Sky rains on Skype's parade - Sky v Skype

Skype Ultd (Skype) applied for the word marks SKYPE and figurative mark 'Skype' as CTMs (the 'Skype marks') in 2004/2005 for a range of goods and services in classes 9, 38 and 42. Sky plc and Sky IP International Ltd (together 'Sky') opposed the applications on the basis of their earlier word CTM, SKY, filed in 2003 and registered in 2008, which covers goods and services in classes 9, 38, 41 and 42.

Sky was successful at first instance and on appeal. Skype appealed to the GC, submitting that the SKY and Skype marks were not similar; that the Skype marks had acquired a secondary meaning; and that there had been coexistence on the market without confusion for a number of years.

Findings of the General Court

The GC agreed with the Board of Appeal's analysis, that the relevant public was the public at large and professionals. Whilst the court sympathised with Skype's argument that the relevant consumer chooses some of the goods and services covered by the marks at issue with care, as peer-to-peer communication services are aimed at a general public, it should be assumed that the relevant consumer does not have greater technical expertise than the average end consumer.

When assessing similarity, the GC endorsed OHIM's findings that the goods and services were identical and that there was a medium degree of visual, phonetic and conceptual similarity between the marks. The figurative element in the Skype mark, surrounding the word element 'skype' with a borderline in the shape of a cloud or bubble, was deemed to have a merely decorative function, as it simply highlights the word 'skype' without adding an identifiable shape. Indeed, the relevant public might recognise the border as a cloud, which could increase conceptual similarity as clouds are found in the sky. Further, the word 'sky' might be recognised within 'skype', being located at the beginning of the marks applied for. Skype's argument that both signs are relatively short and therefore differences have greater weight did not undermine this analysis.

Moreover, the court agreed that SKY had an enhanced distinctiveness in the UK, on account of the public's recognition of it, in respect of some relevant goods and services in classes 9, 38 and 41; and noted that enhanced distinctiveness could apply to areas of activity that were being developed at the time of Skype's filing.

Skype's claims that:

1. the Skype marks had high distinctiveness, having acquired, through extensive use, a secondary meaning;
2. the SKY mark had a low inherent distinctiveness and its use by third parties had resulted in dilution of the brand; and
3. the SKY and Skype marks had peacefully coexisted on the market for a number of years without confusion were all rejected by the GC.

First, the court considered that claim (1) amounted to nothing other than distinctiveness acquired through use and the mark did not itself convey conceptual information. This would not in any case be a defence to an opposition; the court noted that it is recognition by the relevant public of the earlier mark (rather than the mark applied for) that is relevant when considering likelihood of confusion.

Regarding claim (2), the GC considered that any weak inherent distinctiveness of SKY for some goods and services would not affect others and would be outweighed by the SKY mark's enhanced distinctiveness on account of its very high reputation.

Claim (3) was rejected as the marks had only coexisted for peer-to-peer communication services, which was not core to SKY's business, and coexistence for one isolated and highly specific service was insufficient to diminish likelihood of confusion for the entirety of those goods and services.

Comment

It will be interesting to follow Skype's inevitable appeal to the Court of Justice of the European Union; if Skype does not succeed at that final stage, the Skype marks will not be registrable. However Skype will not be faced with a rebrand unless and until Sky brings infringement proceedings against Skype's use of the Skype marks (and even then, the English courts may reach a different conclusion to OHIM). Notably, Sky has already successfully asserted its rights against Microsoft, who acquired Skype in 2011, when Microsoft was forced to change the name of its "SkyDrive" offering to "OneDrive".

In short

The GC upheld Sky's opposition to the word and figurative Skype marks on the basis that they are confusingly similar to the SKY mark.

Skype's claims that the Skype marks had high distinctiveness; that there was dilution of the Sky brand; and that the marks were coexisting were all rejected.

This case concerns registry proceedings so does not prohibit Skype from continuing to use its marks

Case details at a glance

Jurisdiction: European Union
Court: General Court
Parties: Skype Ultd v OHIM, Sky plc and Sky IP International Ltd
Citations: T-423/12, T-183/13 and T-184/13
Date: 05 May 2015
Full decisions: http://dycip.com/T-423-12, http://dycip.com/T-183-13 and http://dycip.com/T-184-13