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A recent high court judgment has made clear that actual
customers are required in order to prove the existence of goodwill
in a trading name; business reputation alone will not suffice. This
case will be of note to businesses seeking to protect their
unregistered marks in the United Kingdom and provides useful
guidance on defining "customers" in such cases.
Background
The appellant had operated an online dating agency in the United
States under the unregistered name "Plenty of Fish" since
2001. It applied to the Intellectual Property Office (IPO) in the
United Kingdom for a declaration of invalidity of another online
dating agency's "Plenty More Fish" trade mark
(registered in the United Kingdom in 2007) on the basis that the
appellant had goodwill in the United Kingdom in 2007 in its
unregistered name which should prevent the respondent from being
able to "pass off" its dating agency services as those of
the appellant. The IPO refused to make such a declaration as the
appellant failed to prove that it had any customers or business in
the United Kingdom on the date when the respondent applied to
register its trade mark, and so did not have any goodwill in the
name. The appellant appealed this decision in the high court
submitting that a "trade connection" was sufficient to
establish the existence of goodwill. The high court judge disagreed
and dismissed the appeal.
Points of interest
This case confirmed that customers in the United
Kingdom are necessary to establish goodwill. The judge
held that this was the case whether the business provides products
or services, and that "reputation alone was not
sufficient".
Visitors to a website do not constitute
"customers" unless they receive services or goods as a
result of such visit. The judge held that even though
visitors to a website may mean that a business receives revenue
from advertisers who advertise on the website, "for a member
of the public to be a customer... there still has to be some sort
of provision of the services in question". In this case the
appellant provided dating agency services, and although many
members of the public visited the site and so would have seen any
external adverts shown on the website, none constituted
"customers" as they did not become members of the
appellant's dating agency and so did not receive dating agency
services.
It is not necessary for customers to pay for goods or
services in order to constitute "customers".
According to the judge, "the concept of 'customers'
required by the English cases must include the people to whom
relevant services are actually provided even if, in a case like
this, they receive the services for free".
Summary
A business will need to establish they have customers who
receive their services or goods in the United Kingdom in order to
prevent competitors using marks similar to their own unregistered
marks using the law of passing off, but may be pleased to note that
these do not need to be paying customers. Under the law of passing
off, a business will also need to show that the competitor made a
misrepresentation to the public which has caused, or is likely to
cause, confusion as to who is providing the goods or services, and
that its business is likely to suffer damage as a result of such
confusion.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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