NOW this is what the Court of Appeal calls "special grounds"

United Kingdom

In British Sky Broadcasting Group PLC v Starbucks (HK) Limited and EMI (IP) Limited v British Sky Broadcasting Group PLC ([2012] EWCA Civ 1201, September 13 2012), the Court of Appeal has upheld a stay of infringement proceedings awaiting the outcome of an invalidity application at the Office for Harmonisation in the Internal Market (OHIM) in respect of the allegedly infringed trademark whilst refusing the appeal for a stay of a separate set of infringement proceedings where invalidity proceedings had also been commenced at OHIM for the mark involved.

In both cases, the mark was NOW, although registered for different goods and services, and held by EMI and Starbucks respectively; infringement actions had been brought in relation to Sky's now launched NOW TV platform.

The Court of Appeal held as follows:

  • Where there was the requisite level of commercial urgency, infringement proceedings could proceed, as these were "special grounds" which allowed the usual presumption in favour of a stay to be overturned (Article 104(1) of the Community Trademark Regulation (207/2009));
  • In relation to Starbucks’ appeal, there were special grounds to prevent a stay. The Court of Appeal found that the judge (Arnold J) was entitled to take the view that there were exceptional circumstances of urgency: Sky had plans to launch its new service very shortly, and it was in its interests to be able to do so and it did in fact do so on July 17 2012. Starbucks’ evidence was that the promotion of that service would soon undermine its goodwill, and would undermine its ability to exploit its registered mark and its plans to expand its imminent rival service later this year. Nevertheless, as Starbucks itself considered, it was not a case in which it would have been appropriate to delay Sky’s launch by interim relief. In that respect, the situation was unusual: in the usual case, the claimant’s interests can be adequately protected by provisional and protective measures,
  • In relation to EMI’s appeal against the stay of its infringement proceedings against Sky, there was no compelling urgency which might suggest that a stay should not be granted. EMI had shown no urgency in launching a NOW-branded music TV channel which it claimed to be planning and there was no evidence of any definite plans.

Other arguments against a stay, such as the existence of passing-off claims, the extended delay that might be caused while awaiting the outcome of the application to OHIM, the "reactive" nature of Sky's application to OHIM for a declaration of invalidity (being made after the receipt of a letter before action, for example) or the "general need for a business to know where it stands", were either irrelevant or insufficient in the court's eyes in these instances to overturn the presumption of a stay under Article 104(1) of the regulation.

Joel Smith and Rachel Montagnon, Herbert Smith LLP, London

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