Once IBM had used and registered its WEBSPHERE trademark for software, it was not going to live with WEB-SPHERE software being sold by a modest but defiant UK company. For the outcome go to
Who: IBM v Web-Sphere Limited, Richard De Serville and Another
Where: Chancery Division of the High Court, London
When: March 2004
In 2002, one of the defendants in this case, Web-Sphere Limited, launched a communications software product under the name "Web-Sphere." Before launch, it did not conduct any searches to see if that the brand name might already be registered or used by a third party. If it had done, it would have discovered that the mark Websphere was a registered community trade mark in the name of IBM. The registration was completed in 2000 and therefore effective from the date of its filing in 1998. It was also registered in classes 9, 38 and 42, relating in particular to computer software, communication and website services.
UK company goes on offensive
At some point after Web-sphere's launch of its product, they discovered the IBM registration. Instead of dropping the brand name, however, they went on the offensive. In 2003, Web-Sphere attended one of IBM's advertising events and its individuals spoke there and delivered leaflets claiming that IBM's Websphere trade mark was unlawful. The leaflet, which was subsequently posted to 1,000 leading companies, also threatened that IBM customers might be libel to pay damages as a result of their use of IBM products sold under the Websphere brand name.
IBM was having none of this and instituted proceedings against Web-Sphere Limited and two if its principals for trade mark infringement. It also sued for malicious falsehood in respect of the leaflet which Web-Sphere had been distributing.
Web-Sphere Limited defended. They did this on the basis of arguments that the mark was invalid because it was devoid of distinctive character: it was essentially descriptive of its intended purpose. It argued in the alternative that Websphere and Web-sphere were not identical because of the presence of a hyphen in the latter.
The court decides
The court gave Web-Sphere's defences short shrift. It held that "Websphere" had no recognisable meaning as a whole in English and was therefore distinctive and non-descriptive.
As regards the effect of the hyphen, the court indicated that when coming to a view as to whether two marks were "identical", the overall impression, including visual, aural and contextual similarities, was crucial. Applying this test, a hyphen was deemed an insignificant difference between the two marks, notwithstanding that the average consumer was a sophisticated computer user who would be aware of the importance of a hyphen for internet searching.
"Own name" defence
Web-Sphere Limited had also defended on grounds that it was using its own name and therefore should be immune from an infringement suit. The court threw this argument out because the Web-Sphere name had only been adopted well after IBM had started registration and use of the Websphere brand.
The claim for malicious falsehood failed, not because the defendants' publications were not malicious and false, but because they were unlikely to have caused IBM any financial damage. However, because the other defences had failed IBM's case in trade mark infringement succeeded and Web-Sphere Limited was ordered to change its name and to either cease using its equivalent domain name or assign it to IBM.
Why this matters:
It is perhaps not surprising to see from the report on this case that the defendants represented themselves. Their case in defence was clearly extremely thin and although some of the arguments put forward were ingenious, it is difficult to see how any trade mark lawyer could have given them more than a snowball's chance in hell of succeeding.
As it is, the defendants saved themselves the cost of legal advice for themselves, although they will undoubtedly have been ordered to pay IBM's costs.
The case also underlines the crucial importance, before adopting any brand-name, of conducting all necessary searches to ensure that the mark is available for use in the target countries. Only then is it worth considering making one's own application to register the chosen mark.