Copyright and freedom of expression are balanced in Copyright Directive, says CJEU advisor
Out-Law Guide | 02 Nov 2007 | 8:31 am | 7 min. read
Easyjet Airline Co. and others v Tim Dainty (T/A Easyrealestate)
The Claimants were a trading group including the well known airline operating, since 1995, low cost flights out of Luton airport. The Defendant was a works manager of a civil engineering business. The Claimants alleged that the Defendant registered a domain name called easyRealestate.co.uk in March 2000 and by so doing, and by trading on the internet, committed the tort of passing off. The Claimants applied for summary judgment under CPR 24.2.
The evidence, which was undisputed, showed that the first Claimant had since 1995 been using the name “easyJet” as its trading name. The business was conducted largely over the internet, so that passengers could book their tickets on the internet, using secure websites for payment. Since 1995, some £30 million pounds had been spent on advertising in the UK with a further £10 million spent on advertising abroad. Turnover in the previous financial year was £267 million. Advertising of “easyJet” has a distinctive getup, with a distinctive livery applied to it (including to the aeroplanes owned by the first Claimant).
The second Claimant (“easyEverything”) had spent some £2.6 million on advertising with a turnover of some £6.7 million. “easyEverything” promotes internet cafes, and uses the same distinctive livery. The third Claimant (“easyRentacar”) started trading in February 2000 in the car rental sector. They too are normally booked over the internet. The livery of the cars is identical to that of the aeroplanes and the easyJet logo is visible on the windows of the cars.
The elements of the getup which were distinctive included the word “easy” associated with another word to form one word. The “easy” is in lower case and the following element begins with a capital letter. The getup appears against a bright orange background with plain white lettering (or sometimes the reverse).
Most of the Claimants’ business is conducted over the internet, with as much as 81% of any day’s bookings done in this manner.
The Defendant prior to 2 January 2000 did not even have a computer and bought one then as an educational tool for his children. In the course of 2000 he came up with the idea of a cut-price estate agency business to be conducted on the internet. He tried to register the name “easyHome” but that was not available, nor was “easyEstates”. He therefore registered “easyRealestates.co.uk”.
The Defendant, who was not represented, made a number of claims, including that the Claimants could not effectively claim a monopoly in the word “easy”. Furthermore, as far as he knew, the Claimants did not have a property business and he had only heard of easyJet. He said that he did not intend to take the Claimants’ goodwill, and did not specifically know of their colours.
The law of passing off was not disputed and could be easily stated. In order to succeed in showing that the goods, services, business or goodwill of A are likely to be passed off as those of B, a claimant must establish three things: firstly, that his own goods, services and goodwill have acquired a particular reputation amongst the public; secondly, that persons wishing to buy his goods are likely to be misled into buying the goods and services of the defendant; and thirdly, that he is likely to suffer damage (see Reckitt and Colman Products Ltd v Boden Inc  RPC 341, 418 per Lord Jauncey).
To establish the likelihood of deception, the court must use its common sense, and take into account all the circumstances, including the similarity of the getup of the marks in question (Neutrogena Corporation v Golden Ltd  RPC 473, 482 per Jacob J.). It is not necessary to show a deliberate intention to deceive the public, but if that intention is there, it is powerful evidence to support the conclusion that the public is likely to be deceived. It is also relevant to the remedy granted.
Likelihood of damage is also a question of fact. The Claimants had never run a property business, but there might be the possibility of damage to the Claimants’ goodwill, i.e. to their reputation in the conduct of their various enterprises (Harrods Ltd v Harrodian School Ltd  RPC 697, 724 per Sir Michael Kerr).
In this case, the Claimants are not entitled to appropriate the word “easy” but here what was being protected was not the word alone but the word in its distinctive getup. It was not credible that the Defendant did not have this in mind when he designed his web-page. He had no knowledge of computers, no interest in estate agency and had not put the idea into practice by trading on the internet. On the contrary, he had in the middle of 2000 approached easyJet with a view to obtaining investment and, after failing to do so, had not approached anyone else with a view to starting the venture. He did make some changes to the colours after the Claimants had threatened proceedings, but the likelihood of the public being deceived had been made out.
As to remedies, the Claimants sought firstly, an injunction to restrain the passing off, secondly an order for delivery up or obliteration on oath of articles or documents that would contravene the injunction, thirdly an inquiry as to damages or an account of profits and fourthly an order that the Defendant should transfer the registration of the domain name “easyRealestate.co.uk” to the Claimants.
As the Defendant had done minimal, if any, business, no order was made as to damages or an account of profits. As to the fourth order requested by the Claimants, the Defendant had no legitimate underlying business to protect and also seemed from what he said to have no real understanding of passing off law or the implications of the orders being made. There was the possibility that he might assign the name to someone who had the intention to do no good with the name. This brought the case back to the words of Aldous L.J. in British Telecommunications plc and Others v One in a Million Ltd  FSR 1 and whether the name was an instrument of fraud. In this case, the name is not inherently one that led to passing off. In this case, the getup associated with the use of the name will probably lead to passing off. The order for transfer of the registration of the domain name would in principle be appropriate. Such an order was made at first instance in Marks & Spencer plc v One in a Million Ltd  FSR 265 and at the Court of Appeal there was no suggestion that this was inappropriate.
After the massive interest shown at the start of the internet phenomenon, and the predictions that the law was out of date and perhaps even out of touch, it is refreshing to see that the courts have had relatively little difficulty in applying existing principles to new fact scenarios. It is now almost commonplace to see decisions on the subject of domain names and courts seem to be astute in expounding the principles that should be applied.
It is worth again looking at the judgment of Aldous LJ, giving the judgment of the Court of Appeal in the One in a Million case where he said:
"In my view there can be discerned from the cases a jurisdiction to grant injunctive relief where a defendant is equipped with or is intending to equip another with an instrument of fraud. Whether any name is an instrument of fraud will depend on all the circumstances. A name which will by reason of its similarity to the name of another inherently lead to passing off is such an instrument. If it would not inherently lead to passing off, it does not follow that it is not an instrument of fraud. The Court should consider the similarity of the names, the intention of the defendant, the type of trade and all the surrounding circumstances. If it be the intention of the defendant to appropriate the goodwill of the other, or enable others to do so, I can see no reason why the court should not infer that will happen, even if there is a possibility that such an appropriation would not take place. If taking all the circumstances into account the court should conclude that the name was produced to enable passing off, is adapted to be used for passing off and, if used, is likely to be fraudulently used, an injunction will be appropriate. It follows that the court will intervene by way of injunction in passing off cases in three types of case: first, where there is passing off established, or it is threatened; secondly, where the defendant is a joint tortfeasor with another in passing off either actual or threatened; thirdly, where the defendant has equipped himself with or intends to equip another with an instrument of fraud.”
As with regular cases of passing off, a case-law is developing that shows how the courts will apply these principles. Very basically, where a defendant can provide a reasonable explanation of why the two domain names are similar (or even as good as identical), the courts will not intervene. Where the courts perceive that the defendant really has no good reason for the name, they will be quick to intervene.
These Reports have already given some good indications of the courts following this sort of approach. Thus, in Britannia Building Society v Prangley  Masons CLR 31, the defendant’s explanation of his registration of britanniabuildingsociety.com as a vehicle for providing labouring skills to Iran in the building industry was described by the judge as “wholly incredible”. On the other hand, in MBNA America Bank v Freeman the defendant’s explanation of his acquiring mbna.co.uk was that it stood for “Marketing Banners for Net Advertising” meant that the court would not intervene except to order that the name should not be transferred by the defendant to a third party (who might well use it as an “instrument of fraud”).
So, there is no new law here, but the application of the principles in this very active area will be of constant interest to practitioners.
Copyright and freedom of expression are balanced in Copyright Directive, says CJEU advisor