A 5 year dispute between internet phone company, Skype and broadcaster BSkyB was brought into the spotlight last month, when Skype filed for an initial placement offering ("IPO") on the New York Stock Exchange.
In addition to revelations that the company is under investigation by the US authorities in connection with potential breaches of trade embargo against Iran, Skype disclosed, in the compulsory "risks" section of the IPO that:
"we have registered and are in the process of applying to register the “Skype” name and other related marks as trademarks and service marks in various jurisdictions. In the European Union and several other countries, some of our applications have received objections from the applicable trademark agency or have been opposed by third parties. In particular, in the European Union, India, Norway and Brazil, our applications in respect of the Skype name are being opposed by BSkyB plc., (...) based on BSkyB’s claimed rights with respect to the mark “SKY.” To date, we have successfully defended these oppositions in Switzerland and Turkey and to date have received a positive decision in Brazil."
However, the document goes on to explain that in July this year, the European Community trade mark register (OHIM) had decided in favour of BSkyB’s opposition against Skype's application for a trade mark for its "bubble logo". Skype noted its intention to submit a notice of appeal to the OHIM Board of Appeal, and to pursue the action further in the European courts if need be.
Skype also disclosed that it is pursuing unrelated actions in China, Russia, Brazil and Indonesia where other companies have made applications for, and in some cases been granted, trade marks for the Skype name and logo.
Whilst stating in no uncertain terms that Skype regards its brand as one of its most valuable assets, the dossier perhaps also serves as a timely reminder of the "dangers", in terms of trade mark law, of becoming a household name. In reporting the IPO filing, many commentators have noted that the company name "Skype" has almost become a verb in the modern lexicon, with users all around the world talking about "skyping" one another on a daily basis.
When a trade mark becomes so successful that it becomes, or replaces, the generic term for the goods or services to which it applies, it can lose its distinctiveness and, in certain circumstances, consequently its ability to be registered as a trade mark. More esoterically, there is a debate as to the value of a trade mark as an indicator of origin where it is also used in respect of the offerings of other businesses. Famous historic examples of trade marked brand names falling into common use include "Sellotape" and "Hoover".
In 2002, Sony lost its exclusive rights to its trade mark "Walkman" when a court in Austria held that the term had become generic. The court noted that a German dictionary defined the word "Walkman" with no reference to Sony.
In recent years, other internet giants Google Inc and Yahoo Inc have been at pains to avoid becoming victims of their own success in this way by actively taking steps (such as Google Inc's well documented issuing of letters to various media organisations in 2006) to prevent use of their registered trade marks "GOOGLE" and "YAHOO" as verbs.
Whether Skype's own popularity represents a greater risk to its registered trade mark portfolio than BSkyB remains to be seen but trade mark owners should police the use of their marks to guard against them becoming generic.