WH Smith brought passing off and trade mark infringement proceedings against a Peter Colman, who had registered WH Smith.com as a domain name.
Who: WH Smith and Peter Colman
When: March 2000
Where: Court of Appeal, London
WH Smith brought passing off and trade mark infringement proceedings against a Peter Colman, who had registered WH Smith.com as a domain name. During prior correspondence Colman wrote a letter marked "without prejudice" to WH Smith’s Chairman, referring to the possibility of settling the matter on the basis of a payment by WH Smith. WH Smith tried to put the letter in as evidence of bad faith on the part of Colman, who opposed this on grounds that as it was marked "without prejudice" the letter should not be placed before the court.
The letter was certainly "disingenuous, rambling, repetitious and unrealistic" said the Court of Appeal, but it seemed to indicate that Colman was seeking a settlement in order to avoid litigation and fell short of showing the "unambiguous impropriety" which was required before the "without prejudice" protection fell away. WH Smith were held not entitled to produce the letter in evidence.
Why this matters:
Under the US Anti-Cybersquatting legislation, (see item under "Domain names" in "World News" International Newsfeed) an offer by a domain name registrant to sell it is regarded as clear prima facie evidence of bad faith. Here in the UK, the courts have taken a similarly dim view of the practice in cases such as BT v One in a Million, but what if a domain name registrant is not a cynical cybersquatter and genuinely wants to explore the possibility of agreeing terms whereby the name can be transferred?
If such a proposal cannot be made without it being thrown back in the face of the proposer as evidence of bad faith, out of court settlement of domain name disputes may become impossible.
Here the court is alive to this risk, but the judgement underlines the great care that needs to be taken in drafting such communications. It also shows that a "without prejudice" marking will stand a greater chance of surviving a challenge if there have been previous without prejudice communications in the matter and there are references in the letter to the weaknesses of one’s own legal case.