Court Confirms Principles to be Applied in Domain Name Cases

The High Court has confirmed that (1) unsuccessful respondents in UDRP or DRS proceedings have no right of appeal to the English Court, and that (2) the mere fact of registering a domain name can constitute an act of passing off.

This case is a welcome confirmation that domain name disputes decided under Nominet’s DRS or UDRP cannot be appealed to the UK Courts. To have decided otherwise would only have served to undermine the usefulness of these well-used and generally well-liked systems which offer, and usually achieve, quick and efficient dispute resolution in domain name cases.

It also serves as a reminder that mere registration of a domain name that includes another party’s trade mark, particularly where that mark has a reputation, is likely to amount to passing off. Such claims will be dealt with quickly and relatively cost effectively by the Courts often on a summary basis, if not quite as quickly and as cost effectively as under the UDRP or the DRS.

Background

Domain name disputes are commonly resolved without the parties having to go to Court by using one of the relatively low cost dispute resolution schemes available. Where the dispute concerns a .uk domain name the parties may use the DRS (Dispute Resolution Service) run by the UK’s domain name body, Nominet and where the dispute concerns a .com domain name the parties may use the UDRP (Uniform Dispute Resolution Policy) which is offered by a number of providers including WIPO (the World Intellectual Property Office).  Variations on the UDRP are available in relation to many other domain names.

The claimant, YOYO.EMAIL (YoYo) registered various domain names based on trade marks owned by members of the Royal Bank of Scotland group (RBS) who then filed a successful UDRP complaint with WIPO to recover them. YoYo brought an action in the English High Court arguing that they should be granted a declaration that the UDRP case had been wrongly decided. RBS asked that the action be struck out and counterclaimed for trade mark infringement and passing off, seeking summary judgement on the basis that YoYo had no realistic prospect of success. They argued that the court had no jurisdiction to act as an appeal body from WIPO’s Decision, and that YoYo had no realistic defence to their passing off claim. YoYo argued that based on the proper construction of the UDRP in accordance with the law of the State of Arizona (where the domain name registrar was based) and an argument that the leading decision is wrong or ought to be distinguished, it did have a realistic prospect of succeeding in its claim.

Appeal to High Court

The judge dealt with the question of whether or not YoYo had the right to appeal a UDRP decision to the High Court by reference to two other domain name related decisions, namely Toth v Emirates and Patel v Allos Therapeutics.

Toth had turned on the proper construction of clause 10(d) of the Nominet DRS Policy and clause 17(c) of the related procedural rules which said that the operation of the DRS will not prevent either the Complainant or the Respondent from submitting the dispute to a court of competent jurisdiction. The corresponding clause 4(k) of the UDRP (dealt with in Patel v Allos Therapeutics) provides that the mandatory requirement to submit to UDRP did not prevent the respondent or the complainant from submitting the dispute to “a court of competent jurisdiction for independent resolution“.

In Patel, the unsuccessful respondent at UDRP commenced proceedings in the Chancery Division and was met with an application for striking out, which was granted, the judge holding that the proceedings disclosed no cause of action and were totally without merit. Referring to clause 4(k) of the UDRP the judge in Patel had noted that this clause speaks of “referring the dispute” to the court for “independent resolution” but had made it clear that this cannot confer a jurisdiction on the court which it does not otherwise have, and that the claimant must demonstrate some independent right of action. By way of example, an unsuccessful complainant may ask the Court for an order that its trade mark has been infringed, but if, on the other hand, the complaint is upheld, the burden is on the registrant to prove a cause of action giving him an interest in retaining the domain name.

His Honour Judge Dight adopted the reasoning in Patel to hold that on a proper construction of the UDRP, clause 4(k) did not give rise to a separate cause of action in favour of the claimant nor did it afford any jurisdiction to the Court to act as an appeal or review body from the Decision.  He also said there is no material difference between the wording and proper construction of DRS and the UDRP schemes (at least so far as clauses 10(d) and 4(k) are concerned) and the reasoning of Mann J in Toth is compelling and should be applied in this case.  Finally, he said this was a plain and obvious case for striking the Claim out.

Passing Off

Relying on the Court of Appeal decision in British Telecom v One in a Million RBS submitted that simply placing the Domain Names on the register led, by itself, to passing off, and that they were entitled to summary judgement on that basis alone. YoYo argued that the One in a Million decision concerned a state of affairs which existed many years ago and the internet has developed considerably since then, such that the reasoning of the Court of Appeal in that case was no longer valid. They also argued that the way in which they intended to use the Domain Names meant that there was no risk of confusion.

These arguments found no favour with His Honour Judge Dight who said that the essential elements behind Aldous LJ’s Decision in One in a Million had not altered, nor did he accept that the law had moved on since One in a Million was decided in any way relevant to the issues.  The reasoning of the Court of Appeal in One in a Million has been followed and applied in a number of cases in the intervening years by judges at first instance and in the Court of Appeal.

The judge also rejected the submission that the claimant’s proposed business model and intended use of the Domain Names needed to be explored at trial, and accepted the RBS submission that actionable passing off occurred at the point of registration of the Domain Names, (but declined to decide the question whether the registration of the Domain Names was, by itself, an instrument of fraud, because he felt it was not necessary to do so).

Eric Ramage, Of Counsel, has practiced in domain name issues since 1996 and lectures on domain name recovery on the Professional Certificate in Trade Mark Practice course offered by Nottingham Law School.

If you wish to discuss any of the issues raised above, please contact Eric Ramage – Of Counsel, or any member of the Edwin Coe Intellectual Property team.

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