English court allows appeal by Sky in trade mark infringement action against email migration service provider
The English Court of Appeal has allowed part of an appeal by the broadcaster and broadband provider Sky after it had the use of its trade marks restricted following an infringement action against a cloud storage business with a similar name founded by former Microsoft employees.
Sky Ltd and other members of the Sky group challenged a decision of a High Court judge that the use of particular marks by SkyKick UK Ltd in relation to email migration and cloud storage services did not constitute passing off, and the restriction of their marks in a way that more closely connected them to pre-existing services provided by the group.
The appeal was heard by Lord Justice Newey, Lord Justice Nugee, and Sir Christopher Floyd. Geoffrey Hobbs QC and Philip Roberts QC appeared for the appellants, and Simon Malynicz QC and Stuart Baran appeared for the respondents.
The appellants’ trade marks were registered in the EU for the purposes of the transmission of sound or images, telecommunications, and entertainment. They also registered marks for the word ‘SKY’ in respect of various computer-based services, including computer software email services and connection to internet databases.
The parent company of the respondents was founded in the United States by two former Microsoft employees who designed a program to automate email migration from Microsoft Office to Office 365. They ultimately chose the name “SkyKick” for their company because it was evocative of the service it provided, namely the “kicking” of users’ data into cloud storage. The UK arm of the business was incorporated in 2014.
Following the initial complaint, the respondents attacked the appellants’ trade marks on the basis that they were insufficiently clear and precise, and that they had been applied for with no genuine intention to use them in relation to all the goods and services within the registration, particularly “telecommunication services” and “electronic mail services”.
Sky advanced a case based on a likelihood of confusion on behalf of the public due to the similarities between the trade marks. Following the issuing of guidance from the CJEU, the IP judge found that it was necessary to limit the specification of several parts of Sky’s trade marks in order to more closely connect them to its established businesses. Sky’s claim of passing off was also dismissed due to lack of evidence of confusion.
The appellants challenged the judge’s finding that its trade marks should be restricted and that it had obtained the marks in bad faith not intending to use them for all the services they covered. In respect of the passing off claim, it was submitted that the judge had failed to assess the ambit of Sky’s goodwill, despite his finding that it had become a household name. In such circumstances, the conclusion that the use of the SkyKick sign involved a misrepresentation flowed naturally from the judge’s findings.
No bad faith
In his opinion, with which the other two judges agreed, Sir Christopher Floyd said of Sky’s trade mark applications: “It is implicit in the way that the case was pleaded, the way it was put at the trial, and in the judge’s ultimate findings that Sky’s trade mark applications were made, at least in part, with the intention of protecting the use of the mark in relation to goods and services in which Sky had a substantial present trade and a future expectation of trade.”
He continued: “That distinguished this case from cases where the sole objective of the application was to provide an exclusive right to stop third party use with a trade mark which would not be used at all.”
In relation to the scope of Sky’s trade marks, he added: “It is true that Sky had no prospect of using the mark in relation to every conceivable sub-division of computer software, but that fact is not, in my judgment, a relevant or objective indication of bad faith.”
Turning to the appellants’ arguments concerning the dismissal of the passing off claim, Sir Christopher said: “I was wholly unpersuaded by these points. The judge gave a proportionate amount of attention to the passing off claim, given the relative lack of importance which the parties had attached to it. The judge would have had well in mind his findings about the extent of Sky’s reputation and use, and its degree of inherent distinctiveness. Against this was the fact that there had not in fact been any confusion.”
For these reasons, the appeal was allowed in relation to the partial invalidity issue only. Cross-appeals by the respondents on other parts of the case were also dismissed.