Out-Law Guide | 21 Nov 2007 | 2:11 pm | 8 min. read
1-800 Flowers Inc v Phonenames Ltd
1-800 Flowers Inc (‘Flowers’) is a US company which operates an international floral telemarketing business. That is, it provides flowers and so on via a marketing system which can be accessed by a number of methods. One of these is by the use of a freephone telephone number. In the US, the freephone number is 1-800-356-9377. This number itself is important. If the numbers are typed in on a telephone keypad which has letters on it as well as numbers, the letters spell 1-800-FLOWERS. This is known as an ‘alpha numeric’ phone name. If members of the public want to contact Flowers, they just need to know their name, not their number.
Flowers also operated a U.S. based internet site accessible in the UK, with the address www.1800flowers.com.
On 13 February 1993 Flowers applied under section 17(1) of the Trade Marks Act 1938 as amended (‘the 1938 Act’) to register the trade mark 800-FLOWERS as a ‘service mark’ in respect of services consisting of the receipt and transfer of orders for flowers and floral products.
Phonenames Ltd run a business licensing alpha-numeric phone numbers to third parties. The UK telephone number – 0800 356 9377 – was allocated to Phonenames Ltd in 1994, that is after Flowers’ application for registration of the trade mark. This telephone number, expressed in alpha-numeric terms, is 0800 FLOWERS.
Phonenames Ltd therefore opposed Flowers’ registration. Jacob J. in the High Court found the mark unregistrable. Flowers appealed.
The judgments analysed the provisions of the 1938 Act in relation to service marks to reach their conclusions. Each relevant section acts as a potential objection to registration, and each was analysed in turn.
Section 10 of the 1938 Act
Under section 10 (1) of the 1938 Act: “In order for a service mark to be registrable…it must be capable, in relation to the services in respect of which it is…proposed to be registered, of distinguishing services with the provision of which the proprietor of the mark is or may be connected in the course of business from services with the provision of which he is not so connected…”.
Under section 10(2)(a) of the 1938 Act, “In determining whether a service mark is capable of distinguishing [as described in section 10(1) of the 1938 Act] the tribunal may have regard to the extent to which the service mark is inherently capable of distinguishing [as described in section 10(1) of the 1938 Act]”.
Flowers’ argument was that at the date of application for registration, the mark was ‘inherently capable’ of distinguishing between services of the relevant type provided by Flowers and similar services provided by others. In relation to this argument, Parker LJ reasoned as follows:
Buxton LJ agreed with this analysis, stating: “the real substance of the mark sought to be registered in the United Kingdom is its mnemonic connection with a telephone number…The focus being…on the phone numbers rather than on the applicant’s distinctive business, the mark, in the context in which the registration is sought, does not distinguish”.
Section 11 of the 1938 Act
By section 11 of the 1938 Act: “It shall not be lawful to register as a service mark…any matter the use of which would, by reason of its being likely to deceive or cause confusion or otherwise, be disentitled to protection in a court of justice…”.
In relation to this section, Buxton LJ stated: “where the business to which the mark is attached…is inherently a business conducted over the telephone, the holder of the mark is necessarily likely to cause confusion…if he does not possess the telephone number to which the mark makes reference”.
The mark was therefore not registrable.
Sections 17 and 68 of the 1938 Act
Section 68 of the 1938 defines a service mark as “…a mark…used or proposed to be used in relation to services for the purpose of indicating, or so as to indicate…that a particular person is connected, in the course of business, with the provision of those services…”. The crucial words are “used or proposed to be used”. These words are also found in section 17(1) of the 1938 Act, the basic provision requiring an application to the Registrar to register the mark. Parker LJ stated that for the purposes of sections 17 and 68, Flowers had to establish use, or proposed use, of the mark in the UK.
At the time of application, there was no actual use of the mark by Flowers in the UK, since: A telephone call from the UK to Flowers’ US telephone number did not necessarily involve the use of the mark in the UK.
Nor was the evidence concerning Flower’s web site was sufficient to justify the conclusion that accessing the web site amounted to use of the mark at the point of access. In any event, the evidence did not disclose the extent to which the web site had in fact been accessed from the UK.
Even had the web site been accessed from the UK, Flowers did not at that time have a place of business in the UK, the services which it provides were performed outside the UK and there was only one piece of advertising directed specifically at the UK.
Buxton LJ agreed, and made some obiter comments regarding use in the UK being established by web site use.
He stated that there was “something inherently unrealistic in saying that A “uses” his mark in the United Kingdom when all that he does is to place the mark on the internet, from a location outside the United Kingdom, and simply wait in the hope that someone from the United Kingdom will download it and thereby create use on the part of A…the very idea of “use” within a certain area would seem to require some active step in that area on the part of the user that goes beyond providing facilities that enable others to bring the mark into the area”.
The mark was not registrable. The appeal was dismissed.
Although the case was decided on the 17th May 2001, it concerned an application made for a trade mark in 1993. As such the case was determined under the provisions of the 1938 Trade Mark Act and not the current 1994 Act. The application also predated the now extensive use of mobile phone texting and for that reason alone is interesting as it demonstrates how much the way in which we communicate has changed in a relatively short period.
Perhaps the most interesting legal aspect of the case lies in the obiter words of Buxton LJ regarding web site use of the mark in the UK. Buxton LJ expressed the opinion that the mere fact that the web site is available by users in the United Kingdom in itself did not constitute use of the service mark in the United Kingdom. Rather there needed to be some direct encouragement to use the service such as an advertising campaign. One advertisement placed by 1-800 FLOWERS Inc in 1994 was considered to be insufficient. This should be compared with the Enforcement of Civil and Commercial Judgments Regulation 2000 (“the Regulation”), which is due to come into force in March 2002. The Regulation amends the current rules relating to consumers set out in the Brussels Convention on the jurisdiction and enforcement of judgments in civil and commercial matters of 1968, as supplemented by the Lugano Convention in 1988 (together “the Conventions”).
Under the Conventions, in order for the rules relating to consumer contracts to apply the conclusion of a contract must have been “proceeded by a specific invitation addressed to the consumer or by advertising in the country of domicile of the consumer, and in that country the consumer took steps necessary for the conclusion of the contract” (Article 13). This is not dissimilar to the proposition put forward by Buxton LJ.
However, Article 15(3) of the Regulation provides “(3) … the contract has been concluded with a person who pursues commercial or professional activities in the Member State of the consumer's domicile or, by any means, directs such activities to that Member State or to several countries including that Member State, and the contract falls within the scope of such activities.” The earlier drafts of the Regulation contained a recital which stated that “electronic commerce in goods and services by a means accessible in another Member State constitutes an activity directed to that State…”. Whilst this was deleted from the final version of the Regulations, no additional wording was added to establish the status of web sites. It remains to be seen as to how the courts will interpret this provision.
Both the Conventions and the Regulation provide that if the exception to the general rules used to determine which country’s courts have jurisdiction applies, then a consumer may bring proceedings against the other party to a contract either in the courts of the country in which that party is domiciled or in the courts of the country in which the consumer is domiciled. However, proceedings may be brought against a consumer only in the courts of the country in which the consumer is domiciled.
The whole question of the legal status of a web site owned and operated by an overseas business accessible in the United Kingdom is one which will become increasingly important over the coming years. It can only be hoped that the approach taken by Buxton LJ will find favour in determining whether a web site in itself constitutes “an activity directed” to a member State of the European Union. However, as Buxton LJ comments “…it is …unlikely… that there will be one uniform rule, specific to the internet, that can be applied in all cases of internet use…” .