Trade Mark Infringement and Passing off: British Sky Broadcasting Group Plc v Microsoft Corporation

In British Sky Broadcasting Group Plc and Others v Microsoft Corporation Microsoft and another [2013] EWHC 1826 (Ch), Sky (that is to say British Sky Broadcasting Group plc, Sky IP International Limited, British Sky Broadcasting Limited and Sky International AG) sued Microsoft (Microsoft Corporation and Microsoft Luxembourg Sarl) for infringement of its British and Community trade marks and passing off while Microsoft counterclaimed for declarations of invalidity of Sky's trade marks on grounds of descriptiveness and  impermissible amendment.

Sky's registrations were:

• 2 415 829 for the word 'SKY', for "computer software to enable searching of data; computer programs; computer software; computer software to enable connection to databases and the Internet; computer software supplied from the Internet".in class 9 and "communications by means of or aided by computers; transmission of text, messages, sound and/or pictures; computer aided transmission of messages or images; telecommunication services relating to the Internet; telecommunication of information (including web pages); provision of telecommunications links to computer databases and websites on the Internet" in class 38;
• 2 302 176E for the word 'SKY' for 'receipt, storage and provision of computerized business information data" in class 35;
• CTM 3,203,411 for the word 'SKY' in relation to various goods "including data storage apparatus and instruments, software and data storage software, and software for video-conferencing, but excluding car batteries." in class 9 and services  "including online storage of files, data, photographs, graphics, documents, videos, images, audio files, audio-visual files, visual files, computer files, computer applications and information for others, electronic data storage services for personal and business use, and services for the electronic storage and organization of files, images, music, audio, video, photos, drawings, audio-visual, text, documents and data, but excluding business relocation services" in class 35,  "video-conferencing services and sharing of files, images, music, video, photos, drawings, audio-visual, text, documents and data; but excluding telegraph communications service." in class 35 and "online technical storage facilities, online technical back-up facilities, software as a service [SaaS] services, and electronic hosting of files, data, photographs graphics, documents, videos images, audio files, audio-visual files, computer applications, information for others and video-conferencing services, but excluding the performance of chemical analyses" in class 42; and
• CTM 3 166 337 for the word SKY in upper case letters for the same goods and services as in the previous mark.

Sky complained of Microsoft's use of the sign

for an online storage facility for its Windows, tablet and smartphone users. The sign that Microsoft now uses is: 

In an appendix to her judgment, the trial judge Mrs Justice Asplin assembled the following examples:

She also added some examples of how the SkyDrive icon appears on the face of a Windows tablet

and Xbox

As for the claim for passing off Sky is now an important internet service provider ("ISP") which also offers online storage to its subscribers by reference to its corporate name and trade mark.

Sky claimed for infringement of its UK marks under s.10 (2) and (3) of the Trade Marks Act 1994 and art 9 (1) (b) and (c) of the CTM Regulation (Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark OJ 24.3.2009 L78/1).

Her ladyship gave judgment to Sky on all three grounds - that is to say, infringement of its British and Community trade marks on both s.10 (2) and (3) grounds and the corresponding provisions of the Regulations and passing off. She also dismissed Microsoft's counterclaim for invalidation of those trade marks.

A comprehensive drubbing then. Not something that Microsoft is used to.

Microsoft does not take reverses of this order lying down but this is going to be a hard judgment to appeal.  Mrs Justice Asplin was careful - ultra careful - in her analysis of the law citing every relevant English and CJEU authority that I had heard of and even one or two that I hadn't.  That part of her judgment is 77 paragraphs long (paragraph [70] to [147].

Her analysis of the facts is also hard to fault.as it was equally thorough.

As to the claim under s.10 (2) (a) and the corresponding provision under the Regulation, she concluded at [148]

"having taken into account all the learning in relation to the nature of the "average consumer" who is a reasonably well informed and reasonably observant user of broadband internet services, if one undertakes a global assessment there is every reason to conclude that there is a likelihood of confusion in the average consumer in the sense that there is a risk that the public might believe that the services come from the same undertaking or one which is economically linked."

She added at [158]

"The global assessment which I have undertaken having taken account of the context in which the sign appears, has  taken into account the visual, aural and contextual effect of the fact that the dominant component in the sign is the same as the mark."

Her ladyship came to a similar conclusion in respect of the claim under s.10 (2) (b) and art 9 (1) (b) at
paragraph [177]:

"it seems to me that if one undertakes a global assessment, given all the matters to which I referred under the "identity" head which are also relevant here, together with the similarity in goods and services to which the UKTM and the CTMs and the sign relates, the descriptive nature of "drive" and the dominant remaining part of the sign being "Sky", there is a likelihood of confusion in the average consumer who is a reasonably well informed and reasonably observant user of the relevant internet services."

As to the claim under s.10 (3) and art 9 (1) (c), the judge directed herself at paragraph [226] that it is not necessary to show a likelihood of confusion but there must be a "link" between the sign and the mark in the mind of the average consumer. Furthermore, it is also necessary to show that the mark has a reputation in the relevant territory.  In the subsequent 8 paragraphs, she found that those elements were established and that Microsoft's use of the sign was without due course.

As to passing off, she referred to Lord Oliver's famous speech in Reckitt & Coleman v Borden [1990] RPC 341 at 406. She found no dispute as to Sky's reputation and in view of her earlier findings on the trade mark matters she concluded that there had been misrepresentation from which damage flowed as a natural result.  Accordingly, that head too was made out.

The counterclaim for invalidity was largely based on the absence of distinctiveness under s.3 (1) (b) and (c) and art 7 of the CTM Regulation. The learned judge did not accept any of that. Upon the evidence before her, the word SKY was distinctive in relation to online storage. There was a secondary argument that an amendment of the registration was made in bad faith in that it had somehow widened the specification. The power to disallow registrations made in bad faith was under art 52 of the CTM Regulation which the judge did not consider applicable in this case.