Facts
The Claimants were a trading group including the well known
airline operating, since 1995, low cost flights out of Luton
airport. The Defendant was a works manager of a civil
engineering business. The Claimants alleged that the
Defendant registered a domain name called easyRealestate.co.uk in
March 2000 and by so doing, and by trading on the internet,
committed the tort of passing off. The Claimants applied for
summary judgment under CPR 24.2.
The evidence, which was undisputed, showed that the first
Claimant had since 1995 been using the name “easyJet” as its
trading name. The business was conducted largely over the
internet, so that passengers could book their tickets on the
internet, using secure websites for payment. Since 1995, some
£30 million pounds had been spent on advertising in the UK with a
further £10 million spent on advertising abroad. Turnover in
the previous financial year was £267 million. Advertising of
“easyJet” has a distinctive getup, with a distinctive livery
applied to it (including to the aeroplanes owned by the first
Claimant).
The second Claimant (“easyEverything”) had spent some £2.6
million on advertising with a turnover of some £6.7 million.
“easyEverything” promotes internet cafes, and uses the same
distinctive livery. The third Claimant (“easyRentacar”)
started trading in February 2000 in the car rental sector.
They too are normally booked over the internet. The livery of
the cars is identical to that of the aeroplanes and the easyJet
logo is visible on the windows of the cars.
The elements of the getup which were distinctive included the
word “easy” associated with another word to form one word.
The “easy” is in lower case and the following element begins with a
capital letter. The getup appears against a bright orange
background with plain white lettering (or sometimes the
reverse).
Most of the Claimants’ business is conducted over the internet,
with as much as 81% of any day’s bookings done in this manner.
The Defendant prior to 2 January 2000 did not even have a
computer and bought one then as an educational tool for his
children. In the course of 2000 he came up with the idea of a
cut-price estate agency business to be conducted on the
internet. He tried to register the name “easyHome” but that
was not available, nor was “easyEstates”. He therefore
registered “easyRealestates.co.uk”.
The Defendant, who was not represented, made a number of claims,
including that the Claimants could not effectively claim a monopoly
in the word “easy”. Furthermore, as far as he knew, the
Claimants did not have a property business and he had only heard of
easyJet. He said that he did not intend to take the
Claimants’ goodwill, and did not specifically know of their
colours.
Judgment
The law of passing off was not disputed and could be easily
stated. In order to succeed in showing that the goods, services,
business or goodwill of A are likely to be passed off as those of
B, a claimant must establish three things: firstly, that his own
goods, services and goodwill have acquired a particular reputation
amongst the public; secondly, that persons wishing to buy his goods
are likely to be misled into buying the goods and services of the
defendant; and thirdly, that he is likely to suffer damage (see
Reckitt and Colman Products Ltd v Boden Inc [1990] RPC
341, 418 per Lord Jauncey).
To establish the likelihood of deception, the court must use its
common sense, and take into account all the circumstances,
including the similarity of the getup of the marks in question
(Neutrogena Corporation v Golden Ltd [1996] RPC 473, 482
per Jacob J.). It is not necessary to show a deliberate
intention to deceive the public, but if that intention is there, it
is powerful evidence to support the conclusion that the public is
likely to be deceived. It is also relevant to the
remedy granted.
Likelihood of damage is also a question of fact. The
Claimants had never run a property business, but there might be the
possibility of damage to the Claimants’ goodwill, i.e. to their
reputation in the conduct of their various enterprises (Harrods
Ltd v Harrodian School Ltd [1996] RPC 697, 724 per Sir Michael
Kerr).
In this case, the Claimants are not entitled to appropriate the
word “easy” but here what was being protected was not the word
alone but the word in its distinctive getup. It was not
credible that the Defendant did not have this in mind when he
designed his web-page. He had no knowledge of computers, no
interest in estate agency and had not put the idea into practice by
trading on the internet. On the contrary, he had in the
middle of 2000 approached easyJet with a view to obtaining
investment and, after failing to do so, had not approached anyone
else with a view to starting the venture. He did make some
changes to the colours after the Claimants had threatened
proceedings, but the likelihood of the public being deceived had
been made out.
As to remedies, the Claimants sought firstly, an injunction to
restrain the passing off, secondly an order for delivery up or
obliteration on oath of articles or documents that would contravene
the injunction, thirdly an inquiry as to damages or an account of
profits and fourthly an order that the Defendant should transfer
the registration of the domain name “easyRealestate.co.uk” to the
Claimants.
As the Defendant had done minimal, if any, business, no order
was made as to damages or an account of profits. As to the
fourth order requested by the Claimants, the Defendant had no
legitimate underlying business to protect and also seemed from what
he said to have no real understanding of passing off law or the
implications of the orders being made. There was the
possibility that he might assign the name to someone who had the
intention to do no good with the name. This brought the case
back to the words of Aldous L.J. in British Telecommunications
plc and Others v One in a Million Ltd [1999] FSR 1 and whether
the name was an instrument of fraud. In this case, the name
is not inherently one that led to passing off. In this case,
the getup associated with the use of the name will probably lead to
passing off. The order for transfer of the registration of
the domain name would in principle be appropriate. Such an
order was made at first instance in Marks & Spencer plc v
One in a Million Ltd [1998] FSR 265 and at the Court of Appeal
there was no suggestion that this was inappropriate.
Commentary
After the massive interest shown at the start of the internet
phenomenon, and the predictions that the law was out of date and
perhaps even out of touch, it is refreshing to see that the courts
have had relatively little difficulty in applying existing
principles to new fact scenarios. It is now almost
commonplace to see decisions on the subject of domain names and
courts seem to be astute in expounding the principles that should
be applied.
It is worth again looking at the judgment of Aldous LJ, giving
the judgment of the Court of Appeal in the One in a
Million case where he said:
"In my view there can be discerned from
the cases a jurisdiction to grant injunctive relief where a
defendant is equipped with or is intending to equip another with an
instrument of fraud. Whether any name is an instrument of
fraud will depend on all the circumstances. A name which will
by reason of its similarity to the name of another inherently lead
to passing off is such an instrument. If it would not
inherently lead to passing off, it does not follow that it is not
an instrument of fraud. The Court should consider the
similarity of the names, the intention of the defendant, the type
of trade and all the surrounding circumstances. If it be the
intention of the defendant to appropriate the goodwill of the
other, or enable others to do so, I can see no reason why the court
should not infer that will happen, even if there is a possibility
that such an appropriation would not take place. If taking
all the circumstances into account the court should conclude that
the name was produced to enable passing off, is adapted to be used
for passing off and, if used, is likely to be fraudulently used, an
injunction will be appropriate. It follows that the court
will intervene by way of injunction in passing off cases in three
types of case: first, where there is passing off established, or it
is threatened; secondly, where the defendant is a joint tortfeasor
with another in passing off either actual or threatened; thirdly,
where the defendant has equipped himself with or intends to equip
another with an instrument of fraud.”
As with regular cases of passing off, a case-law is developing
that shows how the courts will apply these principles. Very
basically, where a defendant can provide a reasonable explanation
of why the two domain names are similar (or even as good as
identical), the courts will not intervene. Where the courts
perceive that the defendant really has no good reason for the name,
they will be quick to intervene.
These Reports have already given some good indications of the
courts following this sort of approach. Thus, in
Britannia Building Society v Prangley [2000] Masons CLR
31, the defendant’s explanation of his registration of
britanniabuildingsociety.com as a vehicle for providing labouring
skills to Iran in the building industry was described by the judge
as “wholly incredible”. On the other hand, in MBNA
America Bank v Freeman the defendant’s explanation of his
acquiring mbna.co.uk was that it stood for “Marketing Banners for
Net Advertising” meant that the court would not intervene except to
order that the name should not be transferred by the defendant to a
third party (who might well use it as an “instrument of
fraud”).
So, there is no new law here, but the application of the
principles in this very active area will be of constant interest to
practitioners.
