Facts
1-800 Flowers Inc (‘Flowers’) is a US company which operates an
international floral telemarketing business. That is, it provides
flowers and so on via a marketing system which can be accessed by a
number of methods. One of these is by the use of a freephone
telephone number. In the US, the freephone number is
1-800-356-9377. This number itself is important. If the numbers are
typed in on a telephone keypad which has letters on it as well as
numbers, the letters spell 1-800-FLOWERS. This is known as an
‘alpha numeric’ phone name. If members of the public want to
contact Flowers, they just need to know their name, not their
number.
Flowers also operated a U.S. based internet site accessible in
the UK, with the address www.1800flowers.com.
On 13 February 1993 Flowers applied under section 17(1) of the
Trade Marks Act 1938 as amended (‘the 1938 Act’) to register the
trade mark 800-FLOWERS as a ‘service mark’ in respect of services
consisting of the receipt and transfer of orders for flowers and
floral products.
Phonenames Ltd run a business licensing alpha-numeric phone
numbers to third parties. The UK telephone number – 0800 356 9377 –
was allocated to Phonenames Ltd in 1994, that is after Flowers’
application for registration of the trade mark. This telephone
number, expressed in alpha-numeric terms, is 0800 FLOWERS.
Phonenames Ltd therefore opposed Flowers’ registration.
Jacob J. in the High Court found the mark unregistrable.
Flowers appealed.
Judgment
The judgments analysed the provisions of the 1938 Act in
relation to service marks to reach their conclusions. Each relevant
section acts as a potential objection to registration, and each was
analysed in turn.
Section 10 of the 1938 Act
Under
section 10 (1) of the 1938 Act: “In order for a service mark to
be registrable…it must be capable, in relation to the services in
respect of which it is…proposed to be registered, of distinguishing
services with the provision of which the proprietor of the mark is
or may be connected in the course of business from services with
the provision of which he is not so connected…”.
Under section 10(2)(a) of the 1938 Act, “In determining
whether a service mark is capable of distinguishing [as described
in section 10(1) of the 1938 Act] the tribunal may have regard to
the extent to which the service mark is inherently capable of
distinguishing [as described in section 10(1) of the 1938
Act]”.
Flowers’ argument was that at the date of application for
registration, the mark was ‘inherently capable’ of distinguishing
between services of the relevant type provided by Flowers and
similar services provided by others. In relation to this argument,
Parker LJ reasoned as follows:
- The question was whether the use of alpha-numeric phonenames in
the UK was reasonably foreseeable in February 1993. By 1993 the use
of alpha-numeric phonenames had for some time been widespread in
the US; the plain inference was that Flowers saw that the use of
phonenames would become increasingly common in the UK. Indeed it
was the perceived existence of an opportunity for the commercial
exploitation of a phonename in the UK which prompted its
application to register the mark 800-FLOWERS in the UK.
- The mark 800-FLOWERS was adopted by Flowers because of its
telephonic significance, rather than because of its inherent
capacity to distinguish. It was chosen because it represents that
part of the corresponding freephone number which is common to all
those countries which operate a freephone system using the prefix
0800 or 1800.
- Judged against the background of the increasingly widespread
use of phonenames in the UK, the mark does not have the requisite
capacity to distinguish. It is no more than an encoded telephone
number.
- The mark was therefore not registrable.
Buxton LJ agreed with this analysis, stating: “the real
substance of the mark sought to be registered in the United Kingdom
is its mnemonic connection with a telephone number…The focus
being…on the phone numbers rather than on the applicant’s
distinctive business, the mark, in the context in which the
registration is sought, does not distinguish”.
Section 11 of the 1938 Act
By
section 11 of the 1938 Act: “It shall not be lawful to register
as a service mark…any matter the use of which would, by reason of
its being likely to deceive or cause confusion or otherwise, be
disentitled to protection in a court of justice…”.
In relation to this section, Buxton LJ stated: “where the
business to which the mark is attached…is inherently a business
conducted over the telephone, the holder of the mark is necessarily
likely to cause confusion…if he does not possess the telephone
number to which the mark makes reference”.
The mark was therefore not registrable.
Sections 17 and 68 of the 1938
Act
Section 68 of the 1938 defines a service
mark as “…a mark…used or proposed to be used in relation to
services for the purpose of indicating, or so as to indicate…that a
particular person is connected, in the course of business, with the
provision of those services…”. The crucial words are “used or
proposed to be used”. These words are also found in section 17(1)
of the 1938 Act, the basic provision requiring an application to
the Registrar to register the mark. Parker LJ stated that for the
purposes of sections 17 and 68, Flowers had to establish use, or
proposed use, of the mark in the UK.
- Parker LJ concluded as follows:
At the time of application,
there was no actual use of the mark by Flowers in the UK, since: A
telephone call from the UK to Flowers’ US telephone number did not
necessarily involve the use of the mark in the UK.
Nor was the evidence concerning Flower’s web site was sufficient to
justify the conclusion that accessing the web site amounted to use
of the mark at the point of access. In any event, the evidence did
not disclose the extent to which the web site had in fact been
accessed from the UK.
Even had the web site been accessed from the UK, Flowers did not at
that time have a place of business in the UK, the services which it
provides were performed outside the UK and there was only one piece
of advertising directed specifically at the UK.
- Any intended user of the mark in the UK by Flowers was plainly
conditional on its acquiring the corresponding UK telephone
number. Such an intention was not sufficient for the purposes
of section 17(1) of the 1938 Act.
Buxton LJ agreed, and made some obiter comments regarding use in
the UK being established by web site use.
He stated that there was “something inherently unrealistic in
saying that A “uses” his mark in the United Kingdom when all that
he does is to place the mark on the internet, from a location
outside the United Kingdom, and simply wait in the hope that
someone from the United Kingdom will download it and thereby create
use on the part of A…the very idea of “use” within a certain area
would seem to require some active step in that area on the part of
the user that goes beyond providing facilities that enable others
to bring the mark into the area”.
The mark was not registrable. The appeal was
dismissed.
Commentary
Although the case was decided on the 17th May 2001, it concerned
an application made for a trade mark in 1993. As such the case was
determined under the provisions of the 1938 Trade Mark Act and not
the current 1994 Act. The application also predated the now
extensive use of mobile phone texting and for that reason alone is
interesting as it demonstrates how much the way in which we
communicate has changed in a relatively short period.
Perhaps the most interesting legal aspect of the case lies in
the obiter words of Buxton LJ regarding web site use of the mark in
the UK. Buxton LJ expressed the opinion that the mere fact that the
web site is available by users in the United Kingdom in itself did
not constitute use of the service mark in the United Kingdom.
Rather there needed to be some direct encouragement to use the
service such as an advertising campaign. One advertisement placed
by 1-800 FLOWERS Inc in 1994 was considered to be insufficient.
This should be compared with the Enforcement of Civil and
Commercial Judgments Regulation 2000 (“the Regulation”), which is
due to come into force in March 2002. The Regulation amends the
current rules relating to consumers set out in the Brussels
Convention on the jurisdiction and enforcement of judgments in
civil and commercial matters of 1968, as supplemented by the Lugano
Convention in 1988 (together “the Conventions”).
Under the Conventions, in order for the rules relating to
consumer contracts to apply the conclusion of a contract must have
been “proceeded by a specific invitation addressed to the consumer
or by advertising in the country of domicile of the consumer, and
in that country the consumer took steps necessary for the
conclusion of the contract” (Article 13). This is not dissimilar to
the proposition put forward by Buxton LJ.
However, Article 15(3) of the Regulation provides “(3) … the
contract has been concluded with a person who pursues commercial or
professional activities in the Member State of the consumer's
domicile or, by any means, directs such activities to that Member
State or to several countries including that Member State, and the
contract falls within the scope of such activities.” The
earlier drafts of the Regulation contained a recital which stated
that “electronic commerce in goods and services by a means
accessible in another Member State constitutes an activity directed
to that State…”. Whilst this was deleted from the final
version of the Regulations, no additional wording was added to
establish the status of web sites. It remains to be seen as to how
the courts will interpret this provision.
Both the Conventions and the Regulation provide that if the
exception to the general rules used to determine which country’s
courts have jurisdiction applies, then a consumer may bring
proceedings against the other party to a contract either in the
courts of the country in which that party is domiciled or in the
courts of the country in which the consumer is domiciled.
However, proceedings may be brought against a consumer only in the
courts of the country in which the consumer is domiciled.
The whole question of the legal status of a web site owned and
operated by an overseas business accessible in the United Kingdom
is one which will become increasingly important over the coming
years. It can only be hoped that the approach taken by Buxton LJ
will find favour in determining whether a web site in itself
constitutes “an activity directed” to a member State of
the European Union. However, as Buxton LJ comments “…it is
…unlikely… that there will be one uniform rule, specific to the
internet, that can be applied in all cases of internet use…”
.
