In a very interesting case having implication for the new gTLD’s domain names,  Tesco Stores Limited of Cheshunt, Hertfordshire, UK was just awarded the domain name Tes.co on the basis of having a trademark on the term Tesco.

The panel combined the left and right of the dot in the domain name to come to the conclusion that the trademark owner of Tesco was entitled to the domain.

Tesco owns the domain names Tesco.com and Tesco.co.uk.

Of course this type of analysis had wide implication for new gTLD domains names and buyer will have to pay a lot of attention to the combined term on the right and left of the dot in taking into account trademark right especially in consider how they will use a particular new gTLD domain.

More troubling in our opinion, this panel as others have done, seems to have taken into account the amount of money the domain holder paid for the domain name ($1,800) compared to the amount they quoted to sell the domain name, (100,000-150,000 GBP).

Panelist are not in the business of buying and selling domains nor are they experts in valuation of domains.

Panelist are lawyers by trade.

Anytime a panelist goes down the road of placing “bad faith” on the domain holder based even in part on the asking price of the domain, we think the panelist exceed their knowledge and boundaries.

The domain name holder (the Respondent) made in our opinion  an excellent argument of why the domain name should not be transferred to the trademark holder and we have included much of his argument for you to review, however his early use of the domain name seems to have sunk his case.

Tesco probably could not have applied in the Sunrise for Tes.co only for Tesco.co.

It could have land rushed the domain and then entered the eventual auction where this domain sold for $1,800 but they did not

Here are the relevant arguments of the domain holder and the findings of the three member panel

“”The Domain Name was purchased by the Respondent in an open auction conducted by the “.co” registry.

The price paid by the Respondent was USD 1,800, a typical price for a three letter acronym in this domain extension.

The auction was for premium generic domains and followed a “sunrise” period, during which trademark holders could assert their priority right to a domain name. The Complainant made no such assertion of rights during the “sunrise” period. The auction was an open process and so the Complainant could have taken part.

Three letter domain names are intrinsically attractive and valuable, which is why the “.co” registry did not release them during the general “land rush” period, but rather sold them to the highest bidder at auction.

 

By purchasing the Domain Name for value at an open auction, the Registrant has acquired a right and legitimate interest.

Moreover, The domain holder says  that “tes” is an acronym that relates to the Respondent’s solar energy business – Solar IQ, to which the Domain Name now points. (The second definition of “tes” from the acronym dictionary is “Thermal Energy Storage” and is clearly associated to a solar power company. Furthermore, ESCo stands for Energy Service Company or Energy Savings Company).

The Respondent says that the Domain Name was purchased with the ultimate aim of using it in relation to his energy supply business

It is said that this is entirely consistent with the widespread use of the acronym and the stated basis for the re-launch of the “.co” registry – to provide registrants with domain names ending in “.co” to represent the words Company/Commercial.

 

The Respondent refers to documents attached to his Response dated January 31, 2013 and February 5, 2013 evidencing a contract entered into with Catalyst Energy Solutions, which it is said shows the Respondent trading as “The Energy Service Company”.

It is pointed out that the documents pre-date any notice of the Complaint and demonstrates the Respondent’s legitimate interest and rights in the Domain Name (being an acronym for “The Energy Service Company”).

 

As to the previous “white label site” (linked to “www.amazon.com”) for “The Entertainment Shopping Company”, it is said that this was a legitimate use of the Domain Name, by which the Respondent was entitled to experiment to see how successful a general retail site on a “.co” domain would be.

The Respondent states that due to limited resources the site was not promoted and it was therefore not successful.

The Respondent makes the point that if the arguments advanced by the Complainant had any merit, the site would have attracted traffic intended for them. That it did not has the coincidental effect of undermining their claim even further.

 

In conclusion, it is said that the Respondent has submitted legitimate reasons that separately and together give him rights and legitimate interests in the Domain Name and that accordingly, the Complaint must fail.

 

Bad faith

 

It is said that the Complaint contains no evidence whatsoever that the Domain Name was registered with the Complainant in mind.

The Respondent denies that it was, suggesting instead that it was registered “for the TES acronym” in combination with the attractive “.co” ccTLD.

 

Accordingly, the Respondent denies that the Domain Name was registered for the reasons asserted in the Complaint, namely, primarily for the purpose of selling it to the Complainant or to its competitors. The Respondent says that there is no evidence to support this contention.

 

Furthermore, it is said that the Complaint misrepresents the nature of the email correspondence passing between its representative and the Respondent.

The correspondence began with an unsolicited approach and offer to purchase the Domain Name.

The Respondent did not initiate the communications and made plain from the outset that he wished to retain the Domain Name.

The Respondent admits referring to his own company, Solar IQ as though it were a third party interested in the Domain Name.

It is said however that this was done to highlight the value of the Domain Name in the energy supply industry and to indicate to the Complainant that he was unwilling to part with the Domain Name unless an extremely large offer was made for it – either by them or by an energy supply company (who would not be a competitor of the Complainant). The Respondent acknowledges that this strategy involved disingenuous information during the brief sales negotiation that the Complainant initiated, but says that this cannot equate to bad faith registration of the Domain Name. A sale was not something that the Respondent had in mind when registering the Domain Name and therefore the circumstances are not such as to satisfy the test the Complainant is required to meet when it advances this particular bad faith argument (i.e. registration primarily for the purpose of selling the Domain Name to the Complainant or to its competitors).

 

The Respondent says that the Complainant (in referring to the alternative provisions of the Policy demonstrating bad faith) is wrong to assert that there can be a “presumption that there is bad faith […]”. It is said that there is no such presumption and that it is for the Complainant to satisfy the burden of proof.

 

It is said that it is preposterous of the Complainant to suggest that the Respondent has engaged in a pattern of abusive registrations.

The Respondent is a legitimate businessman with a successful track record. He has not been involved in any domain name or trademark disputes, much less satisfying the test for a pattern of abusive registrations.

 

The “temporary” use to which the Domain Name was put, prior to linking it to the Respondent’s solar energy business, did not give rise to any confusion nor is there a claim that it disrupted the business of the Complainant.

 

Finally, it is said that it is ludicrous to suggest that the Respondent could in any way have prevented the Complainant from reflecting its mark corresponding to the Domain Name, the Complainant has a large number of domain names that more than adequately reflect the TESCO trademarks, in particular <tesco.com> and <tesco.co.uk>.

By the same analysis, the same would be true of the <tes.co.uk> domain name held for over 17 years by a third party and which contains exactly the same string (“tes.co”) that is complained of in this case.

In reality, no such blocking has taken place in either case.

 

 

 

The Complainant says that the Domain Name is identical or extremely similar to the Complainant’s trademark rights.

The Respondent disagrees on the basis that a) the relevant part of the Domain Name is “tes” and “tes” is plainly not identical to any of the TESCO trademarks or confusingly similar (being neither visually nor aurally similar to TESCO, which has a distinct second syllable); and b) even if one were to compare all levels of the Domain Name (the second level, “tes” and the ccTLD, “.co”), and the Complainant’s mark (which it is contended would be improper to do), given that the two levels are separated by a dot, the Domain Name must be read and seen as “tes dot co”.

As such, the entire Domain Name is neither identical to the TESCO trademarks nor confusingly similar being both visually and phonetically distinct from the single word “Tesco”.

 

The first argument of the Respondent raises a fundamental issue: is it a requirement that the TLD extension be ignored when comparing a mark of a complainant with the domain name in issue for the purposes of the first limb of paragraph 4(a) of the Policy? The Panel is not persuaded that there is such a requirement.

 

There is no rule either within the Policy or that might affect its application, that precludes panels from taking into account TLDs. It is the case that most panels do not, because most of the analysis that takes place is at the second level. And that is because, simply, the TLD, being generic in nature, does not usually form part of the trademark to which a domain name is being compared. But that does not establish any kind of rule that precludes TLDs being taken into account.

 

The Respondent suggests that to take the TLD into account would be a novel and improper approach. The Panel rejects such an assertion. Indeed, the WIPO Overview 2.0 clearly contemplates the TLD being taken into account. There is nothing novel or improper in doing so. The WIPO Overview 2.0, designed to assist awareness of panel views on certain questions that commonly arise in proceedings under the UDRP, is based on some 20,000 UDRP cases the Center has administered through March 31, 2011. At paragraph 1.2, which deals with the test for identity or confusing similarity, it is said “[…] The applicable top-level suffix in the domain name (e.g., “.com”) would usually be disregarded under the confusing similarity test (as it is a technical requirement of registration), except in certain cases where the applicable top-level suffix may itself form part of the relevant trademark.” [emphasis added].

 

The WIPO Overview 2.0 lists past relevant decisions and the decision that appears to underpin the extract quoted above is project.me GmbH v. Alan Lin, supra, concerning the domain name <project.me>. In that decision, it was said (by a three member panel) that:

 

“When considering the issue of identicalness or similarity of a disputed domain name to the complainant’s trademark, previous panel decisions under the UDRP for the ccTLD .me have ignored the TLD identifier – that is, they have undertaken the comparison using only that part of the domain name that precedes the “.me” suffix. An example is Mozilla Foundation and Mozilla Corporation v. Limpkin Walker, WIPO Case No. DME2008-0007 […]”.

 

“This Panel considers that the appropriate approach in this case to determining identicalness or similarity of the disputed .me domain name with the Complainant’s trademark is to not ignore the ccTLD identifier “.me”. The reality is that, unlike most ccTLD identifiers, the TLD identifier “.me” can be seen to have a meaning beyond being the International Standards Organization (ISO) two-letter code for the country Montenegro – in particular, it has the additional meaning of being the common English objective pronoun for oneself […]”.

 

“In this Panel’s opinion, to ignore the ccTLD identifier in all cases when considering identicalness or similarity of a .me domain name to a trademark is to ignore the commercial reality that, in the .me domain name space, the ccTLD identifier is likely to be a key part of the domain name. Thus, it is this Panel’s view that a determination of identicalness and similarity of a .me domain name may in appropriate cases be based on a consideration of the domain name as a whole – that is, of the domain name including the “.me” suffix.”

 

This is not a one-off decision. For instance, in BookIt.com, Inc. v. PrivacyProtect.org / ICS INC., WIPO Case No. D2013-0775 concerning the domain name <extranetbookit.com> (and the trademark BOOKIT.COM), it was said that “[t]he Panel finds in this case the applicable TLD suffix should not be ignored as it is part of Complainant’s trademark, and the Panel finds it likely that Respondent has registered the disputed domain name in this exact manner as to try and incorporate Complainant’s trademark in full without actually incorporating the trademark in the domain name per se.”

 

And in Channel Television Limited v. Legacy Fund LLC / Protected Domain Services Customer ID: R-3108040, WIPO Case No. DTV2011-0008 concerning the domain name <channel.tv>, (another three member panel) it was said that “[t]he disputed domain name is therefore identical to the Complainant’s unregistered trade mark ‘Channel TV’”. [emphasis added].

 

Moreover, in Koninklijke Philips Electronics N.V. v. Alan Horswill, WIPO Case No. DTV2002-0004, concerning the domain names <buyaphilips.tv> and <widescreenphilips.tv> it was said “[w]hilst it is recognized that the gtld, used for a domain name in combination with a mark of the Complainant, cannot be taken into consideration as an element which would exclude or diminish confusing similarity, in the present case the gtld ‘.tv’ even increases the confusing similarity, as users will generally not understand it as reference to Tuvalu, rather as the common abbreviation for ‘television’. […] The domain names <buyaphilips.tv> and <widescreenphilips.tv> are therefore confusingly similar with the trademark PHILIPS in which the Complainant has rights.”

 

There appears to be nothing novel, let alone improper about taking into account the TLD suffix.

 

However, the Respondent seeks to distinguish the project.me case from the present case as follows:

 

“Trying to roll two parts of a domain into a single word is distinguished from the possible use of two conjunctive English words, separated by a dot. This second approach, taken in the Project.me case, results in a recognizable phrase, since .me is (and was marketed on the basis of being) a distinct English word that has meaning. Co is a recognised generic abbreviation for Company/Commercial.”

 

The distinction is understood but its relevance is not accepted. The only consideration is whether, in registering the Domain Name with a particular TLD suffix, a respondent has sought to incorporate a complainant’s trademark in its entity by making use of that TLD suffix, such that it becomes a key part of the Domain Name. In the Panel’s view, if the TLD suffix is part of the Complainant’s trademark, whether forming part of one word, or a second and distinct word, it may be taken into account for comparison purposes.

 

Given the Panel’s view, it must now go on to consider the Respondent’s secondary argument, that even if one were to compare all levels of the Domain Name and the Complainant’s TESCO mark, given the dot between “tes” and “co”, the Domain Name must be read and seen as “tes dot co”, and is therefore neither identical nor confusingly similar to the TESCO mark, being both visually and phonetically distinct.

 

Under the UDRP, the test for confusing similarity involves a comparison between the trademark and the domain name to determine likelihood of Internet user confusion. To satisfy the test, the trademark to which the domain name is said to be confusingly similar would generally need to be recognisable as such within the domain name. Application of the confusing similarity test under the UDRP typically involves a comparison, on a visual or aural level, between the trademark and the domain name. The general approach to confusing similarity is best summarized by reference to Research in Motion Limited v. One Star Global LLC, WIPO Case No. D2009-0227, where the Panel said: “[…] It is necessary to recognise that the term of confusing similarity is a low threshold test the purpose of which is effectively to assess whether a complainant has sufficient rights so as to give it standing to bring a complaint (see, for example, Aubert International SAS and Aubert France SA v. Tucows.com Co., WIPO Case No. D2008-1986). It involves a simple comparison of the mark relied upon with the domain name in issue.”

 

Thus, we have a “low threshold” test that involves a simple comparison of Domain Name with mark. The Panel has found that a TLD suffix may be included in a comparative review. The Panel’s view is that it should include the TLD suffix for comparison purposes in this case, given that the TLD suffix forms part of the trademark (TESCO) to which the Domain Name (<tes.co>) is being compared. There is indeed a dot between “tes” and “co” but nevertheless the Panel is of the view that the Domain Name is confusingly similar to the TESCO trademark. Indeed, the dot is the only element of the Domain Name that prevents it being identical to the TESCO trademark.

 

B. Rights or Legitimate Interests

 

By its allegations in the Complaint, the Panel finds that the Complainant has made out a prima facie case that the Respondent lacks rights or legitimate interests in the Domain Name. As such, the burden shifts to the Respondent to come forward with appropriate arguments or evidence demonstrating that it does in fact have such rights or legitimate interests.

 

A respondent can show it has rights to or legitimate interests in a domain name in various ways. For instance, it can show that it has been commonly known by the domain name or that it is making a legitimate noncommercial 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. A respondent can also demonstrate rights or legitimate interests by showing that it is using a domain name in connection with a bona fide offering of goods or services.

 

Here, the Respondent relies primarily on the following matters:

 

– the Domain Name was purchased in an open auction (run by the “.co” registry) in which the Complainant could have participated.

 

– the “tes” part of the Domain Name is also an acronym relating to the Respondent’s solar energy business, (Solar IQ) and the Domain Name was purchased with the “ultimate” aim of using it in that connection.

 

– there is evidence of trading as “The Energy Service Company”,.(the acronym “tes” standing for The Energy Supply/Service Company) which pre-dates any notice of the Complaint.

 

As to the Domain Name once pointing to what the Respondent describes as a “white label” site for the “The Entertainment Shopping Company”, which was linked to “www.amazon .com”, this it is said was a legitimate use of the Domain Name.

 

The first issue can be taken shortly.

That there is a legitimate (as in lawful) purchase of a domain name does not give rise to rights or legitimate interests for the purposes of the Policy.

If it did, complainants would almost always fail.

There is no support for taking a contrary view where the domain name is acquired from a registry, or at an open auction, or acquired at, below or above market value.

There is nothing particularly unusual about this – lawful acquisition of rights do not automatically prevent challenges to those rights in the purchaser’s hands.

That is why indemnities and warranties are often taken in commercial transactions when rights are being transferred.

Furthermore, the fact that the Complainant did not participate in the auction cannot now preclude it from raising a complaint.

Again, the logical conclusion of such an argument would be that complainants would usually never succeed because at some point or other they would usually have had an opportunity to acquire the domain name in issue themselves.

 

Turning now to the use the Respondent has made of the Domain Name, much is made of the three letter acronym “tes”. And the Domain Name does indeed resolve to the Respondent’s energy related site, Solar IQ website.

But that website does not feature the three letter acronym, or the phrase it stands for “The Energy Supply/Service Company”.

Moreover, the CV of the Respondent does not refer either to “The Energy Supply Company” or “The Energy Service Company”.

Yet, the Respondent says that “[t]he domain name was purchased by [him] with the ultimate aim of using it in relation to his energy supply business – the acronym standing for The Energy Supply/ Service Company”. But the only use appears to be to direct Internet users who type “www.tes.co” to his website.

 

Whilst the Respondent has focused heavily on the first three letters of the Domain Name being relevant to his energy company, in contrast, the earlier site to which the Domain Name pointed, described as “[…] the previous white label site (linked to Amazon.com) for The Entertainment Shopping Company […]” has been given little attention.

The Respondent has quite obviously played down its significance, the website being described as an “experiment” (“[…] a legitimate use of the domain name, by which the Registrant was entitled to experiment to see how successful a general retail site on a .co domain would be”) and “temporary” (“[t]he temporary use that the domain name was put, prior to linking it to the Registrant’s solar energy business […]”). Moreover, by referring to his primary aim of using the Domain Name in connection with his energy business, the Respondent again seeks to diminish the significance of his initial use.

 

However, there are certain features of the original website that casts doubt on what appears to be the core theme of the Respondent’s case, reflected in his denial that “[…] the domain name was registered with the Complainant in mind, but rather for the TES acronym as already described above, in combination with the attractive .co generic Top Level Domain extension”.

The Respondent did make use of the Domain Name in the heading of the website to which the Domain Name first pointed (unlike the position now) and that website contained what appears to be several links to products the Complainant itself sells, e.g. “TES.CO Toys and games”, “TES.CO Home Shopping” and “TES.CO DVD and Gaming”. Moreover, the original website displayed a logo consisting of four (4) thick blue vertical lines which is similar to a logo the Complainant used or uses as described below.

 

In Drexel University v. David Brouda, WIPO Case No. D2001-0067, the panel stated that “rights or legitimate interests cannot be created where the user of the domain name at issue would not choose such a name unless he was seeking to create an impression of association with the Complainant”. On the basis of what the Respondent first did with the Domain Name, that appears to the Panel to be the case here.

 

In all the circumstances, this Panel is of the view that the Respondent has failed to establish rights or legitimate interests in the Domain Name.

 

C. Registered and Used in Bad Faith

 

 

The Complainant suggests (in relation to paragraph 4(b) of the Policy) that there is or should be some form of “presumption” of bad faith given the reputation of the Tesco brand.

There is no such presumption and the Complainant carries the burden of proof to show bad faith.

 

The Complainant contends that there is a pattern of practice supporting an allegation that the Domain Name was registered in order to prevent the Complainant from reflecting its mark in a corresponding domain name (paragraph 4(b)(ii) of the Policy). This sub-paragraph requires a “pattern of conduct”, an assertion that the Complainant appears to acknowledge cannot be sustained.

 

The Complainant also relies on paragraph 4(b)(iii) of the Policy (disruption of the business of a competitor) but it is difficult to find evidence that that was the Respondent’s primary purpose (although it may well have been an obvious side effect of using the Domain Name in the way that he originally did).

 

Finally, the Complainant contends the Respondent intentionally attempted to attract for commercial gain, Internet users to his website by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship, affiliation or endorsement of the Respondent’s website (paragraph 4(b)(iv) of the Policy). It is this allegation, together with what appears to be the Complainant’s primary allegation under paragraph 4(b)(i) of the Policy, that require closer scrutiny.

 

The Respondent says that the Domain Name “[…] was purchased by [him] with the ultimate aim of using it in relation to his energy supply business – the acronym standing for ‘The Energy Supply/ Service Company’”.

The Respondent also denies that the Domain Name was registered with the Complainant in mind.

 

The Respondent’s resume states that the Respondent has been the owner and manager of Solar IQ (UK) (the website to which the Domain Name now points) since September 2009.

The Domain Name was registered on September 2, 2010.

It appears odd, to say the least, that the Respondent first decided to “experiment” with a retail site, advertising toys, games, DVD’s etc., when it is said that his ultimate aim was always i.e. even at the time of registration, to use the Domain Name in connection with his energy business, a business that actually existed at the time of registration of the Doman Name.

 

Moreover, it appears contrived for the Respondent to seek to justify (if that is what he tries to do) his original use of the Domain Name by reference to the name of the website to which it first pointed i.e. “The Entertainment Shopping Co.”. One can of course see how, at first blush, it might appear legitimate to use the name “tes.co” (and therefore the Domain Name) on the website.

However, the Respondent was obviously aware of the Complainant.

The products he advertised on the website were almost all products that the Complainant sells.

Moreover, he used a logo on the website (four (4) thick blue vertical lines) which, (based on the Panel’s personal knowledge, but also readily verifiable from a Google image search for “Tesco”¹), is very similar to that used by the Complainant on its carrier bags i.e. five (5) thick blue lines, which would in the view of the Panel be readily associated with the Complainant by a substantial section of the public, at least in the UK.

 

It seems clear to the Panel that the Respondent selected the Domain Name because it replicates in its entirety or, (if one takes into account the dot), to a substantial degree, the TESCO mark. By using it in the way that he did, i.e. to point to “The Entertainment Shopping Co.”, he was trying to create an appearance of association with the Complainant and/or to attract, for commercial gain, Internet users to his website by creating a likelihood of confusion with the TESCO mark. Accordingly, for the purposes of the Policy, the Panel finds that there is bad faith registration and use under paragraph 4(b)(iv) of the Policy.

 

As to the allegation that the Domain Name was acquired “primarily for the purpose of selling, renting […]” (paragraph 4(b)(i) of the Policy), the Complainant relies on the email exchange referred to earlier. The Respondent says that the nature of the correspondence has been misrepresented, that it began with an unsolicited approach and offer to purchase, and that what followed was an attempt to talk up the price (albeit it is acknowledged that some of what was said to the Complainant was misinformation, but not such as to amount to bad faith). Moreover, it is said that “selling” was not something that the Respondent had in mind when registering the Domain Name.

 

The Panel is of the view that the Respondent registered the Domain Name with the Complainant’s well-known trademark in mind.

The Panel notes the Respondent’s offer to sell the Domain Name to the Complainant and that he appears to suggest that a figure between GBP 100,000 and GBP 150,000 would be appropriate, which must of course be contrasted with the “market price” of USD 1,800 that the Respondent himself paid at auction.

The Respondent admits to having made misleading statements during the course of the negotiation.

Clearly the sum suggested is significantly in excess of the Respondent’s out-of-pocket costs directly related to the Domain Name.

Further, given the nature of the Domain Name, the Panel finds it difficult to conceive of any party other than the Complainant who could make legitimate commercial use of it and who might be prepared to pay anything like the amount suggested in order to secure it.

The Panel does not consider it essential for a finding under paragraph 4(b)(i) of the Policy that the Respondent approached the Complainant (and not vice versa), or that any offer to sell a domain name follows shortly after its registration.

 

As stated earlier, it is the Panel’s view that the Respondent registered the Domain Name with the Complainant’s mark in mind. It is likely to have been obvious to the Respondent that the Complainant would have an interest in securing a transfer of the Domain Name from him. Accordingly, the Panel infers that a potential sale to the Complainant was likely to have been in the contemplation of the Respondent at the time of registration of the Domain Name for the purposes of paragraph 4(b)(i) of the Policy.

In all the circumstances, the Panel finds that the Domain Name has been registered and is being used in bad faith in the circumstances contemplated by paragraph 4(b)(iv) and/or paragraph 4(b)(i) of the Policy