Facts
The Claimant is the largest independent credit card issuer in
the world and offers numerous other related services. It has
had large scale operations in the UK since 1993. MBNA
conducts business from the website “www.mbna.com” and other similar
registered domain names.
The Defendant runs a banner exchange business that enables a
customer to advertise on the website of another company in return
for allowing two other companies to advertise on its site.
The Defendant registered the domain name “www.mbna.co.uk” and
described the business as “Marketing Banners for Net
Advertising”.
In August 1999 MBNA realised the existence of the mbna.co.uk
domain name but took no action at that stage. In March 2000
the Claimant, via its agent, sent a letter to the Defendant asking
for the domain name to be transferred to it. The Defendant
declined. Consequently, MBNA issued proceedings against the
Defendant for passing off and trade mark infringement.
MBNA argued that people searching the internet for its site were
as likely to try www.mbna.co.uk as www.mbna.com. MBNA relied
on the authority of British Telecommunications Plc v One in a
Million Limited [1999] FSR 1. It claimed that business
would be lost from those potential customers who looked no further
than the Defendant’s site. It also claimed that the potential
quality of the Defendant’s service might reflect adversely on MBNA
as some users might believe it owned or licensed the service.
An interim injunction was sought on the following terms:
to stop the Defendant activating a website with the domain name
or any domain name including “mbna,” that allegedly infringed the
Claimant’s registered trade mark; and
- to prevent the Defendant from selling or
dealing with the domain name.
Judgment
MBNA had an arguable case and in considering whether to grant or
refuse an injunction the court looked to the balance of convenience
and to which outcome would result in the least harm to the parties,
if the injunction were granted/not granted.
The learned Judge did not accept the Claimant’s argument that
the domain name used by the Defendant would lose it business.
Even if the Defendant’s site did not exist, people trying to access
MBNA would be faced with a dead end if they attempted
www.mbna.co.uk. Those people who decided not to search again
upon finding the Defendant’s site were no more likely to search
again if faced with a dead end; meaning that in both scenarios
MBNA’s website would not be accessed.
The Judge decided that MBNA had not established a real risk that
in the 3 to 5 months leading up to the trial (an expedited trial
was ordered) there would be any real loss of business beyond that
sustained (if any) by the site not being there in the first
place.
The learned Judge considered that MBNA had not established a
real risk of uncompensatable damage, and it would be wrong to grant
an injunction merely because it would do little harm to the
Defendant. With reference to the fact the Defendant had no
intention of activating the site before the trial, the Judge
recognised that the Defendant still wanted to be in a position to
take advantage of all business opportunities. Thus, if
granted, an injunction would cause the Defendant inconvenience and
uncertainty even though an application to vary it could be
made.
The argument that possibly the quality of the Defendant’s
service may reflect adversely on MBNA was not accepted either
because:
- potential users of a banner exchange service are likely to be
sophisticated internet users and are therefore unlikely to be
confuse the relationship between the two sites;
- evidence in the form of a Daily Mail article reinforced the
Defendant’s business competence.
As concerned the injunction to prevent the Defendant from
selling the domain name, the Judge accepted that the value of the
web site might be increased by the number of visitors to the
site. Thus, he agreed that it would be unacceptable to leave
the Defendant in a position to sell the domain name before the
hearing, at a price which might be inflated by improper use of the
Claimants’ goodwill.
Thus the injunction preventing the Defendant from using the
domain name or operating a website was refused. However, an
injunction preventing the Defendant from selling or dealing with
the domain name prior to the trial without leave of the court was
granted.
Commentary
These cases do not create new law but are interesting examples
of the application of the law after the One in a Million
case.
That case went to the Court of Appeal. Aldous LJ 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.”
The passage has been given in full, as it has been relied on as
an authoritative statement of the law in this area. Its
application in these two cases, with different results for the
claimant, show the sorts of reasoning the courts will use in coming
to decisions.
From the facts given by the judge in Britannia, it
seems that the defendant was always going to have a harder job
convincing a court that it had bona fides in registering
its domain name. The judge described the Defendant's
explanation as “wholly incredible” and it therefore seems to fall
squarely within the third category described by Aldous LJ in the
above passage.
The Defendant in the MBNA case, on the other hand,
seemed to have a far more credible explanation. The result
for this reason is very interesting. Given the procedure for
an expedited trial and the timescales involved, the court was not
prepared to grant an injunction against the defendant to prevent
the website being activated but was prepared to stop the
registration being passed to a third party who might not have a
bona fide reason for wanting that registration. As
the court found, the value of the mark might well be inflated
because of the simple reason that it could become, in the wrong
hands, an “instrument of fraud”.
The lesson for all domain name owners is that success is not
guaranteed, and that a thorough review of the evidence will be
necessary as a court will not automatically assume a defendant has
no reasonable explanation for its own registration.
