'The NOW Case. David Rose, Jonty Warner and Nina O Sullivan King & Wood Mallesons. Chaired by Aaron Wood, ITMA Council Member

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'The NOW Case David Rose, Jonty Warner and Nina O Sullivan King & Wood Mallesons Chaired by Aaron Wood, ITMA Council Member Our webinar will begin shortly Audio is provided via the computer s

1 'The NOW Case David Rose, Jonty Warner and Nina O Sullivan King & Wood Mallesons Chaired by Aaron Wood, ITMA Council Member Our webinar will begin shortly Audio is provided via the computer s speakers or a headset connected to the computer. Please ensure your computer s speakers are un-muted and set to maximum volume. Intermittent audio/general audio issues are often linked to your own local internet connection. If you require further assistance in accessing the webinar, please call Meeting Zone s customer service number on or

2 The NOW case David Rose, Nina O Sullivan and Jonty Warner - 22 October 2015

3 PCCW v Sky NOW TV NOWTV.com PCCW s Community Trade Mark Sky s Signs 3

4 FACTS Mid 2005: UKB adopted name NOW for broadband product From March 2006: PCCW provided closed circuit IPTV service in Hong Kong under name NOW TV) 2009 onwards: PCCW was considering expansion internationally, including into UK market 21 March 2012: Sky announced launch of NOW TV, an OTT IPTV service 11 April 2012: Sky applied to OHIM to invalidate the CTM (and other registrations) 19 April 2012: PCCW issued proceedings for CTM infringement and passing off 4

5 1 2 3 The OHIM Torpedo The Trade Mark Claim Passing Off: Goodwill & Reputation 5

6 The OHIM Torpedo 6

7 Article 104 CTM Regulation 1. A CTM court hearing an action referred to in Article 96, other than for a declaration of non-infringement shall, unless there are special grounds for continuing the hearing, of its own motion after hearing the parties or at the request of one of the parties and hearing the other parties, stay the proceedings where the validity of the CTM is already in issue before another CTM court on account of a counterclaim or where an application for revocation or for a declaration of invalidity has already been filed at the Office Where the CTM court stays the proceedings it may order provisional and protective measures for the duration of the stay. 7

Policy CTM and RCD are unitary rights Avoid irreconcilable decisions between Community

EU-wide meaning Strong presumption in favour of a stay Claimant can be protected by

special grounds within Article 104(1) PCCW v Sky Court of Appeal (Etherton LJ) Special

8 Policy CTM and RCD are unitary rights Avoid irreconcilable decisions between Community courts, and between Community courts & OHIM Special grounds should be given autonomous EU-wide meaning Strong presumption in favour of a stay Claimant can be protected by interim injunction during stay It will be a rare and exceptional case where there are special grounds within Article 104(1) PCCW v Sky Court of Appeal (Etherton LJ) Special to my mind connotes something out of the ordinary run of cases Guccio Gucci v Shipton Lewison J 8

9 What are NOT special grounds? Systemic differences (rules of evidence, procedure & powers of case management) between CTM courts and OHIM Need for business to know where it stands Reactive nature of invalidity application Passing off action and claim for infringement of national registration 9

10 What may be special grounds? Must relate to specific factual circumstances Specific facts giving rise to urgency 10

Stays: Later cases in the UK STAY Media Village Entertainment v Coca-Cola (2012) Regent University v Regent s University London (2013) WS Foster v Brooks Brothers (2013)

does not seem to me that it made sense for these infringement claims to be stayed.

11 Stays: Later cases in the UK STAY Media Village Entertainment v Coca-Cola (2012) Regent University v Regent s University London (2013) WS Foster v Brooks Brothers (2013) Shark v Monster (2013) Enterprise v Europcar (2015) NO STAY Boxing Brands v Sports Direct (2013) D Jacobson v Crocs (2014) Hearst v AVELA (2014) I have to say that it does not seem to me that it made sense for these infringement claims to be stayed... [it] potentially exposed the parties to the need for two trials Arnold J, Enterprise Delay of this scale, and quite possibly until 2020 or even later is, of its nature prejudicial witnesses are not getting any younger, none of us are Warren J, Jacobson 11

12 Stays: Cases outside the UK Glaxo Group Ltd v Rowex Ltd (High Court, Ireland, June 2015) No stay (despite strong presumption) for following cumulative reasons: 1. Neither party wanted a stay 2. Many years before OHIM (& German) proceedings would be resolved 3. German Court had not stayed its proceedings 4. Chance of inconsistent decisions between UK & Germany not great 5. Claim in passing off 6. Expeditious determination was warranted 7. Article 47 Charter of Fundamental Rights of EU & Article 6(1) ECHR? 12

13 Implications? Is the bar for special grounds set too high? Value of national registrations Interim injunctions available but rarely granted in UK and cross-undertaking in damages must be provided (potentially for significant period) Issue protective Claim Form (need not serve)? EU trade mark reform package does not deal with issue 13

14 The Trade Mark Claim 14

15 Counterclaim for invalidity CTM registration held to be invalid due to descriptiveness and lack of distinctive character Upheld by Court of Appeal (not pursued before Supreme Court) 15

16 Conflicting approaches? CTM application accepted by OHIM but held invalid by UK Courts Evidence for descriptive nature of the word NOW 16

17 A figurative figleaf PCCW only succeeded in obtaining registration of the CTM because it included figurative elements. Yet PCCW is seeking to enforce the CTM against signs which do not include the figurative elements or anything like them. [ ] Trade mark registries should be astute to this consequence of registering descriptive marks under the cover of a figurative figleaf of distinctiveness, and refuse registration of such marks in the first place. PCCW v Sky Arnold J 17

18 Later cases in the UK Supreme Petfoods v Henry Bell (Arnold J, Feb 2015) CTM and UK registrations for stylised SUPREME mark held to be inherently non-distinctive Registrations for ribbon mark with additional stylisation did have inherent distinctive character 18

19 Later cases in the UK Thomas Pink v Victoria s Secret (Birss J, July 2014) UK registration for series of two stylised PINK marks held to be inherently nondistinctive 19

20 CP3: Figurative Marks with Descriptive/Non Distinctive Words Typeface and font In general, basic/standard typeface, lettering, handwritten, punctuation & other symbols: not distinctive Graphic design elements: must impact on the mark as a whole Combination with colour Adding single colour not sufficient (more than 1 colour may be) Unusual arrangement of colours in the word element: may be distinctive Position of the word elements Side-ways, upside-down etc Arrangement: must require mental effort by consumer Simple geometric shapes Points, lines, circles, triangles, squares etc: unlikely to be acceptable especially when used as a frame or border Complex shapes: may add distinctiveness 20

21 CP3: Figurative Marks Position & size of figurative element Commonly used figurative elements Representation of goods & services? Must be clearly recognisable in the sign due to its size and position If customary in trade: will not add distinctive character Accurate portrayal: not distinctive Symbolic/stylised portrayal commonly used in trade: not distinctive 21

22 CP3: Figurative Marks OHIM s Examples 22

23 Figurative marks: Lessons Registrations for descriptive/non-distinctive words with minor figurative elements are vulnerable to challenge Even if registrable/valid, scope of protection is only likely to extend to other marks that feature the word AND similar figurative elements 23

24 The Passing Off Claim: Goodwill & Reputation 24

25 The Holy Trinity of Passing Off Claimant s goods or services have acquired a goodwill in the market and are known by a distinguishing name, mark or other indication Defendant uses (or threatens to use) a name, mark or other indication which has led (or is likely to lead) the public to believe D s goods/services are those of C, or are connected with it, and thus to a misrepresentation (whether or not intentional) C has suffered (or is likely to suffer) damage because of the erroneous belief engendered by D s misrepresentation 25

Goodwill: a Vexed Question Is reputation among a significant section of public in the jurisdiction enough? Or, must Claimant also establish a business with customers in the jurisdiction?

an issue on which there is conflicting jurisprudence in the common law world, and it is of particularly acute significance in the age of global electronic communication PCCW v Sky Supreme Court,

26 Goodwill: a Vexed Question Is reputation among a significant section of public in the jurisdiction enough? Or, must Claimant also establish a business with customers in the jurisdiction? Who are customers, and how do they become customers? an issue on which there is conflicting jurisprudence in the common law world, and it is of particularly acute significance in the age of global electronic communication PCCW v Sky Supreme Court, Lord Neuberger There may be powerful reasons why the law will come under pressure to evolve or even to be re-formulated in order to meet some of the challenges created in business worlds transformed by technology However, there may be sound policy reasons why the scope of protection should not be enlarged PCCW v Sky Court of Appeal, Sir John Mummery 26

27 Were UK residents acquainted with PCCW s NOW TV service? Chinese speakers resident in UK were exposed to it when living/visiting Hong Kong PCCW s websites and YouTube channel Airlines 27

Arnold J PCCW had modest (more than de minimis) reputation in UK amongst Chinese-speaking community for NOW TV But it had no protectable goodwill in the jurisdiction: Mere accessibility of website in

28 Arnold J PCCW had modest (more than de minimis) reputation in UK amongst Chinese-speaking community for NOW TV But it had no protectable goodwill in the jurisdiction: Mere accessibility of website in UK does not establish goodwill with customers in the UK Protectable goodwill can arise from advance advertising or promotion, but PCCW s activities were not sufficient PCCW argued that it was sufficient for a TV service to have viewers in the UK. I cannot accept that argument, which seems to me to stretch the concept of customer to breaking point. On that basis hundreds of TV channels worldwide would have customers, and hence protectable goodwill, in the UK courtesy of YouTube PCCW v Sky Arnold J 28

Court of Appeal Strong flavour of property in foundations of passing off Difficult to draw hard and fast line in some cases; but not a valid reason to relax legal requirements Universal presence and

29 Court of Appeal Strong flavour of property in foundations of passing off Difficult to draw hard and fast line in some cases; but not a valid reason to relax legal requirements Universal presence and accessibility of the internet is not a sufficiently close market link to establish identifiable goodwill PCCW s preparatory activities were insufficient Experience shows that judicial game-changing in a property rights environment is a recipe for uncertainty, confusion and injustice where the common expectation is for certainty, clarity and predictability. PCCW v Sky Court of Appeal, Sir John Mummery 29

30 Supreme Court Goodwill is territorial Mere reputation is not sufficient Claimant must show it has a significant goodwill, in the form of customers, in the jurisdiction But need not have an establishment or office Balancing exercise between protection and competition Mere reputation would tip balance too far in favour of protection Claimant with reputation only has not done enough to justify effective monopoly 30

31 Affirmed hard line approach : Clear and consistent view of House of Lords and Privy Council has been Claimant must have customers in the jurisdiction Underlined by CA in Budweiser Supreme Court can change law where it is archaic, but not if it risks undermining legal certainty 31

32 Non-UK cases Important & helpful to look at other common law jurisdictions But no clear trend away from the UK s hard line approach Singapore & USA: consistent with UK hard line approach Australia & South Africa: reputation sufficient Other jurisdictions: position less clear cut 32

33 Key foreign cases Australia: ConAgra v McCain (1992, Federal Court of Australia) hard line cases in England conflict with the needs of contemporary business and international commerce Claim failed because insufficient reputation High Court of Australia has not considered issue South Africa: Caterham Car Sales v Birkin (1998) Claim failed because insufficient reputation Singapore: Staywell Hospitality v Starwood Hotels (2014) 33

34 Support from trade mark law CJEU decisions on genuine use (Leno) and website accessibility (L Oréal v ebay) Sign devoid of distinctive character / descriptive in one Member State may not be in another Member State (Matratzen) 34

35 Well known marks Section 56 Trade Marks Act 1994 / article 6 (bis) Paris Convention Mark used abroad and with a reputation in UK may be protected even if no customers / goodwill Substantially reduces risk of harsh results? What qualifies as a well known mark? 35

36 Issue left open Limited pragmatic exception to hard line approach? Claimant has no goodwill but has launched substantial advertising campaign demonstrating imminent intention to market + reputation In any event, PCCW had merely advertised in the UK 36

37 Lessons from Supreme Court Register marks in key jurisdictions + use within 5 years Consider relevance of section 56 TMA Issues for international brand owners Issues when clearing marks 37

38 Any questions? nina.o

AIPLA Overview of recent developments in Community trade mark law

AIPLA Overview of recent developments in Community trade mark law Marie-Aimée de Dampierre, Partner 2 May 2013 IPMT / Paris Overview Trade mark registration general principles Earlier rights Distinctiveness