Sky Plc and Others v Skykick UK Ltd and Another
| Jurisdiction | England & Wales |
| Judge | The Honourable Mr Justice Birss,Birss J |
| Judgment Date | 13 July 2017 |
| Neutral Citation | [2017] EWHC 1769 (Ch) |
| Docket Number | Case No: HC-2016-001587 |
| Court | Chancery Division |
| Date | 13 July 2017 |
[2017] EWHC 1769 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY
EUROPEAN UNION TRADE MARK COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
The Honourable Mr Justice Birss
Case No: HC-2016-001587
Kieron Beal QC and Philip Roberts (instructed by Mishcon de Reya LLP) for the Claimants
Simon Malynicz QC, Tom Hickman and Stuart Baran (instructed by Dentons UKMEA LLP) for the Defendants
Hearing date: 26th May 2017
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
In this application the Defendants (SkyKick) apply for an order to make a pre-trial reference to the CJEU of a question relating to European trade mark law. The question is whether Article 1(13) of Regulation (EU) 2015/2424 of the European Parliament and the Council of 16 th December 2015 is contrary to fundamental EU Rights and is therefore invalid.
The effect of Article 1(13) is to abolish a defence to a claim for EU trade mark infringement which is known as the "own name defence" in so far as that defence applies to corporate entities such as the Defendants. The own name defence was set out in Article 12(a) of Council Regulation (EC) No 207/2009 on the Community Trade Mark, known also as the European Trade Mark Regulation. Article 1(13) of the 2015 regulation amended Article 12(a) so that that Article only applies to the name of a party where that party is a "natural person". As prescribed by Article 4 of the 2015 Regulation that regulation came in to force on 23 rd March 2016 and was "binding in its entirety and directly applicable in all member states".
This action is a claim for passing off and registered trade mark infringement. The First Claimant is the non trading holding company of the Sky Group of companies. That group provides a range of broadcasting entertainment, digital internet telecommunications and software services including pay television, home entertainment, broadband and telephony. The services are branded SKY. Amongst this are the well known Sky TV satellite channels. The Second Claimant is a subsidiary of the First Claimant and holds various intellectual property rights including EU trade marks. The Third Claimant is a subsidiary of the First Claimant and is said to have an exclusive license under the trade marks.
The Defendants describe themselves as operating a "business to business" start-up enterprise providing cloud based information technology migration, backup, and management services to IT solution providers who are Microsoft "partner" companies. This requires some explanation. The global software company Microsoft has a product called Office 365. Office 365 is a cloud based system, in other words substantial elements of data processing and storage occurs "in the cloud" as opposed to being held locally on a customer's computer system. Microsoft identifies "partners" which are businesses who provide services to third parties, including sale and support of the Office 365 platform. SkyKick in turn provide services to these partner companies rather than providing them directly to the customers of the partners. The services, as I have said, relate to the transfer (migration) of data into the Office 365 platform. In order for a customer to move from a system which is not cloud based to a system which is cloud based, the customer has to migrate their data in to the cloud. SkyKick provide products and services to partners to assist the partners in migrating their customers' data.
SkyKick has three core product offerings:
i) a migration product that moves data stored at a company's premises to the cloud;
ii) a cloud data backup product; and
iii) a cloud management tool which allows customers to manage cloud applications.
SkyKick also offers services such as hosting of the backup data and cloud management software facilities. These are known as Software as a Service or SaaS products.
Mr Schwartz, the co-founder and co-CEO of the Defendants together with his business partner Mr Richman, decided to adopt the name SkyKick in November 2011. Their case is that they carried out US trade mark searches in 2012 and filed US trade mark applications. No SKY marks were identified at that stage although other marks with the prefix Sky were identified. No oppositions were filed by the Claimants' group at that time. In February 2016 the Defendants filed an international trade mark application designating Australia, Japan, New Zealand and the EU. The Defendants established a limited market presence in the EU in 2013 but have seen rapid growth in the EU market. Over half its revenues in the EU were generated in 2016. The current business plan projects a major growth in revenue globally with 30% of them from the EU. Nevertheless the business is trading at a loss and it is predicted to do so until 2018. It is dependent on repeated rounds of private investment funding to sustain it.
The claim was brought on 23 rd May 2016. The Claimants contend that the Defendants infringe European Union trade marks and one UK trade mark in relation to the use of sign SKYKICK. The essential point is that SKYKICK is said to be too similar to the word mark or figurative mark SKY for the relevant services. The Claimants rely on four EU trade marks and a UK registered trade mark. Infringement is alleged under Art 9(1)(b) and Art 9(1)(c) of the European Trade Mark Regulation and the corresponding sections of the UK Trade Marks Act 1994. Use of SKYKICK is also said to amount to passing off having regard to the Claimants' goodwill in the name SKY.
The Defendants brought applications at the EU IPO (formally OHIM) to invalidate the Claimants' EU trade marks on the basis that the word SKY was not distinctive in relation to the field of cloud computing. These were commenced on 17 th February 2016 and one of the issues I have to decide is whether there are special grounds for continuing these proceedings pursuant to Article 104 of the EU trade mark Regulation. On that I should say that both sides agree that there are special grounds in this case and that I should continue the proceedings but they recognise that it is a matter for the court to exercise its independent judgment. I will deal with that at the end.
On the same day 17 th February 2016 SkyKick brought the proceedings in the Intellectual Property Enterprise Court (IPEC) seeking a declaration of non-infringement. After the issue of these High Court proceedings SkyKick has agreed to discontinue the IPEC proceedings. Sky's position is that the High Court is the appropriate place to resolve this dispute given what is at stake. SkyKick do not suggest that the proceedings should be transferred to IPEC. In addition to denying infringement SkyKick also has a counterclaim based on bad faith contending that the Claimants had no bona fide intention to use their mark across the full width of the specifications as at the date they were filed.
Broadly the Defendants' defence is that they have very different businesses from the Claimants and operate in different fields and are not in competition. The Claimants' use of the word SKY and the Defendants' use of the word SKYKICK are such that there is no likelihood of material confusion nor is there any dilution or free riding on the SKY brand or, if there is, the Defendants' have due cause for the purposes of Article 9(1)(c).
In the course of argument SkyKick's counsel showed me the width of the specifications of the Claimants' trade marks. There is no question that they are of striking width with specifications running to many pages of text. As regards the scope of the EU trade marks, it is said that the marks are registered for goods and services that are not identified with sufficient clarity or precision and/or are in bad faith.
SkyKick also rely on the own name defence. They contend that all they are doing is using their own name and doing so in accordance with honest practices in industrial or commercial matters. This defence is still part of the law as far as the UK trade mark is concerned because currently the relevant section of the 1994 Act, which is Section 11(2)(a), is drafted in such a way that the own name defence remains a defence available for a corporate entity under UK law. The time within which that part of the 1994 Act needs to be amended to be in accordance with the EU directive has not yet been reached.
The problem for SkyKick is that the limitation of the own name defence to natural persons for infringement of EU trade marks has already happened and if it is valid, then the own name defence SkyKick wishes to rely on will not be able to help them against the claim for infringement of the EU trade marks.
This application
At times it appeared that the Defendants' approach to this application was that if I was satisfied that there was a doubt about the validity of Article 1(13) of the 2015 regulation then I was obliged to make the order sought which would lead to a reference now. The focus of the Defendants' submissions was on arguing the merits of the Defendants' case that Article 1(13) is invalid. Considerable time was spent at the hearing on this, particularly by the Defendants. The argument seemed to be if the invalid law plea has some prospect of success (which sounds like the same thing as saying that there is indeed a doubt about the validity of Article 1(13)) then the court was obliged now to make a reference to the CJEU. That obligation arises because the validity of EU law is a matter within the exclusive competence of the CJEU. Although it was...
To continue reading
Request your trial
-
Sky Plc v Skykick UK Ltd
...did point out that the consequence was that Sky had not called anyone who was able to speak to Sky's filing strategy from the legal side. SkyKick's witnesses 17 Todd Schwartz is the co-founder and co-CEO, together with Evan Richman, of the Second Defendant. He has general executive responsi......
-
Sky Ltd (formerly Sky Plc) v Skykick, UK Ltd
...to the CJEU which was dismissed by Birss J (as he then was) on 13 July 2017: see Sky plc and others v SkyKick UK Ltd and another [2017] EWHC 1769 (Ch), [2018] FSR 2. The trial took place between 19 and 23 January 2018, following which the judge handed down the main judgment on 6 February ......