In refusing Skype Ultd's application to annul OHIM's earlier decision to refuse Skype's CTM applications for the figurative and word sign SKYPE, the Court of Justice of the European Union (CJEU) has confirmed that there would be a likelihood of confusion between the word mark SKY (held by Sky plc and Sky IP International Ltd) and the figurative and word sign SKYPE.  

Summary  

The CJEU held that:  

  • The SKYPE and SKY marks are visual, phonetic and conceptually similar and there exists a likelihood of confusion between them.
  • In assessing the degree of visual, phonetic and conceptual similarity between the marks, the Court was influenced by the fact that SKY made up the majority (three fifths) of the SKYPE mark, that the two marks were pronounced with one syllable "skai" versus "skaip" with the only difference being the p and that they were conceptually similar, the cloud design around the word SKYPE adding to this effect.
  • The SKY mark has a high level of distinctiveness and marks such as this enjoy broader protection than marks with less distinctive character.
  • Users of peer-to-peer communication services are not better informed than the average consumer of television services and so would not be more able to distinguish the two marks.
  • Coexistence of only one isolated service among a list of goods and services covered by the marks cannot diminish the likelihood of confusion.

Business impact  

  • This case again demonstrates the importance of challenging the use of highly similar trade marks by new market entrants , given their potential to grow into well-known brands quickly and potentially impact upon your own brand in its core activities.

The CJEU's decision

In a judgment handed down on 5 May 2015 in Skype Ultd v OHIM (T-423/12, T-183/13 and T-184/13) the CJEU refused Skype's application to annul OHIM's earlier decision to refuse CTM applications for the figurative and word sign SKYPE on the basis that there exists a likelihood of confusion with the word mark SKY.

The CTM application related to a broad class of goods and services within Classes 9, 38 and 42 and were identical to those covered by Sky's word mark. Although Skype argued that the services covered by the mark applied for, as are actually offered on the market, were significantly different to the goods and services covered by Sky's mark, as are actually offered on the market, the Board of Appeal held that the comparison of goods and services covered by the marks at issue must be made on the basis of the lists of goods and services registered or applied for.

In determining the relevant public, Skype asserted that the average consumer of its products is more circumspect and better informed than the average consumer of television services. The Court disagreed and found that, despite its technical nature, peer-to-peer communication services are aimed at a general public and using them does not require specific technical expertise beyond the ability to use the computer and the internet. Since it is sufficient that a relative ground for refusing a CTM exists in only part of the EU, the Court confined its examination of the public to the UK in this case.

In reaching its decision the Court held that there was an average degree of visual, phonetic and conceptual similarity between the marks at issue. Visually the public would notice the three letters "sky" at the beginning of each mark, which represents three fifths of the letters of the mark applied for. Phonetically the two signs are pronounced with one syllable ("skaip" and "skai"), the only difference being the final "p" of the mark applied for, but the single syllable from the "sky" mark is fully heard in the pronunciation of "skype". Additionally, the pronunciation of the "y" in "skype" is not any shorter than it is in "sky". Conceptually, although the term "skype" has no meaning in English, there is a possibility that the public will recognise the word "sky" within it. Turning its attention to the figurative mark, the Court held that the cloud boarder of the "skype" mark would further increase the probability of the public recognising the element "sky" because clouds are found in the sky.

Click here to view image.

The Court also noted that the more distinctive a mark the greater the likelihood of confusion and therefore marks with a high distinctive character, either per se or because of their recognition by the public, enjoy broader protection than marks with less distinctive character. On the basis of compelling evidence provided by Sky in this case, the Board of Appeal was correct in finding that the "sky" mark had a high level of distinctiveness on account of its very large reputation in the UK for services in Classes 9, 38 and 41. In contrast the Court rejected the assertion that the "skype" mark had acquired distinctiveness in the 20 months that the product had been on the market and any meaning of its own for identifying the services covered by the mark applied for would be a generic term and descriptive for that type of service.

Skype argued that the marks had coexisted in the UK for several years without being confused. In dismissing this argument, the Court held firstly, that any coexistence can only concern peer-to-peer communication services and not the other goods and services covered by the mark applied for. Coexistence of only one isolated and highly specific service among a long list of goods and services covered by the marks at issue cannot diminish the likelihood of confusion for the entirety of those goods and services. Secondly, a period of coexistence of less than 2 years concerning an activity that was not part of the intervener's core business was manifestly insufficient for assuming that coexistence was based on the absence of likelihood of confusion.