British Telecommunications Plc v One In A Million Ltd (Ladbroke Group Plc v One In A Million Ltd, Marks & Spencer Plc v One In A Million Ltd, Sainsbury (J) Plc v One In A Million Ltd, Virgin Enterprises Ltd v One In A Million Ltd)

Passing off may arise when a dealer registers another trader’s distinctive name as an Internet domain name. Registration can itself falsely represent an association with the owner of the goodwill and erode the exclusivity of that goodwill.

An injunction may also restrain a defendant who possesses, or intends to provide another with, an instrument of fraud. Whether a name has that character depends on its similarity to the protected name, the defendant’s intention, the relevant trade and all the surrounding circumstances. Relief is appropriate where the name was produced and adapted for passing off and is likely to be used fraudulently.

Registration and proposed sale of domain names corresponding to reputed registered marks may also threaten infringement under section 10(3) of the Trade Marks Act 1994.

The appellants dealt commercially in Internet domain names. They registered domain names incorporating the well-known business names and registered marks of five groups of claimants without their consent. The registrations included names corresponding to Marks & Spencer, Sainsbury, Ladbroke, Virgin, British Telecommunications and Cellnet.

Mr Jonathan Sumption QC, sitting as a deputy High Court judge, granted summary judgment under Order 14: (1998) FSR 265. He held that the appellants had threatened passing off and infringement of registered trade marks, and granted final quia timet injunctions.

The appellants contended that registration alone was neither passing off nor trade mark infringement. They also argued that some names could be used legitimately. The central questions were whether the registrations themselves constituted or threatened passing off, whether the names were instruments of fraud, and whether their proposed use threatened infringement under section 10(3) of the Trade Marks Act 1994.

1. The appeals were dismissed unanimously. Aldous LJ delivered the judgment, with which Stuart-Smith and Swinton Thomas LJJ agreed. The cases were sufficiently plain for summary judgment.

2. Registration of a domain name containing the uniquely distinctive name Marks & Spencer amounted to passing off. A person consulting the domain-name register could conclude that the registrant was connected or associated with the owner of the goodwill. That was a false representation. Registration also eroded the exclusive goodwill in the name and thereby caused, or was likely to cause, damage.

3. The appellants’ correspondence and course of dealing established threatened use and disposal. Their purported blocking registrations were intended to extract money from the owners of the goodwill. Their commercial force depended upon an express or implied threat that the goodwill would be exploited by the appellants or by a transferee. Quia timet relief was therefore justified.

4. A court may intervene in passing-off cases where:

   1. passing off is established or threatened;
   2. the defendant is a joint tortfeasor in actual or threatened passing off; or
   3. the defendant has equipped himself, or intends to equip another, with an instrument of fraud.

   Whether a name is an instrument of fraud depends on all the circumstances, including the similarity of the names, the defendant’s intention and the type of trade. An injunction is appropriate where the name was produced to enable passing off, is adapted for that purpose and is likely to be used fraudulently.

5. The remaining household names were also instruments of fraud, although legitimate use by some third party was theoretically possible. The appellants selected the names for their goodwill, registered them without distinguishing words, and intended to threaten dishonest use by themselves or others. Passing off and threatened passing off were established.

6. The proposed dealing also threatened infringement under section 10(3) of the Trade Marks Act 1994. Assuming without deciding that the provision required trade mark use and confusion, those requirements were satisfied. The domain names indicated origin, were to be used in the appellants’ domain-name services, and were confusingly similar to reputed registered marks. Their registration sought unfair advantage from, and was detrimental to, the marks’ distinctive character and reputation.

1. Court of Appeal: Dismissed the defendants’ appeals unanimously and affirmed the summary judgments and final injunctions. Leave to appeal to the House of Lords was refused.
2. High Court, Chancery Division: Mr Jonathan Sumption QC, sitting as a deputy judge, granted the claimants summary judgment under Order 14 and final quia timet injunctions for threatened passing off and trade mark infringement: (1998) FSR 265.