1-800 Flowers Inc v Phonenames Ltd

A service mark’s inherent capacity to distinguish must be assessed at the application date in the context of reasonably foreseeable commercial developments. A mark which, in substance, describes an encoded telephone number for obtaining the specified services may lack distinctive capacity.

Registration may also be refused where use creates a real and tangible danger of confusion. That danger arose where the mark referred to a telephone number which the applicant did not possess.

Internet accessibility alone does not establish use of a mark in the United Kingdom. Summary assessment of costs must focus on the receiving party’s itemised statement. It must not substitute a judicial tariff for assessment of the costs actually incurred.

The applicant sought registration of 800-FLOWERS under the Trade Marks Act 1938 for services involving the receipt and transfer of orders for flowers. The Registrar accepted the mark for registration in Part B, subject to disclaimers. Phonenames Ltd successfully appealed to the High Court, where Jacob J ordered refusal of registration: [2000] FSR 697.

The applicant appealed against the refusal. It argued that the mark was inherently distinctive, would not cause confusion and had been used, or was proposed to be used, in the United Kingdom. The opponent cross-appealed against the judge’s summary assessment of its High Court costs at £10,000.

The central questions were whether the mark was capable of distinguishing the specified services, whether its use was likely to cause confusion, whether the applicant had used or genuinely proposed to use it in the United Kingdom, and whether the costs had been summarily assessed according to principle.

1. Appeal dismissed unanimously. Jonathan Parker LJ held that inherent capacity to distinguish under section 10 of the Trade Marks Act 1938 was assessed at the application date, but was not confined to conditions then prevailing. The reasonably foreseeable future was relevant. In 1993 the increasing use of alpha-numeric phonenames in the United Kingdom was reasonably foreseeable. Against that background, 800-FLOWERS was, in substance, an encoded freephone number rather than a mark distinguishing the applicant’s services.

2. Registration was also contrary to section 11. The applicant had never possessed the corresponding United Kingdom telephone number. Use of the mark for a business centred on receiving and transmitting orders by telephone would therefore create confusion, if not deception. The relevant cause was the applicant’s lack of the number, rather than its later allocation to the opponent.

3. The applicant had not established actual use of the mark in the United Kingdom for sections 17 and 68. Calls from the United Kingdom to its United States number did not necessarily constitute United Kingdom use. The evidence about access to its website was also insufficient. The services were performed abroad, the applicant had no United Kingdom place of business, and the evidence did not establish even the minimal domestic use required to found proprietorship.

4. The applicant’s proposed use was conditional upon acquiring the corresponding United Kingdom number. Such a conditional intention did not establish the required proprietorship. Passing-off principles governing domestic goodwill and rules concerning infringing use addressed different questions.

5. Buxton LJ agreed. He added, obiter, that internet availability does not ordinarily amount to use of a mark in every jurisdiction from which the site can be accessed. Use within an area generally requires an active step there by the proprietor beyond merely enabling another person to download the mark. Direct encouragement or advertising to persons in the jurisdiction may alter the position.

6. Cross-appeal allowed unanimously. Summary assessment had to focus upon the detailed items in the receiving party’s statement of costs. Judicial experience and proportionality could inform that exercise, but the jurisdiction could not introduce tariffs for categories of case. The £10,000 assessment was set aside and the opponent’s High Court costs were directed to detailed assessment.

1. Court of Appeal (Civil Division): The applicant’s appeal was dismissed and the opponent’s cross-appeal was allowed: [2001] EWCA Civ 721. The summary costs assessment was set aside and a detailed assessment directed.
2. High Court, Chancery Division: Jacob J allowed the opponent’s appeal from the Registrar, refused the application for registration and summarily assessed the opponent’s costs: [2000] FSR 697.
3. Registrar of Trade Marks: The Hearing Officer rejected the opposition and accepted the mark for registration in Part B, subject to disclaimers concerning “800” and “Flowers”.