Jim
Davies is the Managing Director of Global Projects Management, an
IT security firm based in London that targets its services at law
firms. He lost his High Court battle this week. The judge delivered
a 33-page opinion in his own handwriting.
Travelers Group and Citicorp announced their $140 billion
mega-merger on 6th April 1998. But in what seems like a remarkable
oversight, neither firm had registered either citigroup.co.uk or
citigroup.com. Jim Davies registered citigroup.co.uk later the same
day. He tried for citigroup.com the following day – but that had
just been snapped up by a US opportunist, Peter Tarquinio.
Citigroup's US lawyers, Skadden Arps, sued Tarquinio for trade
mark infringement and dilution. They won the case, getting
citigroup.com transferred. Davies tried a different tactic in his
attempt to keep the .co.uk name: he sued Citigroup before it sued
him.
Citigroup's lawyer, John Linneker, head of intellectual property
litigation at Denton Wilde Sapte, first wrote to Davies, asking him
to transfer the UK name to Citigroup. When that failed, Linneker's
team applied to Nominet, the UK domain name registry which offers a
dispute resolution service. But proceedings before Nominet grind to
a halt if someone files a court action. That's exactly what Davies
did.
In a courageous pre-emptive strike, Davies sued Citigroup
for making groundless threats. This is a remedy that exists in the
Trade Marks Act: as soon as you accuse someone of infringing your
registered trade mark, you expose yourself to damages unless you
can prove your accusation. But Davies' groundless threats action
was struck out by the judge.
It may be that Davies was just hoping that by
suing, Citigroup would quietly settle the case with its cheque
book – although there was no evidence of such a motive in the case.
(Neither Davies nor his lawyers responded to OUT-LAW's request for
comment.) Instead, Citigroup was up for a fight: it
countersued, seeking a transfer of the name and damages for trade
mark infringement and passing off.
Davies had never used the domain name or attempted to sell it
to Citigroup or anyone else. The High Court also acknowledged
that neither he nor his company had any history of
cybersquatting.
But when Davies suggested to the High Court that the timing of
his domain name registration was mere coincidence, Mr Justice Park
did not believe him, describing Davies' assertion as "palpable
nonsense".
Mr Justice Park said the evidence showed "irrefutably" that
Davies and his company's object was to obtain a domain name that
carried the threat of deception harmful to Citigroup. Davies had
been receiving emails intended for Citigroup; Davies even attempted
to use the information in them to trade in shares.
The court said that the mere registration and holding of a
domain name that leads people to believe that the holder of the
domain name is linked with a person is enough to make the domain
name a potential "instrument of fraud" and amounts to passing off.
The phrase has been applied in previous cybersquatting court cases,
the most famous being a landmark victory for Marks & Spencer,
Virgin, BT and other famous brands against a cybersquatting
operation called One in a Million in 1999. Mr Justice Park referred
to and followed that case.
He ruled in favour of Citigroup in Monday's summary judgment. He
said a trial would be "pointless" because it was obvious that
Davies knew of the press announcement when the name was registered.
He concluded that there was passing off and trade mark infringement
by Davies and Global Projects Management.
It was only the evidence around the registration that made the
name an instrument of fraud: the timing, the thousands of emails
received in error, the high profile and distinctive spelling of the
brand involved.
Davies has been ordered to transfer the name to Citigroup. He
has also been ordered to pay £30,000. But that is only an interim
payment. The final damages have still to be assessed together with
Citigroup's legal costs and that Davies could be facing a
substantial loss for his attempt to keep the domain name.
Linneker said, "Citigroup are delighted with this win and very
pleased to get their domain name back."
