Starbucks (HK) Ltd & Anr v British Sky Broadcasting Group Plc & Ots* (Patten & Pitchford LJJ, & Sir John Mummery; [2013] EWCA Civ 1465; 15.11.13)

The Court of Appeal dismissed Starbucks' appeal from the decision of Arnold J in which he dismissed Starbucks' claims for trade mark infringement and passing off, and found Starbuck's NOW trade mark invalid.

Starbucks was part of a Hong Kong based-based group of broadcasting, media and telecommunications companies. Sky was the well-known broadcasting and telecommunications company. Starbucks claimed that Sky’s use of the name NOW TV in relation to its newly launched standalone internet protocol television service infringed its CTM and amounted to passing off. Sky counterclaimed under Article 7(1)(b) and (c) for invalidity of Starbucks’ CTM which was registered for, among other things, radio and television services and broadcasting and transmission of radio and television programmes in Class 38. Starbucks’ CTM is shown below:

Click here to view mark.

The three signs used by Sky of which Starbucks complained were NOW TV, NOWTV.com and the following logo:

Click here to view mark.

The Court of Appeal (Sir John Mummery delivering the lead judgment) observed that, although Sky's competitive conduct might be considered unattractive, such conduct was not necessarily unlawful. Accordingly, the question to be determined was not what was fair or unfair play in competition, but the proper scope of the exclusive rights relied upon.

The Court agreed with Arnold J's disposal of the case, dismissing the trade mark appeal for the following reasons: (i) NOW was devoid of distinctive character that would serve to identify Starbucks' service from the service offered by other undertakings; (ii) it was irrelevant that other uses of the word 'now' were distinctive of other services or products; (iii) Starbucks had chosen as its trade mark a commonplace, ordinary English word when it could have chosen or invented another to designate its service; (iv) it must therefore have been obvious to Starbucks that it was running the risk of invalidity on the ground that the word designated a characteristic of that service; (v) the essential appeal of Starbucks' service was that programmes of choice were available on demand in an instant; and (vi) NOW would be understood by the average consumer as designating the attractive instant and immediate characteristic of the service for which the mark was registered.

The Court also dismissed Starbucks' passing off appeal on the basis that the ability of UK consumers to access programmes emanating from Hong Kong was not a sufficiently close market link to establish an identifiable goodwill with a customer base in the UK. In order to establish goodwill in the UK, it was necessary to have some kind of connection with customers in the market with a view to transacting business and repeat business with them. Starbucks' preparatory activities in the UK were insufficient to establish sufficient goodwill at the relevant date. It was not sufficient for Starbucks simply to have planned to launch NOW TV in the UK; it was necessary either to have promoted, publicised or advertised to a customer base in the UK. However, the Court did note that it agreed with Arnold J that goodwill could, in principle, be established in the supply of a service, even where it was supplied free of charge or profit, and even though it was only supplied to a foreign speaking ethnic minority section of the public.