Reed Executive Plc v Reed Solutions Plc
| Jurisdiction | England & Wales |
| Judge | Mr Justice Pumfrey |
| Judgment Date | 19 December 2002 |
| Neutral Citation | [2002] EWHC 1015 (Ch),[2002] EWHC 2772 (Ch) |
| Docket Number | Case No: HC 2000 No 0003439 |
| Court | Chancery Division |
| Date | 19 December 2002 |
[2002] EWHC 2772 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Pumfrey
Case No: HC 2000 No 0003439
Geoffrey Hobbs QC and Emma Himsworth (instructed by Slaughter & May) for the Claimants
Martin Howe QC and Amanda Michaels (instructed by dj freeman) for the Defendants
Approved Judgment
Hearing dates: 14, 15 and 16 October 2002
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
1. This is my judgment on the further adjourned hearing on the form of order resulting from my judgment delivered on 20 May 2002. The hearing has been adjourned twice (once from July, and on a second occasion in August) because further allegations which went to the scope of relief granted were raised by the claimants, on both occasions shortly before the hearing, which necessitated further adjournments.
2. In my judgment, I expressed the view that the claimants had not established a case for the immediate grant of an injunction. The case revolved around the website 'totaljobs. com' and my finding was as follows:
'89. By the trial a search on 'Reed jobs' was unlikely to elicit totaljobs. com at all, and if it did all the evidence showed that it would be ranked well below the claimants' own site, reed.co.uk. I will draw the inference that the word 'Reed' was the working part of the site until late, probably in November 2001, and odd pages may have continued to contain it in a form in which it might be spidered, depending, according to Mr Roche, on the enthusiasm of the spider and the depth of the page in the site.'
3. By trial, therefore, I considered that the word 'Reed' was ceasing to find the defendants' site.
4. The claimants devoted substantial energy to showing that this was not in fact the case, and in raising further allegations of what I consider to be bad faith on the part of the defendants Mr Hobbs QC strongly urged me to view the further allegations which were made (largely, though not entirely, through Mr Roche, the claimants' expert) as put forward on a disinterested basis, so that where it was said that a particularly matter 'could' be due to deliberate act or omission on the part of the defendants, in no case was the possibility of an innocent explanation excluded. What is more, he said, the defendants had been careless in the manner in which they had sought to remove the word REED from places where it might contribute to search engine indices. No doubt Mr Hobbs was right so far as the form of the allegations went. But the allegations were serious ones.
5.The claimant no longer suggests that injunctive relief is appropriate. I consider that this was a wise concession. The order will therefore include liberty to apply for an injunction, and a declaration in accordance with my judgment in respect of infringement and passing off.
6. The claim for an injunction was maintained until a letter from Slaughter & May for the claimants to dj freeman for the defendants. The costs generated on this issue have been substantial, for reasons which I shall now summarise.
7. Shortly before the date originally fixed for the hearing of the argument on the order, 14 July 2002, the third statement of Mr Roche was served on behalf of the claimants. It is a substantial document of thirty-eight paragraphs, twenty-four of which are concerned with the allegation that the defendants continued to use REED on totaljobs. com. On 20 May or thereabouts he says that the position with the search engines changed. He found search engine results which were identical to the data held on the DMOZ directory (paragraph 90 of the main judgment) but rejected DMOZ as being responsible for them He attributed the result to the presence of the word REED on a page of totaljobs. com between 30 January 2002 and 22 May 2002, that is, during or after the trial, and after the defendants had given evidence of their removal of all indexable instances of the word REED. He attributed the presence of the word REED to inefficiency on the part of the defendants.
8. I gave permission for this evidence to be answered. I wished to continue with the discussion in relation to costs, which I did. However, the contentions in respect of the disclosure sought prior to a decision to elect (so-called Island Records disclosure referring to the decision of Lightman J in Island Records v Tring [1996] 1 WLR 1256) ultimately evolved to the point at which it was clear that Mr Howe QC was inclined to suggest that there should be no inquiry as to damages.
9. Mr Roche clarified his report at the defendants' request in another twenty-four paragraphs. The further information appears to have been divided more or less equally between material going to damages and material relevant to the defendants' willingness to infringe the registered trade marks in suit or pass-off. A further hearing was fixed to take place before me on 27 August 2002. For this hearing, Mr Bloomer produced a very substantial report. On the material available to him, he formed the view that the 'click through' rate from search results which had been obtained using a search string containing the word 'REED', which would be a principal source of damage to the claimants if proved, were very low in number indeed. I give an example: in September 2001, there were click-throughs to the defendants' site from 16 searches containing the word 'Reed'. There were 45,498 click-throughs in total from search results, and some 648,000 visitors. Mr Bloomer was inclined in his report to take the view that any diversion of visitors who used the word 'Reed' in the search engines to find the claimants' site would be negligible. He also said that there had been no page on the site that year containing the word 'REED' that had been indexed by any search engine, thus directly challenging Mr Roche. This evidence itself caused a further adjournment, since it raised the real possibility that there was no appreciable access to the site through Reed-related search terms. If this was right, then the scope of any enquiry would be substantially reduced. Mr Roche had not inspected Mr Bloomer's data, and this was the purpose of the further adjournment. Mr Bloomer had worked on only sample months. The quantity of data analysed had been very substantial, as had the expense of generating it. It became quite clear that the investigation involved in an enquiry which investigated the rate of click-throughs on Reed-related search terms was likely to be extremely expensive. A question of proportionality therefore also arose.
10. By the hearing in October, Mr Roche had produced a further report. It appears that this report adequately sets out the claimants' contentions. Mr Roche agrees in substance with Mr Bloomer's calculations relating to click through on the sample months examined.
11. I do not think that the applicable principles are in doubt. They are well summarised in paragraphs 18–139 ff of Kerly's Law of Trade Marks and Trade Names (13th Edn). I wish to consider the basic principles of granting enquiries, however, referred to in paragraph 18–141, only when I have considered the heads of damage available in this case.
12. One preliminary matter must also be borne in mind. Candidates do not pay either the claimants or the defendants, who obtain their income from the clients, from advertisers on the website and from other sources. 'Diversion of trade' in this context has the rather special connotation that the attention of the user seeking a job website by reference to the word 'REED' is not concentrated on the claimants, but drawn to the defendants, but by reason of the word 'REED'. Thus, in analysing the material which has been made available, it is assumed that any candidate who typed a 'Reed-related search term' into the search engine wanted the claimants
13. Second, I consider that it is axiomatic that damage can be caused by trade mark infringement (use of an infringing sign) or passing off even if no diversion of trade takes place Thus an article bearing an infringing sign can continue to make an untrue representation which causes loss even though there was no deception at the time of sale Damages (calculated on the basis of a royalty or as a lump sum by way of reasonable compensation for use of the infringing sign) are available in such a case.
14 It is convenient to set out Mr Roche's contentions as they are advanced in his sixth report, as they represent the highest at which the claimants can put their case (WebTrends is the name of software which is used to analyse the detailed logfiles generated automatically by the site recording the relevant statistics of its users):
'2.3 …Using WebTrends I have been able to view the information relating to Reed Related search phrases, including the extent to which Reed related phrases generated traffic to the site. The slightly altered configuration of WebTrends as run by myself did not produce results of a different order of magnitude from the results produced by [Mr Bloomer] in August 2002. I do however disagree with Mr Bloomer's conclusion that the figures are insignificant.
2.4 Mr Bloomer has focussed on analysing the number of people using Reed related phrases on searches to get to Totaljobs. He suggests….that the only metric worth considering is that of click through. However, in my view this is only part of the picture. As I explained in my third report…the overall "visibility" of a site is also of prime importance. In this context I have considered the extent to which Totaljobs has been visible in connection with...
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