A company or brand reluctant to make the nature of their business transparent only leads to confusion and distrust among customers. “Which name please?” is a familiar phrase to users of the 192 directory enquiries service. However there are now a number of different ways in which directory enquiry information can be obtained, following the deregulation of BT’s directory enquiries service and the availability of other service mediums, such as the internet. All public telecommunications operators (PTOs) are now required to provide a directory enquiry service to their subscribers. Some of these PTOs use their own databases of information. Others use pre-existing databases such as OSIS (provided by BT).
It is possible to purchase licences to use the OSIS database even if you are not a PTO. This is what Planet Telecom did. Using this information, Planet Telecom set up an internet-based directory enquiry service. But the way in which it obtained custom and income for the service proved rather controversial and resulted in two applications, one by the director general of The Office of Fair Trading and the second by BT.
Planet Telecom sent out faxes to various people listed in the OSIS database effectively requesting updated information. In requesting the information Planet Telecom used allegedly misleading statements. For example “Are 192 enquiries publishing your correct details?” and “192 enquiries are about to delete your directory entry”. In small letters at the bottom of some of the contested faxes there was also a footnote stating: “not associated or connected with BT”. In addition Planet Telecom derives income from receiving reply faxes through premium rate fax lines it operates. To compound matters, Planet Telecom amended the fax form following an earlier preliminary hearing, to include the statement: “The Office of Fair Trading concedes that you may lose business if you do not respond to this fax”. This resulted in a further application to restrain use of the revised fax forms with that particular legend.
In this present application the director general argued that the faxes suggested that the defendants were acting for or were connected with BT or another PTO. Second, he argued that the fax form falsely conveyed the impression that the sender was connected with the provider of a directory enquiry service accessed by dialing the number 192. Third, he suggested that the advertisements falsely conveyed the impression that the recipient of the fax would only be listed in the directory www.192enquiries if the fax was returned to the sender. Finally the director general argued that the statement that the submission was free was misleading as the reply fax was charged at premium rates.
The injunction was granted in full form, restricting all of the defendants (including the directors personally) from using any of the advertisements objected to “or substantially the same form”.
In addition to this action BT brought its own action alleging ‘passing off’. BT alleged that the fax forms supplied by Planet Telecom constituted passing off, in that BT owned goodwill in elements used in the fax forms; that Planet Telecom had made misrepresentations leading to confusion in the mind of the recipient and that there was damage to BT as a result. Additionally, BT put together evidence from telephone subscribers which supported the necessary element of confusion needed to prove passing off. By the summer of 2000, BT had received a number of complaints about the defendant’s fax forms.
In addition to the statements set out above, fax forms were also issued with the headings “BT solicitors directory information update-please check” and containing the phrase “Please check this BT data record”. Following complaints about such forms by BT, the forms were amended in the way discussed above to include at the very bottom of the form in very small print the words “Not associated or connected with BT” or the words “This fax update form is sent by Planet Telecom plc not BT.” BT continued to log complaints and it was found that in many cases subscribers thought they were dealing with either BT or a company associated with BT. The judge therefore found that there was sufficient evidence to raise a triable issue on confusion and to make BT’s case seriously arguable even where the express disclaimers were included on the fax forms. The disclaimers were not prominent or clear enough.
The judge went on to find that it was clear that the forms had been deliberately designed in order to give the impression that the details would be used to maintain the accuracy of BT records and perhaps other PTO records. The fax forms clearly sought to link the defendant’s business with BT or other PTOs and had pushed this to the limit of what it thought it could get away with. In such a situation a ‘mandatory’ injunction was appropriate which prohibits the company from using faxed forms containing references to 192 or directory enquiries unless the form includes a prominent disclaimer.
Suggestion for Avoiding Similar Problems:
- Make the nature of your business transparent
- Be careful in making any references to similar services or similar business providers
- Be careful not to indirectly create any link with other service providers
- Make it clear to recipients what they will get from a service and what financial consequences apply
- Do not seek to mislead even if this is likely to increase business revenue
- If you are unclear or suspect your advertising may be close to the mark, take legal advice on the wording or request clearance (if possible) from the other business service providers
First published in the October 2002 issue Brand Strategy.