Nominet UK Dispute Resolution Service
DRS No. 04242

ZM International Inc -V- Status One Apparel

Decision of Independent Expert

1.	Parties

Complainant:	ZM International, Inc
Country:	USA

Respondent:	Status One Apparel
Country:	GB

2.	Domain Name

kidorable.co.uk
(referred to as the “Domain Name”).

3.	Procedural Background

The Complaint was submitted to Nominet on 21 November 2006 and hard copies of the Complaint were received in full by Nominet on 22 November 2006. On the same day, the Complaint was validated by Nominet. The Complaint was forwarded to the Respondent on 23 November 2006.

On 14 December 2006, Nominet received a non-standard Response to the Complaint. On 18 December 2006, the Response was sent to the Complainant. On 27 December 2006, Nominet received a Reply from the Complainant and on the same date, it received hard copies of the Reply which were forwarded to the Respondent. 

Mediation was unsuccessful and on 1 February 2006, the Complainant paid the fee to obtain an Expert Decision pursuant to paragraph 7 of Nominet’s Dispute Resolution Policy (the “Policy”). 

Antony Gold, the undersigned, (“the Expert”), confirmed to Nominet that he knew of no reason why he could not properly accept Nominet’s invitation to him to act as an Expert in this case.

On 2 February 2007, Antony Gold , was appointed as the Expert.

4.	The Facts

The Complainant is a US company and is the owner of a Community Trade Mark (“CTM”) registration (No. 2027498), for the word KIDORABLE, which was applied for on 13 December 2000 and registered on 11 August 2005. The Complainant has traded under the name KIDORABLE since 2002 and provides children’s clothing and accessories under this brand name. 

The Complainant has appointed an exclusive distributor for its products in the UK, Commerce Attractive Limited t/a Checkpoint (“Checkpoint”). The Respondent is a former re-seller of the Complainant’s goods which were supplied to it by Checkpoint.

From a Whois search, the Domain Name was registered by Status One Apparel on 25 March 2003. The Complaint alleges that in January 2004 the Domain Name resolved to a website containing information about the Complainant’s goods as well as those of other manufacturers. The Domain Name currently resolves to a blank page.

A Mr Whone, Managing Director of Checkpoint notified the Respondent of Checkpoint’s objections to the Respondent’s registration of the Domain Name by a letter of 5 January 2004 as well as during a ‘phone conversation on 12 January 2004, and by a further letter of 12 January 2004. Both letters explained that the Complainant was the owner of the KIDORABLE brand and that Checkpoint was the exclusive distributor for KIDORABLE-branded products in the UK and Ireland. The letter of 12 January asked the Respondent to transfer the Domain Name to Checkpoint. 

Since the Respondent believed that Checkpoint only imported KIDORABLE-branded goods and did not manufacture them, and Checkpoint did not then have a registered trade mark for KIDORABLE, the Respondent did not apparently believe that Checkpoint had a right to the Domain Name and refused to transfer the Domain Name to it.

The Complainant notified the Respondent of its objections to the Respondent’s registration of the Domain Name by a letter of 10 May 2004, sent by the Complainant’s trade mark attorneys which requested transfer of the Domain Name to the Complainant.

The Respondent’s reply dated 1 June 2004 stated that the Respondent had not been contacted by the attorney’s client (i.e. the Complainant) and asked the Complainant’s trade mark attorney to send copies of this correspondence to it. The Complainant’s trade mark attorneys sent copies of Checkpoint’s letters to the Respondent under cover of a letter dated 16 June 2004. No reply to this letter was received and the Complainant’s trade mark attorneys sent a further letter to the Respondent requesting a response on 8 July 2004.

On 9 August 2004, the Respondent replied to the Complainant’s trade mark attorneys asking the attorneys to clarify that they were acting on behalf of Checkpoint and not the Complainant. The Complainant’s trade mark attorneys replied by letter dated 17 August confirming that it represented both Checkpoint and the Complainant. No further correspondence is appended to the Complaint and it appears that the Respondent did not reply to this letter.

5.	The Parties’ Contentions

Complainant:

The Complainant’s submissions may be summarised as follows:

The Complainant has Rights in the Domain Name arising from the following:

(i)	the Complainant had traded under the name KIDORABLE since 2002;

(ii)	the Complainant has registered a Community Trade Mark  corresponding to the word KIDORABLE. This is evidenced by copy trade mark registration details which were appended to the Complaint.

The Domain Name in the hands of the Respondent is an Abusive Registration because:

(i)	by registering the Domain Name, the Respondent took unfair advantage of the Complainant’s Rights because the filing date of the Complainant’s registered trade mark (13 December 2000) is earlier than the date on which the Respondent registered the Domain Name (25 March 2003); 

(ii)	the Domain Name is maintained by the Respondent even though it is fully aware of the Complainant’s Rights to KIDORABLE. The Respondent only ceased operating a website through the Domain Name after it received correspondence from the Complainant’s UK distributor which implies that the Respondent acknowledged the merits of the Complainant’s objection. 

Since the Respondent is no longer operating a website through the Domain Name, it appears that the Respondent is only retaining the Domain Name to prevent the Complainant from obtaining it. 
(iii)	the Respondent’s registration of the Domain Name unfairly disrupts the Complainant’s business and that of Checkpoint. A customer or potential customer of the Complainant’s goods would expect the Complainant to have a website at kidorable.co.uk and the lack of such a website means that the Complainant/Checkpoint are reliant on search engines recognising “kidorable”, which is a much less certain way to direct internet traffic to the Complainant. 
Respondent:

The Respondent filed a non-standard Response in a letter to Nominet dated 14 December 2006. The Respondent’s submissions may be summarised as follows;

(i)	at the time the Domain Name was registered (25 March 2003), the Complainant’s trade mark was not registered and the Complainant’s trade mark application for KIDORABLE had “lapsed”;
(ii)	when the Respondent was contacted by Mr Whone of Checkpoint, he was unable to provide the Respondent with any evidence that he had a legal right to the name. Mr Whone demanded that the Respondent transfer the Domain Name to him, was aggressive and intimidatory [sic], threatened legal action and stated that he was no longer prepared to supply the Respondent with goods;
(iii)	the Respondent’s checks revealed that Mr Whone also operated a company which sold KIDORABLE-branded merchandise, including through a website at stylechild.co.uk. The Respondent also found out that Mr Whone had registered two UK companies under the names Kidorable Limited and Kidorable UK Limited;

(iii)	since Mr Whone (i) was an importer (rather than a manufacturer) of the goods; and (ii) did not have a registered trade mark, the Respondent did not believe that he had a right to the Domain Name;
(iv)	the Respondent received letters from the Complainant’s trade mark attorneys which referred to earlier correspondence from “their client”. The Respondent had only been contacted by Mr Whone, not by the Complainant. The Complainant’s trade mark attorneys subsequently confirmed to the Respondent that they represented Checkpoint and the Complainant, but the Respondent received no information proving that the Complainant was actually the trade mark attorneys’ client;
(v)	the Respondent did not intend to register a domain name that could be abusive. The Respondent carried out all the checks that it could and was satisfied that at the time the Domain Name was registered it was not infringing any rights to the name;
(vi)	the Respondent is not currently using the Domain Name, and does not intend to use it in future but is not prepared to transfer the domain name to Mr Whone, who has no right to the Domain Name;
(vii)	the Respondent acknowledges that the Complainant now has a registered trade mark for KIDORABLE which proves their legal right to the name from the date of registration. The Respondent is prepared to negotiate with the Complainant if it can prove that it had rights to the name on 23 March 2003. (Since the Domain Name was registered on 25 March 2003, it is assumed that the reference in the Reply to 23 March 2005 is a typographical error.)
Complainant:
The Complainant’s Reply may be summarised as follows:
(i)	the Complainant’s trade mark was filed on 13 December 2000. The Respondent’s contention that there was no active trade mark application for KIDORABLE on 23 March 2003 is incorrect;
(ii)	Once a CTM is registered, the rights granted are effectively back-dated to the filing date. The Complaint’s registered CTM for KIDORABLE is therefore effective as of its filing date of 13 December 2000.
6.	Discussion and Findings

In order to succeed, the Complainant must prove, on the balance of probabilities that:

(i)	it has Rights in respect of a name or mark which is identical or similar to the Domain Name (paragraph 2 (a)(i) of the Policy); and

(ii)	the Domain Name in the hands of the Respondent constitute an Abusive Registration (paragraph 2 (a)(ii) of the Policy).

The Complainant’s Rights:

The definition of “Rights” for the purposes of the Policy covers rights including but not limited to rights enforceable under English law.

The Complainant has provided evidence of a registered CTM for the word KIDORABLE which was filed on 13 December 2000 and registered on 11 August 2005. In the light of the evidence of this trade mark registration, the Expert is satisfied that the Complainant has Rights in KIDORABLE.

It should be mentioned in passing that the evidence of unregistered rights is not great. The Complainant refers to its use of KIDORABLE in relation to goods since 2002. The only evidence in support of the Complainant’s contention relating to use, however, is a 2004 brochure which appears to have been distributed by Checkpoint.  In order to show that the Complainant has sufficient goodwill in KIDORABLE to constitute a right enforceable under English law, it would be necessary to adduce more extensive evidence of use, together with (typically) details of the Complainant’s turnover and advertising expenditure. 

Nonetheless, the Community Trade Mark referred to above establishes the Complainant’s rights in KIDORABLE. It is accepted practice to disregard the .co.uk suffix for the purpose of comparing the word in which the Complainant has Rights with the Domain Name. Accordingly, it is found that the Complainant has rights in a name which is identical to the Domain Name.

Abusive Registration:

The Dispute Resolution Service rules defines an Abusive Registration as a domain name which either:

(i)	was registered or otherwise acquired in a manner which, at the time when the registration or acquisition took place, took unfair advantage of or was unfairly detrimental to the Complainant’s rights; or

(ii)	has been used in a manner which took unfair advantage of or was unfairly detrimental to the Complainant’s rights.

Section 3(a) of the Policy sets out a non-exhaustive list of factors which may constitute evidence that a registration is Abusive.  None of these grounds are specifically referred to by the Complainant, but the thrust of the Complaint appears to be that the Respondent’s registration of the Domain Name is a blocking registration against a name in which the Complainant has Rights (section 3(a)(I)(b) of the Policy) and/or that it unfairly disrupts the Complainant’s business (section 3(a)(I)(c) of the Policy).

Abusive Registration at the time of registration? 

The Respondent effectively concedes that the Domain Name should be transferred if its is found that the Complainant had rights to KIDORABLE on 23 March 2003, being the date of registration of the Domain Name - that is after the Complainant’s CTM application was filed but before it proceeded to registration.

The Complainant points out in its Reply that the rights conferred by a CTM upon registration are effectively back-dated to the filing date.  This enables the owner of a CTM to take action (and claim damages) in respect of any infringing acts occurring in the period between filing and registration.  

The Respondent claims that the application had “lapsed” as at 23 March 2003, when the Domain Name was registered, although no evidence of this is provided. The Complainant’s CTM is notable for the long period of time (almost 5 years) between filing and registration, but there is no evidence to suggest that the application lapsed at any point. 

The Respondent also claims that it carried out “all that check that I could” [sic] at the time of registration and was satisfied that it was not infringing any rights to the name. However, it would have been possible, without much effort, for the Respondent to have found both the Complainant’s website at kidorable.com; and/or the fact that the Complainant had filed a trade mark application for KIDORABLE in 2000.

The Expert accepts the thrust of the Complainant’s submissions in relation to Abusive Registration. In particular, as a customer of the Complainant and a re-seller of the Complainant’s goods, the Respondent would have been fully aware that KIDORABLE was the Complainant’s trading name at the date on which the Domain Name was registered and these circumstances indicate, on the balance of probabilities, that the Respondent registered the Domain Name primarily for the purpose of unfairly disrupting the Complainant’s business or as a blocking registration. In this respect it is of note that, even though the Respondent chose to reply to the Complaint, it has not provided a persuasive explanation as to why it was entitled to register and retain the Domain Name. All it has done is explain why it never surrendered it to Checkpoint or the Complainant. On the basis of the information supplied (and notwithstanding the paucity in some respects of information provided by the Complainant) the Expert concludes on a balance of probabilities that the reason why the Respondent would have registered the Domain name was to take unfair advantage of the Complainant’s rights.

Abusive Registration through use? 

The Domain Name is not currently being used by the Respondent. The Complainant asserts that the Domain Name was used by the Respondent in 2004 to display the Complainant’s goods and those of other manufacturers. No evidence of this (such as screen shots from the earlier website) has been provided.

The Complainant also seeks to rely on the fact that the Complainant ceased to use its website when it was contacted by the Complainant’s trade mark attorneys, but the Complainant has not provided any evidence that the Domain Name has ever been used by the Respondent nor that such use changed in the period after its receipt of correspondence from the Complainant’s trade mark attorneys. 

Paragraph 3(b) of the Policy confirms that failure to use a domain name is not in itself (Expert’s emphasis) evidence of Abusive Registration. In other words, if the only argument the Complainant has is that the Domain Name is not being used, it is not enough. 

Paragraph 3 (b), however, requires consideration in the context of the instances of Abusive Registration provided at paragraph 3 (a). These include use of the Domain Name as a blocking registration against a name or mark in which the Complainant has rights and acquisition of the Domain Name for the purpose of unfairly disrupting the business of the Complainant.  It is  at least arguable that in the light of the facts set out above, a case of Abusive Registration through the Respondent’s use of the Domain Name has been made out. It is not, however, necessary for the Expert to make a finding in this respect in the light of the finding that the initial registration of the Domain Name was Abusive.

7.	Decision

The Complainant has Rights in respect of the name KIDORABLE  which is identical and similar respectively to the Domain Name kidorable.co.uk and the Domain Name in the hands of the Respondent is an Abusive Registration.

In the  light of the above, the Expert directs that the Domain Name be transferred to the Complainant.

Antony Gold
21 February 2006