Repost from a bulletin from the Media & Sport Group at DLA Piper
TELEVISION & BROADCASTING
Trade marks and passing-off in internet broadcasting
In a court-ordered expedited trial the High Court considered whether use of the words "NOW TV" by Sky to brand its internet TV service had infringed a Community trade mark and whether that Community trade mark was valid.
Starbucks (HK) Limited, PCCW Media Limited and UK Broadband Limited (together "PCCW"), a Hong Kong-based group of broadcasting, media and telecommunications companies headed by PCCW Limited, claimed that British Sky Broadcasting Group PLC, British Sky Broadcasting Limited and Sky IP International Limited (together "BSkyB") had infringed their Community trade mark.
PCCW registered a figurative mark comprising the word "now" in lower-case letters with six lines arranged in a star shape emanating from the "o". It was registered for telecommunication and broadcasting services in class 38. PCCW used it for a successful closed circuit internet protocol television service in Hong Kong. A substantial number of Chinese speakers in the UK were acquainted with the service through seeing it in Hong Kong, on YouTube or via PCCW's website. PCCW intended to enter the UK broadcasting market. PCCW complained of three signs used by BSkyB for their new online television service: "NOW TV", "NOWTV.com" and a logo using the words "NOW TV" with an arrowhead in the centre of the "o" and the words "Powered by SKY". BSkyB counterclaimed that PCCW's Community trade mark was invalid.
Mr Justice Arnold in his judgment dated 2 November 2012 held that:-
1. Article 7(1)(c) of Regulation 207/2009 precluded the Community trade mark from registration in relation to the services in issue. It was because the average consumer would understand "NOW" as describing the immediate and instant nature of the service, which was unaffected by the Community trade mark's figurative elements. Otherwise, if by including the figurative elements the Community trade mark did not consist exclusively of the unregistrable word "NOW", then it was devoid of distinctive character and thus unregistrable by virtue of Article 7(1)(b). Therefore, the Community trade mark was invalid;
2. If the Community trade mark was valid, then it could only be because the figurative elements contributed to distinctive character. BSkyB had used the signs in relation to services identical to those covered by the Community trade mark. None of BSkyB's signs included anything like the Community trade mark's figurative elements. The only common element was the word "NOW", so there was no likelihood of confusion. Accordingly, even if the Community trade mark was valid, it had not been infringed. Alternatively, if "NOW" was inherently distinctive for services in class 38, then it would follow that BSkyB's use of their three signs were trade mark infringements;
3. If the Community trade mark was valid and if BSkyB's use of the signs was within Article 9(1)(b), then that use would not be saved by the defence under Article 12(b), according to which "a Community trade mark shall not entitle the proprietor to prohibit a third party from using in the course of trade… indications concerning the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of the goods or of rendering of the service, or other characteristics of the goods or service… provided he uses them in accordance with honest practices in industrial or commercial matters". BSkyB were aware of the Community trade mark before adopting the signs, and PCCW had promptly objected. The use complained of was squarely as a Community trade mark for BSkyB's services, and not descriptive. BSkyB's use interfered with PCCW's ability to exploit the Community trade mark. BSkyB did not have sufficient justifications for using the signs. Therefore, BSkyB's use amounted to unfair competition, and not use in accordance with honest practices; and
4. On passing-off, the court asked, and based on the evidence answered, four questions:
a. Can protectable goodwill in the UK arise merely from the accessibility of a website here?
• The mere fact that a website was visible and could be accessed throughout the world did not amount to use of a trade mark throughout the world. The mere accessibility of material in the UK via the internet does not give rise to a protectable goodwill in the UK. Evidence was required to show that the activity on the website was targeted at consumers in the UK. Plentyoffish Media Inc v Plenty More LLP  EWHC 2568 was applied to determine who counted as a "customer" in the context of free services that did not depend upon the provider's location - mere accessibility of the website was not enough - the applicable test was whether a company had shown that PCCW had UK customers for its service at the relevant date.
b. Who counts as a “customer” in the context of services which (i) do not depend on the location of the provider and (ii) are provided free to the consumer?
• Care had to be taken when considering who was to be regarded as a customer in the case of a television service. The commercial reality was that PCCW carried on business as a television services provider in Hong Kong. Its primary purpose in making its programmes available on the internet was to promote its Hong Kong business by encouraging people to subscribe in Hong Kong. Its customers were viewers in Hong Kong, not viewers in the UK. Therefore, the goodwill was in Hong Kong, not in the UK.
c. Can there be protectable goodwill in the UK as result of a reputation which only exists amongst a minority section of the population, and in particular an ethnic minority whose mother tongue is a foreign language?
• A protectable goodwill in the UK could exist as result of a reputation which only existed amongst an ethnic minority section of the population whose mother tongue was a foreign language. PCCW's TV service had acquired a modest, yet not de minimis, reputation amongst UK residents, and it was not a bar to its claim that the reputation was confined to the Chinese-speaking community, nor that it was free.
d. Can protectable goodwill arise as a result of advertising and promotion in advance of goods or services becoming available for purchase or acquisition?
• In appropriate circumstances, protectable goodwill could arise as a result of advertising and promotion in advance of the relevant goods or services becoming available for acquisition or purchase.
5. Although PCCW had a secondary purpose in generating a wider interest in its programmes so as to prepare the ground for launches of PCCW's NOW TV service in other territories including the UK next year, the execution of this expansion still lay some way in the future. Therefore, PCCW had not generated any protectable goodwill in the UK, and the passing off claim failed.
An interim payment of £600,000 on account of costs was awarded to BSkyB, that being the figure which represented the irreducible minimum of costs that were likely to be recovered following a detailed assessment.