Starbucks (HK) Ltd & Ors v British Sky Broadcasting Group Plc & Ors

A figurative trade mark dominated by a common word may be invalid where the word describes an easily recognised characteristic of the relevant services. The assessment depends on the services, the relevant public and the context in which the sign is used. A mark saved from descriptiveness only by minor figurative elements may have very narrow protection.

For passing off, reputation alone is insufficient: the claimant must own goodwill in the United Kingdom. Mere website accessibility does not establish such goodwill. A free service may generate goodwill, but viewers must be actual customers of the relevant service. Goodwill may be confined to an ethnic minority, and advance promotion may suffice where the facts support it.

PCCW claimed that Sky’s proposed and launched NOW TV service infringed a Community trade mark registered in the name of Starbucks (HK) Limited and amounted to passing off in respect of goodwill associated with earlier NOW-branded broadcasting and broadband services.

Sky counterclaimed for invalidity of the mark under Articles 7(1)(b) and 7(1)(c) of the Council Regulation 207/2009/EC. The court also considered infringement under Article 9(1)(b), the honest-practices defence under Article 12(b), and whether PCCW’s overseas and internet-based activities had generated protectable United Kingdom goodwill.

Outcome. Arnold J upheld Sky’s invalidity counterclaim. The Community trade mark was invalid under Article 7(1)(c), alternatively Article 7(1)(b), and the infringement and passing-off claims failed.

1. Validity. The relevant public was the English-speaking general public. The dominant element of the mark was the word NOW. In the context of the Class 38 services, NOW would be understood as describing their instant or immediate nature. The figurative elements did not alter that conclusion. The court applied a stringent and full assessment of the mark and the services. A carefully constructed advertisement could make NOW TV recognisable as the name of a service, but that did not establish inherent distinctiveness in NOW itself.
2. Infringement. The relevant date was when the alleged infringing use commenced. Even if the mark were valid because of its figurative elements, its distinctive character would be extremely narrow. Since Sky’s signs shared only the word NOW and lacked the figurative elements, there was no likelihood of confusion. If NOW were inherently distinctive, the signs would infringe.
3. Article 12(b). Nominative use could fall within the defence, but, on the assumed facts, Sky’s use was as a trade mark rather than descriptively and was not in accordance with honest practices. This conclusion was conditional on validity and infringement and was therefore not necessary to the result.
4. Passing off. The court applied the three elements stated in Reckitt & Colman Products Ltd v Borden Inc [1990] RPC 341. United Kingdom goodwill requires more than reputation. Website accessibility alone was insufficient, and viewers of a free service were not customers merely because they accessed content or generated advertising revenue. Goodwill could nevertheless exist among an ethnic minority, and free television services could have goodwill among viewers where the provider’s business depended on their custom.
5. Application. PCCU’s residual goodwill had disappeared. UKB had modest residual goodwill, but there was no likelihood of confusion; the Office Cleaning Services principle did not assist Sky in the materially different case of identical names and services. PCCM’s activities promoted its Hong Kong business, not a United Kingdom service, and had not generated United Kingdom goodwill. All passing-off claims therefore failed.

The judgment records that the proceedings were commenced on 19 April 2012 and tried on an expedited basis. An order refusing a stay of the Community trade mark claims was made on 29 June 2012, following the court’s earlier judgment: [2012] EWHC 1842 (Ch), [2012] ETMR 57. Sky’s appeal against that interlocutory order was dismissed by the Court of Appeal: [2012] EWCA Civ 1201.