The EU General Court has refused to register the 'Skype' word and logo marks (the Skype marks) as Community Trade Marks (CTMs) in relation to a range of telecommunications and computer-related goods and services. The General Court's decision is based upon a likelihood of confusion with Sky's earlier word CTM SKY (the Sky mark).
In 2004 and 2005, Skype applied to the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) for registration of the Skype marks in relation to a range of telecommunications and computer-related goods and services. Sky opposed the applications, pleading a likelihood of confusion with the earlier Sky mark, filed in 2003 for identical goods and services. OHIM, and subsequently the OHIM Board of Appeal, upheld the opposition and refused to register the marks.
Skype challenged the OHIM decision arguing that:
- The Sky and Skype marks were not similar;
- The Skype marks had acquired a secondary meaning for the telecommunications services provided by the company through extensive use, which served to counteract any similarity with the Sky mark; and
- The Sky and Skype marks had been coexisting on the market without confusion for many years.
The General Court rejected Skype's arguments on all three grounds.
- Comparison of marks
The General Court compared the Sky and Skype marks from a visual, phonetic and conceptual perspective and determined that, given the identical goods and services applied for, the marks were confusingly similar.
Skype had argued that the term 'skype' should be considered as a unitary word and not "artificially split" into 'sky' and 'pe'. However, the General Court emphasised that the Sky mark appeared in full in the beginning of the Skype marks and was likely to be readily picked out by the average consumer as the term 'sky' is a part of the basic vocabulary of the English language. The only phonetic difference between the marks was the 'p' sound at the end of the Skype mark. It rejected Skype's argument that since the marks at issue were relatively short marks, the visual and phonetic differences between them should carry a greater weight.
In relation to the Skype logo, the General Court held that the figurative element was a 'simple border' and did not affect the overall visual impression created by the mark. If anything, it added to the conceptual similarity with the Sky mark as the figurative element on its own could suggest a cloud. This would increase the possibility of consumers associating the Skype mark with the term 'sky' as clouds are found 'in the sky'.
- Secondary meaning
The General Court rejected Skype's contention that the Skype marks had acquired a secondary meaning for the telecommunications services it provided and that this secondary meaning served to counteract any similarity with the Sky mark. The likelihood of confusion must be judged by reference to the public's recognition of the earlier mark, and not the mark applied for. The General Court found that the Sky mark had acquired a high level of distinctiveness based on its large reputation in the UK.
In addition, to the extent that the term 'skype' had acquired a secondary meaning for the services provided, this would make it a generic or descriptive term and therefore preclude registration.
- Peaceful coexistence
The General Court held that the coexistence of Skype and Sky on the market for several years since the filing of Skype's trade mark applications was irrelevant. Although coexistence on the market may reduce the likelihood of confusion, it must be assessed as at the date of filing. Skype had used its marks for, at most, 22 months prior to filing its trade mark applications. Furthermore, the initial use of the Skype marks was confined to peer-to-peer communication services. This short spell of coexistence for one isolated service outside of Sky's core business area did not diminish the likelihood of confusion for the entire range of goods and services applied for.
The General Court's decision does not mean that Skype will have to change its name – it simply prevents registration of it as a trademark. However, given the value of the Skype brand it is unsurprising that Microsoft, which acquired Skype in 2011, has already announced plans to appeal.