Radio Taxicabs v Owner Drivers

Out-Law Guide | 02 Nov 2007 | 8:31 am | 12 min. read

In a dispute over the use of the registered domain name radiotaxis.com it was shown that a domain name need not always be treated as a trade mark, but may just describe a service and its use therefore would be non-infringing.

Radio Taxicabs (London) Ltd v Owner Drivers Radio Taxi Services Ltd

  • Unreported, Chancery Division, 12 October 2001

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Facts

Both parties were “Radio Circuits” (or “Circuits”) for licensed black cabs in London. There are four such Circuits including the parties, and the parties were incorporated in 1953.

The Claimant’s original name was “Radio Taxicabs (Southern) Limited” but this was changed in the early 1980’s to “Radio Taxicabs (London) Limited. The Claimant’s Circuit has some 1,700 subscribers owning between them some 2,650 black cabs. It has 7,000 account customers, made up as to some 40-50% large corporate customers, 40% medium or smaller size business and 10% private individuals. The turnover for the year ended 30th November 2000 was around £40 million.

The Defendant’s Circuit is slightly smaller than the Claimant’s Circuit. Its subscribers own between them some 1,850 black cabs. About 90% of its account customers are businesses against 10% private individuals. The turnover to 25th August 2000 was £37 million.

To put the figures in context, there are some 23,000 licensed black cabs operating in London, about 7,500 of which are owned, part owned or operated by member subscribers of one of the four Circuits.

Each of the Circuits provides its members with computer terminals and radio equipment so they can receive jobs from a data despatch system. They provide their members with the facilities to take credit card payments, which most ordinary black cabs will not do. The Circuits charge the members an admission fee and then a periodic subscription. The Circuits are therefore in competition for cabbies, mostly those who are not already part of a Circuit, but also some who move between Circuits.

There are two distinct markets for these Circuits – the “trade” and the “general public”. Regarding trade customer, there is considerable competition for business from the transport managers who place business with Circuits. Such business contracts can be very lucrative, and transport managers do switch from time to time between Circuits.

Some individuals hold accounts with a Circuit, but there is a lot of business placed by ordinary members of the public who just want to phone for a black cab. However, this custom generates no income for the Circuit unless the payment is by credit card (and normally, of course, payments are made in cash).

The Claimant accepted that the expression “radio taxi” was generic or descriptive and indeed featured in the Oxford English Dictionary. A yell.com search showed some 60 businesses in England which incorporated the words “radio taxis”. The expression also featured in many web sites of businesses providing this service, including some based in London. A search on Google threw up over 68,000 references world wide. Another use of the term in Greater London was outside terminals at Heathrow.  The Claimant had raised no complaint about the use of the term “Licensed Radio Taxis” as used by the Defendant in its promotional leaflets between 1984 and 1990.

On the internet, users commonly use a search engine to find the address of what they want to find. The simpler ones simply look for the same or similar domain names as the search request. Others look at domain names and also “tags”. Businesses therefore not only register their exact name as a domain name but also domain names which reflect what they do. Thus, “insurance.com” is owned by Fidelity Investments and “tvhire.com” is owned by Parmenters.

The Defendant became interested in the internet before the Claimant and its site (whose primary address is dialacab.co.uk) went on line in or around April 1998. However, less than 0.5% of the journeys booked by the Defendant’s account customers are booked over the internet.

The Defendant caused an automatic link to be set up so that radiotaxis.com directed users to dialacab.co.uk. This automatic redirection was in force for some two years until about May 2000. The Claimant’s letter before action was dated 23rd May 2000. Other links were set up by the Defendant by its internet agents (including one redirection from radio-taxis.co.uk to the Defendant’s web site, though this happened from a failure of communication rather than a deliberate policy on the part of the Defendant).

The Claimant set up a web site in 1998, promoting the web address on the door of members’ cabs. Although the Claimant had spent some £500,000 on setting up a booker site, it had only reached the stage of trialling for some of its account customers.

Both parties had registered a variety of names with some odd consequences. The Claimant had registered the domain name radiotaxis.co.uk, but not radiotaxis.com. The Defendant had registered dialacab.com in late 1996 but did not renew it three years later so that someone else had subsequently taken the registration.

Both the parties’ web sites had been updated in the course of time, but there was incomplete evidence as to the contents of those web sites as at any particular time.

The Claimant’s case as it was ultimately put was that the combination of the registration of radiotaxis.com and the automatic redirection for a period of time to dialacab.com amounted to passing off. However, there was no evidence of any actual confusion – despite the fact that the redirection was in force for some two years and despite the large amount of traffic on the web sites.  In fact, the Claimant’s chairman conceded in evidence that there was no evidence of confusion.  Confusion is, of course, a requirement in proving passing off claims concerning unregistered trade marks.

Had the case concerned the alleged infringement of a registered trade mark, confusion would not have been necessary (provided that the mark was identical).  The Claimant had, indeed, made some applications for registered trade mark protection. There was an application for registration of “Radio Taxis” as a word mark in March 1998, which was rejected. A further application was made for a word and device in December 1999 and another application for a word mark was launched in February 2001, well after these proceedings had been commenced.

Judgment

Reputation/distinctiveness

The Claimant asserted that it had since 1953 provided a telephone booking service for taxis under the name “Radio Taxis” and produced evidence to show the extensive promotion of the name – including a range of business stationery, advertisements, handout cards and so on. As far as the trade was concerned, the Claimant was known as “Radio Taxis” and, although there were some other names that had been used, this expression had come to be associated with the Claimant in the trade. However, the Claimant had to concede that there was no real risk of confusion within the trade.

As far as the general public was concerned, this was a different matter. There was no evidence that the Claimant was known to the general public other than as “Radio Taxis”, however, the burden of proof on this issue lay with the Claimant. This was all the more so given the descriptive nature of the name, the fact that there was no real risk of confusion with established account holders and the evidence of the cabbies themselves.

The evidence pointed to the Claimant having used a variety of trading names over the course of time, although the use of “Radio Taxis” did seem to be used as part of a distinctive logo or “get up”. It was possible that the Claimant had built up a sufficient reputation as a result of all the evidence of promotional activities, but it could not be put any higher than that. The Claimant had therefore not discharged its burden of proof.

Misrepresentation/Reasonably probable deception

The Claimant had put its case on the basis of the representation implicit or inherent in the combination of the use of the domain name radiotaxis.com and the operation of the automatic direct link.

It was unsafe to assume that a domain name has to be regarded as the name of a business – there were many examples of where a domain name was a description of a service. The Defendant correctly submitted that, even in a case where a secondary meaning of descriptive words as being generally associated with the claimant’s goods has been established, their use in a context where their meaning is descriptive will defeat a claim in passing off. The question therefore was whether the use of the domain name together with the automatic direct link was calculated or likely to lead to the belief on the part of members of the general public that the Defendant’s business was connected with that of the Claimant.

On the evidence, the Defendant’s actions had not amounted to such a representation. It was valid to take into account the nature of the words which are used in the trade name, the circumstances and peculiarities of the trade, the motives, proved or presumed, of the trader who would use the words and other factors.

In this case, the expression “radio taxis” was descriptive, and descriptive or generic internet domain names are in general usage. The Defendant’s motives in registering and using radiotaxis.com were to promote its services in supplying radio taxis. A further factor is that the domain name, as a domain name, was different from the Claimant’s trading name of “Radio Taxis” – such difference was inevitable by virtue of the way domain names are written. Significant additional support was to be found in this by the complete absence of evidence of confusion over a period of two years. Accordingly, there was no evidence that a relevant misrepresentation had been made, and no likelihood that any relevant misrepresentation would be made in the future.

Damage

The Claimant had submitted that the likelihood of damage was obvious, because where there was a likelihood of deception, damage was almost bound to follow. The Claimant pointed to the account creation feature of the Defendant’s web site.

However, there was no likelihood in fact that a visitor to the Defendant’s web site from the automatic link would believe it to be the Claimant and would not believe that an application was being made to the Claimant or an associate of the Claimant.

Commentary

We report two domain name disputes in this issue, but they raise rather different points and so two comments will be given.

The basic problem surrounded the fact that the Claimant’s name was descriptive of the services provided. As any user of the internet will appreciate, use of a descriptive name on the internet is a positive boon, since it is likely to show up on more searches, and even if a surfer simply types in the descriptive name as a URL, it will still serve its function, as the surfer will end up at the site. The deputy judge in fact gives some examples of this – including insurance.com which, as previously mentioned, directs the surfer to a web site owned by Fidelity Investments.

Of course, with trade marks, the converse is true – in this case, distinctiveness is the trade mark owner’s friend. A good trade mark is generally one that does not describe the product or services it is attached to – Kodak is the classic example.  However, as many such owners have found out, even distinctiveness may not be the end of the story – there are many examples of where even a distinctive mark can become just the generic name for a product e.g. “Hoover” to mean any vacuum cleaner. There was a report recently that Sony had lost an action in Austria to restrict the use of “Walkman” to Sony’s portable products.

This was the problem confronting the Claimant in this case. To get around the obvious difficulties, it put its case on the basis that what was complained of was more subtle than just an appropriation of the name. In this case, the complaint was the combination of the use of the domain name registration as well as the automatic direct link from the equivalent web address to pages displayed at the Defendant’s principal web address.

The deputy judge fully considered the law relating to descriptive names. The starting point for any such mark is still Office Cleaning Services v Westminster Window and General Cleaners (1946) 63 RPC 39. In this case, it was a question of the plaintiff’s name (Office Cleaning Services) finding competition from the Defendant’s trading style, Office Cleaning Association. What came out of that decision of the House of Lords was that where such a descriptive name had been adopted, it was not impossible that an action for passing off could be maintained, but that even small differences between the parties’ names might suffice to avoid liability.

However, what could be derived from the authorities was that the Defendant’s intention was to some extent a relevant consideration. British Telecom and ors v One in a Million and ors [1999] FSR 1 CA had to review this situation and, in a decision which is now well known, the court found that there is:

“ … a jurisdiction to grant injunctive relief where a defendant is equipped 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.”

Of course, in the One in a Million case, it was clear from the evidence that the defendant had systematically acquired “blocking registrations”. This being so, it was clear that the threat of passing off and the likelihood of confusion arising were made out beyond argument. The mere act of placing on the register of a distinctive name (like marksandspencer) makes a representation to anyone consulting that register that there is some sort of connection or association between the person making the registration and the owner of the goodwill in the name.

Aldous LJ made it clear in One in a Million therefore that the defendant’s intention could be key and in an oft quoted passage said:

“If it be the intention of the defendant to appropriate the goodwill of another or enable another or enable others to do so, I can see no reason why the court should not infer that it will happen, even if there is a possibility that such appropriation will 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."

What comes out of this case being reported is that use of such descriptive names in a domain name might well have reasons, very valid reasons, to be considered as bona fide use and need not automatically be put into the “instrument of fraud” category. In fact, the most obvious reason for using a descriptive term in a domain name is not for the sake of using it as a trade mark, but so that it will attract more people who are looking for that type of service or product. In other words, the use of a domain name might not be a reference to a business at all, but a description of the business offered.

This represents an important refinement of the general principles, perhaps made easier in this case where the Claimant’s name was so descriptive in any case. Overall, it is a sensible way to proceed. Trade mark law has always been reluctant to allow anyone a monopoly over a descriptive term – see the Office Cleaning Services case. The judgment is a sensible extension of this principle. What would be the situation if the Claimant were to object to a reference in the Yellow Pages or other hard copy directory to “radio taxis”?

Subsequent cases will illustrate how far this principle will develop. For the moment, any advice about trading styles will remain the same – avoid descriptive terms and choose something distinctive if at all possible. However, when looking at simply describing your business, then choosing a domain name that fairly describes your business will not necessarily infringe.  The obvious exception to this is where there is some element of intention to commit passing off.