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Toth v Emirates

12 April 2012

The High Court has struck out an application for a declaration that a domain name was not an abusive registration, and found that the question of whether or not a registration is abusive is one for the expert only.

Background

Michael Toth is the registrant of a portfolio of domain names, including geographic domains such as China.co.uk, Maldives.co.uk, Canada.co.uk and UnitedKingdom.co.uk. He was also the registrant of the domains emirates.eu and emirates.co.uk. The airline Emirates objected to stop Toths registration of these domains.

In 2009 it succeeded in getting the .eu domain revoked (http://eu.adr.eu/adr/decisions/decision.php?dispute_id=5405), and the following year it brought a complaint under Nominets DRS in respect of the co.uk domain. Initially, Nominets expert held that the emirates.co.uk was not abusive, but in early 2011 the appeal panel overturned this decision and held that the domain should be transferred to Emirates (D00008634).

Court Proceedings

Following the appeal panels decision, Toth applied to the Patents County Court for declarations that the domain was not abusive, that the decision had been improperly reached because of a conflict, that groundless threats of trade mark infringement had been made and that owning and using the domain did not amount to passing off or trade mark infringement. Under CPR 40.20, the court can make binding declarations whether or not any other remedy is claimed. Toth also sought an injunction restraining Emirates from interfering with the Claimants registration for the domain.

The most important of the declarations sought was that "the Domain Name is not an abusive registration in the hands of the Claimant within the meaning of the Nominet Policy properly construed".

Emirates applied to strike out the whole case.

Clause 17(c) of Nominets Dispute Resolution Service (DRS) procedure states that implementation of an experts decision would be stayed if within 10 days of the date of the decision a party could show that it had issued and served "legal proceedings against the other Party in respect of the Domain Name", and clause 10 (d) of the DRS policy states that "The operation of the DRS will not prevent either the Complainant or the Respondent from submitting the dispute to a court of competent jurisdiction".

So although the courts could not technically overturn the appeal panels findings, Toth argued that if the declaration he was seeking were to be granted, the stay provided by clause 17(c) would become perpetual, which would have the same effect as if the appeal panels findings had been overturned.

At first instance in the Patents Country Court, Judge Birss QC held that clause 17(c) is "specifically is intended to, and does, allow for a de novo review of the decision as to who owns a domain name in the court". Accordingly, the judge refused to strike out the application for this declaration.

High Court decision

Emirates appealed to the High Court, and at this appeal Nominet joined the case as an Intervener.

Mann J looked at the overall mechanism of the DRS, and held that there was no provision within it for a party to ask for an experts decision to be reviewed at court. The judge found that any references to parties being able to apply to court only referred to a partys right to bring an established form of action such as a claim for passing off or trade mark infringement. Unlike HHJ Birss, Mann J held that a 1999 WIPO report on the Internet Domain Name Process which recommended that parties should be able to apply to court for a de novo review of their case did not aid the court in construing the Nominet contract. Accordingly, the question of whether or not a registration is abusive is one for the expert alone.

The presence of Nominet as an intervener probably helped the judge to come to this view, but it is certainly supported by the whole rationale behind the policy; as the court said, allowing parties to apply to court for declarations would be inimical to the intention of a cheap quick and efficient resolution mechanism.

The creative nature of the application did not impress the judge - he thought that having the court act indirectly to indefinitely stay the appeal boards decision would be very odd.

As the contract with Nominet did not leave it open for the court to grant a declaration, Mann J held that any declaration which the court could grant would be pointless as it would have no effect. Accordingly, the court should decline to grant a declaration, either as a matter of discretion or as a matter of jurisdiction.

Conclusion

The court has given a clear indication that it will not act to hear de novo a case about whether or not a domain was an abusive registration or not, and this is good news for everyone that uses Nominets DRS. The DRS can still be used by rightsholders to complain about abusive registrations in a timely and cost efficient way. Domain name registrants should also welcome being able to defend their registrations without the potential cost and hassle of court proceedings.

However, the dispute between the parties is not necessarily over; Toths cross-appeal against HHJ Birss decision to strike out the application for a declaration that the appeal boards decision was improperly reached was not considered by Mann J in this judgment, and the other applications were stayed by HHJ Birss.

There remain other limited circumstances in which a court could consider a Nominet decision; for example, a breach of contract claim could be brought in some circumstances against Nominet (although their contract purports to exclude liability unless there has been bad faith), or a decision could be subject to a Nikko Hotels review if the expert hadnt performed the task assigned to him. Judicial review may also be a possibility, particularly if the government exercises its new powers under the Digital Economy Act.

But any such remedies are only likely to be available in exceptional circumstances. This decision makes it clear that Nominet decisions cannot be appealed by the back door to the courts, and emphasises to rightsholders and registrants the importance of getting a DRS action right in the first place.

This article was first published in the ITMA Review

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