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| Starbucks (HK) Ltd v British Sky Broadcasting |
| Case name: Starbucks (HK) Ltd & Another v British Sky Broadcasting Group Plc & Others [2013] EWCA Civ 1465 |
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This Court of Appeal decision concerned a figurative Community Trade Mark (CTM), being a representation of the word NOW, which was registered in class 38 for internet television services as well as in other classes. The appellant and CTM owner was Starbucks (HK) Ltd, a Hong Kong-based media telecommunications company. Starbucks provide a television service in Hong Kong under the trade mark NOW. At the relevant date, Starbucks did not conduct business in the UK and the service was not targeted at the UK public but it could be viewed online for free.
In March 2012, Sky, the UK media business and respondent to this appeal, announced the launch of an internet based television service named NOW TV in the UK. In April 2012 Starbucks issued proceedings against Sky for both trade mark infringement and passing off. Sky counterclaimed that Starbucks’ trade mark was invalid and the matter was granted an expedited trial.
Mr Justice Arnold at first instance dismissed Starbucks’ actions in trade mark infringement and passing off and granted Sky’s counterclaim, declaring Starbucks’ CTM to be invalid. Arnold J held that that the mark was invalid under Article 7(1)(c) of the CTM Regulation because it was descriptive of a characteristic of the service for which it was registered and that it would also be invalid under Article 7(1)(b) because it was devoid of any distinctive character. The passing off claim was dismissed on the basis that Starbucks had not shown that their mark had generated a protectable goodwill in the UK.
The appeal was to both Arnold J’s application of the CTM regulation to the Starbucks registration and the decision on passing off, specifically whether Starbucks had generated sufficient goodwill for the sign to be protectable. |
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The Court of Appeal dismissed the appeal on both the trade mark infringement and passing off aspects.
Regarding the trade mark, Sir John Mummery, giving the lead judgment, said that the trade mark NOW is devoid of distinctive character, it not being inherently distinctive of Starbucks’ TV service and it not having been alleged by Starbucks to have acquired distinctiveness. He also agreed with the assessment made by the trial Judge that the average consumer of Starbucks’ services would understand the word NOW to be designating the attractive instant and immediate characteristic of the service. It was therefore also invalid under Article 7(1)(c) for being descriptive of the service.
Regarding passing off, the Court agreed with Arnold J that there was not protectable goodwill in the UK for Starbucks’ services. This is despite a finding by the trial judge that Starbucks had acquired a reputation in the UK in the provision of television programs to the Chinese speaking population of the UK. The Court of Appeal said that generating a goodwill for a service delivery generally requires making, or at least attempting to make, some kind of connection with customers in the UK market with a view to transacting business and repeat business with them. Regarding a claim that Starbucks had obtained goodwill in planning to launch its service in the UK, the Court found it was necessary either to have, or promote and publicise or advertise to, a customer base in the UK in order to establish a goodwill protectable by law. |
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This judgment may be considered a reminder to companies that the Courts are not sympathetic to trade marks that may be descriptive of the goods and/or services for which they are used. When choosing a trade mark, businesses should remember that in the absence of acquired distinctiveness, the mark may be caught by the exclusion from registration in Article 7(1)(c) even if only one of the possible meanings designates a characteristic of the goods or services concerned.
The judgment also provides some judicial commentary on formation of goodwill in the UK amongst minority groups and for internet-based services. The Court of Appeal agreed that a goodwill may be established in the supply of a service, even though it may be made without charge or profit and even though it is supplied only to a foreign language-speaking ethnic minority section of the public. In practice, such a service would however have to be targeted at UK customers specifically and in some meaningful way. The Court of Appeal also confirmed that it is possible to establish a goodwill in a service by advertising it and by advance promotional activities. |
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