What's it about
This Court of Appeal decision relates to a dispute between advertising agencies concerning passing off and cybersquatting.
The Claimants were Media Agency Group (MAG) and Transport Media Limited (TML). The Defendant, Space Media Agency, had been using the trading style "Transport Media Agency" and had acquired various domain names including transportmediaagency.co.uk and trackaccountableadvertising.co.uk. Traccountable had been registered as a trade mark by the Claimants but had not been used by them.
The Claimants brought a passing off claim in respect of this, and were successful at first instance. One of the Defendants appealed the decision on three grounds, and was successful on one of them.
Why does it matter?
The first ground related to which of the Claimants had the requisite goodwill in the "Transport Media" name to bring a claim. The Court did not accept the appellant's arguments that MAG, as the company which contracted with customers, did not own the relevant goodwill, saying it was clear from the outset that the passing off claim was brought by both MAG and TML. The Court noted that "the goodwill vests in the person who is in fact the source of the services, even if the customer is unaware of the identity of that person."
The second ground was that the trial judge had failed to deal with the defence that the name "Transport Media" was descriptive. Again, the Court of Appeal did not agree with the appellant's arguments, noting that names or marks which are descriptive can nevertheless support an action for passing off if they have acquired distinctiveness. The Court noted that the trial judge had found that the Defendants themselves were using the name "Transport Media Agency" in its secondary, distinctive, meaning and not simply in an ordinary, descriptive sense, in order to attract business to themselves rather than allow it to go to MAG.
However, the appellant was successful on its third ground – that the trial judge's finding of passing off based on the Traccountable domain name was wrongly made. The Court agreed that "Traccountable" was an unused trade mark incapable of supporting an action for passing off. The trial judge appeared to have misinterpreted the case of BT v One in a Million as authority that cybersquatting (the practice of registering other companies' brand names as internet domains in the hope of reselling them at a profit) is a comprehensive basis for an allegation of passing off. In actuality, that case did not dispense with the need to show relevant reputation and goodwill in order to establish passing off in a cybersquatting case. The Claimants had failed to produce evidence establishing goodwill and so this part of the appeal was allowed.
The case serves as a reminder that when considering cybersquatting, and the decision in One in a Million, claimants still need to demonstrate relevant reputation and goodwill in the name or mark relied on, in order to establish passing off, just as they would in any other passing off case. It will not be enough simply to point to an unused trade mark which has been used in a domain name.