Aug 25, 2016

The Sky's the Limit

Skyscape Cloud Services Ltd v Sky Plc and others [2016] EWHC 1340 (IPEC)

Sky plc were formed in 1990 and merged with British Satellite Broadcasting becoming the UK's largest digital subscription television company. Sky also provide satellite broadcasting, on-demand internet, broadband and telephone services and have also offered email services, including email accounts, since 2006. Sky own a number of UK and Community trade marks, including the word SKY, in respect of a wide range of goods and services including "electronic mail services" in class 38.

Sky have always been proactive and successful in preventing competitors from using the word SKY. In particular British Sky Broadcasting Group Plc succeeded in its claim of trade mark infringement and passing off against Microsoft Corporation's use of the mark SkyDrive as a name for cloud storage services.

Skyscape Cloud Services are the latest company involved to become involved in a dispute with Sky. Skyscape provide cloud computing services; including software as a service, infrastructure as a service and platforms as a service. The services provided include the provision of e-mail accounts.

In 2014 Sky alleged that Skyscape were infringing five of their UK and EU trade mark registrations. Sky did not receive a response to these allegations but did not issue infringement proceedings. Skyscape subsequently sought a declaration of non-infringement in order to gain commercial certainty that they would be able to continue to use their name. This was an unusual step as there is no statutory provision which provides for an alleged infringer to seek a declaration of non-infringement. The alleged infringer must instead rely on the court's inherent power to grant a declaration.

Skyscape admitted that they provided identical email services. Therefore, the comparison the Judge had to make was between the word mark Sky and Skyscape in relation to email services.

Judge Hacon from the Intellectual Property Enterprise Court held that there was a likelihood of confusion between the mark and Skyscape and considered that consumers would confuse the word SKYSCAPE used in connection with e-mail services with the email services offered by Sky as well as the many other services offered by Sky for example SKY SPORTS and SKY NEWS. The judge also considered that the mark SKYSCAPE would lead to detriment to the distinctive character of the mark SKY, detriment to the repute of the mark and that SKYSCAPE would take unfair advantage of a well known mark.

Skyscape argued that the average consumer of its services is "a well-informed and careful civil servant" and therefore its services would be selected with a lot of care and attention. Skyscape operate through a scheme called G-Cloud which allows public sector organisations to purchase cloud services from private providers. The Judge did not agree and held that the average consumer was someone working in a small public entity and that the average consumer did not require as much knowledge as someone working in the IT industry. The judge held that Skyscape would infringe Sky's marks. Following this decision Skyscape have now rebranded to UKCLOUD.

This is a further example of Sky being successful in a trade mark action and it seems like they are almost developing a monopoly in relation to any use of the word 'sky' in classes where they have a trade mark. This is similar to the way that McDonalds have recently been successful in stopping others using the 'Mc' prefix in a trade mark and anybody considering using these words in a trade mark should give careful consideration to the likelihood of infringement before proceedings.

Posted by: in: Case Law, Trade Marks

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