A High Court judgement leaves the way open for overseas companies to prevent New Zealanders from trading on the internet, a local manufacturer claims.
Justice Salmon, in the High Court in Auckland, granted an interim injunction in August preventing the manufacturer, Maxwell Rotor, from using the containerlift.com domain name. A second judgment this month limited the injunction to the United Kingdom and Europe.
The injunction was sought by two British companies, Containerlift Services and Containerlift Sales, and a New Zealand manufacturer, Steelbro New Zealand. Steelbro manufactures self-loading trucks, which are operated in the UK by Containerlift Services. Both Maxwell Rotors and director Max Tooley were named as defendants.
Tooley says the decision potentially allows a store in, say, Nigeria to prevent a New Zealand company with the same name from using that name on the internet. “It’s a very stupid case as far as I’m concerned,” Tooley says.
His lawyer, Ross Dillon, says the judgment’s rulings on the Fair Trading Act “is actually rather chilling as a precedent”.
In a letter to Tooley Dillon wrote that the decision “means that someone in NZ can breach the FTA completely unwittingly.
“As long as the shop can prove a reputation in Nigeria, they can mount an action against someone in NZ under the FTA.”
Auckland IP lawyer Clive Elliott agrees. “I can see all sorts of problems with this decision. It’s rather difficult stuff for a New Zealand court to say you have rights in Europe that we’re going to address, but you can use the name in the US or anywhere else.”
In his initial judgement, Justice Salmon found that although the Containerlift companies had no reputation in New Zealand, they could take action in this country. He found that Containerlift Services had established a “significant business” in England and was well-known, and had provided evidence it also operated in northern Europe. Containerlift Sales had sold “limited quantities” of Steelbro’s product, he said.
He also accepted evidence that the word “containerlift” was not used generically, and said the use of the containerlift.com domain “will probably cause damage to the business or goodwill” of the UK Containerlift companies.
Because of this, it was not necessary to determine “at this stage” whether the injunction would infringe the Fair Trading Act, he found.
In a second judgement, Justice Salmon agreed to amend the injunction to cover only the UK and Europe. The difficulty of limiting website access to only the UK and Europe was an issue for the defendants, he said.
Clive Elliott says the case raises questions about the jurisdiction of courts. He doubts that a UK court would be prepared to find in favour of a New Zealand company attempting to stop a British company from using the same domain.
“You’ve got a New Zealand court ruling on rights in the UK through a dot-com domain name registered through the US.
“I think that the correct approach should be [to hear the case] where the harm occurs. In this case, the harm occurs in the UK and the tort is committed, if at all, where the harm occurs,” he says.
Sheena Wheeldon, the Kensington Swan lawyer acting for the Containerlift companies and Steelbro, rejects a suggestion that the case sets a new precedent. “It’s an unusual set of facts and that makes it interesting, but I don’t see it as any precedent,” she told Computerworld.
Domain name disputes have been heard in the past by the World Intellectual Property Organisation. “My view is that this wouldn’t have been an ideal case for [WIPO],” Wheeldon says. “You have to have quite a limited set of facts to succeed there.”
New Zealand wasn’t chosen because its courts were more likely to rule in the plaintiffs’ favour, she says. “The UK would definitely have been a possible forum.”
Tooley says limiting use of the containerlift.com domain to Europe is not a workable solution. “Where’s Europe? Define Europe.”
Tooley, speaking from the UK, says the case has cost him “a lot of money — far too much for justice. It’s a very stupid case as far as I’m concerned.”
An appeal is “the logical next step”, Tooley says, although he’s not confident of prevailing. “Who knows? What I’ve learnt so far is that you get law, you don’t get justice. The whole thing’s a nonsense.”