Skyscape Cloud Services Ltd v Sky Plc and Others
| Jurisdiction | England & Wales |
| Judge | Judge Hacon |
| Judgment Date | 08 June 2016 |
| Neutral Citation | [2016] EWHC 1340 (IPEC) |
| Docket Number | Case No: IP-2015-000086 |
| Court | Intellectual Property Enterprise Court |
| Date | 08 June 2016 |
[2016] EWHC 1340 (IPEC)
His Honour Judge Hacon
Case No: IP-2015-000086
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY ENTERPRISE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Amanda Michaels (instructed by Osborne Clarke LLP) for the Claimant
Philip Roberts (instructed by Olswang LLP) for the Defendants
Hearing dates: 26–27 April 2016
Introduction
The Claimant ("Skyscape") supplies what are known as 'cloud computer services' to organisations within the UK public sector. Remote computer facilities are provided to customers who can then store, manage and process their data on line. The customers share and pay for use of the remote facilities, thus avoiding the need to invest in an installation which is dedicated to their own use.
Skyscape's services are provided under the umbrella of a government scheme called 'G-Cloud'. G-Cloud enables public sector organisations to use cloud services provided by companies in the private sector on a pay-as-you-go basis. In some cases the G-Cloud service enables the public sector body to provide access to the general public. An example mentioned in evidence was the facility created for HMRC which enables taxpayers to file returns online as well as permitting HMRC to process the returns.
The Defendants ("Sky") form part of a group of companies ("the Sky Group") which provides broadcasting and other communication services under the well-known mark SKY.
On 28 July 2014 Sky's solicitors wrote to Skyscape alleging that Skyscape was infringing registered trade marks owned by companies within the Sky Group. Full details of four European Union trade marks and one United Kingdom trade mark were annexed to the letter ("the Cited Marks") together with a list of 27 others. It drew attention to what was then the quite recent judgment of Asplin J in British Sky Broadcasting Group plc v Microsoft Corporation [2013] EWHC 1826 (Ch); [2014] IP & T 1, in which it was held, among other things, that the defendants' use of the sign 'SkyDrive' for a product providing an on-line storage facility infringed the Sky Group's registered trade marks for the word SKY. Sections of the judgment were quoted in the letter. A deadline of 4pm on 14 August 2014 was given to Skyscape to provide specified undertakings, in default of which the Sky Group reserved the right to bring proceedings.
Skyscape declined to give the undertakings in the form sought, although more limited undertakings were offered. For their part, the Sky Group declined to strike. Further correspondence ensued, but so far no proceedings for infringement have been brought by the Sky Group against Skyscape.
Skyscape say that they wish to have commercial certainty regarding the conduct of their business. They have therefore brought the present proceedings against Sky in which they seek a declaration that their use of the sign 'Skyscape' in relation to their services does not infringe any of the five Cited Marks. Four of the Cited Marks are owned by the third defendant and the other is owned by the second defendant. There is no counterclaim for infringement by Sky and no challenge by Skyscape to either the validity or scope of the Cited Marks.
The law on negative injunctions
In contrast with the Patents Act 1977 (see s.71), UK trade mark legislation does not include any express provision for the grant of a declaration of non-infringement ("DNI") in the absence of a threat to bring infringement proceedings. Outside the threats provisions of the Trade Marks Act 1994 (s.21) the English jurisdiction for a DNI in relation to trade mark rights is derived solely from CPR Part 40.20 and the common law. Council Regulation (EC) No. 207/2009 ("the Trade Mark Regulation") as amended by Regulation (EU) 2015/2424 of 16 December 2015 provides that an EU Trade Mark Court has jurisdiction to grant a declaration of non-infringement of an EU Trade Mark if such an action is permitted under national law (art.96(b)).
In Well Barn Shoot Ltd v Shackleton [2003] EWCA Civ 2; [2003] All ER (D) 182 Carnwath LJ traced the increasing acceptance by English courts that it can be appropriate and useful to exercise the discretion to grant a negative declaration, beginning from a low start:
"[50] … For example, in Guarantee Trust Co of New York v Hannay and Co [1915] 2KB 536, 564 Pickford LJ said:
"I think that a declaration that a person is not liable in an existing or possible action is one that will hardly ever be made, but that in practically every case the person asking it will be left to set up his defence in the action when it is brought."
However, as Mr Mann accepts, recent cases have adopted a more flexible approach. Thus, in Camilla Cotton Oil Co v Granadex SA [1975] 1 LLR 470, [1976] 2 LLR 10, Lord Denning MR in the Court of Appeal and Lord Wilberforce in the House of Lords indicated, with varying degrees of emphasis, that the jurisdiction was not as confined as suggested by Pickford LJ, although Lord Wilberforce accepted that his words "warn us that we must apply some careful scrutiny" ( [1976] 2 LLR 10, 14).
[51] In Messier-Dowty Ltd v SABENA SA [2001] WLR 2040, 2050, Lord Woolf MR summarised the modern approach as follows:
"41. The approach is pragmatic. It is not a matter of jurisdiction, it is matter of discretion. The deployment of negative declarations should be scrutinised and their use rejected where it would serve no useful purpose. However, where a negative declaration would help to ensure that the aims of justice are achieved the court should not be reluctant to grant such declarations. They can and do assist in achieving justice ….
42. While negative declarations can perform a positive role they are an unusual remedy insofar as they reverse the more usual roles of the parties. The natural defendant becomes a claimant and vice-versa. This can result in procedural complications and possible injustice to an unwilling 'defendant'. This in itself justifies caution in extending the circumstances where negative declarations are granted, but, subject to the exercise of appropriate circumspection, there should be no reluctance to their being granted when it is useful to do so."
A specific hurdle that used to be in the way of a grant of a DNI has gone. Re Clay [1919] 1 Ch 66 was once authority for the proposition that a court will not grant a negative injunction unless a claim of right has been made by the defendant against the party seeking the declaration. This proposition was doubted by Lord Denning in Camilla Cotton Oil Co v Granadex SA [1975] 1 LLR 470, but anyway the introduction of the civil procedure rules, and specifically CPR 40.20 which permits the court to make "binding declarations whether or not any other remedy is claimed", ushered in the new approach to negative declarations explained by Lord Woolf in Messier-Dowty. It requires no prior claim of right.
As has been seen, Lord Woolf said that an application for a negative declaration requires appropriate circumspection on the part of the court. In Nokia Corp v InterDigital Corp [2006] EWHC 802 (Pat) Pumfrey J said this:
"[20] … A line of authority running from Guaranty Trust Company of New York v Hannay & Co [1915] 2 KB 536 through Messier-Dowty Ltd v. Sabena SA [2001] 1 All ER 275, culminating in the judgment of Neuberger J in Financial Services Authority v Rourke (unreported) 19th October 2001, establishes three relevant principles:
i) The correct approach to the question of whether to grant negative declarations was one of discretion rather than jurisdiction.
ii) The use of negative declarations should be scrutinised and their use rejected where it would serve no useful purpose, but where such a declaration would help ensure that the aims of justice were achieved, the court should not be reluctant to grant a negative declaration.
iii) Before a court can properly make a negative declaration, the underlying issue must be sufficiently clearly defined to render it properly justiciable."
This seems to have been approved on appeal, [2006] EWCA Civ 1618; [2007] F.S.R. 23. The third principle was accepted by Arnold J in Actavis UK Ltd v Eli Lilly & Co [2016] EWHC 234 (Pat), at [34].
The DNI sought in this case
The third principle recited by Pumfrey J in Nokia has particular relevance in the present case. Attached as Annex 1 to this judgment is the relevant part of the order sought by Skyscape at the start of the trial.
The final sentence of the skeleton argument of Ms Michaels, who appeared for Skyscape, was:
"Obviously, it is open to the Court, if it sees fit, and depending upon the extent of any findings it makes, to grant a DNI in different terms to those sought."
This seemed possibly to be not as innocuous as it looked. During Ms Michaels' opening speech I asked her to elaborate on Skyscape's idea of the correct approach by the court to an application for a DNI. It became clear that the real application being made by Skyscape, couched in reassuring and characteristically persuasive language by Ms Michaels, was that were I to decide that the declaration in Annex 1 was too wide in this or that regard, I should make a declaration in whatever narrower form I thought appropriate. Putting it bluntly (which Ms Michaels understandably did not), if I was not prepared to grant the DNI sought in full, Skyscape was willing to take whatever declaration it could get, at least pending any appeal.
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