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IP Cases & Commentary – Details

10 September 2012

EMI v Sky - Now That’s What I Call a Balance of Convenience

On 25 June 2012, Mr John Baldwin QC (sitting as Deputy Judge of the Chancery Division) handed down his judgment following a hearing between the EMI (IP) Ltd and others v British Sky Broadcasting Group plc and another [2012] EWHC 1644 (Ch).

The action was brought by EMI against Sky following the latter’s announcement on 21 March 2012 that it intended to launch an online TV service under the name NOW TV. The proceedings related to both trade mark infringement and passing off (although at the hearing for injunctive relief the passing off claim was not relied upon).

As some readers may be aware (although perhaps less willing to admit), amongst other things, EMI promote and sell serial ‘pop’ compilation albums under the stylised sign NOW THAT’S WHAT I CALL MUSIC (each new edition of the album being given a consecutive number – 1, 2, 3 etc). In arguing trade mark infringement, EMI relied on their Community Trade Mark for the word mark NOW (CTM Registration No. 7153505) as well as their contention that, over time, they had built up significant goodwill in the NOW name.

EMI sought the following from the Court:

  1. An interim injunction preventing Sky from using the name NOW TV (and the corresponding logo) in relation to internet TV services; and
  2. An expedited trial. 

Sky resisted both requests and sought from the Court a stay of proceedings until such a time as the Office for Harmonisation in the Internal Market (OHIM) had decided upon Sky’s application to invalidate EMI’s NOW registered trade mark on the basis of alleged non-use.

1. EMI’s request for an interim injunction

In relation to the request for injunctive relief, Baldwin QC determined that whilst he believed there was a serious issue to be tried, he was not satisfied that the “balance of convenience” (a question considered by the Court when determining whether or not an injunction should be granted) had been made out in EMI’s favour. He concluded that there was a certainty of “real and substantial damage” to Sky if the injunction were to be granted, compared to the merely speculative loss/damage which may be sustained to the NOW brand if the injunction were to be refused. EMI’s argument that irreparable damage would be sustained to the NOW brand was significantly undermined by it having already reached an agreement with Starbucks (HK) Ltd which allows Starbucks to use the name NOW in relation to a TV service. It is interesting to learn that subsequent to the action between EMI and Sky, Starbucks (HK) Ltd has commenced its own action against Sky for trade mark infringement (relying on its CTM for the sign NOW) and passing off.

EMI’s further argument that Sky had done little to “clear the way” for the launch of its new online TV service under the name NOW TV was similarly dismissed as it was said to be unreasonable to expect a commercial entity to give advance notice to its competitors of an intention to use a particular name. An interim injunction was therefore refused.

2. Expedited trial

Revisiting the principles set out in Daltel Europe Ltd & Ors v Hassan Ali Makki, Baldwin QC commented that expedition should only be granted “on the basis of real, objectively viewed, urgency” with various factors being important to consider.

On the facts of the case, it was Baldwin QC’s opinion that EMI had not demonstrated any “pressing need” for the case to be heard sooner rather than later. This conclusion was reached not least as a consequence of the earlier refusal of an interim injunction, which made redundant EMI’s argument that expedition would allow the case to be heard with minimal disruption to the defendant’s proposed launch, which would go ahead before any likely trial date. An expedited trial was refused.

Stay of proceedings

Having already commenced an invalidation action before OHIM against EMI’s NOW mark, Sky requested a stay of proceedings on the basis of Article 104(1) of the Community Trade Mark Regulation (207/2009/EC) (the CTMR).

The Court considered Articles 27-30 of the Brussels Regulation, Article 28 providing that “where related actions are pending in the courts of different Member States, any court other than the court first seised may stay its proceedings”. Article 104 provides for specific rules on related actions to the effect that proceedings shall be stayed unless there are ‘special grounds’ for them being continued. It was therefore for EMI to prove that there were such ‘special grounds’ in the case, so as to justify the continuation of proceedings.

Baldwin QC was unconvinced that any ‘special grounds’ existed and held that none of the factors relied upon by EMI (such as their argument that Sky took no steps to “clear the way”) were such as to “take the case outside the norm”. Commenting upon EMI’s argument that there was a need for commercial certainty, the Judge determined that such an argument was no more persuasive in this case as it may be in many others.

Conclusion of the case

Concluding the judgment, the Judge granted a stay of proceedings.

It is interesting to see how in this case the Court held that the “balance of convenience” was in favour of the defendant. In coming to such a conclusion, the Court has reminded trade mark owners of the importance of making use of a mark (or at least showing firm plans for any intended future use) in relation to certain goods or services. As this case has shown, a failure to do so may prove fatal when seeking to obtain injunctive relief on the basis of alleged trade mark infringement.

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