Software giant Microsoft has been dealt a major blow after a High Court judge ruled in favour of BSkyB in a claim for passing off and trademark infringement of the ‘Sky’ trademark.
This case began two years ago but the recent ruling could mean that Microsoft will now have to re-brand its cloud storage service ‘SkyDrive’ and face the risk of a possible financial penalty in the form of compensation to BSkyB.
Microsoft are likely to appeal the decision.
SkyDrive: Passing Off and Trademark Infringement
The High Court decision could impact how Microsoft will be able to market its cloud service throughout the European Union.
BSkyB sought action against Microsoft for passing off, breach of two registered Community trade marks and two UK registered trade marks for the mark ‘Sky’. The claimant, BskyB, took action after defendant Microsoft branded its cloud storage service ‘SkyDrive’.
BSkyB has become much more than just a pay-TV service provider in recent years and has expanded into other markets including providing mobile applications and an online streaming service that are both cloud-based. It even provided a cloud storage service which was discontinued in 2011, ‘Sky Store & Share’, which was launched before Microsoft’s cloud storage system SkyDrive.
Was Microsoft’s Use of ‘Sky’ Confusing?
Microsoft attempted to invalidate BSkyB’s ‘Sky’ trade mark for being descriptive in relation to cloud services. It contested that the word ‘sky’ cannot be a registered trade mark for the purposes of a cloud based data storage service. It also claimed that no confusion existed between Microsoft’s SkyDrive cloud storage software and BSkyB’s pay-TV, mobile and online services. BSkyB however claimed it had used the trademark ‘Sky’ on its cloud storage system and other products before Microsoft’s service began in the UK.
In the High Court Justice Sarah Asplin opined that Microsoft’s use of SkyDrive was likely to confuse customers who could be misled into thinking that it was in fact a product of BSkyB. According to Justice Asplin this therefore amounted to trade mark infringement and made unfair use of BSkyB’s goodwill. Furthermore she stated that Microsoft’s use of ‘Sky’ was also detrimental to BSkyB’s registered ‘Sky’ mark which in itself amounted to trade mark infringement.
Comment
Should Microsoft’s appeal the decision and fail it is likely it will have to re-brand its SkyDrive service. It is conceivable that Microsoft could instead pay compensation to BSkyB and keep the name, however it is more likely it will change the name and pay compensation.
The good news for Microsoft is that it will not have to remove the product or change it as this could have had potentially disastrous consequences for users of the Microsoft service.
Finally, the judgement serves as a reminder to businesses to be extremely cautious when branding new products as the consequences of infringing existing intellectual property rights can be costly. For more information please contact James Crichton via e-mail jcrichton@rollingsons.co.uk or by telephone on 0207 611 4848.
