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JILT 1997 (2) - Charlotte Waelde

Is the Dam about to Burst?

An Analysis of Domain Name Disputes in the UK

Charlotte Waelde
University of Edinburgh
Charlotte.Waelde@ed.ac.uk

Citation: Waelde C, 'Is the Dam About to Burst? An Analysis of Domain Name Disputes in the UK', Case Note 1997 (2) The Journal of Information, Law and Technology (JILT). <http://elj.warwick.ac.uk/jilt/cases/97_2pitm/>. New citation as at 1/1/04: <http://www2.warwick.ac.uk/fac/soc/law/elj/jilt/1997_2/waelde/>

1. Introduction

Avid Internet aficionados will be quite familiar with the flood of litigation in the United States in relation to disputes over domain names. To date, there has been little activity in the courts in the UK. However, it looks at if that situation may be changing, and the dam may be about to burst. It appears that three cases have been or are about to be litigated in the UK of which Pitman Training Limited and PTC Oxford Ltd v Nominet UK Ltd and Pearson Professional Ltd (High Court Ch D 22 May 1997) (Pitman) is the most recent.

The nub of the problem for those unfamiliar with this area, is the view that a domain name functions as a trade mark. The domain name is seen as a valuable commodity for those businesses that trade under that particular name; a way of identifying with ease the business that provides the goods or services located at the particular Internet address. Disputes arise because a number of different businesses in the terrestrial world may be equally entitled, or see themselves as equally entitled to use one and the same name. But on the Internet no two names can be identical. The question is then, who gets to use a particular domain name that two or more parties may want, and why?

This article will look briefly at these three disputes in the UK, and then comment on some of the issues that arise.

2. The UK Disputes

2.1 Pitman Training Limited and PTC Oxford Ltd v Nominet UK Ltd and Pearson Professional Ltd. (High Court Ch D 22 May 1997) (Pitman)

The facts in Pitman are slightly complicated as the warring parties had an historical business association dating back to before 1985. In fact, they were one and the same company before that date. The dispute arose over the domain name 'pitman.co.uk' and who was entitled to use it after the business had de-merged. The original Pitman business, founded by Sir Issac Pitman in 1849, consisted of a number of diverse divisions, including a publishing division, a training division and an examination division. These were sold off separately in 1985, Pearsons plc acquired the publishing business (Pitman publishing), Pitman Training Ltd acquired the training business (Pitman training) and a third party acquired the examination business.

In the 1985 agreement hiving off the various divisions, Pitman training was permitted to use the name 'Pitman' in connection with their business but only under specified conditions. In particular, they agreed not to use the name 'Pitman' in connection with any business except that of its training and correspondence courses.

Simple as far as it goes, but in 1985 none of the parties anticipated the advent of the Internet and the potential importance of a particular domain names to a business. In February 1996 Pitman publishing sent a request to Nominet (the UK body responsible for the allocation for the .uk country domain) for registration of the domain name 'pitman.co.uk' for use in their publishing business. The application was noted as received, and confirmed on 21 February 1996.

However, in April of the same year, Pitman training enquired as to whether the domain name 'pitman.co.uk' was still available for allocation, and on being told that it was, duly registered it to their business. Pitman training started to use the domain name in July of the same year. It was not until the December, that Pitman publishing were ready to go 'live' with their e-mail service and web site. They were understandably perturbed to find that not only had their domain name been re-allocated to Pitman training without their knowledge or consent, but also that Pitman training had been using it since the July.

After a flurry of letters between solicitors acting for the various parties, and to Nominet, Nominet re-allocated the domain name to Pitman publishing on 7 April 1997. Pitman training immediately issued a writ seeking an interlocutory injunction. This was granted ordering the name 'pitman.co.uk' be reassigned to Pitman training pending a full hearing. However, at the full hearing, the court refused the application for the permanent injunction and ordered the reallocation of the domain name to Pitman publishing.

There were three main grounds on which Pitman training based their assertion that they were entitled to the domain name; firstly that the use by Pitman publishing of the domain name 'pitman.co.uk' constituted passing off; second that there had been tortuous interference with contract; and third that there had been abuse of process. The application was refused on all three grounds, the most interesting, in keeping with other domain name disputes, being that of passing off.

Broadly, the court said that there could be no question of passing off in these circumstances. Both Pitman publishing and Pitman training were equally entitled to use the name 'pitman' in their respective spheres of business . Pitman training argued that a case of passing off could be established because they had used the domain name 'pitman.co.uk' for a few months. Therefore, if the domain name reverted to Pitman publishing, that would constitute passing off because the public associated the domain name with Pitman training. The court looked at the rather derisory evidence prayed in aid of this contention, namely two e-mail messages sent to Pitman training. However, both companies had used the domain name in their respective advertisements, and these two e-mail messages sent to Pitman training were insufficient as evidence to suggest that the public had begun to associate the domain name with Pitman training. The only source of confusion arose from the fact that both ! businesses used the same name, and indeed were entitled to do so in their respective spheres of business.

On the grounds that Nominet operated a first come first served policy to the allocation of domain names, the court ordered that the name revert to Pitman publishing.

2.2 Harrods Ltd v UK Network Services Ltd and Others (High Court, Ch D December 9, 1996) (Harrods).

The other case that has been heard in court in the UK is that of Harrods where the domain name 'harrods.com' was registered by Michael Lawrie. He was ordered by the court to hand this over to Harrods on the grounds that his potential use of the domain name constituted 'trade mark infringement and passing off'. Sadly, as Michael Lawrie did not turn up in court, the arguments to support this contention were not outlined and discussed in full. Therefore the basis on which domain name actions under this head can be brought remain to be seen.

2.3 Prince plc v Prince Sportswear Group Inc. (Prince).

Prince plc is an IT company registered in the UK. For the past two years it has operated a web site under the domain name 'prince.com'. Prince Sportswear Group Inc., a company registered in the US, notified Network Solutions Inc. (NSI) (responsible for the allocation of domain names under the top level domain .com in the US) that it was the owner of the Federal trade mark 'Prince' and that the use of the domain name 'prince.com' by Prince plc was a dilution of its famous mark. NSI operates a domain name allocation policy on a first come first served basis (For the latest revision and details of this policy see http://www.rs.internic.net/policy/internic/internic-domain4.txt). However, if a second person is able to come forwards and show that they are the owner of a Federal registered trade mark pertaining to that name, then the first person who has registered the domain name loses that registration. Such a loss of registration can be put on hold if the first party can eithe! r prove that they have a US Federal trade mark registration, or have commenced proceedings in a US court to protect that domain name. When NSI wrote to Prince plc intimating that that they were about to re-allocate the domain name, Prince plc could neither show they owned a Federal trade mark, nor confirm that they had commenced proceedings in a US Court, and so were in danger of losing the domain name in favour of Prince Sportswear Group Inc. However, at the last minute, Prince plc filed suit in the High Court in London alleging that the statements made by Prince Sportswear Group Inc. that Prince plc were 'infringing and diluting their trade mark rights' constituted groundless threats in terms of section 21 of the UK Trade Marks Act 1994. This action is now waiting to be heard.

3. Comment

A number of very interesting points emerge from these cases. These include the diverse grounds on which they have been brought; the effect of NSI's domain name allocation policy; the clash between territorial trade mark rights in different jurisdictions, and the difficulties in the application of terrestrial territorial trade mark law to disputes over entitlement to a particular domain name in cyberspace.

Pitman was based on the common law tort of passing off as it would appear that neither Pitman publishing nor Pitman training had registered 'Pitman' as a trade mark. Harrods was based on trade mark infringement and passing off, although, as mentioned, the arguments were not aired in full. It appears that Prince will at least air arguments in relation to groundless threats. By contrast, cases in the US have, at least since the introduction of the US Trade Mark Dilution Act 1995, almost all been based on trade mark infringement on the grounds of dilution of a famous US registered trade mark. (Many examples of US trade mark/domain name cases and disputes can be found at http://www.law.georgetown.edu/lc/internic/recent/rec1.html.) It is likely that if and when the numbers of disputes in the UK increase, the basis on which actions are brought will be refined and possibly coalesce. If the experience in the US is drawn upon, then arguments centred around sections 10(3) and 56 of the Trade Marks Act 1994 which bring with them implications of dilution of trade mark rights under UK, law will increase.

Pitman also highlights one of the two main difficulties of equating trade marks (whether registered or not) with domain names. In the terrestrial world, it is quite easy for a number of businesses to use the same name when they are trading in different spheres so long as the goodwill or reputation of one is not misappropriated by another, or for different business to use the same registered trade mark in connection with diverse businesses where those trade marks are registered in different classes and there is no likelihood of public confusion. In cyberspace, where there is only one 'pitman.co.uk' available, these nuances become meaningless.

The second main difficulty of equating domain names with trade marks lies in the international nature of the Internet, and this is brought sharply into focus by Prince. Different business all over the world, trading in the same business area can be equally entitled, in the loose sense of the word, to use a particular name. Trade mark rights are, after all territorial. However, no two domain names can be identical, and therefore parties in different jurisdictions have to fight over the one domain name. This has usually been the .com domain as the one that is viewed as being international in its scope and associated with commercial entities. This is exactly what has happened in Prince. Prince may not have a registered trade mark, either here or in the US, but is nonetheless is perfectly entitled to use the name 'Prince' in the UK in association with its IT business. NSI's policy on the allocation of names in the .com domain apart, there is nothing to suggest that Prince Sp! ortswear Group Inc. should have a greater right to the 'prince.com' domain name than Prince plc as they operate in different jurisdictions. In international disputes of this nature, NSI's domain name allocation policy clearly favours US based companies who are far more likely not only to be holders of US Federal trade mark registrations, but also more able to raise actions in US courts.

NSI does not however become involved in all domain name disputes. They were involved in Harrods even although both litigants were based in the UK because the dispute centred around the .com domain. NSI were involved to the extent that they agreed they would abide by any decision made by the UK Court, which was, in this case, that the domain name 'harrods.com' should be re-allocated to Harrods. NSI are involved in Prince which also centres on the .com domain but where, in contrast with Harrods, the litigants are based on opposite sides of the Atlantic. NSI were not involved in Pitman as that concerned the .uk country domain and the allocation policy of Nominet. Where NSI are involved however, and the dispute is of an international nature, then US based litigants are clearly at an advantage.

4. Regulatory and other proposals for global solutions.

Readers may be familiar with the work of the International Ad Hoc Committee set up by a coalition of experts in this field to try and formulate proposals to deal with the disputes. (Details can be found at http://www.iahc.org/iahc-docs.html). Much discussed solutions include the creation of seven new generic top level domains to try and ease the pressure on the existing most popular top level domains, notably the .com domain; and the creation of 28 new registrars around the world to allocate these names in a competitive environment. Many of the proposals have already come under criticism, from the US, from the EC and many other interested parties and commentators.

One interesting proposal recently surfaced from this body is that the second domain name in the generic top level domains will only be allocated to those parties who have 'demonstrable intellectual property rights' in that name. The obvious question arises as to what is meant by 'demonstrable intellectual property rights'? Does it mean, as favoured by NSI, a registered trade mark right? Does it mean the litigant would need to have a right under passing off or its equivalent? It is hard to see how this proposal in its current form could serve to alleviate the potential disputes, as the cases to date have in any event been based on some form of intellectual property rights. It is the clash between these rights, coupled with the international nature of the disputes that would appear irreconcilable.

We seem already to have gone so far down the line of acceptance that a domain name is in fact a piece of intellectual property, that it would be difficult to persuade people to change their minds on this fundamental question. So one solution is that we get rid of domain names altogether and use either addresses (akin to postal addresses) or numbers instead. After all, domain names are based on an underlying string of numbers. Who would argue that they have intellectual property rights in a string of numbers? Sadly, each time this prima facie simple solution is proffered, howls of protest are heard. How can an Internet surfer possibly identify sites by way of a string of numbers? How can these be easily remembered and found again? But there, of course, we have the heart of the problem.

An alternative solution would be to set up a 'global directory' of Internet sites whereby these can be found by using simple key words. This is of course what we have, at least in part, offered by the search engines. However, we are still apparently still a long way from a truly global directory which would require much time and investment to compile.

In the meantime, it is clear that the disputes are set to continue, if not to escalate dramatically.

5. Conclusion

This brief analysis of these three disputes in the UK serves to highlight that the permutations in relation to grounds of action in domain name disputes, the parties that can become involved, the policy and regulatory implications in this area are only just starting to be explored. It is this writers opinion that the dam is about to burst. That we will soon see a huge increase in litigation in the UK in this area. When that happens, we can look forward to a colourful and creative time in the courts while these issues are aired and, eventually, settled.

Last revised: Wed 23 Feb 2005