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Domain names – websites – goodwill – likelihood of confusion – number of “hits” – increased value of site

[Trade Marks Act 1994 s.10(3)(b).]

F registered a domain name for a site which was intended to develop the idea of marketing banners for advertising on the Internet. M, a major international credit card issuer with similar registered domain names for its various businesses, sought an interlocutory injunction restraining F from activating the web site, contending that F had deliberately chosen the acronym in order to take advantage of the goodwill attached to its business and had taken unfair advantage in connection with a dissimilar business contrary to the Trade Marks Act 1994 s.10(3)(b). F contended that his business was entirely different to that of M and there was no likelihood of confusion between the two. M contended that its business customers may well be interested in the idea of using banner advertising and may be misled into believing that F’s business had connections with M. Furthermore, by increasing the number of “hits” received by F’s site by virtue of its name, the value of the site would increase should he wish to sell it.

Held, granting the application in part, that on the balance of convenience F would not be restrained from using the site, as it was unlikely that visitors to the site would be confused between the two operations. Any individuals interested in using the banner exchange service were likely to be sophisticated Internet users. Furthermore, F had no immediate intention of activating the site, thus the period of restraint involved would be very short and it was open to M to monitor the position. An injunction would not be granted merely on the basis that to do so would cause the defendant no harm. However, F would be restrained from selling or dealing with the domain name, as it would otherwise be open to him to do, at a price possibly enhanced by improper use of M’s goodwill, since M had an arguable point on this issue. A sale of the site could lead to an irrecoverable claim for damages or account of profit. An injunction was granted to ensure that F would have to apply to the court if he wished to sell or deal with the domain name prior to trial.

MBNA AMERICA BANK NA v. FREEMAN [2001] E.B.L.R. 13, Nicholas Strauss Q.C., Ch D.

“Current Law” April 2001