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Monday, 15 July 2013

Reach for the Sky? Or Drive more carefully ...

What is it about the word "sky" that so attracts us? Is it the fact that it is short, simple to remember and easy to pronounce? Or is it the aspirational pull that attaches to it as in 'Reach for the sky', 'The sky's the limit' and so on?  Or has 'sky' replaced 'heaven' in an increasingly secular society?  While the true answer may never be forthcoming, the word is frequently the subject of litigation.

British Sky Broadcasting Group Plc & Others v Microsoft Corporation Microsoft & Another [2013] EWHC 1826 (Ch) is a decision of 28 June 2013 which came from the Chancery Division, England and Wales, via Mrs Justice Asplin. The case itself was a bit of an epic, involving seven days' worth of hearings, and it ended up in consequence of an unfortunate conflict between Sky's SKY Community and trade marks and Microsoft's SkyDrive service which, readers may recall, has been around since 2007, since which time this Kat has managed to mistake it several times for SKYPE but never for SKY ...

The action actually concerned four registered trade marks -- two Community trade marks and two UK marks -- as well as an allegation of passing off.  One of the Community trade marks was a "low level" figurative mark consisting of not much more than the word "Sky" in capitals, which was not really entitled to more protection than the word itself.


For the benefit of readers who may be unaware of Sky, this company provided, among other things, television and communication products and services, including broadband services, in the UK.  As long ago as 2001 it produced a TV set-top box which included digital storage so that viewers could both record and replay content, and, around 2005-6, it started transmitting its content over the internet. From 2006, it had itself been an internet service provider. Sky's trade marks were registered for a wide range of goods and services, including computer software, the online storage of files and the sharing of files.

Microsoft's "SkyDrive" product was launched in 2007: it provided consumers with an online storage facility for document files, photos and the like, which they could then access from anywhere on the internet and make them  available for sharing with others. Since 2012 SkyDrive had started to feature as one of the main start-up tiles on Microsoft's Windows 8 operating system and SkyDrive applications ("apps") had subsequently been made available for platforms including Windows Desktops, Macs, iPhones, iPads, Android Phones, Windows Phones and the Xbox games machine.

Microsoft denied infringement and counterclaimed for partial invalidity of Sky's registered trade marks.

Mrs Justice Asplin upheld Sky's trade mark infringement and passing off claims, while dismissing Microsoft's counterclaim.

Sky had made out its case of infringement under the Trade Marks Act 1994 section 10(2)(b) and Regulation 40/94 [now Regulation 207/2009] article 9(1)(b) [ie (i) identical or similar services, (ii) similar marks and (iii) likelihood of confusion, including a likelihood of association]. If one undertook a global assessment, there was every reason to conclude that there was a likelihood of confusion in the average consumer in the sense that there was a risk that the public might believe that the services came from the same undertaking or one which was economically linked.

Why was this so? Since "drive" was a descriptive term, "Sky" would be bound to be seen as the dominant element of the SkyDrive sign: the average consumer would therefore see "Sky" as fulfilling a trade mark function rather than as being a composite part of the SkyDrive mark as a whole.

It was significant that the word SkyDrive appeared as a pre-loaded tile on a laptop, as an app on a mobile phone or on an Xbox in circumstances in which it was difficult, if not impossible, for the consumer to appreciate that there was any connection with Microsoft. There had also been evidence of actual confusion in the form of calls to the Sky helpline [so that's why calls to helplines are recorded, exclaims Merpel].

The goods and services to which Sky's marks and Microsoft's sign related were closely connected, being (i) file storage, management and sharing software, on the one hand, and (ii) the provision of broadband services, including the provision of email services, on the other.

Danger: dilution!
Infringement under section 10(3) of the 1994 Act and Article 9(1)(c) of the Regulation [protection for marks with a reputation against use without due cause] was also established. Given the strength of Sky's mark within the UK, it had a reputation there. Sky had also established that there was a serious risk of loss of distinctiveness its trade marks in the sense of "dilution, whittling away or blurring" in the minds of the average, reasonably informed consumer of the goods and services for which that mark was registered. Microsoft's use of its sign was "without due cause": it could not be said that it was under such a compulsion to use that specific mark that it could not honestly be asked to refrain from doing so.

Sky's passing-off claim also succeeded, since the three elements of goodwill, misrepresentation and damage were all proved.

Microsoft's counterclaim was for a declaration of partial invalidity in respect of all four of Sky's trade marks on the ground of descriptiveness for cloud storage services, together with a declaration of invalidity in respect of one of the Community trade marks in the light of what was alleged to have been its impermissible amendment. Neither claim was substantiated.

PC World reports that Microsoft is to appeal. This Kat will be vigilant for further developments.

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