Having traded under the Phones4U brand name for some years before the defendant registered the domain name phone4U.co.uk, Phones4U must have thought that they had an open and shut case. Not so, said the court.
Who: Phones4u Limited v Phone4U.co.uk Internet Limited
Where: Chancery Division of the High Court, London
When: March 2005
Phones4u Limited ('Claimant') sued Phone4U.co.uk Internet Limited ('Defendant') over the Defendant's use of the domain name 'Phone4U.co.uk.'
The Claimant had been selling mobile phones and related products and services since about 1987. It adopted the 'Phones4u' branding for its retail outlets in 1995. Since 1997 its flagship branding has been a red, white and blue logo containing the words 'Phones4u" in stylised form. It had applied to register that brand as a trademark in 1996 and achieved registration in 1999. 'Phones4u.co.uk' had also been registered as a domain name at about that time.
The Defendant registered the domain name 'Phone4U. co.uk' in 1999 and later also purchased the domain name 'Phone4u.com.' It had operated a shop in London between 2000 and 2001 selling mobile phones.
The Claimant sued the Defendant for passing off and trademark infringement. Perhaps surprisingly, in March 2005 the court threw out the Claimant's suit.
Phones4U "mainly descriptive"
On passing off, the court took the view that 'Phones4u' was a mainly descriptive expression. However, having looked at the evidence of turnover, the number of shops and customers and advertising spend by the Claimant, the court took the view that although in 1999 the Claimant had not built up sufficient goodwill to found a passing off action, this had been established by 2001.
This meant that the court had to go on to consider whether there was any misrepresentation as a result of the Defendant's use of its very similar domain names.
Here, the evidence did not come up to scratch for the Claimant. The court found that although there was evidence of confusion amongst customers, there was no clear evidence that they had actually been deceived into buying a product through the Defendant's website in the belief they were dealing with the Claimant.
Perhaps surprisingly, the court also found that the Defendant's 'Phone4u.co.uk' domain name was not 'inherently deceptive', despite the existence of the Claimant's very similar and pre-existing branding.
Trade mark infringement claim
On the trademark infringement claim, to succeed the Claimant had to show that its branding and the Defendant's domain name were 'similar' and that there was a likelihood of confusion or association.
It appears from the judgement that the court found insufficient similarity between the two brands, mainly because the Claimant had only registered the appearance of its logo in red, white and blue. Also, a likelihood of deception had not been made out.
Why this matters:
This decision is in many respects quite surprising and we suspect that an appeal is very likely. On the trademark infringement claim, the requirement is that there has to be a likelihood of confusion or association, not that there must be likelihood of deception. On the passing off claim, confusion was made out but it was not shown that this had led to consumers being deceived into buying a product from the Defendant thinking it was coming from the Claimant. But this is very hard to prove and actual or very likely confusion should be sufficient, though a likelihood of loss flowing from it still has to be shown.
The decision on all points appears very harsh, but what the case does show regardless of any appeal or its outcome, is that it remains very challenging and difficult to press home successfully any form of passing off claim. Another strong argument, some may say, for a discrete 'unfair competition' law along the lines of the Australian Unfair Trade Practices Act.