Vertical Leisure Ltd v Poleplus Ltd

On a summary-judgment application, the court must decide whether the defence has a realistic prospect of success, without conducting a mini-trial. The court may analyse evidence and reject assertions contradicted by contemporaneous documents, but must consider reasonably available trial evidence and hesitate where fuller investigation may affect the outcome.

Registration of a domain name incorporating another trader’s distinctive name may itself amount to a misrepresentation to persons consulting the register. Such a registration may also constitute an instrument of fraud where it is liable to facilitate passing off. The principle in British Telecommunications Plc v One in a Million Ltd remained binding on passing off, despite arguments that public sophistication had changed.

Vertical Leisure Limited sought summary judgment in claims for trade mark infringement and passing off against Poleplus Limited and Martin Bowley. The claims concerned domain names incorporating the claimant’s X-Pole and SILKii names. Mr Bowley admitted registering the names and offering them for sale to the claimant, but denied using or threatening to use them.

The claimant relied on trade mark rights and goodwill in England. It also alleged that the defendants were jointly liable for passing off. The central issues were whether the claims against Mr Bowley were suitable for summary determination and whether Poleplus Limited could be held liable on the pleaded case.

1. Summary judgment principles. The court applied the principles summarised in Republic of Nigeria v Santolina Investment Corporation. A defendant must have a realistic, rather than fanciful, prospect of success. The defence must carry some degree of conviction. The court must not conduct a mini-trial, but it need not accept unsupported assertions at face value. It must consider evidence reasonably expected to be available at trial and hesitate where fuller investigation may affect the outcome.
2. Trade mark infringement. The court declined to determine the trade mark issues on the hearing’s limited argument. It was cautious about concluding that British Telecommunications Plc v One in a Million Ltd remained unaltered in the light of Céline SARL v Céline SA and L’Oréal SA v Bellure NV. Further argument was required.
3. Passing off against Mr Bowley. The passing-off reasoning in British Telecommunications Plc v One in a Million Ltd was binding. Registration of a distinctive domain name could represent to persons consulting the register that the registrant was connected or associated with the owner of the goodwill. Registration could also create an instrument of fraud because use of the domain name was liable to result in passing off. The material facts were not sufficiently different to justify another conclusion.
4. Mr Bowley’s registration of the domain names, together with his offer to sell them to the claimant, meant that he had no realistic prospect of defending the passing-off claim. Summary judgment was therefore granted against him.
5. Poleplus Limited. Although the evidence presented a compelling case for joint liability, it remained arguable that Ms Colebourne knew nothing of the registrations. Joint tortfeasance was not pleaded, and the allegation could not be introduced for the first time in a skeleton argument. Vicarious liability was also unpleaded and was not considered. Poleplus Limited was accordingly given permission to defend.
6. The court indicated that relief against Mr Bowley was likely to include assignment of the disputed domain names, and encouraged settlement of the remaining dispute.

First-instance decision. No appellate history was stated in the judgment.