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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> 1-800 Flowers Inc v Phonenames Ltd [2001] EWCA Civ 721 (17 May 2001) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/721.html Cite as: [2001] EWCA Civ 721, [2001] 2 Costs LR 286, [2002] Masons CLR 5, [2002] FSR 12, (2001) 24(7) IPD 24042

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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT,
CHANCERY DIVISION (Mr Justice Jacob)

		Royal Courts of Justice Strand, London, WC2A 2LL
		Thursday 17th May 2001

LORD JUSTICE JONATHAN PARKER:

INTRODUCTION

1. This is an appeal by 1-800 Flowers Inc ("the Applicant") against a decision of Jacob J made on 20 December 1999 (and reported at [2000] FSR 697) whereby he allowed an appeal by Phonenames Ltd ("the Opponent") against a decision of the Registrar of Trade Marks.
2. On 13 February 1993 the Applicant applied under section 17(1) of the Trade Marks Act 1938 as amended ("the 1938 Act") to register the trade mark 800-FLOWERS in respect of services consisting of the receiving and transfer of orders for flowers and floral products. Notice of opposition was given by the Opponent. On 17 December 1998 Mr M. Knight (Principal Hearing Officer acting for the Registrar of Trade Marks) issued a decision rejecting the grounds of opposition relied on by the Opponent and accepting the mark for registration in Part B of the Register subject to a disclaimer of the right to exclusive use, separately, of the numeral "800" and of the word "Flowers". The Opponent appealed to the High Court. Jacob J allowed the appeal and ordered that the application for registration be refused. He also ordered the Applicant to pay the Opponent's costs of the appeal, which he summarily assessed under CPR Part 43.
3. The Applicant appeals to this court against the judge's order that the application for registration be refused; the Opponent cross-appeals against the summary assessment of its costs. The judge granted permission to appeal in respect of both the appeal and the cross-appeal.
4. The Applicant appears on this appeal by Mr Geoffrey Hobbs QC and Miss Emma Himsworth; the Opponent by Mr Mark Platts-Mills QC and Mr James Abrahams.

THE PARTIES

The Applicant

5. The Applicant is a company incorporated in the United States, which carries on an international floral telemarketing business; that is to say, it provides cut flowers, plants and other floral products via a marketing system accessed by telephoning "freephone" numbers or their equivalent (such numbers are known in the United States as toll free numbers) or via the Internet or through customers visiting the Applicant's various retail outlets. In the United States, the toll free number which accesses the Applicant's marketing system is 1-800-356-9377. Expressed in "alpha-numeric" terms (that is to say, using a telephone keypad which has letters on it as well as numbers and dialling by reference to the letters) the toll free number is the equivalent of 1-800-FLOWERS.
6. Through its marketing system, the Applicant receives orders for floral products from customers in the United States and elsewhere, and transmits such orders to, or arranges for them to be met by, retail stores or franchises situated near the intended recipient.
7. The Applicant is the successor to 800-Flowers Inc (another US company), from whom it acquired its business.
8. In 1986 a controlling interest in 800-Flowers Inc was acquired by the McCann family, and since then the business has been run by two members of that family, namely Mr James McCann and Mr Christopher McCann, who are brothers. The evidence in support of the application for registration consists of statutory declarations by Mr Christopher McCann ("Mr McCann").
9. For some ten years prior to 1986 Mr McCann and his brother ran a number of flower shops in the United States, building up a chain of retail floral stores. By 1986 there were 12 such stores in the New York area. In paragraph 4 of his first statutory declaration in support of the application, Mr McCann says that when his family purchased a controlling interest in 800-Flowers Inc they "literally started over again". He continues:

"We were purchasing stock in a corporation whose primary assets were its registered United States service marks DIAL 800-FLOWERS and 800-FLOWERS, which were accorded incontestable status, and the right to use the telephone number 1-800-356-9377, which corresponds to 1-800-FLOWERS. With these assets we believed that we could build a nationwide floral telemarketing business from a struggling company that unquestionably required new management and a commitment to marketing principles that we undertook to establish and implement."

10. Mr McCann's statutory declaration continues:

"5. In October 1986, my Company was a floundering business. Since I have been involved in its management, my Company has invested millions of dollars and enormous time and effort to enhance its name and brand recognition throughout the United States. 800 Flowers is the mnemonic for the toll free number by which customers can place orders with my Company but it is also my Company's corporate and trade name as well as an internationally recognized and well known Trade Mark. Customers choose to do business with my Company because of the world renown of the Company name and Trade Mark 800-FLOWERS.

6. My Company's advertising efforts have occurred at national, regional and local levels, and we have advertised in all mediums, including television, radio, print billboards and, more recently, on the "internet". Our advertising and promotional efforts have been devoted to establishing positive consumer association between the products, the trade name of the Company and the 800-FLOWERS "brand"."

11. Later in his statutory declaration Mr McCann stresses the international nature of the business and the fact that the mark 800-FLOWERS is recognised in many countries. In paragraph 16 of his statutory declaration he says this:

"My Company has a large volume of international sales under the Trade Mark 800-FLOWERS. In fiscal year 1996 international sales were in the region of $250million (£183million) with sales taking place in over 85 countries."

The Opponent

12. The evidence on behalf of the Opponent consists of statutory declarations by Mr James Zockoll, the Chairman of The Zockoll Group Ltd, of which the Opponent is one of a number of wholly-owned subsidiaries. The group is privately owned.
13. Another of the group's wholly-owned subsidiaries is Dyno-Rod plc, which operates a drain cleaning franchise. Dyno-Rod plc has been trading in the United Kingdom for over 30 years, and its current annual profit level is some £2million. The Zockoll Group Ltd owns the trade marks DYNO and DYNA, and it licenses Dyno-Rod plc and other associated subsidiaries to use these marks. Since setting up the Dyno-Rod franchising network the group has established licensed franchise businesses in many other services and in many other countries. The franchises include ice cream sales, paint shops, trailers, silencer shops and mobile car tuning. Mr Zockoll describes the group as an extremely enterprising and growing group with a variety of experience in franchising and licensing operations.
14. The Opponent was set up to carry on what Mr Zockoll describes as "the phonenames business" on behalf of the group. In paragraph 7 of his first statutory declaration he describes the Opponent's business as follows:

"The Opponents are the company responsible for promoting and marketing the alpha-numeric concept. This involves educating the consumer about what numbers go with what letters to form a standard keypad. This is accomplished, for example, by showing consumers and our potential licensees samples of standard keypads and producing templates to fit over existing telephone keypads. It is necessary to educate the consumer to use the letter "O" (not the number "0") when dialling a phonename. The Zockoll Group leases the telephone numbers from the service providers and licenses them to third parties through the Opponents."

15. In paragraph 8 of his first statutory declaration Mr Zockoll says this:

"The Opponents intend to license or franchise the use of trade names. The Opponents have uninterrupted rights to use, for example, the telephone number 0800 758 6237 which translates to the phone name 0800 PLUMBER."

16. Mr Zockoll then goes on to describe the two concepts of "origin dependent routing" and "central telemarketing", which are employed by the Opponent in carrying on its business. In each case a network of traders is established, which can be accessed via an appropriate alpha-numeric number. However, whereas in the case of "origin dependent routing" an arrangement is made with the service provider (e.g. British Telecom or Mercury in the United Kingdom) whereby calls are automatically routed to the trader who is situated nearest to the customer, in the case of "central marketing" all the enquiries will be received on a central number and will then be re-routed to a local trader. Whichever method is adopted, the Opponent receives royalties from its licensees (within the group and outside it) for the use of trade marks and phonenames.
17. Mr Zockoll goes on to say that by these means members of the public will have free access to traders just by remembering their name or the nature of their product or service. He continues (in paragraph 12 of his first statutory declaration):

"It is convenient and of enormous value for small companies who can be licensed by us for the use of a generic phonename as it offers them great opportunities to establish a valuable brand which normally they could not afford. Many such opportunities would be lost if the market for generic phonenames did not exist. The concept of telemarketing is becoming increasingly popular, not least because of the convenience to the consumer."

18. I turn first to the appeal.

THE APPEAL

The relevant statutory provisions

19. It is common ground that by virtue of section 105 of, and paragraph 10 of Schedule 3 to, the Trade Marks Act 1994 the application for registration falls to be dealt with in accordance with the 1938 Act.
20. The provisions of the 1938 Act which are directly relevant to the Applicant's grounds of appeal are sections 10, 11, 17 and 68. As applied to service marks, they provide as follows (so far as material):

"10(1) In order for a service mark to be registrable in Part B of the register it must be capable, in relation to the services in respect of which it is registered or proposed to be registered, of distinguishing services with the provision of which the proprietor of the mark is or may be connected in the course of business from services with the provision of which he is not so connected, either generally or, where the service mark is registered or proposed to be registered subject to limitations, in relation to use within the extent of the registration.

(2) In determining whether a service mark is capable of distinguishing as aforesaid the tribunal may have regard to the extent to which:

(a) the service mark is inherently capable of distinguishing as aforesaid; and

(b) by reason of the use of the service mark or of any other circumstances, the service mark is in fact capable of distinguishing as aforesaid.

....."

21. Section 11 of the 1938 Act provides as follows:

"It shall not be lawful to register as a service mark .... any matter the use of which would, by reason of its being likely to deceive or cause confusion or otherwise, be disentitled to protection in a court of justice, or would be contrary to law or morality, or any scandalous design."

21. Section 17 of the 1938 Act provides as follows (so far as material):

"(1) Any person claiming to be the proprietor of a service mark used or proposed to be used by him who is desirous of registering it must apply in writing to the Registrar in the prescribed manner for registration either in Part A or in Part B of the register.

(2) Subject to the provisions of this Act, the Registrar may refuse the application, or may accept it absolutely or subject to such amendments, modifications, conditions of limitations, if any, as he may think right."

22. The expression "service mark" is defined in section 68(1) of the 1938 Act as meaning:

".... a mark (including a device, name, signature, word, letter, numeral or any combination thereof) used or proposed to be used in relation to services for the purpose of indicating, or so as to indicate, that a particular person is connected, in the course of business, with the provision of those services, whether with or without any indication of the identity of that person."

23. The word "provision" is defined in the same subsection as meaning, in relation to services:

"... their provision for money or money's worth."

24. Section 68(2) provides that references in the 1938 Act to the use of a mark:

".... shall be construed as references to the use of a printed or other visual representation of the mark, and references therein to the use of the mark in relation to services shall be construed as references to the use of the mark as or as part of any statement about the availability or performance of services."

25. In the course of argument, Mr Hobbs referred us in addition to sections 14(b) (disclaimer), 26(1)(a) (removal from register where no bona fide use) and 30(1) (use of an associated mark), but I do not find it necessary for the purposes of this judgment to set out their terms.

The Opponent's Grounds for Opposition

26. By its Grounds for Opposition, the Opponent contended (in summary):

• that the mark applied for is not capable of distinguishing, in relation to the relevant services, those services with which the Applicant may be connected in the course of trade from those in the case of which no such connection exists, and that registration of the mark would accordingly be contrary to section 10 of the 1938 Act and should be refused;

• that the mark applied for is a telephone number, and therefore cannot be used in relation to services for the purposes of indicating, or so as to indicate, that the Applicant is connected in course of business with the provision of the services in question;

• that since the UK telephone number which corresponds to 0800 FLOWERS has been allocated to the Opponent, the use of the mark by the Applicant would be likely to deceive or cause confusion, by reason whereof the Applicant would be disentitled to protection in a court of justice, and that accordingly registration of the mark would be contrary to section 11 of the 1938 Act;

• that in the circumstances the Applicant has neither used nor does it propose to use the mark in the United Kingdom, and that accordingly registration of the mark would be contrary to section 17 of the 1938 Act; and

• in the alternative, that in the exercise of the discretionary powers conferred by section 17(2) of the 1938 Act registration should be refused.

27. In relation to the reference in the Grounds for Opposition to the relevant UK telephone number having been allocated to the Opponent, it is to be noted that that did not occur until 1994; that is to say, after the Applicant had lodged its application for registration.
28. The Grounds for Opposition also contain a ground based on applications by the Opponent for registration of other marks, but in the event that ground has not been pursued.

The Decision of the Registrar

29. As to the ground of opposition based on section 10 of the 1938 Act, the Hearing Officer commented that had the mark been simply a telephone number or its alpha-numeric equivalent he would not have considered that it was acceptable for registration under section 10, but he concluded that it was neither of those things. Rather, he concluded:

".... that the term 800-FLOWERS represents an allusion to the service provided."

30. He continued:

"Perhaps it is not the most covert and skilful of allusions, based upon the combination of two non-distinctive elements, but definitely an allusion. I find, therefore, that that trade mark is capable of distinguishing the services of the applicant from those of other providers and so I dismiss this ground of opposition based upon section 10 of the [1938] Act."

31. As the ground of opposition under section 11 of the 1938 Act, the Hearing Officer said this:

"In the circumstances, it seems to me that the applicants, if their trade mark is registered, will have the right to stop anyone else using the trade-mark 800-FLOWERS in respect of the same or similar services for which the trade mark is registered and that right will predate the right the opponents have obtained in respect of telephone number 0800 3569377. Therefore, it is use of the alpha-numeric version of the telephone number by the opponents which is likely to cause confusion and deception." (My italics.)

32. The Hearing Officer continued:

"In so far as the use of alpha-numerics as phonenames is concerned I have no doubt that the public at large have yet to become accustomed to their use. No evidence has been adduced by the opponents to show that, whatever may be the position in the United States of America, they are a settled part of business practice here in the United Kingdom. And even if phonenames were increasingly becoming a feature of every day life I would not consider that a phone name constructed from a telephone number should put the holder into an advantageous position over the owner of a similar (or the same) earlier trade mark. Unless, of course, an applicant for registration had by their [sic] actions put themselves in a position, as a result of some illegality, of being disentitled to protection in a Court of Law. No evidence has been adduced that they have done so in this case. Thus, there is no reason to believe that any use by the applicants of their 800-FLOWERS trade mark is likely to lead to deception and confusion as to source of origin in relation to the use by the opponent of the telephone number 0800-3569377 and I have no evidence before me that the applicants have taken any action themselves which would render the trade mark deceptive or in any way disentitled themselves from protection. (Indeed the applicants' interest in obtaining the telephone number 0800-3569377 from the opponents indicates that they have attempted to take action to ensure no confusion.) I therefore dismiss the grounds of opposition founded on section 11 of the [1938] Act."

33. After referring to the additional ground of opposition which I mentioned earlier, and which was not pursued at the hearing, the Hearing Officer turned to the grounds of opposition under sections 17 and 68 of the 1938 Act. He concluded that the Applicant proposed to use the mark in relation to the relevant services in the United Kingdom, and on that basis he dismissed the grounds of objection under sections 17 and 68. In reaching this conclusion, he rejected the Opponent's contention that the Applicant would be unable to use the mark in the United Kingdom unless it had the corresponding UK telephone number. In this connection he said:

"I can see no reason why the trade mark in suit cannot be used in relation to a telephone number other than 0800-3569377: especially when the majority of the population are not educated in the use of alpha-numerics (and who may not even possess telephones with alpha-numeric annotations)."

The judgment of Jacob J. on the substantive appeal

34. Having set out the background facts, the judge referred to the advent of alpha-numeric keypads on telephones, saying this (at p.699):

"It is fair to assume at the date of the application, early 1993, the return of letters to telephones was clearly both foreseeable and intended. And so it has been. Modern telephones all have letters on their number buttons. I suspect that most people who have had a new phone in the last few years do not yet make use of the letters: some [may] have wondered why they are there and others may not even have noticed them. But there can be no doubt that alpha-numeric buttons are here to stay and that people will gradually make more and more use of them for telephone number purposes (they have other uses too).....

Technical developments in the phone industry have meant that telephone numbers no longer have as much "locality" about them. In particular freephone numbers have none. This makes it possible to run a nation-wide franchising business using just one number. You can have a central operator system to take "orders" or to put you in contact with the local franchisee. It is also possible for the telephone company to arrange that its system itself detects the locality of a caller and routes the phone call to the nearest centre using that number ("origin dependent routing"). In that way the "owner" of the number can license the number to a variety of different users.....

In the USA knowledge and use of alpha-numeric numbers were more advanced by 1993. Many telephones already had letters – indeed I am not sure that letters were ever wholly abandoned. By 1993 the applicants had a substantial US business. The general freephone number in the US is 1-800 (number). The applicants have the number corresponding to 1-800 FLOWERS. If you phoned that number in the US in 1992 you could place an order for flowers to be delivered anywhere in the world. The order would be taken and transmitted via an intermediary to a local flower shop...."

35. The judge then turned to the first ground of opposition, under section 10 of the 1938 Act. Having set out the material parts of the section, he continued (at p.701):

"Although the applicants claim some use in the UK before their date of application they do not suggest that by reason of that use their mark acquired any factual distinctiveness. So the question is whether the mark is "capable of distinguishing" having regard to its inherent nature.

I have come to the conclusion that it is not. Consider first the position if the mark had been 0800 FLOWERS. At the time of application the number 0800 was, as Mr Hobbs QC for the applicants, conceded "freighted with telephonic significance". That does not mean, however, that the general public would at the time have realised that the whole mark was something that you could actually dial. At that time the use of letters on buttons had only just commenced and there can have been few telephones which carried letters. Nor had there been any education of the public about the letters. So at the time of application the public would have been puzzled by the mark – 0800 says something about freephone, but FLOWERS would have little meaning, so somewhat "de-freighting" the mark as a whole. The mark would, however, not have been a puzzle to anyone who knew of the coming return of letters to phone buttons. He or she would have understood at once that 0800 FLOWERS was an encoded phone number – and particularly so in relation to the specification of services, namely receiving and transmitting orders for flowers.

[The Hearing Officer] accepted that 0800 FLOWERS did not have any inherent capacity to distinguish in 1993.... He was right because, anyone knowing the facts would say, correctly, that the mark had a direct reference to the character of the service to be provided under the mark. Section 10 in its reference to "capacity" to distinguish must include within its scope the foreseeable future. In the future, as perceived in 1993, 0800-FLOWERS would very likely be taken by anyone knowing the facts to be a phone number for ordering flowers. That would be so, whether or not anyone actually used that number for that purpose in the future – it would be the future growth in the practice of traders generally to use 0800 (word) which would have that effect. So the mark would convey a clear descriptive meaning in the future, irrespective of any use by the mark owner."

36. Then, after referring to the passage in the Registrar's decision (quoted above) in which the Hearing Officer concludes that the mark represents "an allusion to the service provided", the judge continued (at p.702):

"I think it is more than a mere allusion. Once people became aware that 0800 (word) marks worked, they would inevitably see this mark as the 0800 (word) with the zero missing. This is particularly so given the specification of services, namely taking and transmitting orders. One of the most obvious ways of doing that is by telephone. I would add that many people would also be aware that an initial zero is the way into many telephone numbers – you use it when you are not making a local call (either national or international) and for other freephone services such as that of Mercury (now AT&T) which begin 0500....

Of course in so saying I am not saying the mark could not also be used in other ways. In principle it could be used for the name of a shop (odd though that might be) and it could be used as a company name or domain name. But these other possible uses do not disguise the real substance of the mark. It is indeed virtually 0800 FLOWERS. It forms the heart of that alphanumeric number.

Two further factors reinforce this conclusion. Firstly there is no escape from the fact that the applicants themselves intended that the mark be understood as a telephone number in the future. That is their whole, or at least their substantial purpose in applying for the mark. They want a trade monopoly which covers 0800 FLOWERS. This registration, if granted, would give them just that. Secondly in support of their application the applicants have sought to allege actual use of the mark. But what they claim to have used in the UK is only the US equivalent of an 0800 number, namely 1-800-FLOWERS. I think they are right in saying that use of 1-800 FLOWERS would be a use of 800 FLOWERS, but it follows that use of 0800 FLOWERS is also use of 800 FLOWERS."

37. The judge turned next to the grounds of opposition under section 11 of the 1938 Act. After quoting the section, the judge continued (at p.702):

"This provision normally is applied to situations where there is a prior mark in use which is said to conflict with the mark proposed for registration. But it covers other situations too – any situation where the use of the mark propounded will lead to deception or confusion of the public would be treated in a court of justice as disentitling the mark to protection.

Now at the time of application the applicants had not obtained the telephone number corresponding to 0800 FLOWERS. So, if and when that number was allocated to someone else and upon the assumption that the trade mark was put into use, a deceptive situation was bound to arise. When the public phoned 0800 FLOWERS, as they would be bound to do, they would get a wrong number. And the "owner" of the number (who has to pay for the freephone calls to it) would find himself paying for those calls. The use of the trade mark was therefore bound to lead to confusion and deception unless and until the applicants themselves obtained the number.....

Mr Hobbs QC, for the applicants, submitted that this was putting the cart before the horse. He said it was objectionable for the registration of a trade mark to depend upon who had got the telephone number – it was making the trade marks register subservient to the telephone companies. I do not see why it is objectionable. Registration of a trade mark is to protect trade marks. If external factors such as who has the telephone number make the mark deceptive in the hands of the applicant that is just a fact which makes the mark deceptive. For instance the registrar will normally allow registration for a mineral water of the name of the source – but only the owner of the source may obtain registration precisely because in other hands the mark would be deceptive. I think this is a fair analogy: although the "owner" of a telephone number does not have the same legal security over the number as the landowner may have over a mineral water source, he is reasonably secure in his number as recent litigation about telephone numbers has shown.

I think, therefore, that registration would be contrary to section 11. In this connection [the Hearing Officer] seems to have rather misunderstood the argument below. It is not so much that the phone number belongs to the opponents (as it does) but that it does not belong to the applicants and did not at the date of application. [The Hearing Officer] could not see how the obtaining of the number by the opponents could disentitle the applicants to protection in a court of law. But it was not the fact that the opponents obtained the mark which mattered. What mattered is that at the date of the application confusion was likely – indeed inevitable – so soon as the public were educated about 0800 (word) numbers and the mark was put into use. [The Hearing Officer] gave credit to the applicants for trying to obtain the number or its use as attempting to ensure no confusion. But that is because at the time of the application confusion would be inevitable unless they obtained the number or the right to use it."

38. The judge then turned to the ground of opposition under sections 17 and 68 of the 1938 Act. He concluded that what the applicants wanted was the right to use the variant 0800 FLOWERS, a mark which is unregistrable; that, he said, was not only the common sense of the position but also an exact description of the Applicant's stated position. He continued (at p.704):

"Mr Platts-Mills [for the Opponent] points to the inter partes correspondence in which the applicants were seeking to obtain the rights to or at least the right to use the telephone number 0800 FLOWERS. In 1995 one of their letters concerning this expressed the view that "several things right now are waiting on the completion of our deal with you so that we may get moving in the European market". That indicates as clearly as anything that up until then the applicants did not regard themselves as having got going here and that they needed the number to get going – a mere conditional intention to use.

So I do not think the applicants can claim that 800 FLOWERS in their hands is properly a trade mark or that they are properly proprietors. That their intention was purely conditional, if and when they get the use of the number, is not good enough."

39. The judge then went on to conclude that in any event evidence of use of the mark by reference to use of the US telephone number 1-800 FLOWERS was not evidence of use in the United Kingdom. He continued (at the foot of p.704):

"Nor does the detailed evidence put forward amount to use of the mark here. It shows that some people with UK addresses for their credit cards have used the US number 1-800 FLOWERS. It is unlikely that those people were in the UK and asking for flower deliveries for someone in this country. The customer was either in the US already and had a UK credit card or, perhaps, was in the UK, knew about the applicants' US number and telephoned them there for flower delivery in the US. The evidence also shows that flowers have been delivered to people in the UK following use of the applicants' services. This must surely be US customers asking for delivery to UK addresses."

40. The judge further concluded that evidence of internet use of the mark or trade name 1-800 FLOWERS was not, in the circumstances of the instant case, evidence of use of the mark in the UK. The judge regarded it as being of significance in this respect that the relevant service would be provided in the US. He expressed his conclusions thus (at p.705):

"So I think that the mere fact that websites can be accessed anywhere in the world does not mean, for trade mark purposes, that the law should regard them as being used everywhere in the world. It all depends upon the circumstances, particularly the intention of the website owner and what the reader will understand if he accesses the site. In other fields of law, publication on a website may well amount to a universal publication, but I am not concerned with that.

But even if Mr Hobbs were right in saying that website use amounted, for trade mark purposes, to use in omnipresent cyberspace, I cannot see how that would help here. If you access the applicant's site in the UK, you can order flowers. But the service of receiving and [transferring] (i.e. the service of the specification) is carried out wholly in New York. ......

In the result, I do not think that the applicants have the requisite intention to use or in fact use the mark 800 FLOWERS."

41. The judge accordingly upheld the ground of opposition under sections 17 and 68.
42. The judge concluded his judgment by rejecting an additional argument advanced by Mr Platts-Mills QC on behalf of the Opponent. Since it is not sought to revive that argument on this appeal, I need not make further reference to it.

The arguments on the appeal

43. As to the ground of opposition under section 10, Mr Hobbs QC submits that, regarded (as it must be) as a combination of numerals and letters, the mark is "inherently capable" of distinguishing between services of the relevant type provided by the Applicant and similar services provided by others.
44. Mr Hobbs challenges the judge's conclusion that the mark is in substance an encoded version of a UK telephone number. He points out that 800 FLOWERS in not a UK telephone number, and that the judge was in error in proceeding as if it was. In any event, he submits, it is in itself no objection to the registration of a mark consisting of a series of numerals that those numerals may also be a telephone number.
45. Mr Hobbs submits that the judge's finding that the growth in the use of alpha-numeric telephone numbers which has in fact occurred in the UK since 1993 was reasonably foreseeable in 1993 was contrary to the weight of the evidence. He submits that Mr Zockoll's own evidence of the need to "educate" consumers establishes that in 1993 the concept of alpha-numeric telephone numbers was little known in the UK, and that the available evidence does not even enable the court to make any finding as to the current position in this respect.
46. Mr Hobbs also relies on a number of cases involving Mr Zockoll's group in which are to be found various judicial references to the lack of public awareness in the UK of the availability or use of phonenames during the 1990s.
47. Mr Hobbs submits that the relevant inquiry is as to how the mark would appear to members of the public in the UK in 1993; and that, on the evidence, analysis and education would generally be required before the mark would be understood as a phonename. As to the minority of members of the public who would or might recognise the mark as a phonename, he submits that those would be the very people would also know that it was a phonename specific to the Applicant, so that in their minds the mark would be sufficiently distinctive.
48. Mr Hobbs referred us to advertising and promotional material issued by the Applicant which, although aimed primarily at the US market, also covered the UK. He referred to this material as "overspill" material. He submits that the overspill material demonstrates that the mark 800-FLOWERS can readily be used as a trade name of a particular supplier, notwithstanding that it resembles a telephone number.
49. Accordingly Mr Hobbs submits that there is no proper basis in the evidence for concluding that the mark lacks the requisite distinctiveness, and no proper basis for exercising the discretion conferred by section 17(2) of the 1938 Act by refusing registration.
50. As to the ground of opposition under section 11, Mr Hobbs submits that there is no illegality involved in the use of the mark, nor is there any other factor inherent in the mark itself which would disentitle it to protection; nor, for that matter, can it be suggested that the mark has become or will become deceptive through any fault of the Applicant.
51. He submits that even if, contrary to his earlier submissions, the mark is recognised as a phonename, it can still be used without deception or confusion. Further, he submits that in so far as there might be any risk of deception or confusion in the UK, that risk has been created by the Opponent's subsequent and adventitious acquisition of the relevant UK telephone number.
52. Mr Hobbs relies on the fact that the Applicant has used the mark without deception or confusion in conjunction with the US telephone number 1-800-FLOWERS.
53. Mr Hobbs points out that to uphold the ground of opposition under section 11 would involve the court in holding that the mark was disentitled to protection by the courts. He submits that it would be anomalous if the mark 800-FLOWERS were disentitled to such protection in the United Kingdom no matter how well-known the mark may be elsewhere.
54. In this connection Mr Hobbs referred to The Law Society v. Griffiths [1995] RPC 16 CA.In that case the defendant had obtained a telephone number which was confusingly similar to a number allocated to the Law Society in respect of which the society had launched a scheme called "Accident Line". The Law Society commenced a passing off action and successfully sought injunctive relief. Mr Hobbs points out that it was not contended by the defendant in that case that the Law Society was disentitled to protection in respect of its telephone number because it did not also have the defendant's number. So in the instant case, he submits, the existence of the confusingly similar number 0800 FLOWERS ought not to disentitle the Applicant to protection in respect of its mark. In the circumstances, the link which the Opponent seeks to establish between the mark and the UK telephone number is, he submits, an "illicit equation".
55. Mr Hobbs also referred us to British Telecommunications plc v. One in a Million Ltd [1999] FSR 1 CA, where the court granted relief in passing off and for infringement of registered trade mark to prevent the use of deceptive domain names. He submits that where a claimant in such an action has a trade name, it is not disentitled to relief simply because the defendant has a telephone number which can be converted into it.
56. Mr Hobbs submits that the judge in the instant case was wrong to proceed on the basis that the purpose of registering the mark 800-FLOWERS is to gain practical control of the UK telephone number 0800 FLOWERS. The Applicant, he submits, wishes to use its US number 1-800-FLOWERS.
57. Mr Hobbs submits that the effect of the judge's judgment is to render the register of trade marks subservient to the allocation of telephone numbers.
58. As to the ground of opposition under sections 17 and 68 of the 1938 Act, Mr Hobbs accepts that what has to be shown is use or proposed use of the mark in the UK, but he submits that the evidence establishes such use or proposed use.
59. Mr Hobbs' starting-point is the proposition that the right to a mark is a common law right, and that in the case of a used mark the owner or proprietor is he who first used the mark in relation to the relevant goods or services. As authority for this proposition, he relies on Al Bassam [1995] RPC 511, 522 CA.
60. Mr Hobbs goes on to submit that where, as here, the Applicant has been using the mark in the US, proprietorship of the mark within the UK can be established by minimal user of it in the UK. In support of this submission he relies on CHIPIE Trade Mark Application (Mauritius): Sprints Ltd v. Comptroller of Customs (Mauritius) [2000] IP & T 735 (PC) and Globelegance BV v.Sarkissian [1974] RPC 603, 613 per Templeman J (a passing off case). Mr Hobbs further points out that in CHIPIE there was no exposure of the goods in question to the public at large in Mauritius; the production of goods exclusively for export was held to be sufficient to found a right to the mark in Mauritius.
61. Mr Hobbs submits that in determining whether an applicant for registration of a mark is the "proprietor" of the mark within the meaning of the section, that is to say whether the applicant has in fact used, or proposes to use, the mark in the UK, the court should adopt the same approach as it adopts when determining whether there has been an infringing use within the UK. He submits that both logic and principle dictate that that which constitutes an infringing use of the mark when undertaken by someone other than the proprietor should equally constitute use of the mark when undertaken by the proprietor. Mr Hobbs relies on RJ Reuter Co Ltd v. Muhlens (1953) 70 RPC 235 (CA) as authority for the proposition that it is not necessary that an infringer should have an intention to trade in the goods in question in the UK and that the infringer's trading activity may be outside the UK.
62. In any event, submits Mr Hobbs, where a customer in the UK telephones the Applicant's US telephone number, and a conversation takes place, the mark 800-FLOWERS is being used simultaneously both in the US and in the UK. In this connection he refers to the uncontradicted evidence that calls to the Applicant's US telephone number have been made from the UK.
63. Mr Hobbs also seeks to draw an analogy with the requirement in passing off cases that a claimant – or a defendant who raises a defence of honest concurrent use – should possess a goodwill within the jurisdiction (see Anheuser Busch Inc v. Budejovicky Budvar [1984] FSR 413 CA (better known as "The Budweiser Case")). He has referred us to the decisions of Browne-Wilkinson V-C in Pete Waterman Ltd v. CBS United Kingdom Ltd [1993] EMLR 27 and of Knox J in Jian Tools for Sale Inc v. Roderick Manhattan Group Ltd [1995] FSR 924 as demonstrating what he describes as the more lenient approach adopted by the courts in recent years to the fulfilment of that requirement. He relies in particular on Browne-Wilkinson V-C's conclusion in Pete Waterman (at ibid. p.58) that:

"The presence of customers in this country is sufficient to constitute the carrying on of business here whether or not there is otherwise a place of business here and whether or not the services are provided here. Once it is found that there are customers, it is open to find that there is a business here to which the local goodwill is attached."

64. Mr Hobbs submits that the same principle should apply, and the same approach should be adopted, when the court is considering whether an applicant for registration of a trade mark has used or proposes to use the mark in the United Kingdom. Thus, he submits, a mark may be used in the UK notwithstanding that the user does not carry on business here.
65. Mr Hobbs relies on the fact that since 1992 the Applicant has had a website under the name 1-800 FLOWERS. He submits that although the available evidence does not enable the court to ascertain how many times the website has been accessed from the UK, the mere fact of internet activity is enough to establish an intention to use the mark in the UK for the purposes of sections 17 and 68.
66. I can now turn to the arguments put forward by Mr Platts-Mills QC, for the Opponent.
67. As to the ground of opposition under section 10 of the 1938 Act, Mr Platts-Mills submits that it is clear on the evidence that the Applicant has throughout intended to use the mark 800-FLOWERS in conjunction with the corresponding UK telephone number, and that it is not and has never been the intention of the Applicant to carry on business in the UK by reference to the US telephone number 1-800-FLOWERS.
68. Mr Platts-Mills points out that there has been but a single advertisement placed by the Applicant in the UK (an advertisement in the Independent newspaper on 2 November 1994), and that in that advertisement the mark appears in combination with the US telephone number and a flower motif, with instructions as to how the US telephone number could be accessed via a special AT&T number (which was not given).
69. He submits that the judge was right to conclude that the advent of alpha-numeric numbers on a significant scale in the UK was reasonably foreseeable at the date of the application to register; that the mark 800-FLOWERS clearly has telephonic significance; and that it is not distinctive for the purposes of section 10.
70. Mr Platts-Mills submits that the whole value of the mark lies in its connection with the UK telephone number, and that just as 0800-FLOWERS would be incapable of distinguishing between services of the relevant type provided by the Applicant and those provided by others, so is the mark similarly incapable.
71. As to the ground of opposition under section 11, Mr Platts-Mills submits that the only telephone number to which the mark could usefully relate in the UK is the number 0800 FLOWERS. He submits that it is nothing to the point that the mark may be used in other ways: any fair and reasonable use of the mark has to be taken into account in deciding whether there is a likelihood of deception or confusion.
72. He submits that members of the public seeing the mark and recognising it as a phonename would inevitably conclude that the Applicant had the corresponding UK telephone number.
73. Mr Platts-Mills also warned us against assuming that the number was unallocated at the date of the application for registration; there is, he points out, no evidence as to whether the number had been allocated at that date, and if so, to whom.
74. As to the ground of opposition under sections 17 and 68, Mr Platts-Mills submits that the passing off cases on which Mr Hobbs relies are of no assistance in determining whether the Applicant either has used or proposes to use the mark in the UK. In passing off cases, he submits, the court looks at all the circumstances in determining whether to grant relief, whereas in the case of an application for registration of a trade mark there are specific statutory requirements which the applicant must meet, one of which is the need to show either actual use or a bona fide intention to use the mark in the UK.
75. In the instant case, submits Mr Platts-Mills, the judge was right to conclude that the Applicant's intention to use the mark in the UK was contingent on its obtaining the corresponding UK telephone number. He submits that the evidence fails to disclose any genuine attempt by the Applicant to establish a business in the UK.
76. Mr Platts-Mills also relies on the contents of a letter written by Mr McCann to a Ms O'Byrne of Telecom Eireann on 30 November 1995, which was quoted by the judge in the course of his judgment in a case brought in the Republic of Ireland by the Opponent against Telecom Eireann. In the judgment, the judge quotes Mr McCann as having written to Ms O'Byrne as follows:

"I would like to thank you for your efforts to date in helping us to start operating our business in Ireland. As you and I have spoken, we have been trying to establish a presence in the UK and Ireland for some time now.

The only thing blocking us in the UK to date has been attaining the 0800 356937 [sic] number from BT. We were contacted by a person by the name of Jim Zockoll approximately one year ago who had the 0800 356937 number and wanted to sell it to us. We have been trying to reach an agreement with Mr Zockoll during the course of this past year, until such time when we realised that the laws governing the brokering of telephone numbers in the UK are quite different than they are here in the US. Upon finding this out, recently we have ceased to contract with Mr Zockoll and are pursuing other routes. It was also brought to our attention that when we requested the corresponding number from Telecom Eireann for use in Ireland that Jim Zockoll was an impediment to our establishing our business in Ireland as well.

Once the hurdles of attaining these numbers are overcome, we plan to move ahead in establishing a point of presence for our business in the European Community, specifically starting off with Ireland and then the UK. ...."

77. Mr Platts-Mills submits that while the evidence shows that members of the public in the UK have used the Applicant's services, and that products have been delivered in the UK, there is no evidence of any connection between the use of the Applicant's services and the use of the mark. He further submits that evidence of a telephone call from the UK to the Applicant's US telephone number is not evidence of use of the mark in the UK.
78. As to the Applicant's website, Mr Platts-Mills submits that the act of setting up the website cannot in itself establish actual use of the mark, or a bona fide intention to use the mark, in the UK. To do that, he submits, the Applicant has to go further and establish a significant degree of use of the website from the UK and/or that the website was actively promoted in the UK. In reality, he submits, there can be no business in the UK without the telephone number.
79. In summary, so far as this ground of opposition is concerned, Mr Platts-Mills submits that such evidence as there is of use of the mark is, as he put it, "vanishingly small"; and that the nature of the use is not such as to amount to use in the UK, let alone a bona fide use such as is required by the 1938 Act.

Conclusions on the appeal

80. I turn first to the ground of opposition under section 10 of the Act.
81. As noted earlier, in support of its contention that the mark is distinctive within the meaning of the section, the Applicant does not rely on actual use of the mark; its case is that, judged as at the date when the application for registration was submitted (13 February 1993), the mark is "inherently capable" of distinguishing between services of the relevant type provided by the Applicant and similar services provided by others, and that it accordingly falls within section 10(2)(b).
82. As Mr Hobbs accepts, the question whether the mark possesses the requisite inherent capacity is essentially a matter of impression.
83. In addressing this question, it is first necessary to establish the context in which the question arises. It is common ground that the question has to be asked as at 13 February 1993, but, as the judge rightly observed, the notion of inherent capacity to distinguish is not confined to the immediate present but must also relate to the foreseeable future. Hence the question is whether the use of alpha-numeric phonenames in the UK was reasonably foreseeable in February 1993.
84. In my judgment the judge was clearly right to conclude that the use of alpha-numeric phonenames in the UK was reasonably foreseeable in 1993. The fact that in 1993 the public needed to be educated in the use of alpha-numeric keypads, and that at that time relatively few members of the public would have recognised the potential of alpha-numeric phonenames, does not answer the question whether the widespread use of alpha-numeric phonenames in the UK was at that time reasonably foreseeable: it merely demonstrates that it had not yet happened. Yet by 1993 the use of alpha-numeric phonenames had for some time been widespread in the US; and so far as the Applicant itself is concerned Mr McCann's evidence is that during 1994 the Applicant received some 4 million calls to its US alpha-numeric telephone number 1-800-FLOWERS, and, as noted earlier, the Applicant has maintained an interactive website since 1992 with the address www.1800flowers.com. Moreover, the plain inference is that in 1993 the Applicant itself foresaw that the use of phonenames would become increasingly common in the UK and (one may assume) elsewhere, and that it was the perceived existence of an opportunity for the commercial exploitation of a phonename in the UK which prompted its application to register the mark 800-FLOWERS in the UK.
85. In seeking to distinguish the mark from its corresponding UK telephone number 0800 FLOWERS, Mr Hobbs described the mark as "nationality neutral" – a reference, as I understand it, to the fact that in some countries (including the UK) the prefix of a freephone number is 0800 whilst in others (including the US) it is 1800. As I see it, this merely serves to confirm that the mark 800-FLOWERS was adopted by the Applicant because of its telephonic significance, in that it represents that part of the corresponding freephone number which is common to all those countries which operate a freephone system using the prefix 0800 or 1800.
86. Accordingly I am of the clear view that the inherent distinctiveness of the mark in 1993 has to be judged against the background of the increasingly widespread use of phonenames in the UK.
87. So judged, the mark does not in my judgment have the requisite inherent capacity to distinguish. In substance it is, as the judge rightly observed, no more than an encoded telephone number. I therefore conclude that the decision of the judge to uphold the ground of objection under section 10 was plainly correct.
88. I turn next to the ground of objection under section 11.
89. If (as I have concluded) the judge was correct in regarding the mark as in substance no more than an encoded UK telephone number (i.e. the number 0800 356 9377), it seems to me that it must inevitably follow that since the Applicant has never had that number the use of the mark in the UK would inevitably lead to confusion, if not also to deception. As the judge pointed out, the potential for confusion and deception arises not from the fact that the number was subsequently allocated to the Opponent, but from the fact that the Applicant has never had it. Accordingly Mr Hobbs' submission that the effect of the judge's judgment is to make the register of trade marks subservient to the allocation of telephone numbers seems to me to be misplaced.
90. Nor, in my judgment, does The Law Society v. Griffiths (above) provide any support for the Applicant in this connection. The ratio of the decision in that case is to be found in the passage in the judgment of Aldous J where he said (at p.21 line 23):

"A person who adopts the mantle of another can by his silence represent that he is that other. Thus a person who selects a confusingly similar telephone number or a similar name may well represent that he is that other by either saying so or by failing to take steps when telephoned or called to disabuse the person who is making the telephone call. A person who takes steps which will lead a person who acts in a particular way to conclude that his business is that of another is guilty of passing off just as much as a person who states that his business is that of another."

91. That reasoning plainly has no application to the instant case. Moreover, the fact that the Law Society was not held to be disentitled to injunctive relief in that case by reason of the existence of a confusingly similar telephone number seems to me to afford no support at all for the proposition that it is no objection to a mark which is in substance an encoded telephone number that the owner of the mark does not in fact have that number.
92. Nor do I derive any assistance in the instant case from British Telecommunications plc v. One in a Million Ltd (above).
93. Accordingly I conclude that the judge was right to uphold the ground of opposition under section 11.
94. I turn finally to the ground of opposition under sections 17 and 68.
95. As already noted, it is common ground that in order to constitute itself the "proprietor" of the mark for the purposes of section 17, the Applicant has to establish use, or proposed use, of the mark in the UK.
96. In CHIPIE (above) an application by the appellant for registration of the mark "Chipie" in Mauritius was opposed by the registered owner of that trade mark in a number of other countries in the world but not in Mauritius. The relevant statutory provision in Mauritius provided that an application for registration could be made only by a person who had a right to use the mark, which in turn required that no one else had the right and the property in the mark. The application was refused on the ground (among others) that the appellant had no right and property in the mark in Mauritius. An appeal by the appellant was refused by the Mauritian Supreme Court, and the appellant appealed to the Privy Council. One of the issues before the Privy Council was whether the opposing party had the right to the mark by reason of its use of the mark.
97. The Privy Council held that a trader could acquire a right of property in a mark merely by using it in connection with his goods, and that the length of the user was immaterial in particular where a mark was already in use as a trade mark by a trader elsewhere in the world and proprietorship could then be proved by minimal user in the country where the mark was proposed to be registered. The Privy Council found that there had been at least minimal user of the mark by the opposing party in Mauritius. Referring to the evidence on this issue, Lord Clyde (delivering the judgment of the Board) said this (at p.739d):

"From the material which was placed before the Comptroller, it is clear that labels displaying the name "Chipie" were sent to Mauritius by the [opposing party] and applied to garments manufactured in Mauritius by a firm called Cogimex (Mtius) Ltd. This was clearly done on a significant scale. Furthermore, there were a number of invoices produced relating to sales transactions passing between the [opposing party] and Cogimex in the course of which the former used the name "Chipie". A question was raised by counsel for the appellant regarding the propriety of taking account of manufacturing work where such work was carried out within an exclusive export zone, that is to say a zone set apart for the purposes of fiscal provisions in which goods manufactured exclusively for the export market could be carried on. But that has not been presented as a live question in the instant case and there is no finding that in fact the manufacture on which the [opposing party] found was conducted in such a zone. A broader issue raised was whether manufacture for export would qualify as user for the relevant purpose."

98. The Privy Council went on to conclude as follows (p.739j):

"Their Lordships are satisfied that the foregoing activities amounted to user of the [opposing party]'s mark in Mauritius since 1987, that is before the appellant began to use it, and that the user was quite sufficient to give the [opposing party] the right to use the mark in Mauritius so as to make it impossible for the appellant to claim a right for the purposes of [the relevant statutory provision]."

99. In my judgment, however, the evidence in the instant case does not establish actual user of the mark by the Applicant in the UK, even to the "minimal" extent required (as illustrated by CHIPIE). In the first place, I reject as unreal the submission that a telephone call from the UK to the Applicant's US telephone number necessarily involves a use of the mark in the UK. Nor, in my judgment, is the evidence (such as it is) concerning the Applicant's internet website sufficient to justify the conclusion that accessing the website amounts to use of the mark at the point of access. In any event, the evidence does not disclose the extent to which the website has in fact been accessed from the UK. The Applicant has never had a place of business in the UK; the services which it provides are performed outside the UK; and, so far as the evidence goes, the only piece of advertising directed specifically at the UK is the one advertisement in the Independent newspaper to which I referred earlier.
100. As to the Applicant's intention to use the mark in the UK, I agree with the judge for the reasons which he gave that the Applicant's intention in that respect is plainly conditional on its acquiring the corresponding UK telephone number. In my judgment that conclusion is further confirmed by the contents of Mr McCann's letter to Ms O'Byrne quoted by the judge in the Irish case to which I referred earlier.
101. Nor, in my judgment, are the passing off cases relied on by Mr Hobbs (Globelegance, Pete Waterman and Jian Tools (above)) in point in the instant case. The issue whether a claimant in a passing off action has a sufficient goodwill in the UK to support the claim seems to me to be an entirely different issue from the issue whether an applicant for registration of a mark can establish that he is the "proprietor" of it for the purposes of section 17.
102. Equally, I am unable to see any reason in logic or principle why activities which would amount to an infringing use when carried out by someone other than the owner of the mark should necessarily be enough to constitute use of the mark for the purposes of section 17.
103. Accordingly I conclude that the judge was right to uphold the ground of opposition under sections 17 and 68.
104. In conclusion, I should note for completeness that no separate arguments were addressed to us in relation to the Registrar's discretion under section 17(2).
105. For the reasons I have given, I would dismiss this appeal.

THE CROSS-APPEAL

106. The hearing of the appeal lasted a full court day, judgment being delivered the following morning. Having delivered judgment allowing the Opponent's appeal, the judge ordered the Applicant to pay the Opponent its costs of the appeal. Mr Platts-Mills then invited the judge to make a summary assessment of the Opponent's costs; an invitation which the judge accepted. The Applicant and the Opponent had each submitted statements of costs, pursuant to CPR 44PD para 13.5(2). Common to each party's statement of costs was an item of £3,090.90, representing the assessed costs of each party of an interlocutory application before Evans-Lombe J which he had ordered should be costs in the case. Excluding that item, the Opponent's statement of costs showed a total of £38,842.46, as compared with a total of £65,009.51 shown by the Applicant's statement of costs.
107. Having heard submissions from Mr Platts-Mills and Miss Himsworth as to the detailed items in the Opponent's statement of costs, the judge delivered judgment as follows:

"Following their success on this appeal, the opponents sought summary assessment of costs. The sum they were seeking was £38,000 for the matter before me. There is an undisputed figure of £3,000 odd resulting from a half day application before Evans-Lombe J. When they saw which way the wind was blowing, Mr Platts-Mills suggested there should have been a detailed assessment. I rejected that.

This case, just like the case before me last week of ELLE Trade Mark, is an appeal from the Trade Mark Registrar. The appeal was on the documents below. There was no disclosure, there were no witnesses, there were no witnesses to be interviewed; it was simply an appeal on the documents below. The appeal lasted, essentially, one day, as did the case last week.

It is quite true that this case has been seen as of considerable importance by both sides. Financially that must be so, but a figure of £38,000 for a paper only one-day case in the High Court is simply, in common parlance, out of order. Of course lawyers, as I said last week, can agree with their clients to charge as much as they like, and they can talk to their clients as long as they like. One would hope that the client is warned that the clock is turning all the time. I expect in this case the client knew that. One can spend a certain amount of time on the documents, and essentially, as I say, on this appeal all that had to be done was to photocopy the documents before the registrar. In fact there are only about 60 odd pages of actual evidence; all the rest is photocopies of exhibits in the other volumes.

If this had been the sort of case I have seen daily in the provinces, or even see here, the figures would seem very large even at £10,000, and that is why I think the figure of £10,000 for a one-day case in the High Court is pretty close to the appropriate amount, unless of course there are special things like disclosure or interviewing witnesses and so on which may have increased the cost. But with a case of immense importance it can still be done for £10,000.

I look at the figures and I just cannot imagine what people were doing; but whatever they were doing it was wholly disproportionate to what such a one-day case would involve. I say that with respect to the figures on both sides.

The court must control costs. No one can feel that they can run up an enormous bill on their side which, if they are successful, can be visited on the other side. That will be true even in cases where both sides are playing the same game.

I assess the costs here at £10,000."

108. The Opponent appeals against the summary assessment, contending that primarily in the circumstances the judge ought to have directed a detailed assessment of its costs; and in the alternative that if the judge was right to assess the costs summarily, he ought not to have selected the arbitrary figure of £10,000 without reference to the costs actually incurred by the Opponent as set out in its statement of costs.
109. Mr Platts-Mills further submits that the judge erred in principle in assessing the costs by reference to another case (i.e. the case of ELLE Trade Mark, referred to by the judge) about which the Opponent and its advisers knew nothing, and which may or may not have been comparable to the instant case.
110. Mr Platts-Mills also submits that the judge overlooked the fact that a substantial amount of new evidence had been admitted after the hearing before the Hearing Officer, pursuant to permission granted by Evans-Lombe J at the interlocutory hearing referred to by the judge.
111. The judge was plainly right in saying that the court must control costs. CPR 44PD para 13.13 says in terms that the court will not give its approval to disproportionate and unreasonable costs. Moreover it is in the nature of the jurisdiction to assess costs summarily that the ambit of the court's discretion when carrying out a summary assessment is very wide.
112. That said, however, I am of the view that in the instant case the judge erred in principle when he in effect applied his own tariff to the case, without carrying out any detailed examination or analysis of the costs actually incurred by the Opponent as set out in its statement of costs.
113. In my judgment, it is of the essence of a summary assessment of costs that the court should focus on the detailed breakdown of costs actually incurred by the party in question, as shown in its statement of costs; and that it should carry out the assessment by reference to the items appearing in that statement. In so doing, the court may find it helpful to draw to a greater or lesser extent on its own experience of summary assessments of costs in what it considers to be comparable cases. Equally, having dealt with the costs by reference to the detailed items in the statement of costs which is before it, the court may find it helpful to look at the total sum at which it has arrived in order to see whether that sum falls within the bounds of what it considers reasonable and proportionate. If the court considers the total sum to be unreasonable or disproportionate, it may wish to look again at the various detailed items in order to see what further reductions should be made. Such an approach is wholly unobjectionable. It is, however, to be contrasted with the approach adopted by the judge in the instant case.
114. In the instant case, the judge does not appear to have focused at all on the detailed items in the Opponent's statement of costs. Rather, having concluded that the total of the detailed items was unreasonably high he then proceeded to apply his own tariff - a tariff, moreover, which appears to have been derived primarily from a case in which the Opponent had not been involved and about which it and its advisers knew nothing. In my judgment the jurisdiction to assess costs summarily is not to be used as a vehicle for the introduction of a scale of judicial tariffs for different categories of case. However general the approach which the court chooses to adopt when assessing costs summarily, and however broad the brush which the court chooses to use, the assessment must in my judgment be directed to and focused upon the detailed breakdown of costs contained in the receiving party's statement of costs.
115. I would therefore allow the cross-appeal, set aside the summary assessment and direct a detailed assessment of the Opponent's costs.

LORD JUSTICE BUXTON:

116. I gratefully adopt the account of the facts and of the issues in the case that is set out by Jonathan Parker LJ. Like him, I would dismiss the appeal and allow the cross-appeal. In deference to the arguments that we have heard on the appeal, and the general importance of some of the issues there raised, I venture to add some words of my own.

Introduction

117. Mr McCann, the deponent on behalf of the applicant, explained in paragraphs 4 and 5 of his Declaration of 3 June 1997 that when his family purchased the stock in the applicant's predecessor company, 800 Flowers, its "primary assets were its registered United States service marks DIAL 800-FLOWERS and 800-FLOWERS, which were awarded incontestable status, and the right to use the telephone number 1-800-356-9377, which corresponds to 1-800-FLOWERS. With these assets we believed we could build a nationwide floral telemarketing business….800 Flowers is the mnemonic for the toll free number by which customers can place orders with my Company but it is also my Company's corporate and trade name as well as an internationally recognised and well known Trade Mark". Mr Hobbs QC on behalf of the applicant expanded on this theme by pointing out that 800-Flowers is not "nationally linked": that is, in the context of national systems of freephone telephone numbers it equally forms a part of 1-800 numbers, as used in the USA and in some other countries, and of 0800 numbers, as used in the United Kingdom and other European countries.
118. These observations demonstrated, if demonstration were needed, that the mark 800-Flowers was selected in the context of, and is inextricably linked with, the operation of the applicant's freephone business in the USA. Were that not so, it would be difficult to think of a style and company name less apt to distinguish the business of an ordinary florist than a number apparently chosen at random followed by a word describing the industry's product. It is this association between the mark and the phone number that has overlaid the whole of this case.
119. The dilemma that this association presents is that when arguing that the mark has been used in the United Kingdom the applicants rely on the inevitable use of or reference to "800 Flowers" when customers in the United Kingdom telephone the United States number 1-800-FLOWERS, or access a web-site that is similarly designated; whereas when arguing that the mark is capable of distinguishing the applicant's business, and will not cause confusion, when registered as a United Kingdom mark, the applicants are forced to stress that the mark is indeed 800 Flowers and not 0800 Flowers, and forced to deny that in the United Kingdom "800 Flowers" would be, or would be thought to be, what Mr McCann says that it is in the USA, a mnemonic for the distinctive part of the company's freephone number. The judge drew attention to this dilemma at p 702 of the judgment:

"in support of their application the applicants have sought to allege actual use of the mark. But what they claim to have used in the UK is only the US equivalent of an 0800 number, namely 1-800-FLOWERS. I think they are right in saying that use of 1-800-FLOWERS would be a use of 800 FLOWERS, but it follows that use of 0800 FLOWERS is also use of 800 FLOWERS"

120. This dilemma is not conclusive in determining the appeal, but it has caused me to approach the applicant's arguments with some caution; and also to remind myself, when considering each separate objection raised before the judge, of the implications for the case as a whole of the arguments adduced to counter the particular objection.

Section 10 of the 1938 Act

121. I readily accept that in general terms an alphanumeric mark, or even a telephone number, is "capable of distinguishing" the services to which the mark is attached. The question, however, is whether this mark is capable of distinguishing these services. Much time was taken up in debating whether, at the date of registration, knowledge and understanding of alphanumeric telephone numbers was present in the United Kingdom, or likely to be present in the foreseeable future. To the extent that the issue arises, as it does in relation to the objection under section 11, I would think the latter to be the test; it could hardly be right for the registrar to be obliged to confer a monopoly on a proprietor when it was foreseeable that the basis on which the proprietor's mark had been registered would be falsified during its currency. But this question is concluded so far as the distinctiveness of the mark for section 10 purposes is concerned by the consideration pointed out by the judge: that the real substance of the mark sought to be registered, and the reason why it is sought to be registered in the United Kingdom, is its mnemonic connexion with a telephone number. Because the mark is not nationally linked it serves its mnemonic function equally in relation to a United Kingdom number and to a USA number accessed from the United Kingdom. The focus being, as the judge found, on the phone numbers rather than on the applicant's distinctive business, the mark, in the context in which its registration is sought, does not distinguish.
122. The foregoing considerations are, of course, strongly underlined by the applicant's argument, already referred to, that its use of the mark in the United Kingdom is by the accessing by customers of its telephone number.

Section 11 of the 1938 Act

123. Most of the exposition of section 11 in the cases has been directed at the possibility of confusion between two marks. In the present case, however, because of the centrality of telephone number to the applicant's business, the issue turns on the fact that, unlike the position in the USA, the applicant does not in the United Kingdom possess the telephone number of which the mark is the mnemonic. As a result, it was argued, a person using the mark, through using a telephone number, in the United Kingdom would be misled into thinking that the services offered by the applicant were available from that number: either provided by the opponents, who in fact hold the number, or provided by the firm in a different line of business or the private individual who might have been allocated the number if it had not been secured by the opponent. I did not understand it to be argued on the part of the applicant that that was not a type of "confusion" that potentially fell under section 11. Rather, it was submitted that the alleged confusion would not, as a matter of fact, arise.
124. Two preliminary points should be made. First, for this objection to succeed, it was not necessary for the judge to find, as was suggested in Ground 5 of the Appellant's Notice to have been the basis of his decision, that the mark would be perceived as "nothing more than" a representation of the telephone number 0800 356 9377. The question, rather, is whether its use would be seen as a representation of that number at all. Second, to establish that a mark is "likely" to cause confusion it is not necessary to show that the mark is inherently confusing, or that everyone seeing it will be confused. All that is required to be found, as a matter of fact, is a real tangible danger of confusion in the shape of reasonable doubt as to the source of the product on the part of a number of persons: Berlei (UK) Ltd v Bali [1969] 1 WLR 1306 at p 1324D-F, per Lord Upjohn.
125. The judge was justified in thinking that education in the use of alphanumeric freephone numbers in the United Kingdom was sufficiently foreseeable to cause potential customers in the United Kingdom to view 800 Flowers in the way in which the applicants wish customers in the USA to view it: as a guide or way in to a local freephone number. In seeking to counter this conclusion Mr Hobbs was reduced to arguing that such confusion would not arise because as customers were educated in the relation of the mark to a telephone number they would be educated in the relation of the mark to the USA number, which is what they would ring. This again sheds some light on the nature of the applicant's actual and intended use of the mark in the United Kingdom; but also, more immediately, the argument misses the point, because what the judge envisaged, and was entitled to envisage, was that persons in the United Kingdom generally, seeing or hearing about 800 Flowers, would think that it was a number within the United Kingdom telephone system that they could dial in order to access the applicant's services. The applicant's argument was that such a state of affairs would not arise; and not that, if it did arise, the case would nonetheless not fall within section 11. The judge's finding was to the contrary, and was plainly open to him.
126. In view of one complaint made by the applicant, it should perhaps be emphasised that the judge's conclusion did not depend on any general rule that the registrability of a mark that takes the form of, or which closely resembles, a telephone number must necessarily be dependent on the possession by the proprietor of that telephone number. One can, admittedly with some difficulty in the conditions of modern commerce, envisage cases where that division would not be a source of confusion. But where the business to which the mark is attached, the receiving and transmission of orders, is inherently a business conducted over the telephone, the holder of the mark is necessarily likely to cause confusion as a matter of fact if he does not possess the telephone number to which the mark makes reference.

Use in the United Kingdom

127. The services to which the mark relates are the receiving and transfer of orders for flowers and floral products. At the date of registration, those services were performed in the applicant's USA switching centre, accessed by use of the 1-800 telephone number, and (it would seem to a lesser extent) through the applicant's web-site, equally administered in the USA. It has never been suggested that such a centre, using a United Kingdom telephone number, would be set up here; indeed, as we have seen in connexion with the argument on confusion, the mark is asserted at all times to read back to a USA, and not to a United Kingdom, telephone number.
128. The services to which the mark relates are not, therefore, located in the United Kingdom. Other less direct manifestations of those services in the United Kingdom therefore have to be posited.
129. It may be noted in passing that the flowers, when delivered to the ultimate recipient, bear no indication that the order has been administered through the applicant. Nor would the actual delivery of the flowers appear to be comprehended within the description of the business as the receiving and transfer of orders. The fact that flowers have actually been delivered in the United Kingdom as the end-result of the applicant's dealing with orders does not therefore assist it. Rather, Mr Hobbs said that use of the mark in the United Kingdom occurred when customers located in the United Kingdom placed orders upon the USA phone number, or upon the applicant's web-site. Knowledge that it was possible to place such orders, in the absence of anything more than token advertising in the United Kingdom, would have arisen from "overspill" advertising contained in USA publications circulating in the United Kingdom; or from personal knowledge on the part of people who had lived in or visited the USA, or from recommendations to others by such people. When the telephone was answered in the USA, the speaker by stating the identity of the applicant, or even, it would seem, simply by stating the telephone number, projected the mark into the United Kingdom and used it there; when the applicant's web-site was accessed by a customer in the United Kingdom, the mark materialised upon that customer's computer screen, and was thereby used by the applicant in the United Kingdom.
130. There are considerable difficulties about this general approach, to some of which I will return. However, in the present case the argument falls at the first hurdle, since as Mr Platts-Mills QC pointed out the evidence adduced by the applicant goes no further than to demonstrate that orders had been placed by telephone and on the internet by persons whose credit card addresses were in the United Kingdom. It did not follow from that that all, or any, of those customers had actually been located in the United Kingdom when the order was placed; and there was no other evidence, for instance in the form of the number and nature of hits on the applicant's web-site, to support the picture of a pattern of trade by customers in the United Kingdom.
131. Mr Hobbs said that that objection was unfair, and not open to the opponent. Mr Zockoll, the deponent on behalf of the opponent, had alleged in terms that the applicant "operate[s] a worldwide franchise-type floral delivery system". Mr McCann had given evidence about the existence of a worldwide business, operated by telephone or by use of the internet, and had not been cross-examined or otherwise challenged. However, Mr McCann's evidence was at the same level of generality as that of Mr Zockoll. What was said was entirely consistent with the trade being confined, so far as the United Kingdom was concerned, to the delivery of flowers. And although Mr Hobbs cautioned us against placing too much weight upon the extent, as opposed to the genuineness, of the asserted use of the mark, there is no doubt that extent of use has some relevance to whether that use qualifies as a use establishing the mark as a badge of origin. I accept that in CHIPIE Trade Mark Application [2000] IP & T 735, much relied on by Mr Hobbs, the Privy Council said, at p739h, that

"the length of user may be immaterial, that is particularly the case where the mark is already in use as a trade mark by a trader elsewhere in the world. Proprietorship of the mark can then be proved by a minimal user in the country where the mark is proposed to be registered"

but even that statement requires some assessment to be made of the nature and extent of the use. The evidence in this case does not permit of even that modest enquiry.

132. I therefore reject the claim of use in the United Kingdom on that ground alone. However, since the matter was debated before us at some length I think it right to go on and make some observations about the general nature of such claims of use, even though what follows is necessarily obiter. In so doing, I note the objection raised by Mr Platts-Mills to the notion of use by speaking over the telephone, that such use would not be a visual representation of the mark, as section 68(2) of the 1938 Act requires. That limitation is removed in relation to current uses by section 103(2) of the 1994 Act, and in any event does not arise at all in relation to displays of the mark over the internet: on which latter it will be convenient to concentrate, the applicable principles being in my view the same in that case and in the case of telephone use under the 1994 Act.
133. Before us, Mr Hobbs disclaimed the more extreme argument as to "use", either in terms of registrability or of infringement, that was attributed to him by the judge at p 705 of the report, and described there by the judge as absurd:

"any use of a trade mark on any website, wherever the owner of the site was, was potentially a trade mark infringement anywhere in the world because website use is in an omnipresent cyberspace; that placing a mark on a web was 'putting a tentacle' into the computer user's premises "

134. Mr Hobbs said rather that he relied on interactive use of the web-site: that is, the accessing of it by customers in the United Kingdom, and thus the inevitable appearance on screens in the United Kingdom of the mark.
135. The implications of internet use for issues of jurisdiction are clearly wide-ranging, and will need to be worked out with care both in domestic and in private international law. We were shown a very interesting and detailed study conducted by the Section of Business Law of the American Bar Association and published in The Business Lawyer for May 2000. Without presuming to enter into detailed discussion of or commentary on that study, or the many cases, mainly in the USA, that it addresses, I do venture to suggest that the essence of the problem is to fit the factual circumstances of internet use into the substantive rules of law applying to the many and very different legal issues that the internet affects. It is therefore unlikely, and it is nowhere suggested, that there will be one uniform rule, specific to the internet, that can be applied in all cases of internet use. That consideration is of importance in our present case, because it was a significant part of the applicant's submissions that, for instance, "publication" of statements in a particular jurisdiction by downloading from the internet according to the rules of the law of defamation or of misrepresentation was of at least strong analogical relevance to whether a trade mark downloaded from the internet had been "used" in the jurisdiction to which it was downloaded; and, even more directly, that when A placed a mark on the internet that was downloaded by B, the same criteria should apply in determining whether A thereby used the mark as determine whether A thereby infringed the same mark in the jurisdiction where B was located.
136. I would wish to approach these arguments, and particularly the last of them, with caution. There is something inherently unrealistic in saying that A "uses" his mark in the United Kingdom when all that he does is to place the mark on the internet, from a location outside the United Kingdom, and simply wait in the hope that someone from the United Kingdom will download it and thereby create use on the part of A. By contrast, I can see that it might be more easily arguable that if A places on the internet a mark that is confusingly similar to a mark protected in another jurisdiction, he may do so at his peril that someone from that other jurisdiction may download it; though that approach conjured up in argument before us the potentially disturbing prospect that a shop in Arizona or Brazil that happens to bear the same name as a trademarked store in England or Australia will have to act with caution in answering telephone calls from those latter jurisdictions.
137. However that may be, the very idea of "use" within a certain area would seem to require some active step in that area on the part of the user that goes beyond providing facilities that enable others to bring the mark into the area. Of course, if persons in the United Kingdom seek the mark on the internet in response to direct encouragement or advertisement by the owner of the mark, the position may be different; but in such a case the advertisement or encouragement in itself is likely to suffice to establish the necessary use. Those considerations are in my view borne out by the observations in this court in Reuter v Mulhens [1954] Ch 50. The envelopes on the outside of which the allegedly infringing mark was placed as advertising matter were sent by post into the United Kingdom by the defendants. It is trite law that the Post Office is the agent of the sender of a letter to carry it, and thus it was the defendants who were to be taken to have delivered the letter to the recipients and to have displayed the mark to them within this jurisdiction. No such simple analysis is available to establish use by the applicant within this jurisdiction if he confines himself to the internet.
138. As at present advised therefore, I am not persuaded on conceptual grounds, any more than on evidential grounds, that the appellant has made out a case of use of the mark within the United Kingdom.

The cross-appeal

139. I would allow the cross-appeal for the reasons stated by my Lord. I do not wish to add anything.

LORD JUSTICE PETER GIBSON:

140. Despite the excellence of the submissions of Mr. Hobbs Q.C. for the Appellant, there is nothing which I would wish to add to the judgments of Jonathan Parker and Buxton L.JJ. with which I am in entire agreement.
ORDER: Appeal dismissed, cross-appeal allowed; summary assessment set aside; detailed assessment of the appellant's costs. The £10,000 that has been paid already to be treated as a payment on account. Costs of the appeal and cross-appeal to be paid by the applicant to the opponent with payment on account of £15,000, within 21 days, pending detailed assessment of those costs. Permission to appeal to the House of Lords refused. (Order does not form part of approved Judgment)