A recent case in the United Kingdom illustrates the problems associated with a descriptive trade mark.[1]

The Plaintiffs

The plaintiffs were members of a substantial Hong Kong-based group of broadcasting, media and telecommunications companies headed by PCCW Ltd. (PCCW). Starbucks (HK) Limited, a PCCW company, owned the registered Community Trade Mark shown below:

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The mark was registered for use with a wide array of goods and services including television communication services; television broadcasting services; broadcasting and transmission of television programmes and cable television broadcasting.

Before choosing the mark detailed studies were carried out by two independent agencies. An internal study concluded that now was the strongest candidate as it fitted in well with the “immediacy product proposition.”Additional supporting rationale for now included the following

  • Creates a sense of urgency applicable to the brand promise
  • ‘now’ is a real name and is easily understood and straightforward
  • There is a sense of immediacy/of the moment/readiness associated to its meaning that is clearly understood by its audience

While the mark tested well one of the agencies involved warned that “A brand, with such a definite and descriptive name is demanding”.

Between June 2000 and January 2002, a PCCW company offered an Internet television service in association with a NOW mark but the service was discontinued in 2002.Another PCCW company offered fixed wireless broadband services in association with a NOW mark from 2005 but the service was wound down in 2008 except in a limited area. Only 81 customers remained in 2012. However, it was decided to re-launch the service in October 2012 using the same mark.

The Defendants

The defendants were members of the well-known group of broadcasting and telecommunications companies which operate under the name Sky in the U.K.(Sky). On March 21, 2012 Sky announced that they intended to launch a new stand alone Internet protocol television service under the name NOW TV. On July 17, 2012. Sky launched the service in beta form. Sky used three trade marks to designate their service: NOW TV, NOWTV.com and the following design:

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Considerable time and effort was devoted to choosing these marks. Sky engaged its consumer research agencyto carry out consumer research into possible brand names. The results of its initial research were that:

“NOW is strongest of current options:

  • Immediacy, ease, impulsiveness, spontaneity
  • Suggests simplicity of engagement
  • No technical hassles
  • No contract”

In addition, the research suggested that, the Sky name “upweights legitimacy of new brand”.”Powered by Sky” was “a very strong expression” which “reinforces Sky’s master Brand credentials”.

Sky also commissioned trade mark searches. The searches revealed the existence of a considerable number of registrations for marks which consisted of or contained the word NOW, including the plaintiff’s registration. The Brand Director for NOW TV gave unchallenged evidence that prior to the receipt of a demand letter on behalf of PCCW he was under the impression that the owner of the mark was the well-known coffee company.

The Action

PCCW claimed that the use by Sky of its trade marks infringed its registered trade mark and amounted to passing off. Sky denied infringement and counter claimed for a declaration that the PCCW’s registered trade mark was invalid.

Invalidity

In Canada the registration of a trade mark can be expunged if the mark was not registrable at the date of registration. A trade mark that is clearly descriptive of the character or quality of the services in association with which it is used is not registrable. The regulations concerning Community Trade Marks are similar.

Sky contended that the word NOW, when used in relation to the services in issue would be recognised by the average consumer as a description of a characteristic of the service, namely the instant, immediate nature of the service. Sky also contended that it would be recognised as signifying that the service was modern, fashionable and up to date. PCCW contended that the word NOW would not be perceived as describing a characteristic of the service. At most, it would be understood as alluding to such qualities. The judge agreed with Sky’s contentions and found the registration to be invalid.

Infringement

The Judge said that if the registration was valid, (contrary to his previous conclusion), it can only be so because of the design elements. Alsothe mark would be entitled to a limited ambit of protection. The marks used by the defendant’s did not include anything like the design elements of the plaintiff’s registration. As the only common element was the word NOW, there was no likelihood of confusion and no infringement.

Passing Off

The claim for passing off was independent of the claim for infringement and the finding of invalidity, In order to succeed three elements must be established. First, the existence of goodwill or reputation attached to the services supplied, in the mind of the purchasing public by association with the plaintiff’s mark under which the services were offered to the public, so that the mark is recognized by the public as distinctive of the plaintiff’s services. This type of goodwill is territorial in nature.

Second, a misrepresentation by the defendant (whether or not intentional) leading or likely to lead the purchasing public to believe that the services offered by the defendant were the services of the plaintiff.

Third, the plaintiff has suffered or that it will likely suffer damage by reason of the erroneous belief engendered by the defendant’s misrepresentation that the source of the defendant’s services is the same as the source of those offered by the plaintiff.

However, this claim was dismissed since it is well established that where a trader adopts words in common use for a trade mark, some risk of confusion is inevitable. The risk must be accepted since to find otherwise would allow the first user to unfairly monopolise the words. A court will accept comparatively small differences as sufficient to avoid confusion. In addition, a greater degree of discrimination may be expected from the public where a trade mark consists wholly or in part of words descriptive of the services to be rendered.

Comment

The decision shows the potential problems associated with descriptive trade marks. While they can be easy to understand and effectively communicate positive brand attributes they are demanding. It can be difficult or impossible to obtain a registration for such a mark and there are problems with their enforcement.