“now” is the trade mark of their discontent: Starbucks v BSkyB

On 29 June 2012, the High Court gave its judgment in a case relating to use of the trade mark “now”: Starbucks (UK) Ltd (“Starbucks”) v British Sky Broadcasting Group plc (“BSkyB”)1.

Sky announced in March 2012 that it intends to launch an internet television service called “NOW TV”. Starbucks commenced proceedings against Sky alleging trade mark infringement and passing off for use of the name “NOW TV”.

Starbucks applied for expedition of the trial, to avoid the potential damage it could suffer as a result of BSkyB’s launch of the service. BSkyB, on the other hand, applied for a stay of the proceedings, pending a decision on an invalidity action for the trade mark upon which Starbucks relied.

The High Court decided to allow expedition of the trial as requested by Starbucks and refused BSkyB’s request for a stay of the proceedings.

Trade mark claims

A trade mark registration allows the owner to prevent other parties from using identical or confusingly similar marks in relation to identical or confusingly similar goods/services. Starbucks owns a figurative trade mark for the word “now” with decoration around the “o”. It is registered, amongst other goods and services, for telecommunication services, radio and television services and broadcasting. The registration is a Community Trade Mark (“CTM”), meaning that protection is given across the European Union. Starbucks claims that use of the name “NOW TV” by BSkyB in relation to the proposed internet television service will infringe the CTM.

BSkyB claim that the CTM is plainly and obviously invalid on the basis that the word “now” is devoid of distinctive character in relation to broadcasting and internet services, and that the figurative elements do not add to the distinctiveness. Alternatively, it claims that it only has a very narrow scope of protection which its proposed “NOW TV” service will not infringe. BSkyB has filed invalidity proceedings at OHIM (the EU trade mark registry) against the CTM.

Passing off claim

Under English common law, a business has the right to prevent a third party from “passing off” its goods and services as those of that business. To succeed in a passing off claim relating to a trading name, a party must show (amongst other elements) that it has goodwill associated with the name in the UK.

Starbucks has made a number of submissions to establish such goodwill in relation to the marks “NOW” and “NOW TV”, including:

  • use by its Hong Kong parent company of the name “Now TV” for a very popular internet television service in Hong Kong, more recently expanded to China, Malaysia and air carriers. Starbucks claim that the overseas activities have given rise to spill-over goodwill in the UK amongst the Chinese ex-pat community in the UK and Britons of Chinese descent2;
  • brief use in the early 2000s of the term “now” by the parent company in relation to an internet television service available in the UK; and
  • use by another UK group entity of Starbucks’ “now” logo for broadband services (under licence from Starbucks).

BSkyB, sensibly, has argued that the goodwill referred to above is primarily owned by other group companies and not by Starbucks itself; Starbucks in turn has indicated that consumers would associate the brand with the group’s business, and that it intends to join the other group entities to the proceedings.

BSkyB has also argued that it will be clear to consumers that its “NOW TV” service derives from BSkyB and that consumers are able to distinguish between different “NOW” brands. It backs this up by reference to a lot of other uses of the word “NOW” in brands for similar services. Therefore, it claims, there are no serious issues to be tried in passing off.

The High Court’s decision

The High Court did not believe that the trade mark invalidity proceeding by BSkyB was bound to succeed, and considered there were serious issues to try in both the trade mark infringement and passing off cases. It indicated that Starbucks has a real (as opposed to a mere fanciful) prospect of success at trial.

The Court then considered in detail the procedural matters on when a trade mark invalidity action might stay a trial for trade mark infringement (as requested by BSkyB), and the basis on which expedition of a trial may be granted (as requested by Starbucks).

The court agreed with submissions made by Starbucks that if BSkyB were to launch its internet television service, any goodwill which Starbucks had may be swamped by BSkyB generating its own goodwill in relation to the name. In addition, Starbucks would not be able to exploit its trade mark once the name became indelibly associated with BSkyB. Further, it was in the interest of consumers that confusion be avoided.

On that basis, the request by Starbucks for expedition of the trial was granted, and BSkyB’s request for a stay was refused.

What next?

The decision indicates that a trial will be scheduled for October 2012 to determine the claims of trade mark infringement and passing off. Based on the facts and issues raised in this judgment, I think some extremely interesting and complex legal matters may be considered, particularly in establishing whether goodwill and other required elements of passing off are present.

Now, we wait...3

Olivia Whitcroft, principal of OBEP, 27 July 2012

1 [2012] EWHC 1842 (Ch)

2 Starbucks also claim that the “now tv” service is due to be expanded to the UK in late 2012, as evidenced by some partnership discussions and a “NOW PLAYER” application for mobiles and computers launched in June 2012 in the UK as a precursor to the wider TV service.

3 But you wait at home; this is my office.

This article provides general information on the subject matter and is not intended to be relied upon as legal advice. If you would like to discuss this topic, please contact Olivia Whitcroft using the contact details set out here: Contact Details