New Guidance on Protection of Trading Names - Summer 2004

01 July 2004

Protection of a trading name should be a paramount concern for businesses. Many people are often surprised to learn that (generally speaking) the Companies House register, the Trade Mark register and the Domain Name registers are mutually exclusive – just because your name is registered in one or two of the registers, it doesn’t mean that you are protected in all three. For example, you may have registered your business at Companies House as a limited company and you may have domain names with all the standard URLs (.co.uk .com etc.) but this will not give you the right to apply for a trade mark if the same or a similar name is already registered. Similarly, if you have a registered trade mark, it does not automatically entitle you to register either in the company’s registry or on the domain name register.

The relationship between these different rights is often looked at in cases before the courts. We now have a new and interesting case from the English High Court. The case involves IBM and a company called

Web-Sphere Limited and was decided in March 2004. It involves the relationship between a community trade mark (a trade mark enforceable throughout all of the states of the European Union) and registered domain names. IBM obtained registration of a trade mark for the word “WEBSPHERE” in 2000 even though Web-Sphere Limited had registered a domain using the same word, in 1999.

The two appeared to co-exist without objection until Web-Sphere Limited launched new software under the Web-Sphere brand in 2002. IBM had launched a software application under the same name back in May 1988.

The High Court found that by the time Web-Sphere Limited registered its domain names, IBM had generated a substantial amount of goodwill and reputation in the brand name “WEBSPHERE” associated with the software that it had been publishing since 1998. The effect is that the community trade mark defeated the registered domain names which existed before the trade mark came into existence. The court now has to decide if it will order Web-Sphere Limited to change its name and cease trading with the domain names it has registered. It will be interesting to see what the final outcome is, especially since IBM’s estimated revenues for its WEBSPHERE software amounted to a sum in excess of $71m in 2003.

The crucial point in this case is that IBM applied to register its trade mark on 6 May 1998 (before the domains were registered) which means that despite the fact that registration did not actually take place until 2000, IBM was protected against Web-Sphere Limited’s actions in the intervening period. This case illustrates the importance of making an application for a trade mark at an early stage, even if (as is regrettably the case in the community registry) the registration does not follow for some months or even years afterwards.

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