Alleged PHONES 4U mark infringer has no case to answer

In Phones 4U Ltd v Phone4u.co.uk Internet Ltd (Case [2005] EWHC 334 (Ch)), the High Court of England and Wales has ruled that the defendant's use of the sign 'phone4u' as part of its domain names did not amount to passing off or trademark infringement of the plaintiff's PHONES 4U mark.

Phones 4U Ltd operates a chain of shops called Phones 4U through which it sells mobile phones. As at the end of 1999, it had approximately 63 retail shops and an annual turnover of £43,685,754. It is the registered proprietor of PHONES 4U as a device mark, limited to the colours red, white and blue.

In August 1999, the owner of Phone4u.co.uk Internet Ltd registered the domain name 'phone4u.co.uk'. The website, which offers for sale mobile phones, became active in early 2000. In 2001, he also purchased the domain name 'phone4u.com'. Phones 4U later brought a claim against Phone4u.co.uk, which was heard in January and February of this year, arguing that its use of the sign 'phone4u' infringed its trademark rights and/or amounted to passing off.

The High Court rejected both claims. It accepted the registrant of the domain names claim that when he registered 'phone4u.co.uk' in August 1999, he was unaware of Phones 4U. This seems to have been a generous finding, given Phone 4U's evidence that (i) by this time there was a Phones 4U shop in Oxford Street, London near the registrant's place of work, and (ii) there had been coverage of Phones 4U in the trade press.

The basis of the decision in relation to passing off was the court's finding that Phones 4U did not have sufficient goodwill or reputation in the expression 'Phones 4U' in August 1999 to found an action for passing off. It considered that the phrase was descriptive, and had not acquired sufficient distinctiveness through use. It also observed that while Phones 4U could demonstrate numerous instances of confusion (such as misdirected emails), there was very little evidence of actual deception leading to a loss of sales.

The court's finding that Phone4u.co.uk's activities did not amount to trademark infringement was based on the fact that the PHONES 4U trademark was limited to the colours red, white and blue, and Phone4u.co.uk did not use the mark in this way. There was no discussion at all of the fact that the registered trademark was a device mark, not a word mark.

While the finding that Phones 4U did not have sufficient goodwill in 1999 to found an action for passing off seems fairly surprising in the circumstances, the lack of evidence of damage after some five years would probably have proved fatal to Phones 4U's passing off claim in any event. It will be interesting to see whether the decision is appealed. It seems likely that if Phones 4U had issued proceedings for passing off earlier it may have been successful, if only because the quality of the evidence would have been better.

Jane Glover, Ashurst, London