SKY v SKYPE: Are you confused?

On 5 May 2015, the General Court of the European Union ruled that there exists a likelihood of confusion between Sky PLC and Sky IP International’s (“Sky”) trade mark for “SKY” and two marks applied for by Skype, namely the logo and the word mark “SKYPE” (“the Skype Marks”).  Please see the full decision here.

Background

Sky applied for its SKY trade mark on 30 April 2003 (the “Sky Mark”), although it took until 14 October 2008 for it to be registered at the European wide equivalent to our Trade Mark Office, the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (“OHIM”).

In August 2003, only a few months later, Skype was first released. Skype was so successful that, only a few years later in September 2005, eBay acquired it for $2.6 billion.

In 2005, Skype applied to OHIM to register the Skype Marks for audio-visual goods, telephony and photography goods and computer services relating to software or to the creation or hosting of websites.

Sky became aware of Skype’s attempts to register its Skype Marks and in 2005/6 filed opposition proceedings against their registration on the basis that, if the registrations were allowed to proceed, there would exist a likelihood of confusion between both of the Skype Marks and the Sky Mark, which was registered for identical goods and services.

In May 2011, owing to Skype’s commercial success and despite the pending opposition proceedings in Europe, Skype was acquired by Microsoft for $8.5 billion!

In 2012 and 2013 respectively, OHIM upheld the oppositions by Sky in relation to the Skype Marks. In short, OHIM ruled that there existed a likelihood of confusion between the Skype Marks and the Sky Mark on the basis of their degree of visual, phonetic and conceptual similarity. Skype appealed these decisions to the General Court.

The General Court

As stated above, the General Court dismissed Skype’s appeal.

In comparing the visual, phonetic and conceptual similarity of the Sky Mark and the Skype Marks, the General Court confirmed the following points:

• the pronunciation of the vowel “y” is no shorter in the word “skype” than it is in the word “sky” (as alleged by Skype), meaning that the relevant marks remained “similar”;
• the word “sky” remains clearly identifiable in the word “skype”, despite being a common English word; and
• “sky” in the mark “skype” can be perfectly well identified by the relevant public, even in circumstances where the ‘pe’ element has no specific meaning.

In addition, in relation to the Skype logo mark above, the General Court rejected the argument that the jagged border, in the shape of a cloud or a bubble, affected the degree of visual, phonetic and conceptual similarity. Indeed, the court suggested the jagged border accentuated the Skype name.

Finally, the General Court rejected that the peaceful coexistence since the launch of Skype and of the Skype Marks and the Sky Mark reduced the likelihood of confusion. This may be hard for many readers to agree with, especially if they have had no difficulty differentiating between Skype and Sky.

What now for Skype?

The decision provides useful guidance in relation to how the issues of distinctiveness and co-existence impact upon the assessment of the likelihood of confusion.

It is understood that Skype intend to appeal against the decision of the General Court to the European Court of Justice (the “ECJ”); not surprising due to the importance of the Skype Mark.  However, they will only be able to appeal to the ECJ on a point of law so the final outcome remains to be seen.

If you have any questions relating to trade marks or any other intellectual property matter, please contact our trade mark specialists at Waterfront on 0207 234 0200 or contact@waterfront.law.