03 July, 2014

Retrospective - Trademarks and the Internet

The Internet has shaped our world in too many ways to even count, and the law and its application has not been exempt from this radical change. What had to apply in only a largely physical and restricted world, now has to operate in one which knows practically no physical or territorial bounds. Through this the use of intellectual property has become international, and the law's confides of struggle to fill the gaps left in this transition to a digital domain. An example of this is the use of trademarks, and whether their use online can infringe on the mark of others, even if done in a different jurisdiction. The answer, at least on the outset, is not an obvious one, but was faced by the United Kingdom Court of Appeals over a decade ago.

The case in question is 1-800 Flowers Inc v Phonenames Ltd, decided in the very first year of the second millennium, which dealt with the phone number "800-FLOWERS", registered in the US as a trademark in the mid 1980s by the company 800-Flowers Inc. The company ran a floral telemarketing company, selling flowers and floral products via telephone to those who called the number 1-800-FLOWERS (or numerically 1-800-356-9377), via the Internet and through physical locations, to destinations both in the US and outside of the country. Phonenames were a business which dealt with alpha-numerical phone numbers in the UK, much like the one above, acquiring them and selling them on to business who wish to use them. Phonenames acquired the number which equated to 800-FLOWERS in the early 1990s from British Telecom, although ownership of the number still remained with BT. 800-Flowers had applied for the same number prior to Phonenames, failing to acquire it while still advertising the new service in newspapers. 800-Flowers then appealed the issuing of the phone number, arguing it would lead to confusion as they could establish a firm presence and goodwill within the US. The matter was ultimately appealed to the Court of Appeals for a final decision.

The case included deliberations on sections 10, 11 and 17 of the Trade Marks Act 1938. Section 10, which deal with whether the mark is capable of distinguishing the 800-Flowers' service in the UK, allowing for its protection, was the first consideration. Lord Justice Parker saw that the usage of alpha-numerical numbers was foreseeable in the UK during the number's registration in 1993, however even then the number was only just that; a phone number, and would not be capable of distinguishing the appellant's services from others in purely that form. The appeal also failed under section 11, as there could not be any confusion since the appellant had not used the number in the UK, creating no prior use which consumers could reasonably believe would be the appellant's service.

What is more relevant to the question posed is under section 17. Under the provision a mark has to be used in the UK (emphasis the court's) to be considered a 'proprietor', defined more specifically under section 68. If no use is found, the appellant cannot be considered to owning the trademark in the UK. This is very important in the proposed Internet context, as the Internet spans vastly beyond the origin country where a website is ran or owned. Lord Justice Parker indicated a website does not necessarily in itself cause for there to be use in the UK, specifying that "...the evidence (such as it is) concerning the Applicant's internet website [is not] sufficient to justify the conclusion that accessing the website amounts to use of the mark at the point of access". Among other considerations, Lord Justice Parker refused the appeal, as there was no sufficient use on 800-FLOWER's part within the UK, even with the existence of the phone number and a website.

Lord Justice Buxton further considered the Internet in his deliberations, still agreeing with the majority's decision. In his mind the matter is still quite open, and needed to be addressed directly:

"The implications of internet use for issues of jurisdiction are clearly wide-ranging, and will need to be worked out with care both in domestic and in private international law... I do venture to suggest that the essence of the problem is to fit the factual circumstances of internet use into the substantive rules of law applying to the many and very different legal issues that the internet affects. It is therefore unlikely, and it is nowhere suggested, that there will be one uniform rule, specific to the internet, that can be applied in all cases of internet use. That consideration is of importance in our present case, because it was a significant part of the applicant's submissions that, for instance, "publication" of statements in a particular jurisdiction by downloading from the internet according to the rules of the law of defamation or of misrepresentation was of at least strong analogical relevance to whether a trade mark downloaded from the internet had been "used" in the jurisdiction to which it was downloaded; and, even more directly, that when A placed a mark on the internet that was downloaded by B, the same criteria should apply in determining whether A thereby used the mark as determine whether A thereby infringed the same mark in the jurisdiction where B was located."

Greg now understood that she wanted flowers, not carrots - a typical mistake
His honor finally rejected the potential notion that use on the Internet would amount to use in every jurisdiction the mark might be potentially accessed from, even via the net: "I would wish to approach these arguments, and particularly the last of them, with caution. There is 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". One can easily agree with Lord Justice Buxton, and as he further states, 'use' should entail a more active component than just passively placing in in a sphere where it is easily accessed from, even by accident. The active part could be an advertisement in that country, or something which encourages the use of the web facilities. To summarize one can quote Justice Jacob in the case's first appeal in the High Court: "...the mere fact that websites can be accessed anywhere in the world does not mean, for trade mark purposes that the law should be regarded as being used everywhere in the world. It all depends upon the circumstances, particularly the intention of the website owner and what the reader will understand if he accesses the site. In other fields of law, publication on a website may well amount to universal publication".

As one can see the Internet poses an interesting sphere where trademarks present their owners with an abundance of opportunities for exposure; however this has to be balanced with regulation and limiting the Internet's scope in terms of use. The Lords above are quite correct, but one can say the Internet has not had its last impact on trademarks.

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