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A real British David & American Goliath story!

(PRWEB) May 25, 2001

In a recent federal lawsuit filed in Alexandria, Virginia, Wal-Mart says it owns the U.S. Trade Marks for Sam’s Club and its former name, Sam’s Wholesale Club. The suit alleges that Sam’s Wholesale Club Ltd. of Norwich, England, registered the domain name sams-wholesale-club.com in the US, in January 2000, knowing it would confuse consumers.

Sam’s Wholesale Club Ltd was established 2nd December 1991 by the Julian W Unsworth with a clear intention to trade as a ‘members only club. A concept that is successfully utilised by UK Market operators (Flea Markets) and retail warehouses to circumnavigate UK planning (zoning) rules and Sunday trading laws regarding the use of industrial land or buildings for retail use.

Prior to establishing Sam’s Wholesale Club Ltd the company’s principal Julian W Unsworth founded Mr Shoes Ltd (1979) and opened the UK’s first Discount Footwear Warehouse. The company was highly successful and later purchased one of its suppliers and opened up the former wholesaler’s warehouse direct to the public. However, after a few months the local planning (zoning) officers forced the closure of the operation as it was operating from an industrial use (non-retail) building.

A card carrying ‘members only’ shopping concept purportedly aims at small businesses and as a result circumnavigates the UK planning restrictions on retailing from non-retail zoned premises. Nevertheless, members of the public are often able to gain entry through their employer’s membership. The notion of operating a ‘members only’ shopper’s club to avoid zoning problems in the future was firmly planted in Unsworth’s mind in the early 1980’s!

Following the sale of Mr Shoes Ltd to the then Chairman of Nike UK as a personal investment, Unsworth turned his attentions to establishing the UK’s first factory outlet shopping centre.

While researching manufacturer’s disposal methods and discount retailers in the UK for the factory outlet concept Unsworth came across many examples of ‘members only’ shopping concepts in the UK, such as Makro, Tradex, Readmans, Cactus, Booker, Great Clothes, The Trading Post, Matalan and Sports Mania. All of which trade from both industrial and warehouse type non-retail premises.

Following an abortive attempt to open the UK’s first factory outlet shopping centre in Asda’s (now owned by Wal-Mart) former super store at Pudsey near Leeds, Unsworth returned to Norwich and opened up the first Sam’s Wholesale Club (named after his oldest daughter Samantha) in a former banana warehouse.

The Sam’s Wholesale Club operation opened in November 1991 supplying clothing and giftware to small traders in the Norwich area and to card carrying members of the public. The company Sam’s Wholesale Club Ltd was formally registered on the 2nd December 1991.

Following further run-ins with local planning (zoning) officers regarding the sale of goods from non-retail premises the Norwich Sam’s Wholesale Club closed in May 1992 leaving Unsworth to continue his original mission of establishing the UK’s first factory outlet shopping centre. The newly formed Sam’s Wholesale Club Ltd company therefore lay dormant for a number of years until the concept was re-launched on the Internet in January 2000 as a ‘members only’ Internet based manufacturer’s outlet.

In the interim Unsworth went on to open the UK’s first factory outlet shopping centre in a former furniture warehouse on the outskirts of York. However, Unsworth’s involvement in the high overhead concept of bricks and mortar retailing ended in 1998. The new intention being, to harness the cost effective potential for Internet-based manufacturer-direct retailing.

Therefore a membership marketing site http://www.sams-wholesale-club.com a ‘free membership buying club offering a wide range of products at discount prices direct to the public’ was launched on the Internet in January 2000

Almost immediately the Sam’s Wholesale Club site began receiving complaints and enquiries referring to specific products and stores located in the USA. Subsequent investigation revealed that Wal-Mart’s Sam’s Club previously traded as Sam’s Wholesale Club and these were the words showing up on the sams-wholesale-club.com visitor logs as being used by web surfers to find Wal-Mart’s Sam’s Club on the Internet search engines.

The following month (16th February 2000) Sam’s Wholesale Club Ltd received a highly aggressive threatening letter at their registered office in Norwich from Wal-Mart’s UK based trade mark agents claiming Trade Mark infringement and deliberate cybersquatting. Even quoting Trade Marks that Wal-Mart didn’t actually own! A speedy response from Sam’s Wholesale Club Ltd’s UK legal advisors claiming otherwise resulted in no further communication.

Nevertheless, in attempt to stem the continual customer service enquiries clearly meant for Wal-Mart’s Sam’s Club being received on the http://www.sams-wholesale-club.com web site, Unsworth sent an Email to the domain administrator for Wal-Mart on the 2nd August 2000 requesting a customer service Email address to forward the complaints and enquiries.

6 months later on the 23rd January 2001 Unsworth received an Email from Wal-Mart’s Sam Club Director of eBusiness Scott Sandlin maintaining that the use of the sams-wholesale-club.com domain was causing confusion and offering to reimburse the UK company for their expense in registering the domain names sams-wholesale-club.co.uk and sams-wholesale-club.com. An offer which was firmly rejected by the UK company as not being a fair and equitable consideration for 10 years of corporate development and management costs.

Subsequent research by Sam’s Wholesale Club Ltd’s advisors show that Wal-Mart have registered hundreds of totally obscure Sam’s Club domain names including samsclubsucks.com except it seems http://www.sams-wholesale-club.com which is the name of Unsworth’s company.

It is of course a popular misconception both in the UK and USA that a .com address applies only to the US whereas in reality a .com address is an international domain. Indeed the Sam’s Wholesale Club concept is intended to operate Internationally and not just in the UK or USA. Hence Sam’s Wholesale Club Ltd’s registration of the .co.uk and .com versions of its corporate title.

Sam’s Wholesale Club Ltd‘s legal advisors believe this suit will develop into a high profile case should Wal-Mart not reconsider their position. Wal-Mart’s subsequent arrival in the UK through their purchase of the Asda supermarket chain has resulted in much publicity. An example of Wal-Mart’s well documented bullying tactics in the USA materializing against a small British company will certainly justify many UK retailer observer’s concerns.

Sam’s Wholesale Club Ltd contend they have legitimate rights to their corporate title and consequently the company’s UK and International domain names. The company therefore fully intends to defend their position and to retain their rights to the sams-wholesale-club.com and sams-wholesale-club.co.uk domains.

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