Should businesses reassess value of registering marks before advancing marketing plans?

In EMI (IP) Ltd v British Sky Broadcasting Group plc ([2012] EWHC 1644 (Ch), June 25 2012), the Patents Court (England and Wales) has refused to grant interim injunctive relief to restrain the defendants from using the name NOW TV in relation to an internet TV service.

British Sky Broadcasting Group plc stated that it planned to launch an online TV service under the name NOW TV. Sky applied to the Office for Harmonisation in the Internal Market (OHIM) to have EMI (IP) Ltd's Community trademark (CTM) NOW removed from the register.

EMI then alleged that Sky was infringing its mark and sought interim injunctive relief. Sky applied to stay EMI's infringement action pending the outcome of its application to invalidate the registered trademark. EMI has at least two CTMs: NOW (E7153505), which seems to be the relevant one in this case, and NOW (E2040970). Other parties also appear to have registered NOW as Community or UK marks.

EMI submitted that there was an arguable case of infringement and that it would suffer uncompensatable and irreparable damages to its registered rights unless injunctive relief was granted. EMI also claimed that there was a pressing need to get the case to court, there being special grounds within the meaning of Article 104(1) of the Community Trademark Regulation (207/2009) for not staying the trademark infringement claim.

The court was unmoved by EMI's pleas. It held as follows:

• Since the court could not be satisfied that there was no serious issue to be tried in connection with the allegation of trademark infringement, the court would pass no further comment on the merits of either side's case.
• Looking at the balance of convenience, the court asked what might happen in the event that a stay either were, or were not, ordered. In its view, there was a certainty of real and substantial damage to Sky if an injunction were granted. Sky, which planned to launch its new service within the coming month, had no alternative name to fall back in within that timeframe - and if EMI did secure an injunction, Sky's preferred name of NOW TV would be lost forever since it was fanciful to suggest that Sky would ever change the name back if it was injuncted now, but won at trial. In contrast, EMI had been considering launching the NOW-branded music channel for many years, but still had no definite plans, having made no investment or commitment. If it transpired that the value of EMI's NOW trademark was indeed destroyed by Sky's conduct, that value could be quantified, there being no certainty that EMI would suffer very substantial damage of the kind which money could not compensate. All in all, this suggested that the balance of convenience lay in favour of letting the NOW TV launch go ahead.
• No pressing need for an expedited trial had been shown: the NOW TV service launch would have gone ahead before any likely date for an expedited trial, and it was not as if EMI was about to implement any actual plan to exploit its trademark in connection with any TV channels or platforms - nor were any special grounds for not staying the action demonstrated.

EMI had clearly had its NOW CTM for a while. The mark was applied for in 2008 and registered in 2009, and the company had apparently done very little with it (although it does seem to have used it as an App). Accordingly, the court found that the balance of convenience lay with Sky, which had advanced its plans virtually to the point of launching its channel. However, once Sky is in that position, how does one weigh up the interest of the trademark-owning claimant? If EMI had meant to get NOW up and running pretty quickly, but had registered the mark only a couple of weeks before Sky announced its intention of launching NOW TV, or if the claimant had been an SME that was unwilling to risk investing in its plans before it knew that its CTM application was secured, would the outcome have been any different? If not, businesses should be seriously reconsidering the strategic value of the oft-favoured policy of gaining a trademark registration before advancing their marketing plans.

Jeremy Phillips, IP consultant to Olswang LLP, London