It was over 20 years ago, at the dawn of the internet age, that the case BT v One in a Million1 established the principle that the mere registration of a domain name could constitute passing off, and that in the hands of a cybersquatter, a domain name could be an “instrument of fraud”.

It is perhaps surprising, therefore, that it has taken until now for a court to agree that the same can be true of a trade mark application.

Litecoin Foundation Limited (LFL) launched its “Litecoin” cryptocurrency in 2011. In 2017 Inshallah Limited, which had no connection to LFL filed a UK trade mark application for LITECOIN (in upper and lower case). When LFL became aware of the application it asked Inshallah to surrender it, but Inshallah refused. LFL therefore filed its own application for “LITECOIN”, which was then opposed by Nasjet Limited – a company under the control of the same sole shareholder and director as Inshallah, a Mr Pepin.

In 2018 Nasjet changed its name to “Litecoin Exchange Limited”, which prompted LFL to issue proceedings in the Intellectual Property Enterprise Court small claims track, seeking an injunction to restrain Inshallah, Nasjet and Mr Pepin from passing off any goods, services or business as those of LFL.

An instrument of fraud

At first instance the court found in LFL’s favour and held that: (i) Inshallah’s trade mark application, which appeared publicly on the UKIPO register, did give rise to a misrepresentation to the public; and (ii) the application, and Nasjet’s change of name, constituted “instruments of fraud”.

Perhaps somewhat optimistically, the defendants appealed, but the decision was upheld by Deputy High Court Judge John Kimbell QC in the Chancery Division of the High Court. The judge agreed that Inshallah’s application was an actionable misrepresentation, as it was a public announcement of a purported connection with Litecoin, and inherently asserted a right and intention to use the sign when there was no such connection or intention. Judge Kimbell agreed with the first instance judge that the trade mark application constituted an actionable passing off for the same reasons as the registration of domain names did in One In A Million. He also agreed that Mr Pepin’s history of registering and selling domain names and trade marks in bad faith was relevant to his intentions regarding the application; and that the judge at first instance had been right to take it into account.

An additional tool

Whilst not a surprising outcome on the facts, the case does provide a helpful additional tool for brand owners, as it makes clear that, rather than just file an opposition, there is the option to seek an injunction to prevent passing off even before a defendant has put a mark into use.