Skype’s the limit

United Kingdom

On 5 May 2015 the General Court of the European Union upheld a decision of the Board of Appeal that two SKYPE marks have an average degree of visual, phonetic and conceptual similarity to broadcaster Sky’s registered Community Trade Mark (CTM).

The case concerned applications to the Office for Harmonisation of Internal Markets (OHIM) in 2004 and 2005 for the registration of the figurative and word mark SKYPE as CTM’s for Classes 9, 38 and 42. In 2005 and 2006 Sky (then British Sky Broadcasting Group) opposed the registrations, arguing that there was a likelihood of confusion with its CTM, SKY, registered in 2003 for identical Classes of goods and services. In 2012 and 2013, by which time Microsoft had acquired Skype, OHIM decided that the marks were visually, phonetically and conceptually similar enough to cause a likelihood of confusion.

Following Microsoft’s appeal of OHIM’s decisions, the Court upheld the finding that this similarity is enough potentially to cause confusion in the relevant public. Thus, the Court prevented Microsoft, as Skype’s owner, from registering SKYPE or its figurative bubble logo as a CTM.

Microsoft and Sky have a history of trade mark disputes, with Microsoft changing the name of its cloud storage service from SkyDrive to OneDrive following a High Court ruling that Sky’s trade mark had been infringed. However, in this case, Microsoft has made clear that it will not be rebranding its Skype services, as Sky’s challenge was to the registration, rather than the use, of the SKYPE marks. In addition, it has stated that it intends to appeal the case to the European Court of Justice.

Similarity and distinctiveness

Microsoft sought to rely on previous case law which demonstrated that visual and phonetic differences between marks hold more weight when reviewing short signs such as these. It argued that, not only was there a clear visual difference, but there was a phonetic difference between the marks resulting from the pronunciation of the vowel ‘Y’, which it felt was shorter in SKYPE than in SKY. This argument was dismissed by the Court.



Further, the Court held that, visually, the position of the word SKY at the beginning of SKYPE meant that the word was clearly identifiable in Microsoft’s mark. It concluded that the relevant public could identify the word SKY within SKYPE even though the remaining element ‘pe’ has no specific meaning. Therefore, any visual and phonetic differences were insufficient to offset the similarities between the marks.



In addition, the Court considered that the figurative sign, the word SKYPE surrounded by a cloud or bubble-shaped border, did not reduce the similarity between the word element of the mark and Sky’s registered mark. Visually, it acted to highlight the word element and therefore only served as a border to the word mark. Clearly this meant that the border would not impact on the phonetic similarity between the marks. It was also seen to convey no concept, except, potentially, that of a cloud. Even if this was the case, it would only serve further to increase the likelihood of the SKY portion of the word mark being recognised within SKYPE, as clouds are easily associated with the word ‘sky’.



When considering distinctiveness, the Court considered that the Board of Appeal was correct in finding that, in the UK, SKY has an enhanced distinctiveness and that there is, therefore, a greater likelihood of confusion. As a result, the mark enjoys a higher level of protection than marks of a less distinctive nature. The argument that SKYPE is highly distinctive, as both the word and figurative marks are known to the public, was rejected by the Court. It decided that even if the term SKYPE had developed a distinct meaning for Microsoft’s telecommunications services, the mark would be a generic, and thus descriptive, term for such services.

Comment

Interestingly, a number of comments made by consumers and the press in the UK seem to indicate that they do not find the two marks confusing, particularly due to their current coexistence. However, these opinions relate to the current operations of both companies, and view the marks from today’s perspective rather than that of the time in which the proceedings began.

The Court was clear in its stance that it could not consider the coexistence as a factor in decreasing the likelihood of confusion. It determined that the coexistence in the UK could only be in regard to the one narrowly defined service (peer-to-peer communications) which Skype had established prior to the date of its trade mark application, as it had not at this time developed the other goods and services for which registration has been applied for. Therefore, the coexistence could not reduce the likelihood of confusion for the numerous other goods and services. Further, the coexistence prior to the date of the applications (a length of 22 months) had not been for a long enough period of time. Therefore, although it may seem to contradict the public opinion, the Court held that the average similarity between the marks was enough potentially to cause confusion, regardless of their current coexistence.

Part of what makes decisions such as this challenging is the length of time the proceedings take. While the public is currently acutely aware of Skype and the services it provides, in part due to Microsoft’s highly publicised takeover of the company in 2011, when the proceedings first started in 2005 and 2006, Skype was still a relatively young business. Now that Skype has developed into a worldwide brand, consumers have become more used to seeing the similar marks side by side, particularly as Sky has even advertised Skype on its television channels.

For the full judgment please click here.