Starbucks (HK) Ltd & Anor vBritish Sky Broadcasting Group Plc & Ors

A trade mark is excluded from registration under Article 7(1)(c) where at least one possible meaning designates a characteristic of the relevant goods or services. The assessment is contextual and made from the average consumer’s perspective. Distinctive use of the same word elsewhere does not prevent descriptiveness in the relevant case. For passing off, a claimant must prove goodwill in the UK, normally through business transactions or targeted prospective transactions with customers there. Mere reputation, internet accessibility, or viewing a foreign service without business contact is insufficient. Goodwill may arise from free services, services directed to a foreign-language minority, and advertising or advance promotion, but preparatory plans alone do not establish it.

The claimants, Hong Kong-based media companies, appealed against Arnold J’s dismissal of their trade mark and passing off claims and his declaration that their Community Trade Mark for NOW was invalid. The High Court decision is reported at [2012] EWHC 3074 (Ch).

The appeal concerned the validity of NOW for internet television services under the Community Trade Mark Regulation 207/2009/EC, and whether the claimants had protectable UK goodwill for passing off. The claimants relied on UK viewing of free online content, other access to their programmes, and preparations for a UK subscription launch. The central issues were whether NOW was descriptive or non-distinctive and whether those activities created UK customers and goodwill.

1. Disposition. Sir John Mummery delivered the leading judgment and dismissed the appeal on both the trade mark and passing off claims. Pitchford LJ and Patten LJ agreed.
2. Trade mark. Article 7(1)(c) of the Community Trade Mark Regulation 207/2009/EC excludes a sign if at least one possible meaning designates a characteristic of the relevant goods or services. The assessment depends on context and the perception of the average consumer. The fact that NOW could operate distinctively in other contexts did not determine its character for the services in issue. Here, NOW conveyed the immediate and instant availability of programmes on demand. It therefore designated a characteristic of the service and was invalid. The mark was also devoid of distinctive character under Article 7(1)(b), and no acquired distinctiveness through use was alleged. Questions of infringement and the Article 12(b) defence consequently did not arise.
3. Passing off. Goodwill has a property-like character and must be established within the UK in proceedings brought there. Foreign goodwill, reputational knowledge, and internet spill-over do not suffice without an identifiable UK business goodwill. Customers are generally persons with whom business is transacted or who are targeted for projected transactions and repeat custom. Mere access to, or viewing of, programmes from a foreign service through the internet, without business contact or targeted UK transactions, did not make the UK viewers customers or create UK goodwill.
4. Qualifying principles. Goodwill may arise from services supplied free of charge or without profit, and may exist among a foreign-language ethnic minority. Advertising and advance promotion can also contribute to goodwill before a service is available. However, the claimants’ preparations for a proposed UK launch did not establish goodwill because they had not created or promoted a UK customer base.
5. Appellate approach. The Court of Appeal was not conducting a retrial on the papers. It would interfere only if the trial judge’s decision was shown to be wrong, while respecting his specialist assessment of the evidence and overall situation.

• Court of Appeal (Civil Division). Dismissed the appeal against the High Court’s dismissal of the claims and grant of the counterclaim.
• High Court of Justice, Chancery Division, Community Trade Mark Court. Arnold J dismissed the trade mark and passing off claims and declared the Community Trade Mark invalid: [2012] EWHC 3074 (Ch).