The England & Wales Court of Appeal has dismissed Hong Kong media company Starbucks’ claims of trademark infringement and passing off against rival BSkyB (Sky).
Mr Justice Arnold ruled last year that Sky’s Internet TV service named Now TV did not infringe Starbucks’ Community trademark (CTM) for “Now” because the registration is invalid.
And he found that Sky’s offering, launched in March 2012, was not passing off Starbucks’ online TV service, also called Now TV.
Starbucks is not associated with the US coffee company of the same name.
In a ruling on November 15, Sir John Mummery and Lord Justices Patten and Pitchford swept aside Starbucks’ appeal.
Writing for the court, Mummery noted there were six reasons for dismissing Starbucks’ trademark appeal, the first that the “Now” CTM is devoid of distinctive character.
“It is not inherently distinctive of the claimants' TV service nor is it alleged to have become distinctive here by use made of the mark,” he said.
Mummery added that by choosing “Now” as a trademark, Starbucks was “running the risk of invalidity on the ground that the message that was conveyed or could be conveyed by the everyday word to the average consumer designated a characteristic of that service”.
Starbucks’ passing off claims had been rejected because UK Internet users viewing Starbucks’ Now TV programmes were not seen as the company’s customers. The customers, Arnold said, were the viewers targeted for business in Hong Kong.
Mummery continued: “In this case the universal presence and accessibility of the Internet ... is not a sufficiently close market link to establish an identifiable goodwill with a customer base here. All that happens in the UK is the viewing of the programmes coming from Hong Kong.
“There is more to establishing a goodwill in a market for the supply of a TV service than evidence that the programmes in the service can be viewed by members of the public who do not need the service.”
The case shows it is dangerous to use ordinary English words that are potentially descriptive of the chosen goods and services and expect to enforce your trademarks, said Ian Starr, partner at D Young & Co LLP.
He added: “It confirms that goodwill (rather than simply reputation) is needed on a country basis to find a passing off action, notwithstanding the global nature and reach of the Internet. There must be actual or likely potential customers in the UK for a service such as a TV service: merely being able to access the foreign service is not enough.
“This might come as a surprise to some companies who use the Internet to advertise or sell their wares and who might have a reputation based on their global sales but with minimal goodwill based on sales or advertising in the UK,” Starr said.
Catherine Wolfe, president of the Institute of Trade Mark Attorneys, said the ruling “reminds us of two crucial points”.
“First, to recall that every case in passing off must turn on its own specific facts and evidence: each case is unique. But second, we should all take a key and practical lesson here – that the decisions of Arnold J are clear and accurate, and are likely to be upheld, and rightly so.”
Dechert LLP, which is acting for Starbucks, could not provide a comment when we published this article.
UPDATE (19/11/2013): David Rose, head of IP at King & Wood Mallesons SJ Berwin, which represented Sky, said: “This case revisits, in the Internet age, what is required to have a protectable goodwill in the UK. The Court of Appeal has confirmed that the mere ability to access, from the UK, websites and content located overseas is not sufficient to generate goodwill, but that something more must be done to make a business connection with customers with a view to transacting business with them.”
This article was first published on 18 November 2013 in World IP Review
starbucks, bskyb, now tv, sir john mummery