In 2004 and 2005, Skype applied to register the word SKYPE and the SKYPE logo (the "SKYPE marks") as Community Trade Marks in relation to a wide range of computer and electronic goods in Class 9 and telecommunication and computer services in Class 42. The SKYPE logo is shown below:
The applications were opposed by Sky plc and Sky IP International Ltd (together "Sky"). The prior rights owned by Sky and relied on in opposition included a Community Trade Mark registration for SKY which covered goods and services in Classes 9, 38 and 42.
Sky was successful at first instance and on appeal. Skype appealed to the General Court, where the key issues raised were whether SKY and SKYPE are similar and whether there is a likelihood of confusion. It was not in dispute that the goods and services of each party were identical.
Comparison of Marks
The General Court agreed with the Board of Appeal that SKY is similar to the SKYPE marks. Despite the additional letters "P" and "E" in the SKYPE marks, the General Court found that the word SKY is clearly recognisable and easily identifiable within the SKYPE marks which gives rise to phonetic, visual and conceptual similarity. Skype argued that this conclusion could only be reached by artificially separating the SKYPE marks into two elements, "SKY" and "PE", but this was rejected by the General Court.
Likelihood of Confusion
Skype argued that confusion between the respective parties' brands would be unlikely because: (i) the SKYPE marks had become highly distinctive through use and so could be distinguished from SKY; (ii) the SKY mark has a low level of distinctiveness which dilutes the scope of protection of that mark; and (iii) the SKY and SKYPE marks have co-existed peacefully on the market without confusion.
The General Court rejected all three lines of argument. First, the General Court held, tellingly, that it is the use and recognition of the earlier mark (SKY) and not that of the contested marks (the SKYPE marks) that must be taken into account when determining whether there is a likelihood of confusion. Second, although it is not inconceivable that SKY could be perceived as inherently weak, this would be overridden by the enhanced distinctiveness of the mark on account of its large reputation in the United Kingdom – and in any event, if the mark is weak, this would only be for some goods and services, not all. And third, while in some circumstances co-existence may reduce the likelihood confusion, that was not the case here. Skype had used its SKYPE marks in relation to a "peer-to-peer communication service" for between six and 22 months prior to the filing of the applications that led to these disputes. This brief period of co-existence, concerning an activity that was not in competition with Sky's core business, was insufficient to demonstrate that the co-existence was due to the absence of a likelihood of confusion.
The General Court's decisions are a timely reminder that trade marks may be deemed similar – even if the common element does not stand alone, independently, in the later mark.
The decisions also provide useful commentary on the relationship between inherent distinctiveness and enhanced distinctiveness, the nature of co-existence, and the extent to which these factors may impact on the assessment of likelihood of confusion. In particular, the distinctiveness of an inherently weak trade mark may be bolstered by showing that it has enhanced distinctiveness through use.
It will be interesting to see if Skype appeals the decision given it is such a well-known brand and must be of great value to the business.