LORD DRUMMOND YOUNG'S Opinion
1 The pursuers are the owners, printers and publishers of the newspaper
known as "B a.m.". They acquired their present name on 20th July 2000.
Before that, they were known as BM. Scotland Limited. On 13th July
2000 they registered a trade mark under the Trade Marks Act 1994.
The mark in question consists of the words "B. a.m." on a rectangular
background. Along the top of the rectangle, in much smaller type, are the
words "Scotland's Business, Financial & Political Daily". That mark was
originally registered in respect of Classes 16 and 41 in the Trade Marks
Rules 2000, but on 12th August 2000 it was further registered to include
Class 35. Class 16, which is the class normally used by newspapers,
includes various materials used in printing, and also printed matter. Class
41 comprises education and the providing of training, entertainment,
sporting and cultural activities. Class 35 comprises advertising, business
management, business administration and office functions.
2 The pursuers' newspaper aims at coverage of business, political
and financial matters. It was launched on 20th September 2000. It is
averred by the pursuers that it has quickly built a reputation as a quality
newspaper to be read by its intended market. In common with all or
nearly all newspaper proprietors, the pursuers operate a website on
behalf of B. a.m.. The pursuers aver that such sites are increasingly
important devices for commercial undertakings to promote themselves
and, in some cases, to buy and sell. In connection with that website, the
pursuers aver that they own six domain names, although in fact they list
seven. These are as follows: "B..co.uk", "B.-am.co.uk", "B.-am.com",
"B.am.net", "B.-am.net", "B.pm.co.uk" and "B.pm.net". The pursuers
provide an online service at their website under the domain name
www.B.am.co.uk. They aver that an online service is a vital addendum to
their business activities and has built up a substantial goodwill in its own
right.
3 In order to follow the arguments presented to the court, it is necessary
to understand the precise nature of a domain name and of a website.
A domain name is the text form of a computer's numeric Internet
protocol (IP) address. The IP address itself is in numeric form, and
the domain name is a textual representation of those numbers. The
domain name is used to identify that computer on the part of the
Internet known as the world wide web. An IP address takes a form
such as "www.advocates.org.uk" (the website address of the Faculty of
Advocates). In this case the suffix ".uk" is the top level domain, and is
a reference to the United Kingdom. The previous suffix ".org" denotes a
particular class of organisations, which includes professional associations
such as the Faculty of Advocates. An ordinary commercial company would
use the suffix ".co.uk", as in "marks-and-spencer.co.uk", or several of the
pursuers' domain names. Many domain names do not contain any national
reference; that applies in particular to the large number of domains that
end in the suffixes ".com" and ".net". The former of these designates a
commercial enterprise; the latter is more general. The system of domain
names does not distinguish between capital letters and lower case letters;
consequently it is immaterial whether capital letters are used in a name.
Each domain name is unique. Full stops can only be used to separate the
levels of a domain, as in "advocates.org.uk"; consequently they cannot be
incorporated into the part of a domain name that occurs before the suffix.
Likewise, spaces cannot be used in the part of a domain name before the
suffix. Thus it would not be possible to have a domain name such as "B.
a.m. co.uk", as it incorporates both a space and a full stop prior to the
suffix ".co.uk".
4 Such names are allocated by a number of regulatory bodies. Since
September 1998 the most senior of these has been the Internet
Corporation for Assigned Names and Numbers, known as ICANN, a
non-profit-making organisation based in the United States. ICANN is
responsible for the supervision of accredited registrars throughout the
world. The names without national signification, such as those ending
in ".com", ".net" or ".org", are provided by an organisation based in the
United States known as Network Solutions International. The names
bearing a country code, such as ".uk", are provided by an organisation
within the country concerned; in the United Kingdom this is a company
known as Nominet UK Limited which provides all names ending in the
suffix ".uk". While some kinds of suffix, for example ".gov", are restricted
to a particular type of user, there is no general system for checking that
an individual name is appropriate for a particular user. When a domain
name is provided, the user enters into a contract with the provider,
usually for a period of two years. Normally such contracts are extended
upon expiry for a further period of two years, and this process continues
indefinitely. When a user applies for a domain name, it must certify that
all the information supplied by it to the provider is true. If any material
part of that information is found to be untrue, the provider may revoke
the name in question. Once a domain name has been allocated, the user
may assign it to another person, and may receive consideration for the
assignation of the name.
5 A website consists of material on a particular computer. In the case of a
commercial website, the computer will be known as a server. The Internet
enables any person, anywhere in the world, who has a computer linked
to the Internet to obtain access to the material contained in that website.
The domain name thus functions as the Internet address of the particular
computer containing a particular website. It follows that a domain name
points to a particular physical location, namely the computer containing
the website.
6 The pursuers' pleadings, so far as material, are as follows. The first
defender is resident and domiciled in Greece, and is the managing
director of the second defenders. The second defender is a company
incorporated in Mauritius. It is further averred that the second defenders
have places of business in London, at the office of a firm of solicitors,
and in Athens; consequently they are domiciled in both England and
Greece. The defenders deny that the second defenders have any place
of business in either London or Athens, and consequently maintain that
their only domicile is in Mauritius. The pursuers also aver that, prior to his
residing in Greece, the first defender had substantial business connections
in Scotland. He ran two Internet companies from Edinburgh, which
went into liquidation. The pursuers published articles concerning the
first defender in B. a.m.. As a result of those articles, the first defender
has raised proceedings for defamation in the English High Court. Those
proceedings are defended. It is averred that the first defender has a
history of making use of domain names calculated to pass himself off
as other organisations. Thus he set up a Greek website entitled "A..gr",
without permission of A., a well-known Internet bookseller. It is further
averred that the first defender fell out with Morison Bishop, solicitors, and
subsequently set up a website entitled "morisonbishopbad.com". That site
was subsequently removed.
7 The pursuers aver that on 21st May 2002 they received an e-mail com
munication from a Mr L. of a firm known as J. and Co. In that e-mail Mr
L. stated that he had recently acquired the domain "B.AM.com", and that
he had received offers to purchase the domain from several individuals.
He offered to sell the name to the pursuers for a price of -25,000. On the
same date the second defenders published an announcement on their
website in the following terms:
"Plans Online Business Advisory Service
Republic of Mauritius-(OfficialSpin.com)-21/05/02-The Board of KTC today
announced that it had agreed to acquire B.am.com for USD11,000 from J.
& Company of Colorado Springs, Colorado USA.
S., managing director said 'We are very pleased to have come to terms
with the present owner of the domain. We have been negotiating for some
time and so its (sic) great to move on to the next level of our plan.'
KTC Intends to offer an Online Business Advisory Service and expects to
have the service operational before the end of June 2002'.
The name of the first defender is given as the contact for the
announcement.
8 The pursuers further aver that they have ascertained that the first
defender has registered an additional 22 domain names in his name.
Those names all included the forms "B.am", "B.-am" or "B.pm". Examples
of such names were "B.am.info", "B.am.net" and "B.am.uk.com". The
pursuers' search of domain names before the action was raised indicated
that the second defenders' purchase of the domain name "B.am.com"
from Mr L: had not gone through. That averment was effectively
superseded by information made available in the course of the hearing
before me on 7th and 10th June 2002. The pursuers produced a further e-
mail from J. & Company dated 30th May 2002, in which it was stated that
J. & Company had discovered that the second defenders had apparently
tried to sell the domain name "B.am.com" to the pursuers, that J. &
Company had been unaware of their activity, and that all business
of J. & Company with the second defenders had been cancelled. The
defenders confirmed during the hearing that the purchase of the domain
name "B.am.com" from J. & Company had not been and would not be
completed.
9 On the basis of the foregoing averments, the pursuers state that
they fear that the defenders will set up or have set up websites passing
themselves off as the pursuers and in breach of section 10 of the Trade
Marks Act 1994. They refer to the fact that the defenders have registered
or own domain names that comprise the name of the newspaper and
trademark of the pursuers, and they aver that the use of such names is
calculated to infringe the pursuers' rights. There was only one possible
reason for registering such names, namely to pass themselves off as the
pursuers. It is further averred that, in the event of any such websites
being set up, members of the Scottish public seeking to find the pursuers'
website are likely to be confused. The pursuers accordingly conclude for
interdict and interim interdict against the defenders' passing themselves
off as the pursuers or threatening to do so, and against the defenders'
breaching the terms of sections 10(2) and 10(3) of the Trade Marks Act
1994, by registering, setting up, administering and maintaining websites
making use of the name "B. a.m." or domain names using the same
sequence of lettering. The pursuers further conclude for orders under
sections 46 and 47(2) of the Court of Session Act in relation to the name
"B. a.m." and any websites bearing names with that sequence of lettering,
but that conclusion is not material for present purposes.
10 The case first called before me on 23rd May 2002, when I pronounced
interim interdict in terms of the pursuers' first conclusion on an ex parte
basis. On 7th June 2002 the defenders moved for recall, or alternatively
for restriction, of that interim interdict. Counsel for the defenders
argued first that the pursuers had not established a prima facie case,
on four grounds. Firstly, he argued that the pursuers' averments did not
disclose a prima facie case in relation to jurisdiction. Secondly, there
was no prima facie case in relation to title to sue. Thirdly, the pursuers'
pleadings did not disclose a prima facie case satisfying the substantive
requirements of the law relating to trade mark infringement. Fourthly, the
pursuers' pleadings did not disclose a prima facie case that satisfied the
requirements of the law relating to passing off. Counsel further submitted
that the balance of convenience favoured recall of the interim interdict,
and that in any event the terms of my interlocutor of 23rd May were too
wide. I will deal with each of the defenders' arguments in turn.Jurisdiction
11 Different arguments were presented in relation to the first and second
defenders. In relation to the first defender, the parties were agreed that
he was domiciled in Greece, and that Greece was a contracting state for
the purposes of the Brussels Convention. Consequently Schedule 1 to the
Civil Jurisdiction and Judgments Act 1982 was applicable. The scheme
of Schedule 1 is that the primary ground of jurisdiction is that found in
article 2, namely domicile in a contracting state. By way of exception
to that primary ground, a number of special jurisdictions are enacted in
article 5. Article 5(3) provides as follows:
"A person domiciled in a Contracting State may, in another Contracting
State, be sued:
_
(3) in matters relating to tort, delict or quasi-delict, in the courts for the
place where the harmful event occurred".
Counsel for the defenders drew attention to the fact that article 5(3)
made no reference to threatened delicts, but only to completed delicts.
That, the submitted, was clear from the reference to the place where the
harmful event 'occurred'. The wording of article 5(3) in Schedule 1 should
be contrasted with the corresponding provision in Schedule 4, dealing
with the allocation of jurisdiction within the United Kingdom. In this case,
article 5(3) reads as follows:
"A person domiciled in a part of the United Kingdom may, in another part
of the United Kingdom, be sued:
_
(3) in matters relating to tort, delict or quasi-delict, in the courts for the
place where the harmful event occurred or in the case of a threatened
wrong is likely to occur".
Likewise, in Schedule 8, which sets out the rules of jurisdiction in Scotland
in cases where neither the Convention nor the rules applicable within the
United Kingdom is applicable, specific provision was made for threatened
wrongs in rule 2(10). Rule 2(3) provided for jurisdiction "in matters
relating to delict or quasi-delict, in the courts for the place where the
harmful event occurred"; in other words, the wording was identical to
Schedule 1. In rule 2(10), however, it was provided that a person might
be sued "in proceedings for interdict, in the courts for the place where it
is alleged that the wrong is likely to be committed". Counsel submitted
that, in view of the contrasting wording in Schedules 4 and 8, the words
used in article 5(3) of Schedule 1 must be given their literal meaning. The
result was that the special jurisdiction conferred by that provision did not
extend to threatened wrongs. In support of that argument he referred to
Scott Robinson on Interdict at p. 8.
12 In my opinion the foregoing argument is not correct, and article 5(3)
of Schedule 1 extends to threatened delicts as much as to completed
delicts. I reach this conclusion for two principal reasons. In the first place,
it is frequently of vital importance that the courts of a country should be
able to take effective action against any civil wrong of a delictual nature
that is threatened within that country, without any need for recourse to
a foreign court. In my opinion such a jurisdiction is essential to secure
proper maintenance of the rule of law. If article 5(3) is construed in
the restricted manner contended for by the defenders, however, that
jurisdiction will be denied in any case where the potential defender is
domiciled in another Contracting State. In my view that cannot have
been the intention of the signatories to the Brussels Convention. The
importance of this point can be seen by a practical example. Suppose that
the proprietor of an area of land plans to carry out operations on that land
which threaten the stability of a neighbouring building. It is obviously of
the utmost importance that the proprietor of that building should be able,
if he has a prima facie case, to obtain interdict against those operations
as a matter of urgency. If article 5(3) does not extend to threatened
wrongs, however, and the person who plans to carry out the operations
is domiciled in a Contracting State other than the United Kingdom, the
threatened proprietor will require to go to the courts of that state to
obtain an interim interdict. The dispute in question is a neighbourhood
dispute involving works performed in Scotland. In the circumstances, it
does not seem sensible that a foreign court should be involved. Article
16(1) confers exclusive jurisdiction on the Scottish courts "in proceedings
which have as the objects rights in rem in _ immoveable property". In
the case of operations of an essentially delictual nature, however, the
proceedings cannot be said to have as their objects rights in rem in land;
the rights and obligations involved are rather personal in nature.
13 In the second place, it is frequently not easy to draw a clear distinction
between a threatened delict and a completed delict. Where, for example,
the owner of a factory has discharged effluent into a river, the proprietor
of land further down the river may raise proceedings in the Scottish
courts in respect of any damage that has been caused. At the same time,
however, that proprietor may fear that a further discharge will take place,
and seek interdict against that possibility. If article 5(3) does not extend
to threatened wrongs, and the factory owner is a company with its seat in
another Contracting State, the result would be that the lower proprietor
could seek damages in the Scottish courts but would have to go to the
state of the factory owner's domicile in order to obtain interdict against
a threatened discharge. That is clearly inappropriate, as the repeated
discharges of effluent are in reality a single course of wrongful conduct.
14 Counsel for the defenders founded on the fact that express provision
is made for threatened wrongs in Schedules 4 and 8. I am nevertheless
of opinion that that was done simply to make the position clear, without
any implications for the proper construction of Schedule 1. Schedule 1
reproduces the text of an international treaty entered into by the United
Kingdom. It is clear that the provisions of an Act of Parliament cannot
have a bearing on the construction of a treaty provision, unless they
expressly modify it for use within the United Kingdom. Article 5(3) of the
Brussels Convention, as enacted in Schedule 1, has not been modified
in that way. Consequently it must be construed without reference to the
remainder of the 1982 Act. Moreover, the European Court of Justice has
held that the expression "tort, delict or quasi-delict" in article 5(3) must
be given an autonomous meaning: Kalfelis v Schroeder, Muenchmeyer,
Hengst & Co., (189/87) 1988 ECR 5565. That emphasises that the
construction of that Article is wholly independent of provisions of national
law.
15 For the foregoing reasons I am of opinion that the Scottish courts have
jurisdiction over the first defender to interdict a threatened wrong that is
likely to produce a harmful event within Scotland. So far as the second
defenders are concerned, their counsel argued that their seat and hence
their domicile was in Mauritius, which is not a Contracting State, with
the result that jurisdiction was based on Schedule 8 to the 1982 Act. He
accepted that rule 2(10) of Schedule 8 would therefore apply. That rule
confers jurisdiction in proceedings for interdict on the courts for the place
where it is alleged that the wrong is likely to be committed. The pursuers
aver that the second defenders are domiciled in England and Greece. It
is not necessary for me to reach a view on the question of their domicile.
If they are domiciled in Mauritius, rule 2(10) applies, and jurisdiction is
based on the place where the alleged wrong is likely to be committed. If
they are domiciled in Greece, they are in the same position as the first
defender, and jurisdiction will exist provided that a wrong is threatened
that is likely to produce a harmful event within Scotland. If they are
domiciled in England, the rule in article 5(3) of Schedule 4 will apply. That
provision, which is quoted above, confers jurisdiction in matters relating
to delict on the courts for the place where a harmful event has occurred
or in the case of a threatened wrong is likely to occur. It follows that,
wherever the second defenders are domiciled, the Scottish courts will
have jurisdiction over them if a wrong is threatened that is likely to result
in a harmful event in Scotland. In the case of both defenders, accordingly,
the crucial question is whether in the present case a wrong is threatened
within Scotland.
16 On this point, counsel for the defenders submitted that the mere
putting up of a website on a server outside Scotland is not a wrong that
would occur in Scotland; unless the server were in Scotland, there would
be no wrong here. The pursuers did not aver that the defenders' website
or server was located in Scotland. While a website could be viewed
anywhere in the world, it did not follow that, at least for the purposes
of trademark infringement or passing off, the provider of a website or
the owner of a domain name was liable anywhere in the world where the
website might be viewed. Reference was made to two English decisions,
800-Flowers Trade Mark, 2002 FSR 191, and Euromarket Designs Inc v
Peters and Trade & Barrel Limited, 2001 FSR 288.
17 In the first of these cases, 800-Flowers Trade Mark, an American
company that sold flowers using a website applied to register a trade
mark, 800-FLOWERS, in the United Kingdom. For that purpose, it was
critical that the American company should establish use of the trade mark
in the United Kingdom. It was held by Jacob J at first instance and by the
Court of Appeal that the mere existence of a website in New York was
not sufficient. Jacob J stated, in a passage quoted at paragraph 41 of the
opinion of Jonathan Parker LJ in the Court of Appeal (2002 FSR 203),
"So I think that the mere fact that websites can be accessed anywhere in
the world does not mean, for trade mark purposes, that the law should
regard them as being used everywhere in the world. It all depends upon
the circumstances, particularly the intention of the website owner and
what the reader will understand if he accesses the site. In otherfields of
law, publication on a website may well amount to a universal publication,
but I am not concerned with that."
Jonathan Parker LJ further stated, at paragraph 100 of his opinion (2002
FSR 212),
"In my judgment_ the evidence in the instant case does not establish
actual user of the mark by the applicant in the UK, even to the "minimal"
extent required_. Nor, in my judgment, is the evidence (such as it is)
concerning the applicant's Internet website sufficient to justify the
conclusion that accessing the website amounts to use of the mark at
the point of access. In any event, the evidence does not disclose the
extent to which the website has in fact been accessed from the UK. The
applicant has never had a place of business in the UK; the services which
it provides are performed outside the UK; and, so far as the evidence
goes, the only piece of advertising directed specifically at the UK is the
one advertisement in the Independent newspaper_".
In the Crate & Barrel case, an American company which ran a chain of
stores under the name "Crate & Barrel" in the United States raised an
action for trade mark infringement against an Irish company and its
majority shareholder, who ran a shop in Dublin named "Crate & Barrel".
All of the shops concerned sold household goods and furniture. The
critical question was whether the English courts had jurisdiction over
the defendants. The defendants had placed a single advertisement in a
magazine published in the United Kingdom, but otherwise the only way in
which their advertising could be said to be directed at the United Kingdom
was the existence of a website, which used the name "Crate & Barrel".
Jacob J held that, although the website could be accessed from the United
Kingdom, that was not sufficient to hold that the defendants carried on
trade within the United Kingdom. He stated at paragraph 24 (2001 FSR
295-296)
"Whether one gets there by a search or by direct use of the address, is
it rational to say that the defendants are using the words 'Crate & Barrel'
in the United Kingdom in the course of trade in goods? If it is, it must
follow that the defendants are using the words in every other country of
the world. Counsel for the plaintiffs says that the Internet is accessible
to the whole world. So it follows that any user will regard any website as
being 'for him' absent a reason to doubt the same_. I think it is not as
simple as that. In 800 Flowers I rejected the suggestion that the website
owner should be regarded as putting a tentacle onto the user's screen.
Counsel for the defendants here used another analogy. He said using the
Internet was more like the user focusing a super-telescope into the site
concerned; he asked me to imagine such a telescope set up on the Welsh
hills overlooking the Irish Sea. I think this analogy is apt in this case.
Via the web you can look into the defendant's shop in Dublin. Indeed
the very language of the Internet conveys the idea of the user going to
the site-'visit' is the word. Other cases would be different-a well-known
example, for instance, is Amazon.com. Based in the US it has actively
gone out to seek world-wide trade, not just by use of the name on the
Internet but by advertising its business here, and offering and operating
a real service of supply of books to this country. These defendants have
done none of that".
18 The critical question for present purposes is the location of a wrong
that is said to have been committed by way of the Internet. For present
purposes it is sufficient to consider cases of passing off and trade mark
infringement, although I find it difficult to see why similar principles
should not be applied to delicts such as defamation, or indeed negligence.
I do not think that it is helpful to reason by way of analogy, as the legal
analysis of delicts committed by means of the Internet must be based on
principle. Nor do I think it helpful to adopt the defenders' analysis of a
website; they contended, in effect, that a website is nothing more than
material stored on a particular computer, with the result that any delict
could only be committed where the computer containing the material
was located. In my opinion is not appropriate to regard the Internet for
legal purposes as a mere static physical entity: nothing more than a
group of computers containing information which are linked physically
to one another. The Internet should rather be viewed as a process of
communication. It is, in essence, a system of communication that allows
a verbal or graphic message to be set up on a computer, which may
be situated anywhere in the world, and conveyed to another computer,
which may likewise be situated anywhere in the world. What is peculiar
about the Internet is that the message will not be conveyed unless the
initiative is taken by the operator of the second, recipient, computer.
Nevertheless, it is essential to bear in mind that there will be no message
to be conveyed unless the operator of the sending computer first sets
up the necessary website. Moreover, when a website is set up, it is self-
evident that the intention is that other persons should be able to obtain
access to it via the Internet. The person who creates the website is linking
himself into a process of communication, with the obvious intention that
communication should take place by way of that process.
19 It follows, in my opinion, that the person who sets up the website can
be regarded as potentially committing a delict in any country where the
website can be seen, in other words in any country in the world. It does
not follow that he actually commits a delict in every country in the world,
however. It is obvious that the overwhelming majority of websites will
be of no interest whatsoever in more than a single country or a small
group of countries. In my opinion a website should not be regarded as
having delictual consequences in any country where it is unlikely to be
of significant interest. That result can readily be achieved by a vigorous
application of the maxim de minimis non curat praetor; if the impact of
a website in a particular country is properly regarded as insignificant, no
delict has been committed there. In determining whether the impact of
a website is insignificant, it is appropriate in my opinion to look both at
the content of the website itself and at the commercial or other context
in which the website operates. In the Crate & Barrel case, for example,
the commercial context of the defendants' website was a shop operating
in Dublin, and obviously catering to a local clientele. The website itself
dealt with goods that were available in that shop. In the circumstances,
it was obvious that the defendants' trade with the United Kingdom was
insignificant, and was accordingly insufficient to give rise to a case of
trade mark infringement.
20 In the present case the pursuers aver that their circulation is
substantially in Scotland. They further aver that they published articles
about the first defender's business dealings in Scotland, where he was
formerly resident, and that the first defender has in consequence raised
defamation proceedings against them in England. That is admitted by
the defenders, and indeed copies of the pleadings in the defamation
actions have been lodged in process. The pursuers further aver that the
first defender has registered a substantial number of domain names that
bear an obvious resemblance to their own domain name, B.am.co.uk.
The defenders aver that the domain names in question have in fact
been registered by the second defenders; it is admitted, however, that
the first defender is the managing director of the second defender, and
accordingly I do not think that it is relevant which of the defenders is
actually the registered owner of the names in question. The pursuers
further aver that the second defenders had published an announcement
on their own website on 21st May 2002 to the effect that they had
acquired the domain name "B.am.com". Moreover, it is clear from the
terms of that announcement that the second defenders intended to
offer an online business advisory service using that domain name. In
my opinion an inference may readily be drawn from the foregoing facts
that the defenders, acting together, intend to set up a website which is
designed to pass themselves off as the pursuers, and to make use of
a name sufficiently close to the pursuers' trade mark to amount to an
infringement of that trade mark. Those acts are clearly aimed at the
pursuers' business. That business is centred in Scotland, and it is in my
opinion obvious that the defenders' actings are intended to have their
main effect in Scotland. In these circumstances I am of opinion that
the requirement that the effect in Scotland of the website should be
significant is plainly satisfied, and that accordingly the defenders can be
regarded as threatening a delict in Scotland. I accordingly conclude that
the Scottish courts have jurisdiction over the defenders.Title to sue
21 The second argument of counsel for the defenders was that the
pursuers lacked title to sue in respect of the alleged trade mark
infringement. The trade mark on which the pursuers founded was
registered in the name of "BM. Scotland", an apparently unincorporated
entity with an address at 50 L. Road, Edinburgh. The pursuers, on the
other hand, were X. Limited, a company having its registered office at
40 T. Street, Edinburgh. The pursuers had in fact been known as BM.
Scotland Limited until 20th July 2000. The applications for the mark in
question, however, had been filed on 13th July and 12th August 2000, the
latter date being some three weeks after the pursuers had changed their
name.
22 In my opinion this argument is not well founded. The pursuers were
known as BM. Scotland Limited at the time when the initial application
for the trade mark was filed. It is therefore an obvious inference that
they are the person referred to in the application. In the absence of any
evidence of any other entity that used the name "BM. Scotland", that
inference is very powerful indeed. The second application was made after
the pursuers had changed their name, but it continued the name used in
the first application. The mark in question is identical in both applications.
In the circumstances I consider that the same inference must plainly be
drawn. I am accordingly of opinion that the pursuers have established title
to sue.Trade mark infringement
23 The next submission for the defenders was that the pursuers had not
averred a prima facie case of trade mark infringement. I understood that
contention to be made on two bases. In the first place, the defenders'
counsel submitted that the full trade mark included the words "Scotland's
Business, Financial & Political Daily" as well as the words "B. a.m.".
That was because it was highly unlikely that the expression "B. a.m."
by itself would be registrable. Section 3(1)(b) of the Trade Marks Act
1994 denied registration to marks which are "devoid of any distinctive
character", and the words "B. a.m.", it was said, lacked such distinctive
character. Counsel referred to paragraphs 3.01, 3.5, 3.9 and 3.11.2 of
the Registry Work Manual, the guide issued by the Registrar of Trade
Marks. The word "B." and the expression "a.m." were each lacking in
sufficiently distinctive character to be registrable, and the same was true
of the two used together. Consequently the trade mark must be taken as
incorporating the full wording of the pursuers' device, and that was not
infringed by the domain name "B.am.com"; it could not be said that the
domain name was the same as or was similar to the pursuers' trade mark.
Indeed, that domain name used the word "B.am", which was not used
as a single word in the pursuers' registered trade mark. In the second
place, counsel submitted that the pursuers did not aver in detail what the
defenders were likely to do with the domain name "B.am.com", and in
the circumstances it could not be said that there was any infringement
of the pursuers' mark. The most that the pursuers averred was that the
defenders planned to set up an "online business advisory service". That
was clearly different from running a newspaper, and did not, it was said,
infringe any of the classes in respect of which the pursuers had registered
their trade mark. While there might be some confusion between two
similar domain names, that was inherent in the nature of the Internet,
where similar domain names were commonplace.
24 In reply, counsel for the pursuers referred me to the English decisions
at first instance and in the Court of Appeal in British Telecommunications
Plc v One in a Million Limited, 1998 FSR 265; 1999 1 WLR 903. On the
basis of that decision, he submitted that interdict should be granted in
any case where a person had acquired a domain name intending to use
it as an instrument of fraud. In the present case, "B. a.m." was clearly
the main part of the pursuers' trade mark. Consequently the acquisition
by the second defenders of a domain name incorporating a version of
that expression, "B.am", was in all the circumstances sufficient for the
inference that the defenders intended to use that domain name as a
means of infringing the pursuers' trade mark, or passing off their website
as that of the pursuers; that was use as an instrument of fraud. Counsel
for the defenders submitted that the present case was distinguishable
from British Telecommunications Plc v One in a Million Limited; that
case was concerned with the practice known as cybersquatting, in which
a dealer acquires domain names that suggest a connection with well-
known companies or organisations, and then attempts to sell the domain
names to those companies or organisations at inflated prices; if the prices
are not paid, the dealer threatens to use the domain name to set up a
website containing pornographic or other undesirable material. In the
present case, by contrast, the pursuers did not aver that the defenders
had acquired the domain name "B.am.com" other than innocently.
25 In my opinion the pursuers have established a prima facie case of
infringement of their trade mark. In the first place, I consider that the
essence of the pursuers' trade mark is the expression "B. a.m.". No doubt
in the full version of the mark other wording is used, and the whole of the
wording is placed on a rectangular device. Nevertheless, the words "B.
a.m." are much more prominent than any other part of the device, and
it is obvious that the pursuers' newspaper is known to the public by that
name. I do not agree that the name "B. a.m." would not be registrable by
itself. Individually, the word "B." and the expression "a.m." would almost
certainly not be registrable, on the ground that they lacked distinctive
character. If the two expressions are used together, however, it is the
totality that must be considered in determining whether the proposed
mark is "devoid of any distinctive character". In my opinion the mark "B.
a.m." taken as a whole is sufficiently distinctive for registration.
26 In the second place, I am of opinion that the defenders' use of the
domain name "B.am.com" for a website providing an "online business
advisory service" is a prima facie infringement of the pursuers' trade
mark. It is obvious that the expressions "B. a.m." and "B.am" are very
similar, and it is likely that they would be pronounced in the same way.
That is particularly clear in the context of a domain name, where full
stops can only be used to separate the levels of a domain name, and
neither spaces nor full stops can be used in the part of the name that
occurs prior to the suffix. Thus there is a clear likelihood of confusion.
It is not entirely clear what an "online business advisory service" would
involve. Counsel for the defenders accepted that it was their intention
to set up such a website, but was unable to provide further detail as to
what might be involved. This was perhaps surprising in view of the terms
of the announcement referred to in paragraph 7 above, which indicated
that the website was to be operational by the end of June 2002. It
seems clear, however, that the website would have to contain substantial
amounts of information relevant to the world of business and finance.
That could easily involve a substantial overlap with the functions of a
financial newspaper, whose very rationale is to provide such information.
Moreover, the pursuers' trade mark is registered for Class 35, which
includes business management and business administration. Once again,
it is easy to see how infringement could occur.
27 In the third place, I am of opinion that the principles stated by the
English Court of Appeal in British Telecommunications Plc v One in a
Million Limited, supra, should be followed in Scotland and are directly
applicable to the present case. On this basis, I would conclude that the
present pursuers had established a prima facie case independently of
the matters discussed in the last paragraph. The defendants in that case
were dealers in internet domain names, and followed the practice of
registering domain names that incorporated well-known trading names.
They then offered such names for sale. The plaintiffs were a number of
large concerns whose names had been incorporated into domain names
registered by the defendants and offered by the defendants for sale. The
plaintiffs contended that the defendants' registration and attempted sale
of the domain names amounted to actual or threatened passing off and
to threats to infringe the plaintiffs' registered trade marks. The Court of
Appeal upheld these contentions. After referring to a number of earlier
cases, Aldous LJ, delivering the opinion of the court, concluded as follows
(at p 920):
"In my view there can be discerned from the cases a jurisdiction to grant
injunctive relief where a defendant is equipped with or is intending to
equip another with an instrument of fraud. Whether any name is an
instrument of fraud will depend upon all the circumstances. A name which
will, by reason of its similarity to the name of another, inherently lead
to passing off is such an instrument. If it would not inherently lead to
passing off, its does not follow that it is not an instrument of fraud. The
court should consider the similarity of the names, the intention of the
defendant, the type of trade and all the surrounding circumstances. If it
be the intention of the defendant to appropriate the goodwill of another or
enable others to do so, I can see no reason why the court should not infer
that it will happen, even if there is a possibility that such an appropriation
would not take place. If, taking all the circumstances into account, the
court should conclude that the name was produced to enable passing
off, is adapted to be used for passing off and, if used, is likely to the
fraudulently used, an injunction will be appropriate.
It follows the court will intervene by way of injunction in passing off
cases in three types of case. First, where there is passing off established
or it is threatened. Second, where the defendant is a joint tortfeasor
with another in passing off either actual or threatened. Third, where the
defendant has equipped himself with or intends to equip another with an
instrument of fraud".
The court made it clear that similar principles would apply to cases of
trade mark infringement. In my opinion those principles represent the law
of Scotland. At the heart of both passing off and trade mark infringement
lies the notion of dishonesty: a trader dishonestly represents that his
goods or services are the goods or services of another person. If one
person supplies another with something calculated to enable that other
to represent dishonestly that his goods or services are those of a third
person, the person making that supply is clearly a party to the dishonesty.
Consequently it is obvious that the law must be able to prevent him from
making the supply. For these purposes, it is immaterial that the item
supplied is a name, or the right to use a name; indeed the supply of a
deceptive name is a very obvious means of facilitating the dishonesty
involved in passing off or trade mark infringement. Exactly the same is
true if a person acquires the right to a name which is calculated to enable
him to represent dishonestly that his goods or services are those of a
third person; such acquisition is in itself dishonest, and the law must be
able to prevent the dishonest use of the name.
28 In British Telecommunications Plc v One in a Million Limited, supra, the
Court of Appeal concluded that the defendants' registration of well-known
trading names as domain names constituted trade mark infringement
and passing off; the names had been registered as instruments of fraud..
Aldous LJ stated (at 923):
"No doubt the primary purpose of registration was to block registration
by the owner of the goodwill. There was, according to counsel for the
defendants, nothing unlawful in doing that. The truth is different. The
registration only blocks registration of the identical domain name and
therefore does not act as a block to registration of a domain name that
can be used by the owner of the goodwill in the name. The purpose of
the so-called blocking registration was to extract money from the owners
of the goodwill in the name chosen. Its ability to do so was in the main
dependent upon the threat, expressed or implied, that the defendants
would exploit the goodwill by either trading under the name or equipping
another with the name so he could do so".
In my opinion the facts of the present case present an even stronger case
of trade mark infringement, and indeed passing off. The defenders have
acquired a substantial number of domain names that are similar to the
essential part of the pursuers' trade mark, "B. a.m.", which is also the
name under which the pursuers trade. For this purpose it is immaterial
which of the defenders has registered the names; the first defender is
managing director of the second defenders, and in cases involving fraud
or dishonesty the courts will not allow the existence of separate corporate
legal personality to stand in the way of an effective legal remedy. There
is an existing dispute between the first defender and the pursuers; that
is clear from the pleadings in the English libel actions. No reason has
been suggested for the defenders' choosing the name "B. a.m.", or a
version of that name, for their proposed website, rather than one of the
multiplicity of other names that might be suitable as a domain name.
These circumstances give rise in my opinion to an irresistible inference
that the defenders have acquired domain names based on the expression
"B. a.m.", including the name "B.am.com", with the specific intention of
representing that a website set up by then is connected in some way with
the pursuers. That involves using a domain name as an instrument of
fraud, and that clearly falls within the principle discussed above.Passing
off
29 In relation to passing off, counsel for the defenders founded on
the definition of passing off found in the speech of Lord Oliver of
Aylmerton in Reckitt & Colman Limited v Borden Inc., 1990 1 WLR
491, at p 499C-H. He submitted that there was no realistic prospect of
members of the public being misled into thinking that the defenders'
website was produced by the pursuers, notwithstanding the use of the
expression "B.am". The defenders' website would not be of the nature of
a newspaper, or a website summarising material in a newspaper. Even
if the name "B.am" might sometimes lead members of the public to
think that they were accessing the pursuers' website, the actual contents
themselves would indicate otherwise, and there would be no material
deception. In any event, the pursuers did not aver that any substantial
damage would be caused to them by the defenders' opening a website
under a name including the expression "B.am".
30 In my opinion the relevant principles are those stated in paragraphs
27 and 28 above, which apply equally to trade mark infringement and
to passing off. The defenders have acquired a number of domain names
containing the expression "B.am", and have indicated that they propose
to use one of those names to set up a website containing an "online
business advisory service". That is against the background of an existing
dispute between the pursuers and the first defender. As with trade mark
infringement, I am of opinion that the circumstances lead to an irresistible
inference that the defenders have acquired domain names based on the
expression "B. a.m." with the specific intention of representing that a
website using one of those names is connected with the pursuers. Once
again, that involves using a domain name as an instrument of fraud,
which constitutes passing off. Because the use of a deceptive name is
calculated to confuse the public, it is immaterial in my opinion to consider
how widespread such confusion is likely to be. I am accordingly of opinion
that the pursuers have averred a prima facie case of passing off.Balance
of convenience
31 Counsel for the defenders submitted that, even if I were against
him on the foregoing matters, the balance of convenience favoured the
defenders. He relied in the first place on the relative strength of the
parties' cases. For the reasons stated above, I am of opinion that the
pursuers have averred clear prima facie cases of trade mark infringement
and passing off. I accordingly consider that this is not a factor that
favours the defenders. Counsel for the defenders further submitted
that, because the parties operated in different areas of business, there
was unlikely to be any significant effect on the pursuers. Likewise,
the defenders' proposed website was to be directed to world-wide
business activities, rather than to the United Kingdom; this was another
factor that would make the impact on the pursuers of the defenders'
activities insignificant. In a case involving deliberate deception, or the
deliberate acquisition of something that is obviously to be used as an
instrument of deception, I am of opinion that the extent of the actual
or prospective damage to the pursuer is immaterial; where a delict is
committed deliberately interdict should be available even if the likely
damage is minimal. Finally, counsel submitted that the present action
was premature, because the pursuers could not aver with certainty
what material would be on the defenders' website. In my opinion that
is immaterial; the pursuers' present averments are quite sufficient to
draw the inference that the defenders intend to set up a website that is
calculated to be confused with the pursuers' website. In particular, the use
of a name almost identical to the pursuers' trading name, in the context
of an existing dispute, leads inevitably to that conclusion. For these
reasons I am of opinion that the defenders' arguments on the balance
of convenience are not well founded. Against the considerations founded
on by the defenders is the fact that, if the defenders set up a website
using a domain name such as "B.am.com", damage may be done to the
pursuers' business. In my opinion the balance of convenience clearly
favours preventing such damage before it occurs.Terms of interdict
32 Finally, counsel for the defenders submitted that the terms of the
interim interdict granted by me on 23rd May 2002 were too wide.
That interdict prohibited the defenders from passing themselves off
as the pursuers or infringing the pursuers' trade mark "and that by
registering, setting up, administering and maintaining websites making
use of the name 'B. a.m.' or domain names using the same sequence of
lettering". Counsel submitted that the interdict should be restricted to
prohibiting three activities: firstly, the use of the pursuers' trade mark
in its registered form, secondly, the use of any domain name containing
the sequence of letters "B.am" in relation to any form of newspaper
service, and thirdly, any representation on the defenders' website that
might cause a viewer to think that the use of a domain name containing
the expression "B.am" was connected with the business or products of
the pursuers. In my opinion is not appropriate to restrict the interdict
in this way. On the facts of the case I have drawn the inference that
the defenders' use of a domain name containing the expression "B.am"
will be calculated to represent that the relative website is that of the
pursuers, or connected with the pursuers. It is accordingly the mere use
of the expression "B.am" in the domain name that is objectionable. I
can accordingly see no reason for restricting the interdict in the manner
suggested.
33 For the foregoing reasons I will refuse the defenders' motion to recall,
or alternatively to restrict, the interdict pronounced on 23rd May 2002.