Judge applies One in a Million principle against CyberScot

If you've seen this movie, you
probably ARE one in a million

It's not often that tytoc collie ventures into the remote and exotic surroundings of the Queens Bench Technology and Construction Court, but he has found this delightful little gem from a judge he never knew existed, Mr Justice Edwards-Stuart. The case is Lifestyle Management Ltd v Frater [2010] EWHC 3258 (TCC) and judgment was given last Friday.  In just a few short paragraphs the judge gave interim relief to two foreign companies in their dispute against a Scottish cybersquatter who was not only using near-identical domain names but was allegedly infringing copyright, passing off and acting in breach of confidence.  Since the defendant was demanding money from the claimants, the judge had the opportunity to apply the Court of Appeal's ruling in One in a Million, in which the notion of an adversely-held website being an "instrument of fraud" was espoused.  Since the judgment was so short, the Kat is reproducing almost all of it here.  It's interesting for the jurisdictional issue too.

"... The Claimants are companies registered in Kenya and the British Virgin Islands, respectively. The Respondent lives in Scotland.

The Claimants carry on business in, I assume, Kenya as financial advisers to expatriates from the United Kingdom working, mainly, in Africa. The Claimants engaged the Respondent as an agent. The terms of that contract are not relevant to this application save for the fact that it contained no jurisdiction clause. That contract has now been terminated. The Respondent claims that he is entitled to commission under the terms of the contract which the Claimants have not paid. The Claimants deny that the Respondent is owed any commission, or at least that he is owed as much as he claims.

... The Claimants have a website with the domain name "offshorelsm.com". According to this evidence the Respondent has registered the domain names "offshorelsm.net", "offshorelsm.org" and "offshorelsm.co.uk". If one goes to these websites there is on at least one of them a home page that bears a very close resemblance to the home page of the Claimants' website. On one, if not both, of the others the Respondent has set out confidential extracts of the Claimants' presentation (or method of presentation) to clients and a photograph of the members of the Claimants' staff. These websites contain material that it is arguably defamatory of the Claimants and which is certainly calculated to damage their business.

The Respondent has made it quite clear that he intends to "cyber squat" using these websites until the Claimants pay the sum that he is currently demanding. The terms of his e-mails to the Claimants make it clear beyond any doubt that his intention is to injure their business and to go on doing so for as long as his demand for payment is not met. One of the websites says this in terms.

Mr Matthew Richardson, who appeared for the Claimants ... submits that the Respondent is using these domain addresses, together with the simulation of the Claimants' home page, to deceive clients of the Claimants, or companies and organisations in England who may refer clients to the Claimants, into going onto one or other of his websites in the belief that they are the Claimants' website and then using the content of those websites to damage the business of the Claimants.

Mr Richardson submits that the Respondent's conduct amounts to the tort of using unlawful means to injure another or is a form of reverse passing off, in the sense that having deceived potential clients to go onto his websites they are then exposed to information that is intended to damage or to undermine the credibility of the Claimants' business.

In my judgment the conduct of the Respondent as disclosed in the evidence before me establishes the threefold requirement of (1) a reputation (or goodwill) required by the Claimants in their domain name"offshorelsm.com", (2) a misrepresentation by the Respondent's use of domain names calculated to lead potential clients of the Claimants into thinking that his three websites are websites of the Claimants and (3) damage to the Claimants ... 

Mr Richardson has also referred me to the case of British Telecommunications plc v One in a Million Ltd [1999] 1 WLR 903, a case which the defendants registered the claimants' company names as domain names as part of a scam to gain money from the legitimate owners. Aldous LJ said, at 920:

"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 upon 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 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 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 a 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. Second, where the defendant is a joint tortfeasor with another in passing off either actual or threatened. Third, where the defendant has equipped himself with or intends to equip another with an instrument of fraud. This third type is probably a mere quia timet action."

Whilst the facts of this case are not the same as those in One in a Million, it seems to me that the essential ingredients of a deceptive use of a company name with an acquired goodwill in order to damage the owner of that name are present here.

The problem that troubled me when this application first came before me last week was whether or not I had jurisdiction to entertain the application. As I have mentioned, the Respondent lives in Scotland. Schedule 4 to the Civil Jurisdiction and Judgements Act 1982 provides that persons domiciled in a part of the United Kingdom shall be sued in the courts of that part unless the case comes within rules 3 to 13 of the Schedule.

Mr Richardson relies on rule 3(c). This provides that a person domiciled in part of the United Kingdom may, in another part of the United Kingdom, be sued . . . in matters relating to tort "in the courts for the place where the harmful event occurred or may occur".

Mr Richardson submits, and I accept, that in the circumstances that I have already described potential clients of the Claimants, or companies or organisations who employ such clients and with whom I am told the Claimants enjoy a relationship, may go on to one of the Respondent's websites in the mistaken belief that it is the website of the Claimants - thereby being deceived - and will then be put off by what they find there. This, he submits, is a harmful event within the meaning of rule 3(c) of Schedule 4 of the 1982 Act with the result that the claimants can sue the Respondent in the courts of England and Wales.

I have been persuaded on the evidence before me that this submission is a good one. The evidence indicates also that the Respondent is in possession of the Claimants' confidential database of their clients.

Accordingly, I am satisfied that this Court has jurisdiction to entertain the application and that interim relief should be granted, against the usual undertakings, in the form that I have set out above.

I am not prepared to make the order requiring the Respondent to relinquish his interest in the three websites that I have identified, or to transfer the domain names to the Claimants, without giving the Respondent an opportunity to be heard. I have therefore adjourned that part of the application to the return date".

tytoc collie looks forward to the next instalment.

Why BBC stalled in race with The Stig

The BBC's next great idea, "Junior Top Gear"
 -- but will little Tommy overtake The Stig in popularity?

Readers with a mild interest in the parameters of commercial privacy/publicity, or with an obsession with the BBC's "Top Gear" television series, may recall tytoc collie's posts here and here on the unsuccessful efforts of the British Broadcasting Corporation to secure an interim injunction to prevent Ben Collins ,the human being whose persona as "The Stig" was the subject of much attention and speculation, from revealing in his biography who he really was. tytoc collie guessed what had happened, and his guess was confirmed at the time -- but now the full judgment of Mr Justice Morgan (Chancery Division, England and Wales) is available for all to read and (unless they do the BBC's contract work) enjoy. In short, there was a contract between the BBC and Collins' service company, but no contract and no obligation of confidentiality owed by Collins himself to the BBC.  As the judge put it,

"My conclusion is that Mr Collins was not a party to the relevant contracts. Although Mr Collins signed the contracts, he did so on behalf of the service company which was expressed to be the relevant contracting party, for which he signed. He did not, by his signature, become a further party to the contracts. The BBC contends that Mr Collins must have been a party to, at any rate, some of the earlier contracts because those contracts contained an obligation on the other contracting party that "you will not reveal your identity". It is said that it cannot have been intended that the service company would not reveal its identity; it must have been intended that Mr Collins would not reveal his identity. Therefore, it is argued, the contract must be directly binding on Mr Collins and it should be held that Mr Collins made himself a party to the contract for the purpose of taking on this obligation, but not, apparently, for any other purpose. I agree that the language of the obligation referring to "you" and "your" is not ideal given that the other contracting party is prima facie the service company. The real reason for that is that the parties did not think through the consequences of the fact that the contracting party was the service company rather than the individual performer. There are a number of ways for a court to react to this state of affairs. One is to take the contract literally. That produces the result that the service company contracted not to reveal its identity. That is not an absurd suggestion; if the service company had revealed its identity, that would indirectly reveal the identity of Mr Collins. Another way to read the contract is to hold that the service company contracted not to reveal its identity or the identity of Mr Collins. In my judgment, it is appropriate to hold that the contract is to be read in one or other of those ways and it is not appropriate to hold that Mr Collins himself entered into the contract for the sole purpose of entering into the obligation in question ...".

What about any duty of confidentiality which, apart from the contract, Collins might owe to the BBC? Yes, the judge said, such a duty of confidence existed.  However, that did not avail the BBC since, on the evidence the cat (metaphorically speaking) was out of the bag.

" I will ask whether the identity of The Stig is so generally accessible so that, in all the circumstances, it can no longer be regarded as confidential. In my judgment, the press coverage, in particular the press coverage in August 2010 [nb the BBC's claim was lodged on 17 August and was heard on 31 August/1 September], goes well beyond speculation as to the identity of The Stig. The statements in the press that Mr Collins was The Stig would be understood by the public as statements of fact. The number of different newspapers which have stated that fact is such that the fact is now generally accessible. For all practical purposes, anyone who would have any interest in knowing the identity of The Stig now knows it. The identity of The Stig is no longer a secret and it is no longer confidential information. I conclude that at the latest by 29th August 2010, the date of the last of the thirteen publications (between 19th and 29th August 2010) to which I referred above, the fact that Mr Collins was The Stig was so generally accessible that that information had lost its confidential character. At the lowest, I think it is likely that the court at any trial of this action would reach that conclusion".

All things considered, this was not good news for anyone seeking an interim injunction:

"Such an injunction would not protect the claimant from harm caused by the unlawful action of a defendant. Although such an injunction would deprive the defendant of a benefit, it is not a proper use of the court's power to grant an injunction merely to punish a defendant for his previous unlawful action, where the injunction does not protect the claimant against further harm, unlawfully caused. The court may award a financial remedy to a claimant in such a case, but that is not the remedy sought by the BBC on this application.".

This must be right, as far as it goes, says tytoc collie, but it does raise questions as to the bases under which the BBC might seek damages or equitable remuneration at some later stage -- if they have not already contemplated doing so.

What's The Stig doing now? Click here, here and here
A speedy Morgan here