Background

A pressure selling scheme was developed by traders in Carmarthenshire whereby they would ring up companies and tell them that a third party (who they would usually decline to name, incorrectly citing the Data Protection Act) wanted to register a number of domain names similar to the name of the company called. The caller would suggest that they were from the disputes, conflict resolution or legal department of some quasi-official sounding organisation and say that, as a matter of courtesty, they were contacting this organisation at this stage to allow them to buy the domain names now and protect themselves. The deal was that the names had to be purchased in a short time period (typically within an hour or so) and were sold at a rate of £100 for 2 years or £200 for 10 years (even .uk domains, which are only available for 2 years).

One of the first companies to operate this scheme was Graphite Marketing Ltd, which went out of business after interest from the local trading standards team. The successor company was Domain Registrar Services Ltd, run by a Mr Scott Denny. This company used the then Nominet logo on its letterhead, and so we took action against it, ostensibly for trade mark infringement. This pressure, and a raid from Trading Standards, with whom we were in close contact, led Domain Registrar Services to move to Swansea, and then close down to be replaced by UK Names Ltd, operated by Mr Matthew Hayes. All were defendents in our case, and in the end consented to a High Court order (below) in which they agreed to get out of the industry for good.

What happened then

In fact Mr Hayes moved on to run a scheme related to telephone opt-outs and was later subject to repeated action from Pembrokeshire Trading Standards.

The domain name calling scheme continued, with a number of companies taking over the sales technique. Extensive action by Swansea Trading Standards had some effect and this information was later used in criminal prosecutions. The scheme has now spead to other countries. We have taken further action where our trade marks have been abused, and have provided information to various trading standards departments who are dealing with this issue.

 

The consent order

IN THE HIGH COURT OF JUSTICE             CLAIM No. HC 02C03457

CHANCERY DIVISION

[Sealed by the Supreme Court of Judicature on 11 August 2003]

B E T W E E N:
NOMINET UK
Claimant
-and-
(1) DOMAIN REGISTRAR SERVICES LIMITED
(2) SCOTT DENNY
(3) UK NAMES LIMITED
(4) MATTHEW JAMES HAYES
Defendants

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CONSENT ORDER
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UPON the Defendants and each of them undertaking as follows (in the case of the First and Third Defendants whether acting by their respective directors, officers, servants or agents or any of them or otherwise howsoever, and in the case of the Second and Fourth Defendants whether acting by themselves, their servants, agents, associates or otherwise howsoever):

1.  That they have ceased to be directly or indirectly engaged in any business associated with domain name registration and/or maintenance whether under the .uk top level domain or otherwise  
2. That they shall not at any time in the future engage directly or indirectly in any business associated with domain name registration and/or maintenance, whether under the .uk top level domain or otherwise  
3. That they shall not register, offer to sell and/or otherwise supply or advertise domain names or associated internet products or services under or by reference to the name or mark NOMINET and/or the logo of the Claimant as set out in United Kingdom registered trade mark no. 2154669
4. That they shall not reproduce, store or otherwise publish a copy or substantial reproduction of the aforesaid logo of the Claimant
5. That they shall not infringe the Claimant's UK registered trade marks nos 2233093, 2233095, 2154669 and/or Community Trade Mark E1662659
6. That they shall not pass themselves off as being Nominet UK, and/or as being authorised by or associated or connected in the course of trade with Nominet UK, contrary to the fact, (which shall for the avoidance of doubt, include, but not be limited to, the making of representations to the effect that the Defendants or any of them are a Registry or official authority or that they are the "UK Registry", "UK Name(s) Registry",  "UK Naming Registry" "UK registration authority" or "UK names authority")

AND UPON the parties agreeing terms set out in the attached schedule

BY CONSENT  

IT IS ORDERED THAT:

1. The Defendants do pay the Claimant by 16 September 2003 the sum of £40,000 as a contribution to the Claimant's costs of this action.

2. All further proceedings in this action be stayed upon the terms set out in the Schedule hereto, save for the purposes of carrying those terms into effect and for that purpose the parties have permission to apply.

3. Save as provided in paragraph 1 above, there be no order as to costs. 

We agree to an order in the above terms:

[Signed]      [Signed]
CMS Cameron McKenna    John Collins & Partners
Solicitors for the Claimant    Solicitors for the Defendants
5 August 2003     6 August 2003
Dated       Dated

THE SCHEDULE

The terms of this Schedule shall apply, in the case of the First and Third Defendants whether acting by their respective directors, officers, servants or agents or any of them or otherwise howsoever, and in the case of the Second and Fourth  Defendants whether acting by themselves, their servants, agents, associates or otherwise howsoever:

1. The Defendants and each of them shall within 30 days of the date of this Order disclose to the Claimant, to the extent that the same is in their possession, custody or power, the names and addresses and other contact details of all persons, firms and companies to whom they or any associated person has sold or purported to sell domain names under the .uk top level domain, ("the Purchasers") to include but not be limited to those domain names for which the registrant address details are currently shown as 32 Blue Street Carmarthen, 1 York Street Swansea, 27 Gloucester Street London and 38 Hall Meadow Cheshire.   The Claimant agrees to use such details only for the purposes of administering and updating the .uk domain name database.

2. The Defendants and each of them agree, on the Claimant's reasonable request, promptly to execute any such documents as may be necessary so as to enable any Purchaser to register, transfer or amend technical or other details relating to any domain names under the .uk top level domain which the Defendants or any of them sold or supplied or purported to sell or supply to such Purchaser.

3. The Defendants and each of them agree on the Claimant's request, promptly to supply to the Claimant such information and assistance as the Claimant may reasonably require for the purpose of implementing the provisions of this Schedule. 

4. The First Defendant shall forthwith resign from its current membership of the Claimant.

5. None of the Defendants shall apply for membership or tag holder status of the Claimant for a period of 5 years from the date of this Order.  Any such application after such date shall be without prejudice to the undertakings given to the Court set out in this Order.