Monday, 1 June 2015

Starbucks v British Sky Broadcasting 2015 UKSC 31

Now... this is Ian (ed)
This is a guest post by Ian Learmonth, following the discussion he lead last week on the case (see further commentary using the hashtag #SandtonDiscussion) especially as it relates to South Africa and other common law jurisdictions heavily influenced by developments in English law.

"This case considers whether a passing off claim in the United Kingdom requires the plaintiff to show that it has customers in the territory concerned, or whether simply having a reputation is sufficient. The plaintiff is the operator of an Internet based television company in Hong Kong, under the brand NOW TV. The services they offer require hardware which is not available in the UK and it was common cause that its core services could not be accessed from the UK. However, a large number of members of the Chinese speaking community in the UK are aware of the brand through past exposure while abroad. Some content generated by the plaintiff was freely available via the plaintiff's website and on YouTube, but this material is primarily intended to promote its services in Hong Kong.

Now ..,this is Sky (ed\)
The defendant launched an Internet based television service under the brand NOW. The Court accepted that the marks were likely to cause confusion, but noted that the plaintiff, despite having a reputation in the UK, had no customers and therefore no goodwill. It was held that the existing English common law required goodwill in the territory. However, the Court was called on to develop the common law to recognize that reputation could substitute for goodwill in light of modern communication and business practices.

The Court conducted a fairly thorough examination of the approach to the requirement of goodwill in other common law jurisdictions. It noted that in Ireland, New Zealand and Canada, the requirement for goodwill was still strictly applied. In Australia and South Africa courts have recognized that reputation alone is sufficient to support a claim for passing off. In Hong Kong and Singapore recent jurisprudence has wavered slightly but both have concluded that goodwill remains a requirement. It should be noted that in Singapore it has been held that reputation created through a large scale pre-launch marketing campaign may be sufficient to attract protection on the basis of passing off.
Now ...this is Starbucks (ed)

In reaching its decision the Court decided that a plaintiff must have customers in a jurisdiction, who access the service in that jurisdiction; in other words it is not sufficient for a plaintiff to show that individuals are present in the jurisdiction who make use of its services outside of the jurisdiction. However, the Court did recognize that customers who are able to book the services within the jurisdiction, should be considered as customers, even if the factual use of the service only occurs outside the jurisdiction.

The Court also noted that consideration must be given to issues of public policy. It specifically drew attention to the fact that a balance must be drawn between the public interest in free competition and the need to protect a trader from unfair competition. It was acknowledged that where a business has been advertised but not marketed no benefit has been provided to the public.

In interpreting the common law, the Court also considered the impact of legislation which protects foreign well known trade marks. It noted that such legislation is put in place precisely to protect foreign brands from abuse where they are not used within a jurisdiction, provided the necessary requirements are met. The defendant argued that the existence of legislative (provided certain criteria are met) militates against providing broader common law protection. The Court noted that this argument had strong force, although ultimately it was not required to make a decision on this argument.


Ultimately, the Court held that reputation, in the absence of goodwill in the form of customers, was not sufficient to sustain a claim of passing off. The Court explicitly left open the question of whether reputation generated by a marketing campaign in advance of an imminent business launch would attract protection."

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