Issue of Passing Off and Trade Mark

Luscious Love Television (LLTV), an ‘adults only’ satellite channel, broadcasts a ‘talent show’ at midnight every Saturday and Sunday. The theme of the programme is romance and love. Contestants are introduced on the show, and then have their details posted on the programme web site, lusciouslove.co.uk. There is also a ‘lusciouslovetv.com site, which automatically redirects visitors to the .uk portal. Following each broadcast, viewers interested in the contestants post their personal details on the site. The contestants then choose ‘partners’, from respondents’ postings on the web site, and introduce them on the following show.

Such has been the success of the format that the Love Company (LC) registered in Tuvalu, has set up two web sites – lusciouslove.tv and luscioustv.com. Dispensing with the broadcast, they merely operate as ‘lonely hearts’ type sites, charging a membership subscription to visitors who wish to post. Luscious Love TV, have received numerous complaints from viewers, who have mistakenly posted their personal information on the two sites hosted by the Love Company. Luscious Love TV believe that they are loosing viewers as a result of the activities of the Love Company, which has resulted in a measurable decline in the advertising revenue generated by the broadcast, and fees based on visitor ‘hit’ numbers to their web sites.

In the meantime, Lame Brain (LB), a viewer who posted his details, but was unsuccessful in his efforts to be selected for the show, has set up a website lusciouslovesick.org, for like-minded ‘complainants’, who have posted numerous derogatory and insulting comments about the Luscious Love TV, the contestants and the ‘partners’ appearing on the show.

Advise Luscious Love TV generally and in particular whether:

Luscious Love TV can do anything about potential participants in their show, mistakenly signing-up with lusciouslove.tv and luscioustv.com

PROCEDURE – Luscious Love TV can get the lusciouslovesick.co site closed down, before any further harm is done to their business and their reputation

DAMAGES – Luscious Love TV can recover any damages for the losses which they have suffered because their viewers visited lusciouslove.tv, luscioustv.com and lusciouslovesick.org, instead of their own sites

there is any further information you need before instituting legal or other proceedings, and what will be the likely cost of such proceedings?

This question concerns basically with the issue of passing off and trade mark which will be discussed in the question.

Passing off is a tort which can be used by an unregistered trademark owner to put his rights into effect. This tort protects a trader’s goodwill to be misrepresented by someone else, which might cause damage to the trader’s goodwill or business. It is not governed by any act of parliament, but has developed through the case law over the years.

Passing off works along with the law of registered trademarks. A trader can enforce his rights for an unregistered mark or name if three of the elements are satisfied which are set out in the case of Reckitt & Colman [1] . According to the case, these requirements are

Goodwill: Goodwill was explained in the case of IRC v Muller [2] . This basically means reputation. A good name, reputation and course of dealing in business. This attracts the customers to the business and something that distinguishes a well established business from a new one.

Misrepresentation: This is a contract law concept. It means that a false statement, act or such is made which induces other party to believe that they are dealing with someone else. This was explained in the case of Reed Executive [3] by Jacob LJ, so basically a misrepresentation has to be made by respondent which persuades the customer to believe that goods or services offered by him are of the claimant’s.

Damage: The claimant will have to establish some kind of loss which he is likely to suffer or has already suffered, which could include loss of profit in existing market, loss of reputation or loss of an opportunity to expand.

The leading case in passing off is the case of BT v One in a million, [4] where the defendant registered big commercial names like Sainsbury, MarksandSpenser without the consent of the respective companies and the defendant accepted that part of his scheme was to use his “blocking registration” to sell the name on to its “legitimate” user or threaten to use it or sell it on to third parties. Aldous LJ in this case held that “The placing on a register of a distinctive name such as marksandspencer makes a representation to persons who consult the register that the registrant is connected to or associated with the name registered and thus the owner of the goodwill in the name. Such persons would not know of One In A Million and would believe that they were connected or associated …”

Examples of passing off over the internet will include selling goods or services which are misrepresented and could be mistaken as claimant’s goods by the customer or when the defendant is supplying his own goods when the customer has ordered claimant’s goods.

According to the scenario, potential participants of Luscious Love TV (LLTV) are signing up with lusciouslove.tv and luscioustv.com. If LLTV is able to establish three requirements, which are, goodwill, misrepresentation and damage, they can bring an action against Love Company (LC) which would stop them from operating their websites for any long.

Part 2

PROCEDURE – Luscious Love TV can get the lusciouslovesick.co site closed down, before any further harm is done to their business and their reputation

To stop LC to operate their websites, LLTV will have to apply for arbitration as this method is faster and less expensive compared to bringing in an action in court. Internet Corporation for Assigned Names and Numbers (ICANN) is a dispute resolution provider which offers service for arbitration. The responsible department for arbitration under ICANN for all gTLDs is Uniform Domain Name Dispute Resolution Policy (UDRP). Any person from all over the world can file a complaint using URDP services [5] , as can be seen in the case of Infospace.com [6] . The general principles under section 1 of Arbitration Act 1996 are (a) the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense; (b) the parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest; and (c) in matters governed by this Part the court should not intervene except as provided by this Part.

From 2001 disputes for ccTLDs “.uk” websites are dealt through Nominet. However, domains in question are gTLDs, .com and .tv, LLTV will have to apply through UDRP. UDRP carries out two types of arbitrations; (i) WIPO Arbitration, (ii) WIPO expedited Arbitration [7] . Expedited arbitration is carried out in shortened period of time and is less expensive. Generally, expedited arbitration takes 3 months before the final award is made, which could take up to 1 month, however, general arbitration takes 9 months before the award is made and time taken for award making can go up to 3 months. The cost for expedited arbitration is lower than of the general arbitration as it takes longer time. The full schedule for fees and costs could be seen at WIPO’s website. [8]

Once a complaint has been made, the UDRP is mandatory for any registrant (respondent) as it is incorporated in ICANN’s agreement, under Para. 4(a) “You are required to submit to a mandatory administrative proceeding in the event that a third party (a ‘complainant’) asserts to the applicable Provider, in compliance with the Rules of Procedure,…” [9]

In order to make a complaint, LLTV will have to establish “(i) the domain name registered by the domain name registrant is identical or confusingly similar to a trademark or service mark in which the complainant (the person or entity bringing the complaint) has rights; and (ii) the domain name registrant has no rights or legitimate interests in respect of the domain name in question; and (iii) the domain name has been registered and is being used in bad faith” (UDRP Para. 4(a))

After LLTV has submitted application to UDRP, the panel will decide if LLTV has built up adequate goodwill in market to grant it rights against passing off as the common law rights are not attained by mere registering, but by actual reputation and customer acknowledgment which was also highlighted in the case of Gallerina v Wilmhurst. [10]

Are the domain names identical or similar

As mentioned earlier, according to the rules of UDRP, in order to make an application, the domain names should be “identical or confusingly similar” to the applicant’s domain name. Making small changes in the names before registering, such as adding ‘and’ instead of ‘&’ or adding hyphen to the name still leaves the name similar and confusingly identical. Such changes are called typo-squatting and it will be held similar perpetually by the panel. Typo-squatting is a registering or buying of misspelled version of a popular domain name. The purpose is to attract visitors who make spelling errors while entering website address. A classic example of typo-squatting could be seen in the case of Arcelormittal v. PrivacyProtect.org [11] , where 5 disputed domain names were turned over to complainant. Also, if the spelling is different but there is a phonetic similarity, the panel is most likely to find it confusingly similar. An example can be seen in the case of Intesa Sanpaolo S.p.A. v. Above.Com Pty Ltd./ David Woo [12] where disputed domain name “intesasanoalo.com” was transferred to the complainant due to phonetic similarity. In the case Sanofi-Aventis v. Davie Kearney [13] addition of a prefix or suffix was taken similar by the panel and the domain names in question ‘ambien-i.com’ and ‘buy-ambien-here.com’ were held to be confusingly similar and transferred to the complainant.

Does the respondent have any legal interest in domain name

According to policy of URDP, the complainant must show that respondent has no legal rights in the domain name registered. At this stage the weight shifts to the respondent, where he has to show an interest in the domain name registered. At this stage the respondent has to show their legal right for example that he is making a authentic use of the domain name, or they are commonly known by that name. If the respondent is unable to establish interest in the domain name, it is most likely that panel will hold the decision in favour of complainant. A good example of interest could be seen in the case of NIKE Inc. v Granger and Associates [14] where both parties were business partners and the respondent registered domain name which complainant had an interest in, when complainant terminated the contract between the two parties. It was held that the respondent did not have a legal interest in the domain name and it was transferred to complainant.

Was the domain name registered and used in bad faith

Para.4(a)(iii) requires complainant to prove that the domain name was registered in bad faith and is being used in bad faith. Para.4(b) further explains use in bad faith as, if the respondent has registered the domain name “primarily for the purpose of selling, renting, or otherwise transferring the domain name … to the complainant who is the owner of the trademark … or to a competitor…, for valuable consideration in excess of your documented out-of-pocket costs…;”. The section also provides that registering for the purpose of disrupting business of a competitor or for the purpose of attracting visitors to the website with the intention of making profit will be considered as bad faith. A classic example of bad faith can be seen in the case of Imperial Chemical Industries PLC v. RareNames [15] where respondent registered a website icidulux.com. The claimant was the trademark holder of ICI and DULUX, and it was found that the respondent is in breach of Para. 4(b)(iv) as respondent had registered the domain name with knowledge of the trademarks, which is bad faith and was using it in order to attract traffic in order to make commercial gains. It was held by the panel to transfer the disputed domain name to the complainant.

A complaint can be made to UDRP by LLTV against LC for passing off, however, LLTV will have to establish three requirements mentioned above. According to the facts given in scenario, it is most likely that the court will find LC’s domain names confusingly similar, with no interest in the domain names registered, and being used in bad faith and it is most likely that the complaint will be upheld. However, the only remedies available through UDRP are cancellation or transfer of domain names to the complainant.

This part of the question deals with the issue of procedures to bring in claim against the defendant or to apply for injunction.

Thus if LLTV wants to bring in an action against LC, it will have to the three requirements are met which were laid in the decision of Reckitt & Colman [16] . In this case, Lord Oliver reduced the elements required to bring a case of passing of to “the trinity of confusion leading to deception, and damage”, which means that LLTV will have to establish that their goodwill or reputation, which has been misrepresented in a way which has lead the customers to believe that LC’s websites are part of LLTV and lastly that LLTV has suffered or likely to suffer some kind of damage to their business.

While establishing goodwill, the claimant has to show that he has a well built reputation, mere confusion between two traders or products will not be classed as passing of in itself as was laid down in the case of HFC Bank Plc v Midland Bank plc [17] where it was held that the similarity has to be as close which could amount to a misrepresentation. However according to scenario, it would be simple for LLTV to show their goodwill and reputation in the market. After goodwill has been successfully established, the claimant has to establish misrepresentation. According to the case of Morning Star Co-operative Society Ltd v Express newspapers [18] per Foster J, misrepresentation should be such that claimant’s goods or services are at a real risk of confusion to the customers. The defendant on the other hand however, cannot rely on innocence as a defence. This was held in the case of Gillette UK Ltd v Edenwest Ltd [19] where defendant had resold counterfeit razors in UK without any knowledge of goods being counterfeit. It was held that innocence cannot be used as a defence. LLTV would be easily able to persuade the courts for the requirement of damage as many of its visitors have been signing up on LC’s websites, confusing them with LLTV’s websites.

If LLTV is able to meet and satisfy all three requirements, it is highly likely that the courts will hold decision and award damages in favour of LLTV.

Another issue which LLTV is concerned about is setting up of “” by Lame Brian (LB). Setting up of websites adding prefixes for e.g. ‘fuck’ or suffixes for e.g. ‘sucks’ to a famous company or person is called cyber griping. These websites are often kind of ‘complaint’ websites where an unhappy individual sets up a website to critique, mock or complaint about the target. If LLTV wishes to bring suit against LB in court, it is most likely that the court will hold decision in favour of LB, as granting an injunction would be breach of freedom of speech. This could also be seen in a recent US case of Taubman Co. v. Webfeats [20] where the US court of appeal reversed the decision of lower courts who had granted an injunction against webfeats. The court of appeal held that as the website is a non-commercial website and does not misrepresent claimant’s business or services, granting an injunction against it would be a breach of freedom of speech. However, if LLTV wishes to proceed through UDRP, the questions arise would be if the domain names are ‘confusingly’ similar and if the registrant has legal rights in the domain name registered. The UDRP case law shows that the panels are ready to recognize that there is no real likelihood of confusion. This can be seen in the case of Asda Group Limited v Kilgour [21] where the panel came to a conclusion that the domain name in question is not confusingly similar to misrepresent the complainant. However, in other cases the panels have found names to be similar and cancelled the domain names. An example would be case of Koninklijke Philips Electronics N.V v Selling Domains Best [22] where the panel found ‘fuckphilips’ confusingly similar to ‘philips’ and decided to cancel the domain name. Thus it remain on the panel to decide if “lusciouslovesick.org” can be confused with “lusciouslove.co.uk” or “lusciouslovetv.com”.