Naked Law

Cyber-squatting on the rise

A recent survey by brand protection firm MarkMonitor reported that the number of cyber-squatting incidents rose by 18% in 2008 to a whopping 1,722,133. 

It came as no surprise then when WIPO reported on 16 March that it had received a record number of complaints under its dispute resolution procedure in relation to domain names registered in bad faith during 2008. 2,329 people or companies reported instances of cyber-squatting, including Arsenal Football Club, Google, Nestle and Scarlett Johansson.

The most popular targets are successful brands and the most popular motive for cyber-squatting is to make money. But please do not admire the entrepreneurial spirit of cyber-squatters, as more often than not they infringe intellectual property rights by "passing off" (that is, they misrepresent that their site is in some way linked to, or endorsed by, the target brand owner).

Furthermore, some cyber-squatters also infringe registered trade marks (for example, Research in Motion's trade mark for 'Blackberry' has been referenced on a cyber-squatter's web site). The thinking seems to be that the more blatant the infringement, the more likely the brand owner is to cough up cash for the cyber-squatter's domain name.

Normally, brand owners would set their lawyers onto the cyber-squatters, with letters before action being sent threatening litigation unless the cyber-squatter ceases to infringe the brand owner's trade mark rights. However, cyber-squatters have become masters of disguise, using identity shields to mask their identities from the WHOIS searcher, which means that it is hard to identify where and to whom letters before action should be sent. This fact, along with the other benefits of resolving a domain name ownership dispute by dispute resolution, explains why brand owners are using the domain name dispute resolution routes such as the UDRP instead of bringing court proceedings against the infringer.

To combat the rise in cyber-squatting, WIPO is proposing to introduce a paperless dispute resolution procedure for .com, .net and .org domains, as well as a number of more recently introduced domains such as .aero, .asia, .biz, .cat, .coop, .info, .jobs, .mobi, .museum, .name and .travel (the eUDRP).  Nominet already uses its own paperless dispute resolution procedure. 

Flower wars

Interflora is at war with Marks & Spencer and Flowers Direct for allegedly infringing its trade mark name. Interflora is claiming that M&S sponsored the word “Interflora” as a keyword in Google’s AdWords programme and is now suing them in the High Court in London. When users searched for Interflora and related misspelt names, the rival company claims that M&S and Flowers Direct appeared as sponsored links beside the official search results.

In May 2008, Google altered its terms and conditions so that almost any word is available for sponsorship, although the text of the adverts that the keywords trigger is still controlled so that the trade marked term is not used.

Interflora is claiming that its competitors gained an unfair advantage by riding upon the fame of its trade marks. While M&S are surprised by the action, arguing that it is industry wide practice to do this and is not unlawful, the decision that the UK court may come to is uncertain. The dispute could set a precedent as to how UK trade mark laws will apply to keyword advertising in the future and may change the way that companies advertise on the internet.

It will be interesting to see whether the Court takes the view that M&S and Flowers Direct should be held liable for any possible infringement of Interflora’s trade mark, or whether in fact Google should be held responsible for allowing it. For the time being it appears that M&S and Flowers Direct have both removed the sponsored links from Google.

A decision not in Interflora's favour would arguably not sit well in the context of the rest of trade mark law given that the use of a third party's registered trade mark without their consent in other scenarios would be trade mark infringement. Furthermore, such a decision could impact on the value of having a registered trade mark at all for use on the internet if proprietors must then go on to pay large amounts of money to outbid competitors to stop advertising alongside themselves on internet searches.

Calling all brand owners

An anouncement has been made by the Community trade mark office (OHIM) of plans to dramatically reduce the official costs involved in filing a trade mark application.  This means that the amount it will cost to protect your name or logo by a European Community trade mark (or CTM) will be much more appealing to smaller businesses. (Although the fees will still be significantly higher than the official fees for filing a UK trade mark application at the UK IPO, which is currently £300 for 3 classes.)

The fees for filing a CTM application (on-line) at the moment, to cover 3 classes of goods or services, are 1600 Euros, and the aim is to lower this figure to 1000 Euros per application.  This is due to a whopping 300 million Euro surplus that OHIM is trying to shed, and in doing so is giving back to the people who use its service.

Come and Meet us at INTA 2008

The 130th Annual International Trademark Association's Meeting is fast approaching!  This meeting is widely attended by all who work with trade marks and is this year being held in Berlin from 17th to 21st May.  It is estimated that around 8,000 will attend this year's meeting from all over the world in order to network with colleagues and attend the educational programmes and dicussions which are organised each year.

Lawyers from Mills & Reeve attend this event each year and this year the firm will be sending a team of trade mark lawyers consisting of Alasdair Poore, Richard Plaistowe, Rachel Witt and myself.  We have been busy setting up meetings with colleagues from all over the world and are really looking forward to attending INTA 2008 and visiting Berlin.  Please let us know if you will also be attending and would like to set up a meeting with us!

It's MY Space

Nominet has ordered that the domain name myspace.co.uk be transferred to MySpace (the social networking site) under the Dispute Resolution Service Procedure. This is in spite of the fact that the original registrant, Total Web Solutions, registered the domain name some six years before the creation of the social networking site! The myspace.co.uk address led to a parked page containing adverts for social networking sites and the Nominet expert held that the income received by Total Web Solutions through its use of the domain name derived "in part as a consequence of it being able to trade off the reputation of the Complainant."

Total Web Solutions relied on the case concerning the name verbatim.co.uk and tried to argue that it had not been aware of the complainant at the time of registration or at the time that it first used the domain name and therefore that the registration could not be abusive. However, the Dispute Resolution Policy ("DRP") states that an Abusive Registration occurs where a domain name, either "at the time when the registration or acquisition took place, took unfair advantage of or was unfairly detrimental to the Complainant's Rights; or has been used in a manner which took unfair advantage of or was unfairly detrimental to your [the Complainant's] Rights...or both." Total Web Solutions had originally tried to sell the domain name to MySpace for around £220,000, although this was found not to be evidence of abuse.

The decision might add fuel to the argument that Nominet and the DRP tend to favour corporate giants, though it also serves as a reminder that a registration that was initially legitimate may become abusive if the registrant subsequently changes its usage of the domain name.

Scrab-u-lose!

Toy giants Hasbro, makers of the board game Scrabble, have written to the owners of Facebook asking that they remove the application Scrabulous from their website.

Scrabulous which is apparently one of the ten most popular Facebook applications attracts more than 500,000 users a day to the social networking site and appears to make litte effort to distinguish itself from Scrabble. It even provides a link to the Wikipedia definition of Scrabble from its rules page.  It's perhaps little wonder, then, that Hasbro accuses the makers of "gross copyright and trademark infringement" of Hasbro's rights in Scrabble.

The fact that Facebook has not immediately shut down the Scrabulous application has lead to suggestions that Hasbro may be willing to do a deal with the makers of Scrabulous.  This would certainly please the 13,000+ users who have signed up to the petition group 'Save Scrabulous' but may depend on the terms of the licensing deal Hasbro agreed with EA Casual in August 2007 which grants EA an exclusive worldwide to develop 'interactive experiences (of Hasbro's games) for a mass audience to play across key platforms including mobile, online, handheld, PC and Consoles'.  Any settlement involving a licence from Hasbro is likely to need EA's consent.

Direct Line wheels out winner

Direct Line recently won in the High Court, in contesting an application by rival esure to have a trade mark registered for a computer mouse on wheels.

To explain the background, in September 2004 esure applied to register a representation of a computer mouse on wheels, see here. Direct Line, with their well known, registered, telephone on wheels trade mark, opposed this application successfully with the intellectual property office hearing officer on the basis that it would be detrimental to the distinctive character of Direct Line's mark, contrary to S. 5(3) of the Trade Marks Act 1994. esure then appealed to the High Court.

In its judgment, the Court dismissed part of Direct Line's claim that the marks were confusingly similar in accordance with S. 5(2) of the Trade Marks Act. However, esure still lost, since they would be taking unfair detrimental advantage of Direct Line's mark, contrary to S. 5(3). The hearing officer's view, that use by esure of their logo would be 'parasitic and unfair' was endorsed by the High Court judge, Lindsay LJ.

This judgment does seem a reasonable outcome on the facts, though my view is that the marks were also confusingly similar. The Limoncello case (as reported here by IPKAT) T-7/04 Shaker di L. Laudato & C. Sas v OHIM, Limiñana y Botella, SL offered guidance at paragraph 67:

'The fact that the average consumer retains only an imperfect mental image of the trade mark renders the dominant element of the mark in question of major importance'.

While this decision has been criticised, it makes good sense to me. If applied in the present case, I think that there is a strong argument that the 'dominant element' of the Direct Line trade mark is the use of wheels on an everyday object that doesn't usually have wheels on, in connection with their particular class of services.

Playboy win appeal

Playboy Enterprises International Inc (“Playboy”) has won its appeal appeal to overturn Nominet’s decision not to transfer the domain name playboyracing.co.uk to it.

Playboy had argued that Trevor Hodges, who registered the domain name and had intended to use it in relation to a horse racing club, was taking unfair advantage of Playboy’s rights to the “Playboy” name and that the registration was unfairly detrimental. Playboy argued that it had a large portfolio of trade mark registrations featuring the name “Playboy” for a wide range of goods and services, including sporting activities, and operated a high profile motor racing team in the US under the brand “Playboy Racing”. However, Nominet’s expert found that the registration was not abusive because, among other things, Playboy was not active in the same field as Mr Hodges and so there was no likelihood that the public would be confused.

Playboy appealed against the decision. The Appeal Panel found that Playboy had strong rights to the “Playboy” name, which was similar to the domain name in question and that registration of playboyracing.co.uk by Mr Hodges was an abusive registration. The Panel felt that the expert at first instance had placed too much emphasis on the registrant's lack of intention to target Playboy. The Panel commented that although intent can be useful in demonstrating an abusive registration, it is not necessary – the test is more objective.

Has Nominet gone too far in its protection against dilution of what is essentially a generic (albeit well-known) name?

iPhone off the hook

We recently reported that Cisco had launched a trade mark infringement claim against Apple over use of its registered `iphone` trade mark.

It now appears that Cisco and Apple have reached a settlement which will allow Apple to use the `iphone` name for its new product, which combines a mobile phone with an e-mail receiver and an MP3 player.  The parties have also announced that they will work together to make their `iphone` products compatible. 

Other terms of the settlement agreement remain confidential, although the parties have apparently agreed to drop all pending legal actions against each other.  Does this mark the end of the dispute, or is there more to come?  One thing is certain - as a result of this dispute both parties have received a lot of publicity for their respective products.

Gowers goes into bat

The Government has been carrying out a review of intellectual property legislation in the UK to see if any improvements need to be made to update the system for the 21st century. Andrew Gowers was appointed to lead the review, and his findings were published earlier this month. The full report is available here.

There are a number of key recommendations, but the first to catch our eye was recommendation 53 - that the UK Patent Office should be renamed...wait for it...the UK Intellectual Property Office.