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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Toth v Emirates & Anor [2012] EWHC 517 (Ch) (07 March 2012) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2012/517.html Cite as: [2013] Bus LR D13, [2012] EWHC 517 (Ch) |
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CHANCERY DIVISION
ON APPEAL FROM THE PATENTS COUNTY COURT
Rolls Building, Fetter Lane, London, EC4A 1NL |
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B e f o r e :
____________________
Michael Toth |
Claimant/ Respondent |
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- and - |
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Emirates - and - Nominet |
Defendant/ Applicant Intervener |
____________________
Jonathan Turner (instructed by Hansel Hensen) for the Respondent
Philip Roberts (instructed by CMS Cameron McKenna LLP) for the Intervener
Hearing dates: 14th & 15th February 2012
____________________
Crown Copyright ©
Mr Justice Mann :
Introduction
(a) a declaration that Emirates has made groundless threats of proceedings for trade mark infringement;
(b) a declaration that Mr Toth's use of his domain name does not infringe certain trade marks;
(c) a declaration that "the Domain Name is not an abusive registration in the hands of the Claimant within the meaning of the Nominet Policy properly construed; and"
(d) a declaration that the appeal panel decision was not properly reached because of certain questions of bias.
He also claims certain associated injunctions.
The relevant rules
"This contract includes the DRS policy, the DRS procedure and the rules. You can get copies of these from our website or from us. Other policies we refer to do not form part of this contract and may change at any time."
The reference to "DRS policy" and "DRS procedure" are references to two documents which lie at the heart of this appeal, some of whose terms appear hereafter. Other provisions of the main contract are as follows:
"4. You have various responsibilities set out generally in this contract. You must also:…
4.2. Notify us at once about any court proceedings which involve the domain name…
7. By entering into this contract you promise that:…
7.4. by registering or using the domain name in any way, you will not infringe the intellectual property rights (for example, trade marks) of anyone else…
The dispute resolution service
14. You agree to be bound by:
14.1. the DRS Policy and DRS Procedure; and
14.2. if there is a dispute, the version of the DRS Policy and DRS Procedure (available on our website) which applies at the time that proceedings under the dispute resolution start, until the dispute is over.
…
17. We may (but do not have to) transfer, cancel, alter or amend the domain name, put it in a special status or prevent its renewal:…
17.5. to carry out the decision an expert has made under our dispute resolution service; or
17.6. if we receive a complete and valid court order which we or you (or both) must obey, or if not making the changes the court orders would be a contempt of court by us or you.
…
37. This contract is a legally binding document…These conditions together with the rules, DRS Policy and DRS Procedure, are the entire contract between you and us for the domain name, and replace all previous contracts, understandings and representations about this domain name, whether written or spoken."
"Abusive 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 used in a manner which has taken unfair advantage of or has been unfairly detrimental to the Complainant's Rights;
Complainant means a third party who asserts to us the elements set out in paragraph 2 of this Policy and according to the Procedure…
Decision means the decision reached by an Expert and where applicable includes the summary decision and decision of an appeal panel;…
Expert means the expert we appoint under paragraph 8 of the Procedure…
Rights means rights enforceable by the Complainant, whether under English law or otherwise, and may include rights in descriptive terms which have acquired a secondary meaning."
"2a. A Respondent must submit to proceedings under the DRS if a Complainant asserts to us, according to the Procedure, that:
i. The Complainant has Rights in respect of a name or mark which is identical or similar to the Domain Name; and
ii. The Domain Name in the hands of the Respondent, is an Abusive Registration.
b. The Complainant is required to prove to the Expert that both elements are present on the balance of probabilities…"
"7a. If the Respondent has submitted a response…we will notify the Parties that we will appoint an Expert when the Complainant has paid the applicable fees…The Expert will come to a written Decision."
"10a. Either Party will have the right to appeal a Decision under paragraph 18 of the Procedure. The appeal panel will consider appeals on the basis of a full review of the matter and may review procedural matters.
…
d. The operation of the DRS will not prevent either the Complainant or the Respondent from submitting the dispute to a court of competent jurisdiction.
e. If a complaint has reached the Decision stage on a previous occasion it will not be reconsidered (but it may be appealed, see paragraph 10(a) and the Procedure paragraph 18) by an Expert. If the Expert finds that the complaint is a re-submission of an earlier complaint he or she shall reject the complaint without examining it.
…
g. A non-exhaustive list of examples which may be exceptional enough to justify a re-hearing under paragraph 10(f)(iii) include:
i. serious misconduct on the part of the Expert, a Party, witness or lawyer;
ii. false evidence having been offered to the Expert;
iii. the discovery of credible and material evidence which could not have been reasonably foreseen or known for the Complainant to have included it in the evidence in support of the earlier complaint;
iv. a breach of natural justice; and
v. the avoidance of an unconscionable result."
"11. Implementation of expert decisions.
a. If the Expert makes a Decision that a Domain Name registration should be cancelled, suspended, transferred or otherwise amended, we will implement that Decision by making any necessary changes to our domain name register database according to the process set out in paragraph 17 of the Procedure. We will use the details set out in the complaint form unless you specify other details to us in good time.
12. Other action by us.
a. We will not cancel, transfer, activate, de-activate or otherwise change any Domain Name registration except as set out in paragraph 11 above and as provided under paragraph 6.3 or 16 to 19 of our standard terms and conditions of domain name registration."
"b. The Respondent will be bound by the Policy and Procedure which are current at the time the DRS is commenced until the dispute is concluded."
"3. The Complaint.
a. Any person or entity may submit a complaint to us in accordance with the Policy and this Procedure. In exceptional circumstances, we may have to suspend our ability to accept complaints. If so we will post a message to that effect on our website which will indicate when the suspension is likely to be lifted…
c. The Complainant must send the complaint to us using the online electronic forms on our website…The complaint shall:
…
viii. State that the Complainant will submit to the exclusive jurisdiction of the English courts with respect to any legal proceedings seeking to reverse the effect of a Decision requiring the suspension, cancellation, transfer or other amendment to a domain name registration, and that the Complainant agrees that any such legal proceedings will be governed by English law;
ix. Conclude with the following statement followed by the signature of the Complainant or its authorised representative:
'The Complainant agrees that its claims and remedies concerning the registration of the Domain Name, the dispute, or the dispute's resolution shall be solely against the Respondent…"
"16. Expert decision
a. The Expert will decide a complaint on the basis of the Parties' submissions, the Policy and this Procedure. The Expert may (but will have no obligation to) look at any websites referred to in the Parties' submissions…
b. Unless exceptional circumstances apply, an expert shall forward his or her Decision to us within fifteen (15) Days of his or her appointment pursuant to paragraph 8. This period includes a period for any peer review of the draft Decision.
c. The Decision shall be in writing and signed, provide the reasons on which it is based, indicate the date on which it was made and identify the name of the Expert…
d. If the Expert concludes that the dispute is not within the scope of paragraph 2 of the Policy, he or she shall state that this is the case. If, after considering the submissions, the Expert finds that the complaint was brought in bad faith, for example in an attempt at Reverse Domain Name Hijacking, the Expert shall state this finding in the Decision. If the Complainant is found on three separate occasions within a two-year period to have brought a complaint in bad faith, Nominet will not accept any further complaints from that Complainant for a period of two years."
"17. Communication of decision to parties and implementation of Decision.
…
c. If the Expert makes a Decision that a Domain Name registration should be cancelled, suspended, transferred or otherwise amended, we will implement that Decision by making any necessary changes to our domain name register database after ten (10) Days of the date that the Parties were notified unless during the ten (10) Days following the date that the Parties were notified we receive from either party:
i. an appeal or statement of intention to appeal complying with paragraph 18, in which case we will take no further action in respect of the Domain Name until the appeal is concluded; or
ii. official documentation showing that the Party has issued and served (or in the case of service outside England and Wales, commenced the process of serving) legal proceedings against the other Party in respect of the Domain Name. In this case we will take no further action in respect of the Domain Name unless we receive:
A. evidence which satisfied us that the Parties have reached a settlement; or
B. evidence which satisfies us that such proceedings have been dismissed, withdrawn or are otherwise unsuccessful."
"20. Effect of court proceedings.
a. If legal proceedings relating to a Domain Name are issued in a court of competent jurisdiction or during the course of proceedings under the DRS and are brought to our attention, we will suspend the proceedings pending the outcome of the legal proceedings.
b. A Party must promptly notify us if it initiates legal proceedings in a court of competent jurisdiction in relating [sic] to a Domain Name during the course of proceedings under the DRS."
The Parties' contentions and the decision below
"It is, in my judgment, intended to allow a registrant, who is about to lose their domain name because a complainant has won under the administrative procedure run by Nominet, to come to court for relief, which relief is contemplated to be something which will have the result of stopping the transfer from taking place or saying that it should not take place. In my judgment, the contract neither purports to preclude or limit the court's jurisdiction in any way.
47. There is no term to which I have had my attention drawn which provides in express terms that the determination by the expert or the appeal determination is final or conclusive. In my judgement, clause 17 indicates quite the opposite."
The arguments on this appeal in outline
The nature of the underlying application
The contractual relationships
The factual matrix in this case
"140. It is recommended that any dispute-resolution system, which is an alternative to litigation and to which domain name applicants are required to submit, should not deny the parties to the dispute access to court litigation."
It went on to recommend (para. 150(iv)):
"As indicated above, the availability of the administrative procedure should not preclude resort to court litigation by a party. In particular, a party should be free to initiate litigation by filing a claim in a competent national court instead of initiating the administrative procedure, if this is the preferred course of action, and should be able to seek a de novo review of a dispute that has been the subject of the administrative procedure."
"42 … [it] must have been one of the things which the people setting the Nominet system would have had in mind. In my judgment it does provide some assistance in understanding Nominet's policy."
As will appear below, I do not think that most of the documents actually contain what Mr Turner seeks to get out of them, but in any event I do not think that any of them provide part of the relevant factual matrix. As submitted by Miss Himsworth and Mr Roberts, the contracts in this case were in the nature of a contract which would have a number of adherents from time to time and in relation to which the concept of the background matrix of fact is not going to be of much assistance. In Sigma Finance Corp [2010] 1 All ER 571 the Supreme Court was called on to consider the construction of a trust deed which would bind various newcomers from time to time. At page 589g-j Lord Collins SCJ considered this situation:
"37. Consequently, this is not the type of case where the background or matrix of fact is or ought to be relevant, except in the most generalised way. I do not consider, therefore, that there is much assistance to be derived from the principles of interpretation re-stated by Lord Hoffman in the familiar passage in Investors Compensation Scheme Ltd v West Bromwich Building Society …. Where a security document secures a number of creditors who have advanced funds over a long period it would be quite wrong to take account of circumstances which are not known to all of them. In this type of case it is the wording of the instrument which is paramount. The instrument must be interpreted as a whole in the light of the commercial intention which may be inferred from the face of the instrument and from the nature of the debtor's business. Detailed semantic analysis must give way to business common sense."
"The principles [of interpretation] may be summarised as follows:
1. Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.
2. The background was famously referred to by Lord Wilberforce as the "matrix of fact", but this phrase is, if anything, an understated description of what the background may include. Subject to the requirement that it should have been readily available to the parties and to the exception mentioned next, it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man."
(ICS v West Bromwich at 912H-913A)
"It is the meaning which the instrument would convey to a reasonable person having all the background knowledge which would reasonably be available to the audience to whom the instrument is addressed …"
(A-G of Belize v Belize Telecomm [2009] 1 WLR at 1993B)
"It is agreed that the question is what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean."
(Chartbrook v Persimmon Homes Ltd [2009] 1AC 1101 at 1112B)
"Consideration of what material was "reasonably available to the parties" may be of assistance in drawing inferences as to what their actual knowledge was but it would be a large step, which is in my view unwarranted upon the present state of the authorities, to impute to the parties knowledge which they did not in fact have. As Optus Vision pointed out, in the age of the internet, the range of material that is "reasonably available" is virtually limitless."
He went on to confine the relevant knowledge to that which was actually known, or that which was "notorious" in the market, and disclaimed the notion that constructive knowledge (which would be encapsulated by a broad meaning of the reference to reasonableness on the authorities) had any part to play in the inquiry:
"Such an inquiry is different in principle from one about what facts the parties could, or should, have ascertained by making inquiries. The concept of constructive or imputed notice is in my view an alien one in the present context because introduction of that concept here would import the notion that contractual parties have an obligation to obtain knowledge of facts relevant to the construction of their contract. There is no obvious reason why they should have any such obligation and it is unclear what the standard required of the parties would be." (para 100).
The operation of the DRS and the availability of parallel court proceedings
(i) The overall mechanism is much more consistent with the conclusion that the question is one for the expert alone. The whole concept of abusive registration has no significance until a complainant complains, and when he does a clear mechanism is provided for dealing with it. No independent cause of action based on "abusive registration" existed before then or is created at that moment. What is created is a question for the expert to decide. That leaves no room for parallel (or consecutive) court proceedings on the point
(ii) Looking at the scheme as a whole, it was apparently intended to create a self-contained dispute resolution mechanism which is closely regulated, cheap, quick and (apparently) efficient. To add a parallel route of applying to court (which I fear would not always attract all those adjectives) would be inimical to the apparent intention of the parties.
(iii) The contrary conclusion produces the lopsided result referred to above.
(iv) The only provision which can be said to point the other way is paragraph 10d. The other provisions of the documents that refer to proceedings are capable of referring to proceedings which relate to the name in other ways - proceedings under the general law such as passing off and trademark cases. In the overall context I do not think that the wording of paragraph 10d is sufficient to displace the strong impression otherwise created by the documents, and despite the fact that it does refer to the "dispute" I think that that should be treated as a reference to those other forms of permitted proceedings. Because they are capable of determining the underlying "Rights" they are capable of impacting on an Expert Decision in that way. That is part of the explanation of the Policy paragraph 3c(viii), which is also explicable as providing for jurisdiction to hear conventionally based challenges to an expert's decision.
The factual matrix revisited
Direction and the declaration sought
"48. Clause 17(c) is not intending to and does not create new causes of action. For example, a disappointed complainant might bring an infringement case and disappointed applicant or registrant might, if they can, bring a threats action. These provision in this contract are not intended, as I say, to create new legal rights for the parties. It also means, in my judgment, that this contract does not purport to oust the court's general jurisdiction in relation to declarations, which is governed by CPR part 40 and in particular 40.20. Accordingly, the court has jurisdiction to grant a declaration, in this case, because that is something which rule 40.20 expressly permits the court to do."
"19 I further think the 'no claim of right point" is commercially unrealistic. Nokia have a manifest and real commercial interest in a decision of the kind sought. They are "technically infringing" if they are wrong."
Conclusion