• COURT DIARY

    The Correct Choice Of a Domain Name

    A recently reported UK case (eFax.com Inc. v. Oglesby) illustrates the dangers of choosing a relatively descriptive domain name.

    In February 1999, eFax.com, a US based computer hardware supplier, introduced a new Internet based service. This was the automatic conversion of faxes to e-mails. Subscribers to this (free) service first logged onto the US company’s website at www.efax.com and were then allocated a US telephone number for use as their "efax number". Faxes sent to that number were automatically converted into digital form and forwarded to the subscriber’s e-mail address, where they were received in e-mail form. The service, which relied on advertising at its website to raise revenue, was an immediate success. By September 1999, there were over 1.4 million subscribers worldwide, with about 17,000 in the UK, 5,000 of whom had actually used the service.

    The disadvantage of the original eFax service to UK subscribers was that each fax message sent involved the cost of a telephone call to the US.

    In November 1999 therefore, following an extensive advertising campaign, eFax.com relaunched its service in the UK, allowing UK subscribers to choose UK telephone numbers.

    At the same time as their initial launch in February 1999, eFax.com had also made enquiries with a view to acquiring the UK domain name efax.co.uk. However, they found that it was already owned by Mark Oglesby. Mr Oglesby had originally acquired the efax.co.uk domain name in February 1998. He offered a number of services at his website, one of which was the manual (by retyping) conversion of e-mail messages into faxes and vice versa. He made a charge for this service to the few (nine) customers that he had. From about mid-1998 onwards, Mr Ogelsby also began funding the development of an automated e-mail/fax conversion service. Having discovered that efax.co.uk had already been registered, the US company approached Mr Oglesby with an offer to purchase the UK domain name. However, the offer was declined. Rather than selling the name, Mr Ogelsby preferred to continue his own automated service and by September 1999, he had produced a working system and had signed up his first paying customer. The revised www.efax.co.uk website went online at the beginning of October 1999.

    Having been rebuffed in February 1999, the US company made two further approaches to Mr Ogelsby, but on both occasions their offers to purchase the UK domain name were turned down. eFax.com then decided to take a legal rather than commercial approach to the problem and, after the usual round of letters before action, they issued proceedings in November 1999. In these proceedings, they sought a preliminary injunction restraining Mr Ogelsby from using the trade mark efax in relation to an automated internet based fax to e-mail and voice to e-mail unified messaging service.

    The Judge (Mr Parker) having decided that damages would not be an adequate remedy for either party then considered where the balance of convenience lay and, in view of that, whether or not the preliminary injunction requested was justified. Mr Parker made the following observations,

    • The US company effectively came to the UK market in November 1999 when they made UK telephone numbers available to UK subscribers. By that date, Mr Ogelsby’s automated fax to e-mail service had been available to the UK public for two months at his efax.co.uk website.

    • On the evidence before the Court, there was considerable force in the submission that the word "efax" is essentially descriptive and that it is already widely used on the Internet to denote a unified messaging service combining fax and e-mail.

    • For the purposes of a passing off action, the only confusion which is relevant is that which results from a misrepresentation by the defendant.

    • Quoting from the Office Cleaning Services case (1945 (63) RPC 39), "where a trader adopts words in common use for his trade name, some risk of confusion is inevitable. But that risk must be run unless the first user is allowed unfairly to monopolise the words".

    • To the extent that efax is descriptive of and generic in relation to the defendant’s business, the use of it by the defendant in relation to his business cannot amount to a misrepresentation or deception and any resulting confusion from mere description cannot be relied on in support of the claim in passing off.

    • Any confusion which may result from the fact that both the US company and Mr Ogelsby are offering similar services in the UK under the name efax will in all likelihood be attributable to the descriptive nature of that name rather than to any misrepresentation by the defendant. The fact that Mr Ogelsby charges for his service (and eFax.com does not), together with the different appearances of the two websites, should indicate to a visitor to the efax.co.uk website that the defendant’s services are not those associated with the US company.

    On this basis, the Judge refused the preliminary injunction requested and allowed Mr Ogelsby to continue running his UK domain name pending the full Court Hearing of the passing off action.

     

    Comment

    In his evidence in this case, Mr Ogelsby stated as follows, "The golden rule in selecting a domain name is to be obvious; identify what most people will look for and pick that for your domain name. To be able to be found is everything on the Internet".

    The outcome of this case casts some doubt on this reasoning, at least in so far as the domain name is also used as a company name and a company’s principal trade mark. The Internet is really no different to any other area of commerce. The more descriptive a domain name (or company name or trade mark), the more likely competitors will be able to use a name (or mark) that is very close to the original. This is bound, in the long term, to lead to a loss of business.

    A better strategy is to choose both an original and imaginative name and a descriptive name and to register both as domain names. The former would also be registered as a trade mark and, in appropriate cases, as a company name. The descriptive name could be used as bait to attract surfers to the main company website. Thus, if a pharmaceutical company sold an anti-migraine product it would want to own both the domain names migraine.com and headache.com and to use these sites to attract potential customers to their company website, at which their proprietary treatment and its benefits to sufferers would be discussed.

    In relation to the case in point, it is noted that the plaintiff, eFax.com, Inc., owns a US trade mark registration for E-fax covering relevant Class 38 services, as well as a UK trade mark registration for Efax covering computer software and programs and a German registration for the same mark covering facsimile apparatus. It is therefore likely that, even if Mr Ogelsby wins the full action in the UK, he will still face difficulties in running his website on a worldwide basis.