Lifestyle Management Ltd. v Frater

Passing off may arise where a defendant uses domain names closely resembling a claimant’s domain name, with the intention of diverting potential clients and damaging the claimant’s business. The claimant must show goodwill or reputation, a misrepresentation likely to deceive, and damage.

The court may grant an injunction where the defendant has equipped himself with an instrument of fraud or intends to use one for passing off. A harmful event for jurisdictional purposes may occur where deceived potential clients access the defendant’s website and are thereby deterred from dealing with the claimant.

The claimant companies, which provided financial advice to expatriates, sought interim relief against their former agent. After termination of the agency relationship, the defendant registered domain names closely resembling the claimant’s domain name and used associated websites to display material said to damage the claimant’s business.

The application sought orders directing the websites to blank pages, delivery up of a confidential client database, and restraint from using confidential information. The central issues were whether the conduct disclosed an arguable passing-off claim and whether the High Court had jurisdiction under Schedule 4 to the Civil Jurisdiction and Judgements Act 1982, because the defendant lived in Scotland.

1. Relief granted. The court granted an interim injunction requiring the defendant to direct enquiries to three named websites to blank pages, deliver up any confidential client database, and refrain from using other confidential information. The orders were made against the usual undertakings.
2. Passing off. The evidence established the three requirements of goodwill or reputation in the claimant’s domain name, a misrepresentation calculated to lead potential clients to believe that the defendant’s websites belonged to the claimant, and damage to the claimant’s business.
3. Instrument of fraud. The court applied the reasoning in British Telecommunications plc v One in a Million Ltd [1999] 1 WLR 903. The essential ingredients of deceptive use of a name with acquired goodwill, for the purpose of damaging its owner, were present. The defendant’s stated intention to continue the conduct until payment was made reinforced the need for injunctive relief.
4. Jurisdiction. Under rule 3(c) of Schedule 4 to the Civil Jurisdiction and Judgements Act 1982, a person domiciled in one part of the United Kingdom may be sued in another part in tort where the harmful event occurred or may occur. The court accepted that potential clients or related organisations in England and Wales might be deceived into visiting the defendant’s websites and then be deterred by their contents. That constituted a sufficient harmful event, so the court had jurisdiction.
5. The court declined, pending an opportunity for the defendant to be heard, to order transfer of the domain names or relinquishment of the defendant’s interest in the websites. That part of the application was adjourned to the return date.

The judgment records that the interim application had first come before the court the previous week and was subsequently heard on an adjourned without notice basis. No appellate history is stated.