Starbucks (HK) Limited and another v British Sky Broadcasting Group Plc and others
The Supreme Court today dismissed the Claimants’ appeal in which they had contended that a claimant who is seeking to maintain an action in passing off need only establish a reputation among a significant section of the public within the jurisdiction.
The Claimants are members of the substantial PCCW group based in Hong Kong which has operated a successful internet protocol television (“IPTV”) service in Hong Kong under the name NOW TV since March 2006. Although the service has not been made available in the UK, a number of Chinese speakers permanently or temporarily resident in the UK in 2012 were aware of the NOW TV service through exposure to it when residing in or visiting Hong Kong. On the findings made by the trial judge (Arnold J) UK residents could also become acquainted with the NOW TV service via the Claimants’ own websites, through YouTube and as videos-on-demand on various international airlines.
On 21 March 2012, the Defendants, Sky, announced that they intended to launch a new IPTV service in the UK under the name NOW TV. The service was launched in beta form in mid-July 2012. The Claimants sought to prevent Sky from using the name NOW TV in connection with its IPTV service in the UK, on the grounds that the use of that name amounted to passing off. The claim failed at first instance and on appeal to the Court of Appeal, on the basis that the Claimants did not possess protectable goodwill in the territory.
Dismissing the Claimants’ appeal, Lord Neuberger (with whom Lord Sumption, Lord Carnwath, Lord Toulson and Lord Hodge agreed) reaffirmed that the law is that a claimant in a passing off claim must establish that it has actual goodwill in this jurisdiction, and that such goodwill involves the presence of clients or customers in the jurisdiction for the products or services in question. Where a claimant’s business is abroad, people who are in the jurisdiction, but who are not customers of the claimant in the jurisdiction, will not do, even if they are customers of the claimant when they go abroad.
The Claimants’ claim failed because their business is based in Hong Kong, and they had no customers, and therefore no goodwill, in the UK. The availability of the Claimants’ NOW TV programmes via the websites, or on various international airlines, was simply intended to, and did, promote their Hong Kong business: people in the UK who might access the programmes in those ways are not their customers in the UK.
The Supreme Court left open the question whether a passing off claim can be brought by a claimant who has not yet attracted goodwill in the UK, but has launched a substantial advertising campaign within the UK making it clear that it will imminently be marketing its goods or services in the UK under the mark in question. The Claimants’ plans to extend their service into the UK were not in the public domain when Sky launched their NOW TV service so, even if such an exception to the “hard line” approach to the territorial goodwill requirement were accepted, it would not have assisted the Claimants.
Geoffrey Hobbs QC and Guy Hollingworth, instructed with Iain Purvis QC by King & Wood Mallesons LLP, acted for Sky, the successful Defendants/Respondents in the Supreme Court.
A full copy of the judgment can be found here with the Supreme Court Press Summary here.