Starbucks (HK) Ltd and Others v British Sky Broadcasting Group Plc and Others

Court:Chancery Division
Docket Number:Case No: HC 12 B01589, Case No: HC12B01589
Judge:The Hon Mr Justice Arnold, Mr Justice Arnold, Mr. Justice Arnold
Judgment Date:02 Nov 2012
Jurisdiction:England & Wales
Neutral Citation:[2012] EWHC 3074 (Ch), [2012] EWHC 1842 (Ch)

[2012] EWHC 1842 (Ch)

IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION

PATENTS COURT

Royal Courts of Justice

The Rolls Building

7 Rolls Building

Fetter Lane

London EC4A 1NL

Before:

Mr. Justice Arnold

Case No: HC 12 B01589

Between:
Starbucks (Uk) Limited
Claimant
and
(1) British Sky Broadcasting Group Plc
(2) British Sky Broadcasting Limited
(3) Sky Ip International Limited
Defendants

Mr Michael Silverleaf QC (instructed by Dechert LLP) appeared for the Claimant.

Mr Geoffrey Hobbs QC and Mr Guy Hollingworth (instructed by S.J. Berwin LLP) appeared for the Defendants.

Mr. Justice Arnold

Introduction

1

I have before me an application by the Claimant ("Starbucks") for an expedited trial of these proceedings and a cross-application by the Defendants (who I will refer to as "Sky") for a stay of part of the claim pursuant to Article 104(1) of Council Regulation 207/2009/EC of 26 February 2009 on the Community Trade Mark (codified version) ("the CTM Regulation"). There is also before the court a contingent application by Starbucks for an interim injunction, but that only arises if the stay is granted. Accordingly, I have not yet heard argument on that application.

2

Starbucks is a subsidiary of the substantial Hong Kong company, PCCW Ltd. Sky are the well-known broadcaster. The casus belli in the proceedings is Sky's announcement on 21 March 2012 that they intend to launch a new standalone internet television service under the name NOW TV. Starbucks contends that the use of that name will infringe Starbucks' Community Trade Mark No 4504891 ("the CTM") and will amount to passing off.

The CTM

3

The CTM is a figurative mark which comprises the word "now" in lower-case letters with six fine lines arranged in a star or sun shape emanating from the central letter "o". It is registered for various goods and services in classes 9, 35, 38, 41 and 42, including in particular "telecommunication services; … telecommunication of information (web pages), computer programs and data; … radio and television communication services; … television broadcasting services; broadcasting and transmission of radio and television programmes; cable television broadcasting; … transmission of music, films, interactive programmes, videos, electronic computer games" in class 38. It has a filing date of 22 June 2005 and a registration date of 17 September 2008.

4

It is important to note that Starbucks has not relied in these proceedings on two earlier Community Trade Marks, Nos. 1417831 and 1421700, for the same mark originally registered, between the two of them, in respect of essentially the same goods and services as the CTM. Sky suggest that that is because Starbucks appreciates that those two earlier registrations are vulnerable to non-use, whereas the CTM cannot yet be attacked on that ground. Indeed, proceedings have been brought in the Office for Harmonisation in the Internal Market (Trade Marks and Designs) ("OHIM") by a third party seeking revocation of those two trade marks on grounds of non-use. In the course of those proceedings Starbucks voluntarily cancelled some of the goods and services. In decisions by the Cancellation Division (OHIM reference nos. 4320C and 4321C) issued on 28 November 2011, the Cancellation Division held that what remained of the application for revocation of the 1421700 registration was partially, but not completely, successful. As for 1417831, the Cancellation Division held that Starbucks had proved genuine use of the trade mark in respect of all the goods and services which remained within the specification after voluntary cancellation. As counsel for Sky pointed out, the goods and services cancelled included, in particular, the services in class 38 relating to broadcasting. He informed me that those two decisions were under appeal by the applicant for revocation.

5

Sky contend that the CTM is plainly and obviously invalid pursuant to Article 7(1)(b) and/or 7(1)(c) of the CTM Regulation. Sky says that the word NOW is devoid of distinctive character in relation to class 38 services, and in particular broadcasting and internet services of the kind germane to the present dispute. In support of that they rely, in addition to well-known authorities, upon two decisions of OHIM Boards of Appeal in Case R 735/2009–2 in relation to the mark PLAY NOW and Case R 1415/2009–1 in relation to the mark ANYTIME.

6

Sky then says that the figurative elements add nothing to the distinctiveness of the trade mark, relying upon the judgments of the Court of Justice of the European Union in C-37/03 P BioID v OHIM [2005] ECR 1–7975, and C-92/10P Media-Saturn-Holding GmbH v OHIM [2011] ECR I-0000. They also point out that in Starbucks' Reply and Defence to Counterclaim no claim is made by Starbucks to acquired distinctiveness.

7

As counsel for Starbucks pointed out, Sky has not brought any application for summary judgment before this court. Counsel for Sky argued that that was unnecessary, and indeed inappropriate in circumstances where Sky is seeking a stay of the proceedings. He submitted that the claim for invalidity was unanswerable, to the extent that this court could say now that there was no serious issue to be tried, and accordingly that Starbucks had no real prospect of success in maintaining its registration.

8

In my judgment, it is not possible to reach the conclusion at this stage of the proceedings that the claim for a declaration of invalidity is bound to succeed. In my judgment, there are serious issues to be tried as to the validity of the CTM, and accordingly Starbucks has a real prospect of success as opposed to a fanciful one.

9

So far as the issue of infringement is concerned, Sky say that, if the CTM is valid at all, its scope can only be ultra-narrow. Accordingly, they say that it will not be infringed by the signs which Sky is proposing to use. Those signs include, even in plain type, the addition of the letters "TV". They also, more importantly, include a specific form of logo and a strapline containing the words "Powered by Sky". In those circumstances it is said that there is no likelihood of confusion.

10

Again, it seems to me that the issue of infringement, assuming that the CTM is valid at all, is a matter on which Starbucks has a real as opposed to a fanciful prospect of success.

Passing off

11

Starbucks contends that it has a substantial goodwill and reputation in the United Kingdom under the names NOW TV and NOW. That reputation and goodwill is said to have arisen in three ways. The first way is pleaded in Starbucks' Particulars of Claim as follows:

"6. Since 2003, PCCW Media Ltd has provided a very successful internet protocol television ('IPTV') service in Hong Kong, which was launched under the name NOW BROADBAND TV. It was renamed ' now TV' in or around March 2006 (' now TV'). Until at least 2007 now tv was the world leader in IPTV and it is now the largest pay TV operator in Hong Kong, offering over 190 channels of local, Asian and international programming, including premium sports and movies, and a range of interactive services.

7. Since 2005, the channels provided by now tv have included 'Sky News' which is owned and operated by BSkyB [that is to say, Sky] and 10 'Star TV' channels, pursuant to a written agreement dated 8 July 2005 between Star TV (also a member of the BSKYB group) and PCCW Media Limited.

8. In late 2010, PCCW decided to expand the distribution of its now tv services internationally, including into the UK. The intention was initially to produce and/or acquire Chinese language content (and subsequently content in other languages, including English) for international distribution under the 'NOW' and now TV brands. Distribution of this extended Chinese language service has already commenced in mainland China, Malaysia and on international air carriers including Cathay Pacific, Virgin Atlantic, Singapore Airlines and Qantas, and is intended to be extended to the UK in the fourth quarter of 2012."

12

That pleading has been supplemented in the evidence in various ways. So far as use in Hong Kong is concerned, I have been shown evidence to the effect that in 2011 NOW TV gained a series of prestigious awards and that it had some 1.1 million subscribers.

13

So far as the intended extension of the service into the United Kingdom is concerned, evidence has been adduced as to two things. First, there is evidence of discussions between Starbucks and a potential partner in the United Kingdom which is a competitor to Sky. The identity of that partner is confidential, and accordingly I will not mention it in this judgment. It is fair to say, however, that, as counsel for Sky pointed out, as yet those discussions do not appear to have resulted in any concrete agreement. Secondly, and perhaps slightly more pertinently, on 18 June 2012 Starbucks launched an application for use on computers and mobile telephones called NOW PLAYER, which offers selected NOW TV content. It is, as indicated in the Particulars of Claim, Starbucks' evidence that a fuller launch of NOW TV in the United Kingdom is intended for the fourth quarter of this year.

14

For present purposes, however, the point that is made more strongly by counsel for Starbucks is not so much the effect of the activities, such as they are, that have been undertaken or are planned in the United Kingdom, but rather the effect of the activities that have undoubtedly been undertaken in Hong Kong. He argues that, by virtue of the commercial activities in Hong Kong, Starbucks, or at any rate the relevant company in the PCCW Group, which from the Particulars of Claim would appear to be PCCW Media Ltd, has acquired a substantial spill-over...

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