British Sky Broadcasting Group Plc (BSB) has been successful in the UK High Court in a claim of trade mark infringement and passing off against Microsoft Corporation (MC) and its use of the trade mark SKYDRIVE.

MC had been using SKYDRIVE in the European Union in relation to a cloud storage service.  The mark was used on its own and in conjunction with other matter such as Windows Live SkyDrive and Microsoft SkyDrive.  BSB sought to stop the same by bringing claims for passing off and trade mark infringement on the basis of registered UK and Community trade marks for various SKY trade marks. 

When comparing the mark SKYDRIVE as a whole, although the mark consisted of two words “sky” and “drive”, the Court held that the word SKY was the dominant element of the mark as DRIVE was descriptive for cloud storage services.  It was consequently held that SKY would be seen as the brand/trade mark by consumers and so confusion was likely to arise with BSB’s SKY marks, with consumers believing SKYDRIVE originated from BSB or an economically linked company to BSB.

Due to consumers being likely to make such a connection, the Court ruled damage was inevitable.  In fact actual confusion had already occurred with consumers calling the BSB Sky helpline complaining about the SKYDRIVE product offered by MC believing it was a BSB product.  Such evidence of actual confusion is very rare and certainly assisted in BSB’s actions being successful.  Furthermore, as BSB was able to demonstrate “a link” between BSB and SKYDRIVE in the mind of the average consumer, the Court also held that there was a serious risk of loss of distinctiveness of the SKY trade marks due to dilution and blurring.

MC filed a number of counterclaims, including invalidity of BSB’s marks due to bad faith and the trade mark SKY being descriptive for cloud storage services but the Court dismissed the same.

It appears that MC will appeal this decision which is not surprising as the only other options available are to rebrand or enter into an agreement with BSB wherein BSB are more than likely to request royalties.