By Ritvik M. Kulkarni
In a decade-old trademark tussle between Microsoft and BSkyB, the latter has prevailed over the use of the word SKY in the market. Owned by Rupert Murdoch, BSkyB is a British television broadcasting company which procured trademark registrations its brand-name “Sky” long before Microsoft came up with its online communications service named “Skype”.
In the present dispute, the General Court of the European Union has accepted Sky’s argument that the word Microsoft’s usage of the word Skype is likely to confuse its users into believing that the latter is a service connected to services provided by Sky. It has further held that due to such likelihood of confusion, Microsoft will be restrained obtaining a trademark registration for its “Skype” as well as its cloud-shaped logo in the European Union.
In the words of the Court, “Conceptually, the figurative element conveys no concept, except perhaps that of a cloud.”
“[That] would further increase the likelihood of the element ‘Sky’ being recognized within the word element ‘Skype’, for clouds are to be found ‘in the sky’ and thus may readily be associated with the word ‘sky’.”
The immediate effect of this ruling is that Microsoft will be left in a vulnerable position in relation to the usage of the word “Skype” by third parties as the word can never be registered in the EU. However, the catch in this is that Microsoft may still be able to protect the mark and prevent others from riding on its reputation by employing the common law remedy of “passing-off”; but enforcement of this common law right can be very tedious and expensive as Microsoft will have to prove extensive usage, market-wide reputation and the element of passing-off. A registration on the other hand is itself enough proof that a particular is the private property of the registered TM owner.
Most importantly, even though presently BSkyB has not asked Microsoft to change the name for its (Skype) service, BSkyB may well be justified in approaching Microsoft to enter into a licensing agreement with the former to use the word SKY in the latter’s product/service. This will put Microsoft into an extremely precarious position unless it secures an order in its favor at the appellate stage.
In my opinion, it was wrong of the OHIM to grant a trademark for the word SKY in the first place, as the said word is a generic word and would create an unjust monopoly in the applicant for the usage of that word. Tomorrow if another company introduces a telephone service named Sky-High, BSkyB may well come after it and sue for trademark infringement. More specifically, a word like SKY becomes very important when it comes to certain products/services like cloud computing and aviation; where the word becomes almost descriptive of the product/service offered.
What do you think?