Freeserve.com plc. v JKC Information Technology Limited
Case No. D2001-0180
1. The Parties
The Complainants are Freeserve.com plc. Represented by, Paul Stevens, Olswang, 90 Long Acre, London WC2 9TT, UK.
The Respondent is JKC Information Technology Limited, Orpington House, 7 Upper Bourne Lane, Farnham, Surrey GU10 4RQ, UK.
2. The Domain Name and Registrar
The Domain Name is <freeserveshopping.com>.
The Registrar is Network Solutions Inc.
3. Procedural History
The Complaint was received by WIPO by email on February 1, 2001 and in hardcopy form on February 6, 2001. WIPO has verified that the Complaint satisfies the formal requirements of the Policy, the Rules and the Supplemental Rules and that payment was properly made. The Administrative Panel ("the Panel") is satisfied that this is the case.
The Complaint was properly notified in accordance with the Rules, paragraph 2(a). The Registrar has confirmed that freeserveshopping.com ("the Domain Name") was registered through Network Solutions Inc and that JKC Information Technology Limited ("the Respondent") is the current registrant. The Registrar has further confirmed that the Policy is applicable to the Domain Name.
On February 14, 2001 WIPO notified the Respondent of the Complaint in the usual manner and informed the Respondent inter alia that the last day for sending its Response to the Complainant and to WIPO was March 5, 2001. A Response was received by WIPO by email from Local4You Limited on March 2, 2001 and in hard copy form on
March 7, 2001. WIPO issued an acknowledgement of Response on March 6, 2001.
The Panel was properly constituted. The undersigned Panellist submitted a Statement of Acceptance and Declaration of Impartiality and Independence.
No further submissions were received by WIPO or the Panel, as a consequence of which the date scheduled for the issuance of the Panel’s Decision is May 1, 2001.
4. Factual Background
The Complainant is the well known UK internet service provider which was launched in September 1998.
The Complainant is the proprietor of various trade mark registrations of and incorporating the names FREE SERVE and FREESERVE ("the Freeserve Trade Marks"), the earliest registration being number 2176580 dated September 4, 1998, for a wide variety of computer related goods and services.
The Domain Name was registered by the Respondent in March 2000 on behalf of Local4You Limited of the same address as the Respondent. It appears from the Response put in by Local4You Limited that Local4You Limited regards itself as the Respondent. For the purposes of this Complaint, the Panel treats Local4You Limited and the Respondent as one and the same entity.
5. Parties’ Contentions
A. Complainant contends as follows:-
The Complainant is an exceptionally well-known UK Internet Service Provider. It was launched by the Dixons Group, one of Europe's leading retailers of electronic products, in September 1998. Within five months, the Complainant had opened one million accounts and had become a market leader. According to research conducted by Fletcher in June 2000 the Complainant has 37% of the home Internet access market in the UK and 96% consumer awareness among home Internet users in the UK. The Complainant is the most recognised Internet brand in the United Kingdom and after only ten months of operation was listed on the London Stock Exchange and NASDAQ.
In addition to providing Internet access, the Complainant provides a number of other services including mobile Internet services, a service devised for use on television sets, a comprehensive selection of UK content including news, entertainment, travel and sport, search and communication tools, an auction service, on-line sharetrading, personal insurance, motoring and some services targeted at specific groups such as women and business people. A core element of the Complainant's business are the shopping areas called shop@freeserve (www.freeserve.com/shopping) and Freeserve Marketplace (www.freeserve.com/marketplace). In these two areas the Complainant has a number of partners or third party retailers who attract custom through operating as part of the Freeserve site rather than from their own website. This is because Freeserve currently has 2.09 million active accounts and had 4 million unique visitors in the UK according to a survey undertaken by MMXI Europe in October 2000.
Freeserve.com Plc has spent Ł31.1 million pounds in the last 2 financial years on advertising its services. It also spent a further Ł2 million promoting its brand during the period proceeding its public floatation. As a result of this advertising spend, the public in the United Kingdom and elsewhere are very familiar with the Freeserve brand and associate it exclusively with Freeserve.com Plc.
12.4 The Complainant is the proprietor of the Freeserve Trade Marks, namely:-
Trade Mark No.
Mark(s)
Date registered
2176580 (UK Registration)
FREE SERVE
FREESERVE
4/9/98
2189290 (UK Registration)
FREE SERVE (word and device)
19/2/99
1108216 (Community Trade Mark Registration)
FREE SERVE (device)
11/3/99
Each of the Freeserve Trade Marks were registered in Classes 9, 16, 35, 38 and 42 in relation to the goods and services set out in their respective registration certificates copies of which were attached to the Complaint.
Any attempt by the Respondent to supply services under or by reference to the domain name <freeserveshopping.com> in the United Kingdom or in any of the Member States of the European Union will amount to an infringement of one or more of the Freeserve Trade Marks, as such use will amount to the use in relation to the supply of services of an identical or similar sign and would be likely to cause confusion and/or would take unfair advantage of and would be detrimental to the distinctive character and repute of the relevant trade mark or marks.
Further, by reason of the operation of the Complainant's business and by reason of the extensive promotion of that business, the Complainant has acquired considerable goodwill in its business in the United Kingdom. That goodwill is associated in the minds of public with the names Freeserve plc, freeserve.com, freeserve.co.uk and the marks FREESERVE and FREE SERVE. In the circumstances, any use by the Respondent of the domain name <freeserveshopping.com> in relation to the supply of services will inevitably lead to members of the public being confused or deceived into believing that the Respondent's business is or is associated with or related to the Complainant's, which it is not. This amounts to the tort of passing-off in the United Kingdom.
Further, the Respondent has offered to sell the Domain Name to the Complainant which constitutes "use" of that domain name within the meaning given to that term in the leading English case British Telecommunications & Others v One In A Million & Others. The court held that such practices rendered a domain name "an instrument of fraud". The Respondent's use in relation to the supply or proposed supply of services is clearly taking advantage of the Complainant's goodwill and reputation in the name Freeserve and the Freeserve Trade Marks and amounts to the tort of passing-off. A copy of the letter by which the Respondent offered the domain name <freeserveshopping.com> for sale to the Complainant is attached to the Complaint.
The Respondent registered the domain name <freeserveshopping.com> either primarily for the purpose of selling the domain name registration to the Complainant for valuable consideration in excess of the Respondent's out-of-pocket costs directly related to the registration of the domain name, or to attempt to attract for financial gain, Internet users to its website 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 the Respondent's website or location or of a product or service on the Respondent's website or location.
The Complainant contends that the complaint satisfies all three elements of paragraph 4(a) of the Policy.
A. The Respondent.
The Response reads (almost verbatim) as follows:-
As stated in correspondence with Freeserve.com plc, Local4You Limited has never infringed the Trade Marks (words and devices) of Freeserve.com plc and does not intend to in the future. FREESERVESHOPPING.COM (and FREESERVESHOPPING.CO.UK) were purchased in order to carry out Local4You Limited’s business in a way described in this document. It will be clear that there was never any intention of "cybersquatting".
This Response references Freeserve.com plc (hereafter called Freeserve.com ) Complaint by Paragraph as well as making additional supportive points for Local4You Limited keeping and using and continuing to use the disputed domain name.
Local4You Limited has developed and is in the process of developing further a Walk-about Shopping Guide to regional shopping centres of the United Kingdom. A considerable proportion of the costs of developing the site necessarily goes in marketing.
This is already up and running for the southern part of the United Kingdom and it is intended to extend the reach of this service to other countries - including non- European Union countries.
Local4You Limited’s Web Site can be found at <local4you.co.uk>.
Local4You Limited started development in early 2000 and the site went on line formally in the Fall of that year (although a test site could be found at this URL from the summer on). Initiation of the site was accompanied by a local promotional campaign in the first towns covered - Camberley and Stratford-upon-Avon.
The original name of the company was Freshname No. 270 Limited and this was registered in February 2000. The name of the company was changed to Local4You Limited in
July 2000. See the copies of Company Registration documents in Appendix 1 (provided as hard copy only).
The domain names <freeserveshopping.com> (and .CO.UK) were purchased to support the promotion of the Walk-about Shopping Guide. The purchase was made in March 2000.
Three important attributes of Local4You Limited’s approach that differentiate it from normal shopping guide sites are:
- The site is FREE to consumers and retailers. Consumers are not required to pay any subscription to use and search the site and retailers’ details are carried free of charge.
- The site is there to SERVE local consumers and retailers. It shows a local map, there is a graphical tour of the town, jobs in local shops are displayed – all on a local basis. It is designed to serve the local community rather than be an abstract, national site.
- The site concentrates only on SHOPPING. There is no information on local government, cinema programmes, local news or other subjects.
As an example of using the domain name in the Local4You Limited promotional campaign, see the advertisement (exhibited) which appeared in the United Kingdom Camberley News of 24th November 2000.
This advertisement uses the domain name <freeserveshopping.co.uk>. The domain name <freeserveshopping.com> was intended to be used in the same manner in other advertisements in other towns but, as a sign of goodwill to Freeserve.com, Local4You Limited has put the promotional campaign on hold pending the resolution of the domain name dispute.
Note the specific use of FREESERVESHOPPING and its close association with Local4You.co.uk. From this it is clear that Local4You Limited were not trying to mislead people into connecting their site with that of Freeserve.
Freeserveshopping.com is obviously not identical to Freeserve.com plc Trade Marks which are Freeserve and Free Serve.
Freeserveshopping.com was never intended to be used other than in association with Local4You.co.uk and Local4You Limited’s other domain names Local4Stratford and Local4Camberley. Thus there would be no confusion about the company and web site involved.
Local4You Limited has never received any complaints from users of its site FREESERVESHOPPING caused confusion with Freeserve’s site. Freeserve.com have never shown any specific instance where their customers have been confused.
The respondent Local4You is the genuine operator of a free Internet shopping guide site which encompasses all the attributes of the domain name Free Serve Shopping (as explained previously).
The respondent registered the domain name in March 2000 in good faith for use in the promotion of his shopping guide site business. The only reason that the domain name <freeserveshopping.com> has not been used to date is that, as a gesture of goodwill, Local4You Limited has put its promotion on hold.
Local4You Limited has never sought in the past nor will seek in the future to infringe its trade marks or goodwill in the United Kingdom or European Union. Freeserve.com has not demonstrated any loss as a result of the registration and subsequent use of the domain names by Local4You Limited. Freeserve.com has not identified any instances of users becoming confused.
Freeserve.com’s advertising budget only relevance to this case is that such sums of money should have been underpinned by a search of domain names and any issues found resolved at that time.
Local4You Limited has used the <freeserveshopping.com> domain name only in association with Local4You.co.uk and only in a specific way that could not be construed as referring to <Freeserve.com>.
Consequent to Local4You’s responsible attitude, there has been no infringement of any trademark.
There is NO INEVITABILITY about FREESERVESHOPPING being associated with <freeserve.com>. This would be tantamount to saying that any conjunction of the words "free" and "serve" – and even in conjunction with any other word, in any business medium would adversely affect Freeserve.com business.
The context of Local4You Limited’s use has been very specific and responsible. There is no overlap between the purposes of Local4You Limited’s web site and that of Freeserve.com.
Freeserve.com first brought its dispute of the domain names <freeserveshopping.com> and .CO.UK to Local4You Limited’s attention through Freeserve.com’s agent Domainnames.com Limited in August 2000.
The contact in Domainnames was Teresa Davidson.
The first communication regarding selling the disputed domain names was from Freeserve.com via its agent Domainnames.com Ltd.
This was in e-mail dated September 7, 2000, where it asked for a figure for the sale of the domain names.
Local4You Limited’s response was that it could not immediately put a figure on the impact of losing the domain names. Local4You Limited asked for Freeserve.com’s valuation of the domain names. Local4You Limited’s response is also given in Appendix 3.
Local4You Limited never received an answer to this e-mail.
Any discussion on selling domain names has been at Freeserve.com’s initiative.
There was no other communication from Freeserve.com until Local4You Limited received an aggressive and threatening letter on November 21, 2000, stating that <freeserve.com> would institute proceedings unless certain conditions were met.
Any offer by Local4You Limited to sell the disputed domain names to Freeserve.com has been as a consequence of Freeserve.com’s original request for Local4You Limited to provide such a price.
At the time, this was not seen by Local4You Limited as provocation by Freeserve.com to engage in domain name bartering. However Freeserve.com’s subsequent failure to respond to Local4You Limited’s e-mail (as described above) throws doubt upon Local4You’s generous interpretation.
Note that <freeserveshopping.com> has never been used by Local4You Limited but was intended to be used in a manner similar to <freeserveshopping.co.uk> (as described above).
Both domain names have a commercial value to Local4You Limited as they form an important part of its overall promotional campaign in the UK and, in the future, other countries.
The Complainant’s assertion that Local4You Limited registered the domain name FREESERVESHOPPING for the purpose of selling the registration is completely undermined by Local4You Limited’s e-mail response to Domainnames.com in
September 2000 - when it did not respond to Freeserve.com’s request for a price.
Prior to September 2000, when Freeserve.com asked for this price to be given, Local4You Limited never approached Freeserve.com to offer them the domain names <freeserveshopping.com> and .CO.UK.
Subsequent to the e-mail exchange with Freeserve.com’s agent Domainnames.com in September 2000 and up to Freeserve.com’s letter in November 2000, Local4You Limited never approached Freeserve.com about sale of domain names. The initiative for selling the domain name has always come from Freeserve.com.
As described above, Local4You Limited’s use of FREESERVESHOPPING was in such a way that no confusion with Freeserve.com could be caused.
As a gesture of goodwill, Local4You Limited has put its promotional campaign on hold pending resolution of this dispute. In order to reinforce the point that no relationship exists with Freeserve.com, Local4You Limited has placed a notice on its web site (linked to FREESERVESHOPPING) stating this.
Local4You’s plans for its web site involved a quick ramp up to 10 town shopping guides by end 2000 with another 25 more by Spring 2001, carrying on to 100 by the Fall of 2001. The dispute with Freeserve.com has severely impacted this schedule.
Freeserve.com has not shown any specific instance where Local4You Limited has infringed its Trade Marks. Freeserve.com does not need to own the disputed domain names to secure its business.
Unlike Freeserve.com which operates in the United Kingdom and European Union, Local4You Limited intends to extend beyond these areas. Local4You Limited would like to use <freeserveshopping.com> in a promotional campaign as described above outside the UK and European Union. Transfer of the domain name to Freeserve.com would preclude Local4You Limited doing this.
The change by Freeserve plc to Freeserve.com occurred in June 2000 – 3 months after the registration by Local4You Limited of FREESERVESHOPPING. It is Local4You Limited’s contention that Freeserve plc should have made satisfactory checks prior to this change to ensure that there were no existing domain names and addressed any issues at that time.
Also, at the time of the FREESERVESHOPPING registration, Freeserve plc had not established their shopping brands. Again, it is Local4You Limited’s contention that Freeserve plc should have made satisfactory checks prior to this introduction to ensure that there were no existing domain names and addressed any issues at that time.
The first indication to Local4You Limited that Freeserve.com disputed the domain name <freeserveshopping.com> was late August 2000 – almost 6 months after the registration.
Subsequent to Local4You Limited entering into communication with Freeserve.com’s agent Domainnames.com Limited in August 2000, there was a delay by Freeserve.com of almost 3 months in progressing the matter.
Freeserve.com have shown unacceptable delay in taking this matter forward causing Local4You Limited to encounter commercial problems in launching and promoting its business. Even so, Local4You Limited have shown exceptional goodwill towards Freeserve.com by halting promotion of its web site using the disputed domain names.
Freeserve.com operates a contradictory policy towards domain names containing the words "free" and "serve".
Exhibited to the Response are screen shots of the Freeserve web site where Freeserve.com are happy to tell customers that domain names such as
<freeservetravel.com>
<reeservemoney.com>
are available to purchase. <freeserve.com> even encourages purchasing domain names other than ".COM" containing "Freeserve". Some of these domains are under the control of ICANN.1
Note that Money and Travel are sections of the Freeserve site on a par with the Shopping section.
Yet in their aggressive letter to Local4You Limited date November 21, 2000 in sub-section (d), Freeserve.com states
"That you shall forthwith transfer all domain names owned by you or under your control which incorporate the word "freeserve" and any phonetically similar or visually similar domain names to Freeserve plc and, in particular, the domain names <freeserveshopping.com> and <freeserveshopping.co.uk>; and ………"
This example illustrates Freeserve.com’s dysfunctional (and confusing) policy towards domain names. Their attempt to grab <freeserveshopping.com> and .CO.UK might be construed merely as an attempt to retrieve a mistake and not related at all to protecting its business. The question of Freeserve.com selling the disputed domain name on even arises from the points made above.
Exhibited to the Response are print outs of registrations for domain names owned by Freeserve (hard copy only). It indicates that Freeserve saw the advantage of registering
<freeserveauctions.com>
in October 1999
<fsmoney.com>
<fshealth.com>
<fsmarketplace.com>
in December 1999.
So late in 1999, Freeserve were purchasing domain names <fsxxxxx.com> rather than <freeservexxxxx.com> in preparation to support there site.
Auctions, Money, Health and Marketplace represent present sections of the Freeserve web site.
Freeserve chose not to register FREESERVESHOPPING to support their future plans for such a section in their web site.
Moving against Local4You Limited so late and demanding transfer of the disputed domain names again reinforces the impression that Freeserve.com’s present actions are to make good oversights in the past and have no commercial significance.
The case cited by Freeserve.com can be distinguished by French Connection v Sutton on the basis that the domain names were registered and used and are continued to be used in good faith and Local4You Limited has not sought to make a profit from the registration as Local4You Limited has not offered them for sale except at the instigation of Freeserve.com.
From the points made by Local4You Limited above, it is clear that
1. Local4You Limited’s registration and use of the FREESERVESHOPPING domain name has been in good faith and there has been no damage to Freeserve.com’s business through its use.
2. Local4You Limited did not seek to hold Freeserve.com to ransom over the domain names and only discussed their sale after Freeserve.com had requested a price to be given.
3. Freeserve.com has shown unacceptable delay and effort in informing Local4You Limited of its disputation of the domain names and progressing resolution of its case. Freeserve.com has registered many names in the past presumably preparing to support the plans for their web site. They chose not to register FREESERVESHOPPING.
4. Freeserve.com operates a contradictory and confusing policy to domain names containing the word "freeserve". It is prepared to sell such domain names under its banner but states, through its solicitors, that this is passing off – implying that the holder of such a name is committing an offence in the UK.
Local4You Limited contends that the above points invalidate Freeserve.com’s case for demanding transfer of the FREESERVESHOPPING domain names.
The Respondent contends that the above demonstrates that the Complaint should fail under all three heads of paragraph 4(a) of the Policy
6. Discussion and Findings
According to paragraph 4(a) of the Policy, the Complainant must prove that
(i) The Domain Name is identical or confusingly similar to a trade mark or service mark in which the Complainant has rights; and
(ii) The Respondent has no rights or legitimate interest in respect of the Domain Name; and
(iii) The Domain Name has been registered and is being used in bad faith.
Identical or confusing similarity
The Domain Name comprises the Complainant’s name and registered trade mark "Freeserve" (albeit with the initial letter in lower case), the word "shopping", which the Respondent acknowledges is the name of a section on the Complainant’s website, and the generic <.com> suffix.
In the context in which the Respondent plans to use the Domain Name the Panel has no hesitation in holding that the Domain Name is confusingly similar to a trade mark in which the Complainant has rights.
Rights or legitimate interest of the Respondent
At the time the Respondent registered the Domain Name, "Freeserve", the name by which the Complainant and its internet services are known, was one of the best known names in the internet industry in the United Kingdom. It is inconceivable to the Panel that at that time the Respondent could have thought that it could have any legitimate right or interest in operating a website under the Domain Name. The Respondent has come forward with no plausible justification for its choice of domain name.
The suggestion that the Complainant has been willing to sell domain names such as <freeservemoney.com> and <freeservetravel.com> is, as the Respondent must know, wholly misconceived. The search facility on the Complainant’s website automatically "offers" any domain name available for registration which the visitor enters into the relevant window. Had the Respondent actually made a purchase of one of those names through that route, the Respondent’s argument would have been stronger, but still far from conclusive.
The Panel finds that the Respondent has no rights or legitimate interests in respect of the Domain Name.
Bad Faith
A complaint under the Policy can only succeed if the Complainant can prove that the Respondent registered the Domain Name with a view to causing damage or disruption to the Complainant in some way (for example by extorting money from the Complainant or deliberately blocking the Complainant from registering the Domain Name or diverting the Complainant’s customers) or with a view to profiting unfairly from the Complainant’s goodwill.
Whether or not the Respondent registered the Domain Name with a view to selling it to the Complainant the Panel is not sure. It is conceivable that the Respondent was waiting for an approach from the Complainant. However, the Complainant cannot rely upon the alleged offer referred to in the evidence. The offer was provoked by the Complainant and (emphasis added) the response was not sufficiently clear to know what the Respondent had in mind.
A much stronger argument of the Complainant is that a shopping guide of the Respondent connected to the Domain Name and operating simultaneously with the Complainant’s shopping services at www.freeserve.com/shopping and www.freeserve.com/marketplace would inevitably lead to confusion.
The Panel finds that the Respondent registered the Domain Name knowing of the Complainant’s very well-known name and with the hope and expectation of benefiting from the association. Visitors to a site connected to the Domain Name would be likely to be visiting that site expecting to reach a service of the Complainant. Even if on reaching the site visitors realize the true position, the Respondent will nonetheless have had the opportunity to benefit from the visit, a visit which would not otherwise have taken place.
The fact that the Domain Name is not currently connected to an active website is of no assistance to the Respondent. The Respondent has made its plans clear and the threat of the impending use is hanging over the Complainant’s head.
The Panel finds that the Domain Name was registered and is being used in bad faith within the meaning of paragraph 4(b)(iv) of the Policy.
7. Decision
In light of the foregoing findings, namely that the Domain Name is confusingly similar to a trade mark in which the Complainant has rights, that the Respondent has no rights or legitimate interests in respect of the Domain Name and that the Domain Name was registered in bad faith and is being used in bad faith, the Panel directs that the Domain Name be transferred to the Complainant.
Tony Willoughby Sole Panelist
Dated: May 3, 2001
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