Domain dispute puts question mark over UK ecommerce

A dispute over ownership of "game.co.uk" could have significant and far-reaching effects on e-commerce in Britain.

The domain, which comes under the control of private company Nominet, was awarded to Game plc in January following a complaint that the owner, Garth Sumpter, was misusing it. Mr Sumpter, a consultant for the games industry, has owned the domain since October 1995 and immediately appealed the decision.

That appeal will soon be heard by three Nominet-chosen experts in a case that raises important questions over UK domain name rights and the basis on which companies can trade online.

The battle for Game.co.uk is unusual and highly significant for two reasons. Firstly, it concerns a generic and common word in the English dictionary - "game". And secondly, Mr Sumpter was using the domain to run a video-game-selling business.

Nominet, as controller of the .uk registry, has created over 3.8 million .uk domains and yet only heard 2,104 domain disputes since its Dispute Resolution Service was launched in September 2001 - an extremely small number in comparison to other top-level domains such as .com or .org. Of these, only six have ever gone to appeal. Nominet is justifiably pleased with this record, even boasting of the service in a recent letter to Internet overseeing organisation ICANN.

These are five main reasons for the service's success:

1. Nominet insists on a mediation session with the parties in dispute before it will allow it to go further.
2. It asks for a significant investment - £750 - from the Complainant if the mediation fails or couldn't happen and the Complainant wants to take it further.
3. Its domain ownership rules are grounded in fairness and have been twice reviewed following feedback from the Internet community as the Net has continued to evolve.
4. Its decisions have been for the most part consistent and well-argued.
5. Experts are handed cases in a pre-decided order

The result of this approach has been to stack the odds against both abusive registrants and acquisitive companies. The system also tends to favour existing owners of domains by making it the job of complainants to prove their case.

In many other domains around the world - where cases are decided by ICANN's UDRP rules - the situation is flipped and complainants traditionally have the upper-hand, with the existing owner forced to argue why they should retain the domain. Big questions have also been raised over the opaque arbitrator selection process. The result has been a huge number of cases, with resulting financial benefits for the four companies allowed to arbitrate in such disputes.

Kicked in the fundamentals

However, both Nominet's DRS system and the ICANN UDRP approach have tended to recognise that no one has greater rights over generic names, names with a common meaning, than anyone else, so the owner is entitled to keep the domain. Equally, few cases have seen company pitched against company since they tend to see the sense in steering clear of each others' trademarks.

That the Game.co.uk decision saw both of these rules-of-thumb dismissed, and under the Nominet system, is highly unusual. Even though Nominet stresses all cases are decided on their individual merits, if the decision is upheld in appeal, it will also have a lasting precedent thanks to the very few appeal decisions in Nominet's DRS system.

Mr Sumpter, the original and at the moment still current owner of Game.co.uk, confessed to us that he didn't think for a second that the original decision would go against him. Now he sees it as a case of big company against small company. Game plc had a £171m turnover in 2002 and has nearly 350 shops across the UK. Mr Sumpter on the other hand has his consultancy and Game.co.uk, which he says makes £60,000 to £70,000 pre-tax profit a year. If a big company can shut down an existing online business - and competitor - through financial might, and over a generic name such as "game", it could have dire knock-on effects for the hundreds of thousands of small online businesses running from .uk domains.

Game plc sees things differently. Its finance director David Thomas told us that the company feels Mr Sumpter had infringed on its rights by starting to sell video games on his site, which was and has been mistaken for Game plc. Mr Sumpter is benefiting from Game plc's good name, it claims. "We have rights under Nominet's procedure and we have exercised those rights. Mr Sumpter has a right of appeal which will be on the points of law," Thomas explained. "We're confident Nominet will uphold its original decision." Mr Sumpter is, of course, confident that the decision will go his way.

And so the spotlight comes down on the original decision made by Scottish solicitor Andrew Lothian, a specialist in domain name law, on 18 January.

Decisions, decisions

Lothian produced a lengthy 17-page explanation of his reasoning in the case in which due consideration was given to nearly all points raised by both parties. However it does contain some unusual assumptions and several apparently contradictory statements.