A scuffle between two internet protocol TV services both called NOW TV highlights the challenges facing brand protection in an increasingly global marketplace. The UK Supreme Court has refused to recognise brand awareness generated through Hong Kong based internet marketing before the launch of a UK business (Starbucks (HK) v British Sky Broadcasting).
PCCM offered a closed circuit IPTV service, NOW TV, in Hong Kong. The service was unavailable in the UK, although users could access some content through websites, YouTube and airline programming services. PCCM made plans for a UK launch and started with the launch of an app in 2012.
Sky launched an over the top (OTT) IPTV service at about the same time, also called NOW TV. PCCM brought proceedings to stop Sky’s launch.
The trade mark claim failed early on due to a 'squeeze'-type argument between distinctiveness and breadth of protection. The registered mark could only be valid with the contribution to distinctive character made by the figurative star-shape element,
but the Sky branding did not use any part of this except the word NOW.
The fight over the passing off claim made its way to the Supreme Court.
Passing off is an unregistered form of protection in common law jurisdictions. To succeed with this argument, you need proof of goodwill, misrepresentation to the public and resulting damage. The courts have often said that goodwill for these purposes is national and must be proved in the country where you want to bring the litigation.
The question here was whether NOW TV’s reputation through its internet presence was enough for the goodwill element.
Decisions in other countries (Australia, South Africa and Singapore) have showed some softening of this approach to take account of the growth of the internet and international travel.
But the court preferred to stick to the requirement for UK goodwill based on UK sales. Otherwise, it said, a claimant could get an indefinite UK monopoly for a mark without having any actual business here. This would tip the balance too far away from promoting free competition towards protection of traders.
The court acknowledged that there might be an exception in a case where a competitor was deliberately trying to ‘spike’ a substantial prelaunch advertising campaign.
As business becomes more global internet based clashes of this type are likely to increase. Obviously, obtaining registered protection for brands is preferable and this can be built up before launch. But where a brand may struggle with gaining strong registered cover, an early, low level launch to start the process of building real goodwill may make sense.