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Cite as: 2002 SCLR 977, [2002] ScotCS 347

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Bonnier Media Ltd v. Smith & Anor [2002] ScotCS 347 (01 July 2002)

OUTER HOUSE, COURT OF SESSION

A1334/02

OPINION OF

LORD DRUMMOND YOUNG

in the cause

BONNIER MEDIA LIMITED

Pursuers;

against

(FIRST) GREG LLOYD SMITH and (SECOND) KESTREL TRADING CORPORATION

Defenders:

________________

Pursuers: Henderson; Haig-Scott & Co, W.S.

Defenders: D. O'Carroll; Anderson Strathern W.S.

1 July 2002

[1] The pursuers are the owners, printers and publishers of the newspaper known as "business a.m.". They acquired their present name on 20th July 2000. Before that, they were known as Business Media Scotland Limited. On 13th July 2000 they registered a trade mark under the Trade Marks Act 1994. The mark in question consists of the words "business a.m." on a rectangular background. Along the top of the rectangle, in much smaller type, are the words "Scotland's Business, Financial & Political Daily". That mark was originally registered in respect of Classes 16 and 41 in the Trade Marks Rules 2000, but on 12th August 2000 it was further registered to include Class 35. Class 16, which is the class normally used by newspapers, includes various materials used in printing, and also printed matter. Class 41 comprises education and the providing of training, entertainment, sporting and cultural activities. Class 35 comprises advertising, business management, business administration and office functions.

[2] The pursuers' newspaper aims at coverage of business, political and financial matters. It was launched on 20th September 2000. It is averred by the pursuers that it has quickly built a reputation as a quality newspaper to be read by its intended market. In common with all or nearly all newspaper proprietors, the pursuers operate a website on behalf of business a.m.. The pursuers aver that such sites are increasingly important devices for commercial undertakings to promote themselves and, in some cases, to buy and sell. In connection with that website, the pursuers aver that they own six domain names, although in fact they list seven. These are as follows: "businessam.co.uk", "business-am.co.uk", "business-am.com", "businessam.net", "business-am.net", "businesspm.co.uk" and "businesspm.net". The pursuers provide an online service at their website under the domain name www.businessam.co.uk. They aver that an online service is a vital addendum to their business activities and has built up a substantial goodwill in its own right.

[3] In order to follow the arguments presented to the court, it is necessary to understand the precise nature of a domain name and of a website. A domain name is the text form of a computer's numeric Internet protocol (IP) address. The IP address itself is in numeric form, and the domain name is a textual representation of those numbers. The domain name is used to identify that computer on the part of the Internet known as the world wide web. An IP address takes a form such as "www.advocates.org.uk" (the website address of the Faculty of Advocates). In this case the suffix ".uk" is the top level domain, and is a reference to the United Kingdom. The previous suffix ".org" denotes a particular class of organisations, which includes professional associations such as the Faculty of Advocates. An ordinary commercial company would use the suffix ".co.uk", as in "marks-and-spencer.co.uk", or several of the pursuers' domain names. Many domain names do not contain any national reference; that applies in particular to the large number of domains that end in the suffixes ".com" and ".net". The former of these designates a commercial enterprise; the latter is more general. The system of domain names does not distinguish between capital letters and lower case letters; consequently it is immaterial whether capital letters are used in a name. Each domain name is unique. Full stops can only be used to separate the levels of a domain, as in "advocates.org.uk"; consequently they cannot be incorporated into the part of a domain name that occurs before the suffix. Likewise, spaces cannot be used in the part of a domain name before the suffix. Thus it would not be possible to have a domain name such as "business a.m.co.uk", as it incorporates both a space and a full stop prior to the suffix ".co.uk".

[4] Such names are allocated by a number of regulatory bodies. Since September 1998 the most senior of these has been the Internet Corporation for Assigned Names and Numbers, known as ICANN, a non-profit-making organisation based in the United States. ICANN is responsible for the supervision of accredited registrars throughout the world. The names without national signification, such as those ending in ".com", ".net" or ".org", are provided by an organisation based in the United States known as Network Solutions International. The names bearing a country code, such as ".uk", are provided by an organisation within the country concerned; in the United Kingdom this is a company known as Nominet UK Limited which provides all names ending in the suffix ".uk". While some kinds of suffix, for example ".gov", are restricted to a particular type of user, there is no general system for checking that an individual name is appropriate for a particular user. When a domain name is provided, the user enters into a contract with the provider, usually for a period of two years. Normally such contracts are extended upon expiry for a further period of two years, and this process continues indefinitely. When a user applies for a domain name, it must certify that all the information supplied by it to the provider is true. If any material part of that information is found to be untrue, the provider may revoke the name in question. Once a domain name has been allocated, the user may assign it to another person, and may receive consideration for the assignation of the name.

[5] A website consists of material on a particular computer. In the case of a commercial website, the computer will be known as a server. The Internet enables any person, anywhere in the world, who has a computer linked to the Internet to obtain access to the material contained in that website. The domain name thus functions as the Internet address of the particular computer containing a particular website. It follows that a domain name points to a particular physical location, namely the computer containing the website.

[6] The pursuers' pleadings, so far as material, are as follows. The first defender is resident and domiciled in Greece, and is the managing director of the second defenders. The second defender is a company incorporated in Mauritius. It is further averred that the second defenders have places of business in London, at the office of a firm of solicitors, and in Athens; consequently they are domiciled in both England and Greece. The defenders deny that the second defenders have any place of business in either London or Athens, and consequently maintain that their only domicile is in Mauritius. The pursuers also aver that, prior to his residing in Greece, the first defender had substantial business connections in Scotland. He ran two Internet companies from Edinburgh, which went into liquidation. The pursuers published articles concerning the first defender in business a.m.. As a result of those articles, the first defender has raised proceedings for defamation in the English High Court. Those proceedings are defended. It is averred that the first defender has a history of making use of domain names calculated to pass himself off as other organisations. Thus he set up a Greek website entitled "Amazon.gr", without permission of Amazon, a well-known Internet bookseller. It is further averred that the first offender fell out with Morison Bishop, solicitors, and subsequently set up a website entitled "morisonbishopbad.com". That site was subsequently removed.

[7] The pursuers aver that on 21st May 2002 they received an e-mail communication from a Mr Gregory A Lindstrom of a firm known as LJ and Co. In that e-mail Mr Lindstrom stated that he had recently acquired the domain "BusinessAM.com", and that he had received offers to purchase the domain from several individuals. He offered to sell the name to the pursuers for a price of $25,000. On the same date the second defenders published an announcement on their website in the following terms:

"Plans Online Business Advisory Service

Republic of Mauritius-(OfficialSpin.com)-21/05/02-The Board of Kestrel Trading Corporation ('KTC') today announced that it had agreed to acquire businessam.com for USD$11,000 from LJ & Company of Colorado Springs, Colorado USA.

Greg Lloyd Smith, managing director said 'We are very pleased to have come to terms with the present owner of the domain. We have been negotiating for some time and so its (sic) great to move on to the next level of our plan.'

"KTC Intends to offer an Online Business Advisory Service and expects to have the service operational before the end of June 2002".

The name of the first defender is given as the contact for the announcement.

[8] The pursuers further aver that they have ascertained that the first defender has registered an additional 22 domain names in his name. Those names all included the forms "businessam", "business-am" or "businesspm". Examples of such names were "businessam.info", "businessam.net" and "businessam.uk.com". The pursuers' search of domain names before the action was raised indicated that the second defenders' purchase of the domain name "businessam.com" from Mr Lindstrom had not gone through. That averment was effectively superseded by information made available in the course of the hearing before me on 7th and 10th June 2002. The pursuers produced a further e-mail from LJ & Company dated 30th May 2002, in which it was stated that LJ & Company had discovered that the second defenders had apparently tried to sell the domain name "businessam.com" to the pursuers, that LJ & Company had been unaware of their activity, and that all business of LJ & Company with the second defenders had been cancelled. The defenders confirmed during the hearing that the purchase of the domain name "businessam.com" from LJ & Company had not been and would not be completed.

[9] On the basis of the foregoing averments, the pursuers state that they fear that the defenders will set up or have set up websites passing themselves off as the pursuers and in breach of section 10 of the Trade Marks Act 1994. They refer to the fact that the defenders have registered or own domain names that comprise the name of the newspaper and trademark of the pursuers, and they aver that the use of such names is calculated to infringe the pursuers' rights. There was only one possible reason for registering such names, namely to pass themselves off as the pursuers. It is further averred that, in the event of any such websites being set up, members of the Scottish public seeking to find the pursuers' website are likely to be confused. The pursuers accordingly conclude for interdict and interim interdict against the defenders' passing themselves off as the pursuers or threatening to do so, and against the defenders' breaching the terms of sections 10(2) and 10(3) of the Trade Marks Act 1994, by registering, setting up, administering and maintaining websites making use of the name "business a.m." or domain names using the same sequence of lettering. The pursuers further conclude for orders under sections 46 and 47(2) of the Court of Session Act in relation to the name "business a.m." and any websites bearing names with that sequence of lettering, but that conclusion is not material for present purposes.

[10] The case first called before me on 23rd May 2002, when I pronounced interim interdict in terms of the pursuers' first conclusion on an ex parte basis. On 7th June 2002 the defenders moved for recall, or alternatively for restriction, of that interim interdict. Mr O'Carroll, who appeared for the defenders, argued first that the pursuers had not established a prima facie case, on four grounds. Firstly, he argued that the pursuers' averments did not disclose a prime facie case in relation to jurisdiction. Secondly, there was no prime facie case in relation to title to sue. Thirdly, the pursuers' pleadings did not disclose a prime facie case satisfying the substantive requirements of the law relating to trade mark infringement. Fourthly, the pursuers' pleadings did not disclose a prima facie case that satisfied the requirements of the law relating to passing off. Counsel further submitted that the balance of convenience favoured recall of the interim interdict, and that in any event the terms of my interlocutor of 23rd May were too wide. I will deal with each of the defenders' arguments in turn.

Jurisdiction
[11] Different arguments were presented in relation to the first and second defenders. In relation to the first defender, the parties were agreed that he was domiciled in Greece, and that Greece was a contracting state for the purposes of the Brussels Convention. Consequently Schedule 1 to the Civil Jurisdiction and Judgments Act 1982 was applicable. The scheme of Schedule 1 is that the primary ground of jurisdiction is that found in article 2, namely domicile in a contracting state. By way of exception to that primary ground, a number of special jurisdictions are enacted in article 5. Article 5 (3) provides as follows:

"A person domiciled in a Contracting State may, in another Contracting State, be sued:

...

(3) in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred".

Counsel for the defenders drew attention to the fact that article 5(3) made no reference to threatened delicts, but only to completed delicts. That, the submitted, was clear from the reference to the place where the harmful event "occurred". The wording of article 5(3) in Schedule 1 should be contrasted with the corresponding provision in Schedule 4, dealing with the allocation of jurisdiction within the United Kingdom. In this case, article 5(3) reads as follows:

"A person domiciled in a part of the United Kingdom may, in another part of the United Kingdom, be sued:

...

(3) in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or in the case of a threatened wrong is likely to occur".

Likewise, in Schedule 8, which sets out the rules of jurisdiction in Scotland in cases where neither the Convention nor the rules applicable within the United Kingdom is applicable, specific provision was made for threatened wrongs in rule 2(10). Rule 2(3) provided for jurisdiction "in matters relating to delict or quasi-delict, in the courts for the place where the harmful event occurred"; in other words, the wording was identical to Schedule 1. In rule 2(10), however, it was provided that a person might be sued "in proceedings for interdict, in the courts for the place where it is alleged that the wrong is likely to be committed". Counsel submitted that, in view of the contrasting wording in Schedules 4 and 8, the words used in article 5(3) of Schedule 1 must be given their literal meaning. The result was that the special jurisdiction conferred by that provision did not extend to threatened wrongs. In support of that argument he referred to Scott Robinson on Interdict at p. 8.

[12] In my opinion the foregoing argument is not correct, and article 5(3) of Schedule 1 extends to threatened delicts as much as to completed delicts. I reach this conclusion for two principal reasons. In the first place, it is frequently of vital importance that the courts of a country should be able to take effective action against any civil wrong of a delictual nature that is threatened within that country, without any need for recourse to a foreign court. In my opinion such a jurisdiction is essential to secure proper maintenance of the rule of law. If article 5(3) is construed in the restricted manner contended for by the defenders, however, that jurisdiction will be denied in any case where the potential defender is domiciled in another Contracting State. In my view that cannot have been the intention of the signatories to the Brussels Convention. The importance of this point can be seen by a practical example. Suppose that the proprietor of an area of land plans to carry out operations on that land which threaten the stability of a neighbouring building. It is obviously of the utmost importance that the proprietor of that building should be able, if he has a prima facie case, to obtain interdict against those operations as a matter of urgency. If article 5(3) does not extend to threatened wrongs, however, and the person who plans to carry out the operations is domiciled in a Contracting State other than the United Kingdom, the threatened proprietor will require to go to the courts of that state to obtain an interim interdict. The dispute in question is a neighbourhood dispute involving works performed in Scotland. In the circumstances, it does not seem sensible that a foreign court should be involved. Article 16(1) confers exclusive jurisdiction on the Scottish courts "in proceedings which have as the objects rights in rem in... immoveable property". In the case of operations of an essentially delictual nature, however, the proceedings cannot be said to have as their objects rights in rem in land; the rights and obligations involved are rather personal in nature.

[13] In the second place, it is frequently not easy to draw a clear distinction between a threatened delict and a completed delict. Where, for example, the owner of a factory has discharged effluent into a river, the proprietor of land further down the river may raise proceedings in the Scottish Courts in respect of any damage that has been caused. At the same time, however, that proprietor may fear that a further discharge will take place, and seek interdict against that possibility. If article 5(3) does not extend to threatened wrongs, and the factory owner is a company with its seat in another Contracting State, the result would be that the lower proprietor could seek damages in the Scottish courts but would have to go to the state of the factory owner's domicile in order to obtain interdict against a threatened discharge. That is clearly inappropriate, as the repeated discharges of effluent are in reality a single course of wrongful conduct.

[14] Counsel for the defenders founded on the fact that express provision is made for threatened wrongs in Schedules 4 and 8. I am nevertheless of opinion that that was done simply to make the position clear, without any implications for the proper construction of Schedule 1. Schedule 1 reproduces the text of an international treaty entered into by the United Kingdom. It is clear that the provisions of an Act of Parliament cannot have a bearing on the construction of a treaty provision, unless they expressly modify it for use within the United Kingdom. Article 5(3) of the Brussels Convention, as enacted in Schedule 1, has not been modified in that way. Consequently it must be construed without reference to the remainder of the 1982 Act. Moreover, the European Court of Justice has held that the expression "tort, delict or quasi-delict" in article 5(3) must be given an autonomous meaning: Kalfelis v. Schroeder, Muenchmeyer, Hengst & Co., (189/87) [1988] ECR 5565. That emphasises that the construction of that Article is wholly independent of provisions of national law.

[15] For the foregoing reasons I am of opinion that the Scottish courts have jurisdiction over the first defender to interdict a threatened wrong that is likely to produce a harmful event within Scotland. So far as the second defenders are concerned, their counsel argued that their seat and hence their domicile was in Mauritius, which is not a Contracting State, with the result that jurisdiction was based on Schedule 8 to the 1982 Act. He accepted that rule 2(10) of Schedule 8 would therefore apply. That rule confers jurisdiction in proceedings for interdict on the courts for the place where it is alleged that the wrong is likely to be committed. The pursuers aver that the second defender is a domiciled in England and Greece. It is not necessary for me to reach a view on the question of their domicile. If they are domiciled in Mauritius, rule 2(10) applies, and jurisdiction is based on the place where the alleged wrong is likely to be committed. If they are domiciled in Greece, they are in the same position as the first defender, and jurisdiction will exist provided that a wrong is threatened that is likely to produce a harmful event within Scotland. If they are domiciled in England, the rule in article 5(3) of Schedule 4 will apply. That provision, which is quoted above, confers jurisdiction in matters relating to delict on the courts for the place where a harmful event has occurred or in the case of a threatened wrong is likely to occur. It follows that, wherever the second defenders are domiciled, the Scottish courts will have jurisdiction over them if a wrong is threatened that is likely to result in a harmful event in Scotland. In case of both defenders, accordingly, the crucial question is whether in the present case a wrong is threatened within Scotland.

[16] On this point, counsel for the defenders submitted that the mere putting up of a website on a server outside Scotland is not a wrong that would occur in Scotland; unless the server were in Scotland, there would be no wrong here. The pursuers did not aver that the defenders' website or server was located in Scotland. While a website could be viewed anywhere in the world, it did not follow that, at least for the purposes of trademark infringement or passing off, the provider of a website or the owner of a domain name was liable anywhere in the world where the website might be viewed. Reference was made to two English decisions, 800-Flowers Trade Mark, [2002] FSR 191, and Euromarket Designs Inc v. Peters and Trade & Barrel Limited, [2001] FSR 288.

[17] In the first of these cases, 800-Flowers Trade Mark, an American company that sold flowers using a website applied to register a trade mark, 800-FLOWERS, in the United Kingdom. For that purpose, it was critical that the American company should establish use of the trade mark in the United Kingdom. It was held by Jacob J at first instance and by the Court of Appeal that the mere existence of a website in New York was not sufficient. Jacob J stated, in a passage quoted at paragraph 41 of the opinion of Jonathan Parker LJ in the Court of Appeal ([2002] FSR 203),

"So I think that the mere fact that websites can be accessed anywhere in the world does not mean, for trade mark purposes, that the law should regard them as being used everywhere in the world. It all depends upon the circumstances, particularly the intention of the website owner and what the reader will understand if he accesses the site. In other fields of law, publication on a website may well amount to a universal publication, but I am not concerned with that."

Jonathan Parker LJ further stated, at paragraph 100 of his opinion ([2002] FSR 212),

"In my judgment... the evidence in the instant case does not establish actual user of the mark by the applicant in the UK, even to the 'minimal' extent required.... Nor, in my judgment, is the evidence (such as it is) concerning the applicant's Internet website sufficient to justify the conclusion that accessing the website amounts to use of the mark at the point of access. In any event, the evidence does not disclose the extent to which the website has in fact been accessed from the UK. The applicant has never had a place of business in the UK; the services which it provides are performed outside the UK; and, so far as the evidence goes, the only piece of advertising directed specifically at the UK is the one advertisement in the Independent newspaper...".

In the Crate & Barrel case, an American company which ran a chain of stores under the name "Crate & Barrel" in the United States raised an action for trade mark infringement against an Irish company and its majority shareholder, who ran a shop in Dublin named "Crate & Barrel". All of the shops concerned sold household goods and furniture. The critical question was whether the English courts had jurisdiction over the defendants. The defendants had placed a single advertisement in a magazine published in the United Kingdom, but otherwise the only way in which their advertising could be said to be directed at the United Kingdom was the existence of a website, which used the name "Crate & Barrel". Jacob J held that, although the website could be accessed from the United Kingdom, that was not sufficient to hold that the defendants carried on trade within the United Kingdom. He stated at paragraph 24 ([2001] FSR 295-296)

"Whether one gets there by a search or by direct use of the address, is it rational to say that the defendants are using the words 'Crate & Barrel' in the United Kingdom in the course of trade in goods? If it is, it must follow that the defendants are using the words in every other country of the world. [Counsel for the plaintiffs] says that the Internet is accessible to the whole world. So it follows that any user will regard any website as being 'for him' absent a reason to doubt the same.... I think it is not as simple as that. In 800 Flowers I rejected the suggestion that the website owner should be regarded as putting a tentacle onto the user's screen. [Counsel for the defendants] here used another analogy. He said using the Internet was more like the user focusing a super-telescope into the site concerned; he asked me to imagine such a telescope set up on the Welsh hills overlooking the Irish See. I think [this] analogy is apt in this case. Via the web you can look into the defendant's shop in Dublin. Indeed the very language of the Internet conveys the idea of the user going to the site -- 'visit' is the word. Other cases would be different -- a well-known example, for instance, is Amazon.com. Based in the US it has actively gone out to seek world-wide trade, not just by use of the name on the Internet but by advertising its business here, and offering and operating a real service of supply of books to this country. These defendants have done none of that".

[18] The critical question for present purposes is the location of a wrong that is said to have been committed by way of the Internet. For present purposes it is sufficient to consider cases of passing off and trade mark infringement, although I find it difficult to see why similar principles should not be applied to delicts such as defamation, or indeed negligence. I do not think that it is helpful to reason by way of analogy, as the legal analysis of delicts committed by means of the Internet must be based on principle. Nor do I think it helpful to adopt the defenders' analysis of a website; they contended, in effect, that a website is nothing more than material stored on a particular computer, with the result that any delict could only be committed where the computer containing the material was located. In my opinion is not appropriate to regard the Internet for legal purposes as a mere static physical entity: nothing more than a group of computers containing information which are linked physically to one another. The Internet should rather be viewed as a process of communication. It is, in essence, a system of communication that allows a verbal or graphic message to be set up on a computer, which may be situated anywhere in the world, and conveyed to another computer, which may likewise be situated anywhere in the world. What is peculiar about the Internet is that the message will not be conveyed unless the initiative is taken by the operator of the second, recipient, computer. Nevertheless, it is essential to bear in mind that there will be no message to be conveyed unless the operator of the sending computer first sets up the necessary website. Moreover, when a website is set up, it is self-evident that the intention is that other persons should be able to obtain access to it via the Internet. The person who creates the website is linking himself into a process of communication, with the obvious intention that communication should take place by way of that process.

[19] It follows, in my opinion, that the person who sets up the website can be regarded as potentially committing a delict in any country where the website can be seen, in other words in any country in the world. It does not follow that he actually commits a delict in every country in the world, however. It is obvious that the overwhelming majority of websites will be of no interest whatsoever in more than a single country or a small group of countries. In my opinion a website should not be regarded as having delictual consequences in any country where it is unlikely to be of significant interest. That result can readily be achieved by a vigorous application of the maxim de minimis non curat praetor; if the impact of a website in a particular country is properly regarded as insignificant, no delict has been committed there. In determining whether the impact of a website is insignificant, it is appropriate in my opinion to look both at the content of the website itself and at the commercial or other context in which the website operates. In the Crate & Barrel case, for example, the commercial context of the defendants' website was a shop operating in Dublin, and obviously catering to a local clientele. The website itself dealt with goods that were available in that shop. In the circumstances, it was obvious that the defendants' trade with the United Kingdom was insignificant, and was accordingly insufficient to give rise to a case of trade mark infringement.

[20] In the present case the pursuers aver that their circulation is substantially in Scotland. The further aver that they published articles about the first defender's business dealings in Scotland, where he was formerly resident, and that the first defender has in consequence raised defamation proceedings against them in England. That is admitted by the defenders, and indeed copies of the pleadings in the defamation actions have been lodged in process. The pursuers further aver that the first defender has registered a substantial number of domain names that bear an obvious resemblance to their own domain name, businessam.co.uk. The defenders aver that the domain names in question have in fact been registered by the second defenders; it is admitted, however, that the first defender is the managing director of the second defender, and accordingly I do not think that it is relevant which of the defenders is actually the registered owner of the names in question. The pursuers further aver that the second defenders had published an announcement on their own website on 21st May 2002 to the effect that they had acquired the domain name "businessam.com". Moreover, it is clear from the terms of that announcement that the second defenders intended to offer an online business advisory service using that domain name. In my opinion an inference may readily be drawn from the foregoing facts that the defenders, acting together, intend to set up a website which is designed to pass themselves off as the pursuers, and to make use of a name sufficiently close to the pursuers' trade mark to amount to an infringement of that trade mark. Those acts are clearly aimed at the pursuers' business. That business is centred in Scotland, and it is in my opinion obvious that the defenders' actings are intended to have their main effect in Scotland. In these circumstances I am of opinion that the requirement that the effect in Scotland of the website should be significant is plainly satisfied, and that accordingly the defenders can be regarded as threatening a delict in Scotland. I accordingly conclude that the Scottish courts have jurisdiction over the defenders.

Title to sue
[21] The second argument of counsel for the defenders was that the pursuers lacked title to sue in respect of the alleged trade mark infringement. The trade mark on which the pursuers founded was in fact registered in the name of "Business Media Scotland", an apparently unincorporated entity with an address at 50 Lothian Road, Edinburgh. The pursuers, on the other hand, were Bonnier Media Limited, a company having its registered office at 40 Torphichen Street, Edinburgh. The pursuers had in fact been known as Business Media Scotland Limited until 20th July 2000. The applications for the mark in question, however, had been filed on 13th July and 12th August 2000, the latter dating some three weeks after the pursuers had changed their name.

[22] In my opinion this argument is not well founded. The pursuers were known as Business Media Scotland Limited at the time when the initial application for the trade mark was filed. It is therefore an obvious inference that they are the person referred to in the application. In the absence of any evidence of any other entity that used the name "Business Media Scotland", that inference is very powerful indeed. The second application was made after the pursuers had changed their name, but it continued the name used in the first application. The mark in question is identical in both applications. In the circumstances I consider that the same inference must plainly be drawn. I am accordingly of opinion that the pursuers have established title to sue.

Trade mark infringement
[23] The next submission for the defenders was that the pursuers had not averred a prima facie case of trade mark infringement. I understood that contention to be made on two bases. In the first place, the defenders' counsel submitted that the full trade mark included the words "Scotland's Business, Financial & Political Daily" as well as the words "business a.m.". That was because it was highly unlikely that the expression "business a.m." by itself would be registrable. Section 3(1)(b) of the Trade Marks Act 1994 denied registration to marks which are "devoid of any distinctive character", and the words "business a.m.", it was said, lacked such distinctive character. Counsel referred to paragraphs 3.01, 3.5, 3.9 & 3.11.2 of the Registry Work Manual, the guide issued by the Registrar of Trade Marks. The word "business" and the expression "a.m." were each lacking in sufficiently distinctive character to the registrable, and the same was true of the two used together. Consequently the trade mark must be taken as incorporating the full wording of the pursuers' device, and that was not infringed by the domain name "businessam.com"; it could not be said that the domain name was the same as or was similar to the pursuers' trade mark. Indeed, that domain name used the word "businessam", which was not used as a single word in the pursuers' registered trade mark. In the second place, counsel submitted that the pursuers did not aver in detail what the defenders were likely to do with the domain name "businessam.com", and in the circumstances it could not be said that there was any infringement of the pursuers' mark. The most that the pursuers averred was that the defenders planned to set up an "online business advisory service". That was clearly different from running a newspaper, and did not, it was said, infringe any of the classes in respect of which the pursuers had registered their trade mark. While there might be some confusion between two similar domain names, that was inherent in the nature of the Internet, where similar domain names were commonplace.

[24] In reply, counsel for the pursuers referred me to the English decisions at first instance and in the Court of Appeal in British Telecommunications PLC v One in a Million Limited, [1998] FSR 265; [1999] 1 WLR 903. On the basis of that decision, he submitted that interdict should be granted in any case where a person had acquired a domain name intending to use it as an instrument of fraud. In the present case, "business a.m." was clearly the main part of the pursuers' trade mark. Consequently the acquisition by the second defenders of a domain name incorporating a version of that expression, "businessam", was in all the circumstances sufficient for the inference that the defenders intended to use that domain name as a means of infringing the pursuers' trade mark, or passing off their website as that of the pursuers; that was use as an instrument of fraud. Counsel for the defenders submitted that the present case was distinguishable from British Telecommunications PLC v One in a Million Limited; that case was concerned with the practice known as cybersquatting, in which a dealer acquires domain names that suggest a connection with well-known companies or organisations, and then attempts to sell the domain names to those companies or organisations at inflated prices; if the prices are not paid, the dealer threatens to use the domain name to set up a website containing pornographic or other undesirable material. In the present case, by contrast, the pursuers did not aver that the defenders had acquired the domain name "businessam.com" other than innocently.

[25] In my opinion the pursuers have established a prima facie case of infringement of their trade mark. In the first place, I consider that the essence of the pursuers' trade mark is the expression "business a.m.". No doubt in the full version of the mark other wording is used, and the whole of the wording is placed on a rectangular device. Nevertheless, the words "business a.m." are much more prominent than any other part of the device, and it is obvious that the pursuers' newspaper is known to the public by that name. I do not agree that the name "business a.m." would not be registrable by itself. Individually, the word "business" and the expression "a.m." would almost certainly not be registrable, on the ground that they lacked distinctive character. If the two expressions are used together, however, it is the totality that must be considered in determining whether the proposed mark is "devoid of any distinctive character". In my opinion the mark "business a.m." taken as a whole is sufficiently distinctive for registration.

[26] In the second place, I am of opinion that the defenders' use of the domain name "businessam.com" for a website providing an "online business advisory service" is a prima facie infringement of the pursuers' trade mark. It is obvious that the expressions "business a.m." and "businessam" are very similar, and it is likely that they would be pronounced in the same way. That is particularly clear in the context of a domain name, where full stops can only be used to separate the levels of a domain name, and neither spaces nor full stops can be used in the part of the name that occurs prior to the suffix. Thus there is a clear likelihood of confusion. It is not entirely clear what an "online business advisory service" would involve. Counsel for the defenders accepted that it was their intention to set up such a website, but was unable to provide further detail as to what might be involved. This was perhaps surprising in view of the terms of the announcement referred to in paragraph [7] above, which indicated that the website was to be operational by the end of June 2002. It seems clear, however, that the website would have to contain substantial amounts of information relevant to the world of business and finance. That could easily involve a substantial overlap with the functions of a financial newspaper, whose very rationale is to provide such information. Moreover, the pursuers' trade mark is registered for Class 35, which includes business management and business administration. Once again, it is easy to see how infringement could occur.

[27] In the third place, I am of opinion that the principles stated by the English Court of Appeal in British Telecommunications PLC v One in a Million Limited, supra, should be followed in Scotland and are directly applicable to the present case. On this basis, I would conclude that the present pursuers had established a prima facie case independently of the matters discussed in the last paragraph. The defendants in that case were dealers in internet domain names, and followed the practice of registering domain names that incorporated well-known trading names. They then offered such names for sale. The plaintiffs were a number of large concerns whose names had been incorporated into domain names registered by the defendants and offered by the defendants for sale. The plaintiffs contended that the defendants' registration and attempted sale of the domain names amounted to actual or threatened passing off and to threats to infringe the plaintiffs' registered trade marks. The Court of Appeal upheld these contentions. After referring to a number of earlier cases, Aldous LJ, delivering the opinion of the court, concluded as follows (at 920):

"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 upon 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, its 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 another or enable others to do so, I can see no reason why the court should not infer that it 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 the fraudulently used, an injunction will be appropriate.

It follows 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. Second, where the defendant is a joint tortfeasor with another in passing off either actual or threatened. Third, where the defendant has equipped himself with or intends to equip another with an instrument of fraud".

The court made it clear that similar principles would apply to cases of trade mark infringement. In my opinion those principles represent the law of Scotland. At the heart of both passing off and trade mark infringement lies the notion of dishonesty: a trader dishonestly represents that his goods or services are the goods or services of another person. If one person supplies another with something calculated to enable that other to represent dishonestly that his goods or services are those of a third person, the person making that supply is clearly a party to the dishonesty. Consequently it is obvious that the law must be able to prevent him from making the supply. For these purposes, it is immaterial that the item supplied is a name, or the right to use a name; indeed the supply of a deceptive name is a very obvious means of facilitating the dishonesty involved in passing off or trade mark infringement. Exactly the same is true if a person acquires the right to a name which is calculated to enable him to represent dishonestly that his goods or services are those of a third person; such acquisition is in itself dishonest, and the law must be able to prevent the dishonest use of the name.

[28] In British Telecommunications PLC v One in a Million Limited, supra, the Court of Appeal concluded that the defendants' registration of well-known trading names as domain names constituted trade mark infringement and passing off; the names had been registered as instruments of fraud.. Aldous LJ stated (at 923):

"No doubt the primary purpose of registration was to block registration by the owner of the goodwill. There was, according to [counsel for the defendants], nothing unlawful in doing that. The truth is different. The registration only blocks registration of the identical domain name and therefore does not act as a block to registration of a domain name that can be used by the owner of the goodwill in the name. The purpose of the so-called blocking registration was to extract money from the owners of the goodwill in the name chosen. Its ability to do so was in the main dependent upon the threat, expressed or implied, that the defendants would exploit the goodwill by either trading under the name or equipping another with the name so he could do so".

In my opinion the facts of the present case present an even stronger case of trade mark infringement, and indeed passing off. The defenders have acquired a substantial number of domain names that are similar to the essential part of the pursuers' trade mark, "business a.m.", which is also the name under which the pursuers trade. For this purpose it is immaterial which of the defenders has registered the names; the first defender is managing director of the second defenders, and in cases involving fraud or dishonesty the courts will not allow the existence of separate corporate legal personality to stand in the way of an effective legal remedy. There is an existing dispute between the first defender and the pursuers; that is clear from the pleadings in the English libel actions. No reason has been suggested for the defenders' choosing the name "business a.m.", or a version of that name, for their proposed website, rather than one of the multiplicity of other names that might be suitable as a domain name. These circumstances give rise in my opinion to an irresistible inference that the defenders have acquired domain names based on the expression "business a.m.", including the name "businessam.com", with the specific intention of representing that a website set up by then is connected in some way with the pursuers. That involves using a domain name as an instrument of fraud, and that clearly falls within the principle discussed above.

Passing off
[29] In relation to passing off, counsel for the defenders founded on the definition of passing off found in the speech of Lord Oliver of Aylmerton in Reckitt & Colman Limited v Borden Inc., [1990] 1 WLR 491, at 499C-H. He submitted that there was no realistic prospect of members of the public being misled into thinking that the defenders' website was produced by the pursuers, notwithstanding the use of the expression "businessam". The defenders' website would not be of the nature of a newspaper, or a website summarising material in a newspaper. Even if the name "businessam" might sometimes lead members of the public to think that they were accessing the pursuers' website, the actual contents themselves would indicate otherwise, and there would be no material deception. In any event, the pursuers did not aver that any substantial damage would be caused to them by the defenders' opening a website under a name including the expression "businessam".

[30] In my opinion the relevant principles are those stated in paragraphs [27] and [28] above, which apply equally to trade mark infringement and to passing off. The defenders have acquired a number of domain names containing the expression "businessam", and have indicated that they propose to use one of those names to set up a website containing an "online business advisory service". That is against the background of an existing dispute between the pursuers and the first defender. As with trade mark infringement, I am of opinion that the circumstances lead to an irresistible inference that the defenders have acquired domain names based on the expression "business a.m." with the specific intention of representing that a website using one of those names is connected with the pursuers. Once again, that involves using a domain name as an instrument of fraud, which constitutes passing off. Because the use of a deceptive name is calculated to confuse the public, it is immaterial in my opinion to consider how widespread such confusion is likely to be. I am accordingly of opinion that the pursuers have averred a prima facie case of passing off.

Balance of convenience
[31] Counsel for the defenders submitted that, even if I were against him on the foregoing matters, the balance of convenience favoured the defenders. He relied in the first place on the relative strength of the parties' cases. For the reasons stated above, I am of opinion that the pursuers have averred clear prima facie cases of trade mark infringement and passing off. I accordingly consider that this is not a factor that favours the defenders. Counsel for the defenders further submitted that, because the parties operated in different areas of business, there was unlikely to be any significant effect on the pursuers. Likewise, the defenders' proposed website was to be directed to world-wide business activities, rather than to the United Kingdom; this was another factor that would make the impact on the pursuers of the defenders' activities insignificant. In a case involving deliberate deception, or the deliberate acquisition of something that is obviously to be used as an instrument of deception, I am of opinion that the extent of the actual or prospective damage to the pursuer is immaterial; where a delict is committed deliberately interdict should be available even if the likely damage is minimal. Finally, counsel submitted that the present action was premature, because the pursuers could not aver with certainty what material would be on the defenders' website. In my opinion that is immaterial; the pursuers' present averments are quite sufficient to draw the inference that the defenders intend to set up a website that is calculated to be confused with the pursuers' website. In particular, the use of a name almost identical to the pursuers' trading name, in the context of an existing dispute, leads inevitably to that conclusion. For these reasons I am of opinion that the defenders' arguments on the balance of convenience are not well founded. Against the considerations founded on by the defenders is the fact that, if the defenders set up a website using a domain name such as "businessam.com", damage may be done to the pursuers' business. In my opinion the balance of convenience clearly favours preventing such damage before it occurs.

Terms of interdict
[32] Finally, counsel for the defenders submitted that the terms of the interim interdict granted by me on 23rd May 2002 were too wide. That interdict prohibited the defenders from passing themselves off as the pursuers or infringing the pursuers' trade mark "and that by registering, setting up, administering and maintaining websites making use of the name 'business a.m.' or domain names using the same sequence of lettering". Counsel submitted that the interdict should be restricted to prohibiting three activities: firstly, the use of the pursuers' trade mark in its registered form, secondly, the use of any domain name containing the sequence of letters "businessam" in relation to any form of newspaper service, and thirdly, any representation on the defenders' website that might cause a viewer to think that the use of a domain name containing the expression "businessam" was connected with the business or products of the pursuers. In my opinion is not appropriate to restrict the interdict in this way. On the facts of the case I have drawn the inference that the defenders' use of a domain name containing the expression "businessam" will be calculated to represent that the relative website is that of the pursuers, or connected with the pursuers. It is accordingly the mere use of the expression "businessam" in the domain name that is objectionable. I can accordingly see no reason for restricting the interdict in the manner suggested.

[33] For the foregoing reasons I will refuse the defenders' motion to recall, or alternatively to restrict, the interdict pronounced on 23rd May 2002.