British Telecommunications Plc v One in A Million Ltd

JurisdictionEngland & Wales
JudgeLORD JUSTICE ALDOUS,LORD JUSTICE SWINTON THOMAS,LORD JUSTICE STUART-SMITH
Judgment Date23 July 1998
Judgment citation (vLex)[1998] EWCA Civ J0723-8
CourtCourt of Appeal (Civil Division)
Docket NumberCHANI 98/0025/B
Date23 July 1998

[1998] EWCA Civ J0723-8

IN THE SUPREME COURT OF JUDICATURE

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

(MR JONATHAN SUMPTION QC)

Sitting as a Deputy Judge of the High Court

Before:

Lord Justice Stuart-Smith

Lord Justice Swinton Thomas

Lord Justice Aldous

CHANI 98/0025/B

98/0092-95/B

(1) British Telecommunications Plc
(2) Virgin Enterprises Ltd
(3) J Sainsbury Plc
(4) Marks & Spencer Plc
(5) Ladbroke Group Plc
Respondents
and
One in a Million Ltd and Others
Appellants

MR ALASTAIR WILSON QC and MR MICHAEL HICKS (instructed by Messrs Finers, London W1N 6LS) appeared on behalf of the Appellants (Defendants).

MR GEOFFREY HOBBS QC and MR MALCOLM CHAPPLE (instructed by Messrs Alan Whitfield, London EC1A 7AJ) appeared on behalf of the BT and Cellnet).

MR GEOFFREY HOBBS QC and MR JAMES MELLOR (instructed by S.J. Berwin & Co, London WC1X 8HB) appeared on behalf of Marks & Spencers, Ladbroke and Sainsbury and (instructed by Messrs Harbottle & Lewis, London W1R 0BE) appeared on behalf of Virgin.

LORD JUSTICE ALDOUS
1

There are before this Court appeals in five actions. Those actions came before Mr Jonathan Sumption QC sitting as a deputy judge of the High Court. On 28 November 1997 he granted summary judgment under O.l4 as the defendants had threatened to pass off and infringe the registered trade marks of the plaintiffs (1998) FSR 265.

2

In each case the first defendant was One In A Million Limited, a company owned and controlled by its two directors, Mr Conway and Mr Nicholson. They are the second and third defendants. The fourth defendant, Global Media, and fifth defendant, Junic, are firms through which Mr Conway and Mr Nicholson trade. Each of the defendants has done acts alleged to infringe the rights of a plaintiff, but resolution of the issues in this appeal does not depend upon the identity of any particular defendant. I will refer to them generally as the appellants except where it is necessary to differentiate between them.

3

The appellants are dealers in Internet domain names. They register them and sell them. They have made a speciality of registering domain names for use on the Internet comprising well-known names and trade marks without the consent of the person or company owning the goodwill in the name or trade mark. Examples are the registration and subsequent offer for sale to Burger King by the second defendant of the domain name burgerking.co.uk for £25,000 plus VAT and of bt.org to British Telecommunications for £4,700 plus VAT.

4

The plaintiffs Marks & Spencer Plc, J Sainsbury Plc, Virgin Enterprises Ltd,British Telecommunications Plc, Telecom Securior Cellular Radio Ltd, Ladbrokes Plc are well-known companies. In the actions brought by them, they allege that the activities of the appellants amount to passing-off, to infringement of their well-known registered trade marks, to threats of passing-off and infringement, and to wrongful acts such as to entitle them to injunctive relief. Their complaints stem from the registration by One In A Million Ltd of ladbrokes.com;sainsbury.com; sainsburys.com; j-sainsbury.com; marksandspencer.com; cellnet.net; bt.org and virgin.org: by Global Media Communications of marksandspencer.co.uk; britishtelecom.co.uk; britishtelecom.net; and by Junic of britishtelecom.com.

5

At its simplest the Internet is a collection of computers which are connected through the telephone network to communicate with each other. As explained by the judge:

"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 johnsmith@marks-and-spencer.co.uk 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:

.com

International commercial organisations

.edu

Educational organisation

.gov

Government organisation

.org

Miscellaneous organisations

There is an argument, which does not matter, about whether this last designation is confined to non-profit-making organisations.

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."

6

Nominet UK applied to intervene in this appeal. It is a "not-for-profit" limited company which is registered with the Internet Assigned Numbers Authority. It operates what is known as the Register Database which contains the domain names and IP addresses for .co.uk, .net.uk, .ltd.uk and plc.uk and full details of the registrant of the domain name and its registration agent. It charges a fee for its service. From time to time (eg every two hours or so) the information on the data base is extracted to a number of Domain Name Servers. Domain Name Servers are computers which hold the index of names which map to particular numbers used in intercomputer transactions. For example, if I wanted to contact Marks & Spencer Plc, I can use the domain name marks-and-spencer.co.uk. The Domain Name Server will recognise the domain name and provide the appropriate sequence of numbers, called the IP address. It is that address which identifies the computer owned by Marks & Spencer Plc, thereby enabling my computer to contact that owned by Marks & Spencer Plc.

7

As part of its service Nominet offers a "Whois" service to the public. Thus the public can type in a domain name on Nominet's website and press the appropriate button to execute the "Whois" search. The answer sets out the recorded information on the organisation or person who has registered the domain name. This is useful if, for example, a person wishes to contact the owner of a domain name.

8

Members of the public would not ordinarily have a domain name. They would subscribe to a Service Provider and have an e-mail address. That enables a subscriber to send messages to another computer through the Service Provider which forwards the message when requested to the appropriate computer. The subscriber can also browse around the world wide web and seek web pages associated with a particular domain name. Thus if he transmits a domain name to his Service Provider, it will contact the domain name and the web pages sought and provide the information obtained.

9

Web sites are used for many activities such as advertising, selling, requesting information, criticism, and the promotion of hobbies.

10

The Judgment

11

The judge referred to Singer Manufacturing Co v Loog (1880) 18 ChD 395 and Reddaway v Banham (1896) AC 199 as two cases which set out the principles upon which the law of passing-off depends. He then considered Direct Line Group Ltd v Direct Line Estate Agency (1997) FSR 374 and Glaxo Plc v Glaxowellcome Ltd (1996) FSR 388. Those were cases where interlocutory relief was granted which prevented use of company names that had been registered with, it seems, either an intention of trading upon the plaintiff's reputation or transferring the name to another who might.

12

The judge held at page 271:

"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.

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...

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