Protection and Use of Trade Marks and Other Distinctive Signs

November 1, 2000

TheStanding Committee on Trademarks (SCT) of The World Intellectual PropertyOrganisation (WIPO) recently agreed in principle draft guidelines (Guidelines)intended to act as a guide to the legal problems resulting from the ‘use of asign’ on the Internet. The Guidelines are not limited to trade mark rights,but apply to all sorts of industrial property rights in signs that exist inMember States, including geographical indications and trade names.

A Trade Mark or Other Sign on a Web site

A trade mark is a sign which is used to distinguish the goods or services ofone undertaking from those of another undertaking. A trade mark on a Web site ispotentially accessible in any country in the world. One of the major problemssurrounding trade mark rights in relation to the Internet is that such rightsare territorial in nature – meaning that different owners in differentcountries can own identical or similar trade marks in respect of identical orsimilar goods in their respective countries. Therefore, there is a substantialrisk of a trade mark owner in one country infringing an identical or similarmark in another country by using a mark or sign on his Web site.

Prior to the Guidelines, a trade mark owner would address this problem bycarrying out a worldwide screening search before using a mark on his Web site toidentify any conflicting marks or signs. Under the new notification procedure, atrade mark owner will no longer be forced to undertake such a search.

Another practical way of addressing this issue is for a trade mark owner,where he has identified conflicting marks, to place a disclaimer on his site tothe effect that the goods or services being provided on that site are notavailable in those particular countries. The effect of such a disclaimer has notyet been tested in the UK courts. The Guidelines examine the effect ofdisclaimers.

A further option open to a trade mark owner is to use specialist technologyto block access to sites from countries where there are conflicting marks. It isnot clear whether existing technology can entirely block out all users in thoseidentified countries. The French courts in a recent case against haveordered an enquiry into whether it should force Yahoo to block French users fromthe sites that violate French national laws. Although Yahoo’s French site, not offer any Nazi memorabilia, French Web surfers can still access Yahoo!Auction pages, which offer such memorabilia. Yahoo! argue that, although it ispossible to prevent access to the Nazi sites in France, the technology it usesis crude and can be easily by-passed by anyone with any technological know-how.The French courts have appointed foreign experts to investigate ways of blockingthe sites and a hearing is set for 6 November 2000.

Rights in Trade Marks

The owner of a mark acquires the right to that mark in respect of certaingoods or services either by registration, through use or through notoriety (bythe mark becoming well-known) in respect of given territories. A trade mark hasto be distinctive in order to perform this function. Distinctiveness can beacquired through use or by the inherent nature of the mark.

If there is a conflicting claim to a trade mark right, the normal course ofevents is that the mark with the prior right in time prevails. Such priority canbe based on first use, first registration or the fact that a trade mark ownerwas well known prior to registration. One exception to this rule is where themark was acquired in bad faith, for example, where an agent registers a mark ina territory without the consent of his principal. In the UK, a trade mark ownercan prevent a third-party infringing or passing off an identical or confusinglysimilar mark by bringing a claim against that third party. Under the Agreementon Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement),Article 16.3, a trade mark owner is also entitled to bring a claim for theunauthorised use of a well-known mark in respect of dissimilar goods orservices.

The Guidelines

The Guidelines set out the basic principle that trade mark and otherindustrial property laws should apply to the Internet and are intended tofacilitate the application of existing laws relating to industrial propertyrights in trade marks or signs to the ‘use of a sign’ on the Internet.

Use of a sign

‘Use of a sign’ on the Internet is defined as ‘any use of a sign thatis simultaneously and immediately accessible irrespective of territoriallocation’. A ‘sign’ on the other hand is defined as ‘a sign thatdistinguishes or that is capable of distinguishing, in a commercial context, oneperson from other persons, one undertaking from other undertakings, or the goodsor services of one undertaking from those of other undertakings’.

A Commercial Effect

A sign on a Web site which does not produce a commercial effect in a MemberState is not deemed to be used in that State. However, if a sign produces acommercial effect in a Member State, what has to be determined is whether anindustrial property right in a mark or other sign has been established,maintained or infringed in that State.

The Guidelines provide a non-exhaustive list of factors to be taken intoaccount in determining whether or not the ‘use of a sign’ has produced acommercial effect, and whether such use can be deemed to have taken place in aMember State. Some of the key factors are listed below.

Circumstances indicating that the user of the sign is doing, or hassignificant plans to do, business in the Member State in relation to goods orservices which are identical or similar to those for which the sign is used onthe Internet:

The level and character of commercial activity of the user in relation to theMember State, including:

  • whether the user is serving customers in the Member State;
  • whether or not there is a clear and unambiguous statement, in the language(s) used on the Web site or used in the Member States disclaimed, to the effect that the goods or services are not available to persons in that Member State;
  • whether the user offers post-sales activities such as a warranty or service in the Member State;
  • whether the user undertakes further commercial activities in the particular Member State which are related to the use of the sign on the Internet but which are not carried over the Internet.

The connection of the goods or services with the Member State, includingwhether:

  • the goods or services offered can be lawfully delivered in the Member State;
  • the prices are indicated in the official currency of the Member State.

The connection of the Web site on which or for which the sign is used withthe Member State, including:

  • whether the Web site offers means of interactive contact which are accessible to users in the Member State;
  • whether the Web site indicates an address, telephone number or other means of contact;
  • whether the Web site is registered under the standard country code 3166 Top Level Domain.
  • The relation of the use of the Web site with an industrial property right, including:
  • if the use of the sign is supported by an industrial property right, whether that sign is protected in that Member State;

Any other factors which indicate a commercial effect in the Member State.


If there is a statement on a Web site to the effect that the goods orservices offered on the site are not available in a particular country then,under the Guidelines, there is no commercial effect in that country. To beeffective the disclaimer should either list all countries in which the goods orservices are available or exclude the countries in which they are not. The mereuse of a disclaimer is not sufficient to avoid liability. Disclaimers should beclearly drafted, placed in a prominent position on a Web site and written in alanguage that will be understood by persons accessing that Web site. The courtsin each Member State will have to decide whether a disclaimer is effective ornot.


The UK courts recently decided in Road Tech Computer Systems Ltd v Mandata(Management and Data Services) Ltd (2000) that the claimant had made out a casefor both passing off and trade mark infringement as the defendant had includedthe names Road Tech and Roadrunner in its meta-tags and in the text page of itssite. The effect was that Internet users searching for the claimant’s Website, by using those names as keywords, were directed to the defendant’s Website. Meta-tagging is mentioned in the draft Guidelines as one of the factors indetermining whether there has been a commercial effect.

Bad Faith

The Guidelines suggest that a trade mark user on the Internet should not beliable for infringement (prior to receiving notification of infringement) if hecan show that (i) he owns the trade mark in another Member State; (ii) he hasnot acquired the mark in bad faith; and (iii) he has provided sufficientinformation to identify himself (including contact details) on his Web site. Thecourts are required to take into account in determining bad faith whether the‘use of a sign’ would take unfair advantage of or unjustifiably impair thedistinctive character or the reputation of the conflicting right or whether theperson who used the sign had, at the time when the sign was first used orregistered, knowledge of that right.


The Guidelines briefly discuss cybersquatting. If a person registers a signin a Member State that is a good indication that he intends to trade in thatState. If a third party, being aware of this, knowingly uses that mark or signbecause he wants to profit from the goodwill embodied in it (ie cybersquatting),such use can have a commercial effect in the country in which the right isprotected. This use would diminish the commercial value of the sign for theright holder.

Liability for Infringement

Liability for infringement through the ‘use of a sign’ on the Internetarises in the same way as for infringement outside the Internet.

Use in Good Faith and Notification

Where a sign is used in ‘good faith’ on the Internet, and such useproduces a commercial effect, this would be exempt from liability up to thepoint when the user is notified of a conflicting right. Notification has to bein writing and must state the right which it is claimed has been infringed,sufficient contact details of the owner, and the ways in which the user hasinfringed the rights.

Once a user has been notified of a conflicting right, the user has to takereasonable measures to avoid or end the conflict. There will be no liability ifon receiving notification he expeditiously takes measures which are effective toavoid a commercial effect in the relevant Member State. The courts must decidewhether the user has taken sufficient measures to avoid or stop the allegedinfringement. n

Dr Rosanna Cooper CChem MRSC is a Partner at Fairmays and can be contactedon 020 7959 0266 or at