In May 2002, an IIR subsidiary launched a new version of its “Pronet” suite of products including “G-Mail™ web based email”. On 1 April 2004 Google announced the launch of its e-mail service, which it branded as “GMail™”. Action, on behalf of IIR and its operating companies, was then taken to protect their intellectual property through the filing of applications to register the trade mark, the filing of oppositions to Google’s CTM applications, and also through notification to Google that its use of the trade mark was inconsistent with IIR's intellectual property rights.

In a statement responding to Google's failure to rename the e-mail service on a Europe-wide basis, IIR announced that:

"The Board is perplexed by Google's stance in particular because:

1. The change implemented by Google is believed to be insufficient to avoid the risk of trade mark infringement in the UK, because Google has stated that only future, not existing Gmail addresses, will be changed;
2. The change, by which Google tacitly recognises that it has a problem with the trade mark, has been implemented only in the UK and not in the other 25 states of the European Community to which the Group’s European trade mark application is relevant;
3. No additional pressure has been applied by the Group in respect of the UK in particular.

The Board has concluded that either:

• Google has not understood the nature of the problem and has consequently implemented an inappropriate solution; or
• Google understands the problem and is using the UK as a test-market for a wider change in the Gmail name.

Google has asserted that it will not implement the change elsewhere, which throws some doubt on the second possible conclusion. The Board has therefore concluded that Google will only make the change if compelled to do so by the Courts (as has been the case in Germany); and that the likelihood of successfully bringing an action against Google has been increased by Google’s apparent recognition of its error at least in the UK.

The Board therefore intends to open dialogue with the three parties that made initial contact with the Group previously... in order to investigate the options for providing funding to pursue actions in those jurisdictions which have an equivalent of Passing Off under common law in England.

The Board anticipates that any prospective arrangement with a third party funding source is likely to close the door on any creative or compromise settlement with Google for the licensed use of the Gmail trade mark, since the interests of third-party funding sources will be primarily financial.

Whilst the Group has been keen to reach a compromise settlement with Google, it anticipates that with the conclusion of a litigation funding arrangement, all previously tabled compromises (notably the final proposal made to Google before Google terminated discussions, being an annual licence capped at ten years for US$500,000 annually plus advertising credits to a similar value to assist the Group in re-branding its GMail service) will be formally withdrawn. Once again the Board cautions investors that trading in its shares on the basis of a prospective financial settlement or court award would be highly speculative."