Starbucks (HK) Ltd and Another v British Sky Broadcasting Group Plc and Others
| Jurisdiction | England & Wales |
| Judge | Sir John Mummery,Lord Justice Pitchford,Lord Justice Patten,Lord Justice Etherton,Lord Justice Richards |
| Judgment Date | 15 November 2013 |
| Neutral Citation | [2013] EWCA Civ 317,[2013] EWCA Civ 1465,[2012] EWCA Civ 1201 |
| Docket Number | Case No: A3/2012/3094(Y),Case No: A3/2012/3094,Case No: (1) A3/2012/1699 & (2) A3/2012/1775 |
| Court | Court of Appeal (Civil Division) |
| Date | 15 November 2013 |
[2012] EWCA Civ 1201
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(1) Mr Justice Arnold
(2) Deputy Judge Baldwin QC
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Etherton
Lord Justice Patten
and
Lord Justice Tomlinson
Case No: (1) A3/2012/1699 & (2) A3/2012/1775
Geoffrey Hobbs QC, Guy Hollingworth (instructed by SJ Berwin LLP) on behalf of BSkyB
Michael Silverleaf QC and Richard Hacon (instructed by Dechert LLP) on behalf of Starbucks
Simon Thorley QC and Anna Edwards-Stuart (instructed by Bird & Bird LLP) on behalf of EMI
Hearing dates : 22/23 August 2012
This judgment concerns appeals in two sets of proceedings by different claimants for trade mark infringement and passing off. Both sets of proceedings are against various companies within the British Sky Broadcasting group of companies. Although the defendants to the two actions are not identical I shall for convenience refer to them globally as "Sky". The two sets of proceedings were prompted by the announcement on 21 March 2012 that Sky intended to launch a new internet television service under the name NOW TV and the logo
The claimants in one set of proceedings ("the EMI proceedings") are companies within the EMI group of companies. The original claimant in the other set of proceedings ("the Starbucks proceedings") was Starbucks (HK) Limited, which is a subsidiary of the Hong Kong company PCCW Ltd, but the claimants now include two other members of the same group of companies (together "Starbucks").
Sky applied in both sets of proceedings for a stay under Article 104(1) of Council Regulation 207/2009/EC of 26 February 2009 on the Community Trade Mark (codified version) ("the CTM Regulation") pending the outcome of applications by Sky to the Office for Harmonisation in the Internal Market (Trade Marks and Designs) ("OHIM") to invalidate the relevant marks. In the EMI proceedings Mr John Baldwin QC, sitting as a deputy judge of the Chancery Division, granted a stay on 25 June 2012 on the basis that there were no special grounds within Article 104 of the CTM Regulation ("Article 104"). In the Starbucks proceedings, a few days later, on 29 June 2012, Arnold J refused a stay and ordered an expedited trial on the ground that there were special grounds within Article 104(1). EMI appeals the decision of Mr Baldwin and Sky appeals the decision of Arnold J on the ground that the respective judges made errors of principle in their approach to what constitute special grounds within Article 104(1).
In the event Sky commenced its new service on 17 July 2012.
The hearing of these appeals, which took place over a day and a half, has been expedited and they have come on for hearing in the legal vacation.
The legal framework
The most important of the relevant provisions of the CTM Regulation and of Regulation 44/2001/EC of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters ("the Judgments Regulation") are set out in the appendix to this judgment.
The EMI proceedings
EMI is the proprietor of Community Trade Mark No. 7,153,505 for the mark NOW ("the EMI mark"). That registration has effect from 12 August 2008 for a range of goods and services including:
(1) The bringing together, for the benefit of others, of sound recordings and audiovisual recordings featuring musical performances, enhanced sound and/or visual recordings featuring musical performances, sound and/or visual recording media…enabling customers to conveniently view and purchase those goods (class 35);
(2) Transmission of sound or audiovisual recordings featuring musical performances over a communication medium, including wired and/or wireless system, broadband, narrowband, Internet, satellite, optical fibre, wire, cable or other electronic means (class 38);
(3) Production and distribution services in the field of sound and/or visual recordings featuring musical performances; information services relating to sound recordings and audiovisual recordings featuring musical performances provided on-line from a computer database, from the Internet or any other communication network including wireless, cable, satellite (class 41).
Following Sky's announcement on 21 March 2012, correspondence with EMI began on 20 April 2012 about alleged infringement of the EMI mark. On 23 April 2012 Sky applied to OHIM for the removal of the EMI mark from the register. Sky also applied for cancellation of another Community trade mark which EMI had registered at an earlier time ("the earlier EMI mark").
The EMI proceedings were commenced against Sky on 18 May 2012. EMI claims an injunction and other relief against Sky for infringement of the EMI mark and for passing off. The passing off claim relies on the goodwill built up in the word "NOW" by reason of the promotion and sale of compilation albums with the title "NOW THAT'S WHAT I CALL MUSIC" followed by a number to identify its number in the series, of which there are presently 81. Each consecutive album has been given a designation "NOW 1", "NOW 2" and so forth on the spines of CDs.
EMI applied for an interim injunction and an expedited trial. Sky countered with an application for a stay pending the outcome of its application to OHIM. The applications came before the deputy Judge on 1 June 2012. At the end of the hearing, the deputy Judge indicated his intention to refuse the application for an interim injunction. He handed down a reserved judgment on 25 June 2012 setting out his reasons for that refusal and also giving his decisions to dismiss the application for an expedited trial and to order a stay of the proceedings.
In his judgment the deputy Judge recorded that during the hearing the leading counsel for EMI, Mr Roger Wyand QC, had abandoned any reliance on passing off and relied only on infringement of EMI's mark. The deputy Judge said that he was, therefore, not troubled with any argument about damage to any existing reputation in the NOW brand.
The deputy Judge addressed, first, EMI's application for an interim injunction. Having said (at [10]) that he was satisfied that there was a serious issue to be tried as to trade mark infringement, he turned directly to the issue of the balance of convenience. On that issue he concluded (at [11]) that there was a certainty of real and substantial damage to Sky if the injunction was granted since Sky planned to launch its new service before the start of the Olympics in July 2012, and, if an injunction was granted, the preferred name of NOW TV would be lost to Sky forever. He considered (at [12]) that, by contrast, EMI had been considering launching a NOW branded music channel for many years, but still had no definite plans. In circumstances in which EMI had not seen occasion to exploit or had chosen not to exploit its registration in connection with TV channels or TV platforms, the deputy Judge considered (at [13]) that there was no certainty of substantial damage to the value of EMI's asset which could not be compensated in money. The deputy Judge said (at [14]) that conclusion was supported by EMI's agreement with Starbucks allowing Starbucks to use the NOW mark in relation to a TV service which it apparently intended to bring into operation in the near future, although he observed that he had little information in that respect. The deputy Judge briefly considered other arguments, but he said (at [17]) that the most significant factor influencing his decision to refuse interim relief was the discrepancy between the unquantifiable damage likely to be suffered by the respective parties.
The deputy Judge also rejected EMI's request for a speedy trial. He considered (at [19]) the principles for deciding an application for expedition, with particular reference to the judgment of Henderson J in J W Spear & Sons v Zynga Inc [2012] EWHC 1374 (Ch), where the various authorities are considered. He concluded (at [21]) that EMI had not demonstrated a pressing need for the matter to be heard sooner rather than later. He observed that Sky's launch of its NOW TV platform would go ahead before any likely trial date and that fact, together with the absence of any sufficiently certain plans by EMI to exploit its NOW mark in connection with TV channels or programmes, pointed against the need to disturb the normal order of things.
The deputy Judge then turned to Sky's application for a stay. In addition to Article 104, the deputy Judge referred to Article 94(1) of the CTM Regulation, Articles 27 to 30 of the Judgments Regulation, Case C-316/05 Nokia Corp. v Joacim Wardell [2006] ECR I-12083 at [38], and observations of Lloyd LJ in Samsung Electronics (UK) Ltd v Apple Inc [2012] EWCA Civ 729 at [49]. He then said (at [31]) that EMI relied on the following factors, individually and collectively, as constituting special grounds for the continuation of the proceedings: (1) Article 104 only applies in this case because of Sky's own filing of an application to invalidate EMI's mark in response to EMI's letter before claim; (2) Sky took no steps to clear the way for its proposed launch, despite being aware of EMI's mark; (3) the passing off claim will continue in any event; and (4) there is a need for commercial certainty, particularly so given EMI's own plans to launch a television channel under the NOW brand,...
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