England and Wales High Court (Patents Court) Decisions

2. The Internet is increasingly used by commercial organisations to promote themselves and their products and in some cases to buy and sell. For these purposes they need a domain name identifying the computer which they are using. A domain name comprises groups of alphanumeric characters separated by dots. A first group commonly comprises the name of the enterprise or a brand name or trading name associated with it, followed by a "top level" name identifying the nature and sometimes the location of the organisation. Marks & Spencer for example have a number of domain names including marks-and-spencer.co.uk., marks-and-spencer.com and stmichael.com. The domain name marks-and-spencer.co.uk for example will enable them to have an e-mail address in the form [email protected] and a web site address in the form http://www.marks-and-spencer.co.uk. The top level suffix co.uk indicates a United Kingdom company. Other top level names bear conventional meanings as follows:

4. There is no central authority regulating the Internet, which is almost entirely governed by convention. But registration services in respect of domain names are provided by a number of organisations. Network Solutions Inc. of Virginia in the United States is the organisation generally recognised as responsible for allocating Domain names with the top level suffixes "com" and "edu". In the United Kingdom a company called Nominet UK provides a registration service in respect of domain names ending with the geographical suffix uk preceded by functional suffixes such as co, org, gov or edu.

13. A rather similar although less explicit and less exorbitant attempt has been made by Mr. Conway to sell the domain name bt.org, one of those in dispute in the present actions, to British Telecom for £4,700.

16. The essence of the tort of passing off is a misrepresentation to the public (whether or not intentional) liable to lead them to believe that the goods and services offered by the representor are those of the Plaintiff. However, the tort is also committed by those who put or authorise someone to put an "instrument of deception" into the hands of others. "No man is permitted to use any mark, sign or symbol, device or other name whereby, without making a direct false representation himself to a purchaser who purchases from him, he enables such a purchaser to tell a lie or to make a false representation to somebody else who is the ultimate customer": Singer v. Loog (1880) 18 ChD 395, 412, cited with approval by Lord Macnaughten in Camel Hair Belting [1896] AC 199, 215-6.

17. In Direct Line Group Limited v. Direct Line Estate Agency [1997] FSR 374 Laddie J. granted an interlocutory injunction to the financial services group Direct Line against two individuals who had arranged the incorporation of a large number of companies under names comprising the names or trade marks of well-known enterprises, including three companies comprising the word "Direct Line". These facts he regarded as "only reasonably consistent with an intention on their part to hitch themselves to other companies reputations and make an elicit profit by doing so". It was not clear whether the three companies in question had actually traded, and unnecessary for the judge to decide the point at the stage of granting interlocutory relief.

18. Glaxo Plc v. Glaxowellcome Limited [1996] FSR 388 was a rather similar case which came before Lightman J., also upon an application for an interlocutory injunction. The relevant defendant was a company registration agent who registered the name Glaxowellcome Limited shortly after the announcement of Glaxo Plc’s intention to make a take-over bid for Wellcome and if it succeeded to re-name itself Glaxo-Wellcome Plc. The defendantly subsequent offered to sell the company to Glaxo Plc for an exorbitant price. In this case it was clear that the company had not traded, but the Judge considered it likely that it would. He appears to have formed this view on the basis that it was implicit in the demand for a high price for the company and that the Defendant was threatening that if it was not paid he would use or transfer the company to someone else who would use it to injure Glaxo’s goodwill. The Judge granted a mandatory interlocutory injunction requiring the name of the company to be changed. In practice this amounted to final relief, because the object was to enable Glaxo themselves to change their name to Glaxo-Wellcome, thereby making a restoration of the original position virtually impossible. Lightman J. said that "the court will not countenance any such pre-emptive strike of registering companies with names where others have the goodwill in those names and the registering party demands a price for changing the names".

19. The mere creation of an "instrument of deception", without either using it for deception or putting it into the hands of someone else to do so, is not passing off. There is no such tort as going equipped for passing off. It follows that the mere registration of a deceptive company name or a deceptive Internet domain name is not passing off. In both of these cases the court granted what amounted to a quia timet injunction to restrain a threatened rather than an actual tort. In both cases, the injunctions were interlocutory rather than final, and the threat is no doubt easier to establish in that context. But even a final injunction does not require proof that damage will certainly occur. It is enough that what is going on is calculated to infringe the Plaintiff’s rights in future.

20. In the case of Marks & Spencer, it is in my judgment beyond dispute that what is going on is calculated to infringe the Plaintiff’s rights in future. The name marksandspencer could not have been chosen for any other reason than that it was associated with the well known retailing group. There is only one possible reason why anyone who was not part of the Marks & Spencer Plc group should wish to use such a domain address, and that is to pass himself off as part of that group or his products off as theirs. Where the value of a name consists solely in its resemblance to the name or trade mark of another enterprise, the Court will normally assume that the public is likely to be deceived, for why else would the Defendants choose it? In the present case, the assumption is plainly justified. As a matter of common sense, these names were registered and are available for sale for eventual use. Someone seeking or coming upon a website called http://marksandspencer.co.uk would naturally assume that it was that of the Plaintiffs.

23. Mark & Spencer is registered as a trade mark in connection with a variety of goods and services. The word marksandspencer, as part of a domain name, is not identical but is clearly similar to the trade mark. There is no requirement under Section 10(3) that the goods or services should be similar to those for which the trade mark is registered. It is beyond argument that the trade mark Marks & Spencer has a reputation in the United Kingdom. It seems to me to be equally clear that the Defendant’s use of it is detrimental to the trade mark, if only by damaging the Plaintiff’s exclusivity.

25. The first of these points can be shortly dealt with. Use "in the course of trade" means use by way of business. It does not mean use as a trade mark: British Sugar Plc v James Robertson & Sons Ltd. [1996] RPC 281, 290-2.The use of a trade mark in the course of the business of a professional dealer for the purpose of making domain names more valuable and extracting money from the trade mark owner is a use in the course of trade.

26. Turning to the second point, there is at the moment some uncertainty about whether it is the law that an infringing sign must for the purposes of Section 10(3) be such as is likely to cause confusion. Some questions of law can appropriately be decided on an application for summary judgment. This one is, however, rather different. It is on the face of it strange that the likelihood of confusion should be required (as it expressly is) where the infringement consists in the use of an identical sign with similar goods or services, or a similar sign with identical or similar goods or services, but not where it consists of its use with goods which are not even similar. For substantially this reason, it has been decided on at least two occasion in England that in Section 10(3) does require proof that the use was such as was likely to cause confusion: see BASF Plc v CEP (UK) Plc [Knox J., 26.10.95, unreported] and Baywatch Production Co. Inc. v Home Video Channel [1997] FSR 22. On the other hand, in a passing dictum in Case C-251/95 Sabel BV v Puma [unreported, 11.11.97], the European Court of Justice has remarked that under the provision of the directive which permits Member States to include a provision such as Section 10(3), no likelihood of confusion is required. This seems to me to be less than conclusive of an issue which raises important questions of principle, requires more fuller argument than can be appropriate on an application for summary judgment, and may ultimately require a reference to the European Court. I do not propose to resolve the question now. Nor do I need to, because even on the footing that the Plaintiffs must demonstrate a likelihood of confusion, they have done so. The test in this context depends not on the way the sign has been used but on whether a comparison between the sign and the trade mark shows an inherent propensity to confuse. There can, as it seems to me, be no doubt that this is the effect of the use by some one else of the domain name marksandspencer. The only basis on which the contrary has been suggested is that internet users must be assumed to access sites by using search methods which will disclose their true owners. I am conscious of the heavy burden which lies on a Paintiff seeking summary judgment when a question of fact is raised, but I regard this point as unarguable. Some people might access a site in that way. Plainly many would not. If the Defendants’ submission had anything in it, they would not have thought it worth their while to register these names and attempt to sell them at a premium.

27. In the four other cases, the facts relevant to both causes of action are substantially the same in all relevant respects save one. The difference is that in the other four cases, it is somewhat less absurd for the Defendants to suggest the names which they have registered have an innocent use. It is impossible to imagine any unconnected party using the phrase "Marks and Spencer" in his name or address if not to deceive, and the same may well be true of Cellnet. But the possibility is not so far-fetched in the case of the words "Sainsbury" "Ladbroke", "Virgin" or "BT". The Defendants also say that in some cases the suffix (for example .org in the case of BT), serves to differentiate them from the trade marks. The Defendants make much of this point, but I am not impressed by it for the simple reason that although the words are probably capable of an innocent use, that is not the use that these Defendants intend. The history of the Defendants’ activities shows a deliberate practise followed over a substantial period of time of registering domain names which are chosen to resemble the names and marks of other people and are plainly intended to deceive. The threat of passing off and trade mark infringement, and the likelihood of confusion arising from the infringement of the mark are made out beyond argument in this case, even in which it is possible to imagine other cases in which the issue would be more nicely balanced.

28. The result is that the Plaintiffs in all five actions are entitled to final injunctions quia timet. These will correspond substantially to paragraphs 1, 2 and 3 of the draft minutes of order attached to the summonses in the Marks & Spencer, Ladbrokes, Sainsbury and Virgin actions. I accept that an order in the form of paragraph 2 (which requires the Defendants to take steps to have the disputed names assigned to the Plaintiffs) goes rather further than the negative form of injunctions normally appropriate quia timet. But it seems to me to be the most completely effective remedy, and one which does no injustice to the Defendants, for these names are of no value to them otherwise than as a means of threatening unlawful acts. It is the equivalent, in this rather arcane context, of the delivery up of infringing goods. The Plaintiffs in the BT/Cellnet action will have orders substantially in the form of paragraphs 1 to 4 of their summons, plus orders in the form of paragraph 2 of the minutes of order in the other actions.