Cyclone Courier Company Ltd v Clark [2004] DRS 1629 (10 May 2004)

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15/03/2004 Dispute entered into system
15/03/2004 Hardcopies received in full
18/03/2004 Complaint validated
18/03/2004 Complaint documents generated
24/03/2004 Electronic Response entered into system
24/03/2004 Electronic Response matched
24/03/2004 Response hard copies received
24/03/2004 Forward response to Complainant documents generated
31/03/2004 Reply entered into system
31/03/2004 Electronic Reply matched
31/03/2004 Electronic Reply entered into system.
31/03/2004 Reply hard copies received
31/03/2004 Reply received and initiate mediation documents generated
15/04/2004 Mediation documents generated
16/04/2004 Fees received from Complainant
19/04/2004 Mr Chris Tulley selected as expert

The Complainant, Cyclone Courier Company Ltd, was incorporated in 1985 and has been trading since then using the name ‘Cyclone’. It started as a document courier company and has expanded into document storage and a chauffeur driven car service. It has two domain names, being cyclone-couriers.com and cyclone-cars.com, which it uses for its websites. It has not registered CYCLONE as a trade mark.

The Domain Name was registered on 8 March 2004 by the Respondent, Mr Seb Clark. For some months prior to this the Complainant says that the Domain Name had been detagged and suspended and it had been doing daily WHOIS searches in the hope of obtaining the Domain Name once it became available. However, when it did become available, the Respondent registered it first.

The Complainant contacted the Respondent by e-mail on 11 March 2004 expressing interest in acquiring the Domain Name. An exchange of emails followed during which the Complainant offered the Respondent £175 to transfer the Domain Name and the Respondent said that he would want ‘a reasonable 4 figure sum’ for effecting such a transfer. The Complainant was not prepared to pay such a sum.

The Respondent arranged for the Domain Name to be linked to a holding page website that displays search engine results relating to the word "cyclone" and has offered it for sale to any interested party via www.sedo.co.uk, a website dedicated to the buying and selling of domain names.

The Respondent is also the registrant of a number of other domain names, all registered in March 2004, such as airs.co.uk; etv.co.uk; agent.co.uk; wrote.co.uk; gtv.co.uk; seduced.co.uk; laf.co.uk; skates.co.uk; eqi.co.uk; and even.co.uk.

6. The Parties’ Contentions:

· It has a right to the Domain Name because of its use of the Cyclone trading name since 1985 and the Domain Name is the most natural choice of domain name for it and one through which existing or potential customers might expect to be able to contact it.

· The registration of the Domain Name by the Respondent constitutes an Abusive Registration, as defined by Nominet UK’s dispute resolution policy, because:

o it was 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 documented out-of-pocket costs directly associated with acquiring or using the Domain Name";

o the other registrations made by the Respondent suggest a pattern of behaviour whereby a large range of names unrelated to the Respondent’s activities are acquired which may be attractive to legitimate users in the hope of selling them on for significant profits; and

o the Respondent's activities could give rise to a claim in passing off. The Complainant relies on the Judgment of Mr. Justice Ferris in the case of Tropical Resorts Management Limited & Ors. -v- Morgan and says that the facts of that case and actions of the Defendant are strikingly similar to the facts here.

· The fact that there are over 50 other companies registered at Companies House whose name begins with “Cyclone” is irrelevant as it only needs to prove that it has rights to the name "Cyclone", but not that these rights are exclusive.

· The fact that it has not registered any of the names ‘Cyclone’, ‘Cyclone Cars’ or ‘Cyclone Couriers’ as a trade mark is irrelevant as Nominet UK’s guidance notes confirm that “a trade mark …might be helpful in demonstrating rights in the disputed domain name, but is not a necessity”.

· The fact that it has not registered ‘cyclone-cars.co.uk’ or ‘cyclone-couriers.co.uk’ is irrelevant, but it is "self-evident that brevity is attractive in a domain name since it makes the name easy to both type and remember" and neither ‘cyclone-cars.co.uk’ or ‘cyclone-couriers.co.uk’ offer any improvement over its existing names of ‘cyclone-cars.com’ or ‘cyclone-couriers.com’.

· The fact that the Respondent did not pro-actively contact the Complainant or any of their competitors within two days of registering the Domain Name is no evidence that the primary purpose of the registration was not the sale of the Domain Name. The Complainant points out that "any company with rights to the name ‘cyclone’ might be reasonably expected to approach the registrant of their own accord, particularly if the name was not being put to use, thus saving the Respondent the trouble of making contact himself."

· The Respondent does not indicate any other genuine purpose for the Domain Name’s registration which indicates that "it was registered primarily with a view to selling it", a claim that is also supported by the fact that the Respondent has taken steps to arrange for the auction, via the domain name trading site www.sedo.co.uk, of the Domain Name along with other domain names registered by him at around the same time.

· The name ‘Cyclone’ is not being used by the Respondent in connection with a genuine offering of goods or services as the website associated with the Domain Name since 9 March only consists of Google advertisements relating to the keyword ‘cyclone’; the results of feeding ‘cyclone’ to a search service; various banner advertisements and a pop-under window containing the home page for the Respondent’s “catalogue search” site.

· The Domain Name has not been registered for a legitimate purpose for “possible future projects” as claimed by the Respondent. If this were true one would reasonably expect the Respondent to elaborate on the nature of these possible projects in his reply to the complaint and the absence of such an elaboration indicates that the Respondent has no such plans.

· The Respondent's claim that his statement that "regular single word domain names usually go for low to mid 4 figure sums” is to be taken simply as expressing an opinion as to the Domain Name’s value and was not an offer to sell at a large profit is not credible.

· The Respondent's claim that he has many thoughts and ideas about each and every name he has registered is not credible, at least in relation to the Domain Name, because he has not explained the nature of that intention in his response and the small size of the Respondent's business would not allow sufficient resources to launch genuine projects relating to even a small proportion of these names.

· The Respondent is engaged in a pattern of Abusive Registrations as evidenced by:

o his prolific registration of ‘single-word’ .co.uk domain names;

o his having arranged for his company, Centraserve Limited, to be registered as a Nominet tag holder, which is consistent with having the need to register a large number of .uk domain names; and

o the fact that the Respondent feels qualified to express a “view of the current economic state of the domain name market” implies that he has gained a strong background in the area of domain name sales.

· The fact that a domain name may be the "natural choice" for someone does not give that person any right to own it.

· There are over 50 other companies whose name starts with the word "cyclone" registered with Companies House.

· The Complainant has not registered any trade marks relating to the Cyclone name and therefore has no right to the Domain Name.

· If having a .co.uk domain name is important to the Complainant then it should have registered the .co.uk versions of their existing .com domain names.

· The Respondent did not make any kind of contact with any competitor of the Complainant nor initiate contact with Complainant. It was the Complainant who made first contact and offered to buy the Domain Name.

· Responding to the contact by asking the Complainant to make a reasonable offer is not unjust and does not imply that the Domain Name was purchased to sell.

· Confirming the Respondent's view of the likely value of single word domain names was to give the Complainant an idea of the current economic state of the domain name market.

· There has been a website live on the Domain Name since 11 March which was set up on 9 March, the day before the Respondent was contacted by the Complainant.

· The Domain Name is a marketable name and was registered for possible future projects and not primarily for the purposes of selling it to the Complainant or one of its competitors for a price in excess of the acquisition costs.

· There is nothing wrong with registering other domain names even if there is no immediate legitimate use for them.

· The Respondent is a web developer and has thoughts and ideas for every domain name he has registered. He gives several examples of active websites he owns and manages relating to a diverse range of business areas such as writing poetry and short stories, catalogue agencies, travel and holiday related sites.

In order to succeed the Complainant must prove, on the balance of probabilities, two matters, i.e. that:
1. The Complainant has Rights in respect of a name or mark which is identical or similar to the Domain Name; and

· Rights includes, but is not limited to, rights enforceable under English law. However, a Complainant will be unable to rely on rights in a name or term which is wholly descriptive of the Complainant's business.

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.

The Complainant has traded under the name "Cyclone" since 1985 and has provided various forms of evidence of its use of the name, such as brochures and letterheads. It started as a document courier company and has expanded into document storage and a chauffeur driven car service and now has an annual turnover in excess of £4 million.

Whilst the Complainant does not have any registered trade marks relating to its use of the Cyclone name that does not mean it does not have Rights as defined in the Nominet UK DRS Policy. Rights include any rights enforceable under English law and therefore unregistered passing off rights in relation to the name are just as relevant.

The Complainant is therefore correct when pointing out that the lack of a registered trade mark is not decisive. The Complainant is also correct in its assertion that it only needs to prove that it has rights to the name ‘Cyclone’, but not that these rights are exclusive. However, this only relates to the question of whether or not the Complainant has "Rights" as defined in the DRS Policy. Whether or not those rights are exclusive can be highly relevant to the second question of whether the Domain Name is, in the hands of the Respondent, an Abusive Registration.

The name Cyclone is not in any way descriptive of the Complainant's business of a document courier, document storage and chauffeur driven car service. From the evidence provided by the Complainant of the extent and period of its use of the Cyclone name I am satisfied on the balance of probabilities that it will have acquired passing off rights enforceable under English law in relation to use of the Cyclone name by others in the same or similar areas of business.

I am therefore satisfied on the balance of probabilities that the Complainant does have Rights in the name Cyclone, which is identical or similar to the Domain Name.

The Complainant has therefore proved, on the balance of probabilities, the first of the two elements that it needs to prove in order to succeed in its complaint.

The second element that the Complainant must prove is that the Domain Name, in the hands of the Respondent, is an Abusive Registration as defined in the DRS Policy.

Paragraph 3 of the DRS Policy gives some examples of circumstances that may tend to show that a registration is an Abusive Registration. Paragraph 4 of the DRS Policy gives examples of how the Respondent may demonstrate that the Domain Name is not an Abusive Registration.

From the matters relied on by the Complainant and Respondent in their submissions the following parts of paragraph 3 and 4 are potentially relevant:

· Paragraph 3 a) i) A) - circumstances indicating that the Respondent has registered or otherwise acquired the Domain Name 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.

· Paragraph 3 a) iii) - in combination with other circumstances indicating that the Domain Name in dispute is an Abusive Registration, the Complainant can demonstrate that the Respondent is engaged in a pattern of making Abusive Registrations.

Factors which may be evidence that the Domain Name is not an Abusive Registration

· Paragraph 4 a) i) A) - before being informed of the Complainant's dispute, the Respondent has used or made demonstrable preparations to use the Domain Name or a domain name which is similar to the Domain Name in connection with a genuine offering of goods or services.

· Paragraph 4 a) i) C) - before being informed of the Complainant's dispute, the Respondent has made legitimate non-commercial or fair use of the Domain Name.

· Paragraph 4 a) ii) - the Domain Name is generic or descriptive and the Respondent is making fair use of it.

The first point to bear in mind is that registering a domain name just for the purpose of selling it is not of itself objectionable. The legitimate buying and selling of domain names is a common business. However, it is often a different story if a domain name is registered or otherwise acquired primarily for the purpose of selling it to a particular company or one of their competitors for an inflated price in excess of its acquisition costs.

The Respondent points out that there is nothing wrong in registering domain names even if there is no immediate legitimate use for them. In any event he says that the Domain Name is a marketable name and was registered for unspecified possible future projects. He claims that as a web developer he has thoughts and ideas for every domain name he has registered, even if he does not have the time available to exploit them all himself. In support of this he gives several examples of active websites he owns and manages relating to a diverse range of business areas such as writing poetry and short stories, catalogue agencies, travel and holiday related sites.

The Respondent also points to the fact that he did not make any kind of contact with any competitor of the Complainant nor initiate contact with the Complainant. It was the Complainant who made first contact and offered to buy the Domain Name and responding to the contact by inviting the Complainant to make a reasonable offer does not imply any wrongdoing. This is notwithstanding the fact that he indicated a view that the market value of the Domain Name was likely to be "a low to mid 4 figure sum" i.e. a figure likely to be well in excess of its acquisition costs.

The Respondent also relies on the fact that there has been a website live on the Domain Name since 11 March which was set up on 9 March, just before the Respondent was contacted by the Complainant.

In relation to this last point, I am not satisfied that the website associated with the Domain Name is sufficient for the Respondent to rely on Paragraph 4 a) i) A) i.e. that before being informed of the Complainant's dispute the Respondent had used or made demonstrable preparations to use the Domain Name in connection with a genuine offering of goods or services. The website is nothing much more than a holding site showing links to other websites and does not itself seem to offer any goods or services, and the Respondent has not demonstrated any preparations to use it for anything more.

However, the use of the Domain Name for such a website seems to me to be "fair use". I also accept the Respondent's evidence, which is not directly challenged, that although the website went live on 11 March, being the same day that the Complainant first contacted the Respondent, he had in fact set it up on 9 March and it took 48 hours to update. The Respondent can therefore seek to rely on Paragraph 4 a) i) C) of the DRS Policy as evidence that the Domain Name is not an Abusive Registration i.e. that before being informed of the Complainant's dispute, the Respondent has made legitimate non-commercial or fair use of the Domain Name.

I agree with Complainant that the Respondent's point that the Complainant has not registered ‘cyclone-cars.co.uk’ or ‘cyclone-couriers.co.uk’ is irrelevant.

In relation to the other points made by the Respondent the Complainant says that no doubt the Respondent was merely waiting to be approached by any company with rights to the Cyclone name thus saving the Respondent the trouble of making contact himself. The Complainant points out that whilst the Respondent has given details of intended uses for some of the other domain names he has registered he did not indicate any purpose for the registration of the Domain Name itself. The Complainant says that this indicates that "it was registered primarily with a view to selling it" and this is supported by the fact that the Respondent has offered the Domain Name for sale via the domain name trading site www.sedo.co.uk, having confirmed to the Complainant that the Respondent's view of its market worth was a "low to mid 4 figure sum".

However, the problem the Complainant has to overcome is that there is nothing objectionable of itself even if the Respondent did register the Domain Name for the purpose of immediately selling it at a substantial profit unless the Complainant can show, on the balance of probabilities, that the Respondent had registered it primarily for the purposes of selling it to the Complainant or to a competitor of the Complainant.

The Respondent does acknowledge that when he registered the Domain Name he did so in the knowledge that such a single word domain name as cyclone.co.uk was likely to be of interest to a number of third parties and would therefore be readily marketable. However, there is nothing in the evidence to suggest that the Respondent even knew of the existence of the Complainant when he registered the Domain Name let alone that he registered it 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.

In the circumstances, I am not satisfied that the Complainant can seek to rely on Paragraph 3 a) i) A) of the DRS Policy as evidence that the Domain name is an Abusive Registration.

The Complainant claims that it has a right to the Domain Name because of its use of the Cyclone trading name since 1985 and it is the most natural choice of domain name for it, and one through which existing or potential customers might expect to be able to contact it.

That may be the case if the Complainant can show exclusive rights to the name, but as the Respondent points out, there are over 50 other companies whose name starts with the word "cyclone" registered with Companies House. I have also carried out a basic online search at Companies House for companies with a name beginning with the word "cyclone" which reveals 5 dissolved companies and 48 currently existing companies, one of which is the Complainant.

The names of these companies suggest a very wide range of different business areas in addition to the Complainant's business of a document courier service including music, asset management, boats, car accessories, cleaning, computers, engineering, helicopters, restaurants and properties. From the evidence submitted there is no way of telling how many of these companies, like the Complainant, trade using the shortened name of just "Cyclone" in their particular field of business, but many of them could well make exactly the same claim as the Complainant that the Domain Name "is the most natural choice of domain name for it and one through which existing or potential customers might expect to be able to contact it".

The Respondent points out that a trade mark search reveals that the Complainant has not registered CYCLONE as a trade mark. That is not in any way fatal to the Complainant's case but a basic online search of the Patent Office database that I carried out reveals 20 or so different UK trade mark registrations of the word CYCLONE that cover a wide range of different goods, and the earliest one dates back to 1920. Each of the various proprietors of these CYCLONE trade marks may well say that the Domain Name "is the most natural choice of domain name for it and one through which existing or potential customers might expect to be able to contact it".

The Complainant also relies on the Judgment of Mr. Justice Ferris in the case Tropical Resorts Management Limited & Ors. -v- Morgan (2001). The Complainant says that the facts of that case and actions of the Defendant are strikingly similar to the facts here and show that the Respondent's activities could give rise to a claim in passing off.

I do not believe that this case assists the Complainant. The Tropical Resorts Management case related to the domain name banyantree.co.uk, Banyan Tree being the Claimant's trading name. The judgment is only two paragraphs long because the only substantive issue between the parties appeared to be costs. Each case of passing off turns on its own facts and the judgement does not give any detail as to the evidence relied upon by the Claimant and in particular whether anyone other than the Claimant used or had rights to the Banyan Tree trading name. Here the evidence suggests that the Complainant shares rights to the name Cyclone as a business trading name with numerous other companies operating in a diverse range of areas.

If the Domain Name were to be used by or offered to another party in a similar field of business to that of the Complainant then that might well give rise to a passing off claim and make the Domain Name in the hands of the Respondent an Abusive Registration. However, when the Domain Name in issue is a single word domain name that could be used legitimately by a wide range of different companies then the registration of it does not automatically make it an instrument of deception and the general offer for sale of the Domain Name to any interested party does not necessarily amount to passing off or make the Domain Name in the hands of the Respondent an Abusive Registration.

Therefore, whilst the name "cyclone" is not generic in a trade mark sense of being the common name for a particular type of product, it is generic in the sense of being a general word that could be applicable to an entire class or group i.e. all those who trade using the CYCLONE name in a diverse range of business areas. The Complainant is only one of that class.

In the circumstances I believe that the Respondent can seek to rely on Paragraph 4 a) ii) of the DRS Policy as evidence that the Domain Name is not an Abusive Registration i.e. that the Domain Name is generic or descriptive and the Respondent is making fair use of it.

The Complainant also relies on the other registrations made by the Respondent which the Complainant says suggests a pattern of behaviour whereby a large range of names unrelated to the Respondent's activities are acquired which may be attractive to legitimate users in the hope of selling them on for significant profits. That may be so, but such a pattern of behaviour is not necessarily objectionable. It describes the activities of numerous legitimate dealers of domain names.

The Complainant goes on to allege that the Respondent is engaged in a pattern of Abusive Registrations as evidenced by:

· his having arranged for his company, Centraserve Limited, to be registered as a Nominet tag holder, which is consistent with having the need to register a large number of .uk domain names; and

· the fact that the Respondent feels qualified to express a “view of the current economic state of the domain name market” implies that he has gained a strong background in the area of domain name sales.

There is nothing wrong as such in being registered as a Nominet tag holder and having a strong knowledge of or background in the sale of domain names. All the domain names registered by the Respondent that the Complainant relies on appear to be generic or descriptive single word domain names or three letter domain names that could legitimately be used by any number of different people in relation to numerous different types of business. The evidence relied on by the Complainant does not indicate that the Respondent is engaged in a pattern of making Abusive Registrations. In the circumstances, I am not satisfied that the Complainant can seek to rely on Paragraph 3 a) iii) the DRS Policy as evidence that the Domain name is an Abusive Registration.

Whilst the registration of the Domain Name might have been be detrimental to the Complainant's Rights, in that the Complainant was deprived of the opportunity of registering its favoured domain name itself, the evidence does not satisfy me on the balance of probabilities that it was unfairly detrimental or that it took unfair advantage of the Complainant's Rights. The Respondent simply got there first and there is nothing in the evidence to suggest that the manner in which the Domain Name has subsequently been used by the Respondent took unfair advantage of or was unfairly detrimental to the Complainant's Rights.
For the reasons outlined above I find that the Complainant has proved on the balance of probabilities that it has Rights in respect of the name "Cyclone", being a name or mark which is identical or similar to the Domain Name, but it has failed to prove on the balance of probabilities that the Domain Name, in the hands of the Respondent, is an Abusive Registration.
In the circumstances I reject the complaint.

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You are here: BAILII >> Databases >> Nominet UK Dispute Resolution Service >> Cyclone Courier Company Ltd v Clark [2004] DRS 1629 (10 May 2004) URL: http://www.bailii.org/uk/cases/DRS/2004/1629.html Cite as: [2004] DRS 1629

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