Passing off

In Harrods Ltd. v UK Network Services Ltd. and others [1997] 4 EIPR D-106, the defendant company and its directors and controlling shareholders, who had nothing to do with the plaintiff, registered the domain name "harrods.com" with a company that registers domain names on the Internet without any reference to the plaintiff.      Harrods brought proceedings against them for passing off, trade mark infringement and various other causes of action.     An application for summary judgment under Order 14 was not contested and Lightman J ordered them inter alia to take all steps to release or facilitate the release of the domain name "harrods.com".   

The practice of registering domain names that are likely to be associated with well known companies, often with a view to holding them to ransom for a release fee, is not unlike that of forming companies under a well-known name.      The costs of bringing proceedings against those responsible for such practices may be very much more than the ransom.    As the usual costs order on motion is "plaintiff's costs in the cause" those costs are often irrecoverable because the defendants will have disappeared or become insolvent  when the time comes for a taxation.    There may be a solution in Laddie J's decision in Direct Line Group Ltd. v Direct Line Estate Agency Ltd. [1997] FSR 374.     The defendants and their promoters, who had no connection with the well known insurance and mortgage brokers, had set up three companies known respectively as "Direct Line Estate Agency Ltd"., "Direct Line Will's Ltd" and "Direct Line Estates Ltd.".    The promoters had a long track record of setting up companies in such as "Manchester U Ltd.," The Virgin Jean Company Ltd." "Hugo Boss Ltd.." and "Cantona Pour Homme Ltd.".     Direct Line Ltd.  issued proceedings for passing-off and moved Laddie J for an interlocutory injunction to restrain the defendants' activities.  

Granting the injunctions, the judge said at page 376:

"I think it is only right to say that this court will view with extreme displeasure any attempt by traders to embark upon a scam designed to make illegitimate use of other companies' trade marks.  No attempt has been made in the evidence put in by [the promoters] to explain why the names Virgin, Nike, Reebok, Armani, Hugo Boss and the like were being registered for companies which had nothing to do with the authentic proprietors of those names.    At least at this stage, I am left with the overwhelming impression that these defendants are engaged in just the sort of scam referred to above."