Facts
Both parties carried on business as suppliers of computer
software and support services to the road haulage industry and were
direct competitors. The Claimant had registered trade marks
and, it alleged, significant goodwill in the names ROAD TECH and
ROADRUNNER. The Claimant also had a website which won the
Financial Times Website (To Watch) of the Year Award in November
1998 and a DTI Certificate of Commendation for E-Commerce in May
1999. The Claimant viewed its website as of strategic value
and considered that around 30-40% of its turnover (being £5
million) was website generated business. The Claimant
introduced evidence to show that in the second half of 1999 its
site was obtaining more than 1,000 hits per day and in the period
September-December 1999, it received 3,134 hits from the search
engines alone.
In September 1999 the Claimant discovered that the Defendant had
included the names ROAD TECH and ROADRUNNER in the metatags and in
the first page text of the Defendant’s website. The relevance
of this was explained to the court by Richard Arnold QC for the
Claimant as follows:
"Metatags are key words which are used
for identifying and indexing websites so that search engines can
find websites which users are looking for. Thus, the
inclusion of particular words in the metatags for a website is a
way of ensuring that users find that site when searching using
search engines. Similarly, some search engines work by
reading the first page of websites and so words included in the
first page can also be used to lead users to the site. The
effect of the Defendant’s use of the names ROAD TECH and ROADRUNNER
was therefore that internet users who were searching for the
Claimant’s website by using the names ROAD TECH and/or ROADRUNNER
as key words would be directed to the Defendant’s website.”
Evidence was adduced to show that the above effect was the clear
intention of the Defendant; on the first page of the Defendant’s
website, the words ROAD TECH and ROADRUNNER were included in the
same colour as the background meaning that the words were invisible
to the user on the screen, but could be read by search engines.
Upon realising the situation, the Claimant, via its agents,
wrote to the Defendant requiring the words to be removed and an
undertaking that they would not use them again. The Defendant
wrote back saying it had removed the words but did not provide the
requested undertaking. Upon further request the Defendant
again refused to give the undertaking and stated that it considered
the matter closed. A number of days later it was discovered
that the Defendant was still using the word ROADRUNNER in its
metatags. Although the Defendant claimed that this was merely
an oversight, in the light of the Defendant’s refusal to provide
the requested undertaking and the Defendant’s failure to remove
ROADRUNNER from the metatags, the Claimant commenced proceedings
for infringement of trade mark and for passing off. On 1
December 1999, the Defendant provided the requested undertaking,
however made no offer of damages. The Defendant contested the
claim on the basis that given the Defendant’s actions to date, the
Claimant had no basis for injunctive relief.
Two applications appeared before the court (1) by the Defendant
for the Claimant’s claim to be dismissed pursuant to CPR 3.4 (on
the basis that the claim was unwinnable) and (2) by the Claimant
for judgment in relation to its claim for infringement of trade
marks on the basis of the Defendant’s admission and for summary
judgment relating to passing off.
Judgment
Master Bowman held that the court’s power under CPR 3.4 to
strike out a claim was a narrow one which should not easily be
invoked. The Applicant needed to establish an abuse of
process to be successful with such an application; none existed in
this case. The Claimant was, on the facts, entitled to
commence and prosecute the action.
In respect to the claim of infringement of the Claimant’s trade
marks on the basis of admission, the Master held there could be no
doubt of the infringement.
As for summary judgment in respect of passing off, the Master
found that no positive defence had been put forward and the
necessary ingredients of (1) reputation and goodwill; (2) a
misrepresentation by the Defendant; and (3) consequent likelihood
of damage had been established by the Claimant. The
misrepresentation was the use of metatags and text which
represented to users looking for the Claimant’s products using
search engines, that the Defendant’s website, and hence the
products and services there advertised, were in some way connected
to the Claimant.
The Claimant claimed damages under four heads: (a) the user
principle, on the basis that the Defendant had “taken a ride on the
back of” the Claimant’s very successful website and had clearly
intended to obtain a commercial advantage by so doing; (b) the cost
of corrective advertising; (c) diversion of trade; and (d) loss of
goodwill.
Master Bowman held that the Defendant’s use of the web site
extended for more than two months and there was a deliberate,
albeit unsophisticated, appropriation of the Claimant’s
rights. The Master awarded compensation of £15,000 under the
first head of claim. The Claimant failed to establish any
recoverable loss in relation to any other claimed headed
damage.
Commentary
It is unfortunate that this matter was decided at an
interlocutory hearing rather than by a High Court judge after full
review of the facts and issues. The case raises a number of
interesting issues from an IP and e-commerce practitioner's
perspective and is unsatisfactory in terms of legal
explanation. Nevertheless, what is clear from the decision is
that there is no doubt that the court will apply familiar
principles in the law of trade marks and passing off to novel
circumstances arising out of the arena of e-commerce and the
internet in general.
Of interest is the fact that although the Master was quick to
find that the tort of passing off had been committed, the Master
did not award damages to the Claimant for diversion of trade as
there was insufficient evidence. The Master accepted the
argument put forward by the Claimant in support of its claim for
passing off, that the Defendant had, by its use of the metatags and
text complained of, falsely represented to internet users looking
for the Claimant or its products using search engines that the
Defendant’s website, and hence the products and services advertised
therein, were connected in some way to the Claimant. However,
the decision was made without consideration of, or evidence to
show, whether the search engines would provide as the results of
the specific search made, details of the Defendant’s website only
or also those of the Claimant’s website. If the latter,
surely there would be arguments that the user made his final
selection of the website on the basis of the website name or
details revealed by the search rather than the results provided by
the search engine. Furthermore, it is arguable that the fact
more than one website offering similar services was revealed would
make the user more discerning as to which company it was he wanted
to do business with; particularly after the user had gone to the
length of searching specifically for the word(s) ROAD TECH and/or
ROADRUNNER.
There was a hint that these arguments were raised by the
Defendant. In its defence to the claim for damages for
diversion of trade it stated that to do so the Claimant would need
to show that the user (1) selected a particular search engine; (2)
used the word ROADRUNNER; (3) selected Mandata; and, (4) made the
association.
Unfortunately. however, the Master did not consider these
arguments, and thus we are left with the result that the inclusion
of certain words associated with one party (albeit that in this
situation they were trade mark words) in the metatags of another
party give rise to a passing off action. In this case, there
was a particularly strong element of the Defendant’s intention to
pass off, but the situation is unresolved as to the case where no
such a clear intention is established and where the words used in
the metatags are not trade marks belonging to the Claimant but
merely words associated with the Claimant.
