Professional Documents
Culture Documents
Date: 28/06/2013
Before :
Iain Purvis QC and Brian Nicholson (instructed by SJ Berwin LLP) for the Claimants
Michael Bloch QC, Anna Carboni and Stuart Baran (instructed by Redd Solicitors LLP)
for the Defendants
1. This is an action for passing off and for infringement of two registered
Community trade marks (CTMs) and two UK registered trade marks (UKTMs) for the
mark ‘SKY’ by which the Claimants seek to prevent the Defendants from using
“SkyDrive” as the name for their cloud storage service throughout the European
Union.
3. The counterclaim for the revocation of UKTM 176 on the grounds of lack of
genuine use in relation to “receipt, storage and provision of computerised business
information data” is no longer pursued.
The Parties
4. There are four Claimants for reasons connected with the ownership and licensed
use of the various marks in issue. They are British Sky Broadcasting Group plc, Sky
IP International Limited, British Sky Broadcasting Limited and Sky International AG.
The first Claimant, British Sky Broadcasting Group plc owns and ultimately controls
the activities of the others and nothing turns for present purposes on any distinction
between them. Accordingly, I shall refer to the Claimants together as ‘Sky’.
7. Over the years, Sky has adopted a whole series of trade marks, comprising the
mark ‘Sky’ followed by a descriptive element. This practice has been followed not
only for its channels such as Sky Movies and Sky Sports, but also for its platforms
such as Sky+, Sky Digital, Sky Broadband and for its computer software running on
such platforms such as Sky Go, Sky Mobile, Sky Bet and Sky Photos. Two typical
presentations of Sky’s sign are:
8. Between 2008 and 2011, Sky provided ‘Sky Store & Share’, which was an online
storage service available for customers to upload and share their digital files and
photos, and information about events and appointments. Sky Store & Share is no
longer available to the public having been discontinued in December 2011.
10. Microsoft’s SkyDrive product was launched in the UK, the USA and India in
August 2007 and in the rest of the EU during 2008. The product provides users with
an online storage facility for document files, photos and the like which they can then
access from anywhere on the internet and make available for sharing with others. It
formed part of the “Windows Live” online services alongside Hotmail email and the
Messenger messaging service. Its logo was:
11. Microsoft’s use of the SkyDrive sign has since developed into what Sky
characterises as a major stand-alone brand. Since 2012, SkyDrive has started to
feature as one of the main start-up tiles on the Defendants’ Windows 8 operating
system and SkyDrive apps are now available for platforms including Windows
Desktops, Macs, iPhones, iPads, Android Phones, Windows Phones and the Xbox
games machine.
12. By June 2011 when this action was commenced, SkyDrive had over 3 million
users in the UK, nearly 20 million in the EU and 92 million worldwide. The SkyDrive
sign is now in the following form:
13. Copies of the sign used in relation to SkyDrive in all of the forms in which it has
appeared are set out in appendix 1 to this judgment. As I have already mentioned, Sky
contends that Microsoft’s use of the signs in all their forms in relation to cloud storage
services has amounted to an infringement of their UKTMs and CTMs and amounts to
passing off.
The Trade Marks
i) UK 2 415 829 (‘UKTM 829’) for the word ‘SKY’, was effective as of 6
March 2006. The mark is registered for a very large spectrum of goods and
services. Although a wider variety were set out in the Particulars of Claim,
Sky relied specifically, on the following:
ii) UK 2 302 176E (‘UKTM 176’) for the word ‘SKY’, effective as of 5 June
2002. This mark is also registered for a range of goods and services. However,
for the purposes of this action, Sky relied on:
15. In relation to UKTM 829, Microsoft challenges its validity on the basis that it is
‘invalid insofar as [it is] held to cover goods and services pertaining to cloud
storage’, the assertion being that the mark is devoid of distinctive character or
consists exclusively of descriptive matter. In relation to UKTM 176 the same
challenge is made as to validity.
16. Sky also relies on the following Community Trade Marks (CTMs):
CTM 3,203,411
17. CTM 3 203 411 (‘CTM 411’) for the word ‘SKY’, effective date 30 April 2003,
registered on 14 October 2008. This mark is registered in a series of classes. As
originally granted, the specification listed all the goods and services in the class
headings published by WIPO under the Nice Classification of Trade Marks for classes
9, 35, 38 and 42.
18. However, by a letter dated 12 April 2010, from Sky’s solicitors to the Office for
Harmonization in the Internal Market (OHIM) Sky requested the amendment of
classes 9, 35, and 42 pursuant to Article 50 of Council Regulation No: 207/2009.
Article 50 reads as follows:
“1. A Community trade mark may be surrendered in
respect of some or all of the goods or services for which it is
registered.
“In our telephone discussion with Mr Clarke, we agreed that the following
changes would be made (the changes insofar as they offer from the initial
amendment request are indicated in capitals)
Class 9
Class 35
Class 42
Scientific and technological services, and research and design relating thereto;
industrial analysis and research services; design and development of computer
hardware and software; legal services; including ONLINE TECHNICAL
STORAGE FACILITIES, ONLINE TECHNICAL BACK-UP SERVICES
AND ONLINE TECHNICAL BACK-UP FACILITIES, software as a service
(SaaS) services, and electronic hosting of files, data, photographs, graphics,
documents, videos, images, audio files, audio-visual files, visual files,
computer files, computer applications, information for others and video-
conferencing services but excluding the performance of chemical analyses.
20.
21. After further discussions between Mr Ladas of SJ Berwin LLP acting on behalf of
Sky and Thom Clarke, a Notification of Entry in the OHIM’s Database dated 16
March 2011 was received. The Notification recorded the partial surrender and set out
the goods and services which remained within the registration.
22. By a letter dated 28 March 2011, SJ Berwin LLP acknowledged the 16 March
2011 Notification described as “amending the specification of the [above
Registration] in respect of classes 9, 38 and 42 as per our letter of 11 January 2011”
but noted that class 35 had not been amended in accordance with the original request.
As a result, on 29 March 2011, a “Correction of Mistakes and Errors in the
Community Trade Mark Bulletin and on the Registration Certificate” was received in
which the amendment to class 35 was recorded.
23. The upshot of all this is a specification in which the following is added at the end
of each respective class heading:
24. Neither the officers of OHIM nor Mr Ladas the senior assistant solicitor at SJ
Berwin LLP who made the calls to them on behalf of Sky were available to give
evidence, Mr Ladas having left that firm. His supervising partner, Mr David Rose
gave evidence and was cross examined. He was unable to shed any light on the
precise nature or content of the calls. However, I shall return to his evidence in this
regard under the heading of “bad faith” below.
CTM 3,166,337
25. Community Trade Mark 3 166 337 (‘CTM 337’), the effective date of which is 14
April 2003, was registered on 26 May 2008.
26. This is for the mark ‘SKY’ in the form of a device. The stylisation is of a very
low level, and it essentially comprises, as Microsoft accepts, simply the word SKY
written in capitals. It is accepted that the scope of protection of this mark will be little
different from the scope of the word mark itself.
27. The specification of goods and services covered by this mark is in exactly the
same form as the specification of CTM 411 prior to the partial surrender process to
which I have referred. In other words, it comprises the complete class headings for
Class 9, Class 35, Class 38 and Class 42.
28. Sky only alleges an infringement of this mark because Microsoft has sought
revocation of CTM 411 in its entirety on the basis of bad faith in the partial surrender
process. As I understand it, if either the application for revocation is rejected in its
entirety; or revocation were only granted in relation to the material added as a result
of the surrender process which it is alleged expands the registration, Sky does not rely
on CTM 337 at all.
The Evidence
29. Before turning to the background, I must say a little about the evidence. First, I
should say that I found all of those witnesses of fact who were cross examined to be
honest, careful and truthful witnesses who endeavoured to assist the court.
30. This was also true of the experts, Riccardo Baxter, a self employed market
research professional who devised and conducted a survey on behalf of Sky, to which
I shall refer, (the Survey) and produced three reports and Philip Ian Malivoire who
produced three expert’s reports on behalf of Microsoft. Mr Malivoire’s evidence was
in relation to the Survey and its reliability. He has extensive experience in the conduct
of research projects for legal purposes and was involved in the surveys carried on in
the Interflora litigation to which I shall refer. He now runs his own market research
consultancy business.
31. Both experts were cross examined at length about the Survey. It was quite clear
that they were both concerned to protect the reputation of the field of market research
and that Mr Malivoire’s strict approach arose from that concern. I shall deal with the
Survey, its contents and its evidential value below.
32. I should also mention that the witness statements of a number of individuals who
contacted the Sky helpline seeking assistance in relation to SkyDrive were not
challenged in cross examination. The only challenges made to that evidence were Mr
Bloch’s cross examination of Ms Baxter, the solicitor who contacted them, seeking a
statement from them and his submissions that the manner of that contact had included
leading questions which may have distorted the evidence, that they amounted to a
skewed sample, in individual cases were atypical and in any event, were of little
assistance to the court.
33. Simon Robert MacLennan is the Group Head of Intellectual Property for Sky. He
is a solicitor and was appointed Head of Intellectual Property in 2006 and Group Head
in 2012.
34. Jonathan Karl Blumberg joined Sky as Head of Telephony in January 2006. He
became Director of Product Management in December 2006 and in May 2010 became
Commercial Director for Broadband and Telephony which is his current role.
36. Victoria Clair Louise Baxter is an assistant solicitor with SJ Berwin LLP,
solicitors for Sky. She assisted Mr David Paul Rose, a partner of that firm who had
care and conduct of this matter. She was responsible for liaising with Sky’s customer
call agents and customers in relation to enquiries made to Sky regarding SkyDrive.
She also assisted in contacting the participants in the Survey.
37. As I have already mentioned, Mr Rose is the solicitor with conduct of these
proceedings on behalf of Sky. He gave evidence as to the commissioning of the
Survey upon which Sky seeks to rely, the way it was set up and the responses. He was
also cross examined as to the partial surrender exercise to which I shall refer below.
38. Josephine Aisling Curry is also a solicitor working for Mr Rose in relation to
these proceedings. Her evidence was unchallenged in cross-examination. She
researched the different ways in which SkyDrive could be used and the user
experience from the perspective of Microsoft Account holders and non- account
holders, the use of “DRIVE” for online storage services, the use of “SKY” for online
storage services, the integration of online storage services generally with third party
goods and services and co-branding in the context of Microsoft SkyDrive and other
Microsoft products.
39. Scott Mackay has been Director of Customer Business Systems at Sky
Subscribers Services Ltd (“SSSL”) since September 2009. SSSL is a subsidiary of
British Sky Broadcasting Ltd which is part of Sky. In August 2008 he became
Director of Business Enablement. In his present role, he operates and controls the
customer management platform for Sky and undertook searches of call records held
by Sky in respect of contacts made in relation to SkyDrive.
41. Gabrielle Maria Hegerty works in Marketing at Microsoft Ltd in the UK and has
the job title “Internet Explorer Lead”. She joined in March 2011 as the Windows Live
and Internet Explorer Lead for the UK in respect of marketing. She gave evidence as
to the marketing, promotion and presentation of SkyDrive in the UK to July 2012 and
any connection of which she was aware between SkyDrive and Sky.
42. Andrew James Burton is a Senior Consumer Technology Account Manager at the
UK communications consultancy firm, 3 Monkeys Communications. He has been in
that role since 2009 and is one of the four managers of the Microsoft account at 3
Monkeys. He is concerned with Microsoft’s public relations. He gave evidence about
what 3 Monkeys did in particular, in relation to SkyDrive and also dealt with feedback
and comments received from press and public about SkyDrive.
45. The evidence of Camillo Gatta, a solicitor employed by Redd Solicitors, acting on
behalf of Microsoft was not challenged on behalf of Sky. He had carried out research
aimed at reviewing the stylistic and/or presentational features of Sky’s advertising and
marketing materials in the United Kingdom promoting the “SKY” branded goods ,
services and channels.
46. The evidence of Claudia Bonatti, Pierre-Eric Daniel Jacoupy, and Anusch
Mohadjer was not challenged. Ms Bonatti works for Microsoft as a Windows
Business Group Lead at Microsoft Italia srl and gave evidence about SkyDrive in
Italy. Mr Jacoupy is a Web Product Marketing Manager for Microsoft and gave
evidence about SkyDrive in France. Mr Mohadjer is a Windows Product Marketing
Manager for Microsoft Germany and gave evidence as to SkyDrive in Germany.
47. The evidence of Peter Hamish Larmour Mercier was also unchallenged. He is
Senior Director, Content Acquisition and Strategy Team at Microsoft Limited. He
gave evidence as to the collaboration between Sky and Microsoft in relation to the
Xbox. He also related an incident when having seen a Microsoft demonstration about
SkyDrive at a conference at the Excel Centre in London’s Docklands, he emailed the
Windows Live Dogfood Discussions Group on 2 September 2010 asking whether
Microsoft had “checked the rights for SkyDrive in the UK against BSkyB’s various
consumer trademarks which are all prefaced clearly as Sky__.”
48. Other witnesses were cross examined more extensively and I refer to their
evidence in more detail below.
49. Having been developed in 2006, SkyDrive was launched in the UK in August
2007 as an addition to the Windows Live suite of services and at that stage was
branded as “Windows Live SkyDrive”. Windows Live contained over twenty
communication tools aimed at the individual computer or electronic device user. Mr
Brian Hall, General Manager Business Planning Windows at Microsoft described
Windows Live as a group of Windows online services that work well together and
with the Microsoft Windows operating system.
50. Prior to August 2007, SkyDrive was called “Windows Live Folders”. As Mr Hall
explained in his evidence in chief, as with the other communications tools in the
Windows Live suite, it was accessed by logging in to a Microsoft account through a
web-based internet page. “Folders” provided the user with the ability to store files
remotely on a server and to access them from other devices.
51. Mr Hall described the core function of SkyDrive in more detail as the provision
of protected online storage for the holder of a Microsoft Account or formerly a
Windows Live Account, the ability to access online files from any browser, the ability
to share folders and to post onto public networks. “SkyDrive” appeared at that stage
in the menu bar within Windows Live. In February 2008 coverage was extended to
Europe.
53. At the time that SkyDrive was launched the two main Windows Live products in
the UK were Hotmail and Messenger. As Gabrielle Hegerty, who works in marketing
for Microsoft in the UK, observed, there was no particular fanfare for SkyDrive at that
stage and no real focus from a marketing perspective. Ms Hegerty also explained that
SkyDrive had its teething troubles and that nothing was done in relation to marketing
until at least 2008 and in fact, it was not given much attention until around August
2010 when it became integrated with Hotmail in “Wave 4” for Windows Live.
54. However, by the middle of 2010 Microsoft started to market SkyDrive across its
Windows Live, Hotmail and Messenger platforms and at this time it was also
integrated with the Windows Phone. This meant that photographs or documents could
be saved in SkyDrive and then shared by means of a link sent by email, rather than
attaching the photographs or documents to the email itself. Mr Hall also described the
process by which SkyDrive was integrated into Windows and the software pacakge
known as Microsoft Office in order to make it available through franchise products
and to make the SkyDrive developer code available to third parties in order to enable
them to integrate their applications with SkyDrive.
55. By the end of 2011 SkyDrive users could use the service to post direct to
Facebook, Twitter and Linkedin and as a result of the iOS application and the
Windows Phone application, SkyDrive files could be accessed from a phone or an
iPad. The applications could be downloaded from the internet or could have been pre-
loaded on a device. SkyDrive applications have also been launched for Android
phones, Mac computers and Windows itself.
56. It will be clear therefore, that by this time, the SkyDrive brand had separated from
Windows. Ms Hegerty explained that ‘In October 2011, the branding began to move
away from ‘Windows Live’ altogether for Hotmail and SkyDrive. The move was part
of a strategy to focus on the individual product names rather than the Windows Live
service.’
57. By this time, the SkyDrive link was also used automatically by default in Hotmail
if the user was attaching more than seven photographs or was attaching any Microsoft
Office document. Mr Hall described this phase as ‘not a complete success’ because
there were difficulties in recipients opening attachments. Microsoft abandoned the
sending of SkyDrive links by default in Spring 2012. However, Mr Hall explained
that it is still an option for the Hotmail user.
58. In 2012 SkyDrive was integrated into Windows 8 which is very widely used as
the operating system for personal computers and devices. Windows 8 has a user
interface made up of pre-loaded tiles visible on the opening screen, one of which is
the SkyDrive tile. A copy of a screen shot depicting the tiles is in the second appendix
to this judgment. Lastly, in December 2012, Microsoft released a SkyDrive
application for Xbox. The way in which the tiles appear when selecting the SkyDrive
application for installation on an Xbox is depicted in Appendix 2 to this judgment.
59. The pictorial time line depicting the way in which the SkyDrive logo developed,
was set out very helpfully by Mr Hall in his witness statement and in fact, it is what I
have reproduced it in the first appendix to this judgment. It is clear that from February
2012 the mark being a number of clouds with SkyDrive beside it, was used
universally.
60. I should mention that the First Board of Appeal gave its decision in relation to the
opposition proceedings to the registration of SkyDrive as a CTM in respect of goods
and services within class 35 on 19 January 2012 and upheld the opposition. I shall
refer to its reasoning below.
61. There is no dispute that the recipient of an email with a SkyDrive picture link
attached neither sees Windows Live branding nor anything to indicate that SkyDrive
is connected with Microsoft. It was also accepted by Mr Hall that in such
circumstances, the recipient was not necessarily a Microsoft or Windows Live
Account holder and therefore had not accessed SkyDrive through the filter of a
Microsoft account.
62. I should add that Mr Hall also accepted that even in the case of the Microsoft
Account holder using SkyDrive through certain Windows versions, it is possible to
remain signed in for some time.
64. Mr Burton also stated that although he had never had feedback to suggest that the
public or the press drew a connection between Sky and SkyDrive, on one occasion he
had used SkyDrive in the office in order to share a report with clients. He uploaded it
to SkyDrive and sent the clients an email to tell them that he had done so. He shared
with them the link which he used to access the SkyDrive login page
(www.skydrive.com) and included the user name and password. As a result one of the
client representatives at the meeting asked him whether SkyDrive was anything to do
with Sky.
65. Returning to the history and use of SkyDrive, it is not disputed that the free-
standing SkyDrive application appears as a separate tile on the device to which it has
been downloaded or pre-loaded and may appear together with any number of
applications which are unconnected with Microsoft or Windows, although Mr Hall
pointed out that the Microsoft product tiles were generally together on one side of the
screen. Ms Hegerty explained that nevertheless, if the individual user is a SkyDrive
customer they will have been exposed to the sign in the Microsoft context but if a
person were to see a SkyDrive tile on someone else’s Apple Mac or android phone for
example, they would not be aware of the Microsoft connection. She also accepted that
a clip from the American television program known as “Hawaii Five O” which was
played to the court and in which SkyDrive was mentioned expressly and depicted in
relation to sharing photographs on a mobile phone, appeared to be product placement.
It made no reference to Microsoft.
66. However, the Windows Phone app store purchase page for the SkyDrive app from
which a consumer would choose and purchase the app before download to their
device, displays the SkyDrive name and a prominent representation of the cloud sign
and in the bottom corner in relatively small print states “Publisher Microsoft
Corporation”. Mr Hall accepted in cross examination that whether a purchaser saw
the reference to the publisher at all would depend on the screen size of their device
and whether they bothered to scroll to the bottom. However, he also added that at the
outset most of the users of phone apps were already Hotmail, Microsoft Messenger or
users of SkyDrive on their personal computers and therefore, were already aware of
the Microsoft context. He also accepted, however, that once the SkyDrive app was in
use on a Windows Phone there no was reference to Microsoft which showed at all.
67. By contrast, the advertisements for the HTC Windows phone, featuring SkyDrive
and its capabilities made reference albeit peripherally, (in the corner of the page) both
to Microsoft and O2. However, the advertisements themselves were prominently for
SkyDrive itself.
68. It was also the evidence of Mr Long, one of the individuals who called the Sky
Customer Services helpline asking for assistance with SkyDrive, that despite the fact
that he had noticed the reference to Microsoft in relation to SkyDrive he had assumed
that there was some sort of partnership with Sky.
69. Mr Hall fairly accepted in cross examination that in the circumstances in which it
is not plain that SkyDrive is a Microsoft product, it was certainly possible that
ordinary consumers familiar with Sky’s position as a provider of broadband internet
might think that there was a connection between Sky and SkyDrive and that it was not
plain to a recipient of an email with a SkyDrive attachment that it is a Microsoft
product.
70. Mr Hall who had overall responsibility for marketing in relation to Windows Live
and SkyDrive in 2007 and was based in the USA, recalled that Windows Live
SkyDrive had been sent for legal clearance in April 2007 and that clearance was
received in May of that year. He stated in cross examination that “sky” was known in
IT circles as a reference to the internet but could not say what the public’s perception
had been in 2007. He also accepted that at the time he had had no knowledge of Sky
other than as a broadcaster and was not aware that it was a broadband provider.
71. I should make clear at this stage that the mark with which Mr Purvis on behalf of
Sky is concerned for the purposes of infringement is SkyDrive however it appears.
His case is that it is just as much an infringement in the form of Windows Live
SkyDrive or Microsoft SkyDrive as it is when it appears alone. He accepts that the
perception of the sign is that of the average consumer and that the context in which it
appears and the likelihood of confusion are all part of the global assessment.
Relevant legal principles – infringement of trade marks
72. It is accepted that the provisions of the Trade Marks Act 1994 (TMA) in relation
to infringement contained in section 10 and in Article 9 of Council Regulation
40/94/EC of 20 December 1993 on the Community trade mark which was replaced by
a codified version Council Regulation 207/2009/EC of 26 February 2009, with effect
from 13 April 2009 (“the Regulation)” are for all practical purposes identical. The
relevant provisions are as follows:
Section 10 TMA:
(a) the sign is identical with the trade mark and is used in
relation to goods or services similar to those for which the trade
mark is registered, or
(b) the sign is similar to the trade mark and is used in relation to
goods or services identical with or similar to those for which
the trade mark is registered
(b) [repealed]
(4) …”
(b) any sign where, because of its identity with, or similarity to,
the Community trade mark and the identity or similarity of the
goods or services covered by the Community trade mark and
the sign, there exists a likelihood of confusion on the part of the
public; the likelihood of confusion includes the likelihood of
association between the sign and the trade mark;
73. The types of infringement with which this case is concerned are set out in TMA
s10(2)(b) and Regulation Article 9(1)(b) and in TMA s10(3) and Article 9(1)(c)
respectively.
74. In relation to section 10(2)(b) TMA and Article 9(1)(b), the claim is based first
upon identity between the goods and services for which the sign is used and those for
which the mark is registered and the sign is similar to the mark and secondly, upon
what has been termed ‘double similarity’, between mark and sign and between the
goods and services. In either of the circumstances, it is accepted that in order to
amount to infringement, the identity/similarity must be such as to be ‘likely to cause
confusion’ on the part of the public.
75. In relation to s10(3) TMA and Regulation Article 9(1)(c) infringement will occur
without the need to show a risk of confusion, if the sign is sufficiently similar to the
trade mark to ‘bring it to mind’, and (inter alia) where this causes detriment to the
distinctive character or repute of the mark.
s10(2)(b) and Art 9(1)(b) – infringement by identity of goods and services and by
similarity
76. I shall turn first to the claims for infringement under s10(2)/Article 9(1)(b) and
the aspects of the law which are of relevance for the purposes of this head of the
claim.
77. It is not disputed that the scope of a trade mark registered for a word as opposed
to a device (as in the case of both UKTMs and CTM 411) is not limited to the form of
the mark as it appears on the Register (in this case, in capitals). It extends to any
representation of the word: the General Court in Present-Service T-66/11 at ¶57.
78. A registered category of goods or services is treated as a compendious claim to all
the individual types of goods or services included within its scope. So where a mark
is registered for a category that includes the goods or services being provided under
the sign, the goods or services must be treated as being identical. See Aventis Parma
v OHIM [2008] ECR II-229 (¶35).
80. To put the matter shortly it is clear from [50] of Jacob LJ’s judgment in the Reed
case that the precise manner in which Sky actually presents its ‘Sky’ brand to the
public whether in capitals or lower case letters, or whether it presents the mark in the
form of a particular logo is not material to this inquiry, since a trade mark gives
monopoly protection regardless of whether or how it is actually used. Similarly, it is
made clear at [45] of the Present Service case that the comparison is not with the
precise goods and services in respect of which a Claimant actually uses its mark but
with the goods and services for which its mark is registered.
81. The question is whether, by reason of the identity/similarity between the mark
‘Sky’ and the sign, “SkyDrive” (however presented) and the identity/similarity of the
goods or services for which the sign is used and those for which the mark is
registered, being software for the online storage and sharing of files, there is a
likelihood of confusion on the part of the relevant public ‘which includes the
likelihood of association’. It is clear from [29] of the judgment of Canon v MGM
[1999] RPC 117 that ‘association’ means the belief that the goods or services provided
under the sign originate with an undertaking which is economically linked in some
way with the trade mark proprietor.
82. I also remind myself that the likelihood of confusion is to be assessed from the
perspective of the:
83. The concept of the “average consumer” has been revisited at some length by
Arnold J in Interflora v M&S [2013] EWHC 1291 (Ch). Having conducted a detailed
consideration of the authorities, he went on:
“208. Against this background, a number of points are
common ground between the parties. First, the average
consumer is, as Lewison LJ put it in Interflora (CA I) at [44]
and [73], a “legal construct”.
85. It is also common ground that it is now well-established that ‘initial interest
confusion’ is sufficient to give rise to infringement. Thus there will be infringement
where the use of a sign in an advertisement gives rise to a risk of confusion amongst
average consumers, even if that confusion would be expected to be dispelled at the
point of sale of the goods or services in question. In this regard, Arnold J came to the
following conclusion in OCH-ZIFF Management Europe Limited v OCH Capital LLP
[2010] 2599 (Ch) at [97]:
“It again seems clear from this that there can be a likelihood of
confusion within the meaning of Article 9(1)(b) at the point
when a consumer views an advertisement, whether or not the
advertisement leads to a sale and whether or not the consumer
remains confused at the time of any such sale.”
86. The case law makes clear that ‘likelihood of confusion’ is established by ‘a risk
that the public might believe that the goods or services in question come from the
same undertaking or, as the case may be, from economically-linked undertakings’. It
is not necessary to show that the public would be confused: Thomson Holidays v
Norwegian Cruise Lines [2003] RPC 32 at 56.
87. Nor is it necessary for Sky to show that all average consumers will be confused,
or even that a majority of average consumers will be confused. Arnold J pointed out
in the extract from his most recent Interflora judgment which I have quoted at some
length, that the Court is not being asked to resolve a simple ‘binary question’ – is the
average consumer confused or not? The question is whether confusion is sufficiently
likely to warrant the court’s intervention:
i) mere association, in the strict sense that the later mark brings
the earlier mark to mind, is not sufficient;
89.
90. In making the global assessment, the Court is considering the degree of ‘visual,
aural and conceptual’ similarity between the marks. Furthermore, the assessment
‘must be based on the overall impression given by the marks, bearing in mind in
particular their distinctive and dominant components.’: Sabel v Puma [1998] RPC
199 at 224. The effect is to strongly discount the significance of distinguishing matter
in a sign which is essentially descriptive of the goods or services in question and is in
common use in the field in question. In Lloyd Schuhfabrik the CJEU stated at
paragraph 21:
As Millett LJ observed in The European v The Economist [1998] FSR 283 at 289, the
converse is also true. He went on to state:
91. In Alejandro v OHIM [2004] ETMR 15 (General Court: BUD v BUDMEN for
clothing) for example:
This approach has been consistently applied in the UK Courts. See for example
Compass v Compass Logistics [2004] RPC 41 at 25:
92. It must also be borne in mind that the closer the goods or services are, the lesser
the degree of similarity which will give rise to a risk of confusion. This was
expressed in the leading case of Canon v MGM [1999] RPC 3 at 17 as follows:
93. It was also made clear in Canon v MGM at [18] that the degree of distinctiveness
of the registered trade mark, either because it is inherently distinctive or because it has
acquired distinctiveness in the mind of the public through extensive use (or both) is a
relevant factor in the global assessment.
94. When assessing likelihood of confusion, the circumstances of the use of the sign
alleged to infringe are relevant to the inquiry. As put by the Court of Appeal in
Specsavers v Asda at 87: the Court
“.. must take into account all the circumstances of that use [the
use alleged to infringe] that are likely to operate in that average
consumer’s mind in considering the sign and the impression it
is likely to make on him. The sign is not to be considered
stripped of its context.”
95. As Mr Bloch submitted, in my judgment, the context here is the context in which
the sign is used and does not include things which might or would happen after the
initial exposure to the sign. See Och-Ziff at 76-78.
96. In Levi-Strauss & Co v Casucci [2006] ECR I-3703, the CJEU considered the
question of the date at which infringement should be assessed. The specific context of
that dispute was a trade mark which had been granted on the basis of distinctiveness
acquired through use. The Defendant argued that by the date of trial, the
distinctiveness had been lost or reduced (at least in part by its own use of a similar
sign). The CJEU considered that the position of the trade mark owner should be
protected by considering infringement at the date the Defendant commenced its use.
97. This authority was recently considered by Arnold J in Stichtung BDO v BDO
Unibank [2013] EWHC 418 at 89-98. Most relevantly, he said this at ¶94:
98. It seems to me therefore that where the defendant has used the sign in a materially
different manner or context after the initial use, the right approach is to undertake a
new assessment at the date of each material change. In this case such an assessment
will be necessary therefore, in relation to Windows Live SkyDrive, Microsoft
SkyDrive and SkyDrive alone. It is also necessary in relation to use in order to share
documents as a result of email contact, as a tile in the Windows 8 armoury and as an
application which can be downloaded or pre-loaded onto a mobile phone or an iPad.
99. Although at one stage, Microsoft sought to make a distinction between goods and
services and to contend that the SkyDrive mark was being used not in relation to
computer programs or software but in relation to the services which are available if
one uses those programs, this distinction was abandoned by Mr Bloch at the
beginning of the closing speeches. It is now accepted that the sign is being used in
relation to software and accordingly, it is common ground that there is an identity of
goods and services for the purposes of s10(2)(b) and Art 9(1)(b).
100. I have already set out the relevant principles to be distilled from the
authorities in this regard. In summary, the comparison is between Microsoft’s sign and
any normal and fair use of the registered trade mark in relation to any of the goods
and services for which it is registered. Therefore, in this case, one assumes the use of
“sky” as a trade mark for computer software including the storage of files on remote
drives and storage services under the same name. One also assumes that the mark has
developed a reputation and goodwill for those goods and services. It is then necessary
to consider the notional average consumer confronted by computer software for the
storage of files on a remote drive under the name “SkyDrive” and the question for the
court in those circumstances is: is there a risk that such consumers might believe that
the two were from the same source or from a connected source?
101. Mr Purvis on behalf of Sky submits that the answer is obviously “yes”. He
says that the mark says that this is Sky’s drive by which is meant a remote storage
program. It is not disputed that there are numerous examples of “drive” used in this
way. For example, evidence of the use of Google Drive, AOL Xdrive, ElephantDrive
and ZumoDrive amongst others were before the court. In fact, Microsoft put in
evidence a list of 132 providers of online storage facilities of whom approximately
twenty per cent used the word “drive” in their title.
102. Mr Purvis submits that the term “drive” has become entirely descriptive and
generic and certainly is of no assistance to Microsoft in distinguishing their mark and
product. In this regard, he referred me to a an article in 2010 PC World entitled “Free
Services that Store, Sync and Share Your Files” which made reference to the fact that
“cloud based syncing services usually use a virtual drive that exists on your desktop in
some manner, and it is linked directly to your online storage space. The contents of
this virtual hard drive remain in sync across all of the desktops, notebooks and mobile
devices on which you have installed client software.” The article makes a number of
further references to “virtual drive” and then goes on to choose five cloud storage
services to review, three of which used “drive” in the name, being DriveHQ,
OpenDrive and ZumoDrive.
103. Once one accepts that ‘drive” is descriptive, which Mr Purvis says is
inevitable and which Microsoft, in fact, have done, he says that Microsoft is left with
no distinguishing matter at all. In such circumstances he says that the average
consumer aware that Sky is operating in this field would take SkyDrive to be another
Sky operation and be uncertain as to which is being referred to. Alternatively, he says
that the average consumer would view SkyDrive as a sub-brand.
104. On the other hand, Mr Bloch on behalf of Microsoft submits that there is no
reason why the average consumer should perceive the SkyDrive sign as a sub-brand at
all, especially where the brand of which it is supposed to be a “sub” is little known in
the field in question.
105. Mr Purvis says that Microsoft’s defence that one would not read SkyDrive
as being “sky” followed by the description ‘drive” even though they say that that is
exactly why they coined the name, is very weak indeed. He referred me to the
evidence of Mr Kroll that he liked the name because it alluded to the idea of a
computer drive removed from the desktop. He also referred me to the decision of the
Board of Appeal of OHIM which had no difficulty in concluding that “SkyDrive” as
presented to them was “sky” followed by ‘drive’ even though it was presented to them
as a single capitalised word.
“30. When comparing the signs, the Board notes that the
word “SKY” which is the sole element of the earlier mark, is
perfectly recognizable at the beginning of the mark applied for.
In this regard, the fact that a mark consists exclusively of the
earlier mark, to which another word has been added, is an
indication that the two trade marks are similar (see, to that
effect, judgment of 4 May 2005, T-22/04, “Westlife”, para 40).
109. Putting the matter another way, Mr Bloch also submits that the comparison
to be made is between the mark SKY and the sign SkyDrive as a whole and not just
the constituent parts and that this is borne out by proposition (c) in the extract from
the judgment of Kitchin LJ in the Specsavers decision to which I have referred in
which he states that the average consumer normally perceives a mark as a whole. Mr
Bloch states that there is no evidence that SkyDrive would be perceived by a member
of the public as “brand+descriptor” in the absence of the significant reputation of the
SKY mark. In this regard, he reminded me that under the head of infringement in
relation to identical goods and services, Sky can only rely upon its reputation in
relation to cloud storage which he says is minimal.
110.In order to see SkyDrive as Sky’s drive, Mr Bloch says that three steps are
necessary: first the consumer would need to see SkyDrive as two separate words;
second, they need to see Sky alone as arbitrary and thirdly, would need to see Sky as
fulfilling a trade mark function only rather than as a distinctive element of the mark
SkyDrive as a whole. He says that the reader is unlikely to embark upon each of those
steps in order to deconstruct the mark unless the first part is truly arbitrary and the
second really descriptive. In this regard, he says that Sky is not arbitrary in the sense
that for example, Adidas, Kodak or Nokia are. In fact, it was Sky’s lawyer (Mr
McLellan)’s evidence in chief, that it is a word which others seek to use in relation to
their goods and services.
111.Mr Purvis says that the second argument that Microsoft falls back on namely that
common presence of “sky” was a complete coincidence, is equally unhelpful to them.
In any event, it can only be of assistance to them, he says, if one also accepts that
“sky” is a term which would be understood by the average consumer as descriptive of
the service or goods being offered. Obviously, the more descriptive and less
inherently distinctive the registered trade mark, the less likely it is that confusion will
arise.
112.He referred me to the evidence of the 132 other provides of online storage
facilities which have been identified between 2005 and 2013, none of whom use
“sky” in any part of their name or of the name of their service. Nor in their own
descriptions of their operations or in the references to them found in Wikipedia which
are also in evidence, is there any reference to them describing themselves as being in
the sky or using the sky in any way to describe their services. Neither is there
evidence outside the field of online storage but in a related field of a trader of which
the public is likely to have heard, using “sky” to denote the internet. Nor, he points
out does the word “sky” appear in any dictionary as meaning the internet.
113.In this regard, Microsoft relies upon the evidence of Ms Connolly who undertook
internet research into the use of the business names, trade marks and brand names and
signs incorporating the word “SKY” whether as a prefix or a suffix. She also
researched the use of the word “SKY” in the names of applications available for
download from the UK version of the Apple “appStore” and a search for articles in
the press and online sources in which “SKY” or “SKIES” had been used in a
descriptive manner in relation to cloud storage services. She searched the LexisNexis
news database amongst other sources.
114.She found 148 SKY names and 429 SKY prefix apps which she had found on the
internet. She also found numerous press articles which refer to “hard drive in the sky”,
“locker in the sky” and “storage in the sky”. She found three examples of the use of
“sky” in the period 2002-2003: in June 2002, in an article in the Guardian newspaper
in London, there was an article about what was the new wireless internet or “wi-fi”
phenomenon in which there was reference to “the idea of casting data clouds across
the skies of London”; in February 2003 there was an article in “The Journal of Light
Construction” which contained the following assertion, “In addition to hosting our
website, we use the Internet like a giant floppy disk in the sky to back up our critical
files . . .” and in an article in the Entrepreneur in December 2003, there was reference
to “a distributed computer in the sky.”
115.She accepts that her searches were not exhaustive. Mr Purvis summarised her
findings in this regard as approximately 27 uses over 8 years throughout the world,
including hi-tech journals many of which repeat the same thing and therefore,
suggested that it was far from meaningful. In cross examination although she was
unwilling to put a number on it, Ms Connolly agreed that the number of publications
in the target areas which she had searched within three databases were considerably
higher than 15,000. As the period searched was of about ten years, Mr Purvis submits
that the number of different issues or editions of the publications searched and the
number of articles within them must have run into the millions.
116.In fact, Mr Purvis submits that if one removes literal uses and references such as
“pie in the sky”, “reach for the sky”, ‘sky’s the limit”, “sky high” and “clear skies
ahead” which I accept are not uses of “sky” in a descriptive sense to indicate the
internet, one is left with about six uses of the term “sky” as a metaphor for the internet
during the period from 2011 to January 2013. It is in this context that he says that the
instances in which “sky” has been used as a metaphor for the internet is miniscule.
117.Mr Kroll who at the relevant time was the Director of Brand Strategy for
Microsoft Online services, gave evidence that in 2007 he considered SkyDrive to be a
descriptive name for cloud storage services. However, it was Microsoft’s own
evidence that “cloud” was not being used in relation to online storage facilities in
publicly available material until 2008. He acknowledged that before that date it was
used within the confines of Microsoft and in the IT industry. He accepted that the
reference was not as much descriptive as metaphorical or allusive, and was intended
to refer to something remote and nevertheless available to be accessed from
anywhere. He also accepted that he could not say what the public would or would
not have recognised at the time.
118.Mr Bloch nevertheless submitted that the context of cloud storage in which
SkyDrive was and is being used contributes to the allusive and descriptive quality of
“sky” and he reminded me of the articles which Ms Connolly had found. He says that
it is bizarre to suggest that all the journalists in question came up with “sky” by
chance and in the knowledge that the public would not understand what they meant.
He says it is obvious that the truth is the converse. They used the term because they
knew what it would convey to the reader. He also says that what one derives from Ms
Connolly’s evidence is that there is a significant and natural use of “sky” in an
allusive sense. In addition, despite his severe criticisms of the Survey, he says that
Microsoft can rely on it for this purpose. Mr Bloch says that it illustrates what people
understand by “sky” and that 20% of them were aware of an allusion to the internet.
119.He submits therefore, that the descriptive/allusive nature of the Sky mark in the
sphere of cloud storage detracts from Sky’s ability to denote the company, Sky. The
likelihood of confusion and the ability to sustain detriment are correspondingly
reduced. He goes as far as saying that the distraction caused to the average consumer
in the field of cloud storage is such that Sky is not able to denote any particular
undertaking offering such services.
120. In relation to the apps which Ms Connolly found, Mr Purvis points out that
there is no evidence of use or of them having penetrated the consciousness of the
public. He also draws attention to the fact that some are in entirely different fields
such as astronomy and sky diving. And he reminded me of the third parties who have
created apps derivative of SkyDrive which included SkyWallet. He also says that the
dilution has naturally occurred since the push from 2011 to market SkyDrive
separately.
121. Microsoft also put forward evidence of other entities which have adopted
names which incorporate the word “Sky”. In this regard, Mr Purvis points out that
they cannot impinge on the distinctive character of the SKY mark unless there is
evidence that the average consumer in the UK would have known about them at the
relevant time. As he rightly pointed out, there was no evidence before the court that
the 148 third parties were businesses with customers in the UK. Ms Connolly
accepted in cross examination that she did not research whether any of the third
parties actually provided services or goods in the UK but considered it sufficient that
she had found them in her search of internet databases.
124. Mr Purvis says that that is analogous to the situation here of a recipient of a
shared document through the SkyDrive link, or someone who sees the SkyDrive tile
on an Xbox, a phone screen or a computer screen.
125. In this regard, however, Mr Bloch says that a distinction must be made
between circumstances for which Microsoft is responsible and those over which they
have no control. In the second category he places the way in which consumers may
discuss or refer to SkyDrive other than in the course of trade, once Microsoft has
placed it before them in a way which does not cause confusion. The cause of
confusion in such a case he says is the use of the sign by the consumer. He says that
the Arsenal and Anheuser Busch cases are not clear authority for the proposition that
such circumstances can be categorised as infringement.
126. Equally, it is not disputed that the court is concerned with confusion at any
time, including initial interest confusion. Therefore, one must take into consideration
those who may be initially confused even if subsequently, perhaps during a signing up
process, they realise that SkyDrive is part of the Microsoft brand.
127. Although it is not necessary to prove that actual confusion has occurred and
what matters is whether the court considers that there is a likelihood of confusion, as
Arnold J put it at [117] of the Och-Ziff case: “evidence of actual confusion supports
the conclusion that there is a likelihood of confusion.” I also take account of Arnold
J’s observation in Interflora v M&S [2013] EWHC 273 at [40] that:
“it is usually quite hard to find people who have been confused,
because confusion by its very nature doesn’t come to light, and
it is even harder to persuade confused people to come to court
to give evidence.”
128. In fact, in this case, there were seventeen recorded incidents of Sky
customers who rang Sky Customer Services because they were sufficiently confused
when seeing the SkyDrive sign that they assumed that it was a service offered by Sky
and rang the helpline to resolve their difficulty with the product. In addition to their
witness statements, transcripts of their calls to the helpline were in evidence. Some of
them were recipients seeking to access documents or photographs and in some cases
they were the immediate user who was attempting to share the document or
photograph.
129. The evidence was gathered by searching Sky’s call management data base,
Chordiant, by visiting call centres and publishing a request on the Sky intranet. Mr
MacLennan had to accept that there was very little response to his request.
132. Only two of the callers were not willing to give a witness statement. One
who had contacted the helpline as a result of difficulties in accessing attachments sent
to her Hotmail account, had various issues with Sky and as a result, a witness
statement was not obtained. The other had had difficulties printing documents for a
meeting and had called the Sky helpline. Sky was her internet provider and because
she saw “SkyDrive” Ms Baxter explained, the customer thought it was Sky. Ms
Baxter stated that the caller, Ms Thorndike went on to explain that “it was like Walls
Ice Cream, which she would expect to be connected with Walls”. Ms Baxter
explained that Ms Thorndike had not wanted to become involved in proceedings but
that the recording of her original call to the Sky helpline had been disclosed in the
proceedings.
133. Two examples of this evidence are the witness statement of Mr Long and
Mrs Cushing. Mr Long a Sky customer who is registered blind uses software to read
aloud the information displayed in his laptop and iPhone. On 20 March 2012 he was
sent an email with attachments. When he clicked on them he was automatically
redirected to a link which suggested that he download the SkyDrive application. He
did so and when prompted to enter his username and ID, attempted to use his Sky ID.
Despite the fact that the link mentioned Microsoft, he thought it was a Sky service.
When his details were not accepted he rang Sky customer services. When he was
informed that SkyDrive was a Microsoft product he commented to the call agent that
it was totally misleading to call the product SkyDrive and that he had assumed that it
was a Sky product because of its name.
134. Mrs Cushing was a user rather than a recipient. She was attempting to
attach a curriculum vitae to an email using her Hotmail account, at a time when
Microsoft was automatically requiring the use of SkyDrive for attachment of Office
documents sent through Hotmail. She stated that she was totally confused by the
appearance of the reference to SkyDrive having no recollection of having signed up
for the service. She was also a Sky customer and assumed that she had been signed up
by Sky without her permission. She rang Sky in order to ask how to remove SkyDrive
from her computer and was amazed to discover that it was not provided by Sky at all.
135. Ms Baxter and Mr MacLennan also visited Sky call centres and asked 59
“Customer Experience Leaders” who are duty managers responsible for overseeing
typically around 8 -12 call agents, to ask whether they had heard of SkyDrive. The
upshot was that 27 call agents responded positively. Of them, ten thought that
SkyDrive was associated with Sky. Two of them recalled taking a call from a
customer in relation to SkyDrive. They were not amongst those which had been
thrown up by the Chordiant research.
iii)Ms Carole Reid, a Customer Adviser within the Broadband technical team
at Sky states in her witness statement that she took a call from a Mr Hanna
who was trying to sign up to the Microsoft Flight Simulator. In order to do so
he needed to register with Hotmail, Messenger or SkyDrive. He wanted to
know whether he could sign in using SkyDrive and whether he was registered
for it automatically as he was a subscriber to many other Sky services. Mr
Hanna was looking at the SkyDrive webpage and explained that it asked for
his Windows Live ID. She records him as commenting, “surely, they wouldn’t
use the word “Sky” without your permission?”
139. There are two incidences where there is no documentation to support the
recollections of the call agent. Although Mr Bloch calls these into question on the
basis of the huge volume of calls with which a call agent is required to deal, in my
judgment, there is no reason to impugn that evidence as far as it goes. It is inevitably
general but nevertheless records occasions on which a Sky call agent was required to
deal with questions relating to SkyDrive.
140. There were also five examples where for one reason or another there was no
documentation before the Court. They were merely examples of an entry on the
Chordiant system. Nevertheless, although the weight to be attached to them is much
less, in my judgment they should not be ignored altogether because they are
references to SkyDrive on the Sky system.
141. Mr Bloch went on to seek to attack the probative value of the evidence of
actual confusion on a number of bases. The first was that they had been led into
giving evidence of their confusion by the way in which they had been contacted by
Ms Baxter a solicitor acting on behalf of Sky when she was seeking witness
statements from them. In this regard, I accept the evidence of Ms Baxter that although
she did not have a script she avoided asking leading questions and only sought to
introduce her call and efficiently to remind the individual of their call to the Sky
Customer Services helpline by reference to SkyDrive.
142. In any event, it must be borne in mind that the individuals concerned had in
fact, contacted the Sky Customer Services helpline in the first place quite
spontaneously, in order to resolve their particular difficulty with SkyDrive. That they
were merely reminded of that call in relation to SkyDrive in order to introduce the
reason for Ms Baxter contacting them can hardly be reason to reject their evidence as
being tainted. Nor, it seems to me, is the question, “why did you make the call?”
unreasonable in the circumstances.
143. In any event, in my judgment, even if the content of the witness statements
was influenced in some way by Ms Baxter’s form of questions, which I do not accept,
it must be remembered that in most cases, the transcript of their original call to the
Customer Services helpline, reveals their confusion. Those calls were unprompted
and unsolicited, real world events.
144. Secondly, it was submitted that witnesses were a skewed sample of the kind
rejected by the Court of Appeal in Interflora II and therefore, of no assistance at all.
Mr Bloch submitted that the fact that some real people with particular characteristics
are confused tells one nothing about whether such people are likely to be confused
generally where they were selected precisely because they were confused. To put the
point shortly, he says that the seventeen are not representative.
145. In Interflora a list had been compiled of over 100,000 people who had
either bought flowers through Interflora’s website or who had participated in a
previous survey. From that potential pool they had found 13 who they said gave
evidence of real world confusion. In Interflora I Lewison LJ had observed:
"[76] … But the remaining objections still hold good: viz. that
the selected witnesses are not (or at least cannot be shown to
be) a fair sample of the class of reasonably well-informed and
reasonably observant internet users, with the consequence that
there is no ground for any extrapolation on a statistical basis, or
on the basis of any mathematical or logical probability, of the
views of the selected witnesses as representing the effect of the
M & S advertisement on the hypothetical reasonably well-
informed and reasonably observant internet user. If evidence of
this kind cannot form the basis for extrapolation on the basis of
any mathematical or logical probability leading to a conclusion
about the effect of M & S's advertisement on the hypothetical
reasonably well-informed and reasonably observant internet
user, then in the absence of special circumstances it cannot be
useful. And if it cannot be useful, it should not be allowed to
distract the focus of the trial even if it is technically
admissible."
146. .....
“15. In reaching that conclusion the judge first held that the
evidence was evidence of real world confusion. He quoted from
the witness statements of four of the witnesses, although he did
not at that stage refer to the raw data themselves. I regret to say
that in my judgment the judge was misled by the impression
created by the witness statements when compared to the raw
data on which they are based. The judge said at [40]:”
148. Mr Bloch emphasises the tiny number of calls and points out that Sky has
not sought evidence from other callers whose Chordiant notes relate to SkyDrive but
who were not confused. He says that Sky simply says that the Court must assume that
since 0.000011% of calls to the helpline indicate confusion, callers generally are
likely to be confused which cannot be correct.
152. Microsoft also sought to draw a statistical extrapolation from the numbers
involved. In this regard, I accept Mr Purvis’ submissions. It is only Sky customers
who will have phoned the helpline in the first place and would also be likely to be
broadband customers which also reduces the size of the pool. In addition, the
difficulties which were thrown up appear for the most part to have arisen from the
automated use of SkyDrive for attachments to emails which was discontinued in
February 2012 which will have had the effect of reducing the potential for direct
complaint at that stage. It seems to me therefore, that one cannot make a statistical
extrapolation and ought not to do so.
Conclusion
153. In my judgment, having taken into account all the learning in relation to the
nature of the “average consumer” who is a reasonably well informed and reasonably
observant user of broadband internet services, if one undertakes a global assessment
there is every reason to conclude that there is a likelihood of confusion in the average
consumer in the sense that there is a risk that the public might believe that the services
come from the same undertaking or one which is economically linked.
154. I come to this conclusion despite the fact that one of the principles to be
borne in mind in the global assessment is that the average consumer normally
perceives the mark as a whole. In my judgment, since it is accepted that “drive” is a
descriptive term, just as in Alejandro v OHIM and Compass v Compass Logistics, the
first syllable, “Sky” must be seen as the dominant element of the sign. As Arnold J put
it in Och-Ziff, given the distinctiveness of the mark, the identity of the services and
the non-distinctiveness of the word “Drive”, I consider that there is a manifest
likelihood of confusion on the part of the consumer with regard to the SkyDrive sign.
155. It follows that I do not accept Mr Bloch’s submission that the average
consumer would be unlikely to undertake what he described as a three stage process.
First, I consider that given the descriptive nature of “drive”, the average consumer
would see SkyDrive as two words and would not characterise it in the same was as
VapoRub or BlackBerry. That is how the computer blogger, “the Hermes project”
treated it and how it would present itself in oral use.
156. Secondly, and in addition, I consider that “Sky” would be seen as arbitrary.
I should say at this stage, that in my judgment, there was no evidence to support
Microsoft’s contention that in 2002 and 2006 “sky” was descriptive in the sense that it
is allusive of or a metaphor for the internet. In coming to this conclusion I rely upon
Ms Connolly’s own evidence that it was not used at all in an allusive way before 2008
and the evidence of Mr Kroll to the effect that in 2007 he was trying out the reference
on the public. Furthermore, after that date, it seems to me that the references which
Ms Connolly was able to unearth in her extensive researches were insufficient from
which to conclude that “sky” was recognised as allusive for the internet. I also take
into consideration the evidence of the 132 providers of online storage facilities,
identified between 2005 and 2013, none of whom use “sky” to denote the internet and
the fact that the word “sky” does not appear in the dictionary as meaning the internet.
157. Lastly, if it were necessary, I would also rely upon the reactions of those
who responded to the Survey to which I refer in more detail below. At best only
eleven of the 515 interviewed, saw any allusion between “sky” and the internet. This
was despite having been asked in the context of having had SkyDrive drawn to their
attention as being an online service. I should add that I have considerable doubts as to
the probative value of the Survey to which I shall refer.
159. In this regard, I also bear in mind that the sign is not to be stripped of its
context. It seems to me however, that even before SkyDrive was set free in effect as a
separate brand in 2011, the evidence clearly shows that it was often free of all
Microsoft context. Mr Hall accepted that a recipient of documents or photographs was
not necessarily a Windows Live or Microsoft account holder and would not have
accessed SkyDrive through that filter. Those who received documents or photos by
email were not necessarily aware of any Microsoft background. Since 2011 those who
see the tile on a laptop, a Windows phone or an Xbox, watch product placement
during TV series such as Hawaii-Five-O or as Mr Burton described, follow a feed on
twitter, will have no reason to associate SkyDrive with Microsoft. Even in the case of
the Windows phone advertising, the reference to Microsoft was relatively peripheral.
It seems to me that this is precisely within the circumstances under consideration in
the Arsenal and Anheuser Busch cases and there is no need to consider the further step
to which Mr Bloch alluded where confusion may arise as a result of discussions
between consumers, not in the course of trade.
161. In addition, I take into account in this regard, the evidence of Mr Burton in
relation to his attempt to share files for the purposes of a meeting in the office which
elicited the question as to whether there was a connection between Sky and SkyDrive.
162. Although, given my serious reservations about it, I place relatively little
evidential weight upon it, my conclusion is also borne out by the responses to the
Survey to which I refer below.
163. The global assessment which I have undertaken having taken account of the
context in which the sign appears, has taken into account the visual, aural and
contextual effect of the fact that the dominant component in the sign is the same as the
mark.
164. Before turning to the next head of the claim I should make clear that given
the way in which a recipient of an email receives the SkyDrive link to documents or
photographs, free of Microsoft connections, I consider that infringement is made out
under this head whether the mark is Windows Live SkyDrive, Microsoft SkyDrive or
SkyDrive alone and that it is also made out whether the facility forms part of the
Windows Live suite or in its independent form after 2011.
165. Under this head, Sky relies upon the non-identical goods and services
covered by the trade marks which form part of the core of Sky’s reputation as an
internet service provider and as a supplier of set boxes for the storage and
management of digital content. For this purpose, Microsoft acknowledges that there is
some similarity between broadband provision and cloud storage.
166. The registered goods and services upon which Sky relies in this regard are:
169. Class 35: ‘electronic data storage services for personal…use and services
for the electronic storage and organization of files, images, music, audio, video’
[this covers Sky Plus services etc.]
Class 35: The whole class [protected by the use of the class heading, this
includes everything in the alphabetical list including the services specifically
listed for CTM 411 above]
Class 38: ‘telecommunications’ [this covers acting as an ISP and email service
provider]
171. Sky submits that the Board of Appeal at OHIM, when rejecting the
Defendants’ application to register the word SkyDrive as a CTM in respect of classes
9 and 35, at paragraph 46 of the Decision, correctly regarded these core goods and
services as having a ‘close and complementary connection’ with the services for
which the SkyDrive application was made, namely ‘electronic storage of files and
documents for others’. The Board of Appeal’s reasoning was that the contested
services ‘do necessarily involve the use of data storage equipment of the kind covered
by the earlier mark and require the use of telecommunication services.’ Sky submits
that the reasoning applies equally to the precise products and services in relation to
which the SkyDrive sign is being used (file storage, management and sharing
software and services).
172. It is said that file storage, management and sharing software and services on
the one hand and the broadband services in relation to which Sky has its core
reputation are particularly complementary. Mr Purvis submits that the average
consumer knows that broadband providers offer a range of services as well as simply
offering access to the internet. In fact, it was Mr Blumberg, Sky’s Head of
Telephony’s evidence that many broadband providers actually offer file storage,
management and sharing services including BT’s ‘Digital Vault’, Virgin’s ‘Back Up
and Storage’, AOL’s ‘X-Drive’, Orange’s ‘My Content Online’. Of course the same
was also true of Sky itself until the end of 2011. Mr MacLennan also gave evidence
before OHIM of TalkTalk Online Backup, NTL Broadband Plus and Tiscali.plus.
However, this should be balanced against Mr Olofsson’s acceptance that Sky is an
entertainment company and that Sky HD and Sky Anytime, for example, relate to
television entertainment, albeit that he pointed out that it is now necessary to be active
in both media and technology in order to deliver entertainment.
173. After cross examination had been concluded, Sky disclosed some further
documents in the form of market research stated to have been conducted between 10
and 15 October 2007. It was prepared by ICM Research. It is stated that 1147
interviews were conducted via an online panel and that the sample included 205 Sky
Broadband customers and 528 Sky TV customers. It revealed that 58% of those who
responded considered it appropriate for internet providers also to provide online data
backup services and 45% stated that they would consider using such a service.
Although it has some probative value, in the absence of any cross examination, it
would not be appropriate to give it a great deal of weight.
174. Sky put in evidence an article which lists the best five free cloud storage
service providers the first two of whom were BT and Virgin which are also broadband
providers. On the other hand, Microsoft introduced an article from the magazine
“PCAdvisor” listing the top 20 cloud storage services which did not reveal the same
correlation. It highlighted services such as those offered by Dropbox, SugarSync,
flickr and MediaFire. Furthermore, Mr Blumberg accepted in cross examination that
despite significant numbers of customers having been given Sky Store and Share
accounts automatically, the usage was low. In fact, there were only 40,000 users
when the service was discontinued in 2011 despite the number of households which
subscribe to Sky Broadband services. Mr Blumberg observed that the Store and Share
service had not been actively marketed.
175. Under this head, evidence of actual confusion can be relied upon. I have set
that out under the “Infringement by Identity” heading above and I will not repeat it
here.
176. I should also mention that Microsoft drew attention to what was said to be
“missing evidence’ from Sky. They say that there ought to be evidence from within
Sky expressing concern about the presence of SkyDrive in the market. It is said that
this is a striking omission given Sky’s insistence that SkyDrive has caused it
detriment.
177. In answer to this, Sky points out that it was not until 2011 that SkyDrive
was launched and marketed separately and by that time, the litigation had commenced
and in any event, Sky’s Store & Share had ceased. All communications after this
action was commenced in 2011 and at a time when SkyDrive’s separate presence in
the market was greater, would be likely to be with the legal department and therefore,
privileged.
178. It is also said that there is no evidence from Sky customers on the closure of
the Store & Share service. Microsoft contends that some of them should have asked
whether SkyDrive was a sister service to which they could transfer.
179. It is also said that the fact that Mr MacLennan only sent out a note on the
intranet to call agents in March 2012 asking them to look out for confusion with
SkyDrive indicates that this is a synthetic dispute and if there had been a real problem
he would have done so in 2007.
180. In my judgment these points do not take the matter much further forwards.
As Mr Purvis submits, SkyDrive was only marketed and launched separately in 2011.
Furthermore, as the authorities show, evidence of actual confusion and deception is
often decisive, but its absence is not.
181. Microsoft also relied upon the evidence of Ms Duncker whose job title was
Group Manager Delivery Community Support. She researched Microsoft customer
feedback for reference to SkyDrive of which there was none. In fact, in cross
examination she accepted that the community help forum deals with technical
problems and that the customer support telephone number merely channels callers to
the forum or to the complaints department. The only other source was the feedback
page on the Microsoft website. Ms Duncker also accepted that the feedback
spreadsheets had not been searched for “sky” but rather for BSkyB or British Sky
Broadcasting Group. In the circumstances, it seems to me that a lack of evidence from
this source is not surprising and is not indicative of very much.
182. Furthermore, Ms Hegerty in cross examination accepted that the student
ambassadors recruited by Microsoft to spread the word about its products in
universities had not been asked about instances of confusion between SkyDrive and
Sky. She also accepted that although she had stated in her witness statement that she
was sure that any concerns about a Windows Live product would have come to her or
to her colleague Fiona Fyfe’s (who also said that she had heard nothing) attention, she
had not heard of the concerns of Mr Mercier a senior director Content Acquisitions
and Strategy Team at Microsoft Limited who saw a Microsoft demonstration about
SkyDrive in September 2010 and as a result sent an email to the internal Microsoft
product testing group, known as Windows Live Dogfood Discussion Group asking
whether they had checked out Sky’s various trade marks given the use of Sky in the
title. She was also unaware of the Hermes Project blog referring to SkyDrive as a
confusing name.
183. Mr Hall, Ms Hegerty and Mr Weeks confirmed that they would have
expected to have heard of any issue arising if people were confused by the SkyDrive
name or were perceiving a link with Sky but that they had not had such feedback. Ms
Bonatti, Mr Jacoupy and Mr Mohadjer’s evidence as to the reasons why they would
have expected to have heard of negative feedback in Italy, France and Germany
respectively but had not done so was unchallenged.
Conclusion
184. As I have already mentioned, for the purposes of this head of the claim,
Microsoft accepts that there is some similarity between broadband provision and
cloud storage. It is also said that file storage, management and sharing software and
services on the one hand and the broadband services in relation to which Sky has its
core reputation are particularly complementary. Mr Blumberg’s evidence was that
many broadband providers also provide file storage and management services
although it is not true to say that there is a complete correlation by any means.
185. It seems to me that the evidence reveals that there is a close connection
between file storage, management and sharing software and the provision of
broadband services, including the provision of email services which are included in
Class 38 both for UKTM 829 and CTMs 337 and 411. Not all data storage providers
are broadband providers but it seems to me that the evidence reveals that a significant
number of broadband providers also provide data storage and I consider it significant
that the complementary services are provided by both BT and Virgin. Accordingly, I
agree with the conclusion reached by the Board of Appeal of OHIM that there is a
close and complementary connection between the core goods and services for which
the CTMs are registered and those to which the SkyDrive mark relates. I also consider
that the same is true in relation to UKTM 829. As the authorities made clear, the
close connection is a matter to be taken into account in the global assessment.
186. Given the evidence of actual confusion manifested in calls to the Sky
helpline and Mr Burton’s experience of sharing documents in the office, to which I
have referred, it seems to me that if one undertakes a global assessment, given all the
matters to which I referred under the “identity” head which are also relevant here,
together with the similarity in goods and services to which the UKTM and the CTMs
and the sign relates, the descriptive nature of “drive” and the dominant remaining part
of the sign being “Sky”, there is a likelihood of confusion in the average consumer
who is a reasonably well informed and reasonably observant user of the relevant
internet services. This is all the more so in the light of Sky’s very considerable
marketing budget for its core services which is not in dispute.
187. In this regard, I have taken into account in the global assessment, in
particular, the conceptual similarity of the goods and services which it seems to me is
close and the aural similarity between the mark and the sign.
188. In addition to the evidence of actual confusion, I also rely upon Mr Hall’s
evidence, that it was certainly possible that ordinary consumers familiar with Sky’s
position as a provider of broadband internet might think that there was a connection
between Sky and SkyDrive and that it was not plain to a recipient of an email with a
SkyDrive attachment that it is a Microsoft product. Just as under the “Identity head” it
is important to bear in mind the context in which the sign appears. As I mentioned
under that head, the context includes for example, the appearance of SkyDrive as a
pre-loaded tile on a laptop, as an app on a mobile phone or on an Xbox in
circumstances in which it is difficult if not impossible for the consumer to appreciate
that there is any Microsoft connection.
189. Under this head, I also place some, albeit only slight, reliance upon the
responses to the Survey. As I said under the “Identity head” they give some indication
of the reaction of the public.
190. I should add that given the fact that this head of claim concerns the non-
identical goods and services which form the core of Sky’s reputation, I consider that
Sky’s case under this head is if anything, stronger than under the “Identity” head.
191. This purpose of this section and Article (which are equivalent in wording to
Article 5(2) and 4(4)(a) of the Trade Marks Directive 2008/95/EC) was explained by
the ECJ in Intel Corp v CPM United Kingdom [2008] ECR I-8823 in the following
terms:
28. Just one of those three types of injury suffices for that
provision to apply.
192. It is not necessary for the trade mark proprietor to establish a likelihood of
confusion in order to succeed in such a claim. However, it is necessary to establish
that the mark has a ‘reputation’ in the relevant territory. As Arnold J said in Och-Ziff
at ¶125: ‘this is not a particularly onerous requirement.’ The relevant test is set out
by the ECJ in General Motors v Yplon [1999] ECR I-5421 at ¶26 as follows:
194. The third requirement is that the trade mark proprietor must establish the
existence of one of three kinds of injury which were described by the court of Justice
in L’Oreal v Bellure. The only form of injury that is relied on in this case is the loss of
distinctiveness, referred to by the CJEU in ¶29 of the passage cited above as ‘dilution,
whittling away, or blurring’.
195. In Intel at ¶42, the CJEU laid down a number of factors which should be
taken into account when assessing whether the sign was likely to bring the trade mark
to mind:
They pointed out (at ¶¶57-58) that the last of these was not necessary but was
sufficient to prove “calling to mind”.
196. As Mr Purvis pointed out, it is clear from Intel at ¶38 that it is not necessary
to prove that ‘dilution’ has actually occurred, merely that there is a serious risk of it
happening in the future. Furthermore, the same paragraph makes clear that dilution is
to be considered from the point of view of the relevant public which comprises
average, reasonably informed consumers of the goods or services for which the
registered trade mark is registered and not average consumers of the Defendants’
services.
197. The fact that the sign ‘calls the mark to mind’ does not automatically give
rise to liability. A serious risk of dilution must be shown. However, it is to be
assessed on the basis of (inter alia) the same factors set out above for establishing the
‘link’ in the first place – see Intel ¶68. In particular,
“The more immediately and strongly the earlier mark is
brought to mind by the later mark, the greater the likelihood
that the current or future use of the later mark is taking unfair
advantage of, or is detrimental to, the distinctive character or
the repute of the earlier mark”
199. The ECJ in Intel said the following in relation to the relevance of the
‘uniqueness’ of the brand seeking to show dilution and the proof of detriment:
74. However, the more 'unique' the earlier mark appears, the
greater the likelihood that the use of a later identical or similar
mark will be detrimental to its distinctive character.
.....
77. It follows that proof that the use of the later mark is or
would be detrimental to the distinctive character of the earlier
mark requires evidence of a change in the economic behaviour
of the average consumer of the goods or services for which the
earlier mark was registered consequent on the use of the later
mark, or a serious likelihood that such a change will occur in
the future.
is not sufficient to establish that the use of the later mark takes
or would take unfair advantage of, or is or would be detrimental
to, the distinct character or the repute of the earlier mark,
within the meaning of Article 4(4)(a) of the Directive.”
200. Lastly, section 10(3)/Article 9(1)(c) infringement requires that the
Defendant’s use of the sign must be ‘without due cause’. The burden to establish ‘due
cause’ is on the Defendant: see Intel ¶39 and Premier Brands v Typhoon [2000] FSR
767.
201. The defence has gained some significance in the difficult area of ‘internet
keyword’ cases, where the CJEU in Interflora v Marks & Spencer C-323/09 noted that
the use of a third party’s trade mark by a competitor as a keyword for the purpose of
offering consumers an alternative competitive product:
202. It is notable that the CJEU seem to have considered that in a case where
dilution was being caused, the use of a sign which would otherwise infringe would
not be ‘with due cause’. Outside the peculiar case of internet keywords, the scope of
the defence is extremely limited. The scope was discussed in detail by Neuberger J in
Premier Brands v Typhoon Europe [2000] FSR 767 at 789-791. At p791, he cited
with approval a passage from the decision of the Benelux Court in Lucas Bols [1976]
I.I.C. 420 at 425 in the context of the very similar wording in the Uniform Benelux
Trade Mark Act (‘without justifiable reason’), in a section generally regarded as a
blueprint for the extended protection given by Article 9(1)(c):
“What this requires, as a rule, is that the user (of the mark) is under
such a compulsion to use this very mark that he cannot honestly be
asked to refrain from doing so regardless of the damage the owner of
the mark would suffer from such use or that the user is entitled to the
use of the mark in his own right and does not have to yield this right
to that of the owner of the mark.”
The Argument
203. It is said on behalf of Sky that the evidence in relation to the double
similarity case under s10(2) and Art 9(1)(b) inevitably satisfies the lesser test of
“calling the mark to mind” for the purposes of section 10(3) and Art 9(1)(c).
204. In this regard, Mr Purvis also draws attention to the admission contained in
Microsoft’s written closing argument that some consumers may call SKY to mind
when encountering SkyDrive in use and that those consumers who do so call SKY to
mind are not people who should be regarded as especially unobservant or lacking in
“circumspectness”.
205. In addition it is said that SkyDrive will inevitably cause dilution in the
sense of the ‘mark’s ability to identify the goods or services for which it is registered
and used as coming from the proprietor of the mark is weakened, since use of the later
mark leads to dispersion of the identity and hold upon the public mind of the earlier
mark.’
206. In support of the contention that dilution will occur, Mr Purvis relied upon
unchallenged evidence as to subsidiary apps to SkyDrive which have been developed
by third parties to enable users to manage their materials stored on SkyDrive. They
are Sky Manager, Sky Wallet, Sky Music and Sky Player.
207. Further, in relation to dilution, Mr Purvis points out that the General Court
in Wolf Head made clear that detriment in the sense of a change of economic
behaviour on the part of customers was not a separate hurdle but that once dilution is
established, that is sufficient for liability.
208. Mr Purvis then went on to refer me to the Survey conducted on behalf of his
clients in late 2010. This was carried out without any prior reference to the Court or to
the Defendants. He says that it is more help here under s10(3) and Art 9(1)(c) than in
relation to the identity and similarity claims because under this head, the association
of names and the creation of a link is enough.
209. As I have already mentioned, the Survey was devised and supervised by Mr
Riccardo Baxter. It was carried out by briefed and trained interviewers provided by a
leading custom market research firm. The Survey involved presenting approximately
515 members of the public with a flash card with the word “SkyDrive” on it in font
size 160. The following substantive questions were asked:
Q1: “What do you think of this as the name of an online storage service for
photos, music and other files?
Q2: “Why do you say that?”
210. Mr Malivoire considered that these questions and in particular the second
question, encouraged speculation and therefore, were unhelpful. In cross examination,
Mr Baxter pointed out that there were two views about whether it is better merely to
use an open ended question such as “what do you think if anything?” as the follow up
question. He said that the second question was more likely to illicit a response and
avoid people failing to take part in the survey. The Survey was conducted in various
locations throughout the United Kingdom and it was not disputed that there was a
good geographic spread. Quotas were imposed on the sample so that it would be
broadly representative of the adult population. Interviews were conducted across all
adult age ranges and the male/female mix of interviewees was 48.5%/51.5%.
211.The interviewer was required to write down the answers verbatim and to record
the interview. It was intended that the interviews be conducted outside and that when
asked the questions, the interviewee should have before them the flash card. The
recordings and the transcripts of them are before the court. In fact, a number of the
recordings have been played to the court.
212. The findings of the Survey were not put forward as empirical data or finite
percentages but as Mr Baxter described, from a qualitative perspective to indicate the
scale and range of potential association between SkyDrive and Sky.
213. A rough and ready reading of the findings from the Survey reveals that
about 100 people mentioned Sky in their answers in a way which implied that they
make a link with the Claimants. Some examples of those responses are in the
following form:
‘1007:
“1011:
Qu 2 – You said it was for photos and videos and the sky made
me think about the Sky TV package. It wouldn’t make me think
of photos.
“1022:
“1026:
“3007:
214. A number of the interviewees also made witness statements explaining their
answers to the Survey. They had been contacted by telephone by SJ Berwin LLP staff
including Ms Baxter. Her evidence was that she informed the interviewee that she was
working from SJ Berwin LLP and was working on proceedings connected with the
Survey in which they had recently participated. She read the original questions and
the interviewee’s responses to them and asked them to confirm whether they could
recall their responses. They were asked whether they would elaborate further on their
answers and if they would provide a witness statement.
215. One such interviewee who was contacted in fact by Mr Kevin Carpenter of
SJ Berwin LLP swore a witness statement in which she set out the process by which
she was contacted after the Survey. It matches up with Ms Baxter’s evidence in this
regard. Her answers to the Survey had been:
“Qu 1 – You think of drive as hard drive, I would know what it was.
Qu 2 – You think of online because Sky is a big company that is all over the
Internet.”
She was then asked what she had meant by Sky being a big company and responded:
“1001:
Qu 2 – It’s unique, no one else has got and its all like with the
internet. The internet is in the air, its about putting the files in
the sky up on the internet.”
1014:
“2008:
`’4012:
2017:
218. He accepted that for the purposes of section 10(2)/article 9(1)(b) however, it
is of limited use because it is impossible to say exactly how many of the participants
would actually have been confused into assuming that SkyDrive was actually a Sky
product when they saw it in context. Nevertheless, he says that it supports Sky’s
primary evidence from customers who were actually confused.
219. The Survey has been subject to serious criticism by Mr Malivoire on behalf
of Microsoft. Having reviewed the transcripts and listened to the recordings, he
appreciated that in a number of instances, interviews had in some cases not been
conducted outside and in one case, it had been conducted on the telephone. In another
case it was clear that the interviewee was the son of the interviewer and in another
that the interviewee was not within the age range recorded in the relevant report. In
other examples, it was relatively clear that the interviewer rather than adhering to the
script had prompted the interviewee and in others that the interview had been
rehearsed before it was recorded. He took the view that such interviewers had
displayed such unreliability that all of their interviews should be excluded from the
results of the Survey.
220. In cross examination, Mr Malivoire was unable to state that the kind of
shortcuts and deviations from instructions revealed by the recordings had not occurred
in all or any of the surveys which he himself had been involved in presenting to the
court in other cases of this kind.
221. Mr Purvis says that all the criticism does not change the position. The
statistics remain the same. He says that the questions were non-leading and a
reasonable cross section of the public were questioned. He also pointed out that
Microsoft had been provided with all relevant materials in compliance with the
Whitford Guidelines and submitted that as a result of the availability of recordings
and transcripts the findings were perhaps the most reliable or at least, the most helpful
to the court of the many surveys conducted, evidence of which is presented in cases
such as this.
223. Mr Purvis submitted therefore, that the Survey was more reliable than
previous surveys and that the results should be accepted save for those in which the
instructions were breached blatantly, which is a very small number. In any event, even
if one adopts Mr Malivoire’s more radical approach of rejecting all of the interviews
of such an interviewer, Mr Purvis says that the results are not materially affected. The
statistics remained the same.
224. In fact, there were 107 mentions of Sky and 103 after adjustments and of 38
responses which made reference to allusions, 9 referred to “cloud” or “sky” and 11
referred to the internet.
228. He also says that the Survey does not assist Sky in relation to spontaneous
calling to mind because the questions put were designed to encourage the
interviewees to think about matters which they might not otherwise have done. He
couples this with the very large font of the SkyDrive sign which was shown. He also
submits that the evidence of confusion is at a de minimis level.
230. He also refers me to paragraph 54 of the Wolf Head decision and submits
that it is clear that in fact detriment must be proved and is not altogether synonymous
with dilution. He says that Sky’s case under this head is necessarily hopeless because
detriment simply has not been established. In particular, he says that Sky do not enjoy
a monopoly in the word SKY nor should they and that the courts have always been
slow to assist a party where the word is descriptive.
231. He says that in this case it is misleading to talk of dilution at all. Sky chose
a descriptive mark which is widely used. The Defendants’ use is merely one more
drop in the ocean and could not give rise to serious dilution such that it could give rise
to a change in economic behaviour.
233. Mr Bloch says therefore, that Sky’s case in relation to SkyDrive alone must
fail and that as the other signs, being Windows Live SkyDrive, SKYDRIVE without
distinctive capitalisation and Microsoft SkyDrive are so much less similar, they must
fail too. The Microsoft context and/or related indicia, it is said, can only improve
Microsoft’s position.
234. With regard to Windows Live SkyDrive and Microsoft SkyDrive it is said
that the sign is just not similar to the mark either visually or aurally, Sky does not
come near the beginning of the sign and the concepts are completely different.
Furthermore, it is said that there is no prospect of the average consumer considering
such signs to be a sub-brand and there is no evidence of it.
Conclusion
236. As Mr Bloch pointed out, there is no evidence as to the mark other than in
the UK. However, as I understand it, it is not in dispute that Sky has a considerable
marketing budget and that its trade marks are well known. As Arnold J pointed out, in
an appropriate case, the territory of a single Member State may suffice to satisfy the
requirement that the mark is known by a significant part of the public in a substantial
part of the territory of the European Union. It seems to me that given the strength of
Sky’s mark within the UK, that test is satisfied.
237. It also seems to me that it is clear given the conclusions which I have
already reached, that the average consumer would make a link such that SkyDrive
calls to mind the “Sky” mark. The case in this regard seems to me to be strong given
my findings in relation to the descriptive part of the SkyDrive sign and the mark’s
distinctive character. I also take account of the existence of evidence of actual
confusion in this case.
238. In this regard, I do not rely heavily upon the Survey, although I do not
discount it altogether. I accept Mr Bloch’s justified criticisms of it. However, I do not
consider that the cases of failure to comply with instructions which were only
apparent because of the availability of the recordings should lead to the results being
discounted altogether or that all of the results of the particular interviewer should be
discounted. I also take account of the fact that even if one makes the adjustments
which Mr Malivoire proposed, the overall results remained much the same. It does not
seem to me that the size of the font on the flash card is likely to have had much
impact in relation to the questions asked nor that the second question necessarily
materially affected the responses.
239. However, I do take account of the fact that it was a survey conducted
without the prior approval of the Court.
241. However, when this is coupled with the similarity of the goods and services,
the strength of Sky’s reputation, the similarity of the marks, the evidence of actual
confusion and my conclusions about the way in which the sign would be appreciated
conceptually, aurally and in context, it seems to me that the average consumer would
call Sky to mind when seeing SkyDrive and given the way in which Windows Live
SkyDrive and Microsoft SkyDrive was presented to the consumer, they too would be
likely to call Sky to mind.
242. Has Sky also established that there is a serious risk of loss of distinctiveness
in the sense of “dilution, whittling away or blurring” in the minds of average,
reasonably informed consumers of the goods and services for which the mark is
registered? It seems to me that such a dilution is an obvious inference from the facts
of this case. The creation of the subsidiary apps, such as SkyWallet supports such a
conclusion. I do not consider that the fact that Ms Connolly found a large number of
apps which use sky in the title detracts from such a conclusion. There was no
evidence that the fruits of her researches were necessarily connected with the area of
Sky’s activities at all.
243. Lastly, was the use of the sign “without due cause”? The burden to show
due cause is on Microsoft. In this regard, I take account of the passage in Lucas Bols
to which I have referred. It seems to me that it cannot be said that Microsoft is under
such a compulsion to use this very mark that it cannot honestly be asked to refrain
from doing so. After all, it has repackaged/branded its service three if not four times
already. Although it has expended a great deal of energy and money on advertising, I
do not consider that it can make out “due cause” and I did not understand Mr Bloch to
seek to do so.
Passing Off
245. It is Sky’s case that all the elements of a passing off claim are also made
out. Mr Purvis submits that the “classical trinity” of goodwill, misrepresentation
(whether or not intentional) leading to likelihood of confusion and damage are all
present. Sky submits that the passing off case is very similar to the case for trade mark
infringement under s10(2) based on double similarity. Sky relies upon its reputation
and goodwill across its entire business, but specifically, in relation to its broadband
business and the digital content storage and management services represented by its
set-top boxes.
246. It is not in dispute that the legal basis of the cause of action in passing off
was explained by Lord Oliver in Reckitt & Coleman v Borden [1990] RPC 341 at 406
as follows:
“The law of passing off can be summarised in one short general
proposition – no man may pass off his goods as those of
another. More specifically, it may be expressed in terms of the
elements which the plaintiff in such an action has to prove in
order to succeed. These are three in number. First, he must
establish a goodwill or reputation attached to the goods or
services which he supplies in the mind of the purchasing public
by association with the identifying “get-up” (whether it consists
simply of a brand name or a trade description, or the individual
features of labelling or packaging) under which his particular
goods or services are offered to the public, such that the get-up
is recognised by the public as distinctive specifically of the
plaintiff's goods or services. Secondly, he must demonstrate a
misrepresentation by the defendant to the public (whether or
not intentional) leading or likely to lead the public to believe
that goods or services offered by him are the goods or services
of the plaintiff. Whether the public is aware of the plaintiff's
identity as the manufacturer or supplier of the goods or services
is immaterial, as long as they are identified with a particular
source which is in fact the plaintiff. For example, if the public
is accustomed to rely upon a particular brand name in
purchasing goods of a particular description, it matters not at all
that there is little or no public awareness of the identity of the
proprietor of the brand name. Thirdly, he must demonstrate that
he suffers or, in a quia timet action that he is likely to suffer,
damage by reason of the erroneous belief engendered by the
defendant's misrepresentation that the source of the defendant's
goods or services is the same as the source of those offered by
the plaintiff. “
“There is ample authority for the view that you must take
customers as you find them including the imprudent and the
unwary”.
249. It is also not in dispute that the ultimate question of ‘likelihood of confusion
amongst a substantial number’ does not admit of quantitative definition. Confusion of
even a relatively small proportion of people will suffice. Thus in Neutrogena at p484,
having considered the evidence of letters written in protest at an advert for the
Defendant’s product, some 9 of which showed that the writers thought it was for the
Claimant’s product, Jacob J said this:
“It should not be thought that the 9 out of 158 letters evincing
confusion represents the totality of it (though if representative
of the degree of confusion amongst the public as a whole it
would certainly be enough).”
250. Furthermore, it is clear from the judgment of Jacob LJ in Phones4U Ltd &
Ors v Phone4u.co.uk Internet Ltd & Ors [2006] EWCA Civ 244, that there is no
requirement for special proof of damage where confusion is likely to occur, even in
separate fields of activity. In particular, Mr Purvis referred me to paragraphs 11 to 14
of the judgment of Jacob LJ, the relevant parts of which are as follows:
251. Mr Purvis prays in aid all of the evidence which is relevant under the other
heads of claim. However, he puts particular emphasis upon the callers to the Sky
Customer Services helpline.
“PASSING OFF
There are significant overlaps between this area and the trade
marks but it is to be noted that AETN claim to restrict under
passing off (inter alia) the use of the specific word HISTORY
and the specific words MILITARY HISTORY or any name or
names confusingly similar thereto. This in my view was and is
a bold claim.
255. Conclusion
256. It seems to me that for this purpose, the existence of goodwill is not really
in dispute. As a result of its considerable marketing budget, Sky has reputation and
goodwill across its entire business including its digital content storage and
management services by way of set top boxes and in broadband.
258. Taking into account all of the evidence upon which I have relied under the
other heads together in particular, with the responses to the Sky helpline I also
consider that it follows therefore, that in my judgment there has been a
misrepresentation whether intentional or not.
259. Although I accept that there was no use of the Sky get up or indicia in
SkyDrive, it seems to me that the evidence revealed confusion amongst real people.
Was there sufficient evidence to satisfy me that there is a likelihood of confusion
amongst a substantial number of the public? In this regard, I note what Lewison LJ
said most recently in Interflora and Jacob J as he then was, in Neutrogena. Although
the test is different from that in infringement, it seems to me that on the basis that the
evidence of confusion given the way in which the Chordiant system works and the
fact that records are only kept for six months, may well be the tip of an iceberg, Mr
Burton’s evidence when sharing a document with clients in the office and Mr Hall’s
acceptance of the effect upon a recipient of an email with a SkyDrive link, that the test
is made out.
260. It seems to me that damage in the general sense identified in the passages
from Phones 4U Ltd & Ors v Phone4u.co.uk Internet Ltd & Ors, inevitably follows.
Damage is inherently likely where frequently the customers of a business wrongly
connect it with another. This must be all the more so given the range of difficulties
which SkyDrive was encountering in 2011/12 and in my judgment, is clear from the
very fact that the callers to the Sky helpline who were enquiring about SkyDrive were
having serious difficulties with the product which they believed to be connected with
Sky.
Counterclaims - Invalidity
(i) Descriptiveness for cloud storage
262. Microsoft’s pleaded objection to the UK trade marks is under s3(1)(b) and
(c) of the TMA. These are in the following terms:
263. They take the same stance on the same basis in relation to the CTMs and
contend that they are partially invalid under Article 7(1)(b) and (c) of the Regulation
which are in the following terms:
“Article 7 ”
.....
264. In Fine & Country v. Okotoks [2012] EWHC 2230 at 216, (which has since
been upheld in the Court of Appeal) Hildyard J said as follows in relation to these
sub-sections of the TMA and their equivalents in the Regulation:
265. Microsoft contends that the word ‘sky’ is not registrable by virtue of s3(1)
(b) and 3(1)(c) in relation to a subset of the goods and services for which the UKTMs
are registered, namely ‘goods and services pertaining to cloud storage’. It is alleged
that:
vii) the word ‘sky’ is a convenient and common word used by traders to
describe or allude to a cloud storage system (be that system a good or a
service) such that (a) it is incapable of distinguishing a cloud storage system of
one undertaking from that of another, and (b) it should be kept free for use by
all traders offering such systems;
and
266. As the Claimants point out, this amounts to an allegation that the mark
should never have been registered. The question of validity must be judged as at the
effective date of registration of the mark, namely the date of application. In the case
of UKTM 176 the relevant date is 5 June 2002. In the case of UKTM 829 it is 6
March 2006.
268. By reference to the perception of such a person at the relevant date, the
question must be asked whether the sign ‘may serve in normal usage … to designate,
either directly or by reference to one of their essential characteristics, the goods or
services for which registration is sought’. See Procter & Gamble v OHIM [2001]
ECR I-6251, ¶20.
269. This will only be the case where there is a ‘sufficiently direct and specific
relationship between the sign and the goods or services in question to enable the
public immediately to perceive, without further thought, a description of the goods
and services in question or one of their characteristics.’ See Lisstoschenko and Henze
v OHIM [LIMO] ECR II-2957 ¶30.
271. Reliance was also placed upon Starbucks v BSkyB [2012] EWHC 3074 (Ch)
in which Arnold J upheld Sky’s descriptiveness counterclaim under article 7(1)(b) and
7(1)(c) CTMR. The judge concluded that taking all the evidence into account,
“NOW” would be understood by the average consumer as a description of a
characteristic of the service, namely the instant, immediate nature of the service. He
placed weight upon the evidence adduced by Sky that the word NOW had been
widely used in a descriptive way in the relevant sector. He put it this way at [112]:
273. In the circumstances, it seems to me that the contention that the average
consumer would immediately have perceived from the word ‘sky’ as an allusion to
‘cloud computing’ or descriptive of the internet in 2002 or 2006 cannot succeed.
274. The only references which have been found prior to 2006 in which the word
‘sky’ is used in relation to anything to do with computing are either the ‘pie-in-the-
sky’ or ‘blue-skies thinking’ style phrases or they refer to a plan for providing internet
by satellite. They did not necessarily relate to online storage.
275. Furthermore, it seems to me that the position is different from that
considered by Arnold J in the Starbucks “NOW” case. As the judge pointed out, the
term was widely used entirely descriptively in the sector. Although Ms Connolly’s
researches unearthed a relatively large number of apps using the term SKY within
their titles, they related to a wide range of sectors which even included skydiving.
Given the outcome of her research in relation to cloud storage and the fact all of the
evidence to which I have referred suggests that the term was not used in relation to
cloud storage prior to 2008 and was not a name which had been used to explain the
concept of data storage in the public domain at that time, it seems to me that there is
no basis upon which it can be said that the average consumer would have understood
“Sky” as either a reference to or an allusion to online data storage prior to 2008.
276. Even if one takes account of the results of the Survey, which was not
conducted until late 2010 and in relation to which the first question serves expressly
to connect the term SkyDrive with the relevant services, only 20% of responses can
be characterised as containing a recognition of some kind of allusion to cloud storage.
Putting aside the doubts as to the probative value of the Survey in the first place and
the suggestive nature of the first question, I consider such a level of response to be
insufficient.
277. This is not a case in which there is a ‘sufficiently direct and specific
relationship between the sign and the goods or services in question to enable the
public immediately to perceive, without further thought, a description of the goods
and services in question or one of their characteristics.’ See Lisstoschenko and Henze
v OHIM [LIMO] ECR II-2957 ¶30.
279. Microsoft counterclaim that the amendment of the registration for CTM 411
by the partial surrender route to which I have referred is sufficient basis for a
declaration that the mark is invalid pursuant to Council Regulation 207/2009 Article
52(1)(b) which is in the following form:
(b) where the applicant was acting in bad faith when he filed
the application for the trade mark.”
282. It is not disputed that the effect of the use of class headings at the relevant
date is set out in Communication No. 4/03 of the President of OHIM:
“… the goods and services for which the protection of the trade
mark is sought [must] be identified by the applicant with
sufficient clarity and precision to enable the competent
authorities and economic operators, on that basis alone, to
determine the extent of the protection conferred by the trade
mark.
285. In this regard, Microsoft submits that it is clear that the partial surrender
was only a device by which to insert additional wording in order to gain additional
protection against Skype and Microsoft by a means which could not be challenged
and of which neither they nor anyone else had notice. That was something which it is
said that Sky knew that they were not or would not necessarily be entitled to as a
result of the IP TRANSLATOR case and the consequent changes in OHIM procedure
which might be necessary.
288. In this regard, he also points to the decision of Patten J in Hotpicks Trade
Mark [2004] RPC 42 in which he decided that the reference “if or to the extent that
the application is made in bad faith” in s3 TMA, was a reference to the application for
registration itself. He also decided at [29] that it was entirely clear that for the
purposes of Article 51 the relevant date for testing bad faith was the date of the filing
of the application for registration. Sky submits therefore, that if there were bad faith
involved in the partial surrender process in 2010/2011, which is denied, the remedy in
Article 52 is not available because it post dates the application for registration itself
by a number of years.
289. Furthermore, Mr Purvis submits that the partial surrender cut down the
class relied upon and defined what was left by the addition of the descriptions after
“including”. He says that there is no room for bad faith. The application is made under
Article 50 and the OHIM either allows or refuses it. There is no discretion involved.
290. I was also referred to the decision of the Second Board of Appeal in Saga
Furs of Scandinavia Case R 585/2008-2. In that case, the proprietor of a CTM had
applied to amend the specification of the goods in Class 18 by the addition of
“including handbags, bags, carryalls, cosmetic bags, purses, briefcases, suitcases, and
travelling bags” at the end. The application was rejected and that rejection was
appealed. It was held that the application to amend the list in Class 18 was neither a
limitation nor an extension of the goods and as a result to completely redundant in
terms of clarifying the scope of the protection as shown on the Register. It was
pointed out that once registration has taken place the only way to change the list of
goods and services is by way of surrender.
291. The issues have been considered most recently by Arnold J in Och-Ziff
Management Europe Ltd & Anr v Och Capital LLP and Ors [2011] Bus LR 632 at
[34] – 37] in the following terms:
292. In addition, as Arnold J held in the Hotel Cipriani case, at [170] there is a
presumption of good faith. He set out the usual test for bad faith at [166]. There must
be dealings which
293. It seems to me that the authorities are quite clear that both in the case of the
TMA and Article 52, attention is to be focused at the time of the application for
registration of the mark. Given the actual wording of Article 52 it does not seem to me
that this is particularly surprising. Article 52(1)(b) is specifically directed to the time
at which the application for registration is filed. The express wording directs one to
bad faith “when he [the applicant] filed the application for the trade mark.” In my
judgment, there is nothing in that language which would enable one to construe the
sub-article sufficiently widely to encompass the exercise of partial surrender and
amendment in this case, which occurred some years after registration.
294. Even if that were not the case, I find it extremely difficult to characterise
the making of an application prior to a judgment which was anticipated by all, in
circumstances in which the application is tried and tested by OHIM and ultimately
accepted, as falling short of the standards of acceptable commercial behaviour
observed by reasonable and experienced men in this area. The process took a number
of months and was tested by OHIM which insisted on various changes before the
change was permitted. I consider this to be the case even if the application was made
with a view to strengthening the position in relation to this litigation. There is no
evidence of or suggestion of deception having been practised upon OHIM.
295. In this regard I also take into account that the amendments were actual
goods and services being provided by Sky under the mark. It was not as if this was
merely an academic exercise or as Mr Bloch would have it, a good wheeze in order to
strengthen Sky’s hand in the litigation. In my judgment, such conduct is entirely
different from that under consideration in the Lindt case to which I have referred.
There, the application was made for marks with no intention of use.
296. It seems to me that whether in the light of the Saga Furs case, the
amendment should have been permitted was a matter for OHIM and cannot reflect
upon the conduct of Sky in making the application. If there was no power to make the
amendment, it seems to me that there is likely to be an appropriate process by which
the decision of OHIM can be challenged. Mr Bloch submits that it was plainly
arguable that it was wrong in law. Even if that is the case, to seek to characterise an
application for such partial surrender and amendment as bad faith goes much too far.
297. It will be clear from the approach which I have taken that I do not consider
it necessary to determine whether in fact, the amendment made to the registration as
part of the partial surrender process had the effect of narrowing or widening the
registration itself.
298. Appendix 1
Appendix 2
ix) The Windows 8 initial desktop showing the SkyDrive app tile:
x)
xi)
xii)
xiii)
xiv)
xv)
xvi)
xvii)
xviii)