Sky Plc & Ors v Skykick UK Ltd & Anor [2017] EWHC 1769 (Ch)

[2017] EWHC 1769 (Ch)Case No HC-2016-001587
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY
EUROPEAN UNION TRADE MARK COURT
Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 13/07/2017
Before
THE HONOURABLE MR JUSTICE BIRSS
Between
(1) SKY PLCClaimants(2) SKY INTERNATIONAL AGClaimant(3) SKY UK LIMITEDClaimant(1) SKYKICK UK LIMITEDDefendants(2) SKYKICK INCDefendant
Kieron Beal QC and Philip Roberts (instructed by Mishcon de Reya LLP) for ClaimantsSimon Malynicz QC, Tom Hickman and Stuart Baran (instructed by Dentons UKMEA LLP) for DefendantsHearing Hearing date: 26th May 2017
Judgment ApprovedBirss J:
[1]In this application the Defendants (SkyKick) apply for an order to make a pre-trial reference to the CJEU of a question relating to European trade mark law. The question is whether Article 1(13) of Regulation (EU) 2015/2424 of the European Parliament and the Council of 16th December 2015 is contrary to fundamental EU Rights and is therefore invalid.[2]The effect of Article 1(13) is to abolish a defence to a claim for EU trade mark infringement which is known as the “own name defence” in so far as that defence applies to corporate entities such as the Defendants. The own name defence was set out in Article 12(a) of Council Regulation (EC) No 207/2009 on the Community Trade Mark, known also as the European Trade Mark Regulation. Article 1(13) of the 2015 regulation amended Article 12(a) so that that Article only applies to the name of a party where that party is a “natural person”. As prescribed by Article 4 of the 2015 Regulation that regulation came in to force on 23rd March 2016 and was “binding in its entirety and directly applicable in all member states”.[3]This action is a claim for passing off and registered trade mark infringement. The First Claimant is the non trading holding company of the Sky Group of companies. That group provides a range of broadcasting entertainment, digital internet telecommunications and software services including pay television, home entertainment, broadband and telephony. The services are branded SKY. Amongst this are the well known Sky TV satellite channels. The Second Claimant is a subsidiary of the First Claimant and holds various intellectual property rights including EU trade marks. The Third Claimant is a subsidiary of the First Claimant and is said to have an exclusive license under the trade marks.[4]The Defendants describe themselves as operating a “business to business” start-up enterprise providing cloud based information technology migration, backup, and management services to IT solution providers who are Microsoft “partner” companies. This requires some explanation. The global software company Microsoft has a product called Office 365. Office 365 is a cloud based system, in other words substantial elements of data processing and storage occurs “in the cloud” as opposed to being held locally on a customer’s computer system. Microsoft identifies “partners” which are businesses who provide services to third parties, including sale and support of the Office 365 platform. SkyKick in turn provide services to these partner companies rather than providing them directly to the customers of the partners. The services, as I have said, relate to the transfer (migration) of data into the Office 365 platform. In order for a customer to move from a system which is not cloud based to a system which is cloud based, the customer has to migrate their data in to the cloud. SkyKick provide products and services to partners to assist the partners in migrating their customers’ data.[5]SkyKick has three core product offerings: i) a migration product that moves data stored at a company’s premises to the cloud; ii) a cloud data backup product; and iii) a cloud management tool which allows customers to manage cloud applications.[6]SkyKick also offers services such as hosting of the backup data and cloud management software facilities. These are known as Software as a Service or SaaS products.[7]Mr Schwartz, the co-founder and co-CEO of the Defendants together with his business partner Mr Richman, decided to adopt the name SkyKick in November 2011. Their case is that they carried out US trade mark searches in 2012 and filed US trade mark applications. No SKY marks were identified at that stage although other marks with the prefix Sky were identified. No oppositions were filed by the Claimants’ group at that time. In February 2016 the Defendants filed an international trade mark application designating Australia, Japan, New Zealand and the EU. The Defendants established a limited market presence in the EU in 2013 but have seen rapid growth in the EU market. Over half its revenues in the EU were generated in 2016. The current business plan projects a major growth in revenue globally with 30% of them from the EU. Nevertheless the business is trading at a loss and it is predicted to do so until 2018. It is dependent on repeated rounds of private investment funding to sustain it.[8]The claim was brought on 23rd May 2016. The Claimants contend that the Defendants infringe European Union trade marks and one UK trade mark in relation to the use of sign SKYKICK. The essential point is that SKYKICK is said to be too similar to the word mark or figurative mark SKY for the relevant services. The Claimants rely on four EU trade marks and a UK registered trade mark. Infringement is alleged under Art 9(1)(b) and Art 9(1)(c) of the European Trade Mark Regulation and the corresponding sections of the UK Trade Marks Act 1994. Use of SKYKICK is also said to amount to passing off having regard to the Claimants’ goodwill in the name SKY.[9]The Defendants brought applications at the EU IPO (formally OHIM) to invalidate the Claimants’ EU trade marks on the basis that the word SKY was not distinctive in relation to the field of cloud computing. These were commenced on 17th February 2016 and one of the issues I have to decide is whether there are special grounds for continuing these proceedings pursuant to Article 104 of the EU trade mark Regulation. On that I should say that both sides agree that there are special grounds in this case and that I should continue the proceedings but they recognise that it is a matter for the court to exercise its independent judgment. I will deal with that at the end.[10]On the same day 17th February 2016 SkyKick brought the proceedings in the Intellectual Property Enterprise Court (IPEC) seeking a declaration of non-infringement. After the issue of these High Court proceedings SkyKick has agreed to discontinue the IPEC proceedings. Sky’s position is that the High Court is the appropriate place to resolve this dispute given what is at stake. SkyKick do not suggest that the proceedings should be transferred to IPEC. In addition to denying infringement SkyKick also has a counterclaim based on bad faith contending that the Claimants had no bona fide intention to use their mark across the full width of the specifications as at the date they were filed.[11]Broadly the Defendants’ defence is that they have very different businesses from the Claimants and operate in different fields and are not in competition. The Claimants’ use of the word SKY and the Defendants’ use of the word SKYKICK are such that there is no likelihood of material confusion nor is there any dilution or free riding on the SKY brand or, if there is, the Defendants’ have due cause for the purposes of Article 9(1)(c).[12]In the course of argument SkyKick’s counsel showed me the width of the specifications of the Claimants’ trade marks. There is no question that they are of striking width with specifications running to many pages of text. As regards the scope of the EU trade marks, it is said that the marks are registered for goods and services that are not identified with sufficient clarity or precision and/or are in bad faith.[13]SkyKick also rely on the own name defence. They contend that all they are doing is using their own name and doing so in accordance with honest practices in industrial or commercial matters. This defence is still part of the law as far as the UK trade mark is concerned because currently the relevant section of the 1994 Act, which is Section 11(2)(a), is drafted in such a way that the own name defence remains a defence available for a corporate entity under UK law. The time within which that part of the 1994 Act needs to be amended to be in accordance with the EU directive has not yet been reached.[14]The problem for SkyKick is that the limitation of the own name defence to natural persons for infringement of EU trade marks has already happened and if it is valid, then the own name defence SkyKick wishes to rely on will not be able to help them against the claim for infringement of the EU trade marks.

This application

[15]At times it appeared that the Defendants’ approach to this application was that if I was satisfied that there was a doubt about the validity of Article 1(13) of the 2015 regulation then I was obliged to make the order sought which would lead to a reference now. The focus of the Defendants’ submissions was on arguing the merits of the Defendants’ case that Article 1(13) is invalid. Considerable time was spent at the hearing on this, particularly by the Defendants. The argument seemed to be if the invalid law plea has some prospect of success (which sounds like the same thing as saying that there is indeed a doubt about the validity of Article 1(13)) then the court was obliged now to make a reference to the CJEU. That obligation arises because the validity of EU law is a matter within the exclusive competence of the CJEU. Although it was never put as starkly as I put it now, in effect the argument boiled down to an unspoken submission that the only two options available to the court at this stage were either a finding that the invalid law plea had no real prospect of success or, if it has a real prospect of success, referring the question to the CJEU.[16]Coupled with this, at least at one stage prior to this hearing, the Defendants’ position was that all proceedings should be stayed pending the reference which must be ordered now. However that position was modified so that by the time the matter came before me the Defendants were making it clear that they did not press for a stay but were prepared to countenance the whole proceeding continuing to trial in any event.[17]It seems to me that the Defendants’ approach has risked confusing two different questions. One is whether to make a reference now, before trial, and the other is the point about what sort of legal conclusion the national court is entitled to reach when dealing with issues of the validity of European law.[18]The Defendants rightly submitted that the question of validity of a European law is not a matter that a national court can decide in the sense that the national court has no jurisdiction to hold that a European law is invalid. However, as the Claimants submitted, the national court can find that a case of this kind can be rejected on the basis that there is no ground for saying that the EU law is invalid. Nevertheless the converse is not a finding by the national court that a European law is invalid. The converse is a finding that there is a well founded argument that the law is invalid. If that finding is made on a material point then the issue must be referred.[19]The Defendants referred to IATA v European Low Fares Airline AssociationC-344/04 [2006] ECR 1403. At paragraph 29 the CJEU held that a national court, if it considers that the arguments put forward before it by the parties in support of invalidity of an EU legislative measure are unfounded, may reject them concluding that the act is completely valid. In that case there is no need for a reference. In paragraph 30 the court explained that it is only if the national court concludes that the argument concerning invalidity are well founded that it must refer.[20]In R (Telephonica 02 Europe PLC) v Secretary of State for Business Enterprise and Regulatory Reform[2007] EWHC 3018 (Admin) Mr

Justice Mitting at paragraph 4 said as follows:

“The underlying question therefore is the validity or otherwise of the roaming regulations. There is no doubt that it has significant direct and indirect effect on the business activities of the Claimants. If satisfied that the challenge to its validity is reasonably arguable or put negatively not unfounded I should refer the issue to the European Court and grant permission for the domestic challenge to the UK regulations.”
[21]These decisions are directed to the issue of the kind of legal conclusion the national court is entitled to reach when dealing with issues of the validity of European law and the point that if there is a doubt then a reference must be made, because the national court cannot decide such a law is invalid. They are not concerned with the question which is before me. The question I have to decide is not whether the court should make a reference after the trial in this action, the question before me is whether a reference should be made now, during the course of proceedings which were commenced in 2016 and which are currently set to be tried in early 2018.[22]Other relevant principles relating to references in general are as follows. First, references should not be made of matters which are of purely academic interest to national proceedings (see Meilicke Case C-83/91 and Bacardi Martini v Newcastle United Case C-318/00). Second, the CJEU has consistently expressed a preference for the relevant factual matrix to be sufficiently determined before a reference is made (see the CJEU’s recent Recommendations to national courts and tribunals in relation to the initiation of preliminary ruling proceedings [2016] C-459 25.11.2016 page 1 at para 13; and see Meilicke at paragraph 26).

The arguments about the validity of Art 1(13)

[23]The Defendants contend that there is a strong argument that there is a doubt about the invalidity of Art 1(13) of the 2015 Regulations. This is on the basis that the law is contrary to Article 16 of the EU Charter (Freedom to Conduct Business), Article 17 of the EU Charter (A Right to Property) Article 20 or the EU Charter (Equality Before the Law) and Article 21 of the EU Charter (Non-Discrimination). The Defendants also rely on Articles 51 and 52 of the EU Charter which concern the Field of Application (Art 51) and Scope and interpretation of the rights and principles (Art 52). The submission based on Art 52(1) is that this article provides that:
“Any limitation on the exercise of the rights and freedoms recognised by this Charter must be provided for by law and respect the essence of those rights and freedoms. Subject to the principle of proportionality, limitations may be made only if they are necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights of freedoms of others.”
[24]The change is said to be an interference with the freedom to conduct business and right to property which companies already had under the existing law as it was interpreted in the decision of the CJEU in Anheuser-Busch v Budejovickybudvar Case C-245/02 [2004] ECR-I-10989. The Anheuser-Busch decision is an important part of the Defendants’ case. In that decision the CJEU decided that corporate entities were able to take advantage of the own name defence as it then was in European trade mark law.[25]Reference is made to the decision in R (Swedish Match AB and Swedish Match UK Ltd) v Secretary of State for Health Case C-210/03 concerning the freedom to conduct business (EU Charter Art 16). In that case the CJEU held that the freedom to pursue a trade of profession, like the right of property (EU Charter Art 17), is a general principle of community law but that those principles are not absolute rights and must be considered in relation to their social function. Restrictions may be imposed provided they in fact correspond to objectives of general interest and do not constitute a disproportionate and intolerable interference impairing the very substance of the rights guaranteed.[26]A key aspect of the argument is that there has been no proper assessment of the impact of the change in the law to remove the own name defence from companies. Another way the Defendants put their case is to submit that the change in the law to remove the defence for companies is discriminatory as between natural persons and legal persons and that no good reason for it can be found in any of the relevant materials.[27]The Defendants contend that they recognise that the EU legislative institutions have a broad discretion (citing Pillbox 38 (UK) Ltd Case C-477/14) but they argue that there is no evidence that the restriction of the own name defence to private persons was the product of any particular political or economic social choices and that the basis for the legislative change is almost completely unexplained.[28]Turning to the Claimants, they do not accept that the Defendants’ approach to the validity of Article 1(13) is correct at all. The Claimants start by emphasising that the legislator in the EU originally intended that the law relating to the own name defence to trade mark infringement would only apply to natural persons. That is clear from a document which was considered by the Court of Justice in the Anheuser-Busch decision itself. In that decision the document was described as a “Joint Declaration by the Council of the European Union and the Commission of the European Communities”. It was recorded in the minutes of the Council meeting at which the original EU legal instrument which harmonised trade mark law at the European level was adopted. That is Directive 89/104/EEC. It records that the own name provision only covers natural persons. When the matter came before the CJEU in Anheuser-Busch, the court decided that the document was of no relevance to the meaning of the relevant provision in the Directive (which was then Article 6(1)). At paragraph 79 of Anheuser-Busch the Court makes the point that no reference to the content of the Joint Declaration is made in the wording of the Directive. The CJEU then construed the legislation as it stood and held it covered both legal and natural persons.[29]The Claimants submit that all that is happening now is that the EU legislator has decided to make an express alteration to the law to adjust it back to what the legislator clearly intended the law to mean in the first place. The Claimants argue that the fact the CJEU, no doubt rightly, decided that the Joint Declaration document was not relevant to the interpretation of the legislation as passed does not alter the fact that the legislator is simply doing what it always intended to do in the first place. That was only to provide an own name defence for natural persons and not for legal persons such as companies.[30]The parties both referred to a report to the EU Commission by Max Plank Institute dated 15th February 2011 (“Study on the Overall Functioning of the European Trade Mark System”). The Claimants point out that following the Institute’s extensive study into the EU trade mark system, the report recommends that the own name defence should be amended to restrict its use to natural persons. The Claimants point out that Art 1(13) was clearly passed having regard to the considerations in that report. The Defendants submit that the reasoning in Max Plank Institute report is flawed and does not provide a cogent justification for the law change.[31]The Defendants also rely on Article 17 of the TRIPS Agreement and the reference to it in the Anheuser-Busch decision. Art 17 is in the section of TRIPS concerning trade marks and provides as follows: Exceptions Members may provide limited exceptions to the rights conferred by a trademark, such as fair use of descriptive terms, provided such exceptions take account of the legitimate interests of the owner of the trademarks and of third parties.

Exceptions

[32]The Defendants’ submissions seem to go as far as suggesting that Article 17 positively requires an own name defence to apply to both natural and legal persons. I am bound to say that my reading of Article 17 is that it does no such thing. The own name defence is not mentioned at all and the Article at least on its face appears to be simply a provision which permits appropriate limitations to trade mark rights provided those exceptions take account of legitimate interests. Nevertheless the Defendants are entitled to refer to paragraph 85 of the Anheuser-Busch decision. That paragraph could be read as if the CJEU interpret Art 17 in the manner contended for by the Defendants although my reading of the decision is simply that the point being made is just that Article 17 permits defences of this kind to be introduced and the court is not there interpreting the Article as if it makes any specific provision about the scope of an own name defence or its availability for legal persons. Nonetheless since this matter may go further at some stage I will not say anymore about that.[33]Finally, the Defendants contend that on this application the Claimants must show that there is no doubt as to the justification and proportionality of Article 1(13) and that the Claimants have not discharged that burden. This final submission is another symptom of the Defendants’ approach on this application. I can assume, without deciding, that it is correct that at a hearing on which the merits of the argument on Art 1(13) necessarily have to be determined, the party contending that there is no doubt as to the justification or proportionality of the measure would bear an onus to demonstrate that. However that is not this application. This is an application for the court to exercise what is undoubtedly a discretion to refer questions to the Court of Justice in the middle of these proceedings. Even if I was in no doubt about the question on the merits, in other words in no doubt that there was “real doubt” about the validity of Art 1(13) in the abstract, that view is not determinative of the question of whether I should refer at this stage for the reasons I will deal with below.

Should a reference be made now?

[34]Evaluating the parties’ submissions overall, each side has a properly arguable case on the merits. That is to say in my judgment the Claimants have a properly arguable case there is no doubt about the validity of Article 1(13), and the Defendants have a properly arguable case to the contrary. This is not an application in which the merits of the argument of law are strong enough either way to weigh in the balance in the exercise of the court’s discretion.[35]It seems to me that the decisive factors are these. First, the Defendants may win the action overall without any reference to the own name defence. A key part of their defence is that there is no infringement by the use of SkyKick for the goods or services which the Defendants offer, particularly when the Claimants’ marks are restricted to what the Defendants contend is their proper scope. The own name defence has nothing to do with that argument. If the Defendants win it then the own name defence is irrelevant.[36]Second, the Claimants may also win this action overall without a question of law about Art 1(13) having to be decided. If the Claimants win the argument on infringement and scope of their trade mark registrations then the own name defence in general terms may become significant. However even then, the point of law may not matter. The own name defence will have to be addressed at trial in relation to the alleged infringement of the UK trade mark, because for now that aspect of the law is unchanged. For the Defendants to win they must establish that their use of the name SkyKick is in accordance with honest practices in industrial and commercial matters. If the court decides the honest practices aspect against the Defendants then whether the law covers companies or not will be irrelevant. Their own name defence will fail even if the Defendants were right on the point of law.[37]On honest practices the Defendants contend they have a strong case but the Claimants do not agree. The Defendants say that they chose the name SkyKick in good faith in the USA and did appropriate searches and had not received any trouble from the Claimants’ group until they came to the United Kingdom or at least the EU. The Claimants contend that the Defendants chose the name in the USA without any consideration of what the position might be in other countries, that their searches were only limited to the USA. Since they are now seeking to trade outside the United States, in particular in the United Kingdom and in the EU where the Claimants contend they have strong trade mark rights, the Claimants argue that the Defendants will fail to establish the necessary facts to justify the own name defence.[38]Reference was made to the particular facts in the decisions on the own name defence including Anheuser-Busch itself but also the recent decision of the Court of Appeal in Maier v Asos[2015] EWCA Civ 210. A particular aspect in which the judges in the Court of Appeal were not in agreement was the weight to apply to whatever searches the alleged infringer may or may not have carried out in choosing its name in the first place. The Claimants submit that the Defendants cannot say that it is clear cut that they will establish the own name defence in this case.[39]Again I cannot resolve the merits of the own name defence at this stage. What is significant however is that, as the Claimants contend, these issues will be examined in detail at trial because the defence also applies to the UK trade mark.[40]Third, the fact that the trial will consider the honest practices of the Defendants in detail and make findings of fact has another impact on the question on whether to refer now or later. If the court makes a reference now it will need to set out a factual basis on which the CJEU is to be invited to consider the matter. At this stage that can only be based on assumptions. There is no doubt that references can be made on the basis of assumed facts and if necessary it can posit a series of alternative facts, however if a reference is made after trial then the court will have by then made actual findings of fact based on proper evidence and argument.[41]I recognise that the background facts may have more significance in an interpretive reference to the CJEU than a validity reference of the kind under consideration. Nevertheless it seems to me that there is still a significant advantage, if a reference is to be made at all, to do so based on a solid factual foundation. That would allow the CJEU to consider the matter on a proper basis.[42]Fourth, the Defendants contend that a strong reason for making the reference now is the nature of their business. They need certainty as soon as possible given that they are a start-up company which is still making a loss and is dependent on rounds of funding from external investors. There was an argument about expert evidence from Mr Andrew Wynn, a financial expert. His evidence was filed to support the evidence of Mr Schwartz himself about the finances of the Defendants and their need for certainty of outcome.[43]I have no doubt that given the way in which the Defendants business is organised they need certainty and they need it as early as is practicable. It did not require the evidence of Mr Wynn to establish that. However as originally formulated the Defendants’ application involved a stay of these proceedings once the reference was made. That was not a way of producing certainty as quickly as possible since on that basis the entire proceedings would have been on hold pending this reference. No doubt recognising this, the Defendants’ approach before me was that they were agnostic about whether the proceedings should continue.[44]Weighing up these points, it is possible that the outcome may turn on the own name defence issue but that is only one of a number of equally possible outcomes. Depending on how the facts turn out the overall dispute may end in either side’s favour without having to decide the issue. If I thought the Defendants’ case on the issue was much stronger than the Claimants’ case then that might weigh in favour of a reference but, at the risk of repetition, I am not convinced the Defendants’ case is any stronger than the Claimants’. The Defendants’ financial vulnerability does not have a strong role to play on the issue I have to decide. It is advanced as a reason why early resolution is needed but the best way to achieve that is to keep the action on track for a trial in early 2018. That is plainly the right thing to do in order to have the best chance of getting as much certainty as possible as early as possible.[45]The Defendants also argued that it would be in the public interest to make a reference now because the issue of validity of Article 1(13) is a matter of wide public importance and should be determined as soon as possible (referring to R v Secretary of State for the Environment (ex parte Omega Air)[2000] 2 CMLR 167). Of course the validity of any legislation is a matter of public importance in a general sense but I am not at all convinced that the public interest is a strong reason for making a reference on this issue at this stage before the facts have been found.[46]If it turns out that the outcome of this dispute has to turn on the validity of Art 1(13) then the final resolution will have to await the CJEU whatever happens but at least the trial will have resolved all the other issues by then. The only real debate is the following. If I refer now while keeping the proceedings on track for a trial in early 2018, the date by which the CJEU will make its decision on Art 1(13) will necessarily be earlier that it would have been if a reference was made after trial. The overall timing of references to the CJEU is such that they tend to take roughly two years to be resolved. Making a reference now might mean that the decision in the CJEU is made about two years from now whereas a reference after trial would lead to a decision about three years from now. Does that justify a reference now? I am not convinced. This difference in timing is tangible but it is not a sufficient justification for making a reference at this stage, which would have to involve assumed or alternative facts, and which may later have to be dropped because the point turns out to be irrelevant.[47]The Defendants fear that if the trial goes against them on infringement but they win on honest practices then the Claimants may get an injunction which would take the Defendants off the market pending the reference they seek. Leaving aside the point that this assumes the Defendants will defeat the Claimants’ case that the law is not invalid and succeed in establishing a properly founded doubt about Art 1(13), the real answer to this is that the judge hearing the trial will be able to make a decision about what to do in the circumstances as they appear after trial. It is by no means inevitable the Claimants would be granted an injunction at that stage pending a reference nor for that matter is it necessarily so that the Defendants would avoid an injunction in those circumstances. Those are matters which can be decided on the facts and evidence as they appear at the relevant time. It is a familiar cry by parties in the early part of proceedings that the court should take a step now because they fear that what is going to happen at a later point in time is that the future judge will not do justice. I am not satisfied that there is any risk of that in this case. The reference will not be made at this stage.

Article 104 EU TMR Stay

[48]Article 104 of the EU Trade Mark Regulation provides as follows:- “Article 104 – Specific Rules on Related Actions 1 An EU trade mark court hearing an action referred to in Article 96 other than an action for declaration of non-infringement shall, unless there are special grounds for continuing the hearing, of its own motion after hearing the parties or at the request of one of the parties and after hearing the other parties, stay the proceedings where the validity of the EU trade mark is already in issue before another EU trade mark court on account of a counterclaim or where an application for revocation or for a declaration of invalidity has already been filed at the office.”[49]It is common ground that Article 104(1) is engaged in these proceedings because the Defendants commenced cancellation proceedings in the EUIPO before the current proceedings were issued. In these circumstances Article 104 obliges the English court, in its capacity as an EU trade mark Court, to consider of its own motion whether there are special reasons why these infringement proceedings should be permitted to proceed in parallel with the EU IPO cancellation proceedings.[50]This is a matter for the court rather than the agreement of the parties. Nevertheless it is legitimate for the court to take into account the fact that the parties are agreed between themselves that there are special grounds within the meaning of Article 104.[51]The parties invite the court to rule that these special grounds exist. The leading English authority on the application of Article 104 is Starbucks v British Sky Broadcasting Group Plc[2012] EWCA Civ 1201. In summary the Court of Appeal in Starbucks held that the policy objective of Article 104 is to avoid inconsistent decisions, something which will be of particular importance in the context of community trade marks. When the court was coming to decide whether there were special grounds to permit national proceedings to continue despite the presence of existing validity or revocation proceedings before the EUIPO, what mattered were the factual circumstances specific to the given case. The issue was whether, despite the risk of irreconcilable decisions, the infringement claims should be permitted to proceed.[52]In my judgment on this case the major factors are as follows. First is the fact the parties agree (although that is not determinative). Second is the point that there is a real risk of inconsistent decisions since both the EUIPO and this court will be ruling on the scope of the trade marks. The overlap between the EUIPO’s invalidity proceedings and the invalidity issues before this court is not total but the issues being argued before the EUIPO are essentially the same as the ones before this court. The key point is the broad nature of the specifications of the SKY marks. The third factor is timing. I have already accepted the need for the trial in early 2018 to remain on track. Fourth is the presence of the passing off and the UK trade mark claims.[53]The parties have not made the strongest case of special grounds for continuing with these national proceedings but overall I am persuaded that special grounds do exist. The decisive points are the timing coupled with the UK trade mark issue. The reason the UK trade mark infringement issue is of particular significance is that it is the means by which the facts relating to the Defendants’ alleged own name defence will be resolved.

Conclusion

[54]These proceedings will not be stayed nor will a reference to the CJEU be made at this stage.

Cited in 2 later judgments