Facts
Both parties were “Radio Circuits” (or “Circuits”) for licensed
black cabs in London. There are four such Circuits including the
parties, and the parties were incorporated in 1953.
The Claimant’s original name was “Radio Taxicabs (Southern)
Limited” but this was changed in the early 1980’s to “Radio
Taxicabs (London) Limited. The Claimant’s Circuit has some 1,700
subscribers owning between them some 2,650 black cabs. It has 7,000
account customers, made up as to some 40-50% large corporate
customers, 40% medium or smaller size business and 10% private
individuals. The turnover for the year ended 30th
November 2000 was around £40 million.
The Defendant’s Circuit is slightly smaller than the Claimant’s
Circuit. Its subscribers own between them some 1,850 black cabs.
About 90% of its account customers are businesses against 10%
private individuals. The turnover to 25th August 2000
was £37 million.
To put the figures in context, there are some 23,000 licensed
black cabs operating in London, about 7,500 of which are owned,
part owned or operated by member subscribers of one of the four
Circuits.
Each of the Circuits provides its members with computer
terminals and radio equipment so they can receive jobs from a data
despatch system. They provide their members with the facilities to
take credit card payments, which most ordinary black cabs will not
do. The Circuits charge the members an admission fee and then a
periodic subscription. The Circuits are therefore in competition
for cabbies, mostly those who are not already part of a Circuit,
but also some who move between Circuits.
There are two distinct markets for these Circuits – the “trade”
and the “general public”. Regarding trade customer, there is
considerable competition for business from the transport managers
who place business with Circuits. Such business contracts can be
very lucrative, and transport managers do switch from time to time
between Circuits.
Some individuals hold accounts with a Circuit, but there is a
lot of business placed by ordinary members of the public who just
want to phone for a black cab. However, this custom generates no
income for the Circuit unless the payment is by credit card (and
normally, of course, payments are made in cash).
The Claimant accepted that the expression “radio taxi” was
generic or descriptive and indeed featured in the Oxford English
Dictionary. A yell.com search showed some 60 businesses in England
which incorporated the words “radio taxis”. The expression also
featured in many web sites of businesses providing this service,
including some based in London. A search on Google threw up over
68,000 references world wide. Another use of the term in Greater
London was outside terminals at Heathrow. The Claimant had
raised no complaint about the use of the term “Licensed Radio
Taxis” as used by the Defendant in its promotional leaflets between
1984 and 1990.
On the internet, users commonly use a search engine to find the
address of what they want to find. The simpler ones simply look for
the same or similar domain names as the search request. Others look
at domain names and also “tags”. Businesses therefore not only
register their exact name as a domain name but also domain names
which reflect what they do. Thus, “insurance.com” is owned by
Fidelity Investments and “tvhire.com” is owned by Parmenters.
The Defendant became interested in the internet before the
Claimant and its site (whose primary address is dialacab.co.uk)
went on line in or around April 1998. However, less than 0.5% of
the journeys booked by the Defendant’s account customers are booked
over the internet.
The Defendant caused an automatic link to be set up so that
radiotaxis.com directed users to dialacab.co.uk. This automatic
redirection was in force for some two years until about May 2000.
The Claimant’s letter before action was dated 23rd May
2000. Other links were set up by the Defendant by its internet
agents (including one redirection from radio-taxis.co.uk to the
Defendant’s web site, though this happened from a failure of
communication rather than a deliberate policy on the part of the
Defendant).
The Claimant set up a web site in 1998, promoting the web
address on the door of members’ cabs. Although the Claimant had
spent some £500,000 on setting up a booker site, it had only
reached the stage of trialling for some of its account
customers.
Both parties had registered a variety of names with some odd
consequences. The Claimant had registered the domain name
radiotaxis.co.uk, but not radiotaxis.com. The Defendant had
registered dialacab.com in late 1996 but did not renew it three
years later so that someone else had subsequently taken the
registration.
Both the parties’ web sites had been updated in the course of
time, but there was incomplete evidence as to the contents of those
web sites as at any particular time.
The Claimant’s case as it
was ultimately put was that the combination of the registration of
radiotaxis.com and the automatic redirection for a period of time
to dialacab.com amounted to passing off. However, there was no
evidence of any actual confusion – despite the fact that the
redirection was in force for some two years and despite the large
amount of traffic on the web sites. In fact, the Claimant’s
chairman conceded in evidence that there was no evidence of
confusion. Confusion is, of course, a requirement in proving
passing off claims concerning unregistered trade marks.
Had the case concerned the alleged infringement of a registered
trade mark, confusion would not have been necessary (provided that
the mark was identical). The Claimant had, indeed, made some
applications for registered trade mark protection. There was an
application for registration of “Radio Taxis” as a word mark in
March 1998, which was rejected. A further application was made for
a word and device in December 1999 and another application for a
word mark was launched in February 2001, well after these
proceedings had been commenced.
Judgment
Reputation/distinctiveness
The Claimant asserted that it had since 1953 provided a
telephone booking service for taxis under the name “Radio Taxis”
and produced evidence to show the extensive promotion of the name –
including a range of business stationery, advertisements, handout
cards and so on. As far as the trade was concerned, the Claimant
was known as “Radio Taxis” and, although there were some other
names that had been used, this expression had come to be associated
with the Claimant in the trade. However, the Claimant had to
concede that there was no real risk of confusion within the
trade.
As far as the general public was concerned, this was a different
matter. There was no evidence that the Claimant was known to the
general public other than as “Radio Taxis”, however, the burden of
proof on this issue lay with the Claimant. This was all the more so
given the descriptive nature of the name, the fact that there was
no real risk of confusion with established account holders and the
evidence of the cabbies themselves.
The evidence pointed to the Claimant having used a variety of
trading names over the course of time, although the use of “Radio
Taxis” did seem to be used as part of a distinctive logo or “get
up”. It was possible that the Claimant had built up a sufficient
reputation as a result of all the evidence of promotional
activities, but it could not be put any higher than that. The
Claimant had therefore not discharged its burden of proof.
Misrepresentation/Reasonably probable deception
The Claimant had put its case on the basis of the representation
implicit or inherent in the combination of the use of the domain
name radiotaxis.com and the operation of the automatic direct
link.
It was unsafe to assume that a domain name has to be regarded as
the name of a business – there were many examples of where a domain
name was a description of a service. The Defendant correctly
submitted that, even in a case where a secondary meaning of
descriptive words as being generally associated with the claimant’s
goods has been established, their use in a context where their
meaning is descriptive will defeat a claim in passing off. The
question therefore was whether the use of the domain name together
with the automatic direct link was calculated or likely to lead to
the belief on the part of members of the general public that the
Defendant’s business was connected with that of the Claimant.
On the evidence, the Defendant’s actions had not amounted to
such a representation. It was valid to take into account the nature
of the words which are used in the trade name, the circumstances
and peculiarities of the trade, the motives, proved or presumed, of
the trader who would use the words and other factors.
In this case, the expression “radio taxis” was descriptive, and
descriptive or generic internet domain names are in general usage.
The Defendant’s motives in registering and using radiotaxis.com
were to promote its services in supplying radio taxis. A further
factor is that the domain name, as a domain name, was different
from the Claimant’s trading name of “Radio Taxis” – such difference
was inevitable by virtue of the way domain names are written.
Significant additional support was to be found in this by the
complete absence of evidence of confusion over a period of two
years. Accordingly, there was no evidence that a relevant
misrepresentation had been made, and no likelihood that any
relevant misrepresentation would be made in the future.
Damage
The Claimant had submitted that the likelihood of damage was
obvious, because where there was a likelihood of deception, damage
was almost bound to follow. The Claimant pointed to the account
creation feature of the Defendant’s web site.
However, there was no likelihood in fact that a visitor to the
Defendant’s web site from the automatic link would believe it to be
the Claimant and would not believe that an application was being
made to the Claimant or an associate of the Claimant.
Commentary
We report two domain name disputes in this issue, but they raise
rather different points and so two comments will be given.
The basic problem surrounded the fact that the Claimant’s name
was descriptive of the services provided. As any user of the
internet will appreciate, use of a descriptive name on the internet
is a positive boon, since it is likely to show up on more searches,
and even if a surfer simply types in the descriptive name as a URL,
it will still serve its function, as the surfer will end up at the
site. The deputy judge in fact gives some examples of this –
including insurance.com which, as previously mentioned, directs the
surfer to a web site owned by Fidelity Investments.
Of course, with trade marks, the converse is true – in this
case, distinctiveness is the trade mark owner’s friend. A good
trade mark is generally one that does not describe the product or
services it is attached to – Kodak is the classic example.
However, as many such owners have found out, even distinctiveness
may not be the end of the story – there are many examples of where
even a distinctive mark can become just the generic name for a
product e.g. “Hoover” to mean any vacuum cleaner. There was a
report recently that Sony had lost an action in Austria to restrict
the use of “Walkman” to Sony’s portable products.
This was the problem confronting the Claimant in this case. To
get around the obvious difficulties, it put its case on the basis
that what was complained of was more subtle than just an
appropriation of the name. In this case, the complaint was the
combination of the use of the domain name registration as well as
the automatic direct link from the equivalent web address to pages
displayed at the Defendant’s principal web address.
The deputy judge fully considered the law relating to
descriptive names. The starting point for any such mark is still
Office Cleaning Services v Westminster Window and General
Cleaners (1946) 63 RPC 39. In this case, it was a question of
the plaintiff’s name (Office Cleaning Services) finding competition
from the Defendant’s trading style, Office Cleaning Association.
What came out of that decision of the House of Lords was that where
such a descriptive name had been adopted, it was not impossible
that an action for passing off could be maintained, but that even
small differences between the parties’ names might suffice to avoid
liability.
However, what could be derived from the authorities was that the
Defendant’s intention was to some extent a relevant consideration.
British Telecom and ors v One in a Million and ors [1999]
FSR 1 CA had to review this situation and, in a decision which is
now well known, the court found that there is:
“ … a jurisdiction to grant injunctive
relief where a defendant is equipped 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.”
Of course, in the One in a Million case, it was clear
from the evidence that the defendant had systematically acquired
“blocking registrations”. This being so, it was clear that the
threat of passing off and the likelihood of confusion arising were
made out beyond argument. The mere act of placing on the register
of a distinctive name (like marksandspencer) makes a representation
to anyone consulting that register that there is some sort of
connection or association between the person making the
registration and the owner of the goodwill in the name.
Aldous LJ made it clear in One in a Million therefore
that the defendant’s intention could be key and in an oft quoted
passage said:
“If it be the intention of the defendant
to appropriate the goodwill of another or enable another or enable
others to do so, I can see no reason why the court should not infer
that it will happen, even if there is a possibility that such
appropriation will 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."
What comes out of this case being reported is that use of such
descriptive names in a domain name might well have reasons, very
valid reasons, to be considered as bona fide use and need not
automatically be put into the “instrument of fraud” category. In
fact, the most obvious reason for using a descriptive term in a
domain name is not for the sake of using it as a trade mark, but so
that it will attract more people who are looking for that type of
service or product. In other words, the use of a domain name might
not be a reference to a business at all, but a description of the
business offered.
This represents an important refinement of the general
principles, perhaps made easier in this case where the Claimant’s
name was so descriptive in any case. Overall, it is a sensible way
to proceed. Trade mark law has always been reluctant to allow
anyone a monopoly over a descriptive term – see the Office
Cleaning Services case. The judgment is a sensible extension
of this principle. What would be the situation if the Claimant were
to object to a reference in the Yellow Pages or other hard copy
directory to “radio taxis”?
Subsequent cases will illustrate how far this principle will
develop. For the moment, any advice about trading styles will
remain the same – avoid descriptive terms and choose something
distinctive if at all possible. However, when looking at simply
describing your business, then choosing a domain name that fairly
describes your business will not necessarily infringe. The
obvious exception to this is where there is some element of
intention to commit passing off.
