Jersey Unreported Judgments

[2006]JRC021

royal court

(Samedi Division)

10^th February, 2006

Before     :		M. C. St. J. Birt, Esq., Deputy Bailiff, and Jurats Le Brocq and Morgan.
Between	Play Limited		Plaintiff
And	Legato Assets Limited		Defendant

Advocate G. S. Robinson for the Plaintiff.

Advocate D. S. Steenson for the Defendant.

judgment

deputy bailiff:

1.        This is an application by the defendant to discharge an ex parte injunction granted by the Bailiff on 15^th November 2005.  The detailed terms of the injunction are contained in the order of justice but essentially it restrained the defendant from using the internet domain name 'play.co.uk' or from establishing, developing or operating a website at 'play.co.uk'. 

Factual background

(i)     The plaintiff's business

2.        The parties have produced a number of affidavits for these proceedings.  Naturally, where there is conflict, this is not the occasion for resolution of factual disputes, but the essential background does not appear to be the subject of real dispute. 

3.        The plaintiff is a Jersey company originally established by Mr Richard Goulding, Mr Simon Perree and Dr Peter de Bourcier.  Its predecessor in business was another Jersey company called Paco Limited.  In August 1998 that company registered the business name "PLAY" with the Jersey Financial Services Commission and in October 1998 it began trading as a mail order business under the PLAY name supplying DVD's by post to the Channel Islands and the UK.  In November 1999, Paco Limited began to trade as an on-line retailer of DVD's.  It wanted to continue to use the trading name PLAY for its on-line business and investigated the possibility of registering and using the domain name PLAY.com for its website but found that that domain name had already been registered by an American company.  Accordingly it registered and began using the domain name 'Play247.com'.  In July 2001 Paco Limited managed to acquire the domain name 'play.com'.  Accordingly it re-branded its trading website and thereafter traded under the name 'play.com'.  The company also adopted a new logo which includes a device of a triangle within a circle within a square which represents the 'play' button on electronic equipment such as DVD players etc.  Accordingly the principal distinctive elements in the PLAY.com logo are the element 'PLAY' (written in capitals, which is how we shall show it) and a device intended to signify the concept of 'play'.  In March 2004 the plaintiff acquired the PLAY.com business as a going concern from its associated company Paco Limited and has carried on such business since then.  When we refer to the plaintiff's business, we intend to cover the business as carried on by the plaintiff and previously by Paco Limited. 

4.        The plaintiff's business is purely as an on-line retailer under the name PLAY.com.  The only way to buy its products is through its website.  It buys its products from others and makes them available for sale over the internet.  The product range offered by the PLAY.com business has grown over time and now includes over 500,000 items, including DVD's, CD's, books, electronic games, electronics (e.g. televisions, mobile phones, mobile telephone content, MP3 players, camcorders, headphones, cameras and DVD players), toys, film memorabilia, gadgets, t-shirts, health and fitness products and activity days (e.g. customers can buy a flight on a Tiger Moth aeroplane or an introduction to racing car driving).  It is intended shortly to introduce a music download service.  The company's headquarters is in Jersey where all its staff and facilities are located apart from a small warehouse facility in the UK.  The number of staff employed in Jersey fluctuates throughout the year but is at present around 340 although it increases at peak times.  90-95% of the business comes from customers in the UK. 

5.        The PLAY.com business has been extremely successful.  The accounting year end is 31^st January each year and, for convenience, we shall refer, for example, to the year 2004 to cover the year from 1^st February 2004 to 31^st January 2005.  Mr Goulding's affidavit traces the development of the business but suffice it to say that (in round terms) sales in 2004 were £190 million and are forecast to reach £248 million in 2005.  The spend on marketing for 2004 was £3.1 million and is forecast at £4.2 million for 2005.  In 2004 £2.7 million was spent on maintaining the website and it received a total of approximately 702 million hits (i.e. page impressions).  The estimate for 2005 is 912 million hits.  To put this in perspective, according to Hitwise, an independent company which monitors online traffic, PLAY.com was ranked No.1 in the UK in June and July 2005 for the number of hits when compared with other sites in the category of 'shopping and classified - video and games'  as well as in the category 'shopping and classified - music'.  Another way of indicating the scale of the use of the website is that, on 11^th November 2005, in the category 'all sites', the PLAY.com website was the 46^th (of a possible 442,814) most visited site by UK internet users.  To put this in perspective, Tesco ranked 43^rd, British Airways 87^th and HMV 166^th.

6.        In 2004 the number of unit sales (i.e. items sold) reached 15.2 million and the forecast for 2005 is 25 million.  The business has 3.9 million customer accounts (of which over 6,000 give addresses in Jersey).  This conceals a greater number of customers as some accounts are shared by more than one person.  The business has also received a number of prestigious awards as set out in paragraph 30 of Mr Goulding's affidavit. 

7.        The Court has no difficulty in finding on the evidence that the plaintiff has acquired a substantial goodwill and reputation in its PLAY.com business having regard to its extensive advertising, the high number of visits to the PLAY.com website, its substantial turnover, the substantial number of customers who use the service and the publicity associated with its awards. 

(ii)     PLAY.co.uk

8.        The domain name play.co.uk was first registered in the name of a company called Interplay Limited in February 1997.  The plaintiff and/or its predecessor Paco Limited have tried to acquire the domain name previously.  This was done through Dr de Bourcier, who did not disclose his connection with the plaintiff's business for fear of increasing the price.

9.        There has been some uncertainty as to the date and exact sequence of these attempts.  According to Mr Goulding's affidavit placed before the Bailiff, the initial approaches were in September or October 2001 when Dr de Bourcier sent e-mails to the registrant and its agent.  All communication was by e-mail.  It is not necessary to recite in detail the content of the discussions.  Suffice it to say that Dr de Bourcier initially offered £5,000 but received no reply.  Later in mid-2002 he tried again and offered £20,000 which, following e-mail correspondence, was increased to a final offer of £25,000.  He subsequently received an e-mail stating that the owner did not wish to sell at that price.  Mr Goulding's affidavit made it clear that he was relying upon Dr de Bourcier for information about these negotiations and that the latter was relying upon his memory because he no longer had any relevant e-mails. 

10.      Subsequently the affidavit of Mr Mark Baker, sworn on behalf of the defendant, has exhibited some of the e-mails (although not all of them) from which it is clear that the initial approach from Dr de Bourcier was in December 2002 (not 2001) and that the subsequent discussions culminating in the offer of £25,000 took place in April 2004 (rather than mid-2002 as suggested by Mr Goulding in his affidavit).  The plaintiff accepts that Dr de Bourcier was wrong in his recollection of the dates. 

11.      Although the plaintiff had been unsuccessful in acquiring the play.co.uk domain, Mr Goulding periodically checked the site in order to see if it had become active.  At the end of June 2005 he noted that the site now contained four pages.  The first indicated that it would become operational in the third quarter of 2005.  The other three pages gave some indication of what the offering from the website might be because they contained stylised versions of the words "Play/Cards", "Play/Games" and "Play/Music".

12.      The plaintiff was concerned by this development and instructed solicitors to carry out enquiries.  A 'who is' search of the Nominet Register revealed that (as now) the domain name was registered in the name of the defendant with an address at 44 Esplanade, St Helier, Jersey.  However the defendant was not incorporated in Jersey.  Further detailed enquiries were carried out and on 26^th July 2005 the plaintiff established that the defendant was incorporated in the Bahamas but was administered by a company called Overseas Management Company Limited at 31 Broad Street, St Helier.

13.      No further action was taken at that time but between 25^th and 28^th October 2005 the website changed.  The new pages were more explicit as to the future intentions of the defendant.  The holding page contains nine icons.  The first is a shopping trolley accompanied by the words "Play Shopping" and "Music, Movies, Games, books and much more!".  If one clicks onto the "Shopping" icon one is taken to another page which contains the words "Coming Soon". 

14.      The second icon in the top row is a series of two musical notes accompanied by the words "Play Music" and the words "500 tracks to download to your PC, MAC or Mobile".  Once again, if one clicks on this icon the message "Coming Soon" is displayed. 

15.      The second icon in the second row is a mobile telephone accompanied by the words "Play Mobile" and the words "Tones, Pictures, Videos, Games and More".  Again, clicking on this icon discloses that this service is "Coming Soon". 

16.      The other six icons are "Play Sport - Up to the minute news and views on all the latest sporting action", "Play 2 Win - Mega prizes up for grabs", "Play Mates - Chat and date for fun or real", "Play Poker - Play the best online poker tables in the world", "Play Casino - Roulette, Blackjack, Slots and more", "Play Backgammon -The biggest online phenomenon since poker". Along the top of the home page is a stylised form of "PLAY.co.uk." (except that the 'A' is replaced by an arrow).  The pages also include a facility permitting the customer to register his interest in the site by supplying contact details. 

(iii)    Evidence concerning the use of the websites

17.      As already mentioned Hitwise is an independent company producing information about the use of websites.  In particular it can provide information about 'upstream' and 'downstream' traffic.  'Upstream traffic' refers to users of the internet who arrive at a particular website after having been at a different website.  Accordingly statistics about 'upstream traffic' tell the plaintiff which websites were visited by users immediately before arriving at the PLAY.com website.  Conversely 'downstream traffic' statistics tell the plaintiff where users go immediately after visiting the PLAY.com website. 

18.      The Hitwise data shows the following:-

(i)        In July, August and September 2005, PLAY.co.uk was the ninth most frequently visited upstream site before a user came to the PLAY.com website.  This percentage varies between 1.25% and 1.27%.  It is apparently very difficult to translate these percentages into exact numbers but according to Mr Goulding his best estimate is that a percentage of 1.25% for a month indicates that there were approximately 110,000 visits in that month to the PLAY.com website which came via the PLAY.co.uk website. 

(ii)       For September 2005 the PLAY.com website was the fourth most frequently visited upstream site before a user came to the PLAY.co.uk site with a percentage of 3.97%. 

(iii)      Even more significantly, in the same month, the downstream figure for PLAY.co.uk showed that PLAY.com was top of the list of downstream sites to which users moved after visiting PLAY.co.uk.  83.17% of all those who visited the PLAY.co.uk website in that month went directly from there to the PLAY.com website.  The next most popular downstream site was Google with a figure of only 2.34%. 

19.      We should add that Mr Goulding drew the Bailiff's attention to the fact that the October 2005 figures from Hitwise did not show PLAY.co.uk featuring at all in the upstream traffic from PLAY.com.  Mr Goulding had made enquiries of Hitwise who said that there appeared to be some problem and they simply did not have the necessary information concerning PLAY.co.uk for that month. 

20.      In his affidavit Mr Baker disclosed that 4,000 people a day had been leaving their e-mail address at the PLAY.co.uk website of which only 20% related to shopping.  In response Mr Goulding, in his third affidavit, comments that, based upon the Hitwise information in relation to PLAY.co.uk for September 2005, of the twenty most common upstream sites, ten are places where one may purchase music and games etc online and of the remaining nine, six are places where one could search for such things.  Similarly, from the downstream data, the vast majority (83,17%) go directly to PLAY.com.  Of the following nineteen most popular downstream sites, six are websites where consumers may purchase CD's and DVD's etc online and nine are search engines which consumers may use to attempt to locate the product they are looking for.  He points out that nowhere within the top twenty downstream or upstream sites is sports information, online dating, or any variations of online gambling website.  He submits that this shows that the vast majority of people do not visit PLAY.co.uk in the hope of locating information in respect of areas in which the plaintiff does not operate; they are looking for goods and services which the plaintiff supplies. 

21.      There is no evidence before the Court that there has been any advertising or promotion of the PLAY.co.uk website.  This is to be contrasted with all the other sites in the upstream top ten from PLAY.com.  They are all either search engines (e.g. Google) or heavily advertised and promoted sites which are competitors of the PLAY.com business, thereby indicating that visitors are shopping around for the best price. 

22.      The plaintiff submits that the only explanation for these various figures is that internet users are visiting PLAY.co.uk in the mistaken belief that it is the PLAY.com website which they have seen advertised and which they are looking for.  They submit that there can be no other explanation for such extraordinarily high volumes of traffic to an un-advertised, un-promoted and dormant site.  The high figure of 83% of visitors to PLAY.co.uk who move on directly to PLAY.com is strongly suggestive of persons visiting the site in the mistaken belief that it is the PLAY.com website that they have seen advertised and which they are looking for.  The defendant is in effect seeking to trade off the goodwill and reputation of the plaintiff's PLAY.com business.

23.      The plaintiff also relies upon the affidavit of Desirée Biehn who exhibits examples, taken from internet message boards, discussion forums or internet blogs, which show consumers confusing the website PLAY.co.uk with PLAY.com. 

(iv)    These proceedings

24.      Having discovered the alterations to the defendant's website effected in late October 2005, the plaintiff instituted proceedings by order of justice on 15^th November 2005.  The action is a claim for passing off on the basis that the defendant's actions are calculated to result in the domain name PLAY.co.uk and the website operated under that name and the goods and services offered for supply at that website being passed off as the plaintiff's domain name, website or goods and services or as being otherwise connected with the plaintiff.  The relief sought includes an order that the defendant should assign registration of the domain name PLAY.co.uk to the plaintiff.  As already mentioned, the Bailiff granted an ex parte interim injunction restraining the defendant from using or operating the website until further order. 

25.      At the beginning of the hearing before us to discharge the injunction Mr Steenson made an open offer on behalf of the defendant.  Although the terms were not put in writing, the defendant essentially offered to undertake not to use its website for the purpose of carrying on any business which competed with the plaintiff's activities.  Thus the defendant would not use or operate the icons Play Shopping, Play Music or Play Mobile; it would only operate the remaining six icons where there was no overlap with any business carried out by the plaintiff.  The plaintiff sought a short adjournment to consider the matter.  Having done so, it rejected the offer on the basis that it wished to maintain the injunction in its present form, thus preventing any use of the defendant's website. 

The principles for granting interim injunctions

26.      In deciding whether to grant an interim injunction the Court seeks to minimise the risk of injustice.  The dilemma was clearly set out by Hoffmann J in Films Rover International Limited v Cannon Film Sales Limited [1986] 3 All ER 772 at 780:-

"The principal dilemma about the grant of interlocutory injunctions, whether prohibitory or mandatory, is that there is by definition a risk that the court may make the 'wrong' decision in the sense of granting an injunction to a party who fails to establish his right at the trial (or would fail if there was a trial) or alternatively, in failing to grant an injunction to a party who succeeds (or would succeed) at trial.  A fundamental principle is therefore that the court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been 'wrong' in the sense I have described.  The guidelines for the grant of both kinds of interlocutory injunctions are derived from this principle."

27.      In seeking to achieve this objective this Court applies the principles laid down in the leading case of American Cyanamid v Ethicon Limited [1975] AC 396.  Those principles were helpfully summarised by Bailhache, Bailiff in Milner v Milner Laboratories Limited [2000] JLR 266 at 273:-

"1.  Has the plaintiff shown on the evidence before the court that there is a serious question to be tried?  If not, then no injunction is granted. 

2.   If there is a serious question to be tried, then the court considers whether the damages awarded at the trial would be an adequate remedy for the plaintiff.  If so, then no injunction is granted.

3.  If damages would not be an adequate remedy for the plaintiff the court then goes on to consider if damages would be an adequate remedy for the defendant; if so, then normally an injunction would be granted. 

4.   If damages would not be an adequate remedy for the defendant, the court goes on to consider the factors affecting the balance of convenience, i.e. which party will suffer more uncompensatable damage from the grant or refusal of the injunction. 

5.   If the balance of convenience is fairly even, then it is prudent for the court to seek to preserve the status quo. 

6.  Finally, where there is approximately equal uncompensatable damage to both parties, it is proper to look at the relative strength of the parties' substantive cases.  Where one is disproportionately stronger than the other, this may swing the balance."

28.      We must therefore turn to apply these principles to the facts of this case.

Is there a serious issue to be tried?

29.      Mr Steenson submits that the plaintiff does not have an arguable case because the word 'Play' is a generic term which the plaintiff cannot appropriate for itself and which cannot lead to a risk of deception.  Mr Steenson's submission necessitates a brief review of some cases on the law of passing off. 

30.      The leading Jersey authority is the decision of the Court of Appeal in Veka A.G. v T A Picot (CI) Limited [1999] JLR 272.  Sumption J A summarised the applicable principles in a passing off action as follows at 278:-

"The essence of the tort of passing off is that it is an invasion of the plaintiff's proprietary right in the goodwill associated with his product.  In order to establish a cause of action for passing off, the plaintiff must prove (i) that its goods have established a reputation in Jersey which is associated with the names 'Veka' and 'Vekaplast'; (ii) that the defendants' use of those names is likely to lead customers or potential customers to believe that the defendants' goods are the plaintiff's or that the defendant is in some material way associated with the plaintiff; and (iii) that this belief is likely to cause damage to the plaintiff.  It is not necessary for customers or potential customers to be aware of the plaintiff's identity, provided that they are accustomed to the plaintiff's goods and have been led to believe the defendants' goods come from the same source."

31.      Mr Steenson submitted that, additionally, it is necessary for there to be some distinctive get-up or feature of the goods.  He said that it was not necessary for the Court of Appeal in Veka to consider this aspect because the name 'Veka' was very distinctive.  He referred to the dicta of Lord Oliver in Reckitt & Colman Products Limited v Borden Inc [1990] 1 WLR 491 at 500:-

"The law of passing off can be summarised in one short general proposition - no man may pass off his goods as those of another.  More specifically, it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed.  These are three in number.  First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying 'get-up' (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public and is distinctive specifically of the plaintiff's goods or services.  Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff.  Whether the public is aware of the plaintiff's identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff.  For example, if the public is accustomed to rely upon a particular brand name in purchasing goods of a particular description, it matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name.  Thirdly, he must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff."

In relation to the first element Lord Oliver went on to say the following at 506 in a passage upon which Mr Steenson places particular reliance:-

"Then it is said - and again there is no disagreement as to this - that the mere fact that the produce of the appellants and that of the respondents may be confused by members of the public is not of itself sufficient.  There is no 'property' in the accepted sense of the word in a get-up.  Confusion resulting from the lawful right of another trader to employ as indicative of the nature of his goods terms of which are common to the trade gives rise to no cause of action.  The application by a trader to his goods of an accepted trade description or of ordinary English terms may give rise to confusion.  It probably will do so where previously another trader was the only person in the market dealing in those goods, for a public which knows of only A will be prone to assume that any similar goods emanate from A.  But there can be no cause of action in passing off simply because there will have been no misrepresentation.  So the application to the defendants' goods of ordinary English terms such as 'cellular clothing' ...... 'office cleaning'........ or the use of descriptive expressions or slogans in general use such as 'Chicago Pizza' ..... cannot entitle a plaintiff to relief simply because he has used the same or similar terms as descriptive of his own goods and has been the only person previously to employ that description."

However Miss Robinson cited a further passage from Lord Oliver's speech on the same page:-

"Every case depends upon its own peculiar facts.  For instance, even a purely descriptive term consisting of perfectly ordinary English words may, by a course of dealing over many years, become so associated with a particular trader that it acquires a secondary meaning such that it may properly be said to be descriptive of that trader's goods and of his goods alone ......"

She submits that is the case here.

32.      These principles have been applied to passing off actions in relation to the use of domain names on the internet.  Thus, in BT Plc v One in a Million Limited [1989] 4 All ER 476 the Court of Appeal held that, in appropriate circumstances, the mere registration of a domain name can itself constitute an instrument of deception or fraud, leading to liability for passing off.  In that case there were two types of domain name in question.  The first type was such as 'marksandspencer.com'.  The court held that the name was so distinctive that the mere use of the name itself was sufficient to lead to the conclusion that the registration of such a domain name by another person constituted an instrument of fraud.  The second type related to names such as Sainsbury or Ladbrokes where there might be people with such names who could lawfully use their own names in a domain name but the court held that, on the facts of the particular case, the defendants' conduct was calculated to deceive and as such amounted to passing off. 

33.      Another case in the first category was Global Projects Management Limited v Citigroup Inc [2005] All ER (D) 182 where the claimant registered the domain name 'citigroup.co.uk' in circumstances where the defendant was the registered owner of the domain name 'citigroup.com'.  Not surprisingly the judge gave summary judgment in favour of the plaintiff and held that the mere registration and maintenance in force of such a domain name was enough to make it a potential instrument of fraud and amounted to passing off. 

34.      Mr Steenson distinguished these cases from the present.  Names such as Marks & Spencer, Sainsburys, Citgroup etc were very distinctive.  Here the only word in question was the word 'play'.  This was quite different and was simply a general word.  It could not give rise to the sort of distinctive get-up to which Lord Oliver had referred.  In reply Miss Robinson referred to two recent cases.  The first was Easyjet Airline Co Limited v Dainty [2002] FSR 6.  In this case the defendant set up a website under the name 'easyRealestate.co.uk'.  Easyjet brought an action for passing off and the court gave summary judgment in its favour notwithstanding that the Easyjet group did not carry out any real estate activities.  However it is clear from the judgment that the defendant had deliberately set up his website so as to be as similar as possible to the Easyjet website.  The judge accepted that the claimant was not entitled to appropriate the word 'easy' and prevent any business from using any name that included the word 'easy' but he held on the facts that there was a clear likelihood of deception because of the similarity of the websites.  He also held that damage could be anticipated because of the risk of damage to Easyjet's reputation for excellence, notwithstanding the fact that it did not have a real estate business. 

35.      In Partygaming Plc v Dabosh [2005] EWHC 3090 (Ch) the claimant was a company which carried on substantial online betting business under a number of names such as PartyPoker, PartyGame, PartyBingo, and PartyCasino.  The defendant registered a domain name of 'partybackgammon.com' and the plaintiff sought an interim injunction to restrain its use.  The court held that the plaintiff had a good arguable case for passing off and infringement of trademarks and granted the injunction.  There seems to have been considerable similarity in the get-up of the respective websites and Mr Steenson submitted that that aspect did not exist in the present case. 

36.      It is not for us to determine whether the plaintiff will ultimately succeed at trial.  We have only to determine whether there is a serious issue to be tried.  In our judgment, notwithstanding the use of the general word 'play', the evidence satisfies us that there is a serious issue to be tried.  There is evidence to support the assertion that PLAY.com has established a substantial goodwill and public reputation and that it is sufficiently distinctive to support an action for passing off. 

37.      The question then arises as to the risk of deception.  Here it is important to see what the plaintiff itself stated in evidence.  In his affidavit Mr Goulding says that what concerned him initially when he saw the defendant's website in June 2005 was that the defendant might sell games, CD's etc (see para 42 of his affidavit).  In paragraph 82 and 83 of his affidavit he emphasises that it is not the existence of the domain name which is a problem; it is its use as an online retail site selling substantially similar goods and services to those of the plaintiff under a misleading similar name. 

38.      For the reasons put forward by the plaintiff and summarised earlier at paras 18-23, we are satisfied from the Hitwise data and the evidence of Miss Biehn that the plaintiff has a good arguable case that, as a result of the defendant's actions, customers are likely to be misled.  However, in our judgment, this risk of confusion only applies to activities which are broadly similar in nature to those undertaken by the plaintiff.  It is clear from the evidence of Miss Biehn that there are other websites containing the word 'play' (e.g. play.org, play.ca, play.de, play.net) but because there is no overlap of activities, there is no risk of confusion (see para 3 of Mr Goulding's first affidavit and paras 36 and 37 of his third affidavit).  It seems clear that, to the extent that customers looking for PLAY.com go by mistake to PLAY.co.uk, they do so because they are looking for the services advertised and promoted by PLAY.com.   Because PLAY.co.uk promises similar services, there is a likelihood of such customers being misled and of the plaintiff suffering damage.  If the PLAY.co.uk website contained only the six icons which do not overlap with the plaintiff (i.e. the four gaming icons, the chat line and the sports news) customers looking for PLAY.com would immediately realise they had come to the wrong site.  The PLAY.co.uk website would be in exactly the same position as the other websites described in Miss Biehn's affidavit.

39.      We appreciate that, for example, in One in a Million, the defendant was restrained from using the name Marks & Spencer for any purpose but that is because the name of Marks & Spencer is so distinctive that any use of that name is liable to mislead a customer into thinking that he is dealing with the well known retailer, which would be likely to cause damage to their reputation.  In our judgment different considerations apply where a company has chosen to use a generic word such as 'play'.  Let us suppose a wholly new site called 'PLAY.co.uk' which, from the outset, offered only online gambling.  We do not see that it is arguable that the plaintiff could succeed in a passing off action in relation to such a site.  There would be nothing calculated to deceive or any instrument of fraud and to allow the plaintiff to succeed would in effect mean that, if a person has once registered a website with '.com' he may restrain any person from using the same name in relation to any other endings such as '.co.uk' no matter how general the wording used in the domain name.   It would mean that the plaintiff could also prevent the use of any of the websites listed by Miss Biehn.

40.      We appreciate that, in the two cases to which Miss Robinson referred, the court restrained the use of sites which included the words 'easy' and 'party', but in each of those cases there was clearly great similarity (done deliberately) between the claimant's and defendant's websites with the result that there was clearly great scope for misleading and confusion.  One can readily understand the court's conclusion that the defendant's deliberate creation of such a website was indeed an instrument of fraud.  That does not apply here.

41.      As to the third element, we are satisfied that there is an anticipation of damage to the plaintiff in that, if the defendant's site becomes active, customers may be misled into purchasing goods from the defendant believing they are buying from the plaintiff and, secondly, there may be damage to the reputation of the plaintiff if the service provided by the defendant does not live up to the standards set by the plaintiff. 

42.      For these reasons we find that there is a serious issue to be tried insofar as the defendant's proposed activities overlap in any way with the plaintiff's but we do not find that there is a serious issue to be tried in respect of the six icons where there is no such overlap. 

The other elements of the American Cyanamid test

43.      Applying the test as set out in paragraph 27 above and having found that there is a serious issue to be tried, we must next consider whether damages would be an adequate remedy for the plaintiff if it succeeded at trial.  We find that it would not.  First, it would be extremely difficult to ascertain and then quantify any business lost from the plaintiff to the defendant by reason of the passing off or to quantify any loss caused by damage to the plaintiff's reputation.  Secondly, there is nothing to suggest that the defendant would be in a position to pay any damages which, if ascertained, could well be substantial.  The defendant is a Bahamian company administered by a trust company in Jersey and has produced no accounts to the Court.

44.      Would damages pursuant to the undertaking in damages be an adequate remedy for the defendant if it ultimately succeeds at trial?   In our judgment it would.  The plaintiff is a substantial company and we are satisfied that it would be in a position to pay any damages awarded.  Furthermore, such damages should be reasonably capable of assessment.  If the defendant is ultimately successful at trial, the effect of the injunction will have been to have delayed the introduction of certain of its activities under the name PLAY.co.uk for the period between now and the conclusion of the trial.  If it then commences such business, the subsequent figures for that business should give a reasonably accurate guide to the loss suffered in the interim period.  Any direct costs incurred later in re-designing the website etc would also clearly be ascertainable. 

45.      Strictly speaking, the finding in the preceding paragraph means that we do not need to go further.  However, if we are wrong in concluding that damages would be an adequate remedy for the defendant, we conclude that the plaintiff would suffer much more compensatable damage if successful than would the defendant if it were ultimately successful.  The losses to the plaintiff could be very substantial, difficult to ascertain or quantify and quite possibly not capable of payment by the defendant.  Conversely, in the case of the defendant, the injunction does not prevent it from carrying on its gaming activities etc; nor does it prevent the defendant from providing goods or services which overlap or compete with those provided by the plaintiff.  It is perfectly free to undertake such activities under a different domain name.  The only restriction upon it is that it cannot do so under the name PLAY.co.uk (or any other domain name calculated to deceive).  As the PLAY.co.uk site is currently dormant and there is no existing goodwill attached to it by reason of the defendant's activities, we conclude that any loss caused to the defendant by having to use a different domain name in the interim for services which overlap with the plaintiff's would be modest indeed.  We find therefore that the balance of convenience comes down firmly in favour of the plaintiff.

The defendant's other points

46.      Mr Steenson submitted that the ex parte injunction should in any event be set aside on the basis of a failure to make full and frank disclosure.  This alleged failure fell under two main headings.  First, he said that Mr Goulding had given a misleading picture of the previous contact between Dr de Bourcier and the agent of defendant (or its predecessor as the owner of the domain in question) and had wrongly suggested to the Bailiff that communications had proved difficult in the past.  It is true that the dates given by Mr Goulding as to the previous contact turned out to be wrong.  However, in his affidavit produced to the Bailiff, he made it clear that he and Dr de Bourcier did not have access to any records and were speaking entirely from Dr de Bourcier's memory.  He was quick to accept that the dates were incorrect once some e-mails were produced.  We have carefully considered the material before the Bailiff but we do not consider that there was any failure to make full and frank disclosure in this respect. 

47.      Secondly, Mr Steenson submits that there was a failure specifically to draw the Bailiff's attention to the fact that there were various areas of the defendant's website which did not overlap with the PLAY.com business and that accordingly there was an argument for suggesting that the injunction sought by the plaintiff was wider than necessary in that it covered all activities in relation to the defendant's website, not just those which overlapped with the plaintiff's business.  In Goldtron Limited v Most Investments Limited [2002] JLR 424 the Court emphasised the need for a plaintiff seeking an ex parte injunction to put before the court any matter which militates against the making of the order in question; particularly, in this context, any possible defences.  In his affidavit Mr Goulding did disclose that there were nine icons on the defendant's website and that only three of these overlapped with the plaintiff's business.  However, he left the matter there.  He did not go on to raise the possibility that a defendant may wish to argue that an injunction should accordingly not cover the non-overlapping areas.  It would of course have been perfectly in order for the plaintiff, having alerted the Bailiff to this possible argument, nevertheless to have sought an injunction in the terms granted; but the Bailiff's attention was not specifically drawn to the fact that there was a possible argument (which in fact has found favour with this Court) that the injunction should be in narrower terms.  Whether this Court is right or wrong in having concluded that the injunction should be in more limited terms is not the point; it is simply a question of whether the Bailiff should have been alerted to the argument.

48.      The need to ensure that a party applying for ex parte relief is completely frank and does put before the court any matters which militate against the order in question lead us to conclude that high standards must be demanded in this respect and we have concluded that the plaintiff should have specifically drawn to the Bailiff's attention the possible argument that the injunction should not cover the six non-overlapping areas.

49.      In the papers put to the Court it appeared there might also be an issue as to whether the plaintiff had made full and frank disclosure in relation to 'sponsored links' but Mr Steenson confirmed at the hearing that, in the light of Mr Goulding's fourth affidavit, he was not pursuing that point.  He made certain other minor criticisms of Mr Goulding's affidavit but we find no other failure to make full and frank disclosure. 

50.      Mr Steenson further submitted that the application for an injunction should not have been made ex parte.  Bailhache B, in the case of Milner referred to earlier, emphasised very clearly that ex parte relief should only be sought where the giving of notice appeared likely to cause the applicant injustice, by reason either of delay or action which it appeared likely the defendant or others would take before the order could be made.  In his affidavit Mr Goulding very properly drew the Bailiff's attention specifically to the fact that no letter before action had been sent.  In our judgment the reasons given by Mr Goulding in his affidavit were sufficient to justify an ex parte application.  In this connection it is of passing interest that, according to the evidence produced for this hearing, following service of these proceedings the defendant immediately arranged for its agent to obtain registration of the domain names 'play.je' and 'play.co.je'. 

Conclusion

51.      For the reasons given we find that the plaintiff failed to make full and frank disclosure in relation to the width of the ex parte injunction.  We have considered carefully whether this failure should lead to the setting aside of the interim injunction (whether or not followed by re-imposition).  We have reminded ourselves of the considerations set out in Goldtron at paras 21-24 but, on balance, we have concluded that, on the particular facts of this case and given that it was made clear to the Bailiff that only three icons overlapped, the failure does not require us to set aside the interim injunction for failure to make full and frank disclosure. 

52.      Having now heard the parties we find that the plaintiff is entitled to an interim injunction, albeit a narrower one than exists at present.  The exact terms of the injunction will need to be drafted but it is to have the effect of allowing the defendant to use the PLAY.co.uk domain for the areas covered by the six icons which do not overlap with the PLAY.com business but restraining the defendant from using it for the areas covered by the three icons and any other areas of business which may overlap with the plaintiff's business. 

53.      It follows that we propose to vary the existing interim injunction so as to reflect the contents of the preceding paragraph.  We propose to distribute this judgment in draft and we will hear counsel on the exact terms of the injunction.  Counsel for the plaintiff is to prepare a draft to reflect the effect of this judgment and is to supply it to Mr Steenson for his observations (and hopefully agreement).  The existing interim injunction remains in force until formally varied by the Court.

Authorities

Films Rover International Limited v Cannon Film Sales Limited [1986] 3 All ER 772 at 780.

American Cyanamid v Ethicon Limited [1975] AC 396. 

Milner v Milner Laboratories Limited [2000] JLR 266 at 273.

Veka A.G. v T A Picot (CI) Limited [1999] JLR 272.

Reckitt & Colman Products Limited v Borden Inc [1990] 1 WLR 491 at 500.

BT Plc v One in a Million Limited [1989] 4 All ER 476.

Global Projects Management Limited v Citigroup Inc [2005] All ER (D) 182.

Easyjet Airline Co Limited v Dainty [2002] FSR 6.

Partygaming Plc v Dabosh [2005] EWHC 3090 (Ch).

Goldtron Limited v Most Investments Limited [2002] JLR 424.