Jane Mutimear examines how the courts in Germany and the UK, as well as OHIM, have treated trade mark applications arising from generic domain names.
One consequence of the .com crash is that many of the domain names which were registered at the height of the internet boom have not been renewed. At least 130,000 domain names which came up for renewal during the last three months of 2001 were not renewed. Many of these domains are those initially taken by speculators who had registered a large number of generic domains, encouraged by the prices achieved ( or at least claimed to have been achieved) during the .com frenzy for descriptive or generic domain names such as business.com ($7.5 million), loans.com ($3 million) and america.com ($10 million).
Although the ones which are falling back into the pot are usually not such attractive generic domains, those who believe that the only way is up for the internet sector at present may be tempted to buy up some of these names for future sale or use. Trade mark lawyers have always faced an uphill battle in persuading clients that the best marks are not descriptive marks, and those who have been closely involved in the e-commerce sector have had an even more arduous task in this respect. Many internet entrepreneurs insisted that the best domain name was the one which most closely described their business, and usually the damage had been done before the trade mark lawyers had the opportunity to complain.
This article looks at the approach taken by the UK and Germany and at the approach adopted by the Office for Harmonization of the Internal Market (OHIM) in relation to protecting what could be described as generic domain names.
The domain name registry approach to generic domains
Nominet, the registry for .uk domain names, has no restrictions on registration of generic domain names. The most commonly used .uk site, which is the closest equivalent to .com, is .co.uk. This is meant to be used by commercial entities, but, as with .com, there are no checks on applications and no method of preventing non-commercial use.
Although generic domain names have not changed hands for the same high premiums as in the US, they have been relatively popular with internet entrepreneurs. Frequently, .com addresses have been used and promoted, with the .co.uk equivalent resolving to the .com site. Some of the most successful websites have been those which although evocative of the goods or services offered at the site, fall short of being entirely generic, for example lastminute.com (with lastminute.co.uk also resolving), thetrainline.com (with thetrainline.co.uk), and thisislondon.co.uk (with thisislondon.com).
Trade Mark Office practice
The UK Trade Mark Office recognises that a domain name can be used as a trade mark and, subject to the usual criteria, can be registered as a trade mark. However, the common elements of the mark: http, www, .co. uk, .com etc are regarded as devoid of any distinctive character and therefore the remainder of the mark has to be distinctive in itself.
The office issued an update explaining how it examines domain names as trade marks, which stated that there are occasions where a domain name suffix could create sufficient distinctiveness to make a normally non-distinctive word mark registrable in the form of a complete domain name. This is likely to apply where it would be unusual to add, for example, .com to the wording. The example which was quoted by the office was canandwill.com where 'can and will' alone would be refused by the office as a slogan merely describing an approach to business, but the addition of .com would be considered to produce a combination sufficiently unusual to give a trade mark character to the otherwise non-distinctive slogan. Since issuing this practice guidance, the office has proceeded to register 'can and will' as a slogan (after an appeal to the appointed person).
In relation to 'e' prefix marks, the office considers that it is now common knowledge among the public that the 'e' stands for electronic. Therefore the general rule is that the mark lacks distinctiveness if it would not be capable of registration if the 'e' element of the word were replaced by 'electronic'.
Evidence of acquired distinctiveness can be submitted where the remainder of the mark is not inherently distinctive and the office practice manual states: "Prominent use of a domain name on webpages offering goods or services for sale may constitute trade mark use, but each case should be considered on its merits taking account of the way the domain name has been used."
UK courts' approach
One in a Million (1998 4 AER 476, 1999 FSR 1, May 23 1998)
The One in a Million case is still the leading UK authority on domain names. The defendant registered a large number of domain names comprising the names or trade marks of several well known commercial enterprises, including: ladbrokes.com, sainsburys.com, britishtelecom.co.uk, virgin.org and marksandspencer.co.uk.
Counsel for the defence argued that many of the domain names could legitimately be sold to and used by other organisations or individuals than the plaintiffs. The trial judge had found the registration of all the domain names in question to amount to instruments of fraud and had accordingly found in favour of the plaintiffs. The Court of Appeal agreed with the judge, explaining that whether any name is an instrument of fraud will depend on all the circumstances, not just that by reason of its similarity to the name of another it would inherently lead to passing off. The intention of the defendant was also relevant. In this case the court found evidence of systematic registration by the defendant of well-known trade names as blocking registrations and a threat to sell them to others. This history enabled the Court to find the registration of domain names, which could theoretically be legitimately owned or used by other people, to amount to instruments of fraud.
FCUK.com (French Connection Ltd v Antony Toolseeram Sutton - December 3 1999)
The FCUK.com case was an application for summary judgment, brought by French Connection, a high street clothes store, who had been using the letters FCUK (to stand for French Connection UK, although UK did not form part of the claimant's name) in advertising. On April 16 1997 they launched a large poster campaign featuring the slogan 'F.C.U.K. fashion'. Several days later the defendant registered fcuk.com. He claimed that this was to reflect the name of his internet consultancy: First Consultants UK and to deflect people searching for pornography to his site, as he argued 'fcuk' was known to a certain class of internet users as indicating pornographic subject matter (of which he submitted be "unpleasant and distasteful examples").
Notwithstanding these justifications for purchasing the domain name, before any use had been made of it, the defendant approached the claimant offering to sell it. After at the threats of proceedings, the defendant at one stage offered to withdraw the domain name, but subsequently changed his mind. The claimant issued proceedings for passing off, registered trade mark infringement and breach of contract and proceeded to summary judgment in relation to the passing off and contract claim. In relation to the passing off claim, the claimant relied very heavily on the One in a Million case. However, the judge, who obviously found the issues involved highly distasteful, refused to grant summary judgment as the claimant had failed to satisfy him that the defendant would have no real prospect of success at trial. One of the reasons he refused the claimant was that there was evidence that 'fcuk' in the context of internet transactions meant something quite different from the claimant company and therefore a clear case of passing off was not made. As the judgment was given in December 1999, just as the UDRP came into operation, the claimant probably regretted not waiting to use this forum.
Efax.com v efax.co.uk (Efax.com v Mark Oglesby, 25 January 2000)
The Efax case concerned an application for an interlocutory injunction by efax.com against efax.co.uk. Efax provided a service to subscribers which involved the conversion of fax messages to email. The defendant provided the same services with the difference being that he charged subscribers for the service. After an offer by the claimant to purchase the domain name was rejected, they brought proceedings for an interlocutory injunction. The defendant cross claimed for strike out and summary judgment, claiming that the word 'efax' was descriptive of and generic when used in relation to any service offering fax to email services. The claimant argued that 'efax' was not a dictionary word and drew an analogy with the trade mark 'Microsoft'.
The judge held that there was "considerable force" in the submission that the word 'efax' was essentially descriptive in nature but it did not mean that the claim would inevitably fail at trial and therefore refused the defendant's application for strike out or summary judgment. In relation to the interim injunction, the judge held that there was a serious issue to be tried and when weighing the balance of convenience considered the extent to which confusion would occur if the injunction was not granted. Here, the judge reverted back to his sympathy with the defendant's submissions on the generic nature of the domain name and held that any confusion which was likely to take place would be as a result of the descriptive nature of the domain name, as opposed to any misrepresentation by the defendant.
Lawyersonline.co.uk v lawyeronline.co.uk (Lawyers Online Limited and Lawyeronline Limited, July 2000)
Lawyers Online Limited had traded under the domain name lawyersonline.co.uk, offering internet services to lawyers and subsequently allowing its members to provide legal advice to the public. They had commenced an advertising campaign inviting the public to contact the web page for (initial) free advice. The defendant had registered lawyeronline.co.uk which claimed to offer free legal advice to the public, provided by two legal executives employed by the defendant.
The claimants applied for an interlocutory injunction. The judge found that there was confusion and that it was arguable that there was goodwill attached to the name lawyersonline, despite its descriptive nature. Given that the defendant had no assets and had only been trading for 10 days by the time of the hearing and in the light of a cross- undertaking in damages from the solicitor behind the claimant company, the judge granted the injunction.
EasyJet v easyrealestate.co.uk (Easyjet Airline Co v Tim Dainty, February lOOt)
In the easyJet case, the claimant was a well-known, low cost airline in the UK, together with its group companies, easyRentacar and easyEverything (used in relation to internet cafes). The advertising for easyJet and its associated companies is distinctive a bright orange background with white lettering, with 'easy' appearing in lower case and the first letter of the next part of the word appearing in upper case. The defendant claimed he chose the domain name easyrealestate.co.uk as the domain name for a cut price internet estate agency he planned to run. He then set up a website with some help from a web designer provided by his ISP.
The defendant argued that the claimant should not be entitled to appropriate the word 'easy' and although the judge agreed with this position, found for the claimant on the basis of the overall look of the website, which mirrored that of the claimant's. Given that the only company the defendant appeared to have approached in relation to his estate agency proposal was the claimant, the judge did not find credible his claim that he was not aware of the claimant's design. Therefore, following the same approach as the Court of Appeal in One in a Million, the judge found that although the name easyrealestate.co.uk was not inherently liable to lead to passing off, the overall appearance of the site was such that its use would probably lead to passing off and therefore ordered the transfer of the domain name.
Radiotaxis.co.uk v radiotaxis.com (Radio Taxicabs (London) Ltd v Owner Driver Radio Taxi Services Ltd, October 2000)
In the radiotaxis case, both parties had very similar histories: both were radio circuits for licensed London black taxicabs, providing their member subscribers with computer terminals incorporating radio equipment enabling them to receive jobs from a control centre. Both were incorporated in about 1953. The defendant was the first to use the internet when it launched its website, dialacab.co.uk, in 1998 which allowed selected credit account customers to book on-line. The defendant had also registered the domain name radiotaxis.com in 1997, which resolved to the same web pages as dialacab.co.uk once this was up and running. The claimant established a website at radiotaxis.co.uk shortly afterwards in 1998 but had only more recently started to invest in and promote its website, which now permitted account customers to book on-line.
The claimant sued for passing off based on its rights in radiotaxis.co.uk, despite the fact that during the two years in which the defendant's radiotaxis.com resolved to its dialacab.co.uk there was no evidence of actual confusion having occurred, despite the fact that the claimant accepted that "radio taxis" was a generic or descriptive term. Following a letter before action the defendant disconnected the automatic link between "radiotaxis.com" and its main website, but this did not deter the claimant from commencing proceedings. The judge reviewed the trade mark authorities relating to the protection of generic names as business names and, having reviewed the evidence, concluded that, despite a finding that the claimant had established distinctiveness in the name 'Radio Taxis' within the trade, it had failed to establish this with the general pubic. He concluded that the defendant's use of radiotaxis.com did not amount to a misrepresentation by the defendant that they were connected with the claimant.
Achieving secondary meaning
The UK courts approach domain names in the same way as they approach other uses of trade marks or threats to infringe trade marks. Just as an otherwise descriptive or partially descriptive mark can acquire a secondary meaning through extensive use - i.e. by educating the public that the mark indicates origin in addition to its descriptive nature - a descriptive domain name can acquire the exclusive reputation required in order for it to be protected.
This task may be made slightly easier with descriptive domain names as opposed to descriptive marks used out- side the internet, as the internet-using public are accustomed to the manner in which the internet works. They understand that a single commercial entity operates a web site and therefore can come to associate an otherwise entirely descriptive or generic word, followed by .com or .co.uk etc, with a particular source. Thus the hurdle which stands in the way of a descriptive mark being capable of protection, i.e. that it is not perceived as a badge of origin, is to a large extent overcome once the public becomes familiar with the domain name.
Domain name registry approach to generic domains
DENIC administers .de domain space. There are no restrictions on the registration of generic domains in .de and they are available to companies and individuals, regardless of whether they are based in Germany. However, in the event that a non-German company or individual applies for a .de domain name, an administrative contact in Germany has to be given on whom service of proceedings can be made.
Trade Mark Office practice
The German Trade Mark Registry takes a similar approach to the UK Registry looking to see whether the part of the trade mark which precedes the domain name suffix is distinctive and considering the domain name suffix itself as not contributory to the distinctiveness of the mark.
German courts' approach
The significant cases involving generic domain names in a Germany have not centred around whether one party has a trade mark which is infringed by another which claims that such use is generic, but have involved the use of German a unfair competition law to prevent the use of a generic domain name per se.
Rechtanwaelte.de (attorneys.de) (Munich Regional Civil Court - November 16 2000)
A German law firm used rechtanwaelte.de to offer their services. They ceased using the domain name but maintained the registration. The regional court held that use of a generic domain name of this type amounted to unfair competition relying on the concept that a number of internet users would merely type in the most logical domain name for the area of goods or services they were interested in. In addition, the domain name was found to breach the German Federal Rules for the Legal Profession, which prohibit a lawyer from advertising.
Mitwohnzentrale.de (short-term letting agency.de) (German Federal High Court - May 17 2001)
The claimants in mitwohnzentrale.de were an association of over 40 letting agencies in different cities in Germany, who used the domain homecompany.de. They brought an action against the defendants who were over 25 other letting agencies who ran the domain mitwhonzentrale.de.
The Lower Regional Court in Hamburg held that the use of the generic domain name mitwohnzentrale.de was anti-competitive. The Higher Regional Court in Hamburg upheld the lower court's decision on appeal, finding that the use of the domain name was unfair because potential customers would be diverted to the defendants' website if they used the generic term. The use of the term by an organisation that only consists of part of the sector led to a substantial risk of an unfair competitive distortion. The court accepted that many users would avail themselves of a search engine to find sites relevant to their subject matter but found that many would simply type in the generic domain name. This would lead them to the defendants' website and even if they realised that not all letting agencies were represented there, there would be no incentive for them to search further. The defendants argued that the claimants could choose a similarly descriptive domain name, but the Higher Regional Court's approach was that effectively two wrongs don't make a right. The court equated domain names with trade marks and held that as trade mark law does to not permit monopolies in descriptive words, neither should descriptive domain names be permissible.
This was the first case of its kind to reach the German Federal High Court, which overturned the lower courts' decisions and held that the use of the generic domain name the was not anti-competitive. The court held that merely to channel customers to one's services fell short of being unlawful competition in violation of public policy. Such unlawful competition would occur if the competitor took steps to interfere between the customer and its competitor. The choice of a generic domain name merely gave the defendants a marketing advantage. The court rejected the analogy with trade marks. The registration of the domain name did not tat give rise to a broad, exclusive right. Competitors were still able to use the term in their advertising and business name. In relation to users who might merely type the generic URL as a search method, the court considered that such users were generally aware of the shortcomings of this method.
However, the court still expressed some reservations about the use of generic domain names and explained that if the owner also blocked the generic name in other top-level domains, this could be anti-competitive. Also, if the use of the generic name was misleading, in that it led the consumer to believe that the domain name owner was the only provider of the services, it could be anti-competitive and on this basis, asked the Higher Regional Court to reconsider this aspect of the case. If the Higher Regional Court were to find that the use of the domain name created a misleading effect, the Federal Court instructed them to permit the use of the domain name, but only if the user clarified on their home page that there were other providers of the services. Given that the website does not at present contain such a disclaimer, it must be assumed that either the court found that it was not necessary, the parties settled the matter or that final judgment is still pending.
A different approach The German courts' approach to generic domain names is distinctly different to that of the UK courts. Although the German Federal High Court has overturned what was starting to look like a general prohibition against the use of generic domain names, it still leaves open the possibility that use of a domain name for which there is no obvious alternative, together with blocking (or potentially resolving to the same site) of other top-level domains, which is usually standard practice, would amount to anti-competitive behaviour and fall foul of German law. The concept that a domain name owner may have to put on their website that there are other providers of the services they offer is an alien concept to most common law lawyers. It will be interesting to see how this area of law develops in Germany in the light of the Federal Court's decision.
The position taken by OHIM on generic domains
The general position adopted by OHIM is a trade mark which consists of a generic term, plus .com (or similar) is devoid of distinctive character and therefore not capable of registration.
Software.com (Case R 866/1999-3, November 14 2000)
The applicant sought to register this for, among other things, computer programs, arguing that it was distinctive of the goods and services or alternatively that it had become distinctive through use. The applicant pointed out that an identical trade mark was registered in the US. In a decision by the Third Board of Appeal, following a refusal on absolute grounds, the board held that the mark, taken as a whole, would be seen by the relevant public as an internet address relating to software. The fact that the mark had been registered in the US was deemed irrelevant to the finding of registrability under the Community Trade Mark Regulation. However, as the examiner had not dealt specifically with the evidence of use which had been submitted, the case was remitted to the examiner for further prosecution and is pending. Meanwhile, the author notes that software.com now defaults to openwave.com.
Buy.com (Case R 638/2000-4, September 10 2001)
The applicant appealed the decision by the examiner that the trade mark was devoid distinctive character due to it being descriptive of services relating to selling via the internet. The applicant argued that the two descriptive elements of the mark, 'buy' and '.com' , combined to create a new word which was therefore distinctive.
Additionally the applicant argued that as the website buy,com was already owned by it, and was known as its website, no third party would be disadvantaged by the registration of the mark. Alternatively, the applicant argued on appeal that the mark had become distinctive through use and relied on an estimated turnover in 2000 of $800 million, $45 million advertising spend in 1999 and 10 million user hits per month on the site, pointing out that Buy.com is used as the company name, the domain name, and displayed in all advertising, invoices and packaging.
The Fourth Board of Appeal agreed with the decision of the examiner and rejected the applicant's evidence of acquired distinctiveness, finding that the use had not been as a trade mark in respect of the services claimed in the specification, but as the domain name of the website which is run as an on-line multiple retailer. The board went on to find that the use of the mark at issue as the domain name not use as a trade mark, because the functions of a trade mark and a domain name are different, the difference being that name was only going to identify the applicant's site on the internet, used in relation to the services claimed.
Given the manner in which Buy,com used,that is as more than just a domain name, this analysis by the Fourth Board of Appeal does give rise to the question of what use is needed to amount to trade mark use?
A different approach in the future?
OHIM's general prohibition against the registration of generic domain names as marks has not prevented the following domain names achieving registered status: biztravel.com, netgrocer.com, webdevelopers.com and getmusic.com.
The change in practice concerning the threshold of registrability which has been brought about by the BABY-DRY decision of the European Court of Justice, may enable marks of the Buy.com type to proceed through to registration more easily. The Court of First Instance (CFI) decision in BABY-DRY (which the European Court of Justice overturned) was often cited against generic domain name applications but with this obstacle removed, the arguments put forward by applicants for seemingly generic domain names can be expected to meet with more success.
First published in Managing Intellectual Property (www.managingip.com) in February 2002 - Issue 116.