Hot News – Issue 4

Injunction on use of ‘blue chip’ Internet names: In a recent High Court judgment blue chip companies such as BT, Ladbrokes, J Sainsbury and Marks & Spencer succeeded in obtaining a final injunction against a future threat of injury, therefore restraining someone else from using its name or trade mark as a domain name. [BT plc and Another -v- One in a Million and Others]

The judge found that the defendants – dealers in Internet domain names – had registered the names comprising the names of the plaintiff companies for future use and that there could only have been 4 possible uses for the domain names:

(1) sale to the enterprise whose name had been included in the domain name to avoid it falling into someone else’s control;

(2) sale to a third (unconnected) party who may use it for purposes of deception;

(3) sale to someone with a distinct (legitimate) interest, e.g. a solicitor called John Sainsbury;

(4) retention by the dealer which would block the use of that domain name by others including the plaintiff companies.

It was held that merely registering the names was not a passing off. However, on the basis that what had been done was calculated to infringe the plaintiff companies’ rights, the judge granted a ‘quia timet’ injunction to restrain a threatened (rather than an actual) wrongdoing, i.e. the future use or sale of the names. The defendants were also ordered to assign the registered names to the respective plaintiffs.

Football TV Rights Case set to come to Court: The Restrictive Practices Court, which has to decide whether agreements referred by the Office of Fair Trading are in the public interest, will examine the exclusive broadcasting agreements between English football’s Premier League and BSkyB/BBC. The case will be heard in January 1999 and may continue for 12 weeks. One of the agreements relates to the rules and regulations of the FA Premier League Ltd, which require member clubs to seek permission before selling television rights to broadcasters; this has enabled the Premier League to sell these rights collectively. The other 2 agreements in dispute concern the exclusive broadcasting obtained by the BBC and BSkyB for the matches up to the end of the 2000/1 season.

Resellers’ advertising materials and trademark infringement: The European Court of Justice has given a preliminary ruling on a Dutch case concerning an action brought by Christian Dior against Evora for trade mark infringement. Evora operates a chain of chemists shops under the name Kruidvat which sells Dior products obtained by means of ‘parallel importation’ (i.e. where goods are marketed with the rights owner’s consent elsewhere and imported from there without the licence of the rights owner). The legality of retailing the products was not challenged by Dior. Kruidvat advertised the sale of the Dior products in its advertising leaflets. Dior contended that the advertising did not correspond to the luxurious and prestigious image of the Dior trade mark.

The Court held that:-

1. when trade marked goods are put on the Community market either by the proprietor of the trade mark or with his consent, a reseller is free to make use of the trade mark for the purpose of advertising to the public;

2. the proprietor of the trade mark, or holder of the copyright, may not oppose the use of the trade mark for advertising purposes by a reseller who habitually markets articles of the same kind but not necessarily the same quality, unless the proprietor establishes that the use of the goods for that purpose seriously damages their reputation.

Therefore, proprietors of goods through out the EU who consent to their goods being on the market will not be able to object to the use of their trade marks in advertising unless they are able to establish that the reputation of the goods is seriously damaged by that advertising.

Shetland Web case issues remain unresolved: the dispute between two Shetland Islands news services regarding hypertext links and copyright was settled out of court in November. A full legal decision would have given much-needed guidelines on the place of copyright in the regulation of the Internet. The case concerned Shetland Times news stories which were directly linked to headlines on a Web site run by Shetland News. The absence of a judgment means that questions remain regarding the extent to which hyperlinking amounts to copyright infringement. An additional issue of the copyright protection afforded to newspaper headlines was also left unresolved. Along with the issues in the Shetland case, possible infringement of the new database right under the proposed Copyright and Rights in Databases Regulations will have to be considered in the future by those designing or operating Web sites.

Tribunal Rules on Cost of Using Music: The Copyright Tribunal has published its interim decision in the dispute between the satellite and cable broadcaster, BSkyB, and the UK performing right society, PRS. The case centred on the amount BSkyB should pay to the PRS each year for the music it uses. PRS had argued that it should receive royalties based on a percentage of BSkyB’s revenue, whereas BSkyB wanted any payment to be linked only to its viewing figures. In the event, the Tribunal decided in favour of a formula consisting of two elements: $2.5 million, based on audience share (to be adjusted in future years to take account of inflation and changes in BSkyB’s viewer hours), and $2.1 million, representing an uplift for broadcast hours (adjustable to reflect any change in the number of BSkyB’s channels as compared with 1995). The parties are also required to sign a 5-year licence, dated from the date the case was referred to the Tribunal (29 May 1996), which reflects the payment formula.

Before the decision can become final, both sides must agree the findings and resolve some technical details. However, it seems likely that the PRS and BSkyB will accept the terms because the PRS is set to receive more money than BskyB had originally offered to pay whereas BSkyB is satisfied that the proposed formula is not based on its revenues.

Bulletins are for general guidance only. Legal advice should be sought before taking action in relation to specific matters. Where reference is made to Court decisions facts referred to are those reported as found by the Court. Please note that past bulletins included in the Archive have not been updated by any subsequent changes in statute or case law.