Nominet UK Dispute Resolution Service

DRS 4447

Dragon Hotel Ltd
 –v- Les Evans

Decision of Independent Expert

1.	Parties: 

Complainant:	Dragon Hotel Ltd.
Country:	UK

Respondent:	Les Evans
Country:	UK

2.	Domain Name:

dragon-hotel.co.uk (“the Domain Name”)

3.	Procedural Background:

Nominet received the Complaint in electronic form on 6 February, 2007 and in hard copy form on 7 February, 2007.  Nominet validated it on 8 February, 2007.  The same day the Complaint was sent by Nominet to the Respondent by airmail and email to the postal and email addresses provided to Nominet by the Respondent for Nominet’s Whois database.

No documents (whether hardcopy or electronic) were returned and there is nothing before the Expert to indicate that those documents were not delivered. At all events, it is clear that Nominet has discharged its obligations under paragraph 2 of the DRS Procedure and the Expert holds that the Respondent has been properly and fully notified at all material stages of this DRS process. The matter is pertinent because the Respondent has not communicated with Nominet at any stage. In particular, the Respondent has not filed a response.

No response having been received, mediation was not possible.  

On 16 March, 2007, the appropriate fee having been paid to Nominet by the Complainant, and Tony Willoughby, the undersigned Expert, having indicated to Nominet that there was no reason why he should not handle the case, the case was referred to the Expert for a decision.

4.	Outstanding Formal/Procedural Issues (if any):

None.

5.	Factual Background

The Complainant was incorporated in England on 4 February, 1985 and, following several name changes, adopted its current name, Dragon Hotel Ltd, on 3 November, 2004.

The Respondent registered the Domain Name on 7 December, 2004. The Complainant asserts and, on the evidence before him, the Expert accepts as fact that the Service Agreement referred to in the next following paragraph was in course of negotiation with the Respondent when he registered the Domain Name as was the matter of the Respondent’s investment in the Complainant’s parent company.

On 17 December, 2004 the Complainant entered into a Service Agreement with the Respondent whereby the Respondent agreed to serve the Respondent as a manager. The scope of his employment was expressed to include the refurbishment, management and day-to-day running of the Dragon Hotel, Swansea.

On 16 February, 2005 the Respondent submitted to the owner of the Complainant an expenses claim which incorporated inter alia a claim for £769.14. The Complainant asserts that this element of the overall claim included the cost of registering the Domain Name. For reasons given below, the Expert has difficulty with this assertion and is unable to accept it as fact.

On 17 February, 2005 the Complainant approved payment of the full amount of the expenses claim to a company which is/was a corporate vehicle of the Respondent and the Complainant asserts that the cheque was duly sent to the Respondent. In the absence of a challenge from the Respondent, the Expert is prepared to accept this as fact.

On 1 July, 2005 the parties entered into a Consultancy Agreement in relation to “the acquisition, refurbishment and trading of the Holiday Inn (to be renamed the Dragon Hotel) in Swansea” whereby the Respondent and his corporate vehicle agreed to provide relevant consultancy services. The agreement includes a provision whereby on termination of the agreement the Respondent will return to the Complainant all company property.

On 5 September, 2005 entered into what the Complainant describes as a Compromise Agreement with the Complainant and its parent company whereby the Respondent sold his shares in the parent company, was repaid a loan and the parties parted company.

On 7 December, 2006 the Respondent telephoned Daniel Stephenson of the Complainant’s parent company, informed Mr Stephenson that he had just been made aware that the Domain Name was registered in his name, expressed intense dislike of Mr Stephenson and his co-directors and offered to sell the Domain Name to the Complainant for £5,000. The only evidence of this is an assertion in the Complaint supported by an attendance note. However, in the absence of a denial from the Respondent, the Expert is prepared to accept the attendance note as an accurate account of what happened. Moreover, the account rings true given that 7 December, 2006 was the renewal date for the Domain Name.

On 18 December, 2006 the Complainant wrote to the Respondent setting out various contractual terms in the afore-mentioned agreements which required the Respondent to transfer the Domain Name to the Complainant and/or precluded the Respondent from using the Domain Name other than for the benefit of the Complainant.

There having been no reply to that letter, on 19 January, 2007 the Complainant’s solicitors wrote a follow-up letter drawing attention to the Complainant’s rights and demanding transfer of the Domain Name.

On 23 January, 2007 the Respondent telephoned Daniel Stephenson of the Complainant’s parent company and inter alia offered to sell the Domain Name to the Complainant for “a couple of grand or 1500 quid.” Again, the only evidence of this is an assertion in the Complaint supported by an attendance note. For the same reasons as before, the Expert accepts the attendance note as factually accurate.

Throughout, the Domain Name has been connected to the Complainant’s operating website.

6.		The Parties’ Contentions:

Complainant’s Contentions

The Complainant contends that it is the owner of rights in the name, Dragon Hotel, by virtue of its adoption of its corporate name in 2004 and its subsequent use of the name in the course of business.

The Complainant contends that its name is identical or similar to the Domain Name.

The Complainant refers to the factual background set out in section 5 above and contends that in the hands of the Respondent the Domain Name is an Abusive Registration because (a) the circumstances set out in paragraph 3(a)v of the DRS Policy apply and (b) the Respondent has sought to extract a substantial sum of money from the Complainant in circumstances where the Complainant, to the Respondent’s knowledge, is the right and proper registrant. 

The Complainant contends that the Domain Name registration should be transferred to the Complainant.

Respondent’s Contentions

The Respondent has not responded to the Complaint.

7.		Discussion and Findings:

General

To succeed in this Complaint the Complainant has to prove to the Expert pursuant to paragraph 2 of the Policy on the balance of probabilities, first, that it has rights (as defined in paragraph 1 of the Policy) in respect of a name or mark identical or similar to the Domain Name and, secondly, that the Domain Name, in the hands of the Respondent, is an Abusive Registration (as defined in paragraph 1 of the Policy).

Complainant’s Rights

The Complainant has no registered trade mark rights of any kind in the name Dragon Hotel. Instead it claims unregistered rights derived from its registration of its corporate name and its subsequent use of Dragon Hotel.

Manifestly, the Domain Name is to all intents and purposes identical to the name, Dragon Hotel, but does the Complainant have rights in that name?

The Expert would have preferred to have seen more substantial evidence from the Complainant to demonstrate unregistered rights. Nonetheless, the Expert can see from the Complainant’s website to which he was referred (and to which the Domain Name is connected) that the Complainant is running a substantial business under and by reference to the name Dragon Hotel and has been doing so since at least 2005.

The Expert regards it as inconceivable that any unauthorised third party could trade in the hotel business in Swansea under the Dragon Hotel name without committing the tort of passing off. In other words, the Complainant has unregistered trade mark rights in respect of the name, Dragon Hotel.

The Expert finds that the Complainant has rights in respect of a name or mark identical or similar to the Domain Name.

Abusive Registration

This leaves the second limb. Is the Domain Name, in the hands of the Respondent, an Abusive Registration? Paragraph 1 of the Policy defines “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.”

Paragraph 3 of the Policy contains a non-exhaustive list of what may constitute an Abusive Registration for these purposes. The only example in that list, which is claimed by the Complainant to be of relevance here is sub-paragraph 3(a)v, which reads:

“The domain name was registered as a result of a relationship between the Complainant and the Respondent, and the Complainant (A) has been using the domain name registration exclusively; and (B) paid for the registration and/or renewal of the domain name registration.”

It is true that the Domain Name was registered as a result of a relationship between the parties and it is also true that at all material times the Domain Name has been connected to the Complainant’s website. It is also likely that one way or another the Complainant reimbursed the Respondent his expenses incurred in registering the Domain Name. However, the invoice, which the Complainant claims verifies the point, is unsatisfactory. It is expressed to cover (i) a number of hours work at an hourly rate on inter alia the Complainant’s website; (ii) telephone calls, faxes and emails; (iii) mileage; (iv) a Severn Bridge toll. There is no disbursement covering acquisition of the Domain Name.

The Expert prefers to decide the case on the second of the Complainant’s claims, namely that the Respondent having registered the Domain Name on behalf of the Complainant in circumstances where, arguably, he owed various fiduciary duties to the Complainant and with the intention that the Complainant should own and use the Domain Name, has behaved abusively in now seeking an extortionate sum of money for transfer of the Domain Name. It is noteworthy that there are provisions in the Consultancy and Compromise Agreements referred to in section 5 above, which are designed to ensure that following termination what belongs to the Complainant remains with or is returned to the Complainant. Paragraph 6 of the Compromise Agreement provides that “to the extent that any facts or matters arise out of or in connection with the period of [the Respondent’s] work with the Company which requires [the Respondent’s] assistance to resolve, [the Respondent] will, for no cost, assist the resolution of the same.”

Paragraph 3 of the DRS Policy is expressed to be a non-exhaustive list of examples of what may be evidence that the Domain Name is an Abusive Registration. Ordinarily, demanding a large sum of money for transfer of a domain name will only constitute an abuse where that was the original purpose behind registration of the Domain Name. However, the Expert is satisfied that the circumstances of this case are another example of where demanding anything over one’s out-of-pocket expenses constitutes an abuse.

To recap, the Respondent registered the Domain Name at a time when he was in negotiations surrounding the setting up of the Complainant’s business. He was anticipating taking shares in the overall business and acting as manager of the hotel. He registered the Domain Name for the benefit of the Complainant and the Domain Name has been used solely for the benefit of the Complainant. He then took up the shares and was appointed manager and subsequently consultant. When the Respondent and the Complainant parted company in 2005, it was intended to be a complete break. The issue of the Domain Name only arose when it came up for renewal on 7 December 2006. Until then, neither party appreciated that the Domain Name had all along been held in the name of the Respondent. The Respondent then set out to exploit the situation first by renewing the Domain Name when he knew that he had no justification for so doing and, secondly, by demanding variously £5,000, £2000 and £1500 for the transfer of the Domain Name to the Complainant.

The Expert finds that the Domain Name is an Abusive Registration on the basis that it has been used in a manner, which has taken unfair advantage of and has been unfairly detrimental to the Complainant’s rights. 

It may be thought to be inconsistent to find abusive use in circumstances where the Domain Name has to date been used exclusively for the benefit of the Complainant. However, it is to be noted that it has been a use, which has not been under the ultimate control of the Complainant, the rights owner. More pertinently, the recent renewal followed by the money demand has certainly taken unfair advantage of and been unfairly detrimental to the Complainant’s rights and unquestionably constitutes an Abusive Use.

5.	Decision:

Having concluded that the Complainant has rights in respect of a name or mark, which is identical or similar to the Domain Name and that the Domain Name, in the hands of the Respondent, is an Abusive Registration, the Expert directs that the Domain Name, dragon-hotel.co.uk, should be transferred to the Complainant.

Tony Willoughby                                                      30 March, 2007