Goodwill Hunting – NOW It's Over

Introduction On 13 May, the Supreme Court handed down judgment in Starbucks (HK) Limited and another (Appellants) v British Sky Broadcasting Group PLC and others (Respondents) [2015] UKSC 31. The case is significant in that it affirms the need to establish goodwill, as opposed to a mere reputation, among members of the public in the relevant jurisdiction in order to succeed in a passing off claim. Goodwill internationally will not be sufficient.

Facts Starbucks (HK) Limited (Starbucks) (not the famous coffee shop brand) has operated a subscription-based internet TV service in Hong Kong since 2003 under the name 'NOW TV'. Within Hong Kong, the service is highly successful and Starbucks successfully registered, among others, a community trade mark for the word 'NOW' with stylised lines emanating from the 'O'.

The service has never been provided on a subscription basis to customers in the UK; however, Starbucks estimated that 440,000 Chinese nationals resident in the UK were aware of the TV service through either (i) having used the service while themselves resident in Hong Kong; (ii) content available for free on NOW TV's YouTube channel; (iii) free content available via websites operated by Starbucks; or (iv) NOW TV content being shown on various international airlines.

In July 2012, British Sky Broadcasting Group (BSkyB) launched an internet protocol TV service in the UK under the name NOW TV. Starbucks commenced proceedings for trade mark infringement and passing off in April 2012, in an attempt to prevent BSkyB from using the name NOW TV. The trade mark claim was dismissed at first instance and was not pursued in the Court of Appeal.

Judgments at first instance and in the Court of Appeal In the lower court1 Arnold J found, as a matter of fact, that although the Starbucks' NOW TV service enjoyed a great deal of goodwill in Hong Kong, it had only developed a modest reputation among a section of the public in the UK. It had no customers in the UK, the NOW TV service was not marketed to the UK, and subscription was not possible from the UK, so there could be no goodwill in this jurisdiction.

Starbucks' appeal was dismissed in the Court of Appeal2 for reasons given by Sir John Mummery. The court upheld the first instance decision, stating that goodwill within the jurisdiction of the court was required, and it was not enough that Starbucks had acquired goodwill in Hong Kong. The ability of the public to access free content online (e.g. via the...

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