Introduction

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

  1. 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”.
  2. 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.
  3. 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.

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