Foreign business requires plenty of UK customers to show local goodwill

This article was included in the winter 2011/12 issue of snIPpets - the intellectual property newsletter.

Introduction

The High Court has upheld a decision of the UK Intellectual Property Office (UK-IPO) in the Plentyoffish Media Inc v Plenty More passing off dispute that a foreign business requires actual customers in the UK in order to prove the existence of goodwill in the trading name. It is consistent with previous case law which confirms that it is not enough for a foreign company to assert that it has a reputation in the UK in order to succeed in a passing off claim; it must also demonstrate the existence of customers at the requisite point in time.

Facts

Plentyoffish Media Inc. ('Plenty of Fish') is a Canadian company that has operated an online dating agency in the United States from the URL plentyoffish.com since 2001. Plenty of Fish runs one of the world's largest online dating agencies and claims to have the second most viewed dating website in the UK.

Plenty More LLP ('Plenty More') is a UK company that created its online dating service from the URL plentymorefish.com in around September 2006. Plenty More applied to register 'plentymorefish' ('the Mark') in 2007. Its application was granted and Plentyoffish opposed on the basis of its passing off rights. Plenty of Fish argued that although it was based in Canada, it had acquired goodwill in the UK in the sign "Plenty of Fish" (and "plentyoffish" and "plentyoffish.com"), and that Plenty More's use of the Mark would cause a misrepresentation to the public and that damage was likely to, or would arise. Conversely, Plenty More argued that Plentyoffish was not able to demonstrate sufficient goodwill in the UK, because it did not have any 'customers' at the relevant time.

The UK-IPO Registrar rejected the opposition on the basis that Plenty of Fish could not claim any goodwill in the name in 2007. Although Plenty of Fish had provided significant evidence of reputation (around 4 million UK 'hits' to the website per year), they were unable to prove the existence of any actual customers (members of the public who actually joined the site) prior to 27 April 2007.  The Registrar confirmed that the establishment of goodwill required a business, and to have a business it was necessary to have persons with whom the business traded.  Visitors to a website did not constitute customers, since visiting a website neither created a business relationship, nor a business in the jurisdiction. The Registrar dismissed the application to invalidate the Mark and Plenty of Fish appealed.

The Appeal

The High Court dismissed the appeal.

Birss J reviewed a number of cases on the law of passing off, most notably the authorities dealing with foreign businesses that did not trade in the UK, but had established a reputation there (see Pete Waterman Ltd v CBS United Kingdom [1993] EMLR and Hotel Cipriani v Cipriani (Grosvenor Street) Ltd [2010] RPC). It was held that the latter authority, which concluded that: "an undertaking which seeks to establish goodwill in relation to a mark for goods cannot do so, however great may be the reputation of his mark in the UK, unless it has customers among the general public in the UK for those products", was binding. Because Plenty of Fish failed (in spite of the number of hits to its website) to provide evidence that it had even a single UK subscriber for its dating services by 27 April 2007, it could not demonstrate the requisite goodwill in the name in the UK, and so the appeal was dismissed.

In practice

This case has provided further useful clarification on the establishment of goodwill claims by foreign businesses, following previous authorities in the area (such as Pete Waterman and Hotel Cipriani).  It has emphasised the importance of being able to demonstrate the existence of actual customers for the purposes of a passing off claim, whether the business provides goods or services, and irrespective of whether its services are provided for free (as they were in this case). This case will serve as a warning to foreign-based businesses which are unable to demonstrate such a customer base in the UK.

Laura Kelly, Trainee Solicitor, IP Protection and IP Enforcement and Litigation at Fieldfisher.