Starbucks (HK) Ltd & Ors v British Sky Broadcasting Group Plc & Ors

Factual and Procedural Background

The Claimants are members of a substantial Hong Kong-based group of broadcasting, media and telecommunications companies headed by Company A. The Defendants are members of a well-known group of broadcasting and telecommunications companies operating under the name Company B. The dispute arose from Company B's announcement on 21 March 2012 of an intention to launch a new standalone internet protocol television service under the name NOW TV and the subsequent beta launch on 17 July 2012. Company A claimed that the use of the name infringed Community Trade Mark No. 4504891 ("the CTM") and amounted to passing off. Company B denied infringement and counterclaimed for a declaration that the CTM was invalid.

The proceedings commenced on 19 April 2012 and were tried on an expedited basis pursuant to an order made on 29 June 2012. That order refused Company B's application for a stay of the CTM claims pending determination of an invalidity application to the Office for Harmonisation in the Internal Market ("OHIM"). Company B's appeal against that order was dismissed by the Court of Appeal on 13 September 2012.

The CTM is a figurative mark comprising the word "now" in lower-case letters with six fine lines arranged in a star or sun shape emanating from the central letter "o". It is registered for a wide range of goods and services, notably including telecommunication and television broadcasting services in Class 38. The CTM was filed on 22 June 2005 and registered on 17 September 2008 in the name of the First Claimant ("Company A1").

Company A complained about three signs used by Company B to designate their internet television service: "NOW TV", "NOWTV.com", and a logo incorporating these elements.

The evidence included witness statements from representatives and customers of the Claimants and Defendants. The principal witness for Company A was its Managing Director of TV and New Media, who gave multiple statements, some of which included information not within her own knowledge, breaching procedural rules. Company A also called three customers of a related Claimant ("Company A3") to establish reputation and goodwill in the UK under the name NOW WIRELESS BROADBAND or NOW for short. The court noted limitations in the representativeness and context of this evidence.

Company A1's historical internet television service ("Now Service") was launched in Asia and accessible globally via a website from June 2000 to January 2002. It targeted niche programming and was broadcast by satellite in Asia, with streaming outside Asia. The service had modest reputation and goodwill in the UK but ceased operation over 10 years before the dispute.

Company A3 provided a fixed wireless broadband service in the UK from 2004, initially under the brand NETVIGATOR, then rebranded as NOW in 2005. It had a substantial reputation and goodwill in the Thames Valley and West London areas under the name NOW WIRELESS BROADBAND, with marketing and promotional activities until the service was wound down around 2009.

Company A2 ("Company A2") has provided a closed circuit IPTV service in Hong Kong since 2003 under the name NOW TV, which has grown to be the largest pay TV operator in Hong Kong with over 1.165 million subscribers. Its service is not available in the UK but is accessible via websites, YouTube channels, and some international airlines. Company A2 was planning entry into the UK market with a partner, but this was after the relevant date.

Company B's NOW TV service is an OTT IPTV service developed from 2011, adopting the name following consumer research that highlighted "NOW TV" as a simple, memorable brand communicating immediacy and flexibility. The service was announced in March 2012 and launched in beta form in July 2012 with applications on various platforms. The branding prominently includes "Powered by Company B" and has been widely promoted in the UK.

Legal Issues Presented

1. Whether the Community Trade Mark No. 4504891 ("the CTM") is invalid under Article 7(1)(b) and/or (c) of the CTM Regulation for lack of distinctive character or because it is descriptive.
2. Whether Company B infringed the CTM by using the signs "NOW TV", "NOWTV.com", and the associated logo.
3. Whether Company B has a defence under Article 12(b) of the CTM Regulation for nominative use.
4. Whether Company A's claims for passing off based on goodwill generated by Company A1's, Company A3's, and Company A2's services succeed.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by assessing the validity of the CTM under Article 7(1)(b) and (c) of the CTM Regulation. It found that the dominant element of the CTM was the word "NOW," which is a common English word with meanings relating to immediacy and present time. The court accepted evidence that the word NOW, when used in relation to the services in Class 38 (telecommunication and broadcasting services), would be understood descriptively by the average consumer as indicating an immediate or current characteristic of the service.

The court also considered extensive third-party uses of the word NOW in the broadcasting and telecommunications sectors, both as descriptive terms and as trade marks. While acknowledging that NOW can function as a trade mark in some contexts, the court concluded that the CTM was precluded from registration because it would be understood as descriptive of a characteristic of the services. Alternatively, if the figurative elements gave some distinctiveness, that distinctiveness was minimal ("needlepoint" or "eggshell").

On infringement, the court found that the signs used by Company B did not incorporate the figurative elements of the CTM and consisted solely of the word NOW. Consequently, there was no likelihood of confusion if the CTM was valid. Regarding Company B's defence under Article 12(b) for nominative use, the court concluded that Company B’s use was not honest, as it was aware of the CTM and used the signs as trade marks without justification, amounting to unfair competition.

Turning to passing off, the court examined goodwill arising from three distinct services: Company A1's now-defunct internet TV service, Company A3's wireless broadband service, and Company A2's Hong Kong IPTV service.

Company A1's goodwill in the UK was modest and residual goodwill was not sufficiently established after a 10-year gap since cessation of trading.

Company A3 had substantial goodwill in a limited UK geographic area (Thames Valley and West London) under the name NOW WIRELESS BROADBAND. However, the court found no evidence of actual confusion and discounted abstract evidence of likelihood of confusion due to methodology and context. The court concluded no likelihood of confusion among a substantial number of consumers.

Company A2’s NOW TV service was not available in the UK but was accessible via websites, YouTube, and airlines, mainly targeting the Chinese-speaking community. The court accepted that this generated a modest reputation but found no protectable goodwill in the UK because viewers were not customers and the service was not provided or booked in the UK. The court rejected the argument that mere accessibility of websites or exposure through indirect means sufficed for UK goodwill.

Even if goodwill existed, the court found a likelihood of confusion among UK viewers familiar with Company A2’s service due to identical names and similar services, with insufficient differences in branding or language to prevent confusion.

Holding and Implications

The court’s final conclusions were:

i) The CTM is invalid under Article 7(1)(c), alternatively Article 7(1)(b), of the CTM Regulation.

ii) Even if the CTM were valid, Company B has not infringed it.

iii) If the CTM were valid and Company B’s use was within Article 9(1)(b), Company B would not have a defence under Article 12(b).

iv) Company A’s claims for passing off fail.

The direct effect of this decision is that Company A’s trade mark infringement and passing off claims against Company B are dismissed. The court did not establish any new legal precedent but applied existing principles concerning trade mark distinctiveness, nominative use, and passing off goodwill, especially in the context of foreign reputation and internet-based services.