own name. On the other hand, the Panel is prepared to accept that the Respondent may be entitled in terms of the agreement between the Parties to hold the disputed domain name in its own name pending performance of various contractual obligations on the part of the Complainant, constituting use of the disputed domain name in good faith. It is also the case that previous panels have recognized that where parties have entered into a contractual relationship a heavier burden of proof for bad faith registration may be appropriate. See Nicholas Lee Jumblatt, Jumbie LLC v. SlantMedia, WIPO Case No. D2012-1011. In this case the Panel finds Complainant has failed, on the present record, to carry that burden. As to the issue of any lien as noted above, this Panel finds a determination on the latter point to be beyond the scope of the present administrative proceeding.

It follows that the Complainant has failed to prove for the purposes of the present policy proceedings that the disputed domain name was registered and is being used in bad faith. The present decision under the Policy in no way precludes the Complainant from pursuing its claims against the Respondent in an appropriate court of competent jurisdiction, and it may be the courts are in any event the more appropriate forum for this type of dispute.

7. Decision

For the foregoing reasons, the Complaint is denied.

Andrew D. S. Lothian
Sole Panelist
Date: December 4, 2012

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