Media Agency Group Ltd & Anor v Space Media Agency Ltd & Ors

In passing off, goodwill in a trading name ordinarily vests in the person who is the actual source of the services, even where a related company’s website generates the customer and the customer does not know the source. A descriptive expression may be protected once substantial use gives it a secondary meaning indicating origin. The nature of the defendant’s use and any intention to divert customers may be relevant, although intention is not an element. Domain-name registration may be actionable, but cybersquatting principles do not remove the need to prove reputation and goodwill. A failure to deny an allegation cannot create an admission where the pleading contains no allegation of the relevant reputation. The appeal was allowed only on the claim concerning an unused mark.

Media Agency Group Limited and Transport Media Limited brought proceedings against Space Media Agency Limited, Mr Faraz Shafiq and Mr Mohammed Buksh. The High Court upheld passing-off claims concerning Transport Media and Traccountable, among other claims. Only Mr Buksh appealed. He challenged the finding that Media Agency Group owned the goodwill in Transport Media, the treatment of the name as capable of protection despite its descriptive element, and the finding based on the unused Traccountable mark and domain-name registration. The central questions were who owned the goodwill, whether the descriptive-use principles applied, and whether the pleadings and evidence established reputation and goodwill in Traccountable.

1. Disposition. The Court of Appeal allowed the appeal in part on ground 3 alone. The remaining grounds were dismissed.
2. Transport Media goodwill and pleadings. The passing-off claim was brought by both claimants, and the appellant’s defence specifically denied that Media Agency Group owned goodwill in Transport Media. The reply was therefore not contradictory or inconsistent with the pleaded case under CPR 16 PD 9.2. The judge was entitled to find that the goodwill vested in Media Agency Group. Customers reached the services through the related company’s website, but Media Agency Group contracted with them and supplied the services. Goodwill generated by exposure to the trading name could therefore vest in the actual source of the services, even if customers were unaware of that source.
3. Descriptive name. A name with a descriptive element can support passing off if use gives it a secondary meaning indicating origin. The phrase Transport Media was not so descriptive that it was incapable of protection. There was no evidence that other advertising agencies used the same combination of words. The defendants were not making ordinary descriptive use: the judge found that the name was used in its secondary meaning to attract business away from Media Agency Group. The principles concerning greater public discrimination and toleration of some confusion in descriptive terms did not protect that use. Intention is not an element of passing off, but it is relevant to the character of the use: see Slazenger v Feltham (1889) 6 RPC 531, at pages 537–538.
4. Traccountable and domain-name registration. The judge had treated cybersquatting as a sufficient basis for passing off and had misinterpreted British Telecommunications plc v One In A Million Ltd [1998] EWCA Civ 1272, [1999] 1 WLR 903. The principle that registration of a well-known domain name may amount to use or threatened use of a trade mark does not dispense with proof of relevant reputation and goodwill for passing off. There was no pleaded reputation in Traccountable, and the evidence showed that the mark had not been used. CPR 16.5(1)(b) could not deem an admission where the pleading contained no such allegation. The passing-off claim based on Traccountable therefore failed.

1. Court of Appeal (Civil Division) — On 12 March 2019, under [2019] EWCA Civ 712, allowed the appeal in part on ground 3 alone and dismissed the remaining grounds.
2. High Court of Justice, Business & Property Courts in Manchester — HHJ Hodge QC, sitting as a High Court judge, gave judgment on 18 April 2018 and made an order on 25 April 2018 upholding the passing-off claims against Space Media Agency Limited and the two individual defendants.