Estate agent ordered to pay damages for directing potential customers of a rival agency to websites containing hardcore pornography? Surely not in England? Jonathan Mayner reports on a case where a domain name dispute got a little out of hand to say the least.
Topic: Domain Names
Who: eddisonwhite Limited / SW19 Estate Agents Limited
When: April 2010
Law stated as at: 24 May 2010
An estate agent was ordered to pay damages after he registered an internet domain name similar to one used by a rival agency and subsequently redirected visitors to the domain to other websites, including his own website and several sites containing hardcore pornography.
eddisonwhite ("EW"), an estate agency based in south-west London, had registered and used the domain name eddisonwhite.co.uk as the home for its internet presence since 2004. In late 2005, Luke Bennett, the proprietor of rival estate agency SW19 Estate Agents Ltd ("SW19"), bought and registered the domain name eddisonwhite.com.
Hapless visitors to www.eddisonwhite.com were then directed by Mr Bennett to a series of websites unconnected with the business of EW, including the website of SW19, other rival estate agencies operating in south-west London, and several websites featuring hardcore pornography.
In June 2009, the High Court held SW19 and Mr Bennett liable to EW for "passing off" and infringement of EW's trade mark rights. An order for payment of damages of £15,000, which was agreed between the parties, was issued on 28 April 2010.
Passing off is, a common law tort, the underlying principle of which is that one should not sell one's own goods under the pretence that they are the goods of someone else. Case law however has made it clear that where domain name registrations are concerned, a defendant does not even have to use a rival's name in connection with the selling of goods and services to be held liable for passing off.
The One in a Million case (full title British Telecommunications Plc & Others v One in a Million Limited & Others  1ETMR 61) established that merely registering domain names could give rise to an action for passing off where (1) the placing of the domain name on a register of domain names constitutes a representation that the registrant of the domain is connected or associated with the name registered, or (2) the domain name in the hands of anyone other than the "true" owner of the name constituted an instrument of fraud.
In the eddisonwhite case, Mr Bennett was held liable for passing off merely by registering the domain name eddisonwhite.com and having his own name appear on the domain register in connection with it. The fact that the domain was subsequently directed towards the website of his own rival estate agency business will not have helped any defence he may have tried to raise, but proof of such activities are not required to establish the wrongdoing before the court – registration of the domain which rightly belonged to another sufficed.
Trade Mark Infringement
EW had, since 2007, a trade mark registration comprising the word "eddisonwhite" and covering estate agency services. Section 10(1) of the Trade Marks Act 1994 states that: "A person infringes a registered trade mark if he uses, in the course of trade a sign which is identical with the trade mark in relation to goods or services which are identical with those for which it is registered."
By registering and using the domain name eddisonwhite.com, which incorporated EW's registered trade mark, and directing internet users visiting that site to the websites of SW19 and other estate agencies other than EW, SW19 and Mr Bennett were found to have been using a sign identical to EW's trade mark in the course of trade in relation to the goods and services for which the trade mark was registered (namely, estate agency services).
Why this matters:
This case highlights the importance of businesses having a strategy for protecting their online presence and reputation. While the seriousness of the activities complained of and the rivalry between the parties probably made a courtroom showdown inevitable, it is important for businesses to realise that litigation is not the only way to protect domain name registrations and associated intellectual property rights.
Points to note for businesses
1. Ringfence registrations
It is all too easy for third parties to register domains that incorporate or are similar to a trade name and/or trade mark for as little as £10 per year. While there are legal remedies available, businesses should consider a series of preventative ringfence registrations of domains which incorporate their important brand or trading names or which are similar to the domain used for their own website, so that others cannot register those domains. These domains can either be used to redirect potential customers to the main website, or they can simply be held to keep them out of the hands of third parties who may seek to profit from or undermine the goodwill of the business.
2. Remedies available outside the courts
Often where there is no real prospect of recovering damages, pursuing a claim for passing off or trade mark infringement in the courts in respect of domain name registrations is not cost-effective. This may particularly be the case where a domain name has been registered by an individual unconnected with a rival business enterprise. Often such individuals will have registered the domain name with the sole intention of selling it to the rightful owner for a significant profit, or in order to take advantage of a domain "parking" service, where they rent the domain out to online advertisers for a small return. In such circumstances it is often more cost-effective to seek a transfer of a domain name via one of the various domain name registrars who operate a Uniform Domain-Name Dispute Resolution Procedure. If a successful complaint is made via one of these procedures a business can gain control of a domain with a minimum of fuss. This can usually be done without prejudice to the other legal remedies available to a claimant.
3. Financial remedies are available through the courts where justified
As the eddisonwhite case shows, financial remedies are available via the courts where justified and where they are worth pursuing. This will normally be done by way of a claim for passing off and trade mark infringement.