yellow.net.nz Appeal

.nz Dispute Resolution Service
DRS Reference: 1116
Decision of Appeal Panel
Yellow Holdings Ltd v Eurobelt Ltd

Key words -
Domain Name
yellow.net.nz

Trade mark rights in name
Unfair registration - inferences as to purpose of registration - well-known mark plus inactivity - initial unfair registration - use unfair registration - effect of delay between registration and complaint - limitation on consideration of acts and omissions more than three years before complaint - meaning of "use" for purposes of unfair registration

Parties

Appellant:

Yellow Holdings Limited
Level 2, 604 Great South Road
Ellerslie
Auckland
New Zealand

Represented by: David Marriott

Respondent:

Eurobelt Limited
PO Box 409
Kumeu
Auckland
New Zealand

Domain Name/s

yellow.net.nz

3. Procedural history

3.1 The Complaint was lodged on 03 August 2015 and Domain Name Commission Limited ("DNC"), notified the Respondent of the validated Complaint on 06 August 2015. The domain/s were locked on 05 August 2015, preventing any changes to the record until the conclusion of these proceedings.

3.2 On 10 August 2015, Mr Henk Klos (one of the Respondent's two directors) requested an extension of time for the filing of a Response on the grounds of his ill health. On 17 August 2015, after receiving a medical certificate from Mr Klos, the DNC granted an extension of time to 5.00pm on 10 September 2015. On that date, Mr Klos requested a further extension of time on the grounds of his recent discharge from hospital following surgery. On 14 September 2015, the DNC granted a further and final extension of time to noon on 16 September 2015. No Response was received.

3.3 On 17 September 2015, the DNC advised Yellow Holdings Limited (the Complainant, but hereinafter "the Appellant") and the Respondent that the Complaint would be referred to an independent expert for a decision if the Appellant paid the appropriate fee by 02 October 2015. The Appellant paid the DNC the appropriate fee on 22 September 2015 for the decision of an Expert, pursuant to para 9 of the .nz Dispute Resolution Service Policy ("the Policy"). The Hon Barry Paterson QC was appointed as an Expert ("the Expert") to determine the Complaint. The Expert delivered a decision dated 12 October 2015.

4. Appeal

4.1 On 06 November 2015, the Appellant lodged an appeal against the Expert's decision. The Appellant paid the DNC the appropriate fee on 10 November 2015 and the notice of appeal was served on the Respondent that day. The Respondent did not file a response to the notice of appeal and did not request an extension of time in which to do so.

4.2 On 27 November 2015, the DNC confirmed an appeal response had not been filed and advised the Appellant and the Respondent that an Appeal Panel would be appointed to consider and determine the appeal. On 03 December 2015, the Appeal Panel ("the Panel") comprising Robert Fisher QC, Terence Stapleton QC and Maria Dew was appointed.

5. The nature of this appeal

5.1 The appeal is governed by the Policy issued by the DNC on behalf of InternetNZ. Para 12.1 of the Policy provides that the Panel "will consider appeals on the basis of a full review of the matter and may review procedural matters".

5.2 The Panel therefore proceeds to deal with this appeal by conducting a full review of the matter, taking into account the documents before the Expert and the notice of appeal and considering whether the decision appealed from was wrong.

6. Factual background

The Appellant

6.1 The Appellant is the current owner and operator of a business directory formerly known as the "Yellow Pages". The Appellant's business has more recently operated under the trading name and registered trademark "Yellow".

6.2 The business directory started in the 1960s when the New Zealand Post Office first published and distributed the printed Yellow Pages directories. As from the late 1980s, Telecom owned and operated the Yellow Pages business directories, until it sold the business to predecessors of the Appellant.

6.3 The business now operated by the Appellant includes all the trademarks that relate to the former "Yellow Pages" business and the trademarks relating to the more recent operation of the business under the trading name "Yellow". All intellectual property is owned by the New Zealand company, NZ Directories IP Limited, a wholly owned subsidiary of the Appellant.

6.4 Since 1996, the business directory listings of Yellow Pages have also been published online with additional services, such as digital marketing and web hosting. The Appellant now describes its business as operating in directories and digital marketing with "YELLOW" as one of its core trademarks. Its primary business is the directory currently residing at yellow.co.nz.1

6.5 The Appellant has existing registrations for domain names, including:

(a) yellow.co.nz;
(b) yellow.org.nz;
(c) yellowpages.nz;
(d) yellowpages.co.nz;
(e) yellowpages.net.nz.

6.6 The Appellant also has many trademarks in New Zealand, registered between 1997 and 2007, including:

(a) The words YELLOW PAGES registered in classes 9, 16, 35, 38 and 42;
(b) The colour yellow registered in class 16;
(c) An insignia with, and without, a yellow background registered in classes 16 and 35;
(d) The words YELLOW PAGES BUSINESS registered in classes 16 and 41;
(e) A combined image and name "Yellow" registered in classes 9, 16, 35 and 38.

6.7 In 2010, NZ Directories IP Limited registered a series of Yellow related trademarks. That company is the Appellant's IP holding company. The new trademarks included the single word YELLOW, registration number 806071, registered in classes 16, 35 and 38.

6.8 The class registration 16 relates to "Goods and Services Descriptions: for printed matter in the form of telephone and business directories and material relating to telephone and business directories and associated advertising material".

6.9 The class registration 35 relates to "Goods and Services Descriptions: Advertising and business services relating to business directories and associated advertising materials".

6.10 The class registration 38 relates to "Goods and Services Descriptions: Services relating to the provision of telephone directories and databases of New Zealand subscribers".

6.11 The Appellant's current website is linked to both the yellow.co.nz and yellowspages.co.nz domain names. The current website features the registered trade mark colour yellow, the registered image of the fingers walking across an open book, and the word "yellow".

The Respondent

6.12 In December 1991, the Respondent Eurobelt Limited was incorporated as a limited liability company in New Zealand. The directors and shareholders of the Respondent are Mr Henk Maria Klos and Ms Johanna Klos of Kumeu, New Zealand.

6.13 In May 1998, the Respondent registered the disputed Domain Name, "yellow.net.nz". The administrator and contact person for the domain name is Mr Henk Klos.

6.14 The Respondent did not file a Response to the initial Complaint or this Appeal. The information relating to the Respondent is therefore necessarily limited to the documentary evidence that has been produced by the Appellant as annexed to the initial Complaint.

6.15 No evidence has been presented to the Panel that the Respondent has used the disputed domain name to establish or promote a business or for any other commercial enterprise to date.

Proceedings between Telecom and Mr Klos/Yellow Web Ltd

6.16 In 1998, there was a dispute between the previous owner of the Yellow Pages business, Telecom, and Mr Klos and his company, Yellow Web Ltd.

6.17 In September 1998, Telecom became aware of Yellow Web Ltd's website at the domain name www.yellowwebpages.co.nz, which appeared to offer competing business directory services called Yellow Web pages. After discussions between Telecom and Mr Klos and Yellow Web Limited the website was withdrawn.

6.18 In February 1999, Yellow Web Ltd's presence reappeared under the domain www.yellowweb.co.nz. Telecom issued proceedings in the High Court at Auckland against Yellow Web Limited and Mr Klos. In April 1999, the High Court granted an interim injunction against the defendants, restraining the defendants from using the description "Yellow Pages", "Yellow Web Pages" and/or "the colour yellow" in relation to any business directory including any business directory on the Internet 2.

6.19 In June 1999, the interim injunction was made permanent. The final judgment was given by consent. The court made orders that registered trade mark numbers 168211 (word mark for YELLOW PAGES) and 261018 (trade mark for the colour yellow) had been infringed by the defendants. Permanent injunctions were ordered by the court restraining the defendants from publishing or promoting business directories with reference to the words YELLOW WEB PAGES or YELLOW PAGES or the colour yellow.

Recent events

6.20 In about June 2015, the Appellant discovered it could not register the domain name www.yellow.nz because there was a competing application for registration by the Respondent.

6.21 On 10 June 2015, Mr Michael Travis, Head of Legal and Commercial, Yellow Pages Group Limited wrote to Mr Klos. Mr Travis set out details of the company's trademark ownership and in particular the "YELLOW" trademark. Yellow Pages Group proposed that Mr Klos sell the Domain Name to the Yellow Pages Group for $5,000. The sale was offered on conditions that Mr Klos agree not to use the word YELLOW in any future business ventures and agree not to register any further domains with the word YELLOW in them.

6.22 On 12 June 2015, Mr Klos replied with a counter-offer of $255,000. In his response, Mr Klos explained his counter-offer was based on the legal costs and interest payments he had incurred following the Telecom litigation in 1998 and 1999.

6.23 The relevant portion of Mr Klos's email dated 12 June 2015 is set out below:

"If and when I decide to hand over the yellow.net.nz domain, it will not be for the amount - or conditions - you've offered me, despite your threats.

The disputes and resulting court cases with the Yellow Pages 15 odd years ago have cost me about $65,000.00. Money I didn't have and had to borrow in order not to be bankrupted courtesy of the Yellow Pages. Money which I am - after 15 years - still paying off.

The $65,000 has cost me $190,106.49 in interest over the last 15 years at an average rate of 9.15%.

My counter offer to you is therefore $190,106.49 plus $65,000.00 which equals $255,106.49.

There are no conditions attached to my counteroffer.

Looking forward to hearing from you."

6.24 The Appellant did not pursue the counter-offer and later filed its complaint with the DNC.

7. The Expert's decision

7.1 The Appellant's complaint to the DNC was referred to the Expert. The Expert dismissed the complaint on 12 October 2015.

7.2 The complaint was dismissed on the basis that the Appellant did not have a registered trade mark in the word "YELLOW" and the Appellant was not able to establish an unregistered mark in the word "YELLOW".3 The Expert held that the Appellant was not able to establish that it had used the word YELLOW on its own as a mark for such a period, and to such a degree, that it gave rise to a right to claim a common law reputation in the word YELLOW.4

7.3 The Expert noted that the registered trademarks on which the Appellant relied were numerous. The Appellant produced a very large sheaf of trade marks without drawing attention to the critical trademark registration number 806071, which registered the unqualified word YELLOW as a mark. As that mark was not drawn to his attention the Expert did not realise that there was a registered mark which was identical or similar to the Domain Name for the purposes of para 4.1.1 of the Policy.

7.4 Although finding that the Appellant did not have sufficient Rights under para 4.1.1 of the Policy, the Expert went on to consider whether there was Unfair Registration for the purposes of paras 4.1.2, 5.1.1 and 5.1.2 of the Policy.

7.5 The Expert concluded that there was no sufficient evidence of Unfair Registration. In summary, he concluded:

(a) the failure of the Respondent to use the Domain Name for the purposes of emails or a website was not in itself evidence of an Unfair Registration;
(b) pursuant to para 5.4 the Expert was not entitled to take account of any evidence of acts or omissions amounting to Unfair Registration or Use which occurred more than 3 years before the date of the Complaint;
(c) there was no evidence that the registration had been for the purposes of selling or blocking and in any event this could not be taken into account given the passage of time since registration;
(d) there was no evidence that the Respondent had been using the Domain Name in a way likely to confuse, mislead or deceive people or businesses and therefore para 5.1.2 of the Policy could have no application.

7.6 The Expert commented that if the Respondent were to begin using the trade name the Appellant might have Rights.The Expert also noted that if he had found the Appellant had Rights in the Domain Name it would have been necessary to go beyond the provisions of paras 5.1.1 and 5.1.2 to consider whether there was an Unfair Registration based on Mr Klos's email of 12 June 2015. The Expert noted that the email suggested that the Respondent did not have a genuine intention to use the trade mark and that his intent was to endeavour to recover money which the Appellant's predecessor caused him to spend on the previous litigation. However, given the Expert's finding in relation to Rights, he did not consider this issue further.

8. Grounds of appeal

8.1 The Appellant's notice of appeal dated 6 November 2015 appeals against the whole of the Expert's decision.

8.2 The Appellant relies on grounds of appeal which can be summarised as follows:

(a) that the Expert made an error in failing to find that the Appellant does have a trade mark registration for the word YELLOW, registration number 806071 in classes 16, 35 and 38, which the Expert failed to identify;
(b) that the Expert failed to consider whether the Appellant had registrations for marks similar to YELLOW;
(c) that the Expert made an error in failing to find the Appellant had accrued unregistered rights to a name or mark identical or similar to YELLOW;
(d) that the Expert was in error in determining that the Domain Name was not an Unfair Registration.

8.3 The Appellant seeks reversal of the Expert's decision, transfer of the Domain Name to its subsidiary company NZ Directories IP Limited, and refund of its filing fee on the appeal.

9. The requirements for a successful complaint by the Appellant

9.1 Complaints under the Policy begin with para 4.1 which provides:

"4. Dispute Resolution Service

4.1 This Policy and Procedure applies to Respondents when a Complainant asserts to the DNC according to the Procedure, that:

4.1.1 The Complainant has Rights in respect of a name or mark which is identical or similar to the Domain Name; and
4.1.2 The Domain Name, in the hands of the Respondent, is an Unfair Registration."

9.2 It will be seen that to support a complaint the Appellant must establish three elements:

(a) Rights in respect of a name or mark (para 4.1.1);
(b) Identity or similarity between that name or mark and the Domain Name (para 4.1.1); and
(c) Unfair Registration in the hands of the Respondent (para 4.1.2).

This decision now deals with each of these elements in turn.

10. Rights in respect of name or mark

10.1 The Expert held that the word "yellow" in isolation is no more than generic and descriptive. Consequently, the Appellant could not establish common law rights in that word. It is unnecessary for us to traverse that finding given the independent rights the Appellant derived from the registered trade mark overlooked by the Expert.

10.2 Trade mark 806071 is an independent source of rights in the unadorned name "YELLOW". This trade mark was not specifically drawn to the Expert's attention. As a result, he concluded that the Appellant had not established rights in respect of that name or mark. The Panel accepts that that was an error. The Appellant's subsidiary does have rights in the word YELLOW. The rights relate to classes 16, 35 and 38.

10.3 The trade mark for the word YELLOW is registered in the name of the Appellant's subsidiary. No evidence was produced to show authorisation from the subsidiary to the Appellant. However the better view appears to be that for present purposes a plaintiff can normally be treated as having rights in a trade mark which is registered in the name of a licensee, subsidiary, parent or a related company (see further WIPO Overview 2.0 (2011) at [1.8]). We adopt that approach.

10.4 We conclude that, contrary to the Expert's decision, the Appellant has established "Rights in respect of a name or mark" and that this element is satisfied.

11. Identical or similar

11.1 The trade mark YELLOW is identical to the Domain Name with the addition of the suffix ".net.nz". This element is also satisfied.

11.2 For completeness we note our agreement with the Expert that there is insufficient similarity between "yellow", on the one hand, and "yellow" when combined with other expressions such as "YELLOW BUSINESS", "YELLOW BUSINESS PAGES", or "CHINESE YELLOW PAGES," on the other.

12. Unfair registration

12.1 The Policy provisions relevant to Unfair Registration in the present case are as follows:

"3. Definitions
...

Unfair Registration means 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, or is likely to be, used in a manner which took unfair advantage of or was unfairly detrimental to the Complainant's Rights.

...
5. Evidence of Unfair Registration

5.1 A non-exhaustive list of factors which may be evidence that the Domain Name is an Unfair Registration is set out in paragraphs 5.1.1-5.1.5:

5.1.1 Circumstances indicating that the Respondent has registered or otherwise acquired the Domain Name primarily:

(a) 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;
(b) as a blocking registration against a name or mark in which the Complainant has Rights; or
(c) for the purpose of unfairly disrupting the business of the Complainant; or

5.1.2 Circumstances demonstrating that the Respondent is using the Domain Name in a way which is likely to confuse, mislead or deceive people or businesses into believing that the Domain Name is registered to, operated or authorised by, or otherwise connected with the Complainant;
5.1.3 The Complainant can demonstrate that the Respondent is engaged in a pattern of registrations where the Respondent is the Registrant of Domain Names (under.nz or otherwise) which correspond to well known names or trade marks in which the Respondent has no apparent rights, and the Domain Name is part of that pattern;
5.1.4 The Complainant can demonstrate that the Respondent has knowingly given false contact details to a Registrar and/or to the DNC; or
5.1.5 The Domain Name was registered arising out of a relationship between the Complainant and the Respondent, and the circumstances indicate that it was intended by both the Complainant and the Respondent that the Complainant would be entered in the Register as the Registrant of the Domain Name.

5.2 Failure on the Respondent's part to use the Domain Name for the purposes of e-mail or a web-site is not in itself evidence that the Domain Name is an Unfair Registration.
...
5.4 In making their decision, the Expert shall not take into account any evidence of acts or omissions amounting to unfair registration or use which occurred more than three (3) years before the date of the Complaint.

6. How the Respondent may demonstrate in its Response that the Domain Name is not an Unfair Registration

...
6.1.2 The Domain Name is generic or descriptive and the Respondent is making fair use of it in a way which is consistent with its generic or descriptive character;
...
6.4 Trading in Domain Names for profit, and holding a large portfolio of Domain Names, are of themselves lawful activities. The Expert will review each case on its merits."

12.2 It will be seen that Unfair Registration can take two quite distinct forms. One arises from para 3 definition (i) which requires unfair advantage or unfair detriment at the time of registration or acquisition. It will be convenient to refer to this as "Initial UR". Definition (ii) requires unfair advantage or unfair detriment in the subsequent use or likely use. It will be convenient to refer to this as "Use UR".

12.3 The Appellant's grounds of appeal relating to Unfair Registration are particularised in paras 10, 11 and 12 of the notice of appeal as follows:

C. Unfair registration
"10. The Expert ought to have had regard to the intention of the Respondent at the time of registering the Domain Name.
(DRS Decision 1110 at para7.10-7.11)
11. Ordinarily, registration primarily for unfair gain is a reasonable inference from the well known nature of a mark and the lack of any active use of the Domain Name (DRS Decision 1061 at para 6.9).
12. The following circumstances further support the drawing of an adverse inference as to the Respondent's state of mind at the time:

12.1 The Respondent's 10 June 2015 email reply (Reply) to the Appellant5 included statements to the effect that:

(a) He knew of the Appellant and the well known nature of its names and marks;
(b) The previous dispute prior to the registration of the Domain Name regarding the same or similar marks;
(c) He had demanded a very large sum of money for the transfer of the Domain Name;

12.2 The Respondent expressed no intention to use the Domain Name.
12.3 The Respondent's application for registration during the "PRE" period, for the yellow.nz domain name;
12.4 The fact that use of the Domain Name by the Respondent for goods or services appropriate to a .net domain name would breach the terms of the permanent High Court injunction imposed upon the Respondent."

12.4 As set out in those grounds of appeal, the Appellant appears to rely solely upon the first form of unfair registration which we have referred to as "Initial UR". The intention to rely on "Initial UR" is express in ground 10. It is a necessary consequence of ground 11, which is said to be concerned with what registration was "for". It is also implicit in the various sub-paragraphs of ground 12, all of which are said to support "the drawing of an adverse inference as to the Respondent's state of mind at the time".

13. "Initial UR" principles

13.1 Before turning to the facts in the case now before us, it will be useful to summarise the principles to be applied. Two of the Appellant's grounds of appeal are concerned with those principles.

Timing in relation to "Initial UR"

13.2 Ground 10 of the Appellant's grounds of appeal is that "The Expert ought to have had regard to the intention of the Respondent at the time of registering the Domain Name."

13.3 We have no difficulty with the Appellant's proposition that where reliance is placed on "Initial UR" the focus lies solely on state of mind at the date of registration. We could not find anything in the Expert's decision to suggest that he thought otherwise.

13.4 There is an important difference between the Respondent's state of mind at the time of registration (definition (i) of unfair registration) and unrelated acts by the Respondent after registration (definition (ii)). As confusion over the difference pervades the grounds of appeal, we will outline the principles before turning to the facts of the present case.

13.5 Pursuant to para 3 of the Policy, unfair registration occurs if the domain name "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" (emphasis added).

13.6 Acquisition is not suggested in the present case. It follows that for this form of unfair registration the Appellant must show unfair advantage or unfair detriment at the time that the Respondent registered the Domain Name.

13.7 Of the possible forms of unfair advantage or unfair detriment, the Appellant relies on para 5.1.1 for its overall case that this was an unfair registration. Under para 5.1.1 the question is whether the Respondent's ultimate objective was to persuade the Appellant, or a competitor of the Appellant, to purchase domain name rights from the Respondent (para 5.1.1(a)) and/or to prevent the Appellant from registering the same domain name in its own right (para 5.1.1(b)) and/or in the meantime to use the domain name with incidental and consequential disruption to the Appellant's business as an incentive to the Appellant - or a competitor - to make the purchase (para 5.1.1(c)).6 In short it is all about purpose.

13.8 Where a complainant relies upon para 5.1.1 in order to show Initial UR, the sole focus is purpose at the time of registration. It is necessary to emphasise that point because events after registration could be relevant to "Initial UR" only if they retrospectively indicate what the Respondent's purpose must have been at the time of registration.

The effect of delay

13.9 Any connection between purpose at time of registration and subsequent conduct necessarily recedes over time. It is difficult to imagine any circumstances in which a Respondent's actions taken many years after registration could be taken to shed light on the purpose for which the name had been registered in the first place.

13.10 That caution is reinforced by para 5.4 of the Policy which provides that "the Expert shall not take into account any evidence of acts or omissions amounting to unfair registration or use which occurred more than three (3) years before the date of the Complaint". It follows from para 5.4 that in cases where a lengthy period has elapsed between registration and complaint, an Expert will be unable to consider the respondent's conduct, or inactivity, in the period immediately following registration. As that is likely to be the critical period, it is highly unlikely that in such cases the Expert will be able to draw any useful conclusions based on conduct or inactivity following registration.

13.11 The Appellant cited two decisions, DRS 10617 and DRS 1110,8 where the Expert referred to inactivity after registration as one of the considerations justifying an adverse inference as to the Respondent's purpose at the time of registration. It is important to note, however, that in both those cases there were other factors justifying an adverse inference and the relevant complaint was lodged within a relatively short period after registration of the domain name (4 months and 15 months respectively).

Evidence of purpose

13.12 A respondent's purpose at the time of registration is a question of fact. As there can never be direct proof of a respondent's state of mind at the time of registration, the question is whether the circumstances justify an adverse inference.9 Inferences must be drawn from directly proven facts and not mere speculation or guesswork.

Well-known mark plus inactivity

13.13 Ground 11 of the grounds of appeal is that "Ordinarily, registration primarily for unfair gain is a reasonable inference from the well known nature of a mark and the lack of any active use of the Domain Name".

13.14 We do not consider that that proposition can be elevated to a general principle.

13.15 We agree that where a complainant's rights in a name were already well-known at the date of registration of the domain name, that consideration is likely to form part of the larger exercise of arriving at the respondent's purpose in registering the domain name. But that is only one of many relevant considerations.

13.16 We also agree that lack of active use of the domain name since its registration is capable of strengthening other evidence showing unfair registration. But lack of active use could never, without more, justify an adverse inference as to the purpose that preceded it.

13.17 Ultimately, the respondent's purpose at the time of registration is a question of fact. Like all questions of fact, it must be decided according to the evidence presented in the particular case. The way in which questions of fact have been answered in one case is unlikely to be of much use in deciding another. Factual issues are case specific.

Summary of "Initial UR" principles

13.18 The principles applicable to a case like the present one can therefore be summarised as follows:

(a) Where reliance is placed on para 5.1.1 to establish unfair registration, the focus lies solely on the respondent's purpose at the time of registering the domain name.
(b) For that kind of unfair registration, events after registration could be relevant only if they retrospectively indicate what the respondent's purpose is likely to have been at the time of registration.
(c) Because the possibility of a connection between original purpose and subsequent conduct recedes over time, a respondent's actions many years after registration are unlikely to shed light on the purpose for which the domain name had been originally registered.
(d) The last point is reinforced by para 5.4 of the Policy which precludes an expert from taking into account evidence of acts or omissions amounting to unfair registration or use which occurred more than three years before the date of the complaint.
(e) There is no principle that an adverse inference will normally be drawn as to the respondent's purpose if the complainant's mark was well known at the time of registration and the respondent has not used the domain name since. These are simply two out of an infinite number of potentially relevant considerations.
(f) Lack of active use of a domain name could never, without more, justify an adverse inference as to the purpose for which it had been registered.
(g) Whether a respondent had one of the purposes referred to in para 5.1.1 is ultimately a question of fact which must be decided according to the evidence presented in the particular case.

Application of "Initial UR" principles to this case

13.19 Those principles must now be applied to the facts in the present case. The Domain Name was registered in May 1998. The controlling mind of the Respondent at the time appears to have been Mr Klos. In terms of para 5.1.1 of the Policy the critical question is whether his purpose in registering the Domain Name in May 1998 was to sell, rent or transfer the Domain Name, to use it as a blocking registration, or to unfairly disrupt the business of the Appellant. The Expert concluded that it was not. The Appellant advanced a number of grounds for challenging that decision.

Ground 11 of Appeal

13.20 Ground 11 of the grounds of appeal is that "Ordinarily, registration primarily for unfair gain is a reasonable inference from the well known nature of a mark and the lack of any active use of the Domain Name". Implicit in this ground is the contention that the relevant mark ("yellow") was well-known as the mark of the Appellant's predecessor Telecom when the Respondent registered the Domain Name in May 1998.

13.21 Even assuming for the moment that the unqualified word "yellow" had been capable of supporting a common law trade mark (about which we share the reservations expressed by the Expert) we have been unable to find any evidence that the Appellant or its predecessors had established such a reputation by May 1998. "Yellow Pages" and its derivatives cannot be equated to the unqualified word "yellow".

13.22 It is true that between 1986 and 1998 the Postmaster-General and Telecom companies registered "Yellow Pages" and "White Pages" as trade marks and "yellow.co.nz", "yellowpages.co.nz" and "whitepages.co.nz" as domain names. But there is no evidence that the unqualified word "yellow" was actually used by any of those companies in trade until much later.

13.23 Many domain names are registered for blocking purposes or to safeguard the domain name for possible future use. That cannot be equated to use of a name in trade in a way that establishes an associated reputation. There is no evidence before us that the domain name "yellow.co.nz", in particular, was used during the relevant period. Significantly, the injunctions sought and granted in 1999 did not attempt to restrain Mr Klos or his companies from using the unqualified word "yellow".

13.24 It was not until 2010, that the Appellant registered the unqualified word "yellow" as a trade mark.10 There is no evidence before us to suggest that prior to that date the Appellant or its predecessors had used the unadorned or unqualified word "yellow", in trade.

13.25 The first ingredient of Ground 11, namely that that the mark "yellow" was well-known as that of the Appellant's predecessor by the time the Respondent registered the Domain Name, therefore fails on the facts.

13.26 As to the other ingredient of Ground 11, the Appellant relies on the Respondent's non-use of the Domain Name once registered. As discussed earlier, in principle lack of active use is capable of strengthening other evidence that might show unfair registration. But lack of active use could never, without more, justify an adverse inference as to the purpose that had preceded it. There is the added difficulty in this case that pursuant to para 5.4 of the Policy we are precluded from considering lack of activity for the first 14 years after registration of the Domain Name. This ground of appeal fails.

Ground 12 of Appeal

13.27 In Ground 12 of the grounds of appeal, the Appellant points to a series of particular circumstances which were said to support an adverse inference as to the Respondent's state of mind at the time of registration.

13.28 The first example of such a circumstance was said to be the Respondent's statement in 2015 that he "knew of the Appellant and the well known nature of its names and marks" (Ground 12.1(a)). That statement says nothing useful as to the state of the Appellant's knowledge 17 years earlier. Events after registration are irrelevant unless they have some demonstrable connection with the Respondent's original state of mind. This ground fails.

13.29 The second example given was "The previous dispute prior to the registration of the Domain Name regarding the same or similar marks" (Ground 12.1(b)). This ground is unsupported by evidence and is almost certainly factually incorrect. The Domain Name was registered in May 1998. Telecom did not become aware of Yellow Web Ltd's competing website until September 1998. Even then the competing website was not based on the Domain Name now in dispute. Proceedings were not commenced until 1999. This ground fails.

13.30 The third example given by the Appellant was that in 2015 the Respondent "demanded a very large sum of money for the transfer of the Domain Name" (Ground 12.1(c)). Again this says nothing useful as to the Respondent's purpose in registering the Domain Name 17 years earlier. The claim for recovery of legal costs, stated by the Respondent to form the basis of the demand for the "very large sum of money", relates to costs incurred from September 1998 once proceedings had been commenced. This was after the registration of the Domain Name in May 1998 and so cannot have been in the Respondent's mind as a purpose in May 1998. This ground fails.

13.31 The next example given was that "The Respondent expressed no intention to use the Domain Name" (Ground 12.2). This appears to be a variant of the inactivity point advanced as Ground 11. There is no obligation or expectation that a Respondent will express an intention to use a Domain Name, either at the time of registration or subsequently. This ground fails.

13.32 The next example given was "The Respondent's application for registration during the "PRE" period, for the yellow.nz domain name" (Ground 12.3). This has no logical connection with the Respondent's purpose in registering the Domain Name 17 years earlier. As the Respondent had registered the Domain Name in May 1998, it does not strike the Panel as unexpected that the Respondent would later apply to register the yellow.nz domain name during the "PRE" period. This ground fails.

13.33 The final example given was "The fact that use of the Domain Name by the Respondent for goods or services appropriate to a .net domain name would breach the terms of the permanent High Court injunction imposed upon the Respondent" (Ground 12.4). The permanent injunction appears to be confined to use of the phrase YELLOW PAGES, the phrase YELLOW WEB PAGES and the colour (not the word) yellow. It also appears to be confined to use of one of those marks in relation to business directories. On the face of it the injunction does not extend to various uses to which the Respondent (which incidentally was not a party to those proceedings) might legitimately put the Domain Name. In any event the Appellant has not explained how an injunction not granted until 1999 could have any bearing on the Respondent's state of mind in May 1998. This ground fails as well.

13.34 Weighing up those considerations we agree with the Expert that unfair registration based on "Initial UR" has not been established. None of the grounds of appeal advanced in support of this aspect of the appeal can be sustained.

14. "Use UR" principles

14.1 Most of the acts and omissions relied upon by the Appellant did not occur until after registration of the Domain Name. Although the Appellant did not purport to rely on the second form of unfair registration (referred to here as "Use UR") it is proper for us to go on to consider whether that form of unfair registration might be available to the Appellant instead.

14.2 We have used the abbreviated expression "Use UR" to refer to a Domain Name which "has been, or is likely to be, used in a manner which took unfair advantage of or was unfairly detrimental to the Appellant's Rights" (definition (ii); para 3 of the Policy).

14.3 Although the Policy does not expressly define the word "use" for this purpose, the context suggests that it contemplates the active use of a domain name as a name, identifier or internet address. Examples of "use" in that sense are found in paras 5.1.2 ("using the Domain Name in a way which is likely to confuse, mislead or deceive") and 5.2 ("Failure on the Respondent's part to use the Domain Name for the purposes of e-mail or a web-site"). That meaning would also be consistent with the requirement that the use take unfair advantage of, or be unfairly detrimental to, the complainant's rights (para 3 definition (ii))). These provisions appear to contemplate "use" of the domain name in a way that places it in active competition with the complainant's intellectual property.

14.4 It follows that to offer a domain name for sale is not to "use" the domain name in the sense required by definition (ii) of para 3. Registration of a domain name provides the registrant with the right to use the domain name. The right to use the domain name can itself be the subject of negotiation or sale. But participating in the negotiation or sale of a domain name is not "using" the domain name in the sense contemplated by definition (ii) of para 3. That principle will be important when it comes to the present case.

14.5 The other principle that will be relevant to this case arises from the fact that "Use UR" includes a situation in which unfair use is merely "likely" (para 3 definition (ii)). The important point to note there is that the onus is on a complainant to put forward enough evidence to show likelihood of unfair use. Mere speculation could never be sufficient.

Application of "Use UR" principles to this case

14.6 In the present case the Respondent has not used the Domain Name since registration. It is not suggested that the Domain Name has been actively used as a name, identifier or internet address. Nor has it been suggested that it has been used in a way that placed it in active competition with the Appellant's intellectual property.

14.7 The Appellant relied on 2015 correspondence in which the Respondent sought an unreasonably high price for the Domain Name. For reasons discussed earlier, this could not amount to unfair "use" of the Domain Name in the sense required by definition (ii) of para 3.

14.8 The Appellant has not pointed to any evidence to support the argument that it is likely that the Respondent will make unfair use of the Domain Name in the future. The Respondent has not used the Domain Name over the past 17 years. Nothing has been put forward to suggest that that is about to change.

14.9 The appeal cannot be sustained on the basis that there was, or is likely to be, "Use UR".

15. Other matters

15.1 The Appellant seeks a refund of its filing fee on the appeal. Even assuming that there were jurisdiction to make such an order, no grounds have been advanced for it on the merits.

16. Decision

16.1 The appeal is dismissed. No action will be taken in response to the Complaint.

Place of decision: Auckland
Date:
Expert Name: Robert Fisher QC
Signature:
Expert Name: Terence Stapleton QC
Signature:
Expert Name: Maria Dew
Signature:

1. Appellant's annexures to Complaint, email 10 June 2015 from Michael Travis, Yellow to Henk Klos.

2.Telecom Corporation of New Zealand Ltd v Yellow Web Ltd HC Auckland M316-SW99, 14 April 1999 per Potter J.

3. Expert decision DRS 1116, para 6.6.

4. Expert decision DRS 1116, para 6.8.

5. 10 June 2015 is the date of Mr Travis's email. Mr Klos's reply was sent on 12 June 2015.

6.Warehouse Stationery Ltd v Domforce Ltd, DRS Decision 1110, 28 August 2015 at 7.10-7.11.

7.The Coca-Cola Company v Chefs With an Edge Australia Pty Ltd, DRS Decision 1061, 19 March 2015 at 6.9.

8.Warehouse Stationery at 7.10-7.11.

9.Warehouse Stationery at 7.10-7.11.

10. Trade mark 806071 was registered on 8 July 2010 - see pages 167-169 of the 208 pages of IPONZ searches of 59 separate trade marks filed as part of the Complaint.