16 November 2012

Community Trade Marks: Starbucks v Sky

In Starbucks (HK) Ltd and Others v British Sky Broadcasting Group Plc and Others [2012] EWHC 3074 (Ch) (2 Nov 2012) a group of Hong Kong-based broadcasting, media and telecommunications companies headed by PCCW Ltd. ("PCCW") sued the well-known group of broadcasting and telecommunications companies that operate under the Sky sign for infringement of Starbruck (HK) Ltd's Community trade mark number 4504891 and passing off.

The CTM was as follows:













It was registered for a variety of goods and services in classes 9, 35, 38, 41 and 42, including 
"telecommunication services; … telecommunication of information (web pages), computer programs and data; … radio and television communication services; … television broadcasting services; broadcasting and transmission of radio and television programmes; cable television broadcasting; … transmission of music, films, interactive programmes, videos, electronic computer games".
The proceedings were precipitated by Sky's announcement on 21 March 2012 that it intended to launch a standalone internet protocol TV service under the name "NOW TV" and it actually started transmission on 17 July 2012.   PCCW objected to use of the following signs to designate the new service: 
  • the sign "NOW TV". 
  • the domain name  "NOWTV.com"; and
  • the following logo:








Sky counterclaimed for a declaration of invalidity under art 7 (1) (b) and (c) of the Community Trade Mark Regulation (Council Regulation No 207/2009 of 26 February 2009 on the Community trade mark 24.3.2009 L78/1).

Mr. Justice Arnold considered the counterclaim first.   It was common ground that the figurative elements of the CTM added nothing to the distinctiveness of the mark and that it would be perceived by the average consumer as the word NOW.  After referring to the Court of Justice's decision in Agencja Wydawnicza Technopol sp. z o.o. v OHIM [2011] ECR I-0000, [2011] ETMR 34 his lordship concluded at paragraph [116] that the CTM was
"precluded from registration by Article 7(1)(c) in relation to the services in issue because NOW would be understood by the average consumer as a description of a characteristic of the service, namely the instant, immediate nature of the service. The figurative elements of the CTM do not affect this conclusion. In the alternative, if the inclusion of the figurative elements means that the CTM does not consist exclusively of the unregistrable word NOW, I consider that the CTM is devoid of distinctive character and thus unregistable by virtue of Article 7(1)(b)."
Mr, Justice Arnold then considered whether the CTM would have been infringed had it been valid. If the only distinctive features were the figurative elements then the answer was clearly no. If the word "NOW" was inherently distinctive then the mark would have been infringed and Sky would have had no defence under art 12 (b) of the CTM Regulation.

As to passing off, there was evidence between paragraphs [19] and [27] that a PCCW company called Pacific Convergence Corporation (UK) Ltd ("PCCU") had operated an Internet protocol television service in the early years of this century as "Network of the World" or "NOW" television under the following mark
but that had closed down long ago.  Also, another PCCW company called United Kingdom Broadband had operated a wireless broadband service in Berkshire, Hampshire and Surrey as "NOW Wireless Broadband" which had connected 15,802 customers in 2006 but there were only 81 left by the date of Sky's announcement.  Finally, there was evidence that another PCCW company offered a TV service in Chinese in Hong Kong which could be accessed in Britain through its website, YouTube and in-flight entertainment channels on various airlines.   The judge  was not persuaded that any of those activities generated any protectable goodwill in the UK by 21 March 2012 and in any case there was no evidence of actual confusion.  It followed that the action for passing off also failed.

Almost as interesting as the decision itself is the judge's dicta.   He had sharp things to say about solicitors who filed witness statements that contained evidence that was not within the witness's personal knowledge and did not indicate its source.  Exonerating the witness from blame, he said at paragraph [10]:
"The fault lies with the solicitors who drafted the witness statements. They are not alone: in a number of other recent cases involving other firms, I have noted the same defect even in witness statements made by solicitors themselves, including statements by partners of those firms. This slipshod approach to the preparation of witness statements must cease."
The judge also endorsed at paragraph [16] Lord Justice Romer's remarks in Payton & Co Ltd v Snelling, Lampard & Co. Ltd (1900) 17 RPC 48 at 57 that the kind of witness who ought to be called in a passing off case is
"the customer who knows the distinguishing characteristics of the plaintiff's goods, those characteristics which distinguish his goods from other goods on the market so far as relates to general characteristics. The customer must be one who, knowing what is fairly common to the trade, knows of the plaintiff's goods by reason of these distinguishing characteristics."
"If he does not know that" added Lord Justice Romer "he is not a customer whose views can properly, or will be, regarded by this court."

Finally, Mr Justice Arnold warned at paragraph [117] that trade mark registries ought to be more careful about the type of combined word and figurative marks that they register:
"I would comment that it appears to me that PCCW only succeeded in obtaining registration of the CTM because it included figurative elements. Yet PCCW is seeking to enforce the CTM against signs which do not include the figurative elements or anything like them. That was an entirely foreseeable consequence of permitting registration of the CTM. Trade mark registries should be astute to this consequence of registering descriptive marks under the cover of a figurative figleaf of distinctiveness, and refuse registration of such marks in the first place."
As the judge had served as one of the Appointed Persons for many years he spoke from experience.   I should be surprised if this did not lead to a change in registration practice at least in Newport if not in Alicante.

There is a lot of law in this case as is typical with Mr Justice Arnold's judgments and I have discussed only the points that leap out at me.   Should anyone want to talk about specific aspects of the judgment, he or she should call me on 0161 850 0080 or send me a message through my contact form.  I can also be reached on Facebook, Linkedin, twitter or xing,

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